Exhibit 13

Annual Report to Shareholders



Exhibit 13 was sent under separate cover

or is enclosed herein.



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Since going public in 1999 First
Place has remained steadfast in its quest to be a premier provider of comprehensive financial services to businesses and households alike. We cannot be a full service financial partner unless we seamlessly provide all the pieces of the puzzle. To
that end, we have worked hard to expand our traditional product lines beyond banking. This requires the investment of time and capital as we pursue that delicate balance between growth and financial performance. That hard work is paying off.



For fiscal 2003 we achieved $1.29 earnings per share
(EPS) and a 9.23% return on equity (ROE). In 2002 EPS was $1.16 and ROE was 8.54%. That represents an increase of 11.2% for EPS.



These results would not have been possible without a significant contribution from our mortgage professionals, who set a company record by originating
over $1 billion in mortgage loans. This is a 67% increase over 2002. Clearly, we were in the midst of a record setting mortgage environment and took advantage of it. To assist in this growth, new loan production offices were established in Toledo,
Cincinnati and Pepper Pike, Ohio.



Our Business Financial
Services (BFS) division has been operating in what can best be described as a perplexing economy. Despite the economic environment, we added $37 million in loans to commercial and industrial clients during the past fiscal year and
increased our commercial deposits by an astounding $56 million. In April, we expanded our business product line to include Business On-Line Banking, an increasingly popular service that makes it simple for our business customers to conduct more
efficient, secure and profitable cash management. BFS will continue to focus on achieving solid lending opportunities with minimal delinquencies that will propel us into the future.



Despite a challenging economy for many of our customers, we remain committed to reducing delinquencies using tighter
management practices and sound underwriting. As a result, delinquencies dropped from $19.2 million to $17.7 million at June 30, 2003.



Investors and savers were also challenged this past year due to uncertain markets along with plummeting deposit rates. Our customer relationships,
however, are more than just rate driven, they are people driven. Over the past year, total deposits grew by $47 million, the bulk of which was in core deposit accounts. We attribute those successes to our Service to People culture, which targets
external as well as internal customers. During 2003 we developed our own Circle of Sales training format and a dynamic customer appreciation program that identifies and rewards our most loyal customers. As a result of these efforts we continue to be
number one in market share in the combined Trumbull, Mahoning and Portage county markets.



Fiscal 2003 saw several corporate growth initiatives take root. In January of 2003, we acquired the APB Financial Group, Ltd. located in Warrendale, PA. APB specializes as an employee benefit consulting firm and
provides wealth management services for businesses and individuals. Their first task was to create an in-bank investment center for our customer base. In addition, APB works closely with our BFS division allowing First Place to provide its business
clients with a unique combination of products and services. This acquisition fills a critical piece in our corporate puzzle. APB will also serve as the foundation for a new Private Banking service line to be developed in fiscal 2004.



We are committed to continuing our growth in mortgage banking and will build
on the success of 2003. This fall we will open a loan production office in Columbus. Once again, another critical piece of our growth plan will be in place. Once open, First Place will have a loan production office in every major metropolitan area
in Ohio. In addition, we are currently assembling a wholesale lending business unit to serve correspondent lenders in multiple states. This new group will be fully functional in September 2003.



Also in the fall of 2003 we will open our initial First Place Financial
Center in Solon, Ohio. This newly developed business model will leverage our successful residential mortgage loan production offices with other high margin capabilities like Business Financial Services, Commercial Real Estate, Insurance and
Wealth Management. The First Place Financial Center for businesses and individuals will house a flexible team of professionals who will be managed to aggressively serve the clients banking and investment needs in a truly integrated
and seamless approach.



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In January we acquired APB Financial Group,
Ltd., a critical puzzle piece, allowing us to provide wealth management services for businesses and consumers.



Solon and the adjacent East Cleveland suburbs represent four of the fastest growing cities in Northeast Ohio. Future sites will be opened in similar high
growth markets where individual and business customers desire to do business with an innovative team of professionals who completely understand their needs and offer financial solutions.



Our performance and growth would not be possible if our management team did not grow, evolve, and adapt. Our vision and
success could not have been imagined or achieved without the contributions of Mr. Jeffrey L. Francis who recently retired as President and Chief Operating Officer. On behalf of the Board of Directors and staff of First Place I want to express a
heartfelt thank you to Mr. Francis. His leadership and experience was critical in the creation of First Place.



As a result of Mr. Francis retirement and other business opportunities, our team has changed and grown. Mr. Albert Blank has been promoted to the
role of Chief Operating Officer and Mr. David Mead to Chief Financial Officer of First Place Bank. Mr. Bruce Wenmoth recently joined the organization as our senior retail lending officer. Mr. Kenton Thompson has also joined the organization as
Regional President and President of Wealth Management Services. Mr. Thompson will focus on spearheading our growth into new markets and developing Private Banking as a new service line. We welcome these changes and look forward-to the significant
contributions they will make as First Place continues to grow.



I want to especially thank our talented group of First Place employees for their dedication and passion. It is truly a privilege to be a part of this team.



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Steven R. Lewis

President and Chief Executive Officer



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Selected Financial and Other
Data



|                                                              |  | At June 30,                 
|------------------------------------------------------------- |  | ----------------------------
|                                                              |  | 2003                        
|                                                              |  | (Dollars in thousands)      
|Selected Financial Condition Data:                            |  |                             
|Total assets                                                  |  | $                           
|Loans receivable, net                                         |  |                             
|Loans held for sale                                           |  |                             
|Allowance for loan losses                                     |  |                             
|Nonperforming assets                                          |  |                             
|Securities available for sale                                 |  |                             
|Deposits                                                      |  |                             
|Federal Home Loan Bank advances                               |  |                             
|Repurchase agreements                                         |  |                             
|Total shareholders equity                                    |  |                             
|                                                              |  | For the Years Ended June
30,
|                                                              |  | 2003                        
|                                                              |  | (Dollars in thousands)      
|Summary of Earnings:                                          |  |                             
|Total interest income                                         |  | $                           
|Total interest expense                                        |  |                             
|                                                              |  |                             
|Net interest income                                           |  |                             
|Provision for loan losses                                     |  |                             
|                                                              |  |                             
|Net interest income after provision for loan losses           |  |                             
|Total noninterest income (1)                                  |  |                             
|Total noninterest expense (2) (3)                             |  |                             
|                                                              |  |                             
|Income before income tax and minority interest                |  |                             
|Provision for income tax                                      |  |                             
|Minority interest in income (loss) of consolidated subsidiary |  |                             
|                                                              |  |                             
|Net income                                                    |  | $                           
|                                                              |  |                             



|(1) |  | For the year ended June 30, 2001, noninterest income included $4.8 million in losses on loans and securities resulting from the balance sheet restructuring associated with the
merger with FFY.
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|(2) |  | For the year ended June 30, 2001, noninterest expense included merger, integration and restructuring charges of $3.9 million for the merger with FFY.
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|(3) |  | For the year ended June 30, 1999, noninterest expense included an $8.0 million contribution to the First Place Bank Community Foundation.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



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|                                                                        |  | For the Years Ended June 30, |       
|----------------------------------------------------------------------- |  | ---------------------------- | ------
|                                                                        |  | 2003                         |       
|Selected Financial Ratios and Other Data:                               |  |                              |       
|Performance Ratios (1):                                                 |  |                              |       
|Return on average assets                                                |  |                              | 1.08  
|Return on average equity                                                |  |                              | 9.23  
|Interest rate spread                                                    |  |                              | 2.98  
|Net interest margin, fully taxable equivalent                           |  |                              | 3.21  
|Noninterest expense to average assets                                   |  |                              | 2.38  
|Efficiency ratio                                                        |  |                              | 56.24 
|Average interest-earning assets to average interest-bearing liabilities |  |                              | 108.69
|Dividend payout ratio                                                   |  |                              | 38.76 
|Capital Ratios:                                                         |  |                              |       
|Equity to total assets at end of period                                 |  |                              | 11.72 
|Average equity to average assets                                        |  |                              | 11.74 
|Tangible capital to adjusted total assets (2)                           |  |                              | 8.20  
|Tier 1 capital to adjusted total assets (2)                             |  |                              | 8.20  
|Tier 1 capital to risk weighted assets (2)                              |  |                              | 13.12 
|Total capital to risk weighted assets (2)                               |  |                              | 14.03 
|Asset Quality Ratios:                                                   |  |                              |       
|Nonperforming assets as a percent of total assets                       |  |                              | 0.88  
|Allowance for loan losses as a percent of loans                         |  |                              | 1.07  
|Net charge-offs to average loans                                        |  |                              | 0.29  
|Allowance for loan losses as a percent o nonperforming loans            |  |                              | 75.15 
|Per Share Data:                                                         |  |                              |       
|Basic net income (loss) (3)                                             |  | $                            | 1.31  
|Diluted net income (loss) (3)                                           |  |                              | 1.29  
|Dividends declared                                                      |  |                              | .50   
|Tangible book value per share at year end                               |  |                              | 11.97 
|Cash dividends per common share                                         |  |                              | 0.50  



|(1) |  | For the year ended June 30, 2001, the ratios reflect $4.8 million in restructuring losses and $3.9 million in merger, integration and restructuring charges associated with the
merger with FFY. The performance ratios include the $8.0 million contribution to the Foundation in the year ended June 30, 1999.
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|(2) |  | Regulatory capital ratios of First Place Bank.
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|(3) |  | Net loss per share for 1999 represents the loss from the mutual-to-stock conversion date, December 28, 1998, through June 30, 1999.
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General



First Place Financial Corp. (Company) was formed as a thrift holding company
as a result of the conversion of First Place Bank (Bank), formerly known as First Federal Savings and Loan Association of Warren, from a federally-chartered mutual savings and loan association to a federally-chartered stock savings and loan
association in December of 1998.



On May 12, 2000, the Company
acquired The Ravenna Savings Bank (Ravenna) in a tax-free exchange accounted for as a purchase. The Company reissued treasury stock valued at $23.9 million on the date the transaction was consummated to acquire all of the outstanding shares of
Ravenna. At the date of acquisition, Ravenna was merged into the Bank.



On December 22, 2000, the Company completed the merger of equals transaction with FFY Financial Corp. (FFY). FFY was merged into the Company, and FFYs thrift subsidiary, FFY Bank, was merged into the Bank. The Company issued 6,887,022
shares of common stock valued at approximately $68.3 million in the transaction with FFY. The transaction was recorded as a purchase and, accordingly, the operating results of FFY have been included in the Companys consolidated financial
statements since the date of acquisition.



The Company changed
the name of its thrift subsidiary, First Federal Savings and Loan Association of Warren, to First Place Bank as part of the merger transaction with FFY. The Bank is a community-oriented financial institution engaged primarily in gathering deposits
to originate one-to-four family residential mortgage loans, consumer loans and commercial loans. The Bank currently operates 24 full service offices in three counties and 12 loan production offices located throughout Ohio.



Managements discussion and analysis represents a review of the
Companys consolidated financial condition and results of operations. This review should be read in conjunction with the consolidated financial statements and footnotes.



Forward-Looking Statements



When used in this Annual Report, or in future filings with the Securities and Exchange Commission, in press releases or other public or shareholder
communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases will likely result, are expected to, will continue, is anticipated,
estimate, project or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may cause the Companys actual results to be materially different from those indicated. Such statements are subject to certain risks and uncertainties including changes in economic
conditions in the market areas the Company conducts business, which could materially impact credit quality trends, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in the market areas the Company conducts
business, and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The Company undertakes no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or unanticipated events.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Financial Condition



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General. Assets at June 30, 2003 totaled $1,558.6 million compared to $1,590.9 million at June 30,
2002, a decrease of $32.3 million or 2%. The decrease was due primarily to a reduction of securities and federal funds sold partially offset by an increase in other assets. More detailed explanations of the changes that resulted in the decrease are
provided below.



Loans.Total loans decreased
from $906.0 million at June 30, 2002 to $901.4 million at June 30, 2003. The loan portfolio, and particularly mortgage loans, were strongly influenced by low interest rates and the effect they had on loan origination volume. Real estate loan
balances of $615.5 million, including residential mortgage and construction loans, accounted for approximately 68% of total loans at June 30, 2003. Real estate loans, primarily residential mortgage loans, decreased $41.3 million or 6.3% from June
30, 2002. The decrease reflected a high level of mortgage refinancing activity and the Companys strategy to sell to the secondary market eligible fixed rate mortgages. In order to maintain and grow internal assets, the Company will seek to
retain ownership of adjustable rate mortgages that it originates to replace the assets lost due to the normal amortization of portfolio loans.



Mortgage loan originations for the year ended June 30, 2003 were $1.0 billion, an increase of $415 million or 67% from $623 million for the year ended
June 30, 2002. The Company opened four loan production offices during the year. Of these four new offices, one was opened in the third fiscal quarter and two were opened in the fourth fiscal quarter. In total, the new loan production offices did not
materially contribute to the increase in mortgage originations in the current fiscal year compared to the total of originations in the prior fiscal year. During the year ended June 30, 2003, the Company sold loans with an aggregate principal balance
of $680.1 million. This was an increase of 46% or $215.7 million over the total for the year ended June 30, 2002 of $464.4 million. The Company will continue to pursue a mortgage banking strategy that will include selling the majority of the
fixed-rate production that is eligible in order to minimize investment in long-term, fixed-rate assets that have the potential to expose the Company to long-term interest rate risk.



Commercial loans and commercial real estate loans totaled $124.0 million at June 30, 2003, an increase of $37.5 million or
43.4% from $86.5 million at June 30, 2002. The increase was primarily due to originations of commercial real estate loans attributable to the Companys expansion of commercial lending activities. Commercial and commercial real estate loans
accounted for approximately 14% of total loans at June 30, 2003.



Consumer loans totaled $162.0 million at June 30, 2003, essentially unchanged from $162.8 million at June 30, 2002. Home equity loan balances increased to $84.5 million at June 30, 2003, an increase of 27.8% or $18.4 million from $66.1
million at June 30, 2002. The increase in home equity loan balances were offset by a decline in automobile loan balances. The Company has not aggressively competed for automobile loans due to the financing incentives and cash-back rebates offered by
the auto industry.



In the quarter ended in September, 2002 the
Bank began offering deferred presentment consumer loans, also referred to as payday loans, in the state of Texas through an agency relationship established with CNG Financial Corporation (CNG). Subsequently, the Company was directed by the Office of
Thrift Supervision (OTS) to discontinue making payday loans. The Company discontinued lending activity under this program and completed an orderly exit from this program in April, 2003.



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Nonperforming
Assets.Nonperforming assets consist of loans past due greater than 90 days, nonaccrual loans, restructured loans and repossessed assets. There were no loans at June 30, 2003 or at June 30, 2002 past due greater than 90 days and still
accruing interest. At June 30, 2003, nonperforming assets consisted of $11.6 million in nonaccrual loans, $1.2 million in restructured loans, and $996,000 in repossessed assets. Nonperforming assets totaled $13.8 million at June 30, 2003 compared to
$12.6 million at June 30, 2002. The increase in nonperforming assets was due primarily to an increase of one-to-four family mortgage loans. At June 30, 2002, nonperforming assets consisted of $10.3 million in nonaccrual loans, $1.4 million in
restructured loans and $908,000 of repossessed assets. The ratio of the allowance for loan losses to nonperforming loans was 75% at June 30, 2003 compared to 81% at June 30, 2002. Nonperforming assets as a percentage of total assets were 0.88% at
June 30, 2003 compared to 0.79% from the previous year-end.



Provision and Allowance for Loan Losses. The provision for loan losses represents the charge to income necessary to adjust the allowance for loan losses to an amount that represents managements assessment of the
estimated probable credit losses inherent in the loan portfolio that have been identified at each balance sheet date. All lending activity contains associated risks of loan losses. At June 30, 2003, the allowance for loan losses totaled 1.07% of
gross loans outstanding, an increase from 1.04% at June 30, 2002. Total net charge-offs for fiscal 2002 totaled $2.7 million compared to $3.3 million for the fiscal year ended June 30, 2002. The provision for loan losses for 2003 was $2.9 million
compared to $3.0 million for the year ended June 30, 2002.



Management analyzes the adequacy of the allowance for loan losses regularly through reviews of the performance of the loan portfolio considering economic conditions, changes in interest rates and the effect of such changes on real estate
values, changes in the composition of the loan portfolio, and trends in past due and nonperforming loans. The allowance for loan losses is a material estimate that is particularly susceptible to significant changes in the near term and is
established through a provision for loan losses based on managements evaluation of the risk inherent in the Companys loan portfolio and the general economy. Such evaluation, which includes a review of all loans for which full
collectibility may not be reasonably assured, considers among other matters, the estimated fair value of the underlying collateral, economic conditions, historical loan loss experience and other factors that management believes warrants recognition
in providing for an adequate loan loss allowance. Additionally, the Company utilizes an outside party to conduct an independent review of commercial and commercial real estate loans. Future additions to the allowance for loan losses will be
dependent on these factors. Management believes that the allowance for loan losses was adequate at June 30, 2003.



Securities.The securities portfolio decreased $116.5 million, or 25.2%, from $462.9 million at June 30, 2002, to $346.4 million at June 30,
2003 and represented approximately 22% of total assets at year-end. The decrease was primarily due to amortization and to highly accelerated prepayment speeds of mortgage-backed securities due to lower interest rates and mortgage refinancings. Also
contributing to the decrease was the sale of certain securities that were anticipated to have very rapid prepayments due to continued low interest rates.



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Other Assets.The increase in other assets was due to the increase in trade receivables for
mortgage loans originated and sold into the secondary market but not yet settled as of the fiscal year end that totaled $115.1 million, an increase of $80.4 million compared to the prior year. Additionally, an investment of $15.0 million in bank
owned life insurance was made during the year to partially offset anticipated increases in the costs of employee health and benefit programs.



Deposits.Total deposits were $1,108.5 million at June 30, 2003, an increase of $47.1 million, or 4.4%, compared to $1,061.4 million at June
30, 2002. The growth in the deposit portfolio came predominantly in money market accounts, which increased by $55.7 million during the year. Non-interest bearing checking balances grew $10.6 million primarily in business checking accounts.
Certificate of deposit balances declined $13.8 million primarily due to a shift of deposits to short-term liquid products. Lower-cost deposits continued to replace certificates of deposit in the deposit mix, and represented 49.4% of the deposit
portfolio at fiscal 2003 year-end compared to 45.8% twelve months ago. The Company regularly monitors competition within its market area and structures deposit rates to remain competitive within the market and to attract and retain customers.



