PEOPLES-SIDNEY FINANCIAL CORPORATION
                                  Sidney, Ohio

                                  ANNUAL REPORT
                                  June 30, 2005

<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                                  Sidney, Ohio

                                  ANNUAL REPORT
                                  June 30, 2005

                                    CONTENTS

TO OUR SHAREHOLDERS .......................................................    2

BUSINESS OF PEOPLES-SIDNEY FINANCIAL CORPORATION ..........................    4

MARKET PRICE OF THE CORPORATION'S COMMON SHARES
  AND RELATED SHAREHOLDER MATTERS .........................................    4

SELECTED CONSOLIDATED FINANCIAL INFORMATION
  AND OTHER DATA ..........................................................    6

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS .....................................    8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ...................   21

CONSOLIDATED FINANCIAL STATEMENTS

       Consolidated Balance Sheets ........................................   22

       Consolidated Statements of Income ..................................   23

       Consolidated Statements of Changes in Shareholders' Equity .........   24

       Consolidated Statements of Cash Flows ..............................   27

       Notes to Consolidated Financial Statements .........................   28

SHAREHOLDER INFORMATION ...................................................   49

CORPORATE INFORMATION .....................................................   50

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                                                                              1.
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Dear Shareholder:

We are pleased to present our ninth annual report for your review.

Our fiscal year results are spread throughout this report, but let me mention a
few in this letter. Our Company's net income was $978,000, up just slightly from
our previous year of $975,000. The increase in net income was due primarily to
an increase in net interest income coupled with a decrease in federal income tax
expense. This increase was partially offset by an increase in noninterest
expense and the provision for loan losses.

Our earnings per share equaled our past fiscal year at $0.71. Although our
earnings remained equal, our shareholders saw an increase in the dividends paid
from $0.64 during fiscal year 2004 to $0.67 for 2005. This equaled a 94.37%
dividend payout ratio, considerably higher than industry standards.

Total assets at year-end were $136,695,000, up $924,000 from 2004. This increase
resulted from an increase in loans of $5.5 million, funded by cash and borrowed
funds. Loans totaled $121.1 million. The most significant change was in
one-to-four family residential loans, which increased $4.6 million. Commercial
real estate loans increased $0.7 million, land loans $0.5 million, consumer
loans $0.8 million and commercial loans $0.5 million.

Deposits decreased $0.9 million and ended at $85.9 million at June 30, 2005. We
noticed, as the Federal Reserve began raising rates a shift resulted from
regular savings accounts into money market accounts. The overall decrease in
deposits occurred as customers searched for higher returns on their deposits or
elected to spend rather than save.

The Company also completed a full data processing conversion during our fiscal
year and upgraded all computers in all our offices. We feel this conversion now
provides state of the art processing for our customers and gives us an
opportunity to look at future services to enhance our operations.

As we enter our tenth year as a public company, new government regulations and
requirements will add additional burden and greater expense to our operations.
Our Board of Directors and management team is poised to control our expenses
wherever possible and will be vigilant in making sound business decisions which
will benefit our Company and our shareholders.

In summary, fiscal year 2005 was a good year for Peoples-Sidney Financial
Corporation. Earnings improved, your dividend increased, shareholder value
improved, total assets and customers increased and we added to the equity of the
Company.

We thank you for your continual support and invite you to visit with any of our
dedicated staff for all your financial needs. Your questions are always welcome.

Sincerely,

/s/ Douglas Stewart

Douglas Stewart
President-CEO


2.
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BUSINESS OF PEOPLES-SIDNEY FINANCIAL CORPORATION

Peoples-Sidney Financial Corporation, a unitary thrift holding company
incorporated under the laws of the State of Delaware ("Peoples"), owns all of
the issued and outstanding capital stock of Peoples Federal Savings and Loan
Association, a savings and loan association chartered under the laws of the
United States (the "Association" and, together with Peoples, the "Corporation").
On April 25, 1997, Peoples acquired all of the common stock issued by the
Association upon its conversion from a mutual savings and loan association to a
stock savings and loan association (the "Conversion"). Peoples' activities have
been limited primarily to holding the common shares of the Association.

Serving the Sidney, Ohio area since 1886, the Association conducts business from
its main office at 101 East Court Street, Sidney, Ohio and three full-service
branches in Sidney, Anna, and Jackson Center, Ohio. The Association's business
involves attracting deposits from the general public and using such deposits as
well as borrowings from the Federal Home Loan Bank to originate one- to
four-family permanent and construction residential mortgages and, to a lesser
extent, commercial real estate, consumer, land, multi-family and commercial
business loans in its market area, which consists primarily of Shelby County and
contiguous counties in Ohio. The Association also invests in securities
consisting primarily of U.S. government obligations, mortgage-backed and related
securities and various types of short-term liquid assets.

As a savings and loan holding company, Peoples is subject to regulation,
supervision and examination by the Office of Thrift Supervision of the United
States Department of the Treasury (the "OTS"). As a savings and loan association
chartered under the laws of the United States, the Association is subject to
regulation, supervision and examination by the OTS and the Federal Deposit
Insurance Corporation (the "FDIC"). The FDIC insures deposits in the Association
up to applicable limits. The Association is also a member of the Federal Home
Loan Bank of Cincinnati (the "FHLB").

MARKET PRICE OF THE CORPORATION'S COMMON SHARES AND
RELATED SHAREHOLDER MATTERS

The Corporation had 1,432,648 common shares outstanding on August 31, 2005,
which were held of record by 816 shareholders. Price information with respect to
the Corporation's common shares is quoted on The NASDAQ National Market System
under the symbol "PSFC". The high and low daily closing prices for the common
shares of the Corporation as quoted by The NASDAQ Stock Market, Inc., and cash
dividends paid by quarter, are shown below.

                       September 30,  December 31,     March 31,      June 30,
                           2004           2004           2005           2005
                       -------------  ------------     ---------      --------

      High                $17.91         $15.75         $15.49         $15.70
      Low                  14.76          14.09          13.40          13.10
      Cash Dividends        0.14           0.24           0.14           0.15

                       September 30,  December 31,     March 31,      June 30,
                           2003           2003           2004           2004
                       -------------  ------------     ---------      --------

      High                $15.00         $15.88         $18.50         $17.67
      Low                  13.25          13.25          14.69          15.77
      Cash Dividends        0.13           0.23           0.14           0.14

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4.
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Peoples' pays dividends to shareholders using primarily funds received as
dividends from the Association. In addition to certain federal income tax
considerations, OTS regulations impose limitations on the payment of dividends
and other capital distributions by savings associations. Under OTS regulations
applicable to converted savings associations, the Association is not permitted
to pay a cash dividend on its common shares if its regulatory capital would, as
a result of such dividend payment, be reduced below the amount required for the
Liquidation Account (the account established for the purpose of granting a
limited priority claim on the assets of the Association in the event of complete
liquidation to those members of the Association before the Conversion who
maintain a savings account at the Association after the Conversion), or
applicable regulatory capital requirements prescribed by the OTS.

A subsidiary of a savings and loan holding company must file a notice or an
application with the OTS before it can declare and pay a dividend (1) if the
proposed distribution would cause total distributions for that calendar year to
exceed net income for that year to date plus the savings association's retained
net income for the preceding two years; (2) if the savings association will not
be at least adequately capitalized following the capital distribution; (3) if
the proposed distribution would violate a prohibition contained in any
applicable statute, regulations or agreement between the savings association and
the OTS (or the FDIC), or a condition imposed on the savings association in an
OTS-approved application or notice; or, (4) if the savings association has not
received certain favorable examination ratings from the OTS. If a savings
association subsidiary of a holding company is not required to file an
application, it must typically file a notice with the OTS, unless it is both
well-capitalized and meets the income test described above. In addition to
current year earnings, approximately $15,000 is available to pay dividends to
the holding company during the fiscal year ending June 30, 2006 without prior
regulatory approval.

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                                                                              5.
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SELECTED CONSOLIDATED FINANCIAL
INFORMATION AND OTHER DATA

The following tables set forth certain information concerning the consolidated
financial condition and earnings of, and other data regarding, the Corporation
at the dates and for the periods indicated.

<TABLE>
<CAPTION>
Selected Financial Condition                                 At June 30,
----------------------------           --------------------------------------------------------
  and Other Data:                        2005        2004        2003        2002        2001
  ---------------                      --------    --------    --------    --------    --------
                                                            (In thousands)
<S>                                    <C>         <C>         <C>         <C>         <C>
Total amount of:
      Assets                           $136,695    $135,771    $143,568    $134,854    $134,304
      Securities available for sale       5,434       5,288      11,517       3,526       3,002
      FHLB stock                          1,674       1,601       1,539       1,475       1,397
      Loans, net (1)                    121,110     115,652     115,260     121,225     120,482
      Deposits                           85,931      86,764      93,452      94,787      91,341
      Borrowed funds                     32,589      31,140      32,190      22,456      25,475
      Shareholders' equity               17,761      17,431      17,384      17,194      17,150

<CAPTION>
                                                          Year ended June 30,
                                       --------------------------------------------------------
Selected Operations Data:                2005        2004        2003        2002        2001
-------------------------              --------    --------    --------    --------    --------
                                                            (In thousands)
<S>                                    <C>         <C>         <C>         <C>         <C>
Interest income                        $  7,803    $  7,910    $  8,782    $  9,667    $ 10,130
Interest expense                          3,189       3,404       4,423       5,579       6,266
                                       --------    --------    --------    --------    --------
Net interest income                       4,614       4,506       4,359       4,088       3,864
Provision for loan losses                    92          53          69          52          73
                                       --------    --------    --------    --------    --------
Net interest income after
  provision for loan losses               4,522       4,453       4,290       4,036       3,791
Noninterest income                          105         131         139         130         204
Noninterest expense                       3,098       3,035       3,118       3,066       2,837
                                       --------    --------    --------    --------    --------
Income before income taxes                1,529       1,549       1,311       1,100       1,158
Income tax expense                          551         574         475         393         418
                                       --------    --------    --------    --------    --------
Net income                             $    978    $    975    $    836    $    707    $    740
                                       ========    ========    ========    ========    ========

Earnings per common
  share - basic                        $    .71    $    .71    $    .61    $    .51    $    .52
                                       ========    ========    ========    ========    ========
Earnings per common
  share - diluted                      $    .71    $    .71    $    .61    $    .51    $    .52
                                       ========    ========    ========    ========    ========
Dividends declared per share           $    .67    $    .64    $    .49    $    .35    $    .31
                                       ========    ========    ========    ========    ========
</TABLE>

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6.
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Selected Financial Ratios and Other Data:
-----------------------------------------

<TABLE>
<CAPTION>
Performance Ratios:                            2005      2004      2003      2002      2001
                                              -----     -----     -----     -----     -----
<S>                                           <C>       <C>       <C>       <C>       <C>
      Return on assets (ratio of net
        income to average total assets)        0.72%     0.70%     0.60%     0.52%     0.56%
      Return on equity (ratio of net
        income to average equity)              5.58      5.65      4.85      4.15      4.33
      Dividend payout ratio (6)               94.37     90.14     80.33     68.63     59.62
      Interest rate spread (2)                 3.20      3.05      2.83      2.57      2.38
      Net interest margin (3)                  3.51      3.36      3.23      3.09      3.01
      Ratio of operating expense to
        average total assets                   2.29      2.19      2.24      2.25      2.15
      Ratio of average interest-earning
        assets to average interest-bearing
        liabilities                            1.13x     1.12x     1.12x     1.12x     1.13x
Quality Ratios:
      Nonperforming assets to total
        assets at end of period (4)            1.22%     0.96%     1.47%     0.79%     0.94%
      Allowance for loan losses to
        nonperforming loans                   50.12     62.17     38.26     66.12     52.32
      Allowance for loan losses to
        gross loans (5)                        0.69      0.65      0.66      0.58      0.55
Capital Ratios:
      Shareholders' equity to total
        assets at end of period               12.99     12.84     12.11     12.75     12.77
      Average equity to average assets        12.94     12.47     12.39     12.49     12.92
Other Data:
      Number of full service offices              4         4         4         4         4
</TABLE>

(1)   Loans are shown net of net deferred loan fees, loans in process and the
      allowance for loan losses.

(2)   The average interest rate spread represents the difference between the
      weighted average yield on interest-earning assets and the weighted average
      cost of interest-bearing liabilities.

(3)   The net interest margin represents net interest income as a percent of
      average interest-earning assets.

(4)   Nonperforming assets consist of nonperforming loans and foreclosed assets.
      Nonperforming loans consist of all accruing loans 90 days or more past due
      and all nonaccrual loans.

(5)   Gross loans are stated at unpaid principal balances, net of deferred loan
      fees.

(6)   Dividends declared per share divided by basic earnings per common share.

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                                                                              7.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

The following is management's analysis of the Corporation's consolidated
financial condition and consolidated results of operations as of and for the
year ended June 30, 2005, compared to prior years. This discussion is designed
to provide a more comprehensive review of the operating results and financial
position than could otherwise be obtained from an examination of the
consolidated financial statements alone. This analysis should be read in
conjunction with the consolidated financial statements and related footnotes and
the selected financial data included elsewhere in this report.

The Corporation provides financial services through its main office in Sidney,
Ohio, and three full-service branch offices in Sidney, Anna, and Jackson Center,
Ohio. The Corporation's primary deposit products are checking, savings and term
certificate accounts. Its primary lending products are residential mortgage,
commercial and installment loans. Substantially all loans are secured by
specific items of collateral including business assets, consumer assets and real
estate. Commercial loans are expected to be repaid from cash flow from
operations of businesses. Real estate loans are secured by both residential and
commercial real estate. Substantially all revenues and services are derived from
financial institution products and services in Shelby County and contiguous
counties.

