GREENVILLE FEDERAL FINANCIAL CORPORATION



As filed with the Securities and Exchange Commission on September 28, 2005		Registration No. 333-126035

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 2

FORM SB-2

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

Greenville Federal Financial Corporation

(Name of small business issuer in its charter)


United States	6035	To be Applied For

(State or other jurisdiction of	(Primary Standard Industrial	(I.R.S. employer
incorporation or organization)	Classification Code Number)	identification number)

690 Wagner Avenue
Greenville, Ohio 45331
(937) 548-4158

(Address and telephone number of registrant’s principal executive offices)

690 Wagner Avenue
Greenville, Ohio 45331
(937) 548-4158

(Address of principal place of business or intended principal place of business)

David M. Kepler
Greenville Federal Financial Corporation
690 Wagner Avenue
Greenville, Ohio 45331
(937) 548-4158

(Name, address and telephone number of agent for service)

With copies to:
Cynthia A. Shafer
Vorys, Sater, Seymour and Pease LLP
Atrium Two, 221 East Fourth Street
Cincinnati, Ohio 45202
(513) 723-4000

Fred A. Summer
Squire, Sanders & Dempsey L.L.P.
1300 Huntington Center
41 South High Street
Columbus, Ohio 43215
(614) 365-2700

Approximate date of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

CALCULATION OF REGISTRATION FEE

Title of each class

Proposed maximum

of securities to be

Amount to

offering price

aggregate

Amount of

registered

be registered

per share

offering price(1)

registration fee

Common shares, par value $.01 per share

1,606,837 shares

$10.00

$16,068,370

$1,891.25(2)

(1)		Estimated solely for the purpose of calculating the registration fee.

(2)		Previously paid.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PROSPECTUS

GREENVILLE FEDERAL FINANCIAL CORPORATION

1,397,250 Shares of Common Stock
(subject to increase to up to 1,606,837 shares)

This is the initial public offering of shares of common stock of Greenville Federal Financial Corporation, a company formed in connection with the reorganization of Greenville Federal Savings and Loan Association into a mutual holding company form of organization. The shares being offered represent 45% of the shares of common stock of Greenville Federal Financial Corporation that will be outstanding following the offering. After the offering, 55% of Greenville Federal Financial Corporation’s outstanding common stock will be owned by Greenville Federal MHC, a federally chartered mutual holding company. Greenville Federal Financial Corporation is the proposed holding company for the planned successor to Greenville Federal Savings and Loan Association.

We must sell a minimum of 1,032,750 shares in order to complete the offering, and we will terminate the offering if we do not sell the minimum number of shares. We may sell up to 1,606,837 shares because of regulatory considerations or changes in market or economic conditions without resoliciting subscribers. The offering is scheduled to terminate on ___, 2005. We may extend the termination date without notice to you, until ___, 200_, unless the Office of Thrift Supervision approves a later date, which may not be beyond ___, 200_.

The minimum number of shares you may purchase is 25. The maximum purchase limitation that an individual may make is $150,000, and no person with an associate or group of persons acting in concert may purchase more than $200,000. Once submitted, orders are irrevocable unless the offering is terminated or extended beyond ___, 200_. If the offering is extended beyond ___, 200_, subscribers will have the right to modify or rescind their purchase orders. Funds received prior to the completion of the offering will be held in an account at Greenville Federal Savings and Loan Association or, at our discretion, at another financial institution, and will bear interest at the Greenville Federal Savings and Loan Association savings account rate, which is currently ___% per annum. If the offering is terminated, subscribers will have their funds returned promptly, with interest.

Keefe, Bruyette & Woods, Inc., will use its best efforts to assist us in selling our common stock but is not obligated to purchase any of the common stock that is being offered for sale. Subscribers will not pay any commissions to purchase shares of common stock in the offering. There is currently no public market for the common stock. Keefe, Bruyette & Woods, Inc. has advised us that it intends to make a market in the common stock but is under no obligation to do so. We expect that the common stock of Greenville Federal Financial Corporation will be quoted on the OTC Bulletin Board.

For more information, you may call the Stock Information Center at the main office of Greenville Federal in Greenville, Ohio, at (937) 548-9355

This investment involves risk, including the possible loss of principal.

Please read the “Risk Factors” beginning on page 12.

OFFERING SUMMARY
Price: $10.00 per share


	Minimum		Maximum		Adjusted maximum
Number of shares		1,032,750		1,397,250		1,606,837

Estimated offering expenses, excluding underwriting commissions and expenses	$	694,000	$	694,000	$	694,000

Underwriting commissions and expenses	$	184,000	$	234,000	$	262,000

Net proceeds	$	9,449,500	$	13,044,500	$	15,112,370

Net proceeds per share	$	9.15	$	9.34	$	9.41

These securities are not deposits or savings accounts and are not insured or guaranteed by the FDIC or any other governmental agency.

None of the Securities and Exchange Commission, the Office of Thrift Supervision, the FDIC, nor any state securities regulator has approved or disapproved these securities or has determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

KEEFE, BRUYETTE & WOODS

The date of this prospectus is __________, 2005

SUMMARY

The following summary explains selected aspects of the reorganization and the offering of common stock by Greenville Federal Financial Corporation and the business of Greenville Federal Savings and Loan Association (the “Association”). It may not contain all information that is important to you. We suggest you read this entire document carefully, including the financial statements and the notes to the financial statements.

The reorganization and the stock offering

The Association is a federally chartered mutual savings and loan association with two offices located in Greenville, Ohio. The Association is reorganizing into the mutual holding company structure. As part of the reorganization, Greenville Federal Financial Corporation is offering for sale between 1,032,750 and 1,397,250 shares to the public, or 45% of the shares to be outstanding upon completion of the reorganization. Greenville Federal MHC, a federally chartered mutual holding company, will own 55% of the outstanding common stock of Greenville Federal Financial Corporation upon the completion of the reorganization. Greenville Federal Financial Corporation will own all of the outstanding common stock of the Association.

The following diagram shows our structure after the reorganization:

The same directors and executive officers who manage the Association will manage Greenville Federal MHC and Greenville Federal Financial Corporation.

The companies

Greenville Federal MHC will be a federally chartered mutual holding company that will own a majority of the outstanding common stock of Greenville Federal Financial Corporation. Greenville Federal MHC will not conduct any business other than owning the stock of Greenville Federal Financial Corporation. So long as Greenville Federal MHC exists, it is required to own at least a majority of the outstanding common stock of Greenville Federal Financial Corporation. Voting control over Greenville Federal MHC will be held by the members of the Association, who will be the depositors of the Association, (as well as a few borrowers of the Association, who have borrowings that have been outstanding since March 1986).

Greenville Federal Financial Corporation will be a federally chartered mid-tier stock holding company for the Association. The Association currently has no plans for Greenville Federal Financial Corporation to engage in any business activities other than holding 100% of the outstanding stock of the Association. Because Greenville Federal MHC will hold a majority of the outstanding common stock of Greenville Federal Financial Corporation, the Board of Directors of Greenville Federal MHC will be able to exercise voting control over most matters put to a vote of the stockholders of Greenville Federal Financial Corporation.

Greenville Federal Savings and Loan Association is a federally chartered mutual savings and loan association headquartered in Greenville, Ohio. The Association was originally founded in 1883 as an Ohio chartered mutual savings and loan association. The Association converted to a federal charter in 1942. The Association’s main office is located at 690 Wagner Avenue, Greenville, Ohio 45331, and our telephone number is (937) 548-4158. We also have a branch located in a Kroger store in Greenville. The executive offices of Greenville Federal MHC and Greenville Federal Financial Corporation will also be located at that address and use that telephone number.

The Association’s principal business activity is the origination of mortgage loans secured by one- to four-family residential real estate. The Association also originates construction loans, loans secured by nonresidential real estate and multifamily real estate, and consumer loans. The Association offers a variety of deposit accounts, including savings, certificate of deposit and demand accounts.

The Association’s reasons for the reorganization

The Association’s primary reasons for the reorganization are:

	•		to structure its business in a form that will enable it to access capital markets;

	•		to support future lending and operational growth;

	•		to enhance its ability to attract and retain qualified directors and management through stock-based compensation plans; and

	•		to support future branching activities and the acquisition of other financial institutions or financial services companies or their assets.

In addition, the Association determined that the mutual holding company structure was preferable to a standard, full mutual-to-stock conversion because it permits the Association to limit the amount of capital being raised to enable the Association to deploy more prudently the proceeds of the offering. Although the Association has purchased property for the construction of an additional branch, it does not have any specific plans or arrangements for further expansion, and the Association does not now have any specific acquisition plans.

In the future, Greenville Federal MHC may convert from the mutual to capital stock form, in a transaction commonly known as a “second-step conversion.” If Greenville Federal MHC decides to undergo a second step conversion, Office of Thrift Supervision regulations require that the Association obtain the approval of a majority of the total outstanding votes of the MHC’s members and the approval of a majority of the votes eligible to be cast by its minority stockholders in order to complete the transaction. The Board of Directors has no current plan to undertake a second-step conversion transaction.

The Association is utilizing the mutual holding company form of reorganization, rather than a standard conversion in which the shares of a savings association are wholly owned by a parent holding company, which sells all of its stock to the public. The mutual holding company structure provides the Association the benefits of a stock company without the directors and officers of the Association losing control of the company to a stockholder or another company, thus allowing the Association to remain an independent savings association providing community-oriented financial services.

How we determined the offering range and the $10.00 price per share

The independent appraisal by Keller & Company, dated as of September 14, 2005, established the offering range. This appraisal was based on our financial condition and operations and the effect of the additional capital raised in this offering. The $10.00 price per share was determined by our board of directors and is the price most commonly used in stock offerings involving reorganizations of mutual savings institutions. Keller & Company will receive fees totaling $30,000 for its appraisal services, plus reasonable out-of-pocket expenses incurred in connection with the appraisal.

The appraisal incorporated an analysis of a peer group of publicly traded thrift institutions and mid-tier thrift holding companies that Keller & Company considered to be comparable to the Association. This analysis included an evaluation of the average and median price-to-earnings and price-to-book value ratios indicated by the market prices of the peer companies. Keller & Company applied the peer group’s pricing ratios, as adjusted for certain qualitative valuation factors to account for differences between the Association and the peer group, to the Association’s pro forma earnings and book value to derive the estimated pro forma market value of the Association.

Keller & Company has estimated that as of September 14, 2005, the pro forma market value of Greenville Federal Financial Corporation on a fully-converted basis ranged from a minimum of $22,950,000 to a maximum of $31,050,000, with a midpoint of $27,000,000. The term “fully converted” means assuming that 100% of our common stock had been sold to the public, as opposed to the 45% that will be sold in the offering. Based on this valuation, the decision to sell 45% of the shares of Greenville Federal Financial Corporation to the public and the $10.00 per share price, the number of shares of common stock being issued by Greenville Federal Financial Corporation to the public will range from 1,032,750 shares to 1,397,250 shares, with a midpoint of 1,215,000 shares. The estimated offering range may be increased by up to 15%, up to 1,606,837 shares.

The following table presents pro forma pricing ratios for the peer group companies, assuming they had completed a second-step conversion, and for the Association, assuming it had also fully converted. Keller & Company’s calculations of the fully-converted pricing multiples for the peer group companies assume the pro forma impact of selling the mutual holding company shares of each of the peer group companies at their respective trading prices as of September 14, 2005. Keller & Company’s calculation of the fully-converted pricing multiples for the Association assumes the pro forma impact of selling 100% of the shares to be issued to the public at $10.00 per share.


	Fully-converted			Fully-converted
	pro forma			pro forma
	price-to-core			price-to-book
	earnings multiple			value ratio
The Association
Adjusted maximum		44.72	x		77.10	%
Maximum		43.83			74.01
Midpoint		42.85			70.78
Minimum		41.59			66.75

Valuation of peer group companies as of September 14, 2005
Averages		26.15	x		111.26	%
Medians		22.89			113.33

Based on the results of the appraisal, compared to the average pricing of the peer group on a fully-converted basis, the Association’s fully-converted pro forma pricing ratios at the midpoint of the offering range indicated a premium of 63.89% on a price-to-core earnings basis and a discount of 36.38% on a price-to-book basis.

The independent appraisal does not indicate market value. Do not assume or expect that the valuation of Greenville Federal Financial Corporation as indicated above means that the common stock will trade at or above the $10.00 purchase price after the reorganization.

This table is not intended to be indicative of how our stock may perform. Stock appreciation is affected by many factors, including, but not limited to, the factors set forth in the more complete discussion elsewhere in this prospectus. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the “Risk Factors,” beginning on page 12.

The independent appraisal will be updated before we complete the reorganization. Any changes in the appraisal would be subject to Office of Thrift Supervision approval.

After-market performance information provided by independent appraiser

The following information was provided to our board of directors by Keller & Company as part of the appraisal. The table presents information for all “first step” mutual holding company offerings completed between July 1, 2004, and September 14, 2005. The information shows the average after-

market performance of the trading price of the stock at certain points after the completion of the offerings.


	Average appreciation from initial trading date
Number of Transactions	1 Day			1 Week			1 Month			To September 14, 2005
23		8.84	%		8.74	%		6.83	%		10.93	%

None of the transactions contained in this table involved issuers that are part of the “comparable group” of 10 publicly traded savings institutions included by Keller & Company in its appraisal. For more detailed information, see “THE REORGANIZATION AND STOCK OFFERING — How we determined the price and the number of shares to be issued in the stock offering” on pages 83 to 106.

The table above presents only short-term historical information on stock price performance, which may not be indicative of the longer-term performance of such stock prices. The data presented in the table is not intended to predict how our shares of common stock may perform following the offering. The historical information in the table may not be meaningful to you because the data were calculated using a small sample.

You should bear in mind that stock price appreciation or depreciation is affected by many factors. There can be no assurance that our stock price will not trade below $10.00 per share. Of these 23 initial public offerings, 6 were trading below their initial offering price on September 14, 2005. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the section entitled “Risk Factors” beginning on page 12.

Keller & Company advised our board of directors that the appraisal was prepared based on guidelines provided by the Office of Thrift Supervision entitled “Guidelines for Appraisal Reports for the Valuation of Savings Institutions Converting from the Mutual to Stock Form of Organization.” That methodology requires a valuation based on an analysis of the financial condition and performance of selected publicly traded savings institutions whose stocks have traded for at least one year prior to the valuation date compared to our financial condition and performance. Keller & Company also gave consideration to the market conditions for securities in general and for publicly traded savings institution stocks in particular, but such conditions were not relied upon as a primary valuation methodology. Keller & Company also reviewed the aftermarket trading experience of recent transactions, but that factor was not relied upon as part of the valuation methodology. Considering that the recent offerings were completed in a variety of different market conditions and in different geographic areas, our board of directors did not consider the recent offering data particularly relevant to our appraisal. The table above is not intended to be indicative of how our stock may perform. Stock appreciation is affected by many factors, including, but not limited to, the factors set forth below. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the “RISK FACTORS” generally beginning on page 12. THERE CAN BE NO ASSURANCE THAT OUR STOCK PRICE WILL NOT TRADE BELOW $10.00 PER SHARE, AS HAS BEEN THE CASE FOR SOME MUTUAL HOLDING COMPANY OFFERINGS. Although the stock prices for the companies in the above table have, on average, increased during the period presented, data represented in the table may not be meaningful to investors in our stock for several reasons, including:

	•		the data were calculated using a small sample;

	•		the transactions from which the data were derived occurred primarily during a low market interest rate environment, during which time the trading prices for financial institution stocks typically increase;



	•		if interest rates rise, our net interest income and the value of our assets could be reduced, which could negatively affect our stock price. See “RISK FACTORS — Rising interest rates may hurt our profits” on page 13; and



	•		stock prices will be affected by general market conditions, the interest rate environment, merger or takeover transactions, speculative market pressures and other unforeseeable events. See “RISK FACTORS — There will be a limited market for our common stock, which may lower our stock price” on page 15; and “ — Our stock price may decline when trading commences” on page 14.

Finally, a particular company’s stock price is subject to various factors, including the amount of proceeds a company raises, the quality of management and management’s ability to deploy the proceeds (such as through investments, the acquisition of other financial institutions or other businesses, the payment of dividends and common stock repurchases).

Conditions to completing the reorganization

The reorganization is being conducted under the terms of the plan of reorganization. The reorganization and related offering cannot be completed unless the plan of reorganization is approved by at least a majority of votes eligible to be cast by members of the Association, we sell at least the minimum number of shares offered and the Association receives the final approval of the Office of Thrift Supervision to complete the reorganization and stock offering.

Benefits to management from the offering

We intend to establish the Greenville Federal Financial Corporation Employee Stock Ownership Plan, which will purchase a number of shares equal to 3.92% of the total number of shares issued in the reorganization, including the shares issued to Greenville Federal MHC. A loan from Greenville Federal Financial Corporation to the plan, funded by a portion of the proceeds from this offering, will be used to purchase these shares. If shares are not available for purchase by the employee stock ownership plan in the offering, then the plan will purchase the shares in the open market. We will allocate these shares to employees of the Association over a period of years in proportion to their compensation. The employee stock ownership plan will provide a retirement benefit to all employees eligible to participate in the plan. The establishment of the plan will also result in additional compensation expense to Greenville Federal Financial Corporation. See “PRO FORMA DATA” for an illustration of the effects of this plan.

We also intend to adopt a stock option plan and a recognition and retention plan for the benefit of directors, officers and employees, subject to stockholder approval. The stock option plan will permit awards representing up to 4.90%, and the recognition and retention plan will permit awards representing up to 1.96%, of the total number of shares of Greenville Federal Financial Corporation issued in the reorganization, including the shares issued to Greenville Federal MHC. Under Office of Thrift Supervision regulations, the plans cannot be adopted until at least six months after the closing of the reorganization. If the plans are adopted within one year of the closing of the reorganization, the Office of Thrift Supervision requires that the plans be approved by a vote of the shareholders of Greenville Federal Financial Corporation, other than Greenville Federal MHC. The vote requirement would be a majority of the votes eligible to be cast by the stockholders other than Greenville Federal MHC. The Office of Thrift Supervision may permit a vote of the majority of the votes actually cast, again not

including the voting of the shares held by Greenville Federal MHC. If we adopt the recognition and retention plan, some members of management may be awarded stock at no cost to them. As a result, both the employee stock ownership plan and the recognition and retention plan will increase the voting control of management without a cash outlay. The granting of awards under the recognition and retention plan and the stock option plan will result in additional compensation expense to Greenville Federal Financial Corporation.

The value of the stock options that would be issued under a stock option plan will be affected by the price of the Greenville Federal Financial Corporation stock at the time the stock option plan is implemented and the options are granted. If the stock option plan were to award stock options for 4.90% of the number of shares issued in the reorganization, including the shares issued to Greenville Federal MHC, the total shares subject to options would be 112,455, 132,300, 152,145 and 174,966, respectively, at the minimum, midpoint, maximum and adjusted maximum of the valuation range.

The following table presents the total value of the shares of common stock, at the maximum of the offering range, which would be acquired by the employee stock ownership plan and the total value of all shares to be available for award and issuance under the recognition and retention plan. The table assumes that the value of the shares is the same as the purchase price in the offering. The table does not include a value for the options because the price paid for the option shares will be equal to the fair market value of the common stock on the day that the options are granted. As a result, financial gains can be realized under an option only if the market price of the common stock increases.


	Estimated		Percentage of shares			Percentage of total
	value of shares		sold in the offering			shares issued
Employee stock ownership plan	$	1,217,160		8.71	%		3.92	%
Recognition and retention plan awards		608,580		4.36			1.96
Stock options		—		10.89			4.90

For a further discussion of benefits to management, see “MANAGEMENT.”

Tax consequences of the reorganization

In general, the reorganization and the offering will not be taxable transactions for U.S. federal income tax purposes to Greenville Federal MHC, Greenville Federal Financial Corporation, the Association, persons who receive or exercise subscription rights, or persons purchasing Greenville Federal Financial Corporation stock in the offering. Our counsel, Vorys, Sater, Seymour and Pease LLP, has issued an opinion to the Association stating in part that, for federal income tax purposes:


	•		no gain or loss will be recognized by the Association as a result of the reorganization; and



	•		no gain or loss will be recognized by account holders of the Association as a result of the reorganization.

The Association has also received an opinion from Vorys, Sater, Seymour and Pease stating that implementation of the plan of reorganization will not result in any Ohio corporation franchise tax liability. See “THE REORGANIZATION AND STOCK OFFERING — Tax effects of our reorganization and stock offering.”

Persons who can order stock in the offering

We are offering the shares of common stock in a Subscription Offering to those with subscription rights, listed below in the following order of priority:

	1.		Depositors who held at least $50 with us on March 31, 2004;

	2.		The Greenville Federal Financial Corporation Employee Stock Ownership Plan;


	3.		Depositors who held at least $50 with the Association on ___, 2005; and



	4.		Members of the Association at the close of business on ___, 2005.

If we receive subscriptions for more shares than are to be sold in this offering, shares will be allocated in order of the priorities described above under a formula outlined in the plan of reorganization. If we increase the number of shares to be sold above 1,397,250 the employee stock ownership plan will have the first priority right to purchase any shares exceeding that amount to the extent that its subscription has not previously been filled. Any shares remaining will be allocated in the order of priorities described above. See “THE REORGANIZATION AND STOCK OFFERING” for a description of the allocation procedure. Shares of common stock not subscribed for in the Subscription Offering will be offered to the general public in a direct community offering and, if necessary a public offering. See pages 98 to 99. The direct community offering, if any, will begin at the same time as, during or promptly after the Subscription Offering.

Purchase limitations

Our plan of reorganization establishes limitations on the purchase of stock in the offering. Such limitations include the following:

	•		The minimum purchase is 25 shares;

	•		No person individually may purchase more than $150,000 (15,000 shares) of stock;

	•		No two or more persons who are associates or acting in concert may purchase more than $200,000 of stock (20,000 shares); and

	•		Subject to the approval of the Office of Thrift Supervision, we may increase or decrease the purchase limitations.

How to purchase common stock

Note: Once we receive your order, you cannot cancel or change it without our consent. If we intend to sell fewer than 1,032,750 shares or more than 1,606,837 shares, all subscribers will be notified and given the opportunity to change or cancel their orders. If you do not respond to this notice, we will return your funds promptly with interest.

If you want to subscribe for shares, you must complete an original stock order form and drop it off, together with full payment or withdrawal authorization, at any Association branch office or send it, together with full payment or withdrawal authorization, to the Association in the postage-paid envelope provided. You must sign the certification that is part of the stock order form. We must receive your stock order form before ___, 2005.

To ensure that we properly identify your subscription rights, you must list all of your deposit accounts as of the eligibility dates on the stock order form. If you fail to do so, your subscription may be reduced or rejected.

You may pay for your subscriptions:

	(1)		by personal check, official bank check or money order made payable to Greenville Federal Financial Corporation;


	(2)		by authorizing us to withdraw money from your deposit account(s), including certificates of deposit, maintained at the Association. To use funds in an individual retirement account or a Coverdell education savings account at the Association, you must transfer your account to an unaffiliated institution or broker. Please contact the Stock Information Center as soon as possible for assistance; or


	(3)		in cash, if delivered in person at any full-service banking office of the Association, although we request that you exchange cash for a check with any of the Association’s tellers.

Stock Information Center

If you have any questions regarding the offering or our change in structure, please call the Stock Information Center at (937) 548-9355.

Subscription rights

Subscription rights are not allowed to be transferred, and we will act to ensure that you do not transfer your subscription rights. We will not accept any stock orders that we believe involve the transfer of subscription rights.

Important Risks in Owning Greenville Federal Financial Corporation’s Common Stock

Before you decide to purchase stock, you should read the “RISK FACTORS” section on pages 12 to 16 of this document.

Termination of the offering

The Subscription Offering will end on ___, 2005. We expect that the direct community offering, if any, would end at the same time. If all of the shares are not subscribed for and we do not get orders for the remaining shares by ___, 2005, we will either:

	•		Promptly return any payment you made to us, with interest, or cancel any withdrawal authorization you gave us; or

	•		Extend the offering, if allowed by the Office of Thrift Supervision, and give you notice of the extension and of your rights to cancel or change your order. If we extend the offering and you do not respond to the notice, then we will cancel your order and return your payment, with interest, or cancel any withdrawal authorization you gave us.

How we will use the proceeds from the sale of the stock

We intend to use the net proceeds received from the stock offering as follows:


					Maximum, as
	Minimum		Maximum		adjusted
	(In thousands)
Retained by Greenville Federal Financial Corporation and initially placed in short-term investments for general corporate purposes	$	3,825	$	5,305	$	6,156
Employee stock ownership plan loan		900		1,217		1,400
Contributed to the capital of the Association		4,725		6,523		7,556


Net offering proceeds	$	9,450	$	13,045	$	15,112

We may use the net proceeds to invest in mortgage-related and investment securities, to finance the possible acquisition of other financial institutions or financial service businesses, to pay dividends or for other general corporate purposes, including repurchasing shares of our common stock. The Association may use the proceeds it receives to make loans, to purchase securities, to expand its banking business internally or through acquisitions, and for general corporate purposes. See “HOW WE INTEND TO USE THE PROCEEDS OF THE OFFERING.”

Dividends

We intend to pay a quarterly dividend to the shareholders of Greenville Federal Financial Corporation, but the amount of such dividend has not yet been determined. Dividends will depend on our ability to pay them and the discretion of the board of directors. We will not pay or take any steps to pay an extraordinary tax-free dividend that qualifies as a return of capital for one year following the stock offering. See “OUR PLANS REGARDING DIVIDENDS.”

Market for common stock

We expect that our stock will be quoted on the OTC Bulletin Board. Keefe, Bruyette & Woods, Inc., has indicated its intention to register to trade the stock, will assist us in identifying other firms to do the same, and may solicit potential buyers and sellers to match buy and sell orders, but it is under no obligation to do so.

RISK FACTORS

You should consider these risk factors, in addition to the other information in this prospectus, before deciding whether to make an investment in this stock.

Risks related to our business:

The Association’s return on equity has been significantly below the return on equity of its peers for the last two fiscal years. After the change in structure and stock offering, our return on equity will be low compared to other companies, which could negatively impact the price of our stock.

The Association’s return on equity has been significantly below that of its peers for the last two fiscal years. The following net earnings and loss for the last two fiscal years resulted in the corresponding returns on equity:


Fiscal year	Net income (loss)			Return on equity
2004	$	(81,000	)		(0.60	)%
2005		71,000			0.53

The relatively low net earnings in 2005 and the net loss in 2004 were the result of several factors. First, the Association sold most of the fixed-rate loans it originated from June 2001 until June 2003 in an attempt to manage its interest rate risk, leaving excess liquidity in a time of low interest rates. Interest income on loans decreased from $8.0 million in fiscal year 2001 to $4.7 million in fiscal year 2004. Interest income on loans increased slightly from fiscal year 2004 to $5.0 million in fiscal year 2005.

Second, in the late 1990’s to the middle of 2001, the Association used long-term borrowings from the Federal Home Loan Bank of Cincinnati to fund the origination of loans held in its portfolio. The loans held in the Association’s portfolio have been paid off because interest rates have decreased to historic lows, but the borrowings from the Federal Home Loan Bank cannot be prepaid without incurring large prepayment penalties. As a result, the Association is maintaining these liabilities with relatively high interest rates. The Association’s resulting interest rate spread (the difference between the weighted average interest rate earned on all interest-earning assets and the weighted average interest rate paid on all interest-bearing liabilities) was 2.03% in fiscal year 2004 and 2.59% in 2005, which is low compared to its peers.

Finally, the Association’s net earnings in fiscal year 2005 were substantially affected by the rising costs of its defined benefit pension plan, which amounted to $684,000, including a one-time charge of $312,000 to reflect the estimated costs of termination of its participation in the plan and a $76,000 increase in costs other than the one-time termination charge compared to such costs in fiscal year 2004. The increased defined benefit pension plan costs were partially offset by a $329,000 pre-tax gain on the redemption of stock of the Association’s data processing firm in connection with that firm’s merger.

The proceeds we will receive from the sale of our common stock will significantly increase our capital, and it will take us time to fully use it in our business operations. Until the proceeds are invested in loans, we can expect a relatively low yield on the funds. In addition, although the expenses associated with the defined benefit plan will no longer be incurred, other compensation expenses will increase due to the costs associated with the employee stock ownership, the stock option plan and the recognition and

retention plan. We estimate the increase in annual compensation expense from implementation of the new stock benefit plans to be approximately $237,000 on an after-tax basis, based on the maximum of the valuation range. We will also have additional expenses as a publicly owned company. We therefore expect our return on equity to be below the Association’s historical level and less than our regional and national peers. This low return on equity could adversely affect our stock price. We cannot guarantee when or if we will achieve returns on equity that are comparable to industry peers. For further information regarding pro forma income and expenses, see “PRO FORMA DATA.” In addition, for discussion of our strategy to enhance profitability, see “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Business Strategy.”

Rising interest rates may hurt our profits.

To be profitable, we have to earn more money in interest we receive on loans and investments we make than we pay in interest to the Association’s our depositors and lenders. If interest rates continue to rise, our net interest income will be negatively affected because interest paid on interest-bearing liabilities, such as deposits and borrowings, generally increases more quickly than interest received on interest-earning assets, such as loans. This would cause our income to go down. In addition, rising interest rates may hurt our income because they may reduce the demand for loans. For a further discussion of how changes in interest rates could impact us, see “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Asset and Liability Management and Market Risk.”

Increased foreclosures may hurt earnings.

The Association has experienced increased foreclosures on single-family homes during the last three years. From 1985 until June 30, 2005, the Association has foreclosed on a total of 45 properties, 15 of them just in the last three years. This foreclosure experience reflects that of Darke County in general, which had 133 foreclosures in 2003, 160 foreclosures in 2004, and 134 foreclosures through June of 2005. The Association is unable to attribute the increase in foreclosures in Darke County to any reason particular to its market area; the local increase in foreclosures appears to be part of a state-wide trend.

The increased foreclosures have caused the Association to increase its provision for losses on loans from $29,000 in fiscal year 2004 to $216,000 in fiscal year 2005. The Association’s net loan charge-offs increased from $19,000 in fiscal 2004 to $82,000 in fiscal 2005.

Although the Association tries to minimize losses on foreclosures by requiring private mortgage insurance for loans with loan-to-value ratios greater than 80%, no assurance can be provided that losses will not increase, particularly if housing prices fall in the Association’s market area.

Strong competition within the Association’s market area may limit our growth and profitability.

Competition in the banking and financial services industry is intense. In the Association’s market area, the Association competes with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Many of these competitors have substantially greater resources and lending limits than the Association does and may offer certain services that the Association does not or cannot provide. Our profitability depends upon the Association’s continued ability to successfully compete in its market.

Our use of proceeds from this offering to buy U.S. government and federal agency securities, mortgage-backed securities and deposits in financial institutions could increase our risk that changes in market interest rates will result in lower income.

We intend initially to use the net proceeds from the stock sale to purchase U.S. government and federal agency securities, mortgage-backed securities and deposits in financial institutions with interest rates that fluctuate with the general trends in the U.S. bond market. These rates could decrease, causing us to earn less on these assets in the future.

We may be adversely affected by changes in laws and regulations.

We are subject to extensive regulation, supervision and examination by the Office of Thrift Supervision, our chartering authority, and by the FDIC, as insurer of our deposits. Both Greenville Federal MHC and Greenville Federal Financial Corporation will be subject to regulation and supervision by the Office of Thrift Supervision. This regulation and supervision governs the activities in which an institution and its holding company may engage, and are intended primarily for the protection of the insurance fund and depositors. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in this regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations.

A reduction in the involvement of the Chief Executive Officer in the operations of the Association may have a material adverse effect on our operations.

As is the case with many small financial institutions, the Association relies heavily on its President and Chief Executive Officer, David M. Kepler. Mr. Kepler has been employed by the Association for 32 years, serving as President and Chief Executive Officer for the last eight years. He performs many functions that typically are delegated to other officers in larger institutions, and he is well known in the community for his affiliation with Greenville Federal. Mr. Kepler’s reduction in involvement in our operations could have a material adverse effect on the Association’s operations. Mr. Kepler has no current intention to decrease his involvement, other than possibly hiring one or more additional employees to assume some customary officer positions he performs.

Risks related to the offering:

Our stock price may decline when trading commences.

We cannot guarantee that if you purchase shares in the offering, you will be able to sell them at or above the $10.00 purchase price. After the shares of our common stock begin trading, the trading price of the common stock will be determined by the marketplace, and will be influenced by many factors, including prevailing interest rates, investor perceptions and general industry, geopolitical and economic conditions. Publicly traded stocks, including stocks of financial institutions, have recently experienced substantial market price volatility. These market fluctuations might not be related to the operating performance of particular companies whose shares are traded. Moreover, if the return on equity and return on assets of the Association for the last three fiscal years continues, our stock price may not increase to or beyond $10.00 per share and may, in fact, fall below $10.00 per share.

There will be a limited market for our common stock, which may lower our stock price.

Although we intend to have Greenville Federal Financial Corporation’s stock quoted on the OTC Bulletin Board, there is no guarantee that the shares of Greenville Federal Financial Corporation will be regularly traded. If an active trading market for Greenville Federal Financial Corporation’s stock does not develop, you may not be able to sell all of your shares of Greenville Federal Financial Corporation’s common stock on short notice, and the sale of a large number of shares at one time could temporarily depress the market price. There also may be a wide spread between the bid and asked price for our common stock. When there is a wide spread between the bid and asked price, the price at which you may be able to sell your common stock may be significantly lower than the price at which you could buy it at that time.

Greenville Federal MHC will have enough votes to control what happens on most matters put to a vote of stockholders.

Greenville Federal MHC is required by the Office of Thrift Supervision to own more than half of the common stock of Greenville Federal Financial Corporation. The board of directors of Greenville Federal MHC will have the power to vote this stock. Therefore, the board of Greenville Federal MHC will control the results of most matters put to a vote of stockholders of Greenville Federal Financial Corporation, including the election of directors. Consequently, Greenville Federal MHC, acting through its board of directors, will be able to control the business and operations of Greenville Federal Financial Corporation and will be able to prevent any challenge to the ownership or control of Greenville Federal Financial Corporation by stockholders other than Greenville Federal MHC. We cannot assure you that Greenville Federal MHC will not take actions that public stockholders believe are against their interests. For more information regarding your lack of voting control over Greenville Federal Financial Corporation, see “GREENVILLE FEDERAL MHC” and “RESTRICTIONS ON ACQUISITION OF GREENVILLE FEDERAL FINANCIAL CORPORATION AND THE ASSOCIATION.”

Stock benefits we plan to award following the change in structure and stock offering could reduce your voting control and ownership interest.

If approved by a vote of the stockholders, excluding the shares owned by Greenville Federal MHC, we intend to establish a stock option plan with a number of shares equal to 4.9%, and a recognition and retention plan with a number of shares equal to 1.96%, of the total number of shares issued in the reorganization, including the shares issued to Greenville Federal MHC. Stock options are paid for by the recipient in an amount equal to the fair market value of the stock on the date of the grant. This payment is not made until the option is actually exercised by the recipient. Recognition and retention plan awards compensation paid in the form of stock rather than cash, and is not paid for by the recipient. Awards under these plans will reduce the ownership interest of the original shareholders other than Greenville Federal MHC by up to 14%, if previously unissued shares are issued for exercised options and recognition and retention plan awards. For further discussion regarding these plans, see “PRO FORMA DATA” and “MANAGEMENT — Benefits — Other Future Stock Benefit Plans.”

Office of Thrift Supervision policy on remutualization transactions could prohibit acquisition of Greenville Federal Financial Corporation, which may lower our stock price.

Current Office of Thrift Supervision regulations permit a mutual holding company to be acquired by a mutual institution in a remutualization transaction. The possibility of a remutualization transaction has recently resulted in a degree of takeover speculation for mutual holding companies which is reflected in the per share price of mutual holding companies’ common stock. The Office of Thrift

Supervision has issued a policy statement indicating that it views remutualization transactions as raising significant issues concerning disparate treatment of minority stockholders and mutual members of the target entity and raising issues concerning the effect on the mutual members of the acquiring entity. Under certain circumstances the Office of Thrift Supervision intends to give these issues special scrutiny and reject applications providing for the remutualization of a mutual holding company unless the applicant can clearly demonstrate that the Office of Thrift Supervision’s concerns are not warranted in the particular case. Should the Office of Thrift Supervision prohibit or otherwise restrict these transactions in the future, our per share stock price may be adversely affected.

SELECTED FINANCIAL AND OTHER DATA

The summary information presented below under “Selected Financial Condition Data” and “Selected Operations Data” for, and as of the end of, each of the five years ended June 30, 2005, and the “Selected Financial Ratios and Other Data” for, and as of the end of, each of the three years ended June 30, 2005, is derived from our audited consolidated financial statements. The following information is only a summary and you should read it in conjunction with our financial statements and notes beginning on page F-1.


