SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
         OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
         __________________ TO _________________

                         Commission file number: 0-21108

                          MARION CAPITAL HOLDINGS, INC.
                          -----------------------------
               (Exact name of registrant specified in its charter)


          Indiana                                               35-1872393
--------------------------                                ----------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                            Identification Number)



                              100 West Third Street
                                  P.O. Box 367
                              Marion, Indiana 46952
                    (Address of principal executive offices,
                               including Zip Code)

                                 (765) 664-0556
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

The  number of shares of the  Registrant's  common  stock,  without  par  value,
outstanding as of May 9, 2000 was 1,356,739.


<PAGE>



                          Marion Capital Holdings, Inc.

                                    Form 10-Q

                                      Index

                                                                        Page No.

Forward Looking Statements.....................................................1

PART I.   FINANCIAL INFORMATION

Item 1.     Financial Statements...............................................2

              Consolidated Condensed Statement of Financial Condition as of
              March 31, 2000 and June 30, 1999.................................2

              Consolidated Condensed Statement of Income for the three-month
              and nine-month periods ended March 31, 2000 and 1999.............3

              Consolidated Condensed Statement of Shareholders' Equity
              for the nine months ended March 31, 2000 and 1999................4

              Consolidated Condensed Statement of
              Cash Flows for the nine months
              ended March 31, 2000 and 1999....................................5

              Notes to Consolidated Financial Statements.......................7

Item 2.     Management's Discussion and Analysis of Financial Condition and
                  Results of Operations........................................9

Item 3.     Quantitative and Qualitative Disclosures About Market Risk........14




PART II.  OTHER INFORMATION

Item 1.     Legal Proceedings.................................................17

Item 6.     Exhibits and Reports on Form 8-K..................................17

SIGNATURES....................................................................18



<PAGE>



                           FORWARD LOOKING STATEMENTS

Except for historical  information contained herein, the discussion in this Form
10-Q quarterly  report includes  certain  forward-looking  statements based upon
management expectations. Factors which could cause future results to differ from
these  expectations   include  the  following:   general  economic   conditions,
legislative  and  regulatory  initiatives,  monetary and fiscal  policies of the
federal government,  deposit flows, the costs of funds,  general market rates of
interest,  interest  rates on competing  investments,  demand for loan products,
demand for financial services, changes in accounting policies or guidelines, and
changes in the  quality or  composition  of the  Company's  loan and  investment
portfolios.

The Company does not undertake  and  specifically  disclaims  any  obligation to
update any forward- looking  statements to reflect the occurrence of anticipated
or unanticipated events or circumstances after the date of such statements.

                                                         1


<PAGE>

                          MARION CAPITAL HOLDINGS, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                      FIRST FEDERAL SAVINGS BANK OF MARION

             CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                              March 31,                   June 30,
                                                                                 2000                       1999
ASSETS
<S>                                                                           <C>                        <C>
  Cash                                                                        $2,493,816                 $2,225,804
  Short-term interest bearing deposits                                         4,443,199                  6,626,884
                                                                         -------------------------------------------
    Total cash and cash equivalents                                            6,937,015                  8,852,688

  Investment securities available for sale                                     2,972,274                  3,020,000
  Loans held for sale                                                            357,400                    326,901
  Loans receivable, net of allowance for loan losses
    of $2,246,114 and $2,271,701                                             164,377,586                165,797,406
  Real estate owned, net                                                         205,099                          0
  Premises and equipment                                                       1,741,498                  2,008,157
  Stock in Federal Home Loan Bank (at cost which
    approximates market)                                                       1,654,900                  1,163,600
  Investment in limited partnerships                                           4,177,675                  4,712,675
  Investment in other affiliate                                                  650,000                    650,000
  Core deposit intangibles and goodwill                                          625,235                    698,580
  Cash value of life insurance                                                11,322,018                  5,887,166
  Other assets                                                                 4,172,820                  3,984,316
                                                                         -------------------------------------------

    Total assets                                                            $199,193,520               $197,101,489
                                                                         ===========================================

LIABILITIES

  Deposits                                                                  $129,474,282               $142,087,269
  Advances from FHLB                                                          29,526,490                 15,533,732
  Other borrowings                                                             2,825,560                  3,240,344
  Advances by borrowers for taxes and
    insurance                                                                    375,585                    201,919
  Other liabilities                                                            5,379,508                  4,294,658
                                                                         -------------------------------------------
    Total liabilities                                                        167,581,425                165,357,922

SHAREHOLDERS' EQUITY
  Preferred stock:
    Authorized and unissued -- 2,000,000 shares
  Common stock, without par value:
    Authorized -- 5,000,000 shares
    Issued and outstanding -- 1,356,739 and
      1,424,550 shares                                                         8,025,048                  8,001,048
  Retained earnings                                                           23,595,404                 23,728,895
  Accumulated other comprehensive income (loss)                                  (8,357)                     13,624
                                                                         -------------------------------------------
    Total shareholders' equity                                                31,612,095                 31,743,567
                                                                         -------------------------------------------

    Total liabilities and shareholders' equity                              $199,193,520               $197,101,489
                                                                         ===========================================
</TABLE>


See notes to consolidated condensed financial statements.

