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, 2004

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


            For the transition period from ______ to ______

                   Commission File Number 0-32623
                   ------------------------------

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

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

            2541 E. College Avenue, State College, Pennsylvania 16801
                    (Address of principal executive offices)

                                (814) 272 - 2265
              (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 12, 2004: 1,924,621


<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
                            March 31, 2004 and December 31, 2003

                        Consolidated Statement of Income (Unaudited)
                            for the Three Months ended March 31, 2004 and 2003                             4

                        Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
                            for the Three Months ended March 31, 2004                                      5

                        Consolidated Statement of Cash Flows (Unaudited)
                            for the Three Months ended March 31, 2004 and 2003                             6

                        Notes to Unaudited Consolidated Financial Statements                               7

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

      Item 3.       Controls and Procedures                                                               15

PART II  -  OTHER INFORMATION

      Item 1.       Legal Proceedings                                                                     16

      Item 2.       Changes in Securities and Small Business Issuer
                         Purchases of Equity Securities                                                   16

      Item 3.       Defaults Upon Senior Securities                                                       16

      Item 4.       Submission of Matters to a Vote of Security Holders                                   16

      Item 5.       Other Information                                                                     16

      Item 6.       Exhibits and Reports on Form 8 - K                                                    17

SIGNATURES                                                                                                18

CERTIFICATIONS
</TABLE>


<PAGE>
                             NITTANY FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                      March 31,      December 31,
                                                                        2004            2003
                                                                    -------------   -------------
                                                                             (unaudited)
<S>                                                               <C>             <C>
ASSETS
     Cash and due from banks                                        $   5,548,013   $     805,812
     Interest-bearing deposits with other banks                         9,857,190      14,147,474
                                                                    -------------   -------------
         Cash and cash equivalents                                     15,405,203      14,953,286

     Investment securities available for sale                           3,251,097       4,074,095
     Investment securities held to maturity (estimated
       market value of $45,210,070 and $39,168,895)                    44,769,578      39,246,289
     Loans receivable (net of allowance for loan losses
       of $1,817,751 and $1,737,475)                                  195,126,530     182,742,537
     Premises and equipment                                             2,575,024       2,570,953
     Federal Home Loan Bank stock                                       1,393,500       1,311,300
     Intangible assets                                                  1,763,231       1,763,231
     Accrued interest and other assets                                  1,930,619       1,925,622
                                                                    -------------   -------------

             TOTAL ASSETS                                           $ 266,214,782   $ 248,587,313
                                                                    =============   =============

LIABILITIES
     Deposits:
         Noninterest-bearing demand                                 $   9,365,603   $   7,880,177
         Interest-bearing demand                                       21,700,061      21,902,355
         Money market                                                  35,019,530      34,237,951
         Savings                                                      152,361,105     136,273,936
         Time                                                          19,219,220      20,598,238
                                                                    -------------   -------------
            Total deposits                                            237,665,519     220,892,657
     Short-term borrowings                                              2,509,686       2,363,887
     Other borrowings                                                   9,775,098       9,829,866
     Accrued interest payable and other liabilities                       927,362         673,159
                                                                    -------------   -------------

             TOTAL LIABILITIES                                        250,877,665     233,759,569
                                                                    -------------   -------------
STOCKHOLDERS' EQUITY
     Serial preferred stock, no par value; 5,000,000 shares
       authorized, none issued                                                  -               -
     Common stock, $.10 par value; 10,000,000 shares
       authorized, 1,924,621 and 1,603,960 issued and outstanding         192,462         160,396
     Additional paid-in capital                                        14,287,483      14,323,021
     Retained earnings                                                    852,395         356,344
     Accumulated other comprehensive income (loss)                          4,777         (12,017)
                                                                    -------------   -------------

             TOTAL STOCKHOLDERS' EQUITY                                15,337,117      14,827,744
                                                                    -------------   -------------

             TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             $ 266,214,782   $ 248,587,313
                                                                    =============   =============
</TABLE>

See accompanying notes to the unaudited consolidated financial statements

                                       3
<PAGE>

                             NITTANY FINANCIAL CORP.
                        CONSOLIDATED STATEMENT OF INCOME


                                                 Three-months Ended March 31,
                                                     2004          2003
                                                  ----------   ----------
                                                        (unaudited)
INTEREST AND DIVIDEND INCOME
     Loans, including fees                        $2,757,840   $2,108,213
     Interest-bearing deposits with other banks       15,366       26,868
     Investment securities                           391,059      369,311
                                                  ----------   ----------
             Total interest and dividend income    3,164,265    2,504,392
                                                  ----------   ----------

