UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20552

                                  FORM 10 - QSB

[X]  QUARTERLY  REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

                             For the quarterly period ended March 31, 1999


[ ]  TRANSITION  REPORT  UNDER  SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT



              For the transition period from ________ to _________

                        Commission File Number 333-57277
                        --------------------------------

                             Nittany Financial Corp.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

  Pennsylvania                                              23-2925762 
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation  (IRS Employer Identification No.)
 or organization)

            116 E. College Avenue, State College, Pennsylvania 16801
            --------------------------------------------------------
                    (Address of principal executive offices)

                                (814) 234 - 7320
                                ----------------
              (Registrant's telephone number, including area code)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act  during  the past 12 months  (or such  shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes  X   No    
                                                              ---     ---   
State the  number  of shares  outstanding  of each of  the  issuer's  classes of
common equity as of the latest practicable date:

                  Class: Common Stock, par value $.10 per share
                      Outstanding at May 10, 1999: 577,436



<PAGE>


                             NITTANY FINANCIAL CORP.

                                      INDEX
<TABLE>
<CAPTION>
<S>                <C>                                                                 <C>  
                                                                                          Page
                                                                                         Number
                                                                                      -------------


PART I  -  FINANCIAL INFORMATION

      Item 1.       Financial Statements

                    Consolidated Balance Sheet (Unaudited) as of                             3
                      March 31, 1999 and December 31, 1998

                    Consolidated Statement of Income (Unaudited)
                      for the Three Months ended March 31, 1999 and 1998                     4

                    Consolidated Statement of Changes in Stockholders' 
                      Equity (Unaudited)                                                     5

                    Consolidated Statement of Cash Flows (Unaudited)
                      for the Three Months ended March 31, 1999 and 1998                     6

                    Notes to Unaudited Consolidated Financial Statements                     7

      Item 2.       Management's Discussion and Analysis of
                      Financial Condition and Results of Operations                     8 - 12

PART II  -  OTHER INFORMATION

      Item 1.       Legal Proceedings                                                       13

      Item 2.       Changes in Securities                                                   13

      Item 3.       Default Upon Senior Securities                                          13

      Item 4.       Submissions of Matters to a Vote of Security Holders                    13

      Item 5.       Other Information                                                       13

      Item 6.       Exhibits and Reports on Form 8 - K                                      13

SIGNATURES                                                                                  14

</TABLE>
<PAGE>


                             NITTANY FINANCIAL CORP.
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
                                                             March 31,        December 31,
                                                               1999               1998
                                                          -------------      -------------
<S>                                                    <C>                <C>           
ASSETS
Cash and due from banks                                  $      209,003     $      307,443
Interest-bearing deposits with other banks                    2,508,895          5,621,800
Investment securities available for sale                     14,988,691         13,150,768
Investment securities held to maturity  (market
      value of $1,944,765)                                    1,945,069                  -
Loans receivable (net of allowance for loan losses
      of $98,678 and $98,988 )                               10,378,885          4,424,132
Premises and equipment                                          168,562            126,160
Intangible assets                                               928,196            941,886
Accrued interest and other assets                               229,397            218,394
                                                           ------------       ------------ 

      TOTAL ASSETS                                       $   31,356,698     $   24,790,583
                                                           ============       ============ 

