United States Securities and Exchange Commission
                             Washington, D.C. 20552
                                   FORM 10QSB


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

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


For the transition period from ________________to__________________


                         Commission file Number 0-21885
                         ------------------------------

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


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

                    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 12, 2000:   932,285


<PAGE>
                            Advance Financial Bancorp

                                      Index
<TABLE>
<CAPTION>
                                                                                Page
                                                                               Number
                                                                               ------

<S>   <C>                                                                 <C>
Part I -  FINANCIAL INFORMATION

          Item 1 - Financial Statements

                   Consolidated Balance Sheet ( Unaudited)  as of
                      March 31, 2000 and June 30, 1999                           3

                   Consolidated Statement of Income (Unaudited)
                       For the Three Months ended March 31, 2000 and 1999        4

                   Consolidated Statement of Income (Unaudited)
                       For the Nine Months ended March 31, 2000 and 1999         5

                   Consolidated Statement of Cash Flows (Unaudited)
                       For the Nine Months ended March 31, 2000 and 1999         6

                   Notes to the Unaudited Consolidated Financial Statements   7- 8


          Item 2 - Management's Discussion and Analysis                       9-14

Part II - OTHER INFORMATION

          Item 1 - Legal Proceedings                                            15

          Item 2 - Changes in Securities                                        15

          Item 3 - Default Upon Senior Securities                               15

          Item 4 - Submissions of Matters to a vote of Security Holders         15

          Item 5 - Other Information                                            15

          Item 6 - Exhibits and Reports on Form 8-K                             15

SIGNATURES                                                                      16
</TABLE>

<PAGE>
                            ADVANCE FINANCIAL BANCORP
                      CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                  MARCH 31,            JUNE 30,
                                                                                    2000                 1999
                                                                              ----------------    ----------------

<S>                                                                            <C>                 <C>
Assets
     Cash and cash equivalents:
       Cash and amounts due from banks                                             $1,039,454          $1,395,704
       Interest bearing deposits with other institutions                            5,489,049           2,964,166
                                                                              ----------------    ----------------
          Total cash and cash equivalents                                           6,528,503           4,359,870
                                                                              ----------------    ----------------

     Investment securities:
       Securities held to maturity (fair value of $1,186,527 and $970,914)          1,249,519             999,896
       Securities available for sale                                                8,233,301           4,481,475
                                                                              ----------------    ----------------
          Total investment securities                                               9,482,820           5,481,371
                                                                              ----------------    ----------------

     Mortgaged-backed securities:
       Securities held to maturity (fair value of $2,128,276 and $2,456,645)        2,179,688           2,472,681
       Securities available for sale                                                1,580,413           1,832,845
                                                                              ----------------    ----------------
          Total mortgage-backed securities                                          3,760,101           4,305,526
                                                                              ----------------    ----------------

     Loans held for sale                                                              147,892                   -
     Loans receivable,  (net of allowance for loan losses
          of $658,714 and $582,280 )                                              120,288,394         109,899,551
     Office properties and equipment, net                                           4,112,006           4,084,793
     Federal Home Loan Bank Stock, at cost                                            800,000             629,500
     Accrued interest receivable                                                      823,644             664,058
     Other assets                                                                     857,239             501,967

                                                                              ----------------    ----------------
          TOTAL ASSETS                                                           $146,800,599        $129,926,636
                                                                              ================    ================

Liabilities:
     Deposits                                                                    $117,883,575        $105,338,770
     Advances from Federal Home Loan Bank                                          13,500,000           9,000,000
     Advance payments by borrowers for taxes and insurance                            152,455             196,993
     Accrued interest payable and other liabilities                                   440,786             397,421

                                                                              ----------------    ----------------
          TOTAL LIABILITIES                                                       131,976,816         114,933,184
                                                                              ----------------    ----------------

