EXHIBIT 13


<PAGE>
                            ADVANCE FINANCIAL BANCORP

Corporate Profile

     Advance  Financial  Bancorp  (the  "Company")  is  a  Delaware  corporation
organized in September 1996 at the direction of Advance  Financial  Savings Bank
(the  "Bank") to acquire  all of the  capital  stock that the Bank issued in its
conversion  from a mutual to a stock form of ownership  (the  "Conversion").  On
December 31, 1996,  the Bank  completed the Conversion and became a wholly owned
subsidiary  of the  Company.  The Company is a unitary  savings and loan holding
company which, under existing laws,  generally is not restricted in the types of
business  activities  in which it may engage  provided  that the Bank  retains a
specified  amount of its  assets in  housing-related  investments.  The  Company
conducts no significant business or operations of its own other than holding all
the outstanding stock of the Bank and investing the Company's portion of the net
proceeds obtained in the Conversion.

The Bank  chartered  in 1935 under the name  Advance  Federal  Savings  and Loan
Association  of West  Virginia,  is a federally  chartered  stock  savings  bank
headquartered  in Wellsburg,  West Virginia.  The Bank is subject to examination
and  comprehensive  regulation  by the  Office  of  Thrift  Supervision  and its
deposits are federally  insured by the Savings  Association  Insurance Fund. The
Bank is a member of and owns stock in the  Federal  Home Loan Bank  ("FHLB")  of
Pittsburgh, which is one of the 12 regional banks in the FHLB System.

     The Bank operates a traditional  savings bank business,  attracting deposit
accounts from the general public and using those  deposits,  together with other
funds,  primarily to originate and invest in loans secured by one to four family
residential real estate,  non-residential real estate and commercial loans. To a
lesser  extent,  the Bank also  originates  multi-family  real estate  loans and
consumer loans.

Stock Market Information

     The Company's  common stock has been traded on the NASDAQ  SmallCap  Market
under the trading  symbol of "AFBC" since it commenced  trading in January 1997.
The following table reflects high and low bid quotations as published by NASDAQ.
The quotations reflect inter-dealer prices,  without retail mark-up,  mark-down,
or commission, and may not represent actual transactions.
<TABLE>
<CAPTION>
                                                                                                 Dividends
                  Date                                        High ($)           Low ($)         Declared ($)
                  ----                                        --------           -------         ------------
       <S>                                                    <C>              <C>                <C>
         July 1, 1998 to September 30, 1998                     18.13            13.88              .08
         October 1, 1998 to December 31, 1998                   14.38            12.63              .08
         January 1, 1999 to March 31, 1999                      13.50            11.63              .08
         April 1, 1999 to June 30, 1999                         12.63            10.44              .08
         July 1, 1999 to September 30, 1999                     12.50            12.00              .10
         October 1, 1999 to December 31, 1999                   13.75            11.63              .10
         January 1, 2000 to March 31, 2000                      13.50            10.00              .10
         April 1, 2000 to June 30, 2000                         11.00             9.00              .10
</TABLE>
     The number of  stockholders of record of common stock as of the record date
of August 31, 2000, was  approximately  452. This does not reflect the number of
persons or entities who held stock in nominee or "street"  name through  various
brokerage firms. At August 31, 2000, there were 932,285 shares outstanding.  The
Company's  ability  to pay  dividends  to  stockholders  is  dependent  upon the
dividends  it  receives  from the Bank.  The Bank may not  declare or pay a cash
dividend  on any of its stock if the  effect  thereof  would  cause  the  Bank's
regulatory  capital  to be  reduced  below  (1)  the  amount  required  for  the
liquidation  account  established in connection with the conversion,  or (2) the
regulatory capital requirements imposed by the OTS.

<PAGE>

Selected Financial Ratios and Other Data

                                                            For  the Years Ended
                                                                    June 30
                                                            --------------------
                                                              2000 %     1999 %
                                                            --------------------
         Return on average assets
              (net income divided by average total assets)       .63        .64
         Return on average equity
              (net income divided by average equity)            6.01       5.22
         Average equity to average assets ratio
              (average equity divided by average assets)       10.53      12.34
         Equity to assets at period end                        10.37      11.54
         Net interest spread                                    3.25       3.30
         Dividend payout ratio                                 37.78      37.02
         Net yield on average interest-earning assets           3.71       3.81
         Non-performing loans to total assets                    .34        .59
         Non-performing loans to total loans                     .41        .70
         Allowance for loan losses to non-performing assets    74.06      70.67

                                       6
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

     The Private  Securities  Litigation Reform Act of 1995 contains safe harbor
provisions regarding forward-looking  statements.  When used in this discussion,
the words  "believes",  "anticipates",  "contemplates",  "expects",  and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, which could cause actual results
to differ materially from those projected. Those risks and uncertainties include
changes in interest  rates,  risks  associated with the ability to control costs
and  expenses,  Year  2000  issues  and  general  economic  conditions.  Advance
Financial  Bancorp (the "Company")  undertakes no obligation to publicly release
the results of any revisions to those  forward-looking  statements  which may be
made to reflect events or circumstances  after the date hereof or to reflect the
occurrence of unanticipated events.

Overview

     The Company conducts no significant business or operations of its own other
than holding all of the outstanding stock of Advance Financial Savings Bank (the
"Bank").

     The Company's  results from  operations are primarily  dependent on its net
interest  income,  which is the  difference  between the interest  earned on its
assets,  primarily  loans  and  investments,  and the  interest  expense  on its
liabilities,  primarily  deposits and  borrowings.  Net  interest  income may be
affected  significantly  by general  economic  and  competitive  conditions  and
policies  of  regulatory  agencies,  particularly  those with  respect to market
interest rates. The results of operations are also  significantly  influenced by
the level of noninterest  expenses,  such as compensation and employee benefits,
noninterest income, such as service charges on deposit related services, and the
Company's provision for loan losses.

Asset and Liability Management

     The  Company's  net  interest  income is  sensitive  to changes in interest
rates, as the rates paid on interest-bearing liabilities generally change faster
than the rates  earned on  interest-earning  assets.  As a result,  net interest
income will frequently  decline in periods of rising interest rates and increase
in periods of decreasing interest rates.

     To mitigate the impact of changing  interest rates on net interest  income,
the Company  manages  interest rate  sensitivity  and  asset/liability  products
through an asset/liability management committee (the "Committee"). The Committee
meets as necessary to  determine  the rates of interest for loans and  deposits.
Rates on deposits are primarily  based on the Company's  need for funds and on a
review of rates offered by other financial  institutions in the Company's market
area.  Interest rates on loans are primarily based on the interest rates offered
by other financial  institutions  in the Company's  market area, as well as, the
Company's cost of funds.

     The Committee manages the imbalance between its interest-earning assets and
interest-bearing   liabilities  through  the  determination  and  adjustment  of
asset/liability  composition and pricing strategies. The Committee then monitors
the  impact  of the  interest  rate  risk  and  earnings  consequences  of  such
strategies  for  consistency  with the  Company's  liquidity  needs,  growth and
capital adequacy.  The Committee's  principal strategy is to reduce the interest
rate sensitivity of interest-earning  assets and attempt to match the maturities
of interest-earning assets with interest-bearing liabilities, while allowing for
a mismatch in an attempt to increase net interest income.

     In an effort to reduce  interest  rate  risk and  protect  itself  from the
negative  effects of rapid or prolonged  changes in interest rates,  the Company
has also instituted certain asset and liability management  measures,  including
underwriting  long-term  fixed  rate loans that are  saleable  in the  secondary
market,  offering  longer  term  deposit  products  and  diversifying  the  loan
portfolio into shorter term consumer and commercial business loans. In addition,
the  Company  originates  one year,  three-year  and five year  adjustable  rate
mortgage loans.

                                       7
<PAGE>
Net Portfolio Value

     The Company  computes  amounts by which the net present  value of cash flow
assets,  liabilities  and off balance  sheet items  ("NPV")  would change in the
event of a range of assumed changes in market interest rates.  The  computations
estimate the effect on the Company's NPV from  instantaneous and permanent 1% to
3% (100 to 300 basis points) increases or decreases in market interest rates.

Based upon the Office of Thrift  Supervision  assumptions,  the following  table
presents the Company's NPV at June 30, 2000.


                 Changes in rates           NPV Ratio (1)        Change(2)
                 ----------------           -------------        ---------
                     +300 bp                    9.14 %            (279) bp
                     +200 bp                   10.39              (154) bp
                     +100 bp                   11.42              ( 51) bp
                        0 bp                   11.93
                     -100 bp                   12.11                18  bp
                     -200 bp                   11.58              ( 35) bp
                     -300 bp                   11.22              ( 71) bp

(1)  Calculated as the estimated NPV divided by present value of total assets.
(2)  Calculated  as the  excess  (deficiency)  of the  NPV  ratio  assuming  the
     indicated change in interest rates over the estimated NPV ratio assuming no
     change in interest rates.

       These  calculations  indicate  that the  Company's  NPV could not only be
  adversely  affected by increases in interest rates but also could be adversely
  affected  by a  decrease  in  interest  rates of 200 or 300 basis  points.  In
  addition,  the  Company  may be deemed  to have  more  than a normal  level of
  interest rate risk under applicable regulatory capital requirements.

       Computations of prospective effects of hypothetical interest rate changes
  are  based on  numerous  assumptions,  including  relative  levels  of  market
  interest rates,  prepayments,  and deposit run-offs,  and should not be relied
  upon as indicative of actual  results.  Certain  shortcomings  are inherent in
  such  computations.  Although  certain assets and liabilities may have similar
  maturity  or periods of  repricing  they may react at  different  times and in
  different  degrees to changes in market interest rates.  The interest rates on
  certain types of assets and liabilities may fluctuate in advance of changes in
  market  interest  rates,  while rates on other types of assets and liabilities
  may lag behind  changes in market  interest  rates.  Certain  assets,  such as
  adjustable rate mortgages,  generally have features, which restrict changes in
  interest  rates on a short-term  basis and over the life of the asset.  In the
  event of a change in interest rates,  prepayments and early withdrawal  levels
  could  deviate  significantly  from those assumed in making  calculations  set
  forth above. Additionally,  an increased credit risk may result as the ability
  of many  borrowers  to  service  their  debt may  decrease  in the event of an
  interest rate increase.

                                       8
<PAGE>
Average Balance Sheet

     The  following  table  sets  forth  certain  information  relating  to  the
Company's  average  balance  sheet and reflects the average  yield on assets and
average cost of  liabilities  for the periods  indicated and the average  yields
earned and rates paid.  Such yields and costs are derived by dividing  income or
expense by the average balance of assets or liabilities,  respectively,  for the
periods  presented.  Average  balances  are  derived  from  month-end  balances.
Management does not believe that the use of month-end  balances instead of daily
average  balances  has  caused  any  material  differences  in  the  information
presented.
<TABLE>
<CAPTION>
                                                  Year Ended June 30,                          Month Ended June 30,
                            ----------------------------------------------------------------   -----------------------
                                        2000                             1999                           2000
                            ------------------------------   -------------------------------   -----------------------
                            Average             Average      Average               Average      Average      Average
                            Balance   Interest  Yield/Cost   Balance   Interest   Yield/Cost    Balance     Yield/Cost
                            --------  --------  ----------   --------  --------   ----------   ---------   -----------
<S>                        <C>        <C>      <C>         <C>         <C>       <C>          <C>            <C>
Interest-earning assets:
  Loans receivable (1)      $116,825   $9,564     8.19%     $103,764    $8,517      8.21%      $119,718         8.32%
  Investment securities(2)    13,627      879     6.45%        9,696       554      5.71%        14,516         6.08%
  Mortgage-backed
    securities                 3,936      256     6.49%        2,031       121      5.95%         3,664         6.73%
                            --------  -------   ------       -------   -------    ------       --------    ---------
     Total interest-
       earning assets        134,388   10,699     7.96%      115,491     9,192      7.95%       137,898         8.04%
                                      -------   ------                 -------    ------                   ---------
Non-interest-earning assets    7,151                           6,286                              6,994
                            --------                         -------                           --------
     Total assets           $141,539                         121,777                           $144,892
                            ========                         =======                           ========
Interest-bearing
liabilities:
  Interest-bearing
    demand deposits          $20,630      691     3.35%      $19,846       650      3.28%       $20,396         3.19%
  Certificates of deposits    71,005    3,849     5.42%       59,066     3,257      5.51%        75,506         5.53%
  Savings deposits            16,958      459     2.71%       15,103       404      2.67%        17,640         2.76%
  FHLB borrowings             12,812      717     5.60%        9,042       486      5.37%        10,250         5.00%
                            --------  -------   ------       -------   -------    ------       --------    ---------
     Total interest-
       bearing liabilities   121,405    5,716     4.71%      103,057     4,797      4.65%       123,792         4.70%
                                      -------   ------                 -------    ------                   ---------
Non-interest bearing
  liabilities                  5,237                           3,693                              6,059
                            --------                         -------                           --------
     Total liabilities       126,642                         106,750                            129,851
Stockholders' equity          14,897                          15,027                             15,041
                            --------                         -------                           --------
     Total liabilities
       and stockholders'
       equity               $141,539                        $121,777                           $144,892
                            ========                         =======                           ========
Net interest income                    $4,983                           $4,395
                                       ======                           ======
Interest rate spread (3)                          3.25%                             3.30%                       3.34%
                                                ======                            =======                     ======
Net Yield on interest-
  earning assets (4)                              3.71%                             3.81%                       3.81%
                                                ======                            ======                      ======
Ratio of average
  interest-earning
  assets to average
  interest-bearing
  liabilities                                   110.69%                           112.07%                     111.39%
                                                ======                            ======                      ======
</TABLE>
--------------
(1)  Average balances include non-accrual loans.
(2)  Includes interest-bearing deposits in other financial institutions and FHLB
     stock.
(3)  Interest-rate spread represents the difference between the average yield on
     interest   earning   assets  and  the  average  cost  of   interest-bearing
     liabilities.
(4)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.
                                       9
<PAGE>
Rate/Volume Analysis

