SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended          September 30, 2002
                          ------------------------------------------------------
                                     - or -

|_|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                  to
                               ----------------    -----------------------------
Commission Number:  0-26570

                    HARRODSBURG FIRST FINANCIAL BANCORP, INC.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

                      Delaware                                  61-1284899
---------------------------------------------                 ----------------
(State or other jurisdiction of incorporation                 (I.R.S. Employer
  or organization)                                           Identification No.)

104 South Chiles Street, Harrodsburg, Kentucky                  40330-1620
----------------------------------------------                  ----------
(Address of principal executive offices)                         Zip Code

Registrant's telephone number, including area code:     (859) 734-5452
                                                        --------------

Securities registered pursuant to Section 12(b) of the Act:        None
                                                                ---------

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.10 per share
                     --------------------------------------
                                (Title of Class)

         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 reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES  X    NO
                                              ---      ---

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-B is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. |X|

         State issuer's revenues for its most recent fiscal year: $9.2 million.

         The aggregate  market value of the voting stock held by  non-affiliates
of the  Registrant,  based on the average bid and ask price of the  Registrant's
Common Stock as quoted on the National Association of Securities Dealers,  Inc.,
Automated  Quotations  System on  December  6,  2002,  was  approximately  $11.1
million.

     As of December 6, 2002 there were issued and outstanding  1,334,016  shares
of the Registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions  of the Annual  Report to  Stockholders  for the Fiscal Year Ended
     September 30, 2002. (Part II)
2.   Portions  of  the  Proxy   Statement   for  the  2002  Annual   Meeting  of
     Stockholders. (Part III)

<PAGE>

                                     PART I

         Harrodsburg   First   Financial   Bancorp,   Inc.  (the   "Company"  or
"Registrant")  may  from  time to time  make  written  or oral  "forward-looking
statements,"  including  statements  contained in the Company's filings with the
Securities and Exchange Commission  (including this Annual Report on Form 10-KSB
and  the  exhibits  thereto),  in its  reports  to  Stockholders  and  in  other
communications  by the  Company,  which  are made in good  faith by the  Company
pursuant to the "Safe Harbor"  provisions of the Private  Securities  Litigation
Reform Act of 1995.

         These forward-looking statements involve risks and uncertainties,  such
as statements of the Company's plans,  objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's  financial  performance to differ  materially from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking statements: the strength of the United States economy in general
and  the  strength  of  the  local  economies  in  which  the  Company  conducts
operations;  the effects of, and changes in, trade, monetary and fiscal policies
and laws,  including  interest  rate  policies of the Board of  Governors of the
Federal Reserve System ("FRB"),  inflation,  interest rate,  market and monetary
fluctuations;  the timely  development  of and  acceptance  of new  products and
services of the company and the perceived  overall  value of these  products and
services by users,  including  the  features,  pricing  and quality  compared to
competitors'  products and  services;  the  willingness  of users to  substitute
competitors' products and services for the Company's products and services;  the
success of the  Company in  gaining  regulatory  approval  of its  products  and
services,  when required;  the impact of changes in financial services' laws and
regulations   (including  laws  concerning   taxes,   banking,   securities  and
insurance);  technological changes;  acquisitions;  changes in consumer spending
and  savings  habits;  and the  success  of the  Company at  managing  the risks
involved in the foregoing.

         The Company  cautions that the foregoing  list of important  factors is
not  exclusive.  The Company does not  undertake  to update any  forward-looking
statement,  whether written or oral, that may be made from time to time by or on
behalf of the company.

Item 1.  Business
-------  --------

General

         The  Registrant  is a bank  holding  company that serves as the holding
company for First  Financial  Bank ("First  Financial"),  a  federally-chartered
stock  savings  bank of  which  it is the  sole  shareholder,  and for  Citizens
Financial Bank, Inc. ("Citizens Financial"),  a state-chartered  commercial bank
in which it holds a 55.80%  interest  at  September  30,  2002.  The  Registrant
completed  its  acquisition  of  Citizens  Financial  on July  15,  2001.  First
Financial  and  Citizens  Financial  are  referred to herein as the "Banks." The
Company  conducts no  significant  business or  operations of its own other than
holding all or a majority of the outstanding  stock of the Banks.  References to
the Company or Registrant  generally refers to the consolidated entity including
the Banks, unless the context indicates otherwise.

         On October 15,  2002,  the  Registrant  entered  into an  agreement  to
acquire  approximately  200,000 shares,  or  approximately  23%, of Independence
Bancorp,  New Albany,  Indiana.  Such  transaction is contingent upon receipt of
regulatory  approval,  which is pending and the closing of the transaction on or
before December 31, 2002.