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                                                    10,329,658          10,316,719
     Retained earnings - substantially restricted                                   8,000,223           7,623,733
     Unallocated shares held by Employee Stock Ownership Plan (ESOP)                 (532,604)           (597,767)
     Unallocated shares held by Restricted Stock Plan (RSP)                          (540,534)           (682,357)
     Treasury Stock (152,165  and 103,165 shares at cost)                          (2,233,265)         (1,626,890)
     Accumulated other comprehensive loss                                            (308,140)           (148,431)

                                                                              ----------------    ----------------
          TOTAL STOCKHOLDERS' EQUITY                                               14,823,783          14,993,452
                                                                              ----------------    ----------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $146,800,599        $129,926,636
                                                                              ================    ================
</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,
                                                                 2000                   1999
                                                         -------------------    -------------------

<S>                                                         <C>                    <C>
INTEREST AND DIVIDEND INCOME
    Loans                                                        $2,434,748             $2,139,788
    Investment securities                                           172,683                 56,170
    Interest-bearing deposits with other institutions                42,812                 50,190
    Mortgage-backed securities                                       63,615                 38,846
    Dividends on Federal Home Loan Bank Stock                        13,426                  9,972
                                                         -------------------    -------------------

         Total interest and dividend income                       2,727,284              2,294,966
                                                         -------------------    -------------------

INTEREST EXPENSE
    Deposits                                                      1,263,373              1,049,053
    Advances from Federal Home Loan Bank                            208,344                119,145
                                                         -------------------    -------------------

         Total interest expense                                   1,471,717              1,168,198
                                                         -------------------    -------------------

NET INTEREST INCOME                                               1,255,567              1,126,768

Provision for loan losses                                            51,000                 37,500
                                                         -------------------    -------------------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES               1,204,567              1,089,268
                                                         -------------------    -------------------


NONINTEREST INCOME
    Service charges on deposit accounts                             105,844                 91,106
    Gain on sale of loans                                             1,994                 16,332
    Gain on sale of investments                                           -                 13,745
    Other income                                                     62,766                 67,906
                                                         -------------------    -------------------

         Total noninterest income                                   170,604                189,089
                                                         -------------------    -------------------

NONINTEREST EXPENSE
    Compensation and employee benefits                              502,256                447,863
    Occupancy and equipment                                         178,320                148,419
    Professional fees                                                23,212                 22,635
    Advertising                                                      28,253                 34,664
    Data processing charges                                          71,951                 84,884
    Other expenses                                                  215,231                203,054
                                                         -------------------    -------------------

         Total noninterest expenses                               1,019,223                941,519
                                                         -------------------    -------------------

Income before income taxes                                          355,948                336,838
Income taxes                                                        140,100                128,140
                                                         -------------------    -------------------

NET INCOME                                                       $  215,848             $  208,698
                                                         ===================    ===================

EARNINGS PER SHARE
         Basic                                                   $      .24             $      .23
         Diluted                                                 $      .24             $      .23

</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,
                                                              2000                1999
                                                        ---------------     ---------------

INTEREST AND DIVIDEND INCOME
<S>                                                    <C>                 <C>
    Loans                                                   $7,067,649          $6,335,060
    Investment securities                                      482,007             119,705
    Interest-bearing deposits with other institutions          124,881             259,931
    Mortgage-backed securities                                 193,195              55,565
    Dividends on Federal Home Loan Bank Stock                   37,857              30,360
                                                        ---------------     ---------------

         Total interest and dividend income                  7,905,589           6,800,621
                                                        ---------------     ---------------

INTEREST EXPENSE
    Deposits                                                 3,650,718           3,215,903
    Advances from Federal Home Loan Bank                       559,720             365,672
                                                        ---------------     ---------------

         Total interest expense                              4,210,438           3,581,575
                                                        ---------------     ---------------

NET INTEREST INCOME                                          3,695,151           3,219,046

Provision for loan losses                                      126,000             112,500
                                                        ---------------     ---------------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES          3,569,151           3,106,546
                                                        ---------------     ---------------

NONINTEREST INCOME
    Service charges on deposit accounts                        323,739             277,191
    Gain on sale of loans                                        6,133              86,567
    Gain on sale of investments                                      -              13,745
    Other income                                               184,748             205,219
                                                        ---------------     ---------------