Other Borrowings. Securities sold under
agreements to repurchase declined to $9.5 million at June 30, 2003 compared to $63.7 million at June 30, 2002. The decrease was due to scheduled maturities. Federal Home Loan Bank (FHLB) advances decreased to $236.0 million at June 30, 2002 compared
to $247.5 million at June 30, 2002. The decrease was also due to the scheduled repayment of principal on these advances. The maturities of repurchase agreements and FHLB advances were not replaced because of the growth in deposits and the
Companys improving liquidity position. The Company monitors borrowings as part of its liquidity management, cash flow, and asset/liability management. Future borrowing commitments will depend on these factors and other changes in the balance
sheet.



Capital Resources.Total
shareholders equity at fiscal year end 2003 totaled $182.7 million, compared to $185.3 million at June 30, 2002, a slight decrease of 1.4%. The decrease was primarily attributable to the repurchase of treasury shares from the Companys
ongoing buy-back program, partially offset by an increase in retained earnings. During fiscal year 2003, the Companys board of directors authorized a stock repurchase program in July and also in March to repurchase up to 750,000 shares per
each authorization of the Companys common stock over a twelve-month period in open market transactions or in privately negotiated transactions in accordance with applicable regulations of the Securities and Exchange Commission. During the
year, the Company repurchased 887,000 shares at an average price of $17.03. At June 30, 2003, there were 718,000 shares remaining under the stock buy-back program approved March 19, 2003. Stock repurchase programs are a component of the
Companys strategy to reduce/invest excess capital after consideration of market and economic factors, the effect on shareholder dilution, adequacy of capital, effect on liquidity and an assessment of alternative investment returns. Shares
repurchased by the Company may be used to meet the Companys requirements for common shares under its dividend reinvestment plan, stock option or other stock based plans and for general corporate purposes such as expansion and acquisitions or
future capital requirements.



Office of Thrift Supervision
(OTS) regulations require savings institutions to maintain certain minimum levels of regulatory capital. Additionally, the regulations establish a framework for the classification of savings institutions into five categories: well-capitalized,
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undercapitalized,
significantly undercapitalized and critically undercapitalized. Generally, an institution is considered well-capitalized if it has a core (Tier 1) capital ratio of at least 5.0% (based on adjusted total assets); a core (Tier 1) risk-based capital
ratio of at least 6.0%; and a total risk-based capital ratio of at least 10.0%. The Bank had capital ratios above the well-capitalized levels at June 30, 2003 and 2002.



Comparison of Results of Operations for Years Ended June 30, 2003 and 2002



General.The Company recorded net income for the year ended
June 30, 2003 of $16.7 million, an increase of 2.8% or $0.5 million, from net income of $16.2 million for the year ended June 30, 2002. Diluted earnings per share for the year ended June 30, 2003 were $1.29, an increase of 11.2% compared to $1.16
for the year ended June 30, 2002. The increase on a per share basis was due primarily to an increase in non-interest revenues and a reduction in shares outstanding arising from treasury stock purchases. For fiscal 2003, returns on average equity
(ROE) and average assets (ROA) were 9.23% and 1.08%, respectively, compared to 8.54% and 0.99% for fiscal 2002.



Net Interest Income.The table below titled Average Balances, Interest Rates, and Yieldsprovides important information on factors
impacting net interest income and should be read in conjunction with this discussion of net interest income. Interest income for the year ended June 30, 2003 totaled $87.4 million, a decrease of $17.7 million from $105.1 million for the year ended
June 30, 2002. Interest income on loans totaled $69.7 million for the year ended June 30, 2003 compared to $79.3 million for the year ended June 30, 2002, a decrease of $9.6 million. The decrease in interest income on loans was primarily due to a
reduction in the average yield on loans of 69 basis points to 7.21%. Market interest rates continued at historically low levels throughout the fiscal year which created an environment favorable for residential one-to-four family mortgage holders to
refinance their existing mortgage or to secure a mortgage on a new residence. The accelerated prepayments of higher yielding mortgages contributed to the overall decline in the yield on the loan portfolio. Average loan balances, including loans held
for sale, decreased $34.6 million to $969.7 million compared to the prior fiscal year. The decrease was primarily due to a reduction in mortgage loan balances, partially offset by an increase in commercial loan balances. Interest income on
securities decreased $6.4 million and totaled $16.5 million for the year ended June 30, 2003 compared to $22.9 million for the prior year. The decrease in interest income on securities was due to a 116 basis point decline in the average yield on the
security portfolio and also due to a $37.6 million decrease in average balances, from $434.9 million for the year ended June 30, 2002 to $397.3 million for the year ended June 30, 2003. Interest income from other earning assets, primarily federal
funds sold, decreased $1.4 million due to a decrease in average balances of $52.5 million to $13.8 million for fiscal 2003 and also due to a 75 basis point decline in the average yield.



Interest expense for the year ended June 30, 2003 was $43.3 million, a decrease of $17.1 million from $60.4 million for the
prior year ended June 30, 2002. A reduction in average balances of interest-bearing liabilities of $92.3 million and a reduction in the average rate paid on interest-bearing liabilities of 102 basis points contributed to the decrease. Interest
expense on deposits decreased by $8.9 million from $39.7 million for the year ended June 30, 2002 to $30.8 million for the year ended June 30, 2003. The decrease in interest expense on deposits was primarily due to a decline in the average cost of
interest-bearing deposits from 3.83% for the prior year ended June 30, 2002 to 2.91% for the year ended

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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



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June 30, 2003, a decline of 92 basis points. Average interest-bearing deposit balances increased $21.9 million to
$1,057.2 million for the year ended June 30, 2003 compared to $1,035.3 million for the year ended June 30, 2002. The increase was due to growth in money market accounts partially offset by a decline in higher-costing time deposits. Interest expense
on borrowed funds was $11.3 million for the year ended June 30, 2003, a decrease of $4.5 million from the prior year. The decrease was primarily due to a combination of lower average balances of FHLB advances and reduced expense from interest rate
swaps that were terminated during the year. The expense recorded for the year ended June 30, 2003 attributable to the interest rate swaps was $3.5 million compared to $5.5 million for the year ended June 30, 2002. The interest rate swaps were
redeemed on August 9, 2002 at the fair value of $12.6 million, which was recorded as a component of other comprehensive income in shareholders equity, for a loss of $8.2 million net of tax. The loss is amortized to interest expense over the
remaining original terms of the individual interest rate swap contracts. The amount amortized to expense in future periods is expected to be less than what the net interest cost would have been in each period under the prevailing lower interest rate
environment that existed at the time the interest rate swaps were redeemed. Approximately 60% of this expense will be recognized within the first three fiscal years beginning in the year ended June 30, 2003 with the remainder to be recognized in
essentially equal annual increments through fiscal year 2010. Additional information can be found in the notes to the consolidated financial statements and in the Comparison of Results of Operations for Years Ended June 30, 2002 and 2001. Interest
expense on repurchase agreements declined $3.6 million to $1.3 million from $4.9 million for the prior year ended June 30, 2002. The decrease was due to a reduction in average balances caused by the scheduled maturity of the repurchase agreements.



Net interest income for the year ended June 30, 2003 totaled
$44.1 million versus $44.7 million for the year ended June 30, 2002, a slight decrease of $0.6 million or 1.3%. The net interest margin increased 20 basis points from 3.01% for the year ended June 30, 2002 to 3.21% for the year ended June 30, 2003.
The improvement in the net interest margin occurred from a reduction of low-yielding earning assets, a favorable shift in the deposit mix to lower cost deposits and a favorable impact of terminating the interest rate swaps.



Noninterest Income.Noninterest income increased 35% to $20.2
million in the year ended June 30, 2003 from $15.0 million for the prior year ended June 30, 2002. The increase was due primarily to gains on the sale of mortgage loans and revenues from non-bank businesses acquired in June, 2002 and January, 2003,
as discussed below, offset by a net loss from loan servicing income. Gains from the sale of loans totaled $13.4 million for the current fiscal year compared to $7.3 million in the prior year. The gains on loan sales were aided by the continuation
throughout the year of low mortgage interest rates, which resulted in high levels of residential mortgage origination activity. For fiscal 2003, mortgage loan sales totaled $680.1 million compared to $464.4 million in the prior year, an increase of
$215.7 million. The full-year net loss in loan servicing income was $5.0 million for the year ended June 30, 2003 compared to a net loss in the prior year of $0.6 million. Included in the current year were $2.4 million of non-cash charges for
impairment to the valuation of the mortgage servicing rights, or MSRs. Similar valuation adjustments to mortgage servicing rights for fiscal 2002 were negligible. Additionally, amortization of the related capitalized servicing asset is charged
against servicing income. Amortization was accelerated throughout fiscal 2003 as a result of rapid prepayments of serviced loans, which contributed to the overall level of losses on loan servicing income. The valuation of MSRs is a



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critical accounting
policy and the Company utilizes the services of two outside firms to support the valuation process. At June 30, 2003, the value of the MSRs was 0.69% of the loans being serviced.



Acquisitions of non-bank businesses contributed to an increase in noninterest income during fiscal 2003. They include
Coldwell Banker The Brokers Realty Group (June 2002); the remaining one-third interest in Coldwell Banker First Place Real Estate, Ltd. (July 2002); APB Financial Group, Ltd. (January 2003); and the majority ownership in TitleWorks Agency, LLC
(January 2003). These acquisitions added $3.1 million to other noninterest income for fiscal 2003 compared to the prior year.



Service charge income increased to $5.1 million in the year ended June 30, 2003, an increase of $0.7 million from $4.4 million for the year ended June 30,
2002. The increase was primarily attributable to revenues generated by transaction accounts. The Company reported net gains on sales of securities for fiscal year 2003 of $1.1 million compared to net gains of $1.6 million for fiscal year 2002.
During the current year the Company sold certain securities that were anticipated to have very rapid prepayments due to continued low interest rates.



Noninterest Expense.Noninterest expense for the year ended June 30, 2003 totaled $36.7 million compared to $32.6 million for the year ended
June 30, 2002, an increase of $4.1 million. The non-bank business acquisitions referenced above contributed $2.2 million to the increase in noninterest expense, as described more fully below. Salaries and benefits expense increased $2.1 million to
$18.4 million for the current fiscal year compared to $16.3 million for the prior year. The non-bank business acquisitions contributed $1.1 million to the increase in salaries and benefits expense. The balance of the increase was due to other
increases in wages, health benefits, and other employee benefits. Occupancy expenses were $5.8 million for the year ended June 30, 2003, an increase of $0.5 million over the prior fiscal year. Non-bank businesses added $0.4 million to occupancy
expense for the year ended June 30, 2003. Loan expenses were $1.5 million for the year ended June 30, 2003 compared to $0.9 million for the year ended June 30, 2002. The increase was attributable to the higher volumes of mortgage loans originated.
Other noninterest expenses increased $0.9 million to $7.1 million for the current fiscal year attributable primarily to the non-bank businesses acquired. The efficiency ratio was 56.2% for the current fiscal year compared to 54.5% for the prior
fiscal year.



Comparison of Results of Operations for Years Ended June 30,
2002 and 2001



General.The Company recorded
net income for the year ended June 30, 2002 of $16.2 million, an increase of $9.9 million, from net income of $6.3 million for the year ended June 30, 2001. Diluted earnings per share for the year ended June 30, 2002 were $1.16 compared to $0.54 for
the year ended June 30, 2001. Net income for the year ended June 30, 2001 included after-tax merger, integration and restructuring charges incurred for the merger with FFY which reduced fiscal year 2001 net income by $5.7 million or $0.48 per
diluted share. The merger, integration and restructuring charges included $3.1 million in after-tax charges related to restructuring of the balance sheet following the merger with FFY. This included losses incurred for loan securitizations and
losses on sales of mortgage-backed securities. The remaining $2.6 million in after-tax expense was related to various noninterest expense items, which are discussed below.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



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Net Interest Income.Interest income for the year ended June 30, 2002 totaled $105.1 million, an increase of $7.1 million from $98.0 million for the year ended June 30, 2001. Interest income on loans totaled $79.3 million for the year ended June 30, 2002
compared to $74.2 million for the year ended June 30, 2001, an increase of $5.1 million. The increase in interest income on loans was due to a $99.4 million increase in average balances, from $904.9 million for the year ended June 30, 2001 to
$1,004.3 million for the year ended June 30, 2002, primarily due to loans acquired in the merger with FFY offset by loan repayments and sale of fixed-rate loan production in fiscal 2002. The increase in income from higher average balances was
partially offset by a 29 basis point decline in average yield, from 8.19% during the year ended June 30, 2001 to 7.90% during the year ended June 30, 2002. Interest income on securities increased $1.7 million and totaled $22.9 million for the year
ended June 30, 2002 compared to $21.2 million for fiscal 2001. The increase in interest income on securities was primarily due to a $107.7 million increase in average balances, from $327.2 million for the year ended June 30, 2001 to $434.9 million
for the year ended June 30, 2002, due to securities acquired in the merger with FFY and the addition of securities due to the increase in liquidity during the fiscal year. The increase in interest income due to higher average balances was
substantially offset by a 151 basis point decline in average yield on the securities portfolio.



Interest expense for the year ended June 30, 2002 was $60.4 million, an increase of approximately $1.0 million from $59.5 million for the prior year ended
June 30, 2001. Interest expense on deposits increased by $1.2 million from $38.5 million for the year ended June 30, 2001 to $39.7 million for the year ended June 30, 2002. The increase in interest expense on deposits was primarily due to a $242.7
million increase in average interest-bearing deposit balances, from $792.6 million during the year ended June 30, 2001 to $1,035.3 million during the year ended June 30, 2002, resulting from deposits acquired in the merger with FFY and fiscal 2002
deposit growth. The increase in expense from higher average balances was partially offset by a 103 basis point decline in the average cost of interest-bearing deposits from 4.86% for the year ended June 30, 2001 to 3.83% for the year ended June 30,
2002.



Net interest income for the year ended June 30, 2002
totaled $44.7 million versus $38.6 million for the year ended June 30, 2001, an increase of $6.1 million. The net interest margin declined 15 basis points from 3.16% for the year ended June 30, 2001 to 3.01% for the year ended June 30, 2002. The
increase in net interest income was due primarily to higher average balances resulting from the merger with FFY, which was completed on December 22, 2000. Partially offsetting the favorable impact of the higher average balances was an increase in
the net interest expense of the Companys interest rate swap position. The interest rate swaps, which had a notional value of $140 million at June 30, 2002, were designated as cash flow hedges of certain FHLB advances. The swap position
provided that the Company pay a 6.50% fixed rate of interest and receive a variable rate. These interest rate swaps had a net interest expense of $5.5 million for the year ended June 30, 2002 compared to net interest expense of $701,000 for the year
ended June 30, 2001. At June 30, 2002, the unrealized after-tax loss included in shareholders equity associated with the swaps was $7.0 million.



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LOGOMANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Noninterest Income.Noninterest income increased significantly in the year ended June 30, 2002 primarily from gains on the sale of mortgage
loans originated during the year. Overall, noninterest income was $15.0 million for fiscal 2002, an increase of $12.0 million from $3.0 million recorded in the year ended June 30, 2001. Fiscal 2001 included the effect of balance sheet restructuring
transactions following the FFY merger. In December 2000, the Company restructured its balance sheet to provide additional liquidity and to reduce the interest rate risk directly resulting from the merger with FFY. The Company securitized $192.0
million in primarily one-to-four family mortgage loans and sold $149.4 million of the securities. In addition, $50.1 million in mortgage-backed and related securities were sold. The transactions resulted in a pre-tax loss of $4.8 million. Gains on
the sale of loans in fiscal 2002 were $7.3 million compared to a loss of $431,000 for the previous year. The restructuring transactions described above contributed a loss of $2.7 million on sale of loans for the year ended June 30, 2001. The gains
on loan sales in fiscal 2002 were aided significantly by the drop in mortgage rates throughout the year to historically low levels which resulted in high refinancing activity. For fiscal 2002, mortgage loan sales totaled $464.4 million, an increase
of $203.2 million over the year ended June 30, 2001. In July 2001, the Company opened two new loan production offices in Cleveland and one in Dayton. These offices contributed materially to the increase in loan origination volume.



The Company reported net gains on sales of securities for fiscal year 2002 of
$1.6 million compared to net losses of $1.1 million for fiscal year 2001. The fiscal 2002 gains primarily resulted from the sale of long-term fixed-rate securities sold to reduce the overall duration of the securities portfolio and improve the
Companys interest rate risk profile. The net loss in fiscal 2001 was primarily due to the effect of the restructuring transactions described above.



Service charge income increased $863,000 in the year ended June 30, 2002 attributable primarily to the merger with FFY in December 2000. The merger added
11 additional branches. The increase in revenue was primarily due to the larger customer base acquired in the merger. Other fee income increased $724,000 in the year ended June 30, 2002 attributable to increased revenues in the Companys
subsidiary insurance and real estate agencies.



Noninterest Expense.Noninterest expense for the year ended June 30, 2002 totaled $32.6 million compared to $30.2 million for the year ended June 30, 2001. Included in expenses for fiscal 2001 were $3.9 million in pre-tax
merger, integration and restructuring charges associated with the FFY merger. Of these charges, $1.6 million resulted from employee severance and voluntary retirement programs associated with integrating back office operations and eliminating
duplicate positions. At June 30, 2001, 32 employees had terminated employment in accordance with the programs. Prior to June 30, 2001, eight additional employees had been identified for severance subsequent to June 30, 2001 in accordance with the
programs. The aggregate salary and benefits of the individuals previously terminated and those identified to be terminated subsequent to June 30, 2001 totaled approximately $1.6 million. The Company also incurred approximately $900,000 of expense
related to the elimination of duplicate computer systems as a result of the merger. The system conversion was completed prior to June 30, 2001 and all computer systems and licenses no longer in use had been written off at that time. The Company
incurred approximately $1.4 million of additional one-time costs related to the FFY merger. These costs primarily included the costs of the Banks name change in conjunction with the merger.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



LOGO

Fiscal 2002 salaries and benefits expense increased $2.4 million to $16.3 million from $13.9 million for the
prior fiscal year. Approximately $1.5 million of the increase in expense for the year ended June 30, 2002 was due primarily to the full-year effect of employees added from the FFY merger. The remaining increase was attributable to the insurance and
real estate agencies.



