<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-K

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the fiscal year ended December 31, 2002

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from _____________________ to  _____________________

Commission file number 000-23667

                              HOPFED BANCORP, INC.
             (Exact name of registrant as specified in its charter)

                     Delaware                           61-1322555
         -----------------------------------       ---------------------
           (State or other jurisdiction of           (I.R.S. Employer
           incorporation or organization)           Identification No.)

      2700 Fort Campbell Boulevard, Hopkinsville, KY           42240
     ------------------------------------------------       ------------
         (Address of principal executive offices)            (Zip Code)

       Registrant's telephone number, including area code: (270) 885-1171.

        Securities registered pursuant to Section 12(b) of the Act: None.

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                     --------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for 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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). YES [ ] No [X]

The registrant's voting stock is traded on the NASDAQ Stock Market. The
aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the price ($12.42 per share) at which the
stock was sold on June 28, 2002, was approximately $41,376,000. For purposes of
this calculation, the term "affiliate" refers to all executive officers and
directors of the registrant and all stockholders beneficially owning more than
10% of the registrant's Common Stock.

As of the close of business on March 24, 2003, 3,630,396 shares of the
registrant's Common Stock were outstanding.

                       Documents Incorporated By Reference

Part II:
Annual Report to Stockholders for the year ended December 31, 2002.

Part III:
Portions of the definitive proxy statement for the 2003 Annual Meeting of
Stockholders.

<PAGE>

                                     PART I

ITEM 1.    BUSINESS

     In February 1998, HopFed Bancorp, Inc. (the "Company") issued and sold
4,033,625 shares of common stock, par value $.01 per share (the "Common Stock"),
in connection with the conversion of Hopkinsville Federal Savings Bank (the
"Bank") from a federal mutual savings bank to a federal stock savings bank and
the issuance of the Bank's capital stock to HopFed Bancorp, Inc. (the
"Company"). The conversion of the Bank, the acquisition of all of the
outstanding capital stock of the Bank by the Company and the issuance and sale
of the Common Stock are collectively referred to herein as the "Conversion." In
February 2001, the Bank changed its name to Hopkinsville Federal Bank.

HOPFED BANCORP, INC.

     HopFed Bancorp, Inc. was incorporated under the laws of the State of
Delaware in May 1997 at the direction of the Board of Directors of the Bank for
the purpose of serving as a savings and loan holding company of the Bank upon
the acquisition of all of the capital stock issued by the Bank in the
Conversion. The Company's assets primarily consist of the outstanding capital
stock of the Bank. The Company's principal business is overseeing the business
of the Bank. The Company has registered with the Office of Thrift Supervision
("OTS") as a savings and loan holding company. See "Regulation - Regulation of
the Company."

     As a holding company, the Company has greater flexibility than the Bank to
diversify its business activities through existing or newly formed subsidiaries
or through acquisition or merger with other financial institutions, although the
Company currently does not have any plans, agreements, arrangements or
understandings with respect to any such acquisitions or mergers. The Company is
classified as a unitary savings and loan holding company and is subject to
regulation by the OTS. The Company's executive offices are located at 2700 Fort
Campbell Boulevard, Hopkinsville, Kentucky 42240, and its main telephone number
is (270) 885-1171.

HERITAGE BANK

     The Bank is a federally chartered stock savings bank headquartered in
Hopkinsville, Kentucky, with branch offices in Hopkinsville, Murray, Cadiz,
Elkton, Fulton, and Benton, Kentucky. The Bank was incorporated by the
Commonwealth of Kentucky in 1879 under the name Hopkinsville Building and Loan
Association. In 1940, the Bank converted to a federal mutual savings association
and received federal insurance of its deposit accounts. In 1983, the Bank became
a federal mutual savings bank. On May 14, 2002, the Bank changed its name from
Hopkinsville Federal Bank to Heritage Bank. The primary market area of the Bank
consists of the adjacent counties of Calloway, Christian, Todd, Trigg, Fulton,
and Marshall located in southwestern Kentucky and Obion and Weakley counties
located in northwestern Tennessee.

     The business of the Bank primarily consists of attracting deposits from the
general public and investing such deposits in loans secured by single family
residential real estate and investment securities, including U.S. Government and
agency securities and mortgage-backed securities. The Bank also originates
single-family residential/construction loans and multi-family and commercial
real estate loans, as well as loans secured by deposits, other consumer loans
and commercial loans. The Bank emphasizes the origination of residential real
estate loans with adjustable interest rates and other assets which are
responsive to changes in interest rates and allow the Bank to more closely match
the interest rate maturation of its assets and liabilities.

FULTON DIVISION ACQUISITION

     On September 5, 2002, the Bank completed an acquisition of the business
assets and liabilities of Old National Bancorp that were located in Fulton,
Kentucky. These assets include two retail banking offices, Fall & Fall Insurance
Agency, and approximately $42 million in loans outstanding and $96 million in
deposits. The Bank recognized the acquisition as a purchase of a business and
included audited financial statements of the business acquired in a current
report on Form 8-K filed with the Securities and Exchange Commission (SEC) on
November 13, 2002. The Bank will amortize the core deposit intangible on a
monthly basis for 84 months. Annually, the Bank will perform a test of
impairment on the remaining unidentified goodwill and amortize goodwill only
when the unamortized value of the business acquired business falls below the
acquisition price.

                                        2

<PAGE>

STOCK REPURCHASES

     On September 20, 2000, the Company announced that its Board of Directors
had approved the repurchase of up to 200,000 shares of its Common Stock. The
stock repurchase program was completed in February 2001. On March 26, 2001, the
Company announced that its Board of Directors had approved the repurchase of an
additional 300,000 shares. The purchases are being made from time to time on the
NASDAQ Stock Market at prices prevailing on that market or in privately
negotiated transactions at management's discretion, depending on market
conditions, price of the Company's Common Stock, corporate cash requirements and
other factors. As of March 26, 2003, 208,909 shares of Common Stock had been
repurchased.

LENDING ACTIVITIES

     General. The total net loan portfolio totaled $ 292.1 million at December
31, 2002, representing 68.32% of total assets at that date. Substantially all
loans are originated in the Bank's market area. At December 31, 2002, $ 171.5
million, or 58.4% of the loan portfolio, consisted of one-to-four family,
residential mortgage loans. Other loans secured by real estate include
non-residential real estate loans, which amounted to $ 32.4 million, or 11.0% of
the loan portfolio at December 31, 2002, and multi-family residential loans,
which were $ 4.6 million, or 1.6% of the loan portfolio at December 31, 2002. At
December 31, 2002, construction loans were $ 1.8 million, or 0.6% of the loan
portfolio, and consumer and commercial loans totaled $ 83.4 million, or 28.4% of
the loan portfolio.

     Analysis of Loan Portfolio. Set forth below is selected data relating to
the composition of the loan portfolio by type of loan at the dates indicated. At
December 31, 2002, there were no concentrations of loans exceeding 10% of total
loans other than as disclosed below.

<TABLE>
<CAPTION>

                                     2002                    2001                    2000
                            --------------------    --------------------    --------------------
                             Amount      Percent      Amount     Percent      Amount     Percent
                            ---------    -------    ---------    -------    ---------    -------
                                                    (Dollars in thousands)
<S>                         <C>             <C>     <C>             <C>     <C>            <C>
Type of Loan:
Real estate loans:
 One-to-four family
  residential ...........   $ 171,453       58.4%   $ 111,768       65.0%   $  91,960       70.8%
 Multi-family residential       4,547        1.6%       2,448        1.4%       2,841        2.2%
 Construction ...........       1,757        0.6%       5,617        3.3%       5,729        4.4%
 Non-residential (1) ....      32,368       11.0%      18,445       10.7%      21,695       16.7%
                            ---------    -------    ---------    -------    ---------    -------
  Total real estate loans     210,125       71.6%     138,278       80.4%     122,225       94.1%
                            =========    =======    =========    =======    =========    =======
Other loans:
 Secured by deposits ....       3,003        1.0%       2,191        1.3%       2,720        2.1%
 Other consumer loans ...      44,238       15.1%      16,455        9.6%       3,971        3.1%
 Commercial loans .......      36,184       12.3%      14,943        8.7%         946        0.7%
                            ---------    -------    ---------    -------    ---------    -------
  Total other loans .....      83,425       28.4%      33,589       19.6%       7,637        5.9%
                            ---------    -------    ---------    -------    ---------    -------
                              293,550      100.0%     171,867      100.0%     129,862      100.0%
                                         =======                  =======                 =======


 Loans held for sale ....          --                     928                      --
 Allowance for loan
  losses ................       1,455                     923                     708
                            ---------               ---------               ---------
Total ...................   $ 292,095               $ 170,016               $ 129,154
                            =========               =========               =========

<CAPTION>
                                     1999                      1998
                            -----------------------    ----------------------
                              Amount       Percent      Amount      Percent
                            ---------    ----------    ---------    ---------
<S>                         <C>                <C>     <C>               <C>
Type of Loan:
Real estate loans:
 One-to-four family
  residential ...........   $  86,345          75.9%   $  87,774         80.5%
 Multi-family residential       2,165           1.9%       1,539          1.4%
 Construction ...........       5,706           5.0%       4,626          4.2%
 Non-residential (1) ....      12,399          10.9%       8,260          7.6%
                            ---------    ----------    ---------    ---------
  Total real estate loans     106,615          93.7%     102,199         93.7%
                            =========    ==========    =========    =========
Other loans:
 Secured by deposits ....       2,525           2.2%       2,280          2.1%
 Other consumer loans ...       4,356           3.8%       4,586          4.2%
 Commercial loans .......         314           0.3%          --           --
                            ---------    ----------    ---------    ---------
  Total other loans .....       7,195           6.3%       6,866          6.3%
                            ---------    ----------    ---------    ---------
                              113,810         100.0%     109,065        100.0%
                                         ==========                 =========


 Loans held for sale ....          --                         --
 Allowance for loan
  losses ................         278                        258
                            ---------                  ---------
Total ...................   $ 113,532                  $ 108,807
                            =========                  =========
</TABLE>

----------
(1)  Consists of loans secured by first liens on residential lots and loans
     secured by first mortgages on commercial real property and land.

                                        3

<PAGE>

     Loan Maturity Schedule. The following table sets forth certain information
at December 31, 2002 regarding the dollar amount of loans maturing in the
portfolio based on their contractual maturity, dates. Demand loans, loans having
no stated schedule of repayments and no stated maturity, and overdrafts are
reported as due in one year or less.

<TABLE>
<CAPTION>
                                                                                                Due after
                                                                 Due after      Due after 5    10 through      Due after
                                  Due during the year ending     3 through 5    through 10      15 years       15 years
                                           December 31,          years after    years after       after          after
                                 ----------------------------   December 31,   December 31,   December 31,   December 31,
                                  2003       2004       2005         2003          2003            2003          2003        Total
                                 --------   -------   -------   ------------   ------------   ------------   ------------  ---------
                                                                         (In thousands)
<S>                              <C>        <C>       <C>       <C>            <C>            <C>            <C>           <C>
One-to-four family residential   $  3,083   $   736   $ 1,535   $      6,387   $     30,229   $     30,824   $     98,659  $ 171,453
Multi-family residential..             --        25        --             78            520            603          3,321      4,547
Construction..............            782       327        --             86             --             --            562      1,757
Non-residential...........          1,798       751     2,938          1,981          7,251          7,862          9,787     32,368
Other.....................         14,192     4,930     5,452         26,317         19.450          8,168          4,916     83,425
                                 --------   -------   -------   ------------   ------------   ------------   ------------  ---------
   Total..................       $ 19,855   $ 6,769   $ 9,925   $     34,849   $     57,450   $     47,457   $    117,245  $ 293,550
                                 ========   =======   =======   ============   ============   ============   ============  =========
</TABLE>

     The following table sets forth at December 31, 2002, the dollar amount of
all loans due after December 31, 2003 which had predetermined interest rates and
floating or adjustable interest rates.

