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 September 30, 2000

---
    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                   (IRS Employer Identification No.)
of incorporation 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 November 8, 2000: 709,389



<PAGE>

                             NITTANY FINANCIAL CORP.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                   Number
                                                                                 ------------

<S>                                                                             <C>
PART I  -  FINANCIAL INFORMATION

     Item 1. Financial Statements

               Consolidated Balance Sheet (Unaudited) as of                          3
                   September 30, 2000 and December 31, 1999

               Consolidated Statement of Income (Unaudited)
                   for the Three Months ended September 30, 2000 and 1999            4

               Consolidated Statement of Income (Unaudited)
                   for the Nine Months ended September 30, 2000 and 1999             5

               Consolidated Statement of Changes in Stockholders' Equity
                   (Unaudited)  for the Nine Months ended  September 30,
                   2000                                                              6

               Consolidated  Statement of Cash Flows (Unaudited) for the
                   Nine Months ended September 30, 2000 and 1999                     7

               Notes to Unaudited Consolidated Financial Statements                  8

     Item 2. Management's Discussion and Analysis of
                     Financial Condition and Results of Operations                   9-12

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>
                                                              September 30,   December 31,
                                                                   2000            1999
                                                              ------------    ------------
<S>                                                          <C>             <C>
ASSETS
Cash and due from banks                                       $    338,652    $    826,181
Interest-bearing deposits with other banks                          14,923       2,231,694
Investment securities available for sale                        15,211,340      15,872,402
Investment securities held to maturity  (market
     value of $1,494,322 and $1,652,336)                         1,551,577       1,674,729
Loans receivable (net of allowance for loan losses
     of $301,673 and $186,647)                                  39,302,925      27,979,708
Premises and equipment                                             358,954         175,587
Intangible assets                                                  858,677         894,392
Accrued interest and other assets                                  435,560         390,031
                                                              ------------    ------------
     TOTAL ASSETS                                             $ 58,072,608    $ 50,044,724
                                                              ============    ============
LIABILITIES
Deposits:
     Noninterest-bearing demand                               $  2,424,201    $  2,626,107
     Interest-bearing demand                                     7,163,835       5,659,727
     Money market                                               14,362,661      15,032,313
     Savings                                                     4,663,331       1,732,077
     Time                                                       17,403,171      10,733,000
                                                              ------------    ------------
          Total deposits                                        46,017,199      35,783,224
FHLB advances                                                    5,600,000       8,600,000
Accrued interest payable and other liabilities                     438,988         430,097
                                                              ------------    ------------
     TOTAL LIABILITIES                                          52,056,187      44,813,321
                                                              ------------    ------------
STOCKHOLDER'S EQUITY
Serial preferred stock, no par value; 5,000,000 shares                   -               -
     authorized, none issued
Common stock, $.10 par value, 10,000,000 shares
     authorized; 709,389 and 656,476 issued and outstanding         70,939          65,648
Additional paid-in capital                                       7,040,564       6,464,476
Retained deficit                                                  (640,828)       (752,781)
Accumulated other comprehensive loss                              (454,254)       (545,940)
                                                              ------------    ------------
     TOTAL STOCKHOLDERS' EQUITY                                  6,016,421       5,231,403
                                                              ------------    ------------
     TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY                                  $ 58,072,608    $ 50,044,724
                                                              ============    ============
</TABLE>

See accompanying notes to the unaudited consolidated financial statements.

                                        3
<PAGE>
                             NITTANY FINANCIAL CORP.
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
                                                     Three Months Ended  September 30,
                                                           2000             1999
                                                        ------------     ------------
<S>                                                  <C>              <C>
INTEREST AND DIVIDEND INCOME
Loans, including fees                                 $     791,636    $     410,363
Investment securities                                       286,728          277,890
Interest-bearing deposits with other banks                    3,447           20,618
                                                        ------------     ------------
     Total interest and dividend income                   1,081,811          708,871
                                                        ------------     ------------
INTEREST EXPENSE
Deposits                                                    520,236          310,235
FHLB advances                                               128,157          115,474
                                                        ------------     ------------
     Total interest expense                                 648,393          425,709
                                                        ------------     ------------

