United States Securities and Exchange Commission
                             Washington, D.C. 20549
                                   FORM 10QSB


{x}  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended March 31, 2003
                               --------------

{ }  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT


For the transition period from ________________to__________________


                         Commission File Number   0-21885
                                                  -------

                            Advance Financial Bancorp
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                               55-0753533
------------------------------                              --------------------
(State or jurisdiction of                                   (IRS Employer
incorporation or organization)                               Identification No.)


                    1015 Commerce Street, Wellsburg, WV 26070
                    -----------------------------------------
                    (Address of principal executive offices)


                                 (304) 737-3531
              ----------------------------------------------------
              (Registrant's telephone number, including area code)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act  during  the past 12 months  (or such  shorter
period that the registrant was required to file such reports),  and (2) has been
subjected  to such filing  requirements  for the past 90 days. Yes  X   No
                                                                   ---    ---

State the  number of shares  outstanding  for each of the  issuer's  classes  of
common equity as of the latest practicable date:

       Class:                        Common Stock, par value $.10 per share
       Outstanding at May 1, 2003:   932,285


Transitional Small Business Disclosure Format (check one):
Yes      No X
   ---     ---

<PAGE>


                            Advance Financial Bancorp

                                      Index

                                                                           Page
                                                                          Number
                                                                          ------

Part I - FINANCIAL INFORMATION

        Item 1 - Financial Statements

        Consolidated Balance Sheet (Unaudited) as of
          March 31, 2003 and June 30, 2002                                     3

        Consolidated Statement of Income (Unaudited)
          For the Three Months ended March 31, 2003 and 2002                   4

        Consolidated Statement of Income (Unaudited)
          For the Nine Months ended March 31, 2003 and 2002                    5

        Consolidated Statement of Cash Flows (Unaudited)
          For the Nine Months ended March  31, 2003 and 2002                   6

        Notes to the Unaudited Consolidated Financial Statements            7-12

        Item 2 - Management's Discussion and Analysis                      13-21

        Item 3 - Controls and Procedures                                      22

Part II - OTHER INFORMATION

        Item 1 - Legal Proceedings                                            23

        Item 2 - Changes in Securities and Use of Proceeds                    23

        Item 3 - Default Upon Senior Securities                               23

        Item 4 - Submissions of Matters to a Vote of Security Holders         23

        Item 5 - Other Information                                            23

        Item 6 - Exhibits and Reports on Form 8-K                             23

SIGNATURES                                                                    24

SECTION 302 CERTIFICATIONS                                                 25-26

                                       -2-


<PAGE>

                            ADVANCE FINANCIAL BANCORP
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)




<TABLE>
<CAPTION>
                                                                                  MARCH 31,        JUNE 30,
                                                                                    2003             2002
                                                                                ------------     ------------
<S>                                                                          <C>              <C>
Assets
     Cash and cash equivalents:
       Cash and amounts due from banks                                          $  2,557,781     $  1,775,051
       Interest bearing deposits with other institutions                          51,409,029        9,995,389
                                                                                ------------     ------------
          Total cash and cash equivalents                                         53,966,810       11,770,440
                                                                                ------------     ------------
     Investment securities:
       Securities held to maturity (fair value of $12,634,465 and $ -0-)          12,588,177                -
       Securities available for sale                                              11,099,819       12,999,362
                                                                                ------------     ------------
          Total investment securities                                             23,687,996       12,999,362
                                                                                ------------     ------------
     Mortgage-backed securities:
       Securities held to maturity (fair value of $15,861,350 and $1,449,641)     15,831,225        1,396,306
       Securities available for sale                                               8,224,339        7,791,566
                                                                                ------------     ------------
          Total mortgage-backed securities                                        24,055,564        9,187,872
                                                                                ------------     ------------

     Loans held for sale                                                                   -          578,647
     Loans receivable,  (net of allowance for loan losses
       of $983,789 and $969,088 )                                                205,741,897      172,145,867
     Office properties and equipment, net                                          5,129,635        3,901,592
     Federal Home Loan Bank Stock, at cost                                         1,752,900        1,058,100
     Accrued interest receivable                                                   1,317,029        1,160,312
     Goodwill                                                                      4,700,472                -
     Other intangibles, net                                                        1,759,735                -
     Other assets                                                                  1,987,732        1,502,749
                                                                                ------------     ------------
          TOTAL ASSETS                                                          $324,099,770     $214,304,941
                                                                                ============     ============
Liabilities:
     Deposits                                                                   $275,481,062     $175,058,743
     Advances from Federal Home Loan Bank                                         20,000,000       20,000,000
     Other borrowings                                                              7,200,000                -
     Advance payments by borrowers for taxes and insurance                           368,890          404,220
     Accrued interest payable and other liabilities                                1,670,141          618,232
                                                                                ------------     ------------
          TOTAL LIABILITIES                                                      304,720,093      196,081,195
                                                                                ------------     ------------
Stockholders' Equity:
     Preferred stock, $.10 par value; 500,000 shares
       authorized, none issued                                                             -                -
     Common stock, $.10 par value; 2,000,000 shares
       authorized 1,084,450 shares issued                                            108,445          108,445
     Additional paid in capital                                                   10,439,456       10,380,430
     Retained earnings - substantially restricted                                 11,212,836       10,274,004
     Unallocated shares held by Employee Stock Ownership Plan (ESOP)                (272,324)        (337,394)
     Unallocated shares held by Restricted Stock Plan (RSP)                         (205,745)        (215,775)
     Treasury Stock (152,165 shares at cost)                                      (2,233,265)      (2,233,265)
     Accumulated other comprehensive income                                          330,274          247,301
                                                                                ------------     ------------
          TOTAL STOCKHOLDERS' EQUITY                                              19,379,677       18,223,746
                                                                                ------------     ------------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $324,099,770     $214,304,941
                                                                                ============     ============

</TABLE>


   See accompanying notes to the unaudited consolidated financial statements.


                                      -3-

<PAGE>


                            ADVANCE FINANCIAL BANCORP
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)


<TABLE>
<CAPTION>

                                                                   THREE MONTHS ENDED
                                                                        MARCH 31,
                                                                    2003          2002
                                                                 ----------    ----------
<S>                                                              <C>           <C>

INTEREST AND DIVIDEND INCOME
      Loans                                                      $3,372,413    $3,062,999
      Investment securities                                         206,692       141,955
      Interest-bearing deposits with other institutions             104,729        28,763
      Mortgage-backed securities                                    175,231       141,908
      Dividends on Federal Home Loan Bank Stock                      13,463        11,494
                                                                 ----------    ----------
         Total interest and dividend income                       3,872,528     3,387,119
                                                                 ----------    ----------
INTEREST EXPENSE
      Deposits                                                    1,577,652     1,444,517
      Advances from Federal Home Loan Bank                          287,627       286,374
      Other Borrowings                                               94,036             -
                                                                 ----------    ----------
         Total interest expense                                   1,959,315     1,730,891
                                                                 ----------    ----------
NET INTEREST INCOME                                               1,913,213     1,656,228

Provision for loan losses                                           121,800        55,500
                                                                 ----------    ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES               1,791,413     1,600,728
                                                                 ----------    ----------
NONINTEREST INCOME
      Service charges on deposit accounts                           162,942       126,207
      Income from loan servicing activity                            43,255        56,649
      Gain on sale of loans                                          85,342        69,976
      Loss on sale of repossessed assets                                  -       (27,500)
      Other income                                                   86,444        66,515
                                                                 ----------    ----------
         Total noninterest income                                   377,983       291,847
                                                                 ----------    ----------
NONINTEREST EXPENSE
      Compensation and employee benefits                            740,487       600,390
      Occupancy and equipment                                       280,623       222,668
      Professional fees                                              44,395        25,188
      Advertising                                                    35,408        31,624
      Data processing charges                                       147,835        84,728
      Other expenses                                                389,543       334,360
                                                                 ----------    ----------
         Total noninterest expenses                               1,638,291     1,298,958
                                                                 ----------    ----------
Income before income taxes                                          531,105       593,617
Income taxes                                                        160,002       163,940
                                                                 ----------    ----------
Net Income                                                       $  371,103    $  429,677
                                                                 ==========    ==========

EARNINGS PER SHARE - NET INCOME
         Basic                                                   $      .41    $      .49
         Diluted                                                 $      .41    $      .49

</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.