<TABLE>
<CAPTION>
                                                                     Predetermined     Floating or
                                                                          Rate       Adjustable Rate
                                                                     -------------   ---------------
                                                                              (In thousands)
<S>                                                                  <C>             <C>
One-to-four family residential....................................   $      24,518   $       143,852
Multi-family residential..........................................              63             4,484
Construction......................................................             409               566
Non-residential...................................................           8,428            22,142
Other.............................................................          41,267            27,966
                                                                     -------------   ---------------
   Total..........................................................   $      74,685   $        199,010
                                                                     =============   ================
</TABLE>

     Scheduled contractual principal repayments of loans do not reflect the
actual life of such assets. The average life of loans is substantially less than
their contractual terms because of prepayments. In addition, due-on-sale clauses
on loans generally give the lender the right to declare a loan immediately due
and payable in the event, among other things, that the borrower sells the real
property subject to the mortgage and the loan is not repaid. The average life of
mortgage loans tends to increase when current mortgage loan market rates are
substantially higher than rates on existing mortgage loans and, conversely,
decrease when current mortgage loan market rates are substantially lower than
rates on existing mortgage loans.

     Originations, Purchases and Sales of Loans. The Bank generally has
authority to originate and purchase loans secured by real estate located
throughout the United States. Consistent with its emphasis on being a
community-oriented financial institution, the Bank conducts substantially all of
its lending activities in its market area.

                                        4

<PAGE>

     The following table sets forth certain information with respect to loan
origination activity for the periods indicated.

                                                 Year Ended December 31,
                                           ---------------------------------
                                              2002        2001        2000
                                           ---------   ---------   ---------
                                                    (In thousands)
Loan originations:
  One-to-four family residential .......   $  58,024   $  47,440   $  16,810
  Multi-family residential .............       4,433         368         549
  Construction .........................       2,590       2,627       1,802
  Non-residential ......................      32,635       9,355       4,213
  Other ................................      55,701      34,037       8,746
                                           ---------   ---------   ---------
     Total loans originated ............     153,383      93,827      32,120
                                           ---------   ---------   ---------

Loans obtained through acquisition:
  One-to-four family residential .......      12,612          --          --
  Multi-family residential .............       2,147          --          --
   Construction ........................         518          --          --
   Non-residential .....................      12,893          --          --
   Other ...............................      13,443          --          --
                                           ---------   ---------   ---------
     Total loans purchased .............      41,613          --          --
                                           ---------   ---------   ---------
Loan principal reductions:
   Change in allowance for loan loss ...         532         215         430
    Loans sold .........................          --      11,235          --
    Loan principal payments ............      72,385      41,515      16,068
                                           ---------   ---------   ---------
Net increase in loan portfolio .........   $ 122,079   $  40,862   $  15,622
                                           =========   =========   =========

     Loan originations are derived from a number of sources, including existing
customers, referrals by real estate agents, depositors and borrowers and
advertising, as well as walk-in customers. Solicitation programs consist of
advertisements in local media, in addition to occasional participation in
various community organizations and events. Real estate loans are originated by
the Bank's loan personnel. All of the loan personnel are salaried, and are not
compensated on a commission basis for loans originated. Loan applications are
accepted at any of the Bank's branches.

     Loan Underwriting Policies. Lending activities are subject to written,
non-discriminatory underwriting standards and to loan origination procedures
prescribed by the Board of Directors and its management. Detailed loan
applications are obtained to determine the ability of borrowers to repay, and
the more significant items on these applications are verified through the use of
credit reports, financial statements and confirmations. Loan requests exceeding
loan officer limits must be approved by the loan committee. In addition, the
full Board of Directors reviews all loans on a monthly basis.

     Generally, upon receipt of a loan application from a prospective borrower,
a credit report and verifications are ordered to confirm specific information
relating to the loan applicant's employment, income and credit standing. If a
proposed loan is to be secured by a mortgage on real estate, an appraisal of the
real estate is undertaken by an appraiser approved by the Board of Directors and
licensed or certified (as necessary) by the Commonwealth of Kentucky. In the
case of one-to-four family residential mortgage loans, except when the Bank
becomes aware of a particular risk of environmental contamination, the Bank
generally does not obtain a formal environmental report on the real estate at
the time a loan is made. A formal environmental report may be required in
connection with nonresidential real estate loans.

     It is the Bank's policy to record a lien on the real estate securing a loan
and to obtain a title opinion from Kentucky counsel which provides that the
property is free of prior encumbrances and other possible title defects.
Borrowers must also obtain hazard insurance policies prior to closing and, when
the property is in a flood hazard area, pay flood insurance policy premiums.

                                        5

<PAGE>

     The majority of real estate loan applications are underwritten and closed
in accordance with the Bank's own lending guidelines, which generally do not
conform to Federal Home Loan Mortgage Corporation ("FHLMC") and Federal National
Mortgage Association ("FNMA") guidelines. Although such loans may not be readily
saleable in the secondary market, management believes that, if necessary, such
loans may be sold to private investors.

     In 2001, the Bank began offering a fixed rate loan program with maturities
of 15, 20, and 30 years. These loans are underwritten and closed in accordance
with FHLMC standards. These loans are originated with the intent to sell them to
FHLMC servicing retained. At December 31, 2002, the Bank's loan servicing
portfolio was $13.7 million dollars.

     The Bank is permitted to lend up to 100% of the appraised value of the real
property securing a mortgage loan. The Bank is required by federal regulations
to obtain private mortgage insurance on that portion of the principal amount of
any loan that is greater than 90% of the appraised value of the property. Under
its lending policies, the Bank will originate a one-to-four family residential
mortgage loan for owner-occupied property with a loan-to-value ratio of up to
95%. For residential properties that are not owner-occupied, the Bank generally
does not lend more than 80% of the appraised value. For all residential mortgage
loans, the Bank may increase its lending level on a case-by-case basis, provided
that the excess amount is insured with private mortgage insurance.

     Under applicable law, with certain limited exceptions, loans and extensions
of credit outstanding by a savings institution to a person at one time shall not
exceed 15% of the institution's unimpaired capital and surplus. Loans and
extensions of credit fully secured by readily marketable collateral may comprise
an additional 10% of unimpaired capital and surplus. Applicable law additionally
authorizes savings institutions to make loans to one borrower, for any purpose,
in an amount not to exceed the lesser of $30.0 million or 30% of unimpaired
capital and surplus to develop residential housing, provided certain
requirements are satisfied. Under these limits, the Bank's loans to one borrower
were limited to $ 6.0 million at December 31, 2002. At that date, the Bank had
no lending relationships in excess of the loans-to-one-borrower limit. At
December 31, 2002, the Bank's largest lending relationship was $5.0 million. The
loans are to a local grain elevator. The loan proceeds are used in the normal
course of business for a grain elevator and are secured by nonresidential real
estate, inventory and accounts receivable. All loans within this relationship
were current and performing in accordance with their terms at December 31, 2002.

     Interest rates charged by the Bank on loans are affected principally by
competitive factors, the demand for such loans and the supply of funds available
for lending purposes. These factors are, in turn, affected by general economic
conditions, monetary policies of the federal government, including the Federal
Reserve Board, legislative tax policies and government budgetary matters.

     One-to-four Family Residential Lending. The Bank historically has been and
continues to be an originator of one-to-four family residential real estate
loans in its market area. At December 31, 2002, one-to-four family residential
mortgage loans, totaled approximately $ 171.5 million, or 58.4% of the Bank's
loan portfolio. The Bank originated $ 15.2 million in loans that were sold in
the secondary market servicing retained.

                                        6

<PAGE>

     The Bank primarily originates residential mortgage loans with adjustable
rates. As of December 31, 2002, 84.2% of one-to-four family mortgage loans in
the Bank's loan portfolio carried adjustable rates. Such loans are primarily for
terms of 25 years, although the Bank does occasionally originate adjustable rate
mortgages for 15, 20 and 30 year terms, in each case amortized on a monthly
basis with principal and interest due each month. The interest rates on these
mortgages are adjusted once per year, with a maximum adjustment of 1% per
adjustment period and a maximum aggregate adjustment of 5% over the life of the
loan. Prior to August 1, 1997, rate adjustments on the Bank's adjustable rate
loans were indexed to a rate which adjusted annually based upon changes in an
index based on the National Monthly Median Cost of Funds, plus a margin of
2.75%. Because the National Monthly Median Cost of Funds is a lagging index,
which results in rates changing at a slower pace than rates generally in the
marketplace, the Bank changed to a one-year Treasury bill constant maturity,
which the Bank believes reflects more current market information and thus allows
the Bank to react more quickly to changes in the interest rate environment. In
previous years, the adjustable rate mortgage loans offered by the Bank also
provided for initial rates of interest below the rates that would prevail when
the index used for re-pricing is applied. Such initial rates, also referred to
as "teaser rates," often reflect a discount from the prevailing rate greater
than the 1.0% maximum adjustment allowed each year. As a result, the Bank may
not be able to restore the interest rate of a loan with a teaser rate to its
otherwise initial loan rate until at least the second adjustment period that
occurs at the beginning of the third year of the loan. Further, in a rising
interest rate environment, the Bank may not be able to adjust the interest rate
of the loan to the prevailing market rate until an even later period because of
the combination of the teaser discount and the 1% limitation on annual
adjustments. For the last two years, declining interest rates have allowed the
Bank to price the one year variable rate mortgage at or in excess of the fully
indexed one year treasury bill.

     The retention of adjustable rate loans in the Bank's portfolio helps reduce
the Bank's exposure to increases in prevailing market interest rates. However,
there are unquantifiable credit risks resulting from potential increases in
costs to borrowers in the event of upward reprising of adjustable-rate loans. It
is possible that during periods of rising interest rates, the risk of default on
adjustable rate loans may increase due to increases in interest costs to
borrowers. Further, although adjustable rate loans allow the Bank to increase
the sensitivity of its interest-earning assets to changes in interest rates, the
extent of this interest sensitivity is limited by the initial fixed-rate period
before the first adjustment and the lifetime interest rate adjustment
limitations. This risk is heightened by the Bank's practice of offering its
adjustable rate mortgages with a discount to its initial interest rate that is
greater than the annual increase in interest rates allowed under the terms of
the loan. Accordingly, there can be no assurance that yields on the Bank's
adjustable rate loans will fully adjust to compensate for increases in the
Bank's cost of funds. Finally, adjustable rate loans increase the Bank's
exposure to decreases in prevailing market interest rates, although the 1%
limitation on annual decreases in the loans' interest rates tends to offset this
effect.

     The Bank also originates, to a limited extent, fixed-rate loans for terms
of 15 years. Such loans are secured by first mortgages on one-to-four family,
owner-occupied residential real property located in the Bank's market area.
Because of the Bank's policy to mitigate its exposure to interest rate risk
through the use of adjustable rate rather than fixed rate products, the Bank
does not emphasize fixed-rate mortgage loans. At December 31, 2002, 15.8% of the
Bank's loan portfolio consisted of fixed-rate mortgage loans. To further reduce
its interest rate risk associated with such loans, the Bank may rely upon FHLB
advances with similar maturities to fund such loans. See "-- Deposit Activity
and Other Sources of Funds -- Borrowing."