	At June 30,
	2005		2004		2003		2002		2001
	(In thousands)
SELECTED FINANCIAL CONDITION DATA:

Total assets	$	126,048	$	126,322	$	137,235	$	128,189	$	120,896
Cash and cash equivalents		3,716		7,902		12,393		4,609		11,713
Certificates of deposit		—		297		6,237		—		—
Investment securities available for sale		15,717		15,404		20,214		15,241		—
Investment securities held to maturity		18,050		18,999		22,000		11,951		—
Mortgage-backed securities held to maturity		1,737		2,591		3,155		5,027		1,606
Loans receivable		78,189		72,597		66,585		86,357		103,072
Deposits		78,898		83,957		89,883		85,214		84,233
Advances from the Federal Home Loan Bank		32,243		27,347		31,690		28,381		23,089
Retained earnings, net – restricted		13,659		13,673		13,876		13,293		12,399
Allowance for loan losses		590		456		441		475		498
Nonperforming loans		311		800		1,366		650		588


	For the year ended June 30,
	2005			2004			2003		2002		2001
SELECTED OPERATIONS DATA:

Total interest income	$	6,245		$	6,130		$	7,199	$	8,297	$	8,274
Total interest expense		2,977			3,351			4,141		4,812		4,710

Net interest income		3,268			2,779			3,058		3,485		3,564
Provision for losses on loans		216			29			40		—		—

Net interest income after provision losses on loans		3,052			2,750			3,018		3,485		3,564
Total other income		1,092			659			1,171		782		307
Total general, administrative and other expense		4,105			3,603			3,305		2,912		2,747

Earnings (loss) before income taxes (credits)		39			(194	)		884		1,355		1,124
Federal income taxes (credits)		(32	)		(113	)		301		461		380

Net earnings (loss)	$	71		$	(81	)	$	583	$	894	$	744

SELECTED FINANCIAL RATIOS AND OTHER DATA


	June 30,
	2005			2004			2003
PERFORMANCE RATIOS:

Return on average assets		0.06	%		(0.06	)%		0.44	%
Return on average equity		0.53			(0.60	)		4.29
Average equity to average assets		10.85			10.48			10.24
Equity to assets at the end of the period		10.84			10.82			10.11
Interest rate spread (1)		2.59			2.03			2.03
Net interest margin (2)		2.82			2.28			2.39
Average interest-earning assets to average interest- bearing liabilities		109.06			109.14			111.11
Total general, administrative and other expenses to average total assets		3.30			2.78			2.49
Efficiency ratio (3)		94.15			104.80			39.49

ASSET QUALITY RATIOS:

Nonperforming loans as a percent of total loans		0.39			1.08			2.05
Nonperforming loans as a percent of total assets		0.25			0.63			1.00
Allowance for loan losses as a percent of total loans		0.74			0.61			0.66
Allowance for loan losses as a percent of nonperforming assets		150.51			52.66			31.43

REGULATORY CAPITAL RATIOS:

Tangible capital		10.93	%		10.91	%		10.09	%
Core capital		10.93			10.91			10.09
Risk-based capital		21.61			23.09			24.16

Number of banking offices		2			2			2



(1)		Interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.


(2)		Net interest margin represents net interest income as a percent of average interest-earning assets for the period.


(3)		The efficiency ratio represents general, administrative and other expense as a percent of the total of net interest income and other income.

GREENVILLE FEDERAL FINANCIAL CORPORATION

Greenville Federal Financial Corporation has been incorporated under federal law to hold all of the stock of the Association. Greenville Federal Financial Corporation has applied for the approval of the Office of Thrift Supervision to become a savings and loan holding company and will be subject to regulation by that agency. After we complete the stock sale, Greenville Federal Financial Corporation will be a unitary savings and loan holding company.

Greenville Federal Financial Corporation will have no significant assets other than all of the outstanding shares of common stock of the Association, the net proceeds it keeps ($5.3 million at the maximum of the offering range) and its loan to the Greenville Federal Financial Corporation Employee Stock Ownership Plan. Greenville Federal Financial Corporation will have no significant liabilities. Initially, the management of Greenville Federal Financial Corporation and the Association will be substantially the same and Greenville Federal Financial Corporation will use the offices of the Association. Greenville Federal Financial Corporation intends to utilize the support staff of the Association from time to time and will pay the Association for this expense. We do not have any current plans for Greenville Federal Financial Corporation to conduct any business other than owning the stock of the Association and investing its money. If Greenville Federal Financial Corporation expands or changes it business in the future, we may hire our own employees.

The executive offices of Greenville Federal Financial Corporation are located at 690 Wagner Avenue, Greenville, Ohio 45331, and its telephone number is (937) 548-4158.

THE ASSOCIATION

The Association is a federally chartered and insured mutual savings institution with two full-service offices. At June 30, 2005, Greenville Federal had total assets of $126.0 million, including total loans receivable of $78.2 million; total deposits of $78.9 million; and retained earnings of $13.7 million. Greenville Federal is examined and regulated by the Office of Thrift Supervision, its primary regulator, and the Federal Deposit Insurance Corporation (the “FDIC”). Greenville Federal is also subject to reserve requirements of the Board of Governors of the Federal Reserve System and membership requirements of the Federal Home Loan Bank of Cincinnati, from which Greenville Federal borrows funds.

The executive offices of Greenville Federal are located at 690 Wagner Avenue, Greenville, Ohio 45331, and its telephone number is (937) 548-4158.

GREENVILLE FEDERAL MHC

The Association will organize the Greenville Federal MHC under federal law as a federal mutual holding company. Persons with membership rights in Greenville Federal as of the date of the reorganization will have membership rights in Greenville Federal MHC after the reorganization as long as they remain depositors of the Association. In addition, a few borrowers of the Association of March 20, 1986, who still have one or more of those loans outstanding as of the date of the reorganization will continue to have membership rights after the reorganization so long as those loans continue to be outstanding. Such depositors and borrowers of the Association, as well as new depositors, will have the authority to elect the directors of Greenville Federal MHC after the reorganization.

The primary assets of Greenville Federal MHC will be shares of common stock of Greenville Federal Financial Corporation received in the reorganization, which will constitute 55% of the outstanding shares initially, as well as $50,000 contributed by Greenville Federal as its initial capitalization. Greenville Federal MHC is not expected initially to engage in any business activities other than holding the stock of Greenville Federal Financial Corporation and investing its money. Greenville Federal MHC will be subject to the Home Owners’ Loan Act and regulation by the Office of Thrift Supervision.

The executive offices of Greenville Federal MHC will be located at 690 Wagner Avenue, Greenville, Ohio 45331, and its telephone number will be (937) 548-4158.

HOW WE INTEND TO USE THE PROCEEDS

Although the actual net proceeds from the sale of the shares of common stock cannot be determined until the reorganization is completed, we presently anticipate that the net proceeds from the sale of the shares of common stock will be between $9.5 million and $13.0 million and up to $15.2 million assuming an increase in the estimated value of the common stock sold in the reorganization by 15%.

We intend to use the net proceeds received from the stock offering as follows:


					Maximum,
	Minimum		Maximum		as adjusted
	(In thousands)
Retained by Greenville Federal Financial Corporation and initially placed in short-term investments for general corporate purposes	$	3,825	$	5,305	$	6,156
Employee stock ownership plan loan		900		1,217		1,400
Contributed to the capital of Greenville Federal		4,725		6,523		7,556


Net offering proceeds	$	9,450	$	13,045	$	15,112

Greenville Federal Financial Corporation will retain 50% of the net reorganization proceeds from which the loan to be made to the employee stock ownership plan will be made, and will contribute the remaining reorganization proceeds to the capital of the Association. Greenville Federal Financial Corporation intends to use a portion of the net proceeds to make a loan directly to the employee stock ownership plan to enable the plan to purchase up to a number of shares equal to 3.92% of the total number of shares issued in the reorganization, including the shares issued to Greenville Federal MHC. Based upon the issuance of 2,295,000 shares of common stock and 3,105,000 shares of common stock at the minimum and maximum of the estimated offering range, respectively, the loan to the employee stock ownership plan would be $899,640 and $1,217,160, respectively. See “MANAGEMENT — Benefits — Employee Stock Ownership Plan.” The remaining net proceeds retained by Greenville Federal Financial Corporation initially may be used to invest in U.S. Government and federal agency securities of various

maturities, mortgage-backed or other securities, deposits in either the Association or other financial institutions, or a combination thereof. The net proceeds may ultimately be used to:


	•		support the Association’s lending activities;


	•		repay borrowings in the ordinary course of business; or

	•		support the future expansion of operations through the establishment of additional banking offices or other customer facilities or through acquisitions of other financial institutions or branch offices, although no such acquisition transactions are specifically being considered at this time.

The net proceeds from the reorganization may also be used for other business and investment purposes, including the payment of regular or special cash dividends, possible repurchases of the common stock or returns of capital. Greenville Federal Financial Corporation and the Association have committed, however, not to take any action to further the payment of any return of capital on the common stock during the one-year period subsequent to completion of the reorganization. Management of Greenville Federal Financial Corporation may consider expanding or diversifying its activities, as such opportunities become available.

Following the completion of the reorganization, to the extent permitted by the Office of Thrift Supervision and based upon then existing facts and circumstances, Greenville Federal Financial Corporation’s board of directors may determine to repurchase shares of common stock, subject to any applicable statutory and regulatory requirements. Such facts and circumstances may include but not be limited to:

	•		market and economic factors, such as the price at which the stock is trading in the market, the volume of trading, the attractiveness of other investment alternatives in terms of the rate of return and risk involved in the investment, the ability to increase the book value and/or earnings per share of the remaining outstanding shares, an improvement in Greenville Federal Financial Corporation’s return on equity, and the availability of cash;

	•		the avoidance of dilution to stockholders by not having to issue additional shares to cover the exercise of stock options or to fund employee stock benefit plans; and

	•		any other circumstances in which repurchases would be in the best interests of Greenville Federal Financial Corporation and its stockholders.

Any stock repurchases will be subject to the determination of Greenville Federal Financial Corporation’s board of directors that the Association will be capitalized in excess of all applicable regulatory requirements after any such repurchases.

The portion of the net proceeds contributed by Greenville Federal Financial Corporation to the capital of the Association will be added to the Association’s general funds to be used for general corporate purposes, including increased lending activities. The amount of net proceeds received by the Association will further strengthen the Association’s capital position, which already exceeds all regulatory requirements. After the reorganization, based upon the maximum of the estimated offering range, the Association’s tangible capital ratio will be approximately 13.9%. As a result, the Association will continue to be a well-capitalized institution.

PRO FORMA DATA

The actual net proceeds from the sale of the common stock cannot be determined until the reorganization is completed. Net proceeds are currently estimated to be between $9.5 million and $13.0 million, or $15.1 million in the event the estimated offering range is increased by 15%, based upon the following assumptions:

	•		all shares of common stock will be sold in the Subscription Offering;

	•		Keefe, Bruyette & Woods, Inc., will receive a fee equal to the greater of 1.35% of the aggregate purchase price for sales in the Subscription Offering, or between $139,421 and $188,629, or $216,923 in the event the estimated offering range is increased by 15%; and


	•		total expenses, including the marketing fees paid to Keefe, Bruyette & Woods, Inc., will be between $878,000 and $928,000, or $956,000 in the event the estimated offering range is increased by 15.0%. Actual expenses may vary from those estimated.

Pro forma consolidated net earnings and stockholders’ equity of Greenville Federal Financial Corporation have been calculated as of and for the year ended June 30, 2005, as if the common stock to be issued in the offering had been sold at the beginning of the period and the net proceeds had been invested at 3.36%, which represents the yield on one-year U.S. Government securities at June 30, 2005. In light of changes in interest rates in recent periods, this yield is deemed by Greenville Federal Financial Corporation and the Association to more accurately reflect the pro forma reinvestment rate than the arithmetic average method. The effect of withdrawals from deposit accounts for the purchase of common stock has not been reflected. A tax rate of 34.0% has been assumed, resulting in an after-tax yield of 2.22% for the year ended June 30, 2005. Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of common stock, as adjusted to give effect to the shares purchased by the employee stock ownership plan. See Note 3 to the tables below. No effect has been given in the pro forma stockholders’ equity calculations for the assumed earnings on the net proceeds. Greenville Federal Financial Corporation intends to make a loan to fund the purchase of the common stock by the employee stock ownership plan and intends to retain $5.3 million of the net proceeds from the offering, at the maximum of the offering range.

The table below gives effect to the recognition and retention plan and the stock option plan, which we expect to adopt following the reorganization and will be presented to stockholders for approval at an annual or special meeting of stockholders to be held at least six months following the completion of the reorganization. If the recognition and retention plan is approved by stockholders, the recognition and retention plan intends to acquire an amount of common stock equal to or up to 1.96 % of the common stock issued in the reorganization, including the shares issued to Greenville Federal MHC, either through open market purchases or from authorized but unissued shares of common stock, if permissible. If the stock option plan is approved by stockholders, management intends to grant a number of options to purchase common stock equal to up to 4.9% of the common stock issued in the reorganization, including the shares issued to Greenville Federal MHC. Shares for the exercise of stock options will be issued either from shares previously acquired through open market purchases or from authorized but unissued shares of common stock. The table below assumes that stockholder approval has been obtained, as to which there can be no assurance, and that the shares acquired by the recognition and retention plan are purchased in the open market at the purchase price in the Offerings. No effect has

been given to Greenville Federal Financial Corporation’s results of operations after the reorganization, the market price of the common stock after the reorganization or a smaller purchase by the recognition and retention plan.

The following pro forma information may not be representative of the financial effects of the foregoing transactions at the dates on which such transactions actually occur and should not be taken as indicative of future results of operations. Pro forma stockholders’ equity represents the difference between the stated amount of assets and liabilities of Greenville Federal Financial Corporation computed in accordance with generally accepted accounting principles (“GAAP”). Greenville Federal Financial Corporation is offering its common stock on a best efforts basis. Greenville Federal Financial Corporation must sell a minimum of 1,032,750 shares to complete its offering. Pro forma stockholders’ equity and book value are not intended to represent the fair value of the common stock and, due to the existence of the tax bad debt reserve, may be different than amounts that would be available for distribution to stockholders if we liquidated.


	At or for the year ended June 30, 2005
	1,032,750			1,215,000			1,397,250			1,606,837
	shares sold at			shares sold at			shares sold at			Shares sold at
	$10.00 per			$10.00 per			$10.00 per			$10.00 per share
	share			share			share			(adjusted
	(minimum)			(midpoint)			(maximum)			maximum) (1)
	(Dollars in thousands)
Gross offering proceeds	$	10,328		$	12,150		$	13,973		$	16,068
Offering expenses		(878	)		(903	)		(928	)		(956	)

Estimated net offering proceeds		9,450			11,247			13,045			15,112
Less:
Common stock purchased by ESOP (2)		(900	)		(1,058	)		(1,217	)		(1,400	)
Common stock purchased by recognition and retention plan (3)		(450	)		(529	)		(609	)		(700	)
Capitalization of Greenville Federal MHC		(50	)		(50	)		(50	)		(50	)

Estimated net cash proceeds	$	8,050		$	9,610		$	11,169		$	12,962


Net earnings:
Historical	$	71		$	71		$	71		$	71
Pro forma adjustments:
Net earnings from proceeds		179			213			248			288
ESOP (2)		(59	)		(70	)		(80	)		(92	)
Recognition and retention plan (3)		(59	)		(70	)		(80	)		(92	)
Stock option plan (4)		(57	)		(67	)		(77	)		(89	)

Pro forma net earnings	$	75		$	77		$	82		$	86


Earnings per share (5)
Historical	$	0.03		$	0.03		$	0.03		$	0.02
Pro forma adjustments:
Net earnings from proceeds		0.08			0.08			0.08			0.08
ESOP (2)		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Recognition and retention plan (3)		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Stock option plan (4)		(0.02	)		(0.02	)		(0.02	)		(0.02	)

Pro forma earnings per share (5)	$	0.03		$	0.03		$	0.03		$	0.02

Shares considered outstanding in calculating earnings per share		2,214,032			2,604,744			2,995,456			3,444,774


Shareholders’ equity: (6)
Historical	$	13,659		$	13,659		$	13,659		$	13,659
Net offering proceeds		9,450			11,247			13,045			15,112
ESOP (2)		(900	)		(1,058	)		(1,217	)		(1,400	)
Recognition and retention plan (3)		(450	)		(529	)		(609	)		(700	)
Capitalization of Greenville Federal MHC		(50	)		(50	)		(50	)		(50	)

Pro forma shareholders’ equity	$	21,709		$	23,269		$	24,828		$	26,621


Shareholders’ equity per share: (7)
Historical	$	5.95		$	5.06		$	4.40		$	3.83
Net offering proceeds		4.12			4.17			4.20			4.23
ESOP (2)		(0.39	)		(0.39	)		(0.39	)		(0.39	)
Recognition and retention plan (3)		(0.20	)		(0.20	)		(0.20	)		(0.20	)
Capitalization of Greenville Federal MHC		(0.02	)		(0.02	)		(0.01	)		(0.01	)

Pro forma shareholders’ equity per share	$	9.46		$	8.62		$	8.00		$	7.46


Offering price to pro forma earnings per share		333.33	x		333.33	x		333.33	x		500.00	x

Offering price to pro forma shareholders’ equity per share		105.71	%		116.01	%		125.00	%		134.05	%

Shares considered outstanding in calculating pro forma shareholders equity per share		2,295,000			2,700,000			3,105,000			3,570,750

(Footnotes on next page)


(1)		As adjusted to give effect to an increase in the number of shares which could occur due to an increase in the estimated offering range of up to 15% to reflect changes in market and financial conditions following the commencement of the reorganization.


(2)		It is assumed that 3.92% of the total number of shares of Greenville Federal Financial Corporation issued in the reorganization, including the shares issued to Greenville Federal MHC, will be purchased by the Association’s employee stock ownership plan. The funds used to acquire such shares are assumed to have been borrowed by the employee stock ownership plan from Greenville Federal Financial Corporation. The amount to be borrowed is reflected as a reduction to shareholders’ equity. The Association intends to make annual contributions to the employee stock ownership plan in an amount at least equal to the principal and interest requirement of the debt. The pro forma net earnings assumes: (i) that the contribution to the employee stock ownership plan is equivalent to the debt service requirement for the fiscal year ended June 30, 2005, at an average fair value of $10.00; (ii) that 8,996, 10,584, 12,172 and 13,997 shares at minimum, midpoint, maximum and adjusted maximum of the offering range, respectively, were committed to be released during the fiscal year ended June 30, 2005, at an average fair value of $10.00 per share; and (iii) only the employee stock ownership plan shares committed to be released were considered outstanding for purposes of the earnings per share calculations. No effect has been given to the put option required to be given to plan participants by Greenville Federal Financial Corporation. Statement of Position (“SOP”) 93-6 requires employers to provide such a put option to participants holding ESOP shares that are not readily tradable, which on exercise requires employers to repurchase the shares at fair value.



(3)		Gives effect to the award of stock under the recognition and retention plan Greenville Federal Financial Corporation expects to adopt following the offering. This plan is expected to acquire a number of shares of common stock equal to 1.96% of the total number of shares of Greenville Federal Financial Corporation stock issued in the reorganization, including the shares issued to Greenville Federal MHC, or 44,982, 52,920, 60,858 and 69,986 shares of common stock at the minimum, midpoint, maximum and adjusted maximum of the estimated offering range, respectively, either through open market purchases or directly from Greenville Federal Financial Corporation. In calculating the pro forma effect of the stock recognition and retention plan, it is assumed that the shares were acquired by the plan at the beginning of the year presented in open market purchases at $10.00 per share and that 20% of the amount contributed was an amortized expense during such period. The issuance of authorized but unissued shares of Greenville Federal Financial Corporation common stock to the stock recognition and retention plan instead of open market purchases would dilute the ownership interests of existing shareholders, other than Greenville Federal MHC, by approximately 4.17%.



(4)		Assumes the issuance of additional shares of common stock pursuant to the stock option plan that Greenville Federal Financial Corporation expects to adopt following the reorganization. Under the stock option plan, an amount equal to 4.90% of the total number of shares of Greenville Federal Financial Corporation issued in the reorganization, including the shares issued to Greenville Federal MHC, or 112,455, 132,300, 152,145 and 174,966 shares at the minimum, midpoint, maximum and adjusted maximum of the estimated offering range, respectively, will be reserved for future issuance upon the exercise of options to be granted under the stock option plan. The fair value of the share options is estimated using the Black-Scholes options pricing model, which model is based upon specific types of assumptions that include an appropriate dividend yield, risk-free reinvestment rate, expected option maturity and volatility rate for the stock. Expense related to the stock option plan, pursuant to SFAS No. 123(R), has been calculated assuming a fair value of $3.84 per share granted and a vesting period of five years. The issuance of authorized but unissued shares of Greenville Federal Financial Corporation common stock upon the exercise of options would dilute the ownership interests of existing shareholders, other than Greenville Federal MHC, by approximately 9.82%.

(Footnotes continued on next page)


(5)		Per share earnings data is based on weighted-average shares outstanding, which represents shares sold in the reorganization offering, shares issued to Greenville Federal MHC and shares to be allocated or distributed under the Association’s employee stock ownership plan and recognition and retention plan for the year presented. For the year ended June 30, 2005, the weighted average shares outstanding for purposes of computing earnings per share have been calculated as follows:


	Shares at			Shares at			Shares at			Shares at adjusted
	minimum of			midpoint of			maximum of			maximum of
	offering			offering			offering			offering
	range			range			range			range
Shares issued		2,295,000			2,700,000			3,105,000			3,570,750
Shares acquired by the employee stock ownership plan		(89,964	)		(105,840	)		(121,716	)		(139,973	)
Employee stock ownership plan shares allocated or committed to be released		8,996			10,584			12,172			13,997

Weighted-average shares outstanding		2,214,032			2,604,744			2,995,456			3,444,774



(6)		The retained earnings of the Association will continue to be restricted after the reorganization. The restriction relates primarily to the regulatory capital requirements and the tax bad debt reserves.



(7)		Pro forma shareholders’ equity per share data is based upon 2,295,000, 2,700,000, 3,105,000 and 3,570,750 shares outstanding at the minimum, midpoint, maximum and adjusted maximum of the estimated offering range, respectively, representing shares issued in the offering, shares purchased by the Association employee stock ownership plan and shares issued to Greenville Federal MHC.

CAPITALIZATION

The following table presents the historical capitalization of the Association at June 30, 2005, and the pro forma consolidated capitalization of Greenville Federal Financial Corporation after giving effect to the reorganization, excluding assumed earnings on the net proceeds, based upon the sale of the number of shares shown below and the other assumptions set forth under “PRO FORMA DATA.” Greenville Federal Financial Corporation is offering its common stock on a best efforts basis. Greenville Federal Financial Corporation must sell a minimum of 1,032,750 shares to complete its offering.


	Pro-forma based upon the sale at $10.00 per share
												1,606,837
	Greenville		1,032,750			1,215,000			1,397,250			Shares (1)
	Federal		Shares			Shares			Shares			(maximum of
	historical		(minimum of			(midpoint of			(maximum of			range, as
	capitalization		range)			range)			range)			adjusted)
	(In thousands)
Deposits (2)	$	78,898	$	78,898		$	78,898		$	78,898		$	78,898
Borrowings		32,243		32,243			32,243			32,243			32,243

Total	$	111,141	$	111,141		$	111,141		$	111,141		$	111,141


Stockholders’ equity
Preferred stock, $.01 par value, 1,000,000 shares authorized; none to be issued		—		—			—			—			—
Common stock, $.01 par value, 8,000,000 shares authorized; shares to be issued as reflected (3)				23			27			31			36
Additional paid-in capital		—		9,427			11,220			13,014			15,076
Retained earnings, net (4)		13,659		13,609			13,609			13,609			13,609
Less:
Common stock to be acquired by the employee stock ownership plan (6)		—		(900	)		(1,058	)		(1,217	)		(1,400	)
Common stock to be acquired by the recognition and retention plan (7)		—		(450	)		(529	)		(609	)		(700	)


Total retained earnings/stockholders’ equity	$	13,659	$	21,709		$	23,269		$	24,828		$	26,621

Total pro forma stockholders’ equity as a percentage of pro forma total assets		—		16.08	%		17.02	%		17.93	%		18.96	%


(1)		As adjusted to give effect to an increase in the number of shares which could occur due to an increase in the estimated offering range of up to 15% to reflect changes in market and financial conditions following the commencement of the reorganization.

(2)		Does not reflect withdrawals from deposit accounts for the purchase of common stock in the reorganization. Such withdrawals would reduce pro forma deposits by the amount of the withdrawals.

(3)		Reflects the issuance of the shares of common stock to be sold in the reorganization. No effect has been given to the issuance of additional shares of common stock pursuant to the proposed stock option plan. See “PRO FORMA DATA” and “MANAGEMENT — Benefits — Other future stock benefit plans.”


(4)		Retained earnings of the Association will be restricted after the offering. All amounts are net of unrealized losses on securities designated as available for sale of $207,000.

(Footnotes continued on next page)


(5)		Pro-forma amounts reflect a $50,000 contribution by the Association to Greenville Federal MHC.


(6)		Assumes that 3.92% of the total number of shares of Greenville Federal Financial Corporation issued in the reorganization, including the shares issued to Greenville Federal MHC, will be purchased by the employee stock ownership plan, which is reflected as a reduction from stockholders’ equity. The employee stock ownership plan shares will be purchased with funds loaned to the employee stock ownership plan by Greenville Federal Financial Corporation. See “PRO FORMA DATA” and “MANAGEMENT — Benefits — Employee Stock Ownership Plan.”

(7)		Greenville Federal Financial Corporation intends to adopt the recognition and retention plan and to submit such plan to stockholders at an annual or special meeting of stockholders held at least six months following the completion of the reorganization. If the plan is approved by stockholders, Greenville Federal Financial Corporation intends to contribute sufficient funds to the recognition and retention plan to enable the plan to purchase a number of shares of common stock equal to 1.96% of the total number of shares of Greenville Federal Financial Corporation stock issued in the reorganization, including the shares issued to Greenville Federal MHC. This assumes that stockholder approval has been obtained and that the shares have been purchased in the open market at the purchase price. In the event Greenville Federal Financial Corporation issues authorized but unissued shares of common stock to the recognition and retention plan, the voting interests of existing stockholders other than Greenville Federal MHC, would be diluted approximately 4.17%. The shares are reflected as a reduction of stockholders’ equity. See “PRO FORMA DATA” and “MANAGEMENT — Benefits — Other future stock benefit plans.”

OUR PLANS REGARDING DIVIDENDS

Although we intend to pay a dividend to the shareholders of Greenville Federal Financial Corporation, the declaration and payment of dividends will be subject to the discretion of the board of directors and will be based on the earnings and financial condition of Greenville Federal Financial Corporation and general economic conditions. If the board of directors determines in the exercise of its discretion that the net income, capital and consolidated financial condition of Greenville Federal Financial Corporation and the Association and the general economy justify the declaration and payment of dividends, the board of directors may authorize the payment of dividends on the common stock. There can be no assurance that dividends will be declared and paid or, if declared and paid, that such dividends will continue to be paid in the future. In addition, pursuant to a commitment we made to the Office of Thrift Supervision, during the one-year period after the reorganization, Greenville Federal Financial Corporation will not take any action to declare an extraordinary dividend to stockholders that could be treated by recipients as a tax-free return of capital for federal income tax purposes.

Other than earnings on the investment of the proceeds of the stock offering retained by Greenville Federal Financial Corporation, the only income currently anticipated to be received by Greenville Federal Financial Corporation will be dividends paid by the Association and the payments on the ESOP loan. The payment of dividends by the Association to Greenville Federal Financial Corporation will be subject to the discretion of the board of directors of the Association, based on the earnings and financial condition of the Association and general economic conditions, and subject to applicable regulations of the Office of Thrift Supervision. The Association may not pay a cash dividend after the reorganization if its regulatory capital would, as a result of the payment of such dividend, be reduced below the amount required for the liquidation account or the applicable regulatory capital requirements of the Office of Thrift Supervision. Regulations of the Office of Thrift Supervision also require the Association to obtain approval from the Office of Thrift Supervision if the amount of capital distributions for the calendar year would exceed the sum of the Association’s net income for that year to date plus its retained net income for the preceding two years.

If Greenville Federal Financial Corporation pays dividends to its stockholders, generally it will be required to pay dividends to Greenville Federal MHC. We expect, however, that Greenville Federal MHC will elect to waive the receipt of dividends if the Office of Thrift Supervision approves of such waiver and Greenville Federal MHC determines that it will not result in adverse federal income tax consequences.

MARKET FOR THE COMMON STOCK

We anticipate that after we complete the reorganization, the common stock of Greenville Federal Financial Corporation will be quoted on the OTC Bulletin Board. In order to remain eligible for trading on the OTC Bulletin Board, we must remain current in our periodic reporting with the Securities and Exchange Commission. Keefe, Bruyette & Woods, Inc., has indicated its intention to register to trade our stock, will assist us in identifying other firms to do the same and may solicit potential buyers and sellers to match buy and sell orders, but it is under no obligation to do so. We will use our best efforts to encourage and assist Keefe, Bruyette & Woods, Inc., to establish and make a market for our common stock. We estimate that three or four firms will commit to make a market in our common stock, although no assurance can be provided that such commitments will be made.

The development of a public market for our common stock depends on the existence of willing buyers and sellers, which is not under the control of Greenville Federal Financial Corporation, Greenville Federal or any market maker. There can be no assurance that persons purchasing the common stock will be able to sell their shares at or above the subscription price of $10.00 per share. Therefore, purchasers of the common stock should have long-term investment intent and should recognize that there may be a limited trading market for the common stock. This limited market may make it difficult to sell the common stock after the reorganization and stock issuance and may have an adverse effect on the price at which your common stock can be sold.

REGULATORY CAPITAL REQUIREMENTS

At June 30, 2005, the Association exceeded all of the regulatory capital requirements applicable to it. The following table sets forth the historical regulatory capital of the Association at June 30, 2005, and the pro forma regulatory capital of the Association after giving effect to the reorganization, based upon the sale of the number of shares shown in the table. The pro forma regulatory capital amounts reflect the receipt by the Association of 50% of the net stock proceeds, after expenses. The pro forma risk-based capital amounts assume the investment of the net proceeds received by the Association in assets which have a risk-weight of 20% under applicable regulations, as if such net proceeds had been received and so applied at June 30, 2005.


						Pro forma at June 30, 2005
	Historical at					1,032,750 shares					1,215,00 shares					1,397,250 shares					1,606,837 shares
	June 30, 2005					sold at $10.00 per share					sold at $10.00 per share					sold at $10.00 per share					sold at $10.00 per share
			Percent of					Percent of					Percent of					Percent of					Percent of
	Amount		assets (2)			Amount		assets (3)			Amount		assets (3)			Amount		assets (3)			Amount		assets (3)
	(Dollars in thousands)
Equity capital under GAAP (1)	$	13,659		10.8	%	$	16,984		13.0	%	$	17,645		13.4	%	$	18,306		13.8	%	$	19,065		14.3	%

Tangible capital:
Actual	$	13,845		10.9	%	$	17,170		13.1	%	$	17,831		13.5	%	$	18,492		13.9	%	$	19,251		14.4	%
Requirement		1,899		1.5			1,964		1.5			1,977		1.5			1,991		1.5			2,006		1.5


Excess	$	11,946		9.4	%	$	15,206		11.6	%	$	15,854		12.0	%	$	16,501		12.4	%	$	17,245		12.9	%

Core capital:
Actual	$	13,845		10.9	%	$	17,170		13.1	%	$	17,831		13.5	%	$	18,492		13.9	%	$	19,251		14.4	%
Requirement		5,065		4.0			5,236		4.0			5,272		4.0			5,308		4.0			5,350		4.0


Excess	$	8,780		6.9	%	$	11,934		9.1	%	$	12,559		9.5	%	$	13,184		9.9	%	$	13,901		10.4	%


Risk-based capital:
Actual	$	14,387		21.6	%	$	17,712		26.2	%	$	18,373		27.1	%	$	19,034		28.6	%	$	19,793		29.1	%
Requirement		5,327		8.0			5,402		8.0			5,416		8.0			5,431		8.0			5,447		8.0


Excess	$	9,060		13.6	%	$	12,310		18.2	%	$	12,957		19.1	%	$	13,603		20.6	%	$	14,346		21.1	%


(1)		“GAAP” means generally accepted accounting principals in the United States.


(2)		Tangible and core capital levels are shown as percentage of adjusted total assets of $127.0 million. Risk-based capital is shown as a percentage of risk-weighted assets of $66.6 million.



(3)		Tangible capital and core capital levels are shown as a percentage of adjusted total assets of $130.9 million, $131.8 million, $132.7 million and $133.7 million at the minimum, midpoint, maximum and adjusted maximum of the offering range, respectively. Risk-based capital levels are shown as a percentage of risk-weighted assets of $67.5 million, $67.7 million, $67.9 million and $68.1 million at the minimum, midpoint, maximum and adjusted maximum of the offering range.

The following table reflects the reconciliation from GAAP capital to regulatory capital at June 30, 2005.


										Maximum
	Minimum			Midpoint			Maximum			as adjusted
	(In thousands)
GAAP capital	$	13,659		$	13,659		$	13,659		$	13,659
Unrealized losses on available-for-sale securities		207			207			207			207
Mortgage servicing rights disallowed		(21	)		(21	)		(21	)		(21	)
Offering proceeds received from Greenville Federal Financial Corporation		4,725			5,623			6,523			7,556
Shares to be acquired by ESOP		(900	)		(1,058	)		(1,217	)		(1,400	)
Shares to be acquired by recognition and retention plan		(450	)		(529	)		(609	)		(700	)
Capitalization of Greenville Federal MHC		(50	)		(50	)		(50	)		(50	)


Tangible and core capital		17,170			17,831			18,492			19,251
Allowance for loan losses		542			542			542			542

Risk-based capital	$	17,712		$	18,373		$	19,034		$	19,793

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

This discussion and analysis reflects the Association’s financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition and results of operations. You should read the information in this section in conjunction with our financial statements and their notes beginning on page F-1 of this prospectus, and the other statistical data provided in this prospectus. The preparation of financial statements involves the application of accounting policies relevant to our business. Certain of our accounting policies are important to the portrayal of our financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Facts and circumstances that could affect these judgments include, without limitation, changes in interest rates, in the performance of the economy or in the financial condition of borrowers.

General

The Association’s results of operations are dependent primarily on net interest income, which is the difference between the income earned on our loans and securities and our cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by the provision for losses on loans and service charges and fees collected on our deposit accounts. The Association’s general, administrative and other expense primarily consists of employee compensation and benefits, occupancy and equipment expense, franchise taxes, data processing expense, charitable contributions expense, other operating expenses and federal income taxes. Results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities.

General, administrative and other expense for Greenville Federal Financial Corporation and the Association can be expected to increase following completion of the reorganization, as a result of the increased costs associated with operating as a public company, the increased compensation expense

associated with adopting and funding our employee stock ownership plan and the recognition and retention plan, if approved by stockholders.

Assuming that the adjusted maximum number of shares are sold in the offering, and further assuming a price of $10.00 per share: (i) the employee stock ownership plan will acquire 139,973 shares with a $1.4 million loan that is expected to be repaid over ten years, resulting in an annual expense (pre-tax) of approximately $140,000 (assuming that the common stock maintains a value of $10.00 per share); and (iii) the recognition and retention plan would award 1.96% of the total number of shares issued in the reorganization, including the shares issued to Greenville Federal MHC, or 69,986 shares to be offered to eligible participants, which would be expensed as the awards vest. Assuming all shares are awarded under the recognition and retention plan at a price of $10.00 per share, and that the awards are subject to a five-year vesting period, the corresponding annual expense (pre-tax) associated with shares awarded under the recognition and retention plan would be approximately $140,000.

The actual expense that will be recorded for the employment stock ownership plan will be determined by the market value of the shares released to employees over the term of the loan. Accordingly, increases in the stock price above $10.00 per share will increase the expense. Further, the actual expense of the recognition and retention plan will be determined by the fair market value of the stock on the grant date, which might be greater than $10.00 per share.

Critical accounting policies

We consider accounting policies involving significant judgments and assumptions by management that have, or could have, a material impact on the carrying value of certain assets or on income to be critical accounting policies. The Association considers its accounting for the allowance for loan losses and mortgage servicing rights to involve critical accounting policies.

The allowance for loan losses is the estimated amount considered necessary to cover credit losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for losses on loans, which is charged against income. In determining the allowance for loan losses, management makes significant estimates and has identified this policy as one of the most critical for us.

Management performs a quarterly evaluation of the allowance for loan losses. Consideration is given to a variety of factors in establishing this estimate, including, but not limited to, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of individual borrowers, results of internal loan reviews and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change.

The analysis has two components, specific allocations and general allocations. Specific allocations are made for loans that are determined to be impaired. Impairment is measured by determining the present value of expected future cash flows or, for collateral-dependent loans, the fair value of the collateral adjusted for market conditions and selling expenses. The general allocation is determined by segregating the remaining loans by type of loan, risk weighting (if applicable) and payment history. Management also analyzes historical loss experience, delinquency trends, general economic conditions and geographic and industry concentrations. This analysis establishes factors that are applied to the loan groups to determine the amount of the general reserve. Actual loan losses may be

significantly more than the reserves established, which could have a material negative effect on financial results.

Mortgage servicing rights are recognized as separate assets when loans are sold with servicing retained. Mortgage servicing rights are subject to an impairment assessment based upon fair value estimates. A pooling methodology is applied for valuation purposes, in which loans supporting mortgage servicing rights and with similar characteristics are “pooled” together. Once pooled, each grouping of loans supporting the mortgage servicing rights is evaluated on a discounted earnings basis to determine the present value of future earnings that a purchaser could expect to realize from the portfolio. Earnings are projected from a variety of sources, including loan service fees, interest earned on float, net interest earned on escrow balances, miscellaneous income and costs to service the loans. The present value of future earnings is the estimated market value for the pool, calculated using consensus assumptions that a third-party purchaser would utilize in evaluating a potential acquisition of the servicing rights. Events that may significantly affect the estimates used are changes in interest rates and the related impact on mortgage loan prepayment speeds and the payment performance of the underlying loans. Based on the assumptions discussed, pre-tax projections are prepared for each pool of loans serviced by a third-party provider. These earning figures approximate the cash flow that could be received from the servicing portfolio. Management reviews the valuation information, and mortgage servicing rights are carried at the lower of amortized cost or fair value.

