PEOPLES-SIDNEY FINANCIAL CORPORATION
                                  Sidney, Ohio

                                  ANNUAL REPORT
                                  June 30, 2000


<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                                  Sidney, Ohio

                                  ANNUAL REPORT
                                  June 30, 2000

                                    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 AUDITORS ........................................    20

CONSOLIDATED FINANCIAL STATEMENTS

      Consolidated Balance Sheets .....................................    21

      Consolidated Statements of Income ...............................    22

      Consolidated Statements of Changes in Shareholders' Equity ......    23

      Consolidated Statements of Cash Flows ...........................    26

      Notes To Consolidated Financial Statements ......................    28

SHAREHOLDER INFORMATION................................................    46

CORPORATE INFORMATION..................................................    47

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<PAGE>

BUSINESS OF PEOPLES-SIDNEY FINANCIAL CORPORATION

Peoples-Sidney  Financial  Corporation  ("Peoples"),  a unitary  thrift  holding
company  incorporated  under the laws of the State of Delaware,  owns all of the
issued  and  outstanding  capital  stock of  Peoples  Federal  Savings  and Loan
Association ("Association"),  a savings and loan association chartered under the
laws of the United States together referred to as 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 ("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. During fiscal 1999, the
Association opened full-service  branches in Anna and Jackson Center,  Ohio. The
Association's  business involves attracting deposits from the general public and
using such deposits 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, consisting
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  ("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 ("FHLB").


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

The Corporation had 1,578,315  common shares  outstanding on July 31, 2000, held
of record by approximately 888  shareholders.  Price information with respect to
the Corporation's  common shares is quoted on The NASDAQ National Market System.
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.

<TABLE>
<CAPTION>
                    September 30,      December 31,      March 31,         June 30,
                        1999             1999              2000              2000
                  --------------     -------------    --------------   --------------
<S>               <C>                <C>              <C>              <C>
High              $        11.50     $       10.50    $      10.75     $        10.75
Low                         9.88              7.94            8.88               8.50
Cash Dividends               .07               .07             .07                .07

                    September 30,      December 31,      March 31,         June 30,
                        1998             1998              1999              1999
                  --------------     -------------    --------------   --------------

High              $        21.75     $       18.06    $      16.88     $        13.25
Low                        18.13             15.00           12.50              10.00
Cash Dividends               .07               .07             .07                .07
</TABLE>

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Peoples'  primary source of funds with which to pay dividends to shareholders is
from dividends  received 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 payment  of such  dividend,  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.

An application must be submitted and approval from the OTS must be obtained by a
subsidiary  of  a  savings  and  loan  holding   company  (1)  if  the  proposed
distribution would cause total distributions for the 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
file a notice with the OTS.




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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.  As the  conversion  was  completed on
April 25,  1997,  information  before the year  ended  June 30,  1997 is for the
Association.

<TABLE>
<CAPTION>
Selected Financial Condition                                             At June 30,
----------------------------             --------------------------------------------------------------------------
  and Other Data:                             2000          1999            1998            1997           1996
  --------------                         ------------   -------------    -----------   ------------    ------------
                                                                       (In thousands)
Total amount of:
<S>                                      <C>            <C>             <C>            <C>             <C>
     Assets                              $    129,287   $     116,882   $    105,903   $    103,142    $     86,882
     Time deposits in other
       financial institutions                      --             400            100          5,000           1,100
     Securities available for sale              8,447           7,858          4,016          2,013              --
     Securities held to maturity                   --              --             --          1,999           2,598
     FHLB stock                                 1,023             908            847            763             667
     Loans, net (1)                           114,650         102,803         94,053         88,924          78,233
     Deposits                                  93,057          84,310         79,054         77,045          77,318
     Borrowed funds                            19,000          14,800          7,000             --              --
     Shareholders' equity (2)                  16,960          17,362         19,626         25,712           9,213

                                                                     Year ended June 30,
                                         --------------------------------------------------------------------------
Selected Operations Data:                     2000          1999            1998            1997           1996
------------------------                 ------------   -------------    -----------   ------------    ------------
                                                                        (In thousands)

Interest income                          $      9,156   $       8,105   $      8,067   $      7,189    $      6,513
Interest expense                                5,376           4,353          3,944          4,051           3,706
                                         ------------   -------------   ------------   ------------    ------------
Net interest income                             3,780           3,752          4,123          3,138           2,807
Provision for loan losses                          61             104             41            103              68
                                         ------------   -------------   ------------   ------------    ------------
Net interest income after
  provision for loan losses                     3,719           3,648          4,082          3,035           2,739
Noninterest income                                 82              89             63             63              57
Noninterest expense                             2,787           2,873          2,205          2,222           1,504
                                         ------------   -------------   ------------   ------------    ------------
Income before income taxes                      1,014             864          1,940            876           1,292
Income tax expense                                378             354            707            312             440
                                         ------------   -------------   ------------   ------------    ------------
Net income                               $        636   $         510   $      1,233   $        564    $        852
                                         ============   =============   ============   ============    ============

Earnings per common
  share - basic (3)                      $        .43   $        .32    $        .74   $        .09
                                         ============   ============    ============   ============
Earnings per common
  share - diluted (3)                    $        .43   $        .32    $        .74   $        .09
                                         ============   ============    ============   ============
Dividends declared per share (3)         $        .28   $        .28    $       4.26   $         --
                                         ============   ============    ============   ============
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
Selected Financial Ratios and Other Data:
----------------------------------------

Performance Ratios:                           2000          1999            1998            1997          1996
                                              ----          ----            ----            ----          ----
<S>                                            <C>           <C>             <C>             <C>           <C>
     Return on assets (ratio of net
       income to average total assets)         0.51%         0.47%           1.17%           0.60%         1.01%
     Return on equity (ratio of net
       income to average equity) (2)           3.70          2.73            4.77            4.70          9.70
     Dividend payout ratio (3)(8)             65.12         87.50          575.68            0.00           N/A
     Interest rate spread (4)                  2.52          2.81            2.78            2.81          2.97
     Net interest margin (5)                   3.13          3.57            4.01            3.45          3.41
     Ratio of operating expense to
       average total assets                    2.23          2.65            2.10            2.38          1.78
     Ratio of average interest-earning
       assets to average interest-bearing
       liabilities                             1.14x         1.18x           1.32x           1.14x         1.10x
Quality Ratios:
     Nonperforming assets to total
       assets at end of period (6)             0.81%         0.65%           0.91%           0.84%         1.41%
     Allowance for loan losses to
       nonperforming loans                    56.59         70.03           44.41           45.78         25.14
     Allowance for loan losses to
       gross loans (7)                         0.50          0.50            0.44            0.43          0.37
Capital Ratios:
     Shareholders' equity to total
       assets at end of period (2)            13.12         14.85           18.53           24.93         10.60
     Average equity to average assets (2)     13.77         17.24           24.59           12.87         10.43
Other Data:
     Number of full service offices            3             3               1               1             1
</TABLE>

---------------
(1)  Loans are shown net of net deferred loan fees, loans in process and the
     allowance for loan losses.
(2)  Retained earnings only before April 25, 1997.
(3)  Earnings and dividends per share are not applicable for any of the periods
     presented before April 25, 1997 due to the Association's mutual form of
     ownership before April 25, 1997. Earnings per share for the period ended
     June 30, 1997 was computed based on net income of the Corporation from
     April 25, 1997 to June 30, 1997. The dividends for 1998 include a $4.00 per
     share special dividend of which $3.99 was a return of capital distribution.
(4)  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.
(5)  The net interest margin represents net interest income as a percent of
     average interest-earning assets.
(6)  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.
(7)  Gross loans are stated at unpaid principal balances.
(8)  Dividends declared per share divided by basic earnings per common share.

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<PAGE>

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, 2000,  compared to prior years.  This discussion is designed
to provide a more  comprehensive  review of the operating  results and financial
position  than  could  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 branch offices in Anna and Jackson  Center,  Ohio. Its primary deposit
products are checking,  savings and term  certificate  accounts,  and it 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.

Forward-Looking Statements

When used in this  discussion  or future  filings  by the  Corporation  with the
Securities   and   Exchange   Commission,   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.

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  which  may be made to any
forward-looking statements to reflect occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.

Financial Condition

Total assets at June 30, 2000 were $129.3 million  compared to $116.9 million at
June 30, 1999,  an increase of $12.4  million,  or 10.6%.  The increase in total
assets was  primarily  due to an  increase  in loans,  funded by an  increase in
deposits and borrowed funds.

The sum of cash  and  cash  equivalents  and time  deposits  in other  financial
institutions  had  very  little  change  from  June 30,  1999 to June 30,  2000,
decreasing from $2.3 million to $2.2 million.

The securities  portfolio,  which is classified as available for sale, increased
$600,000 from June 30, 1999 to June 30, 2000.  The  Corporation  had very little
activity in its securities  portfolio during 2000. Security maturities and sales
were  reinvested in new  purchases.  One security was sold at a loss during 2000
and reinvested in a higher yielding security.  Management  believed the increase
in yield more than compensated for the loss associated with the sale.


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<PAGE>


Federal Home Loan Bank stock  increased  from  $900,000 at June 30, 1999 to $1.0
million  at June 30,  2000 due to stock  dividends  and  purchases  required  to
increase borrowings.

Loans  increased  $11.8  million from $102.8  million at June 30, 1999 to $114.6
million at June 30, 2000. The Corporation  experienced increases in all mortgage
loan categories except for multi-family residential. The largest increase was in
one- to four-family  residential  real estate loans which increased $7.9 million
and real estate  construction  and  development,  which  increased $2.2 million.
Commercial  real estate and land loans  increased a combined  total of $800,000.
The overall  increase and continued growth in total mortgage loans is reflective
of a strong  local  economy  coupled  with  attractive  loan rates and  products
compared to local competition.  However,  the loan growth has slowed down during
the last several months due to the increase in interest rates.

The Corporation's  consumer loan portfolio  increased  $835,000 between June 30,
1999 and June 30, 2000. Commercial loans increased $1.0 million between June 30,
1999 and June 30, 2000. The increases  were primarily  related to new auto loans
and commercial lines of credit  originated at the  Association's  two new branch
locations. Even with the increase,  non-mortgage loans remain a small portion of
the entire loan portfolio and  represented  only 5.0% of gross loans at June 30,
2000 compared to 3.9% at June 30, 1999.

Premises and equipment  decreased $100,000 from $2.0 million at June 30, 1999 to
$1.9 million at June 30, 2000. The decrease resulted from annual depreciation on
the Corporation's premises and equipment.

Total  deposits  increased  $8.8 million from $84.3  million at June 30, 1998 to
$93.1  million  at  June  30,  2000.  The  majority  of  deposit  growth  was in
certificates of deposit,  which increased by $9.4 million.  The  certificates of
deposit  growth  can  be  attributed  to  the  Corporation's   special  15-month
certificate of deposit  product.  This product totaled $17.2 million at June 30,
2000. Other  certificates of deposit declined $7.8 million.  Noninterest-bearing
demand  accounts and NOW  accounts  increased  slightly  from totals at June 30,
1999. Money market accounts and savings accounts  declined from June 30, 1999 as
customers  moved funds to higher  yielding  certificates  of deposit  during the
rising interest rate environment.