     Neither the fixed rate or the adjustable rate residential mortgage loans
held in the Bank's portfolio are originated in conformity with secondary market
guidelines issued by FHLMC or FNMA. As a result, such loans may not be readily
saleable in the secondary market to institutional purchasers. However, such
loans may still be sold to private investors whose investment strategies do not
depend upon loans that satisfy FHLMC or FNMA criteria. Further, given its high
liquidity, the Bank does not currently view loan sales as a necessary funding
source.

     Construction Lending. The Bank engages in construction lending involving
loans to individuals for construction of one-to four- family residential housing
located within the Bank's market area, with such loans converting to permanent
financing upon completion of construction. Such loans are generally made to
individuals for construction primarily in established subdivisions within the
Bank's market area. The Bank mitigates its risk with construction loans by
imposing a maximum loan-to-value ratio of 95% for homes that will be
owner-occupied and 80% for homes being built on a speculative basis. At December
31, 2002, the Bank's loan portfolio included $1.8 million of loans secured by
properties under construction, including construction/permanent loans structured
to become permanent loans upon the completion of construction and interim
construction loans structured to be repaid in full upon completion of
construction and receipt of permanent financing.

                                        7

<PAGE>

     The Bank also makes loans to qualified builders for the construction of
one-to-four family residential housing located in established subdivisions in
the Bank's market area. Because such homes are intended for resale, such loans
are generally not converted to permanent financing at the Bank. All construction
loans are secured by a first lien on the property under construction.

     Loan proceeds are disbursed in increments as construction progresses and as
inspections warrant. Construction/permanent loans may have adjustable or fixed
interest rates and are underwritten in accordance with the same terms and
requirements as the Bank's permanent mortgages. Such loans generally provide for
disbursement in stages during a construction period of up to six months, during
which period the borrower is required to make payments of interest only. The
permanent loans are typically 30-year adjustable rate loans, with the same terms
and conditions otherwise offered by the Bank. Monthly payments of principal and
interest commence the month following the date the loan is converted to
permanent financing. Borrowers must satisfy all credit requirements that would
apply to the Bank's permanent mortgage loan financing prior to receiving
construction financing for the subject property.

     Construction financing generally is considered to involve a higher degree
of risk of loss than long-term financing on improved, occupied real estate. Risk
of loss on a construction loan is dependent largely upon the accuracy of the
initial estimate of the property's value at completion of construction or
development and the estimated cost (including interest) of construction. During
the construction phase, a number of factors could result in delays and cost
overruns. If the estimate of construction costs proves to be inaccurate, the
Bank may be confronted at or prior to the maturity of the loan, with a project
having a value which is insufficient to assure full repayment. The ability of a
developer to sell developed lots or completed dwelling units will depend on,
among other things, demand, pricing, availability of comparable properties and
economic conditions. The Bank has sought to minimize this risk by limiting
construction lending to qualified borrowers in the Bank's market area, by
requiring the involvement of qualified builders, and by limiting the aggregate
amount of outstanding construction loans.

     Multi-Family Residential and Non-Residential Real Estate Lending. The
Bank's multi-family residential loan portfolio consists of adjustable rate loans
secured by real estate. At December 31, 2002, the Bank had $4.5 million of
multi-family residential loans, which amounted to 1.6% of the Bank's loan
portfolio at such date. The Bank's non-residential real estate portfolio
generally consists of adjustable rate loans secured by first mortgages on
residential lots and rental property. In each case, such property is located in
the Bank's market area. At December 31, 2002, the Bank had approximately $32.4
million of such loans, which comprised 11.0% of its loan portfolio. Multi-family
residential real estate loans are underwritten with loan-to-value ratios up to
80% of the appraised value of the property. Non-residential real estate loans
are underwritten with loan-to-value ratios up to 65% of the appraised value for
raw land, 75% for land development loans and non-owner occupied 1 -4 family real
estate.

     Multi-family residential and non-residential real estate lending entails
significant additional risks as compared with one-to-four family residential
property lending. Multi-family residential and commercial real estate loans
typically involve larger loan balances to single borrowers or groups of related
borrowers. The payment experience on such loans typically is dependent on the
successful operation of the real estate project, retail establishment or
business. These risks can be significantly impacted by supply and demand
conditions in the market for the office, retail and residential space, and, as
such, may be subject to a greater extent to adverse conditions in the economy
generally. To minimize these risks, the Bank generally limits itself to its
market area or to borrowers with which it has prior experience or who are
otherwise known to the Bank. It has been the Bank's policy to obtain annual
financial statements of the business of the borrower or the project for which
multi-family residential real estate or commercial real estate loans are made.
At December 31, 2002, there were $90,000 in non-residential mortgage loans
delinquent by 90 days or more.

     Consumer Lending. The consumer loans currently in the Bank's loan portfolio
consist of loans secured by savings deposits and other consumer loans. Savings
deposit loans are usually made for up to 90% of the depositor's savings account
balance. The interest rate is approximately 2.0% above the rate paid on such
deposit account serving as collateral, and the account must be pledged as
collateral to secure the loan. Interest generally is billed on a quarterly
basis. At December 31, 2002, loans on deposit accounts totaled $ 3.0 million, or
1.0% of the Bank's loan portfolio. Other consumer loans include automobile
loans, the amount and terms of which are determined by the loan committee, and
home equity and home improvement loans, which are made for up to 95% of the
value of the property but require private mortgage insurance on 100% of the
value of the property.

                                        8

<PAGE>

     Consumer loans may entail greater credit risk than do residential mortgage
loans, particularly in the case of consumer loans that are unsecured or are
secured by rapidly depreciable assets, such as automobiles. In such cases, any
repossessed collateral for a defaulted consumer loan may not provide an adequate
source of repayment of the outstanding loan balance as a result of the greater
likelihood of damage, loss or depreciation. In addition, consumer loan
collections are dependent on the borrower's continuing financial stability, and
therefore are more likely to be affected by adverse personal circumstances.
Furthermore, the application of various federal and state laws, including
bankruptcy and insolvency laws, may limit the amount which can be recovered on
such loans. At December 31, 2002, there were $246,000 in consumer loans
delinquent 90 days or more. There can be no assurance that delinquencies will
not increase in the future, particularly in light of the Bank's decision to
increase its efforts to originate a higher volume and greater variety of
consumer loans.

     Commercial Lending. The Bank originates commercial loans on a secured and,
to a lesser extent, unsecured basis. At December 31, 2002, the Bank's commercial
loans amounted to $ 36.1 million, or 12.3% of the Bank's loan portfolio. The
Bank's commercial loans generally are secured by corporate assets. In addition,
the Bank generally obtains guarantees from the principals of the borrower with
respect to all commercial loans. At December 31, 2002, there were no commercial
loans delinquent 90 days or more.

Non-performing Loans and Other Problem Assets

     The Bank's non-performing loans totaled 0.29% of total loans, net at
December 31, 2002. Loans are placed on a non-accrual status when the loan is
past due in excess of 90 days and collection of principal and interest is
doubtful. The Bank places a high priority on contacting customers by telephone
as a primary method of determining the status of delinquent loans and the action
necessary to resolve any payment problem. The Bank's management performs quality
reviews of problem assets to determine the necessity of establishing additional
loss reserves.

     Real estate acquired by the Bank as a result of foreclosure is classified
as real estate owned until such time as it is sold. The Bank generally tries to
sell the property at a price no less than its net book value, however, it will
consider slight discounts to the appraised value to expedite the return of the
funds to an earning status. When such property is acquired, it is recorded at
its fair value less estimated costs of sale. Any required write-down of the loan
to its appraised fair market value upon foreclosure is charged against the
allowance for loan losses. Subsequent to foreclosure, in accordance with
generally accepted accounting principles, a valuation allowance is established
if the carrying value of the property exceeds its fair value net of related
selling expenses.

     The following table sets forth information with respect to the Bank's
non-performing assets at the dates indicated. No loans were recorded as
restructured loans within the meaning of SFAS No. 15 at the dates indicated.

                                              At December 31,
                                 ------------------------------------------
                                  2002     2001    2000     1999      1998
                                 -----    -----   ------   ------    ------
                                         (Dollars in thousands)
Accruing loans which are
 contractually past due 90
 days or more:
 Residential real estate .....   $  --    $ 330   $  371   $   51    $  268
 Non-residential real estate.       --       60       63       --        --
   Consumer ..................      --       12       --        7        19
                                 -----    -----   ------   ------    ------
     Total ...................   $  --    $ 402   $  434   $   58    $  287
                                 =====    =====   ======   ======    ======
Non-accrual loans

   Residential real estate ...     497       --       --       --        --
   Non residential real estate      90       --       --       --        --
   Consumer ..................     246       --       --       --        --
   Commercial ................      --      149       --       --        --
                                 -----    -----   ------   ------    ------
     Total non-performing
       loans .................   $ 833    $ 551   $  434   $   58    $  287
                                 =====    =====   ======   ======    ======

Percentage of total loans ....    0.29%    0.32%    0.34%    0.05%     0.26%
                                 =====    =====   ======   ======    ======

                                        9

<PAGE>

     At December 31, 2002, the Bank had $833,000 in loans outstanding which were
classified as nonaccrual, 90 days past due or restructured but where known
information about possible credit problems of borrowers caused management to
have serious concerns as to the ability of the borrowers to comply with present
loan repayment terms and may result in disclosure as nonaccrual, 90 days past
due or restructured. At December 31, 2002, the Bank had no real estate owned.
Also, the Bank had impaired loans, as defined by SFAS 114/118, totaling $
833,000 at December 31, 2002.

     Federal regulations require savings institutions to classify their assets
on the basis of quality on a regular basis. An asset meeting one of the
classification definitions set forth below may be classified and still be a
performing loan. An asset is classified as substandard if it is determined to be
inadequately protected by the current retained earnings and paying capacity of
the obligor or of the collateral pledged, if any. An asset is classified as
doubtful if full collection is highly questionable or improbable. An asset is
classified as loss if it is considered uncollectible, even if a partial recovery
could be expected in the future. The regulations also provide for a special
mention designation, described as assets which do not currently expose a savings
institution to a sufficient degree of risk to warrant classification but do
possess credit deficiencies or potential weaknesses deserving management's close
attention. Such assets designated as special mention may include non-performing
loans consistent with the above definition. Assets classified as substandard or
doubtful require a savings institution to establish general allowances for loan
losses. If an asset or portion thereof is classified loss, a savings institution
must either establish a specific allowance for loss in the amount of the portion
of the asset-classified loss, or charge off such amount. Federal examiners may
disagree with a savings institution's classifications. If a savings institution
does not agree with an examiner's classification of an asset, it may appeal this
determination to the OTS Regional Director. The Bank regularly reviews its
assets to determine whether any assets require classification or
re-classification. At December 31, 2002, the Bank had $ 300,000 in assets
classified as special mention, $975,000 in assets classified as substandard,
$118,000 in assets classified as doubtful and no assets classified as loss.
Special mention assets consist primarily of residential real estate loans
secured by first mortgages. This classification is primarily used by management
as a "watch list" to monitor loans that exhibit any potential deviation in
performance from the contractual terms of the loan.

     Allowance for Loan Losses. In originating loans, the Bank recognizes that
credit losses will be experienced and that the risk of loss will vary with,
among other things, the type of loan being made, the creditworthiness of the
borrower over the term of the loan, general economic conditions and, in the case
of a secured loan, the quality of the security for the loan. It is management's
policy to maintain an adequate allowance for loan losses based on, among other
things, the Bank's and the industry's historical loan loss experience,
evaluation of economic conditions, regular reviews of delinquencies and loan
portfolio quality and evolving standards imposed by federal bank examiners. The
Bank increases its allowance for loan losses by charging provisions for possible
loan losses against the Bank's income.