Overview and Outlook

Market conditions during the fiscal year continued to be somewhat mixed as
short-term rates rose and long-term rates remained flat. As the Federal Reserve
began increasing interest rates, Management continued its policy of leveraging
fixed rate loan production with mortgage-matched advances from the Federal Home
Loan Bank. This policy provides a measure of protection in the event that
interest rates continue to rise in the future. In conjunction with this policy,
Management continues to price "wholesale" funds verses "retail" deposits for its
operational needs. This policy allows the Corporation to acquire funds at the
lowest cost, which enhances our operations. The Corporation anticipates that
loan demand will be somewhat mixed as interest rates rise, with borrowers
considering adjustable rate mortgages again.

As the Federal Reserve Board continues to analyze market adjustments in interest
rates to control inflationary pressures, depositors and borrowers alike continue
to make a shift in the type of instrument that suits their immediate and
long-term needs. During the last fiscal year we saw increases in money market
and demand deposits as well as longer term certificates of deposit. On the
lending side, many borrowers again considered adjustable rate mortgages as
market interest rates have pushed fixed rate mortgages to higher levels. We
expect rates to continue to increase during the 2006 fiscal year, which we
anticipate will exert pressure on our interest margin as the costs of our
liabilities will rise faster than the yield on our assets.

Forward-Looking Statements

When used in this discussion or future filings by the Corporation with the
Securities and Exchange Commission (the "SEC"), or other public or shareholder
communications, or in oral statements made with the approval of an authorized
executive officer, the words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project," "believe" or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The Corporation
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and to advise
readers that various factors, including regional and national economic
conditions, changes in levels of market interest rates, credit risks of lending
activities and competitive and regulatory factors, could affect the
Corporation's financial performance and could cause the Corporation's actual
results for future periods to differ materially from those anticipated or
projected.

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8.
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The Corporation is not aware of any trends, events or uncertainties that will
have or are reasonably likely to have a material effect on its liquidity,
capital resources or operations except as discussed herein. The Corporation is
not aware of any current recommendations by regulatory authorities that would
have such effect if implemented.

The Corporation does not undertake, and specifically disclaims, any obligation
to publicly release the result of any revisions that may be made to any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.

Comparison of Financial Condition at June 30, 2005 and June 30, 2004

Total assets at June 30, 2005 were $136.7 million compared to $135.8 million at
June 30, 2004, an increase of $0.9 million. The increase in total assets was due
primarily to an increase in loans of $5.5 million, funded by cash and cash
equivalents, which decreased $4.7 million and borrowed funds which increased
$1.5 million.

Cash and cash equivalents decreased $4.7 million from $10.0 million at June 30,
2004 to $5.3 million at June 30, 2005. These funds were used to fund the
increase in loans and decrease in deposits.

The securities portfolio, which is classified as available for sale, increased
$0.1 million from $5.3 million at June 30, 2004 to $5.4 million at June 30,
2005. The increase is related to an increase in the fair market value of the
securities during the current reporting period as no security transactions
occurred. See Note 2 of Notes to Consolidated Financial Statements.

Federal Home Loan Bank stock increased $73,000 from June 30, 2004 to June 30,
2005 due to dividends received during the period.

Loans increased $5.5 million from $115.6 million at June 30, 2004 to $121.1
million at June 30, 2005, an increase of 4.7%. The most significant change was
in one-to four-family residential loans, which increased $4.6 million from $90.0
million at June 30, 2004 to $94.6 million at June 30, 2005. The increase in
residential mortgages was created by the ability of customers to "move up" into
existing homes while long- term interest rates remained relatively low.
Commercial real estate loans increased $0.7 million and land loans increased
$0.5 million from June 30, 2004 to June 30, 2005. Consumer and commercial loans
also provided increases to the loan portfolio with growth of $0.8 million and
$0.5 million, respectively, from June 30, 2004 to June 30, 2005. Increases in
commercial and consumer loans were an effort by management to attract shorter
term, higher yielding loans for the portfolio. Offsetting these increases was a
$1.6 million decrease in real estate construction and development loans
primarily since the Corporation's lending area has experienced a shortage of
available building lots. The change to the multi-family residential loan
category was not significant. See Note 3 of Notes to Consolidated Financial
Statements.

Premises and equipment decreased $29,000 from $2,125,000 at June 30, 2004 to
$2,096,000 at June 30, 2005. This decrease resulted form normal depreciation of
existing assets partially offset by equipment purchases primarily related to the
data processing conversion and routine improvements to the office building.

Total deposits decreased $0.9 million, or 1.0%, from $86.8 million at June 30,
2004 to $85.9 million at June 30, 2005 due to decreases in certificates of
deposit, savings and NOW accounts, partially offset by increases in money market
and noninterest-bearing demand accounts. The most significant changes occurred
in savings and money market accounts. Approximately $2.1 million of deposit
balances shifted from savings accounts to money market accounts from June 30,
2004 to June 30, 2005. Certificates of deposit and NOW accounts decreased $0.7
and $0.4 million, respectively since June 30, 2004. The overall decrease in
deposits occurred as customers searched for higher returns on their deposits or
elected to spend rather than save. See Note 7 of Notes to Consolidated Financial
Statements.

Borrowed funds increased $1.5 million, or 4.6%, from $31.1 million at June 30,
2004 to $32.6 million at June 30, 2005. This increase was the result of the
addition of a $1.0 million select pay mortgage-matched advance and $2.5 million
in cash management advances. The increase was offset by the scheduled repayments
of long-term advances.

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                                  (Continued)


                                                                              9.
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FHLB advances were used to offset the small decline in deposits and assist in
funding loan increases. See Note 8 of Notes to Consolidated Financial
Statements.

Total shareholders' equity increased $330,000 from June 30, 2004 to June 30,
2005. This nominal increase is due to the payment of dividends equal to 93.9% of
the Corporation's earnings for fiscal 2005. Maintaining capital at the current
level is part of Management's capital planning strategy.

Comparison of Results of Operations for the
Year Ended June 30, 2005 and June 30, 2004

Net Income. The Corporation earned net income of $978,000 for the year ended
June 30, 2005 compared to net income of $975,000 for the year ended June 30,
2004. The increase in net income was due primarily to an increase in net
interest income coupled with a decrease in federal income tax expense. This
increase was partially offset by a decrease in noninterest income and an
increase in noninterest expense and the provision for loan losses.

Net Interest Income. Net interest income totaled $4,614,000 for the year ended
June 30, 2005 compared to $4,506,000 for the year ended June 30, 2004, an
increase of $108,000, or 2.4%. The increase was the result of a larger decrease
in interest expense on deposits and borrowed money compared to the decline in
interest income on loans and securities with the exception of interest income on
demand deposits and dividends on Federal Home Loan Bank stock, which increased.

Interest and fees on loans decreased $102,000, or 1.4%, from $7,574,000 for the
year ended June 30, 2004 to $7,472,000 for the year ended June 30, 2005. The
decrease in interest income was due primarily to lower interest rates on loans
partially offset by an increase in average loans receivable during fiscal 2005.
The yield earned on loans decreased from 6.50% for fiscal 2004 to 6.30% for
fiscal 2005.

Interest earned on securities decreased $42,000 to $193,000 for the year ended
June 30, 2005 compared to $235,000 for the year ended June 30, 2004. The
decrease in interest on securities was the result of a decrease in the average
balance partially offset by an increase in the average yield earned. Interest on
interest-bearing demand, time and overnight deposits with other financial
institutions increased $26,000 to $65,000 for the year ended June 30, 2005
compared to $39,000 for the year ended June 30, 2004. The increase in interest
earned on deposits with other financial institutions was the result of a higher
average yield earned on such investments partially offset by a decrease in the
average balance.

Dividends on FHLB stock increased over the comparable period due to an increase
in the dividend rate paid by FHLB.

Interest paid on deposits decreased $172,000, or 10.0% for the year ended June
30, 2005 compared to the year ended June 30, 2004. The decrease resulted from a
decline in the average interest rate paid on deposits combined with lower
average balance of deposits. The average balance of deposits for the year ended
June 30, 2004 was $88.3 million at an average cost of 1.96% compared to an
average balance of deposits for the year ended June 30, 2005 of $85.5 million at
an average cost of 1.82%.

Interest paid on borrowed funds decreased $43,000 from $1,676,000 for the year
ended June 30, 2004 to $1,633,000 for the year ended June 30, 2005. This
decrease was caused by a lower average balance of borrowings coupled with a
lower average cost of borrowed funds resulting from the lower interest rate
environment that continued during fiscal 2005. For further discussion about the
Corporation's interest-rate risk management, see the Asset and Liability
Management section.

Provision for Loan Losses. The Corporation maintains an allowance for loan
losses in an amount that, in Management's judgment, is adequate to absorb
probable incurred losses in the loan portfolio. While Management utilizes its
best judgment and information available, the ultimate adequacy of the allowance
is dependent upon a variety of factors, including the performance of the
Corporation's loan portfolio, the economy, changes in real estate values and
interest rates and the view of the regulatory authorities toward loan
classifications. The provision for loan

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10.
<PAGE>

losses is determined by Management as the amount to be added to the allowance
for loan losses after net charge-offs have been deducted to bring the allowance
to a level that is considered adequate to absorb probable incurred losses in the
loan portfolio. The amount of the provision is based on Management's monthly
review of the loan portfolio and consideration of such factors as historical
loss experience, general prevailing economic conditions, changes in the size and
composition of the loan portfolio, specific borrower considerations, including
the ability of the borrower to repay the loan and the estimated value of the
underlying collateral and observations from regulatory authorities.

The provision for loan losses for the year ended June 30, 2005 totaled $91,000
compared to $53,000 for the year ended June 30, 2004, an increase of $38,000.
The allowance for loan losses totaled $836,000, or 0.69% of loans receivable and
50.1% of total nonperforming loans at June 30, 2005, compared with $753,000, or
0.65% of loans receivable and 62.2% of total nonperforming loans at June 30,
2004. The increase in the provision for loan losses was due to an increase in
the total outstanding balance of loans coupled with an increase in the balance
of loans placed on nonaccrual as compared to the prior year. Nonaccrual loans
increased $694,000 from $624,000 at June 30, 2004 to $1,318,000 at June 30,
2005. The Corporation experienced $8,900 in net charge-offs during the current
fiscal year primarily related to consumer loans. The Corporation's low
historical charge-off history is the product of a variety of factors, including
the Corporation's underwriting guidelines, which generally require a
loan-to-value or projected completed value ratio of 90% for purchase or
construction of one- to four-family residential properties and 75% for
commercial real estate and land loans, established income information and
defined ratios of debt to income.

Noninterest income. Noninterest income, which includes service fees and other
miscellaneous income and gains or losses on sale of real estate owned, decreased
$26,000, from $131,000 for the year ended June 30, 2004 to $105,000 for the year
ended June 30, 2005. This decrease resulted primarily from a loss on the sale of
a property held in real estate owned during the current fiscal year.

Noninterest expense. Noninterest expense totaled $3,098,000 for the year ended
June 30, 2005 compared to $3,035,000 for the year ended June 30, 2004, an
increase of $63,000. Compensation and benefits expense increased $24,000 from
$1,604,000 for the year ended June 30, 2004 to $1,628,000 for the year ended
June 30, 2005. The increase is due to normal increases in compensation and
benefits expense. Occupancy and equipment expense also increased $12,000 from
$405,000 for the year ended June 30, 2004 to $417,000 for the year ended June
30, 2005. Computer processing increased $26,000 from $249,000 for the year ended
June 30, 2004 to $275,000 for the year ended June 30, 2005. This increase was
related to the data processing conversion that occurred during the most recent
quarter. Other expense decreased $6,000 from $355,000 for the year ended June
30, 2004 to $349,000 for the year ended June 30, 2005, primarily due to
decreases in expenses on other real estate owned.

Income Tax Expense. The volatility of income tax expense is primarily
attributable to income before income taxes. Income tax expense totaled $552,000
for the year ended June 30, 2005 compared to $574,000 for the year ended June
30, 2004, a decrease of $22,000. The effective tax rates were 36.1% and 37.1%
for the years ended June 30, 2005 and 2004, respectively. The decrease in the
effective tax rate primarily relates to the Corporation's stock-based benefit
plans and their related tax impact.

Comparison of Results of Operations for the
Year Ended June 30, 2004 and June 30, 2003

Net Income. The Corporation earned net income of $975,000 for the year ended
June 30, 2004 compared to net income of $836,000 for the year ended June 30,
2003. The increase in net income was due primarily to an increase in net
interest income coupled with a decrease in noninterest expense and the provision
for loan losses, partially offset by an increase in federal income tax expense.

Net Interest Income. Net interest income totaled $4,506,000 for the year ended
June 30, 2004 compared to $4,359,000 for the year ended June 30, 2003, an
increase of $147,000, or 3.4%. The increase was the result of a larger decrease
in interest expense on deposits compared to the decline in interest income on
loans and other sources of interest income with the exception of interest income
on securities, which increased.

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

                                  (Continued)


                                                                             11.
<PAGE>

Interest and fees on loans decreased $868,000, or 10.3%, from $8,442,000 for the
year ended June 30, 2003 to $7,574,000 for the year ended June 30, 2004. The
decrease in interest income was due primarily to lower interest rates on loans
and to a lesser extent due to a decrease in average loans receivable during
fiscal 2004. The yield earned on loans decreased from 7.10% for fiscal 2003 to
6.50% for fiscal 2004 due to the decreasing interest rate environment that
continued during fiscal 2004.

Interest earned on securities totaled $235,000 for the year ended June 30, 2004
compared to $204,000 for the year ended June 30, 2003. Interest on
interest-bearing demand, time and overnight deposits with other financial
institutions decreased $32,000 to $39,000 for the year ended June 30, 2004
compared to the year ended June 30, 2003. The increase in interest on securities
was the result of an increase in the average balance partially offset by a
decrease in the average yield earned. The decrease in interest earned on
deposits with other financial institutions was the result of a lower average
yield earned on such investments as well as a decrease in the average balance.

