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, 2005

-----
      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) 238 - 5724
--------------------------------------------------------------------------------
              (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, 2005: 2,110,794

<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, 2005 and December 31, 2004

                        Consolidated Statement of Income (Unaudited)
                            for the Three Months ended March 31, 2005 and 2004                                         4

                        Consolidated Statement of Income (Unaudited)
                            for the Three Months ended March 31, 2005 and 2004                                         4

                        Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
                            for the Three Months ended March 31, 2005                                                  5

                        Consolidated Statement of Cash Flows (Unaudited)
                            for the Three Months ended March 31, 2005 and 2004                                         6

                        Notes to Unaudited Consolidated Financial Statements                                           7

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

      Item 3.       Controls and Procedures                                                                           16

PART II  -  OTHER INFORMATION

      Item 1.       Legal Proceedings                                                                                 17

      Item 2.       Unregistered Sales of Equity Securities and
                         Use of Proceeds                                                                              17

      Item 3.       Defaults Upon Senior Securities                                                                   17

      Item 4.       Submission of Matters to a Vote of Security Holders                                               17

      Item 5.       Other Information                                                                                 17

      Item 6.       Exhibits                                                                                          17

SIGNATURES                                                                                                            19

CERTIFICATIONS

</TABLE>

<PAGE>

                             NITTANY FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                      March 31,      December 31,
                                                                        2005             2004
                                                                   -------------    -------------
                                                                           (unaudited)
<S>                                                              <C>              <C>
ASSETS
    Cash and due from banks                                        $     915,958    $   1,094,763
    Interest-bearing deposits with other banks                         8,814,297       14,487,813
                                                                   -------------    -------------
      Cash and cash equivalents                                        9,730,255       15,582,576
    Investment securities available for sale                           1,956,868        2,084,223
    Investment securities held to maturity (estimated
      market value of $42,377,341 and $37,502,230)                    42,817,595       37,491,341
    Loans receivable                                                 244,412,102      237,626,883
    Less allowance for loan losses                                     2,260,408        2,198,315
                                                                   -------------    -------------
      Net loans                                                      242,151,694      235,428,568
    Premises and equipment                                             3,587,308        2,609,528
    FHLB Stock                                                         2,212,900        2,066,100
    Goodwill                                                           1,763,231        1,763,231
    Accrued interest and other assets                                  2,687,858        2,210,133
                                                                   -------------    -------------

          TOTAL ASSETS                                             $ 306,907,709    $ 299,235,700
                                                                   =============    =============

LIABILITIES
    Deposits:
      Noninterest-bearing demand                                   $  11,956,709    $  10,668,777
      Interest-bearing demand                                         26,051,710       25,614,681
      Money market                                                    34,254,744       43,191,121
      Savings                                                        148,020,380      157,200,274
      Time                                                            32,459,625       21,596,027
                                                                   -------------    -------------
         Total deposits                                              252,743,168      258,270,880
    Short-term borrowings                                             22,277,783       14,838,231
    Other borrowings                                                   7,122,345        7,180,612
    Accrued interest payable and other liabilities                     1,653,000        1,279,653
                                                                   -------------    -------------

          TOTAL LIABILITIES                                          283,796,296      281,569,376
                                                                   -------------    -------------

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, 2,110,794 and 1,930,794 issued and outstanding         211,079          193,079
    Additional paid-in capital                                        18,863,413       14,339,979
    Retained earnings                                                  4,047,959        3,139,165
    Accumulated other comprehensive loss                                 (11,038)          (5,899)
                                                                   -------------    -------------

          TOTAL STOCKHOLDERS' EQUITY                                  23,111,413       17,666,324
                                                                   -------------    -------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $ 306,907,709    $ 299,235,700
                                                                   =============    =============
</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                       3

<PAGE>

                             NITTANY FINANCIAL CORP.
                        CONSOLIDATED STATEMENT OF INCOME

                                                    Three-months Ended March 31,

                                                          2005      2004
                                                      ----------   ----------
                                                            (unaudited)
INTEREST AND DIVIDEND INCOME
    Loans, including fees                             $3,527,905   $2,757,840
    Interest-bearing deposits with other banks            80,161       15,366
    Investment securities                                382,210      391,059
                                                      ----------   ----------
           Total interest and dividend income          3,990,276    3,164,265
                                                      ----------   ----------