                                       -4-

<PAGE>


                            ADVANCE FINANCIAL BANCORP
                  CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

<TABLE>
<CAPTION>
                                                                NINE MONTHS ENDED
                                                                     MARCH 31,
                                                               2003            2002
                                                           ------------    ------------
<S>                                                     <C>             <C>

INTEREST AND DIVIDEND INCOME
    Loans                                                  $ 9,711,690     $ 9,093,916
    Investment securities                                      525,331         462,673
    Interest-bearing deposits with other institutions          185,989         107,161
    Mortgage-backed securities                                 416,181         445,558
    Dividends on Federal Home Loan Bank Stock                   31,329          49,895
                                                           -----------     -----------

         Total interest and dividend income                 10,870,520      10,159,203
                                                           -----------     -----------
INTEREST EXPENSE
    Deposits                                                 4,341,288       4,558,717
    Advances from Federal Home Loan Bank                       873,103         874,299
    Other Borrowings                                            94,036               -
                                                           -----------     -----------
         Total interest expense                              5,308,427       5,433,016
                                                           -----------     -----------
NET INTEREST INCOME                                          5,562,093       4,726,187

Provision for loan losses                                      276,000         204,600
                                                           -----------     -----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES          5,286,093       4,521,587
                                                           -----------     -----------
NONINTEREST INCOME
    Service charges on deposit accounts                        467,521         396,550
    Income from loan servicing activity                        118,043         158,880
    Gain on sale of loans                                      249,244         213,865
    Gain on sale of fixed assets                                     -           3,120
    Loss on sale of repossessed assets                         (13,489)        (27,500)
    Other income                                               260,993         206,428
                                                           -----------     -----------

         Total noninterest income                            1,082,312         951,343
                                                           -----------     -----------

NONINTEREST EXPENSE
    Compensation and employee benefits                       1,982,852       1,721,842
    Occupancy and equipment                                    803,435         633,481
    Professional fees                                          118,815          94,829
    Advertising                                                119,695          92,434
    Data processing charges                                    313,945         232,504
    Other expenses                                           1,069,981         935,683
                                                           -----------     -----------

         Total noninterest expenses                          4,408,723       3,710,773
                                                           -----------     -----------

Income before income taxes                                   1,959,682       1,762,157
Income taxes                                                   701,620         605,695
                                                           -----------     -----------

Income before extraordinary item                             1,258,062       1,156,462
Extraordinary item- Excess over cost
  on net assets acquired in merger                                   -         201,206
                                                           -----------     -----------
Net Income                                                 $ 1,258,062     $ 1,357,668
                                                           ===========     ===========


EARNINGS PER SHARE - INCOME BEFORE EXTRAORDINARY ITEM
         Basic                                             $      1.41     $      1.31
         Diluted                                           $      1.41     $      1.31

EARNINGS PER SHARE - NET INCOME
         Basic                                             $      1.41     $      1.54
         Diluted                                           $      1.41     $      1.54


</TABLE>

   See accompanying notes to the unaudited consolidated financial statements.

                                       -5-



<PAGE>


                            ADVANCE FINANCIAL BANCORP
                CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                                             NINE MONTHS ENDED
                                                                                  MARCH 31,
                                                                           2003              2002
                                                                         ------------    ------------
<S>                                                                   <C>             <C>

OPERATING ACTIVITIES
     Net Income                                                          $  1,258,062    $  1,357,668
     Adjustments to reconcile net income to net cash provided by
        operating activities:
          Depreciation, amortization and accretion, net                       377,925         424,122
          Provision for loan losses                                           276,000         204,600
          Gain on sale of loans                                              (249,244)       (213,865)
          Gain on sale of fixed assets                                              -          (3,120)
          Loss on sale of repossessed assets                                   13,489          27,500
          Extraordinary gain on net assets acquired in merger                       -        (201,206)
          Origination of loans held for sale                              (18,472,904)    (17,889,988)
          Proceeds from the sale of loans                                  19,300,795      18,543,802
          Decrease in net other assets and liabilities                        332,007         391,996
                                                                         ------------    ------------
               Net cash provided by operating activities                    2,836,130       2,641,509
                                                                         ------------    ------------
INVESTING ACTIVITIES
     Investment securities held to maturity:
          Purchases                                                       (12,588,093)              -
          Maturities and repayments                                                 -         750,000
     Investment securities available for sale:
          Purchases                                                        (4,007,886)     (1,764,917)
          Maturities and repayments                                         6,036,342       4,257,059
     Mortgage-backed securities held to maturity:
          Purchases                                                       (14,995,240)              -
          Maturities and repayments                                           555,308         398,682
     Mortgage-backed securities available for sale:
          Purchases                                                        (3,723,622)     (1,508,800)
          Maturities and repayments                                         3,274,505       2,570,751
     Purchase of Federal Home Loan Bank Stock                                (694,800)       (115,000)
     Sale of Federal Home Loan Bank Stock                                           -         635,900
     Net increase in loans                                                (33,944,678)     (9,081,069)
     Purchases of premises and equipment                                   (1,255,119)       (214,769)
     Branch Acquisition:
          Loans purchased                                                     (85,347)              -
          Purchase of premises and equipment                                 (440,592)              -
          Premium paid on deposits                                         (5,853,373)              -
          Deposits assumed                                                 88,260,100               -
          Other, net                                                         (184,924)              -
                                                                         ------------    ------------
               Net cash provided by (used in) investing activities         20,352,581      (4,072,163)
                                                                         ------------    ------------

FINANCING ACTIVITIES
     Net increase in deposits                                              12,162,219      12,649,571
     Increase in long term borrowings                                       7,200,000               -
     Net change in advances for taxes and insurance                           (35,330)         23,130
     Net cash purchase of stock in merger                                           -      (6,041,007)
     Cash dividends paid                                                     (319,230)       (297,089)
                                                                         ------------    ------------
               Net cash provided by financing activities                   19,007,659       6,334,605
                                                                         ------------    ------------

               Increase in cash and cash equivalents                       42,196,370       4,903,951

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                           11,770,440       8,553,178
                                                                         ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                               $ 53,966,810    $ 13,457,129
                                                                         ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the period for:
          Interest on deposits and borrowings                            $  5,308,211    $  5,450,308
          Income taxes                                                   $    640,000    $    495,537


</TABLE>


   See accompanying notes to the unaudited consolidated financial statements.


                                      -6-

<PAGE>

                            ADVANCE FINANCIAL BANCORP
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The  consolidated   financial  statements  of  Advance  Financial  Bancorp  (the
"Company"),  includes its wholly-owned  subsidiaries,  Advance Financial Savings
Bank (the  "Bank") and Advance  Statutory  Trust I (the  "Trust") and the Bank's
wholly-owned   service   corporation   subsidiary,   Advance  Financial  Service
Corporation  of  West  Virginia.  All  significant   intercompany  balances  and
transactions have been eliminated.

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with the  instructions  to Form  10-QSB and,  therefore,  do not
necessarily  include all information that would be included in audited financial
statements.  The information  furnished reflects all adjustments,  which are, in
the  opinion  of  management,  necessary  for a fair  statement  of  results  of
operations.  All such adjustments are of a normal recurring nature.  The results
of  operations  for the interim  periods are not  necessarily  indicative of the
results  to be  expected  for the fiscal  year ended June 30,  2003 or any other
period.

These statements should be read in conjunction with the consolidated  statements
of and for the year ended June 30, 2002 and related  notes which are included on
the Form 10-KSB (file no. 0-21885).

NOTE 2 - EARNINGS PER SHARE

There were no  convertible  securities,  which would affect the  denominator  in
calculating  basic and  diluted  earnings  per share;  therefore,  net income as
presented on the Consolidated Statement of Income will be used as the numerator.
The following  table sets forth the composition of the  weighted-average  common
shares   (denominator)  used  in  the  basic  and  diluted  earnings  per  share
computation.

                                                Nine Months Ended March 31
                                                        (Unaudited)
                                                    2003           2002
                                                 -----------   -----------

Weighted-average common shares outstanding        1,084,450     1,084,450
Average treasury stock shares                      (152,165)     (152,165)
Average unearned ESOP and RSP shares                (40,940)      (48,420)
                                                 ----------    ----------

Weighted-average common shares and
    common stock equivalents used to
    calculate basic earnings per share              891,345      883,865

Additional common stock equivalents
    (stock options) used to calculate
    diluted earnings per share                        1,092            -
                                                 ----------    ---------
Weighted-average common shares and
    common stock equivalents used
    to calculate diluted earnings per share         892,437      883,865
                                                  =========    =========




                                       -7-

<PAGE>

NOTE 2 - EARNINGS PER SHARE (CONTINUED)

                                                     Three Months Ended
                                                           March 31
                                                          (Unaudited)
                                                     2003            2002
                                                -------------     -----------

Weighted-average common shares outstanding        1,084,450         1,084,450
Average treasury stock shares                      (152,165)         (152,165)
Average unearned ESOP and RSP shares                (38,070)          (46,527)
                                                 ----------        ----------

Weighted -average common shares and
    common stock equivalents used to
    calculate basic earnings per share              894,215           885,758

Additional common stock equivalents
    (stock options) used to calculate
    diluted earnings per share                        6,271                 -
                                                 ----------        ----------
Weighted-average common shares and
    common stock equivalents used
    to calculate diluted earnings per share         900,486           885,758
                                                  =========        ==========


NOTE 3 - COMPREHENSIVE INCOME

Other accumulated  comprehensive  income consists solely of net unrealized gains
and losses on available for sale securities. For the three and nine months ended
March  31,  2003,   comprehensive   income  totaled   $373,924  and  $1,341,035,
respectively.  For the three and nine months ended March 31, 2002, comprehensive
income totaled $373,807 and $1,339,665, respectively.