LIABILITIES
Deposits:
      Noninterest-bearing demand                         $    1,430,402     $      777,400
      Interest-bearing demand                                 2,929,530          2,146,171
      Money market                                            9,903,036          5,409,434
      Savings                                                 1,327,266          1,269,834
      Time                                                    4,984,392          4,389,545
                                                           ------------       ------------ 
           Total deposits                                    20,574,626         13,992,384
FHLB advances                                                 5,600,000          5,000,000
Accrued interest payable and other liabilities                  120,631            144,546
Commitment to purchase investment security                            -            500,000
                                                           ------------       ------------ 
      TOTAL LIABILITIES                                      26,295,257         19,636,930
                                                           ------------       ------------
STOCKHOLDER'S EQUITY
Serial perferred stock, no par value; 5,000,000 shares                -                  -
      authorized, none issued
Common stock, $.10 par value, 10,000,000 shares
      authorized; 577,436 issued and outstanding                 57,744             57,744
Additional paid-in capital                                    5,652,145          5,652,145
Retained deficit                                               (609,150)          (525,650)
Accumulated other comprehensive income                          (39,298)           (30,586)
                                                           ------------       ------------ 
      TOTAL STOCKHOLDERS' EQUITY                              5,061,441          5,153,653
                                                           ------------       ------------ 
      TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY                           $   31,356,698     $   24,790,583
                                                           ============       ============ 

</TABLE>



See accompanying notes to the unaudited consolidated financial statements.

                                       3

<PAGE>

                             NITTANY FINANCIAL CORP.
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)


                                                Three Months Ended March 31,
                                                   1999             1998
                                               -------------    -------------

INTEREST AND DIVIDEND INCOME
Loans, including fees                        $      150,345   $            -
Interest-bearing deposits with other banks           42,407              464
Investment securities                               204,732                -
                                               -------------    -------------
      Total interest and dividend income            397,484              464
                                               -------------    -------------

INTEREST EXPENSE
Deposits                                            179,845                -
FHLB advances                                        50,057                -
                                               -------------    -------------
      Total interest expense                        229,902                -
                                               -------------    -------------

NET INTEREST INCOME                                 167,582              464

Provision for loan losses                                 -                -
                                               -------------    -------------

NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                        167,582              464
                                               -------------    -------------

NONINTEREST INCOME
Service fees on deposit accounts                     27,251                -
Other income                                          3,472                -
                                               -------------    -------------
      Total noninterest income                       30,723                -
                                               -------------    -------------

NONINTEREST EXPENSE
Compensation and employee benefits                  109,924           20,827
Occupancy and equipment                              49,180              439
Data processing                                      15,778                -
Goodwill amortization                                13,690                -
Professional fees                                    24,757            2,238
Printing and supplies                                16,908                -
Other                                                51,568            1,013
                                               -------------    -------------
      Total noninterest expense                     281,805           24,517
                                               -------------    -------------

Loss before income taxes                            (83,500)         (24,053)
Income taxes                                              -                -
                                               -------------    -------------


NET LOSS                                     $      (83,500)  $      (24,053)
                                               =============    =============


LOSS PER SHARE                               $       ($0.14)  $       ($1.75)(1)

WEIGHTED AVERAGE SHARES OUTSTANDING                 577,436           13,770

-----------------------------
(1)     Loss per share is  calculated  using the  weighted  average  number of
        shares outstanding from February 18, 1998, the first date that stock was
        issued in the private offering with the organizers.


See accompanying notes to the unaudited consolidated financial statements.


                                       4

<PAGE>


                             NITTANY FINANCIAL CORP.
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                Accumulated
                                                                                   Other
                                                   Additional                     Compre-          Total        Compre-
                                     Common         Paid-in      Retained         hensive       Stockholders'   hensive
                                      Stock         Capital      Earnings         Income          Equity        Income
                                   -----------  -------------  -------------    ------------   -------------  -----------

<S>                               <C>          <C>            <C>              <C>           <C>            <C>
Balance, December 31, 1998         $   57,744   $   5,652,145  $   (525,650)    $    (30,586) $    5,153,653 $

Net loss                                                            (83,500)                         (83,500)    (83,500)
Other comprehensive income:
  Unrealized loss on available for
    sale securities                                                                   (8,712)         (8,712)     (8,712)
                                                                                                              -----------
Comprehensive loss                                                                                           $   (92,212)
                                     ---------    ------------   -----------      -----------   ------------- ===========

Balance, March 31, 1999            $   57,744   $   5,652,145  $   (609,150)    $    (39,298) $    5,061,441
                                     =========    ============   ===========      ===========   =============

</TABLE>





See accompanying notes to the unaudited consolidated financial statements.