Occupancy and equipment expense
increased $1.6 million to $5.3 million for the year ended June 30, 2002. This increase was also due primarily to the full-year effect of the addition of 11 retail offices and other facilities from the FFY merger.



Other expense for the year ended June 30, 2002 was $6.2 million compared to
$4.3 million for the year ended June 30, 2001. As with the other categories, the increase in the size of the organization due to the merger was the primary reason for the increase. The increase occurred in operational categories such as telephone,
postage, security, and supplies.



The Company adopted Statement
of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets on July 1, 2001. This statement requires that goodwill arising from business combinations no longer be amortized, but rather assessed regularly for
impairment. The adoption of this statement eliminated approximately $768,000 of goodwill amortization expense for fiscal 2002.



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Average Balances, Interest Rates
and Yields.The following table presents for the periods indicated the total dollar amount of fully taxable equivalent interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average
interest-bearing liabilities, expressed in both dollars and rates.



|For the Years Ended June 30,                                    |  | 2003                      |          
|--------------------------------------------------------------- |  | ------------------------- | ---------
|                                                                |  | AverageOutstandingBalance |          
|(Dollars in thousands)                                          |  |                           |          
|Assets                                                          |  |                           |          
|Interest-Earning Assets:                                        |  |                           |          
|Loans receivable, net(2)                                        |  | $                         | 969,692  
|Mortgage-backed and related securities(1)                       |  |                           | 139,521  
|Securities(1) (2)                                               |  |                           | 257,824  
|Other earning assets                                            |  |                           | 13,768   
|Federal Home Loan Bank stock                                    |  |                           | 21,937   
|                                                                |  |                           |          
|Total interest-earning assets                                   |  |                           | 1,402,742
|Cash and cash equivalents                                       |  |                           | 35,659   
|Other assets                                                    |  |                           | 111,136  
|Allowance for loan losses                                       |  |                           | (9,502   
|                                                                |  |                           |          
|Total assets                                                    |  | $                         | 1,540,035
|                                                                |  |                           |          
|Liabilities and Shareholders Equity                            |  |                           |          
|Interest-Bearing Liabilities:                                   |  |                           |          
|NOW and money market accounts                                   |  | $                         | 348,348  
|Savings accounts                                                |  |                           | 134,028  
|Time deposits                                                   |  |                           | 574,803  
|Repurchase agreements                                           |  |                           | 28,776   
|Federal Home Loan Bank advances                                 |  |                           | 204,654  
|                                                                |  |                           |          
|Total interest-bearing liabilities                              |  |                           | 1,290,609
|Noninterest-bearing liabilities                                 |  |                           | 36,622   
|Other liabilities                                               |  |                           | 32,027   
|                                                                |  |                           |          
|Total liabilities                                               |  |                           | 1,359,258
|Shareholders equity                                            |  |                           | 180,777  
|                                                                |  |                           |          
|Total liabilities and shareholders equity                       |  | $                         | 1,540,035
|                                                                |  |                           |          
|Net interest income/interest rate spread                        |  |                           |          
|                                                                |  |                           |          
|Net interest margin                                             |  |                           |          
|                                                                |  |                           |          
|Average interest-earning assets to interest-bearing liabilities |  |                           |          
|                                                                |  |                           |          



|(1) |  | Includes unamortized discounts and premiums. Average balance is computed using the carrying value of securities. The average yield has been computed using the historical amortized
cost average balance for available for sale securities.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Average yields are stated on a fully taxable equivalent basis.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



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|2002                      |   |  | 2001                |        
|------------------------- | - |  | ------------------- | -------
|AverageOutstandingBalance |   |  | InterestEarned/Paid |        
|$1,004,318                |   |  | $                   | 79,319 
|229,079                   |   |  |                     | 13,806 
|205,851                   |   |  |                     | 10,215 
|66,341                    |   |  |                     | 1,722  
|20,869                    |   |  |                     | 1,134  
|                          |   |  |                     |        
|1,526,458                 |   |  |                     | 106,196
|34,605                    |   |  |                     |        
|85,643                    |   |  |                     |        
|(9,677                    | ) |  |                     |        
|                          |   |  |                     |        
|$1,637,029                |   |  |                     |        
|                          |   |  |                     |        
|$   300,846               |   |  | $                   | 7,073  
|135,243                   |   |  |                     | 2,479  
|599,232                   |   |  |                     | 30,159 
|90,645                    |   |  |                     | 4,893  
|256,911                   |   |  |                     | 15,817 
|                          |   |  |                     |        
|1,382,877                 |   |  |                     | 60,421 
|28,133                    |   |  |                     |        
|35,923                    |   |  |                     |        
|                          |   |  |                     |        
|1,446,933                 |   |  |                     |        
|190,096                   |   |  |                     |        
|                          |   |  |                     |        
|$1,637,029                |   |  |                     |        
|                          |   |  |                     |        
|                          |   |  | $                   | 45,775 
|                          |   |  |                     |        
|                          |   |  |                     |        
|                          |   |  |                     |        
|                          |   |  |                     |        
|                          |   |  |                     |        



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Rate/Volume Analysis of Net Interest Income. The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing
liabilities. It distinguishes between the increase or decrease related to changes in balances and/or changes in interest rates. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes
attributable to (i) changes in volume (i.e., changes in volume multiplied by old rate) and (ii) changes in rate (i.e., changes in rate multiplied by old volume). For purposes of this table, changes attributable to both rate and volume, which cannot
be segregated, have been allocated proportionately to the change due to volume and the change due to rate.



|                                       |  | Year Ended June 30, 2003Compared to Year Ended June 30, 2002 |        |   |      |   |         | Year Ended June 30, 2002Compared to Year Ended June 30, 2001 |  |   |         |  
|-------------------------------------- |  | ------------------------------------------------------------ | ------ | - | ---- | - | ------- | ------------------------------------------------------------ |  | - | ------- | -
|                                       |  | Increase (Decrease) Due to                                   |        |   |      |   |         | Increase (Decrease) Due to                                   |  |   |         |  
|                                       |  | Volume                                                       |        |   | Rate |   |         | Net                                                          |  |   | Volume  |  
|                                       |  | (Dollars in thousands)                                       |       
|Interest-Earning Assets:               |  |                                                              |        |   |      |   |         |                                                              |  |   |         |  
|Loans receivable, net                  |  | $                                                            | (2,674 | ) |      | $ | (6,774  | )                                                            |  | $ | (9,448  | )
|Mortgage-backed and related securities |  |                                                              | (4,853 | ) |      |   | (1,688  | )                                                            |  |   | (6,541  | )
|Securities                             |  |                                                              | 2,271  |   |      |   | (2,441  | )                                                            |  |   | (170    | )
|Other earning assets                   |  |                                                              | (1,075 | ) |      |   | (392    | )                                                            |  |   | (1,467  | )
|Federal Home Loan Bank stock           |  |                                                              | 55     |   |      |   | (244    | )                                                            |  |   | (189    | )
|                                       |  |                                                              |        |   |      |   |         |                                                              |  |   |         |  
|Total interest-earning assets          |  |                                                              | (6,276 | ) |      |   | (11,539 | )                                                            |  |   | (17,815 | )
|                                       |  |                                                              |        |   |      |   |         |                                                              |  |   |         |  
|Interest-Bearing Liabilities:          |  |                                                              |        |   |      |   |         |                                                              |  |   |         |  
|NOW and money market accounts          |  |                                                              | 994    |   |      |   | (2,335  | )                                                            |  |   | (1,341  | )
|Savings accounts                       |  |                                                              | (22    | ) |      |   | (1,241  | )                                                            |  |   | (1,263  | )
|Time deposits                          |  |                                                              | (1,187 | ) |      |   | (5,150  | )                                                            |  |   | (6,337  | )
|Repurchase agreements                  |  |                                                              | (2,834 | ) |      |   | (807    | )                                                            |  |   | (3,641  | )
|Federal Home Loan Bank advances        |  |                                                              | (2,991 | ) |      |   | (1,552  | )                                                            |  |   | (4,543  | )
|                                       |  |                                                              |        |   |      |   |         |                                                              |  |   |         |  
|Total interest-bearing liabilities     |  |                                                              | (6,040 | ) |      |   | (11,085 | )                                                            |  |   | (17,125 | )
|                                       |  |                                                              |        |   |      |   |         |                                                              |  |   |         |  
|Net change in net interest income      |  | $                                                            | (236   | ) |      | $ | (454    | )                                                            |  | $ | (690    | )
|                                       |  |                                                              |        |   |      |   |         |                                                              |  |   |         |  



Asset/Liability Management and
Market Risk



Asset/liability management is the measurement
and analysis of the Companys exposure to changes in the interest rate environment. The objective of the Companys asset/liability management function is to maintain consistent growth in net interest income within the constraints of an
optimum earning asset mix, capital adequacy, liquidity and safety. Management analyzes the effects of interest rate changes on net portfolio value and net interest income over specified periods of time by evaluating the Companys mix of
interest-earning assets and interest-bearing liabilities in varied interest rate environments. The Company manages this risk on a continuing basis through the use of a number of strategies as an ongoing part of its business plan. Management
considers interest rate risk to be the Companys most significant market risk.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



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Income simulation techniques and
net portfolio value analysis are used to determine the Companys sensitivity to changes in interest rates. The models are based on actual cash flows and repricing characteristics for on and off balance sheet instruments, and incorporate
market-based assumptions regarding the impact of changing interest rates on certain assets and liabilities. These assumptions are inherently uncertain, and as a result, the model cannot precisely measure net interest income or precisely predict the
impact of fluctuations in interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and management strategies.



The income simulation modeling employed by the Company
measures changes in net interest income over the next twelve months resulting from hypothetical rising and declining interest rates. Key assumptions used in this model include (i) reinvestment of security and mortgage cash flows, (ii) loan
prepayment speeds, (iii) reinvestment of certificate of deposit maturities and (iv) deposit pricing strategies. Given a linear 200 basis point (bp) increase in interest rates, it is estimated net interest income for the Company would decrease by
3.4% over the next twelve months. The percentage change in net interest income is within the acceptable range established by the Companys board of directors. The Company has modeled the effect on net interest income of a 200 bp linear decrease
in interest rates and found the percentage change would also be within guidelines established by the board of directors. However, under the interest rate environment as of June 30, 2003, a declining 200 basis point scenario was not likely and
therefore provided no meaningful results.



The subsidiary Bank
measures the effect of interest rate changes on its net portfolio value (NPV), which is the difference between the estimated market value of the Banks assets and liabilities under different interest rate scenarios. Changes in NPV are measured
using interest rate shocks rather than linear changes in interest rates over a period of time as are assumed with the income simulation model. At June 30, 2003, the Banks NPV ratios, using interest rate shocks ranging from a 200 bp rise in
rates to a 100 bp decline in rates are shown in the following table. All values are within the acceptable range established by the board of directors.



|Net Portfolio Value (Bank only)
|-------------------------------
|Basis Point Change in Rates    
|+200                           
|+100                           
|Base                           
|-100                           



The Companys
sale of predominantly fixed-rate mortgage loans to Fannie Mae decreases the exposure to interest rate risk and provides income from sales and servicing. Additionally, the servicing asset hedges the Company against rising rates, as it becomes more
valuable in a rising rate environment, offsetting the decline in the value of other longer term assets in a rising rate environment.



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Liquidity



In general terms, liquidity is a measurement of the Companys ability
to meet its cash needs. The Companys objective in liquidity management is to maintain the ability to meet loan commitments, purchase securities or to repay deposits and other liabilities in accordance with their terms without an adverse impact
on current or future earnings. The Companys principal sources of funds are deposits, amortization and prepayments of loans, maturities, sales and principal receipts of securities, borrowings, repurchase agreements and operations.



The Bank is required by regulation to maintain sufficient liquidity to
ensure its safe and sound operation. Thus, adequate liquidity may vary depending on the Banks overall asset/liability structure, market conditions, the activities of competitors, and the requirements of its own deposit and loan customers.
Management believes that the Banks liquidity is sufficient.



Liquidity management is both a daily and long-term responsibility of management. The Bank adjusts its investments in liquid assets, primarily cash, short-term investments and other assets that are widely traded in the secondary market,
based upon managements assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and securities and (iv) the objective of its asset/liability management program. Along with its
liquid assets, the Company has additional sources of liquidity available including, but not limited to, the ability to obtain deposits by offering above-market interest rates and access to advances from the Federal Home Loan Bank.



Impact of Inflation



Consolidated financial data included herein has been prepared in accordance with generally accepted accounting principles
(GAAP). Presently, GAAP requires the Company to measure financial position and operating results primarily in terms of historical dollars. Changes in the relative value of money due to inflation or recession are generally not considered.



In managements opinion, changes in interest rates affect the
financial condition of the Company to a far greater degree than changes in the inflation rate. While interest rates are greatly influenced by changes in the inflation rate, they do not move concurrently. Rather, interest rate volatility is based on
changes in the expected rate of inflation, as well as changes in monetary and fiscal policy. A financial institutions ability to be relatively unaffected by changes in interest rates is a good indicator of its capability to perform in a
volatile economic environment. In an effort to protect itself from the effects of interest rate volatility, the Company reviews its interest rate risk position frequently, monitoring its exposure and taking necessary steps to minimize any
detrimental effects on the Companys profitability.



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



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Critical Accounting Policies



The Company follows financial accounting and reporting policies that are in accordance with generally accepted accounting principles in the United States
of America and conform to general practices within the banking industry. Some of these accounting policies are considered to be critical accounting policies. Critical accounting policies are those policies that require managements most
difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Application of assumptions different than those used by management could result in material
changes in the Companys financial position or results of operations. The Company has identified two accounting polices that are critical accounting policies and an understanding of these policies is necessary to understand the financial
statements. These two policies relate to determining the adequacy of the allowance for loan losses and the valuation of the mortgage servicing rights. Additional information regarding these policies is included in the notes to the consolidated
financial statements, Note 1 (Summary of Significant Accounting Polices), Note 3 (Loans), and the sections above captioned Provision and Allowance for Loan Losses and Noninterest Income, respectively. Management believes that
the judgments, estimates and assumptions used in the preparation of the consolidated financial statements are appropriate given the factual circumstances at the time.



Market Prices and Dividends Declared



The common stock of First Place Financial Corp. trades on the Nasdaq Stock Market under the symbol FPFC. As of July 31, 2003, there were
13,873,431 shares outstanding held by approximately 3,620 shareholders of record (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms).



The table below shows the quarterly reported high and low trade prices of the
common stock and cash dividends per share declared during the years ended June 30, 2003 and 2002.



|June 30, 2003: |  | High |       | Low |   | Dividends
|-------------- |  | ---- | ----- | --- | - | ---------
|First quarter  |  | $    | 19.50 |     | $ | 13.25    
|Second quarter |  |      | 17.58 |     |   | 13.15    
|Third quarter  |  |      | 17.40 |     |   | 15.20    
|Fourth quarter |  |      | 17.50 |     |   | 15.15    



|June 30, 2002: |  |   |       |  |   |      
|-------------- |  | - | ----- |  | - | -----
|First quarter  |  | $ | 14.85 |  | $ | 12.80
|Second quarter |  |   | 16.85 |  |   | 13.91
|Third quarter  |  |   | 17.00 |  |   | 15.74
|Fourth quarter |  |   | 19.91 |  |   | 16.26



18



---

LOGOREPORT OF INDEPENDENT AUDITORS



|Board of Directors and Shareholders  First Place Financial Corp.  Warren, Ohio |  | LOGO
|------------------------------------------------------------------------------ |  | ----



We have audited the
accompanying consolidated statements of financial condition of First Place Financial Corp. as of June 30, 2003 and 2002, and the related consolidated statements of income, changes in shareholders equity and cash flows for each of the three
years in the period ended June 30, 2003. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.



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



In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Place Financial Corp. as of June 30, 2003 and 2002, and the results of
its operations and its cash flows for each of the three years in the period ended June 30, 2003, in conformity with accounting principles generally accepted in the United States of America.



Crowe Chizek and Company LLC



LOGO

Cleveland, Ohio

July 23, 2003



19



---

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|June 30,                                                                                         |  | 2003                                      |           |   | 2002 |  
|------------------------------------------------------------------------------------------------ |  | ----------------------------------------- | --------- | - | ---- | -
|                                                                                                 |  | (Dollars in thousands, except share data) |          
|ASSETS                                                                                           |  |                                           |           |   |      |  
|Cash and cash equivalents                                                                        |  | $                                         | 32,206    |   |      | $
|Federal funds sold                                                                               |  |                                           | 1,650     |   |      |  
|Securities available for sale                                                                    |  |                                           | 346,429   |   |      |  
|Loans held for sale                                                                              |  |                                           | 65,695    |   |      |  
|Loans                                                                                            |  |                                           | 901,445   |   |      |  
|Less allowance for loan losses                                                                   |  |                                           | 9,603     |   |      |  
|                                                                                                 |  |                                           |           |   |      |  
|Loans, net                                                                                       |  |                                           | 891,842   |   |      |  
|Federal Home Loan Bank stock                                                                     |  |                                           | 22,523    |   |      |  
|Accrued interest receivable                                                                      |  |                                           | 6,993     |   |      |  
|Premises and equipment, net                                                                      |  |                                           | 19,766    |   |      |  
|Goodwill                                                                                         |  |                                           | 18,407    |   |      |  
|Core deposits and other intangibles                                                              |  |                                           | 4,902     |   |      |  
|Other assets                                                                                     |  |                                           | 148,200   |   |      |  
|                                                                                                 |  |                                           |           |   |      |  
|Total assets                                                                                     |  | $                                         | 1,558,613 |   |      | $
|                                                                                                 |  |                                           |           |   |      |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                             |  |                                           |           |   |      |  
|Deposits                                                                                         |  |                                           |           |   |      |  
|Non-interest bearing checking                                                                    |  | $                                         | 39,506    |   |      | $
|Interest bearing checking                                                                        |  |                                           | 73,125    |   |      |  
|Savings                                                                                          |  |                                           | 135,819   |   |      |  
|Money market                                                                                     |  |                                           | 298,788   |   |      |  
|Certificates of deposit                                                                          |  |                                           | 561,212   |   |      |  
|                                                                                                 |  |                                           |           |   |      |  
|Total deposits                                                                                   |  |                                           | 1,108,450 |   |      |  
|Securities sold under agreements to repurchase                                                   |  |                                           | 9,547     |   |      |  
|Federal Home Loan Bank advances                                                                  |  |                                           | 235,952   |   |      |  
|Advances by borrowers for taxes and insurance                                                    |  |                                           | 4,385     |   |      |  
|Accrued interest payable                                                                         |  |                                           | 796       |   |      |  
|Other liabilities                                                                                |  |                                           | 16,802    |   |      |  
|                                                                                                 |  |                                           |           |   |      |  
|Total liabilities                                                                                |  |                                           | 1,375,932 |   |      |  
|Preferred stock, $.01 par value, 3,000,000 shares authorized, no shares issued and outstanding   |  |                                           |          |   |      |  
|Common stock, $.01 par value, 33,000,000 shares authorized, 18,128,272 shares issued             |  |                                           | 181       |   |      |  
|Additional paid-in capital                                                                       |  |                                           | 177,059   |   |      |  
|Retained earnings                                                                                |  |                                           | 83,806    |   |      |  
|Unearned employee stock ownership plan shares                                                    |  |                                           | (6,219    | ) |      |  
|Unearned recognition and retention plan shares                                                   |  |                                           | (1,887    | ) |      |  
|Treasury stock, at cost, 4,819,567 shares at June 30, 2003 and 4,065,577 shares at June 30, 2002 |  |                                           | (66,452   | ) |      |  
|Accumulated other comprehensive loss                                                             |  |                                           | (3,807    | ) |      |  
|                                                                                                 |  |                                           |           |   |      |  
|Total shareholders equity                                                                       |  |                                           | 182,681   |   |      |  
|                                                                                                 |  |                                           |           |   |      |  
|Total liabilities and shareholders equity                                                       |  | $                                         | 1,558,613 |   |      | $
|                                                                                                 |  |                                           |           |   |      |  



See accompanying notes
to consolidated financial statements.