NET INTEREST INCOME                                         433,418          283,162

Provision for loan losses                                    44,000           60,000
                                                        ------------     ------------

NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                                389,418          223,162
                                                        ------------     ------------
NONINTEREST INCOME
Service fees on deposit accounts                             52,976           32,816
Other income                                                 12,742           13,362
                                                        ------------     ------------
     Total noninterest income                                65,718           46,178
                                                        ------------     ------------
NONINTEREST EXPENSE
Compensation and employee benefits                          181,254          158,188
Occupancy and equipment                                      74,956           49,559
Data processing                                              52,376           40,809
Goodwill amortization                                        11,970           11,869
Professional fees                                            17,683           14,790
Printing and supplies                                        24,279           17,766
Other                                                        63,108           66,412
                                                        ------------     ------------
     Total noninterest expense                              425,626          359,393
                                                        ------------     ------------

Income (loss) before income taxes                            29,510          (90,053)
Income taxes                                                      -                -
                                                        ------------     ------------

NET INCOME (LOSS)                                     $      29,510    $     (90,053)
                                                        ============     ============
EARNINGS (LOSS) PER SHARE:
     Basic                                            $       $0.04    $      ($0.16)
     Diluted                                                  $0.04           ($0.16)

WEIGHTED AVERAGE SHARES OUTSTANDING:
     Basic                                                  709,389          577,436
     Diluted                                                709,389          577,436
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.

                                       4

<PAGE>
                             NITTANY FINANCIAL CORP.
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                      Nine Months Ended  September 30,
                                                           2000             1999
                                                        ------------     ------------
<S>                                                  <C>              <C>
INTEREST AND DIVIDEND INCOME
Loans, including fees                                 $   2,062,216    $     815,577
Investment securities                                       859,125          728,894
Interest-bearing deposits with other banks                   68,324           81,010
                                                        ------------     ------------
     Total interest and dividend income                   2,989,665        1,625,481
                                                        ------------     ------------
INTEREST EXPENSE
Deposits                                                  1,370,793          724,560
FHLB advances                                               397,262          240,548
                                                        ------------     ------------
     Total interest expense                               1,768,055          965,108
                                                        ------------     ------------

NET INTEREST INCOME                                       1,221,610          660,373

Provision for loan losses                                   115,000           60,000
                                                        ------------     ------------

NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                              1,106,610          600,373
                                                        ------------     ------------

NONINTEREST INCOME
Service fees on deposit accounts                            158,113           88,319
Realized gain on sale of securities                               -            1,342
Other income                                                 33,861           25,606
                                                        ------------     ------------
     Total noninterest income                               191,974          115,267
                                                        ------------     ------------

NONINTEREST EXPENSE
Compensation and employee benefits                          526,987          394,428
Occupancy and equipment                                     189,840          144,625
Data processing                                             136,347           94,452
Goodwill amortization                                        35,715           37,427
Professional fees                                            52,498           77,664
Printing and supplies                                        58,241           43,828
Other                                                       187,003          166,295
                                                        ------------     ------------
     Total noninterest expense                            1,186,631          958,719
                                                        ------------     ------------

Income (loss) before income taxes                           111,953         (243,079)
Income taxes                                                      -                -
                                                        ------------     ------------

NET INCOME (LOSS)                                     $     111,953    $    (243,079)
                                                        ============     ============
EARNINGS (LOSS) PER SHARE:
     Basic                                            $       $0.16    $      ($0.42)
     Diluted                                                  $0.16           ($0.42)

WEIGHTED AVERAGE SHARES OUTSTANDING:
     Basic                                                  700,663          577,436
     Diluted                                                700,663          577,436

</TABLE>
See accompanying notes to the unaudited consolidated financial statements.

