Winton Financial Corporation

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


General

Since 1990, Winton Financial's  activities primarily have been limited to owning
the outstanding common shares of Winton Savings.  Therefore, the discussion that
follows focuses on the comparison of Winton Savings'  operations in fiscal 1998,
fiscal 1997 and fiscal 1996.


Forward-Looking Statements

In the following pages,  management  presents an analysis of Winton  Financial's
financial  condition as of September 30, 1998, and the results of operations for
fiscal  1998,   compared  to  prior  years.   In  addition  to  this  historical
information,  the following discussion contains forward-looking  statements that
involve risks and  uncertainties.  Economic  circumstances,  Winton  Financial's
operations and Winton Financial's actual results could differ significantly from
those  discussed  in the  forward-looking  statements.  Some of the factors that
could cause or contribute  to such  differences  are  discussed  herein but also
include  changes in the economy and  interest  rates in the nation and in Winton
Financial's general market area.

Without  limiting  the  foregoing,  some  of the  statements  in  the  following
referenced  sections of this discussion and analysis are forward-looking and are
therefore, subject to such risks and uncertainties:

1.   Management's  analysis of the interest  rate risk of Winton  Savings as set
     forth under "Asset/Liability Management;"

2.   Management's  discussion of the liquidity of Winton Savings' assets and the
     regulatory  capital of Winton  Savings as set forth  under  "Liquidity  and
     Capital Resources;"

3.   The discussion of the anticipated effect of legislation that may be enacted
     as set forth under "Charter Unification Legislation;" and

4.   Management's  determination of the amount and adequacy of the allowance for
     loan  losses  as set  forth  under  "Discussion  of  Changes  in  Financial
     Condition  from  September 30, 1997 to September 30, 1998,"  "Comparison of
     Results of  Operations  for the Fiscal Years Ended  September  30, 1998 and
     1997" and  "Comparison  of Results of Operations for the Fiscal Years Ended
     September 30, 1997 and 1996."

5.   Management's  determination  of the  effects  of the  year  2000 on  Winton
     Financial's  information  technology  systems as set forth under "Year 2000
     Compliance Issues".

6.   Management's estimate as to the effects of recent accounting pronouncements
     as set forth under "Effects of Recent Accounting Pronouncements".





                                       1
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Discussion of Changes in Financial Condition from September 30, 1997 to 
September 30, 1998

Winton Financial's  consolidated  assets totaled $354.2 million at September 30,
1998, an increase of $29.7 million, or 9.2%, over September 30, 1997 levels. The
current year's growth followed an increase in assets of $32.2 million, or 11.0%,
during  fiscal  1997.  Winton  Financial's  growth  over the  last two  years is
generally  indicative of  management's  efforts to increase net interest  income
levels by  effectively  levering  the  capital  base.  Fiscal  1998  growth  was
primarily  funded by growth in  deposits  of $25.7  million  and an  increase in
shareholders' equity of $3.6 million,  which were partially offset by a decrease
in advances from the FHLB of $526,000.

Cash and interest-bearing deposits increased during fiscal 1998 by $1.4 million,
or  51.3%,  to a  total  of $4.2  million  at  September  30,  1998.  Investment
securities  totaled  $20.4  million at September  30, 1998,  an increase of $4.2
million,  or 26.0%,  over 1997 levels.  This increase  resulted  from  purchases
totaling  $10.4  million  during  fiscal 1998,  which were  partially  offset by
maturities of $6.7 million.

Loans receivable,  including loans held for sale, increased by $24.8 million, or
8.8%, during fiscal 1998 to a total of $305.3 million. The increase is generally
indicative  of the favorable  interest  rate spreads that were  available on the
Company's  portfolio  loans during the year ended  September  30,  1998.  During
fiscal 1998,  loan  origination  volume totaled $227.8  million,  an increase of
$80.2  million,  or 54.3%,  over fiscal 1997.  The growth in the loan  portfolio
consisted  primarily of $3.6 million of  multi-family  residential  loans,  $4.5
million  of  residential  construction,  $21.1  million of  nonresidential  real
estate,  construction and land loans and $3.2 million of consumer loans,  offset
by a decrease of $6.6  million in one- to  four-family  residential  loans and a
$5.3 million increase in the level of undisbursed  loans in process.  Loan sales
volume  totaled $110.5 million during fiscal 1998, an increase of $56.7 million,
or 105.3%, over fiscal 1997 levels.

At September 30, 1998, the allowance for loan losses of Winton  Savings  totaled
$842,000,  an increase of $15,000 over the level  maintained  at  September  30,
1997. At September 30, 1998, the allowance represented approximately .27% of the
total loan portfolio and 78.9% of total non-performing  loans. At that date, the
ratio of total  non-performing loans to total loans amounted to .34% as compared
to .16% at September 30, 1997.  Although  management believes that its allowance
for loan losses at September 30, 1998, was adequate based on the available facts
and  circumstances,  there can be no assurance  that additions to such allowance
will not be necessary in future  periods,  which could  adversely  affect Winton
Financial's results of operations.

Deposits  totaled  $266.0  million at September  30, 1998,  an increase of $25.7
million,  or 10.7%,  over 1997  levels.  This  increase  was  comprised of $23.2
million of growth in  certificates of deposit and an increase of $2.5 million in
transaction  accounts.  During  fiscal  1997,  management  elected  to  employ a
strategy to achieve growth in the deposit portfolio that included acquisition of
brokered  certificates of deposit.  Such brokered deposits totaled $28.5 million
at September 30, 1998.



                                       2
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Discussion  of  Changes  in  Financial  Condition  from  September  30,  1997 to
September 30, 1998 (continued)

Advances  from the FHLB totaled  $56.9 million at September 30, 1998, a decrease
of  $526,000,  or 0.9%,  from the amount  outstanding  at  September  30,  1997.
Management  generally utilizes such advances as an alternative source of funding
for loan origination volume.

Shareholders' equity totaled $26.9 million at September 30, 1998, an increase of
$3.6 million, or 15.5%, over the September 30, 1997 total. The increase resulted
from net earnings of $4.1 million,  coupled with a $288,000  increase in the net
unrealized gains on securities  designated as available for sale and $274,000 in
proceeds  from the exercise of stock  options,  which were  partially  offset by
dividends on common shares totaling $1.0 million.


Comparison of Results of Operations for the Fiscal Years Ended September 30,
1998 and 1997

General

Net earnings for fiscal 1998 totaled $4.1 million,  an increase of $831,000,  or
25.8%,  over the $3.2  million in net  earnings  recorded  in fiscal  1997.  The
increase in net earnings was primarily  attributable to a $1.1 million  increase
in net interest  income,  and a $561,000  increase in other  income,  which were
partially offset by an increase of $60,000 in the provision for losses on loans,
an increase of $414,000  in  general,  administrative  and other  expense and an
increase of $382,000 in the provision for federal income taxes.

Net Interest Income

Total interest  income amounted to $27.1 million for fiscal 1998, an increase of
$2.8 million, or 11.7%, over fiscal 1997. The increase resulted primarily from a
$38.5 million,  or 12.9%,  increase in average  interest-earning  assets year to
year.  Interest  income on loans and  mortgage-backed  securities  totaled $25.7
million in fiscal 1998, an increase of $2.5 million, or 11.0%, over fiscal 1997.
This increase resulted primarily from a $33.1 million, or 11.8%, increase in the
average balance  outstanding,  offset by a decrease in yield, from 8.24% in 1997
to 8.18% in 1998. Interest income on investment  securities and interest-bearing
deposits totaled $1.4 million, a $297,000,  or 27.3%, increase over fiscal 1997,
due  primarily to a $5.3 million  increase in the average  balance  outstanding,
offset by a decrease in yield from 6.27% in 1997 to 6.11% in 1998.

Interest  expense on deposits totaled $13.1 million for fiscal 1998, an increase
of $1.1 million, or 9.2%, over fiscal 1997. The increase resulted primarily from
a $21.7 million, or 9.4%, increase in the average balance outstanding.  Interest
expense on borrowings totaled $3.6 million,  an increase of $603,000,  or 19.9%,
from fiscal 1997,  due primarily to a $10.0 million,  or 19.5%,  increase in the
average balance  outstanding,  coupled with an increase of 2 basis points in the
average cost of borrowings to 5.94% in fiscal 1998.



                                       3
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Results of Operations for the Fiscal Years Ended September 30, 
1998 and 1997 (continued)

Net Interest Income (continued)

As a result of the foregoing  changes in interest  income and interest  expense,
net interest  income  increased by $1.1 million,  or 12.2%,  to a total of $10.3
million for fiscal 1998,  as compared to fiscal 1997.  The interest  rate spread
declined  by 10 basis  points,  from 2.78% for  fiscal  1997 to 2.68% for fiscal
1998. The net interest  margin amounted to 3.07% for fiscal 1998, as compared to
3.08% for fiscal 1997.

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for loan losses to a level considered  appropriate by management based
on  historical  experience,  the  volume and type of  lending  conducted  by the
Company,  the  status  of past due  principal  and  interest  payments,  general
economic  conditions,  particularly as such  conditions  relate to the Company's
market area, and other factors  related to the  collectibility  of the Company's
loan  portfolio.  As a result of such  analysis,  management  recorded a $60,000
provision for losses on loans during fiscal 1998, due primarily to growth in the
loan portfolio during the year. There can be no assurance that the allowance for
loan losses of the Company  will be  adequate to cover  losses on  nonperforming
assets in the future.

Other Income

Other income totaled $2.2 million for the fiscal year ended  September 30, 1998,
an increase of $561,000,  or 34.7%,  compared to fiscal 1997, due primarily to a
$728,000  increase  in gain on sale of loans  and a  $53,000  increase  in other
operating income, which were partially offset by a $152,000 decrease in mortgage
servicing  fees,  a  $36,000  decrease  in the gain on sale of  investments  and
mortgage-backed  securities  designated  as  available  for sale  and a  $32,000
decrease in the gain on sale of real estate acquired  through  foreclosure.  The
increase in the gain on sale of loans was due  primarily  to the  aforementioned
increase in the volume of loan sales during fiscal 1998.

General, Administrative and Other Expense

General,  administrative and other expense totaled $6.3 million for fiscal 1998,
an increase of  $414,000,  or 7.0%,  over fiscal  1997.  The  increase  resulted
primarily from an increase of $170,000,  or 5.8%, in employee  compensation  and
benefits, a $95,000, or 7.8%, increase in occupancy and equipment, a $38,000, or
14.4%, increase in franchise taxes, a $69,000, or 40.8%, increase in advertising
and a  $98,000,  or  9.2%,  increase  in other  operating  expense,  which  were
partially offset by a $56,000,  or 27.2%,  decrease in federal deposit insurance
premiums.




                                       4
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Results of Operations for the Fiscal Years Ended September 30, 
1998 and 1997 (continued)

General, Administrative and Other Expense (continued)

The increase in employee  compensation  and  benefits  resulted  primarily  from
normal merit increases coupled with an increase in staffing levels year to year.
The increase in other  operating  expenses  was due  primarily to an increase in
costs generally related to the increased loan origination volume and an increase
in overall operating costs related to the Corporation's growth year to year.

Federal Income Taxes

The provision for federal income taxes increased by $382,000,  or 22.7%, for the
fiscal year ended  September 30, 1998, as compared to fiscal 1997. This increase
resulted  primarily  from the  increase  in net  earnings  before  taxes of $1.2
million, or 24.7%. Winton Financial's  effective tax rates amounted to 33.7% and
34.3% for the fiscal years ended September 30, 1998 and 1997, respectively.


Comparison of Results of Operations for the Fiscal Years Ended September 30, 
1997 and 1996

General

Net earnings for fiscal 1997 totaled $3.2 million,  a $2.0  million,  or 173.2%,
increase  over the $1.2  million in net earnings  recorded in fiscal  1996.  The
increase in net earnings was  primarily  attributable  to a $1.3 million  charge
recorded  in  fiscal  1996  related  to  the  recapitalization  of  the  Savings
Association Insurance Fund ("SAIF"), coupled with a $1.1 million increase in net
interest  income,  a $253,000  decline in the provision  for losses on loans,  a
$200,000  increase  in other  income  and a decrease  of  $296,000  in  general,
administrative  and other expense (after  consideration of the SAIF assessment),
which were partially  offset by an increase of $1.1 million in the provision for
federal income taxes.

Net Interest Income

Total interest  income amounted to $24.2 million for fiscal 1997, an increase of
$3.4 million, or 16.3%, over fiscal 1996. The increase resulted primarily from a
$37.1 million,  or 14.2%,  increase in average  interest-earning  assets year to
year.  Interest  income on loans and  mortgage-backed  securities  totaled $23.1
million in fiscal 1997, an increase of $3.3 million, or 16.8%, over fiscal 1996.
This increase resulted primarily from a $36.0 million, or 14.7%, increase in the
average balance  outstanding,  coupled with an increase in yield,  from 8.09% in
1996  to  8.24%  in  1997.   Interest   income  on  investment   securities  and
interest-bearing  deposits totaled $1.1 million,  a $66,000,  or 6.5%,  increase
over  fiscal  1996,  due  primarily  to a $1.1  million  increase in the average
balance outstanding.


                                       5
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Results of Operations for the Fiscal Years Ended September 30, 
1997 and 1996 (continued)

Net Interest Income (continued)

Interest  expense on deposits totaled $12.0 million for fiscal 1997, an increase
of $1.3 million,  or 12.2%,  over fiscal 1996. The increase  resulted  primarily
from a $19.8 million increase in the average balance outstanding, coupled with a
13 basis  point  increase in the average  cost of  deposits,  to 5.23% in fiscal
1997.  Interest expense on borrowings  increased by $1.0 million,  or 51.7%, due
primarily to a $15.9 million increase in the average balance outstanding coupled
with a 26 basis point increase in the average cost of borrowings year to year.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest  income  increased by $1.1  million,  or 13.1%,  to a total of $9.2
million for fiscal 1997,  as compared to fiscal 1996.  The interest  rate spread
declined by 2 basis points, from 2.80% for fiscal 1996 to 2.78% for fiscal 1997.
The net interest margin  increased by 6 basis points,  to 3.08% for fiscal 1997,
as compared to 3.02% for fiscal 1996.

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for loan losses to a level considered  appropriate by management based
on  historical  experience,  the  volume and type of  lending  conducted  by the
Company,  the  status  of past due  principal  and  interest  payments,  general
economic  conditions,  particularly as such  conditions  relate to the Company's
market area, and other factors  related to the  collectibility  of the Company's
loan  portfolio.  As a result of such analysis,  management  determined that the
allowance was adequate and,  therefore,  a provision for losses on loans was not
necessary during the fiscal year ended September 30, 1997.