20



---

LOGOCONSOLIDATED STATEMENTS OF INCOME



|Years ended June 30,                                          |  | 2003                                          |        |   | 2002 |   |         | 2001 | 
|------------------------------------------------------------- |  | --------------------------------------------- | ------ | - | ---- | - | ------- | ---- | 
|                                                              |  | (Dollars in thousands, except per share data) |       
|Interest income                                               |  |                                               |        |   |      |   |         |      | 
|Loans, including fees                                         |  | $                                             | 69,741 |   |      | $ | 79,319  |      | 
|Securities:                                                   |  |                                               |        |   |      |   |         |      | 
|Taxable                                                       |  |                                               | 8,479  |   |      |   | 9,111   |      | 
|Tax exempt                                                    |  |                                               | 1,909  |   |      |   | 2,837   |      | 
|Mortgage-backed and related securities                        |  |                                               | 7,265  |   |      |   | 13,806  |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Total interest income                                         |  |                                               | 87,394 |   |      |   | 105,073 |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Interest expense                                              |  |                                               |        |   |      |   |         |      | 
|Deposits                                                      |  |                                               | 30,770 |   |      |   | 39,711  |      | 
|Federal Home Loan Bank advances                               |  |                                               | 11,274 |   |      |   | 15,817  |      | 
|Repurchase agreements                                         |  |                                               | 1,252  |   |      |   | 4,893   |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Total interest expense                                        |  |                                               | 43,296 |   |      |   | 60,421  |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Net interest income                                           |  |                                               | 44,098 |   |      |   | 44,652  |      | 
|Provision for loan losses                                     |  |                                               | 2,864  |   |      |   | 2,990   |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Net interest income after provision for loan losses           |  |                                               | 41,234 |   |      |   | 41,662  |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Noninterest income                                            |  |                                               |        |   |      |   |         |      | 
|Service charges and fees on deposit accounts                  |  |                                               | 5,096  |   |      |   | 4,432   |      | 
|Net gains (losses) on sale of securities                      |  |                                               | 1,125  |   |      |   | 1,552   |      | 
|Net gains (losses) on sale of loans                           |  |                                               | 13,379 |   |      |   | 7,349   |      | 
|Loan servicing income (loss)                                  |  |                                               | (4,991 | ) |      |   | (646    | )    | 
|Other                                                         |  |                                               | 5,598  |   |      |   | 2,320   |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Total noninterest income                                      |  |                                               | 20,207 |   |      |   | 15,007  |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Noninterest expense                                           |  |                                               |        |   |      |   |         |      | 
|Salaries and employee benefits                                |  |                                               | 18,383 |   |      |   | 16,266  |      | 
|Occupancy and equipment                                       |  |                                               | 5,758  |   |      |   | 5,327   |      | 
|Professional fees                                             |  |                                               | 1,356  |   |      |   | 1,573   |      | 
|Loan expenses                                                 |  |                                               | 1,482  |   |      |   | 866     |      | 
|Merger, integration and restructuring expense                 |  |                                               |       |   |      |   |        |      | 
|Franchise taxes                                               |  |                                               | 1,656  |   |      |   | 1,403   |      | 
|Amortization of goodwill                                      |  |                                               |       |   |      |   |        |      | 
|Amortization of intangible assets                             |  |                                               | 997    |   |      |   | 986     |      | 
|Other                                                         |  |                                               | 7,091  |   |      |   | 6,227   |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Total noninterest expense                                     |  |                                               | 36,723 |   |      |   | 32,648  |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Income before income taxes and minority interest              |  |                                               | 24,718 |   |      |   | 24,021  |      | 
|Provision for income taxes                                    |  |                                               | 7,947  |   |      |   | 7,812   |      | 
|Minority interest in income (loss) of consolidated subsidiary |  |                                               | 79     |   |      |   | (21     | )    | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Net income                                                    |  | $                                             | 16,692 |   |      | $ | 16,230  |      | 
|                                                              |  |                                               |        |   |      |   |         |      | 
|Earnings per share:                                           |  |                                               |        |   |      |   |         |      | 
|Basic                                                         |  | $                                             | 1.31   |   |      | $ | 1.18    |      | 
|Diluted                                                       |  | $                                             | 1.29   |   |      | $ | 1.16    |      | 



See accompanying notes
to consolidated financial statements.



21



---

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY



Years ended June 30, 2003, 2002 and 2001

(Dollars in thousands, except per share data)



|                                                                                                           |  | CommonStock |     | AdditionalPaid-inCapital |   |         | RetainedEarnings |  |   | UnearnedESOPShares |   |  | UnearnedRRPShares |        |   | TreasuryStock |   |        | Accumulated OtherComprehensiveIncome (Loss) |  |   | Total   |  
|---------------------------------------------------------------------------------------------------------- |  | ----------- | --- | ------------------------ | - | ------- | ---------------- |  | - | ------------------ | - |  | ----------------- | ------ | - | ------------- | - | ------ | ------------------------------------------- |  | - | ------- | -
|Balance at June 30, 2000                                                                                   |  | $           | 112 |                          | $ | 109,657 |                  |  | $ | 62,855             |   |  | $                 | (8,012 | ) |               | $ | (4,764 | )                                           |  | $ | (6,364  | )
|Comprehensive income:                                                                                      |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Net income                                                                                                 |  |             |     |                          |   |         |                  |  |   | 6,314              |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Change in unrealized gain (loss) on securities available for sale, net of reclassification and tax effects |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Change in unrealized gain (loss) on swaps, net of tax                                                      |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Total comprehensive income                                                                                 |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Cash dividends declared ($.35 per share)                                                                   |  |             |     |                          |   |         |                  |  |   | (4,664             | ) |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Commitment to release stock ownership plan shares (59,220 shares)                                          |  |             |     |                          |   | 102     |                  |  |   |                    |   |  |                   | 592    |   |               |   |        |                                             |  |   |         |  
|Commitment to release recognition and retention plan shares (100,989 shares)                               |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   | 1,337  |                                             |  |   |         |  
|Purchase of 2,559,733 shares of common stock                                                               |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | (29,582 | )
|Issuance of 6,887,022 shares of common stock for merger                                                    |  |             | 69  |                          |   | 68,272  |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Stock options exercised (164,097 shares)                                                                   |  |             |     |                          |   | (845    | )                |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | 1,906   |  
|Tax benefit related to exercise of stock options                                                           |  |             |     |                          |   | 210     |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Acquisition of FFY recognition and retention plan                                                          |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   | (2     | )                                           |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Balance at June 30, 2001                                                                                   |  |             | 181 |                          |   | 177,396 |                  |  |   | 64,505             |   |  |                   | (7,420 | ) |               |   | (3,429 | )                                           |  |   | (34,040 | )
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Comprehensive income:                                                                                      |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Net income                                                                                                 |  |             |     |                          |   |         |                  |  |   | 16,230             |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Change in unrealized gain (loss) on securities available for sale, net of reclassification and tax effects |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Change in unrealized gain (loss) on swaps, net of tax                                                      |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Total comprehensive income                                                                                 |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Cash dividends declared ($.50 per share)                                                                   |  |             |     |                          |   |         |                  |  |   | (7,009             | ) |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Commitment to release employee stock ownership plan shares (59,424 shares)                                 |  |             |     |                          |   | 349     |                  |  |   |                    |   |  |                   | 594    |   |               |   |        |                                             |  |   |         |  
|Commitment to release recognition and retention plan shares (59,770 shares)                                |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   | 800    |                                             |  |   |         |  
|Purchase of 1,445,455 shares of common stock                                                               |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | (22,913 | )
|Stock options exercised (326,011 shares)                                                                   |  |             |     |                          |   | (867    | )                |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | 3,733   |  
|Stock issued as employee compensation (671 shares)                                                         |  |             |     |                          |   | 1       |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | 8       |  
|Tax benefit related to exercise of stock options                                                           |  |             |     |                          |   | 451     |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Balance at June 30, 2002                                                                                   |  |             | 181 |                          |   | 177,330 |                  |  |   | 73,726             |   |  |                   | (6,826 | ) |               |   | (2,629 | )                                           |  |   | (53,212 | )
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Comprehensive income:                                                                                      |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Net income                                                                                                 |  |             |     |                          |   |         |                  |  |   | 16,692             |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Change in unrealized gain (loss) on securities available for sale, net of reclassification and tax effects |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Change in unrealized gain (loss) on swaps, net of tax                                                      |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Loss on termination of interest rate swaps, net of tax                                                     |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Loss on termination of interest rate swaps reclassified into income, net of tax                            |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Total comprehensive income                                                                                 |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Cash dividends declared ($0.50 per share)                                                                  |  |             |     |                          |   |         |                  |  |   | (6,612             | ) |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Commitment to release employee stock ownership plan shares (59,354 shares)                                 |  |             |     |                          |   | 396     |                  |  |   |                    |   |  |                   | 607    |   |               |   |        |                                             |  |   |         |  
|Commitment to release recognition and retention plan shares (55,294 shares)                                |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   | 742    |                                             |  |   |         |  
|Purchase of 887,285 shares of common stock                                                                 |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | (15,111 | )
|Stock options exercised (148,698 shares)                                                                   |  |             |     |                          |   | (905    | )                |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | 1,862   |  
|Stock issued as employee compensation (671 shares)                                                         |  |             |     |                          |   | 3       |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   | 9       |  
|Tax benefit related to exercise of stock options                                                           |  |             |     |                          |   | 235     |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  
|Balance at June 30, 2003                                                                                   |  | $           | 181 |                          | $ | 177,059 |                  |  | $ | 83,806             |   |  | $                 | (6,219 | ) |               | $ | (1,887 | )                                           |  | $ | (66,452 | )
|                                                                                                           |  |             |     |                          |   |         |                  |  |   |                    |   |  |                   |        |   |               |   |        |                                             |  |   |         |  



See accompanying
notes to consolidated financial statements.



22



---

LOGO CONSOLIDATED STATEMENTS OF CASH FLOWS



|Years ended June 30,                                                       |  | 2003                   |          |   | 2002 |   |          | 2001 | 
|-------------------------------------------------------------------------- |  | ---------------------- | -------- | - | ---- | - | -------- | ---- | 
|                                                                           |  | (Dollars in thousands) |         
|Cash flows from operating activities                                       |  |                        |          |   |      |   |          |      | 
|Net income                                                                 |  | $                      | 16,692   |   |      | $ | 16,230   |      | 
|Adjustments to reconcile net income to net cash from operating activities: |  |                        |          |   |      |   |          |      | 
|Depreciation                                                               |  |                        | 2,431    |   |      |   | 2,604    |      | 
|Provision for loan losses                                                  |  |                        | 2,864    |   |      |   | 2,990    |      | 
|Net amortization                                                           |  |                        | 2,850    |   |      |   | (206     | )    | 
|Security (gains) losses                                                    |  |                        | (1,125   | ) |      |   | (1,552   | )    | 
|Proceeds from sales of loans held for sale                                 |  |                        | 595,632  |   |      |   | 424,103  |      | 
|Originations of loans held for sale                                        |  |                        | (648,330 | ) |      |   | (418,966 | )    | 
|(Gain) loss on sale of loans held for sale                                 |  |                        | (12,749  | ) |      |   | (6,719   | )    | 
|(Gain) on sale of loans from portfolio                                     |  |                        | (630     | ) |      |   | (630     | )    | 
|Loss on disposal of fixed assets                                           |  |                        | 5        |   |      |   | 29       |      | 
|Federal Home Loan Bank stock dividends                                     |  |                        | (946     | ) |      |   | (1,498   | )    | 
|ESOP expense                                                               |  |                        | 1,003    |   |      |   | 943      |      | 
|RRP expense                                                                |  |                        | 742      |   |      |   | 800      |      | 
|Increase in cash surrender value of bank owned life insurance              |  |                        | (203     | ) |      |   |         |      | 
|Change in                                                                  |  |                        |          |   |      |   |          |      | 
|Interest receivable and other assets                                       |  |                        | (74,539  | ) |      |   | (16,814  | )    | 
|Interest payable and other liabilities                                     |  |                        | (1,366   | ) |      |   | 4,984    |      | 
|Deferred loan fees                                                         |  |                        | (2,046   | ) |      |   | (1,652   | )    | 
|Deferred taxes                                                             |  |                        | 2,205    |   |      |   | 3,828    |      | 
|                                                                           |  |                        |          |   |      |   |          |      | 
|Net cash from operating activities                                         |  |                        | (117,510 | ) |      |   | 8,474    |      | 
|                                                                           |  |                        |          |   |      |   |          |      | 
|Cash flows from investing activities                                       |  |                        |          |   |      |   |          |      | 
|Securities available for sale                                              |  |                        |          |   |      |   |          |      | 
|Proceeds from sales                                                        |  |                        | 68,565   |   |      |   | 95,869   |      | 
|Proceeds from maturities, calls and principal paydowns                     |  |                        | 137,118  |   |      |   | 111,048  |      | 
|Purchases                                                                  |  |                        | (90,730  | ) |      |   | (251,086 | )    | 
|Net cash received in acquisition                                           |  |                        |         |   |      |   |         |      | 
|Net change in federal funds sold                                           |  |                        | 39,081   |   |      |   | (19,210  | )    | 
|Purchases of Federal Home Loan Bank stock                                  |  |                        |         |   |      |   |         |      | 
|Net change in loans                                                        |  |                        | 2,226    |   |      |   | 77,505   |      | 
|Proceeds from sale of consumer loans                                       |  |                        | 2,610    |   |      |   |         |      | 
|Proceeds from loans sold from portfolio                                    |  |                        | 16,853   |   |      |   | 20,010   |      | 
|Premises and equipment expenditures, net                                   |  |                        | (1,471   | ) |      |   | (1,423   | )    | 
|Investment in bank owned life insurance                                    |  |                        | (15,000  | ) |      |   |         |      | 
|Purchase of APB Financial Group, Ltd.                                      |  |                        | (1,322   | ) |      |   |         |      | 
|Additional investment in Coldwell Banker First Place Real Estate Ltd.      |  |                        | (312     | ) |      |   | (300     | )    | 
|Purchase of The Brokers Realty Group                                       |  |                        |         |   |      |   | (600     | )    | 
|                                                                           |  |                        |          |   |      |   |          |      | 
|Net cash from investing activities                                         |  | $                      | 157,618  |   |      | $ | 31,813   |      | 
|                                                                           |  |                        |          |   |      |   |          |      | 



See accompanying notes
to consolidated financial statements.



23



---

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)



|Years ended June 30,                                                |  | 2003                   |          |   | 2002 |   |         | 2001 | 
|------------------------------------------------------------------- |  | ---------------------- | -------- | - | ---- | - | ------- | ---- | 
|                                                                    |  | (Dollars in thousands) |         
|Cash flows from financing activities                                |  |                        |          |   |      |   |         |      | 
|Net change in deposits                                              |  | $                      | 47,728   |   |      | $ | 42,690  |      | 
|Net change in advances by borrowers for taxes and insurance         |  |                        | (726     | ) |      |   | 327     |      | 
|Net change in repurchase agreements                                 |  |                        | (54,100  | ) |      |   | (26,889 | )    | 
|Cash dividends paid                                                 |  |                        | (6,612   | ) |      |   | (7,009  | )    | 
|Proceeds and tax benefit from stock options exercised               |  |                        | 1,192    |   |      |   | 3,317   |      | 
|Purchase of treasury stock                                          |  |                        | (15,111  | ) |      |   | (22,913 | )    | 
|Net change in overnight Federal Home Loan Bank borrowings           |  |                        |         |   |      |   |        |      | 
|Proceeds from Federal Home Loan Bank borrowings                     |  |                        | 804,439  |   |      |   |        |      | 
|Repayment of Federal Home Loan Bank borrowings                      |  |                        | (815,781 | ) |      |   | (15,730 | )    | 
|Termination of interest rate swaps                                  |  |                        | (12,560  | ) |      |   |        |      | 
|                                                                    |  |                        |          |   |      |   |         |      | 
|Net cash from financing activities                                  |  |                        | (51,531  | ) |      |   | (26,207 | )    | 
|                                                                    |  |                        |          |   |      |   |         |      | 
|Net change in cash and cash equivalents                             |  |                        | (11,423  | ) |      |   | 14,080  |      | 
|Cash and cash equivalents at beginning of year                      |  |                        | 43,629   |   |      |   | 29,549  |      | 
|                                                                    |  |                        |          |   |      |   |         |      | 
|Cash and cash equivalents at end of year                            |  | $                      | 32,206   |   |      | $ | 43,629  |      | 
|                                                                    |  |                        |          |   |      |   |         |      | 
|Supplemental cash flow information:                                 |  |                        |          |   |      |   |         |      | 
|Cash payments of interest expense                                   |  | $                      | 42,302   |   |      | $ | 62,812  |      | 
|Cash payments of income taxes                                       |  |                        | 5,030    |   |      |   | 5,701   |      | 
|Supplemental noncash disclosures:                                   |  |                        |          |   |      |   |         |      | 
|Acquisition of FFY Financial Corp. through issuance of common stock |  |                        |         |   |      |   |        |      | 
|Loans securitized                                                   |  |                        |         |   |      |   |        |      | 
|Transfer of loans to other real estate                              |  | $                      | 1,048    |   |      | $ | 725     |      | 



See accompanying notes
to consolidated financial statements.



