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, 2002

     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 incorporation  (IRS Employer Identification No.)
 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 10, 2002: 1,133,293

<PAGE>

                             NITTANY FINANCIAL CORP.

                                      INDEX


                                                                      Page
                                                                     Number
                                                                     ------


PART I  -  FINANCIAL INFORMATION

   Item 1.  Financial Statements

            Consolidated Balance Sheet (Unaudited) as of                3
                March 31, 2002 and December 31, 2001

            Consolidated Statement of Income (Unaudited)
                for the Three Months ended March 31, 2002 and 2001      4

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

            Consolidated Statement of Cash Flows (Unaudited)
                for the Three Months ended March 31, 2002 and 2001      6

            Notes to Unaudited Consolidated Financial Statements        7

   Item 2.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations         8 - 11

PART II  -  OTHER INFORMATION

      Item 1.  Legal Proceedings                                       12

      Item 2.  Changes in Securities                                   12

      Item 3.  Default Upon Senior Securities                          12

      Item 4.  Submissions of Matters to a Vote of Security Holders    12

      Item 5.  Other Information                                       12

      Item 6.  Exhibits and Reports on Form 8 - K                      12

SIGNATURES                                                             13


<PAGE>
                             NITTANY FINANCIAL CORP.
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)

<TABLE>

                                                            March 31,       December 31,
                                                              2002              2001
                                                         -------------      -----------
<S>                                                     <C>               <C>

ASSETS
Cash and due from banks                                   $    578,788      $    359,187
Interest-bearing deposits with other banks                  13,428,698         5,753,971
Investment securities available for sale                    12,242,221        13,188,065
Investment securities held to maturity  (market
    value of $24,363,407 and $27,789,824)                   24,403,351        27,796,205
Loans receivable (net of allowance for loan losses
    of $798,622 and $649,565)                               86,032,273        73,787,410
Premises and equipment                                       1,857,224         1,344,262
Federal Home Loan Bank stock                                   709,900           710,700
Intangible assets                                              787,247           799,217
Accrued interest and other assets                            1,048,925         1,043,117
                                                          ------------      ------------
     TOTAL ASSETS                                         $141,088,627      $124,782,134
                                                          ============      ============

LIABILITIES
Deposits:
   Noninterest-bearing demand                                4,947,447      $  4,094,714
   Interest-bearing demand                                  14,275,780        14,802,415
   Money market                                             16,363,621        13,827,084
   Savings                                                  58,652,921        46,864,234
   Time                                                     20,292,391        18,932,789
                                                          ------------      ------------
     Total deposits                                        114,532,160        98,521,236
Short-term borrowings                                        8,880,261         8,714,554
FHLB advances                                                7,765,391         7,813,775
Accrued interest payable and other liabilities                 815,524           770,753
                                                          ------------      ------------
     TOTAL LIABILITIES                                     131,993,336       115,820,318
                                                          ------------      ------------

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; 1,133,293 issued and outstanding               113,329           113,329
Additional paid-in capital                                  11,069,804        11,069,804
Retained deficit                                            (1,979,677)       (2,155,207)
Accumulated other comprehensive loss                          (108,165)          (66,110)
                                                          ------------      ------------
     TOTAL STOCKHOLDERS' EQUITY                              9,095,291         8,961,816
                                                          ------------      ------------
     TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY                             $141,088,627      $124,782,134
                                                          ============      ============
</TABLE>


See accompanying notes to the unaudited consolidated financial statements.


                                        3
<PAGE>

                             NITTANY FINANCIAL CORP.
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)


                                                  Three Months Ended March 31,
                                                     2002              2001
                                                  -----------      -----------

INTEREST AND DIVIDEND INCOME
Loans, including fees                             $1,449,268       $  922,688
Investment securities                                 21,491          296,032
Interest-bearing deposits with other banks           454,488           48,966
                                                  ----------       ----------
      Total interest and dividend income           1,925,247        1,267,686
                                                  ----------       ----------

INTEREST EXPENSE
Deposits                                             834,931          645,402
Short-term borrowings                                 52,071                -
Other borrowings                                     111,388          141,902
                                                  ----------       ----------
      Total interest expense                         998,390          787,304
                                                  ----------       ----------

