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, 1999

                                       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 Identification No.)
incorporation or organization)

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. [ ]

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  ($11.25 per share) at which the
stock was sold on March 31, 2000, was approximately $41,614,819. 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  31,  2000,  3,993,592  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, 1999.
Part III:
Portions  of the  definitive  proxy  statement  for the 2000  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."

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 and a  portion  of the net  proceeds  of the  Conversion.  The
Company's  principal  business  is  overseeing  the  business  of the  Bank  and
investing the portion of the net Conversion proceeds retained by it. 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.

HOPKINSVILLE FEDERAL SAVINGS BANK

     The Bank is a federally  chartered  stock  savings  bank  headquartered  in
Hopkinsville,  Kentucky, with branch offices in Hopkinsville,  Murray, Cadiz and
Elkton,  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 and adopted its current corporate title.

     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  and other  consumer
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.

     The primary  market area of the Bank  consists of the adjacent  counties of
Calloway, Christian, Todd and Trigg located in southwestern Kentucky.

LENDING ACTIVITIES

     General.  The total gross loan portfolio totaled $115.7 million at December
31, 1999,  representing  55.7% of total assets at that date.  Substantially  all
loans are  originated  in the Bank's  market area.  At December 31, 1999,  $88.2
million,  or 76.3% 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 $12.4 million, or 10.7% of

<PAGE>

the loan portfolio at December 31, 1999,  and  multi-family  residential  loans,
which were $2.2 million,  or 1.9% of the loan portfolio at December 31, 1999. At
December 31, 1999,  construction  loans were $5.7  million,  or 4.9% of the loan
portfolio,  and  consumer  loans  totaled  $7.2  million,  or 6.2%  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, 1999, there were no  concentrations of loans exceeding 10% of total
loans other than as disclosed below.
<TABLE>
<CAPTION>
                                                                     At December 31,
                            ---------------------------------------------------------------------------------------------------
                                   1999                  1998               1997                1996                1995
                            -----------------     -----------------  -----------------   -----------------   -----------
                             Amount     Percent    Amount   Percent   Amount   Percent    Amount   Percent   Amount   Percent
                             ------     -------    ------   -------   ------   -------    ------   -------   ------   -------
                                                                  (Dollars in thousands)
Type of Loan:
------------
Real estate loans:
<S>                         <C>          <C>     <C>         <C>     <C>       <C>       <C>        <C>     <C>        <C>
   One-to-four family
     residential........    $  88,248     76.3%  $ 88,954     80.6%  $ 83,229   78.7%    $77,318     79.6%  $70,417     81.5%
   Multi-family
     residential........        2,165      1.9%     1,539      1.4%     2,359    2.2%      1,466      1.5%      492      0.6%
   Construction.........        5,706      4.9%     4,626      4.2%     5,166    4.9%      5,389      5.6%    4,062      4.7%
   Non-residential (1)..       12,398     10.7%     8,260      7.5%     7,593    7.2%      5,467      5.6%    5,107      5.9%
                            ---------    ------  --------    ------  --------  ------    -------    ------  -------    ------
     Total real estate
        loans...........      108,517     93.8%   103,379     93.7%    98,347   93.0%     89,640     92.3%   80,078     92.7%
                            =========    ======  ========   =======  ========  ======    =======   =======   ======   =======
Consumer loans:
   Secured by deposits..        2,525      2.2%     2,280      2.1%     3,081    2.9%      3,484      3.6%    3,324      3.8%
   Other consumer loans.        4,670      4.0%     4,586      4.2%     4,298    4.1%      4,004      4.1%    3,016      3.5%
                            ---------    ------  --------    ------  --------  ------    -------    ------  -------    ------
     Total consumer loans       7,195      6.2%     6,866      6.3%     7,379    7.0%      7,488      7.7%    6,340      7.3%
                            ---------    ------  --------    ------  --------  ------    -------    ------  -------    ------
                              115,712    100.0%   110,245    100.0%   105,726  100.0%     97,128    100.0%   86,418    100.0%
                                         ======              ======            ======               ======             ======

Less:.Loans in process.         1,902               1,180               2,019              1,415              1,541
     Allowance for loan
       losses...........          278                 258                 237                217(2)             122
                            ---------            --------            --------            -------            -------
   Total................    $ 113,532            $108,807            $103,470            $95,496            $84,755
                            =========            ========            ========            =======            =======
</TABLE>
---------------------------
(1)  Consists  of loans  secured by first  liens on  residential  lots and loans
     secured by first mortgages on commercial real property.
(2)  Increase in allowance  for loan loss  reflects  $100,000  provision in 1996
     based upon management's  assessment of risks associated with increased loan
     growth and increased  emphasis on consumer  lending.  See  "--Nonperforming
     Loans and Other Assets."

     Loan Maturity Schedule.  The following table sets forth certain information
at  December  31,  1999  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 5    Due after
                                                               3 through 5    through 10     10 through    Due after
                                  Due during the year ending   years after    years after     15 years      15 years
                                         December 31,          December 31,  December 31,      after         after
                              -------------------------------  ------------  ------------    December 31,  December 31,
                                                                                             ------------  ------------
                                2000       2001       2002         1999          1999           1999          1999        Total
                                ----       ----       ----         ----          ----           ----          ----        -----
                                                                         (In thousands)
One-to-four family
<S>                            <C>        <C>        <C>          <C>             <C>         <C>           <C>         <C>
residential...............     $2,705     $1,215     $1,201       $2,124          $  9,665    $22,495       $48,398     $  87,803
Multi-family residential..         --         --         --           --                --        790         1,375         2,165
Construction..............      4,077         --         --           --                --         --            --         4,077
Non-residential...........        614         55         --          649               888      4,250         5,836        12,292
Consumer..................      2,399        526      1,214        2,615               441         --            --         7,195
                               ------     ------     ------       ------          --------    -------       -------     ---------
   Total..................     $9,795     $1,796     $2,415       $5,388          $ 10,994    $27,535       $55,609     $ 113,532
                               ======     ======     ======       ======          ========    =======       =======     =========
</TABLE>
                                       2

<PAGE>
     The following  table sets forth at December 31, 1999,  the dollar amount of
all loans due one year or more after  December 31, 1999 which had  predetermined
interest rates and have floating or adjustable interest rates.