                                        5

<PAGE>
                             NITTANY FINANCIAL CORP.
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
                      NINE MONTHS ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
                                                                          Accumulated
                                                                            Other
                                          Additional                        Compre-        Total
                              Common      Paid-in         Retained          hensive      Stockholders'
                              Stock       Capital         Deficit           Loss          Equity
                             ---------    -----------   ------------     ------------   -----------

<S>                          <C>         <C>           <C>              <C>            <C>
Balance, December 31, 1999    $65,648     $6,464,476    $  (752,781)     $  (545,940)   $5,231,403

Common stock issued, net        5,291        576,088                                       581,379
Net income                                                  111,953                        111,953

Other comprehensive income:
  Unrealized gain on available
    for sale securities                                                       91,686        91,686
                              -------     ----------    ------------     ------------   ----------
Balance, September 30, 2000   $70,939     $7,040,564    $  (640,828)     $  (454,254)   $6,016,421
                              =======     ==========    ============     ============   ==========
</TABLE>


See accompanying notes to the unaudited consolidated financial statements.

                                        6
<PAGE>

                                NITTANY FINANCIAL CORP.
                   CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                          Nine Months Ended   September 30,
                                                                2000              1999
                                                            ------------      ------------
<S>                                                        <C>             <C>
OPERATING ACTIVITIES
Net income (loss)                                           $    111,953    $   (243,079)
Adjustments to reconcile net income (loss) to
   net cash provided by (used for) operating activities:
     Provision for loan losses                                   115,000          60,000
     Depreciation, amortization, and accretion, net               90,225         115,049
     Investment security gains, net                                    -          (1,342)
     Increase in accrued interest receivable                     (46,205)       (102,554)
     Increase in accrued interest payable                          9,042         132,237
     Other, net                                                      525          14,110
                                                            ------------    ------------
     Net cash provided by (used for) operating activities        280,540         (25,579)
                                                            ------------    ------------

INVESTING ACTIVITIES
Investment securities available for sale:
     Purchases                                                         -      (6,851,792)
     Proceeds from sales                                               -         428,554
     Maturities and repayments                                   744,778       2,462,572
Investment securities held to maturity:
     Purchases                                                         -      (1,945,065)
     Maturities and repayments                                   122,914         234,768
Net increase in loans receivable                             (13,535,115)    (19,395,256)
Proceeds from sales of loans                                   2,095,500               -
Purchase of premises and equipment                              (228,271)        (86,608)
                                                            ------------    ------------
     Net cash used for investing activities                  (10,800,194)    (25,152,827)
                                                            ------------    ------------
FINANCING ACTIVITIES
Net increase in deposits                                      10,233,975      19,268,416
Proceeds from long-term FHLB advances                                  -       3,600,000
Repayment of long-term FHLB advances                          (3,000,000)              -
Net proceeds from the sale of common stock                       581,379               -
                                                            ------------    ------------
     Net cash provided by financing activities                 7,815,354      22,868,416
                                                            ------------    ------------

     Decrease in cash and cash  equivalents                   (2,704,300)     (2,309,990)

CASH AND CASH EQUIVALENTS
   AT BEGINNING OF PERIOD                                      3,057,875       5,929,243
                                                            ------------    ------------
CASH AND CASH EQUIVALENTS
                            AT END OF PERIOD                $    353,575    $  3,619,253
                                                            ============    ============

SUPPLEMENTAL CASH FLOW DISCLOSURE
Cash paid during the period for:
     Interest on deposits and borrowings                    $  1,759,013    $    832,871
</TABLE>

See accompanying notes to the unaudited consolidated financial statements.

                                       7
<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  subsidiaries,  Nittany Bank (the "Bank") and Nittany
Asset Management, Inc. 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 that 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 three and  nine-months  ended  September 30, 2000 are not
necessarily  indicative  of the results to be expected for the fiscal year ended
December 31, 2000 or any other interim period.

These statements  should be read in conjunction with the consolidated  financial
statements and related notes for the year ended December 31,1999 and 1998, which
are incorporated by reference in the Company's Annual Report on Form 10-KSB.

