<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 2001
                                               ------------------

                                       OR

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

For the transition period from ______________to  _______________

Commission file Number 0-21720
                       -------

                       SLIPPERY ROCK FINANCIAL CORPORATION
                       -----------------------------------
             (Exact Name of registrant as specified in its charter)

        PENNSYLVANIA                                      25-1674381
        ------------                                      ----------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

        100 SOUTH MAIN STREET
     SLIPPERY ROCK, PENNSYLVANIA                              16057
     ---------------------------                              -----
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (724) 794-2210

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act 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 requirement for the past 90
days. YES  X   NO
          ---     ---

As of November 1, 2001, there were 2,769,874 shares outstanding of the issuer's
class of common stock.



<PAGE>



                       SLIPPERY ROCK FINANCIAL CORPORATION
                     INDEX TO QUARTERLY REPORT ON FORM 10-Q

PART I  FINANCIAL INFORMATION                                              PAGE

        ITEM 1.  Financial Statements (unaudited)

                 Consolidated Balance Sheet, September 30, 2001
                 and December 31, 2000                                      3

                 Consolidated Statements of Income
                 Three months ended September 30, 2001 and 2000
                 and Nine months ended September 30, 2001 and 2000          4

                 Consolidated Statement of Changes in
                 Stockholders' Equity, Nine months ended
                 September 30, 2001 and 2000                                5

                 Consolidated Statement of Cash Flows
                 Nine months ended September 30, 2001 and 2000              6

                 Notes to Consolidated Financial Statements                 7

        ITEM 2.  Management's Discussion and Analysis of
                          Financial Condition and Results of Operations     8

        ITEM 3.  Quantitative and Qualitative Disclosures
                 About Market Risk                                         13

PART II OTHER INFORMATION

        ITEM 1.  Legal Proceedings                                         15

        ITEM 2.  Changes in Securities and Use of Proceeds                 15

        ITEM 3.  Defaults upon Senior Securities                           15

        ITEM 4.  Submission of Matters to a Vote of Security Holders       15

        ITEM 5.  Other Information                                         15

        ITEM 6.  Exhibits and Reports of Form 8-K                          15

        SIGNATURES                                                         16



                                       2
<PAGE>


               SLIPPERY ROCK FINANCIAL CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                             (UNAUDITED - $ IN 000)


<TABLE>
<CAPTION>
                                                                     September 30,     December 31,
                                                                         2001             2000
                                                                     -------------     ------------
<S>                                                                    <C>              <C>
ASSETS
  Cash and due from banks                                              $  17,025         $  12,590
  Interest-bearing deposits in other banks                                    21                52
  Federal funds sold                                                      10,700              --
  Mortgage loans held for sale                                             1,448             1,372
  Investment securities:
     Available for sale                                                   41,395            24,290
     Held to maturity (market value $1,136 and $2,986)                     1,122             2,162
  Loans                                                                  240,723           231,321
  Less allowance for loan losses                                           2,314             2,142
                                                                       ---------         ---------

        Net loans                                                        238,409           229,179
  Premises and equipment                                                   7,555             6,871
  Accrued interest and other assets                                        6,934             6,926
                                                                       ---------         ---------

        Total assets                                                   $ 324,609         $ 283,442
                                                                       =========         =========

LIABILITIES
  Deposits:
    Noninterest-bearing demand                                         $  41,609         $  35,604
    Interest-bearing demand                                               24,844            25,452
    Savings                                                               37,401            28,776
    Money market                                                          21,529            20,734
    Time                                                                 137,067           113,013
                                                                       ---------         ---------

          Total deposits                                                 262,450           223,579

Short-term borrowings                                                       --              30,000
Other borrowings                                                          30,280               336
Accrued interest and other liabilities                                     1,717             1,384
                                                                       ---------         ---------

          Total liabilities                                              294,447           255,299
                                                                       ---------         ---------

STOCKHOLDERS' EQUITY
  Common stock (par value $0.25; 12,000,000 shares authorized;
     2,769,874 and 2,769,381 shares issued and outstanding)                  692               692
  Surplus                                                                 10,559            10,552
  Retained earnings                                                       18,515            16,924
  Accumulated other comprehensive income (loss)                              396               (25)
                                                                       ---------         ---------

          Total stockholders' equity                                      30,162            28,143
                                                                       ---------         ---------

          Total liabilities and stockholders' equity                   $ 324,609         $ 283,442
                                                                       =========         =========
</TABLE>