The table below sets forth  certain  information  regarding  changes in interest
income and interest expense of the Company for the periods  indicated.  For each
category   of   interest-earning   assets  and   interest-bearing   liabilities,
information  is  provided  on  changes  attributable  to (i ) changes  in volume
(changes  in average  volume  multiplied  by old rate) and (ii ) changes in rate
(changes in rate  multiplied  by old  average  volume).  Changes,  which are not
solely  attributable to rate or volume,  are allocated to changes in rate due to
rate sensitivity of interest-earning assets and interest-bearing liabilities.

<TABLE>
<CAPTION>
                                                                   Year Ended June 30,
                                                                ----------------------------
                                                                       2000 vs 1999
                                                                ----------------------------
                                                                   Increase (Decrease)
                                                                          Due to
                                                                ----------------------------
                                                                Volume     Rate        Net
                                                                ----------------------------
                                                                   (Dollars in Thousands)
<S>                                                           <C>         <C>      <C>
              Interest Income:
                Loans receivable                                $1,062      $(15)    $1,047
                Investment securities                              311        15        326
                Mortgage-backed securities                         134         1        135
                                                                ----------------------------
                   Total interest-earning assets                 1,507         1      1,508
                                                                ----------------------------

              Interest Expense:
                Interest-bearing demand
                 deposits                                           26        16         42
                Certificates of Deposit                            621       (30)       591
                Savings Deposits                                    50         5         55
                FHLB borrowings                                    211        20        231
                                                                ----------------------------
                   Total interest-bearing liabilities              908        11        919
                                                                ----------------------------
              Net change in interest income                       $599      $(10)      $589
                                                                ============================
</TABLE>
Comparison of Financial Condition

     The Company's total assets increased approximately $15,338,000,  or 11.81%,
to $145,264,000  at June 30, 2000,  from  $129,927,000 at June 30, 1999. At June
30,  2000,  deposits  and Federal  Home Loan Bank  ("FHLB")  advances  increased
$13,592,000 and $1,500,000, respectively. These increases were used to fund loan
demand and to purchase investment securities.

     Total cash and cash  equivalents  increased by  $1,392,000 to $5,752,000 at
June 30,  2000 from  $4,360,000  at June 30,  1999.  This  additional  liquidity
enables  the  Company's  management  to help  manage  interest  rate risk in the
current  interest rate environment by being less dependent on outside funding to
meet loan demand.

     Investment  securities  available  for  sale  increased  by  $3,753,000  to
$8,235,000  at June 30, 2000 from  $4,481,000  at June 30, 1999.  This  increase
includes  approximately  $1,470,000  in three FHLB bonds with  callable  options
ranging from 3 months to 6 months and an  effective  weighted  average  interest
rate of 7.11%.  The funding for these bonds came from the strong deposit growth.
The increase  also  includes  the purchase of a $2,500,000  15-year FHLB bond in
August 1999 with a callable  option of one year and effective  interest yield of
8.1%.  The funding for this bond came from a FHLB advance that matured in August
2000 and had an  effective  cost of funds of 5.94%.  Currently,  management  has
elected to replace the short term funding for this bond by using  $1,000,000  of
current  liquidity and using $1,500,000 from the Company's Line of Credit at the
FHLB.  The cost of  funding  with the Line of Credit  ranges  from 6.5% to 6.8%,
currently. Management has classified these investments as available for sale for
liquidity  purposes while  maximizing  interest  yields in excess of the federal
overnight rates paid on interest-bearing demand deposits.

                                       10
<PAGE>
     Net loans receivable  increased $9,822,000 to $119,721,000 at June 30, 2000
from  $109,900,000 at June 30, 1999. The net increase was spread over the entire
portfolio.  Loans secured by 1-4 family residences  increased  $2,490,000 due to
demand of ARMs and the bank's "no fee" Equity Line of Credit program. The Bank's
"no fee" program ended during November 1999. Multi-family  residential loans and
non-residential  real estate  loans  increased  by  $2,780,000  and  $1,328,000,
respectively,  due to the strong demand for the Company's  competitively  priced
ARM  products.  Construction  loans  increased  $1,169,000  due to the Company's
competitive  loan  product.  Automobile  loans  increased  $2,255,000  of  which
$1,944,000 were "dealer loans" written by automobile dealership customers of the
Company.  The funding for the loan growth was provided  primarily by an increase
in deposits.

     Deposits  increased by  $13,592,000 or 12.90% to  $118,931,000  at June 30,
2000  from  $105,339,000  at June  30,  1999.  Within  the  deposit  line  item,
certificates of deposit increased by $12,295,000 to $76,012,000 at June 30, 2000
from $63,716,000 at June 30, 1999. This increase is primarily the result of four
certificate of deposit  specials.  The first was called  "Advantage  2000", this
certificate of deposit  offered above market rates on certificates of deposit at
5.25% for 12 months and 5.50% for 18 months. The "advantage" of this product was
that  the  customers  had a  10-day  option  at the end of 1999  to  redeem  the
certificate with no penalty.  This successful special was offered from June 1999
to September 20, 1999. During the ten day option period of 1999, the Company had
approximately  $2,350,000 of the "Advantage 2000" certificates  redeemed without
penalty  which  was  approximately  35% of the  total  amount  deposited  in the
certificate  product.  The  Company  was able to  retain  all but  approximately
$330,000 of the redeemed certificates with customers generally  transferring the
funds into another of the  certificate  products  called "Fives are Wild",  this
certificate  special  offered above market  interest  rates on  certificates  of
deposit  of 5.55%  for five  months,  5.75%  for ten  months,  6.0% for 15 or 18
months,  and 6.07% for 21  months.  The "Fives  are Wild"  special  began in mid
October and ended on March 29, 2000. In mid January of 2000, the Company offered
a third  certificate of deposit special that paid above market interest rates of
6% for 6 months,  6.25%  for 12  months,  6.35%  for 24 months  and 6.89% for 36
months.  As with previous  specials,  this special was well received by the area
consumers.  This special ended on March 29, 2000, as well.  The fourth and final
special   offered  by  the  Company  offered  above  market  interest  rates  on
certificates of deposit of 6.1% for seven months, 6.5% for eleven months,  6.85%
for 13 months and 7% for 19  months.  This  special  was well  received  by area
consumers  and more  specifically  to  current  customers,  as it has helped the
Company in retaining matured deposits from previous specials. This special began
in early April 2000 and is currently  still being  offered.  We believe,  though
there is no  assurance,  that we can  retain the  growth in our  certificate  of
deposit accounts.

     Savings  deposits  increased  $1,271,000  while demand  deposits  increased
$25,000 for the one-year  period.  The demand deposit increase was primarily the
net result of an increase in non-interest bearing deposits of $1,320,000,  and a
decrease  in  NOW  and  money  market   deposits  of  $1,253,000   and  $41,000,
respectively.

     Advances from the FHLB  increased by $1,500,000 to  $10,500,000 at June 30,
2000 from $9,000,000 at June 30, 1999. This is a net increase involving multiple
transactions.  The first  transaction  was to add a  $2,500,000  advance  with a
weighted  average rate of 5.94% that has a one-year  maturity of August of 2000.
The proceeds of this advance were used to purchase a FHLB bond  described  above
under investment securities.  The second transaction was to increase an existing
$1,000,000  callable advance to $3,000,000 with a weighted average rate of 5.52%
that has an initial call date in October  2001.  The  additional  $2,000,000  in
proceeds  from this  advance  were  used to fund a three  year  adjustable  rate
mortgage loan originated in October 1999. The third transaction was to not renew
a $3,000,000 advance that was called in June 2000 due to the Company's liquidity
position.

     In  addition  to the  increases  and  changes  to  advances  from  the FHLB
discussed above, during the quarter ended December 31, 1999, the FHLB called all
three  outstanding  advances at June 30,  1999,  amounting  to  $9,000,000.  The
Company  elected to renew these advances at the proposed higher rates offered by
the FHLB.  The new weighted  average rate of the renewed  $9,000,000 in advances
increased  to 5.63% from 5.37%  prior to the calls.  In June 2000,  one of these
advances for $3,000,000 was called again,  and the company  elected not to renew
the funds as discussed above.

     Stockholders  equity increased $75,000 to $15,068,000 at June 30, 2000 from
$14,993,000 at June 30, 1999.  Through June 30, 2000, the Company  initiated the
payment of dividends of $.40 per share, while maintaining capital ratios well in
excess of regulatory  guidelines.  The Board of Directors will determine  future
dividend  policies in light of earnings and financial  condition of the Company,
including applicable governmental regulations and policies.

                                       11
<PAGE>
Comparison  of the Results of  Operations  for the Years Ended June 30, 2000 and
1999

     Net Interest Income. The Company's net interest income increased  $588,000,
or 13.39%,  to $4,983,000  for the year ended June 30, 2000 from  $4,394,000 for
the same  period  ended  1999.  The  increase in net  interest  income  resulted
primarily  from an increase in the average  volume of the  underlying  principle
balances in interest  earning assets and  liabilities.  The net interest  spread
decreased  to 3.25% for the period  ended June 30,  2000 from 3.30% for the same
period ended 1999.  The average  yield on interest  earning  assets  increased 1
basis point to 7.96% at June 30, 2000 from 7.95% for the comparable period ended
1999.  The average cost of funds  increased 6 basis points to 4.71% for the year
ended June 30, 2000 from 4.65% for the comparable period ended 1999.

     Interest and Dividend Income.  Total interest and dividend income increased
$1,507,000,  or 16.40%,  to  $10,699,000  for the year ended June 30,  2000 from
$9,192,000 for the comparable 1999 period.  The increase was primarily due to an
increase in earnings on loans of  $1,047,000  as the average  principle  balance
increased $13,061,000 to $116,825,000 at June 30, 2000 from $103,764,000 for the
comparable 1999 period. Interest and dividend income on investments and interest
bearing  deposits  with other  financial  institutions  increased  approximately
$460,000 as average principle  balances  increased  $5,836,000 to $17,563,000 at
June 30, 2000 from  $11,727,000  for the  comparable  1999  period.  See Average
Balance Sheet Table included herein for additional detail.

     Interest Expense.  Total interest expense  increased  $919,000 or 19.15% to
$5,716,000  for the year ended June 30, 2000 compared to $4,797,000 for the same
period ended 1999.  The increase was primarily due to an increase in interest on
deposits  of  $688,000  as  the  average   balance   increased   $14,577,000  to
$108,593,000  for  the  year  ended  June  30,  2000  from  $94,015,000  for the
comparable 1999 period.  Interest expense on advances  increased $231,000 as the
average balance increased  $3,770,000 to $12,812,000 for the year ended June 30,
2000 from $9,042,000 for the comparable  1999 period.  See Average Balance Sheet
included herein for additional detail.