Business Strategy

The Association’s business strategy is to operate a financially sound and profitable community-oriented savings bank providing high quality services to individuals and businesses in Darke County and the surrounding counties. The Association has emphasized one- to four-family residential lending and will continue to do so. At June 30, 2005, our one- to four-family loans constituted 83.3% of the Association’s loan portfolio.

The Association will also continue to manage its interest rate risk through the origination of adjustable-rate loans, the sale of long-term, fixed-rate loans when appropriate, the maintenance of a laddered investment portfolio and the lengthening of terms of borrowed funds and attraction of core deposits. Although our earnings have suffered in recent years due to our sale of fixed-rate loans, such sales still may be appropriate in a rising interest rate environment. Adjustable-rate loans constituted 33.3% of our total loans at June 30, 2005. Of total fixed rate loans at June 30, 2005, 5.1% are scheduled to mature by June 30, 2006.

The Association will also maintain asset quality by continuing to adhere to conservative underwriting guidelines and emphasizing the origination of loans secured by real estate. Since the Association has had increased foreclosures in the last three years, it will continue to require private mortgage insurance for loans with loan-to-value ratios in excess of 80%.

The Association’s return on equity has been significantly below that of its peers for the last two fiscal years. The low earnings (a net loss of $81,000 in fiscal 2004 and net earnings of $71,000 in fiscal 2005) were the result of several factors. First, the Association sold most of the fixed-rate loans it originated from June 2001 until June 2003 in an attempt to manage its interest rate risk and subsequently invested excess liquid funds in low-yielding investments. Interest income on loans dropped from $7.9 million in fiscal 2001 to $4.7 million in 2004 and rose slightly to $5.0 million in fiscal 2005 as the Association once again rebuilt its loan portfolio.

Second, from the late 1990s to the middle of 2001, the Association used long-term borrowings from the Federal Home Loan Bank of Cincinnati, which carry relatively high interest rates and large prepayment penalties.

Third, the Association experienced rising defined benefit plan costs, totaling $684,000 in fiscal year 2005, including a one-time termination fee incurred in fiscal year 2005. The increased defined benefit plan costs were partially offset by a $328,880 gain on the redemption of stock of the Association’s data processing firm in connection with that firm’s merger.

The Association will implement a strategy to enhance its profitability, which strategy includes:


	•		Expanding the branch network. Currently, the Association operates from a main office and a branch inside a Kroger grocery store in Greenville. The Association has purchased property in Arcanum, Ohio, with the expectation that it may construct a branch on that property. We believe the Association may draw to that branch customers who currently bank in Dayton. Although the Association has no further plans for additional branches, management will continue to consider strategic opportunities to expand our branch network within and outside of Darke County.



	•		Cross-selling products and services. We have begun the process of educating all of the Association’s employees on how to make customers better aware of the various products and services the Association offers that may serve customers’ needs.



	•		Increasing our loan portfolio. From July 1, 2001, until June 2003, the Association sold a substantial portion of its fixed-rate loan portfolio in an attempt to manage its interest rate risk. The Association expected interest rates to rise faster than they have. The Association’s earnings suffered as the Association was unable to re-invest the proceeds from the sales in better-yielding investments. The Association has begun maintaining more loans in its portfolio and will continue to do so, while still carefully monitoring interest rate risk. The Association may also consider participating in loans originated by other banks in its market area or to a limited extent in other areas, and the Association will search for employees who will help increase loan originations.

The Association has a long tradition and reputation of providing people and businesses in its market area with personalized and quality service. The Association intends to maintain its community orientation, which we believe attracts customers who prefer a smaller, community financial institution to larger regional banks. The Association’s strategy in the near future will be to provide more products and services to existing customers and to become better known and more accessible within our market area.

Comparison of financial condition at June 30, 2005, and June 30, 2004

At June 30, 2005, the Association had total assets of $126.0 million, a decrease of $274,000, or 0.2%, compared to the $126.3 million total at June 30, 2004. The decrease in total assets was comprised primarily of a decrease in investment securities and cash and cash equivalents, which were partially offset by an increase in loans receivable.

Cash and cash equivalents, consisting of cash and due from banks and interest-bearing deposits in other financial institutions, totaled $3.7 million at June 30, 2005, a decrease of $4.2 million, or 53.0%,

from June 30, 2004. Investment securities totaled $33.8 million at June 30, 2005, a decrease of $636,000, or 1.8%, from the $34.4 million total at June 30, 2004. During the year ended June 30, 2005, investment securities purchases consisted of $2.5 million of U.S. Government agency obligations, which were offset by maturities, calls and repayments totaling $3.0 million.

Mortgage-backed securities totaled $1.7 million at June 30, 2005, a decrease of $854,000, or 33.0%, from the $2.6 million total at June 30, 2004. This decrease was comprised entirely of principal repayments.

Loans receivable totaled $78.2 million at June 30, 2005, an increase of $5.6 million, or 7.7%, over June 30, 2004. The increase resulted primarily from loan disbursements of $25.2 million, which were partially offset by principal repayments of $19.5 million. At June 30, 2005, the loan portfolio, before net items, was comprised of $70.3 million of residential real estate loans, 94.5% of which were loans secured by one- to four-family residential real estate, $3.8 million of loans secured by nonresidential real estate, $3.1 million of commercial loans and $2.5 million in consumer loans. After a time of selling its fixed-rate mortgage loans in order to manage interest rate risk, the Association stopped selling loans in June 2003, resulting in the increase in the loan portfolio. During fiscal 2005, the Association increased its portfolio of nonresidential real estate loans by $1.4 million, or 61.2%, and its portfolio of commercial loans by $1.5 million, or 95.6%. Management has elected to increase nonresidential and commercial lending as a means to diversify the portfolio and to obtain an increase in yield. While these loan types generally entail a greater degree of risk than one- to four-family residential loans, management believes such loans have been conservatively underwritten. The majority of these loans have been made to existing customers. Management intends to pursue a moderate rate of growth in the nonresidential and commercial loan portfolios, but is committed to retaining its historical focus on one- to four-family residential lending.

At June 30, 2005, the allowance for loan losses totaled $590,000, or 0.74% of total loans, compared to $456,000, or 0.61% of total loans, at June 30, 2004. Nonperforming loans totaled $311,000 at June 30, 2005, compared to $800,000 at June 30, 2004. At June 30, 2005, non-performing loans were comprised of $307,000 of one- to four-family loans and $4,000 of consumer loans. The nonperforming loans at June 30, 2004, included unrelated loans to two deceased individuals whose affairs took time to resolve. Those two loans and a third for $134,000 have been paid off or resolved in full through foreclosure. The allowance for loan losses totaled 189.7% and 57.0% of nonperforming loans at June 30, 2005 and 2004, respectively. In determining the allowance for loan losses at any point in time, management and the board of directors apply a systematic process focusing on the risk of loss in the portfolio. First, the loan portfolio is segregated by loan types to be evaluated collectively and loan types to be evaluated individually. Delinquent multifamily and nonresidential loans are evaluated individually for potential impairment. Second, the allowance for loan losses is evaluated using the Association’s historic loss experience, adjusted for changes in economic trends in the Association’s lending area, by applying these adjusted loss percentages to the loan types to be evaluated collectively in the portfolio.

The Association’s analysis of the allowance for loan losses as of and for the year ended June 30, 2005, included recognition of the increasing level of foreclosure actions filed in the Association’s lending area over the past two years. Specifically, foreclosure actions filed in Darke County totaled 160 and 133 in the calendar years ending December 31, 2004 and 2003, respectively, and 134 through June 2005. To the best of management’s knowledge, all known and inherent losses that are probable and that can be reasonably estimated have been recorded at June 30, 2005. Although management believes that its allowance for loan losses conforms with generally accepted accounting principles based upon the

available facts and circumstances, there can be no assurance that additions to the allowance will not be necessary in future periods, which would adversely affect our results of operations.

Deposits totaled $78.9 million at June 30, 2005, a decrease of $5.1 million, or 6.0%, from the $84.0 million total at June 30, 2004. The decrease resulted primarily from the withdrawal of maturing certificates of deposit during the period. Although management generally strives to maintain a moderate rate of growth in deposits, primarily through consistent marketing and pricing strategies, the Association historically has not engaged in short-term, promotional increases in interest rates on deposits, nor has it generally offered the highest interest rate on deposit products in its market area. Advances from the Federal Home Loan Bank amounted to $32.2 million at June 30, 2005, an increase of $4.9 million, or 17.9%, over June 30, 2004. The increase in advances was used primarily to fund deposit withdrawals and the growth in loans during the period.

Retained earnings totaled $13.7 million at June 30, 2005, a decrease of $14,000, or 0.1%, from June 30, 2004. The decrease resulted from an $85,000 increase in unrealized losses on securities designated as available for sale, partially offset by net earnings of $71,000.

The Association is required to maintain minimum regulatory capital pursuant to federal regulations. In May 2005, management was notified by the Office of Thrift Supervision that the Association was categorized as well capitalized under regulatory guidelines. At June 30, 2005, the Association’s regulatory capital substantially exceeded all minimum regulatory capital requirements.

Comparison of results of operations for the fiscal years ended June 30, 2005, and June 30, 2004

General. We recorded net earnings of $71,000 for the fiscal year ended June 30, 2005, compared to a net loss of $81,000 recorded for the fiscal year ended June 30, 2004. The improvement in net earnings was primarily attributable to an increase in net interest income of $489,000 and an increase of $433,000 in other income, which were partially offset by a $187,000 increase in the provision for losses on loans, a $502,000 increase in general, administrative and other expense and a decrease of $81,000 in federal income tax credits.

Interest income. Total interest income for the fiscal year ended June 30, 2005, amounted to $6.2 million, an increase of $115,000, or 1.9%, compared to the fiscal year ended June 30, 2004. The increase in interest income primarily reflects the effect of an increase in the average yield, partially offset by a decrease in average interest-earning assets outstanding year to year.

Interest income on loans increased by $259,000, or 5.5%, for the fiscal year ended June 30, 2005, compared to fiscal 2004, due primarily to a $7.3 million, or 10.8%, increase in the average balance outstanding, which was partially offset by a decrease in the average yield on loans, to 6.61% for fiscal 2005 from 6.94% for fiscal 2004. Interest income on mortgage-backed securities decreased by $9,000, or 9.4%, during the fiscal year ended June 30, 2005, due primarily to a $111,000 decrease in the average balance outstanding and a decrease in the average yield from 4.29% in fiscal 2004 to 4.09% in fiscal 2005. Interest income on investment securities decreased by $91,000, or 7.9%, during the fiscal year ended June 30, 2005, due primarily to an $8.3 million, or 19.6%, decrease in the average balance outstanding, offset by an increase in the average yield from 2.70% in fiscal 2004 to 3.09% in fiscal 2005. Interest income on other interest-earning assets decreased by $44,000, or 25.9%, during the fiscal year ended June 30, 2005. The decrease was due primarily to a decrease of $5.1 million, or 55.5%, in the average balance outstanding from fiscal 2004, partially offset by an increase in the average yield from 1.84% to 3.06%.

Interest expense. Interest expense totaled $3.0 million for the fiscal year ended June 30, 2005, a decrease of $374,000, or 11.2%, from interest expense of $3.4 million for fiscal 2004. The decrease resulted from a decrease in the average cost of funds, to 2.81% for fiscal 2005 compared to 3.00% for fiscal 2004, and a $5.6 million, or 5.1%, decrease in the average balance of deposits and borrowings outstanding for the fiscal year ended June 30, 2005. Interest expense on deposits totaled $1.6 million for the fiscal year ended June 30, 2005, a decrease of $284,000, or 15.3%, from fiscal 2004. This decrease was a result of a decrease in the average cost of deposits to 2.02% for fiscal 2005 from 2.25% for fiscal 2004, and a decrease in the average balance of deposits outstanding of $4.8 million, or 5.8%, for fiscal 2005. Interest expense on borrowings totaled $1.4 million for the fiscal year ended June 30, 2005, a decrease of $90,000, or 6.0%, from fiscal 2004. The decrease was due to a decline in the average cost of borrowings from 5.13% to 4.97% and an $864,000, or 3.0%, decrease in the average balance outstanding year to year.

Net interest income. As a result of the foregoing changes in interest income and interest expense, net interest income increased by $489,000, or 17.6%, during the fiscal year ended June 30, 2005, compared to fiscal 2004. The average interest rate spread increased to 2.59% for the fiscal year ended June 30, 2005, from 2.03% for fiscal 2004. The net interest margin increased to 2.82% for the fiscal year ended June 30, 2005, from 2.28% for fiscal 2004.

Provision for losses on loans. A provision for losses on loans is charged to earnings to maintain the total allowance for loan losses at a level calculated by management based on historical experience, the volume and type of lending conducted by the Association, the status of past due principal and interest payments and management’s assessment of economic factors in the Association’s lending area that may affect the collectibility of the Association’s loan portfolio. Based upon an analysis of these factors, management recorded a provision for losses on loans totaling $216,000 for the fiscal year ended June 30, 2005, an increase of $187,000 compared to fiscal 2004. The provision recorded during the fiscal year ended June 30, 2005, generally reflects management’s perception of the risk prevalent in the economy integrated with the overall increase in the level of the loan portfolio and the level of charge-offs recorded in fiscal 2005. Specifically, the Association has experienced increased foreclosures on single-family homes during the last three years. From 1985 until June 30, 2005, the Association has foreclosed on a total of 45 properties, 15 of them just in the last three years. This foreclosure experience reflects that of Darke County in general, which had 133 foreclosures in calendar 2003, 160 foreclosures in calendar 2004, and 134 foreclosures through June 2005. The Association is unable to attribute the increase in foreclosures in Darke County to any reason particular to its market area; the local increase in foreclosures appears to be part of a state-wide trend. Management believes all nonperforming loans are adequately collateralized; however, there can be no assurance that the loan loss allowance will be adequate to absorb losses on known nonperforming assets or that the allowance will be adequate to cover losses on nonperforming assets in the future.

Other income. Other income totaled $1.1 million for the fiscal year ended June 30, 2005, an increase of $433,000, or 65.7%, compared to other income of $659,000 recorded for the fiscal year ended June 30, 2004. The increase was primarily attributable to a gain of $329,000 on the redemption of the shares of Intrieve, Inc., the Association’s data processor, and a $60,000 loss on the sale of investment securities in fiscal 2004, which was not repeated in fiscal 2005. In addition, the Association had a $17,000 increase in customer service charges in fiscal 2005, a $16,000 increase in gain on sale of real estate acquired through foreclosure, and a $52,000 increase in other operating income, partially offset by a $41,000 decrease in gain on sale of loans, as the Association determined not to sell any loans in fiscal 2005. During fiscal 2005, Intrieve was acquired by the John H. Harland Company, which required the

Association to redeem its shares of Intrieve, resulting in the realized gain of $329,000. The increase in customer service charges was due primarily to an increase in non-sufficient fund fees on checking accounts and other miscellaneous income. The increase in other operating income was due primarily to a $12,000 increase in the cash surrender value of life insurance policies, a $9,000 increase in fees for debit cards and a $21,000 adjustment to the valuation allowance for mortgage servicing rights.

General, administrative and other expense. General, administrative and other expense totaled $4.1 million for the fiscal year ended June 30, 2005, an increase of $502,000, or 13.9%, compared to fiscal 2004. The increase in general, administrative and other expense was due primarily to a one-time $312,000 expense to withdraw from a multi-employer defined benefit pension plan, and a $167,000, or 8.3%, increase in employee compensation and benefits, an increase in charitable contributions of $56,000, and an increase in data processing of $46,000, or 13.2%. Offsetting these increases in expenses were a decrease of $43,000, or 8.4%, in occupancy and equipment and a $21,000, or 19.1%, decrease in advertising expense. Greenville Federal’s board of directors elected to terminate its participation in the multi-employer defined benefit pension plan during the fiscal year ended June 30, 2005, and recorded a charge of approximately $312,000 to reflect the estimated costs accrued for the plan participants through the date of termination. Additionally, the increase in employee compensation and benefits was comprised primarily of normal merit increases and an increase in normal retirement fund contributions other than the one-time expense to withdraw from the plan. The increase in charitable contributions expenses reflects our pledge of $50,000 to the Greenville Public Library capital campaign, payable over a five-year term. The increase in data processing was due primarily to an increase in the customer base and increased usage of the ATM network and the internet banking service, as well as an increase in the rate structure from the data processor year to year. The decrease in occupancy and equipment expense was due primarily to a decrease in depreciation expense, as assets placed in service during our move to our current office were fully depreciated.

Federal income taxes. We recorded a federal income tax credit provision of $32,000 for the fiscal year ended June 30, 2005, compared to the $113,000 credit provision recorded for fiscal 2004. The decrease resulted primarily from having pre-tax earnings of $39,000 in fiscal 2005 and a pre-tax loss of $194,000 in fiscal 2004. The nontaxable increases in the cash surrender value of life insurance policies also contributed to the credit tax provisions during both fiscal 2005 and fiscal 2004.

Average balance sheets

The following table presents certain of the Association’s average balance sheet information and reflects the average yield on interest-earning assets and the average cost of customer deposits and Federal Home Loan Bank of Cincinnati advances for the periods indicated. Such yields and costs are derived by dividing annual 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 monthly balances, net of the allowance for losses on loans.


	Year ended
	June 30, 2005							June 30, 2004
			Interest income/		Yield/					Interest income/		Yield/
	Average balance		expense		rate			Average balance		expense		rate
					(Dollars in thousands)
Loans receivable	$	75,323	$	4,977		6.61	%	$	67,996	$	4,718		6.94	%
Mortgage-backed securities		2,126		87		4.09			2,237		96		4.29
Investment securities		34,134		1,055		3.09			42,460		1,146		2.70
Other interest- bearing deposits		4,116		126		3.06			9,246		170		1.84

Total interest- earning assets		115,699		6,245		5.40			121,939		6,130		5.03
Non-interest- earning assets		8,521							7,705


Total assets	$	124,220						$	129,644


Interest-bearing deposits:
Demand deposits	$	5,404		32		0.59		$	4,821		25		0.52
Savings deposits		24,741		179		0.72			26,043		193		0.74
Time deposits		47,653		1,361		2.86			51,713		1,638		3.17

Total interest- bearing deposits		77,798		1,572		2.02			82,577		1,856		2.25

Borrowings		28,290		1,405		4.97			29,154		1,495		5.13

Total interest- bearing liabilities		106,088		2,977		2.81			111,731		3,351		3.00

Non-interest- bearing demand deposits		3,429							3,055
Non-interest bearing liabilities		1,228							1,269


Total liabilities		110,745							116,055

Retained earnings		13,475							13,589


Total liabilities and retained earnings	$	124,220						$	129,644

Net interest income/ average yield			$	3,268		2.59	%			$	2,779		2.03	%


Net interest margin						2.82	%						2.28	%

Average interest- earning assets to average interest-bearing liabilities						109.06	%						109.14	%

Yields earned and rates paid

The following table sets forth, for the years and at the date indicated, the weighted-average yields earned on the Association’s interest-earning assets, the weighted-average interest rates paid on interest-bearing liabilities, the interest rate spread and the net interest margin on interest-earning assets. Such yields and costs are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented.


	At June 30,			Year ended June 30,
	2005			2005			2004
Weighted-average yield on loan portfolio		6.46	%		6.61	%		6.94	%
Weighted-average yield on mortgage-backed securities		4.38			4.09			4.29
Weighted-average yield on investment securities		3.35			3.09			2.70
Weighted-average yield on interest-bearing deposits		2.93			3.06			1.84
Weighted-average yield on all interest-earning assets		5.44			5.40			5.03

Weighted-average interest rate on deposits		2.00			2.02			2.25
Weighted-average interest rate on Federal Home Loan Bank advances		4.74			4.97			5.13
Weighted-average interest rate paid on all interest-bearing liabilities		2.82			2.81			3.00

Interest rate spread (spread between weighted-average interest rate on all interest-earning assets and all interest-bearing liabilities)		2.62			2.59			2.03
Net interest margin (net interest income as a percentage of average interest-earning assets)		—			2.82			2.28

The following table describes the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities have affected the Association’s interest income and expense during the years 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.


	Year ended June 30,
	2005 vs. 2004
	Increase			Increase			Total
	(decrease)			(decrease)			increase
	due to rate			due to volume			(decrease)
Interest income attributable to:
Loans receivable	$	(233	)	$	492		$	259
Mortgage-backed securities		(4	)		(5	)		(9	)
Investment securities		152			(243	)		(91	)
Interest-earning deposits		79			(123	)		(44	)


Total interest income		(6	)		121			115
Interest expense attributable to:
Interest bearing demand deposits		4			3			7
Savings deposits		(5	)		(9	)		(14	)
Time deposits		(154	)		(123	)		(277	)
Federal Home Loan Bank advances		(46	)		(44	)		(90	)

Total interest expense		(201	)		(173	)		(374	)


Increase in net interest income	$	195		$	294		$	489

Asset and Liability Management

The Association, like other financial institutions, is subject to interest rate risk to the extent that our interest-earning assets reprice differently than our interest-bearing liabilities. As part of its effort to monitor and manage interest rate risk, the Association uses the net portfolio value (“NPV”) methodology adopted by the Office of Thrift Supervision.

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 and other liabilities. The application of the methodology attempts to quantify interest rate risk as the change in the NPV that would result from a theoretical change in market interest rates. Both increases and decreases in market interest rates are considered.

Presented below, as of June 30, 2005, is an analysis of the Association’s interest rate risk as measured by changes in NPV for instantaneous and sustained parallel shifts in market interest rates.

As illustrated in the table, the Association’s NPV is more sensitive to rising rates than declining rates. Differences in sensitivity occur principally because, as rates rise, borrowers do not prepay fixed-rate loans as quickly as they do when interest rates are declining. As a result, in a rising interest rate environment, the amount of interest the Association would receive on its loans would increase relatively

slowly as loans are slowly repaid and new loans at higher rates are made. Moreover, the interest the Association would pay on deposits would increase because deposits generally have shorter periods to repricing. A possible flow of funds away from savings institutions into direct investments or other investment vehicles, such as mutual funds, which can occur for a number of reasons, may also affect our NPV. Assumptions used in calculating the amounts in this table are Office of Thrift Supervision assumptions.


	Net portfolio value (2)
Change in			Estimated increase (decrease) in						Net portfolio value as a percentage of
interest rates			NPV						present value of assets (3)
(basis points) (1)	Estimated NPV		Amount			Percent			NPV ratio (4)			Change in basis points
+300	$	15,324	$	(3,546	)		(19	)%		12.30	%		(203	)bp
+200		16,839		(2,031	)		(11	)		13.23			(110	)
+100		18,170		(700	)		(4	)		14.01			(32	)
0		18,870		—			—			14.33			—
-100		18,314		(556	)		(3	)		13.83			(50	)
-200		17,304		(1,566	)		(8	)		13.04			(129	)


(1)		One hundred basis points equals one percent. Assumes an instantaneous uniform change in interest rates at all maturities.


(2)		Net portfolio value represents 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.


(3)		Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4)		NPV ratio represents the net portfolio value divided by the present value of assets.

The change in our NPV that would have been caused by the respective interest rate shock was within the policy limits set by the board of directors. The board of directors considers the results of each quarterly analysis and factors the information into its decision in adjusting the pricing of loans and deposits in the future.

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 rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market 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.

If interest rates continue to rise from the recent levels, the Association’s net interest income will be slightly positively affected, although those same rising interest rates may negatively affect the Association’s earnings due to diminished loan demand. In order to maintain the Association’s net interest margin, management is continually developing and modifying the Association’s strategies to

stimulate the demand for quality loans and tailoring the types of loan products available that can be adjusted to match the current market conditions.

Liquidity and Capital Resources

The Association’s liquidity, primarily represented by cash and cash equivalents, is a result of its operating, investing and financing activities. These activities are summarized below for the fiscal years ended June 30, 2005 and 2004.


	Year ended June 30,
	2005			2004
	(In thousands)
Net earnings (loss)	$	71		$	(81	)
Adjustments to reconcile net earnings (loss) to net cash from operating activities		(345	)		727

Net cash provided by (used in) operating activities		(274	)		646
Net cash provided by (used in) investing activities		(3,765	)		4,903
Net cash provided by (used in) financing activities		(147	)		(10,040	)

Net decrease in cash and cash equivalents		(4,186	)		(4,491	)
Cash and cash equivalents at beginning of year		7,902			12,393

Cash and cash equivalents at end of year	$	3,716		$	7,902

The Association’s principal sources of funds are deposits, loan and mortgage-backed securities repayments, maturities of securities and other funds provided by operations. The Association also borrows from the Federal Home Loan Bank of Cincinnati. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan and mortgage-backed security prepayments are more influenced by interest rates, general economic conditions and competition. The Association maintains investments in liquid assets based upon management’s assessment of (i) the need for funds, (ii) expected deposit flows, (iii) the yields available on short-term liquid assets and (iv) the objectives of the asset/liability management program. The Association historically has not used derivative or hedging instruments, and management currently has no intention of using such instruments in the foreseeable future.

Office of Thrift Supervision regulations require the Association to maintain an average daily balance of liquid assets, which may include, but are not limited to, investments in United States Treasury obligations, federal agency obligations and other investments having maturities of five years or less, in an amount sufficient to provide a source of relatively liquid funds upon which the Association may rely if necessary to fund deposit withdrawals or other short-term funding needs. At June 30, 2005, the Association’s regulatory liquidity ratio was 31.0% of average daily balances of net withdrawable deposit accounts and borrowings payable in one year or less. At such date, the Association had commitments to originate loans totaling $1.2 million and no commitments to purchase or sell loans. The Association considers its capital reserves sufficient to meet its outstanding short- and long-term needs. Adjustments to liquidity and capital reserves may be necessary, however, if loan demand increases more than expected or if deposits decrease substantially.

The following table sets forth information regarding the Association’s obligations and commitments to make future payments under contract as of June 30, 2005.


	Payments due by period
	Less than		Within		Within		More than
	1 year		1-3 years		3-5 years		5 years		Total
	(In thousands)
Contractual obligations:
Advances from the Federal Home Loan Bank	$	3,308	$	9,254	$	2,444	$	17,237	$	32,243
Certificate of deposit maturities		27,039		13,917		5,824		—		46,780

Amount of loan commitments and expiration per period:
Commitments to originate one-to-four-family loans		1,166		—		—		—		1,166
Home equity and commercial lines of credit		3,744		—		—		—		3,744
Undisbursed loans in process		592		—		—		—		592
Lease obligations		47		48		—		—		95
Charitable contributions pledged		10		20		10		—		40


Total contractual obligations	$	35,906	$	23,239	$	8,278	$	17,237	$	84,660

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.

The Association is required by applicable law to meet certain minimum capital standards. Such capital standards include a tangible capital requirement, a core capital requirement or leverage ratio and a risk-based capital requirement. The Association exceeded all of its capital requirements at June 30, 2005.

The following tables summarize the Association’s regulatory capital requirements and actual capital at June 30, 2005:


	June 30, 2005
											Excess of actual
											capital over current
	Actual capital					Current requirement					requirement					Applicable
	Amount		Percent			Amount		Percent			Amount		Percent			asset total
	(Dollars in thousands)
Tangible capital	$	13,845		10.9	%	$	1,899		1.5	%	$	11,946		9.4	%	$	126,627
Core capital		13,845		10.9			5,065		4.0			8,780		6.9			126,627
Risk-based capital		14,387		21.6			5,327		8.0			9,060		13.6			66,583

Impact of Inflation and Changing Prices

The consolidated financial statements and notes included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). U.S. GAAP requires us to measure financial position and operating results in terms of historical dollars, and changes in the relative value of money due to inflation or recession are generally not considered.

In management’s opinion, changes in interest rates affect the financial condition of a financial institution to a far greater degree than changes in the inflation rate. While interest rates are greatly influenced by changes in the inflation rate, they do not change at the same rate or in the same magnitude as the inflation rate. Rather, interest rate volatility is based on changes in the expected rate of inflation, as well as on changes in monetary and fiscal policies.

BUSINESS OF THE ASSOCIATION

General

The Association is principally engaged in the business of accepting deposits from the general public in the area surrounding its offices and using those deposits, as well as funds generated from operations and investments and borrowed funds, to make loans. The loans the Association makes are secured primarily by one- to four-family residences, multifamily residences and nonresidential real estate, although it also makes a variety of consumer and commercial loans. Its income is derived principally from interest on loans and securities and also from service charges and gains on the sale of loans and securities.

Market area

The Association conducts business from the main office and from a branch office inside a Kroger grocery store, both of which are located in Greenville, Darke County, Ohio. Although the Association’s primary market area is Darke County, it also attracts deposits from, and makes loans in, the adjacent Ohio counties of Preble, Auglaize, Miami, Shelby and Mercer, and the Indiana counties of Randolph and Wayne. The Association also operates six automated teller machines, two of which are located at the Association offices and the other four of which are located in various other businesses in Greenville, Ansonia, Gettysburg and Troy.

The Association’s primary market area has a diversified employment base and a higher level of manufacturing employment than the State of Ohio and the country in general. The major employers include consumer products manufacturers and retailers, health care providers and transportation and distribution companies, as well as governmental entities. The top ten employers in Darke County are Whirlpool Corporation, Midmark Corporation (manufacturer of health care products), Greenville Technology, Inc., Wayne Hospital, Brethren Retirement Community, Honeywell (manufacturer of a wide range of products, including aerospace and technology for buildings), Neff Co. (custom lettering and graphic design), Beauty Systems Group (distributor of hair care and makeup products), Dick Lavy Trucking and Norcold (manufacturer of refrigerators and freezers for RVs, boats and trucks). Darke County is rural and is one of the top agricultural counties in Ohio.

The unemployment rate in Darke County in January 2005 was 7.4%, compared to 7.2% for the State of Ohio and 6.2% for the United States. The population of Darke County remained relatively stable from 2000 to 2004, declining from approximately 53,300 to approximately 53,000. The median household income in Darke County increased from $39,815 in 2000 to $42,860 in 2004, or 1.9%, while the median household income in the State of Ohio increased at almost the same rate from $41,499 to $44,607 and median household income in the United States increased at a slightly higher rate, from $42,729 to $46,475.

Competition

The Association competes for deposits with a number of national, regional and locally-based financial institutions, including banks, savings associations and credit unions, as well as the stock and bond markets, mutual funds and insurance companies. There are currently eight banks, three savings associations and two credit unions with offices in Darke County. The Association holds approximately 9.5% of the deposits in Darke County as of June 30, 2004, which ranks the Association third among the financial institutions in the county. With respect to loans, the Association competes not only with those financial institutions with which it competes for deposits but also with mortgage banking companies and consumer finance companies. The Association competes primarily through interest rates and fees charged and through the efficiency and quality of the services provided.

Lending activities

General. The Association’s primary lending activity is the origination of conventional mortgage loans secured by one- to four-family homes located in our primary market area. Loans for the construction of one- to four-family homes and mortgage loans on multifamily properties containing five units or more and nonresidential properties are also offered. The Association does not currently offer loans insured by the Federal Housing Administration or guaranteed by the Veterans Administration, although the Association has some in its portfolio. In addition to mortgage lending, the Association makes consumer loans secured by deposits and automobiles and home improvement loans. The Association also makes a small amount of commercial loans.

Loan portfolio composition. The following tables present certain information with respect to the composition of the Association’s loan portfolio at the dates indicated.


	At June 30,
	2005					2004
			Percent					Percent
			of total					of total
	Amount		loans			Amount		loans
			(Dollars in thousands)
Residential real estate loans:
One- to four-family	$	65,060		81.62	%	$	62,714		84.32	%
Multifamily		3,872		4.86			3,244		4.36
Construction		1,336		1.68			1,939		2.61
Nonresidential real estate		3,818		4.79			2,369		3.19
Commercial		3,092		3.88			1,581		2.13
Consumer and other		2,524		3.17			2,524		3.39

Total loans		79,702		100.00	%		74,371		100.00	%

Less:
Unearned interest		11					10
Deferred loan origination fees, net		320					326
Allowance for loan losses		590					456
Undisbursed portion of loans in process		592					982


Loans receivable, net	$	78,189				$	72,597

Loan maturity schedule. The following table sets forth certain information as of June 30, 2005, regarding the dollar amount of loans maturing in the Association’s portfolio based on their contractual terms to maturity. Demand loans and loans having no stated schedule of repayments and no stated maturity are reported as due in one year or less.


	Due during the year ending
	June 30,						Due 4-5		Due 6-10		Due 11-20		Due more than
							years after		years after		years after		20 years after
	2006		2007		2008		6/30/05		6/30/05		6/30/05		6/30/05		Total
							(In thousands)
Fixed-rate loans
Residential real estate loans:
One- to four-family (first mortgage)	$	1,345	$	1,429	$	1,516	$	3,317	$	9,958	$	16,845	$	9,584	$	43,994
Home equity (second mortgage)		210		227		243		543		1,761		—		—		2,984
Multifamily and nonresidential real estate loans		52		56		61		133		428		445		—		1,175
Construction loans		—		—		—		—		—		—		—		—

Total real estate loans		1,607		1,712		1,820		3,993		12,147		17,290		9,584		48,153

Commercial loans		355		380		408		907		41		—		—		2,091
Consumer and other loans		751		799		851		159		363		—		—		2,923


Total fixed-rate loans		2,713		2,891		3,079		5,059		12,551		17,290		9,584		53,167

Adjustable-rate loans
Residential real estate loans:
One- to four-family (first mortgage)		270		288		305		672		2,101		6,805		5,312		15,753
Home equity (second mortgage)		213		228		246		550		1,782		291		—		3,310

Multifamily and nonresidential real estate loans		175		188		201		225		724		2,480		2,523		6,516
Construction loans		—		—		—		—		—		—		—		—

Total real estate loans		658		704		752		1,447		4,607		9,576		7,835		25,579

Commercial loans		956		—		—		—		—		—		—		956
Consumer and other loans		—		—		—		—		—		—		—		—


Total adjustable-rate loans		1,614		704		752		1,447		4,607		9,576		7,835		26,535


Total loans	$	4,327	$	3,595	$	3,831	$	6,506	$	17,158	$	26,866	$	17,419	$	79,702

One- to four-family residential real estate loans. The primary lending activity of the Association has been the origination of permanent conventional loans secured by one- to four-family residences, primarily single-family residences, located in the Association’s primary market area. Each of such loans is secured by a mortgage on the underlying real estate and improvements, if any. Loans secured by non-owner occupied properties are considered to carry greater risk of loss because the borrower typically depends upon income generated by the property to cover operating expenses and debt service, although such loans carry higher rates of interest. The profitability of a property can be affected by economic conditions, governmental policies and other factors beyond the control of the borrower.

The Association makes fixed-rate first mortgage loans on single-family residences in amounts up to 97% of the value of the real estate and improvements (the “LTV”). The Association offers fixed-rate residential real estate loans for terms of up to 30 years. The Association requires private mortgage insurance for any loans with an LTV in excess of 80%. The Association also requires an escrow of insurance and taxes on loans with an LTV in excess of 80%, but on other loans, an escrow is optional.

The Association also originates adjustable-rate mortgage loans (“ARMs”). ARMs are offered on single-family residences, two- to four-family properties and non-owner occupied one- to four-family

properties with the same maximum LTV, terms and private mortgage insurance requirement as for fixed-rate residential real estate loans. The initial interest rate adjustment periods currently offered are one year, three years, five years and seven years, with annual adjustments after the initial fixed-rate period. The adjustments generally are tied to changes in the monthly average yield on the U.S. Treasury constant maturities index for the corresponding adjustment frequency. The Association also holds in its portfolio some loans with adjustment periods every three years or five years. For those loans with three- or five-year adjustment periods, the adjustments are limited to 2% per adjustment. In addition, the Association holds in its portfolio some loans with seven- and ten-year fixed-rate periods before first adjustment. For those loans with seven-year fixed-rate periods before first adjustment, the first adjustment is limited to 5%, and the annual adjustment thereafter is limited to 2%. Rate adjustments are computed by adding a stated margin, usually a minimum of 2.5%, to the index. The maximum allowable adjustment for one-year adjustment periods is usually 2%, with a maximum adjustment of 6% over the term of the loan.

The Association also offers ARMs and fixed-rate loans secured by unimproved lots for the construction of single-family homes.

ARMs are subject to increased risk of delinquency or default due to increasing monthly payments as the interest rates on such loans increase to the fully-indexed level, although such increase is considered in our underwriting of any such loans if the initial adjustment period is less than five years.

The Association also originates residential home equity loans, lines of credit and second mortgage loans. Such loans have both fixed rates and adjustable rates, LTVs generally limited to 80%, and terms of up to 15 years. If the Association has the first mortgage on a property, we will lend up to 90% LTV.

The aggregate amount of our one- to four-family residential real estate loans equaled approximately $65.1 million at June 30, 2005, and represented 81.6% of loans at such date. Of such amount, approximately 29.3% were ARMs. The largest individual loan balance on a one- to four-family loan at such date was $402,300. At such date, loans secured by one- to four-family residential real estate with outstanding balances of $311,000, or 0.48% of its one- to four-family residential real estate loan balance, were 90 days or more delinquent.

Multifamily residential real estate loans. In addition to loans secured by one- to four-family residences, the Association makes loans secured by multifamily properties containing over four units. Such loans are made with fixed or adjustable interest rates, a maximum LTV of 80% and a maximum term of 30 years.