24



---

LOGO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



(Dollar
amounts in thousands, except per share data)



Principles of
Consolidation:The consolidated financial statements of the Company include the accounts of First Place Financial Corp. (the Company) and its wholly owned subsidiaries, First Place Bank (the Bank) and First Place Holdings, Inc. Wholly owned
subsidiaries of First Place Holdings, Inc. include First Place Insurance Agency, Ltd., Coldwell Banker First Place Real Estate, Ltd., APB Financial Group, Ltd., and American Pension Benefits, Inc. TitleWorks Agency, LLC is a 75% owned affiliate of
First Place Holdings, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.



Business Segments:While the Companys chief decision-makers monitor the revenue streams of the various Company products and services, the
identifiable segments are not material, and operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Companys financial service operations are considered by management to be aggregated in
one reportable operating segment.



Use of Estimates:The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Areas involving the use of managements estimates and assumptions include the allowance
for loan losses, fair values of financial instruments, the realization of deferred tax assets, the carrying value of impaired loans, the carrying value and amortization of intangibles, depreciation of premises and equipment, the carrying value of
goodwill and the amortization and valuation of mortgage servicing rights. Actual results could differ from those estimates.



Cash Flows:Cash and cash equivalents include cash on hand and deposits with other financial institutions with original maturities under 90 days.
Net cash flows are reported for loans, deposits, federal funds sold and short term borrowings with original maturities of less than 90 days.



Securities:Securities are classified as held-to-maturity, available-for-sale or trading on the date of purchase. Securities are classified as
held-to-maturity when the Company has both the ability and the intent to hold until maturity and are carried at amortized cost. Securities classified as available-for-sale are carried at fair values with unrealized gains and losses, net of tax,
reported in other comprehensive income. Trading securities are carried at fair value with changes in unrealized gains and losses included in income. Other securities, such as Federal Home Loan Bank stock, are carried at cost. The fair value of a
security is based on quoted market prices. If quoted prices are not available, fair value is determined based on quoted prices of similar investments. Available-for-sale and held-to-maturity securities are reviewed quarterly for impairment in value.
The cost of securities sold is based on the specific identification method.



Interest income includes amortization of purchase premium or discount. Gains and losses on sales are based on the amortized cost of the security sold. Securities are written down to fair value when a decline in fair
value is not temporary.



25



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Loans:Loans that management has the intent and ability to hold for the foreseeable future or until maturity or
payoff are reported at the principal balance outstanding, net of loans in process, deferred loan origination fees and deferred loan origination costs. Loans held for sale are reported at the lower of cost or market, on an aggregate basis.



Interest income is reported on the interest method and
includes amortization of net deferred loan fees and costs over the loan term. The accrual of interest is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in process of collection. In all cases, loans are
placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.



All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for
on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and future payments are reasonably assured.



Allowance for Loan Losses:The allowance for loan
losses represents managements estimate of probable losses inherent in the portfolio based on factors such as historical loss experience, the nature and volume of the portfolio, loan concentrations, specific problem loans and current economic
conditions. The allowance for loan losses is a material estimate that is particularly susceptible to significant changes in the near term. A provision for loan losses is charged to operations based on managements periodic evaluation of factors
previously mentioned. Loan losses are deducted from the allowance, and subsequent recoveries are added. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in managements
judgment, is deemed to be uncollectible.



A loan is impaired
when full payment under the terms of the loan is not expected. Commercial and commercial real estate loans are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net,
at the present value of estimated future cash flows using the loans existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and
residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.



Foreclosed Assets:Assets acquired through or instead of loan foreclosure are initially recorded at the lower of the loan balance or fair value
when acquired, establishing a new cost basis. If fair value declines, a valuation allowance is recorded through expense. Costs after acquisition are expensed.



Premises and Equipment:Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated
using the straight-line method based on estimated useful lives of the assets. The estimated useful lives are based on the asset type and range from two years to twenty years.



26



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LOGO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Long-term Assets:Premises and equipment and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If
impaired, the assets are recorded at fair value.



Securitizations:The Company may, from time to time, sell mortgage loans through securitization. Mortgage loans have been securitized with a third party. The securitization is recorded as a sale when control has been relinquished,
with a gain or loss recorded on the sale. The gain or loss is calculated based on the cash received versus the carrying value of the assets transferred. If some interests, such as servicing assets and cash reserve accounts, are retained, the
carrying value of all assets sold and retained is allocated to each asset based on fair value at sale date. Fair values are based on market quotes or on the present value of future expected cash flows using estimates of credit losses, prepayment
rates, interest rates, and discount rates. Cash flows are estimated using the Public Securities Associations (PSA) standard prepayment model.



Mortgage Servicing Assets:Servicing assets represent purchased rights and the allocated value of retained servicing rights on loans sold.
Servicing assets are amortized in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the assets, using groupings of the underlying loans as to interest rates and then,
secondarily, as to other prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a
grouping is reported as a valuation allowance.



Bank Owned
Life Insurance:The Company has purchased life insurance policies on certain key management personnel. Bank owned life insurance is recorded at its cash surrender value, or the amount that can be realized.



Goodwill and Other Intangible Assets:Goodwill results from prior
business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment
is recognized in the period identified.



Identified purchased
intangibles, primarily core deposits, are recorded at cost and amortized on a straight-line basis over their estimated lives of seven to eight years.



Employee Stock Ownership Plan:The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of
shareholders equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce shareholders equity; dividends on unallocated ESOP
shares reduce debt and accrued interest.



Treasury Stock:Management utilizes stock repurchases as a component of its strategy to reduce/invest excess capital after consideration of market and economic factors, the effect on



27



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



shareholder dilution, adequacy of capital, effect on liquidity and an assessment of alternative returns. Shares repurchased
by the Company may be used to meet the Companys requirements for common shares under its dividend reinvestment plan, stock option or other stock based plans and for general corporate purposes such as expansion and acquisitions or future
capital requirements. The purchases are made in open market transactions and recorded at cost.



Derivative Instruments and Hedging Activities:All derivative instruments are recorded at their fair values. If derivative instruments are
designated as hedges of fair values, both the change in the fair value of the hedge and the hedged item are included in current earnings. Fair value adjustments related to cash flow hedges are recorded in other comprehensive income and reclassified
to earnings when the hedged transaction is reflected in earnings. Ineffective portions of hedges are reflected in income as they occur. If a hedge of fair values is dedesignated, the fair value adjustment of the hedged item is generally accounted
for as a yield adjustment over its remaining life. If a hedge of cash flows is dedesignated, the fair value adjustment in accumulated other comprehensive income, depending upon the dedesignation circumstances, is either included currently in
earnings or reclassified to earnings over the remaining term of the originally designated hedging relationship.



The Company has a program to reduce the interest rate risk associated with the interest rate commitment made to borrowers for mortgage loans that have not
yet been closed and potentially made eligible for sale to secondary markets. The Company will, from time to time depending on market interest rates and loan volume, enter into interest rate hedging contracts to limit the exposure to potential
movements in market interest rates. Fair value adjustments related to these hedges are recorded in current period earnings as an adjustment to net gains (losses) on sale of loans.



Stock Compensation:Employee compensation expense under stock options is reported using the intrinsic value method.
No stock-based compensation cost is reflected in net income, as all options granted had an exercise price equal to or greater than the market price of the underlying common stock at date of grant. The following table illustrates the effect on net
income and earnings per share if expense was measured using the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation.



28



---

LOGO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|                                                                                  |  | 2003 |        | 2002 |   | 2001  
|--------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------
|Net income as reported                                                            |  | $    | 16,692 |      | $ | 16,230
|Deduct: Stock-based compensation expense determined under fair value based method |  |      | 380    |      |   | 325   
|                                                                                  |  |      |        |      |   |       
|Pro forma net income                                                              |  | $    | 16,312 |      | $ | 15,905
|                                                                                  |  |      |        |      |   |       
|Basic earnings per share as reported                                              |  | $    | 1.31   |      | $ | 1.18  
|Pro forma basic earnings per share                                                |  |      | 1.28   |      |   | 1.16  
|Diluted earnings per share as reported                                            |  | $    | 1.29   |      | $ | 1.16  
|Pro forma diluted earnings per share                                              |  |      | 1.26   |      |   | 1.13  



The pro forma effects are computed
using option pricing models, using the following weighted-average assumptions as of grant date. There were no stock option grants in 2003.



|                                |  | 2002    |   |  | 2001      |  
|------------------------------- |  | ------- | - |  | --------- | -
|Risk-free interest rate         |  | 5.17    | % |  | 5.31      | %
|Expected option life            |  | 9 years |   |  | 6.5 years |  
|Expected stock price volatility |  | 21.50   | % |  | 20.91     | %
|Dividend yield                  |  | 2.89    | % |  | 2.37      | %



Income Taxes:The Company records income tax expense based on the amount of tax due and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the
carrying amounts and tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized.



Earnings Per Share:Basic earnings per common share is net income
divided by the weighted average number of shares outstanding during the period. ESOP shares are considered outstanding for this calculation unless unearned. Recognition and Retention Plan (RRP) shares are considered outstanding as they
become vested. Diluted earnings per share include the dilutive effect of RRP shares and the additional potential shares issuable under stock options.



29



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Off-Balance-Sheet Financial Instruments:Financial instruments include off-blance-sheet credit instruments, such as
commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments
are recorded when they are funded.



Comprehensive Income:Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale and changes in fair value of cash flow hedges which are also recognized
as separate components of equity.



Fair Value of Financial
Instruments:Fair value of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment
regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.



Effect of New Accounting Standards:Effective July 1, 2002,
Derivatives Implementation Group (DIG) Statement 133 Implementation Issue No. C13 required that non-portfolio mortgage loan commitments with interest rate locks be accounted for as free-standing derivatives subject to SFAS No. 133. The change in the
value of these commitments is reflected in earnings as a component of current period gain or loss on sale of loans.



On October 1, 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 147, Acquisitions of Certain Financial
Institutions, effective for certain business combinations initiated after October 1, 2002. This statement addresses the financial accounting and reporting for the acquisition of all or part of a financial institution, except for a transaction
between two or more mutual enterprises. This statement removes acquisitions of financial institutions, other than transactions between two or more mutual enterprises, from the scope of SFAS No. 72, Accounting for Certain Acquisitions of
Banking or Thrift Institutions, and FASB Interpretations No. 9, Applying APB Opinions No. 16 and 17 When a Savings and Loan Association or a Similar Institution is Acquired in a Business Combination Accounted for by the Purchase
Method. The acquisition of all or part of a financial institution that meets the definition of a business combination shall be accounted for by the purchase method in accordance with SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. This statement also provides guidance on the accounting for the impairment or disposal of acquired long-term customer-relationship intangible assets (such as depositor- and
borrower-relationship intangible assets and credit cardholder intangible assets), including those acquired in transactions between two or more mutual enterprises. The adoption of this statement did not have a material effect on the Companys
financial position or results of operations.



The Company has
stock option plans for certain employees that are accounted for under the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations. Because
the exercise price at the date of the grant is equal to the market value of the stock, no compensation expense is recognized. On December 31, 2002, FASB issued SFAS No. 148, Accounting for Stock-Based Compensation, to provide alternative
methods of transition for an entity that changes to the fair value method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure provisions of SFAS No. 123



30



---

LOGO CONSOLIDATED STATEMENTS OF INCOME



NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



to require expanded and more prominent disclosure of the effects of an entitys accounting policy with respect to stock-based employee compensation.



In January 2003, FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities. This
interpretation clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, and addresses consolidation by business enterprises of variable interest entities (more commonly known as Special Purpose
Entities or SPEs). Interpretation No. 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risk among the parties involved. Interpretation No. 46
also enhances the disclosure requirements related to variable interest entities. This statement is effective for variable interest entities created or in which an enterprise obtains an interest after January 31, 2003. Interpretation No. 46 will be
effective for the Company beginning July 1, 2003, for all interest in variable interest entities acquired before February 1, 2003. The adoption of Interpretation No. 46 is not expected to have an effect on the Companys consolidated financial
statements.



Newly Issued But Not Yet Effective Accounting
Standards:FASB recently issued two new accounting standards, SFAS No. 149, Amendment of SFAS No. 133, Derivative Instruments and Hedging Activities, and SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equities, both of which generally become effective in the quarter beginning July 1, 2003. These statements are not expected to have a material effect on the Companys operating results or financial
condition.



Loss Contingencies:Loss contingencies,
including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are
such matters that will have a material effect on the financial statements.



Dividend Restriction:Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company or by the holding company to shareholders. The Bank must
file an application with, and obtain approval from, the Office of Thrift Supervision (OTS) (i) if the proposed distribution would cause total distributions for the calendar year to exceed net income for that year to date plus retained
net income for the preceeding two years; (ii) if the Bank would not be at least adequately capitalized following the capital distribution; (iii) if the proposed distribution would violate a prohibition contained in any applicable statute, regulation
or agreement between the Bank and the OTS or the FDIC, or any condition imposed on the Bank in an OTS-approved application or notice. If the Bank is not required to file an application, it must file a notice of the proposed capital distribution with
the OTS.



Reclassifications:Certain items in the prior
year financial statements were reclassified to conform to the current presentation.



31



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2  SECURITIES



The fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) at June 30,
2003 and 2002 were as follows:



|                                                                   |  | 2003       |        
|------------------------------------------------------------------ |  | ---------- | -------
|                                                                   |  | Fair Value |        
|U.S. Government agencies                                           |  | $          | 94,240 
|Obligations of states and political subdivisions                   |  |            | 24,857 
|Trust preferred securities                                         |  |            | 40,625 
|Mortgage-backed securities and collateralized mortgage obligations |  |            | 116,999
|                                                                   |  |            |        
|Debt securities                                                    |  |            | 276,721
|                                                                   |  |            |        
|Equity securities                                                  |  |            | 2,380  
|FNMA and FHLMC preferred stock                                     |  |            | 19,983 
|Mutual funds                                                       |  |            | 47,345 
|                                                                   |  |            |        
|Equity securities                                                  |  |            | 69,708 
|                                                                   |  |            |        
|Total securities                                                   |  | $          | 346,429
|                                                                   |  |            |        
|                                                                   | 
|                                                                   |  | 2002       |        
|                                                                   |  | Fair Value |        
|U.S. Government agencies                                           |  | $          | 133,479
|Obligations of states and political subdivisions                   |  |            | 23,821 
|Trust preferred securities                                         |  |            | 34,869 
|SLMA                                                               |  |            | 11,661 
|Mortgage-backed securities and collateralized mortgage obligations |  |            | 188,829
|                                                                   |  |            |        
|Debt securities                                                    |  |            | 392,659
|                                                                   |  |            |        
|Equity securities                                                  |  |            | 2,199  
|FNMA and FHLMC preferred stock                                     |  |            | 21,939 
|Mutual funds                                                       |  |            | 46,130 
|                                                                   |  |            |        
|Equity securities                                                  |  |            | 70,268 
|                                                                   |  |            |        
|Total securities                                                   |  | $          | 462,927
|                                                                   |  |            |        



32



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LOGO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 2  SECURITIES (continued)



Sale of available-for-sale securities were as follows:



|             |  | 2003 |        | 2002 |   | 2001  
|------------ |  | ---- | ------ | ---- | - | ------
|Proceeds     |  | $    | 68,565 |      | $ | 95,869
|Gross gains  |  |      | 1,125  |      |   | 1,615 
|Gross losses |  |      |       |      |   | 63    



The fair value of debt securities
available-for-sale by contractual maturity at June 30, 2003 are summarized below. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.



|                                                                 |  | Fair Value
|---------------------------------------------------------------- |  | ----------
|Available-for-sale  Debt Securities                             |  |           
|Due in one year or less                                          |  | $         
|Due after one year through five years                            |  |           
|Due after five years through ten years                           |  |           
|Due after ten years                                              |  |           
|                                                                 |  |           
|                                                                 |  |           
|Mortgage-backed securities and collaterized mortgage obligations |  |           
|                                                                 |  |           
|                                                                 |  | $         
|                                                                 |  |           



Debt and mortgage-backed securities
with a fair value of $116,210 and $253,853 as of June 30, 2003 and 2002 were pledged to secure public deposits, repurchase agreements and for other purposes as required or permitted by law.



At year end 2003 and 2002 there were no holdings of securities of any one issuer, other than
the U.S. Government and its agencies, in an amount greater than 10% of shareholders equity.



NOTE 3  LOANS



Loans at year-end
were as follows:



|                       |  | 2003 |         | 2002
|---------------------- |  | ---- | ------- | ----
|Real estate loans:     |  |      |         |     
|Construction           |  | $    | 50,017  |     
|Residential mortgage   |  |      | 565,461 |     
|Commercial:            |  |      |         |     
|Commercial real estate |  |      | 99,058  |     
|Commercial             |  |      | 24,947  |     
|Consumer               |  |      | 161,962 |     
|                       |  |      |         |     
|                       |  | $    | 901,445 |     
|                       |  |      |         |     



Activity in the allowance for loan
losses was as follows:



|                          |  | 2003 |        |   | 2002 |   |        | 2001 | 
|------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- | 
|Beginning balance         |  | $    | 9,456  |   |      | $ | 9,757  |      | 
|Provision for loan losses |  |      | 2,864  |   |      |   | 2,990  |      | 
|Acquisitions              |  |      |       |   |      |   |       |      | 
|Loans charged off         |  |      | (4,513 | ) |      |   | (3,702 | )    | 
|Recoveries                |  |      | 1,796  |   |      |   | 411    |      | 
|                          |  |      |        |   |      |   |        |      | 
|Ending balance            |  | $    | 9,603  |   |      | $ | 9,456  |      | 
|                          |  |      |        |   |      |   |        |      | 



33



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3 - LOANS (continued)



Impaired loans were as follows:



|                                                           |  | 2003 |       | 2002
|---------------------------------------------------------- |  | ---- | ----- | ----
|Year-end loans with no allocated allowance for loan losses |  | $    |      |     
|Year-end loans with allocated allowance for loan losses    |  |      | 1,944 |     
|                                                           |  |      |       |     
|Total                                                      |  | $    | 1,944 |     
|                                                           |  |      |       |     
|Amount of the allowance for loan losses allocated          |  | $    | 1,387 |     



|                                             |  | 2003 |       | 2002 |   | 2001 
|-------------------------------------------- |  | ---- | ----- | ---- | - | -----
|Average of impaired loans during the year    |  | $    | 1,695 |      | $ | 2,241
|Interest income recognized during impairment |  |      | 361   |      |   | 42   
|Cash-basis interest income recognized        |  |      | 376   |      |   | 40   



Nonperforming loans were as follows:



|                                             |  | 2003 |        | 2002
|-------------------------------------------- |  | ---- | ------ | ----
|Loans past due over 90 days still on accrual |  | $    |       |     
|Nonaccrual loans                             |  |      | 12,779 |     



Nonperforming loans include both
smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Interest not recognized on nonaccrual loans totaled approximately $630, $669 and $1,260 for the years that ended June 30,
2003, 2002 and 2001.



