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 June 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 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 August 10, 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
                            June 30, 2000 and December 31, 1999

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

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

                        Consolidated Statement of Changes in Stockholders' Equity (Unaudited)                     6

                        Consolidated Statement of Cash Flows (Unaudited)
                            for the Six Months ended June 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 - 14

SIGNATURES                                                                                                        15

</TABLE>


<PAGE>
                             NITTANY FINANCIAL CORP.
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                      June 30,               December 31,
                                                                                        2000                     1999
                                                                                  -----------------        -----------------
ASSETS
<S>                                                                            <C>                      <C>
Cash and due from banks                                                         $          128,036       $          826,181
Interest-bearing deposits with other banks                                               1,414,004                2,231,694
Investment securities available for sale                                                15,395,710               15,872,402
Investment securities held to maturity  (market
      value of $1,503,192 and $1,652,336)                                                1,584,531                1,674,729
Loans receivable (net of allowance for loan losses
      of $257,673 and $186,647)                                                         35,792,277               27,979,708
Premises and equipment                                                                     158,911                  175,587
Intangible assets                                                                          870,647                  894,392
Accrued interest and other assets                                                          482,192                  390,031
                                                                                  -----------------        -----------------

      TOTAL ASSETS                                                              $       55,826,308       $       50,044,724
                                                                                  =================        =================

LIABILITIES
Deposits:
      Noninterest-bearing demand                                                $        2,377,035       $        2,626,107
      Interest-bearing demand                                                            5,874,168                5,659,727
      Money market                                                                      14,653,673               15,032,313
      Savings                                                                            2,575,494                1,732,077
      Time                                                                              15,592,720               10,733,000
                                                                                  -----------------        -----------------
           Total deposits                                                               41,073,090               35,783,224
FHLB advances                                                                            8,600,000                8,600,000
Accrued interest payable and other liabilities                                             286,836                  430,097
                                                                                  -----------------        -----------------
      TOTAL LIABILITIES                                                                 49,959,926               44,813,321
                                                                                  -----------------        -----------------
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; 709,389 and 656,476 issued and outstanding                                70,939                   65,648
Additional paid-in capital                                                               7,040,564                6,464,476
Retained deficit                                                                          (670,338)                (752,781)
Accumulated other comprehensive loss                                                      (574,783)                (545,940)
                                                                                  -----------------        -----------------
      TOTAL STOCKHOLDERS' EQUITY                                                         5,866,382                5,231,403
                                                                                  -----------------        -----------------
      TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY                                                 $       55,826,308       $       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>
                                                                                          Six Months Ended June 30,
                                                                                        2000                     1999
                                                                                  -----------------        -----------------
<S>                                                                            <C>                      <C>
INTEREST AND DIVIDEND INCOME
Loans, including fees                                                           $        1,270,580       $          405,214
Investment securities                                                                      572,397                  451,004
Interest-bearing deposits with other banks                                                  64,877                   60,392
                                                                                  -----------------        -----------------
      Total interest and dividend income                                                 1,907,854                  916,610
                                                                                  -----------------        -----------------
INTEREST EXPENSE
Deposits                                                                                   850,557                  414,325
FHLB advances                                                                              269,105                  125,074
                                                                                  -----------------        -----------------
      Total interest expense                                                             1,119,662                 539,399
                                                                                  -----------------        -----------------
NET INTEREST INCOME                                                                        788,192                  377,211

Provision for loan losses                                                                   71,000                        -
                                                                                  -----------------        -----------------
NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                                                               717,192                  377,211
                                                                                  -----------------        -----------------
NONINTEREST INCOME
Service fees on deposit accounts                                                           105,137                   55,503
Realized gain on sale of securities                                                              -                    1,342
Other income                                                                                21,119                   12,244
                                                                                  -----------------        -----------------
      Total noninterest income                                                             126,256                   69,089
                                                                                  -----------------        -----------------
NONINTEREST EXPENSE
Compensation and employee benefits                                                         345,733                  236,240
Occupancy and equipment                                                                    114,884                   95,066
Data processing                                                                             83,971                   33,630
Goodwill amortization                                                                       23,745                   25,558
Professional fees                                                                           34,815                   62,874
Printing and supplies                                                                       33,962                   26,062
Other                                                                                      123,895                  119,896
                                                                                  -----------------        -----------------
      Total noninterest expense                                                            761,005                  599,326
                                                                                  -----------------        -----------------
Income (loss) before income taxes                                                           82,443                 (153,026)
Income taxes                                                                                     -                        -
                                                                                  -----------------        -----------------
NET INCOME (LOSS)                                                               $           82,443       $         (153,026)
                                                                                  =================        =================
EARNINGS (LOSS) PER SHARE:
      Basic                                                                     $            $0.12       $           ($0.27)
      Diluted                                                                                $0.12                   ($0.27)

WEIGHTED AVERAGE SHARES OUTSTANDING:
      Basic                                                                                696,252                  577,436
      Diluted                                                                              696,711                  577,436

</TABLE>

See accompanying notes to the unaudited consolidated financial statements.