         Total noninterest income                              514,620             582,722
                                                        ---------------     ---------------
NONINTEREST EXPENSE
    Compensation and employee benefits                       1,442,155           1,306,900
    Occupancy and equipment                                    505,617             441,627
    Professional fees                                           81,234             107,998
    Advertising                                                 91,361              98,663
    Data processing charges                                    247,256             257,060
    Other expenses                                             679,957             612,422
                                                        ---------------     ---------------

         Total noninterest expenses                          3,047,580           2,824,670
                                                        ---------------     ---------------

Income before income taxes                                   1,036,191             864,598
Income taxes                                                   406,482             335,592
                                                        ---------------     ---------------

NET INCOME                                                  $  629,709          $  529,006
                                                        ===============     ===============

EARNINGS PER SHARE
         Basic                                              $      .70          $      .56
         Diluted                                            $      .70          $      .56
</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,
                                                                                   2000                 1999
                                                                              ----------------     ----------------

<S>                                                                            <C>                  <C>
OPERATING ACTIVITIES
     Net Income                                                                    $  629,709           $  529,006
     Adjustments to reconcile net income to net cash provided by
        operating activities:
         Depreciation, amortization and accretion, net                                414,673              427,030
         Provision for loan losses                                                    126,000              112,500
         Gain on sale of investments                                                        -              (13,745)
         Gain on sale of loans                                                         (6,133)             (86,567)
         Origination of loans held for sale                                        (1,758,832)          (8,302,946)
         Proceeds from the sale of loans                                            1,617,073            8,849,713
         Increase in other assets and liabilities                                      46,198              (87,186)
                                                                              ----------------     ----------------

              Net cash provided by operating activities                             1,068,688            1,427,805
                                                                              ----------------     ----------------


INVESTING ACTIVITIES
     Investment securities held to maturity:
         Purchases                                                                   (249,453)          (2,987,988)
         Maturities and repayments                                                          -            3,737,988
     Investment securities available for sale:
         Purchases                                                                 (4,467,656)          (2,000,000)
         Maturities and repayments                                                    504,545              146,512
     Mortgage-backed securities held to maturity:
         Purchases                                                                          -           (1,006,296)
         Maturities and repayments                                                    291,248              225,855
     Mortgage-backed securities available for sale:
         Purchases                                                                          -           (2,034,336)
         Maturities and repayments                                                    221,657               73,959
     Purchases of Federal Home Loan Bank Stock                                       (170,500)                   -
     Net increase in loans                                                        (10,872,341)         (10,167,452)
     Purchases of premises and equipment                                             (298,227)            (168,715)
                                                                              ----------------     ----------------

              Net cash used in investing activities                               (15,040,727)         (14,180,473)
                                                                              ----------------     ----------------


FINANCING ACTIVITIES
     Net increase in deposits                                                      12,544,805           11,699,954
     Net Proceeds (Repayments) from advances from Federal Home Loan Bank            4,500,000           (1,000,000)
     Net change in advances for taxes and insurance                                   (44,538)             (52,027)
     Purchase of treasury stock                                                      (606,375)            (626,027)
     Cash dividends paid                                                             (253,220)            (224,138)

                                                                              ----------------     ----------------
              Net cash provided by financing activities                            16,140,672            9,797,762
                                                                              ----------------     ----------------

              Increase (decrease) in cash and cash equivalents                      2,168,633           (2,954,906)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                    4,359,870            9,084,193
                                                                              ----------------     ----------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                         $6,528,503           $6,129,287
                                                                              ================     ================


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the period for:
         Interest on deposits and borrowings                                       $4,202,908           $3,578,452
         Income taxes                                                              $  267,672           $  250,476
</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 subsidiary, Advance Financial Savings Bank
(the  "Bank"),  and  its  wholly-owned  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,  2000 or any other
interim period.