Borrowed  funds totaled $19.0 million at June 30, 2000 and $14.8 million at June
30, 1999. Borrowings at June 30, 2000 consisted entirely of long-term fixed-rate
advances.  $7.0  million in new  borrowings  were taken in 2000 to replace  cash
management  advances and lock in interest  rates during a rising  interest  rate
environment  and to fund loan growth not  supported by increased  deposits.  The
$5.0  million  long-term  fixed-rate  advance  borrowed in June 1999 was used to
purchase  GNMA  mortgage-backed  securities  with an original  par value of $5.0
million to leverage some of the Corporation's excess capital. The remaining $7.0
million in long-term fixed-rate advance was borrowed near the end of fiscal 1998
under a 10-year  fixed-rate  advance from the FHLB of Cincinnati to fund a $4.00
per share  special  dividend,  of which  $3.99 was a tax free return of capital,
totaling $7.1 million.  The  Corporation  paid the return of capital on June 26,
1998 as a  means  of  reducing  the  excess  capital  provided  from  the  stock
conversion.

Total  shareholders'  equity  decreased  $400,000 from $17.4 million at June 30,
1999 to $17.0 million at June 30, 2000.  The net decrease is due to the purchase
of treasury stock and paying out a substantial portion of the Corporation's 2000
earnings in dividends.  The decrease is part of  Management's  capital  planning
strategy.  During 2000, the Corporation's Board of Directors approved a 5% stock
buyback, which was completed prior to June 30, 2000.

Results of Operations

The  operating  results of the  Corporation  are  affected  by general  economic
conditions,  the  monetary  and  fiscal  policies  of federal  agencies  and the
regulatory  policies of  agencies  that  regulate  financial  institutions.  The
Corporation's  cost of funds  is  influenced  by  interest  rates  on  competing
investments  and  general  market  rates of  interest.  Lending  activities  are
influenced  by the demand for real estate loans and other types of loans,  which
in turn is affected by the interest rates at which such loans are made,  general
economic conditions and the availability of funds for lending activities.

The  Corporation's  net income  primarily  depends upon its net interest income,
which is the difference  between the interest income earned on  interest-earning
assets,  such  as  loans  and  securities,  and  interest  expense  incurred  on


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                                  (Continued)

                                                                              9

<PAGE>


interest-bearing  liabilities,  such as deposits and other borrowings. The level
of net interest  income is dependent upon the interest rate  environment and the
volume  and  composition  of   interest-earning   assets  and   interest-bearing
liabilities.  Net income is also affected by provisions for loan losses, service
charges,  gains on the sale of assets and other income,  noninterest expense and
income taxes.

Comparison of Results of Operations for the
  Year Ended June 30, 2000 and June 30, 1999

Net Income.  The  Corporation  earned net income of $636,000  for the year ended
June 30, 2000  compared  to net income of  $510,000  for the year ended June 30,
1999.  The increase in net income was primarily due to a slight  increase in net
interest  income  combined  with a decrease in the provision for loan losses and
noninterest expense.

Net Interest Income.  Net interest income totaled  $3,780,000 for the year ended
June 30,  2000  compared  to  $3,752,000  for the year ended June 30,  1999,  an
increase of $29,000,  or 0.8%. The increase was the result of an increase in the
volume of  interest-earning  assets almost  entirely offset by a decrease in the
net interest margin.

Interest and fees on loans  increased  $737,000 or 9.6%, from $7,697,000 for the
year ended June 30, 1999 to  $8,434,000  for the year ended June 30,  2000.  The
increase in interest income was due to higher average loans receivable,  related
primarily to the origination of new one- to four-family residential, real estate
construction  and development,  commercial real estate,  consumer and commercial
loans.  The increase in interest  and fees on loans due to volume was  partially
offset by a decline in the yield earned on loans,  which  dropped from 7.88% for
1999 to 7.74% for 2000.

Interest earned on securities  totaled $577,000 for the year ended June 30, 2000
compared  to  $229,000   for  the  year  ended  June  30,   1999.   Interest  on
interest-bearing  demand,  time and  overnight  deposits  with  other  financial
institutions  decreased to $78,000 for the year ended June 30, 2000  compared to
$117,000  for the  year  ended  June 30,  1999.  The  increase  in  interest  on
securities was the result of higher average balance of securities  combined with
a higher yield earned on securities.  The decrease in  interest-bearing  demand,
time and  overnight  deposits  was the  result  of  lower  average  balances  of
interest-bearing  deposits  and a decrease in the average  yield  earned on such
investments.

Dividends on FHLB stock increased slightly over the comparable periods due to an
increase in the number of shares of FHLB stock owned.

Interest  paid on deposits  increased  $417,000 for the year ended June 30, 2000
compared  to  the  year  ended  June  30,   1999.   The   average   balance  for
interest-bearing  deposits increased and due to the majority of the growth being
in certificates of deposit,  the mix of the deposit portfolio shifted from lower
yielding transaction  accounts to higher yielding  certificates of deposit. As a
result,  the average  cost of deposits  increased  from 4.80% for the year ended
June 30,  1999 to 4.86% for the year ended June 30,  2000.  The  increase in the
average cost of funds may continue due to the current interest rate environment.

Interest paid on borrowed  funds totaled  $1,076,000 for the year ended June 30,
2000 compared to $470,000 for the year ended June 30, 1999. Management increased
its borrowings from the FHLB throughout 2000 to fund loan growth.

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 losses inherent 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 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  which is  considered
adequate to absorb probable losses inherent 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

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                                  (Continued)

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<PAGE>


the  size  and   composition  of  the  loan  portfolio  and  specific   borrower
considerations,  including the ability of the borrower to repay the loan and the
estimated value of the underlying collateral.

The provision  for loan losses for the year ended June 30, 2000 totaled  $61,000
compared to $104,000 for the year ended June 30, 1999, a decrease of $43,000, or
40.8%. The allowance for loan losses totaled  $591,000,  or 0.50% of gross loans
receivable  and 56.6% of total  nonperforming  loans at June 30, 2000,  compared
with  $529,000,   or  0.50%  of  gross  loans  receivable  and  70.0%  of  total
nonperforming loans at June 30, 1999. Charge-offs experienced by the Corporation
have primarily related to consumer and other non-real estate loans. As indicated
previously,  such loans make up a small portion of the Corporation's  total loan
portfolio. 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  includes  service  fees  and  other
miscellaneous income and loss on sale of  available-for-sale  securities totaled
$83,000 for the year ended June 30, 2000  compared to $89,000 for the year ended
June 30, 1999. The primary reasons for the decrease was the $16,000 loss on sale
partially  offset by higher  late  charge  income  and  service  charges  on NOW
accounts due to the increase in the number of accounts.

Noninterest  expense.  Noninterest expense totaled $2,787,000 for the year ended
June 30,  2000  compared  to  $2,872,000  for the year  ended June 30,  1999,  a
decrease  of  $85,000  or 3.0%.  The  decrease  is  primarily  related  to state
franchise taxes and other expenses.

Compensation  and  benefits  expense  decreased  $9,000,  or 0.6%.  Increases in
salaries  were more than  offset by a decrease  in expense  associated  with the
Corporation's  ESOP.  ESOP  expense  was lower in 2000 due to the  Corporation's
lower average stock price during the period.  State  franchise  taxes  decreased
$45,000, or 15.8%. The Association pays franchise taxes on a calendar-year basis
based on its net  worth at June 30 of the  preceding  year.  The  lower  capital
levels at the  Association  at June 30, 1999,  after the large  dividend paid to
Peoples  prior to June 30, 1999,  resulted in lower  franchise  taxes  beginning
January 1, 2000. Other expenses declined $64,000, or 14.3%, due to costs such as
advertising and supplies incurred in 1999 associated with the opening of two new
branches, which were not repeated in 2000, along with lower professional fees.

--------------------------------------------------------------------------------
                                  (Continued)

                                                                             11
<PAGE>

Income  Tax  Expense.   The  volatility  of  income  tax  expense  is  primarily
attributable  to the change in income before  income  taxes.  Income tax expense
totaled  $378,000 for the year ended June 30, 2000  compared to $354,000 for the
year ended June 30, 1999,  an increase of $24,000,  or 6.9%.  The  effective tax
rates  were  37.3%  and  40.9%  for the  years  ended  June 30,  2000 and  1999,
respectively.  The decrease in the effective tax rate  primarily  relates to the
Corporation's  stock-based benefit plans and their relative tax impact resulting
from higher pretax earnings, combined with the Corporation's lower average stock
price in fiscal 2000.

Comparison of Results of Operations for the
  Year Ended June 30, 1999 and June 30, 1998

Net Income.  The  Corporation  earned net income of $510,000  for the year ended
June 30, 1999 compared to net income of  $1,233,000  for the year ended June 30,
1998. The decrease in net income was primarily due to a decrease in net interest
income combined with an increase in noninterest expense.

Net Interest Income.  Net interest income totaled  $3,752,000 for the year ended
June 30,  1999  compared  to  $4,123,000  for the year  ended June 30,  1998,  a
decrease  of  $371,000,  or 9.0%.  The  decrease  was the  result of  additional
interest paid on borrowed funds.

Interest and fees on loans increased $234,000,  or 3.1%, from $7,463,000 for the
year ended June 30, 1998 to  $7,697,000  for the year ended June 30,  1999.  The
increase in interest income was due to higher average loans receivable,  related
primarily  to  the  origination  of new  commercial  real  estate  and  one-  to
four-family residential loans. The increase in interest and fees on loans due to
volume was  partially  offset by a decline in the yield  earned on loans,  which
dropped from 8.09% for 1998 to 7.88% for 1999.

Interest earned on securities  totaled $229,000 for the year ended June 30, 1999
compared  to  $252,000   for  the  year  ended  June  30,   1998.   Interest  on
interest-bearing  demand,  time and  overnight  deposits  with  other  financial
institutions decreased $177,000 for the year ended June 30, 1999 compared to the
year  ended  June 30,  1998.  The  decreases  were the  result of lower  average
balances of  securities  and  interest-bearing  deposits  and  decreases  in the
average yields earned on such investments.

Dividends on FHLB stock increased slightly over the comparable periods due to an
increase in the number of shares of FHLB stock owned.

Interest  paid on  deposits  decreased  $55,000 for the year ended June 30, 1999
compared  to the  year  ended  June  30,  1998.  The  average  balance  for  all
interest-bearing deposits increased and the mix of the deposit portfolio shifted
slightly from certificates of deposit to transaction accounts.  The average cost
of deposits  decreased  from 5.06% for the year ended June 30, 1998 to 4.80% for
the year ended June 30,  1999.  The  decrease in the average  cost of funds more
than offset the increase in volume.

