<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                -----------------

                                    FORM 10-Q

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


For Quarter Ended June 30, 1998                   Commission File Number 0-24120


                       WESTERN OHIO FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)


                   DELAWARE                                    31-1403116
       ------------------------------                     ----------------------
          (State of jurisdiction of                         (I.R.S. Employer
       incorporation or organization)                     Identification Number)


   28 EAST MAIN STREET, SPRINGFIELD, OHIO                     45501-0719
  ----------------------------------------                    ----------
  (Address of principal executive offices)                    (Zip Code)


                                 (937) 325-4683
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.


                               YES [X]     NO [ ]



As of August 6, 1998 there were 2,272,589 shares of the Registrant's common
stock issued and outstanding.


<PAGE>   2
                                      INDEX



                       WESTERN OHIO FINANCIAL CORPORATION




<TABLE>
<CAPTION>
PART I.     FINANCIAL INFORMATION                                                                       Pages
-------     ---------------------                                                                       -----
<S>      <C>                                                                                              <C>


Item 1.  Financial Statements:

              Condensed Consolidated Balance Sheets .............................................           3

              Condensed Consolidated  Statements of Income ......................................           4

              Condensed Consolidated Statements of Comprehensive Income .........................           5

              Condensed Consolidated Statements of Cash Flows ...................................           6

              Notes to Condensed Consolidated Financial Statements ..............................           7-8


Item 2.  Management's Discussion and Analysis of

              Financial Condition and Results of Operations .....................................           9-14

Item 3.  Quantitative and Qualitative Disclosures About Market Risk .............................          14


PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports ...................................................................          15


Signatures ......................................................................................          16
</TABLE>




                                      -2-
<PAGE>   3

                       WESTERN OHIO FINANCIAL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                      June 30,        December 31,
(Dollars in thousands)                                                                  1998              1997
---------------------------------------------------------------------------------------------------------------------

                                     ASSETS

<S>                                                                                 <C>                <C>         
Cash and cash equivalents                                                           $    72,199        $     31,239
Securities available for sale, at fair value                                              6,217              22,455
Mortgage-backed securities available for sale, at fair value                             12,378              22,433
Loans receivable, net                                                                   248,121             277,731
Real estate owned                                                                           304                  56
Federal Home Loan Bank stock, at cost                                                     6,705               6,470
Premises and equipment, net                                                               3,976               3,924
Other assets                                                                              4,036               4,099
Goodwill                                                                                  3,359               3,581
---------------------------------------------------------------------------------------------------------------------

Total Assets                                                                        $   357,295             371,988
=====================================================================================================================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Savings deposits                                                                    $   255,847        $    246,909
Advances from the Federal Home Loan Bank of Cincinnati                                   48,111              68,339
Other liabilities                                                                         1,462               2,140
---------------------------------------------------------------------------------------------------------------------

                      Total Liabilities                                                 305,420             317,388
---------------------------------------------------------------------------------------------------------------------

Stockholders' equity:
Common stock; $.01 par value; 7,250,000 shares authorized; 2,645,000
       shares issued; 2,297,589 and 2,383,435 shares outstanding                             26                  26
Additional paid-in capital                                                               40,439              40,458
Unrealized gain on securities available for sale,
  net of income taxes                                                                        22                 309
Deferred management recognition plan expense                                               (312)               (396)
Unallocated shares held by employee stock ownership plan                                 (1,428)             (1,547)
Treasury stock; 347,411 and 261,565 shares at cost respectively                          (7,830)             (5,448)
Retained earnings (substantially restricted)                                             20,958              21,198
---------------------------------------------------------------------------------------------------------------------

                      Total Stockholders' Equity                                         51,875              54,600
---------------------------------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Equity                                          $   357,295        $    371,988
=====================================================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>



                                       -3-
<PAGE>   4

                       WESTERN OHIO FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                         For the Quarter Ended          For the Six Months Ended
                                                                June 30,                       June 30,
(Dollars in thousands except per share amounts)          1998            1997            1998            1997

----------------------------------------------------------------------------------------------------------------
<S>                                                   <C>             <C>             <C>             <C>       
Interest Income:
  Interest and fees on loans                          $    5,206      $    6,044      $   10,643      $   11,740
  Interest and dividends on investment securities            887             712           1,675           1,811
  Interest on mortgage-backed securities                     326             480             693             675
  Other interest income                                      132             178             281             303
----------------------------------------------------------------------------------------------------------------