These statements should be read in conjunction with the consolidated  statements
of and for the year ended June 30, 1999 and related  notes which are included on
the Form 10-KSB (file no. 0-21885)

NOTE 2 - EARNINGS PER SHARE

 The following table sets forth a reconciliation of the denominator of the basic
and dilutive earnings per share computation in accordance with SFAS No. 128.
<TABLE>
<CAPTION>
                                                                   Nine Months Ended March 31

                                                                     2000           1999
                                                                 ------------  -------------

<S>                                                              <C>            <C>
Denominator:
       Denominator for basic earnings per share
          Weighted-average shares                                    894,643        951,949

Effect of dilutive securities:
         Employee stock options                                           -               -
                                                                 ------------  -------------

Dilutive potential common shares                                     894,643        951,949

  Denominator;
          Denominator for dilutive earnings per share adjusted
             Weighted-average shares                                 894,643        951,949
                                                                 ============  =============
</TABLE>


                                       -7-

<PAGE>

NOTE 2 - EARNINGS PER SHARE (CONTINUED)
<TABLE>
<CAPTION>

                                                                            Three Months Ended
                                                                                 March 31
                                                                           2000           1999
                                                                        ---------     -----------

<S>                                                                   <C>            <C>
Denominator:
       Denominator for basic earnings per share
          Weighted-average shares                                         871,950        921,500


Effect of dilutive securities:
         Employee stock options                                                 -             -

                                                                       ----------     ----------
Dilutive potential common shares                                          871,950        921,500

  Denominator;
          Denominator for dilutive earnings per share adjusted
             Weighted-average shares                                      871,950        921,500
                                                                       ==========     ==========
</TABLE>

NOTE 3 - COMPREHENSIVE INCOME

Other accumulated comprehensive loss consists solely of net unrealized gains and
losses on  available  for sale  securities.  For the three and nine months ended
March  31,  2000,   comprehensive   income   totaled   $237,007  and   $470,000,
respectively.  For the three and nine months ended March 31, 1999, comprehensive
income totaled $175,932 and $485,779, respectively.

                                       -8-
<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,  Year 2000  issues,  and  general  economic  conditions.  Advance
Financial  Bancorp (the "Company")  undertakes no obligation to publicly release
the results of any revisions to those  forward-looking  statements  which may be
made to reflect events or circumstances  after the date hereof or to reflect the
occurrence of unanticipated events.

     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.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31,2000 AND JUNE 30, 1999
--------------------------------------------------------------------
Total assets  increased  $16,874,000  to  $146,800,000  at March 31, 2000,  from
$129,926,000 at June 30, 1999. At March 31, 2000, deposits and Federal Home Loan
Bank ("FHLB") advances increased $12,545,000 and $4,500,000, respectively. These
increases were used to fund loan demand and to purchase investment securities.

Interest-bearing   deposits  with  other  financial  institutions  increased  by
$2,525,000 to $5,489,000  at March 31, 2000,  from  $2,964,000 at June 30, 1999.
This additional  liquidity  enables the Company's  management to properly manage
interest  rate risk in the  current  interest  rate  environment  by being  less
dependent on outside funding to meet loan demand.

Investment  securities  available for sale increased by $3,752,000 to $8,233,000
at March 31, 2000,  from  $4,481,000 at June 30, 1999.  This  increase  includes
approximately  $1,470,000 in three FHLB bonds with callable options ranging from
3 months to 18 months and an effective  weighted average interest rate of 7.11%.
The funding for these bonds came from the strong  deposit  growth.  The increase
also includes the purchase of a $2,500,000 15-year FHLB bond in August 1999 with
a  callable  option of 1-year  and an  effective  interest  yield of 8.10%.  The
funding for this bond came from a FHLB  advance  that matures in August 2000 and
has an effective  cost of funds of 5.94%.  Management  placed these  investments
into this category for liquidity  purposes while  maximizing  interest yields in
excess of the federal overnight rates paid on interest-bearing demand deposits.