NOTE 4 - EXTRAORDINARY ITEM

The  fair  market  value  of the  net  assets  acquired  by the  Company  in its
acquisition  of Ohio State  Financial  Services in September  2001  exceeded the
amount  paid by  approximately  $2,697,000.  In  accordance  with FASB 141,  all
non-current and non-financial  asset balances were reduced until the excess fair
value was eliminated.  The total non-current and non-financial assets created as
a result of the merger was $2,496,000, therefore, since this total was less than
the total  excess  fair  value,  these asset  balances  were  reduced to zero in
accordance with FASB 141. After eliminating these asset balances,  approximately
$201,000 ($2,697,000-$2,496,000) in excess fair value remained that could not be
reduced.  In  accordance  with APB  Opinion 30, any excess  that  remains  after
reducing to zero the amounts that  otherwise  would have been  assigned to those
assets,  the remaining excess shall be recognized as an extraordinary  gain. The
extraordinary  gain  shall be  recognized  in the  period in which the  business
combination is completed.  The remaining  portion of the excess,  $201,206,  was
recognized as an extraordinary gain for the period ended September 30, 2001.





                                       -8-

<PAGE>


NOTE 5 - BRANCH ACQUISITION

At the close of  business,  February  7, 2003,  the  Company  completed a branch
purchase and deposit  assumption of The Second  National Bank of Warren,  Ohio's
two Steubenville,  Ohio branches.  The assumption and purchase had the following
classifications  on the  Company's  Balance  Sheet as of the  close of  business
February 7, 2003:


Assets
------

Cash on hand                                          $   403,482
Interest-bearing deposits with other institutions      81,569,300
Loans, net                                                 85,347
Office Properties and Equipment, net                      368,650
Goodwill                                                4,700,472
Core Deposit Intangible                                 1,783,735
                                                      -----------
         Total Assets                                 $88,910,986
                                                      ===========
Liabilities
-----------

Deposits                                              $88,665,696
Accrued interest payable                                  182,189
Accounts payable and other liabilities                     63,101
                                                      -----------
         Total Liabilities                            $88,910,986
                                                      ===========

The "Core  Deposit  Intangible"  noted above is included on the Balance Sheet in
the line item  "Other  Intangibles,  net".  The total  amount of the  intangible
amortized for the three and nine month periods is $24,000. The estimated life of
the Core Deposit Intangible is estimated at 120 months.

On March 31, 2003, the Bank's notified the Office of Thrift  Supervision and the
customers  of the Market  Street  branch of the  Company's  intent to close that
branch  effective June 30, 2003.  The Market Street  location was one of the two
branches  acquired  from the Second  National  Bank of Warren as of  February 7,
2003. The closure is due to this branch's  close  proximity  (approximately  1.1
miles) to the de novo branch built on Dunbar  Avenue in  Steubenville,  Ohio and
opened in September 2002. Also, the company feels that it can adequately service
these  customers  with  improved  convenience  and  efficiency  from the  Dunbar
location  than what is  presently  done at the Market  Street  branch.  The Bank
believes that there will be minimal,  if any,  inconvenience to the customers of
the Market  Street  branch as a result of the closing.  The  employees  from the
Market Street  location will be used to fill staffing  needs at the Bank's other
branches and departments.

NOTE 6 - OTHER BORROWINGS

Other  borrowings  at March 31, 2003  consisted of $7.2 million of floating rate
trust capital  securities.  In December  2002, the Company formed a wholly-owned
subsidiary,  Advance Statutory Trust I (the "Trust").  On December 19, 2002, the
Trust issued and sold $7.2  million of floating  rate  capital  securities  in a
pooled trust  offering.  The interest rate resets every quarter to 3-month LIBOR
plus 3.25% with an initial rate of 4.66%.  The current rate in effect until June
26, 2003 is 4.54%.  The capital  securities  mature in 2032, and the Company has
the right to redeem the securities prior to the maturity date but no sooner than
five years after the issuance. The proceeds were used for the acquisition of two
branches  from Second  National  Bank of Warren,  which was  completed as of the
close of business February 7, 2003.

                                       -9-

<PAGE>

NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board ("FASB") issued FAS No.
143, Accounting for Asset Retirement  Obligations,  which requires that the fair
value of a  liability  be  recognized  when  incurred  for the  retirement  of a
long-lived  asset and the value of the asset be increased  by that  amount.  The
statement also requires that the liability be maintained at its present value in
subsequent  periods and outlines certain  disclosures for such obligations.  The
adoption of this statement,  which was effective January 1, 2003, did not have a
material effect on the Company's financial position or results of operations.

In April 2002, the FASB issued FAS No. 145,  "Recission of FASB Statement  No.4,
44 and 64, Amendment of FASB Statement No. 13, and Technical  Corrections".  FAS
No.  145  rescinds  FAS  No.4,   which   required  all  gains  and  losses  from
extinguishment  of debt to be  aggregated  and, if  material,  classified  as an
extraordinary  item, net of related income tax effect. As a result, the criteria
in  Opinion  30 will  now be used to  classify  those  gains  and  losses.  This
statement   also  amends  FASB  FAS  No.  13  to  require  that  certain   lease
modifications that have economic effects similar to sale-leaseback  transactions
be  accounted  for in the  same  manner  as  sale-leaseback  transactions.  This
statement also makes technical corrections to existing pronouncements, which are
not substantive but in some cases may change accounting practice. FAS No. 145 is
effective for transactions occurring after May 15, 2002. The adoption of FAS No.
145 did not have a  material  effect  on the  Company's  financial  position  or
results of operations.

In July 2002, the FASB issued FAS No. 146,  Accounting for Costs Associated with
Exit or  Disposal  Activities,  which  requires  companies  to  recognize  costs
associated  with exit or disposal  activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. This statement replaces
EITF Issue No. 94-3,  Liability  Recognition  for Certain  Employee  Termination
Benefits and Other Costs to Exit an Activity  (Including  Certain Costs Incurred
in a  Restructuring).  The new statement  will be effective for exit or disposal
activities initiated after December 31, 2002, the adoption of which did not have
a material effect on the Company's financial position or results of operations.

On December 31, 2002, the FASB issued FAS No. 148,  Accounting  for  Stock-Based
Compensation - Transition and Disclosure,  which amends FAS No. 123,  Accounting
for Stock-Based Compensation.  FAS No. 148 amends the disclosure requirements of
FAS No. 123 to require more prominent and more frequent disclosures in financial
statements about the effects of stock-based  compensation.  Under the provisions
of FAS No. 123,  companies that adopted the preferable,  fair value based method
were required to apply that method  prospectively  for new stock option  awards.
This  contributed to a "ramp-up" effect on stock-based  compensation  expense in
the first few years following  adoption,  which caused concern for companies and
investors  because of the lack of  consistency in reported  results.  To address
that concern,  FAS No. 148 provides two  additional  methods of transition  that
reflect  an  entity's  full  complement  of  stock-based   compensation  expense
immediately upon adoption,  thereby  eliminating the ramp-up effect. FAS No. 148
also  improves the clarity and  prominence  of  disclosures  about the pro forma
effects of using the fair  value  based  method of  accounting  for  stock-based
compensation  for all  companies--regardless  of the accounting  method used--by
requiring  that  the  data  be  presented  more   prominently   and  in  a  more
user-friendly format in the footnotes to the financial statements.  In addition,
the statement  improves the  timeliness of those  disclosures  by requiring that
this information be included in interim as well as annual financial  statements.
The  transition  guidance and annual  disclosure  provisions  of FAS No. 148 are
effective  for fiscal  years  ending  after  December  15,  2002,  with  earlier
application   permitted  in  certain   circumstances.   The  interim  disclosure
provisions are effective for financial reports containing  financial  statements
for interim periods beginning after December 15, 2002.