                                        1
<PAGE>

         First   Financial  is  a  federally   chartered   stock   savings  bank
headquartered  in  Harrodsburg,  Kentucky.  It is  subject  to  examination  and
comprehensive  regulation  by the Office of Thrift  Supervision  ("OTS") and its
deposits  are  federally  insured  by the  Savings  Association  Insurance  Fund
("SAIF").  First  Financial is a member of and owns capital stock in the Federal
Home Loan Bank ("FHLB") in Cincinnati,  which is one of the 12 regional banks in
the FHLB System.

         Citizens  Financial,  a  newly  organized  de  novo  Kentucky-chartered
commercial bank located in Glasgow,  Kentucky,  commenced operations on July 17,
2001.  It is  subject to  examination  and  regulation  by the  Federal  Deposit
Insurance   Corporation  ("FDIC")  and  the  Kentucky  Department  of  Financial
Institutions,  and its deposits are insured by the Bank  Insurance Fund ("BIF").
Citizens  Financial  is also a member of and owns  capital  stock in the FHLB in
Cincinnati.

         First   Financial   operates  a  traditional   savings  bank  business,
attracting  deposit  accounts from the general public and using those  deposits,
together with other funds, primarily to originate and invest in loans secured by
one- to four-family  residential real estate,  non-residential  real estate, and
commercial   loans.  To  a  lesser  extent,   First  Financial  also  originates
multi-family real estate loans and consumer loans.

         Citizens  operates as a commercial  bank,  attracting  deposit accounts
from the general  public and using  these  deposits,  together  with other funds
primarily to originate residential and non-residential,  commercial and consumer
loans.

Competition

         The competition for deposit products comes from other insured financial
institutions such as commercial banks, thrift  institutions,  credit unions, and
multi-state  regional banks in the Registrant's market area of Mercer,  Anderson
and Barren  Counties,  Kentucky.  Deposit  competition also includes a number of
insurance  products sold by local agents and investment  products such as mutual
funds and other securities sold by local and regional brokers.  Loan competition
varies depending upon market  conditions and comes from other insured  financial
institutions  such as commercial  banks,  thrift  institutions,  credit  unions,
multi-state regional banks, and mortgage bankers.

                                        2
<PAGE>

         Analysis of Loan Portfolio.  The following table sets forth information
concerning the composition of the Registrant's  loan portfolio in dollar amounts
and in percentages of the total loan portfolio  (before  deductions for loans in
process, deferred loan origination fees and costs and allowance for loan losses)
as of the dates indicated.

<TABLE>
<CAPTION>

                                                        At September 30,
                                           -------------------------------------------
                                                   2002                 2001
                                           --------------------  ---------------------
                                              Amount    Percent      Amount   Percent
                                              ------    -------      ------   -------
                                                    (Dollars in Thousands)
<S>                                       <C>          <C>      <C>           <C>
Type of Loans:
Real Estate:
  One-to four-family residential.......     $ 75,991     65.52%   $  80,153     73.79%
  Multi-family.........................        2,419      2.09        2,541      2.34
  Agricultural.........................        7,283      6.28        3,865      3.56
  Commercial...........................       14,217     12.26        8,783      8.09
  Construction.........................        5,433      4.68        7,286      6.70
Consumer:
  Home equity..........................        2,666      2.30        1,879      1.73
  Other(1).............................        7,227      6.23        3,612      3.33
  Savings account......................          741       .64          498       .46
                                             -------    ------      -------    ------
      Total loans receivable...........      115,977    100.00%     108,617    100.00%
                                                        ======                 ======
Less:
  Loans in process.....................        1,554                  2,687
  Deferred loan origination fees
   and costs, net......................          439                    438
  Allowance for loan losses............          632                    411
                                            --------               --------
Loans receivable, net..................     $113,352               $105,081
                                            ========               ========
</TABLE>

---------------
(1)  Includes home improvement, personal loans, auto and commercial loans.

Loan Maturity Tables

         The  following  table  sets  forth  the  maturity  of the  Banks'  loan
portfolio  at  September  30, 2002.  The table does not include  prepayments  or
scheduled principal  repayments.  Prepayments and scheduled principal repayments
on loans totaled  approximately  $40.0 million for the year ended  September 30,
2002.  Adjustable-rate mortgage loans are shown as maturing based on contractual
maturities.

<TABLE>
<CAPTION>
                                                  Due     Due after
                                                 within   1 through   Due after
                                                 1 year    5 years    5 years     Total
                                                --------   --------   --------   --------
                                                           (In Thousands)
<S>                                           <C>        <C>        <C>        <C>
One- to four-family residential .............   $     80   $  3,877   $ 74,965   $ 78,922
Multi-family, agricultural and commercial....      2,257      4,167     19,286     25,710
Construction ................................        815         51      4,873      5,739
Consumer ....................................      3,553      2,042         11      5,606
                                                --------   --------   --------   --------
Total .......................................   $  6,705   $ 10,137   $ 99,135   $115,977
                                                ========   ========   ========   ========
</TABLE>

         The  following  table sets forth as of  September  30,  2002 the dollar
amount of all  loans,  which  have  fixed  rates of  interest  and  floating  or
adjustable interest rates. Citizens Financial accounting records do

                                        3
<PAGE>

not currently provide loan maturity information by fixed, floating or adjustable
rates.  At September 30, 2002, of the total loan maturity due within one year of
$6.7 million, Citizens Financial loan maturity was approximately $2.4 million.

