SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

[X]      Quarterly  Report  Pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934

                For the quarterly period ended March 31, 2000

                                       Or

[ ]      Transition  Report  Pursuant  to Section 13 or 15(d) of the  Securities
         Exchange  Act of 1934

             For the transition period from __________ to __________

                          Commission File No.: 0-18833

                           Chester Valley Bancorp Inc.
                           ---------------------------
             (Exact name of registrant as specified in its charter)


          Pennsylvania                                   23-2598554
          ------------                                   ----------
 (State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                     Identification No.)


      100 E. Lancaster Ave., Downingtown PA                19335
      -------------------------------------                -----

    (Address Of Principal Executive Offices)            (Zip Code)

       Registrant's telephone number, including area code: (610) 269-9700

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

Transitional Small Business Disclosure Format.  YES  [   ]       NO [ X ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

         Common Stock ($1.00 par value)                 3,901,144
         ------------------------------                 ---------
               (Title of Each Class)          (Number of Shares Outstanding
                                                  as of May 1, 2000)

<PAGE>

                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES
                                                                      INDEX

PART 1.  FINANCIAL INFORMATION                                         Page
------------------------------                                        Number

Item 1.  FINANCIAL STATEMENTS

         CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
           March 31, 2000 and June 30, 1999 (Unaudited)                  3

         CONSOLIDATED STATEMENTS OF OPERATIONS
           Three Months Ended March 31, 2000 and 1999 (Unaudited)        4

         CONSOLIDATED STATEMENTS OF OPERATIONS
           Nine Months Ended March 31, 2000 and 1999 (Unaudited)         5

         STATEMENT OF OTHER COMPREHENSIVE INCOME
           Three Months Ended March 31, 2000 and 1999 (Unaudited)        6

         STATEMENT OF OTHER COMPREHENSIVE INCOME
           Nine Months Ended March 31, 2000 and 1999 (Unaudited)         6

         CONSOLIDATED STATEMENTS OF CASH FLOWS
           Nine Months Ended March 31, 2000 and 1999 (Unaudited)         7

         NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS          8-13

Item 2 . MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                         14-19


Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
           RISK                                                        20-22

PART 2.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS                                              23

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                      23

Item 3.  DEFAULTS UPON SENIOR SECURITIES                                23

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            23

Item 5.  OTHER INFORMATION                                              23

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K                               23

SIGNATURES                                                              24
----------

<PAGE>
<TABLE>
<CAPTION>
                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             (Dollars in Thousands)
                                                                                              (Unaudited)
                                                                                    March 31,             June 30,
                                                                                      2000                  1999
                                                                               ------------------     ----------------
<S>                                                                                     <C>                  <C>
ASSETS:
Cash in banks                                                                           $ 5,044              $  5,194
Interest-earning deposits                                                                 7,100                13,409
                                                                               ----------------       ---------------
     Total cash and cash equivalents                                                      12,144               18,603
Trading account securities                                                                 6,859                9,221
Investment securities available for sale                                                  93,901              109,600
Investment securities (fair value - March 31,
      $34,299; June 30, $7,816)                                                           35,208                7,801
Loans receivable, less allowance for
      loan losses of $3,829 and $3,651                                                   323,440              291,388
Accrued interest receivable                                                                3,064                2,461
Property and equipment - net                                                               8,197                8,200
Other assets                                                                               5,114                3,884
                                                                               ------------------     ----------------
     Total Assets                                                                      $ 487,927            $ 451,158
                                                                               ==================     ================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits                                                                                $342,885            $ 359,514
Advance payments by borrowers for taxes and insurance                                      2,000                3,055
Federal Home Loan Bank advances                                                          105,377               50,375
Other borrowings                                                                             694                  653
Accrued interest payable                                                                   1,157                1,573
Other liabilities                                                                          1,241                2,135
                                                                               ------------------     ----------------
     Total Liabilities                                                                 $ 453,354            $ 417,305
                                                                               ------------------     ----------------

Stockholders' Equity:
Preferred stock - $1.00 par value;
     5,000,000 shares authorized; none issued                                                 --                   --
Common stock - $1.00 par value; 10,000,000 shares authorized;
     3,900,388  and 3,707,460 shares issued at March 31,
     and June 30, respectively                                                             3,900                3,707
Additional paid-in capital                                                                20,732               17,904
Retained earnings - partially restricted                                                  13,195               13,794
Accumulated other comprehensive loss                                                     (3,254)              (1,552)
                                                                               ------------------     ----------------
     Total Stockholders' Equity                                                           34,573               33,853
                                                                               ------------------     ----------------
     Total Liabilities and Stockholders' Equity                                        $ 487,927            $ 451,158
                                                                               ==================     ================
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.


                                        3

<PAGE>
<TABLE>
<CAPTION>
                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollars in Thousands, Except for Per Share Amounts)

                                                                   (Unaudited)
                                                                Three Months Ended
                                                                    March 31,
                                                             ----------------------
                                                               2000         1999
                                                             --------     --------
<S>                                                           <C>          <C>
INTEREST INCOME:
  Loans                                                       $ 6,196      $ 5,656
  Investment securities and interest-bearing deposits           2,249        1,698
                                                              -------      -------
     Total interest income                                      8,445        7,354
                                                              -------      -------
INTEREST EXPENSE:
  Deposits                                                      3,281        3,140
  Securities sold under agreements to repurchase                 --              2
  Short-term borrowings                                         1,006          263
  Long-term borrowings                                            476          504
                                                              -------      -------
     Total interest expense                                     4,763        3,909
                                                              -------      -------
NET INTEREST INCOME                                             3,682        3,445
  Provision for loan losses                                       105           45
                                                              -------      -------
      Net interest income after provision for loan losses       3,577        3,400
                                                              -------      -------
OTHER INCOME:
  Investment services income, net                               1,064          871
  Service charges and fees                                        365          370
  Loss on trading account securities                             (131)        (133)
  (Loss) gain on sale of assets available for sale                 (1)          20
  Other                                                            22           42
                                                              -------      -------
     Total other income                                         1,319        1,170
                                                              -------      -------
OPERATING EXPENSES:
  Salaries and employee benefits                                2,120        1,790
  Occupancy and equipment                                         572          541
  Data processing                                                 210          195
  Deposit insurance premiums                                       18           44
  Other                                                           716          693
                                                              -------      -------
     Total operating expenses                                   3,636        3,263
                                                              -------      -------
  Income before income taxes                                    1,260        1,307
  Income tax expense                                              241          288
                                                              -------      -------
NET INCOME                                                      1,019        1,019
                                                              =======      =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                           <C>            <C>
EARNINGS PER SHARE (1)
  Basic                                                       $     .26      $         .26
                                                              =========      =============
  Diluted                                                     $     .26      $         .26
                                                              =========      =============
DIVIDENDS PER SHARE PAID DURING PERIOD (1)                    $     .09      $         .08
                                                              =========      =============
WEIGHTED AVERAGE SHARES OUTSTANDING (1)
  Basic                                                       3,892,105          3,871,534
                                                              =========      =============
  Diluted                                                     3,913,473          3,911,065
                                                              =========      =============
</TABLE>