Interest  paid on borrowed  funds  totaled  $470,000 for the year ended June 30,
1999 compared to $6,000 for the year ended June 30, 1998.  The  Corporation  did
not borrow  funds  during 1998 until June 25, 1998 to fund the return of capital
discussed  previously.  Management  borrowed short- and long-term funds from the
FHLB throughout 1999 to fund loan growth and leverage some of the  Corporation's
excess capital.

Provision for Loan Losses. The provision for loan losses for the year ended June
30, 1999 totaled $104,000  compared to $41,000 for the year ended June 30, 1998,
an  increase of  $63,000,  or 151.7%.  The  allowance  for loan  losses  totaled
$529,000,  or 0.50% of gross loans  receivable and 70.0% of total  nonperforming
loans  at June 30,  1999,  compared  with  $426,000,  or  0.44%  of gross  loans
receivable and 44.4% of total nonperforming loans at June 30, 1998.

--------------------------------------------------------------------------------
                                  (Continued)

                                                                             12
<PAGE>


Noninterest   income.   Noninterest  income  includes  service  fees  and  other
miscellaneous  income and  totaled  $89,000  for the year  ended  June 30,  1999
compared to $63,000 for the year ended June 30,  1998.  The primary  reasons for
the increase were higher late charge income and service  charges on NOW accounts
due to the increase in the number of accounts.

Noninterest  expense.  Noninterest expense totaled $2,872,000 for the year ended
June 30,  1999  compared  to  $2,205,000  for the year ended June 30,  1998,  an
increase of $667,000 or 30.3%. The increase is primarily related to compensation
and benefits, occupancy expenses and state franchise taxes.

Compensation and benefits expense increased $409,000,  or 37.5%. The increase is
the result of normal, annual merit increases,  the addition of employees for the
two new  branches  and the added  expense of the MRP,  which  began in May 1998.
Compensation  expense  related to the MRP was $187,000 and $20,000 for the years
ended  June  30,  1999 and  1998.  Occupancy  and  equipment  expense  increased
$128,000, or 82.0%, due to the added costs of the two new branch offices.  State
franchise  taxes  increased  $70,000,  or  32.7%,  due to being  taxed at higher
capital levels at the Association for a full year for 1999. The third and fourth
quarters of fiscal 1998 were the first periods impacted by the capital raised in
the  conversion.  The  increase  in other  expense was  attributable  to various
miscellaneous items.

Income  Tax  Expense.   The  volatility  of  income  tax  expense  is  primarily
attributable  to the change in income before  income  taxes.  Income tax expense
totaled  $354,000 for the year ended June 30, 1999  compared to $706,000 for the
year ended June 30, 1998, a decrease of $352,000,  or 49.9%.  The  effective tax
rates  were  40.9%  and  36.4%  for the  years  ended  June 30,  1999 and  1998,
respectively.  The increase in the effective tax rate  primarily  relates to the
Corporation's  stock-based benefit plans and their relative tax impact resulting
from lower pretax earnings.

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

                                                                             13
<PAGE>


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.

<TABLE>
<CAPTION>
                                                                       Year ended June 30,
                            -------------------------------------------------------------------------------------------------------
                                            2000                                1999                                1998
                            ---------------------------------- --------------------------------- ----------------------------------
                               Average    Interest                Average     Interest              Average       Interest
                             outstanding   earned/   Yield/     outstanding    earned/  Yield/    outstanding      earned/  Yield/
                               balance      paid      rate        balance       paid     rate       balance         paid     rate
                               -------      ----      ----        -------       ----     ----       -------         ----     ----
                                                                     (Dollars in thousands)
ASSETS:
<S>                         <C>            <C>        <C>        <C>         <C>          <C>      <C>           <C>         <C>
Interest-earning assets:
   Interest-earning
     deposits               $   2,203      $   78     3.53%      $   2,853   $   117      4.10%    $   5,919     $   295     4.98%
   Securities available
     for sale (1)               8,344         577     6.76           3,635       229      6.31         3,013         199     6.65
   Securities held to

     maturity                      --          --       --              --        --        --           958          53     5.53
   Loans (2)                  109,030       8,434     7.74          97,702     7,697      7.88        92,208       7,463     8.09
   FHLB stock                     942          67     7.16             870        62      7.13           789          57     7.22
                            ---------     -------                ---------   -------               ---------     -------

      Total interest-
        earning assets        120,519       9,156     7.59         105,060     8,105      7.72       102,887       8,067     7.84
                            ---------     -------                ---------   -------               ---------     -------

Noninterest-earning
  assets:
   Cash and due from
     banks                      1,257                                  725                               536
   Premises and
     equipment, net             1,947                                1,809                               817
   Accrued interest and

     other assets               1,006                                  950                               920
                            ---------                            ---------                         ---------

      Total noninterest-
        earning assets          4,210                                3,484                             2,273
                            ---------                            ---------                         ---------

Total assets                $ 124,729                            $ 108,544                         $ 105,160
                            =========                            =========                         =========
</TABLE>

--------------------------------------------------------------------------------
                                  (Continued)

                                                                             14

<PAGE>



<TABLE>
<CAPTION>
                                                                         Year ended June 30,
                              -----------------------------------------------------------------------------------------------------
                                               2000                             1999                              1998
                              --------------------------------- -------------------------------- ----------------------------------
                                  Average    Interest             Average     Interest              Average     Interest
                                outstanding  earned/   Yield/   outstanding    earned/   Yield/   outstanding    earned/   Yield/
                                  balance     paid      rate      balance       paid      rate      balance       paid      rate
                                  -------     ----      ----      -------       ----      ----      -------       ----      ----
                                                                     (Dollars in thousands)

LIABILITIES AND SHAREHOLDERS' EQUITY:

Interest-bearing
<S>                           <C>          <C>          <C>      <C>            <C>        <C>      <C>          <C>        <C>
  liabilities:
   Savings deposits           $   18,738   $    572     3.05%    $   18,939     $    571   3.01%    $ 18,236     $   557    3.05%
   Demand and NOW
     deposits                      6,719        189     2.81          5,591          152   2.72        3,911          95    2.43
   Certificate accounts           63,078      3,539     5.61         56,415        3,160   5.60       55,737       3,286    5.90
                              ----------   --------              ----------     --------            --------     -------
   Total deposits                 88,535      4,300     4.86         80,945        3,883   4.80       77,884       3,938    5.06
   Borrowed funds                 17,603      1,076     6.11          7,764          470   6.05           96           6    6.25
                              ----------   --------              ----------     --------            --------     -------
      Total interest-
       bearing liabilities       106,138      5,376     5.07         88,709        4,353   4.91       77,980       3,944    5.06
                              ----------   --------              ----------     --------            --------     -------

Noninterest-bearing
  liabilities

   Demand deposits                   691                                440                              493
   Accrued interest
     payable and other
     liabilities                     722                                681                              825
                              ----------                         ----------                         --------
      Total noninterest-
        bearing liabilities        1,413                              1,121                            1,318
                              ----------                         ----------                         --------

Total liabilities                107,551                             89,830                           79,298

Total shareholders'
  equity                          17,178                             18,714                           25,862
                              ----------                         ----------                         --------

Total liabilities and
  shareholders' equity        $  124,729                         $  108,544                         $105,160
                              ==========                         ==========                         ========

Net interest income;
  interest rate
  spread (3)                               $  3,780     2.52%                   $  3,752   2.81%                 $ 4,123    2.78%
                                           ========    =====                    ========  =====                  =======   =====

Net earning assets            $   14,381                         $   16,351                         $ 24,907
                              ==========                         ==========                         ========
Net interest margin (4)                                 3.13%                              3.57%                            4.01%
                                                       =====                              =====                            =====
Average interest-earning
  assets to interest-
  bearing liabilities               1.14x                              1.18x                            1.32x
                              ==========                         ==========                         ========
</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)

                                                                             15
<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,
                                                   -----------------------------------------------------------------
                                                            2000 vs. 1999                     1999 vs. 1998
                                                   -------------------------------   -------------------------------
                                                          Increase                         Increase
                                                         (decrease)                       (decrease)
                                                           due to                           due to
                                                   --------------------               -----------------
                                                     Volume      Rate       Total      Volume     Rate       Total
                                                     ------      ----       -----      ------     ----       -----
                                                                            (In thousands)
Interest income attributable to:
<S>                                                <C>         <C>        <C>         <C>       <C>         <C>
     Interest-earning deposits                     $     (24)  $    (15)  $     (39)  $  (133)  $    (45)   $  (178)
     Securities available for sale                       331         17         348        39         (9)        30
     Securities held to maturity                          --         --          --       (53)        --        (53)
     Loans receivable                                    878       (141)        737       436       (202)       234
     FHLB stock                                            5         --           5         6         (1)         5
                                                   ---------   --------   ---------   -------   --------    -------

         Total interest-earning assets             $   1,190   $   (139)      1,051   $   295   $   (257)        38
                                                   =========   ========   ---------   =======   ========    -------

Interest expense attributable to:
     Savings deposits                              $      (6)  $      7           1   $    21   $     (7)        14
     Demand and NOW deposits                              32          5          37        37         20         57
     Certificates accounts                               374          5         379        40       (166)      (126)
     Borrowed funds                                      601          5         606       464         --        464
                                                   ---------   --------   ---------   -------   --------    -------

         Total interest-bearing liabilities        $   1,001   $     22       1,023   $   562   $   (153)       409
                                                   =========   ========   ---------   =======   ========    -------

Net interest income                                                       $      28                         $  (371)
                                                                          =========                         =======
</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.  If the
NPV would  decrease  by more than 2% of the present  value of the  institution's
assets with either an increase or a decrease in market  rates,  the  institution
must  deduct  50%  of the  amount  of  decrease  in  excess  of  such  2% in the
calculation of the institution's risk-based capital.

At March 31, 2000, the most recent date with  available  data, 2% of the present
value of the Association's assets was $2,459,000. Because the interest rate risk
of a 200 basis point  increase in market  interest rates (which was greater than
the interest rate risk of a 200 basis point  decrease)  was  $3,509,000 at March
31, 2000, the Association would

--------------------------------------------------------------------------------
                                  (Continued)

                                                                             16

<PAGE>

have been required to make additional deductions from its capital of $525,000 in
determining whether the Association met its risk-based capital requirement. Even
with the  deduction,  the  Association  would have still exceeded its risk-based
capital requirement by more than $7.4 million.