<TABLE>
<CAPTION>
                                                                    Floating or
                                               Fixed Rates        Adjustable Rates       Total
                                               -----------        ----------------       -----
                                                                   (In Thousands)
<S>                                             <C>                  <C>            <C>
One- to-four family residential..............     $22,518              $56,404        $  78,922
Multi-family, agricultural and commercial....       3,060               22,650           25,710
Construction.................................         509                5,230            5,739
Consumer.....................................       4,025                1,581            5,606
                                                  -------              -------         --------
Total........................................     $30,112              $85,865         $115,977
                                                  =======              =======         ========
</TABLE>

         One- to- Four  Family  Residential  Loans.  First  Financial's  primary
lending activity consists of the origination of one- to- four family residential
mortgage loans secured by property  located in their primary market area.  First
Financial generally  originates one- to- four family residential  mortgage loans
without  private  mortgage  insurance  in amounts up to 85% of the lesser of the
appraised value or selling price of the mortgaged  property.  Loans in excess of
85% of the value of the mortgaged  property  typically  require private mortgage
insurance in the amount of 25% to 30% of the loan amount.

         First  Financial  offers  three types of  residential  adjustable  rate
mortgage loans,  all of which use the index value of the National Monthly Median
Cost of Funds Ratio to SAIF-Insured  Institutions plus a set margin added to it.
The interest rates on these loans have an initial  adjustment  period of between
one and five years,  and generally  adjust annually  thereafter,  with a maximum
adjustment  of 2% per year  and a  maximum  increase  of 5% over the life of the
loan.  The index margin on a non  owner-occupied  one- to- four family  property
loan is .50% higher than on an  owner-occupied  property loan. First Financial's
adjustable-rate  one-to-  four family  mortgage  loans are for terms of up to 30
years, amortized on a monthly basis, with principal and interest due each month.
Borrowers may refinance or prepay loans at their option without  penalty.  First
Financial originates, to a limited extent, 10 year, 15 year, 20 and 30 year term
fixed-rate  mortgages on one- to four-family,  owner-occupied homes with loan to
value ratios of 85% or less.

         Loan  originations  are  generally  obtained  from existing and walk-in
customers,  members  of  the  local  community,  and  referrals  from  realtors,
depositors  and  borrowers  within  the  Bank's  lending  area.  Mortgage  loans
originated  and held by  First  Financial  in its  portfolio  generally  include
due-on-sale  clauses which provide First Financial with the contractual right to
deem the  loan  immediately  due and  payable  in the  event  that the  borrower
transfers ownership of the property without the Registrant's consent.

         During  periods  of  rising  interest  rates,  the risk of  default  on
adjustable-rate  loans  may  increase  due to  increases  in  interest  costs to
borrowers.  Further,  adjustable-rate  loans which  provide for initial rates of
interest  below the fully  indexed  rates may be  subject to  increased  risk of
delinquency   or  default  as  the  higher,   fully  indexed  rate  of  interest
subsequently replaces the lower, initial rate.

         Construction Loans. The Banks engage in construction  lending involving
loans to qualified  borrowers for construction of one- to-four family dwellings,
multi-family  residential  units,  commercial  buildings and churches,  with the
intent of such loans  converting  to  permanent  financing  upon  completion  of
construction. All construction loans are secured by a first lien on the property
under  construction.  Loan proceeds are disbursed in increments as  construction
progresses and as inspections warrant.

                                        4
<PAGE>

Construction/permanent  loans  generally have adjustable or fixed interest rates
and are  underwritten  in  accordance  with the same terms and  requirements  as
permanent  mortgages,  except the loans  generally  provide for  disbursement in
stages during a  construction  period of up to twelve  months,  during which the
borrower is not required to make monthly payments. If construction  improvements
are not  completed at the end of six months,  accrued  interest  must be paid to
date.  Accrued  interest must be paid at completion of construction to the first
day of the  following  month,  and monthly  payments  start the first day of the
following month if the loan is converted to permanent financing.  Borrowers must
satisfy all credit  requirements  which would apply to permanent  mortgage  loan
financing  for the  subject  property  and  must  execute  a  construction  loan
agreement.