     Provision for Loan Losses.  For the year ended June 30, 2000, the provision
for loan losses was  $175,000 as compared to $150,000  for the  comparable  1999
period. Net charge-offs for the period ended June 30, 2000 were $75,000 compared
to $45,000 for the comparable 1999 period.  Management continually evaluates the
adequacy of the allowance for loan losses,  which  encompasses  the overall risk
characteristics of the various portfolio segments,  past experience with losses,
the impact of economic  conditions on  borrowers,  and other  relevant  factors.
While the loan mix has  changed  slightly  over the past two  years,  management
believes that the underlying  collateral supporting such loans provides adequate
coverage.  The Company  maintains a desirable  level in its loan loss provisions
based upon the  Company's  review of the  market,  loan  portfolio,  and overall
assessment  of  the  adequacy  of  the  valuation  allowance.  There  can  be no
assurance,  however,  that additional  provisions will not be required in future
periods.

     Noninterest  Income.  Noninterest  income decreased  $44,000,  or 5.88%, to
$705,000  for the year ended June 30, 2000  compared  to  $749,000  for the same
period  ended 1999.  For the year ended June 30,  2000,  gains on sales of fixed
rate  mortgages  and related  servicing  rights  decreased  by  $164,000.  These
decreases  are due to the lack of demand of fixed rate  mortgages as a result of
the changing  interest rate  environment  during the year ended June 30, 2000 in
comparison to the rate environment during the same period ended 1999. Offsetting
these  decreases  for the year  ended  June 30,  2000 are  increases  in service
charges on deposit  accounts  of $64,000  and ATM and  Consumer  Card  income of
$35,000  and  $19,000,  respectively.  These  increases  are  due  primarily  to
increased customer activity.

     Noninterest Expense.  Noninterest expense increased $312,000,  or 8.36%, to
$4,040,000 for the year ended June 30, 2000 from  $3,728,000 for the same period
ended 1999.  Compensation and benefits increased $192,000, or 11.03%, due to the
hiring  of  additional  employees  for  loan  collection,  accounting  and  data
processing,  as well as,  additional costs of living increases for all full time
employees.  Occupancy and equipment  increased $89,000, or 15.11%, due primarily
to the  incurrence of real estate taxes for the  Wintersville  branch of $18,000
and an increase in combined  equipment  depreciation and maintenance of $61,000.
Professional  fees  decreased by $34,000  primarily  due to the  preparation  of
regulatory reports internally that were previously  outsourced.  Data processing
charges  decreased  $41,000 due to the conversion to in-house item processing in
January 2000. The decrease in data processing is offset by similar  increases in
"occupancy  and  equipment"  for  depreciation  and  maintenance  and in  "other
expenses" for supplies and postage, which increased $32,000.  Anticipated future
decreases  in data  processing  will be offset by similar  increases  in similar
expense line items. Other expenses increased $118,000 due primarily to, supplies
and  postage  as  discussed  above,  additional  Ohio  franchise  tax due to the
Wintersville branch of $41,000,  and increases for ATM and Consumer Card expense
of $20,000 and $22,000, respectively.

     Income Taxes. Income tax expense increased $96,000 to $578,000 for the year
ended June 30, 2000  compared to $482,000  for the same period  ended 1999.  The
effective tax rate for income taxes as of the years ended June 30, 2000 and 1999
was 39% and 38%, respectively.

                                       12
<PAGE>

     Liquidity and Capital Resources. The Company's primary sources of funds are
deposits,  repayment  of loans and  mortgage-backed  securities,  maturities  of
investments and  interest-bearing  deposits,  funds provided from operations and
advances from the FHLB of Pittsburgh.  While  scheduled  repayments of loans and
mortgage-backed   securities  and   maturities  of  investment   securities  are
predicable  sources of funds,  deposit  flows and loan  prepayments  are greatly
influenced  by the general level of interest  rates,  economic  conditions,  and
competition.  The Company  uses its  resources  primarily  to fund  existing and
future loan  commitments,  maturing  certificates  of deposit and demand deposit
withdraws,   investments  in  other  interest-bearing  assets,   maintenance  of
necessary liquidity, and to meet operating expenses.

     Net  cash  provided  by  operating   activities   decreased  $1,132,000  to
$1,689,000  for the year ended June 30, 2000 compared to $2,821,000 for the same
period ended 1999.  This  decrease was mainly the result of a decline in the net
fixed rate mortgage loans made and sold as a result of the current interest rate
environment  for the period  ended June 30, 2000 in  comparison  to the interest
rate  environment for the comparable 1999 period.  Net proceeds from the sale of
loans for the period ended June 30, 2000 were $9,000 in comparison to $1,548,000
for the comparable period ended 1999.

     Net cash used for  investing  activities  for the year ended June 30,  2000
decreased $7,969,000 to $14,451,000 from $22,420,000 for the year ended June 30,
1999.  This  decrease was  attributable  to a decrease in lending and  investing
activity of $4,105,000  and  $3,890,000,  respectively.  The decrease in lending
activity  is a  direct  result  of the  current  interest  rate  environment  in
comparison to the interest rate  environment for the prior period.  The decrease
in investing  activity is a result of the Company  reducing excess  liquidity in
the prior period.

     Net cash provided by financing  activities for the year ended June 30, 2000
decreased  $721,000 to $14,154,000  from  $14,875,000  for the same period ended
1999.  The  decease  was  primarily  a result of a decrease  in net  deposits of
$3,195,000 offset by an increase in net FHLB advances of $2,500,000.

     Liquidity  may  be  adversely  affected  by  unexpected  deposit  outflows,
excessive interest rates paid by competitors,  adverse publicity relating to the
savings and loan industry and similar  matters.  Management  monitors  projected
liquidity  needs  and  determines  the  level  desirable  based  in  part on the
Company's  commitments to make loans and  management's  assessment of the Bank's
ability to generate funds.


                                       13
<PAGE>

SNODGRASS
Certified Public Accountants and Consultants

[LOGO]



                         Report of Independent Auditors


Board of Directors and Stockholders
Advance Financial Bancorp

We have audited the accompanying consolidated balance sheet of Advance Financial
Bancorp  and  subsidiary  as  of  June  30,  2000  and  1999,  and  the  related
consolidated statements of income,  stockholders' equity, and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 Advance Financial
Bancorp and  subsidiary  as of June 30, 2000 and 1999,  and the results of their
operations  and their cash flows for the years  then  ended in  conformity  with
generally accepted accounting principles.




/s/S.R. Snodgrass, A.C.

Steubenville, Ohio
August 3, 2000



                                       14

<TABLE>
<CAPTION>
<S>                     <C>                          <C>                  <C>

S.R. Snodgrass, A.C.
626 North Fourth Street  Steubenville, OH 43952-1982  Phone: 740-282-2771  Facsimile: 740-282-1606

</TABLE>

<PAGE>
                            ADVANCE FINANCIAL BANCORP
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                                                       June 30,
                                                                                               2000                   1999
                                                                                         ---------------       ---------------
<S>                                                                                      <C>                  <C>
ASSETS Cash and cash equivalents:
     Cash and amounts due from banks                                                      $    1,109,746       $     1,395,704
     Interest-bearing deposits with other institutions                                         4,641,878             2,964,166
                                                                                            ------------          ------------
              Total cash and cash equivalents                                                  5,751,624             4,359,870
                                                                                            ------------          ------------
Investment securities:
     Securities held to maturity (fair value of $1,187,625
      and $ 970,914)                                                                           1,249,672               999,896
     Securities available for sale                                                             8,234,637             4,481,475
                                                                                            ------------          ------------
              Total investment securities                                                      9,484,309             5,481,371
                                                                                            ------------          ------------
Mortgage-backed securities:
     Securities held to maturity (fair value of $2,027,016
      and $2,456,645)                                                                          2,089,010             2,472,681
     Securities available for sale                                                             1,556,172             1,832,845
                                                                                            ------------          ------------
              Total mortgage-backed securities                                                 3,645,182             4,305,526
                                                                                            ------------          ------------
Loans receivable (net of allowance for loan losses of
 $682,103 and $582,280)                                                                      119,721,308           109,899,551
Premises and equipment, net                                                                    4,070,295             4,084,793
Federal Home Loan Bank stock, at cost                                                            800,000               629,500
Accrued interest receivable                                                                      870,955               664,058
Other assets                                                                                     920,767               501,967
                                                                                            ------------          ------------
              TOTAL ASSETS                                                                  $145,264,440          $129,926,636
                                                                                            ============          ============
LIABILITIES
Deposits                                                                                    $118,930,939          $105,338,770
Advances from Federal Home Loan Bank                                                          10,500,000             9,000,000
Advance payments by borrowers for taxes and insurance                                            203,320               196,993
Accrued interest payable and other liabilities                                                   561,907               397,421
                                                                                            ------------          ------------
              TOTAL LIABILITIES                                                              130,196,166           114,933,184
                                                                                            ------------          ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value; authorized 500,000 shares; none issued                                -                     -
Common stock, $.10 par value, 2,000,000 shares authorized;
 1,084,450 shares issued at June 30, 2000 and 1999                                               108,445               108,445
Additional paid in capital                                                                    10,329,885            10,316,719
Retained earnings - substantially restricted                                                   8,181,053             7,623,733
Unallocated shares held by Employee Stock Ownership Plan (ESOP)                                 (510,915)             (597,767)
Unallocated shares held by Restricted Stock Plan (RSP)                                          (505,849)             (682,357)
Treasury stock (152,165 and 103,165 shares at cost)                                           (2,233,265)           (1,626,890)
Accumulated other comprehensive loss                                                            (301,080)             (148,431)
                                                                                            ------------          ------------
              TOTAL STOCKHOLDERS' EQUITY                                                      15,068,274            14,993,452
                                                                                            ------------          ------------
              TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $145,264,440          $129,926,636
                                                                                            ============          ============
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       15
<PAGE>
                            ADVANCE FINANCIAL BANCORP
                        CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
                                                                                                    Year Ended June 30,
                                                                                                   2000                1999
                                                                                              ------------         -----------
<S>                                                                                           <C>                  <C>
INTEREST AND DIVIDEND INCOME
     Loans                                                                                     $ 9,563,641          $8,516,921
     Investment securities                                                                         652,439             188,158
     Interest-bearing deposits with other institutions                                             175,184             325,233
     Mortgage-backed securities                                                                    255,555             120,688
     Federal Home Loan Bank stock                                                                   51,781              40,560
                                                                                               -----------          ----------
              Total interest and dividend income                                                10,698,600           9,191,560
                                                                                               -----------          ----------
INTEREST EXPENSE
     Deposits                                                                                    4,998,754           4,311,105
     Advances from Federal Home Loan Bank                                                          717,212             486,141
                                                                                               -----------          ----------
              Total interest expense                                                             5,715,966           4,797,246
                                                                                               -----------          ----------
NET INTEREST INCOME                                                                              4,982,634           4,394,314

Provision for loan losses                                                                          174,600             150,000
                                                                                               -----------          ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                                              4,808,034           4,244,314
                                                                                               -----------          ----------
NONINTEREST INCOME
     Service charges on deposit accounts                                                           438,984             374,831
     Gain on sale of loans                                                                           8,957              92,909
     Gain on sale of investments                                                                         -              13,745
     Other income                                                                                  257,162             267,703
                                                                                               -----------          ----------
              Total noninterest income                                                             705,103             749,188
                                                                                               -----------          ----------
NONINTEREST EXPENSE
     Compensation and employee benefits                                                          1,936,149           1,743,773
     Occupancy and equipment                                                                       677,675             588,702
     Professional fees                                                                             108,979             143,285
     Advertising                                                                                   107,770             120,726
     Data processing                                                                               299,306             340,113
     Other operating expenses                                                                      909,622             791,151
                                                                                               -----------          ----------
              Total noninterest expense                                                          4,039,501           3,727,750
                                                                                               -----------          ----------
Income before income taxes                                                                       1,473,636           1,265,752
Income taxes                                                                                       577,876             481,925
                                                                                               -----------          ----------
NET INCOME                                                                                     $   895,760          $  783,827
                                                                                               ===========          ==========
EARNINGS PER SHARE:
     Basic                                                                                     $      1.01          $      .83
     Diluted                                                                                   $      1.01          $      .83

</TABLE>

See accompanying notes to the consolidated financial statements.