Multifamily lending is generally considered to involve a higher degree of risk because the loan amounts are larger and the borrower typically depends upon income generated by the property to cover operating expenses and loan payments. The profitability of a property can be affected by economic conditions, government polices and other factors beyond the control of the borrower. The Association attempts to reduce the risk associated with multifamily lending by evaluating the credit-worthiness of the borrower and the projected income from the property and by obtaining personal guarantees on loans made to corporations and partnerships. The Association requires financial statements annually to enable the Association to monitor the loans.

At June 30, 2005, loans secured by multifamily properties totaled approximately $3.9 million, or 4.9% of total loans, all of which were secured by property located within our primary market area, and

all of which were performing in accordance with their terms. The largest such loan at June 30, 2005, had a balance of $1.05 million. At June 30, 2005, approximately $322,000, or 0.4% of total loans, were fixed-rate multifamily loans.

Construction loans. The Association makes loans for the construction of residential and nonresidential real estate. Such loans are structured as permanent loans with fixed rates or adjustable rates of interest with a maximum LTV of 97% for single-family, owner-occupied homes, 90% for two-family homes and 80% for all other construction loans. The Association’s construction loans have been made to borrowers who intended to occupy the newly-constructed real estate or to developers who may or may not have had a purchaser for the property at the time the loan was made. Approximately 9.4% of the construction loan balance at June 30, 2005, was secured by property owned by developers. All construction loans are written as permanent loans but require the payment of interest only until the construction is completed. Construction is required to be completed within one year.

Construction loans generally involve greater underwriting and default risks than do loans secured by mortgages on existing properties because such loans are more difficult to evaluate and monitor. Loan funds are advanced upon the security of the project under construction, which is more difficult to evaluate before the completion of construction. Moreover, because of the uncertainties inherent in estimating construction costs, it is relatively difficult to evaluate accurately the LTV and the total loan funds required to complete a project. In the event a default on a construction loans occurs and foreclosure follows, the Association must take control of the project and attempt either to arrange for completion of construction or dispose of the unfinished project. The Association attempts to reduce such risks on loans to developers by requiring personal guarantees and reviewing current personal financial statements and tax returns and other projects undertaken by the developers.

At June 30, 2005, $1.3 million, or approximately 1.7% of the Association’s total loans, consisted of construction loans. All of the Association’s construction loans are secured by property located within our primary market area. At June 30, 2005, all of such loans were performing in accordance with their terms.

Nonresidential real estate loans. The Association also makes loans secured by a wide variety of nonresidential real estate located in its market area, including churches, retail businesses, offices, a funeral home and farm land. Such loans generally are originated with terms of up to 30 years and may have fixed or adjustable rates. The maximum LTV for such loans is generally 80%.

Nonresidential real estate lending is generally considered to involve a higher degree of risk than residential lending due to the relatively larger loan amounts and the effects of general economic conditions on the successful operation of income-producing properties. If the cash flow on the property is reduced, for example, as leases are not obtained or renewed, the borrower’s ability to repay may be impaired. The Association has endeavored to reduce such risk by evaluating the credit history and past performance of the borrower, the location of the real estate, the quality of the management operating the property, the debt service ratio, and quality and characteristics of the income stream generated by the property and appraisals supporting the property’s valuation. The Association also requires personal guarantees on most of such loans, and the Association generally obtains tax returns and annual financial statements.

At June 30, 2005, the Association had a total of $3.8 million invested in nonresidential real estate loans, $2.8 million of which were secured by property located within Darke County. Such loans

comprised approximately 4.8% of the Association’s total loans at that date, and none of such loans was delinquent at that date.

Federal regulations limit the amount of nonresidential mortgage loans an association may make to 400% of its tangible capital. At June 30, 2005, our nonresidential mortgage loans totaled 27.6% of our tangible capital.

Consumer loans. The Association makes loans secured by deposits, automobiles and recreational vehicles. The Association also makes unsecured loans for a variety of consumer purposes. Most consumer loans have fixed rates of interest, although a small number have adjustable rates. Vehicle loans have maximum LTVs of as much as 100% and terms of up to six years, depending upon the age of the vehicle. Loans secured by deposits have maximum LTVs of 85% and terms of up to five years.

Consumer loans may entail greater credit risk than do residential mortgage loans. The risk of default on consumer loans increases during periods of recession, high unemployment and other adverse economic conditions. Although the Association has not had significant delinquencies on consumer loans, no assurance can be provided that delinquencies will not increase.

At June 30, 2005, the Association had approximately $2.5 million, or 3.2% of total loans, invested in consumer loans. Of such loans, $3,600 were more than 90 days delinquent or nonaccruing.

Commercial loans. The Association does a small amount of commercial lending, securing loans to businesses with a variety of collateral, such as inventory, business equipment, vehicles and accounts receivable. Commercial loans are made at fixed rates with terms of up to five years. The Association also makes commercial loans with one-year terms with interest payments only until maturity.

Commercial lending entails significant risks. The loans are subject to greater risk of default during periods of adverse economic conditions. Particularly with respect to loans secured by equipment, inventory, accounts receivable and other non-real estate assets, the collateral may not be sufficient to ensure full payment in the event of default. The Association tries to minimize such risks through prudent underwriting, which includes guidelines to determine the acceptability of the collateral to be pledged. An evaluation is made of the real estate, if any, accounts receivable, inventory and equipment securing the loan as to their value, marketability, strength of brand names, stability of conditions and environmental impact in order to mitigate or minimize the risk of loss. Loan advance amounts are established in accordance with the type of collateral asset. Credit guidelines have been established relative to debt service coverage, leveraging, established profitability, guarantor strength, liquidity and sales concentration. The guarantee of the principals will generally be required on all loans made to closely held business entities and affiliates. The credit information required includes fully completed financial statements, two years’ federal income tax returns, a current credit report and, generally, a business plan. Adequate insurance, appropriate regulatory disclosures and both a preliminary and final lawyer’s title opinion are required when real estate is involved.

At June 30, 2005, the Association had total commercial loans in the amount of $3.1 million, or approximately 3.9% of total loans. At such date, no commercial loans were more than 90 days delinquent or nonaccruing. The total indebtedness of the largest single borrower within the commercial portfolio was $195,000 at June 30, 2005, and the borrowing was secured by a variety of collateral, including equipment and real estate.

Loan solicitation and processing. Loan originations are developed from a number of sources, including continuing business with depositors, borrowers, realtors, real estate developers, referrals, periodic newspaper advertisements, solicitations by Association staff and walk-in customers. The Association does not use third-party brokers or originators.

Loan personnel take applications for permanent mortgage loans. The Association obtains a credit report concerning the credit-worthiness of the borrower. The Association generally complies with Freddie Mac standards, under which it limits the ratio of mortgage loan payments to the borrower’s income to 28% and the ratio of the borrower’s total debt payments to income to 36%. The Association may make some loans that exceed those ratios if the borrower has a strong credit report or a low LTV. An appraisal of the fair market value of the real estate on which we will be granted a mortgage to secure the loan is prepared by an outside appraiser. As part of the appraisal and prior to foreclosure on any delinquent loan, a visual inspection is performed to identify any obvious environmental concerns. If the visual inspection or the history of the property provides reason to believe an environmental problem might exist, we will conduct further investigations.

For multifamily and nonresidential mortgage loans, a personal guarantee of the borrower’s obligation to repay the loan is usually required. The Association also obtains the borrower’s financial statement, tax returns and information with respect to prior projects completed by the borrower. For multifamily mortgage loans, the Association obtains schedules of rents and sometimes copies of lease agreements.

Upon completion of the appraisal and the receipt of information on the borrower, the application for a loan is approved by the Loan Officer, the President, the Executive Committee or the Board, depending upon the type of the property or the amount of the loan. Any loan in excess of $125,000 for single-family owner-occupied homes or lower amounts for other loans must be approved by the Executive Committee. Loans for multifamily residences and nonresidential loans must be approved by the Executive Committee or the full Board of Directors. Loans of any type of $300,000 or more must be approved by the full Board of Directors.

If a mortgage loan application is approved, the Association obtains an attorney’s opinion of title, but does not require title insurance. Borrowers are required to carry satisfactory fire and casualty insurance and flood insurance, if applicable, and to name the Association as an insured mortgagee.

The procedure for approval of construction loans is the same as for permanent mortgage loans, except that an appraiser evaluates the building plans, construction specifications and estimates of construction costs. The Association also evaluates the feasibility of the proposed construction project and the experience and record of the builder.

Consumer loans are underwritten on the basis of the borrower’s credit history and an analysis of the borrower’s income and expenses, ability to repay the loan and the value of the collateral, if any.

Our loans provide that the entire balance of the loan is due upon sale of the property securing the loan, and the Association generally enforces such due-on-sale provisions. The Association does not impose prepayment penalties on any loans.

Loan purchases and sales. The Association has occasionally purchased some whole loans and some participations in loans originated by other financial institutions and have some in our portfolio,

although we have not made any such purchases in at least the last ten years. Before July 2003, the Association actively originated and sold a substantial amount of our fixed-rate residential mortgage loans into the secondary market for interest rate risk management purposes, retaining the servicing on those loans. This led, however, to a decline in the loan portfolio and an increase in short-term liquidity. Since mid-2003, the Association has sold few loans, striving instead to build the loan portfolio to enhance income. At June 30, 2005, the Association retained the servicing on loans with an aggregate principal balance of $20.0 million.

The following table presents the Association’s mortgage loan origination and purchase activity for the periods indicated:


	Year ended
	June 30,
	2005			2004
Loan originations:
One- to four-family residential	$	15,716		$	24,917
Multifamily residential		942			2,120
Nonresidential		801			667
Land		—			—
Commercial		3,715			2,011
Consumer		4,383			5,051

Total loans originated		25,557			34,766

Loans purchased		—			—

Total loans originated and purchased		25,557			34,766

Principal repayments		(19,430	)		(27,233	)


Loan originations, net		6,127			7,533
Loans sold		—			(1,514	)
Transfers from loans to real estate acquired through foreclosure		(391	)		(126	)
Increase (decrease) due to other items, net (1)		(144	)		93


Net increase in net loan portfolio	$	5,592		$	5,986



(1)		Consists of deferred fees, costs and the allowance for loan losses.

Office of Thrift Supervision regulations generally limit the aggregate amount that a savings association may lend to any one borrower to an amount equal to 15% of the association’s total capital under the regulatory capital requirements plus any additional loan reserve not included in total capital. A savings association may lend to one borrower an additional amount not to exceed 10% of total capital plus additional reserves if the additional amount is fully secured by certain forms of “readily marketable collateral.” Real estate is not considered “readily marketable collateral.” In addition, the regulations require that loans to certain related or affiliated borrowers be aggregated for purposes of such limits. An exception to these limits permits loans to one borrower of up to $500,000 for any purpose.

Based on such limits, Greenville Federal was able to lend approximately $2.2 million to one borrower at June 30, 2005. The largest amount the Association had outstanding to one borrower at that date was $2.0 million, consisting of several loans. Such loans were secured by one- to four-family and multifamily real estate and an automobile. All of such loans were current at June 30, 2005.

Delinquent loans, nonperforming assets and classified assets. When a borrower fails to make a required payment on a loan, the Association attempts to cause the delinquency to be cured by contacting the borrower. In most cases, delinquencies are cured promptly.

When a loan is 5 to 15 days delinquent, the Association sends a notice to the borrower, possibly accompanied by a phone call, and after 15 days’ delinquency, a second notice is sent. At 21 days, the Association generally telephones the borrower. When a loan has been delinquent 45 days, the Association sends a letter advising the borrower of the availability of credit counseling from a counseling agency. Between 45 and 60 days, one of the Association’s employees will attempt to visit the borrower at the borrower’s home. When a loan is delinquent 90 days, the Association will send a letter to the borrower declaring acceleration of payment and providing the borrower 30 days in which to make arrangements for payments. Under certain circumstances, the Association may arrange for an alternative payment structure through a workout agreement. A decision as to whether and when to initiate foreclosure proceedings is based on such factors as the amount of the outstanding loan in relation to the original indebtedness, the extent of the delinquency and the borrower’s ability and willingness to cooperate in curing delinquencies. The Association generally initiates foreclosure when a loan has been delinquent 120 days and no workout agreement has been reached.

Real estate acquired by foreclosure proceedings is classified as real estate owned until it is sold. When property is so acquired, it is initially recorded at the lower of cost or fair value of the real estate, less estimated costs to sell. Any reduction in fair value is reflected in a valuation allowance account established by a charge to income. Costs incurred to carry the real estate are charged to expense. The Association has $81,000 in real estate owned at June 30, 2005.

The Association has been experiencing increased foreclosures on single-family homes in the last three years, as has much of the industry. We believe that many of the foreclosures result from people fully mortgaging their homes through first and second mortgages and then incurring more credit card debt than they can afford. The Association attempts to minimize the effect of increasing foreclosures by requiring private mortgage insurance for any loan with an LTV in excess of 80%.

Nonaccrual status is considered when a loan is more than 90 days delinquent, although placement on nonaccrual status may come earlier or later than 90 days.

The following table reflects the amount of loans in a delinquent status as of the date indicated:


	At June 30,
	2005							2004
					Percent							Percent
					of total							of total
	Number		Amount		loans			Number		Amount		loans
	(Dollars in thousands)
Loans delinquent for (1):
30 - 59 days		21	$	1,187		1.49	%		18	$	646		0.87	%
60 - 89 days		8		392		0.49			12		787		1.06
90 days and over		7		311		0.39			17		800		1.07

Total delinquent loans		36	$	1,890		2.37	%		47	$	2,233		3.00	%


(1)		The number of days a loan is delinquent is measured from the day the payment was due under the terms of the loan agreement.

The following table sets forth information with respect to the Association’s loans 90 days or more past due and other nonperforming assets at the date indicated.


	At June 30,
	2005			2004
	(Dollars in thousands)
Accruing loans greater than 90 days delinquent:
Real estate:
Residential	$	111		$	352
Nonresidential		—			191
Consumer		—			—

Total accruing loans greater than 90 days delinquent		111			543

Nonaccrual loans:
Real estate:
Residential		196			252
Nonresidential		—			—
Consumer		4			5


Total nonaccrual loans		200			257


Total nonperforming loans		311			800

Real estate owned		81			66

Total nonperforming assets	$	392		$	866

Total nonperforming loans as a percentage of total loans		0.39	%		1.08	%
Total nonperforming assets as a percentage of total assets		0.31	%		0.69	%
Allowance for loan losses as a percentage of nonperforming loans		189.71	%		57.00	%

The gross interest income that would have been recorded during fiscal 2005, on nonaccrual loans if they had been current in accordance with their terms and outstanding throughout the period is $9,422. The amount of interest actually recorded on such loans during those periods was $2,634.

During the periods shown, the Association had no restructured loans within the meaning of SFAS No. 15, as amended by SFAS No. 114. There are no loans which are not currently classified as nonaccrual, more than 90 days past due or restructured but which may be so classified in the near future because management has concerns as to the ability of the borrowers to comply with repayment terms.

Office of Thrift Supervision regulations require that each association classify its own assets on a regular basis. Problem assets are classified as “substandard,” “doubtful” or “loss.” “Substandard” assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. “Doubtful” assets have the same weaknesses as “substandard” assets, with the additional characteristics that (i) the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable and (ii) there is a high possibility of loss. An asset classified “loss” is considered uncollectible and of such little value that its continuance as an asset of the institution is not warranted. The regulations also contain a “special mention” category, consisting of assets which do not currently expose an institution to a sufficient degree of risk to warrant classification but which possess credit deficiencies or potential weaknesses deserving management’s close attention.

Generally, the Association classifies as “substandard” all loans that are delinquent more than 90 days, unless management believes the delinquency status is short-term due to unusual circumstances. Loans delinquent fewer than 90 days may also be classified if the loans have the characteristics described above rendering classification appropriate. At June 30, 2005, all nonperforming loans were included within the classified assets totals.

The aggregate amount of the Association’s classified assets at the dates indicated were as follows:


	At June 30,
	2005		2004
	(In thousands)
Classified assets:
Substandard	$	809	$	1,688
Doubtful		—		—
Loss		4		17

Total classified assets	$	813	$	1,705

Federal examiners are authorized to classify an association’s assets. If an association does not agree with an examiner’s classification of an asset, it may appeal this determination to the Regional Director of the Office of Thrift Supervision. The Association had no disagreements with the examiners regarding the classification of assets at the time of the last examination.

Office of Thrift Supervision regulations require that we establish prudent general allowances for losses on loans for any loan classified as substandard or doubtful. If an asset, or portion thereof, is classified as loss, the association must either establish specific allowances for losses in the amount of 100% of the portion of the asset classified loss, or charge off such amount.

Allowance for loan losses. The Association maintains an allowance for loan losses based upon a number of relevant factors, including, but not limited to, the nature of the portfolio, credit concentrations, an analysis of specific loans in the portfolio, known and inherent risks in the portfolio, the estimated value of the underlying collateral, the assessment of general trends in relevant real estate markets, and current and prospective economic conditions, including property values, employment and occupancy rates, interest rates and other conditions that may affect a borrower’s ability to comply with repayment terms.

The single largest component of the Association’s loan portfolio consists of one- to four-family residential real estate loans. Substantially all of the Association’s loans are secured by residential real estate, and most have a down payment of 20% of the lower of the sales price or appraised value of the real estate. If a borrower provides a down payment of less than 20%, the Association requires the borrower to purchase private mortgage insurance. In addition, most of these loans, as well as our multifamily and nonresidential real estate loans, are secured by property in our lending area. These lending practices have contributed to a low historical charge-off history. The Association has not experienced substantial charge-offs on consumer loans in the recent past, although they have increased over the last three years. There can be no assurance that charge-offs on consumer loans will not continue to increase in the future.

The allowance for loan losses is reviewed quarterly by the board of directors. While the directors believe that they use the best information available to determine the allowance for loan losses, unforeseen market conditions could result in material adjustments, and net earnings could be

significantly adversely affected, if circumstances differ substantially from the assumptions used in making the final determination.

The following table sets forth an analysis of the Association’s allowance for loan losses for the periods indicated.


	Year ended June 30,
	2005			2004
	(Dollars in thousands)
Total gross loans outstanding	$	79,702		$	74,371
Average loans outstanding	$	75,323		$	67,996

Allowance for loan losses Balance at beginning of year	$	456		$	446

Charge-offs
Real estate:
Residential		(48	)		—
Nonresidential		—			—
Consumer		(54	)		(36	)

Total charge-offs		(102	)		(36	)
Recoveries
Real estate:
Residential		6			—
Nonresidential		—			—
Consumer		14			17

Total recoveries		20			17

Net charge-offs		(82	)		(19	)

Provision for losses on loans		216			29

Balance at end of year	$	590		$	456

Ratio of allowance for loan losses as a percent of total loans outstanding		0.74	%		0.61	%

Ratio of net charge-offs to average loans outstanding during the period		0.11	%		0.03	%

The following table sets forth the allocation of the allowance for loan losses by loan category at the dates indicated. This allocation is based on management’s assessment, as of a given point in time, of the risk characteristics of each of the component parts of the total loan portfolio, based primarily on the Association’s loss history, as adjusted for management’s assessment of current economic conditions in the Association’s lending area. The provision for losses on loans for the fiscal year ended June 30, 2005, was significantly impacted by management’s recognition of an increase in the level of foreclosures filed in the Association’s lending area of Darke County in calendar 2004 and the first half of 2005 from historic levels. This allocation is subject to changes as and when the risk factors of each such component part change. The allocation is neither indicative of the specific amounts or the loan categories in which future charge-offs may be taken nor is it an indicator of future loss trends. The allocation of the allowance to each category does not restrict the use of the allowance to absorb losses in any category.


	At June 30, 2005
	Amount		Percent of total allowance			Percent of gross loans
One- to four-family real estate	$	478		81.0	%		83.3	%
Multifamily real estate		28		4.7			4.8
Nonresidential real estate		28		4.7			4.8
Commercial		31		5.3			3.9
Consumer		25		4.3			3.2

	$	590		100.0	%		100.0	%


	At June 30, 2004
	Amount		Percent of total allowance			Percent of gross loans
One- to four-family real estate	$	382		83.8	%		86.9	%
Multifamily real estate		19		4.2			4.4
Nonresidential real estate		14		3.1			3.2
Commercial		16		3.5			2.1
Consumer		25		5.4			3.4

	$	456		100.0	%		100.0	%

Mortgage-backed securities

The Association maintains a small portfolio of mortgage-backed securities purchased between 1979 and 2004, which entitle the Association to receive a portion of the cash flows from an identified pool of mortgages. Mortgage-backed securities generally yield less than individual loans originated by us. In addition, a higher rate of prepayment of the underlying loans could have a material negative effect on the yield on the securities.

Mortgage-backed securities present less credit risk than loans originated and held in the Association’s portfolio. These securities were issued by Freddie Mac, Fannie Mae or an issuer whose securities are guaranteed as to principal and interest by Ginnie Mae. Freddie Mac and Fannie Mae are shareholder-owned companies, and they guarantee the securities they issue. Ginnie Mae is a U.S. Government agency. The Association has purchased some adjustable-rate mortgage-backed securities as part of its effort to reduce interest rate risk. If interest rates rise in general, including the interest the Association pays on its liabilities, the interest rates on the loans backing the mortgage-backed securities will also adjust upward. At June 30, 2005, $1.7 million of the Association’s mortgage-backed securities had adjustable rates.

The following tables set forth information regarding scheduled maturities, amortized costs, market value and weighted-average yields of the Association’s mortgage-backed securities at June 30, 2005 and 2004. Expected maturities will differ from contractual maturities due to scheduled repayments and because borrowers may have the right to call or prepay obligations with or without prepayments penalties. The following table does not take into consideration the effects of scheduled repayments or the effects of possible prepayments.


	At June 30, 2005
																					Total mortgage-backed
	One year or less					After one to five years					After five to ten years					After ten years					portfolio
	Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Market		Average
	value		yield			value		yield			value		yield			value		yield			value		value		yield
	(Dollars in thousands)
Fannie Mae certificates	$	—		—	%	$	—		—	%	$	—		—	%	$	1,181		4.28	%	$	1,181	$	1,189		4.28	%
Ginnie Mae certificates		—		—			5		9.00			—		—			22		4.13			27		28		5.03
Freddie Mac certificates		—		—			54		7.28			4		12.36			471		4.10			529		538		4.46

Total	$	—		—	%	$	59		7.43	%	$	4		12.36	%	$	1,674		4.23	%	$	1,737	$	1,755		4.35	%


	At June 30, 2004
																					Total mortgage-backed
	One year or less					After one to five years					After five to ten years					After ten years					portfolio
	Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Market		Average
	value		yield			value		yield			value		yield			value		yield			value		Value		yield
	(Dollars in thousands)
Fannie Mae certificates	$	—		—	%	$	—		—	%	$	—		—	%	$	1,646		4.34	%	$	1,646	$	1,659		4.34	%
Ginnie Mae certificates		—		—			7		9.00			—		—			32		4.63			39		39		5.42
Freddie Mac certificates		—		—			88		7.00			8		12.56			812		4.34			906		924		4.68

Total	$	—		—	%	$	95		7.14	%	$	8		12.56	%	$	2,490		4.35	%	$	2,591	$	2,622		4.48	%

The following table sets forth the composition of the Association’s investment securities at the dates indicated:


	At June 30,
	2005										2004
	Carrying					Market					Carrying					Market
	value		% of total			value		% of total			value		% of total			value		% of total
	(Dollars in thousands)
Held to maturity:
U.S. Government agency securities	$	18,000		53.3	%	$	17,802		53.1	%	$	18,999		55.2	%	$	18,763		54.9	%
Municipal obligations		50		0.1			50		0.1			—		—			—		—

Total securities held to maturity		18,050		53.4			17,852		53.2			18,999		55.2			18,763		54.9
Available for sale:
Asset management fund		15,717		46.6			15,717		46.8			15,404		44.8			15,404		45.1


Total investment securities	$	33,767		100.0	%	$	33,569		100.0	%	$	34,403		100.0	%	$	34,167		100.0	%

The following table sets forth the contractual maturities, carrying values, market values and average yields for the Association’s investment securities held to maturity at June 30, 2005.


	At June 30, 2005
	One year or less					After one to five years					After five to ten years					After ten years					Total Portfolio
																					Weighted						Weighted
	Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			average life		Carrying		Market		average
	value		Yield			value		yield			value		yield			value		yield			in years		value		value		yield
	(Dollars in thousands)
U.S. Government agency securities	$	1,000		1.75	%	$	17,000		3.38	%	$	—		—	%	$	—		—	%		2.51	$	18,000	$	17,802		3.29	%

Municipal obligations		—		—			50		3.63	%		—		—			—		—			4.80		50		50		3.63

	$	1,000		1.75	%	$	17,050		3.38	%	$	—		—	%	$	—		—	%		2.52	$	18,050	$	17,852		3.29	%

Deposits and Borrowings

General. Deposits have traditionally been the primary source of the Association’s funds for use in lending and other investment activities. In addition to deposits, the Association derives funds from Federal Home Loan Bank of Cincinnati advances, interest payments and principal repayments on loans and mortgage-backed securities, service charges and gains on the sale of assets. Loan payments are a relatively stable source of funds, while deposit inflows and outflows fluctuate more in response to general interest rates and money market conditions.

Deposits. The Association attracts deposits principally from within its primary market area through the offering of a broad selection of deposit instruments, including savings accounts, checking accounts, money market deposit accounts and certificates of deposit. At June 30, 2005, deposits from outside the State of Ohio represented approximately 7% of the total deposits of the Association. The Association offers individual retirement accounts (“IRAs”) and had $7.3 million in IRA accounts at June 30, 2005. Interest rates paid, maturity terms, service fees and withdrawal penalties for the various types of accounts are established periodically by management based on the Association’s liquidity requirements, growth goals and interest rates paid by competitors. The Association does not use brokers to attract deposits, and it has no plans to use them in the future.

At June 30, 2005, the Association’s certificates of deposit totaled $46.8 million, or 59.3% of total deposits. Of such amount, approximately $27.0 million mature within one year. Based on past experience and our prevailing pricing strategies, management believes that a substantial percentage of such certificates will renew with the Association at maturity.

The following table sets forth the dollar amount of deposits in the various types of savings programs we offer at the dates indicated.


	At June 30,
	2005					2004
			Percent					Percent
			of total					of total
	Amount		deposits			Amount		deposits
	(Dollars in thousands)
Transaction accounts:
Non-interest-bearing accounts	$	3,553		4.5	%	$	3,128		3.7	%
NOW accounts (1)		5,172		6.6			4,724		5.6
Money market accounts (2)		958		1.2			697		0.8
Savings accounts (3)		22,435		38.4			25,289		30.2


Total transaction accounts		32,118		40.7			33,838		40.3

Certificates of deposit:
0.76% — 2.00%		15,583		19.8			22,077		26.3
2.01% — 3.00%		11,152		14.1			8,207		9.8
3.01% — 4.00%		13,640		17.3			7,074		8.4
4.01% — 5.00%		4,293		5.4			4,967		5.9
Greater than 5.00%		2,112		2.6			7,794		9.3


Total certificates of deposit		46,780		59.3			50,119		59.7


Total deposits (4)	$	78,898		100.0	%	$	83,957		100.0	%

(Footnotes on next page)



(1)		The Association’s weighted-average interest rate paid on NOW accounts fluctuates with the general movement of interest rates. At June 30, 2005 and 2004, the weighted-average rates on NOW accounts were 0.56% and 0.53%, respectively.



(2)		The Association’s weighted-average interest rate paid on money market accounts fluctuates with the general movement of interest rates. At June 30, 2005 and 2004, the weighted-average rates on money market accounts were 0.60%, and 0.60%, respectively.



(3)		The Association’s weighted-average rate on savings accounts fluctuates with the general movement of interest rates. The weighted-average interest rate on savings accounts was 0.73%, and 0.74%, at June 30, 2005 and 2004, respectively.



(4)		IRAs are included in the various certificates of deposit balances. IRAs totaled $7.3 million and $8.4 million as of June 30, 2005 and 2004, respectively.

The following table shows rate and maturity information for the Association’s certificates of deposit as of June 30, 2005.


	Amount Due
			Over		Over
	Up to		1 year to		2 years to		Over
Rate	one year		2 years		3 years		3 years		Total
	(In thousands)
1.01% - 2.00%	$	14,778	$	804	$	—	$	—	$	15,584
2.01% - 3.00%		5,156		4,058		1,380		558		11,152
3.01% - 4.00%		5,130		669		2,576		5,266		13,641
4.01% - 5.00%		279		3,230		784		—		4,293
5.01% and greater		1,696		416		—		—		2,112

	$	27,039	$	9,177	$	4,740	$	5,824	$	46,780

The following table presents the amount of the Association’s certificates of deposit of $100,000 or more by the time remaining until maturity as of June 30, 2005 and 2004.


	June 30, 2005					June 30, 2004
	Amount		Average interest rate			Amount		Average interest rate
	(Dollars in thousands)
3 months or less	$	3,606		2.55	%	$	2,406		1.83	%
Over 3 to 6 months		2,335		1.97			1,190		1.54
Over 6 to 12 months		1,036		4.43			1,642		5.16
Over 12 months		1,894		4.02			1,808		4.57


Total time deposits $100,000 or greater	$	8,871		3.72	%	$	7,046		3.63	%

The following table sets forth the Association’s deposit account balance activity for the years indicated.


	Year ended
	June 30,
	2005			2004
	(Dollars in thousands)
Beginning balance	$	83,957		$	89,870

Deposits		144,755			138,258
Withdrawals		(151,171	)		(145,817	)

Net decrease before interest credited		(6,416	)		(7,559	)
Interest credited		1,357			1,646

Ending balance	$	78,898		$	83,957


Net decrease	$	(5,059	)	$	(5,913	)


Percent decrease		(6.0	)%		(6.6	)%

Borrowings. The Federal Home Loan Bank System functions as a central reserve bank providing credit for its member institutions and certain other financial institutions. As a member in good standing of the Federal Home Loan Bank of Cincinnati, the Association is authorized to apply for advances from the Federal Home Loan Bank of Cincinnati, provided certain standards of credit-worthiness have been met. Under current regulations, an association must meet certain qualifications to be eligible for advances. The extent to which an association is eligible for such advances will depend upon whether it meets the “Qualified Thrift Lender Test” (the “QTL Test”). If an association does not meet the QTL Test, it will be eligible for such advances only to the extent it holds specified QTL Test assets. At June 30, 2005, the Association was in compliance with the QTL Test.

The Association obtained advances from the Federal Home Loan Bank of Cincinnati as set forth in the following table:


	At or for the
	year ended
	June 30,
	2005			2004
	(Dollars in thousands)
Average balance outstanding	$	28,290		$	29,154
Maximum amount outstanding at any month end during the year		32,789			31,650
Balance outstanding at end of year		32,243			27,347
Weighted-average interest rate during the year		4.97	%		5.13	%
Weighted-average interest rate at end of year		4.74	%		5.15	%

Subsidiaries

The only subsidiary of the Association is Greenville Financial Service Corporation. The only business of this subsidiary has been holding stock in Intrieve, Incorporated, our data processor. In April 2005, Intrieve was acquired, entitling Greenville Financial Service Corporation to payment

for its Intrieve stock. Upon payment of intercompany expenses and a dividend of the cash held by Greenville Financial Service Corporation to the Association, including the Intrieve stock proceeds, we expect to dissolve Greenville Financial Service Corporation.

Properties

The following table sets forth certain information at June 30, 2005, regarding the properties on which the main office and the branch office of the Association is located, as well as real property acquired for a possible future branch office.

Date acquired

Location

Owned or leased

or leased

Book Value

Deposits

(Dollars in thousands)

Main Office:

690 Wagner Avenue
Greenville, Ohio

Owned

4/11/95

1,728

76,068

Branch:

Kroger Store
200 Lease Avenue

Leased (1)

8/11/00

2,830

Vacant Land:

State Rt. Alt. 49N
Arcanum, Ohio

Owned

6/18/04

162



(1)		The current term of the lease expires on October 26, 2005, but the Association has exercised its option to extend the lease for an additional two years. The current rental fee is $3,800 per month, and the fee after October 26, 2005, will be $4,000 per month.

Personnel

As of June 30, 2005, the Association had 36 full-time and 4 part-time employees. We believe that relations with the employees are good. The employees are not represented by a collective bargaining unit.

Legal proceedings

Neither we nor the Association is currently involved in any legal proceedings of a material nature. From time to time, the Association is a party to legal proceedings incidental to the conduct of its business to enforce its security interest in collateral pledged to secure loans we have made.

SUPERVISION AND REGULATION

Set forth below is a brief description of certain laws and regulations applicable to Greenville Federal Financial Corporation and the Association. The description of these laws and regulations, as well as descriptions of laws and regulations contained elsewhere herein, does not purport to be complete and is qualified in its entirety by reference to the applicable laws and regulations.

Legislation is introduced from time to time in the United States Congress that may affect the operations of Greenville Federal Financial Corporation and the Association. In addition, the regulations governing Greenville Federal Financial Corporation and the Association may be amended from time to time by the Office of Thrift Supervision. Any such legislation or regulatory changes in the future could adversely affect Greenville Federal Financial Corporation or the Association. No assurance can be given as to whether or in what form any such changes may occur.

General

The Association, as a federally chartered savings institution, is subject to federal regulation and oversight by the Office of Thrift Supervision extending to all aspects of its operations. The Association also is subject to regulation and examination by the FDIC, which insures the deposits of the Association to the maximum extent permitted by law, and requirements established by the Federal Reserve Board. Federally chartered savings institutions are required to file periodic reports with the Office of Thrift Supervision and are subject to periodic examinations by the Office of Thrift Supervision and the FDIC. The investment and lending authority of savings institutions are prescribed by federal laws and regulations, and such institutions are prohibited from engaging in any activities not permitted by such laws and regulations. Such regulation and supervision primarily is intended for the protection of depositors and not for the purpose of protecting stockholders. This regulatory oversight will continue to apply to the Association following the reorganization.

The Office of Thrift Supervision regularly examines the Association and prepares reports for the consideration of the Association’s board of directors on any deficiencies that it may find in the Association’s operations. The FDIC also has the authority to examine the Association in its role as the administrator of the Savings Association Insurance Fund. The Association’s relationship with its depositors and borrowers also is regulated to a great extent by both federal and state laws, especially in such matters as the ownership of savings accounts and the form and content of our mortgage documents. Any change in such regulations, whether by the FDIC, the Office of Thrift Supervision or Congress, could have a material adverse impact on Greenville Federal Financial Corporation and the Association and their operations.

Greenville Federal Financial Corporation

Pursuant to regulations of the Office of Thrift Supervision and the terms of Greenville Federal Financial Corporation’s charter, the purpose and powers of Greenville Federal Financial Corporation are to pursue any or all of the lawful objectives of a thrift holding company and to exercise any of the powers accorded to a thrift holding company.

If the Association fails the QTL test, Greenville Federal Financial Corporation must obtain the approval of the Office of Thrift Supervision prior to continuing after such failure, directly or through other subsidiaries, any business activity other than those approved for certain multiple thrift

companies or their subsidiaries. In addition, within one year of such failure Greenville Federal Financial Corporation must register as, and will become subject to, the restrictions applicable to bank holding companies.

The Association

The Office of Thrift Supervision has extensive authority over the operations of savings institutions. As part of this authority, we are required to file periodic reports with the Office of Thrift Supervision and we are subject to periodic examinations by the Office of Thrift Supervision and the FDIC. When these examinations are conducted by the Office of Thrift Supervision and the FDIC, the examiners may require the Association to provide for higher general or specific loan loss reserves. All savings institutions are subject to a semi-annual assessment, based upon the savings institution’s total assets, to fund the operations of the Office of Thrift Supervision.

The Office of Thrift Supervision also has extensive enforcement authority over all savings institutions and their holding companies, including the Association and Greenville Federal Financial Corporation. This enforcement authority includes, among other things, the ability to assess civil money penalties, to issue cease-and-desist or removal orders and to initiate injunctive actions. In general, these enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. Other actions or inactions may provide the basis for enforcement action, including misleading or untimely reports filed with the Office of Thrift Supervision. Except under certain circumstances, public disclosure of final enforcement actions by the Office of Thrift Supervision is required.

In addition, the investment, lending and branching authority of the Association is prescribed by federal laws. For instance, no savings institution may invest in non-investment grade corporate debt securities. In addition, the permissible level of investment by federal institutions in loans secured by nonresidential real property may not exceed 400% of total capital, except with approval of the Office of Thrift Supervision. The Association is in compliance with the noted restrictions. Federal savings institutions are generally authorized to branch nationwide. As part of this reorganization, we have filed a business plan with the Office of Thrift Supervision. The Association is required to provide quarterly variance reports and prior notice to the Office of Thrift Supervision for any business plan deviation. The Association is also required to obtain an independent audit on an annual basis.

The Association’s general permissible lending limit for loans-to-one-borrower is equal to the greater of $500,000 or 15% of unimpaired capital and surplus (except for loans fully secured by certain readily marketable collateral, in which case this limit is increased to 25% of unimpaired capital and surplus). At June 30, 2005, the Association’s lending limit under this restriction was $2.2 million. The Association is in compliance with the loans-to-one-borrower limitation.

Generally, Office of Thrift Supervision regulations limit consumer lending to 35% of total assets. The Association intends to comply with these lending limitations and does not expect this compliance to have a material adverse effect on its operations or earnings.