Net loans receivable increased by $10,389,000 to $120,288,000 at March 31, 2000,
from $109,900,000 at June 30, 1999. The loan increase was spread over the entire
portfolio. Loans secured by 1-4 family residences increased by $2,980,000 due to
demand for ARMs and the  bank's  "no fee"  Equity  Line of Credit  program.  The
company's "no fee" program ended during November 1999. Multi-family  residential
loans  and  Non-residential  real  estate  loans  increased  by  $2,839,000  and
$1,655,000,   respectively,   due  to  strong  loan  demand  for  the  Company's
competitively  priced ARM products.  Automobile  loans increased  $1,686,000 due
principally  to  increased  loan  activity  written  by  automobile   dealership
customers  of  the  Company.   Commercial  loans  increased  by  $1,308,000  due
principally  to the addition of a new  automobile  dealership  to the  Company's
customer base. See "Risk Elements".

                                       -9-
<PAGE>

Deposits  increased  by  $12,545,000  to  $117,884,000  at March  31,  2000 from
$105,339,000  at June 30, 1999.  Within the deposit line item,  certificates  of
deposit  increased  by  $10,736,000  to  $74,452,000  at  March  31,  2000  from
$63,716,000  at June 30, 1999.  This  increase is primarily  the result of three
certificate of deposit  specials.  The first was called  "Advantage  2000", this
certificate  offered above market rates on  certificates of deposit at 5.25% for
12 months and 5.50% for 18 months.  The "advantage" of this product was that the
customers had a 10-day option at the end of 1999 to redeem the certificate  with
no penalty.  This successful special was offered from June 20, 1999 to September
30,  1999.   During  the  ten  day  option  period  of  1999,  the  Company  had
approximately  $2,350,000 of the "Advantage 2000" certificates  redeemed without
penalty  which  was  approximately  35% of the  total  amount  deposited  in the
certificate  product.  The  Company  was able to  retain  all but  approximately
$330,000 of the redeemed certificates with customers generally  transferring the
funds into another of the  certificate  products  called  "Fives Are Wild".  The
second  certificate  of  deposit  special  was called  "Fives  Are  Wild",  this
certificate  offered above market  interest rates on  certificates of deposit of
5.55% for five months, 5.75% for ten months, 6.0% for 15 or 18 months, and 6.07%
for 21 months.  The "Fives Are Wild"  program  began in mid October and ended on
March 29, 2000. In mid January of 2000, the Company offered a third  certificate
of deposit  special  that paid above market  interest  rates of 6% for 6 months,
6.25% for 12 months,  6.35% for 24 months  and 6.89% for 36 months.  As with the
previous  specials,  this special was well received by the area consumers.  This
special ended on March 29, 2000, as well.

Savings deposits  increased  $1,406,000 while demand deposits increased $403,000
for the nine-month  period ended March 31, 2000. The demand deposit increase was
primarily  the net result of an increase  in  non-interest  bearing  deposits of
$1,189,000,  NOW  accounts of  $182,000,  and a decrease  in large money  market
demand accounts of $968,000.  The majority of the money withdrawn from the money
market demand  account was  generally  deposited in the  certificate  of deposit
specials.

Advances from the FHLB  increased by $4,500,000 to $13,500,000 at March 31, 2000
from $9,000,000 at June 30, 1999. This increase involves two separate  advances.
The first advance was for $2,500,000 with a weighted  average rate of 5.94% that
has a one-year  maturity of August of 2000.  The  proceeds of this  advance were
used to purchase a FHLB bond described above under  investment  securities.  The
second  advance  was to  increase an  existing  $3,000,000  callable  advance to
$5,000,000  with a weighted  average rate of 5.52% that has an initial call date
in October 2001.  The  additional  $2,000,000 in proceeds from this advance were
used to fund a three year  adjustable  rate mortgage loan  originated in October
1999.

A third  advance  for  $2,500,000  with a  weighted  average  rate of 5.76% that
matured in January 2000 was taken in November 1999. The proceeds of this advance
were held to fund Y2K liquidity. At maturity in January 2000, the Company repaid
$1,000,000  of the  outstanding  amount by  utilizing  excess cash on hand.  The
remaining  $1,500,000 was put onto the RepoPlus line of credit and  subsequently
repaid in mid February 2000.