                                      -10-

<PAGE>

NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

The following  table  represents the effect on net income and earnings per share
had the stock-based employee compensation expense been recognized:


                                                         Nine Months Ended
                                                              March 31
                                                             (Unaudited)
                                                         2003           2002
                                                      ----------    ----------

Net Income, as reported:                              $1,258,062    $1,357,668
Less pro forma expense related to stock options         (141,833)         (651)
                                                      ----------    ----------
Pro forma net income                                  $1,116,229    $1,357,017
                                                      ==========    ==========

Basic net income per common share:
     As reported                                      $     1.41    $     1.54
     Pro forma                                        $     1.25    $     1.54


Diluted net income per common share:
     As reported                                      $     1.41    $     1.54
     Pro forma                                        $     1.25    $     1.54


                                                        Three Months Ended
                                                             March 31
                                                            (Unaudited)
                                                          2003          2002
                                                       ---------    ---------

Net Income, as reported:                               $ 371,103     $429,677
Less pro forma expense related to stock options         (141,833)        (651)
                                                       ---------     --------
Pro forma net income                                   $ 229,270     $429,026
                                                       =========     ========

Basic net income per common share:
     As reported                                       $     .41     $    .49
     Pro forma                                         $     .27     $    .48


Diluted net income per common share:
     As reported                                       $     .41     $    .49
     Pro forma                                         $     .27     $    .48




                                       -11-

<PAGE>



NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In April,  2003,  the FASB issued FAS No. 149,  Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities.  This  statement  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts,  and for hedging  activities under FAS
No. 133. The amendments set forth in FAS No. 149 improve financial  reporting by
requiring  that  contracts  with  comparable  characteristics  be accounted  for
similarly.  In particular,  this statement  clarifies under what circumstances a
contract with an initial net investment meets the characteristic of a derivative
as  discussed  in FAS No. 133.  In  addition,  it  clarifies  when a  derivative
contains a financing  component that warrants special reporting in the statement
of cash flows. FAS No. 149 amends certain other existing  pronouncements.  Those
changes  will  result  in  more  consistent  reporting  of  contracts  that  are
derivatives in their entirety or that contain embedded  derivatives that warrant
separate  accounting.  This statement is effective for contracts entered into or
modified  after  June  30,  2003,   except  as  stated  below  and  for  hedging
relationships  designated  after June 30, 2003.  The guidance  should be applied
prospectively.  The  provisions  of this  statement  that  relate to FAS No. 133
Implementation  Issues that have been  effective for fiscal  quarters that began
prior to June 15, 2003,  should  continue to be applied in accordance with their
respective effective dates. In addition,  certain provisions relating to forward
purchases or sales of when-issued securities or other securities that do not yet
exist,  should be applied to existing contracts as well as new contracts entered
into after June 30, 2003.

In November,  2002, the FASB issued Interpretation No.45, Guarantor's Accounting
and Disclosure  requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness of Others. This interpretation  elaborates on the disclosures to be
made by a guarantor  in its interim and annual  financial  statements  about its
obligations  under certain  guarantees that it has issued.  This  interpretation
clarifies  that a  guarantor  is  required  to  disclose  (a) the  nature of the
guarantee,  including the approximate  term of the guarantee,  how the guarantee
arose,  and the events or  circumstances  that would  require the  guarantor  to
perform under the guarantee; (b) the maximum potential amount of future payments
under the guarantee;  (c) the carrying amount of the liability,  if any, for the
guarantor's  obligations  under the guarantee;  and (d) the nature and extent of
any recourse provisions or available  collateral that would enable the guarantor
to recover  the  amounts  paid under the  guarantee.  This  interpretation  also
clarifies  that a guarantor  is required to  recognize,  at the  inception  of a
guarantee,  a liability  for the  obligations  it has  undertaken in issuing the
guarantee,  including its ongoing  obligation to stand ready to perform over the
term of the  guarantee  in the event  that the  specified  triggering  events or
conditions occur. The objective of the initial  measurement of that liability is
the fair value of the guarantee at its inception.  The initial  recognition  and
initial  measurement  provisions  of this  interpretation  are  applicable  on a
prospective  basis to  guarantees  issued or modified  after  December 31, 2002,
irrespective of the guarantor's fiscal year-end. The disclosure  requirements in
this interpretation are effective for financial  statements of interim or annual
periods  ending after  December 15, 2002.  The adoption of this standard did not
have a material effect on the Company's financial statements.

In  January,  2003,  the FASB issued  Interpretation  No. 46,  Consolidation  of
Variable Interest Entities,  in an effort to expand upon and strengthen existing
accounting  guidance  that  addresses  when  a  company  should  include  in its
financial  statements the assets,  liabilities and activities of another entity.
The  objective  of  Interpretation  46 is not to  restrict  the use of  variable
interest entities but to improve financial  reporting by companies involved with
variable  interest  entities.  Until now,  one company  generally  has  included
another entity in its  consolidated  financial  statements only if it controlled
the entity through voting interests. Interpretation 46 changes that by requiring
a variable  interest  entity to be  consolidated by a company if that company is
subject to a majority of the risk of loss from the  variable  interest  entity's
activities or entitled to receive a majority of the entity's residual returns or
both. The  consolidation  requirements of Interpretation 46 apply immediately to
variable  interest  entities  created after January 31, 2003. The  consolidation
requirements  apply to older entities in the first fiscal year or interim period
beginning after June 15, 2003.  Certain of the disclosure  requirements apply in
all financial  statements issued after January 31, 2003,  regardless of when the
variable interest entity was established. The adoption of this statement has not
and is not  expected  to  have a  material  effect  on the  Company's  financial
position or results of operations.


                                      -12-

<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     The Private  Securities  Litigation Reform Act of 1995 contains safe harbor
provisions regarding forward-looking  statements.  When used in this discussion,
the words  "believes",  "anticipates",  "contemplates",  "expects",  and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, which could cause actual results
to differ materially from those projected. Those risks and uncertainties include
changes in interest  rates,  risks  associated with the ability to control costs
and expenses, and general economic conditions.

     The Company conducts no significant business or operations of its own other
than holding all of the outstanding  stock of the Advance Financial Savings Bank
(the "Bank"). As a result, references to the Company generally refer to the Bank
unless the context indicates otherwise.

OVERVIEW

On September 18, 2002,  the Bank began  operations in its newly  constructed  de
novo branch  located in the Hollywood  Plaza in  Steubenville,  Ohio.  This full
service branch is staffed by seven full time employees. The cost of the facility
totalled  approximately  $850,000  and was  paid  for  with  cash  from  current
operations.

At the close of  business,  February  7, 2003,  the  Company  completed a branch
purchase and deposit  assumption of The Second  National Bank of Warren,  Ohio's
two  Steubenville,  Ohio branches.  The assumption  includes  approximately  $88
million in  deposits,  $85,000 in loans and real and  personal  property  with a
value of approximately  $370,000.  The Company paid a premium on the deposits of
approximately $5.9 million.

On March 31, 2003,  the Bank notified the Office of Thrift  Supervision  and the
customers of the Market  Street branch of the Bank's intent to close that branch
effective June 30, 2003. The Market Street  location was one of the two branches
acquired  from the Second  National  Bank of Warren as of February 7, 2003.  The
closure is due to this branch's close proximity (approximately 1.1.miles) to the
de novo  branch  built on Dunbar  Avenue  in  Steubenville,  Ohio and  opened in
September  2002.  Also,  the Bank feels  that it can  adequately  service  these
customers with improved convenience and efficiency from the Dunbar location than
what is presently done at the Market Street branch. The Bank believes that there
will be minimal,  if any,  inconvenience  to the  customers of the Market Street
branch as a result of the closing. The employees from the Market Street location
will  be  used  to  fill  staffing  needs  at  the  Bank's  other  branches  and
departments.

The Company  expects that its  noninterest  expense in fiscal 2003 will increase
due to the costs associated with operating the additional branches.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2003 AND JUNE 30, 2002

The  Company's  total  assets   increased  by   approximately   $109,795,000  to
$324,099,770 at March 31, 2003, from $214,304,941 at June 30, 2002. The increase
is primarily due to the February 7, 2003, deposit assumption and branch purchase
of Second National Bank of Warren's Steubenville,  Ohio, locations.  The deposit
assumption  totalled  $88,260,000,  which was comprised of  $37,312,000  in core
savings and checking  products and $50,948,000 in  certificates of deposit.  Net
loans,  interest-bearing deposits with other instituions,  investment securities
and mortgage-backed securities increased $33,596,000,  $41,414,000,  $10,689,000
and  $14,868,000,  respectively.  The net increases in loans,  cash deposits and
investment  securities  was funded by the increase in  deposits,  primarily as a
result of the deposit acquisition,  and by the issuance of $7,200,000 of Capital
Trust Securities by Advance  Statutory Trust I, a wholly owned subsidiary of the
Company.