The Office of Thrift Supervision, as well as the other federal banking agencies, has adopted guidelines establishing safety and soundness standards on such matters as loan underwriting and documentation, asset quality, earnings standards, internal controls and audit systems, interest rate

risk exposure and compensation and other employee benefits. Any institution which fails to comply with these standards must submit a compliance plan.

Insurance of accounts and regulation by the FDIC

The Association is a member of the Savings Association Insurance Fund, which is administered by the FDIC. Deposits are insured up to the applicable limits by the FDIC, and such insurance is backed by the full faith and credit of the United States Government. As insurer, the FDIC imposes deposit insurance premiums and is authorized to conduct examinations of and to require reporting by FDIC-insured institutions. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious risk to the Savings Association Insurance Fund or the Bank Insurance Fund. The FDIC also has the authority to initiate enforcement actions against savings institutions, after giving the Office of Thrift Supervision an opportunity to take such action, and may terminate the deposit insurance if it determines that the institution has engaged in unsafe or unsound practices or is in an unsafe or unsound condition.

Regulatory capital requirements

Federally insured savings institutions, such as the Association, are required to maintain a minimum level of regulatory capital. The Office of Thrift Supervision has established capital standards, including a tangible capital requirement, a leverage ratio or core capital requirement and a risk-based capital requirement applicable to such savings institutions. The Office of Thrift Supervision is also authorized to impose capital requirements in excess of these standards on a case-by-case basis.

The capital regulations require tangible capital of at least 1.5% of adjusted total assets. In general, tangible capital consists of core capital less intangible assets. Core capital is comprised primarily of retained earnings. At June 30, 2005, the Association had tangible capital of $13.8 million, or 10.9% of adjusted total assets, which is approximately $11.9 million above the minimum requirement of 1.5% of adjusted total assets.

The capital standards also require core capital equal to at least 3.0% of adjusted total assets. Core capital generally consists of tangible capital plus certain intangible assets. As a result of the prompt corrective action provisions discussed below, however, a savings institution must maintain a core capital ratio of at least 4.0% to be considered adequately capitalized, unless its supervisory condition is such as to allow it to maintain a 3.0% ratio.

At June 30, 2005, the Association had core capital equal to $13.8 million, or 10.9% of adjusted total assets, which is $8.8 million above the 4.0% requirement.

The Office of Thrift Supervision also requires savings institutions to have total capital of at least 8.0% of risk-weighted assets. Total capital consists of core capital, as defined above, and supplementary capital, up to a maximum of 100% of core capital, subject to certain deductions. Supplementary capital includes general valuation loan and lease loss allowances up to a maximum of 1.25% of risk-weighted assets. The Office of Thrift Supervision is also authorized to require a savings institution to maintain an additional amount of total capital to account for concentration of credit risk and the risk of non-traditional activities.

In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet items, will be multiplied by a risk weight, ranging from 0% to 100%, based on the risk inherent in the type of asset.

On June 30, 2005, the Association had total risk-based capital of $14.4 million and risk-weighted assets of $66.6 million, or total capital of 21.6% of risk-weighted assets. This amount was $9.1 million above the 8.0% requirement.

The Office of Thrift Supervision and the FDIC are authorized and, under certain circumstances, required to take certain actions against savings institutions that fail to meet their capital requirements. Any such institution must submit a capital restoration plan and, until such plan is approved by the Office of Thrift Supervision, may not increase its assets, acquire another institution, establish a branch or engage in any new activities, and generally may not make capital distributions. The Office of Thrift Supervision is authorized to impose additional restrictions.

Any savings institution that fails to comply with its capital plan or is considered “significantly undercapitalized” must be made subject to one or more additional specified actions and operating restrictions which may cover all aspects of its operations and may include a forced merger or acquisition of the institution. An institution that becomes “critically undercapitalized” is subject to further mandatory restrictions on its activities in addition to those applicable to significantly undercapitalized institutions. In addition, the Office of Thrift Supervision must appoint a receiver, or conservator with the concurrence of the FDIC, for a savings institution, with certain limited exceptions, within 90 days after it becomes critically undercapitalized. The Office of Thrift Supervision may take other action as it determines, with the concurrence of the FDIC, would better achieve its objective.

The Office of Thrift Supervision is also generally authorized to reclassify an institution into a lower capital category and impose the restrictions applicable to such category if the institution is engaged in unsafe or unsound practices or is in an unsafe or unsound condition.

The imposition by the Office of Thrift Supervision or the FDIC of any of these measures on the Association may have a substantial adverse effect on its operations and profitability. At June 30, 2005, the Association met the standards for the highest level, a “well-capitalized” institution.

Limitations on dividends and other capital distributions

Office of Thrift Supervision regulations impose various restrictions on savings institutions with respect to their ability to make distributions of capital, which include dividends, stock redemptions or repurchases, cash-out mergers and other transactions charged to the capital account.

Generally, savings institutions that before and after the proposed distribution remain well-capitalized may make capital distributions during any calendar year equal to up to 100% of net income for the year-to-date plus retained net income for the two preceding years. However, an institution deemed to be in need of more than normal supervision by the Office of Thrift Supervision may have its dividend authority restricted by the Office of Thrift Supervision. The Association may pay dividends in accordance with this general authority.

Savings institutions proposing to make any capital distribution need not submit written notice to the Office of Thrift Supervision prior to such distribution unless they are a subsidiary of a

holding company or would not remain well-capitalized following the distribution. Upon completion of this offering, the Association will be a subsidiary of a holding company. Savings institutions that do not, or would not meet their current minimum capital requirements following a proposed capital distribution or propose to exceed these net income limitations must obtain Office of Thrift Supervision approval prior to making such distribution. The Office of Thrift Supervision may object to the distribution during a 30-day notice period based on safety and soundness concerns.

If Greenville Federal Financial Corporation pays dividends to its stockholders, it also will be required to pay dividends to Greenville Federal MHC, unless Greenville Federal MHC elects to waive the receipt of dividends. We anticipate that Greenville Federal MHC will waive dividends paid by Greenville Federal Financial Corporation. Any decision to waive dividends will be subject to regulatory approval. Under Office of Thrift Supervision regulations, public stockholders would not be diluted for any dividends waived by Greenville Federal MHC in the event Greenville Federal MHC converts to stock form.

Greenville Federal Financial Corporation will not be subject to Office of Thrift Supervision regulatory restrictions on the payment of dividends, but dividends from Greenville Federal Financial Corporation may depend, in part, upon receipt of dividends from Greenville Federal because Greenville Federal Financial Corporation initially will have no source of income other than dividends from the Association, interest paid on the ESOP loan, and earnings from the investment of the net proceeds from the offering retained by Greenville Federal Financial Corporation. Office of Thrift Supervision regulations limit distributions from Greenville Federal to Greenville Federal Financial Corporation. In addition, the Association may not make a distribution that would constitute a return of capital during the first year after completion of the reorganization. No insured depositary institution may make a capital distribution if, after making the distribution, the institution would be undercapitalized.

Liquidity

All savings institutions, including the Association, are required to maintain sufficient liquidity to ensure a safe and sound operation.

Qualified thrift lender test

All savings institutions, including the Association, are required to meet a qualified thrift lender test to avoid certain restrictions on their operations and remain eligible for Federal Home Loan Bank advances. This test requires a savings institution either (a) to have at least 65% of its portfolio assets, as defined by regulation, in qualified thrift investments on a monthly average for nine out of every 12 months on a rolling basis, or (b) to maintain 60% of its assets in those assets specified in Section 7701(a)(19) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Under either test, such assets primarily consist of residential housing related loans and investments. At June 30, 2005, the Association met the test at 89.5%, and has always met the test since its effectiveness.

Community Reinvestment Act

Under the Community Reinvestment Act, every FDIC-insured institution has a continuing and affirmative obligation consistent with safe and sound banking practices to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The

Community Reinvestment Act does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the Community Reinvestment Act. The Community Reinvestment Act requires the Office of Thrift Supervision, in connection with the examination of the Association, to assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications, such as a merger or the establishment of a branch, by the Association. An unsatisfactory rating may be used as the basis for the denial of an application by the Office of Thrift Supervision. Due to the heightened attention being given to the Community Reinvestment Act in the past few years, the Association may be required to devote additional funds for investment and lending in its local community. We received a “satisfactory” rating at the time of our most recent Community Reinvestment Act examination.

Transactions with Affiliates

Generally, transactions between a savings institution or its subsidiaries and its affiliates are required to be on terms as favorable to the institution as transactions with non-affiliates. In addition, certain of these transactions, such as loans to an affiliate, are restricted to a percentage of the institution’s capital. Affiliates of the Association include Greenville Federal Financial Corporation and any company which is under common control with the Association. In addition, a savings institution may not lend to any affiliate engaged in activities not permissible for a bank holding company or acquire the securities of most affiliates. The Office of Thrift Supervision has the discretion to treat subsidiaries of savings institutions as affiliates on a case-by-case basis.

Certain transactions with directors, officers or controlling persons are also subject to conflict of interest regulations enforced by the Office of Thrift Supervision. These conflict of interest regulations and other statutes also impose restrictions on loans to such persons and their related interests. Among other things, such loans must generally be made on terms substantially the same as for loans to unaffiliated individuals or as offered to all employees in a company-wide benefit program.

Federal Reserve System

The Federal Reserve Board requires all depositary institutions to maintain non-interest bearing reserves at specified levels against their transaction accounts, primarily checking, NOW and Super NOW checking accounts. At June 30, 2005, the Association was in compliance with these reserve requirements.

Federal Home Loan Bank System

The Association is a member of the Federal Home Loan Bank of Cincinnati, which is one of 12 regional Federal Home Loan Banks, that administers the home financing credit function of savings institutions. Each Federal Home Loan Bank serves as a reserve or central bank for its members within its assigned region. It is funded primarily from proceeds derived from the sale of consolidated obligations of the Federal Home Loan Bank System. It makes loans or advances to members in accordance with policies and procedures, established by the board of directors of the Federal Home Loan Bank, which are subject to the oversight of the Federal Housing Finance Board. All advances from the Federal Home Loan Bank are required to be fully secured by sufficient

collateral as determined by the Federal Home Loan Bank. In addition, all long-term advances are required to provide funds for residential home financing.

As a member, the Association is required to purchase and maintain stock in the Federal Home Loan Bank of Cincinnati. At June 30, 2005, the Association was in compliance with $1.8 million in Federal Home Loan Bank stock.

Patriot Act

In response to the terrorist events of September 11, 2001, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) was signed into law in October 2001. The Patriot Act gives the federal government new powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. Title III of the Patriot Act takes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies. Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions. Among other requirements, Title III and related OTS regulations impose the following requirements on OTS regulated financial institutions:


	•		Establishment of anti-money laundering programs;



	•		Establishment of a program specifying procedures for obtaining identifying information from customers seeking to open new accounts, including verifying the identity of customers within a reasonable period of time;



	•		Establishment of enhanced due diligence policies, procedures and controls designed to detect and report money laundering; and



	•		Prohibitions on correspondent accounts for foreign shell banks and compliance with record keeping obligations with respect to correspondent accounts of foreign banks.

Bank regulators are directed to consider a holding company’s effectiveness in combating money laundering when ruling on Federal Reserve Act and Bank Merger Act applications. Greenville Federal has updated its policies and procedures to reflect the requirements of the Patriot Act, which had a minimal impact on business and customers.

Federal Securities Law

The stock of Greenville Federal Financial Corporation is registered with the SEC under the Securities Exchange Act of 1934, as amended. Greenville Federal Financial Corporation will be subject to the information, proxy solicitation, insider trading restrictions and other requirements of the SEC under the Securities Exchange Act of 1934.

Greenville Federal Financial Corporation stock held by persons who are affiliates of Greenville Federal Financial Corporation may not be resold without registration unless sold in accordance with certain resale restrictions. Affiliates are generally considered to be officers, directors and principal stockholders. If Greenville Federal Financial Corporation meets specified current public information requirements, each affiliate of Greenville Federal Financial Corporation will be able to sell in the public market, through a broker, without registration, a limited number of shares in any three-month period.

TAXATION

Federal Income Taxation

General. Greenville Federal Financial Corporation and the Association will be subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion is intended only to summarize certain material federal income tax matters and is not a comprehensive description of the tax rules applicable to Greenville Federal Financial Corporation and the Association. For federal income tax purposes, the Association currently reports its income and expenses on the accrual method of accounting and uses a tax year ending June 30. After the reorganization, Greenville Federal MHC, Greenville Federal Financial Corporation, and the Association are expected to report their income separately, each using the accrual method of accounting and a tax year ending June 30.

Bad debt reserves. In August of 1997, legislation was enacted that repealed the percentage of taxable income method of accounting for bad debts, which previously had been used by many savings institutions to calculate their bad debt reserve for federal income tax purposes. As a result, the Association was required to change from the percentage of taxable income method to the experience method to compute its bad debt deduction. In addition, the Association was required to recapture as taxable income approximately $340,000 of its bad debt reserve, which represented the post-1987 additions to the reserve. The recapture amount resulting from the change in the Association’s method of accounting for its bad debt reserves was taken into taxable income ratably (on a straight-line basis) over a six-year period that ended in 2004.

Taxable distributions and recapture. Pre-1988 earnings that were appropriated to the bad debt reserve of the Association and claimed as a tax deduction are not available for the payment of cash dividends or for distributions (including distributions made on dissolution or liquidation), unless the Association includes the amount in income, along with the amount deemed necessary to pay the resulting federal income tax. Retained earnings at June 30, 2005, included approximately $1.8 million appropriated to the bad debt reserve of Greenville Federal for which federal income taxes have not been paid. This reserve (base year and supplement) is not recaptured at this time but may be recaptured in the future.

Charitable contributions. A corporation’s deduction for charitable contributions is limited to ten percent of its taxable income without regard to deductions for charitable contributions, net operating loss carrybacks and capital loss carrybacks. Contributions that exceed the foregoing limitation can be carried over to the five succeeding taxable years.

Tax treatment of distributions. In general, money or other property distributed by a corporation will constitute a dividend for federal income tax purposes provided the distribution is made out of: (i) the earnings and profits of the corporation for the taxable year in which the distribution is made, or (ii) the accumulated earnings and profits of the corporation. “Earnings and profits” in this context is similar in many respects but not identical to retained earnings or earned surplus for financial accounting purposes. The term has the meaning given to it by the Internal Revenue Code and the regulations thereunder. The portion of a distribution that constitutes a dividend for federal income tax purposes is included in the gross income of the stockholder. The portion of a distribution that does not constitute a dividend for federal income tax purposes is applied against and reduces the basis of the stock held by the stockholder. Any amount of such a distribution in excess of the basis of the stock is treated as gain from the sale or exchange of property.

Corporate dividends-received deduction. Greenville Federal Financial Corporation may exclude from its income 100% of dividends received from the Association, a member of the same affiliated group of corporations. Following completion of the reorganization and stock issuance, Greenville Federal MHC will own less than 80% (but more than 50%) of the outstanding common stock of Greenville Federal Financial Corporation. As a result, Greenville Federal MHC will not be permitted to file a consolidated federal income tax return with Greenville Federal Financial Corporation and the Association. Nevertheless, a corporation is entitled to a special deduction for dividends received from a domestic corporation that is subject to income tax. This deduction is equal to 80% of dividends received from corporations with which a corporate recipient does not file a consolidated return, provided the recipient owns more than 20% of the stock of the corporation distributing the dividend. Thus, Greenville Federal MHC will be entitled to deduct 80% of dividends received from Greenville Federal Financial Corporation.

Alternative minimum tax. The Internal Revenue Code imposes an alternative minimum tax at a rate of 20% on a base of regular taxable income plus certain tax preferences (“alternative minimum taxable income”). The alternative minimum tax is payable to the extent such alternative minimum taxable income is in excess of an exemption amount and the alternative minimum tax exceeds the regular income tax. Net operating losses can offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. The Association has not been subject to the alternative minimum tax and has no such amounts available as credits for carryover.

Net operating loss carryovers. A financial institution may carry net operating losses back to the preceding two taxable years and forward to the succeeding 20 taxable years. At June 30, 2005, the Association had no net operating loss carryforwards for federal income tax purposes.

The Association’s federal income tax returns for the tax years ended June 30, 2004, 2003, and 2002, are open under the statute of limitations and are subject to review by the Internal Revenue Service. The Association’s tax returns have not been examined by the Internal Revenue Service in the last five years.

Ohio Franchise and Income Taxation

General. The Association will be treated as a “financial institution” for Ohio tax purposes. As such, it will be subject to the Ohio corporation franchise tax on financial institutions, which is currently imposed annually at a rate of 1.3% of a taxpayer’s book net worth determined in accordance with generally accepted accounting principles. As a financial institution, the Association will not be subject to any tax based upon net income or net profits imposed by the State of Ohio.

Greenville Federal Financial Corporation and Greenville Federal MHC will be treated as general business corporations (i.e., not financial institutions) and will be subject to the Ohio corporation franchise tax if they: (a) engage in business in Ohio; (b) own or use a part or all of their capital or property in Ohio; (c) hold a certificate of compliance with the laws of Ohio authorizing them to do business in Ohio; or (d) otherwise have nexus in or with Ohio under the Constitution of the United States. If Greenville Federal Financial Corporation or Greenville Federal MHC is

subject to the Ohio corporation franchise tax, it will be required annually to calculate a tax liability based upon both its net income and its book net worth, determined in accordance with generally accepted accounting principles, and pay the higher of the two calculated tax liabilities. However, Greenville Federal Financial Corporation and Greenville Federal MHC may elect to be treated as a “qualifying holding company” and, as such, be exempt from the net worth component of the tax. To be exempt, they must satisfy various requirements, which include related member adjustments that could affect the taxable net worth of the Association.

The current net income method tax rate is equal to 5.1% of the first $50,000 of Ohio taxable income and 8.5% of Ohio taxable income in excess of $50,000. The current net worth method tax rate for non-financial institutions is equal to 0.4% of Ohio taxable net worth. A special litter tax is also applicable to all corporations subject to the Ohio corporation franchise tax other than financial institutions. This annual tax is capped at $5,000. Finally, there is a minimum tax applicable to all corporations subject to the Ohio corporation franchise tax, including financial institutions. This annual tax is capped at $1,000.

MANAGEMENT

Management of Greenville Federal Financial Corporation

The Board of Directors of Greenville Federal Financial Corporation consists of seven members divided into three classes. Each of the directors of Greenville Federal Financial Corporation is also a director of the Association. The terms of the directors are as follows:


Name	Year term expires
David Feltman		2007
David M. Kepler		2007
George S. Luce, Jr.		2006
Richard J. O’Brien		2008
Eunice F. Steinbrecher		2008
James W. Ward		2006
David R. Wolverton		2006

The following persons are officers of Greenville Federal Financial Corporation:


Name		Offices held
David M. Kepler		President, Chief Executive Officer
Susan J. Allread		Chief Financial Officer, Secretary

After the consummation of the reorganization, Greenville Federal Financial Corporation intends to have monthly meetings of the Board of Directors and will designate and appoint directors to committees, including an audit committee. Greenville Federal Financial Corporation does not currently pay directors’ fees.

Management of Greenville Federal

In its current mutual form, the charter of the Association provides for a board of directors consisting of not less than 5 nor more than 15 directors, such number to be fixed in the bylaws. The bylaws fix the number of directors at 8, divided into 3 classes with one class elected each year. There is currently one vacancy on the board of directors. Upon completion of the reorganization, the stock charter and bylaws will provide for a board of directors consisting of not less than 5 nor more than 15 directors, as fixed in the bylaws, and the bylaws initially will provide for 7 directors divided into three classes, with one class elected each year.

The board of directors met 15 times during the fiscal year ended June 30, 2005, for regular and special meetings. No director attended fewer than 75% of the aggregate of such meetings and all meetings of the committees of which such director was a member.

The following table presents certain information with respect to the present directors and executive officers of the Association:


			Position with	Date of		Term
Name	Age (1)		the Association	service		expires
David Feltman		70	Director		1980		2007
David M. Kepler		54	Director, President, CEO		1988		2007
George S. Luce, Jr.		44	Director		1996		2006
Richard J. O’Brien		60	Director		1996		2008
Eunice F. Steinbrecher		65	Director		1979		2008
James W. Ward		60	Director, Chairman of the Board		1981		2006
David R. Wolverton		68	Director		1985		2006
Susan J. Allread		29	CFO, Secretary, Vice President, Compliance Officer		N/A		N/A


(1)		At November 1, 2005.

Mr. Feltman was the Director of Human Resources of Brethren Retirement Community from 1990 to 1998, Treasurer of Darke County Habitat for Humanity from 2000 to 2002 and President of that organization from 2003 to 2004. Mr. Feltman has served as a director of Habitat for Humanity since 2000.

Mr. Kepler started his career with Greenville Federal as a Management Trainee in 1973, became Assistant Secretary in 1976, advanced to Assistant Vice President in 1980, Vice President of Operations in 1985 and Executive Vice President in 1988, and then became President and Chief Executive officer in 1997, in which position he has served since then. Mr. Kepler was first elected to the board of directors of Greenville Federal in 1988. Mr. Kepler is also on the board of the Ohio Bankers League’s affiliate, Financial Institutions Service Company.

Mr. Luce has been a truck equipment salesperson for The Best Equipment Co., Inc., located in North Royalton, Ohio, since 2002. From 2000 to 2002, Mr. Luce was employed as a salesperson for the John R. Jurgensen Company, Heavy Equipment Operation, selling aggregate materials.

Mr. O’Brien was the President of Q. O. B. Electric, Inc., an electrical contractor located in Dayton, Ohio, since 1988. Mr. O’Brien retired from that position as of July 1, 2005.

Ms. Steinbrecher has been the Chair of the Board of Messiah College in Grantham, Pennsylvania, for the last five years, as well as Chair of various committees of that Board. Ms. Steinbrecher also owns and manages commercial and rental real estate.

Mr. Ward has been a certified public accountant with Fry & Co. in Greenville, Ohio, since 1967. He has also been a partner with Elm Street Realty, which owns and rents commercial properties, since 1993.

Mr. Wolverton retired in 1997 from a career with the Association, starting as a teller in 1963 and rising through various positions until he was elected President and Chief Executive Officer in 1988. He currently provides management services for farms and other properties, is a member of the board of AAA of Miami Valley and is a member of the Advisory Board of AAA Darke County.

Ms. Allread joined the Association in 1995 as a part-time teller. She became a Management Trainee in 1998; Staff Accountant and Compliance Auditor in 1999; Comptroller and Compliance Officer in 2001; Comptroller, Vice President, Compliance Officer and Corporate Secretary in 2004; and Chief Financial Officer, Vice President, Corporate Secretary and Compliance Officer in 2005.

Committees. The board of directors of the Association maintains an audit committee, which consists of Messrs. Feltman, Luce, O’Brien, Ward and Wolverton and Ms. Steinbrecher. The committee recommends audit firms to the full board of directors and reviews and approves the annual independent audit report. The audit committee met once during the year ended June 30, 2005.

The board of directors of the Association has no compensation or nominating committee.

Compensation of directors. Each director of the Association receives an annual retainer fee of $12,000. Each director, except Mr. Kepler, receives an additional $200 per regular monthly meeting attended, $50 per special meeting of the board of directors attended and, for members of the Executive Committee, $75 for attendance at each weekly meeting of that committee. The Chairman of the Board receives an additional $9,200 per year. During fiscal year 2005, Greenville Federal paid a total of $111,375 in directors’ compensation.

Compensation of executive officers. The following table presents certain information regarding the cash compensation received by the President and Chief Executive Officer of the Association. No other executive officer of the Association received compensation exceeding $100,000 for the fiscal year ended June 30, 2004.

SUMMARY COMPENSATION TABLE


			Annual Compensation					All Other
Name and Principal Position	Year		Salary ($)(1)			Bonus ($)		Compensation
David M. Kepler, President and Chief Executive Officer		2005	$	149,539	(2)	$	—	$	8,252	(3)



(1)		Does not include amounts attributable to other miscellaneous benefits received by executive officers. The cost to the Association of providing such benefits to Mr. Kepler was less than 10% of his cash compensation. All full-time employees, including executive officers, are provided dental, medical, vision, disability and life insurance and educational financial assistance.



(2)		Includes a salary of $137,539 and directors’ fees of $12,000.



(3)		Consists of the Association’s contribution to Mr. Kepler’s 401(k) defined contribution plan account.

401(k) Savings Plan. The Association offers to our employees a qualified, tax-exempt savings plan qualifying under Section 401(k) of the Internal Revenue Code. All salaried employees who have completed at least 12 months of continuous employment during which they have worked at least 1,000 hours are eligible to participate.

Participants are permitted to make salary reduction contributions to the 401(k) plan of up to 50% of their annual salary, up to a maximum of $14,000, or $18,000 for participants over 50 years of age. The Association matches each contribution in an amount equal to 100% of the participant’s 401(k) deferrals for the year, up to 6% of their salary. All contributions made by participants are before-tax contributions. All participant contributions and earnings are fully and immediately vested. All matching contributions are immediately vested in full.

Participants may invest amounts contributed to their 401(k) plan accounts in one or more investment options available under the 401(k) plan. Changes in investment directions among the funds are permitted on a periodic basis pursuant to procedures established by the plan administrator.

Employee stock ownership plan. Greenville Federal Financial Corporation has established the Greenville Federal Financial Corporation Employee Stock Ownership Plan (the “ESOP”) for the benefit of employees of Greenville Federal Financial Corporation and the Association who have completed at least one year of full-time service with Greenville Federal Financial Corporation or the Association. The establishment of the ESOP and the purchase by the ESOP of common stock of Greenville Federal Financial Corporation are subject to the receipt of a favorable determination letter on the qualified status of the ESOP under applicable provisions of the Internal Revenue Code from the Commissioner of Internal Revenue (“Commissioner”). Greenville Federal Financial Corporation will submit to the Commissioner an application for a favorable determination letter on the qualified status of the ESOP. Although no assurances can be given, Greenville Federal expects that the ESOP will receive a favorable determination letter from the Commissioner.

Greenville Federal Financial Corporation intends to accept a promissory note from the ESOP in payment for 3.92% of the shares of common stock issued in connection with the reorganization, including the shares sold in the offering and the shares issued to Greenville Federal MHC. The loan will be secured by the shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Association’s discretionary contributions to the ESOP and earnings on ESOP assets. Shares purchased with such loan proceeds will be held in a suspense account for allocation among participants as the loan is repaid. As payments are made and the shares are released from the suspense account, such shares will be validly issued, fully paid and non-assessable.

Contributions to the ESOP and shares released from the suspense account will be allocated pro rata to participants on the basis of compensation. Except for participants who retire, become disabled, or die during the plan year, all other participants must have completed at least 1,000 hours of service and be employed on the last day of the plan year in order to receive an allocation. Benefits generally vest in full after five years of service, with current employees credited for years they have already served prior to the establishment of the ESOP. Benefits will be paid in the Association common stock and in cash. Benefits may be payable upon retirement, death, disability or separation from service. Benefits payable under the ESOP cannot be estimated. Pursuant to SOP 93-6, the fair market value of ESOP shares allocated during a period are expensed during the period.

A committee appointed by the board of directors of Greenville Federal Financial Corporation will administer the ESOP. The stock of Greenville Federal Financial Corporation and other ESOP funds will be held and invested by a trustee (the “ESOP Trustee”). The ESOP Committee may instruct the ESOP Trustee regarding investments of funds contributed to the ESOP. The ESOP Trustee must vote all allocated shares held in the ESOP in accordance with the instructions of the participating employees. Shares for which employees do not give instructions and unallocated shares will be voted by the ESOP Trustee in its sole discretion.

From time to time, the ESOP may purchase additional shares of Greenville Federal Financial Corporation common stock through purchases in the market or directly from Greenville Federal Financial Corporation. No such purchases are currently contemplated. If the ESOP purchases newly issued shares from Greenville Federal Financial Corporation, such purchases would have a dilutive effect on the interests of the Association’s stockholders.

Other future stock benefit plans. We intend to adopt a stock option plan and a recognition and retention plan for the benefit of selected directors, officers and employees. We expect that under the stock option plan and the recognition and retention plan, we will reserve 4.9% and 1.96%,

respectively, of the stock of Greenville Federal Financial Corporation issued in the reorganization, including the shares issued to Greenville Federal MHC. If the board of directors determines to implement these plans, the plans will be submitted to the stockholders of Greenville Federal Financial Corporation for approval. The plans will not be submitted before six months after the completion of the reorganization. When the plans are submitted to the stockholders for approval, detailed information about the plans will be provided. If the plans are submitted to the stockholders for approval within the first year after completion of the reorganization, Office of Thrift Supervision regulations will impose certain restrictions on the terms of the plans, which restrictions will not apply after one year from completion of the reorganization.

If such plans are approved and implemented, they will have a dilutive effect on the ownership interests of the Greenville Federal Financial Corporation stockholders. Awards will be made without payment of any consideration by the recipients, although the exercise of the stock options would require the payment of an exercise price by the option holder to Greenville Federal Financial Corporation.

Employment agreements. The Association intends to execute at the time of completion of the reorganization two employment agreements, including one for Mr. Kepler. The Association currently has no employment agreements with any employees. Mr. Kepler’s proposed agreement has a term of three years and a salary and performance review by the board of directors not less often than annually, as well as inclusion of Mr. Kepler in any formally established employee benefit, bonus, pension and profit-sharing plans for which senior management personnel are eligible. The employment agreement also provides for vacation and sick leave.

The employment agreement is terminable by the Association or Greenville Federal Financial Corporation at any time. In the event of termination for “just cause,” as defined in the agreement, Mr. Kepler will have no right to receive any compensation or other benefits for any period after such termination. In the event of termination by us other than for cause, at the end of the term or in connection with a “change of control,” as defined in the agreements, Mr. Kepler will be entitled to a continuation of salary payments for a period of time equal to the term of the employment agreement and continuation of benefits substantially equal to those being provided at the date of termination of employment until the earliest to occur of the end of the term or the date Mr. Kepler becomes employed full time by another employer.

The employment agreement also contains provisions with respect to the occurrence of a “change of control” in connection with or within one year before (1) the termination of employment for any reason other than just cause, retirement or termination at the end of the term of the agreement, (2) a change in the capacity or circumstances in which Mr. Kepler is employed or (3) a material reduction in Mr. Kepler’s responsibilities, authority, compensation or other benefits provided under the employment agreement without Mr. Kepler’s written consent. In the event of any such occurrence, the employee will be entitled to payment of an amount equal to three times the greater of his annual salary set forth in the agreement or the annual salary payment as a result of any annual salary review, subject to certain possible adjustments. In addition, Mr. Kepler would be entitled to continued coverage under all benefit plans until the earlier of the expiration of the term or the coverage of Mr. Kepler under another benefit plan. The maximum Mr. Kepler may receive, however, is limited to an amount that will not result in the imposition of a penalty tax pursuant to Section 280G(b)(3) of the Internal Revenue Code or exceed limitations imposed by the Office of Thrift Supervision. “Control, “ as defined in the employment agreement, generally refers to the acquisition by any person or entity of the ownership or power to vote 25% or more of the voting stock of the

Association or Greenville Federal Financial Corporation, the control of the election of a majority of the Association’s or Greenville Federal Financial Corporation’s directors, the exercise of a controlling influence over the management or polices of either company, or the reorganization, merger, consolidation or sale of the assets of the Association or Greenville Federal Financial Corporation, except the “control” exercised by Greenville Federal MHC and Greenville Federal Financial Corporation over their subsidiaries or our conversion from the mutual holding company structure to a full stock form of organization.

The aggregate payment that would have been made to Mr. Kepler, assuming his termination at June 30, 2005, following a change of control, would have been approximately $317,671.

Indemnification

The bylaws of Greenville Federal Financial Corporation provide that it shall indemnify each of its officers and directors to the full extent permitted by applicable laws and regulations against judgments and expenses in various proceedings related to the director’s or officer’s service as a director or officer of Greenville Federal Financial Corporation. In the opinion of the SEC, however, indemnification to an officer or director for liabilities arising under the Securities Act of 1933 is against public policy and is, therefore, unenforceable.

Loans and other transactions with officers and directors

We make loans to directors, executive officers and employees on preferred terms, including reduced rates of interest and closing costs, for personal purposes, such as for their residences and automobiles, but not for business purposes. The preferential terms of the loans are as follows:

•

With respect to mortgage loans:


	(i)		each fixed-rate loan is made at a rate equal to the lowest rate available to sell the loan in the secondary market at par for the delivery period, and if the loan does not qualify for sale, the rate will be the same as charged to the public;



	(ii)		each adjustable-rate loan is made with a rate, a margin and a life cap discounted to 1% less than the rate offered to the public; and



	(iii)		while a fixed-rate mortgage loan rate will not change after termination of employment, the rate discount will be eliminated on an adjustable-rate mortgage loans when employment or service as a director with the Association terminates for any reason.

•

With respect to consumer loans:


	(i)		a discount of 1% is applied to the rate offered the general public; and



	(ii)		the preferred rate is eliminated upon termination of employment or service as a director with the Association.


	•		The only closing costs the director, officer or employee is required to pay are those paid to a third party, provided that the borrower may refinance without paying other closing costs only once every twelve months.



	•		An executive officer must sign an agreement providing that, at the option of the Board of Directors of the Association, any mortgage loan on preferential terms will become due and payable at any time that the executive officer is indebted to any other bank or banks in an aggregate amount greater than the amount specified as the limit for a particular type of credit under an applicable regulation.

Each loan must meet the same underwriting criteria as required of other customers, with underwriting decisions based on the higher interest rate that would apply if the borrower ceased to be affiliated with the Association. Such loans do not, therefore, present any more risk than is presented by similar loans made to persons not affiliated with the Association.

The following table sets forth certain information regarding loans, made on terms more favorable than those offered to the public, to senior executive officers of the Association whose indebtedness to the Association exceeded $60,000 at any time since July 1, 2003:

Largest balance

Loan

during 2 years

Balance

Name and position

origination date

Collateral

ended 6/30/05

at 8/30/05

George S. Luce, Jr.

10/18/02

Home

48,000

37,339

10/18/02

Home (1)

21,510

22,510

Richard J. O’Brien

08/28/02

Home

93,500

80,908

Eunice F. Steinbrecher

09/15/02

Home

105,000

86,330

12/21/02

Home (1)

20,510

—

James W. Ward

09/14/02

Home

241,000

209,546

David M. Kepler

03/10/04

Home

120,000

113,935

Susan J. Allread

07/16/03

Home

87,000

79,004


(1)		Home equity line of credit

None of the outstanding loans to directors and executive officers involves more than the normal risk of collectibility or presents other unfavorable features, and all are current in their payments.

THE REORGANIZATION AND STOCK OFFERING

The board of directors of the Association and the Office of Thrift Supervision have approved the Plan of Reorganization and Stock Issuance Plan. Office of Thrift Supervision approval is subject to approval of the Plan of Reorganization by the Association’s members and the satisfaction of certain other conditions imposed by the Office of Thrift Supervision. Office of Thrift Supervision approval does not constitute recommendation or endorsement of the Plan of Reorganization.

General

The board of directors of the Association adopted the Plan of Reorganization and Stock Issuance Plan. Under this plan, the Association will reorganize into the federal mutual holding company structure as a wholly-owned subsidiary of Greenville Federal Financial Corporation, which in turn will be a majority-owned subsidiary of Greenville Federal MHC. Following receipt of all required regulatory approvals, the approval of the members of the Association entitled to vote on the plan of reorganization, and the satisfaction of all other conditions precedent to the reorganization, we will complete the reorganization. The Association in its stock form will continue to conduct its business and operations from the same offices with the same personnel as prior to the reorganization. The reorganization will not affect the balances, interest rates or other terms of the Association’s loans or deposit accounts, and the deposit accounts will continue to be insured by the FDIC. Greenville Federal MHC initially will be capitalized with $50,000. When the reorganization is completed, this capital will be used for general corporate purposes.

Pursuant to the plan of reorganization, we will accomplish our reorganization as follows:


	(1)		the Association will organize an interim stock savings bank as a wholly-owned subsidiary (“Interim One”);


	(2)		Interim One will organize an interim stock savings bank as a wholly-owned subsidiary (“Interim Two”);

	(3)		Interim One will organize Greenville Federal Financial Corporation as a wholly-owned subsidiary;


	(4)		the Association will exchange its charter for a federal stock savings bank charter, and Interim One will cancel all of its stock and exchange its charter for a federal mutual holding company charter to become Greenville Federal MHC;



	(5)		simultaneously with step (4), Interim Two will merge with and into the Association with the Association as the resulting institution;



	(6)		all of the equity interests of the Association initially issued in step (4) will be transferred to Greenville Federal MHC in exchange for membership interests in Greenville Federal MHC;



	(7)		Greenville Federal MHC will transfer the capital stock of the Association to Greenville Federal Financial Corporation in exchange for Greenville Federal Financial Corporation common stock, and the Association will become a wholly-owned subsidiary of Greenville Federal Financial Corporation; and


	(8)		contemporaneously with the reorganization, Greenville Federal Financial Corporation will offer for sale in the offering shares of common stock based on the pro forma market value of Greenville Federal Financial Corporation and the Association.

Greenville Federal Financial Corporation expects to receive the approval of the Office of Thrift Supervision to become a savings and loan holding company and to own all of the common stock of the Association. Greenville Federal Financial Corporation intends to retain $5.3 million of the net proceeds of the stock offering at the maximum of the offering range. The reorganization will be effected only upon completion of the sale of all of the shares of common stock to be issued pursuant to the plan of reorganization.