NET INTEREST INCOME                                  926,857          480,382

Provision for loan losses                            150,000           40,500
                                                  ----------       ----------

NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                         776,857          439,882
                                                  ----------       ----------

NONINTEREST INCOME
Service fees on deposit accounts                      96,794           69,623
Investment security gain                               7,630                -
Other income                                          22,703           19,455
                                                  ----------       ----------
      Total noninterest income                       127,127           89,078
                                                  ----------       ----------

NONINTEREST EXPENSE
Compensation and employee benefits                   330,457          221,905
Occupancy and equipment                              117,046           85,400
Other                                                250,951          184,368
                                                  ----------       ----------
      Total noninterest expense                      698,454          491,673
                                                  ----------       ----------

Income before income taxes                           205,530           37,287
Income taxes                                          30,000                -
                                                  ----------       ----------

NET INCOME                                        $  175,530       $   37,287
                                                  ==========       ==========

EARNINGS PER SHARE:
      Basic                                            $0.15            $0.05
      Diuluted                                         $0.15            $0.05

WEIGHTED AVERAGE SHARES OUTSTANDING:
      Basic                                        1,133,293          780,312
      Diuluted                                     1,175,293          787,101


See accompanying notes to the unaudited consolidated financial statements.

                                        4


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


<TABLE>

                                                                             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, 2001            $113,329   $11,069,804   $(2,155,207)   $ (66,110)     $8,961,816

Net income                                                         175,530                      175,530     $175,530
Other comprehensive income:
  Unrealized loss on available for
    sale securities, net of tax
    benefit of $21,665                                                          (42,055)        (42,055)     (42,055)
                                                                                                            --------
Comprehensive income                                                                                        $133,475
                                       --------   -----------  -----------     --------      ----------     ========

Balance, March 31, 2002                $113,329   $11,069,804  $(1,979,677)   $(108,165)     $9,095,291
                                       ========   ===========  ===========     ========      ==========


                                                                                                 2002
                                                                                             ----------

  Components of other comprehensive loss:
    Change in net unrealized loss on investment securities available for sale               $   (37,019)
    Realized gains included in net income, net of taxes of $2,594                                (5,036)
                                                                                            -----------
  Total                                                                                     $   (42,055)
                                                                                            ===========

</TABLE>



See accompanying notes to the unaudited consolidated financial statements.


                                        5

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


<TABLE>
                                                                           Three Months Ended March 31,
                                                                                2002          2001
                                                                           ------------   -------------
<S>                                                                     <C>             <C>

OPERATING ACTIVITIES
      Net income                                                           $   175,530     $    37,287
      Adjustments to reconcile net income to net cash
        provided by operating activities:
          Provision for loan losses                                            150,000          40,500
          Depreciation, amortization, and accretion, net                       130,830          49,979
          Investment security gain                                              (7,630)              -
          Increase (decrease) in accrued interest receivable                   (14,913)         89,858
          Increase in accrued interest payable                                  81,909         112,115
          Other, net                                                           (28,033)         61,735
                                                                           -----------     -----------
          Net cash provided by operating activities                            487,693         391,474
                                                                           -----------     -----------

INVESTING ACTIVITIES
      Investment securities available for sale:
          Proceeds from sale                                                    37,630               -
          Proceeds from principal repayments and maturities                    848,267       3,041,364
      Investment securities held to maturity:
          Proceeds from principal repayments and maturities                  3,353,182         687,468
      Net increase in loans receivable                                     (12,399,865)     (2,970,610)
      Redemption of FHLB stock                                                     800               -
      Purchase of premises and equipment                                      (561,626)       (784,496)
                                                                           -----------     -----------
          Net cash used for investing activities                            (8,721,612)        (26,274)
                                                                           -----------     -----------

FINANCING ACTIVITIES
      Net increase (decrease) in deposits                                   16,010,924        (205,269)
      Net increase in short-term borrowings                                    165,707       2,611,110
      Repayment of other borrowings                                            (48,384)       (663,581)
                                                                           -----------     -----------
          Net cash provided by financing activities                         16,128,247       1,742,260
                                                                           -----------     -----------

          Increase in cash and cash equivalents                              7,894,328       2,107,460

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                             6,113,158       4,233,404
                                                                           -----------     -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $14,007,486     $ 6,340,864
                                                                           ===========     ===========

SUPPLEMENTAL CASH FLOW DISCLOSURE Cash paid during the year for:
          Interest on deposits and borrowings                              $   916,481     $   675,189
          Income taxes                                                          75,000               -

</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") 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  months  ended March 31, 2002 are not  necessarily
indicative of the results to be expected for the fiscal year ended  December 31,
2002 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, 2001,  which are
incorporated by reference in the Company's Annual Report on Form 10-KSB.