Other Income

Other income totaled $1.6 million for the fiscal year ended  September 30, 1997,
an increase of $200,000,  or 14.1%,  compared to fiscal 1996, due primarily to a
$95,000, or 12.8%,  increase in gain on sale of loans, a $32,000 gain on sale of
real estate acquired through foreclosure,  and a $27,000 increase in the gain on
sale of investments and mortgage-backed  securities. The increase in the gain on
sale of loans is due primarily to the  aforementioned  increase in the volume of
loan sales during fiscal 1997.

General, Administrative and Other Expense

General,  administrative and other expense totaled $5.9 million for fiscal 1997,
a decrease of $1.6 million,  or 21.1%,  from fiscal 1996. The decrease  resulted
primarily from the absence of a one-time $1.3 million charge recorded in 1996 in
connection  with the  assessment  to  recapitalize  the  SAIF and the  resulting
decline in premiums  for fiscal  1997,  coupled  with a $615,000  provision  for
merger costs  recorded in 1996,  which were partially  offset by a $291,000,  or
11.1%,  increase in employee compensation and benefits and a $194,000, or 22.2%,
increase in other operating expenses.


                                       6
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Results of Operations for the Fiscal Years Ended September 30,
1997 and 1996 (continued)

General, Administrative and Other Expense (continued)

Legislation to recapitalize the SAIF provided for a special  assessment of $.657
per $100 of SAIF  deposits  held at March 31,  1995,  in order to increase  SAIF
reserves to the level required by law. Winton Savings had $195.6 million in SAIF
deposits at March 31, 1995 (including  $11.5 million in deposits  acquired in an
acquisition  in April 1995 which are  attributed to Winton  Savings at March 31,
1995),  resulting in an assessment of  approximately  $1.3 million,  or $850,000
after tax,  which was recorded as a charge in the quarter  ended  September  30,
1996, and was paid on November 27, 1996.

The increase in employee  compensation  and  benefits  resulted  primarily  from
normal merit increases coupled with an increase in staffing levels year to year.
The  increase in other  operating  expenses is due  primarily  to an increase in
costs generally related to the increased loan origination volume and an increase
in overall operating costs related to Winton Financial's growth year to year.

Federal Income Taxes

The provision for federal income taxes increased by $1.1 million, or 168.0%, for
the fiscal year ended  September  30,  1997,  as compared to fiscal  1996.  This
increase  resulted  primarily from the increase in net earnings  before taxes of
$3.1 million,  or 171.4%.  Winton  Financial's  effective tax rates  amounted to
34.3%  and  34.7%  for the  fiscal  years  ended  September  30,  1997 and 1996,
respectively.















                                       7
<PAGE>




                  AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA

The following table sets forth certain  information  relating to Winton Savings'
average   balance   sheet   information   and  reflects  the  average  yield  on
interest-earning assets and the average cost of interest-bearing liabilities for
the years  indicated.  Such yields and costs are  derived by dividing  income or
expense  by  the  average   monthly  balance  of   interest-earning   assets  or
interest-bearing  liabilities,  respectively,  for the years presented.  Average
balances are derived from month-end balances, which include nonaccruing loans in
the loan  portfolio,  net of the allowance for loan losses.  Management does not
believe that the use of month-end  balances instead of daily balances has caused
any material differences in the information presented.
<TABLE>
<CAPTION>

                                                                                                  Year ended September 30,
                                                                       1998                                 1997                 
                                                           Average   Interest                    Average   Interest              
                                                       outstanding    earned/     Yield/     outstanding    earned/     Yield/   
                                                           balance       paid       rate         balance       paid       rate   
                                                                                                   (Dollars in thousands)
<S>                                                        <C>            <C>        <C>           <C>         <C>          <C>  
Interest-earning assets:
  Loans receivable (1)                                    $299,643    $24,813         8.28%     $263,344    $22,086        8.37% 
  Mortgage-backed securities - available for sale              687         46         6.70         1,948        119        6.11  
  Mortgage-backed securities - held to maturity             13,654        829         6.07        15,552        942        6.06  
  Investment securities - held to maturity                  13,424        826         6.15        11,785        757        6.42  
  Investment securities - available for sale                 4,889        279         5.71         2,007        122        6.08  
  Interest-bearing deposits and other                        4,331        278         6.42         3,544        207        5.84  
                                                           -------     ------       ------       -------     ------      ------  
 
     Total interest-earning assets                         336,628     27,071         8.04       298,180     24,233        8.13  

Non-interest-earning assets                                  4,920                                 7,970                         
                                                           -------                               -------                         

     Total assets                                         $341,548                              $306,150                         
                                                           =======                               =======                         

Interest-bearing liabilities:
  Deposits                                                $251,393     13,118         5.22      $229,708     12,009        5.23  
  FHLB advances                                             61,136      3,630         5.94        51,146      3,027        5.92  
                                                           -------     ------       ------       -------     ------      ------  
 
     Total interest-bearing liabilities                    312,529     16,748         5.36       280,854     15,036        5.35  
                                                                       ------       ------                   ------      ------  


Non-interest-bearing liabilities                             3,786                                 3,275                         
                                                           -------                               -------                         

     Total liabilities                                     316,315                               284,129                         

Shareholders' equity                                        25,233                                22,021                         
                                                           -------                               -------                         

     Total liabilities and shareholders' equity           $341,548                              $306,150                         
                                                           =======                               =======                         

Net interest income/Interest rate spread                              $10,323         2.68%                 $ 9,197        2.78% 
                                                                       ======       ======                   ======      ======  
   
Net interest margin (net interest income as a
  percent of average interest-earning assets)                                         3.07%                                3.08% 
                                                                                    ======                               ======  
   

Average interest-earning assets to interest-bearing liabilities                     107.71%                              106.17% 
                                                                                    ======                               ======  

                                                       Year ended September 30,
                                                                    1996
                                                         Average   Interest
                                                     outstanding    earned/     Yield/
                                                         balance       paid       rate
                                                    
<S>                                                        <C>         <C>         <C>
Interest-earning assets:
  Loans receivable (1)                                  $225,164    $18,627      8.27%
  Mortgage-backed securities - available for sale          2,400        113      4.71
  Mortgage-backed securities - held to maturity           17,311      1,070      6.18
  Investment securities - held to maturity                 9,927        636      6.41
  Investment securities - available for sale               3,228        185      5.73
  Interest-bearing deposits and other                      3,049        199      6.53
                                                         -------     ------     -----
 
     Total interest-earning assets                       261,079     20,830      7.98

Non-interest-earning assets                                7,283
                                                         -------

     Total assets                                       $268,362
                                                         =======

Interest-bearing liabilities:
  Deposits                                              $209,879     10,700      5.10
  FHLB advances                                           35,292      1,996      5.66
                                                        --------     ------
 
     Total interest-bearing liabilities                  245,171     12,696      5.18
                                                                     ------     -----


Non-interest-bearing liabilities                           2,349
                                                         -------

     Total liabilities                                   247,520

Shareholders' equity                                      20,842
                                                         -------

     Total liabilities and shareholders' equity         $268,362
                                                         =======

Net interest income/Interest rate spread                            $ 8,134     2.80%
                                                                     ======     ====
   
Net interest margin (net interest income as a
  percent of average interest-earning assets)                                   3.02%
                                                                              ======
   

Average interest-earning assets to interest-bearing liabilities              106.49%
                                                                             =======




</TABLE>


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

(1)  Includes loans held for sale and non-accrual loans.


                                       8

<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Rate/Volume Table

The table below  describes  the extent to which  changes in  interest  rates and
changes in volume of interest-earning  assets and  interest-bearing  liabilities
have affected  WFC's interest  income and expense during the periods  indicated.
For each category of interest-earning  assets and interest-bearing  liabilities,
information is provided on changes attributable to (i) changes in volume (change
in volume  multiplied by prior year rate),  (ii) changes in rate (change in rate
multiplied by prior year volume) and (iii) total changes in rate and volume. The
combined  effects of changes in both volume and rate, which cannot be separately
identified,  have been allocated proportionately to the change due to volume and
the change due to rate.
<TABLE>
<CAPTION>

                                                                          Year ended September 30,
                                                            1998 vs. 1997                           1997 vs. 1996
                                                          Increase                             Increase
                                                         (decrease)                           (decrease)
                                                           due to                               due to
                                                     Volume       Rate      Total          Volume       Rate      Total
                                                                               (In thousands)
<S>                                                    <C>         <C>        <C>           <C>          <C>         <C>
Interest income attributable to:
  Loans receivable (1)                               $2,968      $(241)    $2,727          $3,244      $ 251     $3,495
  Mortgage-backed securities - available
    for sale                                            (83)        10        (73)            (18)        24          6
  Mortgage-backed securities - held to
    maturity                                           (115)         2       (113)           (107)       (21)      (128)
  Investment securities - available for sale            165         (8)       157             (73)        10        (63)
  Investment securities - held to maturity              101        (32)        69             120          1        121
  Other interest-earning assets (2)                      49         22         71              29        (21)         8
                                                      -----       ----      -----           -----       ----      -----
     Total interest income                            3,085       (247)     2,838           3,195        244      3,439

Interest expense attributable to:
  Deposits                                            1,132        (23)     1,109           1,031        278      1,309
  Borrowings                                            593         10        603             933         98      1,031
                                                      -----       ----      -----           -----       ----      -----
     Total interest expense                           1,725        (13)     1,712           1,964        376      2,340
                                                      -----       ----      -----           -----       ----      -----

Increase in net interest income                      $1,360      $(234)    $1,126          $1,231      $(132)    $1,099
                                                      =====       =====     =====           =====       ====      =====
</TABLE>

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

(1)  Includes loans held for sale.

(2)  Includes  interest-bearing  deposits and  certificates  of deposit in other
     financial institutions.








                                       9
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Asset/Liability Management

WFC's  earnings  depend  primarily  upon its net interest  income,  which is the
difference  between its  interest  income on  interest-earning  assets,  such as
mortgage loans,  investment securities and mortgage-backed  securities,  and its
interest expense paid on  interest-bearing  liabilities,  consisting of deposits
and  borrowings.  As market  interest  rates change,  asset yields and liability
costs do not  change  simultaneously.  Due to  maturity,  repricing  and  timing
differences  between  such  interest-earning  assets  and such  interest-bearing
liabilities,  WFC's earnings will be affected differently under various interest
rate  scenarios.  Management  believes  that the steps  which have been taken in
asset/liability  management  may reduce the  overall  vulnerability  of WFC's to
interest rate risk.  For example,  Winton  Savings has sought to limit these net
earnings   fluctuations   and   manage   interest   rate  risk  by   originating
adjustable-rate  loans and by purchasing relatively short-term and variable-rate
investments  and securities.  However,  in order to better compete for deposits,
Winton  Savings  has offered  market-sensitive  certificates  of deposit,  which
result in increased interest expense in rising rate  environments.  At September
30, 1998,  approximately  $143.1 million, or 39.7%, of Winton Savings' portfolio
of interest-earning assets had adjustable rates.

WFC's principal financial objective is to enhance long-term  profitability while
reducing  exposure to increases in interest rates. To accomplish this objective,
WFC has  formulated  an asset and  liability  management  policy,  the principal
elements  of which are (1) to  increase  the  interest-rate  sensitivity  of the
assets of Winton  Savings by  emphasizing  the  origination  of  adjustable-rate
mortgage loans, (2) to maintain its investment portfolio with a relatively short
term  to  maturity,  (3)  to  shorten  asset  maturities,  (4) to  lengthen  the
maturities of  liabilities to the extent  practicable  by marketing  longer term
certificates of deposit,  and (5) to meet the consumer preference for fixed-rate
loans in periods of low  interest  rates by selling  the  preponderance  of such
loans  in the  secondary  market.  Because  interest-rate-sensitive  liabilities
continue  to exceed  interest-rate-sensitive  assets,  Winton  Savings  would be
negatively affected by a rising or protracted high interest rate environment and
would be beneficially affected by a declining interest rate environment.

The management and Board of Directors of Winton Savings attempt to manage Winton
Savings'  exposure to interest rate risk (the  sensitivity  of an  institution's
earnings  and net asset  values to  changes  in  interest  rates) in a manner to
maintain the projected four-quarter percentage change in net interest income and
the projected  change in the market value of portfolio  equity within the limits
established  by the Board of Directors,  assuming a permanent and  instantaneous
parallel shift in interest rates.

As a part of its effort to  monitor  its  interest  rate  risk,  Winton  Savings
reviews  the  reports  of the OTS which set  forth the  application  of the "net
portfolio value" ("NPV") methodology,  adopted by the OTS as part of its capital
regulations,  to the assets and liabilities of Winton  Savings.  Although Winton
Savings  is  not  currently   subject  to  the  NPV   regulation,   because  its
implementation  has  been  delayed  by the  OTS,  the  application  of  the  NPV
methodology may illustrate Winton Savings' level of interest rate risk.










                                       10
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Asset and Liability Management (continued)

Generally,  NPV is the  discounted  present  value  of  the  difference  between
incoming cash flows on interest-earning and other assets and outgoing cash flows
on interest-bearing  liabilities. The application of the methodology attempts to
quantify  interest  rate risk as the change in the NPV which would result from a
theoretical  200 basis  point  (100  basis  points  equals  1%) change in market
interest  rates.  Both a 200 basis point increase in market interest rates and a
200 basis point  decrease in market  interest rates are  considered.  If the NPV
would  decrease  more than 2% of the present value of the  institution's  assets
with either an increase or a decrease in market  rates,  the  institution  would
have to deduct  50% of the  amount of the  decrease  in excess of such 2% in the
calculation of the institution's  risk-based capital, if the regulations were in
effect.  Even before the  regulation  is in effect,  OTS could  increase  Winton
Savings'  risk-based capital  requirement on an individualized  basis to address
excess interest rate risk.

At September  30, 1998, 2% of the present  value of Winton  Savings'  assets was
approximately $7.2 million.  Because the interest rate risk of a 200 basis point
increase in market interest rates (which was greater than the interest rate risk
of a 200 basis point  decrease) was $5.9 million at September  30, 1998,  Winton
Savings  would not have been  required  to reduce  its  capital  in  determining
whether Winton Savings met its risk-based capital requirement, if the regulation
had been in effect for Winton Savings.