NOTE 2 - EARNINGS PER SHARE

The Company provides dual  presentation of Basic and Diluted earnings per share.
Basic  earnings per share  utilizes net income as reported as the  numerator and
the actual average shares  outstanding as the denominator.  Diluted earnings per
share  includes  any  dilutive  effects of options,  warrants,  and  convertible
securities.  For the three and  nine-months  ended  September 30, 1999 and 2000,
there were no dilutive shares of common stock.

NOTE 3 - SUBSEQUENT EVENT

On October 26, 2000, the Board of Directors of the Company  declared a 10% stock
dividend on the Company's  outstanding common stock, payable on or about January
1, 2001, to stockholders of record as of December 1, 2000.

NOTE 4 - COMPREHENSIVE INCOME

Comprehensive  income (loss) for the three and nine months  periods ended is, as
follows:

<TABLE>
<CAPTION>
                                        Three Months Ended     Nine Months Ended
                                        ------------------     -----------------
                                           September 30,          September 30,
                                        2000      1999         2000      1999
                                        ----      ----         ----      ----

<S>                                    <C>       <C>          <C>       <C>
Net income (loss)                       $ 29,510  $ (90,053)   $111,953  $(243,079)

Unrealized gain (loss) on securities
  available for sale, net of taxes       120,529   (100,673)     91,686   (435,434)
                                        --------  ---------    --------  ---------
                                        $150,039  $(190,726)   $203,639  $(678,523)
                                        ========  =========    ========  =========
</TABLE>

                                       8
<PAGE>


                       MANAGEMENT DISCUSSION AND ANALYSIS


GENERAL

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

OVERVIEW

Nittany  Financial Corp.  ("Nittany") is a holding company organized in 1997 for
the  purpose  of  establishing  a de  novo  community  bank  in  State  College,
Pennsylvania.   The  business   operations  of  Nittany  include  two  operating
subsidiaries, Nittany Bank and Nittany Asset Management, Inc. (collectively, the
"Company").  Nittany Bank  commenced  operations on October 26, 1998 and Nittany
Asset Management commenced operations in November 1999.

CHANGES IN FINANCIAL CONDITION

Total assets increased $8,028,000 or 16.0% from $50,045,000 at December 31, 1999
to $58,073,000 at September 30, 2000.  During the first nine months of 2000, the
Company  experienced  strong growth in net loans of $11,323,000  that was funded
primarily through increases in deposit products totaling $10,234,000.

                                       9
<PAGE>




Cash and cash  equivalents  decreased  $2,704,000 to $3,058,000 at September 30,
2000 from  $5,929,000 at December 31, 1999.  Such activity was primarily used to
meet daily operating needs,  repay FHLB advances,  and provide temporary funding
for loan  demand.  Management  maintains  a level of cash  equivalents  which is
desirable for meeting the normal cash flow requirements of its customers for the
funding of loans and repayment of deposits.

Net loans  increased to  $39,303,000  at September 30, 2000 from  $27,980,000 at
December 31, 1999. The increase in net loans  resulted from the economic  health
of the  Company's  market  area and the  strategic,  service-oriented  marketing
approach  taken by  management  to meet the lending  needs of the area.  Of this
increase,  approximately  $11,191,000 was comprised of loans  collateralized  by
various forms of real estate. Management attributes the increases in residential
owner occupied and non-owner  occupied and commercial  properties of $4,759,000,
$2,230,000 and $2,928,000, respectively, to continued customer referrals and the
Company's overall relationship with its customers. As of September 30, 2000, the
Company has additional commitments to fund loan demand of $1,743,000.

At September  30, 2000,  the Company's  allowance  for loan losses  approximated
$302,000 as compared to $187,000 at December  31, 1999.  Management  continually
evaluates the adequacy of the allowance for loan losses,  which  encompasses the
overall risk characteristics of the various portfolio segments,  past experience
with losses, the impact of economic conditions on borrowers,  industry standards
since the Bank is a denovo bank and other relevant  factors that may come to the
attention of management.  Although the Company  maintains its allowance for loan
losses at a level that it  considers  to be adequate to provide for the inherent
risk of loss in its loan portfolio, there can be no assurance that future losses
will not be required in future  periods.  Management  may increase the allowance
for loan losses based upon its quarterly  internal risk analysis.  There were no
loans greater than ninety days past due at September 30, 2000 and loans past due
thirty days or more only totaled $67,000.