Presented  below,  as of March 31,  2000,  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 new Thrift Bulletin 13a reporting  requirements  and
the new target limits set by the  Association.  As illustrated in the table, the
Association is more sensitive to increasing rates than declining rates.  This is
the result of  increases  in  interest  rates by over 1% since July 1999 and the
movement of capital  from the  Association  to Peoples,  which not only  lowered
capital  of  the  Association,  but  also  increased  deposit  liabilities.  The
shortening of terms of  certificates  of deposit by  Association  customers also
contributed to the interest-rate  sensitivity to rising interest rates. As a way
to reduce this risk,  the Board of Directors and  management are looking at ways
to restructure  borrowings at the Federal Home Loan Bank by extending maturities
through  longer-term  advances  and  by  matching  longer-term  advances  to the
origination of fixed-rate mortgages.  The Board of Directors and management also
discussed  potentially offering 48- to 60-month certificates of deposit specials
as a way to lengthen the deposit  liabilities  as the  Association  continues to
have a larger percentage of 1- ,3- and 5-year adjustable-rate  mortgages than it
does fixed-rate mortgages. Since the NPV ratio at the 400 basis point increasing
interest rate scenario  exceeds the Board of Director limit,  management and the
Board of Directors  have also agreed to look at the  possibility  and effects of
selling  longer-term  mortgage loans as another way to shorten asset  maturities
and avoid additional borrowings.  While these options are being considered, they
must be looked at in  conjunction  with their effect on the net interest  income
since the Association  continues to have a strong  shareholders' equity position
overall.  Although  exceeding any limit is critical to interest  rate risk,  the
Board of Directors and  management do not consider it imperative  that wholesale
changes be made  immediately  for  exceeding  the 400 basis  point limit at this
time.

                                                                Target Limit
                     Economic Value               NPV Ratio      Under Asset
                     --------------               ---------       Liability
 Change    Market Value          Market Value       MVE/         Management
In Rates      Equity                Assets          MVTA           Policy
--------   ------------          ------------     ---------     ------------
 +400       $  2,886              $ 106,996         2.70%            4%
 +300          4,557                110,719         4.12             4
 +200          6,391                114,722         5.57             4
 +100          8,186                118,813         6.89             4
 STATIC        9,900                122,961         8.05
 -100         10,704                126,348         8.47             4
 -200         10,728                129,120         8.31             4
 -300          8,849                130,167         6.80             4
 -400          7,236                131,169         5.52             4

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,  2000,  1999 and
1998.

<TABLE>
<CAPTION>
                                                                   Year Ended June 30,
                                                  ------------------------------------------------
                                                       2000              1999             1998
                                                  -------------     ------------      ------------
<S>                                               <C>               <C>               <C>
Net income                                        $         636     $        510      $      1,233
Adjustments to reconcile net income to net
  cash from operating activities                            355              824                83
                                                  -------------     ------------      ------------
Net cash from operating activities                          991            1,334             1,316
Net cash from investing activities                      (12,372)         (14,237)             (602)
Net cash from financing activities                       11,654            9,889             1,437
                                                  -------------     ------------      ------------
Net change in cash and cash equivalents                     273           (3,014)            2,151
Cash and cash equivalents at beginning of period          1,933            4,947             2,796
                                                  -------------     ------------      ------------
Cash and cash equivalents at end of period        $       2,206     $      1,933      $      4,947
                                                  =============     ============      ============
</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.

OTS regulations  presently  require the Association to maintain an average daily
balance of investments in United States Treasury, federal agency obligations and
other  investments  in an  amount  equal  to 4% of the sum of the  Association's
average  daily  balance of net  withdrawable  deposit  accounts  and  borrowings
payable in one year or less.  The  liquidity  requirement,  which may be changed
from  time to  time  by the OTS to  reflect  changing  economic  conditions,  is
intended to provide a source of relatively liquid funds on which the Association
may rely, if necessary,  to fund deposit withdrawals or other short-term funding
needs. At June 30, 2000, the  Association's  regulatory  liquidity was 10.6%. At
such date, the Corporation had commitments to originate  fixed-rate  residential
real estate loans totaling $15,000,  and  variable-rate  residential real estate
mortgage loans totaling  $879,000.  Loan  commitments are generally for 30 days.
The Corporation  considers its liquidity and capital reserves sufficient to meet
its  outstanding  short-  and  long-term  needs.  See  Note 14 of the  Notes  to
Consolidated Financial Statements.

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.  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, 2000 and 1999, 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, 2000 and 1999. No conditions or events have occurred  subsequent to the last
notification  by  regulators  that  management  believes  would have changed the
Association's category.

--------------------------------------------------------------------------------
                                  (Continued)


                                                                             18
<PAGE>

The following table  summarizes the  Association's  minimum  regulatory  capital
requirements and actual capital at June 30, 2000.

<TABLE>
<CAPTION>
                                                                             Excess of Actual
                                                                           Capital Over Current
                          Actual capital        Current 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            $ 14,773       17.2%     $ 6,858        8.0%         $  7,915       9.2%        $  85,724
Tier 1 risk-based
  capital              14,183       16.5        3,429        4.0            10,754      12.5            85,724
Core capital           14,183       10.9        5,183        4.0             9,000       6.9           129,582
Tangible capital       14,183       10.9        1,944        1.5            12,239       9.4           129,582
</TABLE>

Impact of New Accounting Standards

Statement of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for
Derivative  Instruments and Hedging Activities" - SFAS 133 requires companies to
record  derivatives on the balance sheet as assets or  liabilities,  measured at
fair  value.  Gains or losses  resulting  from  changes  in the  values of those
derivatives  would be accounted for depending on the use of the  derivative  and
whether  it  qualifies  for  hedge  accounting.  The  key  criterion  for  hedge
accounting  is that  the  hedging  relationship  must  be  highly  effective  in
achieving  offsetting  changes  in fair value or cash  flows.  SFAS 133 does not
allow  hedging  of  a  security   which  is  classified  as  held  to  maturity.
Accordingly,  upon adoption of SFAS 133,  companies may  reclassify any security
from held to maturity to available for sale if they wish to be able to hedge the
security in the  future.  SFAS 133,  as amended by SFAS 137,  is  effective  for
fiscal years  beginning  after June 15, 2000 with early adoption  encouraged for
any  fiscal  quarter  beginning  July 1,  1998  or  later,  with no  retroactive
application.  Management  does  not  expect  the  adoption  SFAS  133 to  have a
significant impact on the Corporation's financial statements.

Impact of Inflation and Changing Prices

The  Consolidated  Financial  Statements  and Notes  included  herein  have been
prepared in accordance with generally accepted accounting  principles  ("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.

Year 2000

The Corporation  experienced no problems in their computer  application systems,
nor has management been made aware of any system  problems of the  Corporation's
major  customers  and  vendors,  related to Year 2000 issues.  In addition,  the
Corporation did not experience unusual deposit  withdrawals  related to the Year
2000. The Corporation does not anticipate any additional significant expenses in
regards to Year 2000 issues.

--------------------------------------------------------------------------------
                                  (Continued)


                                                                             19

<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

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, 2000 and 1999, 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, 2000.  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  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of  Peoples-Sidney
Financial  Corporation  as of June 30,  2000 and 1999,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
June 30, 2000, in conformity with generally accepted accounting principles.


                                                 Crowe, Chizek and Company LLP


Columbus, Ohio
July 14, 2000


--------------------------------------------------------------------------------
                                  (Continued)


                                                                             20

<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                             June 30, 2000 and 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    2000                 1999
                                                                    ----                 ----
ASSETS
<S>                                                            <C>                <C>
Cash and due from financial institutions                       $       820,629    $      1,298,357
Interest-bearing deposits in other financial institutions              885,364             634,621
Overnight deposits                                                     500,000                  --
                                                               ---------------    ----------------
     Total cash and cash equivalents                                 2,205,993           1,932,978

Time deposits in other financial institutions                               --             400,000
Securities available for sale                                        8,446,681           7,858,111
Federal Home Loan Bank stock                                         1,023,000             907,700
Loans, net                                                         114,649,700         102,802,845
Accrued interest receivable                                            893,569             759,913
Premises and equipment, net                                          1,890,886           1,985,608
Other assets                                                           177,387             235,104
                                                               ---------------    ----------------

     Total assets                                              $   129,287,216    $    116,882,259
                                                               ===============    ================


LIABILITIES
Deposits                                                       $    93,056,941    $     84,310,492
Borrowed funds                                                      19,000,000          14,800,000
Accrued interest payable and other liabilities                         270,477             409,550
                                                               ---------------    ----------------
     Total liabilities                                             112,327,418          99,520,042

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                                          10,754,463          10,779,941
Retained earnings                                                   10,856,394          10,643,040
Treasury stock, 207,060 and 120,753 shares at cost                  (2,636,295)         (1,766,399)
Unearned employee stock ownership plan shares                       (1,347,800)         (1,520,139)
Unearned management recognition plan shares                           (556,043)           (746,692)
Accumulated other comprehensive income (loss)                         (128,775)            (45,388)
                                                               ---------------    ----------------
     Total shareholders' equity                                     16,959,798          17,362,217
                                                               ---------------    ----------------

     Total liabilities and shareholders' equity                $   129,287,216    $    116,882,259
                                                               ===============    ================
</TABLE>


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

          See accompanying notes to consolidated financial statements.

                                                                             21

<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                    Years Ended June 30, 2000, 1999 and 1998
<TABLE>
<CAPTION>
                                                                      2000              1999               1998
                                                                      ----              ----               ----
Interest income
<S>                                                            <C>                <C>               <C>
     Loans, including fees                                     $    8,434,123     $    7,697,298    $     7,463,234
     Securities                                                       577,292            228,786            252,271
     Demand, time and overnight deposits                               77,798            117,218            294,440
     Dividends on Federal Home Loan Bank stock                         67,490             61,386             57,204
                                                               --------------     --------------    ---------------
         Total interest income                                      9,156,703          8,104,688          8,067,149

Interest expense
     Deposits                                                       4,299,957          3,883,143          3,938,606
     Borrowed funds                                                 1,076,346            469,997              5,878
                                                               --------------     --------------    ---------------
         Total interest expense                                     5,376,303          4,353,140          3,944,484
                                                               --------------     --------------    ---------------

Net interest income                                                 3,780,400          3,751,548          4,122,665

Provision for loan losses                                              61,503            103,803             41,240
                                                               --------------     --------------    ---------------

Net interest income after provision for loan losses                 3,718,897          3,647,745          4,081,425

Noninterest income
     Service fees and other charges                                    98,325             88,729             62,912
     Loss on sale of available for sale securities                    (15,781)                --                 --
                                                               --------------     --------------    ---------------
         Total noninterest income                                      82,544             88,729             62,912

Noninterest expense
     Compensation and benefits                                      1,490,680          1,499,573          1,090,237
     Director fees                                                    120,000            120,000            129,000
     Occupancy and equipment                                          312,827            285,073            156,676
     Computer processing expense                                      204,123            185,542            156,470
     FDIC deposit insurance premiums                                   34,490             47,627             49,096
     State franchise taxes                                            239,118            283,863            213,864
     Other                                                            386,208            450,555            409,197
                                                               --------------     --------------    ---------------
         Total noninterest expense                                  2,787,446          2,872,233          2,204,540
                                                               --------------     --------------    ---------------

Income before income taxes                                          1,013,995            864,241          1,939,797

Income tax expense                                                    378,397            353,865            706,488
                                                               --------------     --------------    ---------------

Net income                                                     $      635,598     $      510,376    $     1,233,309
                                                               ==============     ==============    ===============

Earnings per common share - basic                              $          .43     $          .32    $          .74
                                                               ==============     ==============    ==============
Earnings per common share - diluted                            $          .43     $          .32    $          .74
                                                               ==============     ==============    ==============
</TABLE>

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

          See accompanying notes to consolidated financial statements.