Dividends on FHLB stock decreased over the comparable period due to a decrease
in the dividend rate paid by FHLB.

Interest paid on deposits decreased $1,140,000, or 39.7% for the year ended June
30, 2004 compared to the year ended June 30, 2003. The decrease resulted from a
substantial decline in the average interest rate paid on deposits combined with
lower average balance of deposits. The average balance of deposits for the year
ended June 30, 2003 was $92.2 million at an average cost of 3.11% compared to an
average balance of deposits for the year ended June 30, 2004 of $88.3 million at
an average cost of 1.96%

Interest paid on borrowed funds increased slightly from $1,555,000 for the year
ended June 30, 2003 to $1,676,000 for the year ended June 30, 2004. This
increase was caused by a higher average balance of borrowings partially offset
by a lower average cost of borrowed funds resulting from the lower interest rate
environment that continued during fiscal 2004. For further discussion about the
Corporation's interest-rate risk management, see the Asset and Liability
Management section.

Provision for Loan Losses. The provision for loan losses for the year ended June
30, 2004 totaled $53,000 compared to $69,000 for the year ended June 30, 2003, a
decrease of $16,000. The allowance for loan losses totaled $753,000, or 0.65% of
loans receivable and 62.2% of total nonperforming loans at June 30, 2004,
compared with $766,000, or 0.66% of loans receivable and 38.3% of total
nonperforming loans at June 30, 2003. The decrease in the provision for loan
losses was the result of a decrease in nonaccrual loans during fiscal 2004. The
decrease in nonaccrual loans was the result of Management's ongoing efforts to
resolve problem loans. Historically, charge-offs experienced by the Corporation
have related primarily to consumer and other non-real estate loans. However,
during fiscal 2004, the Corporation also experienced minimal charge-off activity
in the one- to four-family residential mortgage category.

Noninterest income. Noninterest income, which includes service fees and other
miscellaneous income and gains or losses on the sale of real estate owned,
decreased $8,000 from $139,000 for the year ended June 30, 2003 to $131,000 for
the year ended June 30, 2004 resulting from a net loss of $4,000 on the sale of
real estate owned during the fiscal year ended June 30, 2004 as compared to a
net gain of $4,000 on the sale of real estate owned during the fiscal year ended
June 30, 2003.

Noninterest expense. Noninterest expense totaled $3,035,000 for the year ended
June 30, 2004 compared to $3,119,000 for the year ended June 30, 2003, a
decrease of $84,000. The change was primarily the result of a decrease in
compensation and benefits as it related to the management recognition plan
("MRP"). All outstanding MRP shares finished vesting in May 2003. This provided
a decrease of $175,000 in compensation and benefits expense for the current year
ended June 30, 2004. This decrease was partially offset by normal increases in
compensation plus the impact of the Corporation's increased stock price on the
ESOP plan. Occupancy and equipment expense also decreased $39,000 from $444,000
for the year ended June 30, 2003 to $405,000 for the year ended June 30, 2004.
The decrease was related primarily to the benefits associated with owning the
Jackson Center branch office building as opposed to leasing. Other expense
increased $37,000 from $318,000 for the year ended June 30, 2003 to $355,000 for
the year ended June 30, 2004, primarily due to increases in charitable
contributions and expenses related to other real estate owned.

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

                                  (Continued)


12.
<PAGE>

Income Tax Expense. The volatility of income tax expense is primarily
attributable to income before income taxes. Income tax expense totaled $574,000
for the year ended June 30, 2004 compared to $475,000 for the year ended June
30, 2003, an increase of $99,000. The effective tax rates were 37.1% and 36.2%
for the years ended June 30, 2004 and 2003, respectively. The increase in the
effective tax rate primarily relates to the Corporation's stock-based benefit
plans and their related tax impact.

Yields Earned and Rates Paid. The following table sets forth certain information
relating to the Corporation's average balance sheet and reflects the average
yield on interest-earning assets and the average cost of interest-bearing
liabilities for the periods indicated. Such yields and costs are derived by
dividing income or expense by the average balances of interest-earning assets or
interest-bearing liabilities, respectively, for the periods presented. Average
balances are derived from average daily balances. Nonaccruing loans have been
included in the table as loans carrying a zero yield.

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

                                  (Continued)


                                                                             13.
<PAGE>

<TABLE>
<CAPTION>
                                                               Year ended June 30,
                                      ---------------------------------------------------------------------
                                                    2005                              2004
                                      --------------------------------    --------------------------------
                                       Average    Interest                 Average    Interest
                                     outstanding   earned/     Yield/    outstanding   earned/     Yield/
                                       balance      paid        rate       balance      paid        rate
                                      --------    --------    --------    --------    --------    --------
                                                              (Dollars in thousands)
<S>                                   <C>         <C>             <C>     <C>         <C>             <C>
ASSETS:
Interest-earning assets:
Interest-earning deposits             $  5,729    $     65        1.14%   $  8,869    $     39        0.44%
Securities available for sale (1)        5,386         193        3.51       7,091         235        3.24
Loans (2)                              118,550       7,472        6.30     116,607       7,574        6.50
FHLB stock                               1,628          73        4.46       1,562          62        4.00
                                      --------    --------                --------    --------
Total interest-
  earning assets                       131,293       7,803        5.94     134,129       7,910        5.89
                                      --------    --------    --------    --------    --------    --------
Noninterest-earning
  assets:
Cash and due from banks                  1,095                               1,072
Premises and equipment, net              2,097                               2,080
Accrued interest and other assets          979                               1,135
                                      --------                            --------
Total noninterest-earning assets         4,171                               4,287
                                      --------                            --------

Total assets                          $135,464                            $138,416
                                      ========                            ========

LIABILITIES AND
  SHAREHOLDERS' EQUITY:
Interest-bearing
  liabilities:
Savings deposits                      $ 29,975    $    225        0.75%   $ 29,460    $    219        0.75%
Demand and NOW deposits                 11,785          67        0.57      11,020          42        0.38
Certificate accounts                    43,780       1,264        2.89      47,826       1,467        3.07
                                      --------    --------                --------    --------
Total deposits                          85,540       1,556        1.82      88,306       1,728        1.96
Borrowed funds                          30,792       1,633        5.30      31,379       1,676        5.34
                                      --------    --------                --------    --------
Total interest-bearing liabilities     116,332       3,189        2.74     119,685       3,404        2.84
                                      --------    --------    --------    --------    --------    --------

Noninterest-bearing liabilities
Demand deposits                          1,150                                 910
Accrued interest payable and
 other liabilities                         450                                 557
                                      --------                            --------
Total noninterest-bearing
  liabilities                            1,600                               1,467
                                      --------                            --------

Total liabilities                      117,932                             121,152
Total shareholders'equity               17,532                              17,264
                                      --------                            --------
Total liabilities and
  shareholders'equity                 $135,464                            $138,416
                                      ========                            ========

Net interest income;
  interest rate spread (3)                        $  4,614        3.20%               $  4,506        3.05%
                                                  ========    ========                ========    ========

Net earning assets                    $ 14,961                            $ 14,444
                                      ========                            ========

Net interest margin (4)                                           3.51%                               3.36%
                                                              ========                            ========

Average interest-earning assets
  to interest- bearing liabilities       1.13x                               1.12x
                                      ========                            ========

<CAPTION>
                                              Year ended June 30,
                                      ---------------------------------
                                                 2003
                                       --------------------------------
                                        Average    Interest
                                     ooutstanding   earned/     Yield/
                                        balance      paid        rate
                                       --------    --------    --------
                                             (Dollars in thousands)
<S>                                    <C>         <C>             <C>
ASSETS:
Interest-earning assets:
Interest-earning deposits              $  9,045    $     71        0.79%
Securities available for sale (1)         5,599         204        3.67
Loans (2)                               118,824       8,442        7.10
FHLB stock                                1,500          65        4.31
                                       --------    --------
Total interest-
  earning assets                        134,968       8,782        6.51
                                       --------    --------    --------
Noninterest-earning
  assets:
Cash and due from banks                   1,064
Premises and equipment, net               1,940
Accrued interest and other assets         1,065
                                       --------
Total noninterest-earning assets          4,069
                                       --------

Total assets                           $139,037
                                       ========

LIABILITIES AND
  SHAREHOLDERS' EQUITY:
Interest-bearing
  liabilities:
Savings deposits                       $ 25,525    $    387        1.52%
Demand and NOW deposits                   9,884         102        1.04
Certificate accounts                     56,835       2,379        4.18
                                       --------    --------
Total deposits                           92,244       2,868        3.11
Borrowed funds                           28,052       1,555        5.54
                                       --------    --------
Total interest-bearing liabilities      120,296       4,423        3.68
                                       --------    --------    --------

Noninterest-bearing liabilities
Demand deposits                             845
Accrued interest payable and
 other liabilities                          674
                                       --------
Total noninterest-bearing
  liabilities                             1,519
                                       --------

Total liabilities                       121,815
Total shareholders'equity                17,222
                                       --------
Total liabilities and
  shareholders'equity                  $139,037
                                       ========

Net interest income;
  interest rate spread (3)                         $  4,359        2.83%
                                                   ========    ========

Net earning assets                     $ 14,672
                                       ========

Net interest margin (4)                                            3.23%
                                                               ========
Average interest-earning assets
  to interest- bearing liabilities        1.12x
                                       ========
</TABLE>

(1)   Average balance includes unrealized gains and losses while yield is based
      on amortized cost.

(2)   Calculated net of deferred loan fees, loan discounts, loans in process and
      allowance for loan losses and includes nonperforming loans.

(3)   Net interest rate spread represents the difference between the yield on
      interest-earning assets and the cost of interest-bearing liabilities.

(4)   Net interest margin represents net interest income divided by average
      interest-earning assets.

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

                                  (Continued)


14.
<PAGE>

The table below describes the extent to which changes in interest rates and
changes in volume of interest-earning assets and interest-bearing liabilities
have affected the Corporation's interest income and expense during the years
indicated. For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (1) changes in
volume (multiplied by prior year rate), (2) changes in rate (multiplied by prior
year volume) and (3) total changes in rate and volume. The combined effects of
changes in both volume and rate, that are not separately identified, have been
allocated proportionately to the change due to volume and change due to rate:

<TABLE>
<CAPTION>
                                                                        Year ended June 30,
                                                 -------------------------------------------------------------------
                                                          2005 vs. 2004                       2004 vs. 2003
                                                 -------------------------------     -------------------------------
                                                       Increase                           Increase
                                                      (decrease)                         (decrease)
                                                        due to                             due to
                                                 -------------------                 -------------------
                                                  Volume      Rate        Total      Volume       Rate        Total
                                                 -------     -------     -------     -------     -------     -------
                                                                           (In thousands)
<S>                                              <C>         <C>         <C>         <C>         <C>         <C>
Interest income attributable to:
      Interest-earning deposits                  $   (18)    $    44     $    26     $    (1)    $   (31)    $   (32)
      Securities available for sale                  (60)         18         (42)         57         (26)         31
      Loans receivable                               125        (227)       (102)       (155)       (713)       (868)
      FHLB stock                                       3           8          11           2          (5)         (3)
                                                 -------     -------     -------     -------     -------     -------

           Total interest-earning assets         $    50     $  (157)    $  (107)    $   (97)    $  (775)    $  (872)
                                                 =======     =======     =======     =======     =======     =======

Interest expense attributable to:
      Savings deposits                           $     4     $     2     $     6     $    53     $  (221)    $  (168)
      Demand and NOW deposits                          3          22          25          11         (71)        (60)
      Certificates accounts                         (120)        (83)       (203)       (340)       (572)       (912)
      Borrowed funds                                 (31)        (12)        (43)        179         (58)        121
                                                 -------     -------     -------     -------     -------     -------

           Total interest-bearing liabilities    $  (144)    $   (71)    $  (215)    $   (97)    $  (922)     (1,019)
                                                 =======     =======     =======     =======     =======     -------

Net interest income                                                      $   108                             $   147
                                                                         =======                             =======
</TABLE>

Asset and Liability Management

The Association, like other financial institutions, is subject to interest rate
risk to the extent that its interest-earning assets reprice differently than its
interest-bearing liabilities. As part of its effort to monitor and manage
interest rate risk, the Association uses the "net portfolio value" ("NPV")
methodology adopted by the OTS as part of its capital regulations. Although the
Association is not currently subject to NPV regulation because such regulation
does not apply to institutions with less than $300 million in assets and
risk-based capital in excess of 12%, application of NPV methodology may
illustrate the Association's interest rate risk.

Generally, NPV is the discounted present value of the difference between
incoming cash flows on interest-earning and other assets and outgoing cash flows
on interest-bearing and other liabilities. The application of the methodology
attempts to quantify interest rate risk as the change in the NPV that would
result from a theoretical 200 basis point (1 basis point equals 0.01%) change in
market interest rates. Both a 200 basis point increase in market interest rates
and a 200 basis point decrease in market interest rates are considered.