The following is a summary of material aspects of the reorganization and stock issuance. The summary is qualified in its entirety by reference to the provisions of the Plan of Reorganization and Stock Issuance Plan. Copies of the Plan of Reorganization and Stock Issuance Plan are available for inspection at any office of the Association and at the Office of Thrift Supervision. The Plan of Reorganization and Stock Issuance Plan are also filed as an exhibit to the Registration Statement of which this prospectus is a part, copies of which may be obtained from the SEC. See “Additional Information.”

The reasons for the reorganization

As a mutual institution, the Association has no authority to issue shares of capital stock and consequently has no access to market sources of equity capital. Only by generating and retaining earnings from year to year is the Association able to increase its capital position.

As a stock corporation upon completion of the reorganization, the Association will be organized in the form used by commercial banks, most major corporations and a majority of savings institutions. The Association’s primary reasons for the reorganization are:


	•		to structure its business in a form that will enable it to access capital markets;



	•		to support future lending and operational growth;



	•		to enhance its ability to attract and retain qualified directors and management through stock-based compensation plans; and



	•		to support future branching activities and the acquisition of other financial institutions or financial services companies or their assets.

The ability to raise new equity capital through the issuance and sale of the Association’s or Greenville Federal Financial Corporation’s capital stock will allow the Association the flexibility to increase its capital position more rapidly than by accumulating earnings and at times deemed advantageous by the board of directors of the Association. It will also support future growth and expanded operations, including increased lending and investment activities, as business and regulatory needs require. The ability to attract new capital also will help the Association address the needs of the communities it serves and enhance its ability to make acquisitions or expand into new businesses. After the reorganization, the Association will have increased ability to acquire

through merger other mutual and stock institutions, and Greenville Federal Financial Corporation may acquire control of other mutual or stock savings associations and retain the acquired institution as a separate subsidiary of Greenville Federal Financial Corporation, although doing so would result in Greenville Federal Financial Corporation being subject to additional regulatory restrictions as a multiple savings and loan holding company. Finally, the ability to issue capital stock will enable the Association to establish stock compensation plans for directors, officers and employees, giving them equity interests in the Association and greater incentive to improve its performance. Although the Association’s ability to raise capital and general business flexibility will be improved by this reorganization, these advantages will be limited by the requirement in applicable laws and regulations that a mutual holding company maintain a majority ownership interest in its savings bank holding company subsidiary. These advantages will also be limited by Greenville Federal Financial Corporation’s offering of up to 45% of its to-be-outstanding common stock, which will affect Greenville Federal Financial Corporation’s ability to issue additional shares of common stock in the future without additional issuances of stock to Greenville Federal MHC.

The advantages of the reorganization also could be achieved if the Association were to reorganize into a wholly-owned subsidiary of a stock holding company, known as a standard conversion, rather than as a second-tier subsidiary of a mutual holding company. A standard conversion also would free the Association from the restrictions on its ability to raise capital which result from the requirement that its mutual holding company maintain a majority ownership interest in Greenville Federal Financial Corporation.

Office of Thrift Supervision regulations require that savings institutions converting to stock form in a standard conversion sell all of their to-be-outstanding capital stock rather than a minority interest. The amount of equity capital that would be raised in a standard conversion would be substantially more than the amount raised in a minority stock offering by a subsidiary of a mutual holding company. A standard conversion would make it more difficult for the Association to maximize the return on its equity. A standard conversion also would eliminate all aspects of the mutual form of organization. Completion of the reorganization does not eliminate the possibility of Greenville Federal MHC converting from mutual to stock form in the future; however, a full conversion is not contemplated at this time.

After considering the advantages and disadvantages of the reorganization, as well as applicable fiduciary duties and alternative transactions, including a reorganization into a wholly-owned subsidiary of a stock holding company rather than as a second-tier subsidiary of a mutual holding company, the board of directors of the Association unanimously approved the reorganization as being in the best interests of the Association and equitable to its account holders.

Effects of the reorganization

General. The reorganization will have no effect on the Association’s present business of accepting deposits and investing its funds in loans and other investments permitted by law. The reorganization will not result in any change in the existing services provided to depositors and borrowers, or in existing offices, management and staff. The Association will continue to be subject to regulation, supervision and examination by the Office of Thrift Supervision and the FDIC.

Deposits and loans. Each holder of a deposit account in the Association at the time of the reorganization will continue as an account holder in the Association after the reorganization, and the

reorganization will not affect the deposit balance, interest rate or other terms of such accounts. Each account will be insured by the FDIC to the same extent as before the reorganization. Depositors in the Association will continue to hold their existing certificates, passbooks and other evidence of their accounts. The reorganization will not affect the loan terms of any borrower from the Association. The amount, interest rate, maturity, security for and obligations under each loan will remain as they existed prior to the reorganization.

Continuity of management. The board of directors presently serving the Association will serve as the board of directors of the Association after the reorganization and stock issuance. The initial members of the board of directors of Greenville Federal Financial Corporation and Greenville Federal MHC will consist of the individuals currently serving on the board of directors of the Association. After the reorganization, the voting stockholders of Greenville Federal Financial Corporation will elect approximately one-third of Greenville Federal Financial Corporation’s directors annually. Approximately one-third of the directors of Greenville Federal MHC will be elected annually by the members of Greenville Federal MHC, who will consist of certain of the borrowers of the Association and all persons who remain or become depositors of the Association after the reorganization. All current officers of the Association will retain their positions with the Association after the reorganization and stock issuance.

Voting rights. Currently, depositors of the Association have voting rights in the Association, including the right to elect the directors of the Association. After completion of the reorganization and stock issuance, depositor members will have no voting rights in the Association or Greenville Federal Financial Corporation and, therefore, will not be able to elect directors of the Association or Greenville Federal Financial Corporation or to control their affairs. After the reorganization and stock issuance, voting rights will be vested exclusively in the stockholders of Greenville Federal Financial Corporation, which will own all of the stock of the Association. Each holder of common stock will be entitled to vote on any matter to be considered by the stockholders of Greenville Federal Financial Corporation, subject to the provisions of Greenville Federal Financial Corporation’s charter.

As a federally-chartered mutual holding company, Greenville Federal MHC will have no authorized capital stock and no stockholders. Greenville Federal MHC will be controlled by members of the Association, primarily depositors. We expect to request the members to sign proxies giving their voting rights to Greenville Federal MHC’s management. The revocable proxies that members of the Association grant to the board of directors of Greenville Federal MHC will give the board of directors of the Association general authority to cast a member’s vote on any and all matters presented to the members. As a result, the board of directors of Greenville Federal MHC will be able to govern the operations of Greenville Federal MHC and Greenville Federal Financial Corporation, notwithstanding objections raised by members of Greenville Federal MHC or stockholders of Greenville Federal Financial Corporation, respectively, so long as the board of directors has been appointed proxy for a majority of the outstanding votes of members of Greenville Federal MHC and these proxies have not been revoked.

Depositors’ rights if we liquidate. In the event of a voluntary liquidation of the Association prior to the reorganization, holders of deposit accounts in the Association would be entitled to distribution of any assets of the Association remaining after the claims of depositors and all other creditors are satisfied. Following the reorganization, the holder of the Association’s common stock, which will be Greenville Federal Financial Corporation, would be entitled to any assets remaining upon a liquidation, dissolution or winding up of the Association and, except

through their liquidation interests in Greenville Federal MHC, discussed below, holders of deposit accounts in the Association would not have any interest in these assets.

In the event of a voluntary or involuntary liquidation, dissolution or winding up of Greenville Federal MHC following completion of the reorganization, holders of deposit accounts in Greenville Federal would be entitled, pro rata to the value of their accounts, to distribution of any assets of Greenville Federal MHC remaining after the claims of all creditors of Greenville Federal MHC are satisfied. Stockholders of Greenville Federal Financial Corporation will have no liquidation or other rights with respect to Greenville Federal MHC solely as stockholders.

In the event of a liquidation, dissolution or winding up of Greenville Federal Financial Corporation, each holder of shares of the common stock would be entitled to receive, after payment of all debts and liabilities of Greenville Federal Financial Corporation, a pro rata portion of all assets of Greenville Federal Financial Corporation available for distribution to holders of the common stock.

There currently are no plans to liquidate the Association, Greenville Federal Financial Corporation or Greenville Federal MHC in the future.

Tax effects of our corporate change and stock offering. We have received an opinion from our counsel, Vorys, Sater, Seymour and Pease LLP, as to the material federal income tax and Ohio franchise and income tax consequences of the reorganization and stock issuance to the Association, Greenville Federal Financial Corporation, and Greenville Federal MHC, and as to the generally applicable material federal income tax and Ohio franchise and income tax consequences of the reorganization and stock issuance to the Association’s account holders and to persons who purchase common stock in the stock offering.

The opinion provides that:


	•		The exchange of the Association’s charter for a federal stock savings bank charter will qualify as a reorganization within the meaning of Section 368(a)(1)(E) and Section 368(a)(1)(F) of the Internal Revenue Code, and the Association’s will not recognize any gain or loss;



	•		Because the Association’s corporate existence will continue under federal law and because the exchange of the Association’s charter for a federal stock savings bank charter is a transaction described in Code Section 381(a): (a) The Association’s tax year will not end merely as a result of the conversion of the Association to stock form; (b) the Association will not be required to obtain a new employer identification number; (c) the tax attributes of the Association, including any bad debt reserves, will not change; and (d) the Association’s earnings and profits or deficit in earnings and profits will not change;



	•		The holding period of the Association in its assets will not change as a result of the exchange of the Association’s charter for a federal stock savings bank charter;



	•		The basis of the Association in its assets will not change as a result of the exchange of the Association’s charter for a federal stock savings bank charter;


	•		The Association’s account holders will recognize no gain or loss upon the constructive receipt of equity interests in the Association in exchange for their membership interests and liquidation rights in the Association;



	•		The Association’s account holders will recognize no gain or loss upon the issuance to them of withdrawable deposit accounts, including certificates of deposit, in the Association in the same dollar amounts and on the same terms and conditions as the accounts, including certificates of deposit, exchanged therefor, and the basis of the withdrawable deposit accounts, including certificates of deposit, in Greenville Federal held by the Association’s account holders immediately after the exchange of the Association’s charter for a federal stock savings bank charter will be the same as the basis in the accounts, including certificates of deposit, exchanged therefor;



	•		The Association’s account holders and tax-qualified employee plans will recognize no gain or loss upon the distribution to them of the nontransferable subscription rights to purchase shares of stock in Greenville Federal Financial Corporation (assuming that such rights have no value), and no taxable income will be recognized by such persons or plans as a result of their exercise of such nontransferable subscription rights;



	•		The constructive transfer to Greenville Federal MHC by the Association’s account holders of their constructively received equity interests in the Association, in exchange for membership interests and liquidation rights in Greenville Federal MHC, will constitute a tax-free exchange of property within the meaning of Code Section 351, and the Association’s account holders will recognize no gain or loss as a result of such exchange;



	•		The basis of the Association’s account holders in their membership interests and liquidation rights in Greenville Federal MHC, received in the transfer to Greenville Federal MHC of equity interests in the Association in exchange for membership interests and liquidation rights in Greenville Federal MHC (which basis is zero), will be the same as the basis of the equity interests in the Association constructively transferred in exchange therefor. The holding period of the Association’s account holders in their membership interests and liquidation rights in Greenville Federal MHC will include the period during which the Association’s account holders held their membership interests and liquidation rights in the Association;



	•		Greenville Federal MHC will recognize no gain or loss upon the receipt of the equity interests in the Association from the Association’s account holders in exchange for membership interests and liquidation rights in Greenville Federal MHC;



	•		The basis of Greenville Federal MHC in Greenville Federal common stock (which basis is zero) will be the same as the basis of the equity interests in the Association in the hands of the Association’s account holders immediately prior to the transfer to Greenville Federal MHC of equity interests in the Association in exchange for membership interests and liquidation rights in Greenville Federal MHC. The holding period of Greenville Federal MHC in the Association common stock will include the period during which the Association’s account holders held their membership interests and liquidation rights in the Association;


	•		The transfer by Greenville Federal MHC of the Association common stock to Greenville Federal Financial Corporation in exchange for Greenville Federal Financial Corporation common stock, contemporaneously with the transfers of cash to Greenville Federal Financial Corporation by persons purchasing Greenville Federal Financial Corporation common stock in the stock issuance, will constitute a tax-free exchange of property within the meaning of Code Section 351, and neither Greenville Federal MHC nor such persons will recognize any gain or loss as a result of such exchange;



	•		Greenville Federal MHC’s basis in Greenville Federal Financial Corporation common stock (which basis is zero), received in the transfer to Greenville Federal Financial Corporation of the Association common stock in exchange for Greenville Federal Financial Corporation common stock, will be the same as its basis in the Association common stock exchanged therefor;



	•		Greenville Federal Financial Corporation will recognize no gain or loss upon its receipt of the Association common stock and cash in exchange for the Greenville Federal Financial Corporation common stock;



	•		Greenville Federal Financial Corporation’s basis in the Association common stock received from Greenville Federal MHC (which basis is zero) will be the same as the basis of such property in the hands of Greenville Federal MHC;


	•		The basis of Greenville Federal Financial Corporation common stock to its stockholders (other than Greenville Federal MHC) will be the purchase price thereof (assuming that the nontransferable subscription rights to purchase Greenville Federal Financial Corporation common stock have no value). The holding period of the Greenville Federal Financial Corporation common stock purchased pursuant to the exercise of subscription rights will commence on the date on which the right to acquire such stock was exercised;


	•		The Association is treated as a “financial institution” for Ohio tax purposes, and the exchange of the Association’s charter for a federal stock savings bank charter will not change such status;



	•		The exchange of the Association’s charter for a federal stock savings bank charter and the stock issuance will not be taxable transactions for purposes of the Ohio corporation franchise tax;


	•		Greenville Federal Financial Corporation and Greenville Federal MHC will be treated as general business corporations (i.e., not “financial institutions”) and will be subject to the Ohio corporation franchise tax if certain nexus standards are met. Formation of Greenville Federal Financial Corporation and Greenville Federal MHC potentially may create two additional Ohio corporation franchise taxpayers, resulting in additional tax liability (as a consequence of the pyramiding of net worth); and


	•		The exchange of the Association’s charter for a federal stock savings bank charter and the stock issuance will not be taxable transactions to the Association’s account holders for purposes of the Ohio corporation franchise tax or the Ohio personal income tax.

The opinion of Vorys, Sater, Seymour and Pease is based in part upon, and subject to the continuing validity in all material respects through the date of the reorganization and stock issuance of, various representations of the Association and upon certain assumptions and qualifications. The opinion is also based upon the Internal Revenue Code, Treasury regulations, case law, and the Internal Revenue Service rulings and Ohio authorities as they now exist. These authorities are all subject to change, and such change may be made with retroactive effect. The opinion is not binding on the Internal Revenue Service or the Ohio Department of Taxation, and no ruling has been, or will be, requested from the Internal Revenue Service as to any federal income tax consequence described above or the Ohio Department of Taxation as to any Ohio franchise or income tax consequence described above.

Greenville Federal Financial Corporation and the Association have received a letter from Keller & Company, stating its belief that the subscription rights do not have any value, based on the fact that these rights are acquired by the recipients without cost, are nontransferable and of short duration, and give the recipients the right only to purchase the Greenville Federal Financial Corporation common stock at a price equal to its estimated fair market value, which will be the same price as the purchase price for the unsubscribed shares of Greenville Federal Financial Corporation common stock. If the Internal Revenue Service disagrees on the ground that the subscription rights in fact do have value, income may be recognized by recipients of these rights, possibly whether or not the rights are exercised. This income may be capital gain or ordinary income, and Greenville Federal Financial Corporation may recognize gain on the distribution of these rights. Eligible subscribers are encouraged to consult with their own tax advisors as to the tax consequences in the event that subscription rights are deemed to have an ascertainable value. The letter of Keller & Company is not binding on the Internal Revenue Service, and the Internal Revenue Service could disagree with conclusions reached in the letter. In the event of any disagreement, there can be no assurance that the Internal Revenue Service would not prevail in a judicial or administrative proceeding.

How we determined the price and the number of shares to be issued in the stock offering

The plan of reorganization requires that the purchase price of the common stock must be based on the appraised pro forma market value of Greenville Federal Financial Corporation and the Association, as determined on the basis of an independent valuation. The Association has retained Keller & Company to make this valuation. For its services in making this appraisal, Keller & Company’s fees and out-of-pocket expenses are estimated to be $31,500. The Association has agreed to indemnify Keller & Company and any employees of Keller & Company who act for or on behalf of Keller & Company in connection with the appraisal against any and all loss, cost, damage, claim, liability or expense of any kind, including claims under federal and state securities laws, arising out of any misstatement or untrue statement of a material fact or an omission to state a material fact in the information supplied by the Association to Keller & Company, unless Keller & Company is determined to be negligent or otherwise at fault.

An appraisal has been made by Keller & Company in reliance upon the information contained in this prospectus, including the financial statements. Keller & Company also considered the following factors, among others:


	•		the present and projected operating results and financial condition of Greenville Federal Financial Corporation and the Association, which were prepared by the Association then adjusted by Keller & Company to reflect the net proceeds of this offering and the economic and demographic conditions in the Association’s existing market areas as prepared by the Association;


	•		certain historical, financial and other information relating to the Association, which were prepared by the Association;



	•		the impact of the reorganization on the Association’s net worth and earnings potential as calculated by Keller & Company; and



	•		the proposed dividend policy of Greenville Federal Financial Corporation and the Association.

The appraisal also incorporated an analysis of a peer group of publicly traded thrift institutions and mid-tier thrift holding companies in mutual holding company form that Keller & Company considered to be comparable to the Association. The peer group analysis conducted by Keller & Company included a total of ten publicly-traded thrift institutions and thrift holding companies. The analysis of comparable publicly traded institutions included an evaluation of the average and median price-to-earnings, price-to-book, and price-to-assets value ratios indicated by the market prices of the of the peer companies. Keller & Company applied the peer group’s pricing ratios as adjusted for certain qualitative valuation factors to account for differences between the Association and the peer group, to the Association’s pro forma earnings and book value to derive the estimated pro forma market value of the Association.

In its review of the appraisal provided by Keller & Company, the board of directors reviewed the methodologies and the appropriateness of the assumptions used by Keller & Company in addition to the factors listed above, and the board of directors believes that these assumptions were reasonable.

On the basis of the foregoing, Keller & Company has advised Greenville Federal Financial Corporation and the Association that in its opinion, dated September 14, 2005, the estimated pro forma market value of the common stock, ranged from a minimum of $22,950,000 to a maximum of $31,050,000 with a midpoint of $27,000,000. The board of directors of the Association determined that the common stock should be sold at $10.00 per share. Based on the estimated offering range and the purchase price, the number of shares of common stock that Greenville Federal Financial Corporation will issue will range from between 2,295,000 shares and 3,105,000 shares, with a midpoint of 2,700,000 shares. The Board determined to offer 45% of these shares, or between 1,032,750 shares and 1,397,250 shares with a midpoint of 1,215,000 shares, the offering range, to depositors and the public pursuant to this prospectus. The 55% of the shares of Greenville Federal Financial Corporation stock that are not sold in the offering will be issued to Greenville Federal MHC. The estimated offering range may be amended with the approval of the Office of Thrift Supervision or if necessitated by subsequent developments in the financial condition of Greenville Federal Financial Corporation and the Association or market conditions generally. In the event the estimated offering range is updated to amend the value of the common stock below $10,327,500 or above $16,068,370, which is the maximum of the estimated offering range, as adjusted by 15%, a new appraisal will be filed with the SEC.

Based upon current market and financial conditions and recent practices and policies of the Office of Thrift Supervision, in the event Greenville Federal Financial Corporation receives orders for common stock in excess of $13,972,500 million (the maximum of the estimated offering range) and up to $16,068,370 million (the maximum of the estimated offering range, as adjusted by 15%), Greenville Federal Financial Corporation may be required by the Office of Thrift Supervision to accept all such orders. No assurances, however, can be made that Greenville Federal Financial Corporation will receive orders for common stock in excess of the maximum of the estimated offering range or that, if such orders are received, that all such orders will be accepted because Greenville Federal Financial Corporation’s final valuation and number of shares to be issued are subject to the receipt of an updated appraisal from Keller & Company which reflects such an increase in the valuation and the approval of such increase by the Office of Thrift Supervision. In addition, an increase in the number of shares above 1,397,250 shares will first be used, if necessary, to fill the order of the employee stock ownership plan. There is no obligation or understanding on the part of management to purchase any shares in order to complete the reorganization.

The following table presents a summary of selected nominal pricing ratios for the peer group companies on a fully-converted basis and the resulting fully-converted pricing ratios for Greenville Federal Financial Corporation reflecting the pro forma impact of the reorganization. Keller & Company’s appraisal was based on a fundamental analysis of Greenville Federal versus the peer group companies and an application of the fully converted pricing ratios of the peer group to Greenville Federal, taking into account subjective valuation adjustments and the pro forma impact of the conversion. Compared to the average pricing ratios of the peer group, Greenville Federal Financial Corporation’s nominal pro forma pricing ratios at the midpoint of the offering range indicated a premium of 63.89% on a price-to-core earnings basis, a discount of 36.38% on a price-to-book basis and a discount of 37.53% on a price-to-tangible book value basis.


	Fully converted pro forma
	Price-to-core			Price-to-book			Price-to-tangible
	earnings multiple			value ratio			book value
Greenville Federal Financial Corporation as of September 14, 2005:
15% above maximum		44.72	x		77.10	%		76.76	%
Maximum		43.83			74.01			73.64
Midpoint		42.85			70.78			70.36
Minimum		41.59			66.75			66.35

All Thrifts Organized in Mutual Holding Company Form Publicly Traded on the NYSE, NASDAQ & AMEX as of September 14, 2005: (1)
Averages		43.36	x		179.38	%		186.20	%
Medians		38.74			171.99			179.30

Valuation of Peer Group Institutions as of September 14, 2005:
Averages		26.15	x		111.26	%		112.62	%
Medians		22.89			113.33			113.33


(1)		Excludes mutual holding companies that are under acquisition or have announced a second step conversion.

Keller & Company’s valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing these shares. Keller & Company did not independently verify the consolidated financial statements and other information provided by the Association, nor did Keller & Company value independently the assets or liabilities of the Association. The valuation considers the Association as a going concern and should not be considered as an indication of the liquidation value of the Association. Moreover, because this valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons purchasing common stock in the offerings will thereafter be able to sell such shares at prices at or above the purchase price or in the range of the valuation described above.

Prior to completion of the reorganization, the maximum of the estimated offering range may be increased up to 15% and the number of shares of common stock may be increased to 1,606,837 shares to reflect changes in market and financial conditions or to fill the order of the employee stock ownership plan, without the resolicitation of subscribers. See “- Limitations on Stock Purchases” as to the method of distribution and allocation of additional shares that may be issued in the event of an increase in the estimated offering range to fill unfilled orders in the Subscription Offering.

No sale of shares of common stock in the reorganization may be completed unless prior to such completion Keller & Company confirms that nothing of a material nature has occurred which, taking into account all relevant factors, would cause it to conclude that the aggregate value of the common stock to be issued is materially incompatible with the estimate of the aggregate consolidated pro forma market value of Greenville Federal Financial Corporation and the Association. If this confirmation is not received, Greenville Federal Financial Corporation may cancel the reorganization, extend the offering period and establish a new estimated offering range, extend, reopen or hold a new offering or take any other action the Office of Thrift Supervision may permit.

Depending upon market or financial conditions following the start of the Subscription Offering, the total number of shares of common stock may be increased or decreased without a resolicitation of subscribers, provided that the product of the total number of shares times the purchase price is not below the minimum or more than 15% above the maximum of the estimated offering range. In the event market or financial conditions change so as to cause the aggregate purchase price of the shares to be below the minimum of the estimated offering range or more than 15% above the maximum of such range, purchasers will be resolicited and be permitted to continue their orders, in which case they will need to reconfirm their subscriptions prior to the expiration of the resolicitation offering or their subscription funds will be promptly refunded with interest at Greenville Federal’s savings account rate of interest, or be permitted to modify or rescind their subscriptions. Any change in the estimated offering range must be approved by the Office of Thrift Supervision.

An increase in the number of shares of common stock as a result of an increase in the estimated pro forma market value would decrease both a subscriber’s ownership interest and Greenville Federal Financial Corporation’s pro forma net income and stockholders’ equity on a per share basis while increasing pro forma net income and stockholders’ equity on an aggregate basis. A decrease in the number of shares of common stock would increase both a subscriber’s ownership interest and Greenville Federal Financial Corporation’s pro forma net income and stockholders’ equity on a per share basis while decreasing pro forma net income and stockholders’ equity on an aggregate basis.

Copies of the appraisal report of Keller & Company, including any amendments, and the detailed report of the appraiser setting forth the method and assumptions for the appraisal are available for inspection at the main office of the Association and the other locations specified under “Additional Information.”

After-market performance information provided by independent appraiser


	Average Stock price appreciation (depreciation) from initial trading date
	Initial		After			After			After			Through
	trading date		one day			one week			one month			9/14/05
Naugatuck Valley Financial Corporation		10/01/04		8.00	%		8.10	%		4.20	%		26.50	%
SI Financial Group, Inc.		10/01/04		12.00			10.50			9.40			20.00
Atlantic Coast Federal Corporation		10/05/04		17.50			24.80			29.30			42.00
PSB Holdings, Inc.		10/05/04		5.00			6.30			4.50			3.60
Home Federal Bancorp, Inc. (Idaho)		12/07/04		24.90			28.00			23.30			27.30
Abington Community Bancorp, Inc.		12/17/04		33.50			33.00			29.00			26.50
Lincoln Park Bancorp		12/20/04		10.00			12.50			0.20			(9.50	)
Ocean Shore Holding Co.		12/22/04		21.50			22.50			6.30			17.00
SFSB, Inc.		12/31/04		7.50			0.00			(0.50	)		(8.00	)
Georgetown Bancorp, Inc.		01/06/05		2.00			0.00			0.50			(9.50	)
BV Financial, Inc.		01/14/05		(6.50	)		(4.00	)		(1.50	)		(13.00	)
Home Federal Bancorp, Inc. of Louisiana		01/21/05		(1.00	)		0.00			(0.80	)		(2.00	)
Kearny Financial Corp.		02/24/05		13.90			14.30			10.80			25.00
Kentucky First Federal Bancorp		03/03/05		7.90			11.00			12.40			1.00
Prudential Bancorp, Inc. of Pennsylvania		03/30/05		(1.50	)		(6.50	)		(12.50	)		20.00
Brooklyn Federal Bancorp, Inc.		04/06/05		(0.50	)		(0.10	)		(5.00	)		19.00
FedFirst Financial Corporation		04/07/05		(6.60	)		(7.10	)		(14.50	)		(11.00	)
Rockville Financial, Inc.		05/23/05		4.80			10.50			19.60			31.70
North Penn Bancorp, Inc.		06/02/05		10.00			2.50			1.50			1.80
Colonial Bankshares, Inc.		06/30/05		6.00			6.90			7.50			11.00
Heritage Financial Group		06/30/05		7.50			7.20			9.30			10.10
United Financial Bancorp		07/13/05		17.50			15.70			17.00			15.80
Ottawa Savings Bancorp		07/15/05		10.00			5.00			7.00			6.00

	AVERAGE			8.84			8.74			6.83			10.93
	MEDIAN			7.90			7.20			6.30			11.00

None of the transactions contained in this table involved issuers that are part of the “peer group” of 10 publicly traded savings institutions included by Keller & Company in its appraisal.

You should bear in mind that stock price appreciation or depreciation is affected by many factors. There can be no assurance that our stock price will not trade below $10.00 per share.

Of these 23 initial public offerings, 6 were trading below their initial offering price on September 14, 2005. Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the section entitled “Risk Factors” beginning on page 12.

	•		the data were calculated using a small sample;

	•		the transactions from which the data were derived occurred primarily during a low market interest rate environment, during which time the trading prices for financial institution stocks typically increase;


	•		if interest rates rise, our net interest income and the value of our assets could be reduced, which could negatively affect our stock price. See “RISK FACTORS — Rising interest rates may hurt our profits” on page 13; and



	•		stock prices will be affected by general market conditions, the interest rate environment, merger or takeover transactions, speculative market pressures and other unforeseeable events. See “RISK FACTORS — There will be a limited market for our common stock, which may lower our stock price” on page 15; and “ — Our stock price may decline when trading commences” on page 14.

Finally, a particular company’s stock price is subject to various factors, including the amount of proceeds a company raises, the quality of management and management’s ability to

deploy the proceeds (such as through investments, the acquisition of other financial institutions or other businesses, the payment of dividends and common stock repurchases).

Subscription Offering and subscription rights

Under the plan of reorganization, rights to subscribe for the purchase of common stock have been granted to the following persons in the following order of descending priority:


	•		Depositors of the Association with account balances of at least $50 as of the close of business on March 31, 2004 (“Eligible Account Holders”);


	•		Tax-qualified employee plans;


	•		Depositors of the Association with account balances of at least $50.00 as of the close of business on ___, 2005 (“Supplemental Eligible Account Holders”); and



	•		Depositors of the Association as of the close of business on ___, 2005, and certain borrowers of the Association, other than Eligible Account Holders or Supplemental Eligible Account Holders (“Other Members”).

All subscriptions received will be subject to the availability of common stock after satisfaction of all subscriptions of all persons having prior rights in the Subscription Offering and to the maximum and minimum purchase limitations set forth in the plan of reorganization and as described below under “— Limitations on Stock Purchases.”

Priority Category 1: Eligible Account Holders. Each depositor who has at least $50 on deposit at the Association at the close of business on March 31, 2004 (“Eligible Account Holders”) will receive, without payment, first priority, nontransferable subscription rights to subscribe for shares of common stock in an amount equal to the greater of:

	(1)		$150,000, or 15,000 shares of common stock;

	(2)		one-tenth of one percent (.10%) of the total offering of shares; or

	(3)		15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be issued by a fraction of which the numerator is the amount of the qualifying deposit of the Eligible Account Holder and the denominator is the total amount of qualifying deposits of all Eligible Account Holders, in each case as of the close of business on March 31, 2004.

Purchases in this category are subject to overall purchase limitations set forth below.

If sufficient shares are not available, shares will be allocated first to permit each subscribing Eligible Account Holder to purchase a number of shares sufficient to make the subscriber’s total allocation, to the extent possible, equal to the lesser of (i) 100 shares or (ii) the number of shares subscribed for. Thereafter, unallocated shares will be allocated among each subscribing Eligible

Account Holder pro rata in the same proportion that his qualifying deposit bears to the total qualifying deposits of all subscribing Eligible Account Holders whose subscriptions remain unfilled. The subscription rights of Eligible Account Holders who are also directors or officers of the Association or their associates will be subordinated to the subscription rights of other Eligible Account Holders to the extent attributable to increased deposits of their director or officer in the year preceding March 31, 2004.

To ensure proper allocation of stock, each subscriber must list on the subscription order form all accounts in which the subscriber has an ownership interest. Failure to list all accounts on the order form could result in your receiving fewer shares of stock than you would have received if you had listed all accounts.

Priority Category 2: Tax-Qualified Employee Plans. Tax-qualified employee plans of the Association and Greenville Federal Financial Corporation will be entitled to receive nontransferable subscription rights to purchase up to 10% of the shares of common stock of Greenville Federal Financial Corporation. We intend to cause the ESOP to purchase a number of shares equal to 8.7% of the number of shares sold in the offering. Subscriptions by the ESOP will not be aggregated with shares purchased directly by or otherwise attributable to any other participants in the offering, including subscriptions of any of the directors, officers, employees or associates of the Association.

Subscription rights received pursuant to this category will be subordinated to all rights received by Eligible Account Holders; provided, however, that the tax-qualified employee plans will have a first priority subscription right to the extent that the total number of shares of Greenville Federal Financial Corporation common stock sold in the offering exceeds the maximum of the estimated valuation range.

Priority Category 3: Supplemental Eligible Account Holders. To the extent that there are sufficient shares remaining after satisfaction of subscriptions by Eligible Account Holders and the tax-qualified employee plans, each depositor with $50 or more on deposit as of the close of business on ___, 2005 (“Supplemental Eligible Account Holders”), will receive nontransferable subscription rights to subscribe for up to the greater of:

	(1)		$150,000, or 15,000 shares of common stock;

	(2)		one-tenth of one percent of the total offering of shares; or


	(3)		15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock to be issued by a fraction of which the numerator is the amount of the qualifying deposit of the Supplemental Eligible Account Holder and the denominator is the total amount of qualifying deposits of all Supplemental Eligible Account Holders in the Association, in each case on ___, 2005.

Subscription rights received pursuant to this category shall be subordinated to all subscription rights received by Eligible Account Holders and tax-qualified employee plans pursuant to priority category nos. 1 and 2.

In the event of an oversubscription for shares under this priority category, the shares available shall be allocated first to permit each subscribing Supplemental Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his total allocation equal to the lesser of: (i) 100 shares, or (ii) the number of shares subscribed for. Thereafter the unallocated shares shall be allocated among each subscribing Supplemental Eligible Account Holder pro rata in the same proportion that his qualifying deposit bears to the total qualifying deposits of all subscribing Supplemental Eligible Account Holders whose subscriptions remain unsatisfied.

Preference Category No. 4: Other Members. To the extent that there are sufficient shares remaining after satisfaction of the subscriptions of Eligible Account Holders, tax-qualified plans and Supplemental Eligible Account Holders, each member of the Association as of the close of business on ___, 2005, will receive non-transferable subscription rights to subscribe for shares of Greenville Federal Financial Corporation common stock up to the greater of the following amounts:

	(1)		$150,000, or 15,000 shares of common stock; or

	(2)		one-tenth of one percent of the total offering of shares of common stock in the offering.

In the event of an oversubscription for shares within this priority category, the shares available will be allocated among the subscribing Other Members pro rata in the same proportion that the subscriber’s number of votes on ___, 2005, bears to the total number of votes on that date of all subscribing members on that date. The number of votes shall be determined based on the Association’s mutual charter and bylaws in effect on the date of the special meeting, as well as applicable Office of Thrift Supervision regulations that provide voting rights to borrowers as of March 20, 1986, whose loans as of March 20, 1986, are still outstanding on ___, 2005.

Direct community offering. To the extent any shares remain available for purchase after satisfaction of all subscriptions of Eligible Account Holders, tax-exempt employee plans, Supplemental Eligible Account Holders and Other Members, we may offer shares to members of the public. We will give preference to natural persons residing in Darke County, Ohio. The direct community offering, if any, will commence concurrently with, during or promptly after the Subscription Offering. The purchase price per share to the general public in a direct community offering will be the same as the subscription price.

No Person may subscribe for or purchase more than $150,000 of stock in the direct community offering, if any. Further, we may limit total subscriptions so as to assure that the number of shares available for the public offering may be up to a specified percentage of the number of shares of Greenville Federal Financial Corporation stock. Finally, we may reserve shares offered in the direct community offering for sales to institutional investors.

In the event of an oversubscription for shares in the direct community offering, shares may be allocated (to the extent shares remain available) first to cover orders of natural persons residing in the local community, then to cover the orders of any other person subscribing for shares in the direct community offering so that each such Person may receive 1,000 shares, and thereafter, on a pro rata basis to such persons based on the amount of their respective subscriptions. In the event that orders for stock in any of the categories exceed the number of shares available for sale, shares

may be allocated on a pro rata basis within a category based on the amount of the respective orders. We may, in our sole discretion, reject subscriptions, in whole or in part, received from any person in the direct community offering. Further, we may elect to forego a direct community offering and instead effect a public offering as described below.

Public offering. Any shares of stock not sold in the Subscription Offering or in the direct community offering, if any, may then be sold through Keefe, Bruyette & Woods, Inc., to selected members of the general public. It is expected that this public offering will commence as soon as practicable after termination of the Subscription Offering and the direct community offering, if any. We may, in our sole discretion, reject any subscription, in whole or in part, received in the public offering. The public offering will be completed within 90 days after the termination of the Subscription Offering, unless extended. No person may purchase more than $150,000 of stock in the public offering, if any.

Keefe, Bruyette & Woods, Inc., may enter into other agreements with selected dealers to assist in the sale of the stock in the public offering. No orders may be placed or filled by or for a selected dealer during the Subscription Offering. After the close of the Subscription Offering, Keefe, Bruyette & Woods, Inc., will instruct selected dealers as to the number of shares to be allocated to each selected dealer. Only after the close of the Subscription Offering and upon allocation of shares to selected dealers may selected dealers take orders from their customers. During the Subscription Offerings and the direct community offering, selected dealers may only solicit indications of interest from their customers to place orders with us as of a certain order date for the purchase of stock. When and if we believe, in consultation with Keefe, Bruyette & Woods, Inc., that enough indications of interest and orders have not been received in the subscription and community offerings to consummate the offering, we will instruct Keefe, Bruyette & Woods, Inc., to request, as of the order date, selected dealers to submit orders to purchase shares for which they have previously received indications of interest from their customers. Selected dealers will send confirmation of the orders to customers on the next business day after the order date. Selected deals will debit the accounts of their customers on the settlement date, which date will be three business days from the order date. Customers who authorize selected dealers to debit their brokerage accounts are required to have the funds for payment in their accounts on but not before the settlement date. On the settlement date, selected dealers will remit funds to the account established for each selected dealer. Each customer’s funds so forwarded to us, along with all other accounts held in the same title, will be insured by the FDIC up to $100,000 in accordance with applicable FDIC regulations. After payment has been received by us from selected dealers, funds will earn interest at our savings account rate until the completion or termination of the offering. Funds will be promptly returned, with interest, in the event the offering is not completed.

