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 September 30, 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)                 4,104,690
         ------------------------------                ------------
               (Title of Each Class)          (Number of Shares Outstanding
                                                  as of November 1, 2000)

<PAGE>


                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES

                                      INDEX
                                                                         Page
                                                                        Number
PART 1.  FINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS

           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
           September 30, 2000 and June 30, 2000 (Unaudited)                1

           CONSOLIDATED STATEMENTS OF OPERATIONS
           Three Months Ended September 30, 2000 and 1999 (Unaudited)      2

           STATEMENT OF OTHER COMPREHENSIVE INCOME
           Three Months Ended September 30, 2000 and 1999 (Unaudited)      3

           CONSOLIDATED STATEMENTS OF CASH FLOWS
           Three Months Ended September 30, 2000 and 1999 (Unaudited)      4

           NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS           5-12


Item 2 .MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                           13-17


Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
           RISK                                                          18-20

PART 2.  OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS                                               21

Item 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS                       21

Item 3.    DEFAULTS UPON SENIOR SECURITIES                                 21

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             21

Item 5.    OTHER INFORMATION                                               22

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K                                22

SIGNATURES                                                                 23

<PAGE>

                  CHESTER VALLEY BANCORP INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                          September 30,                June 30,
                                                                              2000                      2000
                                                                      ---------------------      -------------------
                                                                                          (Unaudited)
<S>                                                                              <C>                       <C>
ASSETS:
Cash in banks                                                                    $   5,473                 $  4,918
Interest-earning deposits                                                            9,524                    8,164
                                                                      --------------------       ------------------
     Total cash and cash equivalents                                                14,997                   13,082
Trading account securities                                                           6,774                   12,838
Investment securities available for sale                                            97,520                   92,468
Investment securities (fair value - September 30,
      $35,947, June 30, $39,020)                                                    36,381                   39,821
Loans receivable, less allowance for
      loan losses of $3,989 and $3,908                                             333,879                  331,306
Accrued interest receivable                                                          3,376                    3,456
Property and equipment - net                                                         8,917                    8,768
Other assets                                                                         5,000                    5,411
                                                                      ---------------------      -------------------
     Total Assets                                                                $ 506,844                $ 507,150
                                                                      =====================      ===================

LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits                                                                         $ 394,473                $ 378,478
Advance payments by borrowers for taxes and insurance                                1,070                    2,962
Federal Home Loan Bank advances                                                     71,272                   86,778
Other borrowings                                                                       471                      373
Accrued interest payable                                                             1,619                    1,648
Other liabilities                                                                    1,147                    1,409
                                                                      ---------------------      -------------------
     Total Liabilities                                                             470,052                  471,648
                                                                      ---------------------      -------------------

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;
      4,109,323 and 4,107,794 shares issued at September 30,
     and June 30, respectively                                                       4,109                    4,108
Additional paid-in capital                                                          24,061                   24,046
Treasury stock (5,050 shares at cost)                                                  (89)                      --
Retained earnings - partially restricted                                            11,238                   10,603
Accumulated other comprehensive loss                                                (2,527)                  (3,255)
                                                                      ---------------------      -------------------
     Total Stockholders' Equity                                                     36,792                   35,502
                                                                      ---------------------      -------------------
     Total Liabilities and Stockholders' Equity                                  $ 506,844                 $507,150
                                                                      =====================      ===================
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                        1