INTEREST EXPENSE
     Deposits                                      1,159,700    1,062,622
     Short-term borrowings                             5,981       12,110
     Other borrowings                                137,692      131,423
                                                  ----------   ----------
             Total interest expense                1,303,373    1,206,155
                                                  ----------   ----------

NET INTEREST INCOME                                1,860,892    1,298,237

Provision for loan losses                            110,000       90,000
                                                  ----------   ----------

NET INTEREST INCOME AFTER PROVISION FOR
   LOAN LOSSES                                     1,750,892    1,208,237
                                                  ----------   ----------

NONINTEREST INCOME
     Service fees on deposit accounts                146,061      118,825
     Investment security gain                              -        6,691
     Asset management fees and commissions           566,745      339,144
     Other                                            10,130        9,094
                                                  ----------   ----------
             Total noninterest income                722,936      473,754
                                                  ----------   ----------

NONINTEREST EXPENSE
     Compensation and employee benefits              692,765      518,726
     Occupancy and equipment                         176,336      144,976
     Professional fees                                43,449       48,024
     Data processing fees                            119,007       77,653
     Supplies, printing, and postage                  32,993       37,157
     Advertising                                      40,405       37,350
     ATM processing fees                              34,871       32,300
     Solicitor fees                                  377,506      217,825
     Other                                           165,445      109,141
                                                  ----------   ----------
             Total noninterest expense             1,682,777    1,223,152
                                                  ----------   ----------

Income before income taxes                           791,051      458,839
Income taxes                                         295,000      159,610
                                                  ----------   ----------

NET INCOME                                        $  496,051   $  299,229
                                                  ==========   ==========

EARNINGS PER SHARE
     Basic                                        $     0.26   $     0.17
     Diluted                                            0.24         0.16

WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic                                         1,924,621    1,723,486
     Diluted                                       2,074,229    1,846,010

See accompanying notes to the unaudited consolidated financial statements

                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                        Accumulated
                                                       Additional                         Other            Total
                                       Common            Paid-in      Retained         Comprehensive   Stockholders'   Comprehensive
                                        Stock            Capital      Earnings         Income (Loss)       Equity         Income
                                   ---------------   ---------------- -------------   --------------  --------------  --------------
                                    (unaudited)

<S>                                    <C>         <C>              <C>              <C>             <C>            <C>
Balance, December 31, 2003                160,396     14,323,021       356,344          (12,017)        14,827,744

Net income                                                             496,051                             496,051   $     496,051
Other comprehensive income:
    Unrealized gain on available
    for sale securities,
    net of taxes of $8,651                                                               16,794             16,794          16,794
                                                                                                                     --------------
Comprehensive income                                                                                                 $     512,845
                                                                                                                     ==============
Twenty percent stock dividend
  (including cash
  paid for fractional shares)              32,066        (35,538)                                           (3,472)
                                    --------------   ------------ -------------   --------------  -----------------

Balance, March 31, 2004             $     192,462    $14,287,483  $    852,395    $       4,777   $     15,337,117
                                    ==============   ============ =============   ==============  =================

</TABLE>

See accompanying notes to the unaudited consolidated financial statements

                                       5
<PAGE>

                             NITTANY FINANCIAL CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                   Three-months ended March 31,
                                                                        2004           2003
                                                                   ------------    ------------
                                                                          (unaudited)
<S>                                                              <C>             <C>
OPERATING ACTIVITIES
     Net income                                                    $    496,051    $    299,229
     Adjustments to reconcile net income to net cash
       provided by (used for) operating activities:
         Provision for loan losses                                      110,000          90,000
         Depreciation, amortization, and accretion, net                 146,929         258,305
         Investment security gain                                             -           6,691
         Increase in accrued interest receivable                        (67,586)       (141,401)
         Increase (decrease) in accrued interest payable                 53,236        (170,320)
         Other, net                                                     279,904        (397,925)
                                                                   ------------    ------------
         Net cash provided by (used for) operating activities         1,018,534         (55,421)
                                                                   ------------    ------------