     Management will continue to actively monitor the Bank's asset quality and
allowance for loan losses. Management will charge off loans and properties
acquired in settlement of loans against the allowances for losses on such loans
and such properties when appropriate and will provide specific loss allowances
when necessary. Although management believes it uses the best information
available to make determinations with respect to the allowances for losses and
believes such allowances are adequate, future adjustments may be necessary if
economic conditions differ substantially from the economic conditions in the
assumptions used in making the initial determinations.

     The Bank's methodology for establishing the allowance for loan losses takes
into consideration probable losses that have been identified in connection with
specific assets as well as losses that have not been identified but can be
expected to occur. Management conducts regular reviews of the Bank's assets and
evaluates the need to establish allowances on the basis of this review.
Allowances are established by the Board of Directors on a quarterly basis based
on an assessment of risk in the Bank's assets taking into consideration the
composition and quality of the portfolio, delinquency trends, current charge-off
and loss experience, loan concentrations, the state of the real estate market,
regulatory reviews conducted in the regulatory examination process and economic
conditions generally. Specific reserves will be provided for individual assets,
or portions of assets, when ultimate collection is considered improbable by
management based on the current payment status of the assets and the fair value
of the collateral.

                                       10

<PAGE>

     At the date of foreclosure or other repossession, the Bank would transfer
the property to real estate acquired in settlement of loans initially at the
lower of cost or estimated fair value and subsequently at the lower of book
value or fair value less estimated selling costs. Any portion of the outstanding
loan balance in excess of fair value less estimated selling costs would be
charged off against the allowance for loan losses. If, upon ultimate disposition
of the property, net sales proceeds exceed the net carrying value of the
property, a gain on sale of real estate would be recorded.

     Banking regulatory agencies, including the OTS, have adopted a policy
statement regarding maintenance of an adequate allowance for loan and lease
losses and an effective loan review system. This policy includes an arithmetic
formula for determining the reasonableness of an institution's allowance for
loan loss estimate compared to the average loss experience of the industry as a
whole. Examiners will review an institution's allowance for loan losses and
compare it against the sum of: (i) 50% of the portfolio that is classified
doubtful; (ii) 15% of the portfolio that is classified as substandard; and (iii)
for the portions of the portfolio that have not been classified (including those
loans designated as special mention), estimated credit losses over the upcoming
12 months given the facts and circumstances as of the evaluation date. This
amount is considered neither a "floor" nor a "safe harbor" of the level of
allowance for loan losses an institution should maintain, but examiners will
view a shortfall relative to the amount as an indication that they should review
management's policy on allocating these allowances to determine whether it is
reasonable based on all relevant factors.

     The following table sets forth an analysis of the Bank's allowance for loan
losses for the periods indicated.

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                ------------------------------------------------------------
                                                   2002        2001          2000         1999       1998
                                                ---------    ---------    ---------    ---------   ---------
                                                                 (Dollars in thousands)
<S>                                             <C>          <C>          <C>          <C>         <C>
Balance at beginning of period ..............   $     923    $     708    $     278    $     257   $     236

Loans charged off:
 Commercial Loans ...........................         (46)          --

 Consumer Loans and Deposits ................                       --
 Real estate mortgage: ......................        (174)
Residential .................................         (52)          (7)          (1)          --          --
                                                ---------    ---------    ---------    ---------   ---------

Total charge-offs ...........................        (272)          (7)          (1)          --          --
                                                ---------    ---------    ---------    ---------   ---------

Recoveries ..................................           9                        --           --          --
                                                ---------    ---------    ---------    ---------   ---------

Net loans charged off .......................        (263)          (7)          (1)          --          --
                                                ---------    ---------    ---------    ---------   ---------

Provision for loan losses ...................         795          222          431           21          21
                                                ---------    ---------    ---------    ---------   ---------
Balance at end of period ....................   $   1,455    $     923    $     708    $     278   $     257
                                                =========    =========    =========    =========   =========

Ratio of net charge-offs to average loans
   outstanding during the period ............        0.12%        0.00%      0.0008%        0.00%       0.00%
                                                =========    =========    =========    =========   =========
</TABLE>

     The following table sets forth the breakdown of the allowance for loan
losses by loan category at the dates indicated. Management believes that the
allowance can be allocated by category only on an approximate basis. The
allocation of the allowance to each category is not necessarily indicative of
future losses and does not restrict the use of the allowance to absorb losses in
any category.

                                       11

<PAGE>

<TABLE>
<CAPTION>
                                                                        At December 31,
                            -----------------------------------------------------------------------------------------------------
                                      2002                      2001                      2000                      1999
                            ------------------------   ----------------------    ----------------------    ----------------------
                                        Percent of                Percent of                Percent of                Percent of
                                      Loans in Each             Loans in Each             Loans in Each             Loans in Each
                                       Category to               Category to               Category to               Category to
                             Amount    Total Loans     Amount   Total Loans      Amount    Total Loans     Amount    Total Loans
                            -------   -------------    ------   -------------    ------   -------------    ------   -------------
                                                                     (Dollars in thousands)
<S>                         <C>               <C>      <C>              <C>     <C>               <C>      <C>              <C>
One-to-four family ......   $   249            58.4%   $  138            65.0%   $   71            71.1%   $  130            76.3%
Construction ............        33             0.6%       50             3.3%      106             4.4%        5             4.9%
Multi-family residential         51             1.6%       60             1.4%      106             2.2%        8             1.9%
Non-residential .........       341            11.0%      210            10.7%      177            16.5%       85            10.7%
Secured by deposits .....        --             1.0%       --              --%       --             2.1%       --             2.2%
Other consumer loans ....       781            27.4%      465            19.6%      248             3.7%       50             4.0%
                            -------   -------------    ------   -------------    ------   -------------    ------   -------------
   Total allowance for
     loan losses ........   $ 1,455           100.0%   $  923           100.0%   $  708           100.0%   $  278           100.0%
                            =======   =============    ======   =============    ======   =============    ======   =============
</TABLE>

                                          At December 31, 1998
                                 ---------------------------------------
                                                Percent of Loans in Each
                                   Amount       Category to Total Loans
                                 ----------     -----------------------
                                      (Dollars in thousands)
One-to-four family..........     $      135             80.5%
Construction................              7              4.2%
Multi-family residential....              6              1.4%
Non-residential.............             71              7.6%
Secured by deposits.........              -              2.1%
Other consumer loans........             38              4.2%
                                 ----------            -----
   Total allowance for
     loan losses                 $      257            100.0%
                                 ==========            =====


INVESTMENT ACTIVITIES

     The Bank makes investments in order to maintain the levels of liquid assets
required by regulatory authorities and manage cash flow, diversify its assets,
obtain yield and to satisfy certain requirements for favorable tax treatment.
The investment activities of the Company and the Bank consist primarily of
investments in agency securities and mortgage-backed securities. Typical
investments include federally sponsored agency mortgage pass-through and
federally sponsored agency and mortgage-related securities. Investment and
aggregate investment limitations and credit quality parameters of each class of
investment are prescribed in the Bank's investment policy. The Company and the
Bank perform analyses on mortgage-related securities prior to purchase and on an
ongoing basis to determine the impact on earnings and market value under various
interest rate and prepayment conditions. Securities purchases must be approved
by the Bank's President. The Board of Directors reviews all securities
transactions on a monthly basis. The principal objective of the investment
policy is to earn as high a rate of return as possible, but to consider also
financial or credit risk, liquidity risk and interest rate risk.

     At December 31, 2002, securities with an amortized cost of $ 101.8 million
and an approximate market value of $ 103.1 million were classified as available
for sale. Management presently does not intend to sell such securities and,
based on the current liquidity level and the access to borrowings through the
FHLB of Cincinnati, management currently does not anticipate that the Company or
the Bank will be placed in a position of having to sell securities with material
unrealized losses.

     Securities designated as "held to maturity" are those assets which the
Company or the Bank has both the ability and the intent to hold to maturity.
Upon acquisition, securities are classified as to the Company's or the Bank's
intent, and a sale would only be affected due to deteriorating investment
quality. The held to maturity investment portfolio is not used for speculative
purposes and is carried at amortized cost. In the event securities are sold from
this portfolio for other than credit quality reasons, all securities within the
investment portfolio with matching characteristics may be reclassified as assets
available for sale. Securities designated as "available for sale" are those
assets which the Company or the Bank may not hold to maturity and thus are
carried at market value with unrealized gains or losses, net of tax effect,
recognized in stockholders' equity.

                                       12

<PAGE>

     Mortgage-Backed and Related Securities. Mortgage-backed securities
represent a participation interest in a pool of one-to-four family or
multi-family mortgages, the principal and interest payments on which are passed
from the mortgage originators through intermediaries that pool and repackage the
participation interest in the form of securities to investors such as the Bank.
Such intermediaries may include quasi-governmental agencies such as FHLMC, FNMA
and the Government National Mortgage Association ("GNMA") which guarantee the
payment of principal and interest to investors. Of the $58.5 million
mortgage-backed security portfolio at December 31, 2002, approximately $11.1
million were originated through GNMA, approximately $ 15.1 million were
originated through FNMA and approximately $ 17.0 million were originated through
FHLMC. The Company owned $1.7 million in mortgage backed securities
collateralized by non-government mortgages, commonly known as "Whole Loans". The
Whole Loan mortgage-backed security is collateralized by more than 100% of the
mortgages in the investment pool and is considered only a slightly higher risk
as opposed to mortgage-backed securities collateralized by government agencies
and carry the same regulatory risk weighting. Mortgage-backed securities
generally increase the quality of the assets by virtue of the guarantees that
back them, are more liquid than individual mortgage loans and may be used to
collateralize borrowings or other obligations of the Bank.

     Mortgage-backed securities typically are issued with stated principal
amounts and the securities are backed by pools of mortgages that have loans with
interest rates that are within a range and have similar maturities. The
underlying pool of mortgages can be composed of either fixed-rate or
adjustable-rate mortgage loans. Mortgage-backed securities generally are
referred to as mortgage participation certificates or pass-through certificates.
As a result, the interest rate risk characteristics of the underlying pool of
mortgages, i.e., fixed-rate or adjustable-rate, as well as prepayment risk, are
passed on to the certificate holder. The life of a mortgage-backed pass-through
security is equal to the life of the underlying mortgages.

     The actual maturity of a mortgage-backed security varies, depending on when
the mortgagors prepay or repay the underlying mortgages. Prepayments of the
underlying mortgages may shorten the life of the investment, thereby adversely
affecting its yield to maturity and the related market value of the
mortgage-backed security. The yield is based upon the interest income and the
amortization of the premium or accretion of the discount related to the
mortgage-backed security. Premiums and discounts on mortgage-backed securities
are amortized or accreted over the estimated term of the securities using a
level yield method. The prepayment assumptions used to determine the
amortization period for premiums and discounts can significantly affect the
yield of the mortgage-backed security, and these assumptions are reviewed
periodically to reflect the actual prepayment.

     The actual prepayments of the underlying mortgages depend on many factors,
including the type of mortgage, the coupon rate, the age of the mortgages, the
geographical location of the underlying real estate collateralizing the
mortgages and general levels of market interest rates. The difference between
the interest rates on the underlying mortgages and the prevailing mortgage
interest rates is an important determinant in the rate of prepayments. During
periods of falling mortgage interest rates, prepayments generally increase, and,
conversely, during periods of rising mortgage interest rates, prepayments
generally decrease. If the coupon rate of the underlying mortgage significantly
exceeds the prevailing market interest rates offered for mortgage loans,
refinancing generally increases and accelerates the prepayment of the underlying
mortgages. Prepayment experience is more difficult to estimate for
adjustable-rate mortgage-backed securities. During the later half of 2002,
prepayment speeds on mortgage-backed securities accelerated into unprecedented
levels due to declining interest rates and the high rate of mortgage
refinancing. These prepayments have sharply reduced the yield of this portion of
the portfolio.