See accompanying notes to the unaudited consolidated financial statements


                                       3
<PAGE>


               SLIPPERY ROCK FINANCIAL CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
                 (UNAUDITED - $ IN 000 EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                           Three Months Ended                     Nine Months Ended
                                                               September 30,                        September 30,
                                                          2001               2000               2001              2000
                                                       -----------------------------        ------------------------------
<S>                                                   <C>                <C>               <C>                 <C>
INTEREST INCOME
  Loans, including fees                                $    5,075         $    4,816         $   15,312         $   13,254
  Interest-bearing deposits in other banks                      1                  1                  2                  2
  Federal funds sold                                          157                 65                709                125
  Interest on investment securities:
     Taxable                                                  230                136                513                448
     Exempt from federal income tax                           219                205                616                619
     Dividends                                                 28                 20                 83                 58
                                                       ----------         ----------         ----------         ----------
                        Total interest income               5,710              5,243             17,235             14,506
INTEREST EXPENSE
  Deposits                                                  2,459              1,995              7,596              5,478
  Borrowed funds                                              397                407              1,231                812
                                                       ----------         ----------         ----------         ----------
                        Total interest expense              2,856              2,402              8,827              6,290
                                                       ----------         ----------         ----------         ----------
NET INTEREST INCOME                                         2,854              2,841              8,408              8,216
Provision for loan losses                                     105                173                315                397
                                                       ----------         ----------         ----------         ----------
NET INTEREST INCOME AFTER PROVISION
  FOR LOAN LOSSES                                           2,749              2,668              8,093              7,819

OTHER INCOME
  Service charges on deposit accounts                         261                207                726                626
  Trust department income                                      21                 19                126                 99
  Net gains on sales of investment securities                  37               --                   37               --
  Net gains on sales of loans                                 294                 32                488                 60
  Mastermoney Interchange fee income                           61                 45                177                127
  Other income                                                178                150                506                431
                                                       ----------         ----------         ----------         ----------
                        Total other income                    852                453              2,060              1,343
OTHER EXPENSE
  Salaries and employee benefits                            1,098                875              3,146              2,570
  Occupancy expense, net                                      166                110                483                312
  Furniture and equipment expense                             191                209                595                606
  Data processing expense                                      97                 83                258                201
  Stationery, printing and supplies                            51                 63                161                170
  Pennsylvania shares tax                                      69                 63                202                183
  Other                                                       495                505              1,461              1,316
                                                       ----------         ----------         ----------         ----------
                        Total other expense                 2,167              1,908              6,306              5,358
                                                       ----------         ----------         ----------         ----------

Income before income taxes                                  1,434              1,213              3,847              3,804
Income tax expense                                            434                356              1,148              1,116
                                                       ----------         ----------         ----------         ----------

NET INCOME                                             $    1,000         $      857         $    2,699         $    2,688
                                                       ==========         ==========         ==========         ==========

PER SHARE DATA
      Average shares for the period, Basic              2,769,671          2,769,381          2,769,489          2,769,188
      Average shares for the period, Diluted            2,769,671          2,769,381          2,769,489          2,769,920
      Earnings per share, Basic                        $     0.36         $     0.31         $     0.97         $     0.97
      Earnings per share, Diluted                      $     0.36         $     0.31         $     0.97         $     0.97
      Dividends paid                                   $     0.14         $     0.10         $     0.40         $     0.30

</TABLE>

See accompanying notes to the unaudited consolidated financial statements


                                       4
<PAGE>



               SLIPPERY ROCK FINANCIAL CORPORATION AND SUBSIDIARY
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             (UNAUDITED - $ IN 000)





<TABLE>
<CAPTION>

                                                                                   ACCUMULATED
                                                                                     OTHER
                                                  COMMON                RETAINED  COMPREHENSIVE           COMPREHENSIVE
                                                   STOCK   SURPLUS      EARNINGS  INCOME/(LOSS)   TOTAL      INCOME
                                             --------------------------------------------------------------------------
<S>                                              <C>     <C>          <C>           <C>        <C>           <C>
  BALANCE, DECEMBER 31, 2000                      $ 692   $ 10,552     $ 16,924      $ (25)     $ 28,143      $  -

  Net Income                                                              2,699                    2,699       2,699
  Net unrealized gain on securities                                                    421           421         421
  Stock issued per directors
      compensation plan                                          7                                     7
  Cash dividends ($0.40 per share)                                       (1,108)                  (1,108)
                                             --------------------------------------------------------------------------
  BALANCE, SEPTEMBER 30, 2001                     $ 692   $ 10,559     $ 18,515      $ 396      $ 30,162      $3,120
                                             ==========================================================================
</TABLE>

 See accompanying notes to the unaudited consolidated financial statements



                                       5
<PAGE>






               SLIPPERY ROCK FINANCIAL CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                             (UNAUDITED - $ IN 000)