INVESTING ACTIVITIES
     Investment securities available for sale:
         Purchases                                                            -         (28,069)
         Proceeds from sale                                                   -          26,901
         Proceeds from principal repayments and maturities              841,959         617,631
     Investment securities held to maturity:
         Purchases                                                  (10,855,899)    (14,910,684)
         Proceeds from principal repayments and maturities            5,247,765       8,049,792
     Net increase in loans receivable                               (12,510,284)     (6,676,627)
     Purchase of FHLB stock                                             (82,200)              -
     Acquisition of subsidiary                                                -        (370,014)
     Purchase of premises and equipment                                 (68,379)        (44,637)
                                                                   ------------    ------------
         Net cash used for investing activities                     (17,427,038)    (13,335,707)
                                                                   ------------    ------------

FINANCING ACTIVITIES
     Net increase in deposits                                        16,772,862      18,792,923
     Net increase in short-term borrowings                              145,799       2,601,551
     Proceeds from other borrowings                                        --           360,000
     Repayment of other borrowings                                      (54,768)        (51,478)
     Cash paid in lieu of fractional shares                              (3,472)              -
                                                                   ------------    ------------
         Net cash provided by financing activities                   16,860,421      21,702,996
                                                                   ------------    ------------

         Increase in cash and cash equivalents                          451,917       8,311,868

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     14,953,286       5,852,073
                                                                   ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $ 15,405,203    $ 14,163,941
                                                                   ============    ============

SUPPLEMENTAL CASH FLOW DISCLOSURE
     Cash paid during the year for:
         Interest on deposits and borrowings                       $  1,250,137    $  1,376,475
         Income taxes                                                   336,500         550,000
</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 subsidiaries, Nittany Bank (the "Bank"), Nittany Asset
Management,  Inc, and Vantage  Investment  Advisors,  LLC. The Bank includes its
wholly-owned subsidiary, FTF Investments 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  months  ended March 31, 2004 are not  necessarily
indicative of the results to be expected for the fiscal year ended  December 31,
2004 or any other future interim period.

These statements  should be read in conjunction with the consolidated  financial
statements  and related  notes for the year ended  December 31, 2003,  which are
incorporated by reference in the Company's Annual Report on Form 10-KSB.

Stock-Based  Compensation  - The Company  maintains a stock  option plan for key
officers, employees, and nonemployee directors. Had compensation expense for the
stock option plan been recognized in accordance  with the fair value  accounting
provisions of Statement of Financial  Accounting  Standards No. 123,  Accounting
for Stock-Based Compensation,  net income applicable to common stock, basic, and
diluted net income per common share would have been as follows:

                                       7
<PAGE>

                                                    Three Months Ended March 31,
                                                        2004             2003
                                                    -----------      -----------

Net income, as reported:                            $   496,051      $   299,229
Less proforma expense related
  to stock options                                       29,747           25,369
                                                    -----------      -----------
Proforma net income                                 $   466,304      $   273,860
                                                    ===========      ===========


Basic net income per common share:
     As reported                                    $      0.26      $      0.17
     Pro forma                                             0.24             0.16
Diluted net income per common share:
     As reported                                    $      0.24      $      0.16
     Pro forma                                             0.22             0.15


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  months  ended March 31,  2004 and 2003,  the diluted
number of shares  outstanding  from  employee  stock  options  was  149,608  and
122,524, respectively.

NOTE 3 - COMPREHENSIVE INCOME

The components of comprehensive  income consist  exclusively of unrealized gains
and losses on available  for sale  securities.  For the three months ended March
31,  2004,  this  activity is shown under the  heading  Comprehensive  Income as
presented in the Consolidated  Statement of Changes in Stockholders' Equity. For
the three months ended March 31, 2003, comprehensive income totaled $298,521.

NOTE 4 - STOCK SPLIT

On February  24,  2004,  the Board of Directors  approved a  six-for-five  stock
split,  effected in the form of a 20 percent stock dividend to  stockholders  of
record  March  10,  2004,  payable  on March  31,  2004.  As a  result,  320,661
additional shares of the Company's stock were issued, common stock was increased
by $32,066, and surplus was decreased by $35,538.

                                       8

<PAGE>


Fractional shares were paid in cash. All average shares  outstanding as of March
31,  2004,  and all per share  amounts  as of March 31,  2004,  included  in the
financial  statements  are based on the increased  number of shares after giving
retroactive effect to the stock split effected in the form of a stock dividend.

                       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, but are
not limited  to,  changes in interest  rates,  the ability to control  costs and
expenses, and general economic conditions.