INTEREST EXPENSE
    Deposits                                           1,256,943    1,159,700
    Short-term borrowings                                 95,870        5,981
    Other borrowings                                     135,818      137,692
                                                      ----------   ----------
           Total interest expense                      1,488,631    1,303,373
                                                      ----------   ----------

NET INTEREST INCOME                                    2,501,645    1,860,892

Provision for loan losses                                 62,000      110,000
                                                      ----------   ----------

NET INTEREST INCOME AFTER PROVISION FOR
   LOAN LOSSES                                         2,439,645    1,750,892
                                                      ----------   ----------

NONINTEREST INCOME
    Service fees on deposit accounts                     164,567      146,061
    Asset management fees and commissions                697,770      566,745
    Other                                                 64,053       10,130
                                                      ----------   ----------
           Total noninterest income                      926,390      722,936
                                                      ----------   ----------

NONINTEREST EXPENSE
    Compensation and employee benefits                   780,841      692,765
    Occupancy and equipment                              176,874      176,336
    Professional fees                                     63,021       43,449
    Data processing fees                                 131,562      119,007
    Supplies, printing, and postage                       50,301       32,993
    Advertising                                           62,582       40,405
    ATM processing fees                                   36,452       34,871
    Commission expense                                   429,573      377,506
    Other                                                237,036      165,445
                                                      ----------   ----------
           Total noninterest expense                   1,968,242    1,682,777
                                                      ----------   ----------

Income before income taxes                             1,397,793      791,051
Income taxes                                             489,000      295,000
                                                      ----------   ----------

NET INCOME                                            $  908,793   $  496,051
                                                      ==========   ==========

EARNINGS PER SHARE
    Basic                                             $     0.45   $     0.26
    Diluted                                                 0.42         0.24
WEIGHTED AVERAGE SHARES OUTSTANDING
    Basic                                              1,997,751    1,924,621
    Diluted                                            2,154,724    2,074,229


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          Loss          Equity         Income
                                         --------------  -------------  -------------   -------------  -------------  --------------
                                                                                  (unaudited)
<S>                                    <C>             <C>            <C>            <C>             <C>             <C>
Balance, December 31, 2004               $     193,079   $ 14,339,979   $  3,139,165    $     (5,899)  $ 17,666,324

Net income                                                                   908,793                        908,793   $     908,793
Other comprehensive income:
    Unrealized loss on available for sale securities
    net of tax benefit of $2,648                                                              (5,139)        (5,139)         (5,139)
                                                                                                                      --------------
Comprehensive income                                                                                                  $     903,654
                                                                                                                      ==============
Stock Offering - 180,000 shares at $26 per share
    (net of offering expenses)                  18,000      4,523,434                                     4,541,434
                                         --------------  -------------  -------------   -------------  -------------

Balance, March 31, 2005                  $     211,079   $ 18,863,413   $  4,047,959    $    (11,038)  $ 23,111,413
                                         ==============  =============  =============   =============  =============

</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,
                                                                        2005            2004
                                                                   ------------    ------------
                                                                           (unaudited)
<S>                                                              <C>             <C>
OPERATING ACTIVITIES
     Net income                                                    $    908,793    $    496,051
     Adjustments to reconcile net income to net cash
       provided by (used for) operating activities:
         Provision for loan losses                                       62,000         110,000
         Depreciation, amortization, and accretion, net                 128,578         180,681
         Increase in accrued interest receivable                        (86,145)        (67,586)
         Increase in accrued interest payable                           127,833          53,236
         Other, net                                                    (143,420)        279,904
                                                                   ------------    ------------
         Net cash provided by operating activities                      997,639       1,052,286
                                                                   ------------    ------------