     Total interest income                                 6,551           7,414          13,292          14,529
----------------------------------------------------------------------------------------------------------------

Interest expense:
  Interest on deposits                                     3,255           3,033           6,438           5,969
  Interest on borrowings                                     738           1,515           1,710           3,010
----------------------------------------------------------------------------------------------------------------

     Total Interest expense                                3,993           4,548           8,148           8,979
----------------------------------------------------------------------------------------------------------------

Net interest income                                        2,558           2,866           5,144           5,550

Provision for losses on loans and securities                (261)             43            (261)            109

Net Interest income after provision for losses             2,819           2,823           5,405           5,441

Gain on sale of investments                                  159              17             307              57

Gain on sale of loans                                         76               -             101               -

Other income                                                 242             115             462             381

Other expense                                             (2,544)         (2,226)         (4,806)         (4,549)
----------------------------------------------------------------------------------------------------------------


     Income before income tax expense                        752             729           1,469           1,330

Income tax expense                                           282             277             563             505

----------------------------------------------------------------------------------------------------------------

     Net Income                                       $      470      $      452      $      906      $      825

================================================================================================================
Basic earnings per common and
  and common equivalent share                         $     0.21      $     0.21      $     0.40      $     0.37
Fully diluted earnings per common
  and common equivalent share                         $     0.21      $     0.20      $     0.39      $     0.37
================================================================================================================
See Notes to Condensed Consolidated Financial Statements.
</TABLE>

                                      -4-
<PAGE>   5



                       WESTERN OHIO FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                         For the Quarter Ended       For the Six Months Ended
                                                         June 30,       June 30,      June, 30     June 30,
(Dollars in thousands)                                     1998          1997           1998          1997

-------------------------------------------------------------------------------------------------------------

<S>                                                    <C>            <C>            <C>            <C>      
Net income                                             $     470      $     452      $     906      $     825
Other comprehensive income, net of tax:
Unrealized gains / (losses) arising during period             13            635             20            201
Less:  reclassification adjustment for accumulated
  gains/losses included in net income                       (159)           (17)          (307)           (57)

-------------------------------------------------------------------------------------------------------------

Other comprehensive income                                  (146)           618           (287)           144

-------------------------------------------------------------------------------------------------------------

Comprehensive income                                   $     324      $   1,070      $     619      $     969

=============================================================================================================
</TABLE>





                                      -5-
<PAGE>   6

                       WESTERN OHIO FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         For the Six Months Ended
                                                                                June 30,
(Dollars in thousands except per share amounts)                            1998           1997
-------------------------------------------------------------------------------------------------

<S>                                                                   <C>             <C>        
Cash flows from operating activities                                  $      665      $     (697)

-------------------------------------------------------------------------------------------------

  Federal Home Loan Bank Stock:  Purchases                                     -            (167)
  Loans:
    Originations                                                         (18,340)        (36,534)
    Purchases                                                                  -          (4,405)
    Collections                                                           48,179          21,571
    Sales                                                                      -           1,706
  Mortgage-backed securities:
    Collections                                                            2,821           2,160
    Sales                                                                  7,119          10,684
  Investment securities:
    Purchases                                                                  -          (2,001)
    Maturities                                                             1,000           1,300
    Sales                                                                 15,193               -
  Property and equipment:
    Additions                                                               (222)           (301)
    Sale proceeds                                                              -             158
  Real Estate Owned
    Purchases                                                               (248)              -

-------------------------------------------------------------------------------------------------

        Net cash provided by investing activities                         55,502          (5,829)

-------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Net increase (decrease) in savings deposits                              8,949           6,924
  Net decrease in advances from borrowers for taxes and insurance           (321)           (530)
  Dividends paid                                                          (1,145)         (1,171)
  Advances from Federal Home Loan Bank:
    Net borrowings                                                         5,690          31,040
    Repayments                                                           (25,904)        (33,262)
  Stock options, net                                                           -             671
  Treasury stock repurchase                                               (2,476)           (206)

-------------------------------------------------------------------------------------------------

        Net cash provided (used) by financing activities                 (15,207)          3,466

-------------------------------------------------------------------------------------------------

Net Increase (decrease) in cash and cash equivalents                      40,960          (3,060)