<PAGE>


                          MARION CAPITAL HOLDINGS, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                      FIRST FEDERAL SAVINGS BANK OF MARION

                   CONSOLIDATED CONDENSED STATEMENT OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>


                                              Three Months Ended                                Nine Months Ended
                                                    March 31,                                         March 31,
                                            2000                      1999                     2000                    1999
Interest income
<S>                                       <C>                      <C>                    <C>                     <C>
  Loans                                   $3,518,509               $3,624,006             $10,584,006             $10,971,215
  Interest-bearing deposits                   49,401                   52,533                 172,091                 123,964
  Investment securities                       46,004                   47,824                 142,659                 182,230
  Other interest and dividend income          30,869                   22,377                  78,806                  68,212
                                         -------------------------------------------------------------------------------------
    Total interest income                  3,644,783                3,746,740              10,977,562              11,345,621

Interest expense
  Deposits                                 1,542,469                1,651,935               4,762,044               5,068,533
  Advances from FHLB                         422,126                  220,991                 988,093                 686,323
                                         -------------------------------------------------------------------------------------
    Total interest expense                 1,964,595                1,872,926               5,750,137               5,754,856

Net interest income                        1,680,188                1,873,814               5,227,425               5,590,765

Provision for losses on loans                      0                    1,400                 458,027                  17,589
                                         -------------------------------------------------------------------------------------

Net interest income after provision        1,680,188                1,872,414               4,769,398               5,573,176

Other income
  Net loan servicing fees                     19,150                   23,057                  61,193                  62,463
  Annuity and other commissions               42,236                   52,743                 129,410                  98,263
  Losses from limited
    partnerships                           (183,000)                 (35,000)               (535,000)               (140,500)
  Life insurance income and
    death benefits                           106,204                   39,750                 904,654                 142,250
  Gain on sale of branch office                    0                        0                 231,626                       0
  Other income                               119,795                   87,110                 350,550                 261,262
                                         -------------------------------------------------------------------------------------
    Total other income                       104,385                  167,660               1,142,433                 423,738
                                         -------------------------------------------------------------------------------------

Other expenses
  Salaries and employee benefits             688,046                  724,474               2,110,841               2,003,670
  Occupancy expense                           64,821                   69,688                 196,081                 199,516
  Equipment expense                           35,652                   34,549                 105,720                  96,849
  Deposit insurance expense                   18,906                   32,855                  83,860                  99,703
  Real estate operations, net                 21,483                  (1,628)                 139,301                 (2,875)
  Data processing expense                     85,529                   77,498                 236,176                 228,632
  Advertising                                 16,392                   20,641                  52,870                  89,944
  Amortization of core deposit
    intangibles and goodwill                  23,446                   25,249                  73,345                  78,755
  Other expenses                             217,275                  204,046                 682,881                 608,255
                                         -------------------------------------------------------------------------------------
    Total other expenses                   1,171,550                1,187,372               3,681,075               3,402,449
                                         -------------------------------------------------------------------------------------

Income before income taxes                   613,023                  852,702               2,230,756               2,594,465
  Income tax expense                          72,058                  328,751                 164,738                 968,845
                                         -------------------------------------------------------------------------------------

Net income                                  $540,965                 $523,951              $2,066,018              $1,625,620
                                         =====================================================================================

Per share
  Basic earnings per share                     $0.40                    $0.35                   $1.49                   $1.04
  Diluted earnings per share                   $0.40                    $0.35                   $1.48                   $1.02
  Dividends                                    $0.22                    $0.22                   $0.66                   $0.66
</TABLE>


See notes to consolidated condensed financial statements.






                                                         2

<PAGE>


                          MARION CAPITAL HOLDINGS, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                      FIRST FEDERAL SAVINGS BANK OF MARION

            CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                     Total
                                                                 Shareholders'
                                                                     Equity
                                                         --------------------------------


<S>                                                      <C>                 <C>
Balances, July, 1 1999 and 1998                          $31,743,567         $37,656,627

  Comprehensive income
    Net income                                             2,066,018           1,625,620
    Other comprehensive income, net of tax
      Unrealized gains (losses) on securities                (21,981)                926
                                                         --------------------------------

    Comprehensive income                                   2,044,037           1,626,546

  Exercise of stock options                                   24,000              61,901

  Repurchase of common stock                              (1,308,413)         (5,311,296)

  Tax benefit of stock options excercised                     20,351             106,982

  Cash dividends                                            (911,447)         (1,032,250)
                                                         --------------------------------

Balances, March 31, 2000 and 1999                        $31,612,095         $33,108,510
                                                         ================================
</TABLE>


See notes to consolidated condensed financial statements.