 (1)  Earnings  per  share,  dividends  per share and  weighted  average  shares
      outstanding  have been  restated  to reflect  the  effects of the 5% stock
      dividend paid in September 1999.

     See accompanying notes to unaudited consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollars in Thousands, Except for Per Share Amounts)
                                                                     (Unaudited)
                                                                  Nine Months Ended
                                                                      March 31,
                                                              ---------------------------
                                                                 2000            1999
                                                              -----------      ----------
<S>                                                           <C>              <C>
INTEREST INCOME:
  Loans                                                       $    18,130      $   17,083
  Investment securities and interest-bearing deposits               6,942           4,433
                                                              -----------      ----------
     Total interest income                                         25,072          21,516
                                                              -----------      ----------
INTEREST EXPENSE:
  Deposits                                                         10,042           9,281
  Securities sold under agreements to repurchase                     --                 9
  Short-term borrowings                                             2,319             721
  Long-term borrowings                                              1,453           1,452
                                                              -----------      ----------
     Total interest expense                                        13,814          11,463
                                                              -----------      ----------
NET INTEREST INCOME                                                11,258          10,053
  Provision for loan losses                                           315             135
                                                              -----------      ----------
      Net interest income after provision for loan losses          10,943           9,918
                                                              -----------      ----------
OTHER INCOME:
  Investment services income, net                                   2,762           2,359
  Service charges and fees                                          1,247           1,099
  (Loss)gain on trading account securities                            (93)            247
  (Loss)gain on sale of assets available for sale                    (171)             98
  Other                                                               108             140
                                                              -----------      ----------
     Total other income                                             3,853           3,943
                                                              -----------      ----------
OPERATING EXPENSES:
  Salaries and employee benefits                                    5,805           5,082
  Occupancy and equipment                                           1,673           1,540
  Data processing                                                     634             580
  Advertising                                                         329             272
  Deposit insurance premiums                                          119             129
  Other                                                             1,887            1677
                                                              -----------      ----------
     Total operating expenses                                      10,447           9,280
                                                              -----------      ----------
  Income before income taxes                                        4,349           4,581
  Income tax expense                                                  895           1,295
                                                              -----------      ----------
NET INCOME                                                    $     3,454      $    3,286
                                                              ===========      ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                           <C>              <C>
 EARNINGS PER SHARE (1)
  Basic                                                       $       .89      $      .85
                                                              ===========      ==========
  Diluted                                                     $       .88      $      .85
                                                              ===========      ==========
DIVIDENDS PER SHARE PAID DURING PERIOD (1)                    $       .27      $      .22
                                                              ===========      ==========
WEIGHTED AVERAGE SHARES OUTSTANDING (1):
  Basic                                                         3,888,466       3,844,540
                                                              ===========      ==========
  Diluted                                                       3,915,766       3,887,030
                                                              ===========      ==========
</TABLE>

 (1)   Earnings  per share,  dividends  per share and  weighted  average  shares
       outstanding  have been  restated  to reflect  the effects of the 5% stock
       dividend paid in September 1999.


     See accompanying notes to unaudited consolidated financial statements.

                                        5
<PAGE>
<TABLE>
<CAPTION>
                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES
                    STATEMENTS OF OTHER COMPREHENSIVE INCOME
                             (Dollars in Thousands)
                                                                                               (Unaudited)
                                                                                           Three Months Ended
                                                                                               March 31,
                                                                                  -------------------------------------
                                                                                       2000                 1999
                                                                                  ----------------     ----------------
<S>                                                                                       <C>               <C>
OTHER  COMPREHENSIVE INCOME, NET OF TAX:
  Net income                                                                              $ 1,019           $1,019
  Net unrealized gains (losses) on securities available
     for sale during the period                                                                19             (245)
  Reclassification adjustment for gains included
     in net income                                                                              1              (13)

                                                                                  ----------------     ----------------
COMPREHENSIVE INCOME                                                                     $  1,039           $  761
                                                                                  ================     ================



                                                                                              (Unaudited)
                                                                                           Nine Months Ended
                                                                                               March 31,
                                                                                  -------------------------------------
                                                                                       2000                 1999
                                                                                  ----------------     ----------------
OTHER  COMPREHENSIVE INCOME, NET OF TAX:
  Net income                                                                             $ 3,454              $ 3,286
  Net unrealized (losses) on securities available
     for sale during the period                                                           (1,813)                (188)
  Reclassification adjustment for gains included
     in net income                                                                           111                  (51)

                                                                                  ----------------     ----------------
COMPREHENSIVE INCOME                                                                     $ 1,752              $ 3,047
                                                                                  ================     ================
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.