                                       13

<PAGE>

     The following table sets forth the carrying value of the investment
securities at the dates indicated.

                                              At December 31,
                                      ---------------------------------
                                         2002        2001        2000
                                      ---------   ---------   ---------
                                               (In thousands)
Securities available for sale:
   FHLB and FHLMC stock ...........   $   2,391   $   2,284   $   2,137
   U. S. government and agency
     securities ...................      24,539      21,111      56,166
   Mortgage-backed securities .....      58,489      72,946      25,951
   Municipal Bonds ................      11,803       4,162          --
   Corporate Bonds ................       5,910          --          --
   Other ..........................          15          15          15

Securities held to maturity:
   Mortgage-backed securities .....       2,932       4,462       7,796
                                      ---------   ---------   ---------
     Total investment securities ..   $ 106,079   $ 104,980   $  92,065
                                      =========   =========   =========

     The following table sets forth information in the scheduled maturities,
amortized cost, market values and average yields for U.S. agency securities,
corporate bonds and municipal securities in the investment portfolio at December
31, 2002. At such date, $17.4 million of the agency securities were callable
and/or due on or before January 31, 2005. At December 31, 2002, $7.8 million of
municipal securities were callable between January 2006 and December 2011. All
corporate bonds were non callable.

<TABLE>
<CAPTION>
                         One Year or Less       One Year or Less         One Year or Less       One Year or Less
                       --------------------   ---------------------    --------------------    ------------------
                        Carrying   Average     Carrying    Average      Carrying    Average    Carrying   Average
                          Value      Yield      Value       Yield         Value      Yield       Value     Yield
                       ---------   --------   ---------   ---------    ---------   --------    --------   -------
                                                      (Dollars in thousands)
<S>                    <C>             <C>    <C>              <C>     <C>             <C>     <C>           <C>
U.S. government and
 agency securities.    $      --         --%  $  12,060        3.68%   $  11,341       5.68%   $  1,138      8.03%
                       =========   ========   =========   =========    =========   ========    ========   =======
Corporate Bonds ....   $   1,013       5.87%  $   4,897        4.67%          --         --          --        --
                       =========   ========   =========   =========    =========   ========    ========   =======

Municipal Bonds ....   $      --         --%  $     951        2.55%   $   4,061       3.36%   $  6,791      4.46%
                       =========   ========   =========   =========    =========   ========    ========   =======

<CAPTION>
                         Total Investment Portfolio
                       ------------------------------
                       Carrying    Market     Average
                         Value      Value      Yield
                       ---------   --------   -------
<S>                    <C>         <C>           <C>
U.S. government and
 agency securities .   $  24,539   $ 24,539      4.77%
                       =========   ========   =======
Corporate Bonds ....   $   5,910   $  5,910      4.89%
                       =========   ========   =======

Municipal Bonds ....   $  11,803   $ 11,803      3.93%
                       =========   ========   =======
</TABLE>

DEPOSIT ACTIVITY AND OTHER SOURCES OF FUNDS

     General. Deposits are the primary source of the Bank's funds for lending,
investment activities and general operational purposes. In addition to deposits,
the Bank derives funds from loan principal and interest repayments, maturities
of investment securities and mortgage-backed securities and interest payments
thereon. Although loan repayments are a relatively stable source of funds,
deposit inflows and outflows are significantly influenced by general interest
rates and money market conditions. Borrowings may be used on a short-term basis
to compensate for reductions in the availability of funds, or on a longer term
basis for general corporate purposes. The Bank has access to borrow from the
FHLB of Cincinnati, and the Bank will continue to have access to FHLB of
Cincinnati advances. The Bank may rely upon retail deposits rather than
borrowings as its primary source of funding for future asset growth.

     Deposits. The Bank attracts deposits principally from within its market
area by offering competitive rates on its deposit instruments, including money
market accounts, passbook savings accounts, individual retirement accounts, and
certificates of deposit which range in maturity from three months to five years.
Deposit terms vary according to the minimum balance required, the length of time
the funds must remain on deposit and the interest rate. Maturities, terms,
service fees and withdrawal penalties for its deposit accounts are established
by the Bank on a periodic basis. The Bank reviews its deposit mix and pricing on
a weekly basis. In determining the characteristics of its deposit accounts, the
Bank considers the rates offered by competing institutions, lending and
liquidity requirements, growth goals and federal regulations. The Bank does not
accept brokered deposits.

                                       14

<PAGE>

     The Bank attempts to compete for deposits with other institutions in its
market area by offering competitively priced deposit instruments that are
tailored to the needs of its customers. Additionally, the Bank seeks to meet
customers' needs by providing convenient customer service to the community.
Substantially all of the Bank's depositors are Kentucky or Tennessee residents
who reside in the Bank's market area.

     Deposits in the Bank at December 31, 2002 were represented by the various
types of savings programs described below.

<TABLE>
<CAPTION>
                                                                                                Percentage
  Interest            Minimum                                          Minimum                   of Total
    Rate*              Term                    Category                 Amount      Balance      Deposits
--------------    ----------------   -----------------------------    ---------    ---------    ----------
                                                                                 (In thousands)
   <S>            <C>                <C>                              <C>          <C>               <C>
    --%           None               Non-interest bearing             $     100    $  19,120           5.4%
   0.4%*          None               Demand/NOW accounts                  1.500       33,215           9.4%
   0.7%           None               Passbook accounts                       10        9,107           2.6%
   1.0%*          None               Money market deposit accounts        2,500       47,360          13.4%
                                                                                   ---------    ----------
                                                                                     108,802          30.8%
                                                                                   ---------    ----------
                                        Certificates of Deposit
                                     -----------------------------
   1.3%           3 months or less   Fixed-term, fixed rate                 500       32,076           9.0%
   1.6%           3 to 12 months     Fixed-term, fixed-rate                 500       94,341          26.7%
   2.4%           12 to 24-months    Fixed-term, fixed-rate                 500       44,645          12.6%
   2.9%           24 to 36-months    Fixed-term, fixed-rate                 500       18,965           5.4%
   3.4%           36 to 48-months    Fixed-term, fixed-rate                 500       39,274          11.1%
   3.8%           48 to 60-months    Fixed-term, fixed rate                 500       15,552           4.4%
                                                                                   ---------    ----------
                                                                                     244,853          69.2%
                                                                                   ---------    ----------
                                                                                   $ 353,655         100.0%
                                                                                   =========    ==========
</TABLE>
----------
* Represents weighted average interest rate.

     The following table sets forth, for the periods indicated, the average
balances and interest rates based on month-end balances for interest-bearing
demand deposits and time deposits.

<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                 ------------------------------------------------------------------------------------------
                             2002                           2001                           2000
                 ----------------------------   ----------------------------   ----------------------------
                 Interest-bearing      Time     Interest-bearing     Time      Interest-bearing      Time
                  demand deposits    deposits    demand deposits    deposits    demand deposits    deposits
                 ---------------     --------   ---------------    --------    ----------------   ---------
                                                 (Dollars in thousands)
<S>              <C>                <C>         <C>                <C>         <C>                <C>
Average
  balance.....       $ 63,384       $ 181,481       $ 44,748       $ 135,432        $ 47,077      $ 112,191
Average
  rate........           2.26%           3.82%          2.57%           5.58%           2.81%          6.07%

</TABLE>

                                       15

<PAGE>

     The following table sets forth the change in dollar amount of deposits in
the various types of accounts offered by the Bank between the dates indicated.

<TABLE>
<CAPTION>
                                                              Increase                                        Increase
                              Balance at                  (Decrease) from      Balance at                  (Decrease) from
                             December 31,      % of         December 31,      December 31,      % of         December 31,
                                 2002        Deposits           2001              2001        Deposits          2000
                             ------------    --------    -----------------    ------------    --------    -----------------
                                                                 (Dollars in thousands)
<S>                          <C>                <C>      <C>                  <C>             <C>         <C>
Non-interest bearing.....    $     19,120         5.4%   $          11,904    $      7,216         3.6%   $           3,388
Demand and NOW
   accounts..............          33,215         9.4%              20,796          12,419         6.2%               2,892
Money market.............          47,360        13.4%              15,187          32,173        16.0%               7,458
Passbook savings.........           9,107         2.6%                (115)          9,222         4.6%                (434)
Other time deposits......         244,853        69.2%             105,567         139,286        69.6%              21,408
                             -----------     --------    -----------------    ------------    --------    -----------------
   Total.................         353,655       100.0%             153,339    $    200,316    $  100.0%   $          34,712
                             ============    ========    =================    ============    ========    =================
</TABLE>

<TABLE>
<CAPTION>
                              Balance at                     Increase           Balance at
                             December 31,      % of       (Decrease) from     December 31, 1999      % of
                                 2000        Deposits    December 31, 1999                         Deposits
                             ------------    --------    -----------------    -----------------    --------
                                                           (Dollars in thousands)
<S>                          <C>                <C>      <C>                  <C>                     <C>
Non-interest bearing.....    $      3,828         2.3%   $             884    $           2,944         1.8%
Demand / NOW                                                                                            5.6%
   accounts..............           9,527         5.8%                 510                9,017
Money market.............          24,715        14.9%              (5,348)              30,063        18.6%
Passbook savings.........           9,656         5.8%                (146)               9,802         6.1%
Other time deposits......         117,878        71.2%               8,799              109,079        67.9%
                             ------------    --------    -----------------    -----------------    --------
   Total.................    $    165,604       100.0%   $           4,699    $         160,905       100.0%
                             ============    ========    =================    =================    ========
</TABLE>

     The following table sets forth the time deposits in the Bank classified by
rates at the dates indicated.

                                     At December 31,
                          -----------------------------------
                             2002         2001        2000
                           --------    ---------    ---------
                                    (In thousands)
  1.00 -  2.00%.......    $   7,406    $      95    $     --
  2.01 -  4.00%.......      130,718       51,804          125
  4.01 -  6.00%.......       77,765       57,821       56,670
  6.01 -  8.00%.......       28,964       29,566       61,083
                          ---------    ---------    ---------
        Total             $ 244,853    $ 139,286    $ 117,878
                          =========    =========    =========

     The following table sets forth the amount and maturities of time deposits
at December 31, 2002.

<TABLE>
<CAPTION>
                                                              Amount Due
                               --------------------------------------------------------------------------
                               Less Than One Year    1-2 Years    2-3 Years    After 3 Years      Total
                               ------------------    ---------    ---------    -------------    ---------
                                                            (In thousands
<S>                                  <C>             <C>          <C>          <C>              <C>
0.00  -  2.00%                       $   7,406       $      --    $      --    $          --    $   7,406
2.01 -  4.00%..................         67,130          18,003       11,445           34,140      130,718
4.01 -  6.00%..................         35,384          19,003        2,901           20,477       77,765
6.01 -  8.00%..................         16,497           7,639        4.619              209       28,964
                                     ---------       ---------    ---------    -------------    ---------
   Total.......................      $ 126,417       $  44,645    $  18,965     $     54,826    $ 244,853
                                     =========        ========    =========    =============    =========
</TABLE>

                                       16

<PAGE>

     The following table indicates the amount of the Bank's certificates of
deposit of $100,000 or more by time remaining until maturity as of December 31,
2002.