<PAGE>


                          MARION CAPITAL HOLDINGS, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                      FIRST FEDERAL SAVINGS BANK OF MARION

                 CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                  Nine Months Ended
                                                                                       March 31,

OPERATING ACTIVITIES                                                          2000                      1999
                                                                       -------------------       -------------------
<S>                                                                            <C>                       <C>
   Net Income                                                                  $2,066,018                $1,625,620
   Adjustments to reconcile net income to net cash
      provided by operating activities:
         Provision for loan losses                                                458,027                    17,589
         Losses from limited partnerships                                         535,000                   140,500
         Amortization of net loan origination fees                              (149,610)                 (196,806)
         Net amortization of investment securities'
            premiums and discounts                                               (29,603)                       817
         Amortization of core deposits and goodwill                                73,345                    25,249
         Depreciation                                                             144,350                   135,101
         Deferred income tax                                                    (389,339)                    14,825
         Gain on sale of branch office                                          (231,626)                         0
         Gain on sale of loans                                                   (10,478)                  (20,840)
         Origination of loans for sale                                        (1,078,252)               (6,743,872)
         Proceeds from sale of loans                                            1,058,231                 7,479,681
         Change in:
            Interest receivable                                                    38,272                   174,463
            Interest payable and other liabilities                              1,145,033                   581,521
            Cash value of insurance                                             (904,654)                 (142,250)
            Prepaid expense and other assets                                      197,331                    34,584
                                                                       -------------------       -------------------
               Net cash provided by operating activities                        2,922,045                 3,126,182
                                                                       -------------------       -------------------

INVESTING ACTIVITIES
   Proceeds from maturity of investment securities
      held to maturity                                                          1,000,000                 2,000,000
   Purchase of investment securities available
      for sale                                                                  (959,070)                         0
   Payments on mortgage-backed securities                                               0                     2,917
   Net changes in loans                                                           819,642                 (850,747)
   Proceeds from real estate owned sales                                           79,294
   Purchase of FHLB stock                                                       (491,300)
   Purchases of premises and equipment                                           (36,974)                 (194,124)
   Proceeds from life insurance                                                 1,419,803                         0
   Premiums paid on life insurance                                            (5,950,000)                         0
   Net cash disbursed in sale of branch office                                (8,593,288)                         0
                                                                       -------------------       -------------------
      Net cash (used) by investing activities                                (12,711,893)                   958,046
                                                                       -------------------       -------------------

   (CONTINUED)


FINANCING ACTIVITIES
   Net change in:
      Interest-bearing demand and savings deposits                            (2,091,090)               (1,563,053)
      Certificates of deposit                                                 (1,590,515)                 6,099,053
   Proceeds from FHLB advances                                                 19,200,000                 8,909,000
   Repayment of FHLB advances                                                 (5,207,242)               (7,412,002)
   Repayment of other borrowings                                                (414,784)                 (394,062)
   Net change in advances by borrowers for taxes
      and insurance                                                               173,666                   225,190
   Proceeds from exercise of stock options                                         24,000                    61,901
   Repurchase of common stock                                                 (1,308,413)               (5,311,296)
   Dividends paid                                                               (911,447)               (1,032,250)
                                                                       -------------------       -------------------
      Net cash provided (used) by financing activities                          7,874,175                 (417,519)

                                                                       -------------------       -------------------
Net change in cash and cash equivalents                                       (1,915,673)                 4,081,611

Cash and Cash Equivalents, Beginning of Period                                  8,852,688                 5,134,764
                                                                       -------------------       -------------------

Cash and Cash Equivalents, End of Period                                       $6,937,015                $9,216,375
                                                                       ===================       ===================

ADDITIONAL CASH FLOWS AND
SUPPLEMENTARY INFORMATION
   Interest paid                                                               $4,992,817                $5,014,576
   Income tax paid                                                                579,032                   585,000
   Loans to finance the sale of real estate owned                                  50,260                     8,500

</TABLE>


See notes to consolidated condensed financial statements.






<PAGE>



                          MARION CAPITAL HOLDINGS, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                      FIRST FEDERAL SAVINGS BANK OF MARION

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE A: Basis of Presentation

The unaudited interim  consolidated  condensed financial  statements include the
accounts of Marion  Capital  Holdings,  Inc. (the  "Company") and its subsidiary
First Federal Savings Bank of Marion (the "Bank").

The unaudited  interim  consolidated  condensed  financial  statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include  all  information  and  disclosures   required  by  generally   accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management,  the financial  statements reflect all adjustments,  comprising only
normal recurring  accruals,  necessary to present fairly the Company's financial
position as of March 31, 2000,  results of operations  for the  three-month  and
nine-month  periods  ended March 31, 2000 and 1999,  and cash flows for the nine
month periods ended March 31, 2000 and 1999.

NOTE B: Dividends and Earnings Per Share

On February 22, 2000, the Board of Directors  declared a quarterly cash dividend
of $.22 per share.  This dividend was paid on March 15, 2000 to  shareholders of
record as of March 6, 2000.