                                       5

<PAGE>


                                        NITTANY FINANCIAL CORP.
                            CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                            Three Months Ended March 31,
                                                               1999               1998
                                                           -------------      -------------

<S>                                                     <C>                <C>            
OPERATING ACTIVITIES
Net loss                                                  $      (83,500)    $      (24,053)
Adjustments to reconcile net loss to
   net cash used for operating activities:
      Provision for loan losses                                        -                  -
      Depreciation, amortization, and accretion,net               30,689                  -
      Increase in accrued interest receivable                    (31,376)                 -
      Increase in accrued interest payable                         7,893                  -
      Other, net                                                 (11,435)            (5,046)
                                                            -------------      -------------
      Net cash used for operating activities                     (87,729)           (29,099)
                                                            -------------      -------------

INVESTING ACTIVITIES
Purchase of one year certificate of deposit                            -            (10,548)
Commitment to purchase AFS investment security                  (500,000)                 -
Investment securities available for sale:
      Purchases                                               (3,523,012)                 -
      Maturities and repayments                                1,665,249                  -
Investment securities held to maturity:
      Purchases                                               (1,945,065)                 -
Net increase in loans receivable                              (5,951,471)                 -
Purchase of premises and equipment                               (51,559)            (2,649)
                                                            -------------      -------------
      Net cash used for investing activities                 (10,305,858)           (13,197)
                                                            -------------      -------------

FINANCING ACTIVITIES
Net increase in deposits                                       6,582,242                  -
Proceeds from FHLB advances                                      600,000                  -
Net proceeds from the sale of common stock                             -            148,747
                                                            -------------      -------------
      Net cash provided by financing activities                7,182,242            148,747
                                                            -------------      -------------

      Increase (decrease) in cash and cash  equivalents       (3,211,345)           106,451

CASH AND CASH EQUIVALENTS
   AT BEGINNING OF PERIOD                                      5,929,243             29,449
                                                            -------------      -------------

CASH AND CASH EQUIVALENTS
  AT END OF PERIOD                                        $    2,717,898     $      135,900
                                                            =============      =============

SUPPLEMENTAL CASH FLOW DISCLOSURE 
Cash paid during the year for:
      Interest on deposits and borrowings                 $      222,009     $            -


</TABLE>

See accompanying notes to the unaudited consolidated financial statements.


                                       6


<PAGE>

                             NITTANY FINANCIAL CORP.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 - BASIS OF PRESENTATION


The consolidated financial statements of Nittany Financial Corp. (the "Company")
includes its wholly- owned subsidiary Nittany Bank (the "Bank"). All significant
intercompany items have been eliminated.

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with the  instructions  to Form  10-QSB and,  therefore,  do not
necessarily  include all information that would be included in audited financial
statements. The information furnished reflects all adjustments which are, in the
opinion  of  management,  necessary  for a  fair  statement  of the  results  of
operations.  All such adjustments are of a normal recurring nature.  The results
of  operations  for the interim  periods are not  necessarily  indicative of the
results to be expected for the full year or any other interim period.


                                       7
<PAGE>
            MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS


COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1999 AND DECEMBER 31, 1998

Total assets at March 31, 1999 increased $6,566,000 or 26.5% from $24,791,000 at
December  31, 1998 to  $31,357,000  at March 31, 1999 due to a strong  growth in
loans within the  Company's  market area of  approximately  $6.0  million.  This
growth was  primarily  funded by an increase in deposits of  approximately  $6.6
million.

Interest-bearing  deposits with other banks  decreased  $3,113,000 or 55.4% from
$5,622,000  at December 31, 1998 to  $2,509,000  at March 31,  1999.  Management
began to utilize  excess  overnight  deposits  and  short-term  certificates  of
deposit to fund loan demand and to  increase  its  holdings  in higher  yielding
investment securities.