Presented  below,  as of September 30, 1998,  is an analysis of Winton  Savings'
interest rate risk as measured by changes in NPV for instantaneous and sustained
parallel shifts of 100 basis points in market interest rates.
<TABLE>
<CAPTION>

                                                                                September 30, 1998
Change in interest rate             Board limit                             $ Change           % Change
    (Basis Points)                  % change                                  in NPV             in NPV
                                                                                   (In thousands)
<S>                                     <C>                                   <C>                 <C>
     +300                              (75)%                              $(9,674)                (33)%
     +200                              (50)                                (5,907)                (20)
     +100                              (20)                                (2,680)                 (9)
       -                                -                                      -                   - 
     -100                              (15)                                 2,311                   8
     -200                              (25)                                 4,847                  17
     -300                              (35)                                 8,105                  28

</TABLE>












                                       11
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Asset and Liability Management (continued)

As  illustrated  in the  table,  NPV is more  sensitive  to  rising  rates  than
declining rates. Such difference in sensitivity occurs principally  because,  as
rates rise,  borrowers do not prepay fixed-rate loans as quickly as they do when
interest rates are declining.  Thus, in a rising interest rate environment,  the
amount of interest  Winton  Savings  would  receive on its loans would  increase
relatively  slowly as loans are slowly prepaid and new loans at higher rates are
made.  Moreover,  the interest  Winton  Savings would pay on its deposits  would
increase rapidly because Winton Savings' deposits generally have shorter periods
to repricing.
Assumptions  used  in  calculating  the  amounts  in the  above  table  are  OTS
assumptions.

As with any method of measuring  interest rate risk,  certain  shortcomings  are
inherent  in  the  NPV  approach.  For  example,  although  certain  assets  and
liabilities may have similar maturities or periods of repricing,  they may react
in different  degrees to changes in market  interest  rates.  Also, the interest
rates on certain  types of assets and  liabilities  may  fluctuate in advance of
changes in market  interest  rates,  while interest rates on other types may lag
behind  changes in market rates.  Further,  in the event of a change in interest
rates, expected rates of prepayment on loans and mortgage-backed  securities and
early  withdrawal  levels from  certificates  of deposit  would  likely  deviate
significantly from those assumed in making the risk calculations.

In the event that interest rates rise, Winton Savings' net interest income could
be expected to be negatively  affected.  Moreover,  rising  interest rates could
negatively affect Winton Savings' earnings due to diminished loan demand.



















                                       12
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Liquidity and Capital Resources

Winton Savings, like other financial institutions,  is required under applicable
federal  regulations to maintain  sufficient funds to meet deposit  withdrawals,
loan  commitments and expenses.  Control of the Company's cash flow requires the
anticipation of deposit flows and loan payments.  The Company's  primary sources
of funds are deposits,  borrowings,  principal and interest  repayments on loans
and proceeds from the sale of mortgage loans.

At September 30, 1998,  Winton  Savings had $118.1  million of  certificates  of
deposit maturing within one year. It has been the Company's historic  experience
that such  certificates  of deposit will be renewed at market rates of interest.
It is  management's  belief that maturing  certificates of deposit over the next
year will  similarly be renewed at market  rates of interest  without a material
adverse effect on results of operations.

In the event that certificates of deposit cannot be renewed at prevailing market
rates,  the Company can obtain up to $18.3 million in  additional  advances from
the FHLB of Cincinnati.  At September 30, 1998, the Company had $56.9 million of
outstanding  FHLB  advances.  The Company  also obtains  brokered  deposits as a
supplement  to its local  deposits  when such funds are  attractively  priced in
relation to the local market.  As of September  30, 1998,  the Company had $28.5
million in brokered deposits.

The Company's liquidity, represented by cash and cash-equivalents, is a function
of its  operating,  investing and financing  activities.  These  activities  are
summarized below for the periods indicated.
<TABLE>
<CAPTION>

                                                                            For the year ended September 30,
                                                                         1998              1997           1996
                                                                                     (In thousands)
<S>                                                                   <C>                 <C>             <C>
Net earnings                                                          $ 4,057           $ 3,226        $ 1,181
Adjustments to reconcile net earnings to net
  cash used in operating activities                                    (3,798)           (1,971)          (194)
                                                                       ------            ------         ------
Net cash provided by operating activities                                 259             1,255            987
Net cash used in investing activities                                 (23,463)          (29,012)       (42,513)
Net cash provided by financing activities                              24,632            29,039         39,440
                                                                       ------            ------         ------
Net increase (decrease) in cash and
  cash equivalents                                                      1,428             1,282         (2,086)
Cash and cash equivalents at beginning of year                          2,786             1,504          3,590
                                                                       ------            ------         ------
Cash and cash equivalents at end of year                              $ 4,214           $ 2,786        $ 1,504
                                                                       ======            ======         ======
</TABLE>

The OTS requires  minimum levels of liquid  assets.  OTS  regulations  presently
require Winton Savings to maintain  specified levels of "liquid"  investments in
qualifying  types of United States  Government and agency  obligations and other
permissible  investments  having certain maturity  limitations and marketability
requirements.  Such minimum requirement,  which was revised by the OTS in fiscal
1998, is an amount equal to 4% of the sum of the Company's average daily balance
of net withdrawable deposit accounts and borrowings payable in one year or less.
The liquidity requirement,  which may be changed from time to time by the OTS to
reflect  changing  economic  conditions,  is  intended  to  provide  a source of
relatively  liquid funds upon which the Company may rely, if necessary,  to fund
deposit withdrawals and other short-term funding needs.






                                       13
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Liquidity and Capital Resources (continued)

The  liquidity  of  Winton  Savings,  as  measured  by the  ratio of cash,  cash
equivalents   (not  committed,   pledged  or  required  to  liquidate   specific
liabilities) and qualifying investments, mortgage-backed securities and loans to
the sum of net withdrawable  savings plus borrowings payable within one year was
19.3% at September  30, 1998.  At September  30, 1998,  the  Company's  "liquid"
assets  totaled  approximately  $37.4  million,  which was  approximately  $29.5
million in excess of the  current  OTS  minimum  requirement.  Winton  Financial
believes  that the  Company's  liquidity  posture at  September  30,  1998,  was
adequate to meet outstanding loan commitments and other cash requirements.

Winton Savings is subject to minimum capital  standards  promulgated by the OTS.
Such capital standards  generally require the maintenance of regulatory  capital
sufficient  to meet  each of the  following  three  requirements:  the  tangible
capital  requirement,  the core capital  requirement and the risk-based  capital
requirement.  At September 30, 1998,  Winton Savings'  tangible capital of $25.6
million,  or 7.3% of adjusted  total assets,  exceeded the 1.5%  requirement  by
$20.3  million;  its core capital of $25.6  million,  or 7.3% of adjusted  total
assets,  exceeded  the minimum  3.0%  requirement  by $15.1  million;  and,  its
risk-based capital of $26.4 million, or 10.6% of risk-weighted assets,  exceeded
the 8% requirement by $6.4 million.

In fiscal  1993,  the OTS  adopted an  amendment  to the  regulatory  risk-based
capital  requirement  to  include  an  interest  rate  risk  component,   though
implementation  of the  component has been  delayed.  Additionally,  the OTS has
proposed an amendment to the core capital  requirement  that would  increase the
minimum requirement to 4% of adjusted total assets for substantially all savings
associations.  Management  anticipates that Winton Savings'  regulatory  capital
will  continue to meet the minimum  requirements  should the interest  rate risk
component or the core capital proposal be adopted in their present form.

Potential Impact on Future Results of Operations of Current and Pending 
Legislation

Legislation  repealing the percentage of earnings bad debt reserve provisions of
the  Internal   Revenue  Code   previously   applicable  to  qualifying   thrift
institutions was enacted into law in fiscal 1997. The legislation, which is part
of The Small Business Job Protection Act of 1996 (the "Jobs Act"),  requires all
thrift  institutions  to pay tax on or recapture  their excess bad debt reserves
accumulated since 1988. The legislation  substantially equalizes the taxation of
banks and thrift  institutions,  but is protects thrifts from taxes on "bad debt
reserves"  established  prior to 1988. The Jobs Act eliminates the percentage of
taxable  income  method for  deducting bad debt reserves for all thrifts for tax
years beginning after December 31, 1995 (1996,  as to Winton  Financial).  Under
the  legislation,  Winton  Financial  is  required  to  recapture  approximately
$980,000  of its bad debt  reserves  as taxable  income,  which  represents  the
post-1987 additions to the reserves,  and is unable to utilize the percentage of
earnings  method to compute its  reserves in the future.  Winton  Financial  has
provided  deferred  taxes for this amount and will be  permitted to amortize the
recapture of its bad debt reserves over six years, beginning in fiscal 1999.





                                       14
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Potential Impact on Future Results of Operations of Current and Pending 
Legislation (continued)

Legislation had been introduced in Congress to eliminate the federal  regulation
of  savings  and loan  associations  and to  develop  a common  charter  for all
financial institutions.  As a result, Winton Financial might become subject to a
different form of holding company regulation,  which may limit the activities in
which it may engage and subject it to other additional regulatory  requirements,
including separate capital requirements. In addition, Congress may eliminate the
OTS, and Winton  Savings may be regulated  under federal law as a bank or may be
required to change its  charter.  Such  change in  regulation  or charter  would
likely  change the range of  activities  in which Winton  Savings may engage and
would probably  subject Winton  Savings to more  regulation by the FDIC.  Winton
Financial  and  Winton  Savings  cannot  predict  when or whether  Congress  may
actually pass such  legislation or whether such legislation will actually change
the  regulation  and  permissible  activities  of Winton  Financial  and  Winton
Savings.  Although  such  legislation  may change the  activities  in which both
Winton  Financial  and Winton  Savings may engage,  it is not  anticipated  that
current activities will be materially affected by those activity limits.

Effects of Recent Accounting Pronouncements

In June 1996,  the  Financial  Accounting  Standards  Board (the "FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 125,  "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
that provides accounting guidance on transfers of financial assets, servicing of
financial assets, and extinguishment of liabilities.  SFAS No. 125 introduces an
approach to accounting  for transfers of financial  assets that provides a means
of dealing with more complex transactions in which the seller disposes of only a
partial  interest in the assets,  retains  rights or  obligations,  makes use of
special  purpose  entities  in the  transaction,  or  otherwise  has  continuing
involvement  with  the  transferred  assets.  The  new  accounting  method,  the
financial  components  approach,  provides  that  the  carrying  amount  of  the
financial assets transferred be allocated to components of the transaction based
on their relative fair values.  SFAS No. 125 provides  criteria for  determining
whether control of assets has been relinquished and whether a sale has occurred.
If the transfer  does not qualify as a sale,  it is  accounted  for as a secured
borrowing. Transactions subject to the provisions of SFAS No. 125 include, among
others, transfers involving repurchase agreements,  securitizations of financial
assets,  loan   participations,   factoring   arrangements,   and  transfers  of
receivables with recourse.

An entity that undertakes an obligation to service  financial assets  recognizes
either a servicing asset or liability for the servicing contract (unless related
to a securitization of assets,  and all the securitized  assets are retained and
classified  as  held-to-maturity).  A  servicing  asset  or  liability  that  is
purchased or assumed is initially recognized at its fair value. Servicing assets
and  liabilities are amortized in proportion to and over the period of estimated
net  servicing  income  or net  servicing  loss and are  subject  to  subsequent
assessments for impairment based on fair value.







                                       15
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Effects of Recent Accounting Pronouncements (continued)

SFAS No. 125 provides that a liability is removed from the balance sheet only if
the debtor  either pays the creditor and is relieved of its  obligation  for the
liability or is legally released from being the primary obligor.

SFAS No. 125 is effective for  transfers  and servicing of financial  assets and
extinguishment  of liabilities  occurring  after December 31, 1997, and is to be
applied  prospectively.  Earlier or  retroactive  application  is not permitted.
Management  adopted  SFAS No. 125  during  fiscal  1998,  as  required,  without
material effect on Winton Financial's consolidated financial position or results
of operations.


In June 1997, the FASB issued SFAS No. 130,  "Reporting  Comprehensive  Income."
SFAS No. 130  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 requires that all items
that are required to be recognized under  accounting  standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same  prominence  as other  financial  statements.  It does  not  require  a
specific  format for that  financial  statement  but requires that an enterprise
display an amount representing total comprehensive income for the period in that
financial statement.

SFAS  No.  130  requires  that  an  enterprise   (a)  classify  items  of  other
comprehensive  income by their nature in a financial  statement  and (b) display
the accumulated balance of other  comprehensive  income separately from retained
earnings and additional  paid-in capital in the equity section of a statement of
financial  position.  SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997.  Reclassification of financial statements for earlier periods
provided for comparative  purposes is required.  SFAS No. 130 is not expected to
have a material effect on Winton  Financial's  financial  position or results of
operations.

In June 1997,  the FASB issued SFAS No. 131,  "Disclosures  about Segments of an
Enterprise and Related  Information." SFAS No. 131 significantly changes the way
that public business  enterprises report information about operating segments in
annual financial  statements and requires that those enterprises 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 uses a
"management approach" to disclose financial and descriptive information about an
enterprise's   reportable   operating  segments  which  is  based  on  reporting
information the way that management organizes the segments within the enterprise
for making operating decisions and assessing performance.  For many enterprises,
the management  approach will likely result in more segments being reported.  In
addition,  SFAS No. 131 requires  significantly more information to be disclosed
for each reportable segment than is presently being reported in annual financial
statements  and  requires  that  selected  information  be  reported  in interim
financial  statements.  SFAS No. 131 is effective for financial  statements  for
periods  beginning after December 15, 1997. SFAS No. 131 is not expected to have
a  material  effect on Winton  Financial's  financial  position  or  results  of
operations.





                                       16
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


Effects of Recent Accounting Pronouncements (continued)

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities,"  which requires  entities to recognize all
derivatives  in their  financial  statements  as either  assets  or  liabilities
measured at fair value.  SFAS No. 133 also  specifies  new methods of accounting
for hedging  transactions,  prescribes  the items and  transactions  that may be
hedged,  and  specifies  detailed  criteria  to be  met  to  qualify  for  hedge
accounting.

The definition of a derivative  financial instrument is complex, but in general,
it is an instrument  with one or more  underlyings,  such as an interest rate or
foreign exchange rate, that is applied to a notional  amount,  such as an amount
of currency,  to determine the settlement  amount(s).  It generally  requires no
significant initial investment and can be settled net or by delivery of an asset
that is  readily  convertible  to cash.  SFAS No.  133  applies  to  derivatives
embedded in other contacts,  unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

SFAS No. 133 is effective  for fiscal years  beginning  after June 15, 1999.  On
adoption, entities are permitted to transfer held-to-maturity debt securities to
the  available-for-sale  or trading category without calling into question their
intent to hold other debt securities to maturity in the future.  SFAS No. 133 is
not expected to have a material impact on Winton Financial's  financial position
or results of operations.

The  foregoing  discussion  of the effects of recent  accounting  pronouncements
contains  forward-looking  statements  that  involve  risks  and  uncertainties.
Changes  in  economic  circumstances,  interest  rates  or the  balance  of loan
servicing  rights sold and retained by Winton Savings could cause the effects of
the accounting pronouncements to differ from management's foregoing assessment.