Earnings per share (EPS) were computed as follows:
<TABLE>
<CAPTION>

                                           Three Months End                           Three Months Ended
                                            March 31, 2000                              March 31, 1999
                                -------------------------------------          -----------------------------------
                                               Weighted                                     Weighted
                                               Average       Per Share                       Average      Per Share
                                  Income        Shares         Amount            Income      Shares         Amount
<S>                                <C>          <C>              <C>             <C>         <C>              <C>
Basic earnings per share
 Income available to
 common shareholders               $540,965     1,356,257        $.40            $523,951    1,493,227       $.35
                                                =========                                                    ====

Effect of dilutive securities
 Stock Options                                      5,813                                       17,432
                                 ---------      ---------                        --------    ---------

Diluted earnings per share
 Income available to
 common shareholders and
assumed conversions               $540,965      1,362,070        $.40             $523,951    1,510,659      $.35
                                  ========      =========        ====            =========    =========      ====
</TABLE>



                                                           7


<PAGE>
<TABLE>
<CAPTION>

                                           Nine Months Ended                            Nine Months Ended
                                            March 31, 2000                               March 31, 1999
                                -------------------------------------          -----------------------------------
                                               Weighted                                     Weighted
                                               Average       Per Share                       Average      Per Share
                                  Income        Shares         Amount            Income      Shares         Amount
<S>                                <C>          <C>              <C>             <C>         <C>              <C>
Basic earnings per share
 Income available to
 common shareholders               $2,066,018   1,385,383      $1.49          $1,625,620     1,568,802        $1.04
                                                               =====                                          =====

Effect of dilutive securities
 Stock Options                                      7,252                                       22,198
                                   ----------   ---------                     -----------    ---------

Diluted earnings per share
 Income available to
 common shareholders and
assumed conversions                $2,066,018   1,392,635      $1.48           $1,625,620    1,591,000        $1.02
                                   ==========   =========      =====           ===========   =========        =====
</TABLE>




NOTE C: Reporting Comprehensive Income

The  Company  adopted  Statement  of  financial  Accounting  Standards  No. 130,
Reporting   Comprehensive  Income.   Comprehensive  income  includes  unrealized
gains(losses) on securities  available for sale, net of tax.  Accumulated  other
comprehensive income and income tax on such income reported are as follows:

                                                       Nine Months Ended
                                                           March 31
                                                   ------------------------
                                                     2000            1999
                                                   --------        --------
Accumulated other comprehensive income
  Balance, July 1                                  $ 13,624        $ 30,332
  Net unrealized gains(losses)                      (21,981)            926
                                                   --------        --------
  Balance, September 30                            $  8,357        $ 31,258
                                                   ========        ========

Income tax expense(benefit)
  Unrealized holding gains(losses)                 $(14,417)       $    607
                                                   ========        ========


                                                           8


<PAGE>



Item 2: Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

General

The  Company's  total assets were $199.2  million at March 31, 2000  compared to
$197.1  million  at June 30,  1999.  Cash and cash  equivalents  decreased  $1.9
million and investment  securities remained  relatively  unchanged from June 30,
1999 to March 31, 2000.  Net loans  receivable,  including  loans held for sale,
were $164.7 million at March 31, 2000, a decrease of $1.4 million,  or .8%, from
June 30, 1999.

For the nine months ended March 31, 2000, cash value of life insurance increased
by $5.4 million as the result of the Company  purchasing  life  insurance on key
directors  and a key employee in  connection  with new  supplemental  retirement
agreements.  Effective  February  1, 2000,  these  agreements  were  designed to
provide benefits at retirement age as set forth in the agreements.

Deposits  decreased  to $129.5  million  at March 31,  2000  compared  to $142.1
million at June 30, 1999,  an 8.9%  decrease.  This $12.6  million  decrease was
primarily  the result of the  Company  selling its  Decatur  branch  deposits on
September 3, 1999, to another financial institution.  The deposits sold amounted
to $9.0 million. Passbook and transaction accounts decreased by $3.8 million and
certificate of deposit accounts decreased by $8.8 million.

Federal Home Loan Bank  advances  increased by $14.0 million to $29.5 million at
March 31, 2000,  compared to $15.5  million at June 30, 1999, a 90.1%  increase.
Advances  were used  primarily  to fund the sale of the  Decatur  branch  and to
purchase life insurance on key directors and employees.

Shareholders'  equity was $31.6  million at March 31,  2000,  compared  to $31.7
million at June 30,  1999.  During the nine  months  ended March 31,  2000,  the
Company  repurchased  70,700 shares of common stock in the open market at a cost
of $1.3  million,  or an average  price of $18.51 per share.  These  repurchases
primarily  account  for the  reduction  in the number of shares  outstanding  to
1,356,739 at March 31, 2000.

Results of Operations  Comparison of Three Months Ended March 31, 2000 and March
31, 1999

Net income for the three  months  ended March 31,  2000 of  $540,965  was a 3.2%
increase from the three months ended March 31, 1999,  of $523,951.  Net interest
income for the quarter ended March 31, 2000, equaled  $1,680,188,  a decrease of
10.3% from the quarter ended March 31, 1999, of $1,873,814.

No  provision  for losses on loans was made for the three months ended March 31,
2000,  compared to a $1,400 provision in the same period last year. No loan loss
provision  was made during the quarter  ending  March 31,  2000,  as the Company
believes that the loan loss reserves are adequate after reviewing non-performing
loans within its portfolio.

Total other  income  decreased  by $63,275 for the three  months ended March 31,
2000,  compared to the same period in the prior year. This decrease is primarily
attributable  to  increased   operating   losses  from  investments  in  limited
partnerships  of  $148,000  offset by an increase  in life  insurance  income of
$66,454.