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

                                  (Continued)


15.
<PAGE>

Presented below, as of March 31, 2005, is an analysis of the Association's
interest-rate risk as measured by changes in the NPV for instantaneous and
sustained parallel shifts of 100 basis points in market interest rates. The
table below represents the Thrift Bulletin 13a reporting requirements and the
target limits set by the Association. Although the Association would also
experience a decline in market value equity should interest rates increase, the
Association is more sensitive to declining rates than increasing rates as it was
in the March 2004 report. This continues to be the result of historically low
interest rates despite the six increases by the Federal Reserve over the past
year. The Board of Directors and Management continued to monitor interest rates
during the past year and anticipate the increases the Federal Reserve started in
June 2004 will continue during the 2006 fiscal year. During the preceding 12
months, Management continued efforts to control rising liability costs as the
result of higher short-term interest rates while being constrained on increases
in loan interest rates because of relatively modest changes in long term
interest rates. Because of the flattening of the yield curve, a Federal Home
Loan Bank advance of $1,000,000 for 5 years at 4.10% was secured to help control
rising liability costs. The continued narrowing of the spread between short-term
rates and long-term rates will represent the greatest challenge during the
coming year. The greatest interest rate sensitivity at March 31, 2005 was a 190
basis point decline in the NPV ratio if interest rates decreased 200 basis
points. While this appears greater than the 129 basis point decline reported
last year, that interest rate sensitivity measure was at a decrease of 100 basis
points. Starting with the March 2005 OTS report, the decrease of 200 basis
points category has been reintroduced. Management does not consider declining
interest rates to be a problem in the current interest rate environment with
interest rates still at near historically low levels and the continued increases
in short term rates by the Federal Reserve. Management also continues to work
towards having a proper mix of assets and liabilities in order to combat the
fluctuations in interest rates and market conditions that result in non-parallel
shifts in interest rates that occur in some interest rate environments.

                                 March 31, 2005

                                                               Target Limit
                         Economic Value         NPV Ratio       Under Asset
                         --------------         ---------       Liability
       Change      Market Value  Market Value      MVE/         Management
      In Rates        Equity     Total Assets      MVTA           Policy
      --------        ------     ------------      ----           ------
                     (Dollars in  thousands)
      +400            $     *      $      *           *             4%
      +300             19,351       134,299       14.41%            4
      +200             20,749       137,445       15.10             6
      +100             21,746       140,384       15.49             7
      STATIC           22,116       142,910       15.48
      -100             21,515       144,679       14.87             7
      -200             19,756       145,488       13.58             6
      -300                  *             *           *             4
      -400                  *             *           *             4

      *Not currently reported by OTS

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

                                  (Continued)


16.
<PAGE>

                                 March 31, 2004

                                                               Target Limit
                         Economic Value         NPV Ratio       Under Asset
                         --------------         ---------       Liability
       Change      Market Value  Market Value      MVE/         Management
      In Rates        Equity     Total Assets      MVTA           Policy
      --------        ------     ------------      ----           ------
                     (Dollars in  thousands)
      +400             $     *     $      *           *             4%
      +300              19,566      136,565       14.33%            4
      +200              20,655      139,815       14.77             6
      +100              21,177      142,708       14.84             7
      STATIC            20,775      144,913       14.34
      -100              19,066      146,072       13.05             7
      -200                   *            *           *             6
      -300                   *            *           *             4
      -400                   *            *           *             4

      *Not currently reported by OTS

As with any method of measuring interest rate risk, certain shortcomings are
inherent in the NPV approach. For example, although certain assets and
liabilities may have similar maturities or periods of repricing, they may react
in different degrees to changes in market interest rates. Also, the interest
rates on certain types of assets and liabilities may fluctuate in advance of
changes in market interest rates, while interest rates on other types may lag
behind changes in market rates. Further, in the event of a change in interest
rates, expected rates of prepayment on loans and mortgage-backed securities and
early withdrawal levels from certificates of deposit would likely deviate
significantly from those assumed in making risk calculations.

Liquidity and Capital Resources

The Corporation's liquidity, primarily represented by cash and cash equivalents,
is a result of its operating, investing and financing activities. These
activities are summarized below for the years ended June 30, 2005, 2004 and
2003.

<TABLE>
<CAPTION>
                                                            Year Ended June 30,
                                                    ----------------------------------
                                                      2005         2004         2003
                                                    --------     --------     --------
<S>                                                 <C>          <C>          <C>
Net income                                          $    978     $    975     $    836
Adjustments to reconcile net income to net
  cash from operating activities                         258          401          706
                                                    --------     --------     --------
Net cash from operating activities                     1,236        1,376        1,542
Net cash from investing activities                    (5,645)       5,059       (2,245)
Net cash from financing activities                      (304)      (8,702)       7,415
                                                    --------     --------     --------
Net change in cash and cash equivalents               (4,713)      (2,267)       6,712
Cash and cash equivalents at beginning of period      10,034       12,301        5,589
                                                    --------     --------     --------
Cash and cash equivalents at end of period          $  5,321     $ 10,034     $ 12,301
                                                    ========     ========     ========
</TABLE>

The Corporation's principal sources of funds are deposits, loan repayments,
maturities of securities and other funds provided by operations. The Corporation
also has the ability to borrow from the FHLB. While scheduled loan repayments
and maturing investments are relatively predictable, deposit flows and early
loan prepayments are more influenced by interest rates, general economic
conditions and competition. The Corporation maintains investments in liquid
assets based upon management's assessment of (1) need for funds; (2) expected
deposit flows; (3) yields available on short-term liquid assets; and, (4)
objectives of the asset/liability management program.

The Association is subject to various regulatory capital requirements
administered by the federal regulatory agencies. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Association must meet specific capital guidelines that involve quantitative
measures of the Association's assets, liabilities and certain

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

                                  (Continued)


                                                                             17.
<PAGE>

off-balance-sheet items as calculated under regulatory accounting practices. The
Association's capital amounts and classifications are also subject to
qualitative judgments by the regulators about the Association's components, risk
weightings and other factors. Failure to meet minimum capital requirements can
initiate certain mandatory actions that, if undertaken, could have a direct
material effect on the Corporation's financial statements. At June 30, 2005 and
2004, management believes the Association complies with all regulatory capital
requirements. Based on the Association's computed regulatory capital ratios, the
Association is considered well capitalized under FDIC guidelines at June 30,
2005 and 2004. No conditions or events have occurred subsequent to the last
notification by regulators that management believes would change the
Association's category.

The following table summarizes the Association's capital requirements to be well
capitalized under prompt corrective action regulations and actual capital
amounts at June 30, 2005.

<TABLE>
<CAPTION>
                                                                           Excess of Actual Capital
                                                   Well Capitalized         Over Well Capitalized
                          Actual capital              Requirement                Requirement
                      ---------------------      ---------------------     ------------------------    Applicable
                       Amount       Percent       Amount       Percent       Amount       Percent     Asset Total
                      --------     --------      --------     --------      --------     --------     -----------
                                                         (Dollars in thousands)
<S>                   <C>              <C>       <C>              <C>       <C>              <C>       <C>
Total risk-based
  capital             $ 16,909         20.7%     $  8,188         10.0%     $  8,721         10.7%     $ 81,878
Tier 1 risk-based
  capital               16,083         19.6         4,913          6.0        11,170         13.6        81,878
Core capital            16,083         11.8         6,838          5.0         9,245          6.8       136,769
</TABLE>

On April 19, 2005, the Corporation authorized of the commencement of a 5% stock
repurchase program. The plan allows for repurchases of up to 71,600 shares to be
made from time to time at the discretion of management in both the open market
and through unsolicited negotiated transactions. Purchases will be funded with
positive operating cash flow and existing cash balances. The repurchase plan may
be suspended or discontinued at any time, and repurchased shares will be
available for use in connection with the Corporations existing stock plans and
for other corporate purposes. As of September 2, 2005, 7,500 shares have been
repurchased under the plan at a price of $13.875 per share.

Impact of New Accounting Standards

On December 16, 2004, the Financial Accounting Standards Board ("FASB") issued
statement 123R, Share-Based Payment (FAS 123R). The revised statement replaces
existing requirements under Statement No. 123, Accounting for Stock-Based
Compensation and APB Opinion 25, Accounting for Stock Issued to Employees. The
FASB concluded that the fair-value-based method of accounting is appropriate for
share-based employee compensation, which includes stock options. Under FAS 123R,
there are two methods of transition. The modified prospective method applies to
new awards granted after the effective date and unvested portions of awards
granted in prior years. A company recognizes compensation expense from the
beginning of the period in which the recognition provisions are first applied
"as if" fair-value accounting had been used to account for all employee awards
granted or modified in fiscal years beginning after December 15, 1994 (which was
the original effective date of Statement 123). The modified retrospective method
recognizes employee compensation cost for prior periods presented using
compensation expense consistent with the pro forma disclosures previously
required by Statement 123 for those periods. This method may be applied as
follows to all years for which Statement 123 was effective. For all prior years
where Statement 123 was effective but not recognized in the comparative
financial statements, the beginning balances of paid-in capital, deferred taxes
and retained earnings for the earliest year presented are adjusted to reflect
the results of modified retrospective application. FAS 123R is effective for the
Corporation July 1, 2005. However, it will only impact the Corporation if new
options are granted as all options outstanding at June 30, 2005 were fully
vested.
--------------------------------------------------------------------------------

                                  (Continued)


18.
<PAGE>

In December 2003, the American Institute of Certified Public Accountants'
(AICPA) Accounting Standards Executive Committee (AcSEC) issued Statement of
Position ("SOP") 03-3, Accounting for Certain Loans or Debt Securities Acquired
in a Transfer. AcSEC began this project to address practice issues with the
purchase of troubled loans and the treatment of the allowance for loan losses in
an acquisition. This SOP applies only to "problem" loans that are defined as:
(1) that have been acquired, (2) that have evidence of credit deterioration, and
(3) when the purchaser does not expect to collect all contractual cash flows.
Deterioration may be evidenced by sources, such as Fair Isaac & Co. (FICO)
scores or another automated rating process for credit reports, downgrading,
decline in value of collateral, or past-due status. Such loans might be
purchased individually, identified within a purchase of a pool or purchased as
part of a business combination.

For those loans within the scope (i.e., problem loans), this statement clarifies
a buyer cannot carry over the seller's allowance for loan losses for the
acquisition of loans with credit deterioration. This is consistent with recent
conclusions by the FASB in its business combination project. FASB is addressing
the broader issue of whether to carryover the seller's allowance by a purchaser
in a business combination. As part of its purchase method procedures project,
FASB has concluded it is not appropriate to carry over the seller's allowance in
a business combination. For purchases of problem loans, the buyer must estimate
cash flows and recognize only income based on expected cash flows. The statement
is effective for loans acquired in fiscal years beginning after December 15,
2004.

Critical Accounting Policies and Estimates

The accounting and reporting policies of the Corporation are in accordance with
accounting principles generally accepted within the United States of America and
conform to general practices within the banking industry. The accounting and
reporting policy for the allowance for loan losses is deemed critical since it
involves the use of estimates and requires significant management judgments. The
allowance for loan losses is a valuation allowance for probable incurred credit
losses, increased by the provision for loan losses and decreased by charge offs.
We estimate the allowance balance by considering the nature and volume of the
portfolio, information about specific borrower situations and estimated
collateral values, economic conditions and other factors. Allocations of the
allowance may be made for specific loans, but the entire allowance is available
for any loan that, in out judgment, has incurred a loss. Loan losses are charged
against the allowance when we believe the loan balance cannot be collected. We
monitor loan quality monthly and consider various factors, including portfolio
risk, economic environment and loan delinquencies, when determining the level of
the provision for loan losses. Application of assumptions different than those
used by management could result in material changes in the Corporation's
financial position or results of operations. See Notes 1 (Summary of Significant
Accounting Policies) and 3 (Loans), which provide detail with regard to the
Corporation's methodology and reporting of the allowance for loan losses.

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

                                  (Continued)


                                                                             19.
<PAGE>

Impact of Inflation and Changing Prices

The Consolidated Financial Statements and Notes included herein have been
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). Presently, GAAP requires the Corporation to
measure financial position and operating results primarily in terms of historic
dollars. Changes in the relative value of money due to inflation or recession
are generally not considered.

In management's opinion, changes in interest rates affect the financial
condition of a financial institution to a far greater degree than changes in the
inflation rate. While interest rates are greatly influenced by changes in the
inflation rate, they do not change at the same rate or in the same magnitude as
the inflation rate. Rather, interest rate volatility is based on changes in the
expected rate of inflation, as well as on changes in monetary and fiscal
policies.

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

                                  (Continued)


20.
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders
Peoples-Sidney Financial Corporation
Sidney, Ohio

We have audited the accompanying consolidated balance sheets of Peoples-Sidney
Financial Corporation as of June 30, 2005 and 2004, and the related consolidated
statements of income, changes in shareholders' equity and cash flows for each of
the three years in the period ended June 30, 2005. These financial statements
are the responsibility of the Corporation's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Peoples-Sidney
Financial Corporation as of June 30, 2005 and 2004, and the results of its
operations and its cash flows for each of the three years in the period ended
June 30, 2005 in conformity with U.S. generally accepted accounting principles.

                                        /s/ Crowe Chizek and Company LLC
                                        --------------------------------
                                        Crowe Chizek and Company LLC

Columbus, Ohio
July 15, 2005

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

                                  (Continued)


                                                                             21.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                             June 30, 2005 and 2004

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

<TABLE>
<CAPTION>
                                                                    2005               2004
                                                                -------------      -------------
<S>                                                             <C>                <C>
ASSETS
Cash and due from financial institutions                        $   1,366,825      $   1,327,745
Interest-bearing deposits in other financial institutions           3,954,371          4,705,943
Overnight deposits                                                         --          4,000,000
                                                                -------------      -------------
      Total cash and cash equivalents                               5,321,196         10,033,688
Securities available for sale                                       5,433,915          5,288,280
Federal Home Loan Bank stock                                        1,673,900          1,601,400
Loans, net of allowance of $835,500 and $752,900                  121,110,189        115,651,910
Accrued interest receivable                                           745,534            670,521
Premises and equipment, net                                         2,095,691          2,124,986
Other real estate owned                                                    --             99,085
Other assets                                                          314,841            301,160
                                                                -------------      -------------

      Total assets                                              $ 136,695,266      $ 135,771,030
                                                                =============      =============

LIABILITIES
Deposits                                                        $  85,930,737      $  86,764,253
Borrowed funds                                                     32,588,719         31,140,388
Accrued interest payable and other liabilities                        414,419            435,476
                                                                -------------      -------------
      Total liabilities                                           118,933,875        118,340,117

SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 500,000 shares authorized,
  none issued and outstanding                                              --                 --
Common stock, $.01 par value, 3,500,000 shares authorized,
  1,785,375 shares issued                                              17,854             17,854
Additional paid-in capital                                         10,785,770         10,748,851
Retained earnings                                                  11,702,497         11,642,982
Treasury stock, 352,727 shares at cost                             (4,113,716)        (4,113,716)
Unearned employee stock ownership plan shares                        (588,958)          (727,121)
Accumulated other comprehensive income (loss)                         (42,056)          (137,937)
                                                                -------------      -------------
      Total shareholders' equity                                   17,761,391         17,430,913
                                                                -------------      -------------

      Total liabilities and shareholders' equity                $ 136,695,266      $ 135,771,030
                                                                =============      =============
</TABLE>

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

          See accompanying notes to consolidated financial statements.