                                                                             22
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                    Years Ended June 30, 2000, 1999 and 1998

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

<TABLE>
<CAPTION>
                                                                     Additional
                                                    Common            Paid-In            Retained          Treasury
                                                     Stock            Capital            Earnings           Stock
                                                     -----            -------            --------           -----
<S>                                              <C>            <C>                 <C>                 <C>
Balance, July 1, 1997                            $   17,854     $     17,234,087    $     9,776,982     $         --

Comprehensive income:

   Net income for the year ended
     June 30, 1998                                       --                   --          1,233,309               --

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


      Total comprehensive income

Cash dividends - $.26 per share                          --                   --           (429,195)              --

$4.00 per share special dividend of
  which $3.99 was a return of capital
  distribution                                           --           (6,602,996)                --               --

Commitment to release 13,920 employee
  stock ownership plan shares                            --               86,900                 --               --
                                                 ----------     ----------------    ---------------     ------------

Balance, June 30, 1998                           $   17,854     $     10,717,991    $    10,581,096     $         --
                                                 ==========     ================    ===============     ============
<CAPTION>

                                                                                  Accumulated
                                                 Unearned         Unearned           Other
                                                   ESOP             MRP          Comprehensive
                                                  Shares           Shares            Income          Total
                                                  ------           ------            ------          -----
<S>                                            <C>              <C>             <C>             <C>
Balance, July 1, 1997                          $ (1,326,280)    $        --     $      9,070    $  25,711,713

Comprehensive income:
    Net income for the year ended
     June 30, 1998                                       --              --               --        1,233,309

   Change in net unrealized gain (loss) on
     securities available for sale, net of
     reclassification and tax effects                    --              --            2,119            2,119
                                                                                                -------------

      Total comprehensive income                                                                    1,235,428

Cash dividends - $.26 per share                          --              --               --         (429,195)

$4.00 per share special dividend of
  which $3.99 was a return of capital
  distribution                                     (538,504)             --               --       (7,141,500)

Commitment to release 13,920 employee
  stock ownership plan shares                       162,670              --               --          249,570
                                              -------------     -----------     ------------    -------------

Balance, June 30, 1998                        $  (1,702,114)    $        --     $     11,189    $  19,626,016
                                              =============     ===========     ============    =============
</TABLE>

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

                                  (Continued)

                                                                             23
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                    Years Ended June 30, 2000, 1999 and 1998

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

<TABLE>
<CAPTION>

                                                                  Additional
                                                   Common          Paid-In            Retained            Treasury
                                                    Stock          Capital            Earnings             Stock
                                                    -----          -------            --------             -----
<S>                                             <C>            <C>                <C>                 <C>
Balance, July 1, 1998                           $   17,854     $    10,717,991    $    10,581,096     $          --

Comprehensive income:

   Net income for the year ended
     June 30, 1999                                      --                  --            510,376                --

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

      Total comprehensive income

Cash dividends - $.28 per share                         --                  --           (448,432)               --

Commitment to release 15,248 employee
  stock ownership plan shares                           --              61,950                 --                --

Purchase of 177,881 treasury shares,
  at cost                                               --                  --                 --        (2,719,692)

Transfer of 57,128 shares from treasury
  stock to management recognition plan                  --                  --                 --           953,293

12,378 shares earned under
  management recognition plan                           --                  --                 --                --
                                                ----------     ---------------    ---------------     -------------

Balance, June 30, 1999                          $   17,854     $    10,779,941    $    10,643,040     $  (1,766,399)
                                                ==========     ===============    ===============     =============

<CAPTION>
                                                                                    Accumulated
                                                  Unearned         Unearned            Other
                                                    ESOP              MRP          Comprehensive
                                                   Shares           Shares         Income (Loss)       Total
                                                   ------           ------         -------------       -----

<S>                                            <C>                <C>             <C>              <C>
Balance, July 1, 1998                          $   (1,702,114)    $        --     $     11,189     $  19,626,016

Comprehensive income:

   Net income for the year ended
     June 30, 1999                                         --              --               --           510,376

   Change in unrealized gain (loss) on
     securities available for sale, net of
     reclassification and tax effects                      --              --          (56,577)          (56,577)
                                                                                                   -------------

      Total comprehensive income                                                                         453,799

Cash dividends - $.28 per share                            --              --               --          (448,432)

Commitment to release 15,248 employee
  stock ownership plan shares                         181,975              --               --           243,925

Purchase of 177,881 treasury shares,
  at cost                                                  --              --               --        (2,719,692)

Transfer of 57,128 shares from treasury
  stock to management recognition plan                     --        (953,293)              --                --

12,378 shares earned under
  management recognition plan                              --         206,601               --           206,601
                                               --------------     -----------     ------------     -------------

Balance, June 30, 1999                         $   (1,520,139)    $  (746,692)    $    (45,388)    $  17,362,217
                                               ==============     ===========     ============     =============
</TABLE>

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

                                  (Continued)

                                                                             24

<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                    Years Ended June 30, 2000, 1999 and 1998

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

<TABLE>
<CAPTION>

                                                                   Additional                                           Unearned
                                                   Common           Paid-In         Retained          Treasury            ESOP
                                                    Stock           Capital         Earnings            Stock            Shares
                                                    -----           -------         --------            -----            ------
<S>                                             <C>            <C>               <C>              <C>               <C>
Balance, July 1, 1999                           $   17,854     $   10,779,941    $   10,643,040   $  (1,766,399)    $  (1,520,139)

Comprehensive income:

   Net income for the year ended
     June 30, 2000                                      --                 --           635,598              --                --

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


      Total comprehensive income

Cash dividends - $.28 per share                         --                 --          (422,244)             --                --

Commitment to release 14,687 employee
  stock ownership plan shares                           --            (25,478)               --              --           172,339

Purchase of 86,307 treasury shares,
  at cost                                               --                 --                --        (869,896)               --

11,425 shares earned under
  management recognition plan                           --                 --                --              --                --
                                                ----------     --------------    --------------   -------------     -------------

Balance, June 30, 2000                          $   17,854     $   10,754,463    $   10,856,394   $  (2,636,295)    $  (1,347,800)
                                                ==========     ==============    ==============   =============     =============

<CAPTION>

                                                                       Accumulated
                                                     Unearned             Other
                                                        MRP           Comprehensive
                                                      Shares          Income (Loss)         Total
                                                      ------          -------------         -----
<S>                                               <C>              <C>                 <C>
Balance, July 1, 1999                             $  (746,692)     $    (45,388)       $ 17,362,217

Comprehensive income:

   Net income for the year ended
     June 30, 2000                                         --                --             635,598

   Change in unrealized gain (loss) on
     securities available for sale, net of
     reclassification and tax effects                      --           (83,387)            (83,387)
                                                                                       ------------

      Total comprehensive income                                                            552,211

Cash dividends - $.28 per share                            --                --            (422,244)

Commitment to release 14,687 employee
  stock ownership plan shares                              --                --             146,861

Purchase of 86,307 treasury shares,
  at cost                                                  --                --            (869,896)

11,425 shares earned under
  management recognition plan                         190,649                --             190,649
                                                  -----------      ------------        ------------

Balance, June 30, 2000                            $  (556,043)     $   (128,775)       $ 16,959,798
                                                  ===========      ============        ============
</TABLE>


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

          See accompanying notes to consolidated financial statements.

                                                                             25
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Years Ended June 30, 2000, 1999 and 1998

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

<TABLE>
<CAPTION>
                                                                   2000            1999            1998
                                                                   ----            ----            ----
Cash flows from operating activities
<S>                                                           <C>              <C>             <C>
     Net income                                               $    635,598     $    510,376    $  1,233,309
     Adjustments to reconcile net income to net cash
       from operating activities
         Depreciation                                              156,886          124,252          51,399
         Provision for loan losses                                  61,503          103,803          41,240
         Gain on sale of real estate owned                              --           (3,086)             --
         Loss on sale of securities available for sale              15,781               --              --
         FHLB stock dividends                                      (67,300)         (61,200)        (57,000)
         Deferred taxes                                            (29,183)         (56,025)         (1,101)
         Compensation expense for ESOP shares                      146,861          243,925         249,570
         Compensation expense for MRP shares                       190,649          186,601              --
         Change in:
              Accrued interest receivable and other assets         (75,939)         (28,444)       (212,755)
              Accrued interest payable and other liabilities       (71,249)          291,106        (25,707)
              Deferred loan fees                                    27,339           22,600          37,183
                                                              ------------     ------------    ------------
                  Net cash from operating activities               990,946        1,333,908       1,316,138

Cash flows from investing activities
     Purchase of securities available for sale                  (2,997,813)      (7,926,777)     (2,499,141)
     Proceeds from maturities of securities
       available for sale                                        1,000,000        4,000,000         500,000
     Principal repayments on mortgage-
       backed securities available for sale                        287,215               --              --
     Proceeds from sale of securities
       available for sale                                          984,219               --              --
     Proceeds from maturities of securities
       held to maturity                                                 --               --       2,000,000
     Purchase of time deposits in other financial
       institutions                                             (1,000,000)        (900,000)     (3,100,000)
     Proceeds from maturities of time deposits
       in other financial institutions                           1,400,000          600,000       8,000,000
     Purchase of Federal Home Loan Bank stock                      (48,000)              --         (27,000)
     Net increase in loans                                     (11,935,697)      (8,939,161)     (5,206,615)
     Premises and equipment expenditures                           (62,164)      (1,136,457)       (269,516)
     Proceeds from sale of real estate owned                            --           65,530              --
                                                              ------------     ------------    ------------
         Net cash from investing activities                    (12,372,240)     (14,236,865)       (602,272)
</TABLE>

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

                                  (Continued)

                                                                             26


<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Years ended June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                           2000              1999               1998
                                                           ----              ----               ----
Cash flows from financing activities
<S>                                                  <C>                <C>               <C>
     Net change in deposits                          $    8,746,449     $    5,256,806    $     2,008,256
     Proceeds from long-term borrowings                   7,000,000          5,000,000          7,000,000
     Net change in short-term borrowings                 (2,800,000)         2,800,000                 --
     Return of capital distribution                              --                 --         (7,141,500)
     Cash dividends paid                                   (422,244)          (448,432)          (429,195)
     Purchase of treasury shares                           (869,896)        (2,719,692)                --
                                                     --------------     --------------    ---------------
         Net cash from financing activities              11,654,309          9,888,682          1,437,561
                                                     --------------     --------------    ---------------

Net change in cash and cash equivalents                     273,015         (3,014,275)         2,151,427

Cash and cash equivalents at beginning of year            1,932,978          4,947,253          2,795,826
                                                     --------------     --------------    ---------------

Cash and cash equivalents at end of year             $    2,205,993     $    1,932,978    $     4,947,253
                                                     ==============     ==============    ===============

Supplemental disclosures of cash flow information
     Cash paid during the year for
         Interest                                    $    5,385,712     $    4,343,587    $     3,946,041
         Income taxes                                       448,000            191,000            951,000

     Noncash transactions

         Transfer from loans to real estate owned                --             62,444                 --
         Transfer of treasury stock to MRP                       --            953,293                 --
</TABLE>

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

          See accompanying notes to consolidated financial statements.