                                        Predetermined             Floating or
                                            Rate                Adjustable Rate
                                      -----------------        ----------------
                                                    (In thousands)
One-to-four family residential.....        $15,579                 $69,519
Multi-family residential...........             --                   2,165
Construction.......................             --                      --
Non-residential....................             --                  11,678
Consumer...........................          4,796                      --
                                           -------                 -------
   Total...........................        $20,375                 $83,362
                                           =======                 =======

     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.

     The  following  table sets forth certain  information  with respect to loan
origination  activity for the periods  indicated.  The Bank has not purchased or
sold any loans in the periods presented.

                                                 Year Ended December 31,
                                          --------------------------------------
                                             1999          1998         1997
                                             ----          ----         ----
                                                        (In thousands)
Loan originations:
   One-to-four family residential          $  16,474   $  24,406     $ 14,578
   Multi-family residential......                686         204        1,115
   Construction..................              2,470       1,749        6,302
   Non-residential...............              4,970       1,056          372
   Consumer......................              5,922       5,324        7,472
                                           ---------   ---------     --------
     Total loans originated......             30,522      32,739       29,839
                                           ---------   ---------     --------

Loan principal reductions:
   Loan principal repayments.....             25,797      27,403       21,865
                                           ---------   ---------     --------
Net increase in loan portfolio...          $   4,725   $   5,336     $  7,974
                                           =========   =========     ========

     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.  All loans  must be
reviewed by the loan  committee,  which is  comprised  of lending  officers  and
branch managers.  Exceptions to the

                                       3
<PAGE>

underwriting standards 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.

     Applications   for  real  estate  loans  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.

     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 $6.6 million at December 31, 1999. At that date, the Bank had no
lending relationships in excess of the loans-to-one-borrower  limit. At December
31,1999, the Bank's largest lending relationship was $2.6 million. The loans are
to a local real estate  developer  and his business  associate and are primarily
for  the  development  of  apartments,  the  purchase  of lots  for  residential
construction,  and construction of one-to-four  residential  housing.  All loans
within this  relationship  were current and performing in accordance  with their
terms at December 31, 1999.

     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, 1999,  one-to-four  family residential
mortgage loans, totaled approximately $88.2 million, or 76.3% of the Bank's loan
portfolio.  All loans  originated  by the Bank are  maintained  in its portfolio
rather than sold in the secondary market.

                                       4
<PAGE>

     The Bank primarily  originates  residential  mortgage loans with adjustable
rates.  As of December 31, 1999,  81.7% 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. A borrower may also obtain a loan in which the maximum  annual  adjustment
is 0.5% with a higher initial rate. 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 has 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.  The  adjustable  rate mortgage loans offered by the
Bank also  provide  for  initial  rates of  interest  below the rates that would
prevail when the index used for repricing 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.

     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 repricing 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 tend 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, 1999, only $15.6
million,  or 13.7%,  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 of
the Bank 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, 1999,  the Bank's loan  portfolio  included $5.7 million of loans secured by
properties under construction, including construction/permanent loans structured
to

                                       5
<PAGE>

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.

     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  31,1999  the Bank had $2.2  million  of
multi-family  residential  loans,  which  amounted  to 1.9% 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, 1999, the Bank had  approximately  $12.4
million of such loans, which comprised 10.7% 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 and 75% for land development  loans. The Bank currently does not intend
to significantly expand multi-family  residential or non-residential real estate
lending, but may do so if opportunities arise in the future.

     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.

     Consumer and Other 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

                                       6
<PAGE>

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, 1999, loans on deposit accounts totaled $2.5 million,  or 2.2% 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.  The
Bank is attempting to grow its portfolio of consumer loans.

     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, 1999,  there were  approximately  $7,000 of 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.

NON-PERFORMING LOANS AND OTHER PROBLEM ASSETS

     The Bank's  non-performing  loans  totaled .05% of total assets at December
31, 1999. 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.
<TABLE>
<CAPTION>
                                                            At December 31,
                                  ----------------------------------------------------------------
                                        1999         1998         1997         1996          1995
                                        ----         ----         ----         ----          ----
                                                          (Dollars in thousands)

Accruing loans which are
  contractually past due 90
  days or more:
<S>                                  <C>          <C>          <C>         <C>            <C>
   Residential real estate...        $     51     $    268     $    140    $    266       $   133
   Consumer..................               7           19           23          --             1
                                     --------     --------     --------    --------       -------
     Total...................        $     58     $    287     $    163    $    266       $   134
                                     --------     --------     --------    --------       -------
     Total non-performing
       loans.................        $     58     $    287     $    163    $    266       $   134
                                     ========     ========     ========    ========       =======

Percentage of total loans....           0.05%        0.26%        0.16%       0.28%         0.16%
                                     ========     =========    =========   ========       =======
</TABLE>
     At December 31, 1999, the Bank had no loans  accounted for on a non-accrual
basis, no other non-performing assets and no real estate owned.