Year 2000 Compliance Issues

The Year 2000 issue is a serious  operational  problem which is  widespread  and
complex, affecting all industries. The Federal Financial Institution Examination
Council (the "FFIEC"),  representing the views of each of the primary  financial
institution  regulators,  has  focused  on the risk  that  programming  codes in
existing  computer  systems will fail to properly  recognize the new  millennium
when it occurs in the year 2000.  Winton  Savings is  addressing  the  potential
problems  associated  with the  possibility  that the computers which control or
operate the Company's operating systems may not be programmed to read four-digit
date codes and, upon arrival of the year 2000,  may recognize the two-digit code
"00" as the year  1900,  causing  systems  to fail to  function  or to  generate
erroneous data. Other concerns have been raised regarding  February 29, 2000, as
well as September 9, 1999, which are new calculation  challenges that may result
in further problems.






                                       17
<PAGE>


                          Winton Financial Corporation

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)



Year 2000 Compliance Issues (continued)

Most  significantly  affected are all forms of financial  accounting,  including
interest  computations,  due dates, pensions,  personnel benefits,  investments,
legal commitments,  valuations,  fixed asset depreciation schedules, tax filings
and  financial  models.  Additional  problems may occur on other  systems  using
computers for processing, vault openings, check protectors and gas and electric.
The total impact is currently unknown;  however, it is projected that failure to
address these programming code issues and make appropriate changes may expose an
institution to all types of risks,  including  credit,  transaction,  liquidity,
interest rate, compliance, reputation, strategic, price and foreign exchange.

Winton Savings has established a Year 2000 team,  headed by the systems analyst,
to analyze the risk of potential  problems that might arise from the failures of
computer  programming  to  recognize  the  year  2000 and to  develop  a plan to
mitigate  any such  risk.  Research  by the  team  indicates  that the  greatest
potential  impact upon  Winton  Savings is the risk  related to vendors  used by
Winton  Savings,  particularly  the Company's data  processing  service  bureau.
Quarterly  progress reports from the service bureau indicated levels of manpower
and  expertise  sufficient  to amend  and test the  adequacy  of their  computer
programming and systems prior to the arrival of the year 2000. All other vendors
and  commercial  customer's  have been  identified  and  requests  for year 2000
certificates have been forwarded by Winton Savings.

The year 2000 team submits quarterly  progress reports to the Board of Directors
and has established a target date of December 31, 1998 for all required internal
testing of each system  utilized,  which is  expected  to be  minimal.  The team
estimates that the impact upon the Company's  results of  operations,  liquidity
and capital resources will be immaterial.

Management  has developed a contingency  plan which includes  manual  procedures
along with certain  off-line  canned  programs.  Management  has set a budget of
approximately  $100,000 to ensure Winton  Financial and Winton  Savings are year
2000 compliant.

In addition,  financial  institutions may experience  increases in problem loans
and credit losses in the event that borrowers fail to prepare  properly for Year
2000,  and higher  funding  costs could result if  consumers  react to publicity
about the issue by withdrawing deposits.  Winton Savings is assessing such risks
among its customers.  WFC could also be materially  adversely  affected if other
third  parties,  such  as  governmental  agencies,  clearing  houses,  telephone
companies,  utilities  and other  service  providers  fail to prepare  properly.
Winton Savings is therefore  attempting to assess these risks and take action to
minimize their effect.






                                       18
<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Winton Financial Corporation

We have audited the accompanying  consolidated statements of financial condition
of Winton  Financial  Corporation  as of  September  30, 1998 and 1997,  and the
related consolidated statements of earnings, shareholders' equity and cash flows
for each of the years in the three year period ended  September 30, 1998.  These
consolidated  financial  statements are the  responsibility of the Corporation's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of Winton Financial
Corporation as of September 30, 1998 and 1997, and the  consolidated  results of
its  operations  and its cash  flows for each of the three  years in the  period
ended  September 30, 1998,  in conformity  with  generally  accepted  accounting
principles.




GRANT THORNTON LLP



Cincinnati, Ohio
November 19, 1998 (except for Note O, as to which the date is December 4, 1998)





                                       19
<PAGE>

<TABLE>
<CAPTION>

                          Winton Financial Corporation

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                  September 30,
                        (In thousands, except share data)


          ASSETS                                                                                 1998              1997
<S>                                                                                             <C>                <C>
Cash and due from banks                                                                    $    1,607        $    1,367
Interest-bearing deposits in other financial institutions                                       2,607             1,419
                                                                                              -------           -------
          Cash and cash equivalents                                                             4,214             2,786

Investment securities available for sale - at market                                            5,579             3,631
Investment securities - at amortized cost, approximate market
  value of $15,185 and $12,679 at September 30, 1998 and 1997                                  14,858            12,585
Mortgage-backed securities available for sale - at market                                         565               799
Mortgage-backed securities - at cost, approximate market
  value of $12,266 and $14,345 at September 30, 1998 and 1997                                  12,418            14,614
Loans receivable - net                                                                        297,055           276,334
Loans held for sale - at lower of cost or market                                                8,253             4,210
Office premises and equipment - at depreciated cost                                             2,945             2,627
Real estate acquired through foreclosure                                                          495               513
Federal Home Loan Bank stock - at cost                                                          4,033             2,998
Accrued interest receivable on loans                                                            2,407             2,185
Accrued interest receivable on mortgage-backed securities                                          91               109
Accrued interest receivable on investments and interest-bearing deposits                          285               241
Prepaid expenses and other assets                                                                 488               393
Intangible assets - net of amortization                                                           402               463
Prepaid federal income taxes                                                                      105                - 
                                                                                              -------           -------

          Total assets                                                                       $354,193          $324,488
                                                                                              =======           =======

          LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits  $266,007                                                                           $240,317
Advances from the Federal Home Loan Bank                                                       56,899            57,425
Accounts payable on mortgage loans serviced for others                                            912               842
Advance payments by borrowers for taxes and insurance                                             610               412
Other liabilities                                                                               1,342             1,137
Accrued federal income taxes                                                                       -                 85
Deferred federal income taxes                                                                   1,531               993
                                                                                              -------           -------
          Total liabilities                                                                   327,301           301,211

Commitments                                                                                        -                 - 

Shareholders' equity
  Preferred stock - 2,000,000 shares without par value authorized;
    no shares issued                                                                               -                 - 
  Common stock - 5,000,000 shares without par value authorized;
    4,014,304 and 1,986,152 shares outstanding                                                     -                 - 
  Additional paid-in capital                                                                    8,782             6,501
  Retained earnings - restricted                                                               17,520            16,474

  Unrealized gains on securities designated as available for sale,
    net of related tax effects                                                                    590               302
                                                                                              -------           -------
          Total shareholders' equity                                                           26,892            23,277
                                                                                              -------           -------

          Total liabilities and shareholders' equity                                         $354,193          $324,488
                                                                                              =======           =======

</TABLE>

The accompanying notes are an integral part of these statements.


                                       20
<PAGE>


<TABLE>
<CAPTION>

                          Winton Financial Corporation

                       CONSOLIDATED STATEMENTS OF EARNINGS

                            Year ended September 30,
                        (In thousands, except share data)

                                                                                    1998            1997           1996
<S>                                                                                 <C>            <C>             <C>
Interest income
  Loans                                                                          $24,813         $22,086        $18,627
  Mortgage-backed securities                                                         875           1,061          1,183
  Investment securities                                                            1,105             879            821
  Interest-bearing deposits and other                                                278             207            199
                                                                                  ------          ------         ------
         Total interest income                                                    27,071          24,233         20,830

Interest expense
  Deposits                                                                        13,118          12,009         10,700
  Borrowings                                                                       3,630           3,027          1,996
                                                                                  ------          ------         ------
         Total interest expense                                                   16,748          15,036         12,696
                                                                                  ------          ------         ------

         Net interest income                                                      10,323           9,197          8,134

Provision for losses on loans                                                         60              -             253
                                                                                  ------          ------         ------

         Net interest income after provision for losses on loans                  10,263           9,197          7,881

Other income
  Gain on sale of mortgage loans                                                   1,565             837            742
  Gain on sale of investment and mortgage-backed securities
    designated as available for sale                                                  -               36              9
  Gain on sale of real estate acquired through foreclosure                            -               32             - 

  Mortgage servicing fees, net                                                       168             320            284
  Other operating                                                                    447             394            384
                                                                                  ------          ------         ------
         Total other income                                                        2,180           1,619          1,419

General, administrative and other expense
  Employee compensation and benefits                                               3,086           2,916          2,625
  Occupancy and equipment                                                          1,320           1,225          1,154
  Federal deposit insurance premiums                                                 150             206          1,773
  Franchise taxes                                                                    302             264            254
  Amortization of intangible assets                                                   61              61             61
  Advertising                                                                        238             169            137
  Other operating                                                                  1,164           1,066            872
  Merger related costs                                                                -               -             615
                                                                                  ------          ------         ------
         Total general, administrative and other expense                           6,321           5,907          7,491
                                                                                  ------          ------         ------

         Earnings before income taxes                                              6,122           4,909          1,809

Federal income taxes
  Current                                                                          1,675             972            844
  Deferred                                                                           390             711           (216)
                                                                                  ------          ------         ------
         Total federal income taxes                                                2,065           1,683            628
                                                                                  ------          ------         ------

         NET EARNINGS                                                            $ 4,057         $ 3,226        $ 1,181
                                                                                  ======          ======         ======

         EARNINGS PER SHARE
           Basic                                                                   $1.01            $.81           $.30
                                                                                    ====             ===            ===

           Diluted                                                                  $.96            $.80           $.30
                                                                                     ===             ===            ===
</TABLE>


The accompanying notes are an integral part of these statements.

                                       21
<PAGE>

<TABLE>
<CAPTION>

                          Winton Financial Corporation

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                  Years ended September 30, 1998, 1997 and 1996
                       (In thousands, except share data)
                                                                                           Unrealized
                                                                                             gains on
                                                                            Additional     securities
                                                                   Common      paid-in      available    Retained
                                                                    stock      capital       for sale    earnings           Total
<S>                                                                  <C>          <C>          <C>          <C>              <C>
Balance at October 1, 1995                                            $-        $6,444           $178     $13,775         $20,397

Proceeds from exercise of stock options                                -            57             -           -               57
Net earnings for the year ended September 30, 1996                     -            -              -        1,181           1,181
Unrealized gains on securities designated as available for
  sale, net of related tax effects                                     -            -              10          -               10
Cash dividends of $.2075 per share                                     -            -              -         (814)           (814)
                                                                       --        -----             --      ------         -------

Balance at September 30, 1996                                          -         6,501            188      14,142          20,831

Net earnings for the year ended September 30, 1997                     -            -              -        3,226           3,226
Unrealized gains on securities designated as available for
  sale, net of related tax effects                                     -            -             114          -              114
Cash dividends paid of $.225 per share                                 -            -              -         (894)           (894)
                                                                       --        -----             --      ------         ------

Balance at September 30, 1997                                          -         6,501            302      16,474          23,277

Stock dividend effected in the form of a 2-for-1 stock split           -         2,007             -       (2,007)             - 
Proceeds from exercise of stock options                                -           274             -           -              274
Net earnings for the year ended September 30, 1998                     -            -              -        4,057           4,057
Unrealized gains on securities designated as available for
  sale, net of related tax effects                                                  -             288          -              288
Cash dividends of $.25 per share                                       -            -              -       (1,004)         (1,004)
                                                                       --        -----             --      ------          ------

Balance at September 30, 1998                                         $-        $8,782           $590     $17,520         $26,892
                                                                       ==        =====            ===      ======          ======
</TABLE>





The accompanying notes are an integral part of these statements.



                                       22
<PAGE>

<TABLE>
<CAPTION>

                          Winton Financial Corporation
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            Year ended September 30,
                                 (In thousands)
                                                                                         1998           1997           1996
<S>                                                                                    <C>              <C>             <C>
Cash flows from operating activities:
  Net earnings for the year                                                        $    4,057     $    3,226       $  1,181
  Adjustments to reconcile net earnings to net
  cash provided by (used in) operating activities:
    Amortization of premiums on investments and mortgage-backed
      securities                                                                           29             17             52
    Amortization of deferred loan origination fees                                       (198)          (198)          (149)
    Depreciation and amortization                                                         409            393            355
    Amortization of intangible assets                                                      61             61             61
    Gain on sale of investment securities designated as available for sale                 -             (36)            - 
    Gain on sale of mortgage-backed securities designated as available
      for sale                                                                             -              -              (9)
    Gain on sale of real estate acquired through foreclosure                               -             (32)            - 
    Provision for losses on loans                                                          60             -             253
    Gain on sale of mortgage loans                                                     (1,199)          (517)          (420)
    Loans disbursed for sale in the secondary market                                 (108,187)       (43,888)       (36,301)
    Proceeds from sale of loans in the secondary market                               105,343         42,930         35,065
    Federal Home Loan Bank stock dividends                                               (248)          (188)          (155)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable on loans                                               (222)          (277)          (329)
      Accrued interest receivable on mortgage-backed securities                            18             17              9
      Accrued interest receivable on investments                                          (44)           (78)            24
      Prepaid expenses and other assets                                                   (95)            16            (73)
      Accounts payable on mortgage loans serviced for others                               70            156             64
      Other liabilities                                                                   205         (1,136)         1,666
      Federal income taxes
        Current                                                                          (190)            78            (91)
        Deferred                                                                          390            711           (216)
                                                                                      -------        -------         ------
         Net cash provided by operating activities                                        259          1,255            987

Cash flows provided by (used in) investing activities:
  Principal repayments on mortgage-backed securities                                    2,389          3,950          2,040
  Purchase of mortgage-backed securities designated as available for sale                  -              -          (3,087)
  Purchase of mortgage-backed securities designated as held to maturity                    -              -            (293)
  Proceeds from the sale of mortgage-backed securities designated as
    available for sale                                                                     -              -           1,406
  Proceeds from the maturity of investment securities                                   6,650          3,500          2,250
  Proceeds from the sale of investment securities designated as
    available for sale                                                                     -             122             - 
  Purchase of investment securities designated as held to maturity                     (8,928)        (2,491)        (1,350)
  Purchase of investment securities designated as available for sale                   (1,495)        (4,988)            - 
  Loan principal repayments                                                            92,741         63,990         40,475
  Loan disbursements                                                                 (119,653)      (103,776)       (85,242)
  Sale of loan participations                                                           6,329         11,385          1,732
  Proceeds from the sale of real estate acquired through foreclosure                       -              94             - 
  Purchase and renovation of office premises and equipment                               (709)          (334)          (246)
  Additions to real estate acquired through foreclosure                                    -             (13)          (157)
  Purchase of Federal Home Loan Bank stock                                               (787)          (451)           (41)
                                                                                     --------       --------         ------
         Net cash used in investing activities                                        (23,463)       (29,012)       (42,513)
                                                                                     --------       --------         ------