         Construction  financing  generally  is  considered  to involve a higher
degree of risk of loss  than long term  financing  on  improved,  occupied  real
estate.  Risk of loss on a  construction  loan is  dependent  largely  upon  the
accuracy  of the initial  estimate  of the  property's  value at  completion  of
construction  or  development  and the estimated  cost  (including  interest) of
construction. During the construction phase, a number of factors could result in
delays and cost  overruns.  If the  estimate of  construction  cost proves to be
inaccurate,  the Banks may be  required  to  advance  funds  beyond  the  amount
originally  committed to permit  completion of the  development.  The Banks have
sought to minimize this risk by requiring  precise  construction cost estimates,
specifications, and drawing plans from qualified borrowers in their market area.

         Multi-Family  and Commercial  Real Estate Loans.  In order to serve its
community and enhance yields on its assets, the Banks originate loans secured by
commercial  real  estate  and  multi-family  properties.  The  multi-family  and
commercial real estate loans originated have generally been made to individuals,
small  businesses  and  partnerships.  They have primarily been secured by first
mortgages  on  apartment  buildings,   office  buildings,   churches  and  other
properties.  The  Banks  benefit  from  originating  such  loans  due to  higher
adjustable interest rates. Adjustable-rate loans for this type of lending have a
margin that is .50% higher than the margin added to single family owner-occupied
property loan. First  Financial's  multi-family  residential and commercial real
estate  loans are  adjustable-rate  loans with  terms of 25 years or less,  with
loan-to-value  ratios not exceeding 80%. Citizens  multi-family  residential and
commercial real estate loans are adjustable  rate loans with a maximum  maturity
of twenty years,  and loan-  to-value  ratios not exceeding 85%. As of September
30,  2002,  loans  on  multi-family   residential  and  commercial  real  estate
properties constituted approximately $16.6 million, or 14.34% of the Banks total
loan portfolio.

         Multi-family  and commercial  real estate lending  entails  significant
additional risks as compared to one- to- four family  residential  lending.  For
example, such loans typically involve large loans to single borrowers or related
borrowers,  the payment  experience on such loans is typically  dependent on the
successful  operation  of the  project,  and these  risks  can be  significantly
affected  by the  supply  and demand  conditions  in the  market for  commercial
property and multi-family residential units.

         Loans secured by  commercial  real estate  generally  involve a greater
degree of risk than  residential  mortgage loans and carry larger loan balances.
This  increased  credit  risk is a result  of  several  factors,  including  the
concentration  of  principal  in a limited  number of loans and  borrowers,  the
effects of general economic conditions on income producing  properties,  and the
increased  difficulty  of  evaluating  and  monitoring  these  types  of  loans.
Furthermore,  the  repayment  of loans  secured  by  commercial  real  estate is
typically  dependent  upon the  successful  operation of the related real estate
project. If the cash flow from the project is reduced, the borrower's ability to
repay the loan may be impaired.  To minimize  these risks,  the Banks  generally
limits loans of this type to its market area and to borrowers  with which it has
substantial  experience  or who are  otherwise  well  known to them.  The Banks'
underwriting procedures

                                        5
<PAGE>

require  verification  of  the  borrower's  credit  history,  income,  financial
statements, banking relationships, credit references, and income projections for
the property.  It is their current  practice to obtain personal  guarantees from
all principals obtaining this type of loan. For the small total dollar amount of
loans secured by church real estate that are originated by the Banks,  repayment
is dependent upon the continuing  financial support of the church's members. The
Banks also obtain appraisals on each property.  All appraisals on commercial and
multi-family real estate are reviewed by the Banks' management.

         Agricultural  Loans.  The Banks engage in lending on improved farm land
with no dwelling,  building lots and building  acreage sites.  The Banks benefit
from  originating  such  loans due to  higher  origination  fees and  adjustable
interest rates.  These properties must have good road access.  The loan to value
ratio for this type of loan is generally 85% or less with a maximum loan term of
15  years  for  First  Financial  and  20  years  for  Citizens  Financial  . An
adjustable-  rate loan for this type of lending has a margin that is .50% higher
than the margin added to one- to four-family owner-occupied property loans.

         The Banks also engage in loans for  improved  farm land with  dwelling.
The loan to value  ratio for this type of loan is  generally  85% or less with a
maximum  term  of 25  years  for  First  Financial  and 20  years  for  Citizens
Financial.  These  loans  can be set  up  with  payment  of  interest  collected
semi-annually  and  principal  yearly as well as monthly  principal and interest
payments.

         Consumer  Lending.  The  Banks  originate  consumer  loans on  either a
secured  or  unsecured  basis.  These  loans  generally  require a  pre-existing
relationship  with the Banks.  The Banks  generally make  certificate of deposit
loans for  terms of up to six  months in  amounts  up to the face  amount of the
certificate.  The  interest  rate charged on these loans is up to 2% higher than
the rate paid on the  certificate,  and interest is billed on a quarterly basis.
These loans are payable on demand and the account  must be assigned to the Banks
as collateral for the loan.

         Consumer  loans  may  entail  greater  risk  than  residential   loans,
particularly  in the case of  consumer  loans that are  unsecured  or secured by
assets that depreciate rapidly.  Repossessed collateral for a defaulted consumer
loan may not be  sufficient  for  repayment  of the  outstanding  loan,  and the
remaining deficiency may not be collectible.