<PAGE>

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

<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                      September 30,
                                                                       --------------------------------------------
                                                                              2000                     1999
                                                                       --------------------     -------------------
                                                                                       (Unaudited)
<S>                                                                              <C>                     <C>
INTEREST INCOME:
  Loans                                                                          $   6,632               $   5,900
  Investment securities and interest-bearing deposits                                2,390                   2,342
                                                                       --------------------     -------------------
     Total interest income                                                           9,022                   8,242
                                                                       --------------------     -------------------
INTEREST EXPENSE:
  Deposits                                                                           4,301                   3,457
  Short-term borrowings                                                                613                     388
  Long-term borrowings                                                                 589                     526
                                                                       --------------------     -------------------
     Total interest expense                                                          5,503                   4,371
                                                                       --------------------     -------------------
NET INTEREST INCOME                                                                  3,519                   3,871
  Provision for loan losses                                                            105                     105
                                                                       --------------------     -------------------
      Net interest income after provision for loan losses                            3,414                   3,766
                                                                       --------------------     -------------------
OTHER INCOME:
  Investment services income, net                                                      935                     812
  Service charges and fees                                                             421                     399
  Gain (loss) on trading account securities                                            182                     (12)
  (Loss) gain on sale of assets available for sale                                     (11)                     13
  Other                                                                                 35                      46
                                                                       --------------------     -------------------
     Total other income                                                              1,562                   1,258
                                                                       --------------------     -------------------
OPERATING EXPENSES:
  Salaries and employee benefits                                                     1,980                   1,803
  Occupancy and equipment                                                              596                     540
  Data processing                                                                      230                     218
  Advertising                                                                          217                     105
  Deposit insurance premiums                                                            17                      48
  Other                                                                                802                     608
                                                                       --------------------     -------------------
     Total operating expenses                                                        3,842                   3,322
                                                                       --------------------     -------------------
  Income before income taxes                                                         1,134                   1,702
  Income tax expense                                                                   139                     422
                                                                       --------------------     -------------------
NET INCOME                                                                         $   995               $   1,280
                                                                       ====================     ===================
EARNINGS PER SHARE (1):
  Basic                                                                           $    .24                $    .31
                                                                       ====================     ===================
  Diluted                                                                         $    .24                $    .31
                                                                       ====================     ===================
DIVIDENDS PER SHARE PAID DURING PERIOD (1)                                        $    .09                $    .09
                                                                       ====================     ===================
WEIGHTED AVERAGE SHARES OUTSTANDING (1):
  Basic                                                                          4,105,703               4,084,305
                                                                       ====================     ===================
  Diluted                                                                        4,158,961               4,118,288
                                                                       ====================     ===================
</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 and 2000.


   See accompanying notes to unaudited consolidated financial statements.


                                        2


<PAGE>



                        CHESTER VALLEY BANCORP INC. AND SUBSIDIARY
                         STATEMENT OF OTHER COMPREHENSIVE INCOME
                                  (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                                     Three Months Ended
                                                                        September 30,
                                                                    --------------------
                                                                      2000         1999
                                                                    -------      -------
                                                                         (Unaudited)
<S>                                                                  <C>         <C>
 Net income                                                          $  995      $ 1,280

 Other Comprehensive income (loss), net of tax:
  Net unrealized holding gains (losses) on securities available
     for sale during the period                                         720       (1,531)
  Reclassification adjustment for losses (gains)
     included in net income                                               8           (1)
                                                                     ------      -------
COMPREHENSIVE INCOME (LOSS)                                          $1,723      $  (252)
                                                                     ======      =======
</TABLE>


     See accompanying notes to unaudited consolidated financial statements.






                                        3


<PAGE>



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

                                                                                                Three Months Ended September 30,
                                                                                                --------------------------------
                                                                                                     2000               1999
                                                                                                ------------       -------------
                                                                                                           (Unaudited)
<S>                                                                                              <C>                <C>
Cash flows from (used in) operating activities:
Net income                                                                                       $     995          $     1,280
Add (deduct) items not affecting cash flows from operating activities:
   Depreciation                                                                                        251                  226
   Provision for loan losses                                                                           105                  105
   (Gain) loss on trading account securities                                                          (182)                  12
   Loss (gain) on sale of securities available for sale                                                 11                  (13)
   Amortization of deferred loan fees, discounts and premiums                                         (223)                (210)
   Decrease in trading account securities                                                            6,311                  262
   Decrease (increase) in accrued interest receivable                                                   80                 (577)
   Increase in other assets                                                                           (149)              (1,212)
   Decrease in other liabilities                                                                      (262)                (329)
   Decrease in accrued interest payable                                                                (29)                (211)
--------------------------------------------------------------------------------------------------------------------------------
Net cash flows from (used in) operating activities                                                   6,909                 (667)
--------------------------------------------------------------------------------------------------------------------------------
Cash flows from (used in) investment activities:
   Capital expenditures                                                                               (400)                 (90)
   Net increase in loans                                                                            (2,579)             (13,716)
   Purchase of investment securities                                                                (2,011)                (757)
   Proceeds from maturities, payments and calls of investment securities                                59                1,096
   Purchase of securities available for sale                                                            --              (35,821)
   Proceeds from sales and calls of securities available for sale                                    1,675               21,526
--------------------------------------------------------------------------------------------------------------------------------
Net cash flows used in investment activities                                                        (3,256)             (27,762)
--------------------------------------------------------------------------------------------------------------------------------
Cash flows from (used in) financing activities:
   Net increase (decrease)in deposits before interest credited                                      12,005              (17,188)
   Interest credited to deposits                                                                     3,990                3,843
   Proceeds from FHLB advances                                                                      17,500               38,400
   Repayments of FHLB advances                                                                     (33,006)                 (15)
   Decrease in advance payments by borrowers for taxes and insurance                                (1,892)              (1,901)
   Net increase in other borrowings                                                                     98                   58
   Cash dividends on common stock                                                                     (352)                (333)
   Common stock issued                                                                                  --                  161
   Payment for fractional shares                                                                        (7)                  (7)
   Stock options exercised                                                                             146                   56
   Common stock repurchased as treasury stock                                                         (220)                (191)
--------------------------------------------------------------------------------------------------------------------------------
Net cash flows (used in) from financing activities                                                  (1,738)              22,883
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)  in cash and cash equivalents                                                1,915               (5,546)