                                       7
<PAGE>

     At  December  31,  1999,  the  Bank  had no 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. Also, the Bank had no impaired loans under SFAS 114/118. As
such, the impact of adopting these statements was not significant to the Bank.

     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,  1999,  the  Bank  had  $9,922  in  assets
classified as special mention,  $58,026 in assets classified as substandard,  no
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

                                       8
<PAGE>

security.  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,
                                            --------------------------------------------
                                             1999    1998      1997     1996       1995
                                             ----    ----      ----     ----       ----
                                                        (Dollars in thousands)
<S>                                         <C>      <C>      <C>      <C>       <C>
Balance at beginning of period ..........   $ 258    $ 237    $ 217    $ 122     $ 122

Loans charged off:
   Real estate mortgage:
   Residential ..........................      --       --       --       (5)       --
                                            -----    -----    -----    -----     -----
Total charge-offs .......................      --       --       --       (5)       --
                                            -----    -----    -----    -----     -----
Recoveries ..............................      --       --       --       --        --
                                            -----    -----    -----    -----     -----
Net loans charged off ...................      --       --       --       (5)       --
                                            -----    -----    -----    -----     -----
Provision for loan losses ...............   $  20    $  21       20      100        --
                                            -----    -----    -----    -----     -----
Balance at end of period ................   $ 278    $ 258    $ 237    $ 217     $ 122
                                            =====    =====    =====    =====     =====
Ratio of net charge-offs to average loans
   outstanding during the period ........       0%       0%       0%   0.0053%       0%
                                            =====    =====    =====    ======    =====
</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.
                                       9
<PAGE>
<TABLE>
<CAPTION>
                                                                       At December 31,
                          ----------------------------------------------------------------------------------------------------------
                                   1999                       1998                        1997                        1996
                          -----------------------    -----------------------     ------------------------    -----------------------
                                     Percent of                 Percent of                   Percent of                 Percent of
                                      Loans in                   Loans in                     Loans in                   Loans in
                                        Each                       Each                         Each                       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...     $  130           76.3%     $  136        80.6%         $  186         78.7%        $   163       79.6%
Construction.........          5            4.9%          7         4.2%              6          4.9%             11        5.6%
Multi-family residential       8            1.9%          6         1.4%             12          2.2%              3        1.5%
Non-residential......         85           10.7%         71         7.5%             19          7.2%             23        5.6%
Secured by deposits..         --            2.2%         --         2.1%             --          2.9%             --        3.6%
Other consumer loans.         50            4.0%         38         4.2%             14          4.1%             17        4.1%
                          ------          ------     ------       ------         ------       -------        -------      ------
   Total allowance for
     loan losses.....     $  278          100.0%     $  258       100.0%         $  237        100.0%        $   217      100.0%
                          ======          ======     ======       ======         ======       =======        =======      ======
</TABLE>

                                       10
<PAGE>
                                          At December 31, 1995
                                 ---------------------------------------
                                                 Percent of Loans in Each
                                     Amount       Category to Total Loans
                                     ------       -----------------------
                                 (In thousands)

One-to-four family..........       $    94                 81.5%
Construction................             5                  4.7%
Multi-family residential....             1                  0.6%
Non-residential.............            14                  5.9%
Secured by deposits.........            --                  3.8%
Other consumer loans........             8                  3.5%
                                   -------                ------
   Total allowance for
     loan losses............       $   122                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, 1999,  securities  with an amortized  cost of $72.8 million
and an  approximate  market value of $71.4 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  effected  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 other comprehensive income.

     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  $43.3  million
mortgage-backed  security  portfolio at December 31, 1999,  approximately  $22.5
million  were  originated  through  GNMA,   approximately   $11.0  million  were
originated  through FNMA and approximately  $9.8 million were originated through
FHLMC.  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.

                                       11
<PAGE>

     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.

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

                                         At December 31,
                                   ----------------------------
                                     1999      1998      1997
                                     ----      ----      ----
                                          (In thousands)
Securities available for sale:
   FHLB and FHLMC stock ........   $ 1,987   $ 9,845   $ 6,895
   U. S. government and agency
     securities (1) ............    36,120    23,065    13,000
   Mortgage-backed securities ..    33,301    35,214     6,789
   Other .......................        15        15        15
Securities held to maturity:
   U.S. government and agency
     securities (1) ............        --    13,997    31,988
   Mortgage-backed securities ..     9,958    13,357    19,578
                                   -------   -------   -------
     Total investment securities   $81,381   $95,493   $78,265
                                   =======   =======   =======

---------------------------
(1)  Primarily reflects debt securities purchased from the FHLB of Cincinnati.

     The following  table sets forth  information  in the scheduled  maturities,
amortized cost, market values and average yields for U.S.  government and agency
securities in the  investment  portfolio at December 31, 1999. At such date, all
of these securities were callable and/or due on or before December 15, 2000.
<TABLE>
<CAPTION>
                       One Year or Less   One to Five Years   Five to Ten Years    After Ten Years    Total Investment Portfolio
                       ----------------   -----------------   -----------------    ---------------    --------------------------
                      Carrying  Average   Carrying  Average   Carrying  Average   Carrying  Average  Carrying  Market    Average
                       Value     Yield     value     Yield     Yield     Value     Value     Yield    Value     Value     Yield
                       -----     -----     -----     -----     -----     -----     -----     -----    -----     -----     -----
                                                                (Dollars in thousands)
U.S. government and
<S>                   <C>                <C>         <C>     <C>         <C>      <C>        <C>      <C>       <C>        <C>
   agency securities  $     --      --%  $ 15,997    6.29%   $  7,206    6.92%    $ 14,209   7.96%    $37,412   $36,120    7.04%
                      ========  =======  ========    =====   ========    =====    ========   =====    =======   =======    =====
</TABLE>
                                       12
<PAGE>
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.