         Loan  Approval   Authority  and   Underwriting.   First  Financial  has
established  various  lending  limits  for its  officers  and  maintains  a loan
committee.  The loan  committee  consists of Arthur L. Freeman,  Chairman of the
Board and Chief Executive Officer,  Jack D. Hood,  Treasurer and Chief Financial
Officer, and Wickliffe T. Asbury,  Executive Vice President,  Charles W. Graves,
Jr.,  Senior Vice  President,  and Vice  Presidents Gay Gaines and James Baxter.
Messrs.  Freeman,  Hood, and Asbury,  each have the authority to approve secured
loan  applications up to $300,000 and unsecured loans of up to $30,000.  Messrs.
Graves and Gaines,  each have the authority to approve secured loan applications
up to $200,000 and unsecured loans of $20,000,  and Mr. Baxter has the authority
to approve  secured  applications up to $150,000 and unsecured loans of $15,000.
Any two officers may join  together to approve  loans,  but only to the limit of
the higher authority of the two officers. The loan committee approves loans that
exceed the limits  established  for individual  officers and may approve secured
loans of up to $500,000 and unsecured  loans of $50,000.  The Board of Directors
must approve all loans that exceed the lending limit of the loan committee.

         For  all  loans  originated  by  First  Financial,  upon  receipt  of a
completed  loan  application  from a  prospective  borrower,  a credit report is
generally  ordered,  income and certain  other  information  is verified and, if
necessary,  additional financial  information is requested.  An appraisal of the
real estate  intended to be used as security for the proposed  loan is obtained.
All appraisals are reviewed by officers of First

                                        6
<PAGE>

Financial  designated  by the  Board  of  Directors.  An  independent  appraiser
designated and approved by the Board of Directors of First Financial is utilized
for all real estate mortgage loans. For construction/permanent  loans, the funds
advanced during the  construction  phase are held in a loan-in-  process account
and disbursed  based upon various  stages of  completion in accordance  with the
results of  inspection  reports that are based upon  physical  inspection of the
construction  by an independent  contractor  hired by First Financial or in some
cases by an officer of the Bank.  For real  estate  loans First  Financial  will
require either title  insurance or a title  opinion.  Borrowers must also obtain
fire and casualty, hazard or flood insurance (for loans on property located in a
flood zone, flood insurance is required) prior to the closing of the loan.

         Citizens has  established  various  lending limits for its officers and
maintains an officers loan  committee.  The officers loan committee  consists of
Terry Bunnell, President, Larry Ramey, Chief Operating Officer, Nancy Hale, Vice
President  Loans,  and Jennie  Wilson.  Mr. Bunnell has the authority to approve
secured and  unsecured  loans up to  $250,000,  Mr.  Ramey has the  authority to
approve secured and unsecured  loans up to $200,000.  Ms. Hale has the authority
to approve  secured and  unsecured  loans up to $100,000 and Ms.  Wilson has the
authority to approve secured and unsecured loans up to $2,500.

         Officers  may not join  authorities  to approve  loans but officers may
have an officer  with  higher  authority  approve  loans up to the limit of that
officer.  The loan committee  approves loans exceeding  officer limits up to the
loan  committee  limit of  $500,000.  The loan  committee  consists  of Officers
Bunnell,  Ramey,  Hale and Wilson.  The Board loan  committee  consists of Terry
Bunnell,  Larry  Ramey,  Henry H.  Dickinson,  Chairman of the Board,  Thomas K.
Lyons,  Samuel D. Dickinson,  Philip J. Rutledge and Arthur Freeman and approves
loans in excess of $500,000.

         The Board of Directors  approves  all insider  loans and other loans as
presented by the Board loan committee for full board approval.

         For all loans originated by Citizens,  upon receipt of a completed loan
application from a prospective  borrower,  a credit report is generally ordered,
income and certain other  information  is verified and, if necessary  additional
financial information is requested.  An appraisal of the real estate intended to
be  used  as  security  for  the  proposed  loan  is  obtained  as  required  by
regulations.   For  loans  for  which  appraisals  are  not  required,   written
evaluations  of the real estate  collateral  are prepared.  Officers of Citizens
review all appraisals or written evaluations prepared. Independent appraisers as
approved by the Board of  Directors  are  utilized.  For  construction/permanent
loans a line of credit is  established  and advances are drawn  against the line
based upon  various  stages of  completion  in  accordance  with the  results of
inspection  reports  based on  physical  inspection  of the  construction  by an
independent  contractor or bank officer. For real estate loans Citizens requires
either title  insurance or a title opinion.  Borrowers must also obtain fire and
casualty,  hazard or flood  insurance  if in a flood zone  prior to closing  the
loan.

