PRESS RELEASE

Nittany Financial Corp.        Subject: Cash Dividend

                               Contact: Samuel J. Malizia, Chairman of the Board
                                        David Z. Richards, Jr., President & CEO
                                        116 E. College Ave.
                                        State College, PA 16801
                                        (814) 238-5724

                               Date:    May 20, 2005

FOR IMMEDIATE RELEASE


                             NITTANY FINANCIAL CORP.
                             ANNOUNCES CASH DIVIDEND

         State College,  Pennsylvania--May 20, 2005--Samuel J. Malizia, Chairman
of the Board of Nittany  Financial  Corp.  (the  "Company") (OTC Bulletin Board:
NTNY), the holding company of Nittany Bank (the "Bank") announced today that the
Company's Board of Directors has declared its first semi-annual cash dividend of
$.25 per share to stockholders of record as of June 6, 2005. The Company expects
to pay the cash  dividend on June 30,  2005.  This is the  Company's  first cash
dividend since opening for business in 1998.

         President David Z. Richards stated, "The cash dividend is being paid to
provide a return to stockholders, after considering the equity and profitability
of the  Company  and the  Bank.  It is the  current  intention  of the  Board of
Directors to continue to pay such a dividend semi-annually. However, the payment
of future  dividends  will be  subject  to the  Board's  periodic  review of the
financial  condition,  earnings and capital  requirements of the Company and the
Bank."

         Nittany Bank is a federally  chartered bank which conducts its business
from its four offices in State  College,  Pennsylvania  and one branch office in
Bellefonte,  Pennsylvania.  At May 19,  2005,  the Company had total  assets and
stockholders'   equity  of   approximately   $311   million  and  $23   million,
respectively.  The  Company's  common stock is traded on the OTC Bulletin  Board
under the symbol "NTNY."