                                       16
<PAGE>
                                         ADVANCE FINANCIAL BANCORP
                       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                             Retained                                          Accumulated
                                Additional   Earnings    Unallocated  Unallocated                 Other        Total
                        Common   Paid In   Substantially Shares Held  Shares Held   Treasury  Comprehensive  Stockholders'
                         Stock   Capital    Restricted     By ESOP       By RSP      Stock        Loss         Equity
                      --------  ---------- ------------- -----------  ----------- ----------- -------------  -------------
<S>                  <C>       <C>          <C>          <C>          <C>        <C>           <C>           <C>
Balance,
  June 30, 1998       $108,445  $10,288,928  $7,130,056   $(715,158)   $(869,636) $(1,000,863)  $(13,650)     $14,928,122
Comprehensive
income:
   Net income                                   783,827                                                           783,827
   Net unrealized
    loss on
    securities,
    net of
    reclassification
    adjustment,
    net of tax
    benefit of
    $64,759                                                                                     (134,781)        (134,781)
                                                                                                              -----------
Comprehensive income                                                                                              649,046
Purchase of treasury
  stock                                                                              (626,027)                   (626,027)
Accrued compensation
  expense for RSP                                                        201,881                                  201,881
RSP forfeited shares                                                     (14,602)                                 (14,602)
Release of earned
  ESOP shares                        27,791                 117,391                                               145,182
Cash dividends
   declared
   ($.32 per share)                            (290,150)                                                         (290,150)
                      --------  -----------  ----------   ---------    ---------  -----------  ---------      -----------

Balance,
June 30, 1999          108,445   10,316,719   7,623,733    (597,767)    (682,357)  (1,626,890)  (148,431)      14,993,452
Comprehensive income:
   Net income                                   895,760                                                           895,760
   Net unrealized
     loss on
     securities,
     net of tax
     benefit of
     $78,637                                                                                    (152,649)        (152,649)
                                                                                                              -----------
Comprehensive income                                                                                              743,111
Purchase of treasury
  stock                                                                              (606,375)                   (606,375)
Accrued compensation
  expense for RSP                                                        197,591                                  197,591
RSP forfeited shares                                                     (21,083)                                 (21,083)
Release of earned
  ESOP shares                        13,166                  86,852                                               100,018
Cash dividends
   declared
   ($.40 per share)                            (338,440)                                                         (338,440)
                      --------  -----------  ----------   ---------    ---------  -----------  ---------      -----------
Balance,
  June 30, 2000       $108,445  $10,329,885  $8,181,053   $(510,915)   $(505,849) $(2,233,265) $(301,080)     $15,068,274
                      ========  ===========  ==========   =========    =========  ===========  =========      ===========
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       17
<PAGE>
                            ADVANCE FINANCIAL BANCORP
                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                   Year Ended June 30,
                                                                                                2000                  1999
                                                                                          ---------------       ---------------
<S>                                                                                      <C>                    <C>
OPERATING ACTIVITIES
     Net income                                                                           $      895,760         $     783,827
     Adjustments to reconcile net income to net cash provided by
      operating activities:
         Depreciation, amortization and accretion, net                                           560,757               423,127
         Provision for loan losses                                                               174,600               150,000
         Gain on sale of investments                                                                   -               (13,745)
         Gain on sale of loans                                                                    (8,957)              (92,909)
         Origination of loans held for sale                                                   (2,297,188)           (8,658,980)
         Proceeds from the sale of loans                                                       2,306,145            10,206,589
         Increase in accrued interest receivable                                                (206,897)              (46,078)
         Increase in accrued interest payable                                                    138,151                 3,644
         Other, net                                                                              126,392                65,687
                                                                                          --------------         -------------
              Net cash provided by operating activities                                        1,688,763             2,821,162
                                                                                          --------------         -------------
INVESTING ACTIVITIES
     Investment securities held to maturity:
         Purchases                                                                              (249,453)           (2,987,051)
         Maturities and repayments                                                                     -             3,737,988
     Investment securities available for sale:
         Purchases                                                                            (4,467,656)           (4,498,871)
         Maturities and repayments                                                               506,330                11,440
         Proceeds from sale                                                                            -               139,995
     Mortgage-backed securities held to maturity:
         Purchases                                                                                     -            (2,516,658)
         Maturities and repayments                                                               381,374               380,968
     Mortgage-backed securities available for sale:
         Purchases                                                                                     -            (2,046,363)
         Maturities and repayments                                                               253,257               149,274
     Purchases of Federal Home Loan Bank Stock                                                  (170,500)               (7,300)
     Net increase in loans                                                                   (10,353,855)          (14,459,354)
     Purchases of premises and equipment                                                        (350,187)             (324,250)
                                                                                          --------------         -------------
              Net cash used for investing activities                                         (14,450,690)          (22,420,182)
                                                                                          --------------         -------------
FINANCING ACTIVITIES
     Net increase in deposits                                                                 13,592,169            16,787,227
     Proceeds of advances from Federal Home Loan Bank                                         16,000,000                     -
     Repayment of advances from Federal Home Loan Bank                                       (17,000,000)           (1,000,000)
     Net increase in short term advances from Federal Home Loan Bank                           2,500,000                     -
     Net change in advances for taxes and insurance                                                6,327                 3,647
     Purchase of treasury stock                                                                 (606,375)             (626,027)
     Cash dividends paid                                                                        (338,440)             (290,150)
                                                                                          --------------         -------------
         Net cash provided by financing activities                                            14,153,681            14,874,697
                                                                                          --------------         -------------
         Increase (decrease) in cash and cash equivalents                                      1,391,754            (4,724,323)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                                 4,359,870             9,084,193
                                                                                          --------------         -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                                  $    5,751,624         $   4,359,870
                                                                                          ==============         =============
</TABLE>
See accompanying notes to the consolidated financial statements

                                       18
<PAGE>
                            ADVANCE FINANCIAL BANCORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of significant  accounting and reporting  policies applied in the
     presentation of the accompanying financial statements follows:

     Nature of Operations and Basis of Presentation
     ----------------------------------------------

     Advance Financial Bancorp (the "Company") is the holding company of Advance
     Financial Savings Bank, (the "Bank"). The Bank and its wholly-owned service
     corporation  subsidiary,  Advance  Financial  Service  Corporation  of West
     Virginia are wholly-owned  subsidiaries of the Company. The Company and its
     subsidiaries  derive  substantially  all  their  income  from  banking  and
     bank-related  services which include interest  earnings on residential real
     estate,  commercial real estate,  and consumer loan  financing,  as well as
     interest earnings on investment securities,  interest-bearing deposits with
     other  financial  institutions,  and charges  for  deposit  services to its
     customers.  The Bank is a federally chartered stock savings bank located in
     Wellsburg,  WV. The  Company  and the Bank are  subject to  regulation  and
     supervision by the Office of Thrift Supervision.

     The consolidated  financial  statements include the accounts of the Company
     and its wholly-owned subsidiary, the Bank, and its wholly-owned subsidiary,
     Advance  Financial  Service  Corporation  of West  Virginia.  All  material
     intercompany   balances   and   transactions   have  been   eliminated   in
     consolidation.  The Company's  fiscal year end for  financial  reporting is
     June 30. For  regulatory  and income tax  reporting  purposes,  the Company
     reports on a December 31 calendar year basis.

     The consolidated financial statements have been prepared in conformity with
     generally  accepted  accounting  principles.  In preparing the consolidated
     financial  statements,   management  is  required  to  make  estimates  and
     assumptions  that affect the reported  amounts of assets and liabilities as
     of the date of the balance  sheet and revenues and expenses for the period.
     Actual results could differ  significantly from those estimates.  The major
     accounting policies and practices are summarized below.

     Investment Securities Including Mortgage-Backed Securities
     ----------------------------------------------------------

     Debt and Equity  securities  consist of  mortgage-backed  securities,  U.S.
     Government  and federal agency  obligations,  money funds and common stock.
     Securities are classified , at the time of purchase based upon management's
     intention  and  ability,  as available  for sale or held to  maturity.  The
     company does not hold any securities as trading.  Securities  classified as
     held to  maturity  are  stated at cost and  adjusted  for  amortization  of
     premium and accretion of discount,  which are computed  using a level yield
     method and are  recognized as adjustments  of interest  income.  Securities
     classified as available  for sale are carried at estimated  fair value with
     unrealized  holding gains and losses  reflected as a separate  component of
     shareholders'  equity.  Realized  gains and  losses on the sale of debt and
     equity  securities are computed using the specific  identification  method.
     Interest and dividends on investment  securities  are  recognized as income
     when earned.

     Common  stock  of the  Federal  Home  Loan  Bank  (the  "FHLB")  represents
     ownership  in an  institution,  which is  wholly-owned  by other  financial
     institutions.  This equity  security is accounted  for at cost and reported
     separately on the accompanying balance sheet.

     Loans Held for Sale
     -------------------

     Mortgage  loans  originated  and held for sale in the secondary  market are
     carried at the lower of cost or market  value  determined  on an  aggregate
     basis.  Net  unrealized  losses are  recognized  in a  valuation  allowance
     through  charges to income.  Gains and losses on the sale of loans held for
     sale are determined using the specific  identification  method. At June 30,
     2000 and 1999, there were no loans held for sale.

                                       19
<PAGE>
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Loans
     -----

     Loans are stated at unpaid principal balances,  less loans in process,  net
     deferred loan fees, and the allowance for loan losses. Interest on loans is
     credited  to income as earned on an accrual  basis.  Loan  origination  and
     commitment  fees and  certain  direct  loan  origination  costs  are  being
     deferred  and the net amount  amortized  as an  adjustment  of the  related
     loan's yield.  The Company is amortizing these amounts over the contractual
     life of the related loans using the interest method.

     A loan is  considered  impaired  when it is probable that the borrower will
     not repay the loan according to the original  contractual terms of the loan
     agreement.   Management  has  determined   that  first  mortgage  loans  on
     one-to-four family properties and all consumer loans represent large groups
     of   smaller-balance,   homogeneous  loans  that  are  to  be  collectively
     evaluated. Management considers an insignificant delay, which is defined as
     less than 90 days by the Company, will not cause a loan to be classified as
     impaired. A loan is not impaired during a period of delay in payment if the
     Company  expects to collect all amounts due including  interest  accrued at
     the  contractual  interest  rate  during  the  period of  delay.  All loans
     identified  as impaired are  evaluated  independently  by  management.  The
     Company  estimates  credit  losses on  impaired  loans based on the present
     value of expected cash flows or the fair value of the underlying collateral
     if the loan  repayment  is expected to come from the sale or  operation  of
     said collateral.  Impaired loans or portions thereof,  are charged-off when
     it is determined  that a realized  loss has  occurred.  Until such time, an
     allowance for loan losses is maintained for estimated losses. Cash receipts
     on impaired loans are applied first to accrued interest receivable,  unless
     otherwise required by the loan terms,  except when an impaired loan is also
     a nonaccrual  loan,  in which case the portion of the  receipts  related to
     interest is recognized as income.

     Loans considered to be nonperforming  include  nonaccrual  loans,  accruing
     loans  delinquent  more  than  90  days  and  restructured  loans.  A loan,
     including an impaired loan, is classified as nonaccrual when collectability
     is in doubt. When a loan is placed on nonaccrual status, unpaid interest is
     reversed and an allowance is established by a charge to income equal to all
     accrued interest. Income is subsequently recognized only to the extent that
     cash payments are received.  Loans are returned to accrual  status when, in
     management's  judgement,  the  borrower  has the ability and intent to make
     periodic  principal and interest payments (this generally requires that the
     loan be brought current in accordance with its original terms).

     Allowance for Loan Losses
     -------------------------

     The  allowance  for loan  losses  represents  the amount  which  management
     estimates  is  adequate  to  provide  for  potential  losses  in  its  loan
     portfolio.  The  allowance  method is used in  providing  for loan  losses.
     Accordingly,  all  loan  losses  are  charged  to  the  allowance  and  all
     recoveries are credited to it. The allowance for loan losses is established
     through a provision for loan losses  charged to  operations.  The provision
     for loan losses is based on management's  periodic evaluation of individual
     loans,  economic  factors,  past  loan  loss  experience,  changes  in  the
     composition and volume of the portfolio,  and other relevant  factors.  The
     estimates  used in  determining  the  adequacy  of the  allowance  for loan
     losses,  including the amounts and timing of future cash flows  expected on
     impaired loans, are particularly susceptible to changes in the near term.