                                        6
<PAGE>
<TABLE>
<CAPTION>
                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)

                                                                                                  (Unaudited)
                                                                                          Nine Months Ended March 31,
                                                                                     ---------------------------------------
                                                                                           2000                  1999
                                                                                     ------------------    -----------------
<S>                                                                                       <C>                    <C>
Cash flows (used in) from operating activities:
Net income                                                                                $     3,454            $    3,286
Add (deduct) items not affecting cash flows from operating activities:
   Depreciation                                                                                    680                  638
   Provision for loan losses                                                                       315                  135
   Loss (gain) on trading account securities                                                        93                (247)
   Loss (gain) on sale of loans held for sale                                                        3                 (20)
   Loss (gain) on sale of securities available for sale                                            168                 (78)
   Amortization of deferred loan fees, discounts and premiums                                    (513)                (657)
   Decrease in trading account securities                                                        2,269                4,283
   Increase in accrued interest receivable                                                       (603)                (220)
   Increase in other assets                                                                      (160)              (1,659)
   (Decrease) increase in other liabilities                                                      (894)                2,981
   (Decrease) increase in accrued interest payable                                               (416)                  175
------------------------------------------------------------------------------------ ------------------ -- -----------------
Net cash flows from operating activities                                                         4,396                8,617
------------------------------------------------------------------------------------ ------------------ -- -----------------
Cash flows from (used in) investment activities:
   Capital expenditures                                                                          (677)              (1,815)
   Net increase in loans                                                                      (32,272)             (11,317)
   Proceeds from sale of loans held for sale                                                       197                1,457
   Purchase of investment securities                                                          (33,064)              (1,198)
   Proceeds from maturities, payments and calls of investment securities                         5,648                8,154
   Purchase of securities available for sale                                                  (40,569)             (75,596)
   Proceeds from sales and calls of securities available for sale                               53,554               25,581
------------------------------------------------------------------------------------ ------------------ -- -----------------
Net cash flows used in investment activities                                                  (47,183)             (54,734)
------------------------------------------------------------------------------------ ------------------ -- -----------------
Cash flows from (used in) financing activities:
   Net  (decrease) increase in deposits before interest credited                              (27,305)               27,293
   Interest credited to deposits                                                                10,677                8,243
   (Decrease) increase in securities sold under agreements to repurchase                            --                (104)
   Proceeds from FHLB advances                                                                  55,050               13,599
   Repayments of FHLB advances                                                                    (48)              (2,925)
   Decrease in advance payments by borrowers for taxes and insurance                           (1,055)                (715)
   Net increase (decrease) in other borrowings                                                      41                (183)
   Cash dividends on common stock                                                              (1,032)                (822)
   Repayments of principal on ESOP debt                                                             --                (147)
   Common stock issued                                                                             463                  392
   Payment for fractional shares                                                                   (7)                 (15)
   Stock options exercised                                                                          75                   88
   Reduction of common stock acquired by ESOP                                                       --                  147
   Common stock repurchased                                                                      (531)                   --
------------------------------------------------------------------------------------ ------------------ -- -----------------
Net cash flows from financing activities                                                        36,328               44,851
------------------------------------------------------------------------------------ ------------------ -- -----------------
Net decrease in cash and cash equivalents                                                      (6,459)              (1,266)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                        <C>                   <C>
Cash and cash equivalents:
   Beginning of period                                                                          18,603               15,905
                                                                                     ------------------    -----------------
   End of period                                                                           $    12,144           $   14,639
                                                                                     ==================    =================

Supplemental disclosures:
   Cash payments during the year for:
      Taxes                                                                                $       858           $    1,347
      Interest                                                                             $    14,230           $   11,288



Non-cash items:
   Net unrealized loss on investment securities available for sale, net of tax             $    (1,702)          $     (239)
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                        7
<PAGE>
                           CHESTER VALLEY BANCORP INC.
                                AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Chester Valley Bancorp Inc. (the "Company") is a unitary thrift holding company,
incorporated in the Commonwealth of Pennsylvania in 1989. The Company is subject
to the regulations of certain  federal and state banking  agencies and undergoes
periodic  examinations  by those  regulatory  authorities.  The  business of the
Company and its subsidiaries  consists of the operations of First Financial Bank
("First  Financial" or the "Bank"), a  Pennsylvania-chartered  stock savings and
loan association  founded in 1922, and  Philadelphia  Corporation for Investment
Services ("PCIS"),  a full service investment advisory and securities  brokerage
firm.  The Bank  provides a wide range of banking  services  to  individual  and
corporate  customers  through its branch banks in Chester County,  Pennsylvania.
All of the branches are full service and offer commercial and retail deposit and
loan products.  These  products  include  checking  accounts  (non-interest  and
interest-bearing),  savings  accounts,  certificates of deposit,  commercial and
installment  loans, real estate mortgages,  and home equity loans. The Bank also
offers ancillary services,  including trust services and money management,  that
complement  these products.  The Bank is subject to extensive  competition  from
other  financial   institutions  and  other  companies  that  provide  financial
services. PCIS is registered as a broker/dealer in all 50 states and Washington,
DC and it is also  registered as an investment  advisor with the  Securities and
Exchange  Commission.   PCIS  provides  many  additional   services,   including
self-directed and managed retirement  accounts,  safekeeping,  daily sweep money
market funds, portfolio and estate valuations, life insurance and annuities, and
margin accounts, to individuals and small corporate accounts.


Principles of Consolidation and Presentation

The accompanying  consolidated  financial statements include the accounts of the
Company and its  wholly-owned  subsidiaries,  the Bank and PCIS. The accounts of
the Bank include its wholly-owned  subsidiary, D & S Service Corp., which owns D
& F  Projects  and  Wildman  Projects,  Inc.,  both of  which  are  wholly-owned
subsidiaries thereof. All material  inter-company balances and transactions have
been eliminated in  consolidation.  Prior period amounts are  reclassified  when
necessary to conform with the current period's presentation.

                                        8
<PAGE>

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance with instructions to Form 10-Q. Accordingly,  they do not include all
of the  information  and  footnotes  required by generally  accepted  accounting
principles ("GAAP") for complete financial statements. However, such information
reflects all adjustments which are, in the opinion of management,  necessary for
a fair presentation of results for the unaudited interim periods.

The results of operations for the three- and nine-month  periods ended March 31,
2000,  are not  necessarily  indicative  of the results to be  expected  for the
fiscal  year  ending  June  30,  2000.  The  consolidated  financial  statements
presented  herein should be read in  conjunction  with the audited  consolidated
financial  statements  and the notes thereto  included in the  Company's  Annual
Report to Stockholders for the fiscal year ended June 30, 1999.

Earnings Per Share

The dilutive  effect of stock options is excluded from basic  earnings per share
but included in the  computation  of diluted  earnings  per share.  Earnings per
share and weighted average shares  outstanding for the periods  presented herein
have been  adjusted  to reflect  the  effects of the 5% stock  dividend  paid in
September 1999.