               Maturity Period               Certificates of Deposit
------------------------------------------   ----------------------
                                                 (In millions)
Three months or less......................           $     6.8
Over three through six months.............                 4.9
Over six through 12 months................                18.5
Over 12 months............................                31.5
                                                     ---------
   Total..................................           $    61.7
                                                     =========

     Certificates of deposit at December 31, 2002 included approximately $ 61.7
million of deposits with balances of $100,000 or more, compared to $25.3 million
and $14.4 million at December 31, 2001 and 2000, respectively. Such time
deposits may be risky because their continued presence in the Bank is dependent
partially upon the rates paid by the Bank rather than any customer relationship
and, therefore, may be withdrawn upon maturity if another institution offers
higher interest rates. The Bank may be required to resort to other funding
sources such as borrowings or sales of its securities held available for sale if
the Bank believes that increasing its rates to maintain such deposits would
adversely affect its operating results. At this time, the Bank does not believe
that it will need to significantly increase its deposit rates to maintain such
certificates of deposit and, therefore, does not anticipate resorting to
alternative funding sources. See Note 7 of Notes to Consolidated Financial
Statements.

     The following table sets forth the deposit activities of the Bank for the
periods indicated.

                                              Year Ended December 31,
                                       -------------------------------------
                                          2002         2001          2000
                                       ---------    ---------     ----------
                                                  (In thousands)

Deposits............................   $ 348,419    $  293,038    $  265,659
Obtain through acquisition                96,532
Withdrawals.........................    (300,462)     (267,043)     (268,175)
                                       ---------    ---------     ----------
Net increase (decrease) before
   interest credited................     144,489        25,995        (2,516)
Interest credited...................       9,073         8,717         7,215
                                       ---------    ----------    ----------
Net increase  in savings
   deposits.........................   $ 153,562    $   34,712    $    4,699
                                       =========    ==========    ==========

     In the unlikely event the Bank is liquidated after the Conversion,
depositors will be entitled to full payment of their deposit accounts prior to
any payment being made to the sole stockholder of the Bank, which is the
Company.

     Borrowings. Savings deposits historically have been the primary source of
funds for the Bank's lending, investments and general operating activities. The
Bank is authorized, however, to use advances from the FHLB of Cincinnati to
supplement its supply of lendable funds and to meet deposit withdrawal
requirements. The FHLB of Cincinnati functions as a central reserve bank
providing credit for savings institutions and certain other member financial
institutions. As a member of the FHLB System, the Bank is required to own stock
in the FHLB of Cincinnati and is authorized to apply for advances. Advances are
pursuant to several different programs, each of which has its own interest rate
and range of maturities. The Bank has entered into a Cash Management Advance
program with FHLB. See Note 8 of Notes to Financial Statements. Advances from
the FHLB of Cincinnati were $23.6 million at December 31, 2002 and are secured
by a blanket security agreement in which the Bank has pledged its 1-4 family
first mortgage loans held in the Bank's loan portfolio.

                                       17

<PAGE>

SUBSIDIARY ACTIVITIES

     As a federally chartered savings bank, the Bank is permitted to invest an
amount equal to 2% of its assets in subsidiaries, with an additional investment
of 1% of assets where such investment serves primarily community, inner-city and
community development purposes. The Bank's lone subsidiary is Fall & Fall
Insurance Agency of Fulton, Kentucky. The agency was acquired as part of the
Fulton acquisition on September 5, 2003. The Bank's investment in the agency is
immaterial.

COMPETITION

     The Bank faces significant competition both in originating mortgage and
other loans and in attracting deposits. The Bank competes for loans principally
on the basis of interest rates, the types of loans it originates, the deposit
products it offers and the quality of services it provides to borrowers. The
Bank also competes by offering products which are tailored to the local
community. Its competition in originating real estate loans comes primarily from
other savings institutions, commercial banks and mortgage bankers making loans
secured by real estate located in the Bank's market area. Commercial banks,
credit unions and finance companies provide vigorous competition in consumer
lending. Competition may increase as a result of the continuing reduction of
restrictions on the interstate operations of financial institutions.

     The Bank attracts its deposits through its six offices primarily from the
local community. Consequently, competition for deposits is principally from
other savings institutions, commercial banks and brokers in the local community
as well as from credit unions. The Bank competes for deposits and loans by
offering what it believes to be a variety of deposit accounts at competitive
rates, convenient business hours, a commitment to outstanding customer service
and a well-trained staff. The Bank believes it has developed strong
relationships with local realtors and the community in general.

     The Bank is a community and retail-oriented financial institution.
Management considers the Bank's branch network and reputation for financial
strength and quality customer service as its major competitive advantage in
attracting and retaining customers in its market area. A number of the Bank's
competitors have been acquired by statewide/nationwide banking organizations.
While the Bank is subject to competition from other financial institutions which
may have greater financial and marketing resources, management believes the Bank
benefits by its community orientation and its long-standing relationship with
many of its customers.

EMPLOYEES

     As of December 31, 2002, the Company and the Bank had 90 full-time and 9
part-time employees, none of whom were represented by a collective bargaining
agreement. Management considers the Bank's relationships with its employees to
be good.

REGULATION

     General. The Bank is chartered as a federal savings bank under the Home
Owners' Loan Act, as amended (the "HOLA"), which is implemented by regulations
adopted and administered by the OTS. As a federal savings bank, the Bank is
subject to regulation, supervision and regular examination by the OTS. The OTS
also has extensive enforcement authority over all savings institutions and their
holding companies, including the Bank and the Company. Federal banking laws and
regulations control, among other things, the Bank's required reserves,
investments, loans, mergers and consolidations, payment of dividends and other
aspects of the Bank's operations. The deposits of the Bank are insured by the
SAIF administered by the FDIC to the maximum extent provided by law. In
addition, the FDIC has certain regulatory and examination authority over
OTS-regulated savings institutions and may recommend enforcement actions against
savings institutions to the OTS. The supervision and regulation of the Bank is
intended primarily for the protection of the deposit insurance fund and the
Bank's depositors rather than for holders of the Company's stock or for the
Company as the holder of the stock of the Bank.

                                       18

<PAGE>

     The financial services industry is regulated extensively. Federal and state
laws and regulations are designed to protect the deposit insurance funds and
consumer, and not to benefit a financial company's stockholders. These laws and
regulations may sometimes impose significant limitations on operations, are
constantly evolving and may change significantly over time. Current events that
may not have a direct impact on the Company or the Bank, such as a accounting
improprieties, may result in the adoption of substantive revisions to the laws
and regulations. The adoption of subsequent new laws and regulations, change in
existing laws and regulations, or revision of existing laws and regulations may
have a material impact on the business, results of operations and financial
condition of the Company and the Bank.

     As a savings and loan holding company, the Company is registered with the
OTS and subject to OTS regulation and supervision under the HOLA. The Company
also is required to file certain reports with, and otherwise comply with the
rules and regulations of, the Securities and Exchange Commission ("SEC") under
the federal securities laws.

     The following discussion is intended to be a summary of certain statutes,
rules and regulations affecting the Bank and the Company. A number of other
statutes and regulations have an impact on their operations. The following
summary of applicable statutes and regulations does not purport to be complete
and is qualified in its entirety by reference to such statutes and regulations.

RECENT DEVELOPMENTS

..    Sarbanes-Oxley Act of 2002

     On July 30, 2002, the President of the United States signed the
Sarbanes-Oxley Act of 2002 into law. The Sarbanes-Oxley Act provides for
sweeping changes with respect to corporate governance, accounting policies and
disclosure requirements for public companies, and also for their directors and
officer. Section 302 of the Sarbanes-Oxley Act ("Corporate Responsibility for
Financial Reports") required the SEC to adopt new rules to implement the
requirements and rules concerning corporate governance. New SEC rules, effective
August 29, 2002, require a reporting company's chief executive and chief
financial officers to certify certain financial and other information included
in the company's quarterly and annual reports under the Security and Exchange
Act of 1934 ("the Exchange Act"). The rules also require these officers to
certify that they are responsible for establishing, maintaining and regularly
evaluating the effectiveness of the company's disclosure controls and
procedures; that they have made certain disclosures to the auditors and to the
audit committee of the board of directors about the company's controls and
procedures; and that they have included information in their quarterly and
annual filings about whether there have been significant changes to the controls
and procedures or other factors which would significantly impact these controls
subsequent to their evaluation. See "Certifications " for certifications by the
Company's Chief Executive Officer and Chief Financial Officer of the financial
statements and other information included in this Annual Report on Form 10K. See
Item 14 ("Controls and Procedures") hereof for the Company's evaluation of
disclosure controls and procedures. The certifications required by Section 906
of Sarbanes-Oxley Act also accompany this Form 10-K.

..    USA Patriot Act

     The President of the United States signed the USA Patriot Act into law on
October 26, 2001. The USA Patriot Act authorizes new regulatory powers to combat
international terrorism. The provisions that affect financial institutions most
directly are contained in Title III of the Act. In general, Title III amends
current law - primarily the Bank Secrecy Act - to provide the federal government
with enhanced authority to identify, deter, and punish international money
laundering and other crimes.

     Among other things, the USA Patriot Act prohibits financial institutions
from doing business with foreign "shell" banks and requires increased due
diligence for private banking transactions and correspondent accounts for
foreign banks. In addition, financial institutions have to follow new minimum
verification of identity standards for all new accounts and are permitted to
share information with law enforcement authorities under circumstances that were
not previously permitted. These and other provisions of the USA Patriot Act
became effective at varying times and the Treasury Department and various
federal banking agencies are responsible for issuing regulations to implement
the new law.

                                       19

<PAGE>

..    Financial Modernization Act

     On November 12, 1999, the President signed into law The Gramm-Leach-Biley
Act of 1999 (the "GLB Act"). The GLB Act significantly changed the regulatory
structure and oversight of the financial services industry and expanded
financial affiliation opportunities for bank holding companies. Among other
changes, the GLB Act permits "financial holding companies" to engage in a range
of activities that are "financial in nature" or "incidental" thereto, such as
banking, insurance, securities activities, and merchant banking. To qualify to
engage in expanded financial activities, a financial holding company must make
certain required regulatory filings, and subsidiary depository institutions must
be well-capitalized, well-managed and rates "satisfactory" or better under the
Community Reinvestment Act. The Company meets these requirements and has become
a financial holding company.

     The GLB Act prohibits financial institutions from sharing non-public
financial information on their customers to non-affiliated third parties unless
the customer is provided the opportunity to opt-out or the customer consents.
However, the GLB Act allows a financial institution to disclose confidential
information to non-affiliated third parties pursuant to a joint marketing
agreement (after full disclosure to the customer), to perform services on behalf
of the institution, to market the institution's own products, and to protect
against fraud. The federal banking agencies have issued regulations implementing
privacy provision of the GLB act.

     Regulatory Capital. The OTS' capital adequacy regulations require savings
institutions such as the Bank to meet three minimum capital standards: a "core"
capital requirement of 4% of adjusted total assets (or 3% if the institution is
rated Composite 1 under the CAMELS examination rating system), a "tangible"
capital requirement of 1.5% of adjusted total assets, and a "risk-based" capital
requirement of 8% of total risk-based capital to total risk-weighted assets. In
addition, the OTS has adopted regulations imposing certain restrictions on
savings institutions that have a total risk-based capital ratio of less than 8%,
a ratio of Tier 1 capital to risk-weighted assets of less than 4% or a ratio of
Tier 1 capital to total assets of less than 4%. See Note 15 of Notes to
Consolidated Financial Statements.

     Prompt Corrective Regulatory Action. Under the OTS prompt corrective action
regulations, the federal banking regulators are required to take prompt
corrective action in respect of depository institutions that do not meet certain
minimum capital requirements, including a leverage limit and a risk-based
capital requirement. All institutions, regardless of their capital levels, are
restricted from making any capital distribution or paying any management fees
that would cause the institution to become undercapitalized. The federal banking
regulators, including the OTS, have issued regulations that classify insured
depository institutions by capital levels and provide that the applicable agency
will take various prompt corrective actions to resolve the problems of any
institution that fails to satisfy the capital standards.