                                        4
<PAGE>

                             NITTANY FINANCIAL CORP.
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                         Three Months Ended June 30,
                                                                                        2000                     1999
                                                                                  -----------------        -----------------
<S>                                                                            <C>                      <C>
INTEREST AND DIVIDEND INCOME
Loans, including fees                                                           $          688,686       $          254,869
Investment securities                                                                      287,973                  246,272
Interest-bearing deposits with other banks                                                  31,837                   17,985
                                                                                  -----------------        -----------------
      Total interest and dividend income                                                 1,008,496                  519,126
                                                                                  -----------------        -----------------
INTEREST EXPENSE
Deposits                                                                                   453,105                  234,480
FHLB advances                                                                              138,891                   75,017
                                                                                  -----------------        -----------------
      Total interest expense                                                               591,996                  309,497
                                                                                  -----------------        -----------------
NET INTEREST INCOME                                                                        416,500                  209,629

Provision for loan losses                                                                   38,000                        -
                                                                                  -----------------        -----------------
NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                                                               378,500                  209,629
                                                                                  -----------------        -----------------
NONINTEREST INCOME
Service fees on deposit accounts                                                            50,977                   28,252
Realized gain on sale of securities                                                              -                    1,342
Other income                                                                                11,257                    8,772
                                                                                  -----------------        -----------------
      Total noninterest income                                                              62,234                   38,366
                                                                                  -----------------        -----------------
NONINTEREST EXPENSE
Compensation and employee benefits                                                         177,275                  126,316
Occupancy and equipment                                                                     58,270                   45,886
Data processing                                                                             41,345                   17,852
Goodwill amortization                                                                       11,873                   11,868
Professional fees                                                                           20,867                   38,117
Printing and supplies                                                                       17,481                    9,154
Other                                                                                       68,084                   68,328
                                                                                  -----------------        -----------------
      Total noninterest expense                                                            395,195                  317,521
                                                                                  -----------------        -----------------
Income (loss) before income taxes                                                           45,539                  (69,526)
Income taxes                                                                                     -                        -
                                                                                  -----------------        -----------------
NET INCOME (LOSS)                                                               $           45,539       $          (69,526)
                                                                                  =================        =================
EARNINGS (LOSS) PER SHARE:
      Basic                                                                     $            $0.06       $           ($0.12)
      Diluted                                                                                $0.06                   ($0.12)

WEIGHTED AVERAGE SHARES OUTSTANDING:
      Basic                                                                                709,389                  577,436
      Diluted                                                                              709,389                  577,436

</TABLE>

See accompanying notes to the unaudited consolidated financial statements.

                                        5

<PAGE>

<TABLE>
<CAPTION>
                                                                    NITTANY FINANCIAL CORP.
                                            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAIDITED)


                                                                                     Accumulated
                                                                                        Other
                                                        Additional                     Compre-         Total       Compre-
                                          Common          Paid-in     Retained         hensive     Stockholders'   hensive
                                          Stock           Capital     Deficit           Loss         Equity       Income
                                          ----------    -----------   ---------       ----------   ------------   --------

<S>                                     <C>           <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                                                              82,443                          82,443  $  82,443
Other comprehensive income:
  Unrealized loss on available for
    sale securities                                                                     (28,843)       (28,843)   (28,843)
                                                                                                                  --------
Comprehensive income                                                                                            $  53,600
                                          ----------    -----------   ---------       ----------   ------------   ========

Balance, June 30, 2000                   $   70,939    $ 7,040,564   $(670,338)      $ (574,783)  $  5,866,382
                                          ==========    ===========   =========       ==========   ============
</TABLE>




See accompanying notes to the unaudited consolidated financial statements.