         Net cash used in operating and investing activities
           (subtotal carried forward)                                                 (23,204)       (27,757)       (41,526)
                                                                                     --------       --------         ------

</TABLE>



                                       23
<PAGE>

<TABLE>
<CAPTION>

                          Winton Financial Corporation

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                            Year ended September 30,
                                 (In thousands)

                                                                                    1998            1997           1996

<S>                                                                                <C>             <C>             <C>
         Net cash used in operating and investing activities
           (balance brought forward)                                            $(23,204)       $(27,757)      $(41,526)

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts, including
    purchased deposits                                                            25,690          18,784         23,628
  Proceeds from Federal Home Loan Bank advances                                   68,039          37,107         65,262
  Repayment of Federal Home Loan Bank advances                                   (68,565)        (26,058)       (48,716)
  Advances by borrowers for taxes and insurance                                      198             100             23
  Proceeds from exercise of stock options                                            274              -              57
  Dividends paid on common stock                                                  (1,004)           (894)          (814)
                                                                                --------       ---------      ---------
         Net cash provided by financing activities                                24,632          29,039         39,440
                                                                                 -------         -------        -------

Net increase (decrease) in cash and cash equivalents                               1,428           1,282         (2,086)

Cash and cash equivalents at beginning of year                                     2,786           1,504          3,590
                                                                                --------         -------        -------

Cash and cash equivalents at end of year                                       $   4,214        $  2,786       $  1,504
                                                                                ========         =======        =======


Supplemental disclosure of cash flow information: 
  Cash paid during the year for:
    Federal income taxes                                                       $   1,805        $    894       $    809
                                                                                ========         =======        =======

    Interest on deposits and borrowings                                        $  16,643        $ 14,808       $ 12,650
                                                                                 =======         =======        =======

Supplemental disclosure of noncash investing activities:
  Transfer from loans to real estate acquired through
    foreclosure                                                                $      52        $    200       $     61
                                                                                ========         =======        =======

  Unrealized gains on securities designated as
    available for sale, net of related tax effects                             $     288        $    114       $     10
                                                                                ========         =======        =======

  Recognition of mortgage servicing rights in
    accordance with SFAS No. 125                                               $     366        $    320       $    322
                                                                                ========         =======        =======


</TABLE>






The accompanying notes are an integral part of these statements.


                                       24
<PAGE>


                          Winton Financial Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Winton Financial Corporation ("Winton Financial", or the "Corporation") is a
    savings and loan holding company whose  activities are primarily  limited to
    holding the stock of The Winton Savings and Loan Company ("Winton  Savings",
    or the  "Company").  The  Company  conducts a general  banking  business  in
    southwestern  Ohio which  consists of  attracting  deposits from the general
    public and applying those funds to the origination of loans for residential,
    consumer  and  nonresidential   purposes.  The  Company's  profitability  is
    significantly  dependent on its net interest income, which is the difference
    between interest income generated from  interest-earning  assets (i.e. loans
    and  investments)   and  the  interest  expense  paid  on   interest-bearing
    liabilities (i.e. customer deposits and borrowed funds). Net interest income
    is  affected  by  the  relative  amount  of   interest-earning   assets  and
    interest-bearing  liabilities  and the  interest  received  or paid on these
    balances. The level of interest rates paid or received by the Company can be
    significantly  influenced  by a number  of  environmental  factors,  such as
    governmental monetary policy, that are outside of management's control.

    The financial  information  presented herein has been prepared in accordance
    with  generally  accepted   accounting   principles   ("GAAP")  and  general
    accounting  practices within the financial services  industry.  In preparing
    consolidated  financial  statements in accordance  with GAAP,  management is
    required to make estimates and assumptions  that affect the reported amounts
    of assets  and  liabilities  and the  disclosure  of  contingent  assets and
    liabilities  at  the  date  of the  consolidated  financial  statements  and
    revenues and expenses  during the  reporting  period.  Actual  results could
    differ from such estimates.

    During fiscal 1996,  Winton  Financial  merged Blue Chip Savings Bank ("Blue
    Chip") with and into its subsidiary,  Winton Savings, in a transaction which
    was accounted for as a pooling-of-interests. In connection with the business
    combination, Winton Financial issued 361,952 shares of common stock.

    1.  Principles of Consolidation

    The  consolidated   financial   statements   include  the  accounts  of  the
    Corporation  and  the  Company.   Condensed  financial   statements  of  the
    Corporation  are presented in Note M as of September 30, 1998 and 1997,  and
    for  the  fiscal  years  ended  September  30,  1998,  1997  and  1996.  All
    significant  intercompany  balances and transactions have been eliminated in
    the accompanying consolidated financial statements.










                                       25
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    2.  Investment Securities and Mortgage-Backed Securities

    The Corporation  accounts for investment and  mortgage-backed  securities in
    accordance  with Statement of Financial  Accounting  Standards  ("SFAS") No.
    115,  "Accounting  for Certain  Investments in Debt and Equity  Securities."
    SFAS No. 115 requires that  investments be categorized as  held-to-maturity,
    trading,  or available for sale.  Securities  classified as held-to-maturity
    are  carried at cost only if the  Corporation  has the  positive  intent and
    ability  to hold  these  securities  to  maturity.  Trading  securities  and
    securities  available  for sale are  carried at fair  value  with  resulting
    unrealized gains or losses recorded to operations or  shareholders'  equity,
    respectively. At September 30, 1998 and 1997, the Corporation's shareholders
    equity reflected net unrealized gains on securities  designated as available
    for sale totaling $590,000 and $302,000, respectively.

    Realized  gains and  losses on the sale of  investment  and  mortgage-backed
    securities are recognized using the specific identification method.

    3.  Loans Receivable

    Loans held in  portfolio  are stated at the  principal  amount  outstanding,
    adjusted for deferred loan  origination  fees, the allowance for loan losses
    and  premiums  and  discounts  on loans  purchased  and sold.  Premiums  and
    discounts  on loans  purchased  and  sold  are  amortized  and  accreted  to
    operations using the interest method over the average life of the underlying
    loans.

    Interest is accrued as earned  unless the  collectibility  of the loan is in
    doubt.  Uncollectible  interest on loans that are contractually  past due is
    charged off, or an allowance is established  based on management's  periodic
    evaluation.  The  allowance is  established  by a charge to interest  income
    equal  to all  interest  previously  accrued,  and  income  is  subsequently
    recognized  only to the extent that cash  payments  are received  until,  in
    management's  judgment, the borrower's ability to make periodic interest and
    principal  payments  has  returned  to  normal,  in  which  case the loan is
    returned to accrual status.  If the ultimate  collectibility of principal is
    in doubt, in whole or in part, all payments received on nonaccrual loans are
    applied to reduce principal until such doubt is eliminated.

    Loans held for sale are  carried at the lower of cost or market,  determined
    in the aggregate.  In computing  cost,  deferred loan  origination  fees are
    deducted from the principal  balances of the related loans. At September 30,
    1998 and 1997, loans held for sale were carried at cost.

    Winton  Savings  accounts  for  mortgage  servicing  rights  pursuant to the
    provisions  of SFAS No. 125,  "Accounting  for  Transfers  and  Servicing of
    Financial Assets and  Extinguishments  of Liabilities,"  which requires that
    Winton  Savings  recognize as separate  assets,  rights to service  mortgage
    loans for others,  regardless of how those servicing rights are acquired. An
    institution  that acquires  mortgage  servicing  rights  through  either the
    purchase  or  origination  of  mortgage  loans and sells  those  loans  with
    servicing  rights  retained  would allocate some of the cost of the loans to
    the mortgage servicing rights.





                                       26
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    3.  Loans Receivable (continued)

     SFAS No. 125 requires that  securitization  of mortgage  loans be accounted
     for  as  sales  of  mortgage  loans  and  acquisitions  of  mortgage-backed
     securities.  Additionally,  SFAS No. 125 requires that capitalized mortgage
     servicing rights and capitalized  excess servicing  receivables be assessed
     for impairment. Impairment is measured based on fair value.

    The  mortgage  servicing  rights  recorded  by the  Company,  calculated  in
    accordance  with the provisions of SFAS No. 125, were  segregated into pools
    for valuation  purposes,  using as pooling criteria the loan term and coupon
    rate.  Once  pooled,  each  grouping of loans was  evaluated on a discounted
    earnings  basis to determine  the present  value of future  earnings  that a
    purchaser  could  expect to  realize  from  each  portfolio.  Earnings  were
    projected from a variety of sources including loan servicing fees,  interest
    earned on float, net interest earned on escrows,  miscellaneous  income, and
    costs to service  the loans.  The  present  value of future  earnings is the
    "economic" value for the pool, i.e., the net realizable  present value to an
    acquirer of the acquired servicing.

    The  Company  recorded  amortization  related to mortgage  servicing  rights
    totaling  approximately  $213,000,  $32,000  and $6,000 for the years  ended
    September 30, 1998, 1997 and 1996,  respectively.  At September 30, 1998 and
    1997,  the fair value of the Company's  mortgage  servicing  rights  totaled
    approximately $790,000 and $636,000, respectively.

    4.  Loan Origination and Commitment Fees

    The  Company  accounts  for loan  origination  fees in  accordance  with the
    provisions  of SFAS No. 91,  "Accounting  for  Nonrefundable  Fees and Costs
    Associated  with  Originating or Acquiring Loans and Initial Direct Costs of
    Leases."  Pursuant  to the  provisions  of SFAS  No.  91,  origination  fees
    received from loans, net of certain direct  origination  costs, are deferred
    and amortized to interest income using the interest method, giving effect to
    actual loan  prepayments.  Additionally,  SFAS No. 91  generally  limits the
    definition of loan  origination  costs to the direct costs  attributable  to
    originating a loan, i.e.,  principally actual personnel costs. Fees received
    for loan  commitments  that are  expected  to be  drawn  upon,  based on the
    Company's  experience with similar  commitments,  are deferred and amortized
    over the life of the related loan using the interest method.  Fees for other
    commitments are deferred and amortized over the loan commitment  period on a
    straight-line basis.

    5.  Allowance for Loan Losses

    It is the Company's  policy to provide  valuation  allowances  for estimated
    losses on loans based on past loss  experience,  current trends in the level
    of delinquent and problem loans,  loan  concentrations  to single borrowers,
    changes in the  composition of the loan portfolio,  adverse  situations that
    may  affect the  borrower's  ability to repay,  the  estimated  value of any
    underlying collateral and current and anticipated economic conditions in its
    primary lending






                                       27
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    5.  Allowance for Loan Losses (continued)

    areas.  When  the  collection  of a  loan  becomes  doubtful,  or  otherwise
    troubled,  the Company records a charge-off equal to the difference  between
    the fair value of the  property  securing  the loan and the loan's  carrying
    value. Major loans,  including development projects, and major lending areas
    are reviewed  periodically to determine potential problems at an early date.
    The  allowance  for loan  losses is  increased  by charges to  earnings  and
    decreased by charge-offs (net of recoveries).

    The Company  accounts for impaired  loans in  accordance  with SFAS No. 114,
    "Accounting  by Creditors  for  Impairment of a Loan." SFAS No. 114 requires
    that  impaired  loans be measured  based upon the present  value of expected
    future cash flows discounted at the loan's effective interest rate or, as an
    alternative,  at the  loan's  observable  market  price or fair value of the
    collateral.

    A loan is  defined  under SFAS No. 114 as  impaired  when,  based on current
    information  and events,  it is probable  that a creditor  will be unable to
    collect all  amounts  due  according  to the  contractual  terms of the loan
    agreement. In applying the provisions of SFAS No. 114, the Company considers
    its  investment  in one-  to  four-family  residential  loans  and  consumer
    installment  loans to be  homogeneous  and therefore  excluded from separate
    identification  for evaluation of impairment.  With respect to the Company's
    investment in nonresidential and multi-family residential real estate loans,
    and  its  evaluation  of  impairment  thereof,   such  loans  are  generally
    collateral  dependent and, as a result, are carried as a practical expedient
    at the lower of cost or fair value.

    Collateral  dependent  loans which are more than ninety days  delinquent are
    considered  to  constitute  more than a minimum  delay in repayment  and are
    evaluated for impairment under SFAS No. 114 at that time.

     At  September  30,  1998 and 1997,  the  Company had no loans that would be
     defined as impaired under SFAS No. 114.

    6.  Office Premises and Equipment

    Office  premises and equipment are carried at cost and include  expenditures
    which extend the useful lives of existing assets.  Maintenance,  repairs and
    minor   renewals  are  expensed  as  incurred.   For  financial   reporting,
    depreciation  and  amortization  are  provided  on  the   straight-line  and
    accelerated  methods  over the useful  lives of the assets,  estimated to be
    thirty to forty  years for  buildings,  five to fifteen  years for  building
    improvements  and three to fifteen  years for furniture  and  equipment.  An
    accelerated depreciation method is used for tax reporting purposes.



                                       28
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    7.  Real Estate Acquired through Foreclosure

    Real  estate  acquired  through  foreclosure  is carried at the lower of the
    loan's unpaid principal  balance (cost) or fair value less estimated selling
    expenses  at the  date of  acquisition.  Real  estate  loss  provisions  are
    recorded if the properties' fair value subsequently declines below the value
    determined at the recording  date. In determining  the lower of cost or fair
    value at  acquisition,  costs  relating to  development  and  improvement of
    property are  considered.  Costs  relating to holding  real estate  acquired
    through  foreclosure,  net of rental income, are charged against earnings as
    incurred.

    8.  Federal Income Taxes

    The Corporation  accounts for federal income taxes pursuant to SFAS No. 109,
    "Accounting  for Income Taxes." In accordance  with SFAS No. 109, a deferred
    tax  liability  or deferred  tax asset is  computed by applying  the current
    statutory  tax rates to net  taxable  or  deductible  temporary  differences
    between the tax basis of an asset or liability  and its  reported  amount in
    the  consolidated  financial  statements  that will result in net taxable or
    deductible amounts in future periods.  Deferred tax assets are recorded only
    to the extent that the amount of net  deductible  temporary  differences  or
    carryforward  attributes may be utilized  against  current period  earnings,
    carried back against prior years' earnings, offset against taxable temporary
    differences  reversing  in future  periods,  or  utilized  to the  extent of
    management's  estimate of future taxable  income.  A valuation  allowance is
    provided  for  deferred  tax  assets  to the  extent  that the  value of net
    deductible  temporary   differences  and  carryforward   attributes  exceeds
    management's  estimates of taxes payable on future taxable income.  Deferred
    tax   liabilities  are  provided  on  the  total  amount  of  net  temporary
    differences taxable in the future.