                                                                             27
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:  The consolidated  financial statements include the
accounts  of   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.  All significant  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 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  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.
Management  considers  the  Corporation  to operate  primarily  in one  segment,
banking.

Use of Estimates:  To prepare financial  statements in conformity with generally
accepted accounting principles, 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 future
results  could differ.  The allowance for loan losses,  fair values of financial
instruments and status of contingencies are particularly subject to change.

Cash  Flows:  Cash and cash  equivalents  are  defined  as 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 customer 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.
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  determined  using the
amortized  cost of the specific  security  sold.  Securities are written down to
fair value when a decline in fair value is not temporary.

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,  loans in process  and the
allowance for loan losses.

Interest income is reported on the interest method and includes  amortization of
net deferred loan fees over the loan term.  Interest income is not reported when
full loan repayment is in doubt, typically when the loan is impaired or payments
are past due over 90 days.  Payments  received  on such  loans are  reported  as
principal reductions.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Allowance  for Loan  Losses:  The  allowance  for  loan  losses  is a  valuation
allowance for probable credit losses, increased by the provision for loan losses
and decreased by charge-offs less recoveries. Management estimates the allowance
balance required based on past loan loss experience, known and inherent risks in
the nature and volume of the  portfolio,  information  about  specific  borrower
situations  and estimated  collateral  values,  economic  conditions,

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

                                  (Continued)

                                                                             28
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

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.

A loan is  impaired  when full  payment  under the loan  terms is not  expected.
Impairment  is evaluated in total for  smaller-balance  loans of similar  nature
such  as  first  mortgage  loans  secured  by one-  to  four-family  residences,
residential  construction  loans,  automobile,  home equity and second  mortgage
loans.  Commercial  loans and mortgage  loans  secured by other  properties  are
evaluated  individually for impairment.  If a loan is impaired, a portion of the
allowance  for loan losses 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.

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.  The  Corporation  had no real  estate  owned at
year-end 2000 or 1999.

Premises and Equipment:  Asset cost is reported net of accumulated depreciation.
Depreciation  expense is calculated using the straight-line  method based on the
estimated  useful lives of the assets.  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.

Stock Compensation:  Employee  compensation  expense under stock option plans is
reported if options  are granted  below  market  price at grant date.  Pro forma
disclosures  of net income and earnings per share are shown using the fair value
method to measure expense using an option pricing model to estimate fair value.

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.

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.


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

                                  (Continued)

                                                                             29
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration  of  Credit  Risk:  The  Corporation's   loan  portfolio  consists
principally of long-term  conventional  loans secured by first mortgage deeds on
single family  residences  located in its primary  lending area of Shelby County
and its contiguous counties.  Mortgage loans comprise  approximately 95% and 96%
of the Corporation's loan portfolio at June 30, 2000 and 1999.

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

Earnings Per Common Share:  Basic  earnings per common share ("EPS") is based on
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 shows the dilutive effect of MRP
shares and the additional common shares issuable under stock options.

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

Comprehensive  Income:  Comprehensive  income  consists  of net income and other
comprehensive   income  (loss).   Other  comprehensive  income  (loss)  includes
unrealized  gains and losses on securities  available  for sale,  which are 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 separately.  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  year
consolidated  financial  statements  has  been  made  to  conform  to  the  2000
presentation.

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

                                  (Continued)

                                                                             30
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 2 - SECURITIES AVAILABLE FOR SALE

Securities available for sale at year-end were as follows:

<TABLE>
<CAPTION>
                                                      Gross           Gross          Estimated
                                     Amortized     Unrealized      Unrealized          Fair
                                       Cost           Gains          Losses            Value
                                       ----           -----          ------            -----
2000
<S>                              <C>                <C>           <C>             <C>
    U.S. Government agencies     $     3,996,736    $       --    $  (100,336)    $    3,896,400
    Mortgage-backed securities         4,645,059            --        (94,778)         4,550,281
                                 ---------------    ----------    -----------     --------------
       Total                     $     8,641,795    $       --    $  (195,114)    $    8,446,681
                                 ===============    ==========    ===========     ==============

1999
    U.S. Government agencies     $     2,998,229    $       --    $   (41,509)    $    2,956,720
    Mortgage-backed securities         4,928,652            --        (27,261)         4,901,391
                                 ---------------    ----------    -----------     --------------
       Total                     $     7,926,881    $       --    $   (68,770)    $    7,858,111
                                 ===============    ==========    ===========     ==============
</TABLE>

Contractual maturities of securities available for sale at year-end 2000 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. Securities not due at a single maturity date, primarily
mortgage-backed securities, are shown separately.

                                                                  Estimated
                                                 Amortized          Fair
                                                   Cost             Value
                                                   ----             -----
   Due after one year through five years      $    2,998,835    $   2,917,810
   Due after five years through ten years            997,901          978,590
   Mortgage-backed securities                      4,645,059        4,550,281
                                              --------------    -------------
                                              $    8,641,795    $   8,446,681
                                              ==============    =============

No securities were pledged as collateral at year-end 2000 or 1999. Proceeds from
the sale of securities  available for sale were $984,219 in fiscal 2000. A gross
loss of $15,781 was  realized on the sale.  No  securities  were sold during the
years ended June 30, 1999 and 1998.


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

                                  (Continued)

                                                                             31
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------


NOTE 3 - LOANS

Year-end loans were as follows:

                                                 2000              1999
                                                 ----              ----
      Mortgage loans:
           1-4 family residential          $    92,116,695   $     84,165,483
           Multi-family residential              1,300,151          1,358,906
           Commercial real estate               10,047,775          9,407,998
           Real estate construction and
             development                         8,088,290          5,930,241
           Land                                    991,864            866,988
                                           ---------------   ----------------
               Total mortgage loans            112,544,775        101,729,616
      Consumer loans                             3,571,071          2,735,885
      Commercial loans                           2,406,064          1,395,584
                                           ---------------   ----------------
               Total loans                     118,521,910        105,861,085
      Less:
           Allowance for loan losses              (591,350)          (528,898)
           Loans in process                     (3,035,548)        (2,311,369)
           Deferred loan fees                     (245,312)          (217,973)
                                           ---------------   ----------------

                                           $   114,649,700   $    102,802,845
                                           ===============   ================

Activity in the allowance for loan losses was as follows:

                                           2000         1999         1998
                                           ----         ----         ----

     Balance at beginning of year      $  528,898   $  425,642    $  397,159
     Provision for losses                  61,503      103,803        41,240
     Charge-offs                               --      (22,621)      (15,037)
     Recoveries                               949       22,074         2,280
                                       ----------   ----------    ----------

     Balance at end of year            $  591,350   $  528,898    $  425,642
                                       ==========   ==========    ==========

Nonperforming loans at year-end were as follows:

                                                          2000         1999
                                                          ----         ----

      Loans past due over 90 days still on accrual    $  289,000   $  440,000
      Nonaccrual loans                                   756,000      315,000

Nonperforming   loans  include  smaller  balance   homogeneous  loans,  such  as
residential  mortgage and consumer loans,  that are  collectively  evaluated for
impairment.

As of and for the  years  ended  June 30,  2000,  1999 and 1998,  no loans  were
required to be evaluated for  impairment on an individual  loan basis within the
scope of SFAS No. 114.


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

                                  (Continued)

                                                                             32
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 3 - LOANS (Continued)

Loans to  executive  officers,  directors  and  companies  with  which  they are
affiliated  aggregating  $60,000 or more to any one  related  party for the year
ended June 30, 2000, were as follows.

     Balance at beginning of period          $      315,227
     New loans                                      240,000
     Principal repayments                          (117,041)
                                             --------------

     Balance at end of period                $      438,186
                                             ==============


NOTE 4 - ACCRUED INTEREST RECEIVABLE

Year-end accrued interest receivable was as follows:

                                                    2000            1999
                                                    ----            ----

     Loans                                    $    791,454     $    684,767
     Securities                                    102,115           72,296
     Interest-bearing deposits in other
       financial institutions                           --            2,850
                                              ------------     ------------

                                              $    893,569     $    759,913
                                              ============     ============

NOTE 5 - PREMISES AND EQUIPMENT

Year-end premises and equipment was as follows:

                                        2000            1999
                                        ----            ----

     Land                         $    225,166     $    225,166
     Buildings and improvements      1,785,182        1,769,702
     Furniture and equipment         1,173,124        1,148,856
     Automobile                         22,416               --
                                  ------------     ------------
          Total cost                 3,205,888        3,143,724
     Accumulated depreciation        1,315,002        1,158,116
                                  ------------     ------------

                                  $  1,890,886     $  1,985,608
                                  ============     ============


The Jackson Center branch facility is leased under an operating lease that began
in September  1998.  The lease term is for ten years.  At the  conclusion of the
fifth  year,  the rent  shall be  adjusted  by the  cumulative  increase  in the
Consumer Price Index over the previous five years with a maximum increase of 15%
for the remaining five years of the lease term. Total rental expense was $24,271
and  $20,226 for the years  ended June 30,  2000 and 1999.  The lease  agreement
includes an option to purchase the property at any time during the lease term.

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

                                  (Continued)

                                                                             33
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 5 - PREMISES AND EQUIPMENT (Continued)

Rental commitments under this noncancelable  operating lease, assuming a maximum
increase of 15% after year five, were:

     Year ending June 30,
         2001                     $    24,271
         2002                          24,271
         2003                          24,271
         2004                          25,784
         2005                          26,086
         Thereafter                    82,606
                                  -----------
                                  $   207,289

NOTE 6 - FEDERAL INCOME TAXES

Income tax expense was as follows:

                         2000          1999          1998
                         ----          ----          ----

     Current         $   407,580    $   409,890   $   707,589
     Deferred            (29,183)       (56,025)       (1,101)
                     -----------    -----------   -----------

                     $   378,397    $   353,865   $   706,488
                     ===========    ===========   ===========

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

                                                          2000         1999
                                                          ----         ----
Items giving rise to deferred tax assets
     Deferred loan fees                                $   67,630   $   55,688
     Reserve for delinquent interest                        5,372        2,132
     Allowance for loan losses                             69,034       15,198
     Accrued ESOP expense                                  19,548       12,385
     Accrued MRP expense                                    5,401        5,401
     Unrealized loss on securities available for sale      66,339       23,381
                                                       ----------   ----------
         Total deferred tax assets                        233,324      114,185

Items giving rise to deferred tax liabilities
     Depreciation                                         (74,779)     (50,663)
     Federal Home Loan Bank
       stock dividends                                   (137,122)    (114,240)
                                                       ----------   ----------
         Total deferred tax liabilities                  (211,901)    (164,903)
                                                       ----------   ----------

         Net deferred tax asset (liability)            $   21,423   $  (50,718)
                                                       ==========   ==========

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

                                  (Continued)

                                                                             34

<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 6 - FEDERAL INCOME TAXES (Continued)