Overview

Nittany  Financial  Corp.  ("Nittany")  is  a  unitary  thrift  holding  company
organized in 1997 for the purpose of  establishing  a de novo  community bank in
State College, Pennsylvania. Nittany Bank (the "Bank") commenced operations as a
wholly-owned  FDIC-insured federal savings bank subsidiary of Nittany on October
26, 1998. At March 31, 2004, the business  operations of Nittany  included three
operating  subsidiaries  (collectively  defined  as the  "Company",  unless  the
context indicates otherwise), as follows:

     o    Nittany  Bank  commenced  banking  operations  in  October  1998  as a
          federally-insured  federal  savings  bank with two offices at 116 East
          College Avenue and 1276 North Atherton,  State College,  Pennsylvania.
          On August 7, 2000,  a third  branch  office was opened at 129  Rolling
          Ridge Drive in State  College and on January 14,  2002, a fourth State
          College branch office opened at 2541 East College Avenue.  On July 28,
          2003, the 129 Rolling Ridge Drive office moved to a larger location at
          1900 South  Atherton  Street.  The Bank  formed a Delaware  investment
          company during the quarter to aid in asset utilization.

     o    Nittany  Asset  Management,  Inc. was formed in May 1999  primarily to
          offer  investment  products  and  services  to retail  customers.  The
          subsidiary  is  headquartered  at  2541  East  College  Avenue,  State
          College, Pennsylvania.

     o    On  January  1,  2003,   Nittany  Financial  Corp.   acquired  Vantage
          Investment  Advisors,   LLC  ("Vantage").   Vantage  is  a  registered
          investment advisor which currently manages investment assets in excess
          of $240 million.  This subsidiary is also  headquartered  at 2541 East
          College Avenue in State College.

                                       9
<PAGE>

Our retail business is conducted  principally through Nittany Bank. Nittany Bank
provides a wide range of banking  services with an emphasis on  residential  and
commercial real estate lending, consumer lending,  commercial lending and retail
deposits.  At March 31, 2004, we had consolidated assets of $266 million,  loans
receivable (net of allowance for loan losses) of $195 million,  deposits of $238
million,  and stockholders'  equity of $15.3 million. Net income for the quarter
ended March 31, 2004  increased  $197,000 to $496,000 or $.24 per diluted  share
from  $299,000  or $.16 per  diluted  share for the same  period  in 2003.  This
included an income tax expense of $295,000 for the quarter  compared to $160,000
for the 2003 quarter.

COMPARISON OF FINANCIAL CONDITION

Total  assets  increased  $17,628,000  to  $266,215,000  at March 31,  2004 from
$248,587,000  at December 31, 2003.  Strong growth in residential and commercial
real estate loans resulted in an increase in net loans receivable of $12,384,000
which were primarily  funded through  increased  balances in the savings deposit
products of $16,087,000  for the quarter.  Total assets included $1.8 million of
intangible  assets from the  acquisition of Vantage and the Bank's original core
deposits. These intangibles are not currently being amortized.

Cash and cash  equivalents  increased  $452,000 at March 31, 2004 as compared to
December 31, 2003. This increase resulted from growth in deposits which exceeded
loan demand during the quarter.  Management believes that the liquidity needs of
the Company are satisfied by the current  balance of cash and cash  equivalents,
readily available access to traditional funding sources, FHLB advances,  and the
portion of the  investment  and loan  portfolios  which mature  within one year.
These  sources of funds will  enable the  Company to meet cash  obligations  and
off-balance sheet commitments as they come due.

Investment  securities  available for sale  decreased to $3,251,000 at March 31,
2004 from  $4,074,000  at December 31, 2003 and  investment  securities  held to
maturity increased to $44,770,000 at March 31, 2004 from $39,246,000 at December
31, 2003. The increase in the investment  securities  held to maturity portfolio
resulted  primarily  from the  investment of savings  deposits not yet needed to
fund loan growth.

Net  loans  receivable   increased  to  $195,127,000  at  March  31,  2004  from
$182,743,000 at December 31, 2003. The increase in net loans receivable resulted
from the strong real estate  market in the  Company's  market  area,  low market
interest rates, and the strategic,  service-oriented marketing approach taken by
management  to  meet the lending  needs of the area.  At March 31,  2004,  1 - 4
family  residential  mortgage  balances grew by $7,233,000 to $131,580,000  from
$124,347,000  at December  31,  2003.  Management  attributes  the  increases in
lending balances to continued  customer  referrals,  the economic climate within
the market area, and  competitive  rates.  As of March 31, 2004, the Company had
additional   commitments   to  fund  loan  demand  of   $11,275,000,   of  which
approximately $5,029,000 relates to commercial customers.