Cash and cash equivalents:
   Beginning of period                                                                              13,082               18,603
                                                                                            ---------------     ----------------
   End of period                                                                               $    14,997           $   13,057
                                                                                            ===============     ================

Supplemental disclosures:
   Cash payments during the year for:
      Taxes                                                                                    $        77           $       54
      Interest                                                                                       5,532           $    4,582

Non-cash items:
   Stock dividend issued                                                                       $     3,344           $    3,014
   Net unrealized (loss) gain on investment securities available for sale, net of tax          $       728           $   (1,532)
   Transfer investment securities from held to maturity to available for sale                  $     5,319                   --

</TABLE>


See accompanying notes to unaudited consolidated financial statements.

                                        4

<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  eight  branch  offices  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 (both
non-interest and interest-bearing),  savings accounts,  certificates of deposit,
commercial  business and  installment  loans,  real estate  mortgages,  and home
equity loans.  The Bank also offers  ancillary  services 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.


                                        5
<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-month  period ended September 30, 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, 2000.

Earnings Per Share

The dilutive  effect of stock options is excluded from the  computation of 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 and 2000.




                                        6

<PAGE>



The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>

                                                                  Three Months Ended
                                                                    September 30,
                                                           -----------------------------------
                                                              2000                     1999
                                                           ----------              -----------
                                                            (Dollars in Thousands, Except
                                                                  Per Share Amounts)
                                                           -----------------------------------
<S>                                                         <C>                     <C>
Numerator:
   Net income                                              $      995               $    1,280
                                                           ==========               ==========

Denominator:
   Denominator for basic per share-
   weighted average shares                                  4,105,703                4,084,305

Effect of dilutive securities:
   Stock options                                               53,259                   33,983
                                                           ----------               ----------


Denominator for diluted earnings
   per share-adjusted weighted
   average shares and assumed
   exercise                                                 4,158,961                4,118,288
                                                           ==========               ==========

Basic earnings per share                                   $      .24               $      .31
                                                           ==========               ==========

Diluted earnings per share                                 $      .24               $      .31
                                                           ==========               ==========
</TABLE>
The  Company's  number of  antidilutive  stock  options was 0 and 94,206 for the
three month period ended September 30, 2000 and 1999, respectively

                                        7


<PAGE>



NOTE 2 -   LOANS RECEIVABLE

Loans receivable are summarized as follows:

<TABLE>
<CAPTION>


                                                          September 30,                  June 30,
                                                              2000                         2000
                                                    -----------------------      --------------------------
                                                                (Dollars in Thousands)
<S>                                                           <C>                         <C>
             First mortgage loans:
                Residential                                   $164,339                    $167,451
                Construction-residential                        18,080                      18,146
                Land acquisition and
                   development                                  10,686                      10,960
                Commercial                                      70,870                      66,221
                Construction-commercial                         18,617                      13,266
             Commercial business                                18,560                      19,358
             Consumer                                           63,466                      62,433
                                                    -------------------      ----------------------

             Total loans                                       364,618                     357,835
                                                    -------------------      ----------------------

             Less:
                Undisbursed loan proceeds:
                   Construction-residential                    (15,425)                    (15,578)
                   Construction-commercial                      (9,624)                     (5,330)
                Deferred loan fees - net                        (1,701)                     (1,713)
                Allowance for loan losses                       (3,989)                     (3,908)
                                                    -------------------      ----------------------

             Net loans                                        $333,879                    $331,306
                                                    ===================      ======================
</TABLE>