<TABLE>
<CAPTION>
                                                                      Nine Months Ended
                                                                        September 30,
                                                                    2001             2000
                                                                  --------          --------
<S>                                                              <C>               <C>
OPERATING ACTIVITIES
     Net income                                                   $  2,699          $  2,688
     Adjustments to reconcile net income to
        net cash provided by operating activities:
       Provision for loan losses                                       315               397
       Depreciation and amortization                                   577               444
       Deferred taxes                                                  (80)              (87)
       Origination of loans held for sale                          (18,618)           (6,325)
       Proceeds from sale of loans held for sale                    18,762             5,857
       Gain on sale of loans                                          (488)              (60)
       Gain on sale of investment securities                           (37)             --
       Decrease (increase) in accrued interest receivable               36              (223)
       Increase in accrued interest payable                            203               299
       Other, net                                                       47               512
                                                                  --------          --------
         Net cash provided by operating activities                   3,416             3,502
                                                                  --------          --------

INVESTING ACTIVITIES
  Investment securities available for sale:
    Proceeds from sales                                              4,539              --
    Repayments                                                       1,941             2,072
    Purchases                                                      (22,896)             (387)
  Investment securities held to maturity:
    Repayments                                                       1,040               345
    Purchases                                                         --                (100)
  Increase in loans, net                                           (15,851)          (39,836)
  Purchase of premises and equipment                                (1,228)           (1,863)
  Proceeds from sale of student loans                                5,741              --
  Proceeds from sale of credit card portfolio                          687              --
                                                                  --------          --------
         Net cash used for investing activities                    (26,027)          (39,769)
                                                                  --------          --------

FINANCING ACTIVITIES
  Increase in deposits, net                                         38,872            23,102
  Increase (decrease) in short term borrowings, net                (30,000)           16,000
  Proceeds from other borrowings                                    30,000               186
  Repayments of other borrowings                                       (56)              (46)
  Proceeds from stock issued                                             7                 5
  Cash dividends paid                                               (1,108)             (830)
                                                                  --------          --------
         Net cash provided by financing activities                  37,715            38,417
                                                                  --------          --------

         Increase in cash and cash equivalents                      15,104             2,150

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                    12,642            11,306
                                                                  --------          --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $ 27,746          $ 13,456
                                                                  ========          ========

Cash payments for interest                                        $  8,624          $  5,991
Cash payments for income taxes                                    $  1,145          $  1,085

</TABLE>

See accompanying notes to the unaudited consolidated financial statements


                                       6
<PAGE>



               SLIPPERY ROCK FINANCIAL CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and, therefore, do not
necessarily include all information, which would be included in audited
financial statements. The information furnished reflects all normal recurring
adjustments, which are, in the opinion of management, necessary for fair
statement of the results of the period. The results of operations for the
interim periods are not necessarily indicative of the results to be expected for
the full year.

NOTE 2 - RECLASSIFICATION OF COMPARATIVE AMOUNTS

Certain comparative amounts for the prior periods have been reclassified to
conform to current period presentations. Such reclassifications had no effect on
net income or stockholders' equity.

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 141, Business Combinations, effective for
all business combinations initiated after June 30, 2001, as well as all business
combinations accounted for by the purchase method that are completed after June
30, 2001. The new statement requires that the purchase method of accounting be
used for all business combinations and prohibits the use of the
pooling-of-interests method. The adoption of Statement No. 141 is not expected
to have a material effect on the Company's financial position or results of
operations.

In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001. The new statement changes the accounting for goodwill
from an amortization method to an impairment-only approach. Thus, amortization
of goodwill, including goodwill recorded in past business combinations, will
cease upon adoption of this Statement. At September 30, 2001, the Company has
approximately $1.0 million of goodwill intangibles. The Company will discontinue
amortization of goodwill intangibles effective January 1, 2002.






                                       7
<PAGE>



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


FORWARD LOOKING STATEMENT

The Private Securities Litigation 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 that could cause actual results to differ
materially from those projected. Those risks and uncertainties include changes
in interest rates, the ability to control costs and expenses, and general
economic conditions. 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.


COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

Total interest income of $5,710,000 for the three-month period ended September
30, 2001 compared to $5,243,000 for the same three-month period in 2000, an
increase of $467,000 or 8.9%. The overall increase in total interest income is
attributed principally to an increase in interest and fees on loans of $259,000
or 5.4%. Income from interest and fees on loans increased due to volume
increases within the loan portfolio. Average loans for the three-month period,
including loans available for sale, at September 30, 2001 were $241.9 million,
an increase of $27.0 million or 12.6% from $214.9 million at September 30, 2000.

Virtually all major segments within the loan portfolio reflected net increases
in average balances. The most significant growth occurred within the 1-4 family
real estate and commercial real estate segments. Average 1-4 family real estate
loans increased $11.8 million or 12.5% and average commercial real estate loans
increased $5.4 million or 8.5%. The increase within the loan portfolio was
brought about by general market activity and due to the Bank's expansion into
two new markets in Lawrence County, Pennsylvania with the opening of its New
Wilmington and Laurel offices.