Total investment  securities  increased  $3,783,000 or 28.8% from $13,151,000 at
December 31, 1998 to $16,934,000  at March 31, 1999.  The Company  increased its
investments by purchasing $2,878,000 of longer-term  mortgage-backed  securities
with  yields  ranging  from 5.0% to 7.0%,  and  $1,592,000  of 5 and 8 year U.S.
Government Agency securities with yields ranging from 5.6% to 6.5%. During 1998,
management focused on supplementing  loan demand by primarily  investing in U.S.
Government  Agency  securities;  however,  during the first quarter of 1999, the
emphasis has been directed  toward  increasing  the  mortgage-backed  securities
portfolio from 27.4% to 37.1% of the total investment portfolio.  As a result of
this increase, the Company has classified $1,945,000 as held to maturity

Net loans receivable  increased $5,955,000 or 134.6% from $4,424,000 at December
31, 1998 to  $10,379,000  at March 31,  1999.  The net  increase  was  primarily
attributable  to increases in  one-to-four  family  mortgages of $4,478,000  and
nonresidential  mortgages of $1,031,000.  Such increases primarily reflected the
economic health of the Bank's market area, the competitive pricing of the Bank's
loan product,  and the strategic  approach taken by management to meet projected
growth.  Funding was mainly  provided by an increase in deposits of  $6,582,000,
the usage of  interest-bearing  deposits with other  institutions of $3,113,000,
and an  increase in FHLB  borrowings  of  $600,000.  As of March 31,  1999,  the
Company has outstanding commitments of $1.9 million.

                                       8
<PAGE>



Deposits  increased  $6,582,000 or 47.0% to  $20,575,000  at March 31, 1999 from
$13,992,000 at December 31, 1998 due primarily to an increase in volume of money
market and  transaction  accounts of $4,494,000  and  $1,436,000,  respectively.
During the first quarter of 1999 management began a marketing  campaign aimed at
promoting the Bank's services, in general, and the favorable rates being offered
on its tiered money market accounts,  in specific.  Within this product mix, the
most  significant  growth  occurred at the two highest  tiers,  which  require a
minimum balance of $50,000 at rates of 4.75% and 5.00%.  This increase accounted
for  approximately  $2.9  million of the overall  fluctuation.  Other  increases
resulted from the Company  offering a 25 basis point  decrease on a loan for any
customer  involved in the automatic  transfer of payment  program from a Nittany
Bank account.

As noted above,  the Company  obtained  funding through an additional fixed rate
advance  from  the  FHLB  of  $600,000.  This  represents  a 12.0%  increase  of
borrowings to $5,600,000 at March 31, 1999 from  $5,000,000 at December 31, 1998
in order to  support  business  development.  FHLB  borrowings  have  staggering
maturities, which range from two to five years.

PLAN OF OPERATIONS

The  Company's  wholly owned  subsidiary,  Nittany  Bank (the "Bank")  commenced
operations as of October 26, 1998, and its activities  have primarily  consisted
of offering  deposits,  originating  loans and  servicing the deposits and loans
acquired  from  First  Commonwealth  Bank.  Prior to October  26, the  Company's
primary activities centered on the formation of the Bank.

Net interest  income for the three months ended March 31, 1999 was $168,000.  As
regional  interest  rates have remained  relatively  unchanged  during the first
three  months  of  1999,   both  interest  income  and  expense  are  driven  by
fluctuations in average principal balances.  Interest earning assets, which rose
$9.0 million during 1999,  were fueled by increases in investment  securities of
$7.3 million and loans of $6.1 million,  while offset  somewhat by a decrease in
interest-bearing  deposits  with other banks of $6.7  million.  Interest-bearing
liabilities  increased  $8.7  million  during 1999 as  increases in money market
accounts  of $4.4  million  and FHLB  advances  of $4.3  million  occurred.  The
resultant  fluctuations  in  average  principal  balances  have been  previously
discussed.