    Deferral  of income  taxes  results  primarily  from  different  methods  of
    accounting for deferred loan origination fees,  Federal Home Loan Bank stock
    dividends,  mortgage  servicing rights,  the general loan loss allowance and
    the  percentage of earnings bad debt  deduction.  Additionally,  a temporary
    difference is recognized for depreciation  utilizing accelerated methods for
    federal income tax purposes.

    9.  Amortization of Intangible Assets

    Goodwill  and  other  intangible  assets  arising  from the  acquisition  of
    deposits  from  another  financial  institution  are being  amortized on the
    straight-line method over a ten year period.


                                       29
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    10.  Employee Benefit Plans

    The Corporation has an Employee Stock Ownership Plan ("ESOP") which provides
    retirement  benefits for  substantially all employees who have completed one
    year of service.  Contributions of $98,000, $90,000 and $65,000 were made to
    the  ESOP  for  the  years  ended   September  30,  1998,   1997  and  1996,
    respectively. At September 30, 1998, the ESOP held 321,992 shares (adjusted)
    of the  Corporation's  common  stock,  all of which  had been  allocated  to
    participants  as of that date.  All share totals and per share  amounts have
    been adjusted to give effect to the two-for-one stock split in the form of a
    stock dividend effected during fiscal 1998.

    The Company has a  contributory  401(k) plan covering all employees who have
    attained the age of 21 and have completed one year of service. Contributions
    to the plan are voluntary and are matched at the  discretion of the Board of
    Directors.  Contributions to the plan totaled $29,000,  $25,000 and $23,000,
    for the years ended September 30, 1998, 1997 and 1996, respectively.

    11.  Earnings Per Share

    Basic  earnings per share is computed  based upon  4,012,605,  3,972,304 and
    3,970,034  weighted-average  shares  outstanding  for the fiscal years ended
    September 30, 1998, 1997 and 1996, respectively.

    Diluted  earnings  per share is computed  taking into  consideration  common
    shares  outstanding and dilutive  potential common shares to be issued under
    the Corporation's stock option plan.  Weighted-average  common shares deemed
    outstanding  for purposes of computing  diluted  earnings per share  totaled
    4,205,030,  4,026,996 and 3,989,657 for the fiscal years ended September 30,
    1998, 1997 and 1996, respectively.

    Effective  during the fiscal year ended  September 30, 1998, the Corporation
    began  presenting  earnings per share pursuant to the provisions of SFAS No.
    128,  "Earnings per Share."  Accordingly,  the fiscal 1997 and 1996 earnings
    per share  presentation  has been revised to conform to SFAS No. 128, and to
    give effect to the two-for-one stock split effected during fiscal 1998.

    12.  Cash and Cash Equivalents

    For purposes of reporting  cash flows,  cash and cash  equivalents  includes
    cash  and due from  banks  and  interest-bearing  deposits  due  from  other
    financial institutions with original maturities of less than ninety days.




                                       30
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    13.  Fair Value of Financial Instruments

    SFAS No.  107,  "Disclosures  about  Fair Value of  Financial  Instruments,"
    requires disclosure of the fair value of financial instruments,  both assets
    and liabilities  whether or not recognized in the consolidated  statement of
    financial  condition,  for which it is  practicable  to estimate that value.
    When quoted market prices are not available for financial instruments,  fair
    values  are based on  estimates  using  present  value  and other  valuation
    methods.

    The methods used are greatly affected by the assumptions applied,  including
    the discount  rate and estimates of future cash flows.  Therefore,  the fair
    values  presented  may not  represent  amounts  that could be realized in an
    exchange for certain financial instruments.

    The  following  methods  and  assumptions  were used by the  Corporation  in
    estimating its fair value disclosures for financial instruments at September
    30, 1998 and 1997:

                  Cash and cash  equivalents:  The carrying amounts presented in
                  the  consolidated  statements of financial  condition for cash
                  and cash equivalents are deemed to approximate fair value.

                  Investments and mortgage-backed securities: For investment and
                  mortgage-backed  securities, fair value is deemed to equal the
                  quoted market price.

                  Loans receivable:  The loan portfolio has been segregated into
                  categories  with  similar  characteristics,  such  as  one- to
                  four-family   residential,    multi-family   residential   and
                  nonresidential real estate. These loan categories were further
                  delineated into fixed-rate and adjustable-rate loans. The fair
                  values for the  resultant  loan  categories  were computed via
                  discounted  cash flow analysis,  using current  interest rates
                  offered for loans with  similar  terms to borrowers of similar
                  credit quality.  For loans on deposit  accounts,  and consumer
                  and other loans, fair values were deemed to equal the historic
                  carrying  values.  The historical  carrying  amount of accrued
                  interest on loans is deemed to approximate fair value.

                  Federal Home Loan Bank stock: The carrying amount presented in
                  the consolidated  statements of financial  condition is deemed
                  to approximate fair value.

                  Deposits:  The fair value of NOW  accounts,  passbook and club
                  accounts,  advance  payments and amounts due on loans serviced
                  for  others are deemed to  approximate  the amount  payable on
                  demand.  Fair values for  fixed-rate  certificates  of deposit
                  have been estimated using a discounted  cash flow  calculation
                  using the  interest  rates  currently  offered for deposits of
                  similar remaining maturities.





                                       31
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    13.  Fair Value of Financial Instruments (continued)

                  Advances  from the Federal  Home Loan Bank:  The fair value of
                  these advances is estimated using the interest rates currently
                  offered for advances of similar remaining  maturities or, when
                  available, quoted market prices.

                  Commitments   to   extend    credit:    For   fixed-rate   and
                  adjustable-rate  loan  commitments,  the fair  value  estimate
                  considers the  difference  between  current levels of interest
                  rates and committed  rates.  The  difference  between the fair
                  value and notional amount of outstanding  loan  commitments at
                  September 30, 1998 and 1997, was not material.

    Based on the foregoing methods and assumptions,  the carrying value and fair
    value of the Corporation's financial instruments are as follows at September
    30:
<TABLE>
<CAPTION>

                                                                       1998                         1997
                                                             Carrying         Fair       Carrying         Fair
                                                                value        value          value        value
                                                                              (In thousands)
<S>                                                             <C>           <C>           <C>            <C>
    Financial assets
      Cash and cash equivalents                            $    4,214   $    4,214     $    2,786   $    2,786
      Investment securities designated
        as available for sale                                   5,579        5,579          3,631        3,631
      Investment securities - at cost                          14,858       15,185         12,585       12,679
      Mortgage-backed securities designated
        as available for sale                                     565          565            799          799
      Mortgage-backed securities - at cost                     12,418       12,266         14,614       14,345
      Loans receivable - net                                  305,308      317,216        280,544      283,594
      Federal Home Loan Bank stock                              4,033        4,033          2,998        2,998
                                                              -------     --------        -------      -------

                                                             $346,975     $359,058       $317,957     $320,832
                                                              =======      =======        =======      =======
    Financial liabilities
      Deposits                                               $266,007     $266,556       $240,317     $240,875
      Advances from Federal Home Loan Bank                     56,899       56,905         57,425       57,428
      Advance payments and amounts due on loans

        serviced for others                                     1,522        1,522          1,254        1,254
                                                              -------     --------        -------      -------

                                                             $324,428     $324,983       $298,996     $299,557
                                                              =======      =======        =======      =======
</TABLE>





                                       32
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    14.  Reclassifications

    Certain  prior year  amounts have been  reclassified  to conform to the 1998
consolidated financial statement presentation.


NOTE B - INVESTMENT AND MORTGAGE-BACKED SECURITIES

    Amortized  cost,  gross  unrealized  gains,  gross  unrealized  losses,  and
    estimated  fair  values  of  investment   securities  at  September  30  are
    summarized as follows:
<TABLE>
<CAPTION>

                                                                  1998                           1997
                                                                         Estimated                   Estimated
                                                         Amortized            fair      Amortized         fair
                                                              cost           value           cost        value
                                                                                (In thousands)
<S>                                                         <C>             <C>              <C>          <C>
    Held to maturity:
      U.S. Government and agency
        obligations                                        $14,858         $15,185        $12,585      $12,679

    Available for sale:
      U.S. Government and agency obligations                 4,587           4,855          3,088        3,149
      Corporate equity securities                              103             724            103          482
                                                            ------          ------         ------       ------
                                                             4,690           5,579          3,191        3,631
                                                            ------          ------         ------       ------

         Total investment securities                       $19,548         $20,764        $15,776      $16,310
                                                            ======          ======         ======       ======

</TABLE>

    At September  30, 1998,  the fair value  appreciation  of the  Corporation's
    investment  securities  in  excess  of cost  totaled  $1,216,000,  which was
    comprised solely of gross unrealized gains.

    At September  30, 1997,  the fair value  appreciation  of the  Corporation's
    investment  securities  in  excess  of  cost  totaled  $534,000,  which  was
    comprised of gross unrealized gains of $549,000 and gross unrealized  losses
    of $15,000.

    The amortized  cost and estimated  fair value of U.S.  Government and agency
    obligations,  including those designated as available for sale, at September
    30, 1998, by term to maturity are shown below.
<TABLE>
<CAPTION>
                                                              Estimated
                                             Amortized             fair
                                                  cost            value
                                                      (In thousands)
<S>                                            <C>                 <C>
    Due in one year or less                   $  6,149         $  6,193
    Due in one to three years                    4,710            4,770
    Due in three to five years                   8,586            9,077
                                                ------           ------

                                               $19,445          $20,040
                                                ======           ======
</TABLE>

                                       33
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES (continued)

    The amortized cost, gross unrealized  gains,  gross unrealized  losses,  and
    estimated  fair values of  mortgage-backed  securities at September 30, 1998
    and 1997, are shown below.
<TABLE>
<CAPTION>

                                                                                            1998
                                                                                  Gross            Gross      Estimated
                                                               Amortized     unrealized       unrealized           fair
                                                                    cost          gains           losses          value
                                                                                      (In thousands)
<S>                                                              <C>              <C>                <C>           <C>
    Held to maturity:
      Federal Home Loan Mortgage Corporation
        Participation certificates                               $ 4,402          $  11           $  (68)      $  4,345
      Government National Mortgage Association
        Participation certificates                                   598              9               -             607
      Federal National Mortgage Association
        Participation certificates                                 2,912              1              (65)         2,848
        Collateralized mortgage obligations                        1,181             -               (12)         1,169
      CMC Securities Corporation
        Collateralized mortgage obligations                        3,137             -               (24)         3,113
      Residential Funding Corporation
        Collateralized mortgage obligations                          188             -                (4)           184
                                                                  ------           ----             ----         ------
         Total mortgage-backed securities
           held to maturity                                       12,418             21             (173)        12,266

    Available for sale:
      Government National Mortgage Corporation
        Participation Certificates                                   561              4               -             565
                                                                  ------           ----             ----         ------

         Total mortgage-backed securities                        $12,979          $  25            $(173)       $12,831
                                                                  ======           ====             ====         ======
</TABLE>


















                                       34
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES (continued)
<TABLE>
<CAPTION>

                                                                                            1997
                                                                                  Gross            Gross      Estimated
                                                               Amortized     unrealized       unrealized           fair
                                                                    cost          gains           losses          value
                                                                                      (In thousands)
<S>                                                                 <C>          <C>                <C>            <C>
    Held to maturity:
      Federal Home Loan Mortgage Corporation
        Participation certificates                               $ 5,371          $  34           $  (92)      $  5,313
      Government National Mortgage Association
        Participation certificates                                   811             25               -             836
      Federal National Mortgage Association
        Participation certificates                                 3,449              5              (63)         3,391
        Collateralized mortgage obligations                        1,657             -               (67)         1,590
      CMC Securities Corporation
        Collateralized mortgage obligations                        3,137             -              (106)         3,031
      Residential Funding Corporation
        Collateralized mortgage obligations                          189             -                (5)           184
                                                                  ------           ----             ----         ------
         Total mortgage-backed securities
           held to maturity                                       14,614             64             (333)        14,345

    Available for sale:
      Government National Mortgage Corporation
        Participation Certificates                                   782             17               -             799
                                                                  ------           ----             ----         ------

         Total mortgage-backed securities                        $15,396          $  81            $(333)       $15,144
                                                                  ======           ====             ====         ======

</TABLE>



















                                       35
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES (continued)

    The amortized cost of mortgage-backed securities, including those designated
    as  available  for sale at  September  30,  1998,  by  contractual  terms to
    maturity,  are shown below. Expected maturities will differ from contractual
    maturities  because  borrowers  may  generally  prepay  obligations  without
    prepayment penalties.
<TABLE>
<CAPTION>

                                                        Amortized cost
                                                        (In thousands)
<S>                                                         <C>
    Due within three years                                 $         2
    Due after three years through five years                         7
    Due after five years through ten years                          12
    Due after ten years through twenty years                     2,943
    Due after twenty years                                      10,015
                                                                ------

                                                               $12,979
                                                                ======
</TABLE>

     Mortgage-backed  securities  with an  approximate  carrying  value  of $3.2
     million were pledged to secure public deposits at September 30, 1998.


NOTE C - LOANS RECEIVABLE

    The composition of the loan portfolio at September 30 is as follows:
<TABLE>
<CAPTION>


                                                                 1998            1997
                                                                     (In thousands)
<S>                                                            <C>                 <C>
    Residential real estate
      One- to four-family residential                        $138,415          $145,039
      Multi-family residential                                 75,442            71,798
      Construction                                             19,505            15,036
    Nonresidential real estate and land                        60,722            47,974
    Nonresidential construction                                 9,782             1,401
    Consumer and other                                          8,176             5,003
                                                              -------           -------
                                                              312,042           286,251
    Less:
      Undisbursed portion of loans in process                  13,616             8,364
      Deferred loan origination fees                              529               726
      Allowance for loan losses                                   842               827
                                                              -------           -------

                                                             $297,055          $276,334
                                                              =======           =======
</TABLE>






                                       36
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE C - LOANS RECEIVABLE (continued)

    The  Company's  lending  efforts  have  historically   focused  on  one-  to
    four-family  residential  and  multi-family  residential  real estate loans,
    which  comprise  approximately  $223.0  million,  or 75%,  of the total loan
    portfolio at September 30, 1998,  and $223.5  million,  or 81%, of the total
    loan  portfolio  at  September  30,  1997.  Generally,  such loans have been
    underwritten on the basis of no more than an 80% loan-to-value  ratio, which
    has historically  provided the Company with adequate  collateral coverage in
    the  event of  default.  Nevertheless,  the  Company,  as with  any  lending
    institution,  is subject to the risk that  residential  real  estate  values
    could deteriorate in its primary lending area of southwestern  Ohio, thereby
    impairing  collateral  values.  However,  management  is of the belief  that
    residential  real estate  values in the Company's  primary  lending area are
    presently stable.