     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  residents who reside in
the Bank's market area.

     Savings  deposits in the Bank at December 31, 1999 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         $2,943               1.8%
    2.5%*     None                    Demand/NOW accounts                  1.500          9,017               5.6
    2.8%      None                    Passbook accounts                       10          9,803               6.1
    3.9%*     None                    Money market deposit accounts        2,500         30,063              18.7
                                                                                       --------             -----
                                                                                         51,826              32.2
                                                                                       --------             -----
                                          Certificates of Deposit
                                      ------------------------------

    5.2%      3 months or less        Fixed-term, fixed rate                 500         19,216              11.9
    5.3%      Over 3 to 12-months     Fixed-term, fixed-rate                 500         44,572              27.7
    5.7%      Over 12 to 24-months    Fixed-term, fixed-rate                 500         35,294              21.9
    5.6%      Over 24 to 36-months    Fixed-term, fixed-rate                 500          4,388               2.8
    5.7%      Over 36 to 48-months    Fixed-term, fixed-rate                 500          2,995               1.9
    5.6%      Over 48 to 60-months    Fixed-term, fixed rate                 500          2,614               1.6
                                                                                       --------             -----
                                                                                        109,079              67.8
                                                                                       --------             -----
                                                                                       $160,905             100.0%
                                                                                       ========             ======
</TABLE>
-----------------
* Represents weighted average interest rate.

                                       13
<PAGE>

         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,
                        --------------------------------------------------------------------------------------------------------
                                     1999                               1998                                 1997
                        -------------------------------    --------------------------------    ---------------------------------
                        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........       $  49,365          $103,880        $  62,414          $ 109,508        $    71,590         $ 123,429
Average
  rate...........           3.14%             5.37%            3.36%              5.39%              3.51%             5.52%
</TABLE>
     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,
                                  1999         Deposits          1998              1998         Deposits        1997
                                  ----         --------          ----              ----         --------        ----
                                                                 (Dollars in thousands)
<S>                          <C>               <C>           <C>               <C>               <C>        <C>
Non-interest bearing.....    $    2,943          1.8%        $     212         $    2,731          1.8%     $     768
Demand and NOW
   accounts..............         9,017          5.6%              393              8,624          5.6%          (860)
Money market.............        30,063         18.7%             (709)            30,772         19.9%       (11,292)
Passbook savings.........         9,803          6.1%             (391)            10,194          6.6%      (137,886)
Other time deposits......       109,079         67.8%            6,584            102,495         66.1%       (16,547)
                             ----------        ------        ---------         ----------      --------    ----------
   Total.................    $  160,905        100.0%        $   6,089         $  154,816        100.0%    $ (165,817)
                             ==========        ======        =========         ==========      ========    ==========
</TABLE>

(continued)
<TABLE>
<CAPTION>
                                Balance at                        Increase         Balance at
                              December 31,        % of        (Decrease) from     December 31,       % of
                                   1997         Deposits     December 31, 1996        1996         Deposits
                                   ----         --------     -----------------        ----         --------
                                                             (Dollars in thousands)
<S>                          <C>               <C>           <C>               <C>                   <C>
Non-interest bearing.....    $    1,963          0.6%        $     179          $   1,784              1.0%
Demand and NOW
   accounts..............         9,484          3.0%            1,881              7,603              4.1%
Money market.............        42,064         13.1%            5,124             36,940             20.1%
Passbook savings.........       148,080         46.2%          137,448             10,632              5.8%
Other time deposits......       119,042         37.1%           (7,826)           126,868             69.0%
                             ----------      --------        ---------          ---------            ------
   Total.................    $  320,633        100.0%        $ 136,806          $ 183,827            100.0%
                             ==========      ========        =========          =========            ======
</TABLE>
     The following  table sets forth the time deposits in the Bank classified by
rates at the dates indicated.

                                       14
<PAGE>
                                                At December 31,
                          -----------------------------------------------------
                                  1999                 1998              1997
                                  ----                 ----              ----
                                               (In thousands)

 2.01 -  4.00%.......       $           211        $         212     $      39
 4.01 -  6.00%.......                94,719               92,870       102,474
 6.01 -  8.00%.......                14,149                9,413        16,529
                            ---------------        -------------     ---------
   Total.............       $       109,079        $     102,495     $ 119,042
                            ===============        =============     =========

     The following  table sets forth the amount and  maturities of time deposits
at December 31, 1999.
<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>
2.01 -  4.00%..................         $         211         $          --     $        --   $          --    $         211
4.01 -  6.00%..................                56,911                28,210           3,989           5,609           94,719
6.01 -  8.00%..................                 6,666                 7,084             399              --           14,149
                                        -------------         -------------     -----------   -------------    -------------
   Total.......................         $      63,788         $      35,294     $     4,388   $       5,609    $     109,079
                                        =============         =============     ===========   =============    =============
</TABLE>
     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,
1999.

            Maturity Period                 Certificates of Deposit
-------------------------------------     --------------------------
                                                   (In thousands)
Three months or less.................                 $  1,166
Over three through six months........                    1,953
Over six through 12 months...........                    2,742
Over 12 months.......................                    4,518
                                                      --------
   Total.............................                 $ 10,379
                                                      ========

     Certificates of deposit at December 31, 1999 included  approximately  $10.4
million of deposits with balances of $100,000 or more,  compared to $7.2 million
and $8.1 million at December 31, 1998 and 1997, 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 5 of Notes to Financial Statements.