                                        9
<PAGE>

The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
                                                             Three Months Ended                          Nine Months Ended
                                                                  March 31,                                  March 31,
                                                   ----------------------------------------    -------------------------------------
                                                                   (Dollars in Thousands, Except for Per Share Amounts)

                                                        2000                  1999                  2000                  1999
                                                   ----------------     -----------------     ----------------     ----------------
<S>                                                      <C>                   <C>                   <C>                   <C>
Numerator:
   Net income                                              $ 1,019               $ 1,019                $3,454               $ 3,286
                                                   ================     =================    =================      ================
Denominator:
   Denominator for basic earnings    per
share-weighted average
   shares                                                3,892,105             3,871,534             3,888,466             3,844,540

Effect of dilutive securities:
   Stock options                                            21,368                39,531                27,300                42,490
                                                   ----------------     -----------------    -----------------      ----------------

Denominator for diluted earnings
   per share-adjusted weighted
   average shares and assumed
   exercise                                              3,913,473             3,911,065             3,915,766             3,887,030
                                                   ================     =================      ================     ================

Basic earnings per share                                   $   .26               $   .26               $   .89               $   .85
                                                   ================     =================      ================     ================

Diluted earnings per share                                 $   .26               $   .26               $   .88               $   .85
                                                   ================     =================      ================     ================
</TABLE>

                                       10

<PAGE>

NOTE 2 - LOANS RECEIVABLE

Loans receivable are summarized as follows:
<TABLE>
<CAPTION>
                                                               At March 31,                      At June 30,
                                                                   2000                             1999
                                                        ---------------------------     ------------------------------
                                                                            (Dollars in Thousands)
<S>                                                                   <C>                               <C>
           First mortgage loans:
              Residential                                             $    166,436                       $    157,342
              Construction-residential                                      17,548                             14,469
              Land acquisition and
                 development                                                 5,152                              5,075
              Commercial                                                    64,425                             55,198
              Construction-commercial                                       14,562                              9,794
           Commercial business                                              17,866                             14,708
           Consumer                                                         60,087                             51,416
                                                        ---------------------------     ------------------------------

           Total loans                                                     346,076                            308,002
                                                        ---------------------------     ------------------------------
           Less:
              Undisbursed loan proceeds:
                 Construction-residential                                 (11,720)                            (8,712)
                 Construction-commercial                                   (5,428)                            (2,681)
              Deferred loan fees - net                                     (1,659)                            (1,570)
              Allowance for loan losses                                    (3,829)                            (3,651)
                                                        ---------------------------     ------------------------------

           Net loans                                                 $    323,440                       $    291,388
                                                        ===========================     ==============================
</TABLE>


NOTE 3 - COMMITMENTS

Commitments to potential  mortgagors of the Bank amounted to $6.57 million as of
March 31, 2000, of which $5.80 million was for variable-rate  loans. The balance
of the commitments represents $771,000 of fixed-rate loans (primarily consisting
of single-family  residential mortgages) bearing interest rates of between 7.00%
and 9.00%.  At March 31,  2000,  the Company had $17.15  million of  undisbursed
construction  loan  funds as well as $20.49  million  of  undisbursed  remaining
consumer and commercial line balances.

                                       11
<PAGE>

NOTE 4 - REGULATORY CAPITAL

The Bank is subject to various regulatory capital  requirements  administered by
the federal banking agencies.  Failure to meet minimum capital  requirements can
result  in  the  initiation  of  certain   mandatory  and  possibly   additional
discretionary  actions by regulators  that, if implemented,  could have a direct
material  effect on the Company's  and the Bank's  financial  statements.  Under
capital adequacy  guidelines and the regulatory  framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities,  and certain off balance sheet items
as calculated under regulatory accounting practices.  The Bank's capital amounts
and classification  are also subject to qualitative  judgments by the regulators
about components, risk weightings, and other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below)  of  total  and  Tier  1  capital  (as  defined  in the  regulations)  to
risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average
assets  (as  defined).  At March  31,  2000  and  June 30,  1999 the Bank was in
compliance  with  all  such  requirements  and is  deemed  a  "well-capitalized"
institution  for  regulatory  purposes.  There are no conditions or events since
March 31, 2000 that management believes have changed the institution's category.

The Bank's  regulatory  capital amounts and ratios are presented in the table as
follows (dollars in thousands):
<TABLE>
<CAPTION>
                                                                                                     To Be Well Capitalized
                                                                                                     Under Prompt Corrective
                                                       Actual                 Adequacy Purposes        Action Provisions
                                                -------------------         --------------------      ---------------------
                                                Amount        Ratio         Amount         Ratio      Amount         Ratio
                                                ------        -----         ------         -----      ------         -----
<S>                                            <C>            <C>           <C>             <C>        <C>           <C>
As of March 31, 2000

   Total Capital
     (to Risk-Weighted Assets)                 $37,529        12.97%        $23,144         8.00%      $28,930       10.00%

   Tier 1 Capital
     (to Risk-Weighted Assets)                 $33,910        11.72%        $11,572         4.00%      $17,358        6.00%

   Tier 1 Capital
     (to Average Assets)                       $33,910         6.96%        $19,492         4.00%      $24,366        5.00%

As of June 30, 1999:

   Total Capital
     (to Risk- Weighted Assets)                $34,005        13.05%        $20,848         8.00%      $26,060       10.00%

   Tier 1 Capital
    (to Risk-Weighted Assets)                  $30,768        11.81%        $10,424         4.00%      $15,636        6.00%

   Tier 1 Capital
     (to Average  Assets)                      $30,768         6.86%        $17,934         4.00%      $22,418        5.00%
</TABLE>

                                       12

<PAGE>

NOTE 5 - SEGMENT REPORTING

The Company has two reportable  segments:  First Financial Bank ("the Bank") and
Philadelphia  Corporation for Investment Services ("PCIS").  The Bank operates a
branch bank network with eight full-service banking offices and provides deposit
and loan services to customers.  Additionally, the Bank offers trust services at
its  Downingtown,  Pennsylvania  headquarters.  PCIS  operates  a  full  service
investment  advisory and  securities  brokerage  firm through two offices.  Both
segments operate primarily in southeastern Pennsylvania.

