PRESS RELEASE
                                  -------------

January 3, 2005                        Samuel J. Malizia, Chairman of the Board
                                       Board, Nittany Financial Corp.
                                       (814) 272-3502

Nittany Financial Corp.                David Richards, President and CEO
State College, Pennsylvania            Nittany Financial Corp.
                                       (814) 234-7320

                 NITTANY FINANCIAL CORP. ANNOUNCES COMMENCEMENT
                       OF ADDITIONAL COMMON STOCK OFFERING

     January 3, 2005,  STATE COLLEGE,  PENNSYLVANIA  -- NITTANY  FINANCIAL CORP.
(OTC Ticker Symbol "NTNY"),  the holding company of Nittany Bank, State College,
Pennsylvania,  previously  announced  that it had filed with the  Securities and
Exchange  Commission  ("SEC") a  Registration  Statement  to sell up to  150,000
additional shares of Common Stock. The Registration  Statement has been declared
effective by regulators and the  Corporation  has commenced the Stock  Offering.
The  Corporation is offering up to 115,000  shares of the common stock,  with an
option to sell an  additional  35,000  shares.  The offering  will first be made
through January 31, 2005 to shareholders of record as of November 26, 2004, at a
price of $26.00  per  share.  In the event of an  oversubscription  by  existing
stockholders,  orders will be filled pro- ratably.  If the stock is not entirely
purchased by existing  stockholders  on January 31, 2005,  it will be offered to
the public, with a preference given to current customers of Nittany Bank.

     Nittany Bank  commenced  operations  in October 1998 with two offices.  The
Bank currently  operates from four offices and five ATMs located  downtown State
College and on the North,  South and East sides of State College. A fifth office
will open in early  2005 in the  nearby  historic  town of  Bellefonte.  Nittany
Financial  Corp.  owns all of the  outstanding  stock of Nittany  Bank,  Vantage
Investment  Advisors,  LLC and Nittany Asset  Management,  Inc. At September 30,
2004, the Company had total assets,  deposits,  loans (net of allowance for loan
losses) and stockholders' equity of $295 million, $247 million, $226 million and
$16.8  million,  respectively.  A copy of the stock  offering  prospectus may be
obtained by contacting LWilliams@NittanyBank.com.

     THE  ABOVE  INFORMATION  DOES NOT  CONSTITUTE  AN  OFFER  TO  SELL,  OR THE
SOLICITATION OF AN OFFER TO BUY, ANY  SECURITIES.  THE OFFER WILL BE MADE SOLELY
BY THE PROSPECTUS AND IS NOT BEING MADE TO PERSONS IN ANY  JURISDICTION IN WHICH
THE OFFER OR SOLICITATION WOULD BE UNLAWFUL.

     The foregoing material contains  forward-looking  statements concerning the
financial  condition,  results of  operations  and business of the  Company.  We
caution that such statements are subject to a number of uncertainties and actual
results could differ materially, and, therefore,  readers should not place undue
reliance on any forward-looking  statements. The Company does not undertake, and
specifically  disclaims,  any obligation to publicly  release the results of any
revisions  that may be made to any  forward-looking  statements  to reflect  the
occurrence of anticipated or  unanticipated  events or  circumstances  after the
date of such statements.