Cash and cash equivalents:
  Beginning                                                               31,239          15,611

-------------------------------------------------------------------------------------------------

  Ending                                                              $   72,199      $   12,551

=================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


                                      -6-
<PAGE>   7

                       WESTERN OHIO FINANCIAL CORPORATION

              Notes to Condensed Consolidated Financial Statements

1.      Principles of consolidation:
        ----------------------------

        The financial statements for 1998 are presented for Western Ohio
        Financial Corporation ("the Company") and its wholly-owned subsidiary,
        Cornerstone Bank ("Cornerstone"), a combination of the former
        Springfield Federal Savings Bank ("Springfield"), Mayflower Federal
        Savings Bank ("Mayflower"), and Seven Hills Savings Association ("Seven
        Hills"). The statements of income for the three months and six months
        ended June 30, 1998, and 1997, are for the Company and Cornerstone
        ("formerly Springfield, Mayflower and Seven Hills").

2.      Basis of presentation:
        ----------------------

        The accompanying unaudited condensed financial statements have been
        prepared in accordance with generally accepted accounting principles for
        interim financial reporting and with the instructions to Form 10-Q and
        Article 10 of Regulation S-X. Accordingly, they do not include all of
        the information and footnotes required by generally accepted accounting
        principles for complete financial statements. In the opinion of
        management, all adjustments (consisting of normal recurring accruals)
        considered necessary for a fair presentation have been included. These
        unaudited condensed financial statements should be read in conjunction
        with the financial statements and notes thereto included in the
        Company's annual report on Form 10-K for the year ended December 31,
        1997. The financial data and results of operations for periods presented
        may not necessarily reflect the results to be anticipated for the entire
        year.

3.      Earnings per common and common equivalent share:
        ------------------------------------------------

        Basic earnings per share are computed by dividing income available to
        common shareholders by the weighted-average number of common shares
        outstanding for the period. Diluted earnings per share are computed by
        dividing income available to common shareholders by the potential
        dilution of securities that could share in earnings such as stock
        options, warrants or other similar items. The fully diluted weighted
        average number of common shares giving effect to options outstanding
        during the three month and six month periods ended June 30, 1998 were
        2,287,428 and 2,307,242, respectively. The basic weighted average number
        of common shares during the three month and six month periods ended June
        30, 1998 were 2,240,706 and 2,257,244, respectively. The fully diluted
        weighted average number of common shares giving effect to options
        outstanding during the three month and six month periods ended June 30,
        1997 were 2,271,329 and 2,250,508, respectively. The basic weighted
        average number of common shares during the three month and six month
        periods ended June 30, 1997 were 2,223,014 and 2,201,084, respectively.

4.      Recent accounting pronouncements
        --------------------------------

        Statement of Financial Accounting Standards ("SFAS") No. 125, Accounting
        for Transfers and Servicing of Financial Assets and Extinquishments of
        Liabilities, was adopted by the Company in 1997. SFAS No. 125 revises
        the accounting for transfers of financial assets such as loans and
        securities, and for distinguishing between sales and secured borrowings.
        The adoption of the portions of SFAS No. 125 relating to securities
        lending, repurchase agreements and other similar transactions are not
        required to be adopted until 1998. SFAS No. 125 did not have a material
        impact on the Company's financial statements, nor are the portions to be
        adopted in 1998 expected to materially impact the financial statements.

        SFAS No. 128, Earnings Per Share, became effective for the Company in
        1997. SFAS No. 128 requires dual presentation of basic and diluted
        earnings per share ("EPS") for entities with complex capital structures.
        Basic EPS includes no dilution and is computed by dividing income
        available to common shareholders by weighted average common shares
        outstanding for the period. Diluted EPS reflects the potential dilution
        of securities that could share in earnings such as stock options,
        warrants or other similar items.

                                      -7-
<PAGE>   8

        SFAS No. 129, Disclosures of Information about Capital Structure,
        consolidated existing accounting guidance in relation to disclosure
        about a Company's capital structure. Public companies generally have
        always been required to make disclosures now required by SFAS No. 129
        and, therefore, SFAS No. 129 did not impact the Company's disclosures.