                                        6
<PAGE>

                             NITTANY FINANCIAL CORP.
                CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       Six Months Ended June 30,
                                                                          2000            1999
                                                                    --------------  --------------
<S>                                                                 <C>             <C>
OPERATING ACTIVITIES
Net income (loss)                                                    $     82,443    $   (153,026)
Adjustments to reconcile net income (loss) to
   net cash used for operating activities:
      Provision for loan losses                                            71,000            --
      Depreciation, amortization, and accretion, net                       53,821          81,931
      Decrease (increase) in accrued interest receivable                  (72,617)       (101,882)
      Increase (decrease) in accrued interest payable                    (165,972)          4,760
      Other, net                                                            3,167         (91,143)
                                                                     ------------    ------------
      Net cash used for operating activities                              (28,158)       (259,360)
                                                                     ------------    ------------
INVESTING ACTIVITIES
Investment securities available for sale:
      Purchases                                                              --        (6,851,792)
      Maturities and repayments                                           442,237       2,596,201
Investment securities held to maturity:
      Purchases                                                              --        (1,945,065)
      Maturities and repayments                                            89,906         128,444
Net increase in loans receivable                                       (9,978,990)    (13,372,124)
Proceeds from sales of loans                                            2,095,500            --
Purchase of premises and equipment                                         (7,575)        (78,541)
                                                                     ------------    ------------
      Net cash used for investing activities                           (7,358,922)    (19,522,877)
                                                                     ------------    ------------
FINANCING ACTIVITIES
Net increase in deposits                                                5,289,866      11,454,503
Proceeds from long-term FHLB advances                                        --         4,100,000
Net proceeds from the sale of common stock                                581,379            --
                                                                     ------------    ------------
      Net cash provided by financing activities                         5,871,245      15,554,503
                                                                     ------------    ------------
      Decrease in cash and cash  equivalents                           (1,515,835)     (4,227,734)

CASH AND CASH EQUIVALENTS
   AT BEGINNING OF PERIOD                                               3,057,875       5,929,243
                                                                     ------------    ------------
CASH AND CASH EQUIVALENTS
   AT END OF PERIOD                                                  $  1,542,040    $  1,701,509
                                                                     ============    ============

SUPPLEMENTAL CASH FLOW DISCLOSURE
Cash paid during the period for:
      Interest on deposits and borrowings                            $  1,285,634    $    544,159

</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  six-months  ended  June  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 six months ended June 30, 2000, the diluted number of shares
outstanding  from  employee and director  stock  options was 459.  There were no
dilutive  shares of common stock for the three months ended June 30, 2000 or for
the three and six-months ended June 30, 1999.

                                       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").

         On April 24, 2000, the Company entered into a lease agreement for a new
branch office to be located in State  College at 129 Rolling Ridge Drive,  which
began operations on August 7, 2000. The Company  currently  estimates that costs
in connection with  renovations to this new branch location to be  approximately
$140,000.

CHANGES IN FINANCIAL CONDITION

         During the first six months of 2000, the Company has experienced strong
growth with total assets  increasing  $5,782,000 or 11.6% to $55,826,000 at June
30, 2000. This growth was fueled by a steady increase in net loans of $7,813,000
that  was  funded  primarily  through  increases  in time and  savings  deposits
totaling  $5,703,000,  as well as the  receipt  of  aggregate  net  proceeds  of
$1,402,000 from the common stock offering.

         The decrease in cash and cash  equivalents  was  primarily used to meet
daily  operating  needs,  as well as  provided  funding  for loan  originations.
Management maintains a

                                       9
<PAGE>

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.

         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  94.6%,  or  $7,453,000  was comprised of loans secured by various
forms of real estate.  The real estate  lending growth  included  $3,864,000 and
$1,366,000  in  owner  occupied  and  non-owner   occupied   one-to-four  family
mortgages, respectively, and $1,868,000 in commercial real estate.

         At June 30, 2000, the Company's  allowance for loan losses approximated
$258,000 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.  At June 30,
2000, loans past due thirty days or more totaled $4,000.

         Due to the  continued  marketing  efforts of promoting the opening of a
new community bank in the State College area,  deposits increased  $5,290,000 or
14.8% to $41,073,000 at June 30, 2000. This increase was primarily the result of
increases in time and savings deposits of $4,860,000 and $843,000, 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 $5,333,000
for  the  period  while  partially  being  offset  by a  decline  in  short-term
certificates of $1,695,000.

         Stockholder's  equity increased $635,000 to $5,866,000 at June 30, 2000
from  $5,231,000  at December  31, 1999  primarily  as a result of net income of
$82,000 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 $46,000 and $82,000 for the three
and six months ended June 30, 2000,  respectively,  as compared to a net loss of
$70,000 and $153,000, respectively, for the same periods in 1999.
 .
         The $115,000 increase in net income for the three months ended June 30,
2000, as compared to the three months ended June 30, 1999, was  attributable  to
an increase in net interest  income of $207,000  and an increase in  noninterest
income of  $24,000.  Partially  offsetting  these  favorable  variances  between
quarters  were  increases  in  noninterest  expense and the  provision  for loan
losses, of $78,000 and $38,000, respectively.


                                       10
<PAGE>

         The  $235,000  increase in net income for the six months ended June 30,
2000, as compared to the six months ended June 30, 1999, was  attributable to an
increase  in net  interest  income of $411,000  and an  increase in  noninterest
income of  $57,000.  Partially  offsetting  these  favorable  variances  between
quarters  were  increases  in  noninterest  expense and the  provision  for loan
losses, of $162,000 and $71,000, respectively.