NOTE 4 - MORTGAGE SERVICING ASSETS



Following is a summary of mortgage servicing assets at June 30:



|                               |  | 2003 |        |   | 2002 |  
|------------------------------ |  | ---- | ------ | - | ---- | -
|Servicing rights:              |  |      |        |   |      |  
|Beginning of year              |  | $    | 7,127  |   |      | $
|Additions                      |  |      | 7,113  |   |      |  
|Valuation allowance            |  |      | (2,397 | ) |      |  
|Amortized to expense           |  |      | (4,792 | ) |      |  
|                               |  |      |        |   |      |  
|End of year                    |  | $    | 7,051  |   |      | $
|                               |  |      |        |   |      |  
|Valuation allowance:           |  |      |        |   |      |  
|Beginning of year              |  | $    | 35     |   |      | $
|Additions expensed             |  |      | 2,397  |   |      |  
|Reductions credited to expense |  |      |       |   |      |  
|                               |  |      |        |   |      |  
|End of year                    |  | $    | 2,432  |   |      | $
|                               |  |      |        |   |      |  



Loans serviced for others, which are
not reported as assets, totaled $1,035 and $775 at June 30, 2003 and 2002.



34



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LOGO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5  PREMISES AND EQUIPMENT



Following is a summary
of premises and equipment:



|                               |  | 2003 |         |   | 2002 |  
|------------------------------ |  | ---- | ------- | - | ---- | -
|Land and improvements          |  | $    | 5,047   |   |      | $
|Buildings and improvements     |  |      | 14,504  |   |      |  
|Leasehold improvements         |  |      | 1,578   |   |      |  
|Furniture and equipment        |  |      | 9,345   |   |      |  
|Construction in process        |  |      | 175     |   |      |  
|                               |  |      |         |   |      |  
|                               |  |      | 30,649  |   |      |  
|Less: Accumulated depreciation |  |      | (10,883 | ) |      |  
|                               |  |      |         |   |      |  
|                               |  | $    | 19,766  |   |      | $
|                               |  |      |         |   |      |  



Depreciation expense totaled $2,431,
$2,604, and $1,474 for 2003, 2002 and 2001, respectively.



The Companys
subsidiaries have entered into a number of noncancelable lease agreements with respect to premises. Following is a summary of future minimum rental payments under operating leases that have initial or remaining noncancelable terms in excess of one
year as of June 30, 2003:



|2004       |  | $ | 700  
|---------- |  | - | -----
|2005       |  |   | 603  
|2006       |  |   | 558  
|2007       |  |   | 299  
|2008       |  |   | 103  
|Thereafter |  |   | 436  
|           |  |   |      
|           |  | $ | 2,699
|           |  |   |      



Rent expense for cancelable and
noncancelable agreements totaled $666, $504 and $394 for 2003, 2002 and 2001, respectively.



NOTE 6  GOODWILL AND INTANGIBLE ASSETS



Goodwill



The change in the carrying amount of goodwill for
the year ended June 30, 2003 is as follows:



|Balance as of June 30, 2002         |  | $ | 16,841
|----------------------------------- |  | - | ------
|Goodwill acquired during the period |  |   | 1,566 
|                                    |  |   |       
|Balance as of June 30, 2003         |  | $ | 18,407
|                                    |  |   |       



At June 30, 2002, the Company owned
two-thirds interest in Coldwell Banker First Place Real Estate, Ltd., a real estate agency/brokerage located in Warren and Youngstown, Ohio. In July 2002, the Company aquired the remaining one-third interest in the business for consideration of
$314,000. The acquisition consideration was allocated to goodwill. In January 2003, the Company acquired APB Financial Group, Ltd., an employee benefit consulting firm headquartered in Warrendale, Pennsylvania for consideration of $1.3 million, the
majority of which has been allocated to goodwill.



35



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6  GOODWILL AND INTANGIBLE ASSETS (continued)



The following summarizes the non-amortization of goodwill for the years ended June 30:



|                                |  | 2003 |        | 2002 |   | 2001  
|------------------------------- |  | ---- | ------ | ---- | - | ------
|Reported net income:            |  | $    | 16,692 |      | $ | 16,230
|Add back: goodwill amortization |  |      |       |      |   |      
|                                |  |      |        |      |   |       
|Adjusted net income             |  | $    | 16,692 |      | $ | 16,230
|                                |  |      |        |      |   |       
|Basic earnings per share:       |  |      |        |      |   |       
|Reported net income             |  | $    | 1.31   |      | $ | 1.18  
|Goodwill amortization           |  |      |       |      |   |      
|                                |  |      |        |      |   |       
|Adjusted net income             |  | $    | 1.31   |      | $ | 1.18  
|                                |  |      |        |      |   |       
|Diluted earnings per share:     |  |      |        |      |   |       
|Reported net income             |  | $    | 1.29   |      | $ | 1.16  
|Goodwill amortization           |  |      |       |      |   |      
|                                |  |      |        |      |   |       
|Adjusted net income             |  | $    | 1.29   |      | $ | 1.16  
|                                |  |      |        |      |   |       



Acquired Intangible Assets



Acquired intangible assets were as follows as of year-end:



|                             |  | As of June 30, 2003 
|---------------------------- |  | --------------------
|                             |  | Gross CarryingAmount
|Amortized intangible assets: |  |                     
|Core deposit intangibles     |  | $                   
|Other intangibles            |  |                     
|                             |  |                     
|                             |  | $                   
|                             |  |                     
|                             | 
|                             |  | As of June 30, 2002 
|                             |  | Gross CarryingAmount
|Amortized intangible assets: |  |                     
|Core deposit intangibles     |  | $                   
|Other intangibles            |  |                     
|                             |  |                     
|                             |  | $                   
|                             |  |                     



Aggregate amortization expense was
$997, $986 and $625 for 2003, 2002 and 2001.



Estimated amortization expense
for each of the next five years:



|For the year ending June 30, 2004 |  | $ | 1,003
|--------------------------------- |  | - | -----
|2005                              |  |   | 1,002
|2006                              |  |   | 984  
|2007                              |  |   | 972  
|2008                              |  |   | 941  
|Thereafter                        |  |   |     
|                                  |  |   |      
|                                  |  | $ | 4,902
|                                  |  |   |      



36



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LOGONOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7  INTEREST BEARING DEPOSITS



At June 30, 2003,
scheduled maturities of certificates of deposit are as follows:



|2004       |  | $ | 256,289
|---------- |  | - | -------
|2005       |  |   | 159,909
|2006       |  |   | 54,610 
|2007       |  |   | 34,417 
|2008       |  |   | 52,816 
|Thereafter |  |   | 3,171  
|           |  |   |        
|           |  | $ | 561,212
|           |  |   |        



At June 30, 2003, scheduled maturities
of certificates of deposit of $100 thousand or more are as follows:



|Three months or less           |  | $ | 15,814 
|------------------------------ |  | - | -------
|Over three through six months  |  |   | 30,159 
|Over six through twelve months |  |   | 47,366 
|Over twelve months             |  |   | 77,050 
|                               |  |   |        
|Total                          |  | $ | 170,389
|                               |  |   |        



NOTE 8  SECURITIES SOLD UNDER
AGREEMENTS TO REPURCHASE



Securities sold under agreements to repurchase
are secured primarily by mortgage-backed securities with a carrying value and fair value of approximately $10,403 at June 30, 2003 and $79,893 at June 30, 2002.



Securities sold under agreements to repurchase are financing arrangements that mature within one year. At maturity, the securities underlying the agreements are
returned to the Company. Information concerning securities sold under agreements to repurchase is summarized as follows:



|                                           |  | 2003 |        |   | 2002 |  
|------------------------------------------ |  | ---- | ------ | - | ---- | -
|Average daily balance during the year      |  | $    | 28,789 |   |      | $
|Average interest rate during the year      |  |      | 4.35   | % |      |  
|Maximum month-end balance during the year  |  | $    | 61,415 |   |      | $
|Weighted average interest rate at year-end |  |      | 1.08   | % |      |  



NOTE 9  FEDERAL HOME LOAN
BANK ADVANCES



Following is a summary of advances from the Federal Home
Loan Bank at June 30:



|                         |  | 2003   |         |                       | 2002 |  
|------------------------ |  | ------ | ------- | --------------------- | ---- | -
|                         |  | Amount |         | Weighted Average Rate |      |  
|Adjustable rate advances |  | $      | 118,815 |                       | 1.51 | %
|Fixed rate advances      |  |        | 117,137 |                       | 3.39 | %
|                         |  |        |         |                       |      |  
|                         |  | $      | 235,952 |                       |      |  
|                         |  |        |         |                       |      |  



37



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 9  FEDERAL HOME LOAN BANK ADVANCES (continued)



Scheduled maturities are as follows:



|2004       |  | $ | 123,184
|---------- |  | - | -------
|2005       |  |   | 29,849 
|2006       |  |   | 20,175 
|2007       |  |   | 4,375  
|2008       |  |   | 4,375  
|Thereafter |  |   | 53,994 
|           |  |   |        
|           |  | $ | 235,952
|           |  |   |        



All advances are collateralized by a
blanket collateral of the Companys FHLB stock and certain residential mortgage loans. At June 30, 2003 and 2002, securities and loans totaling $298,685 and $313,423 were pledged under the blanket collateral agreement. Fixed rate advances are
generally subject to early prepayment fees approximately equal to the present value of the lost cash flow to the FHLB due to the prepayment. At June 30, 2003, there were no FHLB advance borrowings that were currently callable by the Federal Home
Loan Bank. Based on the Companys investment in FHLB stock, the maximum dollar amount of FHLB advance borrowings available at June 30, 2003 was $450,452, of which $235,952 was outstanding at year-end.



NOTE 10  INCOME TAXES



The provision for income taxes consisted of the following:



|                             |  | 2003 |       | 2002 |   | 2001  | 
|---------------------------- |  | ---- | ----- | ---- | - | ----- | 
|Current provision            |  | $    | 5,742 |      | $ | 3,984 | 
|Deferred provision (benefit) |  |      | 2,205 |      |   | 3,828 | 
|                             |  |      |       |      |   |       | 
|                             |  | $    | 7,947 |      | $ | 7,812 | 
|                             |  |      |       |      |   |       | 



The income tax benefit from the
exercise of non-qualified stock options and disposition of incentive stock options was recognized for financial reporting purposes by crediting additional paid-in capital for $235 in 2003, $451 in 2002, and $210 in 2001.



The differences between the financial statement provision and amounts computed by applying
the statutory federal income tax rate to income before taxes were as follows:



|                                                  |  | 2003 |       |   | 2002 |   |       | 2001 | 
|------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | ---- | 
|Income tax computed at the statutory federal rate |  | $    | 8,624 |   |      | $ | 8,412 |      | 
|Add (subtract) tax effect of:                     |  |      |       |   |      |   |       |      | 
|Tax-exempt income                                 |  |      | (391  | ) |      |   | (366  | )    | 
|Dividends received deduction                      |  |      | (220  | ) |      |   | (395  | )    | 
|Goodwill amortization                             |  |      |      |   |      |   |      |      | 
|Miscellaneous items                               |  |      | (66   | ) |      |   | 161   |      | 
|                                                  |  |      |       |   |      |   |       |      | 
|                                                  |  | $    | 7,947 |   |      | $ | 7,812 |      | 
|                                                  |  |      |       |   |      |   |       |      | 



The statutory tax rate was 35% for
2003, 2002 and 2001.



38



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|LOGO |  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|---- |  | ------------------------------------------



NOTE 10  INCOME TAXES
(continued)



The tax effects of principal temporary differences and the
resulting deferred tax assets and liabilities that comprise the net deferred tax balance were as follows at June 30:



|                                                        |  | 2003 |         |   | 2002 |  
|------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|Items giving rise to deferred tax assets:               |  |      |         |   |      |  
|Deferred loan fees and costs                            |  | $    |        |   |      | $
|Charitable contribution carryforward                    |  |      | 611     |   |      |  
|Bad debts                                               |  |      | 3,180   |   |      |  
|Nonaccrual loan interest                                |  |      | 248     |   |      |  
|Accrued stock awards                                    |  |      | 259     |   |      |  
|Deferred compensation                                   |  |      | 127     |   |      |  
|Mark-to-market adjustments                              |  |      | 879     |   |      |  
|Unrealized loss on hedging transactions                 |  |      | 3,455   |   |      |  
|Other                                                   |  |      | 560     |   |      |  
|                                                        |  |      |         |   |      |  
|                                                        |  |      | 9,319   |   |      |  
|Items giving rise to deferred tax liabilities:          |  |      |         |   |      |  
|Deferred loan fees and costs                            |  |      | (210    | ) |      |  
|Unrealized gain on securities available for sale        |  |      | (1,405  | ) |      |  
|FHLB stock dividends                                    |  |      | (3,700  | ) |      |  
|Franchise taxes                                         |  |      | (283    | ) |      |  
|Depreciation                                            |  |      | (1,487  | ) |      |  
|Purchase accounting adjustments and related intangibles |  |      | (1,151  | ) |      |  
|Loan servicing                                          |  |      | (2,468  | ) |      |  
|Other                                                   |  |      | (88     | ) |      |  
|                                                        |  |      |         |   |      |  
|                                                        |  |      | (10,792 | ) |      |  
|                                                        |  |      |         |   |      |  
|Net deferred assets                                     |  | $    | (1,473  | ) |      | $
|                                                        |  |      |         |   |      |  



The Company has
sufficient taxes paid in prior years and available for recovery and expected future taxable income sufficient to warrant recording the full deferred tax asset without a valuation allowance.



Retained earnings at June 30, 2003, include approximately $30,574 for which
no provision for federal income taxes has been made. This amount represents the tax bad debt reserve at June 30, 1988, which is the end of the Companys base year for purposes of calculating the bad debt deduction for tax purposes. If this
portion of retained earnings is used in the future for any purpose other than to absorb bad debts, the amount used will be added to future taxable income. The unrecorded deferred tax liability on the above amount at June 30, 2003 was approximately
$10,701.



Tax expense (benefit) attributable to securities
gains (losses) approximated $394, $543, and $(374) for 2003, 2002 and 2001.



39



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 11 - EMPLOYEE STOCK OWNERSHIP PLAN



During 1999, the Company established an Employee Stock Ownership Plan (ESOP) for the benefit of employees 21 and older and who have completed
at least one thousand hours of service.



To fund the plan, the
ESOP borrowed $8,993 from the Company for the purposes of purchasing 899,300 shares of stock at $10 per share in the conversion. Principal and interest payments on the loan are due in annual installments which began December 31, 1999 with the final
payments of principal and interest being due and payable at maturity on December 31, 2013. Interest is payable during the term of the loan at a fixed rate of 7.75%. The loan is collateralized by the shares of the Companys common stock
purchased with the proceeds. As the Bank periodically makes contributions to the ESOP to repay the loan, shares are allocated to participants on the basis of the ratio of each years principal and interest payments to the total of all principal
and interest payments. Dividends on allocated shares increase participant accounts. Dividends on unallocated shares are used for debt service. ESOP compensation expense was $1,003, $943 and $694 for 2003, 2002 and 2001.



Shares held by the ESOP at June 30 were as follows:



|                                                 |  | 2003 |         | 2002
|------------------------------------------------ |  | ---- | ------- | ----
|Shares allocated to participants  current       |  |      | 59,354  |     
|Shares allocated to participants  prior periods |  |      | 216,723 |     
|Unearned shares                                  |  |      | 623,223 |     
|                                                 |  |      |         |     
|Total ESOP shares                                |  |      | 899,300 |     
|                                                 |  |      |         |     
|Fair value of unearned shares                    |  | $    | 10,906  |     
|                                                 |  |      |         |     



NOTE 12 - 401(k) PLAN



A 401(k) benefit plan allows employee contributions up to
15% of their compensation, which are matched equal to 50% of the first 6% of compensation contributed. The Company match is in the form of cash or stock from the ESOP shares that are committed to be released to participants for that year. 401(k)
expense was $0, $53, and $74 for 2003, 2002 and 2001.



NOTE 13 - RELATED
PARTY TRANSACTIONS



In the ordinary course of business,
the Company has granted loans to executive officers, directors, and their related business interests. A summary of related party loan activity is as follows:



|                                    |  | 2003 |        |   | 2002 |  
|----------------------------------- |  | ---- | ------ | - | ---- | -
|Balance at beginning of period      |  | $    | 1,983  |   |      | $
|New loans                           |  |      | 1,262  |   |      |  
|Effect of change in related parties |  |      | (91    | ) |      |  
|Repayments                          |  |      | (1,087 | ) |      |  
|                                    |  |      |        |   |      |  
|Balance at end of period            |  | $    | 2,067  |   |      | $
|                                    |  |      |        |   |      |  



Deposits from
executive officers, directors and their related business interests at year-end 2003 and 2002 were $14,620 and $3,329.



40



---

LOGO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 14 - STOCK OPTION PLAN



The Company
sponsors a stock option and incentive plan (Plan) for the benefit of directors and employees of the Company. There are 1,711,625 shares of common stock authorized under the Plan. Of this, 587,500 shares of common stock represent the
increase in the Plan for options previously granted to employees and directors in FFY Financial Corp.s option plan. All of the options granted to FFY employees and directors vested upon the closing date of the merger. The Plan provides for the
grant of options, which may qualify as either incentive stock options or nonqualified options. Generally, one-fifth of the options awarded become exercisable on each of the first five anniversaries of the date of grant. The option period expires 10
years from the date of grant, and the exercise price is the market price at the date of grant.