        SFAS No. 130, Reporting Comprehensive Income, establishes standards for
        reporting and display of comprehensive income and its components
        (revenues, expenses, gains and losses) in a full set of general-purpose
        financial statements. SFAS No. 130 is effective for the Company in 1998.
        Reclassification of financial statements for earlier periods provided
        for comparative purposes is required.

        SFAS No. 131, Disclosures about Segments of an Enterprise and Related
        Information, changes the way public business enterprises report
        information about operating segments in annual financial statements and
        requires those enterprises to report selected information about
        reportable segments in interim financial reports issued to shareholders.
        It also establishes standards for related disclosures about products and
        services, geographic areas and major customers. SFAS No. 131 becomes
        effective for the Company in 1998.


                                      -8-
<PAGE>   9

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         Impact of Inflation and Changing Prices - The consolidated financial
statements and related data presented herein have been prepared according to
generally accepted accounting principles which require the measurement of
financial position and operating results in terms of historical dollars without
considering changes in the relative purchasing power of money over time due to
inflation. An exception to historical cost presentation is the valuation of
securities available for sale under FASB No. 115. The primary assets and
liabilities of Western Ohio Financial Corporation ("the Company") are monetary
in nature. As a result, interest rates have a more significant impact on the
Company's performance than the effects of general levels of inflation. Interest
rates do not necessarily move in the same direction or magnitude as the prices
of goods and services.

         Forward-Looking Statements - When used in this filing and in future
filings by the Company with the Securities and Exchange Commission, in the
Company's press releases or other public or shareholder communications, or in
oral statements made with the approval of an authorized executive officer, the
words or phrases "would be", "will allow", "intends to", "will likely result",
"are expected to", "will continue", "is anticipated", "estimate", "project" or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to risks and uncertainties, including but not limited to
changes in economic conditions in the Company's market area, changes in policies
by regulatory agencies, fluctuations in interest rates, demand for loans in the
Company's market area and competition, all or some of which could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as of
the date made, and advises readers that various factors, including regional and
national economic conditions, substantial changes in levels of market interest
rates, credit and other risks of lending and investment activities and
competitive and regulatory factors, could affect the Company's financial
performance and could cause the Company's actual results for future periods to
differ materially from those anticipated or projected.

         The Company does not undertake, and specifically disclaims any
obligation, to update any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such statements.

         Impact of the Year 2000 - The Company has conducted a comprehensive
review of its computer systems to identify applications that could be affected
by the "Year 2000" issue, and has developed an implementation plan to address
the issue. The Company's data processing is performed primarily by a third-party
service bureau with part of its processing being performed in-house; however
software and hardware utilized are under maintenance agreements with third-party
vendors, consequently the Company is very dependent on those vendors to conduct
its business. The Company has already contacted each vendor to request time
tables for Year 2000 compliance and expected costs, if any, to be passed along
to the Company. To date, the Company has been informed that its primary service
providers anticipate that the majority of reprogramming efforts will be
completed by December 31, 1998, allowing the Company adequate time for testing.
Certain other vendors have not yet responded, however. The Company will pursue
other options if it appears that these vendors will be unable to comply.
Management does not expect these costs to have a significant impact on its
financial position or results of operations. However, there can be no assurance
that the vendors systems will be Year 2000 compliant. Consequently the Company
could incur incremental costs to convert to another vendor. The Company has
identified certain of its hardware and software equipment that will not be Year
2000 compliant and intends to purchase new equipment and software prior to
December 31, 1998. These capital expenditures are expected to total
approximately $185,000.

FINANCIAL CONDITION
-------------------

         Western Ohio Financial Corporation ("the Company") is the holding
company of Cornerstone Bank ("Cornerstone") formerly a combination of
Springfield Federal Savings Bank, Mayflower Federal Savings Bank, and Seven
Hills Savings Association. Consolidated assets of the Company totaled $357.3
million at June 30, 1998, a decrease of $14.7 million from the December 31,
1997, total of $372.0 million. The decrease in assets

                                      -9-
<PAGE>   10

is primarily the result of a decrease of $29.6 million in loans receivable
coupled with a decrease of $16.2 million in investment securities and $10.0
million in mortgage-securities offset by an increase of $41.0 million in cash
and cash equivalents. Liabilities decreased $12.0 million primarily due to a
decrease in Federal Home Loan Bank advances of $20.2 million offset by an
increase in savings deposits of $8.9 million.