For  purposes of applying the  measurement  criteria  for  impaired  loans,  the
Company excludes large groups of smaller balance  homogeneous  loans,  primarily
consisting  of  residential  real  estate  loans and  consumer  loans as well as
commercial  business  loans with principal  balances of less than $100,000.  For
applicable loans, the Company evaluates the need for impairment recognition when
a loan becomes  non-accrual or earlier if, based on  management's  assessment of
the relevant  facts and  circumstances,  it is probable that the Company will be
unable  to  collect  all  proceeds  under  the  contractual  terms  of the  loan
agreement.  At and during the three- month period ended  September 30, 2000, the
recorded investment in impaired loans was not material.

                                        8

<PAGE>

NOTE 3 -   COMMITMENTS

Commitments to potential  mortgagors of the Bank amounted to $1.87 million as of
September  30, 2000,  of which $292 thousand was for  variable-rate  loans.  The
balance  of  the  commitments  represents  $1.57  million  of  fixed-rate  loans
(primarily consisting of single-family  residential  mortgages) bearing interest
rates of between 7.25% and 8.50%.  At September 30, 2000, the Company had $25.05
million of  undisbursed  construction  loan  funds as well as $12.60  million of
undisbursed remaining consumer and commercial line balances.

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
initiate  certain  mandatory and possibly  additional  discretionary  actions by
regulators  that,  if  undertaken,  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
adjusted total assets (as defined).  At September 30, 2000 and June 30, 2000 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  September  30, 2000 that  management  believes have changed the
institution's category.


                                        9

<PAGE>



The Bank's  regulatory  capital amounts and ratios are presented in the table as
follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                                    Required                To Be Well Capitalized
                                                                                   For Capital              Under Prompt Corrective
                                                       Actual                   Adequacy Purposes              Action Provisions
                                               -------------------              -----------------            -------------------

                                                Amount       Ratio              Amount      Ratio            Amount        Ratio
                                                ------       -----              ------      -----            ------        -----
<S>                                             <C>          <C>               <C>          <C>              <C>          <C>
As of September 30, 2000:

   Total Capital
     (to Risk Weighted Assets)                  $39,590      12.96%            $24,444      8.00%            $30,555      10.00%

   Tier 1 Capital
     (to Risk Weighted Assets)                  $35,769      11.71%            $12,222      4.00%            $18,333       6.00%

   Tier 1 Capital
     (to Adjusted Total Assets)                 $35,769       7.08%            $20,220      4.00%            $25,275       5.00%

As  of June 30, 2000:

   Total Capital
     (to Risk Weighted Assets)                  $38,662      12.80%            $24,104      8.00%            $30,130      10.00%

   Tier 1 Capital
    (to Risk Weighted Assets)                   $34,894      11.58%            $12,052      4.00%            $18,078       6.00%

   Tier 1 Capital
     (to Adjusted Total Assets)                 $34,894       6.88%            $20,276      4.00%            $25,345       5.00%
</TABLE>



NOTE 5 - SEGMENT REPORTING

The  Company  has two  reportable  segments:  First  Financial  and PCIS.  First
Financial 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  headquarters.  PCIS  operates a full
service investment  advisory and securities  brokerage firm through two offices.
Both segments operate 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 the segment.

                                       10


<PAGE>


The following table highlights  income  statement and balance sheet  information
for each of the segments at or for September 30, 2000 and 1999:

<TABLE>
<CAPTION>

                                                        At and during the three months ended September 30,
                                -----------------------------------------------------------------------------------------------
                                                     2000                                               1999
                                -----------------------------------------------    --------------------------------------------
                                   Bank              PCIS            Total             Bank            PCIS            Total
                                -----------------------------------------------------------------------------------------------
                                                                     (Dollars in Thousands)
<S>                               <C>                <C>           <C>               <C>               <C>            <C>
Net interest
    income                        $ 3,496            $ 23          $ 3,519           $ 3,848           $ 23           $ 3,871
Other income                          695             867            1,562               498            760             1,258
Total net income                      899              96              995             1,209             71             1,280
Total assets                      505,074           1,770          506,844           470,718          2,531           473,249
Total interest-
   bearing deposits                 8,359           1,165            9,524             3,562          1,689             5,251
Total trading
    securities                      6,546             228            6,774             8,483            464             8,947
</TABLE>



NOTE 6 - ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
         ACTIVITIES

On July 1, 2000, the Company adopted Statement of Financial Accounting Standards
No.  133  (SFAS  133),   "Accounting  for  Derivative  Instruments  and  Hedging
Activities",  as amended.  This statement  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
derivatives depends on 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.