     Under the joint prompt corrective action regulations, a "well-capitalized"
institution is one that is not subject to any regulatory order or directive to
meet any specific capital level and that has or exceeds the following capital
levels: a total risk-based capital ratio of 10%, a Tier 1 risk-based capital
ratio of 6%, and a ratio of Tier 1 capital to total assets ("leverage ratio") of
5%. An "adequately capitalized" institution is one that does not qualify as
"well capitalized" but meets or exceeds the following capital requirements: a
total risk-based capital of 8%, a Tier 1 risk-based capital ratio of 4%, and a
leverage ratio of either (i) 4% or (ii) 3% if the institution has the highest
composite examination rating. An institution not meeting these criteria is
treated as "undercapitalized," "significantly undercapitalized," or "critically
undercapitalized" depending on the extent to which its capital levels are below
these standards. An institution that fails within any of the three
"undercapitalized" categories will be subject to certain severe regulatory
sanctions required by OTS regulations. As of December 31, 2002, the Bank was
"well-capitalized" as defined by the regulations.

                                       20

<PAGE>

     Qualified Thrift Lender Test. The HOLA and OTS regulations require all
savings institutions to satisfy one of two Qualified Thrift Lender ("QTL") tests
or to suffer a number of sanctions, including restrictions on activities. A
savings institution must maintain its status as a QTL on a monthly basis in at
least nine out of every 12 months. An initial failure to qualify as a QTL
results in a number of sanctions, including the imposition of certain operating
restrictions and a restriction on obtaining additional advances from its Federal
Home Loan Bank. If a savings institution does not requalify under the QTL test
within the three-year period after it fails the QTL test, it would be required
to terminate any activity not permissible for a national bank and repay as
promptly as possible any outstanding advances from its Federal Home Loan Bank.
In addition, the holding company of such an institution, such as the Company,
would similarly be required to register as a bank holding company with the
Federal Reserve Board. At December 31, 2002, the Bank qualified as a QTL.

     Limitations on Capital Distributions. OTS regulations impose limitations
upon capital distributions by savings institutions, such as cash dividends,
payments to repurchase or otherwise acquire its shares, payments to stockholders
of another institution in a cash-out merger and other distributions charged
against capital. Under the OTS capital distribution regulations, a savings
institution that (i) qualifies for expedited treatment of applications by
maintaining one of the two highest supervisory examination ratings, (ii) will be
at least adequately capitalized after the proposed capital distribution and
(iii) and is not otherwise restricted by applicable law in making capital
distributions may, without prior approval by the OTS, make capital distributions
during a calendar year equal to its net income for such year plus its retained
net income for the preceding two years. Capital distributions in excess of such
amount would require prior OTS approval.

     Under OTS regulations, the Bank would not be permitted to pay dividends on
its capital stock if its regulatory capital would thereby be reduced below the
amount then required for the liquidation account established for the benefit of
certain depositors of the Bank at the time of the Conversion. In addition, under
the prompt corrective action regulations of the OTS, the Bank would be
prohibited from paying dividends if the Bank were classified as
"undercapitalized" under such rules. See "-- Prompt Corrective Regulatory
Action."

     Future earnings of the Bank appropriated to bad debt reserves and deducted
for federal income tax purposes are not available for payment of dividends or
other distributions to the Company without payment of taxes at the then current
tax rate by the Bank on the amount of earnings removed from the reserves for
such distributions.

     Transactions with Affiliates and Insiders. Generally, transactions between
a savings bank or its subsidiaries and its affiliates are required to be on
terms as favorable to the savings bank as transactions with non-affiliates. In
addition, certain of these transactions, such as loans to an affiliate, are
restricted to a percentage of the savings bank's capital. Affiliates of the Bank
include the Company and any company that is under common control with the Bank.
In addition, a savings bank may not lend to any affiliate engaged in activities
not permissible for a bank holding company or acquire the securities of most
affiliates. The OTS has the discretion to treat subsidiaries of savings banks as
affiliates on a case-by-case basis.

     Certain transactions with directors, officers or controlling persons are
also subject to conflict of interest regulations enforced by the OTS. These
conflict of interest regulations and other statutes also impose restrictions on
loans to such persons and their related interests. Among other things, such
loans must generally be made on terms that are substantially the same as for
loans to unaffiliated individuals.

     Reserve Requirements. Pursuant to regulations of the Federal Reserve Board
(the "FRB"), all FDIC-insured depository institutions must maintain average
daily reserves at specified levels against their transaction accounts. As of
December 31, 2002, the Bank met these reserve requirements.

     Federal Home Loan Bank System. The Federal Home Loan Bank System consists
of 12 district Federal Home Loan Banks subject to supervision and regulation by
the Federal Housing Finance Board ("FHFB"). The Federal Home Loan Banks provide
a central credit facility primarily for member institutions. As a member of the
FHLB, the Bank is required to acquire and hold shares of capital stock in the
FHLB in an amount at least equal to 1% of the aggregate unpaid principal of its
home mortgage loans, home purchase contracts, and similar obligations at the
beginning of each year, or 1/20 of its advances (borrowings) from the FHLB,
whichever is greater. The Bank was in compliance with this requirement, with an
investment in FHLB stock at December 31, 2002 of $ 2.4 million.

                                       21

<PAGE>

REGULATION OF THE COMPANY

     The Company is a unitary savings and loan holding company subject to OTS
regulation, supervision and examination. In addition, the OTS has enforcement
authority over the Company and its non-savings institution subsidiaries and may
restrict or prohibit activities that are determined to represent a serious risk
to the safety, soundness or stability of the Bank or any other subsidiary
savings institution.

     Under the HOLA, a savings and loan holding company is required to obtain
the prior approval of the OTS before acquiring another savings institution or
savings and loan holding company. A savings and loan holding company may not (i)
acquire, with certain exceptions, more than 5% of a non-subsidiary savings
institution or a non-subsidiary savings and loan holding company; or (ii)
acquire or retain control of a depository institution that is not insured by the
FDIC. In addition, while the Bank generally may acquire a savings institution by
merger in any state without restriction by state law, the Company could acquire
control of an additional savings institution in a state other than Kentucky only
if such acquisition is permitted under the laws of the target institution's home
state or in a supervisory acquisition of a failing institution.

     As a unitary savings and loan holding company, the Company generally is not
subject to activity restrictions. If the Company were to acquire control of
another savings institution as a separate subsidiary, it would become a multiple
savings and loan holding company, and the activities of the Company and any of
its subsidiaries (other than the Bank or any other SAIF-insured savings
institution) would become subject to such restrictions unless such other
institutions each qualify as a QTL and were acquired in a supervisory
acquisition.

     If the Bank fails the QTL test, the Company must obtain the approval of the
OTS prior to continuing, after such failure, directly or through its other
subsidiaries, any business activity other than those approved for multiple
savings and loan holding companies or their subsidiaries. In addition, within
one year of such failure the Company would be required to register as, and would
become subject to, the restrictions applicable to the bank holding companies.
The activities authorized for a bank holding company are more limited than are
the activities authorized for a unitary or multiple savings and loan holding
company.

FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-K, including all documents incorporated
herein by reference, contains forward-looking statements. Additional written or
oral forward-looking statements may be made by the Company from time to time in
filings with the Securities and Exchange Commission or otherwise. The words
"believe," "expect," "seek," and "intend" and similar expressions identify
forward-looking statements, which speak only as of the date the statement is
made. Such forward-looking statements are within the meaning of that term in
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements may include, but
are not limited to, projections of income or loss, expenditures, acquisitions,
plans for future operations, financing needs or plans relating to services of
the Company, as well as assumptions relating to the foregoing. Forward-looking
statements are inherently subject to risks and uncertainties, some of which
cannot be predicted or quantified. Future events and actual results could differ
materially from those set forth in, contemplated by or underlying the
forward-looking statements.

     The Company does not undertake, and specifically disclaims, any obligation
to publicly release the results of revisions which may be made to
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.

                                       22

<PAGE>

ITEM 2.  PROPERTIES

     The following table sets forth information regarding Company offices at
December 31, 2002.

<TABLE>
<CAPTION>
                                                                                                            Approximate
                                          Year Opened      Owned or Leased       Book Value (1)      Square Footage of Office
                                         -------------     ---------------      ---------------      ------------------------
                                                                                 (In thousands)
<S>                                       <C>                   <C>                <C>                                 <C>
MAIN OFFICE:
   2700 Fort Campbell Boulevard
   Hopkinsville, Kentucky ..........          1995              Owned              $      1,832                        17,625

BRANCH OFFICES:
   Downtown Branch Office
     605 South Virginia Street
     Hopkinsville, Kentucky  .......          1997              Owned              $        183                           756
   Murray Branch Office
     7th and Main Streets
     Murray, Kentucky...............          1969              Leased             $         74                         4,800
    Murray Branch Office
       Hwy 641
       Murray, Kentucky                   January 2003          Owned              $        751                        3,650
   Cadiz Branch Office
     352 Main Street
     Cadiz, Kentucky  ..............          1998              Owned              $        383                         2,200
   Elkton Branch Office
     West Main Street
     Elkton, Kentucky   ............          1976              Owned              $        104                         3,400
    Benton Branch Office
         59 Main Street
         Benton, Kentucky                     2001              Owned              $        180                        1,100
    Benton Branch Office
         321 Main Street
         Benton, Kentucky                  March 2003           Owned              $        270                         3,800
    Carr Plaza Office
        45 Bypass
        Fulton, KY                            2002              Owned              $         92                           800
    Lake Street Office
        Lake Street
        Fulton, KY                            2002              Owned              $        840                        15,000
    Fall & Fall Insurance Office
        Fulton, KY                            2002              Owned              $        250                        3,200
</TABLE>

----------

(1) Represents the book value of land, building, furniture, fixtures and
equipment owned by the Company.

ITEM 3.  LEGAL PROCEEDINGS

     From time to time, the Company or the Bank is a party to various legal
proceedings incident to its business. At December 31, 2002, there were no legal
proceedings to which the Company or the Bank was a party, or to which any of
their property was subject, which were expected by management to result in a
material loss to the Company or the Bank. There are no pending regulatory
proceedings to which the Company or the Bank is a party or to which any of their
properties is subject which are currently expected to result in a material loss.

                                       23

<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

     John E. Peck. Mr. Peck, 38, has served as President and Chief Executive
Officer of the Company and the Bank since July 2000. Prior to that, he was
President and Chief Executive Officer of United Commonwealth Bank and President
of Firstar Bank-Calloway County.

     Boyd M. Clark. Mr. Clark, 57, has served as Senior Vice President -- Loan
Administration of the Bank since 1995. Prior to his current position, Mr. Clark
served as First Vice President of the Bank. He has been an employee of the Bank
since 1973. Mr. Clark also serves as Vice President and Secretary of the
Company. From May to July 2000, Mr. Clark served as Acting President of both the
Company and the Bank.

     Michael L. Woolfolk. Mr. Woolfolk, 49, has served as Executive Vice
President and Chief Operations Officer of the Bank since August 2000. Prior to
that, he was President of Firststar Bank-Marshall County, President and Chief
Executive Officer of Bank of Marshall County and President of Mercantile Bank.

     Billy C. Duvall.CPA Mr. Duvall, 37, has served as Vice President, Chief
Financial Officer and Treasurer of the Company and the Bank since June 1, 2001.
Prior to that, he was an Auditor with Rayburn, Betts & Bates, P.C., independent
public accountants and a Principal Examiner with the National Credit Union
Administration.