Although the average volume of loans increased during the three-month period
ended September 30, 2001, the tax equivalent yield on earning assets declined.
In an effort to stimulate the national economy, the Federal Reserve Board
continued to lower interest rates during the third quarter of 2001. As interest
rates fell, the Bank's variable rate earning assets repriced downward, and
continue to do so. As a result, the Bank's tax equivalent yield on interest
earning assets fell from 8.53% at September 30, 2000 to 8.07% at September 30,
2001.

Total interest expense of $2,856,000 for the three-month period ended September
30, 2001 represented an increase of $454,000 from the $2,402,000 reported for
the same three-month period in 2000. The change is comprised primarily of an
increase in interest expense on deposits. The increase in interest expense on
deposits is due to an increase in average interest-bearing deposits of $40.6
million. Average interest-bearing deposits increased from the Bank's expansion
into the new markets. In addition, interest expense increased as a result of
several "special" promotional certificate rates offered bank wide as part of the
grand opening celebrations for the new offices. The Bank's yield on
interest-bearing deposits increased from 4.19% at September 30, 2000 to 4.71% at
September 30, 2001. The remaining promotional certificates are primarily
comprised of 11 month cds with a balance of $10.4 million that will reprice in
the fourth quarter of 2001. As a result, management anticipates a decrease in
the cost of interest-bearing deposits beginning in the first quarter of 2002.

Average borrowings for the three-month period ended September 30, 2001 were
$30.3 million, which compared to $23.7 million for the three-month period ended
September 30, 2000. Average borrowed funds at September 30, 2001 were comprised
primarily of a long-term advance from the Federal Home Loan Bank ("FHLB"), while
average borrowed funds at September 30, 2000 were comprised of short-term
advances from FHLB. In anticipation of potential interest rate declines,
management opted to use short-term advances during 2000. Interest rates began to
decline during the first quarter of 2001. As interest rates declined, management
viewed March 2001 to be an appropriate time to lock in the advances for the
long-term and thereby reduce overall interest expense associated with the
borrowings. The



                                       8
<PAGE>

weighted average rate paid on short-term advances for the period ended
September 30, 2000 was 6.67%, which compares to 5.11% for the long-term advance
outstanding at September 30, 2001.

Net interest income of $2,854,000 for the three months ended September 30, 2001
compared to $2,841,000 for the same three-month period in 2000, an increase of
$13,000.

Total other income for the three-month period ended September 30, 2001 of
$852,000 compared to $453,000 for the three-month period ended September 30,
2000, an increase of $399,000. This increase is comprised of an increase in
gains on loan sales of $262,000, an increase in service charges on deposit
accounts of $54,000, and $37,000 from gains on the sale of available for sale
securities.

Gains of $211,000 were recorded on the sale of $9.2 million of fixed rate, 1-4
family residential mortgages to the Federal Home Loan Mortgage Corporation
("Freddie Mac") for the three-month period ended September 30, 2001. For the
three-month period ended September 30, 2000, $3.0 million of fixed rated, 1-4
family residential mortgages were sold resulting in a gain of $32,000.

Due to increasing competition and rising service costs, the credit card
portfolio, which consisted of $662,000 in outstanding principal balance, was
sold during the third quarter resulting in a gain of $26,000. A gain of $57,000
was also recognized on the sale of $5.7 million of student loans. As a result of
restructuring within the investment portfolio during the third quarter, a net
gain of $37,000 was recorded on the sale of available for sale securities. The
purpose of the investment portfolio restructuring was to shorten the duration
(average lives) of the investments in order to take advantage of rising interest
rates in the future.

Total other expense of $2,167,000 for the three months ended September 30, 2001
compared to $1,908,000 for the same three-month period in 2000. This represented
an increase of $259,000 or 13.6%. The increase is primarily derived from an
increase in salaries and employee benefits expense of $223,000 and an increase
in occupancy expense of $56,000. The increases in each of these areas resulted
principally from the new retail facilities. As a result of staff additions to
support the new offices, the number of full-time equivalent employees ("FTE")
increased from 117 at September 30, 2000 to 135 at September 30, 2001.

Net income for the three-month period ended September 30, 2001 was $1,000,000,
an increase of $143,000 from the $857,000 reported at September 30, 2000.
Earnings per share for the three-month period ended September 30, 2001 was
$0.36, an increase of $0.05 from $0.31 per share earned during the same
three-month period in 2000.


COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

Total interest income of $17,235,000 for the nine-month period ended September
30, 2001 compared to $14,506,000 for the same nine-month period in 2000, an
increase of $2,729,000 or 18.8%. The primary increase in total interest income
is attributed to an increase in interest and fees on loans of $2,058,000 or
15.5%. Income from interest and fees on loans increased due to volume increases
within the loan portfolio. Average loans, including loans available for sale, at
September 30, 2001 were $237.6 million, an increase of $36.6 million or 18.2%
from $201.0 million at September 30, 2000. Interest income on Federal Funds Sold
increased $584,000. Average daily Federal Funds Sold increased $18.9 million
from $2.5 million at September 30, 2000 to $21.4 million at September 30, 2001.
Federal Funds Sold increased as a result of an increase in average daily
deposits. Subsequent to the reporting date, dollars were reallocated from
Federal Funds Sold to the investment portfolio.