                                       9
<PAGE>



Noninterest  expense,  which is comprised of compensation and employee benefits,
occupancy and equipment,  data processing,  goodwill amortization,  professional
fees,  printing  and  supplies,  and other  expense,  was $282,000 for the three
months  ended March 31, 1999.  Compensation  and  employee  benefits  expense of
$110,000 represents the necessary  compensation and benefits associated with the
employment of the equivalent of 14 full time employees.  Occupancy and equipment
expense of $49,000 consists primarily of rental payments for both branch offices
and  the  related   maintenance,   utilities,   and  depreciation  of  leasehold
improvements.  Data processing  expense of $16,000 is primarily  related to fees
associated with the Company's third party service bureau.  Goodwill amortization
of $14,000 is related to the amortization of goodwill over a 20-year period from
the branch office  acquisitions with First Commonwealth Bank.  Professional fees
of $25,000 stem from outside  assistance in complying with the increased  levels
of regulatory  compliance of a public reporting company.  Stationary,  printing,
supplies, and postage of $17,000 and other expense of $52,000 consist of various
smaller  dollar  items that are  continually  incurred in  performing  the daily
operations of the Company.

LIQUIDITY AND CAPITAL RESOURCES

Our   primary   sources  of  funds  are   deposits,   repayment   of  loans  and
mortgage-backed securities, maturities of investments, and interest-bearing time
deposits with other banks and funds provided from  borrowings.  While  scheduled
repayments of loans and mortgage-backed  securities and maturities of investment
securities are predictable sources of funds,  deposit flows and loan prepayments
are  greatly  influenced  by the  general  level  of  interest  rates,  economic
conditions,  and competition.  We use our liquid  resources  principally to fund
loan   commitments,   maturing   certificates  of  deposit  and  demand  deposit
withdrawals,  to invest in other interest-earning  assets, and to meet operating
expenses.

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

Management  monitors both the Company's and the Bank's Total risk-based,  Tier I
risk-based and Tier I leverage capital ratios in order to assess compliance with
regulatory guidelines. At March 31, 1999, both the Company and the Bank exceeded
the minimum risk-based and leverage capital ratios  requirements.  The Company's
and Bank's Total  risk-based,  Tier I risk-based and Tier I leverage  ratios are
22.6%, 22.1%, 13.7% and 21.4%, 20.9%, 12.9%, respectively at March 31, 1999.

                                       10
<PAGE>



RISK ELEMENT

As of March 31, 1999, the Company did not have any nonperforming  assets,  which
would  include  impaired  loans.  Management  monitors  its loan  portfolio  for
impaired loans on a continual basis.

Although  there  was  significant  growth  in  the  loan  portfolio  during  the
three-month  period ended March 31,  1999,  nonperforming  loans  continue to be
nonexistent.  On a  percentage  basis,  the  allowance  for loan losses to loans
outstanding  declined from 2.18% as of December 31, 1998 to .94% as of March 31,
1999.  Approximately 75% of the total loan portfolio to date is comprised of 1-4
family and commercial real estate loans,  with the consumer real estate mortgage
loans comprising over 57% of the portfolio. These loan types have historically ,
by industry  standards,  incurred  significantly  less losses in relationship to
actual principal disbursed.

Management believes the level of the allowance for loan losses at March 31, 1999
is sufficient; however, there can be no assurance that the current allowance for
loan losses will be adequate to absorb all future loan losses.  The relationship
between the allowance for loan losses and outstanding loans is a function of the
credit  quality and known risk  attributed to the loan  portfolio.  The on-going
loan  review  program  and  credit  approval  process is used to  determine  the
adequacy of the allowance for loan losses.