The Corporation's  only derivative that requires separate  accounting under SFAS
133 is an interest-rate cap with a notional amount of $30.0 million which limits
3-month  LIBOR  to 7% for two  years  ending  September  30,  2002.  The cap was
recorded at the date of purchase on September 28, 2000,  in other  assets,  at a
cost of $114,000.  The fair market value ("FMV"), which at inception is equal to
the cost, is broken into two components:  the intrinsic value and the time value
of the cap.  The cap will be  marked-to-market  quarterly,  with  changes in the
intrinsic  value of the cap,  net of tax,  included in a separate  component  of
other comprehensive income and changes in the time value of the

                                       11

<PAGE>


cap included in interest  expense as required  under SFAS 133. In addition,  the
ineffective   portion,  if  any,  will  be  expensed  in  the  period  in  which
ineffectiveness  is determined.  It has been determined that the hedge is highly
effective and can  reasonably be expected to remain so.  Management is not aware
of any events that would result in the  reclassification  into earnings of gains
and losses that are currently reported in accumulated other comprehensive income
except for the change in the FMV of the interest rate cap which  pertains to the
time value of the hedging instrument.  The FMV is estimated using the calculated
FMV of similar instruments. The cap purchased on September 28, 2000 for $114,000
is the FMV as of September 30, 2000.

An  additional  provision  of SFAS 133 affords  the  opportunity  to  reclassify
investment securities between  held-to-maturity,  available-for-sale and trading
at the date of adoption.  Accordingly, the Company reclassified $5.32 million in
investment securities from held-to-maturity to available-for-sale.




                                       12
<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
including  management's  expectations of 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,  but are not
limited to, interest rate trends,  competition,  the general economic climate in
Chester County, Pennsylvania, 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  decreased  $306,000 to $506.84 million at September
30, 2000, from $507.15 million at June 30, 2000,  principally due to a decreases
in trading  account  securities of  approximately  $6.06 million and  investment
securities  held to maturity of $3.44 million.  These decreases were offset by a
$1.92 million  increase in cash and  equivalents,  an increase in loans of $2.57
million and an increase in  investment  securities  available  for sale of $5.05
million.  Total liabilities decreased $1.60 million,  which reflected the effect
of a $16.00 million increase in deposits,  primarily municipal  deposits,  which
was partially offset by a $15.51 million decrease in FHLB advances.

Stockholders'  equity increased $1.29 million to $36.79 million at September 30,
2000 from $35.50  million at June 30, 2000,  primarily as a result of a decrease
in net unrealized  losses on securities  available for sale of $728,000,  net of
taxes,  net income for the period of $995,000 and the exercise of stock  options
of $146,470.  These increases were offset in part by the payment of a $0.09 cash
dividend of $352,265,  the payment of  fractional  shares of 7,400  related to a
cash-in-lieu payment as part of the Company's most recent stock dividend and the
repurchase of shares of common stock totaling $220,000.





                                       13


<PAGE>
                              RESULTS OF OPERATIONS

Net interest income,  on a fully tax equivalent  basis,  decreased 7.5% to $3.80
million for the three-month  period ended September 30, 2000,  compared to $4.11
million  for the same  period in 1999.  Total  interest  income,  on a fully tax
equivalent  basis,  increased to $9.31 million for the three-month  period ended
September 30, 2000, from $8.48 million for the same period in 1999, primarily as
a result of the effect of an increase in the average balance of interest-earning
assets.

The average balance of interest-earning  assets increased to $477.29 million for
the  three-month  period ended  September 30, 2000, from $442.99 million for the
same period in 1999. The increase was primarily due to a $31.72 million increase
in the average  balance of loans  during the same period.  Interest  income also
increased  because  of the 14  basis-point  increase  in the  yield  to 7.80% on
interest-earning  assets for the three-month period ended September 30, 2000, as
the result of increasing general market rates of interest.

Total  interest  expense  increased  25.9% to $5.50 million for the  three-month
period ended  September  30, 2000,  compared to $4.37 million for same period in
1999.  This was  largely the result of the  increase  in the average  balance of
interest-bearing liabilities to $450.03 million for the three-month period ended
September 30, 2000, as compared to $390.31  million for the same period in 1999.
This increase was  principally  due to a $48.85 million  increase in the average
balance of deposits during the same period. Also contributing to the increase in
interest expense was an increase in the average rate paid on such liabilities to
4.89% for the  three-month  period ended  September 30, 2000, from 4.48% for the
same period in 1999. This was primarily the result of increasing  general market
rates of interest during the period.