INVESTING ACTIVITIES
     Investment securities available for sale:
         Proceeds from principal repayments and maturities              118,004         841,959
     Investment securities held to maturity:
         Purchases                                                   (9,119,951)    (10,855,899)
         Proceeds from principal repayments and maturities            3,731,514       5,214,013
     Net increase in loans receivable                                (6,783,055)    (12,510,284)
     Purchase of FHLB stock                                            (146,800)        (82,200)
     Purchase of premises and equipment                              (1,044,679)        (68,379)
                                                                   ------------    ------------
         Net cash used for investing activities                     (13,244,967)    (17,460,790)
                                                                   ------------    ------------

FINANCING ACTIVITIES
     Net increase (decrease) in deposits                             (5,527,712)     16,772,862
     Net increase in short-term borrowings                            7,439,552         145,799
     Repayment of other borrowings                                      (58,267)        (54,768)
     Proceeds from the sale of common stock                           4,541,434               -
     Cash paid in lieu of fractional shares                                   -          (3,472)
                                                                   ------------    ------------
         Net cash provided by financing activities                    6,395,007      16,860,421
                                                                   ------------    ------------

         Increase (decrease) in cash and cash equivalents            (5,852,321)        451,917

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     15,582,576      14,953,286
                                                                   ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $  9,730,255    $ 15,405,203
                                                                   ============    ============

SUPPLEMENTAL CASH FLOW DISCLOSURE
     Cash paid during the year for:
         Interest on deposits and borrowings                       $  1,360,798    $  1,250,137
         Income taxes                                                   137,500         336,500

</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, 2005 are not  necessarily
indicative of the results to be expected for the fiscal year ended  December 31,
2005 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, 2004,  which are
incorporated herein by reference to 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:


                                                       Three Months Ended
                                                             March 31,
                                                          2005       2004
                                                        --------   --------

Net income, as reported:                                $908,793   $496,051
Less proforma expense related
  to stock options                                        13,855     29,747
                                                        --------   --------
Proforma net income                                     $894,938   $466,304
                                                        ========   ========


Basic net income per common share:
     As reported                                        $   0.45   $   0.26
     Pro forma                                              0.45       0.24
Diluted net income per common share:
     As reported                                            0.42       0.24
     Pro forma                                              0.42       0.22

                                       7

<PAGE>

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,  2005 and 2004,  the diluted
number of shares  outstanding  from  employee  stock  options  was  156,973  and
149,608, 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,  2005,  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, 2005,  comprehensive  income totaled  $903,654.
For the  three  months  ended  March  31,  2004,  comprehensive  income  totaled
$512,845.

NOTE 4 - STOCK OFFERING

In November  2004,  the Board of Directors  approved a stock  offering which was
completed  during the first quarter of 2005 to existing  shareholders and to the
public.  As a result,  180,000  additional  shares of the  Company's  stock were
issued,  common  stock was  increased by $18,000,  and surplus was  increased by
$4,523,434, the net proceeds of the offering.

NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

In April 2005, the Securities  and Exchange  Commission  adopted a new rule that
amends the compliance dates for Financial  Accounting Standards Board's ("FASB")
Statement of Financial Accounting Standards No. 123 (revised 2004),  Share-Based
Payment (FAS No. 123R). The Statement  requires that  compensation cost relating
to share-based  payment  transactions be recognized in financial  statements and
that this cost be  measured  based on the fair value of the equity or  liability
instruments  issued.  FAS  No.  123  (Revised  2004)  covers  a  wide  range  of
share-based compensation arrangements including share options,  restricted share
plans,  performance-based  awards, share appreciation rights, and employee share
purchase plans.  The Company will adopt FAS No. 123 (Revised 2004) on January 1,
2006 and is currently  evaluating  the impact the adoption of the standard  will
have on the Company's results of operations.