                                                           9


<PAGE>





Total other  expenses  decreased by $15,822,  or 1.3% for the three months ended
March 31,  2000,  compared  to the same  period in the prior  year.  Real estate
operations expense increased $23,111 as a result of an increase in the number of
property  foreclosures.  Salaries  and employee  benefits for the quarter  ended
March 31,  2000,  decreased  by $36,428  from the quarter  ended March 31, 1999.
Deposit  insurance  expense decreased by $13,949 as the result of lower premiums
from the prior period. Other increases reflect normal operating cost increases.

The income tax expense for the three months  ended March 31,  2000,  amounted to
$72,058,  compared to tax expense of $328,751  for the three  months ended March
31, 1999. The Company's  effective tax rate for the three months ended March 31,
2000, was 12%,  compared to 39% tax rate for the comparable  period in 1999. The
decrease  in  income  taxes  is due from the  nontaxable  proceeds  from key man
insurance and the increase in federal tax credits from the limited partnerships.
A recent investment has generated new tax credits beginning in July 1999.

Results of  Operations  Comparison of Nine Months Ended March 31, 2000 and March
31, 1999.

Net income for the nine months ended March 31,  2000,  was  $2,066,018  compared
with  $1,625,620  for the nine  months  ended  March 31,  1999,  an  increase of
$440,398,  or 27.1%.  Interest  income for the nine months ended March 31, 2000,
decreased  $368,059,  or 3.2%,  compared  to the same  period in the prior year,
while  interest  expense for the nine months  ended  March 31,  2000,  decreased
$4,719, or 0.1%, compared to the same period in the prior year. As a result, net
interest  income  for  the  nine  months  ended  March  31,  2000,  amounted  to
$5,227,425,  a decrease of $363,340, or 6.5%, compared to the same period in the
prior year.  Earnings  for the nine months  ended  March 31,  2000,  included an
additional $360,000 in federal income tax credits as compared to the nine months
ended March 31,  1999.  Also,  for the nine months  ended March  31,2000,  death
benefit  proceeds  from key man  insurance  resulted  in  additional  income  of
$767,000.  This increase in tax credits and the nontaxable proceeds from key man
life  insurance  had the  effect of  decreasing  the  effective  tax rate of the
Company from  approximately  37% for the nine months ended March 31, 1999, to 7%
for the nine months ended March 31, 2000.

A $458,027  provision  for losses on loans for the nine  months  ended March 31,
2000, was made compared to a $17,589 provision  reported in the same period last
year. The increased provision for the nine months ended March 31, 2000, compared
to the prior period was made as a result of the Company's ongoing  evaluation of
its  impaired  loans  and  their net  realizable  value;  and a review of recent
charge-offs reflecting a higher loss ratio than in previous years.

Total other  income  increased  by $718,695  for the nine months ended March 31,
2000,  compared  to the  same  period  in  the  prior  year.  This  increase  is
attributable  to increased  income from loan servicing  fees,  annuity and other
commissions,  and other income of approximately $119,000 over income reported in
the prior period.  Also, life insurance  income and death benefits  increased by
$762,404  over the prior  period  and gain on the sale of a branch  amounted  to
$231,626.  Also, for the nine months ended March 31, 2000,  the Company  charged
off an  additional  $100,000 on one of its limited  partnership  investments  in
excess of normal operating  losses.  Recent financial reports indicate a decline
in net income produced by the  partnership  which thus reflects a lower residual
value of the investment.

                                                           10


<PAGE>



Total other  expenses  increased  by $278,626 or 8.2% for the nine months  ended
March 31,  2000,  compared to the same period in the prior  year.  Salaries  and
employee  benefits  increased  $107,171,   or  5.3%  primarily  due  to  funding
additional  benefits  associated  with  key  man  death  benefits.  Real  estate
operating  expense  increased  by $142,176  for the nine months  ended March 31,
2000,  compared  to  the  same  period  in  the  prior  year  as a  result  of a
nonrecurring estimated loss of $100,000 related to real estate operations.

Income tax  expense  for the nine  months  ended  March 31,  2000,  amounted  to
$164,738,  a decrease of $804,107  from the nine  months  ended March 31,  1999,
resulting in a decrease in the  effective  tax rate from 37% for the nine months
ended March 31, 1999 to 7% for the nine months ended March 31, 2000. This change
in effective  tax rate is the result of  nontaxable  proceeds  from key man life
insurance and an increase in federal income tax credits as previously  described
above.

Allowance for loan losses amounted to $2.2 million at March 31, 2000,  which was
relatively  unchanged from June 30, 1999,  after  adjusting for  charge-offs and
recoveries. Management considered the allowances for loan and real estate losses
at March 31, 2000, to be adequate to cover  estimated  losses  inherent in those
portfolios at that date, and its  consideration  included  probable  losses that
could be  reasonably  estimated.  Such belief is based upon an analysis of loans
currently outstanding, real estate owned, past loss experience, current economic
conditions  and other  factors  and  estimates  which are subject to change over
time. The following table  illustrates  the changes  affecting the allowance for
loan losses for the nine months ended March 31, 2000.