The tax equivalent  interest rate spread  decreased to 2.91% from 3.18%, and the
average tax equivalent net yield on  interest-earning  assets decreased to 3.19%
from  3.71%  for the  three-month  period  ended  September  30,  2000 and 1999,
respectively, due to the reasons discussed above.

Provision for Loan Losses

The Company  provided  $105,000 for loan losses  during the  three-month  period
ended September 30, 2000,  which was unchanged as compared to the same period in
1999. This provision was added to the Company's allowance for loan losses due to
current  economic  conditions  and  management's  assessment  of the  known  and
inherent risk of loss existing in the loan portfolio. At September 30, 2000, the
allowance  for loan losses  totaled  $3.99 million or 1.18% of net loans (before
allowance), compared to $3.91 million or 1.17% of net loans at June 30, 2000. As
a percentage of non-performing assets, the

                                       14
<PAGE>


allowance  for loan losses was 499% at  September  30, 2000  compared to 414% at
June 30, 2000, and further compared to 384% at September 30, 1999.

Other Income

Total other income  increased  $300,000 to $1.56 million during the  three-month
period ended  September  30, 2000 as compared to $1.26  million  during the same
period  in  1999.   Investment  services  income  increased  15.15%  during  the
three-month period ended September 30, 2000, compared to the same period in 1999
due to PCIS' increased  commission income resulting from an increase in customer
trading  activity  and an increase in money market fund fees  resulting  from an
increase in customer balances. In addition,  PCIS' advisory fee income increased
due to the continued implementation of PCIS' strategic plan to focus on advisory
services since such services  provides a more stable revenue stream for PCIS and
stabilizes  expenses  for  customers.  The Trust  Division,  which  offers  both
individual  and  corporate  clients  an  array of money  management,  trust  and
investment  services  including  portfolio  management,  estate  and  retirement
planning,  and self directed  individual  retirement accounts also increased its
fees during the period.  An increase in checking  account fees, as the result of
an  increased  number of  accounts,  and an  increase  in the fees earned on the
Bank's  debit  card,  due  to  increased  usage  and  an  increased   number  of
cardholders,  contributed to the increase of $22,000 in service charges and fees
during the three-month  period ended September 30, 2000. The Company  recognized
gains on trading  account  securities and sales of assets  available for sale of
$171,000  during the  three-month  period ended  September  30, 2000 compared to
$1,000 during the same period in 1999.

Operating Expenses

Total operating  expenses  increased  $520,000 or 15.7% to $3.84 million for the
three-month  period ended September 30, 2000 as compared to the same time period
in 1999. The increase in operating expenses for the three-month period in fiscal
2000 was due to (1) an increase  in the number of  employees  and normal  salary
increases  combined  with  increasing  benefits  expense;  (2)  an  increase  in
occupancy and equipment  expenses related to renovations to a loan office; (3) a
106.7% increase in advertising  costs due primarily to the Bank's image campaign
and the  advertising  of our new E products and (4) a 31.9% increase or $194,000
in other expenses with the largest increase being  approximately  $70,000 in the
consulting area.

Income Tax Expense

Income tax expense was $139,000 for the  three-month  period ended September 30,
2000,  compared to $422,000 for the same period in 1999.  The decrease in income
tax expense for the three-month period ended September 30, 2000 was due to lower


                                       15
<PAGE>

earnings,  a higher  portion of the  Company's  pre-tax  earnings  comprised  of
tax-free interest income as compared to the same period in 1999 and also because
of the tax credits related to low-income housing projects.

                                  ASSET QUALITY

Non-performing  assets are comprised of non-accrual  loans and real estate owned
("REO") and totaled  $800,000 and  $943,000 at  September  30, 2000 and June 30,
2000 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 September 30, 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 .16% at September  30, 2000 compared to .19% at June 30, 2000,
and .20% at September 30, 1999. Non-performing assets, which totaled $800,000 at
September  30, 2000  consisted of 7  single-family  residential  mortgage  loans
aggregating  $622,000 and non-performing  consumer and commercial business loans
totaling $178,000.