NOTE 2 - EARNINGS PER SHARE

The Company provides dual  presentation of Basic and Diluted earnings per share.
Basic  earnings per share  utilizes net income as reported as the  numerator and
the actual average shares  outstanding as the denominator.  Diluted earnings per
share  includes  any  dilutive  effects of options,  warrants,  and  convertible
securities.  For the three  months  ended March 31,  2002 and 2001,  the diluted
number of shares  outstanding  from employee stock options was 42,000 and 6,789,
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,  2002,  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, 2001, comprehensive income totaled $138,376.

                                       7

<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,  and general
economic conditions.

COMPARISON OF FINANCIAL CONDITION

Total  assets  increased  $16,307,000  to  $141,089,000  at March 31,  2002 from
$124,782,000  at December 31, 2001.  Strong growth in residential and commercial
real estate loans resulted in an increase in net loans receivable of $12,245,000
which were primarily  funded through  increased  balances in the savings deposit
products of $11,835,000 for the quarter.

Cash and cash equivalents  increased $7,895,000 at March 31, 2002 as compared to
December 31, 2001. 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 $12,242,000 at March 31,
2002 from  $13,188,000  at December 31, 2001 and investment  securities  held to
maturity decreased to $24,403,000 at March 31, 2002 from $27,796,000 at December
31,  2001.  The  decreases  in the  investment  securities  portfolios  resulted
primarily from  $4,201,000 of proceeds  received from  principal  repayments and
maturities.  Management  elected  not  to  reinvest  these  funds  into  similar
securities at this time as higher yielding  opportunities are being evaluated in
response to an increased loan demand.

Net loans receivable increased to $86,032,000 at March 31, 2002 from $73,787,000
at December 31, 2001.  The increase in net loans  receivable  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. At
March 31, 2002,  commercial real estate grew to $16,256,000  from $13,097,000 at
December  31,  2001  and 1 to 4 family  residential  mortgage  balances  grew by
$6,797,000 to  $51,478,000  from  $44,681,000  at December 31, 2001.  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, 2002,  the Company had  additional  commitments

                                       8

<PAGE>

to fund loan demand of $3.2 million of which  approximately $2.5 million relates
to residential and commercial real estate.

At March 31, 2002, the Company's allowance for loan losses increased $149,000 to
$799,000 from $650,000 at December 31, 2001.  This increase was primarily due to
the growth of  residential  and  commercial  real estate  loans.  The  increased
allowance  resulted from a loan loss  provision of $150,000 and  charge-offs  of
$1,000 during the period.

The additions to the allowance for loan losses are based upon a careful analysis
by  management  of  loan  data.  As 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, 2002,  there can be no assurance
that additional losses will not be required in future periods.

Premises and  equipment  increased  $513,000 to  $1,857,000 as of March 31, 2002
from $1,344,000 at December 31, 2001. The major portion of the increase resulted
from the  Company's  purchased and  renovation of a commercial  building at 2541
East College  Avenue in State College.  This property  opened as a fourth branch
office and administrative center on January 14, 2002.

Total deposits  increased by $16,011,000  to  $114,532,000  at March 31, 2002 as
compared to  $98,521,000  at December 31, 2001.  Of such  increase,  the nittany
savings deposit account  contributed  approximately $11.1 million to the amount.
The nittany  savings  deposit is a  competitive  deposit  account  with a tiered
annual  interest  rate of 3.25 % for  balances  over  $2,500 for the the current
period.  Due to the continued  decreases of short term  interest  rates over the
past year by the  Federal  Reserve,  the nittany  savings  deposit has helped to
increase our deposit base.