The Company evaluates performance based on profit or loss from operations before
income taxes not including  nonrecurring gains and losses. There are no material
intersegment sales or transfers.

The  Company's  reportable  segments  have  traditionally  been two  independent
financial  services  institutions.  PCIS was  acquired by the Company on May 29,
1998.  The two segments are managed  separately.  All senior  officers from PCIS
prior to the acquisition have been retained to manage that segment.

The following table highlights  income  statement and balance sheet  information
for each of the segments at or for March 31, 2000 and 1999:
<TABLE>
<CAPTION>
                                                      At and for the three months ended March 31,
                                                               (Dollars in Thousands)
                             ------------------------------------------     ---------------------------------------------
                                               2000                                            1999
                             -------------------------------------------    ---------------------------------------------
                               Bank           PCIS            Total           Bank             PCIS            Total
                             -----------    -----------     ------------    ------------     ------------    ------------
<S>                           <C>              <C>            <C>            <C>                <C>            <C>
Net interest
    income                    $  3,659         $   23         $  3,682        $  3,433          $    12        $  3,445
Other income                       305          1,014            1,319             373              797           1,170
Total net income                   913            106            1,019             945               74           1,019
Total assets                   486,158          1,769          487,927         425,971            2,095         428,066
Total trading
    securities                $  6,409         $  450         $  6,859        $ 16,037          $   279        $ 16,316
</TABLE>
<TABLE>
<CAPTION>
                                                      For the nine months ended March 31,
                                                            (Dollars in Thousands)
                            ----------------------------------------      ---------------------------------------------
                                            2000                                              1999
                            ----------------------------------------       ---------------------------------------------
                              Bank            PCIS           Total           Bank             PCIS            Total
                           ------------    -----------    ----------      ------------    -------------    ------------
<S>                            <C>             <C>           <C>             <C>               <C>            <C>
Net interest
    income                     $11,182         $   76        $ 11,258        $ 10,000          $   53         $10,053
Other income                     1,242          2,611           3,853           1,679           2,264           3,943
Total net income               $ 3,192         $  262        $  3,454        $  3,028          $  258         $ 3,286
</TABLE>

                                       13

<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATION


In this Report,  the Company has included certain  "forward looking  statements"
concerning the future  operations of the Company.  It is management's  desire to
take  advantage  of the  "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform Act of 1995.  This  statement  is for the express  purpose of
availing the Company of the  protections of such safe harbor with respect to all
"forward  looking  statements"  contained in this  Report.  The Company has used
"forward  looking  statements"  to describe the future plans and  strategies and
future  financial  results.  Management's  ability to predict the results or the
effect of future plans and strategy is inherently uncertain.  Factors that could
affect results include interest rate trends,  competition,  the general economic
climate in Chester County,  the  mid-Atlantic  region and the United States as a
whole,  loan delinquency  rates,  changes in federal and state  regulation,  and
other  uncertainties  described in the Company's filings with the Securities and
Exchange  Commission.  These factors  should be  considered  in  evaluating  the
"forward  looking  statements",  and undue reliance should not be placed on such
statements.

                               FINANCIAL CONDITION

The Company's total assets  increased to $487.93 million at March 31, 2000, from
$451.16 million at June 30, 1999,  principally due to a $32.05 million  increase
in loans from $291.39  million at June 30, 1999 to $323.44  million at March 31,
2000,  and  to  a  lesser  extent,  a  $27.41  million  aggregate   increase  in
held-to-maturity  investment  securities to $35.21 million from $7.80 million at
June 30, 1999.  Such increases were funded in large part by increases in Federal
Home Loan Bank  ("FHLB")  advances  from  $50.38  million at June 30,  1999,  to
$105.38 million at March 31, 2000.

Stockholders'  equity increased $.72 million to $34.57 million at March 31, 2000
from $33.85  million at June 30,  1999.  The  increase in  stockholders'  equity
resulted from net income of $3.45 million,  the sale of $463,000 of common stock
in  connection  with the  Company's  dividend  reinvestment  plan,  and  $75,000
received from the exercise of stock options, partially offset by the increase in
net unrealized  losses on securities  available for sale of $1.70  million,  the
payment of cash dividends totaling $1.03 million and the repurchase of shares of
common stock for an aggregate cost of $531,000.

                                       14

<PAGE>
                              RESULTS OF OPERATIONS

Net interest income,  on a fully tax equivalent  basis,  increased 7.1% to $3.90
million for the  three-month  period ended March 31,  2000,  and 13.8% to $11.95
million  for the  nine-month  period  ended  March 31,  2000,  compared to $3.64
million and $10.5  million,  respectively,  for the same periods in 1999.  Total
interest income, on a fully tax equivalent basis, increased to $8.67 million and
$25.77 million for the three- and nine-month  periods ended March 31, 2000, from
$7.55  million and $21.96  million for the same periods in 1999,  primarily as a
result of increases in the average balance of interest-earning assets.

The average balance of interest-earning  assets increased to $461.87 million and
$453.05  million for the three- and  nine-month  periods  ended March 31,  2000,
respectively,  from $398.35 million and $381.59 million,  respectively,  for the
same periods in 1999.  The increases  were primarily due to a $24.90 million and
$48.40 million increase in the average balance of investment securities and to a
$36.13 million and $30.60 million  increase in the average  balance of net loans
during the  three-  and  nine-month  periods  in 2000,  respectively.  Partially
offsetting  the  effect on  interest  income  of the  increases  in the  average
balances were the 8  basis-point  and 11  basis-point  decreases in the yield on
interest-earning assets to 7.50% and 7.58% for the three- and nine-month periods
ended March 31, 2000, respectively, as the result of a minor decline in rates of
interest experienced during the period.

Total interest expense  increased to $4.76 million and $13.81 million from $3.91
million and $11.46 million for the respective  three- and nine-month  periods in
2000 and 1999,  largely as the result of the increase in the average  balance of
interest-bearing  liabilities  to $410.40  million and  $401.71  million for the
three- and nine-month periods ended March 31, 2000, respectively, as compared to
$348.49  million  and  $329.56  million  for the same  periods  in  1999.  These
increases were due to $26.69 million and $35.71 million increases in the average
balance of deposits  and $46.50  million  and $36.43  million  increases  in the
average  balance  of  borrowings  during  the  three  and  nine-month   periods,
respectively.  The  increase  in  interest  expense  was also the  result  of an
increase in the average rate paid on such liabilities to 4.64% and 4.58% for the
three- and nine-month periods ended March 31, 2000, respectively, from 4.60% and
4.55% for the same periods in 1999, as the result  primarily of increasing rates
of interest on borrowings and deposits despite management's continued efforts to
focus in the areas of low-costing or no-cost deposits.