At September 30, 2000 the Company's classified assets, which consisted of assets
classified  as  substandard,  doubtful or loss,  as well as REO,  totaled  $1.49
million  compared to $1.59  million at June 30,  2000,  and further  compared to
$1.14 million at September 30, 1999.  Included in assets classified  substandard
at September  30, 2000 and 1999,  and at June 30,  2000,  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  also  includes in the
special  mention  category an  investment  with a balance of $4.19 million to an
extended term healthcare  provider which was performing but had  characteristics
which  warranted  management to classify it special  mention.  Although  special
mention  assets are not  considered or classified  as  substandard,  doubtful or
loss, they do have a potential  weakness which may, if not corrected,  result in
increased risk of loss at some future date.




                                       16

<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES

Management  monitors  liquidity  daily and  maintains  funding  sources  to meet
unforeseen 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 manages the pricing of its deposits to
maintain a deposit  balance  deemed  appropriate  and  desirable.  Although  the
Company's deposits represent the majority of its total liabilities,  the Company
has also utilized other borrowing sources, namely FHLB advances.

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 September 30, 2000, the Company
had $1.87 million in commitments to fund loan originations. In addition, at such
date the Company had  undisbursed  loans in process  for  construction  loans of
$25.05 million and $12.60 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 current and prior quarter and other  relevant  aspects.  On
August 18,  2000,  the Board of  Directors  declared a 5% stock  dividend  and a
quarterly cash dividend of $.09 per share,  both of which were paid on September
15, 2000, to stockholders of record as of September 1, 2000. Cash dividends from
the Holding  Company are primarily  dependent upon dividends paid to it by First
Financial,  which, in turn, are subject to certain  restrictions  established by
federal regulators and Pennsylvania law.

The Bank is required under applicable federal regulations, to maintain specified
levels of liquid  investments  and qualifying  types of United States  Treasury,
federal agency and other  investments  having  maturities of five years or less.
Regulations currently in effect

                                       17
<PAGE>

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 OTS to  reflect  economic  conditions.  First  Financial's
average  regulatory  liquidity  ratio for the month ended September 30, 2000 was
10.03%.


Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's  market risk arises primarily from the interest rate risk inherent
in its lending and deposit taking activities.  To that end,  management actively
monitors and manages its interest rate risk exposure. At September 30, 2000, the
Company's   management   believes  that  the  interest  rate  exposure  has  not
significantly changed since disclosed at June 30, 2000.

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 money
market, NOW and savings

                                       18
<PAGE>

deposits  are  sensitive  to interest  rate  changes.  Accordingly,  some of the
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  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. Although interest rate sensitivity gap
is a  useful  measurement  and  contributes  towards  effective  asset/liability
management,  it is  difficult to predict the effect of changing  interest  rates
solely on that measure. An alternative methodology is to estimate the changes in
the Company's portfolio equity over a range of interest rate scenarios.

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 September 30, 2000, the Company  serviced  $15.48
million of mortgage loans for others.  Sales of loans produce  future  servicing
income and provide funds for additional lending and other purposes.

The following is an interest rate sensitivity analysis for the Bank at September
30, 2000.


                                       19
<PAGE>
            Interest Rate Sensitivity Analysis at September 30, 2000
                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                                More Than            More Than          More Than
                                                                                Three Months         Six Months         One Year
                                                         Three Months             Through            Through            Through
                                                              or Less          Six Months            One Year           Three Years
                                                       ---------------  ------------------  -------------------  ------------------
<S>                                                          <C>                  <C>                  <C>                 <C>
INTEREST-EARNING ASSETS:
   Loans: (1)
        Real estate (2)                                       $24,677             $17,130              $35,148             $89,068
        Commercial                                              9,971               1,147                2,042               3,763
        Consumer                                                7,449               2,316                4,595              16,852
   Securities and interest-bearing deposits                    38,823                 490                8,649              19,010
                                                       ---------------  ------------------  -------------------  ------------------

   Total interest-earning assets                              $80,920             $21,083              $50,434            $128,693
                                                       ---------------  ------------------  -------------------  ------------------

INTEREST-BEARING LIABILITIES:
   Savings accounts                                              $501                $501                 $998                 $--
   NOW accounts                                                   450                 450                  900                  --
   Money market accounts                                       46,414                  --                   --                  --
   Certificate accounts                                        59,476              21,322               80,095              74,812
   Borrowings                                                   8,980               1,532                  599              10,059
                                                       ---------------  ------------------  -------------------  ------------------
   Total interest-bearing liabilities                        $115,821             $23,805              $82,592             $84,871
                                                       ---------------  ------------------  -------------------  ------------------