         Loan  Commitments.   First  Financial  issues  written  commitments  to
prospective  borrowers  on  all  approved  real  estate  loans.  Generally,  the
commitment  requires  acceptance  within  20 days of the  date of  issuance.  At
September  30,  2002,  First  Financial  had   approximately   $6.2  million  of
commitments to cover originations,  undisbursed funds for  loans-in-process  and
unused lines of credit.

         Citizens  issues written  commitments  to prospective  borrowers on all
approved real estate loans. Generally, the commitment requires acceptance within
20  days  of  the  date  of  issuance.  At  September  30,  2002,  Citizens  had
approximately $1.5 million of commitments to cover unused lines of credit.

                                        7
<PAGE>

Non-Performing and Problem Assets

         Loan Delinquencies. First Financial monitors delinquencies on all types
of loans  closely.  If such  loans  later  become  delinquent,  First  Financial
contacts  and  works  with  the  borrower  to  resolve  the  delinquency  before
initiating  foreclosure  proceedings.  First Financial's  collection  procedures
provide that when a mortgage loan is 10 days past due, a notice of nonpayment is
sent.  Delinquent  notices are sent if the loan becomes delinquent for more than
30 days. If payment is still delinquent after 60 days, the customer will receive
a letter and/or telephone call and may receive a visit from a representative  of
the Registrant.  If the delinquency  continues,  similar  subsequent efforts are
made to eliminate the delinquency.  If the loan continues in a delinquent status
for 90  days  past  due and no  repayment  plan is in  effect,  management  will
generally initiate legal proceedings.

         Loans are reviewed on a monthly basis by  management  and are generally
placed  on a  non-accrual  status  when  the  loan  becomes  more  than  90 days
delinquent  and, in the opinion of  management,  the  collection  of  additional
interest is doubtful.  Interest  accrued and unpaid at the time a loan is placed
on non- accrual status is charged against interest income.  Subsequent  interest
payments,  if any, are either applied to the  outstanding  principal  balance or
recorded  as  interest  income,  depending  on the  assessment  of the  ultimate
collectibility of the loan.

         Citizens monitors  delinquencies on all types of loans closely. If such
loans later become delinquent,  Citizens contacts and works with the borrower to
resolve the delinquency before initiation of foreclosure  proceedings.  Citizens
collection  procedures provide that when a mortgage loan is 15 days past due (10
days for other loans),  a notice of nonpayment is sent.  Delinquent  notices are
sent if the loan becomes  delinquent for more than 30 days. At 30 days past due,
the customer also receives a letter,  phone call or officer visit to discuss the
loan status. If the delinquency  continues,  similar subsequent efforts are made
to eliminate the delinquency.  If the loan continues in a delinquent  status for
up to 90 days  past due and no  repayment  plan is in  effect,  management  will
generally initiate legal proceedings.

         Loans are reviewed on a monthly basis by management  and will be placed
on  non-accrual  status when the loan becomes more than 90 days past due and, in
the opinion of management,  the  collection of additional  interest is doubtful.
Interest  accrued and unpaid at the time a loan is placed on non-accrual  status
is charged against interest income.  Subsequent  interest payments,  if any, are
either applied to principal then to interest that would have been  contractually
accrued.

                                        8
<PAGE>

         Non-Performing  Assets.  The  following  table sets  forth  information
regarding  non-accrual  loans,  real estate owned and certain other  repossessed
assets  and  loans.  As of the  dates  indicated,  the  Registrant  had no loans
categorized  as troubled debt  restructuring  within the meaning of Statement of
Financial  Accounting  Standards  ("SFAS") 15 and no impaired  loans  within the
meaning of meaning of SFAS 114, as amended by SFAS 118.



                                                           At September 30,
                                                       ------------------------
                                                        2002            2001
                                                        ----            ----
                                                         (In Thousands)
Loans accounted for on a non-accrual basis:
Total..............................................     $ 41            $ --
Accruing loans which are contractually past
 due 90 days or more:
Mortgage loans:
  Construction loans...............................       --              --
  Permanent loans secured by 1 to 4 family
    dwelling units.................................      217             166
  All other mortgage loans.........................        5               6
 Non-mortgage loans:
  Commercial.......................................       --              --
  Consumer.........................................      112              50
                                                        ----            ----
Total..............................................      334             222
                                                        ----            ----
Total non-accrual and accrual loan.................      375             222
Real estate owned..................................      233              --
                                                        ----            ----
Total non-performing assets........................     $608            $222
                                                        ====            ====
Total non-performing loans to net loans............      .33%            .21%
                                                        ====            ====
Total non-performing loans to total assets.........      .25%            .16%
                                                        ====            ====
Total non-performing assets to total assets........      .40%            .16%
                                                        ====            ====