Total interest expense of $8,827,000 for the nine-month period ended September
30, 2001 represented an increase of $2,537,000 from the $6,290,000 reported for
the same nine-month period in 2000. The increase in interest expense was
comprised of increases in interest expense on deposits of $2,118,000 and on
borrowed funds of $419,000. The increase in interest expense on both deposits
and borrowed funds was due to an increase in average daily deposits and in
average borrowings outstanding during the nine-month period ended September 30,
2001.


                                       9
<PAGE>

Net interest income of $8,408,000 for the nine months ended September 30, 2001
compared to $8,216,000 for the same nine-month period in 2000, an increase of
$192,000. The changes in interest income, interest expense and ultimately, net
interest income were driven by the volume changes and changes in interest rates
discussed above.

Total other income for the nine-month period ended September 30, 2001 of
$2,060,000 compared to $1,343,000 for the nine-month period ended September 30,
2000, an increase of $717,000. This change was principally due to the gains on
the sales of fixed rate mortgages, student loans, and the credit card portfolio,
as discussed above, which amounted to an increase of $428,000. Sales of fixed
rated mortgages to Freddie Mac for the nine-month period ended September 30,
2001 were $18.8 million, with net gains recorded of $405,000. Sales for the
nine-month period ended September 30, 2000 were $5.9 million with net gains of
$60,000. The increase in other income was also due, in part, to an increase in
service charges on deposit accounts of $100,000 and an increase in other income
of $75,000.

Total other expense of $6,306,000 for the nine months ended September 30, 2001
compared to $5,358,000 for the same nine-month period in 2000. This represented
an increase of $948,000 or 17.7%. The increase is primarily derived from an
increase in salaries and employee benefits expense of $576,000, an increase in
net occupancy expense of $171,000, and an increase in other expenses of
$145,000. These increases resulted from additional costs associated with the new
branch offices.

Net income for the nine-month period ended September 30, 2001 was $2,699,000, an
increase of $11,000 from $2,688,000 reported at September 30, 2000. Earnings per
share for the nine-month periods ended September 30, 2001 and 2000 was $0.97 for
both periods.


FINANCIAL CONDITION

Total assets increased $41.2 million or 14.5% from $283.4 million at December
31, 2000 to $324.6 million at September 30, 2001. The increase in total assets
is due to an increase in available for sale securities of $17.1 million, federal
funds sold of $10.7 million, and an increase in net loans, including loans
available for sale, of $9.3 million. The most significant growth within the loan
portfolio occurred within 1-4 family real estate loans, which increased $3.2
million.

Total deposits of $262.5 million at September 30, 2001 represented an increase
of $38.9 million or 17.4% from $223.6 million at December 31, 2000. With the
exception of interest-bearing demand, all deposit products had net increases
during the period. The most significant increases were within time certificates
and savings, which increased $24.1 million and $8.6 million, respectively. The
increase in time certificates was due to the opening of the new branch
facilities and to various time certificate promotions offered as part of the
"Grand Openings". The increase in savings accounts is due to a special "Classic
Plus Savings" product, which pays an attractive market rate while fulfilling
customer liquidity needs.

At September 30, 2001, the Company serviced approximately $57.9 million in sold
fixed rate mortgages. Sales of fixed rate mortgages for the nine-month period
ended September 30, 2001 totaled $18.8 million with net gains of $405,000.
Management does anticipate future sales of fixed rate mortgages; however, the
extent to which the Company participates in the secondary market will be
dependent upon demand for fixed rate mortgages in the market place, liquidity
needs of the Company and interest rate risk exposure. Management will continue
to obtain the necessary documentation to allow loans to be sold in the secondary
market, so that if liquidity or market conditions dictate, management will be
able to respond to these conditions.

At September 30, 2001, management has calculated and monitored risk-based and
leverage capital ratios in order to assess compliance with regulatory
guidelines. The following schedule presents certain regulatory capital ratio
requirements along with the Company's position at September 30, 2001:


                                       10
<PAGE>


<TABLE>
<CAPTION>
                                          Actual
                                   --------------------       Minimum         Well
                                    Amount        Ratio        Ratio       Capitalized
                                   --------------------        -----       -----------

<S>                                <C>            <C>          <C>           <C>
Tier 1 risk - based capital        $ 28,472       12.47 %      4.00 %          6.00 %

Total risk - based capital           30,786       13.49        8.00           10.00

Leverage capital                     28,472        8.96        4.00            5.00

</TABLE>


As the above table illustrates, the Company exceeds both the minimum and
well-capitalized regulatory capital requirements at September 30, 2001.
Management does not anticipate any future activity that would have a negative
impact on any of these ratios. Also, management is not aware of any current
recommendations by the regulatory agencies that will have a material effect on
future earnings, liquidity or capital of the Company.