     The following  table sets forth the deposit  activities of the Bank for the
periods indicated.
<TABLE>
<CAPTION>
                                                           Year Ended December 31,
                                          ------------------------------------------------------
                                                1999               1998              1997
                                                ----               ----              ----
                                                               (In thousands)
<S>                                         <C>                <C>              <C>
Deposits...............................     $  314,635         $  211,652       $   430,943
Withdrawals............................       (314,279)          (383,743)         (301,475)
                                            ----------         ----------       -----------
Net increase (decrease) before
   interest credited...................            356           (172,091)          129,468
Interest credited......................          5,733              6,274             7,338
                                            ----------         ----------       -----------
Net increase (decrease) in savings
   deposits............................     $    6,089         $ (165,817)      $   136,806
                                            ==========         ===========      ===========
</TABLE>
     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.

                                       15
<PAGE>
     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

                                       16
<PAGE>

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  6 of  Notes  to  Financial
Statements.  Advances from the FHLB of Cincinnati are secured by FHLB investment
securities.

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 does not have any subsidiaries.

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 five 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, 1999,  the Company and the Bank had 29 full-time  and 5
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.

                                       17
<PAGE>

     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 Commission 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.

     FINANCIAL   MODERNIZATION   LEGISLATION.   On  November   12,   1999,   the
Gramm-Leach-Bliley Act of 1999 (the "GLB Act") was enacted into law. The GLB Act
makes sweeping  changes in the authorized  activities of banks and their holding
companies.  In particular,  the GLBA Act repealed the Glass-Steagall  Act, which
had generally  prevented banks from affiliating with securities  firms, and also
permitted bank holding  companies for the first time to affiliate with insurance
companies.  A new "financial  holding company," which owns only well capitalized
and  well-managed  banks,  will be permitted to engage in a variety of financial
activities, including insurance and securities underwriting and insurance agency
activities.  The  financial  holding  company  provisions of the GLB Act are not
expected to have a material effect on the Company or the Bank.

     The GLB Act also  places  substantial  restrictions  on the  activities  of
companies that apply to become savings and loan holding  companies  after May 4,
1999. However, the GLB Act permits unitary savings and loan holding companies in
existence on May 4, 1999,  including  the Company,  to continue to engage in all
activities  that they were  permitted to engage in prior to the enactment of the
Act.  Under such  authority,  the  Company's  business  powers  are  essentially
unlimited,  provided that the Bank remains a qualified  thrift lender.  However,
the GLB Act further  provides that a unitary thrift holding company in existence
on May 4, 1999,  will lose its exempt status if it or its  subsidiary  thrift is
sold to any unaffiliated company other than another grandfathered unitary thrift
holding  company.  The GLB Act is not expected to have a material  effect on the
activities  in which the Company and the Bank  currently  engage,  except to the
extent that  competition  with banks and bank holding  companies may increase as
they engage in activities not permitted prior to enactment of the GLB Act.

     In addition, the GLB Act adopts a number of consumer protections, including
provisions intended to protect privacy of bank customers' financial  information
and new  requirements  for the  disclosure  of ATM  fees  imposed  by  banks  on
customers  of  other  banks.  Most  of the GLB  Act's  provisions  have  delayed
effective  dates  and  require  the  adoption  of  implementing  regulations  to
implement the statutory provisions. Accordingly, at this time the Bank is unable
to predict the eventual impact of the Act on its operations.

REGULATION OF THE BANK

     BUSINESS  ACTIVITIES.  The Bank derives its lending and  investment  powers
from the HOLA and the  regulations of the OTS  thereunder.  Under these laws and
regulations,  the Bank may invest in mortgage loans secured by  residential  and
commercial  real  estate,  commercial  and  consumer  loans,  certain  types  of
commercial  paper and debt  securities,  and certain other assets.  The Bank may
also establish service  corporations that may engage in activities not otherwise
permissible for the Bank,  including certain real estate equity  investments and
securities  and  insurance  brokerage.  These  investment  powers are subject to
various limitations.

     BRANCHING. Subject to certain limitations, OTS regulations currently permit
a federally chartered savings institution like the Bank to establish branches in
any state of the United States,  provided that the federal  savings  institution
qualifies  as a "domestic  building  and loan  association"  under the  Internal
Revenue Code. See "-- Qualified Thrift Lender Test." The authority for a federal
savings institution to establish an interstate branch network would facilitate a
geographic diversification of the institution's activities.

     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

                                       18
<PAGE>

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 "-- Prompt Corrective Regulatory Action."

     The core  capital,  or "leverage  ratio,"  requirement  mandates  that most
savings  institutions  maintain  core  capital  equal to at least 3% of adjusted
total assets.  "Core capital"  includes common  stockholders'  equity (including
retained earnings), noncumulative perpetual preferred stock and related surplus,
minority interests in the equity accounts of fully consolidated subsidiaries and
certain  nonwithdrawable  accounts and pledged deposits and is generally reduced
by the amount of the  savings  institution's  intangible  assets,  with  limited
exceptions for  permissible  mortgage  servicing  rights  ("MSRs") and purchased
credit card  relationships.  Core capital is further  reduced by the amount of a
savings  institution's  investments  in and  loans to  subsidiaries  engaged  in
activities not  permissible  for national  banks. At December 31, 1999, the Bank
had no such investments.