In December 2004, FASB issued FAS No. 153, "Exchanges of Nonmonetary Assets - An
Amendment  of APB  Opinion  No.  29".  The  guidance  in  APB  Opinion  No.  29,
"Accounting  for  Nonmonetary  Transactions",  is  based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  The guidance in that Opinion,  however,  included certain
exceptions to that principle. FAS No. 153 amends Opinion No. 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and replaces it
with a general  exception for exchanges of  nonmonetary  assets that do not have
commercial  substance.  A nonmonetary  exchange has commercial  substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange.  The  provisions  of FAS No. 153 are effective for  nonmonetary
asset exchanges occurring in fiscal periods beginning after June 15, 2005. Early
application  is permitted and companies  must apply the standard  prospectively.
The adoption of this  standard is not expected to have a material  effect on the
Company's results of operations or financial position.

                                       8

<PAGE>

NOTE 6 - BUSINESS SEGMENTS

The Company operates two reportable  segments:  community banking and investment
advisory and product  services.  The Company's  community banking segment offers
services  traditionally  offered by  full-service  commercial  banks,  including
commercial  mortgage,  residential real estate, and consumer loan financing,  as
well as commercial  demand,  individual demand, and time deposit services to its
customers. The investment advisory and product services segment offers fee based
investment management services and alternative investment products.

Selected segment information is included in the following tables:

<TABLE>
<CAPTION>
                                                                           Investment
                                                                          Advisory and
                                                             Community      Product
                                                              Banking       Services       Consolidated
                                                          --------------  --------------  --------------
<S>                                                      <C>             <C>             <C>
For the quarter ended March 31, 2005:

Interest income                                           $   3,990,276   $           -   $   3,990,276
Interest expense                                              1,488,631               -       1,488,631
                                                          --------------  --------------  --------------

Net interest income                                           2,501,645               -       2,501,645
Provision for loan losses                                        62,000               -          62,000
                                                          --------------  --------------  --------------

Net interest income after provision for loan losses           2,439,645               -       2,439,645
Noninterest income                                              228,621         697,769         926,390
Noninterest expense                                           1,398,284         569,958       1,968,242
                                                          --------------  --------------  --------------

Income before income taxes                                    1,269,982         127,811       1,397,793
Income taxes                                                    444,000          45,000         489,000
                                                          --------------  --------------  --------------

Net income                                                $     825,982   $      82,811   $     908,793
                                                          ==============  ==============  ==============

Intersegment revenues (expenses) included above           $     136,048   $    (136,048)  $           -
Goodwill                                                        799,217         964,014       1,763,231
Depreciation and amortization expense                            66,351             549          66,900
Total assets                                                305,722,950       1,184,759     306,907,709
</TABLE>

                                       9

<PAGE>

<TABLE>
<CAPTION>
                                                                           Investment
                                                                          Advisory and
                                                             Community      Product
                                                              Banking       Services       Consolidated
                                                          --------------  --------------  --------------
<S>                                                      <C>             <C>             <C>
For the quarter ended March 31, 2004:

Interest income                                            $   3,164,265   $           -   $   3,164,265
Interest expense                                               1,303,373               -       1,303,373
                                                           --------------  --------------  --------------

Net interest income                                            1,860,892               -       1,860,892
Provision for loan losses                                        110,000               -         110,000
                                                           --------------  --------------  --------------

Net interest income after provision for loan losses            1,750,892               -       1,750,892
Noninterest income                                               156,191         566,745         722,936
Noninterest expense                                            1,181,655         501,122       1,682,777
                                                           --------------  --------------  --------------

Income before income taxes                                       725,428          65,623         791,051
Income taxes                                                     272,000          23,000         295,000
                                                           --------------  --------------  --------------

Net income                                                 $     453,428   $      42,623   $     496,051
                                                           ==============  ==============  ==============

Intersegment revenues (expenses) included above            $    (119,048)  $     119,048   $           -
Goodwill                                                         799,217         964,014       1,763,231
Depreciation and amortization expense                             63,753             555          64,308
Total assets                                                 265,028,907       1,185,875     266,214,782
</TABLE>


                       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, 2005, the business  operations of Nittany  included three
operating  subsidiaries  (collectively  defined  as the  "Company",  unless  the
context indicates otherwise), as follows:

                                       10

<PAGE>

     o    Nittany  Bank  commenced  banking  operations  in  October  1998  as a
          federally-insured  federal  savings  bank  with two  offices  in State
          College,  Pennsylvania.  Two  additional  offices were opened in State
          College in August  2000 and January  2002.  A lease was signed in June
          2004 for a historic property in downtown Bellefonte,  Pennsylvania,  a
          neighboring  community  to State  College,  which  opened as the fifth
          branch in February 2005. The Bank formed a Delaware investment company
          called FTF Investments Inc. during the first quarter of 2004 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  of
          approximately  $300 million.  This subsidiary is also headquartered at
          2541 East College Avenue in State College.