                              Allowance For    Allowance For       Total
                               Loan Losses       REO Loses       Allowance
                               -----------       ---------       ---------

Balances at July 1, 1999....   $2,271,701      $       0      $   2,271,701
Provision for losses........      458,027              0            471,977
Recoveries..................        3,381         13,950              3,381
Loans and REO charged off...     (486,995)            (0)         ( 486,995)
                              -----------       ---------        ----------

Balances at March 31, 2000..   $2,246,114       $ 13,950         $2,260,064
                               ==========       =========        ==========

The loan loss  reserves to total loans at March 31, 2000 equaled  1.35% of total
loans  outstanding,  the same percentage of total loans  outstanding at June 30,
1999. Total  non-performing  assets decreased during the nine months ended March
31, 2000,  from $3.3 million at June 30, 1999 to $2.2 million at March 31, 2000.
Non-performing  assets at March 31, 2000 consisted of loans  delinquent  greater
than 90 days of $1,965,000 and real estate owned of $205,000.

Total non-performing loans totaled 1.18% of total loans outstanding at March 31,
2000, compared to 1.98% of total loans at June 30, 1999.

                                                           11


<PAGE>



The  following  table further  depicts the amounts and  categories of the Bank's
non-performing assets.

                                            March 31,           June 30,
                                              2000                1999
                                            -------             -------
                                               (Dollars in Thousands)
Accruing loans delinquent
    more than 90 days ...........             $   --              $   --
Non-accruing loans:
    Residential .................                486               1,108
    Multi-family ................                 --                 462
    Commercial real estate ......              1,299               1,585
    Commercial loans ............                152                 153
    Consumer ....................                 28                  21
Troubled debt restructurings ....                 --                  --
                                              ------              ------
   Total non-performing loans ...              1,965               3,329
Repossessed assets, net .........                205                   2
                                              ------              ------
    Total non-performing assets..             $2,170              $3,331
                                              ======              ======

Non-performing loans to
    total loans .................               1.18%               1.98%
Non-performing assets to
    total assets ................               1.09%               1.69%

Average Balances and Interest

The  following  table  presents for the periods  indicated  the monthly  average
balances  of  the  Company's   interest-earning   assets  and   interest-bearing
liabilities, the interest earned or paid on such amounts, and the average yields
earned and rates paid.  Such yields and costs are determined by dividing  income
or  expense by the  average  balance of assets or  liabilities  for the  periods
presented.

<TABLE>
<CAPTION>
                                                           Three Months Ended March 31
                                  ---------------------------------------------------------------------------
                                                  2000                                    1999
                                  ----------------------------------         --------------------------------
                                                              (Dollars in thousands)

                                   Average                  Average          Average                  Average
                                   Balance      Interest      Rate           Balance      Interest      Rate
                                   -------      --------      ----           -------      --------      ----

<S>                               <C>            <C>         <C>             <C>           <C>         <C>
Total interest-
  earnings assets............     $176,598       $3,645      8.26%           $175,724      $3,747      8.54%
Total interest-
  bearing liabilities........      157,251          965      5.00%            153,192       1,873      4.89%
                                                 ------                                     -----
Net interest income/
Interest rate spread.........                    $1,680      3.26%                         $1,874      3.64%
                                                 ======                                    ======
</TABLE>




                                                           12


<PAGE>

<TABLE>
<CAPTION>

                                                        Nine Months Ended March 31
                                ------------------------------------------------------------------------
                                                2000                                  1999
                                -----------------------------------      --------------------------------
                                                           (Dollars in thousands)

                                Average                     Average      Average                  Average
                                Balance       Interest      Rate         Balance      Interest     Rate
<S>                             <C>           <C>          <C>           <C>        <C>           <C>
Total interest-
  earnings assets............   $177,188      $10,978      8.26%         $176,260   $11,346       8.58%
Total interest-
  bearing liabilities........    155,879        5,750      4.92%          150,421     5,755       5.10%
                                              -------                                 -----
Net interest income/
Interest rate spread.........                  $5,228      3.34%                     $5,591       3.48%
                                               ======                                ======
</TABLE>

Shareholders' Equity

Shareholders' equity at March 31, 2000, was $31,612,095,  a decrease of $131,472
from June 30, 1999. The Company's  equity to asset ratio was 15.87% at March 31,
2000  compared to 16.11% at June 30,  1999.  There are five  capital  categories
defined  in  the  regulations,  ranging  from  well  capitalized  to  critically
undercapitalized.  Classification  of a bank  in  any  of  the  undercapitalized
categories can result in actions by regulators that could have a material effect
on a bank's  operations.  At March 31,  2000,  the Bank is  categorized  as well
capitalized  and met all subject  capital  adequacy  requirements.  There are no
conditions or events since March 31, 2000, that management believes have changed
the Bank's classification.