Limitations on stock purchases. In addition to the limitations within each priority category, the following limitations apply:

	(1)		No fewer than 25 shares of common stock may be purchased, to the extent shares are available;

	(2)		No person may subscribe for or purchase in the offering more than $150,000 of stock.

	(3)		No person together with any “associates” or group of persons “acting in concert” may subscribe for or purchase in the offering more than $200,000 of stock.

The term “associate” is used to indicate any of the following relationships with a person:


	•		any corporation or organization (other than the Association, Greenville Federal Financial Corporation, Greenville Federal MHC or a majority-owned subsidiary of any of them) of which such person is a director, officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities;


	•		any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity;


	•		any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of the Association, Greenville Federal Financial Corporation, Greenville Federal MHC, or any subsidiary or affiliate of any of them; and


	•		any person acting in concert with any of the persons or entities specified above.

The definition of “associate” does not, however, include the relationship of any employee plan to any director or officer of the Association, Greenville Federal Financial Corporation, or Greenville Federal MHC. With respect to persons other than officers and directors of the Association, we may in our sole discretion determine the persons that are associates of other persons.

The term “acting in concert” means:

	•		knowing participation in a joint activity or interdependent conscious parallel action towards a common goal, whether or not pursuant to an express agreement;

	•		a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise; or

	•		a person or company which acts in concert with another person or company (“other party”) shall also be deemed to be acting in concert with any person or company who is also acting in concert with that other party, except that any tax-qualified employee plan will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated.


	(4)		No officer or director and his or her associates, exclusive of any stock acquired by such persons in the secondary market, may purchase more than the lesser of

100


			(i) $150,000 individually or $200,000 with his or her associates or as a group acting in concert; (ii) 4.9% of the shares issued in the offering, including those issued to Greenville Federal MHC; or (iii) 4.9% of Greenville Federal Financial Corporation’s stockholders’ equity at the close of the reorganization. For purposes of this paragraph (4) and paragraph (5) below, in calculating the number of shares held by any officer or director or his or her associates, shares to be held by any tax-qualified employee plan or non-tax-qualified employee plan that are attributable to such persons shall not be counted;



	(5)		The only stock benefit plan of Greenville Federal, Greenville Federal Financial Corporation, or Greenville Federal MHC that will be permitted to purchase shares in the offering will be the ESOP. The ESOP may purchase up to 10% of the shares issued in the offering, excluding shares issued to Greenville Federal MHC; and



	(6)		The maximum amount of stock that may be purchased in the offering by all officers and directors and their associates, exclusive of any stock acquired by such persons in the secondary market, shall not exceed 33% of the shares of stock held by persons other than Greenville Federal MHC at the close of the offering or exceed 33% of the stockholders’ equity of Greenville Federal Financial Corporation held by persons other than Greenville Federal MHC at the close of the offering. For purposes of this paragraph (7), in calculating the number of shares held by officers and directors and their associates, shares held by any tax-qualified employee plans that are attributable to such persons shall not be included.

Depending upon market and financial conditions, the boards of directors of Greenville Federal Financial Corporation and the Association, with the approval of the Office of Thrift Supervision and without further approval of the members, may increase or decrease any of the above purchase limitations. Should we increase the maximum purchase limitation, persons who previously subscribed for the maximum number of shares will be given the opportunity to subscribe for additional shares.

We have made reasonable efforts to comply with the securities laws of all states in the United States in which persons entitled to subscribe for stock in the offering reside. However, no such person will be issued subscription rights in the offering or be permitted to purchase stock if such person resides in a foreign country or in a state of the United States with respect to which we have determined not to register the sale of the stock because any of the following apply: (a) a small number of persons otherwise eligible to subscribe for Greenville Federal Financial Corporation stock reside in such state; (b) the issuance of subscription rights or the offer or sale of stock to such persons would require Greenville Federal Financial Corporation, under the securities laws of such state, to register as a broker, dealer, salesman or agent or to register or otherwise qualify its securities for sale in such state; or (c) such registration or qualification would be impracticable for reasons of cost or otherwise.

Marketing arrangements

Greenville Federal Financial Corporation and the Association have retained Keefe, Bruyette & Woods, Inc., to consult with and to advise the Association, and to assist Greenville Federal Financial Corporation, on a best efforts basis, in the distribution of the shares of common stock in the Subscription Offering and direct community offering. The services that Keefe, Bruyette & Woods, Inc., will provide include, but are not limited to:

101


	•		training the employees of the Association who will perform certain ministerial functions in the Subscription Offering and direct community offering regarding the mechanics and regulatory requirements of the stock offering process;


	•		managing the stock information centers by assisting interested stock subscribers and by keeping records of all stock orders;

	•		preparing marketing materials; and


	•		assisting in the solicitation of proxies from the Association’s members for use at the special meeting.

For its services, Keefe, Bruyette & Woods, Inc., will receive a management fee of $25,000 and a success fee of 1.35% of the aggregate purchase price of the shares of Greenville Federal Financial Corporation common stock sold in the Subscription Offering and direct community offering. The success fee paid to Keefe, Bruyette & Woods, Inc., will be reduced by the amount of the management fee. In the event that selected dealers are used to assist in the sale of shares of Greenville Federal Financial Corporation common stock in the direct community offering, Keefe, Bruyette & Woods, Inc., will be paid a fee of up to 5.5% of the total purchase price of the shares sold by such dealers, from which Keefe, Bruyette & Woods, Inc., will pay the dealers. The Association has agreed to indemnify Keefe, Bruyette & Woods, Inc., against certain claims or liabilities, including certain liabilities under the Securities Act of 1933, as amended, and will contribute to payments Keefe, Bruyette & Woods, Inc., may be required to make in connection with any such claims or liabilities. In addition, Keefe, Bruyette & Woods, Inc., will be reimbursed for the fees of its legal counsel in an amount not to exceed $35,000 and other reasonable out-of-pocket expenses, which are expected to be $10,000.

Sales of shares of Greenville Federal Financial Corporation common stock will be made by registered representatives affiliated with Keefe, Bruyette & Woods, Inc., or by the broker-dealers managed by Keefe, Bruyette & Woods, Inc. A stock information center will be established at the main office of the Association in Greenville, Ohio. Greenville Federal Financial Corporation will rely on Rule 3a4-1 of the Securities Exchange Act of 1934 and sales of Greenville Federal Financial Corporation common stock will be conducted within the requirements of this rule, so as to permit officers, directors and employees to participate in the sale of Greenville Federal Financial Corporation common stock in those states where the law permits. No officer, director or employee of Greenville Federal Financial Corporation or the Association will be compensated directly or indirectly by the payment of commissions or other remuneration in connection with his or her participation in the sale of common stock.

102

Procedure for purchasing shares in the Subscription Offering

To ensure that each purchaser receives a prospectus at least 48 hours before the Subscription Expiration Date (unless extended) in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, no prospectus will be mailed any later than five days prior to such date or hand delivered any later than two days prior to such date. Execution of the order form will confirm receipt or delivery in accordance with Rule 15c2-8. Order forms will only be distributed with a prospectus.

To purchase shares in the Subscription Offering, an executed order form with the required payment for each share subscribed for, or with appropriate authorization for withdrawal from a deposit account at the Association, must be received by the Association by noon, Eastern ___ Time, on the Subscription Expiration Date, unless extended. In addition, Greenville Federal Financial Corporation and the Association will require a prospective purchaser to execute a certification in the form required by applicable Office of Thrift Supervision regulations in connection with any sale of common stock. Order forms that are not received by this time or are executed defectively or are received without full payment or appropriate withdrawal instructions are not required to be accepted. In addition, the Association will not accept orders submitted on photocopied or facsimiled order forms nor order forms unaccompanied by an executed certification form. The Association has the right to waive or permit the correction of incomplete or improperly executed forms, but does not represent that it will do so. Once received, an executed order form may not be modified, amended or rescinded without the consent of the Association, unless the reorganization has not been completed within 45 days after the end of the Subscription Offering, or this period has been extended.

In order to ensure that Eligible Account Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Other Members are properly identified as to their stock purchase priority, depositors as of the close of business on the Eligibility Record Date (March 31, 2004) or the Supplemental Eligibility Record Date (___, 2005) and depositors and certain borrowers as of the close of business on the voting record date (___, 2005) must list all accounts with the Association on the stock order form giving all names in each account and the account numbers.

Payment for subscriptions may be made:

	•		by check or money order payable to Greenville Federal Financial Corporation;


	•		by authorization of withdrawal from deposit accounts maintained with the Association (including a certificate of deposit); or



	•		in cash, if delivered in person at any full-service banking office of the Association, although we request that you exchange cash for a check with any of the Association’s tellers.

No wire transfers or third-party checks will be accepted. Funds received prior to the completion of the offering will be held in an account at the Association or, at our discretion, at another financial institution. Interest will be paid on payments made by cash, check or money order at our then-current savings account yield from the date payment is received until completion of the offering. If payment is made by authorization of withdrawal from deposit accounts, the funds

103

authorized to be withdrawn from a deposit account will continue to accrue interest at the contractual rate, but may not be used by the subscriber until all of Greenville Federal Financial Corporation common stock has been sold or the plan of reorganization is terminated, whichever is earlier.

If a subscriber authorizes the Association to withdraw the amount of the purchase price from his deposit account, the Association will do so as of the effective date of the reorganization. The Association will waive any applicable penalties for early withdrawal from certificate accounts.

In the event of an unfilled amount of any subscription order, the Association will make an appropriate refund or cancel an appropriate portion of the related withdrawal authorization, after completion of the offering. If for any reason the offering is not consummated, purchasers will have refunded to them all payments made, with interest, and all withdrawal authorizations will be canceled in the case of subscription payments authorized from accounts at the Association.

If any tax-qualified employee plans or non-tax-qualified employee plans subscribe for shares during the Subscription Offering, these plans will not be required to pay for the shares subscribed for at the time they subscribe, but rather, may pay for shares of common stock subscribed for at the purchase price upon completion of the Subscription Offering and direct community offering, if all shares are sold, or upon completion of the public offering if shares remain to be sold in such offering. In the event that, after the completion of the Subscription Offering, the amount of shares to be issued is increased above the maximum of the estimated valuation range included in this prospectus, the tax-qualified and non-tax-qualified employee plans will be entitled to increase their subscriptions by a percentage equal to the percentage increase in the amount of shares to be issued above the maximum of the estimated valuation range, provided that such subscription will continue to be subject to applicable purchase limits and stock allocation procedures.

Owners of self-directed individual retirement accounts (“IRAs”) and Coverdell education savings accounts (“Coverdell Accounts”) may use the assets of their IRAs and Coverdell Accounts to purchase shares of Greenville Federal Financial Corporation common stock in the Subscription Offering and direct community offering. ERISA provisions and IRS regulations require that officers, directors and 10% stockholders who use self-directed IRA funds or Coverdell Accounts to purchase shares of common stock in the offerings make such purchases for the exclusive benefit of the IRAs or Coverdell Accounts. Persons with IRAs or Coverdell Accounts at Greenville Federal must have their accounts transferred to a self-directed IRA or a Coverdell Account with an unaffiliated trustee in order to purchase common stock in the offering. The transfer of funds to a new trustee takes time, so please contact the Stock Information Center or your broker to make arrangements as soon as possible.

The records of the Association will be deemed to control with respect to all matters related to the existence of subscription rights and a person’s right to purchase shares of common stock in the Subscription Offering.

Restrictions on transfer of subscription rights and shares

Pursuant to the rules and regulations of the Office of Thrift Supervision, no person with subscription rights may transfer or enter into any agreement or understanding to transfer the legal or beneficial ownership of the subscription rights issued under the plan of reorganization or the shares of common stock to be issued upon their exercise. Such rights may be exercised only by the person to whom they are granted and only for such person’s account. Each person exercising such

104

subscription rights will be required to certify that the person is purchasing shares solely for the person’s own account and that such person has no agreement or understanding regarding the sale or transfer of such shares. Federal regulations also prohibit any person from offering or making an announcement of an offer or intent to make an offer to purchase such subscription rights or shares of common stock prior to the completion of the reorganization.

The Association will refer to the Office of Thrift Supervision any situations that it believes may involve a transfer of subscription rights and will not honor orders believed by it to involve the transfer of such rights.

Delivery of certificates

Greenville Federal Financial Corporation’s transfer agent will mail certificates representing common stock issued in the offering to the persons entitled to them at the addresses of such persons appearing on the stock order forms as soon as practicable following completion of the reorganization. Any certificates returned as undeliverable will be held by Greenville Federal Financial Corporation until claimed by persons legally entitled to them or will be otherwise disposed of in accordance with applicable law. Until certificates for common stock are available and delivered to subscribers, the subscribers may not be able to sell the common stock for which they have subscribed, even though trading of the common stock may have commenced.

Required approvals

Various approvals of the Office of Thrift Supervision are required in order to consummate the reorganization. The Office of Thrift Supervision has approved the plan of reorganization, subject to approval by the Association’s members and other standard conditions. Greenville Federal Financial Corporation’s holding company application has also been approved.

Greenville Federal Financial Corporation is required to make certain filings with state securities regulatory authorities in connection with the issuance of Greenville Federal Financial Corporation common stock in the offering.

Restrictions on purchase or transfer of shares after the reorganization

All shares of common stock purchased in connection with the reorganization by a director or an executive officer of Greenville Federal Financial Corporation and the Association will be subject to a restriction that the shares not be sold for a period of one year following the reorganization except in the event of the death of the director or officer or pursuant to a merger or similar transaction approved by the Office of Thrift Supervision. Each certificate for restricted shares will bear a legend giving notice of this restriction on transfer, and instructions will be issued to the effect that any transfer within such time period of any certificate or record ownership of the shares other than as provided above is a violation of the restriction. Any shares of common stock issued at a later date within this one-year period as a stock dividend, stock split or otherwise with respect to the restricted stock will be subject to the same restrictions.

Directors, executive officers and their associates may purchase common stock of Greenville Federal Financial Corporation during the three-year period following completion of the reorganization only through a broker or dealer registered with the Securities and Exchange Commission, except with the prior written approval of the Office of Thrift Supervision. This

105

restriction does not apply, however, to negotiated transactions involving more than 1% of Greenville Federal Financial Corporation’s outstanding common stock or to certain purchases of stock pursuant to an employee stock benefit plan.

Pursuant to Office of Thrift Supervision regulations, Greenville Federal Financial Corporation may not, for a period of one year following completion of this offering, repurchase shares of the common stock except on a pro rata basis, pursuant to an offer approved by the Office of Thrift Supervision and made to all stockholders, or through open market purchases of up to five percent of the outstanding stock where extraordinary circumstances exist.

Proposed purchases by management

The following table sets forth the number of shares of Greenville Federal Financial Corporation, the aggregate purchase price, and the percent of the shares that would be sold at the midpoint of the estimated valuation range, our directors and senior executive officers anticipate purchasing in the offering, assuming sufficient shares are available to satisfy their subscriptions. The amounts include shares that may be purchased through individual retirement accounts and by associates.


	Number		Aggregate		Percent
Name	of shares		purchase price		at midpoint
David Feltman		13,000	$	130,000		1.07	%

David M. Kepler		20,000		200,000		1.65

George S. Luce, Jr.		20,000		200,000		1.65

Richard J. O’Brien		5,000		50,000		.41

Eunice F. Steinbrecher		15,000		150,000		1.23

James W. Ward		20,000		200,000		1.65

David R. Wolverton		20,000		200,000		1.65

Susan J. Allread		2,500		25,000		0.21


All directors and senior executive officers as a group (8 persons)		115,500	$	1,155,000		9.51	%

RESTRICTIONS ON ACQUISITION OF GREENVILLE FEDERAL FINANCIAL CORPORATION AND THE ASSOCIATION

The principal federal regulatory restrictions that affect the ability of any person, firm or entity to acquire Greenville Federal Financial Corporation, the Association or their respective capital stock are described below. Also discussed are certain provisions in Greenville Federal Financial Corporation’s charter and bylaws that may be deemed to affect the ability of a person, firm or entity to acquire Greenville Federal Financial Corporation.

106

Federal law

The Change in Bank Control Act provides that no person, acting directly or indirectly or through or in concert with one or more other persons, may acquire control of a savings institution unless the Office of Thrift Supervision has been given 60 days prior written notice. The Home Owners’ Loan Act provides that no company may acquire “control” of a savings institution without the prior approval of the Office of Thrift Supervision. Any company that acquires such control becomes a savings and loan holding company subject to registration, examination and regulation by the Office of Thrift Supervision. Pursuant to federal regulations, control of a savings institution is conclusively deemed to have been acquired by, among other things, the acquisition of more than 25% of any class of voting stock of the institution or the ability to control the election of a majority of the directors of an institution. Moreover, control is presumed to have been acquired, subject to rebuttal, upon the acquisition of more than 10% of any class of voting stock, or of more than 25% of any class of stock of a savings institution, where certain enumerated “control factors” are also present in the acquisition. The Office of Thrift Supervision may prohibit an acquisition of control if:

	•		it would result in a monopoly or substantially lessen competition;

	•		the financial condition of the acquiring person might jeopardize the financial stability of the institution; or

	•		the competence, experience or integrity of the acquiring person indicates that it would not be in the interest of the depositors or of the public to permit the acquisition of control by such person.

These restrictions do not apply to the acquisition of a savings institution’s capital stock by one or more tax-qualified employee stock benefit plans, provided that the plans do not have beneficial ownership of more than 25% of any class of equity security of the savings institution.

For a period of three years following completion of the reorganization, Office of Thrift Supervision regulations generally prohibit any person from acquiring or making an offer to acquire beneficial ownership of more than 10% of the stock of Greenville Federal Financial Corporation or the Association without Office of Thrift Supervision approval.

Charter and Bylaws of Greenville Federal Financial Corporation

The following discussion is a summary of certain provisions of the charter and bylaws of Greenville Federal Financial Corporation that relate to corporate governance. The description is necessarily general and qualified by reference to the charter and bylaws.

Classified board of directors. Certain provisions of Greenville Federal Financial Corporation’s charter and bylaws will impede changes in majority control of the board of directors. Greenville Federal Financial Corporation’s charter provides that the board of directors will be divided into three classes, with directors in each class elected for three-year staggered terms, except for the initial directors. It will therefore take two annual elections to replace a majority of Greenville Federal Financial Corporation’s board.

107

Authorized but unissued shares of capital stock. Following the stock offering, Greenville Federal Financial Corporation will have authorized but unissued shares of preferred stock and common stock. Although these shares could be used by the board of directors of Greenville Federal Financial Corporation to make it more difficult or to discourage an attempt to obtain control of Greenville Federal Financial Corporation through a merger, tender offer, proxy contest or otherwise, it is unlikely that we would use or need to use shares for these purposes because Greenville Federal MHC owns a majority of the common stock of Greenville Federal Financial Corporation.

How shares are voted. Greenville Federal Financial Corporation’s charter provides that there will not be cumulative voting by stockholders for the election of Greenville Federal Financial Corporation’s directors. No cumulative voting rights means that Greenville Federal MHC, as the holder of a majority of the shares eligible to be voted at a meeting of stockholders, may elect all directors of Greenville Federal Financial Corporation to be elected at that meeting. This could prevent minority stockholder representation on Greenville Federal Financial Corporation’s board of directors.

Restrictions on acquisitions of shares. The Association’s charter provides that for a period of five years from the closing of the stock issuance, no person other than Greenville Federal Financial Corporation and Greenville Federal MHC may offer directly or indirectly to acquire or acquire the beneficial ownership of more than 10% of any class of equity security of Greenville Federal Financial Corporation. This provision does not apply to any tax-qualified employee benefit plan of the Association or Greenville Federal Financial Corporation or to an underwriter or member of an underwriting or selling group involving the public sale or resale of securities of Greenville Federal Financial Corporation or any of its subsidiaries so long as after the sale or resale, no underwriter or member of the selling group is a beneficial owner of more than 10% of any class of equity securities of Greenville Federal Financial Corporation. In addition, during this five-year period, all shares owned over the 10% limit may not be voted in any matter submitted to stockholders for a vote. The inclusion of this provision in the Association’s charter is deemed to restrict the acquisition and voting of shares of Greenville Federal Financial Corporation.

Procedures for stockholder nominations. Greenville Federal Financial Corporation’s bylaws provide that any stockholder wanting to make a nomination for the election of directors or a proposal for new business at a meeting of stockholders must send written notice to the Secretary of Greenville Federal Financial Corporation at least five days before the date of the annual meeting. The bylaws further provide that if a stockholder wanting to make a nomination or a proposal for new business does not follow the prescribed procedures, the proposal will not be considered until an adjourned, special, or annual meeting of the stockholders taking place 30 days or more thereafter. Management believes that it is in the best interests of Greenville Federal Financial Corporation and its stockholders to provide enough time for management to disclose to stockholders information about a dissident slate of nominations for directors. This advance notice requirement may also give management time to solicit its own proxies in an attempt to defeat any dissident slate of nominations if management thinks it is in the best interest of stockholders generally. Similarly, adequate advance notice of stockholder proposals will give management time to study such proposals and to determine whether to recommend to the stockholders that such proposals be adopted.

108

Benefit plans

In addition to the provisions of Greenville Federal Financial Corporation’s charter and bylaws described above, benefit plans of Greenville Federal Financial Corporation and Greenville Federal intended to be adopted after completion of this offering contain provisions which also may discourage hostile takeover attempts that the board of directors of the Association might conclude are not in the best interests of Greenville Federal MHC, Greenville Federal Financial Corporation and the Association or of Greenville Federal Financial Corporation’s stockholders. For a description of the benefit plans and the provisions of these plans relating to changes in control of Greenville Federal Financial Corporation or the Association, see “MANAGEMENT — Benefits.”

DESCRIPTION OF CAPITAL STOCK OF GREENVILLE FEDERAL FINANCIAL CORPORATION

General

Greenville Federal Financial Corporation is authorized to issue 8,000,000 shares of common stock having a par value of $.01 per share and 1,000,000 shares of preferred stock having a par value of $0.01 per share. Greenville Federal Financial Corporation currently expects to issue up to a maximum of 1,397,250 shares of common stock, or 1,606,837 shares in the event that the maximum of the estimated offering range is increased by 15%, and no shares of preferred stock in the reorganization. Each share of Greenville Federal Financial Corporation’s common stock will have the same relative rights as, and will be identical in all respects with, each other share of common stock. Upon payment of the purchase price for the common stock in accordance with the plan of reorganization, all of the stock will be duly authorized, fully paid and nonassessable. Presented below is a description of all aspects of Greenville Federal Financial Corporation’s capital stock which are deemed material to an investment decision with respect to the reorganization.

The common stock of Greenville Federal Financial Corporation will represent nonwithdrawable capital, will not be an account of an insurable type, and will not be insured by the FDIC.

Common stock

Distributions. Greenville Federal Financial Corporation can pay dividends if, as and when declared by its board of directors, subject to compliance with limitations which are imposed by law. The holders of common stock of Greenville Federal Financial Corporation will be entitled to receive and share equally in these dividends as they may be declared by the board of directors of Greenville Federal Financial Corporation out of funds legally available for such purpose. If Greenville Federal Financial Corporation issues preferred stock, the holders of such preferred stock may have a priority over the holders of the common stock with respect to dividends. See “Our Plans Regarding Dividends.”

Voting rights. Upon the effective date of the reorganization, the holders of common stock of Greenville Federal Financial Corporation will possess exclusive voting rights in Greenville Federal Financial Corporation. Each holder of common stock will be entitled to one vote per share and will not have any right to cumulate votes in the election of directors. Directors will be elected, therefore, by a plurality of the shares actually voting on the matter. Under certain circumstances,

109

shares in excess of 10% of the issued and outstanding shares of common stock may be considered “excess shares” and, accordingly, not be entitled to vote. See “Restrictions on Acquisition of Greenville Federal Financial Corporation and the Association.” If Greenville Federal Financial Corporation issues preferred stock, holders of the preferred stock may also possess voting rights.

Liquidation. In the event of any liquidation, dissolution or winding up of the Association, Greenville Federal Financial Corporation, as holder of the Association’s capital stock, would be entitled to receive, after payment or provision for payment of all debts and liabilities of the Association, including all deposit accounts and accrued interest thereon and the liquidation account established as part of this offering, all assets of Greenville Federal available for distribution. In the event of liquidation, dissolution or winding up of Greenville Federal Financial Corporation, the holders of its common stock would be entitled to receive, after payment or provision for payment of all its debts and liabilities, all of the assets of Greenville Federal Financial Corporation available for distribution. If preferred stock is issued, the holders thereof may have a priority over the holders of the common stock in the event of liquidation or dissolution.

Rights to buy additional shares. Holders of the common stock of Greenville Federal Financial Corporation will not be entitled to preemptive rights with respect to any shares that may be issued. Preemptive rights are the priority right to buy additional shares if Greenville Federal Financial Corporation issues more shares in the future. Therefore, if additional shares are issued by Greenville Federal Financial Corporation without the opportunity for existing stockholders to purchase more shares, a stockholder’s ownership interest in Greenville Federal Financial Corporation may be subject to dilution. The common stock is not subject to redemption.

Preferred stock

None of the shares of Greenville Federal Financial Corporation’s authorized preferred stock will be issued in the reorganization. This stock may be issued with preferences and designations as the board of directors may from time to time determine. The board of directors can, without stockholder approval, issue preferred stock with voting, dividend, liquidation and reorganization rights that could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control. Greenville Federal Financial Corporation has no present plans to issue preferred stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent for Greenville Federal Financial Corporation common stock is Illinois Stock Transfer Company, 209 West Jackson Boulevard, Suite 903, Chicago, Illinois 60606.

EXPERTS

The Association’s financial statements as of June 30, 2005 and 2004, and for each of the two years in the period ended June 30, 2005, included in this prospectus have been audited by Grant Thornton LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein and in the registration statement, and are included in reliance upon the report of this firm given upon the authority as experts in accounting and auditing.

110

Keller & Company has consented to the publication in this prospectus of the summary of its report to Greenville Federal setting forth its opinion as to the estimated pro forma market value of the common stock upon reorganization and its letter with respect to subscription rights.

LEGAL AND TAX OPINIONS

The legality of the common stock and the federal and Ohio income tax consequences of the reorganization have been passed upon for the Association and Greenville Federal Financial Corporation by their legal counsel, Vorys, Sater, Seymour and Pease LLP, 52 E. Gay Street, Columbus, Ohio 45215. Certain legal matters will be passed upon for Keefe, Bruyette & Woods, Inc., by Squire, Sanders & Dempsey L.L.P.

ADDITIONAL INFORMATION

Greenville Federal Financial Corporation has filed with the Securities and Exchange Commission (the “SEC”) a registration statement under the Securities Act of 1933 with respect to the common stock offered by this prospectus. As permitted by the rules and regulations of the SEC, this prospectus does not contain all the information set forth in the registration statement. This information, including the appraisal report which is an exhibit to the registration statement, can be examined without charge at the public reference facilities of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of this material can be obtained from the SEC at prescribed rates. In addition, the SEC maintains a web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including Greenville Federal Financial Corporation. The statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are, of necessity, brief descriptions thereof and are not necessarily complete; each statement is qualified by reference to the contract or document. Greenville Federal also maintains a website (http://www.greenvillefederal.com) which contains various information about Greenville Federal.

The Association has filed a Mutual Holding Company Application on Form MHC-1 and a Holding Company Application on Form H-(e)1 with the Office of Thrift Supervision with respect to the reorganization. This prospectus omits certain information contained in those applications. The applications may be examined at the principal office of the Office of Thrift Supervision, 1700 G Street, N.W., Washington, D.C. 20552, and at the Northeast Regional Office of the Office of Thrift Supervision located at Harborside Financial Center Plaza Five, Suite 1600, Jersey City, New Jersey 07311.

In connection with the reorganization, Greenville Federal Financial Corporation will register its common stock with the SEC under Section 12 of the Securities Exchange Act of 1934, and, upon such registration, Greenville Federal Financial Corporation and the holders of its stock will become subject to the proxy solicitation rules, reporting requirements and restrictions on stock purchases and sales by directors, officers and greater than 10% stockholders, the annual and periodic reporting and certain other requirements of the Securities Exchange Act of 1934. Under the plan of reorganization, Greenville Federal Financial Corporation has undertaken that it will not terminate this registration for a period of at least three years following the reorganization.

111

A copy of the plan of reorganization, the charter and bylaws of Greenville Federal Financial Corporation and the Association are available without charge from the Association. Requests for such information should be directed to: Stockholder Relations, Greenville Federal, 690 Wagner Avenue, Greenville, Ohio 45331.

You should rely only on the information contained in this document or the information to which we have referred you. We have not authorized anyone to provide you with information that is different. This document does not constitute an offer to sell, or the solicitation of an offer to buy, any of the securities offered by this document to any person in any jurisdiction in which such offer or solicitation would be unlawful. The affairs of Greenville Federal Savings and Loan Association, Greenville Federal Financial Corporation or Greenville Federal MHC may change after the date of this prospectus. Delivery of this document and the sales of shares made under this document does not mean otherwise.

112

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Greenville Federal Savings and Loan Association

We have audited the accompanying consolidated statements of financial condition of Greenville Federal Savings and Loan Association as of June 30, 2005 and 2004, and the related consolidated statements of operations, comprehensive income, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Association’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Association is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control over financial reporting. Accordingly, we express no such opinion. 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Greenville Federal Savings and Loan Association as of June 30, 2005 and 2004, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Cincinnati, Ohio
August 18, 2005

F-2

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

June 30, 2005 and 2004
(In thousands)


	2005			2004
ASSETS

Cash and due from banks	$	2,119		$	1,826
Interest-bearing deposits in other financial institutions		1,597			6,076

Cash and cash equivalents		3,716			7,902

Certificates of deposit in other financial institutions		—			297
Investment securities designated as available for sale — at market		15,717			15,404
Investment securities designated as held to maturity — at amortized cost, approximate market value of $17,852 and $18,763 at June 30, 2005 and 2004, respectively		18,050			18,999
Mortgage-backed securities designated as held to maturity — at amortized cost, approximate market value of $1,755 and $2,622 at June 30, 2005 and 2004, respectively		1,737			2,591
Loans receivable — net		78,189			72,597
Office premises and equipment — at depreciated cost		2,133			2,276
Real estate acquired through foreclosure		81			66
Stock in Federal Home Loan Bank — at cost		1,769			1,693
Cash surrender value of life insurance		3,571			3,435
Accrued interest receivable on loans		418			417
Accrued interest receivable on mortgage-backed securities		8			13
Accrued interest receivable on investment securities and other		146			146
Prepaid expenses and other assets		513			408
Prepaid federal income taxes		—			78


Total assets	$	126,048		$	126,322


LIABILITIES AND RETAINED EARNINGS

Deposits	$	78,898		$	83,957
Advances from the Federal Home Loan Bank		32,243			27,347
Advances by borrowers for taxes and insurance		333			317
Accrued interest payable		205			161
Other liabilities		589			667
Accrued federal income taxes		23			—
Deferred federal income taxes		98			200

Total liabilities		112,389			112,649

Commitments and contingencies		—			—

Retained earnings — restricted		13,866			13,795
Accumulated comprehensive loss — unrealized losses on securities designated as available for sale, net of related tax benefits		(207	)		(122	)

Total retained earnings		13,659			13,673


Total liabilities and retained earnings	$	126,048		$	126,322

The accompanying notes are an integral part of these statements.

F-3

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended June 30, 2005 and 2004
(In thousands)


	2005			2004
Interest income
Loans	$	4,977		$	4,718
Mortgage-backed securities		87			96
Investment securities		1,055			1,146
Interest-bearing deposits and other		126			170

Total interest income		6,245			6,130

Interest expense
Deposits		1,572			1,856
Borrowings		1,405			1,495

Total interest expense		2,977			3,351


Net interest income		3,268			2,779

Provision for losses on loans		216			29


Net interest income after provision for losses on loans		3,052			2,750

Other income (loss)
Customer service charges		492			475
Gain on sale of loans		—			41
Gain on sale of real estate acquired through foreclosure		24			8
Gain on redemption of investment security		329			—
Loss on sale of investment securities designated as available for sale		—			(60	)
Other operating		247			195

Total other income		1,092			659

General, administrative and other expense
Employee compensation and benefits		2,181			2,014
Multi-employer pension plan termination fee		312			—
Occupancy and equipment		466			509
Franchise taxes		184			181
Data processing		395			349
Advertising		89			110
Charitable contributions		63			7
Other operating		415			433

Total general, administrative and other expense		4,105			3,603


Earnings (loss) before income tax credits		39			(194	)

Federal income tax credits
Current		28			(24	)
Deferred		(60	)		(89	)

Total federal income tax credits		(32	)		(113	)


NET EARNINGS (LOSS)	$	71		$	(81	)

The accompanying notes are an integral part of these statements.

F-4

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended June 30, 2005 and 2004
(In thousands)


	2005			2004
Cash flows from operating activities:
Net earnings (loss) for the year	$	71		$	(81	)
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Accretion and amortization of premiums and discounts on investment and mortgage-backed securities — net		—			1
Amortization of deferred loan origination fees		(81	)		(102	)
Depreciation and amortization		208			269
Amortization and impairment of mortgage servicing rights		9			85
Provision for losses on loans		216			29
Loss on sale of investment securities		—			60
Origination of loans for sale in the secondary market		—			(216	)
Proceeds from sale of loans		—			1,543
Gain on sale of loans		—			(41	)
Gain on sale of real estate acquired through foreclosure		(24	)		(8	)
Gain on redemption of investment security		(329	)		—
Federal Home Loan Bank stock dividends		(76	)		(66	)
Increase in cash surrender value of life insurance		(136	)		(139	)
Increase (decrease) in cash due to changes in:
Accrued interest receivable on loans		(1	)		19
Accrued interest receivable on mortgage-backed securities		5			8
Accrued interest receivable on investment securities and other		—			(14	)
Prepaid expenses and other assets		(120	)		(64	)
Accrued interest payable		44			(64	)
Other liabilities		(101	)		(441	)
Federal income taxes
Current		101			(24	)
Deferred		(60	)		(89	)

Net cash provided by (used in) operating activities		(274	)		646

Cash flows provided by (used in) investing activities:
Purchases of investment securities designated as available for sale		(440	)		(436	)
Purchases of investment securities designated as held to maturity		(2,050	)		(20,000	)
Proceeds from sale of investment securities designated as available for sale		—			5,000
Proceeds from redemption of investment securities		344			—
Proceeds from maturity of investment securities designated as held to maturity		3,000			28,945
Purchases of mortgage-backed securities designated as held to maturity		—			(1,000	)
Proceeds from repayment of mortgage-backed securities		853			1,560
Loan principal repayments		19,430			27,233
Loan disbursements		(25,202	)		(34,550	)
Purchase of office premises and equipment		(65	)		(314	)
Proceeds from sale of real estate acquired through foreclosure		68			105
Purchase of bank-owned life insurance		—			(1,640	)
Decrease in certificates of deposit in other financial institutions		297			—

Net cash provided by (used in) investing activities		(3,765	)		4,903


Net cash provided by (used in) operating and investing activities (subtotal carried forward)		(4,039	)		5,549

F-7

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

For the years ended June 30, 2005 and 2004
(In thousands)


	2005			2004
Net cash provided by (used in) operating and investing activities (subtotal brought forward)	$	(4,039	)	$	5,549

Cash flows provided by (used in) financing activities:
Net decrease in deposit accounts		(5,059	)		(5,913	)
Proceeds from Federal Home Loan Bank advances		9,000			3,000
Repayment of Federal Home Loan Bank advances		(4,104	)		(7,343	)
Advances by borrowers for taxes and insurance		16			216

Net cash used in financing activities		(147	)		(10,040	)


Net decrease in cash and cash equivalents		(4,186	)		(4,491	)

Cash and cash equivalents at beginning of year		7,902			12,393


Cash and cash equivalents at end of year	$	3,716		$	7,902


Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits and borrowings	$	2,933		$	3,415


Federal income taxes	$	—		$	—


Supplemental disclosure of noncash investing activities:
Transfers from loans to real estate acquired through foreclosure	$	391		$	126


Loans originated upon sale of real estate acquired through foreclosure	$	355		$	—


Unrealized losses on securities designated as available for sale, net of related tax benefits	$	(85	)	$	(162	)


Recognition of mortgage servicing rights in accordance with SFAS No. 140	$	—		$	12

The accompanying notes are an integral part of these statements.

F-8

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES

Greenville Federal Savings and Loan Association (the “Association”) is a federally-chartered mutual financial institution located in Greenville, Ohio. The Association conducts a general banking business in west-central 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 Association’s profitability is significantly dependent on net interest income, which is the difference between interest income generated from interest-earning assets (i.e. loans and investments) and 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 Association 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 accounting principles generally accepted in the United States of America (“U.S. GAAP”) and general accounting practices within the financial services industry. In preparing financial statements in accordance with U.S. 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 financial statements and revenues and expenses during the reporting period. Actual results could differ from such estimates.

The following is a summary of the Association’s significant accounting policies which have been consistently applied in the preparation of the accompanying financial statements.

1. Principles of Consolidation

The consolidated financial statements include the accounts of the Association and its wholly-owned subsidiary, Greenville Financial Service Corporation (“Greenville Financial”). Greenville Financial was incorporated for the primary purpose of holding shares in the Association’s data processing service provider, Intrieve, Inc. The principal assets of Greenville Financial at June 30, 2004, were an investment in common stock of Intrieve, Inc. and an intercompany cash balance, which totaled less than $30,000; Greenville Financial had no liabilities and insignificant historic results of operations. In April 2005, Intrieve, Inc. was acquired by John H. Harland Company. As a result, Greenville Financial received cash consideration of approximately $344,000 for its shares of Intreve, Inc., resulting in a pretax gain of $329,000.