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

<TABLE>
<CAPTION>
                                                     2000          1999          1998
                                                     ----          ----          ----
<S>                                              <C>            <C>           <C>
Income taxes computed at the statutory
  tax rate on pretax income                      $   344,758    $   293,842   $   659,531
Add tax effect of:
    ESOP fair value in excess of tax deduction         8,082         39,481        46,546
    MRP cost in excess of fair value                  25,102         19,884            --
    Nondeductible expenses and other                     455            658           411
                                                 -----------    -----------   -----------

                                                 $   378,397    $   353,865   $   706,488
                                                 ===========    ===========   ===========

Statutory tax rate                                      34.0%         34.0%          34.0%
                                                 ===========    ==========    ===========
Effective tax rate                                      37.3%         40.9%          36.4%
                                                 ===========    ==========    ===========
</TABLE>

In August  1996,  legislation  was enacted  that  repeals the reserve  method of
accounting  used by many thrifts to calculate their bad debt reserve for federal
income tax  purposes.  Therefore,  small  thrifts such as the  Association  must
recapture  that  portion of the reserve  that exceeds the amount that could have
been taken under the experience  method for tax years  beginning  after December
31, 1987.  The  legislation  also requires  thrifts to account for bad debts for
federal income tax purposes on the same basis as commercial  banks for tax years
beginning  after  December 31, 1995.  The recapture is occurring over a six-year
period,  the  commencement  of which was delayed  until the first  taxable  year
beginning  after  December  31,  1997,   because  the  Association  met  certain
residential lending requirements. At June 30, 2000 and 1999, the Association had
approximately  $387,000 and $484,000 in bad debt  reserves  subject to recapture
for federal  income tax  purposes.  The  deferred tax  liability  related to the
recapture has been previously established.  In fiscal 2000 and 1999, $97,000 bad
debt reserves were recaptured.

Retained  earnings at June 30, 2000 and 1999 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.  The related  amount of
unrecognized deferred tax liability was approximately  $739,000 at June 30, 2000
and 1999.  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.

NOTE 7 - DEPOSITS

Year-end deposits were as follows:

                                          2000               1999
                                          ----               ----
         Noninterest-bearing
           demand deposits         $       870,734    $        649,972
         NOW accounts                    4,940,258           4,873,938
         Money market accounts           1,562,590           1,845,923
         Savings accounts               18,888,875          19,544,387
         Certificates of deposit        66,794,484          57,396,272
                                   ---------------    ----------------

                                   $    93,056,941    $     84,310,492
                                   ===============    ================
NOTE 7 - DEPOSITS (Continued)

The aggregate  amount of certificates of deposit with a minimum  denomination of
$100,000 was $6,312,000 and $4,463,000 at June 30, 2000 and 1999,  respectively.
Deposits more than $100,000 are not insured by the FDIC.


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

                                  (Continued)

                                                                             35
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

The scheduled  maturities of certificates of deposit as of June 30, 2000 were as
follows:

        Year ended June 30,
               2001              $      44,699,597
               2002                     10,531,613
               2003                      8,433,824
               2004                      2,305,765
               2005                        823,685
                                 -----------------

                                 $      66,794,484
                                 =================

NOTE 8 - BORROWED FUNDS

At June 30, 2000, 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.  There were no  borrowings
outstanding on this line of credit at June 30, 2000.  Borrowings  outstanding on
this line of credit at June 30, 1999 were $2,800,000.

As a member  of the FHLB  system,  the  Association  has the  ability  to obtain
borrowings up to a maximum total of  $20,460,000,  including the cash management
line-of-credit.  Advances  from the Federal  Home Loan Bank at year-end  were as
follows:

                                                      2000            1999
                                                      ----            ----

4.90% FHLB cash management advance,
  due September 17, 1999                          $         --    $   2,300,000
4.90% FHLB cash management advance,
  due September 22, 1999                                    --          300,000
6.02% FHLB cash management advance,
  due September 28, 1999                                    --          200,000
7.15% FHLB fixed-rate advance, due May 2, 2001       2,500,000               --
7.41% FHLB fixed-rate advance, due May 15, 2001      2,000,000               --
7.40% FHLB fixed-rate advance, due  May 2, 2002      2,500,000               --
6.13% FHLB fixed-rate advance, due June 25, 2008     7,000,000        7,000,000
6.00% FHLB fixed-rate advance, due June 11, 2009     5,000,000        5,000,000
                                                  ------------    -------------

                                                  $ 19,000,000    $  14,800,000
                                                  ============    =============

The maximum  month-end  balance of advances  outstanding was $19,800,000 in 2000
and $14,800,000 in 1999. Average balances of borrowings  outstanding during 2000
and  1999  were  $17,603,000  and  $7,764,000.   Advances  under  the  borrowing
agreements  are   collateralized  by  a  blanket  pledge  of  the  Association's
residential mortgage loan portfolio and its FHLB stock.

NOTE 9 - RETIREMENT PLANS

The Corporation maintains a 401(k) profit sharing. 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  $25,172,  $15,951 and $18,440 for the years ended June 30,  2000,
1999 and 1998.


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

                                  (Continued)

                                                                             36
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------


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 and earnings on ESOP assets.  All  dividends on  unallocated  shares
received by the ESOP are used to pay debt service.  When loan payments are made,
ESOP shares are allocated to participants based on relative compensation.

During  fiscal  1998,  the  Corporation  declared  and  paid a $4.00  per  share
distribution of which $3.99 was a tax-free return of capital  distribution.  The
ESOP  received  approximately  $539,000 on 134,262  unallocated  shares from the
return of capital  distribution.  The ESOP used the proceeds to purchase  26,000
additional  shares.  The additional shares are held in suspense and allocated to
participants in a manner similar to the shares originally in the ESOP.

ESOP  compensation  expense was  $146,861,  $243,925  and $249,570 for the years
ended June 30, 2000, 1999 and 1998.

Year-end ESOP shares were as follows:

                                           2000               1999
                                           ----               ----

Allocated shares                             53,966              39,279
Unreleased shares                           114,864             129,551
                                    ---------------    ----------------

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

Fair value of unreleased shares     $       976,344      $    1,295,510
                                    ===============      ==============


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

                                  (Continued)

                                                                             37
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

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 at an exercise  price  ranging  from $16.01 to
$18.75 to certain  employees,  officers and  directors of the  Corporation.  The
exercise price for options  granted prior to June 10, 1998,  were reduced by the
$3.99 return of capital  distribution.  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>
                                           2000                      1999                     1998
                                           ----                      ----                     ----
                                               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    141,824   $  16.03       142,824    $ 16.03             --   $   --
Granted                                  --        --             --         --        142,824     16.03
Exercised                                --        --             --         --             --       --
Forfeited                            (1,000)     16.01        (1,000)     16.01             --       --
                                 ----------   --------    ----------    -------     ----------   ------
Outstanding at end of year          140,824   $  16.03       141,824    $ 16.03        142,824   $ 16.03
                                 ==========   ========    ==========    =======     ==========   =======

Options exercisable at year-end      56,330   $  16.03        28,365    $ 16.03             --   $   --
Remaining shares available
  for grant                          37,714                   36,714                    35,714
</TABLE>


Options outstanding at year-end were as follows:

                                                Weighted Average
                                                   Remaining
  Exercise                         Number         Contractual        Number
  Prices                        Outstanding          Life          Exercisable
  --------                      -----------     ----------------   -----------
  $16.01                            139,579         7.89 yrs          55,832
  $18.75                              1,245         7.95 yrs             498
                                -----------        ---------       ----------

  Outstanding at year-end           140,824         7.89 yrs          56,330
                                ===========        =========       ==========

The fair value of options granted in 1998 was estimated using the  Black-Scholes
options pricing model with the following weighted-average information: risk-free
interest rate of 5.44%,  expected life of 10 years, expected volatility of stock
price of 32.65% and expected dividend rate of 1.47%. Based on these assumptions,
the estimated fair value per share of options granted in 1998 was $8.89.


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

                                  (Continued)

                                                                             38
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 11 - STOCK OPTION AND INCENTIVE PLAN (Continued)

The following pro forma  information  presents net income and earnings per share
for 2000, 1999 and 1998 had Statement of Financial  Accounting Standards No. 123
fair value  method  been used to  measure  compensation  cost for stock  options
granted.  No  compensation  expense was  recognized  for the year ended June 30,
2000, 1999 and 1998.

                                            2000        1999         1998
                                            ----        ----         ----

Net income as reported                   $ 635,598   $ 510,376    $ 1,233,309
Pro forma net income                       425,988     297,210      1,215,385
Basic earnings per share as reported           .43         .32            .74
Pro forma basic earnings per share             .29         .19            .73
Diluted earnings per share as reported         .43         .32            .74
Pro forma diluted earnings per share           .29         .19            .73

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,  which  is  equal  to 4% of the  common  shares  sold in
connection  with  the  conversion.  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.

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
is earned and nonforfeitable on each of the first five anniversaries of the date
of the award. At June 30, 2000,  22,851 shares have vested.  In the event of the
death or disability of a participant or a change in control of the  Corporation,
however,  the participant's shares will be deemed earned and nonforfeitable upon
such date. At June 30, 2000, 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.
For the years ended June 30, 2000, 1999 and 1998,  compensation  expense totaled
$190,649, $186,601 and $20,000.

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.

NOTE 13 - REGULATORY MATTERS (Continued)

At June 30, 2000 and 1999, 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


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

                                  (Continued)

                                                                             39
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

the Federal  Deposit  Insurance  Act at June 30, 2000 and 1999. No conditions or
events have occurred  subsequent  to the last  notification  by regulators  that
management believes would have changed the Association's category.

At year-end 2000 and 1999, the  Association's  actual capital levels and minimum
required levels were:

<TABLE>
<CAPTION>
                                                                                           Minimum Required
                                                                                              To Be Well
                                                                    Minimum Required       Capitalized Under
                                                                       For Capital        Prompt Corrective-
                                                   Actual           Adequacy Purposes     Action Regulations
                                               Amount    Ratio      Amount     Ratio       Amount      Ratio
                                               ------    -----      ------     -----       ------      -----
                                                                 (Dollars in thousands)
2000
<S>                                          <C>           <C>     <C>           <C>      <C>          <C>
Total capital (to risk-weighted assets)      $  14,773     17.2%   $   6,858     8.0%     $   8,572    10.0%
Tier 1 (core) capital (to risk-weighted
  assets)                                       14,183     16.5        3,429     4.0          5,143     6.0
Tier 1 (core) capital (to adjusted
  total assets)                                 14,183     10.9        5,183     4.0          6,479     5.0
Tangible capital (to adjusted total assets)     14,183     10.9        1,944     1.5           N/A


1999
Total capital (to risk-weighted assets)      $  13,634     18.0%   $   6,069     8.0%     $   7,586    10.0%
Tier 1 (core) capital (to risk-weighted
  assets)                                       13,152     17.3        3,035     4.0          4,552     6.0
Tier 1 (core) capital (to adjusted
  total assets)                                 13,152     11.2        4,677     4.0          5,847     5.0
Tangible capital (to adjusted total assets)     13,152     11.2        1,754     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 that this test is met.