22.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                    Years Ended June 30, 2005, 2004 and 2003

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

<TABLE>
<CAPTION>
                                                            2005             2004             2003
                                                        -----------      -----------      -----------
<S>                                                     <C>              <C>              <C>
Interest income
      Loans, including fees                             $ 7,471,853      $ 7,573,870      $ 8,442,163
      Securities                                            193,054          234,765          203,964
      Demand, time and overnight deposits                    65,535           39,446           71,581
      Dividends on Federal Home Loan Bank stock              72,648           62,575           64,662
                                                        -----------      -----------      -----------
           Total interest income                          7,803,090        7,910,656        8,782,370

Interest expense
      Deposits                                            1,556,564        1,728,572        2,868,309
      Borrowed funds                                      1,632,866        1,675,789        1,554,935
                                                        -----------      -----------      -----------
           Total interest expense                         3,189,430        3,404,361        4,423,244
                                                        -----------      -----------      -----------

Net interest income                                       4,613,660        4,506,295        4,359,126

Provision for loan losses                                    91,497           53,450           68,605
                                                        -----------      -----------      -----------

Net interest income after provision for loan losses       4,522,163        4,452,845        4,290,521

Noninterest income
      Service fees and other charges                        129,966          135,414          134,571
      Gain (loss) on sale of real estate owned              (24,600)          (4,379)           4,388
                                                        -----------      -----------      -----------
           Total noninterest income                         105,366          131,035          138,959

Noninterest expense
      Compensation and benefits                           1,627,546        1,603,600        1,720,274
      Director fees                                          97,200           97,200           97,200
      Occupancy and equipment                               417,384          404,661          444,306
      Computer processing                                   275,096          249,180          251,092
      Professional services                                 126,669          120,573          100,420
      State franchise taxes                                 205,373          204,670          187,410
      Other                                                 348,788          355,210          317,925
                                                        -----------      -----------      -----------
           Total noninterest expense                      3,098,056        3,035,094        3,118,627
                                                        -----------      -----------      -----------

Income before income taxes                                1,529,473        1,548,786        1,310,853

Income tax expense                                          551,600          574,200          475,051
                                                        -----------      -----------      -----------

Net income                                              $   977,873      $   974,586      $   835,802
                                                        ===========      ===========      ===========

Earnings per common share - basic                       $       .71      $       .71      $       .61
                                                        ===========      ===========      ===========
Earnings per common share - diluted                     $       .71      $       .71      $       .61
                                                        ===========      ===========      ===========
</TABLE>

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

          See accompanying notes to consolidated financial statements.


                                                                             23.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                    Years Ended June 30, 2005, 2004 and 2003

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

<TABLE>
<CAPTION>

                                                                    Additional                                         Unearned
                                                     Common          Paid-In         Retained         Treasury           ESOP
                                                      Stock          Capital         Earnings           Stock           Shares
                                                   ------------    ------------    ------------     ------------     ------------
<S>                                                <C>             <C>             <C>              <C>              <C>
Balance, July 1, 2002                              $     17,854    $ 10,689,800    $ 11,371,950     $ (3,703,717)    $ (1,023,928)

Comprehensive income:

   Net income for the year ended
     June 30, 2003                                           --              --         835,802               --               --

   Change in net unrealized gain (loss)
     on securities available for sale,
     net of reclassification and tax effects                 --              --              --               --               --


      Total comprehensive income

Cash dividends - $.49 per share                              --              --        (667,566)              --               --

Commitment to release 12,932 employee
  stock ownership plan shares                                --          16,409              --               --          151,736

Purchase of 24,646 treasury shares,
  at cost                                                    --              --              --         (317,483)              --

11,426 shares earned under
  management recognition plan                                --              --              --               --               --
                                                   ------------    ------------    ------------     ------------     ------------

Balance, June 30, 2003                             $     17,854    $ 10,706,209    $ 11,540,186     $ (4,021,200)    $   (872,192)
                                                   ============    ============    ============     ============     ============

<CAPTION>
                                                                    Accumulated
                                                     Unearned          Other
                                                       MRP         Comprehensive
                                                      Shares       Income (Loss)        Total
                                                   ------------    -------------    ------------
<S>                                                <C>             <C>              <C>
Balance, July 1, 2002                              $   (174,746)   $     16,995     $ 17,194,208

Comprehensive income:

   Net income for the year ended
     June 30, 2003                                           --              --          835,802

   Change in net unrealized gain (loss)
     on securities available for sale,
     net of reclassification and tax effects                 --          (3,572)          (3,572)
                                                                                    ------------

      Total comprehensive income                                                         832,230

Cash dividends - $.49 per share                              --              --         (667,566)

Commitment to release 12,932 employee
  stock ownership plan shares                                --              --          168,145

Purchase of 24,646 treasury shares,
  at cost                                                    --              --         (317,483)

11,426 shares earned under
  management recognition plan                           174,746              --          174,746
                                                   ------------    ------------     ------------

Balance, June 30, 2003                             $         --    $     13,423     $ 17,384,280
                                                   ============    ============     ============
</TABLE>

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

                                  (Continued)


24.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Continued)
                    Years Ended June 30, 2005, 2004 and 2003

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

<TABLE>
<CAPTION>

                                                                    Additional                                         Unearned
                                                     Common          Paid-In         Retained         Treasury           ESOP
                                                      Stock          Capital         Earnings           Stock           Shares
                                                   ------------    ------------    ------------     ------------     ------------
<S>                                                <C>             <C>             <C>              <C>              <C>
Balance, July 1, 2003                              $     17,854    $ 10,706,209    $ 11,540,186     $ (4,021,200)    $   (872,192)

Comprehensive income:

      Net income for the year ended
        June 30, 2004                                        --              --         974,586               --               --

      Change in net unrealized gain (loss)
        on securities available for sale,
        net of reclassification and tax effects              --              --              --               --               --


           Total comprehensive income

Cash dividends - $.64 per share                              --              --        (871,790)              --               --

Commitment to release 12,364 employee
  stock ownership plan shares                                --          42,642              --               --          145,071

Purchase of 6,853 treasury shares,
  at cost                                                    --              --              --          (92,516)              --
                                                   ------------    ------------    ------------     ------------     ------------

Balance, June 30, 2004                             $     17,854    $ 10,748,851    $ 11,642,982     $ (4,113,716)    $   (727,121)
                                                   ============    ============    ============     ============     ============

<CAPTION>
                                                    Accumulated
                                                       Other
                                                   Comprehensive
                                                   Income (Loss)        Total
                                                   -------------    ------------
<S>                                                <C>              <C>
Balance, July 1, 2003                              $     13,423     $ 17,384,280

Comprehensive income:

      Net income for the year ended
        June 30, 2004                                        --          974,586

      Change in net unrealized gain (loss)
        on securities available for sale,
        net of reclassification and tax effects        (151,360)        (151,360)
                                                                    ------------

           Total comprehensive income                                    823,226

Cash dividends - $.64 per share                              --         (871,790)

Commitment to release 12,364 employee
  stock ownership plan shares                                --          187,713

Purchase of 6,853 treasury shares,
  at cost                                                    --          (92,516)
                                                   ------------     ------------

Balance, June 30, 2004                             $   (137,937)    $ 17,430,913
                                                   ============     ============
</TABLE>

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

                                  (Continued)


                                                                             25.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Continued)
                    Years Ended June 30, 2005, 2004 and 2003

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

<TABLE>
<CAPTION>

                                                                    Additional                                         Unearned
                                                     Common          Paid-In         Retained         Treasury           ESOP
                                                      Stock          Capital         Earnings           Stock           Shares
                                                   ------------    ------------    ------------     ------------     ------------
<S>                                                <C>             <C>             <C>              <C>              <C>
Balance, July 1, 2004                              $     17,854    $ 10,748,851    $ 11,642,982     $ (4,113,716)    $   (727,121)

Comprehensive income:

      Net income for the year ended
        June 30, 2005                                        --              --         977,873               --               --

      Change in net unrealized gain (loss)
        on securities available for sale,
        net of reclassification and tax effects              --              --              --               --               --


           Total comprehensive income

Cash dividends - $.67 per share                              --              --        (918,358)              --               --

Commitment to release 11,775 employee
  stock ownership plan shares                                --          36,919              --               --          138,163
                                                   ------------    ------------    ------------     ------------     ------------

Balance, June 30, 2005                             $     17,854    $ 10,785,770    $ 11,702,497     $ (4,113,716)    $   (588,958)
                                                   ============    ============    ============     ============     ============

<CAPTION>
                                                    Accumulated
                                                       Other
                                                   Comprehensive
                                                   Income (Loss)        Total
                                                   -------------    ------------
<S>                                                <C>              <C>
Balance, July 1, 2004                              $   (137,937)    $ 17,430,913

Comprehensive income:

      Net income for the year ended
        June 30, 2005                                        --          977,873

      Change in net unrealized gain (loss)
        on securities available for sale,
        net of reclassification and tax effects          95,881           95,881
                                                                    ------------

           Total comprehensive income                                  1,073,754

Cash dividends - $.67 per share                              --         (918,358)

Commitment to release 11,775 employee
  stock ownership plan shares                                --          175,082
                                                   ------------     ------------

Balance, June 30, 2005                             $    (42,056)    $ 17,761,391
                                                   ============     ============
</TABLE>

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

          See accompanying notes to consolidated financial statements.


26.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Years Ended June 30, 2005, 2004 and 2003

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

<TABLE>
<CAPTION>
                                                                    2005             2004             2003
                                                                ------------     ------------     ------------
<S>                                                             <C>              <C>              <C>
Cash flows from operating activities
      Net income                                                $    977,873     $    974,586     $    835,802
      Adjustments to reconcile net income to net cash
        from operating activities
           Depreciation                                              192,512          197,281          206,804
           Provision for loan losses                                  91,497           53,450           68,605
           Net amortization (accretion) of securities                   (359)            (360)            (620)
           Loss (gain) on sale of real estate owned                   24,600            4,379           (4,388)
           FHLB stock dividends                                      (72,500)         (62,400)         (64,400)
           Deferred taxes                                             59,239           (3,284)         (65,800)
           Compensation expense for ESOP shares                      175,082          187,713          168,145
           Compensation expense for MRP shares                            --               --          174,746
           Change in:
                Accrued interest receivable and other assets         (88,694)         119,756           68,635
                Accrued expense and other liabilities               (129,691)        (106,003)         123,815
                Deferred loan fees                                     6,291           10,759           30,548
                                                                ------------     ------------     ------------
                     Net cash from operating activities            1,235,850        1,375,877        1,541,892

Cash flows from investing activities
      Purchase of securities available for sale                           --               --      (18,496,295)
      Proceeds from maturities of securities
        available for sale                                                --        4,000,000       10,500,000
      Proceeds from sale of securities
        available for sale                                                --        2,000,000               --
      Net change in loans                                         (5,665,710)        (808,689)       5,542,902
      Premises and equipment expenditures                           (163,217)        (490,428)          (9,648)
      Proceeds from sale of real estate owned                        184,128          358,250          217,963
                                                                ------------     ------------     ------------
           Net cash from investing activities                     (5,644,799)       5,059,133       (2,245,078)

Cash flows from financing activities
      Net change in deposits                                        (833,516)      (6,687,648)      (1,334,722)
      Proceeds from long-term FHLB advances                        1,000,000        1,000,000       11,000,000
      Repayments of long-term FHLB advances                       (2,051,669)      (2,049,966)        (765,459)
      Net change in short-term FHLB advances                       2,500,000               --         (500,000)
      Cash dividends paid                                           (918,358)        (871,790)        (667,566)
      Purchase of treasury shares                                         --          (92,516)        (317,483)
                                                                ------------     ------------     ------------
           Net cash from financing activities                       (303,543)      (8,701,920)       7,414,770
                                                                ------------     ------------     ------------

Net change in cash and cash equivalents                           (4,712,492)      (2,266,910)       6,711,584
Cash and cash equivalents at beginning of year                    10,033,688       12,300,598        5,589,014
                                                                ------------     ------------     ------------

Cash and cash equivalents at end of year                        $  5,321,196     $ 10,033,688     $ 12,300,598
                                                                ============     ============     ============

Supplemental cash flow information
           Interest paid                                        $  3,179,028     $  3,424,342     $  4,332,326
           Income taxes paid                                         600,000          557,000          576,000

Supplemental noncash disclosures
           Transfer from loans to real estate owned                  109,643          352,411          322,877
</TABLE>

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

          See accompanying notes to consolidated financial statements.


                                                                             27.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements include
Peoples-Sidney Financial Corporation ("Peoples") and its wholly-owned
subsidiary, Peoples Federal Savings and Loan Association (the "Association"), a
federal stock savings and loan association, together referred to as the
Corporation. Intercompany accounts and transactions have been eliminated in
consolidation.