Capital ratios at March 31, 2000, are as follows:

<TABLE>
<CAPTION>

                                                             Required
                                                           for Adequate         To Be Well
                                          Actual            Capitalized
                                    -----------------    -----------------  ------------------
                                     Amount     Ratio     Amount     Ratio   Amount     Ratio
<S>                                 <C>         <C>      <C>         <C>    <C>          <C>
Total risk-based capital
  (to risk-weighted assets)         $27,790     19.5%    $11,340     8.0%   $14,185      10.0%
Tier I risk based capital
  (to risk-weighted assets)          26,719     18.8%     11,348     8.0%    14,185      10.0%
Core capital
   (to adjusted tangible assets)     26,719     13.9%      5,734     3.0%    11,468       6.0%
Core capital
   (to adjusted total assets)        26,719     13.9%      5,734     3.0%     9,557       5.0%
</TABLE>




                                                           13


<PAGE>



Liquidity and Capital Resources

The standard measure of liquidity for savings  associations is the ratio of cash
and eligible  investments to a certain  percentage of net  withdrawable  savings
accounts  and  borrowings  due within one year.  The minimum  required  ratio is
currently set by the Office of Thrift Supervision regulation at 5%. At March 31,
2000, the Bank's liquidity ratio was 8.0%.

Other

The  Securities  and  Exchange  Commission  maintains  a Web site that  contains
reports,   proxy  information   statements,   and  other  information  regarding
registrants that file electronically with the Commission, including the Company.
The address is (http://www.sec.gov).

Item 3:  Quantitative and Qualitative Disclosure About Market Risk

The  Bank  is  subject   to   interest   rate  risk  to  the  degree   that  its
interest-bearing  liabilities,  primarily  deposits with short- and  medium-term
maturities,  mature or reprice  at  different  rates  than our  interest-earning
assets.  Although having  liabilities  that mature or reprice less frequently on
average than assets will be beneficial in times of rising interest  rates,  such
an  asset/liability  structure will result in lower net income during periods of
declining interest rates, unless offset by other factors.

The  Bank  protects   against  problems  arising  in  a  falling  interest  rate
environment  by  requiring   interest  rate  minimums  on  its  residential  and
commercial real estate adjustable-rate mortgages and against problems arising in
a rising  interest rate  environment  by having in excess of 86% of its mortgage
loans with  adjustable rate features.  Management  believes that these minimums,
which establish  floors below which the loan interest rate cannot decline,  will
continue to reduce its interest rate  vulnerability in a declining interest rate
environment.  For the loans  which do not adjust  because of the  interest  rate
minimums, there is an increased risk of prepayment.

The Bank  believes it is critical to manage the  relationship  between  interest
rates  and  the  effect  on its  net  portfolio  value  ("NPV").  This  approach
calculates the difference  between the present value of expected cash flows from
assets and the present value of expected cash flows from liabilities, as well as
cash  flows  from  off-balance  sheet  contracts.  The Bank  manages  assets and
liabilities  within the context of the marketplace,  regulatory  limitations and
within  its  limits on the  amount of  change in NPV which is  acceptable  given
certain interest rate changes.

The OTS  issued a  regulation,  which  uses a net market  value  methodology  to
measure the interest rate risk exposure of savings associations.  Under this OTS
regulation,  an institution's  "normal" level of interest rate risk in the event
of an assumed change in interest rates is a decrease in the institution's NPV in
an  amount  not  exceeding  2% of  the  present  value  of its  assets.  Savings
associations  with over  $300  million  in assets or less than a 12%  risk-based
capital  ratio are required to file OTS Schedule  CMR. Data from Schedule CMR is
used by the OTS to calculate  changes in NPV (and the related  "Normal" level of
interest rate risk) based upon certain interest rate changes  (discussed below).
Associations  which  do not  meet  either  of the  filing  requirements  are not
required to file OTS Schedule CMR, but may do so  voluntarily.  As the Bank does
not meet either of these requirements, it is not required to file Schedule

                                                           14


<PAGE>



CMR, although it does so voluntarily.  Under the regulation,  associations which
must file are  required  to take a deduction  (the  interest  rate risk  capital
component)  from their total  capital  available to  calculate  their risk based
capital  requirement  of their  interest rate exposure is greater than "normal".
The amount of that  deduction  is  one-half  of the  difference  between (a) the
institution's  actual  calculated  exposure to a 200 basis point  interest  rate
increase or  decrease  (whichever  results in the greater pro forma  decrease in
NPV) and (b) its "normal"  level of exposure which is 2% of the present value of
its assets.

Presented  below,  as of March 31, 2000, is an analysis  performed by the OTS of
the Bank's  interest  rate risk as measured by changes in NPV for  instantaneous
and sustained parallel shifts in the yield curve, in 100 basis point increments,
up and down 300 basis points.  At March 31, 2000, 2% of the present value of the
Bank's assets was approximately $3.8 million.  Because the interest rate risk of
a 200 basis point  increase in market rates (which was greater than the interest
rate risk of a 200 basis point decrease) was $1.4 million at March 31, 2000, the
Bank would not have been  required  to make a deduction  from its total  capital
available to calculate its risk based capital requirement if it had been subject
to the OTS's reporting requirements under this methodology.