Stockholder's  equity  increased to  $9,095,000 at March 31, 2002 as a result of
net income of $176,000  offset by an increase of $42,000 in net unrealized  loss
on  investment  securities  available for sale due to  fluctuations  in interest
rates. Because of interest rate volatility, accumulated other comprehensive loss
could materially fluctuate for each interim period and year-end period depending
on economic and interest rate conditions

RESULTS OF OPERATIONS

Net income of $176,000 for the period ended March 31, 2002 increased by $139,000
as compared to the same period ended 2001 as  increases  in net interest  income
and  noninterest  income of $447,000 and $38,000,  respectively,  were offset by
increases in noninterest expense. Basic and diluted earnings per share increased
to $.15 per share for the three month  period  ended March 31, 2002  compared to
$.05 per share for the three month period ended March 31, 2001.

                                       9

<PAGE>


Net  interest  income for the three  months ended March 31, 2002 was $927,000 as
compared to $480,000 for the same period ended 2001.  Interest income  increased
$657,000 for 2002 as compared to the prior year period and was influenced mainly
by increases in interest earned on loans receivable of $526,000. Interest income
was  primarily  driven by an  increase of $58.0  million in average  balances of
interest-earning assets that primarily resulted from a $35.2 million increase in
the average balance of loans  receivable.  The yield on interest  earning assets
decreased  to 6.09% for the three months ended March 31, 2002 from 7.41% for the
same period  ended 2001 as interest  rates  continued  to drop for the  quarter.
Although there were  significant  increases in residential  and commercial  real
estate lending,  the yield on the loans receivable decreased 101 basis points in
2002 as compared to 2001.

Interest  expense  increased  $211,000  for 2002 as  compared  to the prior year
period and was influenced  mainly by an increase in interest expense on deposits
of $190,000.  This  increase was  primarily  attributable  to an increase in the
average  balance of  interest-bearing  deposits  of $48.8  million.  The average
balances of savings  deposit  accounts  increased  $45.0  million as a result of
marketing efforts and competitive rates of the Nittany Savings product. The cost
of funds decreased to 3.52% for the three month period ended March 31, 2002 from
5.21% for the same  period  ended  2001 as a result of a  general  reduction  in
interest rate levels.

Total  noninterest  income for the three months  ended March 31, 2002  increased
$38,000 as compared to the same period ended 2001.  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, 2002, Nittany Asset Management  contributed  $21,000 in commission and
management fees, an increase of $7,000 over 2001.

Total noninterest  expenses  increased $207,000 for the three months ended March
31,  2002 as  compared to the same  period  ended  2001.  The  increase in total
noninterest  expenses for the current period was primarily related to the larger
organization  that  resulted  from  the  opening  of an  additional  branch  and
administrative center during the first quarter, as well as the related marketing
efforts to increase visibility within the Company's market. On January 14, 2002,
the Company opened a new branch office and administrative center on East College
Avenue in State College.  Salary and benefits costs increased in connection with
the staffing of this new branch office, as well as, annual merit increases given
to current  staff.  Occupancy and equipment  expenses also  increased due to the
opening of the new office.  Additionally,  for the three-months  ended March 31,
2002, Nittany Asset Management operations  contributed  approximately $11,000 of
other operating expense, a decrease of $6,000 over 2001.

                                       10

<PAGE>


Income tax expense of $30,000  was  recognized  in the first  quarter of 2002 in
anticipation that all operating loss  carryforwards  will be utilized during the
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, 2002, 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
12.8%, 11.6%, 6.0% and 12.4%, 11.3%, 5.8%, respectively, at March 31, 2002.


                                       11

<PAGE>


PART II - OTHER INFORMATION

Item 1. Legal Proceedings

        None

Item 2. Changes in securities and use of proceeds

        None

Item 3. Defaults by the Company on its senior securities

        None

Item 4. Submission of matters to a vote of security holders

        None

Item 5. Other information

        None

Item 6. Exhibits and Reports on Form 8-K

        (a) The following exhibits are 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 **
            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.

        (b) Reports on Form 8-K.

            None

                                       12

<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 14, 2002                    By: /s/David Z. Richards
                                           -------------------------------------
                                           David Z. Richards
                                           President and Chief Executive Officer



                                       13