Nature of Operations: The Corporation provides financial services through its
main office in Sidney, Ohio, and branch offices in Sidney, Anna and Jackson
Center, Ohio. Its primary deposit products are checking, savings and term
certificate accounts, and its primary lending products are residential mortgage,
commercial and installment loans. Substantially all loans are secured by
specific items of collateral including business assets, consumer assets and
commercial and residential real estate. Commercial loans are expected to be
repaid from cash flow from operations of businesses. Other financial
instruments, which potentially represent concentrations of credit risk, include
deposit accounts in other financial institutions and overnight deposits.
Substantially all revenues and services are derived from financial institution
products and services in Shelby County and contiguous counties. Management
considers the Corporation to operate primarily in one segment, banking.

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

Cash Flows: Cash and cash equivalents include cash, deposits with financial
institutions, overnight deposits and time deposits with original maturities of
90 days or less. Overnight deposits are sold for one-day periods. Net cash flows
are reported for loan and deposit transactions, as well as short-term borrowings
under its cash management line of credit with the Federal Home Loan Bank of
Cincinnati.

Securities: Securities are classified as held to maturity and carried at
amortized cost when management has the positive intent and ability to hold them
to maturity. Securities are classified as available for sale when they might be
sold before maturity. Securities available for sale are carried at fair value,
with unrealized holding gains or losses reported in other comprehensive income,
net of tax. Other securities such as Federal Home Loan Bank stock are carried at
cost.

Interest income includes amortization of premiums and accretion of discounts.
Realized gains and losses on sales of securities are recorded on the trade date
and determined using the amortized cost of the specific security sold.

Declines in the fair value of securities below their cost that are other than
temporary are reflected as realized losses. In estimating other-than-temporary
losses, management considers: (1) the length of time and extent that fair value
has been less than cost, (2) the financial condition and near term prospects of
the issuer, and (3) the Corporation's ability and intent to hold the security
for a period sufficient to allow for any anticipated recovery in fair value.

Loans: Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or payoff are reported at the principal
balance outstanding, less net deferred loan fees and the allowance for loan
losses.

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

                                  (Continued)


28.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interest income is accrued on the unpaid principal balance using the interest
method and includes amortization of net deferred loan fees over the loan term.
Interest income on loans is discontinued at the time the loan is 90 days
delinquent unless the credit is well secured and in process of collection. Past
due status is based upon the contractual terms of the loan. In all cases, loans
are placed on nonaccrual or charged-off at an earlier date if collection of
principal or interest is considered doubtful.

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

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

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

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

Foreclosed Assets: Assets acquired through or instead of loan foreclosure are
initially recorded at fair value at acquisition, establishing a new cost basis.
Any reduction to fair value from the carrying value of the related loan at the
time the property is acquired is accounted for as a loan charge-off. After
acquisition, a valuation allowance reduces the reported amount to the lower of
the initial amount or fair value less costs to sell. Expenses, gains and losses
on disposition, and changes in the valuation allowance are reported in net gain
or loss on other real estate owned.

Premises and Equipment: Land is carried at cost. Premises and equipment are
stated at cost less accumulated depreciation. Depreciation expense is calculated
using the straight-line method based on the estimated useful lives of the
assets. The useful lives range from 10 years to 40 years for building and
improvements, 3 years to 20 years for furniture and equipment and 5 years for
automobiles. These assets are reviewed for impairment when events indicate the
carrying amount may not be recoverable. Maintenance and repairs are charged to
expense as incurred and improvements are capitalized.

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

                                  (Continued)


                                                                             29.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

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

Stock-Based Compensation: Employee compensation expense under stock option plans
is reported using the intrinsic value method. No stock-based compensation cost
is reflected in net income, as all options granted had an exercise price equal
to or greater than the market price of the underlying common stock at the date
of grant. All outstanding options finished vesting during the year ended June
30, 2003. The following table illustrates the effect on net income and earnings
per share if expense were measured using the fair value recognition provisions
of Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
Stock-Based Compensation.

<TABLE>
<CAPTION>
                                                      2005        2004        2003
                                                    --------    --------    --------
<S>                                                 <C>         <C>         <C>
      Net income as reported                        $977,873    $974,586    $835,802
      Deduct: Stock-based compensation expense
        determined under fair value based method          --          --     190,671
                                                    --------    --------    --------

      Pro forma net income                          $977,873    $974,586    $645,131
                                                    ========    ========    ========

      Basic earnings per share as reported          $    .71    $    .71    $    .61
      Pro forma basic earnings per share                 .71         .71         .47

      Diluted earnings per share as reported        $    .71    $    .71    $    .61
      Pro forma diluted earnings per share               .71         .71         .47
</TABLE>

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

Earnings Per Common Share: Basic earnings per common share ("EPS") is net income
divided by the weighted average number of common shares outstanding during the
period. ESOP shares are considered outstanding for this calculation unless
unearned. Management recognition plan ("MRP") shares are considered outstanding
as they become vested. Diluted EPS includes the dilutive effect of MRP shares
and the additional potential common shares issuable under stock options.

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

                                  (Continued)


30.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Dividend Restriction: Financial institution regulations require the maintenance
of certain capital levels and may limit the amount of dividends that may be
paid. For detail on dividend restrictions and regulatory capital requirements,
see Note 13.

Comprehensive Income: Comprehensive income consists of net income and other
comprehensive income (loss), net of tax. Other comprehensive income (loss)
includes net unrealized gains and losses on securities available for sale, which
is also recognized as a separate component of equity.

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

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

Reclassification: Reclassification of certain amounts in the prior years
consolidated financial statements has been made to conform to the current
presentation.

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

                                  (Continued)


                                                                             31.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 2 - SECURITIES AVAILABLE FOR SALE

The fair value of available for sale securities and the related gross unrealized
gains and losses recognized in accumulated other comprehensive income (loss)
were as follows.

                                                         Gross          Gross
                                          Fair        Unrealized     Unrealized
                                         Value           Gains         Losses
                                       ----------     ----------     ----------
2005
----
    U.S. Government agencies           $5,433,915     $    3,905     $  (67,624)
                                       ==========     ==========     ==========

2004
----
    U.S. Government agencies           $5,288,280     $   13,280     $ (222,275)
                                       ==========     ==========     ==========

Contractual maturities of securities available for sale at year-end 2005 were as
follows. Actual maturities may differ from contractual maturities because
borrowers may have the right to call or prepay obligations with or without call
or prepayment penalties.

                                                                   Fair
                                                                   Value
                                                                ----------

      Due after one year through five years                     $2,493,905
      Due after five years through ten years                     2,940,010
                                                                ----------

                                                                $5,433,915
                                                                ==========

No securities were pledged as collateral at year-end 2005 or 2004. Proceeds from
the sale of securities available for sale totaled $2,000,000 for 2004. There was
no gain or loss realized on this sale. There were no sales of securities in 2005
or 2003.

Securities with unrealized losses at year-end 2005 and 2004, aggregated by
investment category and length of time that individual securities have been in a
continuous unrealized loss position, are as follows.

<TABLE>
<CAPTION>
                               Less than 12 Months           12 Months or More                 Total
                            ------------------------     ------------------------     ------------------------
                               Fair       Unrealized        Fair       Unrealized        Fair       Unrealized
Description of Securities     Value          Loss          Value          Loss          Value          Loss
-------------------------   ----------    ----------     ----------    ----------     ----------    ----------
<S>                         <C>           <C>            <C>           <C>            <C>           <C>
2005
----
U.S. Government agencies    $1,990,000    $   (9,602)    $2,940,010    $  (58,022)    $4,930,010    $  (67,624)
                            ==========    ==========     ==========    ==========     ==========    ==========

2004
----
U.S. Government agencies    $2,949,380    $  (50,109)    $1,825,620    $ (172,166)    $4,775,000    $ (222,275)
                            ==========    ==========     ==========    ==========     ==========    ==========
</TABLE>

Unrealized losses on the investment securities have not been recognized into
income because the securities are of high credit quality, management has the
intent and ability to hold for the foreseeable future, and the decline in fair
value is largely due to changes in interest rates. The fair value is expected to
recover as the securities approach their maturity date or reset date.

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

                                  (Continued)


32.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 3 - LOANS

Year-end loans were as follows.

<TABLE>
<CAPTION>
                                                            2005              2004
                                                       -------------     -------------
<S>                                                    <C>               <C>
      Mortgage loans:
           1-4 family residential                      $  94,593,583     $  89,974,734
           Multi-family residential                        1,297,418         1,330,844
           Commercial real estate                         12,564,156        11,847,794
           Real estate construction and development        1,441,815         3,056,172
           Land                                            2,186,890         1,694,844
                                                       -------------     -------------
                Total mortgage loans                     112,083,862       107,904,388
      Consumer loans                                       5,056,291         4,211,193
      Commercial loans                                     5,184,668         4,662,070
                                                       -------------     -------------
                Total loans                              122,324,821       116,777,651
      Less:
           Allowance for loan losses                        (835,500)         (752,900)
           Deferred loan fees                               (379,132)         (372,841)
                                                       -------------     -------------

                                                       $ 121,110,189     $ 115,651,910
                                                       =============     =============
</TABLE>

Activity in the allowance for loan losses was as follows.

                                         2005          2004          2003
                                      ---------     ---------     ---------

      Balance at beginning of year    $ 752,900     $ 766,000     $ 708,000
      Provision for losses               91,497        53,450        68,605
      Charge-offs                        (9,353)      (67,244)      (15,409)
      Recoveries                            456           694         4,804
                                      ---------     ---------     ---------

      Balance at end of year          $ 835,500     $ 752,900     $ 766,000
                                      =========     =========     =========

Impaired loans were as follows.

<TABLE>
<CAPTION>
                                                                           2005        2004
                                                                         --------    --------
<S>                                                                      <C>         <C>
Period-end impaired loans with no allowance for loan losses allocated    $     --    $     --
Period-end impaired loans with allowance for loan losses allocated        161,000     129,000
Amount of the allowance allocated to impaired loans                       134,000     129,000

Average of impaired loans during the year                                 139,000      22,000
Interest income recognized during the year                                 10,046       1,000
Cash-basis interest income recognized                                       3,875       1,000
</TABLE>

Impaired loans for the year ended June 30, 2003 were not material.

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

                                  (Continued)


                                                                             33.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 3 - LOANS (Continued)

Nonperforming loans at year-end were as follows.

                                                         2005          2004
                                                      ----------    ----------

      Loans past due over 90 days still on accrual    $  349,000    $  587,000
      Nonaccrual loans                                 1,318,000       624,000

Nonperforming loans include both smaller balance homogeneous loans that are
collectively evaluated for impairment and individually classified impaired
loans.

Loans to executive officers, directors and companies with which they are
affiliated for the year ended June 30, 2005, were as follows.

      Balance at beginning of period                          $   518,795
      New loans                                                   725,890
      Principal repayments                                       (204,247)
                                                              -----------

      Balance at end of period                                $ 1,040,438
                                                              ===========

NOTE 4 - ACCRUED INTEREST RECEIVABLE

Year-end accrued interest receivable was as follows.

                                                 2005               2004
                                               --------           --------

      Loans                                    $734,923           $660,604
      Securities                                 10,611              9,917
                                               --------           --------

                                               $745,534           $670,521
                                               ========           ========

NOTE 5 - PREMISES AND EQUIPMENT

Year-end premises and equipment was as follows.

                                                2005              2004
                                            -----------       -----------

      Land                                  $   225,166       $   225,166
      Buildings and improvements              2,456,094         2,438,537
      Furniture and equipment                 1,644,749         1,510,775
      Automobile                                 22,416            22,416
                                            -----------       -----------
           Total cost                         4,348,425         4,196,894
      Accumulated depreciation               (2,252,734)       (2,071,908)
                                            -----------       -----------

                                            $ 2,095,691       $ 2,124,986
                                            ===========       ===========

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

                                  (Continued)


34.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 5 - PREMISES AND EQUIPMENT (Continued)

The Jackson Center branch facility had been leased under an operating lease that
began in September 1998. During 2004, the Association exercised its option to
purchase the property. The Association entered into a lease for a branch in the
Super Wal-Mart in Sidney that commenced in June 2002. The lease term is for five
years with two five-year renewal options. Annual rent is $31,800 for the first
five years and increases to $39,750 annually for the first five-year renewal
period and $49,688 annually for the second five-year renewal period. Total
rental expense was $31,800, $35,301 and $56,071 for the years ended June 30,
2005, 2004 and 2003.

Rental commitment under the noncancelable operating lease was as follows, before
considering renewal options.

            Year ending June 30,
                    2006                                     $30,828
                                                             =======

NOTE 6 - FEDERAL INCOME TAXES

Income tax expense was as follows.

                                  2005            2004             2003
                               ---------       ---------        ---------

      Current                  $ 492,361       $ 577,484        $ 540,851
      Deferred                    59,239          (3,284)         (65,800)
                               ---------       ---------        ---------

                               $ 551,600       $ 574,200        $ 475,051
                               =========       =========        =========

Effective tax rates differ from federal statutory rates applied to financial
statement income due to the following.

<TABLE>
<CAPTION>
                                                      2005         2004         2003
                                                    --------     --------     --------
<S>                                                 <C>          <C>          <C>
      Income taxes computed at the statutory
        tax rate on pretax income                   $520,021     $526,587     $445,690
      Add tax effect of:
          ESOP fair value book expense in excess
             of tax deduction                         25,973       28,590       20,317
          MRP cost in excess of fair value                --           --           37
          Nondeductible expenses and other             5,606       19,023        9,007
                                                    --------     --------     --------

                                                    $551,600     $574,200     $475,051
                                                    ========     ========     ========

      Statutory tax rate                                34.0%        34.0%        34.0%
                                                    ========     ========     ========
      Effective tax rate                                36.1%        37.1%        36.2%
                                                    ========     ========     ========
</TABLE>

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

                                  (Continued)


                                                                             35.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 6 - FEDERAL INCOME TAXES (Continued)

Year-end deferred tax assets and deferred tax liabilities were due to the
following.