                                 March 31, 2000

                    Net Portfolio Value                 NPV as % of PV of Assets
Change
In Rates      $ Amount       $Change        %Change      NPV Ratio      Change
--------------------------------------------------------------------------------
              (Dollars in Thousands)

+300 bp       29,506         -2,726             -8%       15.78%        -76 bp

+200 bp       30,800         -1,432             -4%       16.22%        -33 bp

+100 bp       31,748           -483             -1%       16.48%         -6 bp

   0 bp       32,231                                      16.54%

-100 bp       32,236            -95              0%       16.34%        -20 bp

-200 bp       31,615           -617             -2%       15.97%        -57 bp

-300 bp       31,233           -998             -3%       15.65%        -89 bp



                                                           15


<PAGE>



                                 March 31, 1999

                  Net Portfolio Value                 NPV as % of PV of Assets
Change
In Rates    $ Amount       $Change        %Change       NPV Ratio       Change
--------------------------------------------------------------------------------
           (Dollars in Thousands)

+300 bp     31,673         -296               -1%       16.89%          +30 bp

+200 bp     32,374         -405                1%       17.06%         +147 bp

+100 bp     32,455         -486                2%       16.96%          +36 bp

   0 bp     31,969                                      16.59%

-100 bp     31,436         -533               -2%       16.21%          -38 bp

-200 bp     31,216         -752               -2%       15.97%          -62 bp

-300 bp     31,292         -677               -2%       15.85%          -74 bp


As with any method of measuring  interest rate risk,  certain  shortcomings  are
inherent in the methods of  analysis  presented  above.  For  example,  although
certain  assets  and  liabilities  may have  similar  maturities  or  periods to
repricing,  they may react in  different  degrees to changes in market  interest
rates.  Also, the interest rates on certain types of assets and  liabilities may
fluctuate in advance of changes in market interest  rates,  while interest rates
on other types may lag behind  changes in market  rates.  Additionally,  certain
assets,  such as adjustable rate loans,  have features which restrict changes in
interest rates on a short-term basis and over the life of the asset. Most of the
Bank's   adjustable  rate  loans  have  interest  rate  minimums  of  6.00%  for
residential  loans  and 8.50%  for  commercial  real  estate  loans.  Currently,
originations  of  residential  adjustable  rate  mortgages  have  interest  rate
minimums of 7.50%. Further, in the event of a change in interest rates, expected
rates of  prepayments on loans and early  withdrawals  from  certificates  could
likely  deviate  significantly  from  those  assumed in  calculating  the table.
Finally, the ability of many borrowers to service their debt may decrease in the
event of an interest  rate  increase  although  the Bank does  underwrite  these
mortgages  at  approximately  2.0%  above  the  origination  rate.  The  Company
considers all of these factors in monitoring its exposure to interest rate risk.

                                                           16


<PAGE>



                            PART II OTHER INFORMATION

Item 1.           Legal Proceedings

Neither the Company nor the Bank were, during the three-month period ended March
31, 2000, or are, as of the date hereof,  involved in any legal  proceeding of a
material  nature.  From time to time,  the Bank is a party to legal  proceedings
wherein it enforces  its  security  interests  in  connection  with its mortgage
loans.

Item 6.           Exhibits and Reports on Form 8-K

a)       Exhibits

         3(1)     The  Articles  of   Incorporation   of  the   Registrant   are
                  incorporated by reference to Exhibit 3(1) to the  Registration
                  Statement on Form S-1 (Registration No. 33-55052).

         3(2)     The Code of  By-Laws  of the  Registrant  is  incorporated  by
                  reference  to Exhibit  3(2) to the  Registration  Statement on
                  Form S-1 (Registration No. 33-55052).

         10(1)    Second  Restated  Executive  Supplemental   Retirement  Income
                  Agreement between the Bank and Jackie Noble dated February 29,
                  2000

         10(2)    Second  Restated  Executive  Supplemental   Retirement  Income
                  Agreement  between the Bank and Nora Kuntz dated  February 29,
                  2000

         10(3)    Second  Restated  Executive  Supplemental   Retirement  Income
                  Agreement  between the Bank and John M. Dalton dated  February
                  29, 2000

         10(4)    Second  Restated  Executive  Supplemental   Retirement  Income
                  Agreement  between  the  Bank  and  Larry  G.  Phillips  dated
                  February 29, 2000

         10(5)    Executive  Shareholder Benefit Agreement for Steve Banks dated
                  February 1, 2000

         10(6)    Directors Shareholder Benefit Plan Agreement dated February 1,
                  2000

         10(7)    Second Amendment to the Excess Benefit  Agreement  between the
                  Bank and John M. Dalton dated March 10, 2000

         27       Financial Data Schedule

b)       Reports on Form 8-K

          The  Company  filed no reports on Form 8-K  during the  quarter  ended
          March 31, 2000.

                                                           17


<PAGE>

                                   Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          MARION CAPITAL HOLDINGS, INC.


Date: May 11, 2000                        By: /s/ Steven L. Banks
                                              -------------------
                                              Steven L. Banks, President



Date: May 11, 2000                        By: /s/ Larry G. Phillips
                                             ----------------------
                                             Larry G. Phillips, Vice President,
                                             Secretary and Treasurer








                                                      18