The tax equivalent  interest rate spread  decreased to 3.00% from 3.03%, and the
average tax equivalent net yield on  interest-earning  assets decreased to 3.52%
from  3.67%  for  the  nine-month   periods  ended  March  31,  2000  and  1999,
respectively, due to the reasons discussed above.

                                       15
<PAGE>

Provision for Loan Losses

The Company provided $105,000 and $315,000 for loan losses during the three- and
nine-month periods ended March 31, 2000, respectively as compared to $45,000 and
$135,000,  respectively,  for the same periods in 1999.  The  provision  for the
three- and  nine-months  ending March 31, 2000 has increased over the three- and
nine-months  ending March 31, 1999 primarily as a result of an increase in loans
of $32.05 million since June 30, 1999.  These  provisions have been added to the
Company's  allowance for loan losses due to economic conditions and management's
assessment of the inherent risk of loss existing in the loan portfolio. At March
31, 2000,  the allowance  for loan losses  totaled $3.83 million or 1.17% of net
loans  (before  allowance),  compared to $3.65 million or 1.24% of net loans and
$3.40  million  or 1.18% of net loans at June 30,  1999,  and  March  31,  1999,
respectively.  As a percentage of non-performing  assets, the allowance for loan
losses  was 412% at March  31,  2000,  compared  to 391% at June 30,  1999,  and
further compared to 446% at March 31, 1999.

Other Income

Total other income  increased to $1.32  million and  decreased to $3.85  million
during the three- and nine-month periods ended March 31, 2000, respectively,  as
compared to $1.17 million and $3.94 million during the same periods in 1999. The
increase for the  three-month  period ended March 31, 2000 of $149,000  resulted
from the growth in investment service income of $193,000 offset by several minor
decreases.  The decrease of $90,000 for the  nine-month  period ending March 31,
2000  compared to the same period in 1999  resulted  from a decrease in gains on
trading account securities and sales of assets held for sale of $345,000 in 1999
plus  losses of $264,000  at March 31,  2000 for a total  decrease of  $609,000.
These decreases were partially offset by increases in investment  service income
of $403,000 and service charge and fees income of $148,000.

Operating Expenses

Total operating  expenses  increased $373,000 or 11.43% and $1,167,000 or 12.58%
to $3.64 million and $10.45 million, respectively, for the three- and nine-month
periods  ended March 31, 2000 as compared to the same time periods in 1999.  The
increase in operating  expenses for the three- and nine-month  periods in fiscal
2000 was due to (i) normal salary increases combined with benefits expense;  and
(ii) the  increased  number of staff  resulting  from the addition of the Bank's
eighth branch office that opened in March 1999 in Devon, Pennsylvania.

Income Tax Expense

Income tax expense  was  $241,000  and  $895,000  for the three- and  nine-month
periods ended March 31, 2000, respectively, as compared to $288,000 and $1.30

                                       16
<PAGE>

million for the same periods in 1999. The decrease in income tax expense for the
three- and nine-month periods ended March 31, 2000 is due to a higher portion of
the Company's pre-tax earnings comprised of tax-free interest income as compared
to the same period in 1999.  This caused the effective tax rate to decrease from
28.27% at March 31, 1999 to 20.58% at March 31, 2000.

                                  ASSET QUALITY

Non-performing  assets are comprised of non-accrual  loans and real-estate owned
("REO") and totaled  $729,171  and $933,000 at March 31, 2000 and June 30, 1999,
respectively.  Non-accrual  loans are loans on which the accrual of interest has
ceased because the collection of principal or interest payments is determined to
be doubtful by management.  It is the policy of the Company to  discontinue  the
accrual of interest when  principal or interest  payments are delinquent 90 days
or more (unless the loan  principal and interest are determined by management to
be fully secured and in the process of collection), or earlier, if the financial
condition of the borrower raises significant  concern with regard to the ability
of the borrower to service the debt in  accordance  with the current loan terms.
Interest income is not accrued until the financial  condition and payment record
of the borrower once again  demonstrate  the  borrower's  ability to service the
debt. At March 31, 2000, the Company did not have any loans greater than 90 days
delinquent which were accruing interest.  Non-performing  assets to total assets
and  non-performing  loans to total  assets  were both  .15% at March 31,  2000,
compared to .21% at June 30, 1999,  and .18% at March 31,  1999.  Non-performing
loans,  which totaled  $729,171 at March 31, 2000  consisted of 6  single-family
residential mortgage loans aggregating $573,000,  and 7 non-performing  consumer
and commercial business loans totaling $156,171.

At March 31, 2000, the Company's  classified  assets,  which consisted of assets
classified  as  substandard,  doubtful  or loss,  as well as REO,  totaled  $5.5
million  compared to $1.24  million at June 30,  1999,  and further  compared to
$1.30 million at March 31, 1999.  Included in assets  classified  substandard at
March 31, 2000 and 1999,  and at June 30, 1999,  were all loans 90 days past due
and loans which were less than 90 days delinquent but inadequately  protected by
the current  paying  capacity of the borrower or of the collateral  pledged,  or
which were subject to one or more  well-defined  weaknesses which may jeopardize
the satisfaction of the debt. The Company  maintains a $4.56 million  investment
in a long-term tax-free revenue bond which it had classified as substandard as a
result of a deterioration in cash flow for debt service. The investment has been
performing since its origination. Company management has met with the debtor and
a plan was presented to management to improve these deficiencies.