         Classified  Assets.  Federal  regulations  provide for a classification
system for  problem  assets of insured  institutions  which  covers all  problem
assets. Under this classification system, problem assets of insured institutions
are classified as  "substandard,"  "doubtful," or "loss." An asset is considered
substandard if it is inadequately  protected by the current net worth and paying
capacity of the obligor or of the collateral pledged, if any. Substandard assets
include  those  characterized  by the  "distinct  possibility"  that the insured
institution  will sustain  "some loss" if the  deficiencies  are not  corrected.
Assets  classified  as  doubtful  have all of the  weaknesses  inherent in those
classified  substandard,  with the  added  characteristic  that  the  weaknesses
present  make  "collection  or  liquidation  in full," on the basis of currently
existing facts,  conditions,  and values,  "highly questionable and improbable."
Assets  classified  as loss are  those  considered  "uncollectible"  and of such
little value that their  continuance  as assets without the  establishment  of a
specific  loss  reserve  is not  warranted.  Assets may be  designated  "special
mention"   because  of  potential   weakness  that  do  not  currently   warrant
classification in one of the aforementioned categories.

         When  an  insured  institution  classifies  problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan losses in
an amount  deemed  prudent by  management.  General  allowances  represent  loss
allowances which have been established to recognize the inherent risk associated

                                        9
<PAGE>

with lending activities,  but which, unlike specific  allowances,  have not been
allocated to particular problem assets. When an insured  institution  classifies
problem assets as loss, it is required either to establish a specific  allowance
for losses equal to 100% of that portion of the asset so classified or to charge
off such amount. First Financial and Citizens Financial  determination as to the
classification  of its  assets  and the amount of its  valuation  allowances  is
subject  to review by the OTS and the  FDIC,  respectively,  which may order the
establishment of additional  general or specific loss  allowances.  A portion of
general loss  allowances  established to cover possible losses related to assets
classified  as  substandard  or  doubtful  may be  included  in  determining  an
institution's  regulatory capital,  while specific valuation allowances for loan
losses generally do not qualify as regulatory capital.

         The following table sets forth the  Registrant's  classified  assets in
accordance with its classification system:


                                                  At September 30, 2002
                                                  ---------------------
                                                     (In Thousands)

          Special Mention..................                $  5
          Substandard......................                 486
          Doubtful.........................                  --
          Loss.............................                  --
                                                           ----
          Total............................                $491
                                                           ====

         Allowance  for Loan Losses.  It is  management's  policy to provide for
losses on loans in its loan portfolio. A provision for loan losses is charged to
operations  based on management's  evaluation of the losses that may be incurred
in the Registrant's loan portfolio. Such evaluation,  which includes a review of
all loans of which full  collectibility  of interest  and  principal  may not be
reasonably assured, considers the Registrant's past loan loss experience,  known
and inherent  risks in the  portfolio,  adverse  situations  that may affect the
borrower's  ability  to repay,  estimated  value of any  underlying  collateral,
current  economic  conditions,  and the  relationship  of the allowance for loan
losses to outstanding loans.

                                       10
<PAGE>

         The  following  table  sets  forth  information  with  respect  to  the
Registrant's  allowance  for  loan  losses  at the  dates  and for  the  periods
indicated:


                                                           At or For the Year
                                                           Ended September 30,
                                                        ------------------------
                                                          2002           2001
                                                        --------       --------
                                                         (Dollars in Thousands)

Total loans outstanding............................     $115,977       $108,617
                                                        ========       ========
Average loans outstanding..........................     $109,011       $102,989
                                                        ========       ========


Allowance balances (at beginning of  period).......     $    411       $    372
Provision (credit):
  Residential......................................          241             39
  Consumer.........................................           --             --
Net Charge-offs (recoveries):
  Residential......................................           20             --
  Consumer.........................................           --             --
                                                        --------       --------
Allowance balance (at end of period)...............     $    632       $    411
                                                        ========       ========
Allowance for loan losses as a percent
  of total loans outstanding.......................          .54%           .38%
Net loans charged off as a percent of
  average loans outstanding........................          .02%            --%

         Management  will  continue  to review  the  entire  loan  portfolio  to
determine the extent, if any, to which further additional loss provisions may be
deemed  necessary.  There can be no assurance that the allowance for loan losses
will be adequate to cover losses which may in fact be realized in the future and
that additional provisions for losses will not be required.

                                       11
<PAGE>

Analysis of the Allowance for Loan Losses

         The  following  table sets forth the  allocation  of the  allowance  by
category,  which  management  believes can be allocated  only on an  approximate
basis.  The  allocation  of the  allowance to each  category is not  necessarily
indicative  of future loss and does not  restrict  the use of the  allowance  to
absorb losses in any category.