Cumulative excess of interest-earning assets
   to interest-bearing liabilities                           ($34,901)           ($37,623)            ($69,781)           ($25,959)
                                                       ===============  ==================  ===================  ==================
Cumulative ratio of interest rate-sensitive
   assets to interest rate-sensitive liabilities                69.9%               73.1%                68.6%               91.5%
                                                       ===============  ==================  ===================  ==================
Cumulative difference as a percentage of
   total assets                                                 (6.9%)              (7.4%)               (13.8%)              (5.1%)
                                                       ===============  ==================  ===================  ==================
</TABLE>



<TABLE>
<CAPTION>

                                                           More Than
                                                           Three Years
                                                           Through            More Than
                                                           Five Years         Five Years              Total
                                                       ----------------  -----------------  ---------------
<S>                                                            <C>               <C>              <C>
INTEREST-EARNING ASSETS:
   Loans: (1)
        Real estate (2)                                        $44,503            $46,406         $256,932
        Commercial                                               1,358                277           18,558
        Consumer                                                11,791             20,083           63,086
   Securities and interest-bearing deposits                     24,779             61,009          152,760
                                                       ----------------  -----------------  ---------------

   Total interest-earning assets                               $82,431           $127,775         $491,336
                                                       ----------------  -----------------  ---------------

INTEREST-BEARING LIABILITIES:
   Savings accounts                                            $    --            $23,799          $25,799
   NOW accounts                                                     --             37,380           39,180
   Money market accounts                                            --                 --           46,414
   Certificate accounts                                          7,094              3,329          246,128
   Borrowings                                                    6,719             43,383           71,272
                                                       ----------------  -----------------  ---------------
   Total interest-bearing liabilities                          $13,813           $107,891         $428,793
                                                       ----------------  -----------------  ---------------

Cumulative excess of interest-earning assets
   to interest-bearing liabilities                             $42,659            $62,543          $62,543
                                                       ================  =================  ===============
Cumulative ratio of interest rate-sensitive
   assets to interest rate-sensitive liabilities                113.3%             114.6%           114.6%
                                                       ================  =================  ===============
Cumulative difference as a percentage of
   total assets                                                   8.4%              12.3%            12.3%
                                                       ================  =================  ===============
</TABLE>


(1)  Net of undisbursed loan proceeds.
(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.
                                       20

<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

                     The Company's  annual meeting of stockholders was
                     held on October 25, 2000.  The following  matters
                     were  presented  for  stockholder  action at such
                     meeting:

                     (1)   To elect three directors for a term of three years or
                           until their successors have been elected and
                           qualified:

                               Name                    Votes For Votes Withheld
                               ----                    --------- --------------
                               Edward T. Borer         3,279,238     55,090
                               Robert J. Bradbury      3,278,532     55,796
                               James E. McErlane       3,279,238     55,090

                     (2)   To ratify the appointment of KPMG LLP as the
                           Company's independent auditors for the fiscal year
                           ending June 30, 2001:

                           Votes For     Votes Against       Votes Abstained
                           ---------     -------------       ---------------
                           3,307,644       23,136                3,543

                     (3)   To increase the number of issuable shares under the
                           Company's 1997 Stock Option Plan by 315,000 shares.

                           Votes For     Votes Against       Votes Abstained
                           -----------   -------------       ---------------
                           2,351,445        154,850              12,776



                                       21
<PAGE>

                     Item 5.   Other Information
                               On October 6, 2000, the Company's Chairman of the
                               Board  and  Chief  Executive  Officer,  Ellen Ann
                               Roberts,  passed away.  On October 25, 2000,  the
                               Board of Directors appointed James E. McErlane as
                               Chairman  of the Board and on  November  6, 2000,
                               Donna M. Coughey  assumed the duties of President
                               and Chief Executive Officer of the Company.


                     Item 6.   Exhibits and Reports on Form 8-K

                               Exhibit 27 Financial Data Schedule


                                       22

<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   11-10-00                          /s/ Donna M. Coughey
    -------------                        -----------------------------------
                                         Donna M. Coughey
                                         President and Chief Executive Officer


Date   11-10-00                          /s/ Albert S. Randa
    -------------                        -----------------------
                                         Albert S. Randa, CPA
                                         CFO and Treasurer



                                       23