         Net interest  income for the three and  six-months  ended June 30, 2000
was  $416,000  and  $788,000 as compared to $210,000  and  $377,000 for the same
periods  ended 1999.  Interest  income  increased  $489,000 and $991,000 for the
three and  six-months  ended June 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 $434,000 and $42,000,  for the three
months ended June 30, 2000 and 1999,  respectively,  and $865,000 and  $121,000,
for the six-months  ended June 30, 2000 and 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  $20.3 million to
$33.6 million and $20.9  million to $31.1  million for the three and  six-months
ended June 30, 2000, respectively,  compared to $13.3 million and $10.5 million,
respectively,  for the same  periods in the prior year.  The average  balance of
investment  securities  increased  $419,000 to $17.2 million and $2.0 million to
$17.3 million for the three and  six-months  ended June 30, 2000,  respectively,
compared to $16.7 million and $15.3  million,  for the same periods in the prior
year. The yield on interest  earning  assets  increased from 6.18% and 6.32% for
the three and six-months ended June 30, 1999,  respectively,  to 7.57% and 7.40%
for the same periods ended in 2000, primarily due to an increasing interest rate
environment.

         Interest  expense  increased  $282,000  and  $580,000 for the three and
six-months ended June 30, 2000 as compared to the prior year.  Interest incurred
on deposits  increased  $219,000  and  $436,000 to $453,000 and $851,000 for the
three and six-months ended June 30, 2000,  compared to $234,000 and $414,000 for
the same periods in the prior year. This increase was primarily  attributable to
an increase in the average balance of interest-bearing deposits of $16.7 million
and  $17.5  million  to $37.6  million  and  $36.1  million  for the  three  and
six-months  ended June 30,  2000,  respectively,  compared to $20.9  million and
$18.6 million,  respectively,  for the same periods in the prior year.  Interest
incurred on  borrowed  funds  increased  $64,000  and  $144,000 to $139,000  and
$269,000  for the  three  and  six-months  ended  June 30,  2000,  respectively,
compared to $75,000 and $125,000  for the same  periods in the prior year.  This
increase was  primarily  attributable  to an increase in the average  balance of
borrowed funds of $3.3 million and $3.4 million to $8.4 million and $8.5 million
for the three and six-months  ended June 30, 2000,  compared to $5.1 million for
the both  periods  in the prior  year.  This  increase  in  borrowed  funds is a
reflection of the increase in loans receivables,  as such funds were utilized to
provide for loan growth.  The cost of funds  increased  from 4.75% and 4.56% for
the three and six-months ended June 30, 1999,  respectively,  to 5.15% and 5.02%
for the same periods ended in 2000, primarily due to an increasing interest rate
environment.

                                       11
<PAGE>

         Total  noninterest  income for the three and six-months ending June 30,
2000  increased  $24,000 and $57,000 to $62,000 and $126,000,  respectively,  as
compared to $38,000 and $69,000 for the same  periods  ended 1999.  Non-interest
income  items are  primarily  comprised  of normal  service  charges and fees on
deposits,  along with fee income derived from ATM surcharges.  Such amounts have
progressively  increased  during each quarter as the number of deposit  accounts
and volume of related transactions have increased.

         Total noninterest  expenses  increased $78,000 and $162,000 to $395,000
and $761,000  for the three and  six-months  ended June 30, 2000,  respectively,
from  $318,000 and $599,000,  respectively,  for the same periods ended 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
six-month  periods is  primarily  related to  operating  a larger  organization.
Higher professional fees for the prior year three and six-month periods were the
result of the Company's new operations.

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 June 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  16.7%,  16.0%,  10.0%  and  16.0%,  15.3%,  9.6%,
respectively, at June 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

           The following represents the results of matters submitted to a vote
           of the stockholders at the annual meeting held on May 18, 2000:

           Election of a Director for term to expire in 2004:
           David K. Goodman, Jr. was elected by the following vote:

           For:                   485,345
           Votes Withheld:          2,700

           Election of a Director for term to expire in 2004:
           William A. Jaffe was elected by the following vote::

           For:                   485,345
           Votes Withheld:          2,700

           S.R. Snodgrass A.C.was selected as the Company's independent auditors
           for the fiscal year 2000 by the following vote:

           For:                   482,145
           Against:                 2,900
           Votes Abstaining:        3,000

Item 5.    Other information

           None

                                       13
<PAGE>

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  April  6,  2000,  an Item 5 Form  8-K was  filed  to  disclose  the
completion of the common stock offering.

                                       14
<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: August 11, 2000                  By: /s/David Z. Richards
                                           -------------------------------------
                                           David Z. Richards
                                           President and Chief Executive Officer