         Loans receivable decreased $29.6 million during the six months ended
June 30, 1998, decreasing from $277.7 million as of December 31, 1997 to $248.1
million on June 30, 1998. This decrease is in response to management's decision
to place greater emphasis on selling one-to-four-family loans in the secondary
market coupled with an increased rate of repayment on similar loans in its loan
portfolio. Management made the decision to emphasize selling loan production due
to its anticipation of a flat interest rate yield curve in 1998. While the
majority of new loan production will be designated as held for sale, management
is shifting its strategy slightly to include the possibility of retaining some
loans in portfolio. Management believes that overall it can achieve greater
returns through secondary market sales on a servicing released basis.

         In December 1997, the Company established an additional provision for
loan losses of $2.3 million. Management identified potential losses and
increased its provision for several problem loans during the fourth quarter of
1997. These loans were primarily of a commercial nature. Management reduced the
allowance $261,000 during the quarter ended June 30, 1998, as the result of its
decreasing overall loans receivable portfolio and the successful resolution of a
major loan of concern. Management believes that the reduced allowance is
adequate given the area economic conditions and its current loan portfolio
composition. In addition, the Company is aware of no regulatory directives or
suggestions that the Company make additional provisions for losses on loans.

         Cash and cash equivalents increased by $41.0 million to $72.2 million
on June 30, 1998, from $31.2 million on December 31, 1997. Cash and cash
equivalents consist of cash, checking deposits and federal funds deposited at
other financial institutions.

         Investment securities available for sale decreased $16.2 million or
72.3% from $22.4 million at December 31, 1997, to $6.2 million on June 30, 1998.
The decrease is the result of a sale of $15.2 million of investment securities
in addition to the maturity of securities totaling $1.0 million.

         The Company's mortgage-backed securities available for sale decreased
by $10.0 million or 44.6% from $22.4 million on December 31, 1997, to $12.4
million on June 30, 1998. This was due to the sale of $7.0 million of securities
in addition to principal repayments on existing mortgage-backed securities
available for sale. A portion of these securities is often referred to as
derivatives. The derivative securities are all adjustable rate in nature and
were not "high risk" securities under the criteria set forth by the Federal
Financial Institutions Examination Council ("FFIEC").

         The investment in the stock of the Federal Home Loan Bank of Cincinnati
increased by $235,000 from $6.5 million at December 31, 1997, to $6.7 million at
June 30, 1998. The increase is due primarily to the stock dividends paid by the
Federal Home Loan Bank. This investment is dictated by Cornerstone's membership
in the Federal Home Loan Bank and is a factor of the Cornerstone's borrowings
and total assets. Currently, dividends on such stock are paid primarily in the
form of additional shares of stock.

         Other assets decreased by $63,000 over the six months ended June 30,
1998, primarily due to the decrease in prepaid expenses.

         Deposits increased by $8.9 million or 3.6% during the six months ended
June 30, 1998. This increase is generally due to Cornerstone's aggressive
attempt to increase deposits, especially in its checking account base.

         Advances from the Federal Home Loan Bank of Cincinnati decreased by
$20.2 million or 29.6% as the result of repayment of borrowings. The repayment
of the borrowings was a result of the decrease in net loans receivable over the
first six months of 1998. The advances are fixed rate advances utilized by
Cornerstone.

                                      -10-
<PAGE>   11

         Other liabilities decreased $678,000 from $2.1 million on December 31,
1997, to $1.4 million on June 30, 1998. This decrease is primarily due to a
decrease in escrow holdings as taxes are paid and the decline in the overall
loan receivable portfolio.

         Total stockholders' equity decreased $2.7 million from $54.6 million at
December 31, 1997, to $51.9 million at June 30, 1998, a decrease of 5.0%. This
decline is primarily due to an increase in treasury stock repurchases.

         As of June 30, 1998, the Company had commitments to make $1.1 million
of residential loans and no nonresidential mortgage loans. It is expected that
these loans will be funded within 30 days. The Company also had $1.4 million in
commitments to fund loans on residential properties under construction. These
commitments are anticipated to be filled within three to six months. Unused
commercial lines of credit were $515,000 and unused home equity lines of credit
were $6.3 million.
Commitments to originate nonmortgage loans totaled $20,000.