                                       17
<PAGE>

                         LIQUIDITY AND CAPITAL RESOURCES

Management  monitors  liquidity  daily and  maintains  funding  sources  to meet
unforseen changes in cash  requirements.  The Company's primary sources of funds
are deposits, borrowings,  repayments, prepayments and maturities of outstanding
loans  and  mortgage-backed  securities,  sales of  assets  available  for sale,
maturities of investment securities and other short-term investments,  and funds
provided from operations.  While scheduled loan and  mortgage-backed  securities
repayments and maturing  investment  securities and short-term  investments  are
relatively  predictable sources of funds, deposit flows and loan prepayments are
greatly  influenced  by the  movement  of interest  rates in  general,  economic
conditions and  competition.  The Company reviews and  periodically  adjusts the
pricing of its deposits to achieve a reasonable  deposit  balance.  Although the
Company's  deposits,  which  decreased  $16.6 million for the nine-month  period
ending March 31, 2000,  represent  the  majority of its total  liabilities,  the
Company has increased  borrowings  consisting  of $55 million in overnight  FHLB
advances to fund new loan growth and replace the  decrease in  deposits.  During
the   twelve-month   period  ending  March  31,  2001,  the  Company  will  have
approximately  $115  million in maturing  Certificates  of Deposit.  The Company
expects to retain these deposits by periodically adjusting deposit rates.

Liquidity management is both a daily and long-term function. Excess liquidity is
generally invested in short-term investments such as FHLB overnight deposits. On
a longer term basis,  the Company  maintains a strategy of  investing in various
lending and  investment  securities  products.  The Company  uses its sources of
funds to primarily fund loan commitments and maintain a substantial portfolio of
investment  securities,  and to meet its  ongoing  commitments  to pay  maturing
savings certificates and savings withdrawals. At March 31, 2000, the Company had
$6.57 million in commitments  to fund loan  originations.  In addition,  at such
date the Company had  undisbursed  loans in process  for  construction  loans of
$17.15 million and $20.49 million in undisbursed lines of credit.  Management of
the  Company  believes  that  the  Company  has  adequate  resources,  including
principal  prepayments  and  repayments of loans and  investment  securities and
borrowing capacity, to fund all of its commitments to the extent required.

The Company's current dividend policy is to declare a regular quarterly dividend
with the intent  that the level of the  dividend  per share be  reviewed  by the
Board of Directors on a quarterly  basis.  Dividends will be in the form of cash
and/or  stock  after  giving  consideration  to all  aspects  of  the  Company's
performance  for the quarter.  On November  17, 1999 and February 16, 2000,  the
Board  of  Directors  declared  quarterly  cash  dividends  of  $.09  per  share
respectively,  which  were paid on  December  17,  1999 and March 17,  2000,  to
stockholders of record as of December 3, 1999 and March 3, 2000.

The Bank is required under applicable federal regulations, to maintain specified
levels of liquid  investments  and qualifying  types of United States  Treasury,
federal agency
                                       18
<PAGE>

and other  investments  having  maturities  of five  years or less.  Regulations
currently  in effect  require the Bank to  maintain a liquid  asset ratio of not
less than 4% of its net withdrawable accounts plus short-term borrowings.  These
levels  are  changed  from time to time by the Office of Thrift  Supervision  to
reflect economic  conditions.  First Financial's  average  regulatory  liquidity
ratio for the month ended March 31, 2000 was 20.90%.

                        RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998 the Financial  Accounting  Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities."  This
statement (as amended by SFAS No. 137 in June 1999)  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other  contracts,   (collectively   referred  to  as
derivatives)  and for hedging  activities.  It requires that an entity recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position and measure those instruments at fair value. The accounting for changes
in the fair value of a derivative  depends on the intended use of the derivative
and the resulting  designation.  If certain conditions are met, a derivative may
be specifically designated as (a) a hedge of the exposure to changes in the fair
value of a recognized asset or liability or an unrecognized firm commitment, (b)
a hedge of the exposure to variable cash flows of a forecasted  transaction,  or
(c) a hedge of certain foreign currency exposures.  SFAS No. 133, as amended, is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
Earlier  adoption is permitted.  The Company has not determined  the impact,  if
any,  of  this   statement,   including   its   provisions   for  the  potential
reclassifications  of  investments  securities,  on  the  Company's  operations,
financial condition or equity.


                                       19
<PAGE>

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  primary  asset/liability  management  goal of the  Company is to manage and
control its interest rate risk, thereby reducing its exposure to fluctuations in
interest rates, and achieving sustainable growth in net interest income over the
long term. Other objectives of asset/liability  management include: (1) ensuring
adequate  liquidity and funding,  (2)  maintaining a strong capital base and (3)
maximizing net interest income opportunities.

In general,  interest rate risk is mitigated by closely  matching the maturities
or repricing  periods of  interest-sensitive  assets and liabilities to ensure a
favorable  interest  rate spread.  Management  regularly  reviews the  Company's
interest-rate sensitivity,  and uses a variety of strategies as needed to adjust
that sensitivity  within acceptable  tolerance ranges established by management.
Changing the relative  proportions of fixed-rate and adjustable-rate  assets and
liabilities  is  one of the  primary  strategies  utilized  by  the  Company  to
accomplish this objective.

The matching of assets and  liabilities  may be analyzed by examining the extent
to which such  assets  and  liabilities  are  "interest-rate  sensitive"  and by
monitoring an institution's  interest-sensitivity  gap. An  interest-sensitivity
gap is considered  positive when the amount of  interest-rate  sensitive  assets
exceeds the amount of  interest-rate  sensitive  liabilities  repricing within a
defined  period and is  considered  negative  when the  amount of  interest-rate
sensitive  liabilities  exceeds  the amount of  interest-rate  sensitive  assets
repricing within a defined period.

To provide a more accurate one-year gap position of the Company, certain deposit
classifications are based on the interest-rate  sensitive  attributes and not on
the  contractual  repricing   characteristics  of  these  deposits.   Management
estimates,  based on historical trends of the Bank's deposit accounts,  that 52%
of its money market and NOW accounts are  sensitive to interest rate changes and
that  7% of its  savings  deposits  are  sensitive  to  interest  rate  changes.
Accordingly,   these  interest   sensitive  portions  of  such  liabilities  are
classified in the less than one year categories with the remainder placed in the
over five years  category.  Deposit  products  with  interest  rates  based on a
particular   index  are   classified   according  to  the   specific   repricing
characteristic  of the index.  Deposit  rates other than time deposit  rates are
variable,  and changes in deposit  rates are  typically  subject to local market
conditions  and  management's  discretion  and are not indexed to any particular
rate.