Interest-bearing   deposits   with  other   financial   institutions   increased
$41,414,000 to  $51,409,029 at March 31, 2003 from  $9,995,389 at June 30, 2002.
The  increase is the result of the  completion  of the deposit  assumption  from
Second National Bank of Warren on February 7, 2003. The net liabilities  assumed
amounted to $81,600,000  from the  transaction.  The Company's  management began
investing  funds during the prior quarter by switching  the  Company's  strategy
from selling to retaining fixed rate 1-4 family mortgage loans. Also, during the
prior quarter,  management  had begun the process of investing  into  short-term
callable agency  securities,  as well as adjustable rate and 5 to 7 year balloon
mortgage-backed   securities.  The  effects  of  these  investment  and  lending
strategies are discussed  below.  It is  management's  intent and desire to have
most of the excess liquidity  resulting from the branch acquisition  invested by
June 30, 2003,  however,  the full  deployment of the funds may take longer than
anticipated.


                                      -13-

<PAGE>


Investment  securities  increased  $10,689,000  to $23,687,996 at March 31, 2003
from  $12,999,362  at June 30, 2002. The increase is due in part to the purchase
of five municipal  securities  totalling  $3,100,000 with a weighted average tax
equivalent  yield  of 6.43%  and an  average  maturity  of 15  years  with  call
provisions ranging from 7 to 10 years. The increase is also due in part to a net
increase in callable  agency  securities of  $7,500,000.  During the nine months
ended  March  31,  2003,  the  Company  has had 10 agency  securities  totalling
$5,500,000 called.  These investments were replaced by similar agency securities
in terms of amounts and maturities. The weighted average yield on the securities
called was 4.01%  while the average  yield on the  investments  replacing  these
securities was 2.75%.  The decrease in yield is due to the current interest rate
environment of decreasing yields.

Mortgage-backed  securities  increased  $14,868,000  to $24,055,564 at March 31,
2003 from $9,187,872 at June 30, 2002. The increase is due to the purchase of 10
securities  totalling  $18,700,000.  These  securities  have an average yield of
3.78% and average  lives  ranging from 2.0 to 5.25 years.  The purchase of these
securities was offset by accelerated  prepayments of higher yielding  securities
of  $3,800,000  for the nine months ended March 31, 2003 due to the current rate
environment for 1-4 family mortgages.

Loans  receivable,  net increased  $33,596,000 to $205,741,879 at March 31, 2003
from $172,145,867 at June 30, 2002. The increase in net loans consists primarily
of 1-4 family  mortgages,  automobile  dealer floor plan loans, land development
loans and indirect  automobile  loans which  increased  $22,116,000,  $1,800,000
$1,135,000 and $3,721,000,  respectively.  The increase in 1-4 family  mortgages
includes  approximately  $20,900,000  for the six-month  period  October 2002 to
March  2003.  The  increase  over this  period is due to a change in  management
strategy to increase the  Company's  interest-earning  assets as a result of the
deposit assumption and branch purchase of the Steubenville,  Ohio branch offices
from the Second National Bank of Warren,  Ohio. The majority of these 1-4 family
mortgage loans would have been sold in periods prior to this change in strategy.
The increase in indirect automobile loans is the result of new relationships the
company has developed with floor plan automobile  dealership  customers over the
nine-month period ended March 31, 2003.

Office properties and equipment, net increased $1,228,000 to $5,129,635 at March
31, 2003 from  $3,901,592 at June 30, 2002. The increase is primarily the result
of two projects.  The first is the  construction and furnishing of the Bank's de
novo branch facility at the Hollywood Plaza in  Steubenville,  Ohio which opened
for business on September 18, 2002 with a total cost of $850,000.  The second is
the  market  value  assessment  for  $370,000  for the  purchased  assets of the
Steubenville, Ohio branch offices of the Second National Bank of Warren.

Goodwill and other  intangibles,  net  increased  $4.7 million and $1.8 million,
respectively  at March 31, 2003 from $0 at June 30, 2002.  The increases are the
result of the  calculated  premium paid to The Second  National  Bank of Warren,
Ohio for the deposit  assumption and branch purchase of their two  Steubenville,
Ohio branches. The Other Intangibles, net represents the Core Deposit Intangible
from the deposit  assumption.  The value was derived  from an  independent  core
study performed after the branch acquisition. This intangible is being amortized
over an estimated ten (10) calendar years.

Deposits  increased   $100,422,000  to  $275,481,062  at  March  31,  2003  from
$175,058,743  at June 30,  2002.  The  increase  includes  $88,260,000  from the
deposit  assumption and branch purchase as discussed above. Net of these assumed
deposits,  regular deposits have increased $12,200,000 for the nine-month period
ended March 31,  2003.  This change  includes  an  increase in  certificates  of
deposit of  $8,426,000,  while core  savings  and NOW  accounts  have  increased
$4,700,000  and  $1,400,000,  respectively.  Offsetting  these  increases  is  a
decrease  in  core  money  market  accounts  of  $2,400,000.   The  increase  in
certificates  and decrease in money  market  accounts  reflects  the  customer's
preference to obtain higher yields in the current  interest rate  environment by
extending  the term of their  investments.  Deposit  growth over the  nine-month
period has gone from an increase of $7,500,000 during  three-month  period ended
September 2002 to an increase of only $800,000 for the three-month  period ended
March 31, 2003.  This trend of slowing of deposit growth is a result of a change
in management  strategy during the nine-month  period. Due to the recent deposit
assumption,  the company has not used high cost  certificate of deposit specials
to fund asset growth. This change in strategy is only expected to continue until
all excess  liquidity  received from the deposit  assumption has been reinvested
into higher yielding assets.

On December  19, 2002,  the Company  participated  in a pooled  trust  preferred
offering.  The rate on the  securities is at 3-month  LIBOR plus 3.25%  adjusted
quarterly,  the beginning rate was 4.66% and expired on March 26, 2003. On March
26,  2003,  the  effective  rate of the  securities  was lowered to 4.54% and is
effective  until  June 26,  2003.  The  securities  are  written  with a 30 year
maturity and a five year call provision.

Accrued  interest  payable  and  other  liabilities   increased   $1,052,000  to
$1,670,141  at March 31,  2003 from  $618,232  at June 30,  2002.  The  increase
includes a purchase  accounting  adjustment  of $402,000 as a result of a market
value  adjustment on the  certificates of deposit assumed from the  Steubenville
branches of the Second  National Bank of Warren.  Also, the increase  includes a
$300,000 timing transaction for loans prepaid and refinanced with Freddie Mac as
of March 31, 2003.

                                      -14-

<PAGE>



Stockholders' equity increased approximately  $1,156,000 to $19,379,677 at March
31, 2003 from  $18,223,746 at June 30, 2002. This increase was the result of net
income of $1,258,000 for the period,  the  recognition of shares in the Employee
Stock  Ownership Plan and  Restricted  Stock Plan of $134,000 and an increase in
the net unrealized gain on securities of $83,000. These increases were offset by
the payment of cash dividends of $319,000.

COMPARISON  OF THE RESULTS OF  OPERATIONS  FOR THE THREE AND NINE  MONTHS  ENDED
MARCH 31, 2003 AND 2002

Net interest income  increased  $257,000 or 15.52%,  to $1,913,000 for the three
months  ended March 31, 2003 from  $1,656,000  for the  comparable  period ended
2002. The increase in net interest income resulted primarily from an increase in
the average  volume of the  underlying  principle  balances in interest  earning
assets and liabilities. The net interest spread for the three months ended March
31, 2003,  decreased to 2.67% from 3.08% for the  comparable  period ended 2002.
The 41 basis  point  decrease  in the net  interest  rate spread for the current
three month  period was  primarily  due to a 120 basis point  decline in average
yields on assets which was offset by a 79 basis point decline in average cost of
funds. The increase in  interest-bearing  deposits with other  institutions as a
result  of the  deposit  assumption  of The  Second  National  Bank of  Warren's
Steubenville,  Ohio  branches has  contributed  to a decline in the net interest
margin and net interest spread of the Company.  See "Average  Balance Sheet" for
the three-month periods ended March 31, 2003 and 2002.