         On June 16, 1998, the Company announced the proposed sale of its
deposits in the Cincinnati market. The combined total of deposits that were the
object of the sale were approximately $79.4 million. This transaction represents
a part of management's broader strategy of concentrating more fully on our
traditional strengths and greater west central Ohio market area. This
divestiture should significantly enhance the Company's efficiency ratio and
allow the Company to improve its financial performance. The Company expects to
take an estimated one-time charge of $913,000 upon completion of the sale of its
Cincinnati offices.


                                      -11-
<PAGE>   12

CAPITAL RESOURCES AND LIQUIDITY OF CORNERSTONE BANK
---------------------------------------------------

         The Office of Thrift Supervision (OTS) has three minimum regulatory
capital standards. During the three months ended June 30, 1998, Cornerstone
continued to comply with all three requirements. The following is a summary of
the Bank's approximate regulatory capital position, in dollars (millions) and as
a percentage of regulatory assets, at June 30, 1998.

<TABLE>
<CAPTION>
                                      Actual                     Required                    Excess
                                      ------                     --------                    ------
<S>                             <C>          <C>             <C>         <C>           <C>          <C>  
Tangible Capital                $43.2        12.2%           $5.4        1.5%          $37.8        10.7%
Core Capital                    $43.2        12.2%          $14.1        4.0%          $29.1         8.2%
Risk-Based Capital              $45.3        23.3%          $15.6        8.0%          $29.7        15.3%
</TABLE>

         Federal regulations require the Bank to maintain an average daily
balance of liquid assets equal to at least 4% of the sum of its average daily
balance of net withdrawable deposit accounts and borrowings payable in one year
or less for the preceding calendar quarter. This regulation changed in December
1997 by modifying the requirement to be 4% instead of 5% for overall liquidity
and eliminating the short term requirement of 1%. In addition, the regulation
now allows for mortgage-backed and other securities to be included as part of
liquid assets without any term limitation. Liquidity is measured by cash and
certain investments that are not committed, pledged, or required to liquidate
specific liabilities. The following is a summary of Cornerstone's regulatory
liquidity ratio.


<TABLE>
<CAPTION>
                                    June 30,               March 31,         December 31,       September 30, 
                                      1998                   1998                1997               1997
                                      ----                   ----                ----               ----
<S>                                   <C>                  <C>                   <C>                   <C> 
Liquid Assets                         27.4%                26.4%                 23.0%                 5.7%
</TABLE>


         The above tables pertain only to Cornerstone. The resources of the
Company are not considered in meeting the above requirements.









                                      -12-
<PAGE>   13

RESULTS OF OPERATIONS
---------------------


General
-------

         For the six months ended June 30, 1998, net income increased by $81,000
compared to the six months ended June 30, 1997. The largest factor in the
increase was the increase of gain on sales of investments. These sales included
the sale of Federal Home Loan Mortgage Corporation Stock in addition to sales of
mortgage-backed securities and an agency callable security. For the quarter
ended June 30, 1998, net income rose $18,000 compared to the quarter ended June
30, 1997. The sale of mortgage-backed securities and an agency callable security
was the primary reason for the increase.

Interest Income
---------------

         For the six months ended June 30, 1998, interest income decreased by
$1.2 million compared to the six months ended June 30, 1997, from $14.5 million
to $13.3 million. Interest and fees on loans decreased by $1.1 million for the
six months ended June 30, 1998, compared to the six months ended June 30, 1997.
This is due primarily to lower outstanding balances which are attributable to
the repayment of loans in portfolio. Interest income decreased $863,000 for the
three month period ended June 30, 1998, compared to the three month period ended
June 30, 1997. The major causes of the decline are the reduced balances of loans
and mortgage-backed securities.

Interest Expense
----------------

         Interest expense decreased by $831,000, from $9.0 million for the six
months ended June 30, 1997, as compared to $8.1 million for the six months ended
June 30, 1998. The decrease was primarily due to the decrease in the level of
borrowing from the Federal Home Loan Bank. Funds from the repayment of loans
receivable were used to repay advances owed to the Federal Home Loan Bank.
Management has also aggressively marketed its deposit programs using the funds
to repay Federal Home Loan Bank advances. The interest on borrowings decreased
$1.3 million from $3.0 million for the six months ended June 30, 1997, to $1.7
million for the six months ended June 30, 1998. Interest expense decreased by
$555,000, from $4.5 million for the three months ended June 30, 1997, as
compared to $4.0 million for the three months ended June 30, 1998. The interest
on borrowings decreased $777,000 from $1.5 million for the three months ended
June 30, 1997, to $738,000 for the three months ended June 30, 1998.
These borrowings were fixed rate in nature.