                                       10
<PAGE>

At March 31, 2004, the Company's  allowance for loan losses increased by $81,000
to $1,818,000 from  $1,737,000 at December 31, 2003. The increase  resulted from
an  additional  loan loss  provision of $110,000  needed for the growth in loans
during the quarter which were partially  offset by a few minor  charge-offs  and
one repossessed property now in other real estate owned property ("OREO").

The additions to the allowance for loan losses are based upon a careful analysis
by management of loan data.  Because the Company  lacks  substantial  historical
experience,  management  must base its  determination  upon such  factors as the
Company's volume and the type of loans that it originates, the amount and trends
relating  to its  delinquent  and  non-performing  loans,  regulatory  policies,
general economic  conditions and other factors relating to the collectibility of
loans in its  portfolio.  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 at March 31, 2004,  there can be no assurance
that additional losses will not be required in future periods.

The table below outlines the Company's past due loans as of March 31, 2004:

<TABLE>
<CAPTION>
----------------------- -------------------- ---------------------- -------------------- --------------------

                                                              > 90 Days Past Due   > 90 Days Past Due
                            # of Loans              Balance   - Number of Loans    - Balance of Loans
----------------------- ------------- ---------------------- -------------------- --------------------
<S>                          <C>             <C>                           <C>            <C>
Personal Loans                   352             $7,389,000                    1              $15,400
----------------------- ------------- ---------------------- -------------------- --------------------
Credit
Line Loans                       401              4,389,000                    0                    0
----------------------- ------------- ---------------------- -------------------- --------------------
Business Loans                   153             11,351,000                    0                    0
----------------------- ------------- ---------------------- -------------------- --------------------
Real
Estate Loans                   1,058            173,816,000                    0                    0
----------------------- ------------- ---------------------- -------------------- --------------------
      Total                    1,964           $196,945,000                    1              $15,400
----------------------- ------------- ---------------------- -------------------- --------------------
</TABLE>


Total deposits  increased by $16,773,000  to  $237,666,000  at March 31, 2004 as
compared to  $220,893,000  at December 31, 2003. Of such  increase,  the Nittany
Savings deposit account accounted for  approximately  $16,087,000 to the amount.
The Nittany  Savings  deposit is a  competitive  deposit  account  with a tiered
annual  interest rate of 2.05% for balances over $2,500 for the current  period.
Due to the continuation of historically low short-term interest rates during the
quarter,  the Nittany Savings deposit has remained popular with local depositors
and has helped to increase our deposit base.

Stockholder's equity increased to $15,337,000 at March 31, 2004 from $14,828,000
at December  31,  2003 as a result of net income of $496,000  and an increase of
$17,000 in net  unrealized  gain on  investment  securities  available for sale.
Because of interest  rate  volatility  and an  illiquid  market for sales of the
investment  securities,  accumulated  other  comprehensive  income  (loss) could
materially  fluctuate for each interim period and year-end  period  depending on
economic and interest rate  conditions.  Additionally,  a  twenty-percent  (20%)
stock dividend was completed  during the quarter which resulted in an additional
320,661 shares being issued.

                                       11
<PAGE>

         Nittany Average Balance Sheet and Supplemental Information:
         -----------------------------------------------------------
<TABLE>
<CAPTION>