     The  risk-based  capital  standards of the OTS require  maintenance of core
capital equal to at least 4% of risk-weighted  assets and total capital equal to
at least 8% of  risk-weighted  assets.  For purposes of the  risk-based  capital
requirement,  "total capital" includes core capital plus supplementary  capital,
provided that the amount of supplementary  capital does not exceed the amount of
core  capital.  Supplementary  capital  includes  preferred  stock that does not
qualify as core capital,  nonwithdrawable  accounts and pledged  deposits to the
extent  not  included  in core  capital,  perpetual  and  mandatory  convertible
subordinated   debt  and  maturing   capital   instruments   meeting   specified
requirements and a portion of the institution's loan and lease loss allowance.

     The  risk-based  capital  requirement  is  measured  against  risk-weighted
assets,  which equal the sum of each asset and the  credit-equivalent  amount of
each  off-balance  sheet item after being multiplied by an assigned risk weight,
which range from 0% to 100% as assigned by the OTS capital  regulations based on
the risks the OTS believes are  inherent in the type of asset.  Comparable  risk
weights are assigned to off-balance sheet assets.

     The OTS risk-based  capital  regulation also includes an interest rate risk
("IRR")  component that requires savings  institutions  with greater than normal
IRR, when determining  compliance with the risk-based capital  requirements,  to
maintain additional total capital. The OTS has, however,  indefinitely  deferred
enforcement of its IRR requirements.

     The following  table sets forth the Bank's  compliance  with its regulatory
capital requirements at December 31, 1999.
<TABLE>
<CAPTION>
                                     The Bank's Capital         Capital Requirements        Excess Capital
                                   -----------------------    ----------------------    ----------------------
                                     Amount      Percent        Amount     Percent        Amount     Percent
                                     ------      -------        ------     -------        ------     -------
                                                             (Dollars in thousands)
<S>                                <C>            <C>         <C>              <C>      <C>           <C>
Tangible capital..............     $  44,971      21.6%       $  3,123         1.5%     $  41,848     20.1%
Core capital..................     $  44,971      21.6%       $  8,327         4.0%     $  36,644     17.6%
Total risk-based capital......     $  45,249      58.6%       $  6,177         8.0%     $  39,072     50.6%
</TABLE>
     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.

                                       19
<PAGE>

     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, 1999,  the Bank was
"well-capitalized" as defined by the regulations.

     FEDERAL  DEPOSIT  INSURANCE.  The FDIC has adopted a  risk-based  insurance
assessment system for determining the deposit  insurance  assessments to be paid
by insured  depository  institutions.  The FDIC assigns an institution to one of
three capital categories based on the institution's financial information, as of
the  reporting  period  ending  seven  months  before  the  assessment   period,
consisting  of  (1)  well  capitalized,   (2)  adequately   capitalized  or  (3)
undercapitalized, and one of three supervisory subcategories within each capital
group. The supervisory  subgroup to which an institution is assigned is based on
a  supervisory  evaluation  provided  to the FDIC by the  institution's  primary
federal regulator and information that the FDIC determines to be relevant to the
institution's  financial  condition and the risk posed to the deposit  insurance
funds. Assessment rates for SAIF-member institutions like the Bank depend on the
capital  category  and  supervisory  category  to which  they are  assigned  and
currently  range  from 0 basis  points  to 27 basis  points.  In  addition,  all
FDIC-insured  institutions  are required to pay  assessments to the FDIC to help
fund  interest  payments on certain  bonds issued by the  Financing  Corporation
("FICO"),  an agency of the federal  government  established to recapitalize the
predecessor  to the  SAIF.  The  assessment  rate for  FICO  bond  servicing  is
approximately .0216% of insured deposits for the year 2000.

     The  Federal  Deposit  Insurance  Act also  provides  that the FDIC may not
assess regular insurance assessments for the SAIF unless required to maintain or
to achieve the designated reserve ratio of 1.25%, except for such assessments on
those  institutions that are not classified as  "well-capitalized"  or that have
been  found  to  have  "moderately   severe"  or   "unsatisfactory"   financial,
operational   or   compliance   weaknesses.    The   Bank   is   classified   as
"well-capitalized"  and has not been  found by the OTS to have such  supervisory
weaknesses.

     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.  To
qualify as a QTL, a savings  institution  must  either (i) be deemed a "domestic
building and loan  association"  under the Internal Revenue Code (the "Code") by
maintaining  at least 60% of its  total  assets in  specified  types of  assets,
including cash, certain government securities, loans secured by and other assets
related to residential  real property,  educational  loans,  and  investments in
premises of the  institution  or (ii) satisfy the HOLA's QTL test by maintaining
at least 65% of "portfolio  assets" in certain  "Qualified Thrift  Investments."
For  purposes  of the HOLA's  QTL test,  portfolio  assets are  defined as total
assets less intangibles,  property used by a savings institution in its business
and liquidity  investments  in an amount not exceeding 20% of assets.  Qualified
Thrift Investments  consist of (a) loans, equity positions or securities related
to domestic,  residential  real estate or manufactured  housing,  (b) 50% of the
dollar  amount of  residential  mortgage  loans  subject to sale  under  certain
conditions,  and (c) loans to small  businesses,  student  loans and credit card
loans.  In  addition,  subject  to a 20%  of  portfolio  assets  limit,  savings
institutions  are able to treat as Qualified  Thrift  Investments  200% of their
investments  in loans to finance  "starter  homes"  and loans for  construction,
development or improvement  of housing and community  service  facilities or for
financing small business in "credit needy" areas.

     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, 1999, the Bank qualified as a QTL.