     Real Estate Acquired in Settlement of Loans
     -------------------------------------------

     Real estate  acquired in  settlement  of loans are reported at the lower of
     cost or fair value at the acquisition  date, and  subsequently at the lower
     of its  new  cost  or fair  value  minus  estimated  selling  costs.  Costs
     represents the unpaid loan balance at the  acquisition  date plus expenses,
     when  appropriate,  incurred to bring the property to a salable  condition.
     Any  subsequent   write-downs  are  charged  against  operating   expenses.
     Operating expenses of such properties,  net of related income and losses on
     their disposition are included in other expenses.

     Premises and Equipment
     ----------------------

     Land is carried at cost;  buildings and equipment are stated at cost,  less
     accumulated  depreciation.  The  provision  for  depreciation  is  computed
     primarily by the straight-line method based upon the estimated useful lives
     of the  assets,  which  range from five to forty  years.  Expenditures  for
     maintenance  and repairs are charged  against income as incurred.  Costs of
     major additions and improvements are capitalized.

                                       20
<PAGE>
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Income Taxes
     ------------

     Deferred tax assets and  liabilities  are  reflected  at currently  enacted
     income tax rates  applicable to the period in which the deferred tax assets
     or  liabilities  are expected to be realized or settled.  As changes in tax
     laws or rates are enacted, deferred tax assets and liabilities are adjusted
     through the  provision for income  taxes.  Deferred  income tax expenses or
     benefits  are based on the changes in the  deferred  tax asset or liability
     from period to period.  The Company and its subsidiary  file a consolidated
     income tax return.

     Earnings per Share
     ------------------

     The Company  provides dual  presentation of basic and diluted  earnings per
     share.  Basic  earnings  per share is  calculated  by  dividing  net income
     available to common stockholders by the  weighted-average  number of common
     shares  outstanding  during  the  period.  Diluted  earnings  per  share is
     calculated  by  dividing  net  income  available  to  common  stockholders,
     adjusted   for   the   effects   of  any   dilutive   securities,   by  the
     weighted-average  number of common  shares  outstanding,  adjusted  for the
     effects of any dilutive securities.

     Comprehensive Income
     --------------------

     The Company is required  to present  comprehensive  income in a full set of
     general  purpose  financial  statements  for all periods  presented.  Other
     comprehensive income (loss) is comprised  exclusively of unrealized holding
     gains (losses) on the available for sale securities portfolio.  The Company
     has elected to report the effects of other  comprehensive  income (loss) as
     part of the Statement of Changes in Stockholders' Equity.

     Cash Flow Information
     ---------------------

     The Company has defined cash and cash equivalents as cash on hand,  amounts
     due from depository  institutions,  and overnight deposits with the Federal
     Home Loan Bank and the Federal Reserve Bank.

     Cash  payments  for  interest  for the fiscal years ended June 30, 2000 and
     1999 were $5,577,815 and $4,793,602, respectively. Cash payments for income
     taxes for the fiscal  years ended June 30, 2000 and 1999 were  $501,622 and
     $468,000, respectively.

     Stock Options
     -------------

     The Company maintains a stock option plan for the directors,  officers, and
     employees.  The stock options  typically have expiration terms of ten years
     subject  to  certain  extensions  and  early  terminations.  The per  share
     exercise price of a stock option shall be, at a minimum,  equal to the fair
     value of a share of common stock on the date the option is granted. Because
     the exercise  price of the Company's  stock options equals the market price
     of the underlying  stock on the date of the grant, no compensation  expense
     is recognized in the Company's  financial  statements.  If applicable,  pro
     forma net income and  earnings  per share would be presented to reflect the
     impact of the stock  option  plan  assuming  compensation  expense had been
     effected  based on the fair value of the stock  options  granted under this
     plan.

     Recent Accounting Pronouncements
     --------------------------------

     In June 1999, the Financial  Accounting Standards Board issued Statement of
     Financial   Accounting   Standards  No.  137,  "Accounting  for  Derivative
     Instruments  and  Hedging  Activities--Deferral  Date of FASB No.  133--and
     amendment of FASB No. 133." The statement delays the effective date for one
     year of SFAS No. 133, to fiscal years  beginning  after June 15, 2000. SFAS
     No.'s 133 and 137 apply to quarterly and annual financial  statements.  The
     Company  does not  believe  that  there  will be a  material  impact on its
     financial  condition or results of operation upon adoption of SFAS No. 133.
     Statement  No.  133,  precludes  a  held-to-maturity  security  from  being
     designated as a hedged item, however, at the date of initial application of
     this  statement,  an entity is permitted  to transfer any  held-to-maturity
     security into the available-for-sale or trading categories.  The unrealized
     holding  gain or loss on such  transferred  securities  shall  be  reported
     consistent  with the  requirements  of Statement No. 115,  "Accounting  for
     Certain  Investments in Debt and Equity  Securities." Such transfers do not
     raise an issue  regarding an entity's  intent to hold other debt securities
     to maturity in the future.

                                       21
<PAGE>
1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Reclassification of Comparative Amounts
     ---------------------------------------

     Certain  comparative  account  balances  for the  prior  period  have  been
     reclassified  to  conform  to  the  current  period  classifications.  Such
     reclassifications did not affect net income.


2.   Earnings Per Share
     ------------------

     There were no convertible  securities,  which would affect the numerator in
     calculating basic and diluted earnings per share; therefore,  net income as
     presented  on the  Consolidated  Statement  of  Income  will be used as the
     numerator.   The  following   table  sets  forth  the  composition  of  the
     weighted-average  common shares (denominator) used in the basic and diluted
     earnings per share computation.



                                                       2000            1999
                                                     -----------     -----------

     Weighted-average common shares outstanding       1,084,450       1,084,450
     Average treasury stock shares                     (132,011)        (65,310)
     Average unearned ESOP and RSP shares               (62,054)        (72,564)
                                                      ---------       ---------
     Weighted -average common shares and
       common stock equivalents used to
       calculate basic earnings per share               890,385         946,576

     Additional common stock equivalents
       (stock options) used to calculate
       diluted earnings per share                             -               -
                                                      ---------       ---------

     Weighted-average common shares and
       common stock equivalents used
       to calculate diluted earnings per share          890,385         946,576
                                                      =========       =========


                                       22
<PAGE>
3.   INVESTMENT SECURITIES

     The  amortized  cost  and  estimated  market  value of  investments  are as
follows:
<TABLE>
<CAPTION>
                                                                                     2000
                                                          ------------------------------------------------------
                                                                              Gross      Gross
                                                            Amortized      Unrealized  Unrealized       Fair
                                                              Cost            Gains      Losses         Value
                                                            ----------     ----------- -----------   -----------
<S>                                                        <C>            <C>         <C>            <C>
     Held-to-maturity
     ----------------
         U.S. Government and Agency Obligations             $1,249,672     $         - $  (62,047)    $1,187,625
                                                            ----------     ----------- ----------     ----------
     Available-for-sale
     ------------------
         U.S. Government and Agency Obligations              8,469,628               -   (341,201)     8,128,427
         Common stocks                                         105,625               -    (25,625)        80,000
         Money Fund Securities                                  34,026               -     (7,816)        26,210
                                                            ----------     -----------------------    ----------
              Total available for sale                       8,609,279               -   (374,642)     8,234,637
                                                            ----------     ----------- -----------    ----------
              Total Investment Securities                   $9,858,951     $         -  $(436,689)    $9,422,262
                                                            ==========     ===========  ==========    ==========
</TABLE>
<TABLE>
<CAPTION>
                                                                                     1999
                                                          ------------------------------------------------------
                                                                              Gross      Gross
                                                            Amortized      Unrealized  Unrealized       Fair
                                                              Cost            Gains      Losses         Value
                                                            ----------     ----------- -----------   -----------
<S>                                                        <C>            <C>          <C>          <C>
     Held-to-maturity
     ----------------
         U.S. Government and Agency Obligations             $  999,896     $         -   $(28,982)   $   970,914
                                                            ----------     -----------   --------    -----------
     Available-for-sale
     ------------------
         U.S. Government and Agency Obligations              4,498,042               -   (136,664)     4,361,378
         Common stocks                                         105,625               -    (16,875)        88,750
         Money Fund Securities                                  40,682               -     (9,335)        31,347
                                                            ----------     -----------  ----------    ----------
              Total available for sale                       4,644,349               -   (162,874)     4,481,475
                                                            ----------     -----------  ----------    ----------
              Total Investment Securities                   $5,644,245     $         -  $(191,856)    $5,452,389
                                                            ==========     ===========  ==========    ==========
</TABLE>
     The weighted average  interest rate on investment  securities was 6.95% and
6.58% at June 30, 2000 and 1999, respectively.

     The amortized cost and estimated fair value of debt  securities at June 30,
     2000, by contractual  maturity,  are shown below.  Expected maturities will
     differ from contractual  maturities because borrowers may have the right to
     call or repay obligations with or without call or repayment penalties.

                                                    Amortized          Fair
                                                        Cost          Value
                                                    -----------    -----------
         One year or less                            $        -     $        -
         After one through five years                 3,719,540      3,628,450
         After five through ten years                 1,500,000      1,415,999
         After ten years                              4,499,760      4,271,603
                                                     ----------     ----------
              Total                                  $9,719,300     $9,316,052
                                                     ==========     ==========

     Proceeds  received  on  securities  as a result of sales and calls prior to
     maturity  were  $500,000 and $139,995 for the years ended June 30, 2000 and
     1999, respectively.  Gains on sales were $0 and $13,745 for the years ended
     June 30,  2000 and 1999,  respectively.  No losses on sales  were  realized
     during either year ended June 30, 2000 and 1999.

                                       23
<PAGE>
4.   MORTGAGE-BACKED SECURITIES

     The amortized cost and estimated market value of mortgage-backed securities
are as follows:
<TABLE>
<CAPTION>
                                                                                     2000
                                                          ------------------------------------------------------
                                                                              Gross      Gross
                                                            Amortized      Unrealized  Unrealized       Fair
                                                              Cost            Gains      Losses         Value
                                                            ----------     ----------- -----------   ------------
<S>                                                       <C>           <C>            <C>           <C>
     Held-to-maturity
     ----------------
         Government National Mortgage Association          $  579,864      $    3,017   $  (5,320)    $   577,561
         Federal Home Loan Mortgage Corporation               131,343           7,922           -         139,265
         Federal National Mortgage Association              1,377,803               -     (67,613)      1,310,190
                                                           ----------      ----------   ---------     -----------
              Total held to maturity                        2,089,010          10,939     (72,933)      2,027,016
                                                           ----------      ----------   ---------     -----------
     Available-for-sale
     ------------------
         Government National Mortgage Association           1,223,787               -     (61,487)      1,162,300
         Federal National Mortgage Association                413,923               -     (20,051)        393,872
                                                          -----------      ----------   ---------     -----------
              Total available for sale                      1,637,710               -     (81,538)      1,556,172
                                                           ----------      ----------   ---------     -----------
              Total Mortgage backed securities             $3,726,720      $   10,939   $(154,471)     $3,583,188
                                                           ==========      ==========   =========     ===========
</TABLE>
<TABLE>
<CAPTION>
                                                                                     1999
                                                          ------------------------------------------------------
                                                                              Gross      Gross
                                                            Amortized      Unrealized  Unrealized       Fair
                                                              Cost            Gains      Losses         Value
                                                            ----------     ----------- -----------   ------------
<S>                                                       <C>             <C>         <C>            <C>
     Held-to-maturity
     ----------------
         Government National Mortgage Association          $  837,676      $   7,701   $   (2,465)    $   842,912
         Federal Home Loan Mortgage Corporation               133,581          9,893            -         143,474
         Federal National Mortgage Association              1,501,424              -      (31,165)      1,470,259
                                                           ----------      ---------   -----------     ----------
              Total held to maturity                        2,472,681         17,594      (33,630)      2,456,645
                                                           ----------      ---------   -----------     ----------
     Available-for-sale
     ------------------
         Government National Mortgage Association           1,413,784              -      (48,958)      1,364,826
         Federal National Mortgage Association                481,081              -      (13,062)        468,019
                                                           ----------      ---------   -----------     ----------
              Total available for sale                      1,894,865              -      (62,020)      1,832,845
                                                           ----------      ---------   -----------     ----------
              Total Mortgage backed securities             $4,367,546      $  17,594   $  (95,650)     $4,289,490
                                                           ==========      =========   ==========      ==========
</TABLE>

     Mortgage-backed securities provide for periodic, generally monthly payments
     of principal and interest and have contractual  maturities ranging from ten
     to thirty years at June 30, 2000. However,  due to expected repayment terms
     being significantly less than the underlying mortgage loan pool contractual
     maturities, the estimated lives of these securities could be significantly
     shorter. As of June 30, 2000,  mortgage-backed securities with a book value
     of $476,741  and a fair value of  $471,421  are one year  adjustable  types
     currently paying 7.125%. The remaining instruments are all fixed rate types
     ranging from 6.25% to 10%.  Certain  instruments  have been  classified  as
     available for sale based upon  management's'  evaluation of liquidity needs
     while optimizing return at the time of purchase.