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, 2005, we had consolidated assets of $307 million,  loans
receivable (net of allowance for loan losses) of $242 million,  deposits of $253
million,  and  stockholders'  equity of $23 million.  Net income for the quarter
ended March 31, 2005  increased  $412,700 to $908,800 or $0.42 per diluted share
from  $496,100  or $0.24 per  diluted  share for the same  period in 2004.  This
included  an income tax  expense of $489,000  for the 2005  quarter  compared to
$295,000 for the 2004 quarter.

COMPARISON OF FINANCIAL CONDITION

Total  assets  increased  $7,672,000  to  $306,907,700  at March  31,  2005 from
$299,235,700  at December 31, 2004.  Strong growth in residential and commercial
real estate loans resulted in an increase in net loans  receivable of $6,723,100
which were funded mainly through Federal Home Loan Bank borrowings. 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  decreased $5,852,300 at March 31, 2005 as compared to
December  31,  2004.  This  decrease  resulted  from growth in loan demand which
exceeded  deposits  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 short
term  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.

                                       11

<PAGE>

Investment  securities  available for sale  decreased to $1,956,900 at March 31,
2005 from  $2,084,200  at December 31, 2004 and  investment  securities  held to
maturity increased to $42,817,600 at March 31, 2005 from $37,491,300 at December
31, 2004. The increase in the investment  securities held to maturity  portfolio
resulted  primarily  from the  investment  of cash held at  Nittany  Bank's  FTF
Investments Inc. subsidiary.

Net loans receivable increased $6,723,100 to $242,151,700 at March 31, 2005 from
$235,428,600 at December 31, 2004. The increase in net loans receivable resulted
from the strong real estate market in the Company's  market area, and low market
interest  rates.  At March 31,  2005,  one to four family  residential  mortgage
balances grew by $5,160,300 to  $161,883,300  from  $156,723,000 at December 31,
2004 and  commercial  real estate loans grew by $3,432,900  during the same time
period.  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, 2005, the Company had additional commitments to fund loan
demand of $12,522,000 of which  approximately  $4,974,000  relates to commercial
customers.

At March 31, 2005, the Company's  allowance for loan losses increased by $62,100
to $2,260,400 from  $2,198,300 at December 31, 2004. The increase  resulted from
an  additional  loan loss  provision  of $62,000  needed for the growth in loans
during  the  quarter  which  were  offset  by  a  few   recoveries  of  previous
charge-offs.

The additions to the allowance for loan losses are based upon a careful analysis
by  management  of loan data.  Because the Company has incurred very little loan
losses in its five-year  history,  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, 2005, there can
be no assurance that additional losses will not be incurred in future periods.


The table below outlines the Company's past due loans as of March 31, 2005:

<TABLE>
<CAPTION>
----------------- --------------------------------------------------------------------
                                                > 90 Days Past Due -   > 90 Days Past
                                   Total Loan      Due -  Number         Due - Balance
                    # of Loans      Balance          of Loans              of Loans
----------------- --------------------------------------------------------------------
<S>                      <C>      <C>                      <C>                <C>
Personal Loans             363      6,046,600                1                  9,700
----------------- --------------------------------------------------------------------
Credit
Line Loans                 452      4,564,200                2                 37,800
----------------- --------------------------------------------------------------------
Business Loans             188     13,107,200                3                181,300
----------------- --------------------------------------------------------------------
Real
Estate Loans             1,307    218,433,700                1                 80,900
----------------- --------------------------------------------------------------------
      Total              2,310    242,151,700                7                309,700
----------------- --------------------------------------------------------------------
</TABLE>