                                       20
<PAGE>

     SAFETY AND SOUNDNESS  STANDARDS.  The FDI Act requires the federal  banking
agencies,   including  the  OTS,  to  prescribe   for  all  insured   depository
institutions  standards  relating to,  among other  things,  internal  controls,
information systems and audit systems, loan documentation,  credit underwriting,
interest rate risk exposure, asset growth, asset quality and compensation,  fees
and benefits and such other operational and managerial standards as the agencies
deem  appropriate.  The federal banking agencies have adopted final  regulations
and  Interagency  Guidelines  Establishing  Standards  for Safety and  Soundness
("Guidelines")  to  implement  safety and  soundness  standards  pursuant to the
statute.  The Guidelines  set forth the safety and soundness  standards that the
federal

                                       21
<PAGE>

banking  agencies  use to identify  and address  problems at insured  depository
institutions  before capital becomes impaired.  The Guidelines  address internal
controls and information  systems;  internal audit system;  credit underwriting;
loan documentation;  interest rate risk exposure;  asset growth;  asset quality;
earnings;  and  compensation,  fees and  benefits.  If the  appropriate  federal
banking  agency  determines  that an  institution  fails  to meet  any  standard
prescribed by the  Guidelines,  the agency may require the institution to submit
to the agency an acceptable  plan to achieve  compliance  with the standard,  as
required  by the FDI Act.  The final  regulations  establish  deadlines  for the
submission and review of such safety and soundness compliance plans.

     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.  A savings  institution must give notice to the OTS at least 30
days  before  declaration  of a proposed  capital  distribution  to its  holding
company, and capital distributions in excess of specified earnings or by certain
institutions  are  subject  to  approval  by the  OTS.  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."

     In addition to the foregoing, 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. See "Taxation."

     TRANSACTIONS WITH AFFILIATES.  The Bank is subject to restrictions  imposed
by Sections 23A and 23B of the Federal  Reserve Act on  extensions of credit to,
and certain other  transactions  with, the Company and other affiliates,  and on
investments in the stock or other securities thereof.  Such restrictions prevent
the Company and such other  affiliates  from  borrowing from the Bank unless the
loans are secured by specified collateral, and require such transactions to have
terms  comparable  to terms of  arms-length  transactions  with  third  persons.
Further,  such secured loans and other  transactions and investments by the Bank
are generally  limited in amount as to the Company and as to any other affiliate
to 10% of the Bank's  capital  and  surplus  and as to the Company and all other
affiliates  to an  aggregate  of 20% of the Bank's  capital and  surplus.  These
restrictions  may limit the Company's  ability to obtain funds from the Bank for
its cash needs,  including funds for  acquisitions and for payment of dividends,
interest and operating expenses.

     RESERVE REQUIREMENTS.  Pursuant to regulations of the Federal Reserve Board
(the "FRB"),  all  FDIC-insured  depository  institutions  must maintain average
daily reserves against their transaction  accounts.  No reserves are required to
be maintained on the first $5.0 million of  transaction  accounts,  and reserves
equal  to 3% must  be  maintained  on the  next  $44.3  million  of  transaction
accounts,  plus reserves equal to 10% on the remainder.  These  percentages  are
subject to adjustment by the FRB. Because  required  reserves must be maintained
in the form of vault  cash or in a  non-interest-bearing  account  at a  Federal
Reserve Bank,  the effect of the reserve  requirement is to reduce the amount of
the institution's interest-earning assets. As of December 31, 1999, the Bank met
its reserve requirements.

     LIQUIDITY REQUIREMENTS.  The Bank is required by OTS regulation to maintain
an average daily balance of liquid assets (cash, certain time deposits, bankers'
acceptances,  highly  rated  corporate  debt and  commercial  paper,  qualifying
mortgage-related  securities  and mortgage  loans,  securities of certain mutual
funds,  and  specified  United  States  government,   state  or  federal  agency
obligations)  equal  to the  monthly  average  of  not  less  than  a  specified

                                       22
<PAGE>

percentage  (currently  4%) of its net  withdrawable  accounts  plus  short-term
borrowings.  The average daily  liquidity  ratio of the Bank for the month ended
December 31, 1999 was 58.0%.

     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, 1999 of $2.0 million. Banks and savings
associations  generally may obtain  long-term FHLB advances only for the purpose
of  providing  funds  for  residential  housing  finance;  however,   depository
institutions  with  less than  $500  million  in  assets  may also  obtain  such
financing  for use in small  business  and small farm  lending.  At December 31,
1999, the Bank had no advances outstanding from the FHLB.

REGULATION OF THE COMPANY

     The Company is a savings and loan  holding  company  under the HOLA and, as
such, is 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.

     As a unitary savings and loan holding company,  grandfathered under the GLB
Act, the Company  generally is not subject to any restriction as to the types of
business activities in which it may engage,  provided that the Bank continues to
satisfy the QTL test. See "Regulation - Financial Modernization Legislation" and
"--  Regulation and  Supervision  of the Bank -- Qualified  Thrift Lender Test."
Upon  any  non-supervisory   acquisition  by  the  Company  of  another  savings
institution  that is held as a separate  subsidiary,  the Company would become a
multiple savings and loan holding company and would be subject to limitations on
the types of business  activities in which it could engage.  The HOLA limits the
activities of a multiple  savings and loan holding  company and its  non-insured
institution  subsidiaries  primarily to  activities  permissible  for  financial
holding  companies  under the Bank  Holding  Company  Act,  subject to the prior
approval of the OTS, and to other activities authorized by OTS regulation.

                                       23
<PAGE>

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.