Net  interest  income  increased  $836,000  or  17.69%,  to  $5,562,000  for the
nine-months ended March 31, 2003 from $4,726,000 for the comparable period ended
2002. The increase in net interest income resulted primarily from an increase in
the average  volume of the  underlying  principle  balances in interest  earning
assets and liabilities.  The net interest spread for the nine months ended March
31, 2003 decreased to 2.96% from 3.05% for the comparable period ended 2002. The
9 basis point  decrease  in the net  interest  rate spread for the current  nine
month period was  primarily  the result of a 115 basis point  decline in average
yields on assets  which was offset by a 106 basis point  decline in average cost
of funds. The increase in interest-bearing deposits with other institutions as a
result  of  the  deposit   assumption  of  Second   National  Bank  of  Warren's
Steubenville,  Ohio  branches has  contributed  to a decline in the net interest
margin and net interest spread of the Company.  See "Average  Balance Sheet" for
the nine-month periods ended March 31, 2003 and 2002.

The provision for loan losses increased $66,000 to $122,000 for the three months
ended March 31, 2003 from  $56,000 for the  comparable  period  ended 2002.  The
provision increased $71,000 to $276,000 for the nine months ended March 31, 2003
from  $205,000  for the  comparable  period  ended  2002.  The  increase  in the
provision  for loan losses was  precipitated  by an increase in loan volume.  In
determining  the adequacy of the allowance for loan losses,  management  reviews
and  evaluates on a quarterly  basis the potential  risk in the loan  portfolio.
This  evaluation  process  is  documented  by  management  and  approved  by the
Company's  Board of Directors.  The evaluation is performed by senior members of
management  with years of lending and review  experience.  Management  evaluates
homogenous consumer-oriented loans, such as 1-4 family mortgage loans and retail
consumer  loans,  based  upon  all  or  a  combination  of  delinquencies,  loan
concentrations and charge-off  experience.  Management supplements this analysis
by reviewing the local economy,  political  trends  effecting local industry and
business  development  and other known  factors  which may impact  future credit
losses.  Nonhomogenous loans,  generally defined as commercial business and real
estate loans,  are selected by  management  to be reviewed on a quarterly  basis
upon the combination of  delinquencies,  concentrations  and other known factors
that  may  effect  the  local  economy  and  more  specifically  the  individual
businesses.

During this evaluation,  the individual loans are evaluated  quarterly by senior
members  of  management  for  impairment  as  prescribed  under  SFAS  No.  114,
"Accounting  by  Creditors  for  Impairment  of a Loan".  Impairment  losses are
assumed when,  based upon current  information,  it is probable that the Company
will be unable to collect all amounts due according to the contractual  terms of
the loan agreement.  Impairment is measured by a loan's observable market value,
fair  value  of the  collateral  or the  present  value  of  future  cash  flows
discounted at the loan's  effective  interest  rate.  This data on impairment is
combined  with the  other  data  used for  homogenous  loans  and is used by the
classified asset committee in determining the adequacy of the allowance for loan
losses.

The  allowance  for  loan  losses  is  maintained  at a  level  that  represents
management's best estimates of losses in the loan portfolio at the balance sheet
date. However, there can be no assurance that the allowance for loan losses will
be  adequate  to cover  losses  which,  may be  realized  in the future and that
additional provision for loan losses will not be required. See "Risk Elements".

Noninterest income increased $86,000 or 29.51%, to $378,000 for the three months
ended  March 31,  2003 from  $292,000  for the  comparable  period  ended  2002.
Noninterest  income  increased  $131,000  or 13.77% to  $1,082,000  for the nine
months ended March 31, 2003 from $951,000 for the comparable  period ended 2002.
For the three and nine  month  periods of 2003,  miscellaneous  fees and fees on
deposit accounts increased by $57,000 and $126,000, respectively, as a result of
an increase in core customers and related activity.

                                      -15-

<PAGE>
For the three and nine month periods of 2003, gains on sales of fixed rate loans
and  income  from  loan  servicing   activity   decreased   $2,000  and  $5,000,
respectively,  as a result of the change in management strategy toward retaining
fixed rate 1-4 family mortgage loans that would have been sold in prior periods,
as noted above in the loan discussion.  Until such time as the funds acquired in
the  deposit  assumption  have  been  invested  into  interest  earning  assets,
management  expects to maintain its strategy of retaining 1-4 family  mortgages.
Therefore,  future  gains  and  servicing  income  should  continue  to  decline
accordingly.

Noninterest  expense  increased  $339,000 or 26.12%, to $1,638,000 for the three
months ended March 31, 2003,  from  $1,299,000 for the  comparable  2002 period.
Noninterest  expense  increased  $698,000 or 18.81%,  to $4,409,000 for the nine
months  ended March 31, 2003 from  $3,711,000  for the  comparable  period ended
2002.  For the three and nine month periods  ended March 31, 2003,  compensation
and  employee  benefits  increased  $140,000  and  $261,000,  respectively.  The
increase in  compensation  and  employee  benefits  for the three and nine month
periods  ended March 31, 2003 due to the four  branch  acquisitions  and de novo
branch  opening over the past two fiscal years  totalled  $83,000 and  $180,000,
respectively.  Occupancy and equipment,  professional  fees,  marketing and data
processing  expenses  have  increased by $144,000 and $303,000 for the three and
nine-month  periods  ended March 31,  2003,  respectively.  Such  increases  are
primarily due to the operation of the four new branches acquired since September
2001 and the opening of the de novo branch in September  2002. For the three and
nine month period ended March 31, 2003,  other expenses have  increased  $55,000
and $134,000, respectively. The increase in other expense is due to increases in
supplies and  communications  of $25,000 and  $40,000,  in fees paid for ATM and
consumer  card  usage of $9,000  and  $35,000,  and in fees paid to the  Federal
Reserve for item  processing of $5,000 and $9,000,  for the three and nine month
periods, respectively. Each of these increases are primarily related to customer
activity due to the increase in the Company's core customers  created  primarily
by four branch purchases and the de novo branch opening over the past two fiscal
years.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2003, the Company had commitments to fund loans of approximately
$4,599,844. These loan commitments are expected to be funded by April 30, 2003.

Management monitors both the Company's equity capital ratio and the Bank's total
risk-based,  Tier I risk-based  and Tier I leveraged  capital ratios in order to
assess  compliance  with  regulatory  guidelines.  At March 31,  2003,  both the
Company  and the Bank  exceeded  the  minimum  capital  requirements,  including
risk-based and leveraged capital ratios.  The Company's equity capital ratio and
the Bank's total  risk-based,  Tier I risk-based and Tier I leverage  ratios are
4.01% and 10.93%, 10.38% and 5.83%, respectively, at March 31, 2003.

RATE/VOLUME ANALYSIS

The table below sets forth  certain  information  regarding  changes in interest
income and interest expense of the Company for the periods  indicated.  For each
category  of  interest   earning   assets  and   interest-bearing   liabilities,
information  is  provided on changes  attributable  to (i) changes in volume and
(ii) changes in rate.  Changes not solely  attributable  to rate or volume,  are
allocated to changes in rate due to rate sensitivity of interest-earning  assets
and interest-bearing liabilities.
                                               Three Months Ended March 31,
                                            -----------------------------------
                                             2003         Vs         2002
                                            -----------------------------------
                                                   Increase (Decrease)
                                                         Due to
                                            -----------------------------------
                                               Volume      Rate          Net
                                            -----------------------------------
Interest Income:
    Loans                                   $  628,542   $(319,128)    $309,414
    Investments                                485,331    (309,336)     175,995
                                            -----------------------------------
      Total interest-earning assets          1,113,873    (628,464)     485,409
                                            -----------------------------------
Interest Expense
    Core Deposits                              161,380    (207,282)     (45,902)
    Certificates of Deposit                    460,994    (281,957)     179,037
    FHLB Borrowings                              1,253           -        1,253
    Other Borrowings                            94,036           -       94,036
                                            -----------------------------------
      Total interest-bearing liabilities       717,663    (489,239)     228,424
                                            -----------------------------------

Change in net interest income               $  396,210   $(139,225)    $256,985
                                            ===================================

                                      -16-
<PAGE>

RATE/VOLUME ANALYSIS (Continued)


                                                Nine Months Ended March 31,
                                           -------------------------------------
                                              2003          Vs          2002
                                           -------------------------------------
                                                  Increase (Decrease)
                                                         Due to
                                           -------------------------------------
                                              Volume        Rate         Net
                                           -------------------------------------
Interest Income:
    Loans                                  $1,825,280   $(1,207,506)  $ 617,774
    Investments                               644,199      (550,656)     93,543
                                           -------------------------------------
      Total interest-earning assets         2,469,479    (1,758,162)    711,317
                                           -------------------------------------

Interest Expense
    Core Deposits                             390,963      (432,374)    (41,411)
    Certificates of Deposit                   895,255    (1,071,273)   (176,018)
    FHLB Borrowings                            (1,196)            -      (1,196)
    Other Borrowings                           94,036             -      94,036
                                           -------------------------------------
      Total interest-bearing liabilities    1,379,058    (1,503,647)   (124,589)
                                           -------------------------------------

Change in net interest income              $1,090,421   $  (254,515)  $ 835,906
                                           =====================================




                                      -17-


<PAGE>



Average Balance Sheet for the Three-Month Period ended March 31

The  following  table sets forth certain  information  relating to the Company's
average  balance sheet and reflects the average yield on assets and average cost
of liabilities for the periods indicated and the average yields earned and rates
paid.  Such yields and costs are  derived by  dividing  income or expense by the
average  balance  of  assets  or  liabilities,  respectively,  for  the  periods
presented. Average balances are derived from month-end balances. Management does
not believe that the use of month-end balances instead of daily average balances
has caused any material differences in the information presented.