LIQUIDITY

The principal functions of the Company's asset/liability management program are
to provide adequate liquidity and to monitor interest rate sensitivity.
Liquidity represents the ability to meet the cash flow requirements of both
depositors and customers requesting bank credit. Asset liquidity is provided by
repayments and the management of maturity distributions for loans and
securities. An important aspect of asset liquidity lies in maintaining adequate
levels of adjustable rate, short term, or relatively risk free interest earning
assets. Management evaluates the Company's liquidity position over 30 day, 60
day, and 90+ day time horizons. The analysis not only identifies liquidity
within the balance sheet, but off of the balance sheet as well. It identifies
anticipated sources and uses of funds as well as potential sources and uses.
Anticipated needs would include liquidity for credit demand, commitments to
purchase assets, and anticipated deposit decreases. Anticipated sources would
include cash (net of reserve requirements), maturing investment securities,
daily fed funds sold, anticipated deposit increases, and the repayment of loans.
Potential uses would include unfunded loan commitments available on lines of
credit. Potential sources would include borrowing capacity available to the
Company through the FHLB. At September 30, 2001 for the 30-day horizon, the
Company had a net anticipated funding position of 1.8% of total assets. This
ratio was 2.7% as of December 31, 2000. The decrease is due to an increase in
total assets, specifically available for sale securities, which are not
considered to be an anticipated source of funds. Management views this ratio to
be at an adequate level.

Management also monitors its liquidity by the net loans to deposits ratio. The
net loans (including loans held for sale) to deposits ratio was 91.4% at
September 30, 2001 as compared to 104.1% at December 31, 2000 and 100.5% at
September 30, 2000. The Company's liquidity plan allows for the use of long-term
advances or short-term lines of credit with the Federal Home Loan Bank ("FHLB")
as a source of funds. Borrowing from the FHLB not only provides a source of
liquidity for the Company, but also serves as a tool to reduce interest rate
risk. The Company may structure borrowings from FHLB to match those of customer
credit requests, and therefore, lock in interest rate spreads over the lives of
the loans. At September 30, 2001, the Company continued to have three such
matched funding loans outstanding totaling $163,000.

The Company continues to also have short-term borrowing availability through
FHLB "RepoPlus" advances. "RepoPlus" advances are short-term borrowings maturing
within one year, bearing a fixed rate of interest and subject to prepayment
penalty. At September 30, 2001, the Company had no "RepoPlus" advances
outstanding. At September 30, 2000, the Company had $25.0 million in "RepoPlus"
advances outstanding, which were used for general liquidity purposes. The
Company's remaining borrowing capacity with FHLB was $69.1 million at September
30, 2001.

In addition to borrowing from the FHLB as a source for liquidity, as mentioned
earlier, the Company also continued activity in the secondary mortgage market.
Specifically, the Company continues to sell fixed rate residential real estate
mortgages to Freddie Mac. The sales to Freddie Mac not only provide an
opportunity for the Company to remain


                                       11
<PAGE>

competitive in the market place by allowing it to offer a fixed rate mortgage
product, but also provide an additional source of liquidity. Loan sales on the
secondary market also provide management an additional tool to use in managing
interest rate risk exposure within the balance sheet. The Company continues to
service all loans sold to Freddie Mac.

The Statement of Cash Flows, for the nine-month period ended September 30, 2001,
indicates an increase in cash and cash equivalents of $15.1 million. Cash was
provided from a net increase in deposits of $38.9 million, proceeds from sales
of mortgage loans of $18.8 million, proceeds from the sale of student loans of
$5.7 million, and proceeds from sales of investment securities of $4.5 million.
Cash was used during the period for the origination of loans held for sale of
$18.6 million, the purchase of available for sale investments of $22.9 million,
and the origination of loans of $15.9 million. Dividends paid during the
nine-month period ended September 30, 2001 totaled $1,108,000. Cash and cash
equivalents totaled $27.7 million at September 30, 2001, an increase of $15.1
million from $12.6 million at December 31, 2000.

Management is not aware of any conditions, including any regulatory
recommendations or requirements, which would adversely affect its liquidity or
ability to meet its funding needs in the normal course of business.