     There were no sales of  mortgage-backed  securities for either period ended
     June 30, 2000 or 1999.

                                       24
<PAGE>
5.   LOANS RECEIVABLE


     Loans receivable are comprised of the following at June 30:

                                                  2000                1999
                                              ------------       -------------
         Mortgage loans:
              1 - 4 family                     $ 62,163,992       $ 59,673,803
              Multi-family                        5,469,906          2,689,531
              Non-residential                    24,543,795         23,216,018
              Construction                        3,241,801          2,073,165
                                               ------------       ------------
                   Total mortgage loans          95,419,494         87,652,517
                                               ------------       ------------
         Consumer loans:
              Home improvement                    1,439,387          1,195,518
              Automobile                         10,903,416          8,647,953
              Share loans                         1,406,328          1,360,054
              Other                               2,675,498          2,384,401
                                               ------------       ------------
                   Total consumer loans          16,424,629         13,587,926
                                               ------------       ------------
         Commercial loans                        10,500,256         10,387,570
                                               ------------       ------------
         Less:
              Loans in process                    1,812,877          1,006,813
              Net deferred loan fees                128,091            139,369
              Allowance for loan losses             682,103            582,280
                                               ------------       ------------
                                                  2,623,071          1,728,462
                                               ------------       ------------

                  Total loans                  $119,721,308       $109,899,551
                                               ============       ============


     Single  family  mortgage  loans  serviced  for Freddie  Mac,  which are not
     included  in  the  Consolidated  Balance  Sheet,  totaled  $19,682,946  and
     $19,040,615 at June 30, 2000 and 1999, respectively.

     The Company is a party to financial instruments with off-balance-sheet risk
     in the  normal  course  of  business  to meet  the  financing  needs of its
     customers.  These  financial  instruments  include  commitments  to  extend
     credit. These instruments  involve, to varying degrees,  elements of credit
     risk in excess of the  amount  recognized  in the  statement  of  financial
     condition.  The contract amounts of these instruments reflect the extent of
     involvement the Company has in particular classes of financial instruments.

     The Company's exposure to credit loss in the event of nonperformance by the
     other party to the financial instrument for commitments to extend credit is
     represented by the  contractual  amount of those  instruments.  The Company
     uses the  same  credit  policies  in  making  commitments  and  conditional
     obligations  as it does for  on-balance-sheet  instruments.  No losses  are
     anticipated by management as a result of these commitments.

     The following  represents  financial  instruments  whose  contract  amounts
represent credit risk at June 30:

                                                  2000                1999
                                              ------------       ------------

         Commitments to originate loans
              Fixed rate                      $    119,000       $    637,060
              Variable rate                   $    163,962       $  1,467,300
         Loans in process                     $  1,812,877       $  1,006,813
         Unused lines of credit               $  6,734,552       $  7,456,372
         Letters of credit                    $     55,000       $     22,500

     The range of interest  rates on fixed rate loan  commitments  was 8.375% to
     8.50% at June 30, 2000.

                                       25
<PAGE>
5.   LOANS RECEIVABLE (Continued)

     Commitments  to extend credit are  agreements to lend to a customer as long
     as there is no  violation of any  condition  established  in the  contract.
     Commitments  generally  expire  within  30 days or have  other  termination
     clauses and may require payment of a fee. Since many of the commitments are
     expected to expire without being drawn upon, the total  commitment  amounts
     do  not  necessarily  represent  future  cash  requirements.   The  Company
     evaluates each customer's  creditworthiness  on a case-by-case  basis.  The
     amount of  collateral  obtained,  if deemed  necessary  by the Company upon
     extension of credit,  is based on  management's  credit  evaluation  of the
     counter  party.   Collateral  held  consists   primarily  of  single-family
     residences and income-producing commercial properties.

     In the  normal  course  of  business,  loans  are  extended  to  directors,
     executive  officers and their  associates.  A summary of loan  activity for
     those  directors,  executive  officers,  and  their  associates  with  loan
     balances  in excess  of  $60,000  for the year  ended  June 30,  2000 is as
     follows:

           Balance                       Amount          Balance
            1999          Additions     Collected         2000
         ----------     -----------     ---------      ----------

         $1,704,024        $14,500       $223,236      $1,495,288

     The Company's  primary business  activity is with customers  located within
     its local trade  area.  Residential,  consumer,  and  commercial  loans are
     granted. The Company also selectively funds loans originated outside of its
     trade area provided such loans meet its credit policy guidelines.  Although
     the Company has a diversified  loan  portfolio,  at June 30, 2000 and 1999,
     loans  outstanding  to  individuals  and  businesses are dependent upon the
     local economic conditions in its immediate trade area.

6.   ALLOWANCE FOR LOAN LOSSES

     Activity  in the  allowance  for loan losses for the years ended June 30 is
summarized as follows:

                                                          2000           1999
                                                        --------       --------

         Balance, beginning of period                   $582,280       $477,654
         Add:
              Provisions charged to operations           174,600        150,000
              Loan recoveries                              4,273          1,529
                                                        --------       --------
                  Total                                  761,153        629,183
         Less: loans charged off                          79,050         46,903
                                                        --------       --------

         Balance, end of period                         $682,103       $582,280
                                                        ========       ========

     Nonperforming loans totaled $484,195 and $765,126 at June 30, 2000 and 1999
     respectively.

     At June 30,  2000,  the  company  had no loans that met the  definition  of
     impaired.  At June 30, 1999,  the total  investment  in impaired  loans was
     $385,922.  The entire $385,922 was subject to a specific allowance for loan
     losses of $25,468. The average investment in impaired loans during the year
     ended June 30, 1999 was $377,753, and interest income recognized during the
     year was $12,315.  The interest  income  potential  based upon the original
     term of the  contracts  on these  impaired  loans was  $31,313 for the year
     ended June 30, 1999.

                                       26
<PAGE>
7.   PREMISES AND EQUIPMENT, NET

     Premises and equipment are summarized by major classification as follows:

                                                      2000            1999
                                                   ----------      ----------

         Land                                      $  303,857      $  303,857
         Buildings and improvements                 3,421,642       3,409,515
         Furniture, fixtures, and equipment         2,210,790       1,909,094
                                                   ----------      ----------
              Total                                 5,936,289       5,622,466
         Less accumulated depreciation              1,865,994       1,537,673
                                                   ----------      ----------

              Premises and equipment, net          $4,070,295      $4,084,793
                                                   ==========      ==========

     Depreciation  charged to  operations  amounted to $364,686 and $322,314 for
     the years ended June 30, 2000 and 1999, respectively.

8.   FEDERAL HOME LOAN BANK STOCK

     The Bank is a member of the Federal Home Loan Bank System. As a member, the
     Bank  maintains an investment in the capital stock of the Federal Home Loan
     Bank of  Pittsburgh,  at cost, in an amount not less than the greater of 1%
     of its outstanding  home loans or 5% of its  outstanding  borrowings to the
     Federal Home Loan Bank of  Pittsburgh  as calculated at December 31 of each
     year.

9.   ACCRUED INTEREST RECEIVABLE

     Accrued interest receivable consists of the following:

                                                      2000            1999
                                                   ----------      ----------

         Investment securities                      $160,874        $ 43,509
         Mortgage-backed securities                   18,991          28,741
         Loans receivable                            691,090         591,808
                                                    --------        --------
         Total                                      $870,955        $664,058
                                                    ========        ========

10.  DEPOSITS

     Deposit accounts are summarized as follows:

<TABLE>
<CAPTION>
                                                                 2000                             1999
                                                   -----------------------------     ---------------------------
                                                                      Percent of                      Percent of
                                                         Amount       Portfolio           Amount      Portfolio
                                                      ------------    ----------       ------------   ----------
<S>                                                  <C>                <C>           <C>               <C>
         Non-interest-bearing                         $  5,054,410         4.3%        $  3,734,867        3.6%
                                                      ------------       -----         ------------      -----

         Savings accounts                               17,651,027        14.8           16,379,596       15.6
         NOW accounts                                    7,807,308         6.6            9,060,464        8.6
         Money market accounts                          12,406,664        10.4           12,447,642       11.8
                                                      ------------       -----         ------------      -----
                                                        37,864,999        31.8           37,887,702       36.0
                                                      ------------       -----         ------------      -----
         Time certificates of deposit:
              2.00 -  4.00%                              2,101,639         1.8            2,260,291        2.1
              4.01 -  6.00%                             42,621,436        35.8           45,841,219       43.5
              6.01 -  8.00%                             31,288,455        26.3           15,614,691       14.8
                                                      ------------       -----         ------------      -----
                                                        76,011,530        63.9           63,716,201       60.4
                                                      ------------       -----         ------------      -----

                  Total                               $118,930,939       100.0%        $105,338,770      100.0%
                                                      ============       =====         ============      =====
</TABLE>
                                       27
<PAGE>
10.  DEPOSITS (CONTINUED)


     The scheduled  maturities of time  certificates of deposit at June 30, 2000
are as follows:

                                                                   Amount
                                                               -------------

         Within one year                                         $49,095,230
         Beyond one year but within two years                     15,681,607
         Beyond two years but within three years                   8,277,541
         Beyond three years but within five years                  2,382,553
         Beyond five years                                           574,599
                                                                 -----------

              Total                                              $76,011,530
                                                                 ===========

     The Company had time certificates  with a minimum  denomination of $100,000
     in the amount of  approximately  $6,685,503 and $7,258,263 at June 30, 2000
     and 1999,  respectively.  Deposits in excess of $100,000 are not  federally
     insured. The Company does not have any brokered deposits.

     Interest  expense by  deposit  category  for the years  ended June 30 is as
follows:

                                                         2000           1999
                                                     ------------    -----------

         Passbooks                                     $  458,723     $  404,099
         NOW and Money Market Deposit accounts            690,941        649,652
         Time certificates                              3,849,090      3,257,354
                                                       ----------      ---------
                                                       $4,998,754     $4,311,105
                                                       ==========     ==========

11.  ADVANCES FROM FEDERAL HOME LOAN BANK

     Advances from the Federal Home Loan Bank consists of the following:

                   Principal   Interest  Interest
                       Due       Due        Rate         2000       1999
                  -----------  --------   --------  ------------   ----------

         Advance  08-03-2000   Annually     5.94%   $  2,500,000   $        -
         Advance  06-30-2005   Monthly      6.36%      5,000,000            -
         Advance  10-22-2009   Monthly      5.52%      3,000,000            -
         Advance  03-25-2002   Monthly      5.51%              -    3,000,000
         Advance  11-04-2002   Monthly      5.37%              -    5,000,000
         Advance  01-23-2008   Monthly      4.94%              -    1,000,000
                                                    ------------   ----------
                                                    $10,500,000    $9,000,000
                                                    ===========    ==========

     These  borrowings  are subject to the terms and conditions of the Advances,
     Collateral Pledge and Security Agreement between the Federal Home Loan Bank
     of  Pittsburgh  and the Bank.  All  advances  have fixed rates with putable
     options with the  exception of the advance due August 3, 2000,  that has no
     putable option.

     In addition, the Bank entered into a "RepoPlus" Advance credit arrangement,
     which is renewable annually and incurs no service charges. During 2000, the
     Bank had a borrowing  limit of  approximately  $62 million  with a variable
     rate of interest,  based upon the FHLB's cost of funds. All borrowings from
     the FHLB are secured by a blanket  lien on  qualified  collateral,  defined
     principally as investment  securities and mortgage loans which are owned by
     the Bank free and clear of any liens or encumbrances.