                                                                     For the period ended
                                   ------------------------------------------------------------------------------------------
                                                  03/31/2004                                     03/31/2003
                                   -----------------------------------------    ---------------------------------------------
                                    Average                      Average           Average                        Average
                                    Balance        Interest      Yield/Cost        Balance         Interest     Yield/Cost
                                    -------     ------------     ----------        -------       ------------   ----------
                                                                     (Dollars in thousands)
<S>                                <C>             <C>             <C>             <C>            <C>               <C>
Interest-earning assets:
  Loans receivable                   $188,661        $2,758           5.85%          $128,024        $2,108            6.59%
  Investments securities               49,072           391           3.70%            44,995           369            3.28%
  Interest-bearing deposits             8,090            15           0.75%            11,488            27            0.93%
                                   -----------  ------------  --------------    --------------  ------------   --------------
Total interest-earning assets         245,824         3,164           5.25%           184,507         2,504            5.43%
                                                ------------                                    ------------
Noninterest-earning assets              8,782                                           7,484
Allowance for loan losses              (1,751)                                         (1,208)
                                   -----------                                  --------------
Total assets                         $252,854                                        $190,783
                                   ===========                                  ==============
Interest-bearing liabilities:
  Interest - bearing demand
    deposits                          $19,139            39           0.83%           $16,402            49            1.18%
  Money market deposits               $34,466           184           2.13%            30,577           210            2.75%
  Savings deposits                    144,343           771           2.14%            92,325           610            2.65%
  Certificates of deposit              21,637           165           3.05%            20,952           193            3.68%
  Advances from FHLB                    9,829           144           5.85%            10,970           144            5.23%
                                   -----------  ------------  --------------    --------------  ------------   --------------
Total interest-bearing liabilities    229,414         1,303           2.27%           171,225         1,206            2.82%
                                   -----------  ------------                    --------------  ------------   --------------
Noninterest-bearing liabilities
  Demand deposits                       8,298                                           9,207
Stockholders' equity                   15,143                                          10,351
                                   -----------                                  --------------
Total liabilities and
  stockholders' equity                252,854                                         190,783
                                   ===========                                  ==============
Net interest income                                  $1,861                                          $1,298
                                                ============                                    ============
Interest rate spread                                                  2.98%                                            2.61%
Net yield on interest-earning assets                                  3.13%                                            2.81%
Ratio of average interest-earning assets to
  average interest-bearing liabilities                              107.15%                                          107.76%
-----------------------
</TABLE>

                                       12
<PAGE>

RESULTS OF OPERATIONS

Net income was  $496,000  for the period  ended March 31,  2004,  an increase of
$197,000 as compared to the same period ended 2003, as increases in net interest
income and noninterest income of $563,000 and $249,000,  respectively, more than
offset  increases in noninterest  expense and taxes.  Basic and diluted earnings
per share increased to $.26 and $.24 per share, respectively for the three month
period ended March 31, 2004  compared to $.17 and $.16 per share,  respectively,
for the three month period  ended March 31, 2003.  All "per share" data has been
adjusted for the 20% stock dividend issued during the quarter.


                                       13

<PAGE>

Net interest  income for the three months ended March 31, 2004 was $1,861,000 as
compared to $1,298,000 for the same period ended 2003. Interest income increased
$660,000 for 2004 as compared to the prior year period and was influenced mainly
by increases in interest earned on loans receivable of $650,000. The increase in
interest income was the result of an increase of $61,317,000 in average balances
of interest-earning  assets that primarily resulted from a $60,637,000  increase
in the average balance of loans receivable. The yield on interest earning assets
decreased  to 5.25% for the three months ended March 31, 2004 from 5.43% for the
same period  ended 2003 as interest  rates  continued  to drop for the  quarter.
Although there were  significant  increases in residential  real estate lending,
the yield on the loans receivable  decreased 74 basis points in 2004 as compared
to 2003.

Interest expense increased $97,000 for 2004 as compared to the prior year period
and was  influenced  mainly by an increase  in  interest  expense on deposits as
increases  in deposit  balances were  essentially  offset by lower  rates.  This
increase was  primarily  attributable  to an increase in the average  balance of
interest-bearing  deposits  of  $59,330,000.  The  average  balances  of savings
deposit  accounts  increased  $52,018,000  as  a  result  of  customer  service,
referrals,  and marketing  efforts and competitive  rates of the Nittany Savings
product.  The cost of funds  decreased to 2.27% for the three month period ended
March  31,  2004  from  2.82% for the same  period  ended  2003 as a result of a
general  reduction  in market  interest  rate levels and a decrease in the rates
paid on deposits.

Management's  attention to loan rates, deposit rates, and the liquidity position
of the Bank has been successful as the Bank's net interest  margin  increased by
32 basis points to 3.13% from 2.81% at March 31, 2003, a period of interest rate
volatility.

Total  noninterest  income for the three months  ended March 31, 2004  increased
$249,000 as compared to the same period ended 2003. Noninterest income items are
primarily  comprised of service  charges and fees on deposit  account  activity,
along with fee  income  derived  from  asset  management  services  and  related
commissions.  Service  fees on  deposit  accounts  increased  $27,000  and  have
progressively increased during each quarter as the number of accounts and volume
of related transactions have increased. Additionally, for the three-months ended
March 31, 2004,  commissions  and management fees from Vantage and Nittany Asset
Management increased by $228,000 over the same period of 2003.