RISK ELEMENTS

The following schedule presents the non-performing assets for the last five
quarters:

<TABLE>
<CAPTION>
                                                       Sept        Jun         Mar         Dec         Sept
                                                       2001        2001        2001        2000        2000
                                                      ------      ------      ------      ------      ------
                                                                       (dollars in thousands)
<S>                                                  <C>         <C>         <C>         <C>         <C>
NON-PERFORMING AND RESTRUCTURED LOANS
  Loans past due 90 days or more                      $   49      $   32      $    2      $   54      $   36
  Non-accrual loans                                    2,640       2,621       2,681       2,486       2,770
  Restructured loans                                    --          --          --          --          --
                                                      ------      ------      ------      ------      ------

    Total non-performing
      and restructured loans                           2,689       2,653       2,683       2,540       2,806
                                                      ------      ------      ------      ------      ------

OTHER NON-PERFORMING ASSETS
  Other real estate owned                                193        --          --           280         280
  Repossessed assets                                      46          77          42          14          20
                                                      ------      ------      ------      ------      ------

    Total other non-performing assets                    239          77          42         294         300
                                                      ------      ------      ------      ------      ------

TOTAL NON-PERFORMING ASSETS                           $2,928      $2,730      $2,725      $2,834      $3,106
                                                      ======      ======      ======      ======      ======



           Non-performing and restructured loans
           as a percentage of total loans(1)            1.12 %      1.11 %      1.14 %      1.10 %      1.26 %

           Non-performing assets and
           restructured loans as a
           percentage of total loans
           and other non-performing
           Assets and restructured LOANS(1)             1.22 %      1.14 %      1.16 %      1.00 %      1.39 %

</TABLE>

(1) Excludes loans held for sale.


The allowance for loan losses at September 30, 2001 totaled $2,314,000 or 0.96%
of total loans (including loans held for sale) as compared to $2,142,000 or
0.92% at December 31, 2000. Provisions for loan losses were $315,000 and
$397,000 for the nine-month periods ended September 30, 2001 and 2000.

Management performs a quarterly evaluation of the allowance for loan losses. The
evaluation incorporates internal loan review, actual historical losses, as well
as any negative economic trends in the local market. The evaluation is

                                       12
<PAGE>


presented to and approved by the Board of Directors of the Company. Management,
through the use of the quarterly evaluation, believes that the allowance is
maintained at an adequate level.

A loan is considered impaired when, based upon current information and events,
it is probable that the Company will be unable to collect all principal and
interest amounts due according to the contractual terms of the loan agreement.
At September 30, 2001, the Company had nonaccrual loans of $2,640,000. Impaired
loans at September 30, 2001 were $1,714,000, of which, $1,511,000 were also
classified as nonaccrual. The average balance in 2001 of impaired loans was
$1,908,000. Impaired loans had a related allowance allocation of $257,000 and
income recognized in 2001 for impaired loans totaled $73,000.

Impaired loans at September 30, 2001 continued to be comprised principally of
three borrowers. These three borrowers accounted for $1.6 million of total
impaired loans. One borrower in particular totaled $991,000. The Company
continues to seek restitution through the bankruptcy courts with two of the
borrowers and has begun foreclosure proceedings with the third.

The largest borrower within the impaired loan accounts pertains to a
participated loan for a dairy operation. The Company was cross-collateralized on
cattle, feed and real estate, including facilities. In 1999, the Bank recorded a
$300,000 charge off pertaining to the cattle portion of the loan. The borrower
has subsequently filed for bankruptcy relief, and the Company continues
foreclosure proceedings on the real estate portion of the loan through the
bankruptcy courts. An additional $100,000 charge off was recorded in 2000. As a
result of prudent collateral valuation, the Bank anticipates an additional
charge off in the fourth quarter of 2001. Management will continue its
collateral valuations until final resolution of the matter. Although the Company
anticipated possession of the real estate in 2001, it now appears that
possession will not occur until 2002.

Management does not consider any of the remaining non-performing loans to pose
any significant risk to the capital position or future earnings of the Company.

Management believes none of the non-performing assets, including other real
estate owned, at September 30, 2001, pose any significant risk to the
operations, liquidity or capital position of the Company.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk for the Company is comprised primarily from interest rate risk
exposure and liquidity risk. Since virtually all of the interest-earning assets
and paying liabilities are at the Bank, virtually all of the interest rate risk
and liquidity risk lies at the Bank level. The Bank is not subject to currency
exchange risk or commodity price risk, and has no trading portfolio, and
therefore, is not subject to any trading risk. In addition, the Bank does not
participate in hedging transactions such as interest rate swaps and caps.
Changes in interest rates will impact both income and expense recorded and also
the market value of long-term interest-earning assets. Interest rate risk and
liquidity risk management is performed at the Bank level. Although the Bank has
a diversified loan portfolio, loans outstanding to individuals and businesses
are dependent upon the local economic conditions in the immediate trade area.

One of the principal functions of the Company's asset/liability management
program is to monitor the level to which the balance sheet is subject to
interest rate risk. The goal of the asset/liability program is to manage the
relationship between interest rate sensitive assets and liabilities, thereby
minimizing the fluctuations in the net interest margin, which achieves
consistent growth of net interest income during periods of changing interest
rates.