                                       28
<PAGE>
12.  INCOME TAXES

     The  components  of income  tax  expense  for the years  ended  June 30 are
summarized as follows:

                                                          2000          1999
                                                       ----------    ---------

         Currently payable:
              Federal                                    $531,869     $410,461
              State                                        85,531       59,453
                                                         --------     --------
                                                          617,400      469,914
              Deferred                                    (39,524)      12,011
                                                        ----------   ---------
                  Total                                  $577,876     $481,925
                                                         ========     ========

     The  following  temporary  differences gave rise to deferred tax asset  and
     liabilities:

                                                          2000         1999
                                                       ----------   ----------
         Deferred tax assets
              Allowance for loan losses                $  231,915   $  197,975
              Loan origination fees, net                   16,773       21,520
              Net unrealized loss on securities           155,101       76,464
              Other, net                                   10,241       10,241
                                                       ----------   ----------
                  Deferred tax assets                     414,030      306,200
                                                       ----------   ----------
         Deferred tax liabilities
              Premise and equipment depreciation          253,176      235,712
              Tax reserve for loan losses                  64,261       91,802
              Other, net                                   54,613       54,867
                                                       ----------   ----------
                  Deferred tax liabilities                372,050      382,381
                                                       ----------   ----------
                  Net deferred tax asset (liability)   $   41,980   $  (76,181)
                                                       ----------   -----------

     On August 20, 1996,  the Small  Business Job Protection Act (the "Act") was
     signed into law. The Act  eliminated  the  percentage of taxable income bad
     debt  deduction  for  thrift  institutions  for tax years  beginning  after
     December 31,  1995.  The Act provides  that bad debt  reserves  accumulated
     prior to 1988 be exempt from recapture. Bad debt reserves accumulated after
     1987 are subject to recapture.  The recapture tax will be paid in six equal
     installments  beginning  with the 1998 tax year. At December 31, 1995,  the
     Bank had $324,005 in bad debt reserves in excess of the base year.  Subject
     to prevailing  corporate tax rates, the Bank owes $64,261 in federal income
     taxes, which is reflected as a deferred tax liability.

     The  reconciliation  between the actual  provision for income taxes and the
     amount of income taxes which would have been  provided at  statutory  rates
     for the years ended June 30 is as follows:

<TABLE>
<CAPTION>
                                                               2000                1999
                                                    --------------------   ----------------------
                                                      Amount    Percent       Amount       Percent
                                                      ------    -------       ------       -------

<S>                                                <C>          <C>        <C>            <C>
         Provision at statutory rate                 $501,036     34.0%      $430,356       34.0%
         State income tax expense, net of federal
          tax benefit                                  56,450      3.8         40,504        3.2
         Tax exempt interest                          (12,693)     (.9)        (8,441)       (.7)
         Other, net                                    33,083      2.3         19,506        1.5
                                                     --------     ----       --------       ----
              Actual expense and effective rate      $577,876     39.2%      $481,925       38.0%
                                                     ========     ====       ========       ====
</TABLE>
13.  RETIREMENT PLAN

     The Company has a  profit-sharing  plan with a 401(k)  feature.  The 401(k)
     allows  employees  to make  contributions  to the  plan up to 10% of  their
     annual compensation. The Company will match 50% of the employees' voluntary
     contributions up to 3% of the employee's compensation.  Additional employer
     contributions  are made at the  discretion of the Board of  Directors.  The
     plan covers  substantially all employees with more than one year's service.
     The Company's  contributions for the benefit of covered employees  amounted
     to  $32,988  and  $25,579  for the  years  ended  June 30,  2000 and  1999,
     respectively.

                                       29
<PAGE>
14.  RESTRICTED STOCK PLAN (RSP)

     In 1998,  the  Board of  Directors  adopted  a RSP for  directors,  certain
     officers and  employees,  which was approved by  stockholders  at a special
     meeting held on January 20, 1998.  The  objective of this Plan is to enable
     the Company and the Bank to retain its corporate  officers,  key employees,
     and directors who have the experience and ability necessary to manage these
     entities.  Directors,  officers,  and key  employees  who are  selected  by
     members of a Board  appointed  committee  are eligible to receive  benefits
     under the RSP. The non-employee directors of the Company and the Bank serve
     as trustees for the RSP, which has the  responsibility  to invest all funds
     contributed by the Bank to the Trust created for the RSP.

     On February 23, 1998,  the Trust  purchased  with funds  contributed by the
     Bank,  43,378 shares of the common stock of the Company.  At June 30, 2000,
     15,180  shares have been issued to  non-employee  directors,  26,844 shares
     have  been  issued  to  officers,   and  1,354  shares  remained  unissued.
     Directors, officers, and key employees who terminate their association with
     the Company  shall  forfeit the right to any shares  which were awarded but
     not  earned.  Shares are vested  over a  four-year  period from their grant
     date.  A total of 24,614  shares  were  vested as of June 30,  2000.  Total
     operating  expense  attributed to the RSP amounted to $197,591 and $201,881
     for the years ended June 30, 2000 and 1999.


15.  EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

     In conjunction  with the Bank's  conversion from mutual to stock,  the Bank
     adopted an ESOP for the  benefit of  officers  and  employees  who have met
     certain eligibility  requirements  related to age and length of service. An
     ESOP trust was created,  and acquired  86,756 shares of common stock in the
     Company's  initial public offering,  using proceeds of a loan obtained from
     the Company,  which bears  interest at the Wall Street  Journal prime rate,
     adjusted  quarterly.  The loan,  which is  secured  by the  shares of stock
     purchased,  calls for quarterly  interest over a ten year period and annual
     principal payments of $86,756.

     The Bank makes quarterly  contributions  to the trust to allow the trust to
     make the required  loan  payments to the Company.  Shares are released from
     collateral based upon the proportion of annual  principle  payments made on
     the loan each year and  allocated  to  qualified  employees.  As shares are
     released from collateral,  the Bank reports compensation expense based upon
     the amounts  contributed or committed to be  contributed  each year and the
     shares become  outstanding for earnings per share  computations.  Dividends
     paid on  allocated  ESOP shares are  recorded  as a  reduction  in retained
     earnings.  Dividends paid on  unallocated  shares were added to participant
     accounts  and  reported as  compensation  for the year ended June 30, 1999,
     however,  for the year ended June 30, 2000,  dividends  paid on unallocated
     shares  were used to reduce the  company's  contribution  to the ESOP plan.
     Compensation  expense for the ESOP was  $100,018 and $145,182 for the years
     ended June 30, 2000 and 1999, respectively.

     The following table represents the components of the ESOP shares:

                                                      2000           1999
                                                    --------       --------

         Allocated shares                             30,252         22,632

         Shares released for allocation                4,338          4,338

         Shares distributed                           (1,056)       (1,056)

         Unreleased shares                            52,166         59,786
                                                    --------       --------

         Total ESOP share                             85,700         85,700
                                                    ========       ========

         Fair value of unreleased shares            $554,264       $717,432
                                                    ========       ========

                                       30
<PAGE>
16.  STOCK OPTION PLAN

     In December  1997,  the Board of Directors  adopted a Stock Option Plan for
     the directors,  officers, and employees, which was approved by stockholders
     at a special  meeting  held on January 20,  1998.  An  aggregate of 108,445
     shares of authorized but unissued common stock of the Company were reserved
     for  future  issuance  under the plan.  The stock  options  typically  have
     expiration  terms of ten years  subject  to  certain  extensions  and early
     terminations. The per share exercise price of a stock option shall be, at a
     minimum, equal to the fair value of a share of common stock on the date the
     option is granted.  Proceeds  from the  exercise  of the stock  options are
     credited  to common  stock for the  aggregate  par value and the  excess is
     credited to additional paid-in capital.

     On January 20, 1998,  qualified stock options were granted for the purchase
     of 65,061 shares  exercisable  at the market price of $18.75 per share at a
     rate of one fourth per year beginning  January 20, 1998. All options expire
     ten years  from the date of grant.  At June 30,  2000,  the  initial  stock
     options granted remain outstanding with none being exercised.

     The Company  accounts  for its stock  option plan under  provisions  of APB
     Opinion No. 25, " Accounting  for Stock Issued to  Employees,"  and related
     interpretations.  Under this  opinion,  no  compensation  expense  has been
     recognized  with  respect to the plan  because  the  exercise  price of the
     Company's  employee stock options equals the market price of the underlying
     stock on the grant date.

     Had  compensation  expense  for the stock  option plan been  recognized  in
     accordance  with the fair  value  accounting  provisions  of  Statement  of
     Financial  Accounting  Standards  No.  123, "  Accounting  for  Stock-based
     Compensation,"  net income  applicable to common stock,  basic and dilutive
     net income per common share, for the years ended June 30 would have been as
     follows:

                                                    2000           1999
                                               ------------   --------------

         Net Income:
              As reported                      $    895,760   $      783,827
                                               ============   ==============

              Pro forma                        $    895,357   $      767,939
                                               ============   ==============

         Basic Earnings Per Share:
              As reported                      $       1.01   $          .83
                                               ============   ==============
              Pro forma                        $       1.01   $          .81
                                               ============   ==============

         Diluted Earnings Per Share:
              As reported                      $       1.01   $          .83
                                               ============   ==============
              Pro forma                        $       1.01   $          .81
                                               ============   ==============


     The following table presents share data related to the stock option plans:

                                                      2000             1999
                                                    --------         --------

         Outstanding, beginning                       65,061           65,061

              Granted                                      -                -
              Exercised                                    -                -
              Forfeited                                    -                -
                                                    --------         --------

         Outstanding, ending (at $18.75 per share)    65,061           65,061
                                                    ========         ========

                                       31

<PAGE>
16.  STOCK OPTION PLAN (CONTINUED)

     The fair value of the option grant was  estimated  using the  Black-Scholes
     option-pricing model with the following  weighted-average  assumptions used
     for the grant in 2000 and 1999,  respectively:  expected  dividend yield of
     4.0% and 2.67%;  expected  volatility of 6.7% and 8.9%;  risk-free interest
     rate of 6.13% and 6.02%; and expected lives of 7 and 8 years.

     Dividend  Equivalent  Rights  may be granted  concurrently  with any option
     granted.  These  rights  provide that upon the payment of a dividend on the
     Common  Stock,  the  holder  of  such  Options  shall  receive  payment  of
     compensation  in an amount  equivalent  to the dividend  payable as if such
     Options had been  exercised  and such Common  Stock held as of the dividend
     date. Dividend Equivalent Rights were granted  concurrently with respect to
     the stock options granted in 1998.

     Compensation  expense resulting from Dividend Equivalent Rights was $26,024
     and $20,820 for the year ended June 30, 2000 and 1999, respectively.

17.  PREFERRED SHARE PURCHASE RIGHTS PLAN

     In July 1997,  the Board of Directors  adopted a Preferred  Share  Purchase
     Rights Plan and  correspondingly  issued one Preferred Share Purchase Right
     ("a  Right")  for each  share of common  stock of the  Company.  Each Right
     entitles  the   registered   holder  to  purchase   from  the  Company  one
     one-hundredth  of a share of the Company's junior  Participating  Preferred
     Stock,   Series  A  ("Preferred   Shares"),   at  a  price  of  $37.00  per
     one-hundredth  of a Preferred  Share. The Rights will not be exercisable or
     separable  from the common shares until ten business days after a person or
     group  acquire  15% or more  or  tenders  for 50% or more of the  Company's
     outstanding  common  shares.  The Plan also  provides that if any person or
     group  becomes  an  "Acquiring  Person,"  each  Right,  other  than  Rights
     beneficially owned by the Acquiring Person (which will thereafter be void),
     will  entitle  its holder to receive  upon  exercise  that number of common
     shares having a market value of two times the exercise  price of the Right.
     In the  event  the  Company  is  acquired  in a merger  or  other  business
     combination transaction, each Right will entitle its holder to receive upon
     exercise of the Right,  at the Right's then current  exercise  price,  that
     number of the  acquiring  company's  common shares having a market value of
     two times the  exercise  price of the Right.  The  company is  entitled  to
     redeem  the  Rights at a price of one cent per  Right at any time  prior to
     them becoming exercisable, and the Rights expire on July 17, 2007. The Plan
     was designed to protect the interest of the Company's  shareholders against
     certain coercive tactics sometimes employed in takeover attempts.