In addition to the  increases  and changes to advances  from the FHLB  discussed
above,  during the quarter  ended  December 31, 1999,  the FHLB called all three
outstanding  advances at June 30,  1999,  amounting to  $9,000,000.  The Company
elected to renew these  advances at the  proposed  higher  rates  offered by the
FHLB.  The new  weighted  average  rate of the  renewed  $9,000,000  in advances
increased to 5.63% from 5.37% prior to the calls.

Equity capital decreased by approximately,  $170,000 to $14,824,000 at March 31,
2000  from  $14,993,000  at June  30,  1999.  Net  income  of  $630,000  and the
recognition of shares in the Employee Stock Ownership Plan and Restricted  Stock
Plan of $220,000,  were offset by the payment of cash dividends of $253,000,  an
increase in net  unrealized  loss on  securities of $160,000 and the purchase of
49,000  shares  of  treasury   stock  for  $607,000,   at  an  average  cost  of
approximately $12.38 per share.

                                      -10-
<PAGE>

COMPARISON  OF THE RESULTS OF  OPERATIONS  FOR THE THREE AND NINE  MONTHS  ENDED
--------------------------------------------------------------------------------
MARCH 31, 2000 AND 1999
-----------------------


Net interest income  increased  $129,000 or 11.43%,  to $1,256,000 for the three
months  ended March 31, 2000 from  $1,127,000  for the  comparable  period ended
1999. 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, 2000 decreased to 3.25% from 3.35% for the comparable period ended 1999. The
average yield on interest  earning assets  increased by 19 basis points to 8.02%
for the three months ended March 31, 2000, from 7.83% for the comparable  period
ended 1999. The average cost of funds  increased by 29 basis points to 4.77% for
the three months ended March 31, 2000 from 4.48% for the comparable period ended
1999.

Net interest  income  increased  $476,000 or 14.79%,  to $3,695,000 for the nine
months  ended March 31, 2000 from  $3,219,000  for the  comparable  period ended
1999. 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, 2000 decreased to 3.26% from 3.27% for the comparable period ended 1999. The
average yield on interest  earning  assets  decreased by 6 basis points to 7.94%
for the nine months ended March 31, 2000,  from 8.00% for the comparable  period
ended 1999.  The average cost of funds  decreased by 5 basis points to 4.68% for
the nine months ended March 31, 2000 from 4.73% for the comparable  period ended
1999.

Interest and dividend income  increased  $432,000 or 18.84% for the three months
ended March 31, 2000  compared to the same period ended 1999.  This increase was
primarily  due to an  increase  in  earnings on loans of $295,000 as the average
principle  balance  increased  $13,440,000 to $119,039,000  for the period ended
March 31, 2000, from  $105,599,000 for the comparable 1999 period.  Interest and
dividend  income  on  investments  and  interest-bearing   deposits  with  other
financial  institutions  increased  approximately  $137,000 as average principal
balances  increased  $5,378,000  to  $16,976,000  for the period ended March 31,
2000, from $11,598,000 for the comparable 1999 period.

Interest and dividend income increased  $1,105,000 or 16.25% for the nine months
ended March 31, 2000  compared to the same period ended 1999.  This increase was
primarily  due to an  increase  in  earnings on loans of $733,000 as the average
principle  balance  increased  $13,210,000 to $115,731,000  for the period ended
March 31, 2000, from  $102,521,000 for the comparable 1999 period.  Interest and
dividend  income  on  investments  and  interest-bearing   deposits  with  other
financial  institutions  increased  approximately  $372,000 as average principal
balances  increased  $6,236,000  to  $17,070,000  for the period ended March 31,
2000, from $10,834,000 for the comparable 1999 period.