2. Investment and Mortgage-Backed Securities

The Association 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 amortized cost only if the Association has the positive intent and ability to hold these securities to maturity. Securities designated as available for sale are carried at fair value with resulting unrealized gains or losses recorded to retained earnings.

F-9

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

2. Investment and Mortgage-Backed Securities (continued)

Realized gains and losses on sales of securities are recognized using the specific identification method.

3. Loans Receivable

Loans held in the portfolio are stated at the principal balance outstanding, adjusted for deferred loan origination fees and costs and the allowance for loan losses. Interest is accrued as earned unless the collectibility of the loan is in doubt. 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.

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. The Association had no loans held for sale at June 30, 2005 and 2004.

The Association accounts for mortgage servicing rights pursuant to the provisions of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” which requires that the Association 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 must allocate some of the cost of the loans to mortgage servicing rights.

SFAS No. 140 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 Association, calculated in accordance with the provisions of SFAS No. 140, 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.

F-10

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

3. Loans Receivable (continued)

A summary of the Association’s mortgage servicing rights for the fiscal years ended June 30, 2005 and 2004 is as follows:


	2005			2004
	(In thousands)
Balance at beginning of year	$	239		$	312

Recognition of mortgage servicing rights on sale of loans		—			12

Amortization of mortgage servicing rights		(31	)		(85	)


Balance at end of year	$	208		$	239


Valuation allowance for impairment at beginning of year	$	(24	)	$	(53	)

Valuation allowance recovered		21			29


Valuation allowance for impairment at end of year	$	(3	)	$	(24	)


Net carrying value of mortgage servicing rights at end of year	$	205		$	215

At June 30, 2005 and 2004, the fair value of the Association’s mortgage servicing rights approximated the net carry values at the respective dates set forth above. Mortgage servicing rights are included within prepaid expenses and other assets on the consolidated statements of financial condition.

4. Loan Origination Fees and Costs

The Association accounts for loan origination fees and costs in accordance with 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, all loan origination fees received, net of certain direct origination costs, are deferred on a loan-by-loan basis 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 are deferred and amortized over the life of the related loan using the interest method.

F-11

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

5. Allowance for Loan Losses

It is the Association’s policy to provide valuation allowances for estimated losses on loans based upon past loss experience, trends in the level of delinquent and specific problem loans, 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 the primary market area. When the collection of a loan becomes doubtful, or otherwise troubled, the Association records a loan loss provision equal to the difference between the fair value of the property securing the loan and the loan’s carrying value. Major loans 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 Association accounts for impaired loans in accordance with SFAS No. 114, “Accounting by Creditors for Impairment of a Loan,” which 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 Association 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 Association’s investment in multi-family, nonresidential and commercial loans, and its evaluation of impairment thereof, such loans are collateral dependent and as a result are carried, as a practical expedient, at the lower of cost or fair value.

It is the Association’s policy to charge off, or provide a specific allowance on, unsecured credits that are more than 120 days delinquent. Similarly, 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. The Association had no loans that would be defined as impaired at June 30, 2005 or 2004.

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 method over the useful lives of the assets, estimated to be forty years for buildings and improvements, three to ten years for furniture and equipment, and five years for automobiles. An accelerated method is used for tax reporting purposes.

F-12

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE A — SUMMARY OF 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 Association accounts for federal income taxes pursuant to SFAS No. 109, “Accounting for Income Taxes.” Pursuant to the provisions of 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 financial statements that will result in 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.

The Association’s principal temporary differences between pretax financial income and taxable income result primarily from the different methods of accounting for Federal Home Loan Bank stock dividends, deferred loan origination fees and costs, mortgage servicing rights and the allowance for loan losses. A temporary difference is also recognized for depreciation expense computed using accelerated methods for federal income tax purposes.

9. Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks and interest-bearing deposits in other financial institutions (including the Federal Home Loan Bank and the Federal Reserve Bank) with original terms to maturity of less than ninety days.

10. Fair Value of Financial Instruments

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

F-13

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

10. Fair Value of Financial Instruments (continued)

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 Association in estimating its fair value disclosures for financial instruments at June 30, 2005 and 2004:

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.

Certificates of deposit: The carrying amounts presented in the consolidated statements of financial condition for certificates of deposit are deemed to approximate fair value.

Investment 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, nonresidential real estate, commercial and consumer loans. 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.

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 checking and NOW accounts, savings accounts, and money market deposits is deemed to approximate the amount payable on demand at June 30, 2005 and 2004. 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.

Federal Home Loan Bank advances: The fair value of Federal Home Loan Bank advances has been estimated using discounted cash flow analysis, based on the interest rates currently offered for advances of similar remaining maturities.

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. At June 30, 2005 and 2004, the fair value of loan commitments was not material.

F-14

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

10. Fair Value of Financial Instruments (continued)

Based on the foregoing methods and assumptions, the carrying value and fair value of the Association’s financial instruments are as follows at June 30:


	2005				2004
	Carrying		Fair		Carrying		Fair
	value		value		value		value
	(In thousands)
Financial assets
Cash and cash equivalents	$	3,716	$	3,716	$	7,902	$	7,902
Certificates of deposit		—		—		297		297
Investment securities available for sale		15,717		15,717		15,404		15,404
Investment securities held to maturity		18,050		17,852		18,999		18,763
Mortgage-backed securities		1,737		1,755		2,591		2,622
Loans receivable		78,189		80,666		72,597		75,589
Federal Home Loan Bank stock		1,769		1,769		1,693		1,693


	$	119,178	$	121,475	$	119,483	$	122,270


Financial liabilities
Deposits	$	78,898	$	79,285	$	83,957	$	84,871
Advances from the Federal Home Loan Bank		32,243		31,290		27,347		27,491
Advances by borrowers for taxes and insurance		333		333		317		317



	$	111,474	$	110,908	$	111,621	$	112,679

11. Cash Surrender Value of Life Insurance

The cash surrender value of bank-owned life insurance policies represents the value of life insurance policies on certain officers of the Association for which the Association is the beneficiary. The Association accounts for these assets using the cash surrender value method in determining the carrying value of the insurance policies.

12. Advertising

Advertising costs are expensed when incurred.

13. Reclassifications

Certain prior year amounts have been reclassified to conform to 2005 consolidated financial statement presentation.

F-15

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

14. Recent Accounting Developments

In December 2004, the Financial Accounting Standards Board (“FASB”) issued a revision to Statement of Financial Accounting Standards (“SFAS”) No. 123 which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, primarily on accounting for transactions in which an entity obtains employee services in share-based transactions. This Statement, SFAS No. 123(R) “Share Based Payment”, requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award, with limited exceptions. That cost will be recognized over the period during which an employee is required to provide services in exchange for the award — the requisite service period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Employee share purchase plans will not result in recognition of compensation cost if certain conditions are met.

Initially, the cost of employee services received in exchange for an award of liability instruments will be measured based on current fair value; the fair value of that award will be remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period will be recognized as compensation cost over that period. The grant-date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification.

Excess tax benefits, as defined by SFAS No. 123(R) will be recognized as an addition to additional paid-in capital. Cash retained as a result of those excess tax benefits will be presented in the statement of cash flows as financing cash inflows. The write-off of deferred tax assets relating to unrealized tax benefits associated with recognized compensation cost will be recognized as income tax expense unless there are excess tax benefits from previous awards remaining in additional paid-in capital to which it can be offset.

Compensation cost is required to be recognized in the beginning of the first interim or annual period that begins after December 15, 2005, or July 1, 2006 as to the Association. The Association currently has no stock option or other share-based incentive plans that are subject to the provisions of SFAS No. 123(R). However, in connection with the Reorganization discussed in Note M, management contemplates that a stock option plan will be submitted to shareholders for a vote. If such plan is ratified by the shareholders, the Association will be required to expense stock option grants under the plan pursuant to SFAS No. 123(R).

F-16

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE B — INVESTMENT AND MORTGAGE-BACKED SECURITIES

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair value of investment securities at June 30 are shown below.


	June 30, 2005
			Gross		Gross			Estimated
	Amortized		unrealized		unrealized			fair
	cost		gains		losses			value
	(In thousands)
Available for sale:
Asset management fund	$	16,030	$	—	$	(313	)	$	15,717


Held to maturity:
Municipal obligations	$	50	$	—	$	—		$	50
Federal Home Loan Mortgage Corporation bonds		2,000		—		(6	)		1,994
Federal National Mortgage Association bonds		7,000		—		(77	)		6,923
Federal Home Loan Bank bonds		9,000		—		(115	)		8,885


	$	18,050	$	—	$	(198	)	$	17,852


	June 30, 2004
			Gross		Gross			Estimated
	Amortized		unrealized		unrealized			fair
	cost		gains		losses			value
	(In thousands)
Available for sale:
Asset management fund	$	15,590	$	—	$	(186	)	$	15,404


Held to maturity:
Federal Home Loan Mortgage Corporation bonds	$	3,999	$	3	$	(29	)	$	3,972
Federal National Mortgage Association bonds		7,000		6		(78	)		6,928
Federal Home Loan Bank bonds		8,000		—		(138	)		7,862


	$	18,999	$	9	$	(245	)	$	18,763

F-17

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE B — INVESTMENT AND MORTGAGE-BACKED SECURITIES (continued)

The amortized cost and estimated fair value of U.S. Government agency and municipal obligations held to maturity, by term to maturity at June 30, 2005 and 2004, are shown below.


	June 30, 2005
			Estimated
	Amortized		fair
	cost		value
	(In thousands)
Held to maturity:
Due within one year	$	1,009	$	1,002
Due after one year through three years		8,020		7,902
Due after three years through five years		9,021		8,948


Total held to maturity	$	18,050	$	17,852


	June 30, 2004
			Estimated
	Amortized		fair
	cost		value
	(In thousands)
Held to maturity:
Due after one year through three years	$	6,000	$	5,915
Due after three years through five years		12,999		12,848


Total held to maturity	$	18,999	$	18,763

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair value of mortgage-backed securities designated as held to maturity at June 30 are shown below.


	June 30, 2005
			Gross		Gross			Estimated
	Amortized		unrealized		unrealized			fair
	cost		gains		losses			value
	(In thousands)
Federal Home Loan Mortgage Corporation participation certificates	$	529	$	9	$	—		$	538
Federal National Mortgage Association participation certificates		1,181		9		(1	)		1,189
Government National Mortgage Association participation certificates		27		1		—			28


Total mortgage-backed securities	$	1,737	$	19	$	(1	)	$	1,755

F-18

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE B — INVESTMENT AND MORTGAGE-BACKED SECURITIES (continued)


	June 30, 2004
			Gross		Gross		Estimated
	Amortized		unrealized		unrealized		fair
	cost		gains		losses		value
	(In thousands)
Federal Home Loan Mortgage Corporation participation certificates	$	906	$	17	$	—	$	924
Federal National Mortgage Association participation certificates		1,646		14		—		1,659
Government National Mortgage Association participation certificates		39		—		—		39


Total mortgage-backed securities	$	2,591	$	31	$	—	$	2,622

The amortized cost and estimated fair values of mortgage-backed securities at June 30, 2005 and 2004, by contractual term to maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may generally prepay obligations without prepayment penalties.


	June 30, 2005
			Estimated
	Amortized		fair
	cost		value
	(In thousands)
Due in three to five years	$	57	$	59
Due in five to ten years		3		4
Due after ten years		1,677		1,692


	$	1,737	$	1,755


	June 30, 2004
			Estimated
	Amortized		fair
	cost		value
	(In thousands)
Due in three to five years	$	90	$	93
Due in five to ten years		8		10
Due after ten years		2,493		2,519


	$	2,591	$	2,622

F-19

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE B — INVESTMENT AND MORTGAGE-BACKED SECURITIES (continued)

The tables below indicate the length of time individual securities have been in a continuous unrealized loss position at June 30, 2005 and 2004:


	June 30, 2005
	Less than 12 months							12 months or longer							Total
Description of	Number of		Fair		Unrealized			Number of		Fair		Unrealized			Number of		Fair		Unrealized
securities	investments		value		losses			investments		value		losses			investments		value		losses
	(Unaudited)
	(Dollars in thousands)
Investment securities held to maturity		9	$	8,940	$	(61	)		8	$	7,862	$	(137	)		17	$	16,802	$	(198	)
Investment securities available for sale		—		—		—			1		15,717		(313	)		1		15,717		(313	)
Mortgage-backed securities		—		—		—			1		66		(1	)		1		66		(1	)


Total temporarily impaired securities		9	$	8,940	$	(61	)		10	$	23,645	$	(451	)		19	$	32,585	$	(512	)


	June 30, 2004
	Less than 12 months							12 months or longer							Total
Description of	Number of		Fair		Unrealized			Number of		Fair		Unrealized			Number of		Fair		Unrealized
securities	investments		value		losses			investments		value		losses			investments		value		losses
	(Unaudited)
	(Dollars in thousands)
Investment securities held to maturity		17	$	16,754	$	(245	)		—	$	—	$	—			17	$	16,754	$	(245	)
Investment securities available for sale		—		—		—			1		15,404		(186	)		1		15,404		(186	)


Total temporarily impaired securities		17	$	16,754	$	(245	)		1	$	15,404	$	(186	)		18	$	32,158	$	(431	)

The Association’s investments are generally limited to issuances of U. S. Government, government agencies and other high quality debt instruments. The asset management fund represents an open-ended adjustable-rate mortgage fund. The fund invests primarily in high quality adjustable-rate mortgage-related investments, with a target duration generally no shorter than a six-month U. S. Treasury Bill and no longer than a one-year U.S. Treasury Bill. The fund may also invest in U.S. Government and agency securities, certificates of deposit, repurchase agreements and bankers acceptances.

Management has the intent and ability to hold these securities, including asset management funds, for the foreseeable future. The decline in fair value was primarily due to changes in market interest rates. In the opinion of management, the unrealized losses on investment and mortgage-backed securities held to maturity are expected to recover as securities approach the respective maturity dates. The unrealized losses on the asset management fund are expected to recover as the underlying adjustable-rate securities reprice.

F-20

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE C — LOANS RECEIVABLE

The composition of the loan portfolio at June 30 is as follows:


	2005		2004
	(In thousands)
Residential real estate
One- to four-family	$	65,060	$	62,714
Multi-family		3,872		3,244
Construction		1,336		1,939
Nonresidential real estate		3,818		2,369
Commercial		3,092		1,581
Consumer and other		2,524		2,524

		79,702		74,371

Less:
Unearned interest		11		10
Deferred loan origination fees, net		320		326
Allowance for loan losses		590		456
Undisbursed portion of loans in process		592		982


	$	78,189	$	72,597

The Association’s lending efforts have historically focused on one- to four-family and multi-family residential real estate loans, which comprise approximately $69.7 million, or 89% of the total loan portfolio at June 30, 2005, and approximately $66.9 million, or 92% of the total loan portfolio at June 30, 2004. The preponderence of such loans have been underwritten on the basis of no more than an 80% loan-to-value ratio, which has historically provided the Association with adequate collateral coverage in the event of default. Nevertheless, the Association, as with any lending institution, is subject to the risk that real estate values could deteriorate in its primary lending area of west central Ohio, thereby impairing collateral values.

The Association has sold loans in the secondary market, retaining servicing on the loans sold. Loans sold and serviced for others totaled approximately $20.0 million and $24.1 million at June 30, 2005 and 2004, respectively.

In the ordinary course of business, the Association has made loans to some of its directors, officers and their related business interests. In the opinion of management, such loans are consistent with sound lending practices and are within applicable regulatory lending limitations. The balance of such loans totaled approximately $1.0 million and $1.1 million at June 30, 2005 and 2004, respectively. During the fiscal year ended June 30, 2005, new borrowings to related parties amounted to $30,000 and repayments totaled $70,000. Additionally, line of credit commitments to related parties totaled $251,000 and $184,000 at June 30, 2005 and 2004, respectively.

F-21

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE D — ALLOWANCE FOR LOAN LOSSES

The activity in the allowance for loan losses for the years ended June 30 is summarized as follows:


	2005			2004
	(In thousands)
Balance at beginning of year	$	456		$	446
Provision for losses on loans		216			29
Charge-offs of loans		(102	)		(36	)
Recoveries		20			17


Balance at end of year	$	590		$	456

As of June 30, 2005 and 2004, approximately $542,000 and $433,000, respectively, of the Association’s allowance for loan losses was general in nature and was includible as a component of regulatory risk-based capital.

At June 30, 2005 and 2004, the Association had nonperforming loans totaling $311,000 and $800,000, respectively. Interest income that would have been recognized had such nonperforming loans performed pursuant to contractual terms totaled approximately $9,000 and $11,000 for the years ended June 30, 2005 and 2004, respectively.

NOTE E — OFFICE PREMISES AND EQUIPMENT

Office premises and equipment are summarized as follows at June 30:


	2005			2004
	(In thousands)
Land	$	572		$	565
Leasehold improvements		204			204
Buildings and improvements		1,716			1,716
Furniture and equipment		1,479			1,421
Vehicles		20			20

		3,991			3,926
Less accumulated depreciation and amortization		(1,858	)		(1,650	)


	$	2,133		$	2,276

F-22

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE F — DEPOSITS

Deposits consist of the following major classifications at June 30:

Deposit type and weighted-average interest rate


	2005					2004
	Amount		%			Amount		%
	(Dollars in thousands)
Non-interest-bearing checking	$	3,553		4.5	%	$	3,128		3.7	%
NOW accounts
2005 - 0.56%		5,172		6.6
2004 - 0.53%							4,724		5.6
Money market accounts
2005 - 0.60%		958		1.2
2004 - 0.60%							697		0.9
Savings accounts
2005 - 0.73%		22,435		28.4
2004 - 0.74%							25,289		30.1

Total demand, transaction and savings deposits		32,118		40.7			33,838		40.3

Certificates of deposit Original maturities of:
Less than twelve months
2005 - 2.04%		18,033		22.9
2004 - 1.23%							18,044		21.5
Twelve months to thirty-six months
2005 - 2.58%		14,190		18.0
2004 - 2.62%							15,407		18.3
Thirty-six months and greater
2005 - 4.11%		14,557		18.4
2004 - 5.06%							16,668		19.9


Total certificates of deposit		46,780		59.3			50,119		59.7


Total deposit accounts	$	78,898		100.0	%	$	83,957		100.0	%

The Association had certificate of deposit accounts with balances in excess of $100,000 totaling approximately $8.1 million and $5.7 million at June 30, 2005 and 2004, respectively. Deposits with balances greater than $100,000 are not federally insured. At June 30, 2005, the Association had letters of credit from the Federal Home Loan Bank totaling $5.5 million to secure certain deposits.

F-23

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE F — DEPOSITS (continued)

Interest expense on deposits is summarized as follows for the years ended June 30:


	2005		2004
	(In thousands)
Demand, transaction and savings accounts	$	211	$	218
Certificate of deposit accounts		1,361		1,638


	$	1,572	$	1,856

Maturities of certificate of deposit accounts as of June 30 are as follows:


	2005		2004
	(In thousands)
Due within:
Three months	$	10,927	$	10,732
Three to six months		8,075		8,079
Six months to one year		8,037		13,652
One year to three years		13,917		13,038
Three years and thereafter		5,824		4,618


	$	46,780	$	50,119

NOTE G — ADVANCES FROM THE FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank, collateralized at June 30, 2005, by a blanket pledge of residential real estate mortgage loans totaling $51.0 million and the Association’s investment in Federal Home Loan Bank stock, are summarized as follows:


Maturing in fiscal year ending
June 30,	2005			2004
	(Dollars in thousands)
2006	$	3,308		$	2,433
2007		3,041			74
2008		6,213			1,326
2009		1,380			1,782
2010		1,064			1,261
Thereafter		17,237			20,471


	$	32,243		$	27,347


Weighted-average interest rate		4.74	%		5.15	%

F-24

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE H — FEDERAL INCOME TAXES (CREDITS)

The provision for federal income taxes (credits) differs from that computed at the statutory corporate rate for the fiscal years ended June 30 as follows:


	2005			2004
	(In thousands)
Federal income taxes (credits) computed at the 34% statutory rate	$	13		$	(66	)
Increase (decrease) in taxes resulting from:
Increase in cash surrender value of life insurance		(51	)		(47	)
Other		6			—


Federal income tax provision (credits) per financial statements	$	(32	)	$	(113	)


Effective rate of tax (benefit)		(82.1	)%		(58.2	)%

The composition of the Association’s net deferred tax liability at June 30 is as follows:

Taxes (payable) refundable on temporary differences at statutory rate:


	2005			2004
	(In thousands)
Deferred tax assets:
General loan loss allowance	$	184		$	147
Deferred loan origination fees		49			42
Charitable contributions		24			—
Unrealized losses on securities available for sale		106			64
Other		3			14

Deferred tax assets		366			267

Deferred tax liabilities:
Federal Home Loan Bank stock dividends		(344	)		(318	)
Difference between book and tax depreciation		(20	)		(44	)
Mortgage servicing rights		(70	)		(73	)
Prepaid expenses and other		(30	)		(32	)

Deferred tax liabilities		(464	)		(467	)


Net deferred tax liability	$	(98	)	$	(200	)

Prior to 1997, the Association was allowed a special bad debt deduction generally limited to 8% of otherwise taxable income and subject to certain limitations based on aggregate loans and deposit account balances at the end of the year. If the amounts that previously qualified as deductions for federal income taxes are later used for purposes other than bad debt losses, including distributions in liquidation, such distributions will be subject to federal income taxes at the then current corporate income tax rate. Retained earnings at June 30, 2005, include approximately $1.8 million for which federal income taxes have not been provided. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $600,000 at June 30, 2005.

Management believes that it is more likely than not that the results of future operations, as integrated with the reversal of deferred tax credits, will generate sufficient taxable income to realize reported deferred tax assets.

F-25

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE I — COMMITMENTS AND CONTINGENCIES

The Association 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 statement of financial condition. The contract or notional amounts of the commitments reflect the extent of the Association’s involvement in such financial instruments.

The Association’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 Association uses the same credit policies in making commitments and conditional obligations as those utilized for on-balance-sheet instruments.

At June 30, 2005, the Association had outstanding commitments of $196,000 to originate adjustable-rate loans and $970,000 to originate fixed-rate loans at interest rates ranging from 5.5% to 11.1%. Additionally, the Association had commitments under unused lines of credit for home equity loans and commerical loans totaling approximately $3.4 million and $312,000, respectively. Finally, the Association had commitments under stand-by letters of credit totaling approximately $40,000. Stand-by letters of credit are conditional commitments issued by the Association to guarantee the performance of a customer to a third party. In the opinion of management, all loan commitments equaled or exceeded prevalent market interest rates as of June 30, 2005 and will be funded from normal cash flow from operations.

The Association had no contingent liabilities at June 30, 2005 and 2004.

NOTE J — LEASE COMMITMENTS

The Association conducts a portion of its operations in leased facilities under noncancelable operating leases scheduled to expire in fiscal 2006. In April 2005, the Association exercised a two-year renewal option providing for an annual rental of $48,000.

The minimum rental commitment under operating leases, excluding sublease income, totaled $47,000 and $48,000 for the fiscal years ended June 30, 2006 and 2007, respectively.

Rental expense for all operating leases totaled approximately $46,000 and $45,000 for the fiscal years ended June 30, 2005 and 2004, respectively.

F-26

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE K — BENEFIT PLANS

The Association has a contributory 401(k) plan which covers substantially all employees. Eligible participants of the plan may voluntarily make contributions up to 50% of annual compensation. Employer contributions to the plan are required in an amount equal to 100% of the employees’ contributions, not to exceed 6% of the employees’ eligible salary level. The expense for this plan totaled approximately $69,000 and $68,000 for fiscal years ended June 30, 2005 and 2004, respectively.

The Association also participated in a noncontributory, multi-employer defined benefit pension fund covering all employees who qualified as to length of service. Contributions were based upon covered employees’ ages and salaries. During fiscal 2005, the Association elected to withdraw from this plan. A charge of $312,000 was recorded for the final withdrawal liability. The Association recorded expense totaling approximately $684,000 and $296,000 for the plan for the the fiscal years ended June 30, 2005 and 2004, respectively. With payment of the terminating contribution, the Association has no further liability for vested benefits. Data concerning the actuarial present value of the accumulated benefits, vested plan benefits, and net assets available for plan benefits relevant to the employees of the Association is not available because such determinations are not made for individual participating entities.

NOTE L — REGULATORY CAPITAL

The Association is subject to the regulatory capital requirements of the Office of Thrift Supervision (the “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 the Association’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Association must meet specific capital guidelines that involve quantitative measures of the Association’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Association’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

Such minimum capital standards 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 retained earnings less all intangible assets) equal to 1.5% of adjusted total assets. The core capital requirement provides for minimum core capital (tangible capital plus qualifying intangible assets) generally equal to 4.0% of adjusted total assets, except for those associations with the highest examination rating and acceptable levels of risk. The risk-based capital requirement provides for the maintenance of core capital plus general loss allowances equal to 8.0% of risk-weighted assets. In computing risk-weighted assets, the Association multiplies the value of each asset on its statement of financial condition by a defined risk-weighting factor, e.g., one- to four-family residential loans carry a risk-weighted factor of 50%.

During fiscal 2005, the Association was notified by the OTS that it was categorized as “well-capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well-capitalized” the Association must maintain minimum capital ratios as set forth in the following table.

F-27

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE L — REGULATORY CAPITAL (continued)

As of June 30, 2005 and 2004, management believes that the Association met all capital adequacy requirements to which it was subject.

As of June 30, 2005

To be “well-

capitalized” under

For capital

prompt corrective

Actual

adequacy purposes

action provisions

Amount

Ratio

Amount

Ratio

Amount

Ratio

(Dollars in thousands)

Tangible capital

13,845

10.9

³$1,899

³1.5

³$6,331

³ 5.0

Core capital

13,845

10.9

³$5,065

³4.0

³$7,598

³ 6.0

Risk-based capital

14,387

21.6

³$5,327

³8.0

³$6,658

³10.0

As of June 30, 2004

To be “well-

capitalized” under

For capital

prompt corrective

Actual

adequacy purposes

action provisions

Amount

Ratio

Amount

Ratio

Amount

Ratio

(Dollars in thousands)

Tangible capital

13,774

10.9

³$1,897

³1.5

³$6,322

³ 5.0

Core capital

13,774

10.9

³$5,057

³4.0

³$7,586

³ 6.0

Risk-based capital

14,207

23.1

³$4,922

³8.0

³$6,152

³10.0

The following table reconciles capital as determined under generally accepted accounting principles (GAAP) to tangible, core and risk-based capital as determined by the Association’s primary regulator (Regulatory Capital).

Reconciliation of GAAP to Regulatory Capital


	June 30,
	2005			2004
	(In thousands)
GAAP capital	$	13,659		$	13,673
Reconciling items:
Unrealized losses on available for sale securities		207			122
Mortgage servicing rights excluded		(21	)		(21	)

Tangible and core capital		13,845			13,774
General valuation allowance		542			433


Risk-based capital	$	14,387		$	14,207

F-28

GREENVILLE FEDERAL SAVINGS AND LOAN ASSOCIATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2005 and 2004

NOTE L — REGULATORY CAPITAL (continued)

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

NOTE M — REORGANIZATION AND CHANGE OF CORPORATE FORM

On April 18, 2005, the Board of Directors of the Association adopted a Plan of Reorganization (the “Plan” or the “Reorganization”) pursuant to which the Association proposes to reorganize into a two-tier mutual holding company structure with the establishment of a stock holding company, Greenville Federal Financial Corporation, as parent of the Association, and the Association will convert to the stock form of ownership, followed by the issuance of all the Association’s outstanding stock to Greenville Federal Financial Corporation. Pursuant to the Plan, Greenville Federal Financial Corporation will offer for sale between 1,032,750 and 1,606,837 common shares representing 45.0% of the outstanding common stock, at $10.00 per share, to the Association’s depositors, a newly formed Employee Stock Ownership Plan (“ESOP”) and possibly other persons. Greenville Federal MHC is being organized as a federally chartered mutual holding company and will own 55.0% of the outstanding common stock of Greenville Federal Financial Corporation upon completion of the Reorganization. The costs of issuing the common stock will be deferred and deducted from the sale proceeds of the offering. If the Reorganization is unsuccessful, all deferred costs will be charged to operations. At June 30, 2005, the Association had incurred and deferred Reorganization costs totaling approximately $137,000. The transaction is subject to approval by regulatory authorities and members of the Association.

The Reorganization will be accounted for as a change in corporate form with the historic basis of the Association’s assets, liabilities and equity unchanged as a result. Subsequent to the Reorganization, the existing rights of the Association’s depositors upon liquidation as of the effective date will be transferred with records maintained to ensure such rights receive statutory priority in the event of a future mutual to stock conversion, or in the more unlikely event of the Association’s liquidation.

F-29

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

Article XII of the Bylaws of Greenville Federal Financial Corporation (the “Corporation”) sets forth the following circumstances under which directors, officers, employees and agents of the Corporation may be indemnified against liability they incur in their capacities as such:

Article XII – Indemnification, Expenses and Insurance

Section 1. Indemnification. The Company shall indemnify its officers and directors to the full extent permitted by the regulations of the Office, the regulations of the Federal Deposit Insurance Corporation and any other applicable laws and regulations. The Company may, to such extent and in such manner as is determined by the board of directors, but in no event to an extent greater than is permitted by the regulations of the Office, the regulations of the Federal Deposit Insurance Corporation and any other applicable laws and regulations, indemnify any employees or agents of the Company permitted to be indemnified by provisions of such laws and regulations. The rights to indemnification conferred in these bylaws shall be contract rights and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit f the person’s heirs, executors and administrators.

Section 2. Expenses. The right to indemnification conferred by these bylaws shall include the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition, to the fullest extent authorized by the regulations of the Office, the Federal Deposit Insurance Corporation and any other applicable laws and regulations.

Section 3. Insurance. The Company may maintain insurance to the full extent permitted by the regulations of the Office, regulations of the Federal Deposit Insurance Corporation and any other applicable laws and regulations, at its expense, to protect itself and any director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss.

Item 25. Other Expenses of Issuance and Distribution.

Set forth below is an estimate of the fees and expenses expected to be incurred in connection with the issuance of the shares, based on the maximum of the valuation range:


Legal fees and expenses	$	350,000
Accounting fees and expenses		125,000
Printing and mailing expenses		80,000
SEC registration fees		1,891
OTS application filing fee		14,400
Underwriter’s fees and expenses		198,629
Legal counsel for underwriter		35,000
Appraisal fee and expenses		31,500
Business Plan fee and expenses		25,000
Conversion agent fee and expenses		20,000
Stock transfer agent and certificates		10,000
Blue sky filing fees and counsel fees		25,000
Miscellaneous		11,580


Total	$	928,000

II-1

Item 26. Recent Sales of Unregistered Securities.

Not applicable.

Item 27. Exhibits.

	1.1		Engagement letter between Keefe, Bruyette & Woods, Inc., and Greenville Federal Savings and Loan Association

	1.2		Form of Agency Agreement between Keefe, Bruyette & Woods, Inc., and Greenville Federal Savings and Loan Association

	2		First Amended Plan of Reorganization and Stock Issuance Plan

	3.1		Charter of Greenville Federal Financial Corporation (attached as Exhibit B-1 to Plan of Reorganization and Stock Issuance Plan included as Exhibit 2)

	3.2		Bylaws of Greenville Federal Financial Corporation (attached as Exhibit B-2 to Plan of Reorganization and Stock Issuance Plan included as Exhibit 2)

	4		Form of Stock Certificate of Greenville Federal Financial Corporation

	5		Opinion of Vorys, Sater, Seymour and Pease LLP regarding legality of securities being registered

	8		Opinion of Vorys, Sater, Seymour and Pease LLP regarding federal and state tax matters

	10.1		Form of Employment Agreement for David M. Kepler

	10.2		Form of Employment Agreement for Susan J. Allread

	10.3		Form of Tax Allocation Agreement

	10.4		Form of Expense Allocation Agreement

	21		Subsidiaries of registrant

	23.1		Consent of Vorys, Sater, Seymour and Pease LLP (contained in opinions included as Exhibits 5 and 8)

	23.2		Consent of Grant Thornton LLP

	23.3		Consent of Keller & Company, Inc.

	99.1		Appraisal Report of Keller & Company, Inc.

	99.2		Subscription Order Form and Instructions

	99.3		Additional solicitation materials

	99.4		Proxy Statement

II-2

Item 28. Undertakings.

The undersigned Registrant hereby undertakes to:

(1) file, during any period in which securities are being offered or sold, a post-effective amendment to this registration statement to:

(i) include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and the price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii) include any additional or changed material information on the plan of distribution;

(2) for determining liability under the Securities Act, treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time to be the initial bona fide offering; and

(3) file a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering.

The undersigned registrant hereby further undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-3

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Greenville, State of Ohio, on September 27, 2005.


		GREENVILLE FEDERAL FINANCIAL CORPORATION

		By:		/s/ David M. Kepler

				David M. Kepler
				President, Chief Executive Officer

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated:


Name	Title	Date
/s/ David Feltman *	Director	September 27, 2005

David Feltman

/s/ David M. Kepler	Director, Chief Executive Officer	September 27, 2005

David M. Kepler

/s/ George S. Luce, Jr. *	Director	September 27, 2005

George S. Luce, Jr.

/s/ Richard J. O’Brien *	Director	September 27, 2005

Richard J. O’Brien

/s/ Eunice F. Steinbrecher *	Director	September 27, 2005

Eunice F. Steinbrecher

/s/ James W. Ward *	Director, Chairman of the Board	September 27, 2005

James W. Ward

/s/ David R. Wolverton *	Director	September 27, 2005

David R. Wolverton

/s/ Susan J. Allread	Chief Financial	September 27, 2005

Susan J. Allread	Officer (principal
	accounting officer)



*		/s/ David M. Kepler

		David M. Kepler,
		as attorney-in-fact

EXHIBIT INDEX

Exhibits

1.1		Engagement letter between Keefe, Bruyette & Woods, Inc., and Greenville Federal Savings and Loan Association*

1.2		Form of Agency Agreement between Keefe, Bruyette & Woods, Inc., and Greenville Federal Savings and Loan Association


2		Second Amended Plan of Reorganization and Stock Issuance Plan


3.1		Charter of Greenville Federal Financial Corporation (attached as Exhibit B-1 to Plan of Reorganization and Stock Issuance Plan, included as Exhibit 2)*

3.2		Bylaws of Greenville Federal Financial Corporation (attached as Exhibit B-2 to Plan of Reorganization and Stock Issuance Plan, included as Exhibit 2)*

4		Form of Stock Certificate of Greenville Federal Financial Corporation*

5		Opinion of Vorys, Sater, Seymour and Pease LLP regarding legality of securities being registered*


8		Opinion of Vorys, Sater, Seymour and Pease LLP regarding federal and state tax matters


10.1		Form of Employment Agreement for David M. Kepler*

10.2		Form of Employment Agreement for Susan J. Allread*

10.3		Form of Tax Allocation Agreement*

10.4		Form of Expense Allocation Agreement*

21		Subsidiaries of registrant*

23.1		Consent of Vorys, Sater, Seymour and Pease LLP (contained in opinions included as Exhibits 5 and 8)*

23.2		Consent of Grant Thornton LLP

23.3		Consent of Keller & Company, Inc.


99.1		Appraisal Report of Keller & Company, Inc., dated September 14, 2005 **


99.2		Subscription Order Form and Instructions*

99.3		Additional solicitation materials*

99.4		Proxy Statement


*		Previously filed


**		Replaces previous Exhibit 99.1 in its entirety; changes from previous not marked


	Page
SUMMARY		2
RISK FACTORS		12
SELECTED FINANCIAL AND OTHER DATA		16
GREENVILLE FEDERAL FINANCIAL CORPORATION		18
THE ASSOCIATION		18
GREENVILLE FEDERAL MHC		18
HOW WE INTEND TO USE THE PROCEEDS		19
PRO FORMA DATA		22
CAPITALIZATION		27
OUR PLANS REGARDING DIVIDENDS		28
MARKET FOR THE COMMON STOCK		29
REGULATORY CAPITAL REQUIREMENTS		30
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		31
BUSINESS OF THE ASSOCIATION		45
SUPERVISION AND REGULATION		66
TAXATION		73
MANAGEMENT		75
THE REORGANIZATION AND STOCK OFFERING		83
RESTRICTIONS ON ACQUISITION OF GREENVILLE FEDERAL FINANCIAL CORPORATION AND THE ASSOCIATION		106
DESCRIPTION OF CAPITAL STOCK OF GREENVILLE FEDERAL FINANCIAL CORPORATION		109
TRANSFER AGENT AND REGISTRAR		110
EXPERTS		110
LEGAL AND TAX OPINIONS		111
ADDITIONAL INFORMATION		111
INDEX TO FINANCIAL STATEMENTS		F-1


	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-2

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION		F-3

CONSOLIDATED STATEMENTS OF OPERATIONS		F-4

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		F-5

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS		F-6

CONSOLIDATED STATEMENTS OF CASH FLOWS		F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		F-9


Balance at July 1, 2003	$	13,876

Unrealized losses on securities designated as available for sale, net of realized losses and related tax benefits		(122	)

Net loss for the year ended June 30, 2004		(81	)


Balance at June 30, 2004		13,673

Unrealized losses on securities designated as available for sale, net of related tax benefits		(85	)

Net earnings for the year ended June 30, 2005		71


Balance at June 30, 2005	$	13,659