    As discussed previously,  the Company has sold whole loans and participating
    interests in loans in the secondary market, generally retaining servicing on
    the loans sold.  Loans sold and  serviced for others  totaled  approximately
    $163.0  million,  $145.2  million and $116.6  million at September 30, 1998,
    1997 and 1996, respectively. At September 30, 1998, loans sold with recourse
    totaled $7.7 million.



NOTE D - ALLOWANCE FOR LOAN LOSSES

     The activity in the  allowance for loan losses is summarized as follows for
     the years ended September 30:
<TABLE>
<CAPTION>


                                            1998           1997         1996
                                                    (In thousands)
<S>                                          <C>            <C>          <C>
    Beginning balance                       $827           $857         $654
    Provision for losses on loans             60             -           253
    Charge-off of loans                      (47)           (51)         (50)
    Recoveries of loan losses                  2             21           - 
                                             ---            ---           --

    Ending balance                          $842           $827         $857
                                             ===            ===          ===
</TABLE>














                                       37
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE D - ALLOWANCE FOR LOAN LOSSES (continued)

    At September 30, 1998, the Company's allowance for loan losses was comprised
    of a general  loan loss  allowance  of $789,000,  which is  includible  as a
    component  of  regulatory  risk-based  capital,  and a  specific  loan  loss
    allowance totaling $53,000.

    Nonperforming  and  nonaccrual  loans at September 30, 1998,  1997 and 1996,
    totaled $1.1 million, $472,000 and $923,000,  respectively.  Interest income
    that would have been recognized had nonaccrual  loans performed  pursuant to
    contractual terms totaled approximately $31,000, $26,000 and $53,000 for the
    years ended September 30, 1998, 1997 and 1996, respectively.


NOTE E - OFFICE PREMISES AND EQUIPMENT

    Office premises and equipment is comprised of the following at September 30:
<TABLE>
<CAPTION>

                                                         1998            1997
                                                            (In thousands)
<S>                                                      <C>             <C>
    Land                                              $   336         $   336
    Office buildings and improvements                   2,466           2,413
    Furniture, fixtures and equipment                   2,979           2,323
                                                        -----           -----
                                                        5,781           5,072
      Less accumulated depreciation and
        amortization                                    2,836           2,445
                                                        -----           -----

                                                       $2,945          $2,627
                                                        =====           =====
</TABLE>

    The Company  leases part of the main office  facility and the adjacent  real
    property under  three-year  operating lease  agreements at an annual cost of
    $46,000 per year.  The lease for the main office  facility is renewable  for
    seven  additional  three-year  terms at  market  rates.  The  lease  for the
    adjacent real property is renewable for six additional  three-year  terms at
    market  rates.  The Company may  purchase  the land and property at any time
    after  the  first  three-year  term for  total  consideration  of  $500,000.
    Additionally, a lease was assumed as part of the Blue Chip merger. The lease
    expires on December 1, 1999,  with two five year  renewal  options and has a
    minimum  commitment  of  approximately  $45,000 for each of the fiscal years
    ended December 31, 1998 and 1999, and $7,000 for fiscal 2000.  Further,  the
    Company has entered into a lease agreement  during fiscal 1998 on a new loan
    origination  office,  which  provides for annual  lease  payments of $21,000
    through fiscal 2002 and a commitment of $18,000 for fiscal 2003. The Company
    has an option to extend the lease term for an additional five year period at
    market rates.




                                       38
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE F - DEPOSITS

    Deposits consist of the following major classifications at September 30:
<TABLE>
<CAPTION>

    Deposit type and weighted-average interest rate                         1998             1997
                                                                              (In thousands)
<S>                                                                      <C>                <C>
    NOW accounts and money market deposits
      1998 - 0.95%                                                     $  18,338
      1997 - 1.65%                                                                      $  13,575
    Passbook and Club accounts
      1998 - 3.59%                                                        48,362
      1997 - 3.70%                                                                         50,622
                                                                         -------          -------

         Total demand, transaction and passbook deposits                  66,700           64,197

    Certificates of deposit
      Original maturities of:
        Less than 12 months
          1998 - 5.66%                                                    60,188
          1997 - 5.66%                                                                     49,356
        12 months to 36 months
          1998 - 5.98%                                                    89,966
          1997 - 6.14%                                                                     80,730
        More than 36 months
          1998 - 6.24%                                                    17,470
          1997 - 6.25%                                                                     15,758
      Individual Retirement and Keogh
        1998 - 6.05%                                                      31,683
        1997 - 6.16%                                                                       30,276
                                                                         -------          -------

         Total certificates of deposit                                   199,307          176,120
                                                                         -------          -------

         Total deposit accounts                                         $266,007         $240,317
                                                                         =======          =======
</TABLE>

     The Company had  certificate of deposit  accounts with balances equal to or
     in excess of $100,000 totaling $64.7 million and $54.7 million at September
     30, 1998 and 1997, respectively.










                                       39
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE F - DEPOSITS (continued)

    Interest expense on deposits at September 30 is summarized as follows:
<TABLE>
<CAPTION>

                                                          1998           1997          1996
                                                                    (In thousands)
<S>                                                       <C>            <C>            <C>
    Passbook and money market deposit accounts          $1,813       $  1,843      $  1,735
    NOW accounts                                           191            218           206
    Certificates of deposit                             11,114          9,948         8,759
                                                        ------         ------        ------

                                                       $13,118        $12,009       $10,700
                                                        ======         ======        ======
</TABLE>

     Maturities  of  outstanding  certificates  of deposit at  September  30 are
     summarized as follows:
<TABLE>
<CAPTION>

                                                 1998            1997
                                                     (In thousands)
<S>                                           <C>               <C>
    Less than one year                       $118,079        $101,627
    One year to three years                    75,823          68,954
    More than three years                       5,405           5,539
                                            ---------       ---------

                                             $199,307        $176,120
                                              =======         ======= 
</TABLE>


NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

    Advances  from the Federal Home Loan Bank,  collateralized  at September 30,
    1998,  by pledges of  certain  residential  mortgage  loans  totaling  $85.3
    million,  and the Company's  investment in Federal Home Loan Bank stock, are
    summarized as follows:
<TABLE>
<CAPTION>

                                                   Maturing fiscal
    Interest rate                                   year ending in                    1998                 1997
                                                                                           (In thousands)
<S>                                                        <C>                       <C>                   <C>
    5.15% - 7.20%                                             1998                $     -               $25,500
    5.67% - 7.20%                                             1999                   8,500                8,500
    6.17% - 8.35%                                             2000                  11,000               11,000
    6.23% - 7.20%                                             2001                   4,000                4,000
    6.05% - 7.20%                                             2002                   8,256                8,318
    5.87%                                                     2003                   2,000                   - 
    2.50% - 5.95%                                       Thereafter                  23,143                  107
                                                                                    ------               ------

                                                                                   $56,899              $57,425
                                                                                    ======               ======

    Weighted-average interest rate                                                    5.98%                6.22%
                                                                                      ====                 ==== 

</TABLE>




                                       40
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE H - FEDERAL INCOME TAXES

     Federal  income  taxes  differ from the amounts  computed at the  statutory
     corporate tax rate for the years ended September 30 as follows:
<TABLE>
<CAPTION>

                                                              1998         1997         1996
                                                                  (In thousands)
<S>                                                           <C>          <C>            <C>
    Federal income taxes computed at statutory rate         $2,081       $1,669         $615
    Increase (decrease) in taxes resulting from:
      Nondeductible expenses                                    11           11           11
      Nontaxable dividend income                                (4)          (4)          (4)
      Low income housing investment tax credits                (42)          -            - 
      Other                                                     19            7            6
                                                             -----        -----          ---
    Federal income tax provision per consolidated
      financial statements                                  $2,065       $1,683         $628
                                                             =====        =====          ===

    Effective tax rate                                       33.7%         34.3%        34.7%
                                                             ====          ====         ==== 
</TABLE>

     The  composition  of  the  Corporation's  net  deferred  tax  liability  at
     September 30 is as follows:
<TABLE>
<CAPTION>

    Taxes (payable) refundable on temporary                                        1998         1997
    differences at statutory rate:                                                   (In thousands)
<S>                                                                              <C>            <C>
    Deferred tax assets:
      General loan loss allowance                                               $   286       $  281
      Amortization of intangible assets                                              42           43
                                                                                 ------        -----
         Total deferred tax assets                                                  328          324

    Deferred tax liabilities:
      Federal Home Loan Bank stock dividends                                       (529)        (444)
      Difference between book and tax depreciation                                  (50)         (76)
      Percentage of earnings bad debt deduction                                    (331)        (331)
      Unrealized gains on securities designated as available for sale              (303)        (155)
      Deferred loan origination costs                                              (366)         (68)
      Mortgage servicing rights                                                    (269)        (216)
      Other                                                                         (11)         (27)
                                                                                 ------        -----
         Total deferred tax liabilities                                          (1,859)      (1,317)
                                                                                 ------        -----

         Net deferred tax liability                                             $(1,531)      $ (993)
                                                                                 ======        ===== 
</TABLE>








                                       41
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE H - FEDERAL INCOME TAXES (continued)

    The Company was allowed a special bad debt deduction generally limited to 8%
    of  otherwise  taxable  income,  subject  to  certain  limitations  based on
    aggregate loans and savings account  balances at the end of the year. If the
    amounts that qualify as deductions  for federal  income taxes are later used
    for purposes  other than for bad debt  losses,  including  distributions  in
    liquidation,  such  distributions will be subject to federal income taxes at
    the then current  corporate income tax rate. This percentage of earnings bad
    debt deduction had accumulated to approximately $2.0 million as of September
    30, 1998. The amount of the unrecognized  deferred tax liability relating to
    the cumulative bad debt  deduction was  approximately  $400,000 at September
    30, 1998. See Note K for additional  information regarding future percentage
    of earnings bad debt deductions.


NOTE I - LOAN COMMITMENTS

    The Company is a party to financial instruments with  off-balance-sheet risk
    in the  normal  course  of  business  to meet  the  financing  needs  of its
    customers including  commitments to extend credit. Such commitments involve,
    to varying degrees,  elements of credit and interest-rate  risk in excess of
    the amount recognized in the consolidated  statement of financial condition.
    The contract or notional  amounts of the  commitments  reflect the extent of
    the Company's involvement in such financial instruments.

    The Company's  exposure to credit loss in the event of nonperformance by the
    other party to the financial  instrument for commitments to extend credit is
    represented by the  contractual  notional amount of those  instruments.  The
    Company uses the same credit policies in making  commitments and conditional
    obligations as those utilized for on-balance-sheet instruments.

    At September  30, 1998,  the Company had total  outstanding  commitments  of
    approximately $18.8 million to originate residential one- to four-family and
    multi-family real estate loans on the basis of an 80%  loan-to-value  ratio,
    of which $1.6  million  were  comprised  of  adjustable-rate  loans at rates
    ranging from 6.875% to 8.00%, and $17.2 million were comprised of fixed-rate
    loans at rates  ranging  from 6.375% to 9.00%.  The  Company  also had total
    outstanding   commitments  of   approximately   $2.4  million  to  originate
    nonresidential  real  estate  and land  loans,  of which $2.3  million  were
    comprised  of  fixed-rate  loans at interest  rates  ranging  from 7.125% to
    8.75%,  and $65,000 were  comprised of adjustable  rate loans at 8.00%.  The
    Company also had total outstanding  commitments of approximately $717,000 to
    originate  lines of credit.  Additionally,  the Company had unused  lines of
    credit  related to home equity loans and  commercial  loans  totaling  $12.0
    million and $3.3 million,  respectively.  In the opinion of management,  all
    loan commitments  equaled or exceeded  prevalent market interest rates as of
    September 30, 1998, and such commitments have been  underwritten on the same
    basis as that of the existing loan portfolio.  Management  believes that all
    loan commitments are able to be funded through cash flow from operations and
    existing   excess   liquidity.   Fees  received  in  connection  with  these
    commitments have not been recognized in earnings.




                                       42
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 19967


NOTE J - REGULATORY CAPITAL

    The Company is subject to minimum regulatory  capital standards  promulgated
    by the Office of Thrift Supervision ("OTS"). Failure to meet minimum capital
    requirements  can  initiate  certain  mandatory  - and  possibly  additional
    discretionary  - actions by  regulators  that, if  undertaken,  could have a
    direct material effect on its financial  statements.  Under capital adequacy
    guidelines and the regulatory framework for prompt corrective action, Winton
    Savings must meet  specific  capital  guidelines  that involve  quantitative
    measures of Winton  Savings'  assets,  liabilities  and certain  off-balance
    sheet items as calculated  under  regulatory  accounting  practices.  Winton
    Savings' capital amounts and classifications are also subject to qualitative
    judgments by the  regulators  about  components,  risk  weightings and other
    factors.

    The minimum capital  standards of the OTS generally  require the maintenance
    of regulatory  capital  sufficient to meet each of three tests,  hereinafter
    described as the tangible capital requirement,  the core capital requirement
    and the risk-based  capital  requirement.  The tangible capital  requirement
    provides for minimum tangible capital (defined as shareholders'  equity less
    all  intangible  assets) equal to 1.5% of adjusted  total  assets.  The core
    capital requirement provides for minimum core capital (tangible capital plus
    certain  forms of  supervisory  goodwill  and  other  qualifying  intangible
    assets)  equal to 3.0% of adjusted  total  assets.  The  risk-based  capital
    requirement  currently  provides  for the  maintenance  of core capital plus
    general loan loss  allowances  equal to 8.0% of  risk-weighted  assets as of
    September  30,  1998.  In computing  risk-weighted  assets,  Winton  Savings
    multiplies  the value of each asset on its statement of financial  condition
    by a defined  risk-weighted  factor,  e.g., one- to four-family  residential
    loans carry a risk-weighted factor of 50%.

    The OTS has proposed an amendment to the core capital requirement that would
    increase the minimum requirement to a range of 4.0% - 5.0% of adjusted total
    assets for substantially all savings associations. Management anticipates no
    material change to the Company's excess  regulatory  capital position if the
    proposal is adopted in its present form.