Interest expense increased  $304,000 or 25.98%, for the three months ended March
31, 2000 compared to the same period ended 1999. This increase was primarily due
to an increase  in  interest  on  deposits  of  $214,000 as the average  balance
increased  $13,667,000 to $108,980,000 for the period ended March 31, 2000, from
$95,313,000  for the  comparable  1999  period.  Interest  expense  on  advances
increased $89,000 as the average balance increased $5,417,000 to $14,417,000 for
the period ended March 31, 2000, from $9,000,000 for the comparable 1999 period.

Interest expense increased  $629,000 or 17.56%,  for the nine months ended March
31, 2000 compared to the same period ended 1999. This increase was primarily due
to an increase  in  interest  on  deposits  of  $435,000 as the average  balance
increased  $15,117,000 to $107,013,000 for the period ended March 31, 2000, from
$91,897,000  for the  comparable  1999  period.  Interest  expense  on  advances
increased  $194,000 as the average balance  increased  $4,083,000 to $13,139,000
for the period ended March 31, 2000,  from  $9,056,000 for the  comparable  1999
period.

                                      -11-

<PAGE>

Noninterest  income decreased $18,000 or 9.78%, to $171,000 for the three months
ended  March 31,  2000 from  $189,000  for the  comparable  period  ended  1999.
Noninterest  income decreased $68,000 or 11.69%, to $515,000 for the nine months
ended March 31, 2000 from $583,000 for the comparable period ended 1999. For the
three and nine  month  periods of 2000,  gains on sales of fixed  rate  mortgage
loans and related servicing rights decreased by a combined $37,000 and $159,000,
respectively.  These  decreases  are due to the lack of  demand  of  fixed  rate
mortgages as a result of the changing interest rate environment  during the nine
months ended March 31, 2000 in  comparison  to the rate  environment  during the
same period ended 1999.  Offsetting these decreases for the three and nine month
periods of 2000 are increases in service charges on deposit accounts of $ 15,000
and $47,000,  respectively,  and ATM income of $7,000 and $26,000, respectively.
These increases are due primarily to increased customer activity.

Noninterest  expense  increased  $77,000 or 8.25%,  to $1,019,000  for the three
months  ended March 31, 2000,  from  $942,000  for the  comparable  1999 period.
Noninterest  expense  increased  $223,000 or 7.89%,  to $3,048,000  for the nine
months ended March 31, 2000 from $2,825,000 for the comparable 1999 period.  For
the three and nine month periods ended March 31, 2000, compensation and employee
benefits  increased  $54,000 and  $135,000,  respectively,  due to the hiring of
additional  employees for loan collection,  accounting and data  processing,  as
well as,  additional  costs of living  increases  for all full  time  employees.
Occupancy  and  equipment  increased  $30,000  and  $64,000,  respectively,  due
primarily to the incurrence of real estate taxes for the Wintersville  branch of
$3,000  and  $18,000,  respectively,  and  an  increase  in  combined  equipment
depreciation and maintenance of $25,000 and $43,000, respectively.  Professional
fees decreased $0 and $27,000, respectively, primarily due to the preparation of
regulatory reports internally that were previously out sourced.  Data processing
charges decreased $13,000 and $10,000,  respectively due to the conversion to in
house item processing in January 2000. The decrease in data processing is offset
by  similar   increases  in  "occupancy  and  equipment"  for   maintenance  and
depreciation and in "other  expenses" for supplies and postage,  which increased
for the  three and nine  month  periods  $12,000  and $14,  0000,  respectively.
Anticipated  future  decreases  in data  processing  will be offset  by  similar
increases in these line items.  Other  expenses  increased  $12,000 and $68,000,
respectively  due primarily  to,  supplies and postage as discussed  above,  and
additional  Ohio  franchise  tax due to the  Wintersville  branch of $11,000 and
$27,000, respectively.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

As of March 31, 2000, the Company had commitments to fund loans of approximately
$734,000. These loan commitments were funded in April 2000.

Management  monitors both the Company's 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, 2000,  both the Company and the Bank
exceeded the minimum  risk-based and leveraged capital ratio  requirements.  The
Company's and the Bank's total risk-based, Tier I risk-based and Tier I leverage
ratios are 15.89%, 15.22%, 9.72% and 14.84%, 14.18%, and 9.57%, respectively, at
March 31, 2000.