18.  COMMITMENTS AND CONTINGENT LIABILITIES

     Lease Commitments
     -----------------
     The future  lease  commitments  as of June 30, 2000 for all  noncancellable
     equipment and land leases follows:

                             Fiscal Year
                           Ending June 30,                  Amount
                           ---------------                  ------

                                 2001                      $    73,617
                                 2002                           76,417
                                 2003                           78,417
                                 2004                           77,669
                                 2005                           75,420
                          2006 and thereafter                2,140,900
                                                           -----------

                                                           $ 2,522,440
                                                           ===========

     Litigation
     ----------

     The  Company is  involved  in  litigation  arising in the normal  course of
     business.  Management believes that liabilities, if any, arising from these
     proceedings  will not have a material  adverse  effect on the  consolidated
     financial position, operating results, or liquidity.

                                       32
<PAGE>
19.  OTHER COMPREHENSIVE INCOME

     Other Comprehensive  income in the Consolidated  Statement of Stockholders'
     Equity consists solely of unrealized gains and losses on available for sale
     securities.  The change in net unrealized loss on securities  available for
     sale securities includes reclassification  adjustments to reclassify gains,
     net of tax for sales of the related security of $0 and $4,673 for the years
     ended June 30, 2000 and 1999.

20.  FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS

     The estimated carrying amounts and fair values are as follows:

<TABLE>
<CAPTION>
                                                              2000                             1999
                                                --------------------------------     ----------------------------
                                                                     Estimated                        Estimated
                                                    Carrying           Fair            Carrying         Fair
                                                    Amount             Value            Amount          Value
                                                --------------   ---------------     ------------  -------------
<S>                                             <C>               <C>               <C>            <C>
         Financial assets:
              Cash and cash equivalents          $   5,751,624     $   5,751,624     $  4,359,870   $  4,359,870
              Investment securities
                    Held to maturity                 1,249,672         1,187,625          999,896        970,914
                    Available-for-sale               8,234,637         8,234,637        4,481,475      4,481,475
              Mortgage-backed securities:
                   Held to maturity                  2,089,010         2,027,016        2,472,681      2,456,645
                   Available for sale                1,556,172         1,556,172        1,832,845      1,832,845
              Loans receivable                     119,721,308       119,150,000      109,899,551    110,308,000
              Federal Home Loan Bank Stock             800,000           800,000          629,500        629,500
              Accrued interest receivable              870,955           870,955          664,058        664,058
                                                 -------------     -------------     ------------   ------------
                  Total                          $ 140,273,378     $ 139,578,029     $125,339,876   $125,703,307
                                                 =============     =============     ============   ============
</TABLE>

<TABLE>
<CAPTION>
                                                              2000                                1999
                                                --------------------------------     ---------------------------
                                                                    Estimated                         Estimated
                                                    Carrying          Fair             Carrying         Fair
                                                    Amount            Value             Amount          Value
                                                --------------     -------------     -------------   -----------
<S>                                             <C>               <C>               <C>            <C>
         Financial liabilities:
              Deposits                           $ 118,930,939     $ 118,299,000     $105,338,770   $105,243,000
              Advances from Federal
               Home Loan Bank                       10,500,000        10,418,000        9,000,000      9,000,000
              Advance payment by borrowers
               for taxes and insurance                 203,320           203,320          196,993        196,993
              Accrued interest payable                 189,508           189,508           50,357         50,357
                                                 -------------     -------------     ------------   ------------
                  Total                          $ 129,823,767     $ 129,109,828     $114,586,120   $114,490,350
                                                 =============     =============     ============   ============
</TABLE>

                                       33
<PAGE>
20.  FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS (CONTINUED)

     Financial  instruments are defined as cash,  evidence of ownership interest
     in an entity, or a contract which creates an obligation or right to receive
     or deliver cash or another financial  instrument from/to a second entity on
     potentially favorable or unfavorable terms.

     Fair value is defined as the amount at which a financial  instrument  could
     be exchanged in a current transaction between willing parties other than in
     a forced or  liquidation  sale. If a quoted market price is available for a
     financial  instrument,  the estimated fair value would be calculated  based
     upon the market price per trading unit of the instrument.

     If no  readily  available  market  exists,  the fair  value  estimates  for
     financial  instruments should be based upon management's judgment regarding
     current  economic  conditions,  interest  rate risk,  expected  cash flows,
     future estimated  losses,  and other factors as determined  through various
     option  pricing  formulas  or  simulation   modeling.   As  many  of  these
     assumptions  result from judgments made by management  based upon estimates
     which are inherently uncertain, the resulting estimated fair values may not
     be  indicative  of the  amount  realizable  in  the  sale  of a  particular
     financial  instrument.  In addition,  changes in  assumptions  on which the
     estimated  fair  values  are  based  may have a  significant  impact on the
     resulting estimated fair values.

     As certain  assets such as deferred tax assets and  premises and  equipment
     are not  considered  financial  instruments,  the  estimated  fair value of
     financial instruments would not represent the full value of the Company.

     The Company employed  simulation modeling in determining the estimated fair
     value of  financial  instruments  for which quoted  market  prices were not
     available based upon the following assumptions:

     Cash and Cash Equivalents,  Federal Home Loan Bank Stock,  Accrued Interest
     ---------------------------------------------------------------------------
     Receivable, Accrued Interest Payable, and Advance Payment by Borrowers  for
     ---------------------------------------------------------------------------
     Taxes and Insurance
     -------------------

     The fair value is equal to the current carrying value.

     Investment Securities, Mortgage-backed Securities, and Loans Held for Sale
     --------------------------------------------------------------------------

     The fair value of investment  securities,  mortgage-backed  securities  and
     loans held for sale is equal to the available  quoted  market price.  If no
     quoted market price is available,  fair value is estimated using the quoted
     market price for similar securities.

     Loans, Deposits, and Advances from Federal Home Loan Bank
     ---------------------------------------------------------

     The fair value of loans is estimated by  discounting  the future cash flows
     using a  simulation  model  which  estimates  future cash flows and employs
     discount  rates  that  consider   reinvestment   opportunities,   operating
     expenses, non-interest income, credit quality, and prepayment risk. Demand,
     savings, and money market deposit accounts are valued at the amount payable
     on demand as of year-end.  Fair values for time  deposits and advances from
     Federal  Home  Loan  Bank  are  estimated  using  a  discounted  cash  flow
     calculation  and applies  contractual  costs currently being offered in the
     existing  portfolio to current  market rates being offered for deposits and
     notes of similar remaining maturities.

     Commitments to Extend Credit
     ----------------------------

     These financial instruments are generally not subject to sale and estimated
     fair values are not readily available.  The carrying value,  represented by
     the net deferred fee arising from the unrecognized commitment, and the fair
     value,  determined by discounting  the remaining  contractual  fee over the
     term of the commitment  using fees currently  charged to enter into similar
     agreements  with  similar  credit  risk,  are not  considered  material for
     disclosure.  The contractual amounts of unfunded  commitments are presented
     in Note 5.

                                       34
<PAGE>
21.  CAPITAL REQUIREMENTS

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

     Quantitative  measures  established  by the  regulation  to ensure  capital
     adequacy  require the Company and the Bank to maintain  minimum amounts and
     ratios of Total and Tier I  capital  (as  defined  in the  regulations)  to
     risk-weighted  assets,  and of tangible and core capital (as defined in the
     regulations) to adjusted assets (as defined).  Management  believes that as
     of June  30,  2000 the  Company  and the Bank  meet  all  capital  adequacy
     requirements to which they are subject.

     As of June 30, 2000,  the most recent  notification  from the Company's and
     Bank's primary  regulatory  authorities have categorized the entity as well
     capitalized under the regulatory framework for prompt corrective action. To
     be  categorized  as well  capitalized,  the Company must  maintain  minimum
     tangible,  core,  and risk-based  ratios.  There have been no conditions or
     events since that  notification  that management  believes have changed the
     Company's or the Bank's category.

     The following  table  reconciles  the  Company's  and Bank's  capital under
     generally accepted accounting principles to regulatory capital:

<TABLE>
<CAPTION>
                                                          Company                              Bank
                                            -------------------------------      -------------------------------
                                                         June 30,                             June 30,
                                                 2000              1999               2000              1999
                                             -------------      -----------       -------------    -------------
<S>                                         <C>                <C>               <C>                <C>
         Total equity                        $  15,068,274      $14,993,452       $  14,241,112      $13,481,216
         Unrealized loss on securities            (301,080)        (148,431)           (284,163)        (137,293)
                                             --------------     ------------      --------------     -----------

         Tier I, core, and tangible capital     15,369,354       15,141,883          14,525,275       13,618,509

         Allowance for loan losses                 682,103          582,280             682,103          582,280
                                             --------------     ------------      --------------     -----------

         Risk-based capital                  $  16,051,457      $15,724,163       $  15,207,378      $14,200,789
                                             =============      ===========       =============      ===========
</TABLE>

                                      35
<PAGE>
21.  CAPITAL REQUIREMENTS (CONTINUED)

     The actual capital amounts and ratios were as follows:
<TABLE>
<CAPTION>
                                                                              Company at June 30,
                                                          --------------------------------------------------------
                                                                        2000                         1999
                                                          ----------------------------   -------------------------
                                                              Amount           Ratio         Amount         Ratio
                                                          --------------     ---------   -------------    --------
<S>                                                      <C>                <C>          <C>            <C>
     Total Capital to Risk-Weighted Assets
     -------------------------------------

         Actual                                           $  16,051,457       16.06%      $15,724,163     17.03%
         For Capital Adequacy Purposes                        7,994,160        8.00         7,385,779      8.00
         To be "Well Capitalized"                             9,992,700       10.00         9,232,224     10.00

     Tier I Capital to Risk-Weighted Assets
     --------------------------------------

         Actual                                           $  15,369,354       15.38%      $15,141,883     16.40%
         For Capital Adequacy Purposes                        3,997,080        4.00         3,692,890      4.00
         To be "Well Capitalized"                             5,995,620        6.00         5,539,334      6.00

     Core Capital to Adjusted Assets
     -------------------------------

         Actual                                           $  15,369,354       10.56%      $15,141,883     11.59%
         For Capital Adequacy Purposes                        5,822,620        4.00         5,227,400      4.00
         To be "Well Capitalized"                             7,278,280        5.00         6,534,250      5.00

     Tangible Capital to Adjusted Assets
     -----------------------------------

         Actual                                           $  15,369,354       10.56%      $15,141,883     11.59%
         For Capital Adequacy Purposes                        2,183,480        1.50         1,960,530      1.50
         To be "Well Capitalized"                             N/A               N/A           N/A           N/A


                                                                                Bank at June 30,
                                                        -----------------------------------------------------------
                                                                        2000                         1999
                                                        -----------------------------     -------------------------
                                                             Amount           Ratio            Amount        Ratio
                                                        ---------------     ---------     -------------    -------
<S>                                                      <C>                  <C>        <C>               <C>
     Total Capital to Risk-Weighted Assets
     -------------------------------------

         Actual                                           $  15,207,378        15.23%     $  14,200,789      15.79%
         For Capital Adequacy Purposes                        7,987,760         8.00          7,193,840       8.00
         To be "Well Capitalized"                             9,984,700        10.00          8,992,300      10.00

     Tier I Capital to Risk-Weighted Assets
     --------------------------------------

         Actual                                           $  14,525,275        14.55%     $  13,618,509      15.14%
         For Capital Adequacy Purposes                        3,993,880         4.00          3,596,920       4.00
         To be "Well Capitalized"                             5,990,820         6.00          5,395,380       6.00

     Core Capital to Adjusted Assets
     -------------------------------

         Actual                                           $  14,525,275         9.94%     $  13,618,509      10.42%
         For Capital Adequacy Purposes                        5,846,400         4.00          5,227,400       4.00
         To be "Well Capitalized"                             7,308,000         5.00          6,534,250       5.00

     Tangible Capital to Adjusted Assets
     -----------------------------------

         Actual                                           $  14,525,275         9.94%     $  13,618,509      10.42%
         For Capital Adequacy Purposes                        2,192,400         1.50          1,960,275       1.50
         To be "Well Capitalized"                                   N/A          N/A            N/A            N/A
</TABLE>
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