Following is activity under the Plan during the years ended June 30, 2003 and 2002:



|                                         |  | 2003      |   | 2002
|---------------------------------------- |  | --------- | - | ----
|                                         |  | Shares    |   |     
|Options outstanding, beginning of year   |  | 1,134,008 |   |     
|Forfeited                                |  | (22,440   | ) |     
|Exercised                                |  | (148,698  | ) |     
|Granted                                  |  |          |   |     
|                                         |  |           |   |     
|Options outstanding, end of year         |  | 962,870   |   |     
|                                         |  |           |   |     
|Options exercisable, end of year         |  | 586,184   |   |     
|Options available for grant, end of year |  | 109,949   |   |     



|                                                            |  | 2003 |  | 2002 |      | 2001
|----------------------------------------------------------- |  | ---- |  | ---- | ---- | ----
|Weighted-average fair value of options granted during year: |  |     |  | $    | 3.88 |     



Options outstanding at June 30, 2003
were as follows:



|Outstanding              |  |         |  | Exercisable                                
|------------------------ |  | ------- |  | -------------------------------------------
|Range of Exercise Prices |  | Number  |  | Weighted Average Remaining Contractual Life
|$   9.54  $11.50        |  | 186,078 |  | 6.7                                        
|$ 11.51  $17.33         |  | 776,792 |  | 5.8                                        
|                         |  |         |  |                                            
|Outstanding at year-end  |  | 962,870 |  | 6.0                                        
|                         |  |         |  |                                            





41



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 15 - RECOGNITION AND RETENTION PLAN



The Company maintains a recognition and retention plan used to provide ownership interest in the Company in a manner designed to compensate directors and
certain key employees for services. The Company contributed sufficient funds to enable the stock based incentive plan to purchase a number of common shares in the open market equal to 4% of the common shares sold in connection with the conversion of
First Place Bank from a mutual company to a stock based company.



On July 2, 1999, a Committee of the Board of Directors awarded 449,650 shares to certain directors and officers of the Company. No shares had been previously awarded. Generally, one-fifth of such shares are earned and nonforfeitable on each
of the first five anniversaries of the date of the awards. In the event of the death or disability of a participant or a change in control of the Company, the participants shares will be deemed to be entirely earned and nonforfeitable upon
such date. During the year ended June 30, 2003, 8,960 shares were forfeited and no shares were awarded. At June 30, 2003, 83,380 shares were available for grant. Compensation expense is based on the cost of the shares, which approximates fair value
at the date of grant, and was $741, $800 and $1,337 for 2003, 2002 and 2001.



NOTE 16 - OFF-BALANCE-SHEET ACTIVITIES



Some
financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions
established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk for credit loss exists up to the face amount of these instruments, although material losses are not
anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.



The Company began a program in October 2001 to reduce the interest rate risk associated with the interest rate commitment made to borrowers for mortgage
loans that have not yet been closed and potentially made eligible for sale to secondary markets. The Company will, from time to time depending on market interest rates and loan volume, enter into interest rate hedging contracts to limit the exposure
to potential movements in market interest rates. The interest rate hedging position is monitored daily to maintain coverage ranging from 40% to 100% of loan commitments depending on the status of the loan commitments as they progress from
application to origination.



42



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|LOGO |  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|---- |  | ------------------------------------------



NOTE 16  OFF-BALANCE-SHEET
ACTIVITIES (continued)



The contractual amount of
financial instruments with off-balance-sheet risk was as follows at year-end:



|                                             |  | 2003       |         | 2002        
|-------------------------------------------- |  | ---------- | ------- | ------------
|                                             |  | Fixed Rate |         | VariableRate
|Commitments to make loans (at market rates)  |  | $          | 157,031 |             
|Unused lines of credit and letters of credit |  |            |        |             
|Mortgage loan commitment hedge               |  |            | 116,000 |             



Commitments to make
loans are generally made for periods of 60 days or less. The fixed rate loan commitments have interest rates ranging from 4.125% to 15.0% and maturities ranging from 5 years to 30 years.



The hedges will be established with mortgage-backed securities of like maturity and coupon to the loan commitments and as of
June 30, 2003, have a maturity of less than 90 days.



NOTE 17 
INTEREST RATE SWAPS



During 2001, the Company entered into
interest rate swap agreements to assume fixed interest payments in exchange for variable interest payments. The interest rate swaps, derivative instruments, were used by the Company to mitigate the Companys overall risk to increases in
interest rates during the life of the swaps and were a component of the Companys asset/liability management strategy in order to manage the risk of changes in interest rates and its impact on net interest income. The notional amount of the
interest rate swaps do not represent amounts exchanged by the parties. The amount exchanged was determined by reference to the notional amount and the other terms of the interest rate swap.



These interest rate swaps were designated as cash flow hedges of certain
FHLB advances and were determined to be fully effective for the year ended June 30, 2002. As such, the aggregate fair value of the swaps was recorded in other assets or other liabilities with changes in fair value recorded in other comprehensive
income and no amount of ineffectiveness was included in net income.



On August 9, 2002, the Company redeemed the interest rate swaps at the fair value of $12,560 and dedesignated the hedge relationship. The loss recorded in accumulated other comprehensive income at the time of the dedesignation totaled
$8,164, net of tax, and is reclassified into interest expense over the remaining term of the hedge periods.



43



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 17  INTEREST RATE SWAPS (continued)



Summary information about interest rate swaps at year-end follows:



|                                |  | 2002 |          
|------------------------------- |  | ---- | ---------
|Notional amounts                |  | $    | 140,000  
|Weighted average fixed rates    |  |      | 6.50     
|Weighted average variable rates |  |      | 1.85     
|Weighted average maturities     |  |      | 3.8 years
|Fair value at June 30           |  | $    | (10,746  



NOTE 18  REGULATORY CAPITAL



The Bank is subject to regulatory capital requirements
administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting
practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors, and the regulators can lower classifications in certain cases. Failure to meet various
capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.



Under Office of Thrift Supervision (OTS) regulations, limitations have been imposed on all capital distributions, including cash dividends.
The regulation establishes a three-tiered system of restrictions, with the greatest flexibility afforded to thrifts which are both well-capitalized and given favorable qualitative examination ratings by the OTS.



The prompt corrective action regulations provide five classifications,
including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory
approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. As of June 30, 2003 and 2002, the Bank is considered well
capitalized under the regulatory framework for prompt corrective action.



44



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|LOGO |  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|---- |  | ------------------------------------------



NOTE 18  REGULATORY CAPITAL
(Continued)



At year end, actual capital levels of the
Bank (in thousands) and minimum required levels were:



|                                            |  | Actual |         |       | For Capital Adequacy Purposes |   |        | To Be Well Capitalized Under Prompt Corrective Action Regulations |       
|------------------------------------------- |  | ------ | ------- | ----- | ----------------------------- | - | ------ | ----------------------------------------------------------------- | ------
|                                            |  | Amount |         | Ratio |                               |   | Amount |                                                                   | Ratio 
|2003                                        |  |        |         |       |                               |   |        |                                                                   |       
|Total capital (to risk weighted assets)     |  | $      | 133,016 |       | 14.03                         | % |        | $                                                                 | 75,852
|Tier 1 capital (to risk weighted assets)    |  | $      | 124,432 |       | 13.12                         | % |        | $                                                                 | 37,926
|Tier 1 capital (to adjusted total assets)   |  | $      | 124,432 |       | 8.20                          | % |        | $                                                                 | 60,672
|Tangible capital (to adjusted total assets) |  | $      | 124,432 |       | 8.20                          | % |        | $                                                                 | 22,752
|2002                                        |  |        |         |       |                               |   |        |                                                                   |       
|Total capital (to risk weighted assets)     |  | $      | 136,030 |       | 15.97                         | % |        | $                                                                 | 68,145
|Tier 1 capital (to risk weighted assets)    |  | $      | 126,876 |       | 14.89                         | % |        | $                                                                 | 34,073
|Tier 1 capital (to adjusted total assets)   |  | $      | 126,876 |       | 8.27                          | % |        | $                                                                 | 61,395
|Tangible capital (to adjusted total assets) |  | $      | 126,876 |       | 8.27                          | % |        | $                                                                 | 23,023



The Bank converted
from a mutual to a stock institution, and a liquidation account was established at $113,063, which was net worth reported in the conversion prospectus. Eligible depositors who have maintained their accounts, less annual reductions to the
extent they have reduced their deposits, would receive a distribution from this account if the Bank liquidated. Dividends may not reduce shareholders equity below the required liquidation account balance.



45



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 19  FAIR VALUES OF FINANCIAL INSTRUMENTS



The following table shows the estimated fair value and the related carrying value of the Companys financial
instruments at June 30, 2003 and 2002:



|                                              |  | 2003           |          |   | 2002       |  
|--------------------------------------------- |  | -------------- | -------- | - | ---------- | -
|                                              |  | CarryingAmount |          |   | Fair Value |  
|Financial Assets                              |  |                |          |   |            |  
|Cash and cash equivalents                     |  | $              | 32,206   |   |            | $
|Federal funds sold                            |  |                | 1,650    |   |            |  
|Securities available for sale                 |  |                | 346,429  |   |            |  
|Loans held for sale                           |  |                | 65,695   |   |            |  
|Loans receivable, net                         |  |                | 891,842  |   |            |  
|Federal Home Loan Bank stock                  |  |                | 22,523   |   |            |  
|Accrued interest receivable                   |  |                | 6,993    |   |            |  
|Financial Liabilities                         |  |                |          |   |            |  
|Demand and savings deposits                   |  | $              | (547,238 | ) |            | $
|Time deposits                                 |  |                | (561,212 | ) |            |  
|Repurchase agreements                         |  |                | (9,547   | ) |            |  
|FHLB advances                                 |  |                | (235,952 | ) |            |  
|Advances by borrowers for taxes and insurance |  |                | (4,385   | ) |            |  
|Accrued interest payable                      |  |                | (796     | ) |            |  
|Interest rate swaps                           |  |                |         |   |            |  



The methods and assumptions used to
estimate fair value are described as follows:



Carrying amount
is the estimated fair value for cash and cash equivalents, federal funds sold, accrued interest receivable and payable, demand deposits, and advances by borrowers for taxes and insurance. Security fair values are based on market prices or dealer
quotes, and if no such information is available, on the rate and term of the security and information about the issuer. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair
value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of loans held for sale is based on market quotes. Fair value of repurchase agreements and FHLB advances is based on current
rates for similar financing. The fair value of interest rate swaps is based on market prices or dealer quotes.



46



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|LOGO |  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|---- |  | ------------------------------------------



NOTE 20  CONDENSED PARENT
COMPANY FINANCIAL INFORMATION



Condensed financial information of First
Place Financial Corp. is as follows:



CONDENSED BALANCE SHEETS

As of June 30,



|                                                                                           |  |      |        |   | 2003 |   | 2002    | 
|------------------------------------------------------------------------------------------ |  | ---- | ------ | - | ---- | - | ------- | 
|ASSETS                                                                                     |  |      |        |   |      |   |         | 
|Cash and cash equivalents                                                                  |  |      |        |   |      | $ | 18,594  | 
|Securities available for sale                                                              |  |      |        |   |      |   | 7,557   | 
|Note receivable                                                                            |  |      |        |   |      |   | 7,511   | 
|Investment in banking subsidiary                                                           |  |      |        |   |      |   | 144,022 | 
|Investment in other subsidiaries                                                           |  |      |        |   |      |   | 7,468   | 
|Other assets                                                                               |  |      |        |   |      |   | 1,375   | 
|                                                                                           |  |      |        |   |      |   |         | 
|Total assets                                                                               |  |      |        |   |      | $ | 186,527 | 
|                                                                                           |  |      |        |   |      |   |         | 
|LIABILITIES AND SHAREHOLDERS EQUITY                                                       |  |      |        |   |      |   |         | 
|Accrued expenses and other liabilities                                                     |  |      |        |   |      | $ | 3,846   | 
|Shareholders equity                                                                       |  |      |        |   |      |   | 182,681 | 
|                                                                                           |  |      |        |   |      |   |         | 
|Total liabilities and shareholders equity                                                 |  |      |        |   |      | $ | 186,527 | 
|                                                                                           |  |      |        |   |      |   |         | 
|                                                                                           |  |      |       
|CONDENSED STATEMENTS OF INCOME                                                             |  |      |        |   |      |   |         | 
|Years ended June 30,                                                                       |  |      |        |   |      |   |         | 
|                                                                                           |  | 2003 |        |   | 2002 |   | 2001    | 
|INCOME                                                                                     |  |      |        |   |      |   |         | 
|Interest income                                                                            |  | $    | 1,086  |   |      | $ | 2,004   | 
|Dividend from bank                                                                         |  |      | 20,000 |   |      |   | 15,000  | 
|Net gains (losses) on sale of securities                                                   |  |      | 20     |   |      |   | 249     | 
|                                                                                           |  |      |        |   |      |   |         | 
|Total income                                                                               |  |      | 21,106 |   |      |   | 17,253  | 
|EXPENSES                                                                                   |  |      |        |   |      |   |         | 
|Other expenses                                                                             |  |      | 530    |   |      |   | 623     | 
|                                                                                           |  |      |        |   |      |   |         | 
|Total expense                                                                              |  |      | 530    |   |      |   | 623     | 
|Income before income taxes                                                                 |  |      | 20,576 |   |      |   | 16,630  | 
|Income tax provision                                                                       |  |      | 161    |   |      |   | 594     | 
|                                                                                           |  |      |        |   |      |   |         | 
|Income before undistributed net earnings of subsidiaries                                   |  |      | 20,415 |   |      |   | 16,036  | 
|Equity in undistributed net earnings of subsidiaries (distributions in excess of earnings) |  |      | (3,723 | ) |      |   | 194     | 
|                                                                                           |  |      |        |   |      |   |         | 
|Net income                                                                                 |  | $    | 16,692 |   |      | $ | 16,230  | 
|                                                                                           |  |      |        |   |      |   |         | 



47



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 20  CONDENSED PARENT COMPANY FINANCIAL INFORMATION (continued)



CONDENSED STATEMENTS OF CASH FLOWS

Years ended June 30,



|                                                                                         |  | 2003 |         |   | 2002 |   |         | 2001 | 
|---------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- | 
|Cash flows from operating activities                                                     |  |      |         |   |      |   |         |      | 
|Net income                                                                               |  | $    | 16,692  |   |      | $ | 16,230  |      | 
|Adjustments to reconcile net income to net cash provided by operating activities:        |  |      |         |   |      |   |         |      | 
|Distributions in excess of earnings (equity in undistributed earnings from subsidiaries) |  |      | 3,723   |   |      |   | (194    | )    | 
|Net amortization                                                                         |  |      | 17      |   |      |   | (8      | )    | 
|Security (gains) losses                                                                  |  |      | (20     | ) |      |   | (249    | )    | 
|Change in deferred taxes                                                                 |  |      |        |   |      |   | 543     |      | 
|Change in other assets                                                                   |  |      | (56     | ) |      |   | (318    | )    | 
|Change in other liabilities                                                              |  |      | 3,438   |   |      |   | 101     |      | 
|                                                                                         |  |      |         |   |      |   |         |      | 
|Net cash from operating activities                                                       |  |      | 23,794  |   |      |   | 16,105  |      | 
|                                                                                         |  |      |         |   |      |   |         |      | 
|Cash flows from investing activities                                                     |  |      |         |   |      |   |         |      | 
|Paydowns of mortgage-backed securities                                                   |  |      |        |   |      |   | 2,140   |      | 
|Proceeds from sales of mortgage-backed securities                                        |  |      |        |   |      |   | 6,664   |      | 
|Proceeds from maturities of securities                                                   |  |      | 1,090   |   |      |   | 1,195   |      | 
|Net decrease (increase) in loans receivable                                              |  |      | 1,733   |   |      |   | 203     |      | 
|Net cash received in merger                                                              |  |      |        |   |      |   |        |      | 
|Investment in First Place Holdings, Inc.                                                 |  |      | (4,523  | ) |      |   | (935    | )    | 
|Distribution from TitleWorks Agency, LLC                                                 |  |      | 76      |   |      |   | 111     |      | 
|Change in interest bearing accounts                                                      |  |      |        |   |      |   |        |      | 
|Change in loans to Bank                                                                  |  |      | 409     |   |      |   | 381     |      | 
|                                                                                         |  |      |         |   |      |   |         |      | 
|Net cash from investing activities                                                       |  |      | (1,215  | ) |      |   | 9,759   |      | 
|                                                                                         |  |      |         |   |      |   |         |      | 
|Cash flows from financing activities                                                     |  |      |         |   |      |   |         |      | 
|Purchase of treasury stock                                                               |  |      | (15,111 | ) |      |   | (22,913 | )    | 
|Cash dividends paid                                                                      |  |      | (6,612  | ) |      |   | (7,009  | )    | 
|Proceeds from stock options exercised                                                    |  |      | 957     |   |      |   | 2,875   |      | 
|Dividends on unearned ESOP shares                                                        |  |      | (330    | ) |      |   | (364    | )    | 
|                                                                                         |  |      |         |   |      |   |         |      | 
|Net cash from financing activities                                                       |  |      | (21,096 | ) |      |   | (27,411 | )    | 
|                                                                                         |  |      |         |   |      |   |         |      | 
|Net change in cash and cash equivalents                                                  |  |      | 1,483   |   |      |   | (1,547  | )    | 
|Cash and cash equivalents at beginning of year                                           |  |      | 17,111  |   |      |   | 18,658  |      | 
|                                                                                         |  |      |         |   |      |   |         |      | 
|Cash and cash equivalents at end of year                                                 |  | $    | 18,594  |   |      | $ | 17,111  |      | 
|                                                                                         |  |      |         |   |      |   |         |      | 



48



---

LOGONOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 21  EARNINGS PER SHARE



The factors used in the
earnings per share computation follow:

|                                                                 |  | 2003 |            |   | 2002 |   |            | 2001 | 
|---------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- | 
|Basic                                                            |  |      |            |   |      |   |            |      | 
|Net income                                                       |  | $    | 16,692     |   |      | $ | 16,230     |      | 
|                                                                 |  |      |            |   |      |   |            |      | 
|Weighted average shares outstanding                              |  |      | 13,539,941 |   |      |   | 14,669,220 |      | 
|Less: Average unearned ESOP shares                               |  |      | (655,326   | ) |      |   | (714,729   | )    | 
|Less: Average unearned RRP shares                                |  |      | (171,445   | ) |      |   | (229,645   | )    | 
|                                                                 |  |      |            |   |      |   |            |      | 
|Weighted average shares                                          |  |      | 12,713,170 |   |      |   | 13,724,846 |      | 
|                                                                 |  |      |            |   |      |   |            |      | 
|Basic earnings per share                                         |  | $    | 1.31       |   |      | $ | 1.18       |      | 
|                                                                 |  |      |            |   |      |   |            |      | 
|Diluted                                                          |  |      |            |   |      |   |            |      | 
|Net income                                                       |  | $    | 16,692     |   |      | $ | 16,230     |      | 
|                                                                 |  |      |            |   |      |   |            |      | 
|Weighted average shares outstanding for basic earnings per share |  |      | 12,713,170 |   |      |   | 13,724,846 |      | 
|Add: Dilutive effects of assumed exercises of stock options      |  |      | 242,889    |   |      |   | 295,294    |      | 
|Add: Dilutive effects of unearned RRP shares                     |  |      | 11,293     |   |      |   | 14,981     |      | 
|                                                                 |  |      |            |   |      |   |            |      | 
|Weighted average shares and dilutive potential shares            |  |      | 12,967,352 |   |      |   | 14,035,121 |      | 
|                                                                 |  |      |            |   |      |   |            |      | 
|Diluted earnings per share                                       |  | $    | 1.29       |   |      | $ | 1.16       |      | 
|                                                                 |  |      |            |   |      |   |            |      | 



Stock options for 33,117, 33,117 and
21,381 shares of stock were not considered in computing diluted earnings per share for 2003, 2002 and 2001 because they were antidilutive.