                                      -12-

<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,
                                                            2000         1999
                                                      ------------  ------------

Loans on a nonaccrual basis                                  $355          $456
Loans past due 90 days or more and still accruing             191           309
                                                      ------------  ------------
         Total nonperforming loans                            546           765
                                                      ------------  ------------

Other real estate                                             407            50
Repossessed assets                                             14             9
                                                      ------------  ------------
         Total nonperforming assets                          $967          $824
                                                      ------------  ------------


Nonperforming loans as a percentage of total loans           0.45%         0.69%
                                                      ============  ============

Nonperforming assets as a percentage of total assets         0.66%         0.63%
                                                      ============  ============

Allowance for loan losses to nonperforming loans           120.70%        76.12%
                                                      ============  ============


Nonaccrual loans consist of $310,000 in one to four family residential mortgages
and $45,000 in a multi-family real estate mortgage at March 31, 2000. Management
regularly  performs an analysis to identify  the  inherent  risks of loss in its
loan  portfolio.  This  evaluation  includes  evaluations of  concentrations  of
credit,  past  loss  experience,   current  economic   conditions,   amount  and
composition of loan portfolio  (including loans being specifically  monitored by
management),  estimated fair value of underlying  collateral,  loan  commitments
outstanding, delinquencies, and other information available at such times.

The Company monitors its allowance for loan losses and makes future  adjustments
to the allowance  through the  provision for loan losses as economic  conditions
dictate. Management continues to offer a wide variety of loan products. Although
the Company maintains its allowance for loan losses at a level that it considers
to be adequate to provide for the inherent risk of loss in its portfolio,  there
can be no assurance that future losses will not exceed estimated amounts or that
additional provisions for loan losses will not be required in future periods due
to the higher degree of credit risk included in the loan portfolio.

                                       13-

<PAGE>

The  following  is a breakdown of the loan  portfolio  mix at March 31, 2000 and
June 30, 1999:

                                          March 31,              June 30,
                                            2000                   1999
                                       ----------------     -----------------
Mortgage loans:
           1-4 family                      $62,146,866           $59,673,803
           Multi-family                      5,528,621             2,689,531
           Non-residential                  24,377,631            23,216,018
           Construction                      2,999,365             2,073,165
                                       ----------------     -----------------
                                            95,052,483            87,652,517
                                       ----------------     -----------------
Consumer Loans:
           Home Improvement                  1,268,510             1,195,518
           Automobile                       10,337,746             8,647,953
           Share loans                       1,250,658             1,360,054
           Other                             2,566,385             2,384,401
                                       ----------------     -----------------
                                            15,423,299            13,587,926
                                       ----------------     -----------------

                                       ----------------     -----------------
Commercial Loans                            11,694,429            10,387,570
                                       ----------------     -----------------

Less:
           Loans in process                  1,092,432             1,006,813
           Net deferred loan fees              130,671               139,369
           Allowance for loan losses           658,714               582,280
                                       ----------------     -----------------
                                             1,881,817             1,728,462
                                       ----------------     -----------------
                Total                     $120,288,394          $109,899,551
                                       ================     =================



                                      -14-

<PAGE>

PART II - OTHER INFORMATION


Item 1 - Legal Proceedings

                NONE

Item 2 - Changes in securities

                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 ****
               27    Financial Data Schedule (electronic filing only)

          (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.

*****Incorporated  by  reference  to the June 30,  1999  Form  10KSB  (File  No.
     0-21885) filed on . September 23, 1999.


                                      -15-

<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 12, 2000                By:/s/Stephen M. Gagliardi
                                      -----------------------------------------
                                          Stephen M. Gagliardi
                                          President and Chief Executive Officer


Date:  May 12, 2000                By:/s/Stephen M. Magnone
                                      -----------------------------------------
                                          Stephen M. Magnone
                                          Vice President and CFO


                                       -16