<TABLE>
<CAPTION>
                                                                  2005          2004
                                                               ---------     ---------
<S>                                                            <C>           <C>
      Items giving rise to deferred tax assets
           Deferred loan fees                                  $ 126,780     $ 124,324
           Reserve for delinquent interest                        14,497         5,202
           Allowance for loan losses                             284,070       255,986
           Accrued compensation                                    2,638         2,605
           Unrealized loss on securities available for sale       21,663        71,058
           Accrued ESOP expense                                   30,409        31,542
                                                               ---------     ---------
                Total deferred tax assets                        480,057       490,717

      Items giving rise to deferred tax liabilities
           Prepaid expenses                                      (55,172)           --
           Securities accretion                                     (251)         (122)
           Depreciation                                         (103,646)      (85,623)
           FHLB stock dividends                                 (262,650)     (238,000)
                                                               ---------     ---------
                Total deferred tax liabilities                  (421,719)     (323,745)
                                                               ---------     ---------

                Net deferred tax asset                         $  58,338     $ 166,972
                                                               =========     =========
</TABLE>

Retained earnings at June 30, 2005 and 2004 included approximately $2,174,000
for which no provision for federal income taxes had been made. This amount
represents the qualifying and nonqualifying tax bad debt reserve as of December
31, 1987, which is the end of the Association's base year for purposes of
calculating the bad debt deduction for tax purposes. If this portion of retained
earnings is used in the future for any purpose other than to absorb bad debts,
it will be added to future taxable income. The related amount of unrecognized
deferred tax liability was approximately $739,000 at June 30, 2005 and 2004.

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

                                  (Continued)


36.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 7 - DEPOSITS

Year-end deposits were as follows.

                                                 2005              2004
                                             -----------       -----------
      Noninterest-bearing
        demand deposits                      $ 1,073,496       $   797,172
      NOW accounts                             6,290,788         6,690,579
      Money market accounts                    6,016,666         3,940,498
      Savings accounts                        28,432,476        30,516,298
      Certificates of deposit                 44,117,311        44,819,706
                                             -----------       -----------

                                             $85,930,737       $86,764,253
                                             ===========       ===========

The aggregate amount of certificates of deposit with a minimum denomination of
$100,000 was $4,709,000 and $4,710,000 at June 30, 2005 and 2004, respectively.
Deposits more than $100,000 are not insured by the FDIC. Related party deposits
were $526,000 and $751,000 at June 30, 2005 and 2004.

The scheduled maturities of certificates of deposit as of June 30, 2005 were as
follows.

         Year ended June 30,
                 2006                                       $23,807,032
                 2007                                        11,792,658
                 2008                                         4,559,898
                 2009                                         1,179,031
                 2010                                         2,778,692
                                                            -----------

                                                            $44,117,311
                                                            ===========

NOTE 8 - BORROWED FUNDS

At June 30, 2005, the Association had a cash management line of credit enabling
it to borrow up to $8,000,000 from the Federal Home Loan Bank of Cincinnati
("FHLB"). All cash management advances have an original maturity of 90 days. The
line of credit must be renewed on an annual basis. A total of $2,500,000 was
outstanding under this line at June 30, 2005. There were no borrowings
outstanding on this line of credit at June 30, 2004.

At June 30, 2005, based on the Association's current FHLB stock ownership, total
assets and pledgable residential mortgage loan portfolio, the Association had
the ability to obtain borrowings up to a maximum of $67.5 million.

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

                                  (Continued)


                                                                             37.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 8 - BORROWED FUNDS (Continued)

Advances from the Federal Home Loan Bank at year-end were as follows.

<TABLE>
<CAPTION>
                                                                   2005           2004
                                                               -----------    -----------
<S>                                                            <C>            <C>
      Cash management advance, variable rate 3.53% at          $ 2,500,000    $        --
        June 30, 2005
      6.13% fixed-rate advance, due June 25, 2008                7,000,000      7,000,000
      6.00% convertible advance, fixed-rate until September
        2005, due June 11, 2009                                  5,000,000      5,000,000
      6.27% convertible advance, fixed-rate until
        September 2005, due September 8, 2010                    5,000,000      5,000,000
      5.30% select pay mortgage-matched advance, final
        maturity May 1, 2011                                       858,399      1,087,505
      5.35% select pay mortgage-matched advance, final
        maturity July 1, 2011                                    1,954,752      2,466,217
      3.92% select pay mortgage-matched advance, final
        maturity November 1, 2012                                  702,046        823,214
      3.55% select pay mortgage-matched advance, final
        maturity March 1, 2013                                     804,848        893,507
      4.10% select pay mortgage-matched advance, final
        maturity March 1, 2015                                     979,664             --
      4.09% select pay mortgage-matched advance, final
        maturity November 1, 2017                                  703,360        828,866
      3.31% select pay mortgage-matched advance, final
        maturity April 1, 2019                                     797,932        991,393
      4.72% select pay mortgage-matched advance, final
        maturity November 1, 2022                                2,483,689      2,709,021
      4.38% select pay mortgage-matched advance, final
        maturity December 1, 2022                                  827,909        903,923
      3.92% select pay mortgage-matched advance, final
        maturity December 1, 2022                                  739,884        854,173
      3.64% select pay mortgage-matched advance, final
        maturity March 1, 2023                                   2,236,236      2,582,569
                                                               -----------    -----------

                                                               $32,588,719    $31,140,388
                                                               ===========    ===========
</TABLE>

The interest rates on the convertible advances are fixed for a specified number
of years, then convertible on a quarterly basis to a variable rate at the option
of the FHLB. If the convertible option is exercised, the advance may be prepaid
without penalty. The select pay mortgage-matched advances require monthly
principal and interest payments and annual additional principal payments.

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

                                  (Continued)


38.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 8 - BORROWED FUNDS (Continued)

The maximum month-end balance of advances outstanding was $32,589,000 in 2005
and $31,811,000 in 2004. Average balances of borrowings outstanding during 2005
and 2004 were $30,792,000 and $31,379,000. Advances under the borrowing
agreements were collateralized by the Association's FHLB stock owned and
$93,506,000 of qualifying mortgage loans.

Maturities of FHLB advances for the next five years and thereafter were as
follows.

         Year ended June 30,
                 2006                                       $ 4,577,451
                 2007                                         1,822,237
                 2008                                         8,603,739
                 2009                                         6,416,185
                 2010                                         1,254,807
              Thereafter                                      9,914,300
                                                            -----------

                                                            $32,588,719
                                                            ===========

NOTE 9 - RETIREMENT PLANS

The Corporation maintains a 401(k) profit sharing plan. With certain exceptions,
all employees who have attained the age of 21 and who have completed one year of
employment, during which they worked at least 1,000 hours, are eligible to
participate in the plan. The Corporation provides a matching contribution on
behalf of participants who make elective compensation deferrals at the rate of
50% of the first 6% of participant contributions up to a maximum match of 3% of
the participant's compensation. The Corporation may also contribute additional
amounts at its discretion. Employee contributions are vested at all times and
the Corporation's matching contributions vest evenly over 5 years of service.
The cash contribution and related expense included in salaries and employee
benefits was $29,117, $33,561 and $30,328 for the years ended June 30, 2005,
2004 and 2003.

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

                                  (Continued)


                                                                             39.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 10 - EMPLOYEE STOCK OWNERSHIP PLAN

The Corporation offers an employee stock ownership plan ("ESOP") for the benefit
of substantially all employees of the Corporation. The ESOP received a favorable
determination letter from the Internal Revenue Service on the qualified status
of the ESOP under applicable provisions of the Internal Revenue Code. The ESOP
borrowed funds from Peoples in order to acquire common shares of Peoples. The
loan is secured by the shares purchased with the loan proceeds and will be
repaid by the ESOP with funds from the Association's discretionary contributions
to the ESOP, dividends on unallocated shares received by the ESOP and earnings
on ESOP assets. When loan payments are made, ESOP shares are allocated to
participants based on relative compensation. Dividends on allocated shares
increase participant accounts.

ESOP compensation expense was $175,082, $187,713 and $168,145 for the years
ended June 30, 2005, 2004 and 2003.

Year-end ESOP shares were as follows.

                                                      2005          2004
                                                    --------      --------

      Allocated shares                               118,639       106,864
      Unreleased shares                               50,191        61,966
                                                    --------      --------

           Total ESOP shares                         168,830       168,830
                                                    ========      ========

      Fair value of unreleased shares               $703,678      $991,456
                                                    ========      ========

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

                                  (Continued)


40.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 11 - STOCK OPTION AND INCENTIVE PLAN

The Stock Option and Incentive Plan was approved by the shareholders of the
Corporation on May 22, 1998. The Board of Directors has granted options to
purchase shares of common stock to certain employees, officers and directors of
the Corporation. One-fifth of the options awarded become first exercisable on
each of the first five anniversaries of the date of grant. The option period
expires 10 years from the date of grant.

A summary of the activity in the plan was as follows.

<TABLE>
<CAPTION>
                                                 2005                  2004                  2003
                                                 ----                  ----                  ----
                                                     Weighted              Weighted              Weighted
                                                     Average               Average               Average
                                                     Exercise              Exercise              Exercise
                                           Shares     Price      Shares     Price      Shares     Price
                                          -------    --------   -------    --------   -------    --------
<S>                                       <C>        <C>        <C>        <C>        <C>        <C>
      Outstanding at beginning of year    140,824    $ 16.03    140,824    $ 16.03    140,824    $ 16.03
      Granted                                  --         --         --         --         --         --
      Exercised                                --         --         --         --         --         --
      Forfeited                                --         --         --         --         --         --
                                          -------    -------    -------    -------    -------    -------
      Outstanding at end of year          140,824    $ 16.03    140,824    $ 16.03    140,824    $ 16.03
                                          =======    =======    =======    =======    =======    =======

      Options exercisable at year-end     140,824    $ 16.03    140,824    $ 16.03    140,824    $ 16.03
      Remaining shares available
        for grant                          37,714                37,714                37,714
</TABLE>

Options outstanding at year-end were as follows.

                                                Weighted Average
                                                    Remaining
      Exercise                       Number        Contractual        Number
      Prices                      Outstanding          Life         Exercisable
      ------                      -----------          ----         -----------

      $16.01                         139,579         2.90 yrs         139,579
      $18.75                           1,245         2.95 yrs           1,245
                                    --------         --------         -------

      Outstanding at year-end        140,824         2.90 yrs         140,824
                                    ========         ========         =======

NOTE 12 - MANAGEMENT RECOGNITION PLAN

A Management Recognition Plan ("MRP") was adopted by the Board of Directors and
approved by the shareholders of the Corporation on May 22, 1998 to purchase
71,415 common shares. The MRP is used as a means of providing directors and
certain key employees of the Corporation with an ownership interest in the
Corporation in a manner designed to compensate such directors and key employees
for services to the Corporation.

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

                                  (Continued)


                                                                             41.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 12 - MANAGEMENT RECOGNITION PLAN (Continued)

In conjunction with the adoption of the MRP on May 22, 1998, the Board of
Directors awarded 57,128 shares to certain directors, officers and employees of
the Corporation. No shares had been previously awarded. One-fifth of such shares
were earned and nonforfeitable on each of the first five anniversaries of the
date of the award. All MRP shares outstanding fully vested on May 22, 2003. At
June 30, 2005, there were 14,287 shares reserved for future awards and held as
treasury stock. Compensation expense related to MRP shares is based upon the
cost of the shares, which approximates fair value at the date of grant.
Compensation expense totaled $174,746 for the year ended June 30, 2003. There
was no compensation expense in 2005 or 2004.

NOTE 13 - REGULATORY MATTERS

The Association is subject to various regulatory capital requirements
administered by the federal regulatory agencies. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Association must meet specific capital guidelines that involve quantitative
measures of the Association's assets, liabilities and certain off-balance-sheet
items as calculated under regulatory accounting practices. Capital amounts and
classifications are also subject to qualitative judgments by the regulators.
Failure to meet minimum capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized, although these terms are not
used to represent overall financial condition. If adequately capitalized,
regulatory approval is required to accept brokered deposits. If
undercapitalized, capital distributions are limited, as is asset growth and
expansion, and capital restoration plans are required.

At June 30, 2005 and 2004, management believes the Association complies with all
regulatory capital requirements. Based on the Association's computed regulatory
capital ratios, the Association is considered well capitalized under the Federal
Deposit Insurance Act at June 30, 2005 and 2004. No conditions or events have
occurred subsequent to the last notification by regulators that management
believes would change the Association's category.

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

                                  (Continued)


42.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 13 - REGULATORY MATTERS (Continued)

At year-end 2005 and 2004, the Association's actual capital levels and minimum
required levels were as follows.

<TABLE>
<CAPTION>
                                                                                                       To Be Well
                                                                                                    Capitalized Under
                                                                             For Capital           Prompt Corrective-
                                                       Actual             Adequacy Purposes        Action Regulations
                                                -------------------      -------------------      -------------------
                                                 Amount      Ratio        Amount      Ratio        Amount      Ratio
                                                -------     -------      -------     -------      -------     -------
                                               (Dollars in thousands)
<S>                                             <C>            <C>       <C>             <C>      <C>            <C>
2005
----
Total capital (to risk-weighted assets)         $16,909        20.7%     $ 6,550         8.0%     $ 8,188        10.0%
Tier 1 (core) capital (to risk-weighted
  assets)                                        16,083        19.6        3,275         4.0        4,913         6.0
Tier 1 (core) capital (to adjusted
  total assets)                                  16,083        11.8        5,471         4.0        6,838         5.0
Tangible capital (to adjusted total assets)      16,083        11.8        2,052         1.5          N/A

2004
----
Total capital (to risk-weighted assets)         $15,448        20.0%     $ 6,176         8.0%     $ 7,720        10.0%
Tier 1 (core) capital (to risk-weighted
  assets)                                        14,855        19.2        3,088         4.0        4,632         6.0
Tier 1 (core) capital (to adjusted
  total assets)                                  14,855        10.9        5,440         4.0        6,801         5.0
Tangible capital (to adjusted total assets)      14,855        10.9        2,040         1.5          N/A
</TABLE>

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

When the Association converted from a mutual to a stock institution, a
"liquidation account" was established at $9,307,000, which was net worth
reported in the conversion prospectus. Eligible depositors who have maintained
their accounts, less annual reductions to the extent they have reduced their
deposits, would receive a distribution from this account if the Association
liquidated. Dividends may not reduce shareholders' equity below the required
liquidation account balance.