Total noninterest  expenses  increased $460,000 for the three months ended March
31,  2004,  as  compared to the same period  ended 2003.  The  increase in total
noninterest expenses for the current period was primarily related to an increase
in compensation and employee benefits from the acquisition of Vantage as well as
the related marketing efforts to increase visibility within the Company's market
area, annual merit increases and bonuses given to employees, and data processing
expenses.  Vantage paid $378,000 of solicitors' fees for the quarter as compared
to  $218,000  for the same  period in 2003 due to the  growth  in  assets  under
management.

                                       14
<PAGE>

Income tax  expense of $295,000  was  recognized  in the first  quarter of 2004,
compared to $160,000 for the same period of 2003. All of the Company's operating
loss carry-forwards  were fully utilized during the 2003 tax year.

LIQUIDITY AND CAPITAL RESOURCES

Our   primary   sources  of  funds  are   deposits,   repayment   of  loans  and
mortgage-backed securities, maturities of investments, interest-bearing deposits
with other banks and, funds provided from operations. 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  tangible  capital  ratios  in order to assess  compliance  with
regulatory guidelines. At March 31, 2004, both the Company and the Bank exceeded
the minimum  risk-based and tangible capital ratio  requirements.  The Company's
and the Bank's  risk-based,  Tier I risk-based,  and tangible capital ratios are
10.9%, 9.6%, 5.2% and 12.4%, 11.1%, 5.9%, respectively, at March 31, 2004.


Item 3.  Controls and Procedures

(a) Evaluation of disclosure controls and procedures.  Based on their evaluation
    -------------------------------------------------
as of a date within 90 days of the filing date of this Quarterly  Report on Form
10-QSB,  the Registrant's  principal  executive officer and principal  financial
officer have concluded that the Registrant's  disclosure controls and procedures
(as defined in Rules 13a-14(c) and 15d-14(c)  under the Securities  Exchange Act
of 1934 (the "Exchange Act")) are effective to ensure that information  required
to be  disclosed  by the Company in reports  that it files or submits  under the
Exchange Act is recorded,  processed,  summarized  and reported  within the time
periods specified in Securities and Exchange Commission rules and forms.

(b)  Changes in  internal  controls.  There were no  significant  changes in the
     -------------------------------
Registrant's  internal  controls or in other  factors  that could  significantly
affect these controls subsequent to the date of their evaluation,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.

                                       15
<PAGE>

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

               None

Item 2.    Changes in securities and Small Business Issuer Purchases of Equity
           Securities

               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   included  in  this  Report  or
             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 **
             10.3  Supplemental Executive Retirement Plan ***
             31.1  Certification  Pursuant  to  Section  302 of the  Securities
                   Exchange Act of 1934 - David Z. Richards
             31.2  Certification  Pursuant  to  Section  302 of the  Securities
                   Exchange Act of 1934 - Gary M. Bradley
             32.1  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
                   Pursuant to Section 906 of the Sarbanes-Oxley Act 0f 2002.
             99.1  Independent Accountants 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
     December 31, 1999 Form 10-KSB filed with the SEC on March 28, 2000.

***  Incorporated  by  reference  to the  identically  numbered  exhibit  to the
     December 31, 2003 Form 10-KSB filed with the SEC on March 30, 2004.

                                       16
<PAGE>

          (b)  Reports on Form 8-K.


          (1)  A Report on Form 8-K was filed on February  23, 2004  pursuant to
               Items 7 and 12 in accordance  with Release No. 34-47583 to report
               earnings for the quarter ended December 31, 2003.

          (2)  A Report on Form 8-K was filed on February 24, 2004,  pursuant to
               items 5, 7 and 9 announcing that that the  Registrant's  Board of
               Directors declared a six-for-five stock split payable in the form
               of a 20%  stock  dividend  on the  Company's  outstanding  common
               stock.

                                       17

<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:    May 13, 2004                By: /s/David Z. Richards
                                     -------------------------------------------
                                     David Z. Richards
                                     President and Chief Executive Officer



Date:    May 13, 2004                By: /s/Gary M. Bradley
                                     -------------------------------------------
                                     Gary M. Bradley
                                     Vice President and Chief Accounting Officer



                                       18