Generally, during a period of rising interest rates, a positive gap would result
in an increase  in net  interest  income  while a negative  gap would  adversely
affect net interest income.  However,  the interest  sensitivity  table does not
provide a comprehensive representation of the impact of interest rate changes on
net interest income. Each category of assets or liabilities will not be affected
equally or

                                       20
<PAGE>

simultaneously  by changes in the general level of interest  rates.  Even assets
and liabilities which  contractually  reprice within the same period may not, in
fact, reprice at the same price or the same time or with the same frequency.  It
is also  important to consider  that the table  represents  a specific  point in
time.  Variations  can occur as the  Company  adjusts its  interest  sensitivity
position  throughout  the year.  For a  discussion  of the  potential  impact of
interest rate changes upon the market value of the Company's  portfolio  equity,
see "Market Risk" in the Company's Annual Report on Form 10-K for the year ended
June 30, 1999.  There has been no material change in the Company's  market value
of  portfolio  equity  since  June 30,  1999  except  as  reflected  in this 10Q
financial statement.

The Company  periodically  identifies certain loans as held for sale at the time
of origination,  primarily consisting of fixed-rate,  single-family  residential
mortgage  loans  which  meet  the   underwriting   characteristics   of  certain
government-sponsored  enterprises  (conforming  loans).  The  Company  regularly
re-evaluates  its policy and  revises it as deemed  necessary.  The  majority of
loans sold to date have consisted of sales to Freddie Mac of whole loans and 95%
participation  interests in  long-term,  fixed-rate,  single-family  residential
mortgage  loans in  furtherance  of the  Company's  goal of better  matching the
maturities and  interest-rate  sensitivity of its assets and  liabilities.  When
selling loans, the Company has generally retained servicing in order to increase
its non-interest  income. At March 31, 2000, the Company serviced $16.11 million
of mortgage loans for others. Sales of loans produce future servicing income and
provide funds for additional lending and other purposes.

                                       21
<PAGE>
<TABLE>
<CAPTION>
              Interest Rate Sensitivity Analysis at March 31, 2000
                             (Dollars in thousands)

                                                               More Than    More Than   More Than    More Than
                                                            Three Months   Six Months    One Year  Three Years
                                              Three Months       Through      Through     Through      Through   More Than
                                                or Less       Six Months     One Year Three Years   Five Years  Five Years   Total
                                              -------------  -----------  ----------  ----------- ------------ ----------- ---------
<S>                                                <C>          <C>         <C>         <C>          <C>         <C>      <C>
INTEREST-EARNING ASSETS:
   Loans (1)
        Real estate (2)                            $21,462      $19,770     $33,585     $84,999      $48,073     $43,091  $250,980
        Commercial                                   9,098        1,200       1,691       4,360        1,264         255    17,868
        Consumer                                     8,045        2,094       4,148      15,118       10,491      19,798    59,694
   Securities and interest-bearing deposits         33,924        3,317         855      18,116       23,771      60,322   140,305
                                              -------------  -----------  ----------  ---------- ------------ ----------- ---------

   Total interest-earning assets                   $72,529      $26,381     $40,279    $122,593      $83,599    $123,466  $468,847
                                              -------------  -----------  ----------  ---------- ------------ ----------- ---------

INTEREST-BEARING LIABILITIES:
   Savings accounts                                   $501         $501        $998          --           --     $25,202   $27,202
   NOW accounts                                        450          450         900          --           --      37,464    39,264
   Money market accounts                            44,699           --          --          --           --          --    44,699
   Certificate accounts                             66,853       19,730      29,914      67,625        8,094       3,223   195,439
   Borrowings                                       70,599        1,506       3,460      12,727       15,205       1,882   105,379
                                              -------------  -----------  ----------  ---------- ------------ ----------- ---------
   Total interest-bearing liabilities             $183,102      $22,187     $35,272     $80,352      $23,299     $67,771  $411,983
                                              -------------  -----------  ----------  ---------- ------------ ----------- ---------

Cumulative excess (deficit) of
interest-earning assets to interest-bearing     ($110,573)   ($106,379)   ($101,372)   ($59,131)     ($1,169)    $56,864   $56,864
                                                ==========   ==========   =========   =========     ========     =======   =======
liabilities
Cumulative ratio of interest rate-sensitive
   assets to interest rate-sensitive
  liabilities                                        39.6%         48.2%       57.9%       81.6%       100.3%      113.8%    113.8%
                                                     =====        =====       =====       =====       ======      ======    ======
Cumulative difference as a percentage of
   total assets                                     (22.7%)      (21.8%)      (20.8%)      12.1%         0.2%       11.7%     11.7%
                                                    ======       ======       ======      =====        =====       =====     =====
</TABLE>
(1) Net of undisbursed loan proceeds related to commercial and residential
    construction loans.
(2) Includes commercial mortgage loans.

            Certain   shortcomings  are  inherent  in  the  method  of  analysis
presented  in  the  table  above.  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, 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  loans,  have features which restrict  changes in interest rates
both on a short-term basis and over the life of the asset. Further, in the event
of changes in interest  rates,  prepayment  and early  withdrawal  levels  would
likely  deviate  significantly  from  those  assumed in  calculating  the table.
Finally,  the ability of many borrowers to service their  adjustable-rate  loans
may decrease in the event of an interest rate increase.

                                       22

<PAGE>

Part II.          Other Information

                  Item 1.  Legal Proceedings

                                    None

                  Item 2.  Changes in Securities and Use of Proceeds

                                    None

                  Item 3.  Defaults Upon Senior Securities

                                    Not Applicable.

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

                                    None

                  Item 5.  Other Information

                                    None

                  Item 6.  Exhibits and Reports on Form 8-K

                                    (a)  Exhibits

                                    Exhibit 27 Financial Data Schedule

(b)      Reports on Form 8-K

                                    None



                                       23
<PAGE>

                                   SIGNATURES

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


                                    Chester Valley Bancorp Inc.


Date        MAY-11-00               /s/ Ellen Ann Roberts
    -----------------------         -----------------------
                                    Ellen Ann Roberts
                                    Chairman and Chief Executive Officer


Date        MAY-11-00               /s/ Anthony J. Biondi
    -----------------------         ----------------------
                                    Anthony J. Biondi
                                    President and Chief Operating Officer


                                       24