<TABLE>
<CAPTION>
                                                                     Three-Month Period Ended March 31,
                                              -----------------------------------------------------------------
                                                            2003                                  2002
                                              --------------------------------  -------------------------------
                                               Average                Average    Average               Average
                                               Balance    Interest  Yield/Cost   Balance  Interest   Yield/Cost
                                              ---------   --------  ----------  --------  --------   ----------
<S>                                        <C>          <C>        <C>       <C>        <C>         <C>

Interest-earning assets:
  Loans receivable (1)                        $198,431     $3,372     6.80%     $164,617   $3,063      7.44%
  Investment securities (2)                     53,000        325     2.45%       19,498      182      3.74%
  Mortgage-backed securities                    15,597        175     4.49%        9,386      142      6.05%
                                              --------     ------     ----      --------   ------      ----
     Total interest-earning assets             267,028      3,872     5.80%      193,501    3,387      7.00%
                                                           ------     ----                 ------      ----
Non-interest-earning assets                     13,449                             7,988
                                              --------                          --------
     Total assets                             $280,477                          $201,489
                                              ========                          ========

Interest-bearing liabilities:
  Interest-bearing demand deposits            $ 43,285        168     1.55%     $ 26,140      157      2.41%
  Certificates of deposit                      136,232      1,246     3.66%       97,405    1,068      4.38%
  Savings deposits                              42,607        163     1.53%       33,189      220      2.65%
  FHLB Borrowings                               21,167        288     5.44%       20,000      286      5.73%
  Other Borrowings                               7,200         94     5.66%            -        -         -
                                              --------     ------     ----      --------   ------    ------
     Total interest-bearing liabilities        250,491      1,959     3.13%      176,734    1,731      3.92%
                                                           ------     ----                 ------    ------
Non-interest bearing liabilities                10,730                             7,299
                                              --------                          --------
     Total liabilities                         261,221                           184,033
Stockholders' equity                            19,256                            17,456
                                              --------                          --------
     Total liabilities and stockholders'
       equity                                 $280,477                          $201,489
                                              ========                          ========

Net interest income                                        $1,913                          $1,656
                                                           ======                          ======
Interest rate spread (3)                                              2.67%                            3.08%
                                                                      ====                             ====
Net Yield on interest-earning assets (4)                              2.87%                            3.42%
                                                                      ====                             ====
Ratio of average interest-earning assets  to
  average interest-bearing liabilities                              106.60%                          109.49%
                                                                    ======                           ======

</TABLE>

------------------------
(1)  Average balances include non-accrual loans.
(2)  Includes interest-bearing deposits in other financial institutions and FHLB
     stock.
(3)  Interest-rate spread represents the difference between the average yield on
     interest   earning   assets  and  the  average  cost  of   interest-bearing
     liabilities.
(4)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.


                                      -18-

<PAGE>



Average Balance Sheet for the Nine-Month Period ended March 31

The  following  table sets forth certain  information  relating to the Company's
average  balance sheet and reflects the average yield on assets and average cost
of liabilities for the periods indicated and the average yields earned and rates
paid.  Such yields and costs are  derived by  dividing  income or expense by the
average  balance  of  assets  or  liabilities,  respectively,  for  the  periods
presented. Average balances are derived from month-end balances. Management does
not believe that the use of month-end balances instead of daily average balances
has caused any material differences in the information presented.

<TABLE>
<CAPTION>
                                                                     Nine-Month Period Ended March 31,
                                              -------------------------------------------------------------------
                                                            2003                                  2002
                                              ---------------------------------  --------------------------------
                                               Average                 Average    Average                Average
                                               Balance    Interest   Yield/Cost   Balance   Interest   Yield/Cost
                                              ---------   --------   ----------  ---------  --------   ----------
<S>                                        <C>          <C>         <C>        <C>        <C>         <C>

Interest-earning assets:
  Loans receivable (1)                        $184,904     $9,712      7.00%      $153,968   $ 9,094     7.88%
  Investment securities (2)                     34,837        743      2.84%        18,920       620     4.37%
  Mortgage-backed securities                    11,097        416      5.00%         9,538       445     6.23%
                                              --------    -------    ------       --------   -------   ------
     Total interest-earning assets             230,838     10,871      6.28%       182,426    10,159     7.43%
                                                          -------    ------                  -------   ------
Non-interest-earning assets                     10,638                               7,695
                                              --------                            --------
     Total assets                             $241,476                            $190,121
                                              ========                            ========

Interest-bearing liabilities:
  Interest-bearing demand deposits             $34,171        449      1.75%       $23,815       449     2.51%
  Certificates of deposit                      117,430      3,367      3.82%        93,697     3,537     5.03%
  Savings deposits                              38,496        526      1.82%        28,134       573     2.72%
  FHLB Borrowings                               20,789        873      5.60%        20,000       874     5.83%
  Other Borrowings                               2,400         94      5.66%             -         -        -
                                              --------    -------    ------       --------   -------   ------
     Total interest-bearing liabilities        213,286      5,309      3.32%       165,646     5,433     4.38%
                                                          -------    ------                  -------   ------
Non-interest bearing liabilities                 9,270                               7,417
                                              --------                            --------
     Total liabilities                         222,556                             173,063
Stockholders' equity                            18,920                              17,058
                                              --------                            --------
     Total liabilities and stockholders'
       equity                                 $241,476                            $190,121
                                              ========                            ========

Net interest income                                       $ 5,562                            $ 4,726
                                                          =======                            =======
Interest rate spread (3)                                               2.96%                             3.05%
                                                                     ======                            ======
Net Yield on interest-earning assets (4)                               3.21%                             3.45%
                                                                     ======                            ======
Ratio of average interest-earning assets to
  average interest-bearing liabilities                               108.23%                           110.13%
                                                                     ======                            ======
</TABLE>

------------------
(1)  Average balances include non-accrual loans.
(2)  Includes interest-bearing deposits in other financial institutions and FHLB
     stock.
(3)  Interest-rate spread represents the difference between the average yield on
     interest   earning   assets  and  the  average  cost  of   interest-bearing
     liabilities.
(4)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.



                                      -19-

<PAGE>

RISK ELEMENTS

The table below presents information  concerning  nonperforming assets including
nonaccrual loans,  renegotiated loans, loans 90 days past due, other real estate
loans and repossessed  assets.  A loan is classified as nonaccrual  when, in the
opinion of management, there are serious doubts about collectibility of interest
and  principal.  At the time the  accrual of interest  is  discontinued,  future
income is recognized  only when cash is received.  Renegotiated  loans are those
loans which terms have been  renegotiated  to provide a reduction or deferral of
principal or interest as a result of the deterioration of the borrower.


                                                          March 31,   June 30,
                                                            2003        2002
                                                          ---------   --------

Loans on a nonaccrual basis                                $  926       $  864
Loans past due 90 days or more and still accruing             689        1,148
                                                           ------       ------
         Total nonperforming loans                          1,615        2,012
                                                           ------       ------

Other real estate                                             810          645
Repossessed assets                                             11           18
                                                           ------       ------
         Total nonperforming assets                        $2,436       $2,675
                                                           ------       ------


Nonperforming loans as a percentage of total net loans      0.78%        1.17%
                                                           =====        =====

Nonperforming assets as a percentage of total assets        0.75%        1.25%
                                                           =====        =====

Allowance for loan losses to nonperforming loans           60.92%       48.16%
                                                           =====        =====


Nonaccrual loans at March 31, 2003,  consisted of $502,483 in one-to-four family
residential  mortgages,  $197,822 in  multi-family  mortgages,  and  $225,498 in
non-residential real estate mortgages.