NOTE 22  OTHER COMPREHENSIVE INCOME (LOSS)



Other comprehensive income components, net of taxes at June 30 are as follows:



|                                                                                |  | 2003 |        |   | 2002 |   |        | 2001 | 
|------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- | 
|Net income                                                                      |  | $    | 16,692 |   |      | $ | 16,230 |      | 
|Change in unrealized gains (losses) on available for sale securities            |  |      | (349   | ) |      |   | 641    |      | 
|Change in unrealized gain (losses) on interest rate swaps                       |  |      | 568    |   |      |   | (1,788 | )    | 
|Less reclassification adjustments for (gains) losses later recognized in income |  |      | (731   | ) |      |   | 1,009  |      | 
|                                                                                |  |      |        |   |      |   |        |      | 
|Other comprehensive income                                                      |  | $    | 16,180 |   |      | $ | 16,092 |      | 
|                                                                                |  |      |        |   |      |   |        |      | 



49



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 23  QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)



|                                                       |  | September 30 |        | December 31 |   | March 31 |  | June 30
|------------------------------------------------------ |  | ------------ | ------ | ----------- | - | -------- |  | -------
|2003                                                   |  |              |        |             |   |          |  |        
|Total interest income                                  |  | $            | 23,181 |             | $ | 22,638   |  | $      
|Total interest expense                                 |  |              | 12,798 |             |   | 11,167   |  |        
|                                                       |  |              |        |             |   |          |  |        
|Net interest income                                    |  |              | 10,383 |             |   | 11,471   |  |        
|Provision for loan losses                              |  |              | 511    |             |   | 697      |  |        
|                                                       |  |              |        |             |   |          |  |        
|Net interest income after provision for loan losses    |  |              | 9,872  |             |   | 10,774   |  |        
|Total noninterest income                               |  |              | 2,876  |             |   | 4,786    |  |        
|Total noninterest expense                              |  |              | 8,374  |             |   | 9,160    |  |        
|                                                       |  |              |        |             |   |          |  |        
|Income before income taxes and minority interest       |  |              | 4,374  |             |   | 6,400    |  |        
|Provision for income taxes                             |  |              | 1,343  |             |   | 2,112    |  |        
|Minority interest in income of consolidated subsidiary |  |              |       |             |   |         |  |        
|                                                       |  |              |        |             |   |          |  |        
|Net income                                             |  | $            | 3,031  |             | $ | 4,288    |  | $      
|                                                       |  |              |        |             |   |          |  |        
|Basic earnings per share                               |  | $            | 0.23   |             | $ | 0.34     |  | $      
|Diluted earnings per share                             |  | $            | 0.23   |             | $ | 0.33     |  | $      



50



---

LOGONOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 23  QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Continued)



|                                                     |  | September 30 |        | December 31 |   | March 31 |  |   | June 30 |  
|---------------------------------------------------- |  | ------------ | ------ | ----------- | - | -------- |  | - | ------- | -
|2002                                                 |  |              |        |             |   |          |  |   |         |  
|Total interest income                                |  | $            | 27,903 |             | $ | 27,143   |  | $ | 25,735  |  
|Total interest expense                               |  |              | 16,415 |             |   | 15,696   |  |   | 14,831  |  
|                                                     |  |              |        |             |   |          |  |   |         |  
|Net interest income                                  |  |              | 11,488 |             |   | 11,447   |  |   | 10,904  |  
|Provision for loan losses                            |  |              | 660    |             |   | 660      |  |   | 1,010   |  
|                                                     |  |              |        |             |   |          |  |   |         |  
|Net interest income after provision for loan losses  |  |              | 10,828 |             |   | 10,787   |  |   | 9,894   |  
|Total noninterest income                             |  |              | 4,016  |             |   | 3,829    |  |   | 3,703   |  
|Total noninterest expense                            |  |              | 7,925  |             |   | 7,280    |  |   | 8,684   |  
|                                                     |  |              |        |             |   |          |  |   |         |  
|Income before income taxes and minority interest     |  |              | 6,919  |             |   | 7,336    |  |   | 4,913   |  
|Provision for income taxes                           |  |              | 2,156  |             |   | 2,556    |  |   | 1,495   |  
|Minority interest in loss of consolidated subsidiary |  |              |       |             |   |         |  |   | (17     | )
|                                                     |  |              |        |             |   |          |  |   |         |  
|Net income                                           |  | $            | 4,763  |             | $ | 4,780    |  | $ | 3,435   |  
|                                                     |  |              |        |             |   |          |  |   |         |  
|Basic earnings per share                             |  | $            | 0.34   |             | $ | 0.34     |  | $ | 0.25    |  
|Diluted earnings per share                           |  | $            | 0.33   |             | $ | 0.34     |  | $ | 0.25    |  



CORPORATE DATA



|                     |  | A copy of the Annual Report on Form 10-K filed with the Securities and Exchange Commission will be available September 30, 2003 without charge upon written request
to:                                   
|-------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     | 
|                     |  | David L. Mead  Chief Financial Officer First Place Financial Corp.                                                                                                                                       
|                     |  | 185 E. Market Street  P.O. Box 551                                                                                                                                                                       
|                     |  | Warren, OH 44482  Phone: (330) 373-1221 ext. 2279 Fax: (330) 393-5578 Email: dmead@fpfc.net                                                                                                              
|                     | 
|Annual Meeting       |  | The Annual Meeting of Shareholders of First Place Financial Corp. will be held at 10 a.m. on Thursday, October 23, 2003 at:                                                                               
|                     | 
|                     |  | Avalon Inn  9519 E. Market St.  Warren, OH 44484                                                                                                                                                        
|                     | 
|Shareholder Services |  | The Registrar and Transfer Company serves as transfer agent for First Place Financial Corp. shares. Communications regarding change of address, transfer of shares or lost
certificates should be sent to:
|                     | 
|                     |  | The Registrar & Transfer Company 10
Commerce Drive Cranford, New Jersey 07016 Phone: (800)
368-5948                                                                                                       



51



---

|     | 
|---- | 
|LOGO | 



|FIRST PLACE FINANCIAL CORP. OFFICERS   |  |                                   |  |                                   
|-------------------------------------- |  | --------------------------------- |  | ----------------------------------
|                                       |  |                                  
|Steven R. Lewis                        |  | Peggy R. DeBartolo                |  | Alan K. Smith                     
|President and Chief                    |  | Controller                        |  | Vice President  Loan Production  
|Executive Officer                      |  |                                   |  | Manager                           
|                                       |  |                                   |  |                                   
|David L. Mead                          |  | Bruce R. Downie                   |  |                                   
|Chief Financial Officer                |  | Vice President                   |  | Paul B. Snyderman                 
|                                       |  | Financial Reporting and Analysis  |  | Vice President  Wholesale Lending
|                                       |  |                                   |  |                                   
|J. Craig Carr                          |  | Joanne Harrold                    |  | James W. Sollars                  
|General Counsel and Secretary          |  | Senior Internal Auditor           |  | Vice President  Loan Production  
|                                       |  |                                   |  | Office, Cincinnati                
|                                       |  |                                   |  |                                   
|FIRST PLACE BANK OFFICERS              |  | Kandy L. Hricik                   |  | Karen S. Watson                   
|                                       |  | Vice President  Loan Service     |  | Vice President  Bank Systems     
|                                       |  |                                   |  |                                   
|Steven R. Lewis                        |  | Robert H. Kempe                   |  | Caroline M. York                  
|President and Chief Executive Officer  |  | Vice President                   |  | Vice President                   
|                                       |  | Business Financial Services       |  | Business Financial Services       
|                                       |  |                                   |  |                                   
|Albert P. Blank                        |  | Lora L. Koralewski                |  | Deborah J. Brown                  
|Chief Operating Officer and            |  | Vice President                   |  | Assistant Vice President         
|Executive Vice President               |  | Loan Production Office, Toledo    |  | Branch Sales Manager              
|                                       |  |                                   |  |                                   
|David L. Mead                          |  | Darrin L. Kresevic                |  | Jeanette R. Brown                 
|Chief Financial Officer and Treasurer  |  | Vice President                   |  | Assistant Vice President         
|                                       |  | Loan Production Office, Solon     |  | Manager of Deposit Operations     
|                                       |  |                                   |  |                                   
|Timothy A. Beaumont                    |  | Mark S. Makoski                   |  | Michael J. Dolgae                 
|Sr. Vice President                    |  | Vice President                   |  | Assistant Vice President         
|Business Financial Services            |  | Administrative Services           |  | Network Operations & Technology   
|                                       |  |                                   |  |                                   
|J. Craig Carr                          |  | Joseph M. Noss                    |  | Barbara P. Earnest                
|Sr. Vice President                    |  | Vice President  Marketing        |  | Assistant Vice President         
|General Counsel and Secretary          |  |                                   |  | Director of Corporate Training    
|                                       |  |                                   |  |                                   
|David S. Hinkle                        |  | Rocco R. Page                     |  | Roger D. Ferrante                 
|Sr. Vice President  Retail Banking    |  | Vice President                   |  | Assistant Vice President         
|                                       |  | Loan Production Manager           |  | Business Financial Services       
|                                       |  |                                   |  |                                   
|Brian E. Hoopes                        |  | Thomas P. Pishotti                |  | David H. Gebhardt                 
|Sr. Vice President                    |  | Vice President  Consumer Lending |  | Assistant Vice President         
|Chief Information Officer              |  |                                   |  | Branch Sales Manager              
|                                       |  |                                   |  |                                   
|Dominique K. Stoeber                   |  | Thomas J. Roberts                 |  | Roberta L. Harding                
|Sr. Vice President  Human Resources   |  | Vice President  Appraisal        |  | Assistant Vice President         
|                                       |  |                                   |  | Branch Sales Manager              
|                                       |  |                                   |  |                                   
|Kenton A. Thompson                     |  | Joseph R. Sainato                 |  | Linda S. Hardman                  
|Regional President and President of    |  | Vice President  Human Resources  |  | Assistant Vice President         
|Wealth Management Services             |  |                                   |  | Bank Systems                      
|                                       |  |                                   |  |                                   
|R. Bruce Wenmoth                       |  | Dennis G. Sell                    |  | Jane A. Hutchins                  
|Sr. Vice President  Retail Lending    |  | Vice President  Loan Operations  |  | Assistant Vice President         
|                                       |  |                                   |  | Mortgage Loan Officer             
|                                       |  |                                   |  |                                   
|Timothy B. Atkinson                    |  | Mary G. Shaffer                   |  | Mary Ann McElfresh                
|Vice President  Loan Production       |  | Vice President                   |  | Assistant Vice President         
|Office, N. Olmsted                     |  | CRA/Residential Development       |  | Branch Sales Manager              
|                                       |  |                                   |  |                                   
|Robert R. Campolito                    |  | Kathy A. Shaw                     |  |                                   
|Vice President                        |  | Vice President  Loan Production  |  |                                   
|Chief Technology Officer               |  | Office, Dayton                    |  |                                   
|                                       |  |                                   |  |                                   
|Craig A. Cumberworth                   |  |                                   |  |                                   
|Vice President  Regional Retail Sales |  |                                   |  |                                   



52



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Corporate Directory



|                                    |  | FIRST PLACE AFFILIATES                 |  |                                    
|----------------------------------- |  | -------------------------------------- |  | -----------------------------------
|Stella J. Ryser                     |  | Albert P. Blank                        |  | W. Terry Patrick                   
|Assistant Vice President           |  | President, Coldwell Banker First Place |  | Chairman of the Board of           
|Branch Sales Manager                |  | Real Estate, Ltd.                      |  | First Place Financial Corp. &      
|                                    |  |                                        |  | First Place Bank                   
|                                    |  |                                        |  | Partner, Friedman & Rummell Co.,   
|                                    |  |                                        |  | L.P.A.                             
|                                    |  |                                        |  |                                    
|Michael D. Schrock                  |  | Mero Capo, III                         |  | E. Jeffrey Rossi                   
|Assistant Vice President           |  | President, APB Financial Group, Ltd.   |  | Principal, E.J. Rossi & Co.        
|Senior Sales Manager                |  |                                        |  |                                    
|                                    |  |                                        |  |                                    
|Laurie B. Whited                    |  | Daniel W. Landers                      |  | Samuel A. Roth                     
|Assistant Vice President           |  | President, First Place Insurance       |  | Consultant to Businesses           
|Loan Operations, Ravenna            |  | Agency, Ltd.                           |  | Retired President, First Energy    
|                                    |  |                                        |  | Facilities Service Group           
|                                    |  | FIRST PLACE FINANCIAL CORP.            |  |                                    
|John J. Wlodarski                   |  | FIRST PLACE BANK                       |  | William A. Russell                 
|Assistant Vice President           |  | BOARD OF DIRECTORS                     |  | President, Canteen Service of Steel
|Branch Sales Manager                |  |                                        |  | Valley, Inc.                       
|                                    |  |                                        |  |                                    
|Janet Byrne                         |  | A. Gary Bitonte, M.D.                  |  | Ronald P. Volpe, Ph.D.             
|Administrative Assistant            |  | Northeastern Ohio and Ohio University  |  | Professor of Finance, Williamson   
|                                    |  | Medical Schools Faculty                |  | College of Business Administration 
|                                    |  |                                        |  | Youngstown State University        
|                                    |  |                                        |  |                                    
|Christine L. Chasko                 |  | Donald Cagigas                         |  | Robert L. Wagmiller                
|Accounting Officer  Analyst        |  | President of Youngstown/Mahoning       |  | Chairman of the Board of           
|                                    |  | Valley United Way                      |  | First Place Insurance Agency, Ltd. 
|                                    |  |                                        |  | Chairman, Belmont Distributing     
|                                    |  |                                        |  |                                    
|Joseph P. Conroy                    |  | Marie Izzo Cartwright                  |  |                                    
|Mortgage Loan Officer               |  | Chairman of the Board                  |  |                                    
|                                    |  | of First Place Holdings, Inc.          |  |                                    
|                                    |  | Consultant, Revak & Associates         |  |                                    
|                                    |  |                                        |  |                                    
|Linda R. Cooper                     |  | Jeffrey L. Francis                     |  |                                    
|Loan Review Officer                 |  | Former Chief Operating Officer &       |  |                                    
|                                    |  | Executive Vice President of            |  |                                    
|                                    |  | First Place Financial Corp.            |  |                                    
|                                    |  | Former Chief Operating Officer &       |  |                                    
|                                    |  | President of First Place Bank          |  |                                    
|                                    |  |                                        |  |                                    
|Richard W. Curry                    |  | George J. Gentithes                    |  |                                    
|Mortgage Loan Officer               |  | Consultant, T.F. Industries            |  |                                    
|                                    |  |                                        |  |                                    
|Dominick P. DeNunzio                |  | Robert P. Grace                        |  |                                    
|Mortgage Loan Officer  Underwriter |  | Retired Vice President & Chief         |  |                                    
|                                    |  | Financial Officer, Salem Label Co.     |  |                                    
|                                    |  | Retired Partner, Ernst & Young         |  |                                    
|                                    |  |                                        |  |                                    
|Barbara D. Essig                    |  | Thomas M. Humphries                    |  |                                    
|Mortgage Loan Officer  Underwriter |  | President, Youngstown-Warren           |  |                                    
|                                    |  | Regional Chamber                       |  |                                    
|                                    |  |                                        |  |                                    
|Barbara A. Gaffey                   |  | Earl T. Kissell                        |  |                                    
|Appraisal Officer                   |  | Former President & Chief Executive     |  |                                    
|                                    |  | Officer of Ravenna Savings Bank        |  |                                    
|                                    |  | Assistant Professor Economics and      |  |                                    
|                                    |  | Management, Hiram College              |  |                                    
|                                    |  |                                        |  |                                    
|Vikki L. Greene                     |  | Steven R. Lewis                        |  |                                    
|Security Officer                    |  | President & Chief Executive Officer of |  |                                    
|                                    |  | First Place Financial Corp.            |  |                                    
|Lynn A. Maizel                      |  | President & Chief Executive Officer of |  |                                    
|Compliance Officer                  |  | First Place Bank                       |  |                                    
|                                    |  |                                        |  |                                    
|Jill Mayfield                       |  |                                        |  |                                    
|Recruiting Officer                  |  |                                        |  |                                    
|                                    |  |                                        |  |                                    
|Frank A. Pasquale                   |  |                                        |  |                                    
|Mortgage Loan Officer              |  |                                        |  |                                    
|Credit Analyst                      |  |                                        |  |                                    



53



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