                                       12

<PAGE>

Total  deposits  decreased by  $5,527,700 to  $252,743,200  at March 31, 2005 as
compared to  $258,270,900  at December 31,  2004.  The Nittany  Savings  deposit
account  deposit is a  competitively  priced  deposit  account  which  comprises
approximately  59% of total  deposits  at March 31,  2005.  During the  quarter,
Management made the decision to not retain  selected  higher  yielding  deposits
during the rise in short term rates that did not compliment the overall  funding
strategy of the Bank.  Time deposits  increased by $10,863,600  for the quarter,
mainly in the variable rate products tied to prime rate,  which partially offset
the decline of $9,179,900 in the Nittany Savings account and $8,936,400 in money
market accounts.  Non-interest  bearing demand deposits increased to $11,956,700
at March 31, 2005 from  $10,668,800  at December  31, 2004 which  helped the net
interest  margin.  Short  term  borrowing  from the  Federal  Home  Loan Bank in
Pittsburgh, with very competitive market rates, were used to offset funding gaps
caused by the decline in deposits.

Stockholder's equity increased to $23,111,400 at March 31, 2005 from $17,666,300
at December 31, 2004 because of net income of  $908,800,  the stock  offering of
180,000 shares at $26 per share during the quarter,  and minor  fluctuations  in
the market value of available for sale securities.

Average Balance Sheet for March 31, 2005

The  following  tables set forth certain  information  relating to the Company's
quarterly  average  balance  sheet and reflects the average  yield on assets and
average cost of  liabilities  for the periods  indicated and the average  yields
earned and rates paid.  Such yields and costs are derived by dividing  income or
expense by the average balance of assets or liabilities,  respectively,  for the
periods presented. Average balances are derived from average daily balances.

The yield on earning assets and the net interest margin are presented on a fully
taxable-equivalent (FTE) and annualized basis. The FTE basis adjusts for the tax
benefit of income on certain  tax-exempt loans and investments using the federal
statutory tax rate of 34% for each period  presented.  The Company believes this
measure to be the  preferred  industry  measurement  of net interest  income and
provides relevant comparison between taxable and non-taxable amounts.

                                       13

<PAGE>

a.  Nittany   Financial   Quarterly   Average  Balance  Sheet  and  Supplemental
    Information:

<TABLE>
<CAPTION>
                                                                          For the period ended
                                               ------------------------------------------------------------------------
                                                           3/31/2005                           3/31/2004
                                               ----------------------------------   -----------------------------------
                                                                          (3)                                   (3)
                                                Average   Annualized    Average      Average   Annualized     Average
                                                Balance    Interest    Yield/Cost    Balance    Interest     Yield/Cost
                                                -------   ----------   ----------    -------   ----------    ----------
                                                      (Dollars in thousands)              (Dollars in thousands)
<S>                                           <C>            <C>         <C>       <C>            <C>          <C>
Interest-earning assets:
  Loans receivable                             $240,154       $3,528      5.88%     $188,661       $2,758       5.85%
  Investments securities                         43,704          382      4.06%       48,753          391       3.73%
  Interest-bearing dep. with other banks         12,341           80      2.59%        8,409           15       0.71%
                                               --------  -----------   -------      --------   ----------   --------
Total interest-earning assets                   296,199        3,990      5.47%      245,824        3,164       5.25%
                                                         -----------                           ----------
Noninterest-earning assets                        7,086                                8,782
Allowance for loan losses                        (2,218)                              (1,751)
                                               --------                             --------
Total assets                                   $301,066                             $252,854