The  Association  converted  from  a  mutual  to  a  stock  institution,  and  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.

OTS regulations limit capital distributions by savings associations.  Generally,
capital  distributions are limited to the 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.  At year-end 2000, no
amount is  available  to pay  dividends  to the holding  company  without  prior
approval from the OTS.

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.


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

                                  (Continued)

                                                                             40
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------


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

                                     2000                       1999
                                     ----                       ----
                              Fixed     Variable       Fixed        Variable
                              Rate        Rate         Rate           Rate
                              ----        ----         ----           ----
Residential real estate    $ 15,000    $ 879,000    $  375,000    $   394,000
Interest rates                 9.00%    8.25-9.50%    7.00-7.75%    7.00-7.75%

Commitments  to make loans are  generally  made for a period of 30 days or less.
Maturities for fixed-rate loan commitments range from 10 years to 20 years.

The  Corporation  also had unused lines of credit  approximating  $2,200,000 and
$1,434,000 at year-end 2000 and 1999.

At June 30, 2000 and 1999,  the  Association  was required to have  $419,000 and
$532,000 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
salary  and  performance  review by the Board of  Directors  not less often than
annually,  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.


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

                                  (Continued)

                                                                             41
<PAGE>

                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------


NOTE 15 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial instruments at year-end were as follows:

<TABLE>
<CAPTION>
                                                      2000                                    1999
                                                      ----                                    ----
                                                               Estimated                                Estimated
                                            Carrying             Fair               Carrying              Fair
                                              Value              Value                Value               Value
                                              -----              -----                -----               -----
Financial assets:
<S>                                     <C>                 <C>                 <C>                <C>
     Cash and cash equivalents          $     2,205,993     $     2,206,000     $     1,932,978    $      1,933,000
     Time deposits in other
       financial institutions                        --                  --             400,000             400,000
     Securities available for sale            8,446,681           8,447,000           7,858,111           7,858,000
     Federal Home Loan Bank stock             1,023,000           1,023,000             907,700             908,000
     Loans, net                             114,649,700         111,633,000         102,802,845         102,621,000
     Accrued interest receivable                893,569             894,000             759,913             760,000

Financial liabilities:
     Deposits                               (93,056,941)        (92,484,000)        (84,310,492)        (84,877,000)
     Borrowed funds                         (19,000,000)        (17,736,000)        (14,800,000)        (13,659,000)
     Accrued interest payable                   (34,682)            (35,000)            (44,091)            (44,000)
</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

A reconciliation  of the numerators and denominators  used in the computation of
the basic  earnings  per common  share and diluted  earnings per common share is
presented below:

<TABLE>
<CAPTION>
                                                2000            1999           1998
                                                ----            ----           ----
Basic Earnings Per Common Share
<S>                                          <C>            <C>             <C>
    Numerator
      Net income                             $   635,598    $   510,376     $ 1,233,309
                                             ===========    ===========     ===========
    Denominator
      Weighted average common shares
        outstanding                            1,635,106      1,777,192       1,785,375
      Less:  Average unallocated ESOP shares    (122,208)      (137,176)       (127,831)
      Less:  Average nonvested MRP shares        (39,037)       (50,463)             --
                                             -----------    -----------     -----------
      Weighted average common shares
        outstanding for basis earnings per
        common share                           1,473,861      1,589,553       1,657,544
                                             ===========    ===========     ===========

    Basic earnings per common share          $       .43    $       .32     $      .74
                                             ===========    ===========     ==========
</TABLE>

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

                                  (Continued)

                                                                             42
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 16 - EARNINGS PER SHARE (Continued)

<TABLE>
<CAPTION>
                                                 2000            1999           1998
                                                 ----            ----           ----
Diluted Earnings Per Common Share
<S>                                           <C>            <C>             <C>
    Numerator
      Net income                              $   635,598    $   510,376     $ 1,233,309
                                              ===========    ===========     ===========
    Denominator
      Weighted average common shares
        outstanding for basic earnings per
        common share                            1,473,861      1,589,553       1,657,544
      Add:  Dilutive effects of average
        nonvested MRP shares                           --             --              --
      Add:  Dilutive effects of assumed
        exercises of stock options                     --             --              --
                                              -----------    -----------     -----------
      Weighted average common shares
        and dilutive potential common
        shares outstanding                      1,473,861      1,589,553       1,657,544
                                              ===========    ===========     ===========

    Diluted earnings per common share         $       .43    $       .32     $      .74
                                              ===========    ===========     ==========
</TABLE>

Stock options  granted did not have a dilutive effect on EPS for the years ended
June 30, 2000,  1999 and 1998, as the exercise price of outstanding  options was
greater than the average market price for the period.  As of June 30, 2000, 1999
and 1998, there were 140,824,  141,824 and 142,824 options outstanding that were
not dilutive.  Unearned MRP shares did not have a dilutive effect on EPS for the
year ended June 30,  2000 and 1999,  as the fair value of MRP shares on the date
of grant was greater than the average market price for the period. No MRP shares
had been purchased as of June 30, 1998.

NOTE 17 - OTHER COMPREHENSIVE INCOME (LOSS)

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

<TABLE>
<CAPTION>
                                                   2000            1999           1998
                                                   ----            ----           ----
<S>                                             <C>            <C>             <C>
Unrealized holding gains and (losses) on
  available-for-sale securities                 $  (142,125)   $   (85,724)    $     3,212
Reclassification adjustments for (gains) and
  losses later recognized in income                  15,781             --              --
                                                -----------    -----------     -----------
Net unrealized gains and losses                    (126,344)       (85,724)          3,212
Tax effect                                           42,957         29,147          (1,093)
                                                -----------    -----------     -----------

Other comprehensive income (loss)               $   (83,387)   $   (56,577)    $     2,119
                                                ===========    ===========     ===========
</TABLE>


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

                                  (Continued)

                                                                             43
<PAGE>


                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

NOTE 18 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Following  is  condensed  financial  information  of  Peoples-Sidney   Financial
Corporation  as of June 30, 2000 and 1999,  and for the  periods  ended June 30,
2000, 1999 and 1998:

                            CONDENSED BALANCE SHEETS
                             June 30, 2000 and 1999
<TABLE>
<CAPTION>
                                                                 2000                1999
                                                                 ----                ----
     Assets
<S>                                                       <C>                 <C>
     Cash and cash equivalents                            $     1,975,217     $     3,154,168
     Investment in subsidiary                                  14,054,239          13,107,093
     Loans receivable from ESOP                                 1,020,214           1,122,236
     Other assets                                                      --              16,145
                                                          ---------------     ---------------

         Total assets                                     $    17,049,670     $    17,399,642
                                                          ===============     ===============

     Liabilities
     Other liabilities                                    $        89,872     $        37,425

     Shareholders' Equity                                      16,959,798          17,362,217
                                                          ---------------     ---------------

         Total liabilities and shareholders' equity       $    17,049,670     $    17,399,642
                                                          ===============     ===============

<CAPTION>

                         CONDENSED STATEMENTS OF INCOME

                                                                        2000           1999            1998
                                                                        ----           ----            ----
     Income:
<S>                                                               <C>              <C>             <C>
        Dividend income from subsidiary                           $           --   $   5,250,000   $        --
        Interest on loans                                                 78,497          85,399       515,584
                                                                  --------------   -------------   -----------
                                                                          78,497       5,335,399       515,584

     Other expenses                                                      112,955         122,303       100,294
                                                                  --------------   -------------   -----------

     Income (loss) before taxes and undistributed earnings
       of subsidiary                                                     (34,458)      5,213,096       415,290

     Income tax expense (benefit)                                        (13,307)        (12,548)      139,211
                                                                  --------------   -------------   -----------

     Income (loss) before undistributed earnings
       of subsidiary                                                     (21,151)      5,225,644       276,079

     Equity in undistributed earnings of subsidiary
       (distributions in excess of earnings)                             656,749      (4,715,268)      957,230
                                                                  --------------   -------------   -----------

        Net income                                                $      635,598   $     510,376   $ 1,233,309
                                                                  ==============   =============   ===========
</TABLE>


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

                                  (Continued)

                                                                             44
<PAGE>



                      PEOPLES-SIDNEY FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 2000, 1999 and 1998
--------------------------------------------------------------------------------

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

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                               2000             1999              1998
                                                               ----             ----              ----
     Cash flows from operating activities
<S>                                                       <C>              <C>             <C>
     Net income                                           $     635,598    $     510,376   $    1,233,309
     Adjustments to reconcile net income to cash
       provided by operations:
        (Equity in undistributed income of subsidiary)
          distributions in excess of earnings                  (656,749)       4,715,268         (957,230)
        Net change in other assets and liabilities               68,592           34,365          (15,845)
                                                          -------------    -------------   --------------
           Net cash from operating activities                    47,441        5,260,009          260,234

     Cash flows from investing activities
     Proceeds from loan principal repayments                    102,022          102,021        7,102,022
                                                          -------------    -------------   --------------
           Net cash from investing activities                   102,022          102,021        7,102,022

     Cash flows from financing activities
     Return of capital distribution                                  --               --       (7,141,500)
     Purchase of treasury shares                               (869,896)      (2,719,692)              --
     57,128 shares contributed to MRP from treasury                  --          953,293               --
     Cash dividends paid                                       (422,244)        (448,432)        (429,195)
     Dividends on unallocated ESOP shares                       (36,274)         (40,404)         (35,003)
                                                          -------------    -------------   --------------
           Net cash from financing activities                (1,328,414)      (2,255,235)      (7,605,698)
                                                          -------------    -------------   --------------

     Net change in cash and cash equivalents                 (1,178,951)       3,106,795         (243,442)
     Cash and cash equivalents at beginning of year           3,154,168           47,373          290,815
                                                          -------------    -------------   --------------

     Cash at end of year                                  $   1,975,217    $   3,154,168   $       47,373
                                                          =============    =============   ==============
</TABLE>


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

                                  (Continued)

                                                                             45
<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 13, 2000 at the Holiday Inn, I-75 and S.R. 47, Sidney, Ohio.


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,  2000,  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.


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

                                  (Continued)

                                                                             46
<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


DIRECTORS OF THE BOARD

Douglas Stewart
     President and Chief Executive Officer of Peoples
     Federal Savings and Loan Association

Robert W. Bertsch
     Retired Treasurer of Peoples Federal Savings and
     Loan Association

John W. Sargeant
     Part Owner of Sidney Tool and Die Co. and BenSar
     Development, a warehouse provider

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

Harry N. Faulkner
      Partner in the law firm of Faulkner, Garmhausen,
      Keister & Shenk LPA

James W. Kerber
      Owner of James W. Kerber CPA, a private practice
      accounting firm


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

Special Counsel                            Independent Auditors
---------------                            --------------------
Silver, Freedman & Taff, L.L.P.            Crowe, Chizek and Company LLP
1100 New York Avenue, N.W.                 One Columbus
Washington, D.C. 20005-3934                10 West Broad Street
Columbus, Ohio 43215


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

                                  (Continued)

                                                                             47