Interest rate sensitivity is the result of differences in the amounts and
repricing dates of a bank's rate sensitive assets and rate sensitive
liabilities. These differences, or interest rate repricing "gap", provide an
indication of the extent that the Company's net interest income is affected by
future changes in interest rates. During a period of rising interest rates, a
positive gap, a position of more rate sensitive assets than rate sensitive
liabilities, is desired. During a falling interest rate environment, a negative
gap is desired, that is, a position in which rate sensitive liabilities exceed
rate sensitive assets.



                                       13
<PAGE>

The Company's gap analysis indicates that if interest rates were to rise 100
basis points (1.00%), the Company's net interest income would decline at the one
year horizon because the Company's rate sensitive liabilities would reprice
faster than rate sensitive assets. Conversely, if rates were to fall 100 basis
points, the Company would earn more in net interest income.

Management also manages interest rate risk with the use of simulation modeling
which measures the sensitivity of future net interest income as a result of
changes in interest rates. The analysis is based on repricing opportunities for
variable rate assets and liabilities and upon contractual maturities of fixed
rate instruments.

The simulation also calculates net interest income based upon estimates of the
largest foreseeable rate increase or decrease, (+or - 200 basis points or
2.00%). The current analysis indicates that, given a 200 basis point overnight
increase in interest rate, the Bank would experience a potential $1,363,000 or
10.7% change in net interest income. It is important to note, however, that this
exercise would be of a worst-case scenario. It would be more likely to have
incremental changes in interest rates, rather than a single significant increase
or decrease. When management believes interest rate movements will occur, it can
restructure the balance sheet and thereby the ratio of rate sensitive assets to
rate sensitive liabilities which in turn will effect the net interest income. It
is important to note; however, not all assets and liabilities with similar
maturities and repricing opportunities will reprice at the same time or to the
same degree and therefore, could effect forecasted results.

Much of the Bank's deposits have the ability to reprice immediately; however,
deposit rates are not tied to an external index. As a result, although changing
market interest rates impact repricing, the Bank retains much of the control
over repricing by determining itself the extent and timing of repricing of
deposit products. In addition, the Bank maintains a significant portion of its
investment portfolio as available for sale securities and also has a significant
variable rate loan portfolio, which is used to offset rate sensitive
liabilities.

Changes in market interest rates can also affect the Bank's liquidity position
through the impact rate changes may have on the market value of the available
for sale portion of the investment portfolio. Increases in market rates can
adversely impact the market values and therefore, make it more difficult for the
Bank to sell available for sale securities needed for general liquidity purposes
without incurring a loss on the sale. This issue is addressed by the Bank with
the use of borrowings from the Federal Home Loan Bank ("FHLB") and the selling
of fixed rate mortgages as a source of liquidity to the Bank.

The Company's liquidity plan allows for the use of long-term advances or
short-term lines of credit with the FHLB as a source of funds. Borrowing from
FHLB not only provides a source of liquidity for the Company, but also serves as
a tool to reduce interest risk as well. The Company may structure borrowings
from FHLB to match those of customer credit requests, and therefore, lock in
interest rate spreads over the lives of the loans.

In addition to borrowing from the FHLB as a source for liquidity, the Company
also participates in the secondary mortgage market. Specifically, the Company
sells fixed rate, residential real estate mortgages to the Federal Home Loan
Mortgage Corporation ("Freddie Mac"). The sales to Freddie Mac not only provide
an opportunity for the Bank to remain competitive in the market place, by
allowing it to offer a fixed rate mortgage product, but also provide an
additional source of liquidity and an additional tool for management to limit
interest rate risk exposure. The Bank continues to service all loans sold to
Freddie Mac.



                                       14
<PAGE>


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
        (none)

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
        (none)

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
        (none)

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) Exhibits required by Item 601 of Regulation S - K:

Exhibit Number

2       N/A

3(i)    Articles of Incorporation filed on March 6, 1992 as Exhibit 3(i) to
        Registration Statement on Form S-4 (No. 33-46164) and incorporated
        herein by reference.

3(ii)   By - laws filed on March 6, 1992 as Exhibit 3(ii) to Registration
        Statement on Form S-4 (No.33-46164) and incorporated herein by
        reference.

4       N/A

10      N/A

11      N/A

15      N/A

18      N/A

19      N/A

22      N/A

23      N/A

24      N/A

99.0    Independent Auditor's Review

        (b) Reports on Form 8-K
        None


                                       15
<PAGE>



                                   SIGNATURES

Pursuant to the requirements 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.



Slippery Rock Financial Corporation
             (Registrant)



Date:  November 1, 2001                          By: /s/ William C. Sonntag
       ----------------                              ----------------------
                                                     William C. Sonntag
                                                     President & CEO



Date:  November 1, 2001                          By: /s/ Mark A. Volponi
       ----------------                              --------------------
                                                     Mark A. Volponi
                                                     Treasurer




                                       16