     As of September 30, 1998 and 1997, management believes that the Company met
     all capital adequacy  requirements to which it is subject. 
<TABLE>
<CAPTION>

                                                      As of September 30, 1998
                                                                                      To be "well-
                                                                                   capitalized" under
                                                          For capital               prompt corrective
                                  Actual                adequacy purposes          action provisions
                              Amount    Ratio           Amount    Ratio             Amount     Ratio
                                                       (Dollars in thousands)
<S>                            <C>        <C>            <C>       <C>              <C>           <C>
    Tangible capital         $25,633      7.3%       =>$ 5,291    =>1.5%         =>$17,637     => 5.0%

    Core capital             $25,633      7.3%       =>$10,582    =>3.0%         =>$21,164     => 6.0%

    Risk-based capital       $26,422     10.6%       =>$20,001    =>8.0%         =>$25,001     =>10.0%

</TABLE>




                                       43
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE J - REGULATORY CAPITAL (continued)
<TABLE>
<CAPTION>

                                                                As of September 30, 1997
                                                                                                 To be "well-
                                                                                              capitalized" under
                                                                     For capital               prompt corrective
                                             Actual                adequacy purposes          action provisions
                                         Amount    Ratio           Amount    Ratio             Amount     Ratio
                                                                  (Dollars in thousands)
<S>                                       <C>        <C>            <C>        <C>              <C>          <C>
    Tangible capital                    $22,252      6.9%       =>$ 4,852    =>1.5%         =>$16,173     => 5.0%

    Core capital                        $22,252      6.9%       =>$ 9,704    =>3.0%         =>$19,408     => 6.0%

    Risk-based capital                  $23,015     10.8%       =>$17,129    =>8.0%         =>$21,412     =>10.0%
</TABLE>

    The Company's  management believes that under the current regulatory capital
    regulations,   the  Company  will  continue  to  meet  its  minimum  capital
    requirements in the foreseeable future.  However,  events beyond the control
    of the  Company,  such as  increased  interest  rates or a  downturn  in the
    economy in the Company's market area, could adversely affect future earnings
    and   consequently,   the   ability  to  meet  future   regulatory   capital
    requirements.


NOTE K - LEGISLATIVE MATTERS

    The deposit accounts of Winton Savings and of other savings associations are
    insured by the Federal Deposit  Insurance  Corporation  ("FDIC") through the
    Savings Association  Insurance Fund ("SAIF").  The reserves of the SAIF were
    below the  level  required  by law,  because a  significant  portion  of the
    assessments  paid into the fund  were  used to pay the cost of prior  thrift
    failures.  The deposit  accounts of commercial banks are insured by the FDIC
    through the Bank  Insurance  Fund  ("BIF"),  except to the extent such banks
    have acquired SAIF deposits.  The reserves of the BIF met the level required
    by law in May 1995.

    Legislation was enacted to recapitalize the SAIF that provided for a special
    assessment  totaling $.657 per $100 of SAIF deposits held at March 31, 1995,
    in order to  increase  SAIF  reserves to the level  required by law.  Winton
    Savings held $195.6  million in deposits at March 31, 1995,  resulting in an
    assessment of approximately $1.3 million, or $850,000  after-tax,  which was
    charged to operations in fiscal 1996.

    Under separate  legislation  related to the  recapitalization  plan,  Winton
    Savings is required to recapture as taxable income approximately $980,000 of
    its tax bad debt reserve,  which  represents the post-1987  additions to the
    reserve,  and will be unable to utilize the percentage of earnings method to
    compute its bad debt  deduction in the future.  Winton  Savings has provided
    deferred  taxes  for this  amount  and will be  permitted  to  amortize  the
    recapture  of the  bad  debt  reserve  in  taxable  income  over  six  years
    commencing in fiscal 1999.




                                       44
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996

NOTE L - STOCK OPTION PLAN

    The  Corporation has a Stock Option and Incentive Plan that provides for the
    issuance of 523,000  shares  (adjusted)  of authorized  but unissued  common
    shares.

    In 1996, the Corporation  adopted SFAS No. 123,  "Accounting for Stock-Based
    Compensation,"   which  contains  a  fair  value-based  method  for  valuing
    stock-based  compensation that entities may use, which measures compensation
    cost at the grant date based on the fair value of the award. Compensation is
    then  recognized  over the  service  period,  which is usually  the  vesting
    period. Alternatively,  SFAS No. 123 permits entities to continue to account
    for stock options and similar equity instruments under Accounting Principles
    Board ("APB")  Opinion No. 25,  "Accounting  for Stock Issued to Employees."
    Entities that continue to account for stock options using APB Opinion No. 25
    are required to make pro forma  disclosures of net earnings and earnings per
    share, as if the fair value-based  method of accounting  defined in SFAS No.
    123 had been applied.

    The  Corporation  applies  Accounting  Principles  Board  Opinion No. 25 and
    related   Interpretations   in   accounting   for  its  stock  option  plan.
    Accordingly,  no  compensation  cost has been  recognized  for the plan. Had
    compensation  cost for the  Corporation's  stock option plan been determined
    based on the  fair  value at the  grant  dates  for  awards  under  the plan
    consistent  with  the  accounting  method  utilized  in SFAS  No.  123,  the
    Corporation's net earnings and earnings per share would have been reduced to
    the pro forma amounts indicated below:
<TABLE>
<CAPTION>

                                                                   1998             1997              1996
<S>                                       <C>                      <C>              <C>              <C>
    Net earnings (In thousands)         As reported              $4,057           $3,226            $1,181
                                                                  =====            =====             =====

                                          Pro-forma              $3,966           $3,226            $  910
                                                                  =====            =====             =====

    Earnings per share
      Basic                             As reported               $1.01             $.81              $.30
                                                                   ====              ===               ===

                                          Pro-forma                $.99             $.81              $.26
                                                                    ===               ==               ===

      Diluted                           As reported                $.96             $.80              $.30
                                                                    ===              ===               ===

                                          Pro-forma                $.94             $.80              $.26
                                                                    ===              ===               ===
</TABLE>

    The fair value of each option  grant is estimated on the date of grant using
    the  modified   Black-Scholes   options-pricing  model  with  the  following
    assumptions used for grants in fiscal 1998 and 1996: dividend yield of 3.4%,
    expected  volatility of 20.0%,  risk-free interest rate of 6.0% and expected
    lives of ten years.








                                       45
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE L - STOCK OPTION PLAN (continued)

    A  summary  of the  status  of the  Corporation's  stock  option  plan as of
    September 30, 1998,  1997 and 1996, and changes during the periods ending on
    those dates is presented below:

<TABLE>
<CAPTION>
                                           1998                            1997                       1996
                                               Weighted-                       Weighted-                  Weighted-
                                                 average                         average                    average
                                                exercise                        exercise                   exercise
                                     Shares        price         Shares            price         Shares       price
<S>                                       <C>          <C>           <C>              <C>            <C>           <C>            
Outstanding at beginning of year    493,000      $5.80          493,000         $5.80           252,000     $5.00
Granted                              30,000      $9.94               -          $  -            241,000     $6.66
Exercised                           (42,000)     $9.84               -          $  -                 -      $  -    
Forfeited                                -       $  -                -          $  -                 -      $  -    
                                    -------       ----          -------          ----           -------      ----

Outstanding at end of year          481,000      $6.13          493,000         $5.80           493,000     $5.80
                                    =======       ====          =======          ====           =======      ====

Options exercisable at year-end     481,000      $6.13          493,000         $5.80           241,000     $6.66
                                    =======       ====          =======          ====           =======      ====
Weighted-average fair value of
  options granted during the year                $1.99                           N/A                        $1.71
                                                  ====                           ===                         ====
</TABLE>

The following information applies to options outstanding at September 30, 1998:
<TABLE>
<CAPTION>
<S>                                                                        <C>
    Number outstanding                                                  481,000
    Range of exercise prices                                      $5.00 - $9.94
    Weighted-average exercise price                                       $6.13
    Weighted-average remaining contractual life                       6.7 years
</TABLE>




















                                       46
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE M - CONDENSED FINANCIAL STATEMENTS OF WINTON FINANCIAL
  CORPORATION

    The  following  condensed  financial   statements  summarize  the  financial
    position of the  Corporation  as of  September  30,  1998 and 1997,  and the
    results of its  operations  and its cash  flows for each of the years  ended
    September 30, 1998, 1997 and 1996.
<TABLE>
<CAPTION>

                                                       Winton Financial Corporation
                                                     STATEMENTS OF FINANCIAL CONDITION
                                                               September 30,

         ASSETS                                                                     1998                  1997
                                                                                           (In thousands)
<S>                                                                              <C>                     <C>
    Cash                                                                         $   265               $   313
    Investment in The Winton Savings and Loan Co.                                 26,294                22,830
    Corporate equity securities - at fair value                                      724                   482
    Prepaid expenses and other assets                                                  9                     9
    Prepaid federal income tax                                                        61                    - 
                                                                                  ------                ------

             Total assets                                                        $27,353               $23,634
                                                                                  ======                ======

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Accrued expenses and other liabilities                                       $   250               $   228
    Deferred federal income taxes                                                    211                   129
                                                                                  ------                ------
             Total liabilities                                                       461                   357

    Shareholders' equity
      Additional paid-in capital                                                   8,782                 6,501
      Retained earnings                                                           17,520                16,474
      Unrealized gains on securities designated as
        available for sale, net of related tax effects                               590                   302
                                                                                  ------                ------

             Total shareholders' equity                                           26,892                23,277
                                                                                  ------                ------

             Total liabilities and shareholders' equity                          $27,353               $23,634
                                                                                  ======                ======
</TABLE>










                                       47
<PAGE>


                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996

NOTE M - CONDENSED FINANCIAL STATEMENTS OF WINTON FINANCIAL
  CORPORATION (continued)
<TABLE>
<CAPTION>

                                                       Winton Financial Corporation
                                                          STATEMENTS OF EARNINGS
                                                         Year ended September 30,

                                                                         1998              1997           1996
                                                                                     (In thousands)
<S>                                                                     <C>               <C>            <C>
    Revenue
      Interest and dividends on investments                            $   15            $   13         $   17
      Gain on sale of investment securities
        designated as available for sale                                   -                 36             - 
      Dividends received from subsidiary                                  773               894            904
      Equity in undistributed earnings of subsidiary                    3,335             2,400            346
                                                                        -----             -----          -----
                                                                        4,123             3,343          1,267
    Expenses
      General and administrative                                           66               117             86
                                                                        -----            ------          -----

           Net earnings                                                $4,057            $3,226         $1,181
                                                                        =====             =====          =====
</TABLE>

<TABLE>
<CAPTION>

                                                       Winton Financial Corporation
                                                         STATEMENTS OF CASH FLOWS
                                                         Year ended September 30,

                                                                                1998         1997         1996
                                                                                    (In thousands)
<S>                                                                            <C>            <C>         <C>
    Cash flows provided by (used in) operating activities:
      Net earnings for the year                                               $4,057       $3,226       $1,181
      Adjustments to reconcile net earnings to net cash
      provided by (used in) operating activities:
        Undistributed earnings of consolidated subsidiary                     (3,335)      (2,400)        (346)
        Gain on sale of investment securities
          designated as available for sale                                        -           (36)          - 
        Increases (decreases) in cash due to changes in:
          Prepaid expenses and other assets                                      (61)          23          (18)
          Other                                                                   21           20           16
                                                                               -----        -----        -----
             Net cash provided by operating activities                           682          833          833

    Cash flows provided by investing activities:
      Proceeds from sale of investment securities
        designated as available for sale                                          -           122           - 

    Cash flows provided by (used in) financing activities:
      Payment of dividends on common stock                                    (1,004)        (894)        (814)
      Proceeds from exercise of stock options                                    274           -            57
                                                                               -----        -----        -----
             Net cash used in financing activities                              (730)        (894)        (757)
                                                                               -----        -----        -----

    Net increase (decrease) in cash and cash equivalents                         (48)          61           76

    Cash and cash equivalents at beginning of year                               313          252          176
                                                                               -----        -----        -----

    Cash and cash equivalents at end of year                                  $  265       $  313       $  252
                                                                               =====        =====        =====
</TABLE>


                                       48
<PAGE>

                          Winton Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                        September 30, 1998, 1997 and 1996


NOTE M - CONDENSED FINANCIAL STATEMENTS OF WINTON FINANCIAL
  CORPORATION (continued)

     Regulations  of the OTS impose  limitations on the payment of dividends and
     other   capital   distributions   by  savings   associations.   Under  such
     regulations, a savings association that, immediately prior to, and on a pro
     forma basis after giving  effect to a proposed  capital  distribution,  has
     total  capital (as defined by OTS  regulation)  that is equal to or greater
     than the amount of its fully  phased-in  capital  requirement  is generally
     permitted  without OTS approval (but  subsequent to 30 days prior notice to
     the OTS of the planned  dividend)  to make capital  distributions  during a
     calendar  year in the  amount of up to the  greater  of (i) 100% of its net
     earnings  to date  during the year plus an amount  equal to one-half of the
     amount  by which  its  total  capital-to-assets  ratio  exceeded  its fully
     phased-in  capital to assets ratio at the beginning of the year or (ii) 75%
     of its net earnings for the most recent four quarters. Pursuant to such OTS
     dividend  regulations,  Winton  Savings had the ability to pay dividends of
     approximately $6.3 million to Winton Financial at September 30, 1998.


NOTE O - BUSINESS COMBINATION

    On  December  4,  1998,  the  Corporation's  Board of  Directors  approved a
    business  combination  whereby BenchMark Federal Savings Bank  ("BenchMark")
    would  merge with and into  Winton  Savings.  The merger is  expected  to be
    completed  during fiscal 1999 pending  regulatory and BenchMark  shareholder
    approval.   The   business   combination   will  be   accounted   for  as  a
    pooling-of-interests and, accordingly,  the assets,  liabilities and capital
    of the  respective  combining  companies  will be added together at historic
    carrying  value.   Unaudited   pro-forma   condensed,   combined   financial
    information  of the  Corporation  and BenchMark as of and for the year ended
    September 30, 1998, is as follows:

<TABLE>
<CAPTION>
                                                            Winton                                   Pro-forma
                                                         Financial             BenchMark              combined
                                                                             (unaudited)           (unaudited)
                                                                         (In thousands, except share data)
<S>                                                         <C>                    <C>                   <C>
    Total assets                                          $354,193               $54,710              $408,903
                                                           =======                ======               =======

    Total liabilities                                     $327,301               $51,215              $378,516
                                                           =======                ======               =======

    Shareholders' equity                                  $ 26,892               $ 3,495              $ 30,387
                                                           =======                ======               =======

    Total revenue                                         $ 29,251               $ 3,923              $ 33,174
    Total expense                                           25,194                 3,845                29,039
                                                           -------                ------               -------

    Net earnings                                          $  4,057               $    78              $  4,135
                                                           =======                ======               =======

    Basic earnings per share                                 $1.01                  $.69                  $.94
                                                              ====                   ===                   ===
</TABLE>




                                       49