YEAR 2000

A great deal of information has been disseminated about the global computer year
2000.  Many computer  programs can only  distinguish the final two digits of the
year entered (a common programming practice in prior years) are expected to read
entries for the year 2000 as the year 1900 or as zero and incorrectly attempt to
compute payment,  interest,  delinquency and other data. Rapid and accurate data
processing  is  essential  to the  Bank's  operation.  Data  processing  is also
essential to most other financial institutions and many other companies. A third
party service bureau  provides the Bank with all of the material data processing
that could be affected by this  problem.  The third  party  service  bureau (the
"service bureau") has advised the Bank that it is substantially compliant and it
expects to resolve this  potential  problem  before the year 2000. In this vein,
the core  application  software  vendor,  whose products are used by the service
bureau, has recently obtained ITAA*2000 certification,  which indicates that the
software has the core capabilities needed to handle the Year 2000 challenge.

                                       11
<PAGE>



YEAR 2000 (Continued)

However,  if the service  bureau is unable to resolve all facets of this problem
in time, we could likely experience significant data processing delays, mistakes
or failures. These delays, mistakes or failures could have a significant adverse
impact on our  financial  condition  and our results of  operation.  In order to
determine  the  service  bureau is year  2000  compliant,  management  is in the
process of  developing  and  testing a plan,  which it  intends to be  completed
during the second quarter of 1999.  Management is aware of the  significance  of
the year 2000 issue and is presently  working to define a comprehensive  plan of
action for year 2000.  Management expects to incur additional operating expenses
during  1999  relating  to the  designing  and  performing  tests of the  Bank's
computer systems. Currently, the Bank estimates such costs will be approximately
$10,000.  The Bank will continue  monitoring  their  service  bureau to evaluate
whether its data processing system will fail and is being provided with periodic
updates on the status of testing and upgrades being made by the service bureau.

If the Bank service bureau fails,  the Bank will revert to a fully manual system
with customer ledger cards. Such a contingency alternative was determined as the
most  viable of the  Bank's  options  in the event of a "worst  case"  Year 2000
compliance disaster.  The Bank's contingency options are documented in a written
plan. If this  labor-intensive  approach is necessary,  management and employees
will become much less efficient.  However,  the Bank believes that they would be
able to operate in this manner in the short-term,  until their existing  service
bureau, or their replacement, is able to again provide data processing services.
If very few financial  institution  services  bureaus were operating in the year
2000,  the  Bank's  replacement  costs,  assuming  the Bank could  negotiate  an
agreement, could be material.

Successful and timely  completion of the year 2000 plan is based on management's
best estimates  derived from various  assumptions  of future  events,  which are
inherently  uncertain,  including the progress of testing plans and all vendors,
suppliers and customer readiness.

                                       12
<PAGE>



                             Nittany Financial Corp.
                                   FORM 10-QSB


OTHER INFORMATION

Item 1.    Legal Proceedings

           None

Item 2.    Changes in rights of the Company's security holders

           None


Item 3.    Defaults by the Company on its senior securities

           None

Item 4.    Results of votes of security holders

           None

Item 5.    Other information

           None

Item 6.    Exhibits and Reports on Form 8-K

          (a)  The following exhibits are incorporated herein by reference:

               3(I) Amended  Articles  of  Incorporation  of  Nittany  Financial
                    Corp.**
               3(ii)Bylaws of Nittany Financial Corp.**
               4    Specimen Stock Certificate of Nittany Financial Corp.**
               10   Employment   Agreement   between   the  Bank  and  David  Z.
                    Richards**
               27   Financial Data Schedule, (electronic filing only)

-----------------------
**   Incorporated  by  reference  to the  identically  numbered  exhibit  to the
     registration statement Form SB-2 (File No. 333-57277) declared effective by
     the SEC on July 31, 1998.

(b)      None
             







<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned and thereunto duly authorized.


                                  Nittany Financial Corp.
                                  (Registrant)


Date:                             By:  /s/ David Z. Richards
                                       -----------------------------------------
May 14, 1999                           David Z. Richards
                                       President, Chief Executive Officer, and
                                       Principal Financial Officer