Net Interest Income
-------------------

         Net interest income decreased $406,000 to $5.1 million for the six
months ended June 30, 1998, as compared to $5.5 million for the six months ended
June 30, 1997. This is primarily due to the decline in total outstanding loans
receivable. In addition, the repayment of Federal Home Loan Bank advances and
the increase in deposits contributed to the change in the interest expense
composition affecting net interest income. Net interest income decreased
$309,000 to $2.6 million for the three months ended June 30, 1998, as compared
to $2.9 million for the three months ended June 30, 1997.

Provision for Losses on
-----------------------

         There was a recovery of the provision of $261,000 shown for the three
and six month periods ended June 30, 1998. As explained in the financial
condition section of this filing, management reduced the allowance $261,000
during the quarter ended June 30, 1998, as the result of its decreasing overall
loan portfolio and successful resolution of a major loan of concern. This
adjustment to the allowance provided an increase to income of $304,000 and
$370,000 for the three and six month periods ended June 30, 1998, respectively
as compared to the three and six month periods ended June 30, 1997.


                                      -13-
<PAGE>   14


Gain on Sale of Investments
---------------------------

         The gain on sale of investments was $307,000 for the six month period
ended June 30, 1998. This is an increase of $250,000 or 438.6% over the $57,000
reported for the six month period ended June 30, 1997. The gain on sale of
investments for the three month period ended June 30, 1998 was $159,000, an
increase of $142,000 over the $17,000 reported for the three month period ended
June 30, 1997. The sales during the three month period ended June 30, 1998 were
of mortgage-backed securities and agency callable securities.

Gain on Sale of Loans
---------------------

         There was a gain on sale of loans of $76,000 and $101,000 for the three
and six month periods ended June 30, 1998 respectively. No gain on sale of loans
was reported for the three or six month periods ended June 30, 1997.

Other Income
------------

         Other income is reported as $462,000 for the six month period ended
June 30, 1998, an increase of $81,000 or 21.3% over the $381,000 reported for
the six month period ended June 30, 1997. Other income increased from $115,000
for the three months ended June 30, 1997, to $242,000 for the three months ended
June 30, 1998. This increase is related to increased efforts to generate service
fees by Cornerstone with its checking account program. Management is actively
taking steps to increase this area of income generation.

Other Expense
-------------

         Total other expense increased $257,000 to $4.8 million for the six
month period ended June 30, 1998 from $4.5 million for the six month period
ended June 30, 1997. Total other expense increased by $318,000 to $2.5 million
for the three month period ended June 30, 1998 from $2.2 million for the three
month period ended June 30, 1997. Management increased expenditures in marketing
and operations to generate and support a higher level of business activity.

Income Tax Expense
------------------

         Income tax expense increased $5,000 and $58,000 for the three and six
month periods ended June 30, 1998 respectively. These changes are the result of
changes in earnings before taxes.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------

         There have been no material changes in the quantitative and qualitative
disclosures about market risks as of June 30, 1998 from that presented in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997.





                                      -14-
<PAGE>   15

                                     PART II
                                     -------

Item 6.  Exhibits and Reports
------

(b.)     A Form 8-K was filed June 17, 1998 that included exhibits of a Press
         Release dated June 16, 1998, announcing the sale of a branch of
         Cornerstone Bank to Oak Hills Savings and Loan Company, F.A. and a
         Press Release dated June 16, 1998, announcing the sale of three
         branches of Cornerstone Bank to Enterprise Federal Savings Bank.







                                      -15-
<PAGE>   16

                                   SIGNATURES


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

                                    WESTERN OHIO FINANCIAL CORPORATION
                                    Registrant


Date:    August 14, 1998            /s/ John W. Raisbeck
       --------------------         -------------------------------------
                                    John W. Raisbeck, President
                                    and Chief Executive Officer
                                    (Duly Authorized Officer)



Date:    August 14, 1998            /s/ Thomas A. Estep
       --------------------         -------------------------------------
                                    Thomas A. Estep, Vice President,
                                    Treasurer and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)


                                      -16-