The Company considers a loan impaired when it is probable that the borrower will
not repay  the loan  according  to the  original  contractual  terms of the loan
agreement.  Management has  determined  that first mortgage loans on one-to-four
family   properties   and  all  consumer   loans   represent   large  groups  of
smaller-balance,  homogenous  loans  that  are  to  be  collectively  evaluated.
Management  considers an insignificant  delay,  which is defined as less than 90
days by the Company,  will not cause a loan to be classified as impaired. A loan
is not impaired  during the period of delay in payment if the Company expects to
collect all amounts due including  interest accrued at the contractual  interest
rate during the period of delay.  All loans identified as impaired are evaluated
independently  by management.  The Company  estimates  credit losses on impaired
loans  through  the  allowance  for  loan  losses  by  evaluating  the  recorded
investment in the impaired loan to the estimated present value of the underlying
collateral or the present value of expected cash flows.

As of March 31, 2003, the total  investment in impaired loans was $580,946,  and
such amount was subject to a specific allowance for loan losses of $80,530.  The
average  investment in the impaired loans for the nine-month  period ended March
31, 2003 was $936,776.  The interest  income  potential  based upon the original
terms of the contracts of these  impaired  loans was $69,908 for the  nine-month
period  ended March 31,  2003.  A total of $39,024 of  interest  income has been
recognized for the nine-month period ended March 31, 2003.


                                      -20-

<PAGE>

During the nine-month  period ended March 31, 2003, the Company  foreclosed upon
two loans with combined balances of $376,921 that were classified as impaired at
June 30, 2002. As a result of the foreclosure action, the assets collateralizing
the loans were added to "Other  Real  Estate" in the amount of  $270,000,  which
resulted  in a write down to the  allowance  for loan  losses  during the period
ended March 31, 2003 of $137,517.

The  allowance  for loan  losses is based  upon  estimates  of  probable  losses
inherent in the loan portfolio.  The amount actually  observed in respect to the
losses  can vary  significantly  from the  estimated  amounts.  Our  methodology
includes  several  features that are intended to reduce the differences  between
estimated and actual losses.  The historical loss experience  model that is used
to established  the loan loss factors for problem graded loans is designed to be
self-correcting by taking into account our recent loss experience. Similarly, by
basing  the  past  graded  loss  factors  on  historical  loss  experience,  the
methodology is further designed to take our recent loss experience into account.
In addition to historical and recent loss trends,  our methodology  incorporates
the current volume and trend in delinquencies,  as well as, a self-assessment of
the status of the local economy.  Our methodology requires the monitoring of the
changing  loan  portfolio  mix and the effect that the  changing  mix has on the
trend in delinquencies, as well as, actually loss factors.

The combination of the historical loss factors, recent loss experience,  current
trend in delinquencies,  the local economic  environment,  and the assessment of
the changing loan portfolio mix are used in  conjunction  with the internal loan
grading system to adjust our allowance on a quarterly  basis.  Furthermore,  our
methodology includes our impaired loan assessment and permits adjustments to any
loss factor used in determining the allowance in the event that, in management's
judgement,  significant  conditions  which  effect  the  collectibility  of  the
portfolio as of the  evaluation  date are not reflected in the loss factors.  By
assessing  the probable  estimated  losses  inherent in the loan  portfolio on a
quarterly  basis,  we are able to adjust  specific and inherent  loss  estimates
based upon recent information, as it becomes available.



The following is a breakdown of the loan portfolio composition at March 31, 2003
and June 30, 2002:

                                      March 31,            June 30,
                                        2003                 2002
                                    -------------        -------------
Mortgage loans:
    1-4 family                      $113,779,221          $91,663,131
    Multi-family                       8,092,751            6,864,328
    Non-residential                   38,282,488           36,146,830
    Construction                       6,210,959            4,338,936
                                    ------------         ------------
                                     166,365,419          139,013,225
                                    ------------         ------------
Consumer Loans:
    Home Improvement                     919,569              943,384
    Automobile-Direct                  8,206,375            7,377,763
    Automobile-Indirect               13,519,515            9,798,701
    Share loans                        1,822,643            1,589,842
    Other                              2,555,479            2,613,244
                                    ------------         ------------
                                      27,023,581           22,322,934
                                    ------------         ------------

Commercial Loans                      17,531,294           14,824,483

Less:
    Loans in process                   4,087,926            2,961,044
    Net deferred loan fees               106,982               84,643
    Allowance for loan losses            983,489              969,088
                                    ------------         ------------
                                       5,178,397            4,014,775
                                    ------------         ------------
         Total                      $205,741,897         $172,145,867
                                    ============         ============



                                      -21-


<PAGE>

ITEM 3 - CONTROLS AND PROCEDURES
         -----------------------

(1)  Evaluation  of  disclosure   controls  and  procedures  -  Based  on  their
     evaluation as of a date within 90 days of the filing date of this Quarterly
     Report on Form 10-QSB,  the Registrant's  principal  executive  officer and
     principal financial officer have concluded that the Registrant's disclosure
     controls and procedures (as defined in Rules  13a-14(c) and 15d-14(c) under
     the Securities  Exchange Act of 1934 (the "Exchange Act")) are effective to
     ensure that information  required to be disclosed by the Company in reports
     that it files or submits  under the Exchange  Act is  recorded,  processed,
     summarized and reported within the time periods specified in Securities and
     Exchange Commission rules and forms.

(2)  Changes in  internal  controls - There were no  significant  changes in the
     Registrant's internal controls or in other factors that could significantly
     affect these controls subsequent to the date of their evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.




                                      -22-

<PAGE>


                          PART II - OTHER INFORMATION


Item 1 - Legal Proceedings
         -----------------

         NONE

Item 2 - Changes in Securities and Use of Proceeds
         -----------------------------------------

         NONE

Item 3 - Defaults upon Senior Securities
         -------------------------------

         NOT APPLICABLE

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

         NONE

Item 5 - Other Information
         -----------------

         NONE

Item 6 - Exhibits and reports on Form 8-K
         --------------------------------

         (a) List of Exhibits:

          3 (i) Certificate of Incorporation of Advance Financial Bancorp*
          3 (ii) Amended Bylaws of Advance Financial Bancorp
          4 (i) Specimen Stock Certificate*
          4 (ii) Shareholders Rights Plan**
          10 Employment Agreement between the Bank and Stephen M. Gagliardi***
          10.1 1998 Stock Option Plan****
          10.2 Restricted Stock Plan and Trust Agreement****
          99 Certifications  pursuant to 18 U.S.C. Section 1350, as adopted
             pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

         (b) None

-------------------
*    Incorporated by reference to the  Registration  Statement on Form S-1 (File
     No. 333-13021) declared effective by the SEC on November 12, 1996.
**   Incorporated  by reference to the Form 8-K ( File No.  0-21885)  filed July
     17, 1997.
***  Incorporated  by  reference  to the June 30,  1997  Form  10K-SB  (File No.
     0-21885) filed September 23, 1997.
**** Incorporated by reference to the proxy statement for the Special Meeting of
     the Stockholders on January 20, 1998 and filed with the SEC on December 12,
     1997.


                                      -23-


<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  the  report  to be  signed  on its  behalf  by the
undersigned, thereunto duly authorized.

                                       Advance Financial Bancorp



Date:  May 13, 2003                    By: /s/ Stephen M. Gagliardi
                                           -------------------------------------
                                           Stephen M. Gagliardi
                                           President and Chief Executive Officer




Date:  May 13, 2003                    By: /s/ Stephen M. Magnone
                                           -------------------------------------
                                           Stephen M. Magnone
                                           Treasurer (Chief Financial Officer)



                                      -24-

<PAGE>


                            SECTION 302 CERTIFICATION


     I, Stephen M. Magnone, certify that:

1.   I have reviewed this quarterly  report on Form 10-QSB of Advance  Financial
     Bancorp ;

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

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

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

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

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

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

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

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

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

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


Date:  May 13, 2003                          /s/ Stephen M. Magnone
                                             -----------------------------------
                                             Stephen M. Magnone
                                             Treasurer (Chief Financial Officer)

                                      -25-


<PAGE>


                            SECTION 302 CERTIFICATION


         I, Stephen M. Gagliardi, certify that:

1.   I have reviewed this quarterly  report on Form 10-QSB of Advance  Financial
     Bancorp;

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

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

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

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

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

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

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

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

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


Date:  May 13, 2003                        /s/ Stephen M. Gagliardi
                                           -------------------------------------
                                           Stephen M. Gagliardi
                                           President and Chief Executive Officer




                                      -26-