                                       24
<PAGE>

ITEM 2.  PROPERTIES

     The following table sets forth information  regarding the Bank's offices at
December 31, 1999.
<TABLE>
<CAPTION>
                                                                                                            Approximate
                                           Year Opened     Owned or Leased       Book Value (1)      Square Footage of Office
                                           -----------     ---------------       --------------      ------------------------
MAIN OFFICE:                                                                     (In thousands)
<S>                                           <C>               <C>                <C>                         <C>
   2700 Fort Campbell Boulevard
   Hopkinsville, Kentucky 42240.....          1995              Owned              $   1,764                   16,575

BRANCH OFFICES:
   Downtown Branch Office
     605 South Virginia Street
     Hopkinsville, Kentucky  .......          1997              Owned              $     165                      756
   Murray Branch Office
     7th and Main Streets
     Murray, Kentucky...............          1969              Owned              $      64                    4,800
   Cadiz Branch Office
     352 Main Street
     Cadiz, Kentucky  ..............          1998              Owned              $     422                    2,200
   Elkton Branch Office
     West Main Street
     Elkton, Kentucky   ............          1976              Owned              $      57                    3,400
                                                                                   -----------
                                                                                   $   2,472
</TABLE>
----------------------
(1)  Represents  the book  value  of land,  building,  furniture,  fixtures  and
equipment owned by the Bank.

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, 1999, 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.

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

     Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

     BRUCE THOMAS.  Mr. Thomas,  62, has served as President and Chief Executive
Officer of the Bank since 1992.  He has been an employee of the Bank since 1962.
Mr. Thomas also serves as President and Chief Executive  Officer of the Company.
Effective May 5, 2000, Mr. Thomas will retire as an officer and director of each
of the Company and the Bank.

     PEGGY R. NOEL. Ms. Noel, 61, has served as Executive Vice President,  Chief
Financial  Officer and Chief Operations  Officer of the Bank since 1990. She has
been an employee of the Bank since 1966. Ms. Noel also serves as Vice President,
Chief Financial Officer and Treasurer of the Company.

                                       25
<PAGE>

     BOYD M. CLARK.  Mr. Clark,  54, 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.  Effective May 5, 2000, Mr. Clark will become Acting  President of each
of the Company and the Bank.

                                       26
<PAGE>
     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, 1999 (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, 1999 (Exhibit No. 13) is incorporated herein by reference.

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, 1999 (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,  1999  (Exhibit  No.  13) is  incorporated  herein by
reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Bank's  Financial  Statements  together  with the related notes and the
report of York, Neel & Co. - Hopkinsville,  LLP, independent public accountants,
all as set forth in the  Company's  Annual Report to  Stockholders  for the year
ended December 31, 1999 (Exhibit No. 13) are incorporated herein by reference.

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

     Not applicable.

                                    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 has filed a definitive  proxy statement (the "Proxy  Statement"),
and the information 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

                                       27
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

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

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

                                     PART IV

ITEM 14. 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,
1999,  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 Auditor's Report.

     2.   Statements of Financial Condition - December 31, 1999 and 1998.

     3.   Statements of Income for the Years Ended  December 31, 1999,  1998 and
          1997.

     4.   Statements  of Changes  in  Stockholders'  Equity for the Years  Ended
          December 31, 1999, 1998 and 1997.

     5.   Statements of Cash Flows for the Years Ended  December 31, 1999,  1998
          and 1997.

     6.   Notes to Financial Statements.

     (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.

                                       28
<PAGE>

          Exhibit No. 10.1.  Employment  Agreements by and between  Hopkinsville
          Federal  Savings  Bank and  Bruce  Thomas,  Peggy R.  Noel 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 Agreements by and between HopFed Bancorp,
          Inc. and Bruce Thomas,  Peggy R. Noel 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  Amendments  by and between
          Hopkinsville  Federal Savings Bank and Bruce Thomas, Peggy R. Noel 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  Amendments  by and between
          HopFed  Bancorp,  Inc.  and  Bruce  Thomas,  Peggy R. Noel 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. 13. Annual Report to Stockholders

          Except for those portions of the Annual Report to Stockholders for the
          year ended December 31, 1999, 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. 27. Financial Data Schedule (SEC use only)

     (b)  Current  Report on Form 8-K dated November 17, 1999,  reporting  under
          Item 5 the approval of a special cash dividend of $4.00 per share.

          Current  Report on Form 8-K dated December 15, 1999,  reporting  under
          Item 5 the approval of the termination of the Employee Stock Ownership
          Plan, effective December 31, 1999.

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

     (d)  None.

                                       29
<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:  April 14, 2000                     By: /s/ Bruce Thomas
                                              ---------------------
                                              Bruce Thomas
                                              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/ Bruce Thomas                                              April 14, 2000
--------------------------------------------
Bruce Thomas
Director, President and Chief Executive Officer
(Principal Executive Officer)


/s/ Peggy R. Noel                                             April 14, 2000
--------------------------------------------
Peggy R. Noel
Director, Vice President, Chief
Financial Officer and Treasurer
(Principal Financial and Accounting Officer)


/s/ WD Kelley                                                 April 14, 2000
--------------------------------------------
WD Kelley
Chairman of the Board


/s/ Boyd M. Clark                                             April 14, 2000
--------------------------------------------
Boyd M. Clark
Director, Vice President and Secretary


/s/ Clifton H. Cochran                                        April 14, 2000
--------------------------------------------
Clifton H. Cochran
Director


/s/ Walton G. Ezell                                           April 14, 2000
--------------------------------------------
Walton G. Ezell
Director

                                       30
<PAGE>

/s/ Gilbert E. Lee                                            April 14, 2000
--------------------------------------------
Gilbert E. Lee
Director


/s/ Harry J. Dempsey                                          April 14, 2000
--------------------------------------------
Harry J. Dempsey
Director

                                       31