C ontact: James P. Wetzel, Jr.
                                                      President
                                                      PHSB Financial Corporation
                                                      (724) 846-7300

PHSB Financial Corporation
Peoples Home Savings Bank
744 Shenango Road
Beaver Falls, PA  15010

NASD   PHSB                                                FOR IMMEDIATE RELEASE
                                                           October 10, 2003


                           PHSB FINANCIAL CORPORATION
               ANNOUNCES $ .10 QUARTERLY AND SPECIAL CASH DIVIDEND

         Beaver  Falls,  Pennsylvania  October 10, 2003,  James P. Wetzel,  Jr.,
President  of  PHSB  Financial   Corporation   (the   Company),   Beaver  Falls,
Pennsylvania,  the  holding  company of Peoples  Home  Savings  Bank (the Bank),
announced  today that the  Company's  Board of Directors  has declared a special
cash dividend of $ .50 per share and a regular  quarterly  dividend of $ .10 per
share to stockholders  of record as of October 23, 2003.  This special  dividend
paid by the Company is in  addition  to, not in lieu of, the  Company's  regular
quarterly  cash  dividend  of $ .10.  The special and  quarterly  dividends  are
expected to be paid on or about November 6, 2003.

         President Wetzel indicated that the special cash dividend is being paid
as a result of the Company's high level of stockholders equity and the continued
profitability  of the Company and the Bank.  Based upon the stock market and the
financial  condition of the Company,  the Board of  Directors  may  periodically
consider  the  payment  of a  special  dividend  in  addition  to the  quarterly
dividend. However, the payment of future special and quarterly dividends will be
subject to the Boards periodic review of the financial condition,  earnings, and
capital requirements of the Company and the Bank.

         The Bank is a Pennsylvania  chartered stock savings bank  headquartered
in Beaver Falls,  Pennsylvania.  The Banks deposits are federally insured by the
Federal  Deposit  Insurance  Corporation  (AFDIC).  At September  30, 2003,  the
Company had total assets and  stockholders  equity of $ 339.3 million and $ 47.3
million, respectively.

         The common stock of the Company is traded on the NASD  National  Market
System under the symbol PHSB.