Due to the  continued  marketing  efforts  of  promoting  the  opening  of a new
community bank in the State College area, as well as customer  referrals and the
Company's overall  relationship with its customers,  deposits increased 28.6% to
$46,017,000 at September 30, 2000 from  $35,783,000  at December 31, 1999.  This
increase was primarily  the result of increases in time and savings  deposits of
$6,670,000  and  $2,931,000,  respectively.  The Company  completed a successful
effort to lengthen  the  maturities  of its deposit base by growing one to three
year  certificates of deposit by $6,840,000 for the period while partially being
offset by a decline in  short-term  certificates  of  $1,706,000.  In  addition,
management  aggressively marketed depositors by promoting a core savings account
product.

Stockholder's equity increased $785,000 to $6,016,000 at September 30, 2000 from
$5,231,000  at December  31, 1999 as a result of net income of $112,000  and the
sale of 52,913 shares of common stock resulting in net proceeds of $581,000.

RESULTS OF OPERATIONS

The Company  recorded  net income of $30,000 and $112,000 for the three and nine
months  ended  September  30, 2000,  respectively,  as compared to a net loss of
$90,000 and $243,000, respectively, for the same periods in 1999.
 .
The $120,000  increase in net income for the three months  ended  September  30,
2000, as compared to the three months ended September 30, 1999, was attributable
to an increase in net interest income of $150,000 and an increase in noninterest
income of  $20,000.  Partially  offsetting  these  favorable  variances  between
quarters  were  increases  in  noninterest  expense and the  provision  for loan
losses, of $66,000 and $16,000, respectively.

                                       10
<PAGE>
The  $355,000  increase in net income for the nine months  ended  September  30,
2000, as compared to the nine months ended September 30, 1999, was  attributable
to an increase in net interest income of $561,000 and an increase in noninterest
income of $77,000.  Also partially  offsetting these favorable variances between
quarters  were  increases  in  noninterest  expense and the  provision  for loan
losses, of $228,000 and $55,000, respectively.

Net interest income for the three and  nine-months  ended September 30, 2000 was
$433,000  and  $1,222,000  as  compared to $283,000  and  $660,000  for the same
periods ended 1999.  Interest income  increased  $373,000 and $1,364,000 for the
three and  nine-months  ended  September 30, 2000 as compared to the prior year.
These  increases can be attributed  primarily to increases in interest earned on
loans  receivable and  investment  securities of $389,000 and $1,377,000 for the
three and  nine-month  periods ended  September 30, 2000 as compared to the same
periods  ended  1999,  respectively.  Although  there was an increase in general
interest rate levels during these periods,  interest income was primarily driven
by increases in average balances of interest-earning assets. The average balance
of loans outstanding  increased $16.7 million to $37.7 million and $19.5 million
to $33.5  million  for the three  and  nine-months  ended  September  30,  2000,
respectively, compared to $21.0 million and $14.1 million, respectively, for the
same periods ended in 1999. The yield on interest  earning  assets  increased to
7.79%  and  7.54%  for the  three and  nine-months  ended  September  30,  2000,
respectively,  from 6.79% and 6.52% for the same  periods  ended in 1999.  These
increases result primarily from an overall increasing  interest rate environment
during the aforementioned time periods.