     All officers serve at the discretion of the boards of directors of the
Company or the Bank. There are no known arrangements or understandings between
any officer and any other person pursuant to which he or she was or is to be
selected as an officer.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The information set forth under the caption "Market and Dividend
Information" in the Company's Annual Report to Stockholders for the year ended
December 31, 2002 (Exhibit No. 13) is incorporated herein by reference.

ITEM 6.  SELECTED FINANCIAL DATA

     The information set forth under the caption "Selected Financial Information
and Other Data" in the Company's Annual Report to Stockholders for the year
ended December 31, 2002 (Exhibit No. 13) is incorporated herein by reference.

                                       24

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     The information set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report to Stockholders for the year ended December 31, 2002 (Exhibit No.
13) is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Interest Rate
Sensitivity Analysis" in the Company's Annual Report to Stockholders for the
year ended December 31, 2002 (Exhibit No. 13) is incorporated herein by
reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company's Financial Statements together with the related notes and the
report of Rayburn, Betts & Bates, P.C., independent public accountants, all as
set forth in the Company's Annual Report to Stockholders for the year ended
December 31, 2002 (Exhibit No. 13) are incorporated herein by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     No items are reportable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information regarding directors of the Company is omitted from this Report
as the Company will file a definitive proxy statement not later than 120 days
after December 31, 2002 (the "Proxy Statement"), and the information to be
included therein under "Proposal I -- Election of Directors" is incorporated
herein by reference. Information regarding the executive officers of the Company
is included under separate caption in Part I of this Form 10-K

ITEM 11. EXECUTIVE COMPENSATION

     Information regarding executive compensation is omitted from this Report as
the Company will file the Proxy Statement, and the information to be included
therein under "Proposal I -- Election of Directors" is incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

     Information required by this Item is omitted from this Report as the
Company will file the Proxy Statement, and the information to be included
therein under "Voting Securities and Principal Holders Thereof" and "Proposal
I - Election of Directors" is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information required by this Item is omitted from this Report as the
Company will file the Proxy Statement, and the information to be included
therein under "Proposal I -- Election of Directors" is incorporated herein by
reference.

                                       25

<PAGE>

ITEM 14. CONTROLS AND PROCEDURES

     Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon that evaluation, the Company's Chief Executive Officer and
the Company's Chief Financial Officer concluded that the Company's disclosure
controls and procedures are effective in alerting them in a timely manner to
material information relating to the Company's periodic SEC filings. These have
been no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date
that Company conducted its evaluation.

     Disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports filed by the Company under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. Disclosure controls are also designed
with the objective of ensuring such information is accumulated and communicated
to the Company's management, including the Chief Executive Officer and the Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosures. Disclosure controls include internal controls that are designed to
provide reasonable assurance that transactions are properly authorized, assets
are safeguarded against unauthorized or improper use and transactions are
properly recorded and reported.

     Any control system, no matter how well conceived and operated, can provide
only reasonable assurance that its objectives are achieved. The design of a
control system inherently has limitations, including the controls cost relative
to their benefits. Additionally, controls can be circumvented. No cost-effective
control system can provide absolute assurance that all control issues and
instances of fraud, if any, will be detected.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)(1) The following consolidated financial statements of the Company
included in the Annual Report to Stockholders for the year ended December 31,
2002, are incorporated herein by reference in Item 8 of this Report. The
remaining information appearing in the Annual Report to Stockholders is not
deemed to be filed as part of this Report, except as expressly provided herein.

            1  Independent Auditors' Report.

            2  Consolidated Balance Sheets - December 31, 2002 and 2001.

            3. Consolidated Statements of Income for the Years Ended December
               31, 2002, 2001 and 2000.

            4. Consolidated Statements of Comprehensive Income for the Years
               Ended December 31, 2002, 2001 and 2000.

            5. Consolidated Statements of Changes in Stockholders' Equity for
               the Years Ended December 31, 2002, 2001 and 2000.

            6. Consolidated Statements of Cash Flows for the Years Ended
               December 31, 2002, 2001 and 2000.

            7. Notes to Consolidated Financial Statements.

                                       26

<PAGE>

     (a)(2) All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.

     (a)(3) The following exhibits either are filed as part of this Report or
are incorporated herein by reference: Exhibit No. 2. Plan of Conversion of
Hopkinsville Federal Savings Bank. Incorporated herein by reference to Exhibit
No. 2 to Registrant's Registration Statement on Form S-1 (File No. 333-30215).

            Exhibit No. 3.1. Certificate of Incorporation. Incorporated herein
            by reference to Exhibit No. 3.1 to Registrant's Registration
            Statement on Form S-1 (File No. 333-30215).

            Exhibit No. 3.2. Bylaws. Incorporated herein by reference to Exhibit
            No. 3.2 to Registrant's Annual Report on Form 10-K for the fiscal
            year ended December 31, 1998.

            Exhibit No. 10.1. Employment Agreement by and between Hopkinsville
            Federal Savings Bank and Boyd M. Clark. Incorporated herein by
            reference to Exhibit No. 10.1 to Registrant's Registration Statement
            on Form S-1 (File No. 333-30215).

            Exhibit No. 10.2. Employment Agreement by and between HopFed
            Bancorp, Inc. and Boyd M. Clark. Incorporated herein by reference to
            Exhibit No. 10.2 to Registrant's Registration Statement on Form S-1
            (File No. 333-30215).

            Exhibit No. 10.3. Employment Agreement Amendment by and between
            Hopkinsville Federal Savings Bank and Boyd M. Clark. Incorporated
            herein by reference to Exhibit No. 10.3 to Registrant's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1998.

            Exhibit No. 10.4. Employment Agreement Amendment by and between
            HopFed Bancorp, Inc. and Boyd M. Clark. Incorporated herein by
            reference to Exhibit 10.4 to Registrant's Annual Report on Form 10-K
            for the fiscal year ended December 31, 1998.

            Exhibit No. 10.5. HopFed Bancorp, Inc. Management Recognition Plan.
            Incorporated herein by reference to Exhibit 99.1 to Registration
            Statement on Form S-8 (File No. 333-79391).

            Exhibit No. 10.6. HopFed Bancorp, Inc. 1999 Stock Option Plan.
            Incorporated herein by reference to Exhibit 99.2 to Registration
            Statement on Form S-8 (File No. 333-79391).

            Exhibit No. 10.7. Employment Agreement by and between Hopkinsville
            Federal Savings Bank and John E. Peck. Incorporated herein by
            reference to Exhibit No. 10.2 to Registrant's Quarterly Report on
            Form 10-Q for the fiscal quarter ended June 30, 2000.

            Exhibit No. 10.8. Employment Agreement by and between HopFed
            Bancorp, Inc. and John E. Peck. Incorporated herein by reference to
            Exhibit No. 10.1 to Registrant's Quarterly Report on Form 10-Q for
            the fiscal quarter ended June 30, 2000.

            Exhibit 10.9. HopFed Bancorp, Inc. 2000 Stock Option Plan.
            Incorporated herein by reference to Exhibit 10.10 to Registrant's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            2000.

            Exhibit 10.10. Employment Agreement by and between HopFed Bancorp,
            Inc. and Billy C. Duvall. Incorporated herein by reference to
            Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the
            fiscal quarter ended June 30, 2001.

                                       27

<PAGE>

            Exhibit 10.11. Employment Agreement by and between Hopkinsville
            Federal Bank and Billy C. Duvall. Incorporated herein by reference
            to Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for
            the fiscal quarter ended June 30, 2001.

            Exhibit 10.12. Employment Agreement by and between HopFed Bancorp,
            Inc. and Michael L. Woolfolk. Incorporated herein by reference to
            Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the
            fiscal quarter ended September 30, 2002.

            Exhibit 10.13. Employment Agreement by and between Heritage Bank and
            Michael L. Woolfolk. Incorporated herein by reference to Exhibit
            10.2 to Registrant's Quarterly Report on Form 10-Q for the fiscal
            quarter ended September 30, 2002.

            Exhibit 10.14. Fulton Division Acquisition Agreement dated as of
            March 1, 2002, by and between Old National Bank and Hopkinsville
            Federal Bank. Incorporated herein by reference to Exhibit 10.1 to
            Registrant's Current Report on Form 8-K dated March 1, 2002.

            Exhibit No. 13. Annual Report to Stockholders Except for those
            portions of the Annual Report to Stockholders for the year ended
            December 31, 2002, which are expressly incorporated herein by
            reference, such Annual Report is furnished for the information of
            the Commission and is not to be deemed "filed" as part of this
            Report.

            Exhibit No. 21. Subsidiaries of the Registrant.

            Exhibit No. 23.1. Consent of Rayburn, Betts & Bates, P.C.

     (b)    Reports on Form 8-K. Current Report on Form 8-K, dated September 6,
            2002, as amended, reporting under Items 2 and 7, completion of the
            acquisition of two offices of Old National Bank in Fulton, Kentucky
            and Fall & Fall Insurance, an insurance agency.

     (c)    Exhibits to this Form 10-K are attached or incorporated by reference
            as stated above.

     (d)    None.

                                       28

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
behalf by the undersigned, thereunto duly authorized.

                                         HOPFED BANCORP, INC.
                                               (Registrant)


Date:  March 28, 2003                    By: /s/ John E. Peck
                                             -----------------------------------
                                             John E. Peck
                                             President and
                                             Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated and on the dates indicated.

DATE:    SIGNATURE AND TITLE:


/s/ John E. Peck                                              March 28, 2003
--------------------------------------------
John E. Peck

Director, President and Chief Executive Officer
(Principal Executive Officer)

/s/ Billy C. Duvall                                           March 28, 2003
--------------------------------------------
Billy C. Duvall
Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

/s/ WD Kelley                                                 March 28, 2003
--------------------------------------------
WD Kelley
Chairman of the Board

/s/ Boyd M. Clark                                             March 28, 2003
--------------------------------------------
Boyd M. Clark

Director, Vice President and Secretary

/s/ Walton G. Ezell                                           March 28, 2003
--------------------------------------------
Walton G. Ezell
Director

/s/ Gilbert E. Lee                                            March 28, 2003
--------------------------------------------
Gilbert E. Lee
Director

<PAGE>

/s/ Harry J. Dempsey                                          March 28, 2003
--------------------------------------------
Harry J. Dempsey
Director

/s/ Kerry Harvey                                              March 28, 2003
--------------------------------------------
Kerry Harvey
Director

/s/Thomas I. Miller                                           March 28, 2003
--------------------------------------------
Thomas I. Miller
Director

<PAGE>

                                 CERTIFICATIONS

I, John E. Peck, certify that:

          (1)  I have reviewed this annual report on Form 10-K of HopFed
Bancorp, Inc.;

          (2)  Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

          (3)  Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual report;

          (4)  The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

               (a)  designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

               (b)  evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

               (c)  presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

          (5)  The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

               (a)  all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

               (b)  any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and

<PAGE>

      (6)  The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 31, 2003

                                     /s/ John. E. Peck
                                         -------------------------------------
                                         John E. Peck, President and
                                         Chief Executive Officer


<PAGE>

                                 CERTIFICATIONS

I, Billy C. Duvall, certify that:

          (1)  I have reviewed this annual report on Form 10-K of HopFed
Bancorp, Inc.;

          (2)  Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

          (3)  Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual report;

          (4)  The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

               (a)  designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

               (b)  evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

               (c)  presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;


          (5) The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

               (a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

               (b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and

<PAGE>

    (6)    The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: March 31, 2003

                                   /s/ Billy C. Duvall
                                       -----------------------------------------
                                       Billy C. Duvall, Vice President,
                                       Chief Financial Officer and Treasurer