Interest-bearing liabilities:
  Interest - bearing demand deposits            $22,822           48      0.85%      $19,139           39       0.83%
  Money market deposits                          40,800          211      2.06%       34,466          184       2.13%
  Savings deposits                              154,466          769      1.99%      144,343          772       2.14%
  Certificates of deposit                        28,991          229      3.16%       21,637          165       3.05%
  Advances from FHLB                             22,584          232      4.10%        9,829          144       5.85%
                                               --------  -----------   -------      --------   ----------   --------
Total interest-bearing liabilities              269,663        1,489      2.21%      229,414        1,304       2.27%
                                               --------  -----------                --------   ----------   --------
Noninterest-bearing liabilities
  Demand deposits                                10,382                                7,665
  Other liabilities                               1,256                                  633
Stockholders' equity                             19,765                               15,143
Total liabilities and stockholders' equity     $301,066                             $252,854
                                               ========                             ========
Net interest income                                           $2,501                               $1,860
                                                         ============                          ==========
Interest rate spread (1)                                                  3.26%                                 2.98%
Net yield on interest-earning assets (2)                                  3.46%                                 3.13%
Ratio of average interest-earning assets to
  average interest-bearing liabilities                                  109.84%                               107.15%
</TABLE>

-------------------
(1)  Interest rate spread  represents the  difference  between the avg. yield on
     interest-earning assets and the avg. cost of interest-bearing liabilities
(2)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.
(3)  Average yields are computed using  annualized  interest  income and expense
     for the periods.

RESULTS OF OPERATIONS

Net income was $908,800  for the three months ended March 31, 2005,  an increase
of $412,700 as compared to the same period ended 2004. The increase is primarily
due to increases in net interest income and  noninterest  income of $640,700 and
$203,500,  respectively,  which were offset by increases in noninterest  expense
and taxes. Basic and diluted earnings per share increased to $0.45 and $0.42 per
share, respectively for the three months period ended March 31, 2005 compared to
$0.26 and $0.24 per share, respectively,  for the three month period ended March
31, 2004.

Net interest  income for the three months ended March 31, 2005 was $2,501,600 as
compared to $1,860,900 for the same period ended 2004. Interest income increased
$826,000 for 2005 as compared to the prior year period and was influenced mainly
by increases in interest earned on loans receivable of $770,100. The increase in
interest income was the result of an increase of $50,375,000 in average

                                       14

<PAGE>

balances of  interest-earning  assets that primarily resulted from a $51,493,000
increase  in the  average  balance of loans  receivable.  The yield on  interest
earning assets increased to 5.47% for the three months ended March 31, 2005 from
5.25% for the same period ended 2004 due to increasing interest rates during the
quarter.  There were  significant  increases in residential  real estate lending
plus the  yield on the  loans  receivable  increased  3 basis  points in 2005 as
compared to 2004.

Interest expense increased by $185,200 for the three months ended March 31, 2005
as compared to the prior year period and was influenced primarily by an increase
in interest  expense on deposits as decreases in deposit balances were partially
offset by higher rates. This increase was primarily  attributable to an increase
in the average balance of interest-bearing deposits of $27,494,000.  The average
balance of savings  deposit  accounts  increased by $10,123,000  but the average
rate  decreased by 15 basis points when compared to the same period in 2004. The
cost of funds decreased to 2.21% for the three month period ended March 31, 2005
from 2.27% for the same period  ended 2004 as a result of a increases  in market
interest  rate levels,  a increase in the rates paid on deposits,  and a greater
use of our Federal Home Loan Bank overnight borrowing capabilities.

As a result of an increase in the average yield on interest earning assets,  the
Bank's  quarterly net interest margin increased by 33 basis points to 3.46% from
3.13% at March 31, 2004, a period of interest rate volatility.

Total  noninterest  income for the three months  ended March 31, 2005  increased
$203,500 as compared to the same period ended 2004. Noninterest income items are
primarily  comprised of service  charges and fees on deposit  account  activity,
overdraft  privilege fees,  along with fee income derived from asset  management
services and related  commissions.  Service fees on deposit  accounts  increased
$18,500 have increased as the number of accounts and the volume of  transactions
have  increased.  Additionally,  for the  three-months  ended  March  31,  2005,
commissions  and  management  fees from  Vantage  and Nittany  Asset  Management
increased by $131,000 over the same period of 2004.

Total noninterest  expenses  increased $285,400 for the three months ended March
31,  2005,  as  compared to the same period  ended 2004.  The  increase in total
noninterest  expenses for the current period was primarily related to the larger
organization  that resulted  from opening of the new branch in  Bellefonte  last
year 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 $429,600 of independent  investment
solicitors'  fees for the quarter as compared to $377,500 for the same period in
2004 due to the growth in assets under management.