Interest expense  increased  $223,000 and $803,000 for the three and nine-months
ended  September  30,  2000 as  compared  to the same  period in 1999.  Interest
incurred on deposits  increased $210,000 and $646,000 to $520,000 and $1,371,000
for the three and nine-months ended September 30, 2000, compared to $310,000 and
$725,000 for the same periods in 1999. This increase was primarily  attributable
to an  increase  in the average  balance of  interest-bearing  deposits of $13.2
million and $14.5  million to $40.7  million and $36.1 million for the three and
nine-months  ended September 30, 2000,  respectively,  compared to $27.5 million
and  $21.6  million,  respectively,  for the  same  periods  in  1999.  As noted
previously, increased marketing efforts and higher yielding promotional products
stimulated this growth.  Interest  incurred on borrowed funds increased  $13,000
and  $157,000 to  $128,000  and  $397,000  for the three and  nine-months  ended
September 30, 2000, respectively, compared to $115,000 and $241,000 for the same
periods in 1999. These increases were also driven by fluctuations in the average
principal  balances  coupled with the rising interest rate  environment and were
necessitated  due to increased demand for real estate loans. The rising interest
rate environment resulted in the cost of funds increasing to 5.37% and 5.28% for
the three and nine-months ended September 30, 2000, respectively, from 4.72% and
4.53% for the same periods ended in 1999.

Total noninterest income for the three and nine-months ending September 30, 2000
increased $20,000 and $77,000 to $66,000 and $192,000, respectively, as compared
to $46,000 and $115,000 for the same periods ended in 1999.  Noninterest  income
items are primarily  comprised of normal  service  charges and fees on deposits,
along with fee  income  derived  from  asset  management  services  and  related
commissions.  Such amounts have  progressively  increased during each quarter as
the  number of  accounts  and  volume of related  transactions  have  increased.
Additionally,  for the  current  three  and nine  months  period, Nittany  Asset
Management contributed approximately $10,000 and $31,000,  respectively to other
income.

Total  noninterest  expenses  increased  $66,000 and  $228,000  to $426,000  and
$1,187,000 for the three and nine-months ended September 30, 2000, respectively,
from $359,000 and $959,000, respectively, for the same periods ended in 1999. In
the prior year periods, Nittany Bank had been in operation for less than a year.
The  increase  in total  noninterest  expenses  for the  current  year three and
nine-month periods is primarily related to operating a larger organization which
includes the opening of an  additional  branch during the third quarter of 2000,
and  related  marketing  efforts to  increase  visibility  within the  Company's
market.  On April 24, 2000, the Company entered into a lease agreement for a new
branch  office  located in State  College,  which began  operations on August 7,
2000.  In  connection  with the new  branch  office,  3 people  were  hired  and
increased expenses occurred due to depreciation resulting from renovation costs,
as well as  increased  utility  usage  from  operating  another  branch.  Higher
professional  fees for the prior  year  three and  nine-month  periods  were the
result of costs incurred at the onset of the Company's operations.

                                       11
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

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 September  30,  2000,  both the Company and the Bank
exceeded the Minimum  risk-based and leverage  capital ratio  requirements.  The
Company's  and Bank's Total  risk-based,  Tier I risk-based  and Tier I leverage
ratios are 16.2%, 15.3%, 9.7% and 15.6%, 14.8%, 9.4%, respectively, at September
30, 2000.

                                       12
<PAGE>



PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

               None

Item 2.    Changes in Securities and Use of Proceeds

            None

Item 3.    Defaults by the Company on its senior securities

                None

Item 4.    Submission of matters to a vote 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. *
         10.1   Employment Agreement between the Bank and David Z. Richards *
         10.2   Nittany Financial Corp. 1998 Stock Option Plan**
         27     Financial Data Schedule (electronic filing only)
         99     Independent Accountants Review Report
-----------
*    Incorporated  by  reference  to the  identically  numbered  exhibit  to the
     registration statement on Form SB-2 (File No. 333-57277) declared effective
     by the SEC on July 31, 1998.
**   Incorporated by reference to the identically  numbered  exhibit to the Form
     10-KSB filed with the Commission on March 28, 2000.

(b)      Reports on Form 8-K.

     On  October  26,  2000,  an  Item 5 Form  8-K was  filed  to  disclose  the
declaration of a 10% stock dividend on the Company's outstanding common stock.

                                       13

<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 hereunto duly authorized.


                                       Nittany Financial Corp.


Date: November 14, 2000                By: /s/David Z. Richards
                                           -------------------------------------
                                           David Z. Richards
                                           President, Chief Executive Officer,
                                           and Chief Accounting Officer




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