In addition to the liquidation account restriction discussed above, OTS
regulations limit capital distributions by savings associations. Generally,
capital distributions are permitted without notice or application to the OTS if
the distributions are limited to current year to date undistributed net income
and prior two years' undistributed net income, as long as the institution
remains well capitalized after the proposed distribution. If dividends to be
paid would exceed the net income test, an application would be required. In
addition to current year earnings, approximately $15,000 is available to pay
dividends to the holding company during the fiscal year ending June 30, 2006
without prior regulatory approval.

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

                                  (Continued)


                                                                             43.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 14 - OFF-BALANCE-SHEET ACTIVITIES

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

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

                                                           2005          2004
                                                        ----------    ----------

1-4 family residential real estate - fixed rate         $  407,000    $  299,000
1-4 family residential real estate - variable rate         695,000       212,000
Commercial real estate - variable rate                          --       265,000
Commercial lines of credit                               2,592,000     3,186,000
Home equity lines of credit                                709,000       823,000

The interest rate on fixed-rate commitments ranged from 5.75% to 7.00% at June
30, 2005 and 5.88% to 6.75% at June 30, 2004. Commitments to make loans are
generally made for a period of 30 days or less. The maximum maturity for
fixed-rate commitments range from 10 years to 20 years.

At June 30, 2005 and 2004, the Association was required to have $325,000 and
$3,454,000 on deposit with its correspondent banks as a compensating clearing
requirement.

The Association entered into employment agreements with certain officers of the
Corporation. The agreements provide for a term of one to three years and a set
salary as well as inclusion of the employee in any formally established employee
benefit, bonus, pension and profit-sharing plans for which management personnel
are eligible. The agreements provide for extensions for a period of one year on
each annual anniversary date, subject to review and approval of the extension by
disinterested members of the Board of Directors of the Association. The
employment agreements also provide for vacation and sick leave and include
provisions that would accelerate certain benefits upon change of control.

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

                                  (Continued)


44.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 15 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying amounts and estimated fair values of financial instruments at year-end
were as follows.

<TABLE>
<CAPTION>
                                                     2005                               2004
                                                     ----                               ----
                                                           Estimated                           Estimated
                                         Carrying            Fair            Carrying            Fair
                                           Value             Value             Value             Value
                                       -------------     -------------     -------------     -------------
 <S>                                    <C>               <C>               <C>               <C>
Financial assets:
      Cash and cash equivalents        $   5,321,196     $   5,321,196     $  10,033,688     $  10,033,688
      Securities available for sale        5,433,915         5,433,915         5,288,280         5,288,280
      Federal Home Loan Bank stock         1,673,900         1,673,900         1,601,400         1,601,400
      Loans, net                         121,110,189       120,464,413       115,651,910       114,746,495
      Accrued interest receivable            745,534           745,534           670,521           670,521

Financial liabilities:
      Deposits                           (85,930,737)      (85,888,352)      (86,764,253)      (87,259,460)
      Borrowed funds                     (32,588,719)      (33,233,942)      (31,140,388)      (31,471,009)
      Accrued interest payable              (162,301)         (162,301)         (151,899)         (151,899)
</TABLE>

The estimated fair value approximates carrying amounts for all items except
those described below. Security fair values are based on market prices or dealer
quotes, and if no such information is available, on the rate and term of the
security and information about the issuer. For fixed rate loans or deposits and
for variable rate loans or deposits with infrequent repricing or repricing
limits, fair value is based on discounted cash flows using current market rates
applied to the estimated life and credit risk. Fair values for impaired loans
are estimated using discounted cash flow analysis or underlying collateral
values. Fair value of debt is based on current rates for similar financing. The
fair value of off-balance-sheet items is based on the current fees or cost that
would be charged to enter into or terminate such arrangements, which are not
material.

NOTE 16 - EARNINGS PER SHARE

The factors used in the earnings per share computation follow.

<TABLE>
<CAPTION>
                                                           2005            2004            2003
                                                       -----------     -----------     -----------
<S>                                                    <C>             <C>             <C>
      Basic
             Net income                                $   977,873     $   974,586     $   835,802
                                                       ===========     ===========     ===========

             Weighted average common shares
               outstanding                               1,432,648       1,435,138       1,449,086
             Less:  Average unallocated ESOP shares        (56,079)        (68,148)        (80,796)
             Less:  Average nonvested MRP shares                --              --          (4,792)
                                                       -----------     -----------     -----------
             Weighted average common shares
               outstanding for basic earnings per
               common share                              1,376,569       1,366,990       1,363,498
                                                       ===========     ===========     ===========

             Basic earnings per common share           $       .71     $       .71     $       .61
                                                       ===========     ===========     ===========
</TABLE>

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

                                  (Continued)


                                                                             45.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 16 - EARNINGS PER SHARE (Continued)

<TABLE>
<CAPTION>
                                                        2005          2004          2003
                                                     ----------    ----------    ----------
<S>                                                  <C>           <C>           <C>
      Diluted
             Net income                              $  977,873    $  974,586    $  835,802
                                                     ==========    ==========    ==========

             Weighted average common shares
               outstanding for basic earnings per
               common share                           1,376,569     1,366,990     1,363,498
             Add:  Dilutive effects of assumed
               exercises of stock options                    92         1,690            --
                                                     ----------    ----------    ----------
             Weighted average common shares
               and dilutive potential common
               shares outstanding                     1,376,661     1,368,680     1,363,498
                                                     ==========    ==========    ==========

             Diluted earnings per common share       $      .71    $      .71    $      .61
                                                     ==========    ==========    ==========
</TABLE>

For the years ending June 30, 2005, 2004 and 2003, there were 1,245, 1,245 and
140,824 stock options outstanding that were not dilutive as the exercise price
of outstanding options was greater than the average market price for the
periods. Unearned MRP shares did not have a dilutive effect on EPS for the years
ended June 30, 2005 and 2004 as all MRP shares outstanding fully vested on May
22, 2003. Unearned MRP shares did not have a dilutive effect for the year ended
June 30, 2003 as the fair value of the MRP shares on the date of grant was
greater than the average market price for the periods.

NOTE 17 - OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) components and related taxes were as follows.

<TABLE>
<CAPTION>
                                                     2005          2004          2003
                                                  ---------     ---------     ---------
<S>                                               <C>           <C>           <C>
      Unrealized holding gains and (losses) on
        available-for-sale securities             $ 145,276     $(229,335)    $  (5,410)
      Tax effect                                    (49,395)       77,975         1,838
                                                  ---------     ---------     ---------

      Other comprehensive income (loss)           $  95,881     $(151,360)    $  (3,572)
                                                  =========     =========     =========
</TABLE>

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

                                  (Continued)


46.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 18 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Following is condensed financial information of Peoples-Sidney Financial
Corporation as of June 30, 2005 and 2004, and for the periods ended June 30,
2005, 2004 and 2003.

                            CONDENSED BALANCE SHEETS
                             June 30, 2005 and 2004

                                                          2005           2004
                                                      -----------    -----------
   Assets
   Cash and cash equivalents                          $ 1,216,639    $ 2,109,097
   Investment in subsidiary                            16,041,184     14,716,801
   Loans receivable from ESOP                             510,107        612,129
                                                      -----------    -----------

        Total assets                                  $17,767,930    $17,438,027
                                                      ===========    ===========

   Liabilities
   Other liabilities                                  $     6,539    $     7,114

   Shareholders' Equity                                17,761,391     17,430,913
                                                      -----------    -----------

        Total liabilities and shareholders' equity    $17,767,930    $17,438,027
                                                      ===========    ===========

                         CONDENSED STATEMENTS OF INCOME
                    Years Ended June 30, 2005, 2004 and 2003

<TABLE>
<CAPTION>
                                                                2005            2004            2003
                                                            -----------     -----------     -----------
<S>                                                         <C>             <C>             <C>
   Income
      Dividend income from subsidiary                       $        --     $ 2,000,000     $        --
      Interest on loans                                          42,700          49,952          56,932
                                                            -----------     -----------     -----------
                                                                 42,700       2,049,952          56,932
   Other expenses                                                94,330          93,379          93,022
                                                            -----------     -----------     -----------
   Income (loss) before taxes and undistributed earnings
     of subsidiary                                              (51,630)      1,956,573         (36,090)
   Income tax benefit                                           (17,600)        (14,900)         (5,949)
                                                            -----------     -----------     -----------
   Income (loss) before undistributed earnings
     of subsidiary                                              (34,030)      1,971,473         (30,141)
   Equity in undistributed earnings of subsidiary
     (distributions in excess of earnings)                    1,011,903        (996,887)        865,943
                                                            -----------     -----------     -----------
      Net income                                            $   977,873     $   974,586     $   835,802
                                                            ===========     ===========     ===========
</TABLE>

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

                                  (Continued)


                                                                             47.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2005, 2004 and 2003

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

NOTE 18 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Continued)

                       CONDENSED STATEMENTS OF CASH FLOWS
                    Years Ended June 30, 2005, 2004 and 2003

<TABLE>
<CAPTION>
                                                            2005            2004            2003
                                                        -----------     -----------     -----------
<S>                                                     <C>             <C>             <C>
   Cash flows from operating activities
      Net income                                        $   977,873     $   974,586     $   835,802
      Adjustments to reconcile net income to cash
        provided by operations:
      (Equity in undistributed income of subsidiary)
        distributions in excess of earnings              (1,011,903)        996,887        (865,943)
      Net change in other assets and liabilities               (575)            300           4,922
                                                        -----------     -----------     -----------
          Net cash from operating activities                (34,605)      1,971,773         (25,219)

   Cash flows from investing activities
      Proceeds from loan principal repayments               102,022         102,021         102,021
                                                        -----------     -----------     -----------
          Net cash from investing activities                102,022         102,021         102,021

   Cash flows from financing activities
      Purchase of treasury shares                                --         (92,516)       (317,483)
      Cash dividends paid                                  (918,358)       (871,790)       (667,566)
      Dividends on unallocated ESOP shares                  (41,517)        (47,572)        (42,759)
                                                        -----------     -----------     -----------
          Net cash from financing activities               (959,875)     (1,011,878)     (1,027,808)
                                                        -----------     -----------     -----------

   Net change in cash and cash equivalents                 (892,458)      1,061,916        (951,006)
   Cash and cash equivalents at beginning of year         2,109,097       1,047,181       1,998,187
                                                        -----------     -----------     -----------

   Cash at end of year                                  $ 1,216,639     $ 2,109,097     $ 1,047,181
                                                        ===========     ===========     ===========
</TABLE>

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


48.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION

                             SHAREHOLDER INFORMATION

ANNUAL MEETING

The Annual Meeting of Shareholders will be held at 11:00 a.m., Sidney, Ohio on
October 14, 2005, at the Holiday Inn, I-75 and S.R. 47, Sidney, Ohio. Further
information with regard to the meeting can be found in the proxy statement.

STOCK LISTING

Peoples-Sidney Financial Corporation common stock is traded on the NASDAQ
National Market under the symbol "PSFC."

SHAREHOLDERS AND GENERAL INQUIRIES                 TRANSFER AGENT

Douglas Stewart, President                         Registrar and Transfer Co.
Peoples-Sidney Financial Corporation               10 Commerce Drive
101 East Court Street                              Cranford, NJ  07016
P.O. Box 727 Sidney, Ohio 45365-3021
(937) 492-6129

ANNUAL AND OTHER REPORTS

A copy of Peoples-Sidney Financial Corporation's Annual Report on Form 10-KSB
for the year ended June 30, 2005, as filed with the Securities and Exchange
Commission, may be obtained without charge by contacting Douglas Stewart,
President and Chief Executive Officer, Peoples-Sidney Financial Corporation, 101
East Court Street, P.O. Box 727, Sidney, Ohio 45365-3021.

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


                                                                             49.
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION

                              CORPORATE INFORMATION

CORPORATION AND ASSOCIATION ADDRESS

101 East Court Street                                  Telephone: (937) 492-6129
P.O. Box 727                                           Fax:       (937) 498-4554
Sidney, Ohio 45365-3021

<TABLE>
<CAPTION>
BOARD OF DIRECTORS
<S>                                                 <C>
Douglas Stewart                                     Harry N. Faulkner
    President and Chief Executive Officer of            Partner in the law firm of Faulkner, Garmhausen,
    Peoples Federal Savings and Loan Association        Keister & Shenk LPA

John W. Sargeant                                    James W. Kerber
    Part Owner of Sidney Tool and Die Co. and           Owner of James W. Kerber CPA, a private practice
    BenSar Development, a warehouse provider            accounting firm

Richard T. Martin (Chairman of the Board)
    Certified Public Accountant, in private
    practice
</TABLE>

OFFICERS OF THE CORPORATION AND
THE ASSOCIATION

Douglas Stewart, President & CEO
David R. Fogt, VP Financial Services and
  Operations
Gary N. Fullenkamp, VP Mortgage Loans
  and Corporate Secretary
Debra A. Geuy, Chief Financial Officer and
  Treasurer

SPECIAL COUNSEL                                     INDEPENDENT AUDITORS

Katten Muchin Rosenman, LLP                         Crowe Chizek and Company LLC
1025 Thomas Jefferson Street, N.W.                  One Columbus
East Lobby, Suite 700                               10 West Broad Street
Washington, D.C. 20007-5201                         Columbus, Ohio  43215

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


50.