Income tax  expense of $489,000  was  recognized  in the first  quarter of 2005,
compared to $295,000 for the same period of 2004. The purchase of  approximately
$15 million in high  quality  municipal  bonds and the  formation  of a Delaware
investment company in 2004, have helped to reduce our effective tax rate.

                                       15

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Liquidity  management for Nittany is measured and monitored on both a short- and
long-term basis,  allowing management to better understand and react to emerging
balance  sheet trends.  After  assessing  actual and projected  cash flow needs,
management seeks to obtain funding at the most economical cost to Nittany.  Both
short- and long-term  liquidity  needs are addressed by maturities,  repayments,
and sales of investments securities, and loan repayments and maturities. The use
of these  resources,  in  conjunction  with  access to credit,  provide the core
ingredients for satisfying depositor, borrower, and creditor needs.

Nittany's  liquid assets  consist of cash and cash  equivalents,  and investment
securities  classified  as  available  for sale.  The  level of these  assets is
dependent on Nittany's operating, investing, and financing activities during any
given period. At March 31, 2005, cash and cash equivalents  totaled $9.7 million
or 3% of total assets while  investment  securities  classified as available for
sale totaled $1,956,900. Management believes that the liquidity needs of Nittany
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 that mature within one year. These sources
of funds will enable  Nittany to meet cash  obligations  and  off-balance  sheet
commitments as they come due.

Operating  activities  provided  net cash of $997,600 for the three month period
ended March 31, 2005, generated principally from net income of $908,800 million.
Also  contributing  to operating  activities  was  provision for loan losses and
depreciation, amortization, and accretion of $62,000 and $128,578, respectively.

Investing  activities  consist primarily of loan originations and repayments and
investment  purchases and maturities.  These cash usages primarily  consisted of
loan  originations of $6.8 million for the three months ended March 31, 2005, as
well as investment purchases of $9.1 million for the same time period. Partially
offsetting  the usage of investment  activities is $3.7 million of proceeds from
investment security maturities and repayments for the same time period.

Financing  activities  consist of the  solicitation  and  repayment  of customer
deposits, borrowings and repayments, and proceeds from the sale of common stock.
During the three  month  period  ending  March 31,  2005,  net cash  provided by
financing  activities totaled $6.4 million,  principally  derived from the stock
offering  during the quarter  (180,000  shares at $26 per share) plus short term
borrowings from the Federal Home Loan Bank of Pittsburgh.  Also  contributing to
this influx of cash was proceeds from short term borrowings of $7.4 million.

Nittany's primary source of capital has been common stock offerings and retained
earnings.  Historically,  Nittany has generated  net retained  income to support
normal growth and expansion.  Management has developed a capital planning policy
to not only  ensure  compliance  with  regulations,  but also to ensure  capital
adequacy for future expansion.

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, 2005, 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
13.6%, 12.4%, 7.0% and 13.5%, 12.3%, 6.9%, respectively, at March 31, 2005.

                                       16

<PAGE>

Item 3.  Controls and Procedures

(a) Evaluation of disclosure controls and procedures.  Based on their evaluation
    ------------------------------------------------
as of March 31, 2005, 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-15(c) and 15d-15(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.


PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

           None

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

           None

Item 3.    Defaults upon Senior Securities

           None


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

           None

Item 5.    Other Information

           None

Item 6.    Exhibits

<TABLE>
<CAPTION>
          (a)  The   following   exhibits   are   included  in  this  Report  or
               incorporated herein by reference:
        <C>        <C>

               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

                                       17

<PAGE>

               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
</TABLE>

*    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.

                                       18

<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, 2005            By: /s/ David Z. Richards
                                     -------------------------------------------
                                     David Z. Richards
                                     President and Chief Executive Officer



Date:    May 13, 2005            By: /s/ Gary M. Bradley
                                     -------------------------------------------
                                     Gary M. Bradley
                                     Vice President and Chief Accounting Officer


                                       19