<TABLE>
<CAPTION>
                                                             At September 30,
                                              ------------------------------------------------
                                                   2002                       2001
                                              --------------------      ----------------------

                                                       Percent of                  Percent of
                                                        Loans to                    Loans to
                                              Amount   Total Loans      Amount     Total Loans
                                              ------   -----------      ------     -----------
                                                          (Dollars in Thousands)
<S>                                         <C>         <C>           <C>          <C>
Real estate mortgage:
  One- to four-family residential.........     $414        65.52%        $302         73.79%
  Multi-family............................       13         2.09           10          2.34
  Agricultural............................       40         6.28           15          3.56
  Commercial..............................       77        12.26           33          8.09
  Residential construction................       30         4.68           28          6.70
Consumer..................................       58         9.17           23          5.52
                                               ----       ------         ----        ------
    Total allowance for loan
      losses..............................     $632       100.00%        $411        100.00%
                                               ====       ======         ====        ======
</TABLE>

Investment Activities

         The  Registrant  is required  under federal  regulations  to maintain a
sufficient amount of liquid assets which may be invested in specified short-term
securities and certain other investments.  However, neither the OTS nor the FDIC
prescribes by regulation to a minimum or percentage of liquid assets.  The level
of liquid assets  varies  depending  upon several  factors,  including:  (i) the
yields  on  investment  alternatives,  (ii)  management's  judgment  as  to  the
attractiveness of the yields then available in relation to other  opportunities,
(iii) expectation of future yield levels,  and (iv) management's  projections as
to the  short-term  demand  for funds to be used in loan  origination  and other
activities.  Investment securities,  including mortgage-backed  securities,  are
classified  at the time of  purchase,  based upon  management's  intentions  and
abilities, as securities held to maturity or securities available for sale. Debt
securities  acquired  with  the  intent  and  ability  to hold to  maturity  are
classified  as held to  maturity  and  are  stated  at  cost  and  adjusted  for
amortization of premium and accretion of discount,  which are computed using the
level yield method and recognized as adjustments of interest  income.  All other
debt  securities are classified as available for sale to serve  principally as a
source of liquidity.

         Current  regulatory  and  accounting  guidelines  regarding  investment
securities  (including  mortgage  backed  securities)  require the Registrant to
categorize  securities as "held to maturity," "available for sale" or "trading."
As of September 30, 2002, Registrant had securities  (including  mortgage-backed
securities)  classified  as "held to maturity" and  "available  for sale" in the
amount of $2.3 million and $17.3  million,  respectively  and had no  securities
classified as  "trading."  Securities  classified  as  "available  for sale" are
reported  for  financial  reporting  purposes at the fair market  value with net
changes in the fair market value

                                       12
<PAGE>

from period to period included as a separate component of stockholders'  equity,
net of  income  taxes.  At  September  30,  2002,  the  Registrant's  securities
available for sale had an amortized  cost of $12.9 million and fair market value
of $17.3 million.  Changes in the fair market value of securities  available for
sale do not affect the Company's income. In addition, changes in the fair market
value of  securities  available  for sale do not affect  the  Bank's  regulatory
capital requirements or its loan-to-one borrower limit.

         At September 30, 2002, the  Registrant's  investment  portfolio  policy
allowed investments in instruments such as: (i) U.S. Treasury obligations,  (ii)
U.S.  federal  agency or federally  sponsored  agency  obligations,  (iii) local
municipal   obligations,   (iv)   mortgage-backed   securities,   (v)   banker's
acceptances,  (vi) certificates of deposit, and (vii) investment grade corporate
bonds,  and commercial  paper.  The board of directors may authorize  additional
investments.

         As a  source  of  liquidity  and  to  supplement  Registrant's  lending
activities,   the  Registrant   has  invested  in  residential   mortgage-backed
securities.  Mortgage-backed  securities  can serve as collateral for borrowings
and, through repayments,  as a source of liquidity.  Mortgage-backed  securities
represent a participation  interest in a pool of  single-family or other type of
mortgages.  Principal  and  interest  payments  are  passed  from  the  mortgage
originators, through intermediaries (generally quasi-governmental agencies) that
pool and  repackage  the  participation  interests in the form of  securities to
investors.  The quasi- governmental  agencies guarantee the payment of principal
and interest to investors and include FreddieMac, GinnieMae, and FannieMae.

         Mortgage-backed  securities  typically are issued with stated principal
amounts.  The  securities  are backed by pools of mortgages that have loans with
interest  rates that are  within a set range and have  varying  maturities.  The
underlying  pool of mortgages can be composed of either fixed rate or adjustable
rate mortgage  loans.  Mortgage-backed  securities are generally  referred to as
mortgage participation certificates or pass-through  certificates.  The interest
rate risk  characteristics of the underlying pool of mortgages (i.e., fixed rate
or adjustable  rate) and the prepayment  risk, are passed on to the  certificate
holder. The life of a mortgage-backed pass-through security is equal to the life
of the underlying  mortgages.  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   prepayment   penalties.
Mortgage-backed securities issued by FreddieMac,  GinnieMae, and FannieMae, make
up a majority of the pass-through certificates market.

         At September 30, 2002, the  Registrant's  securities  portfolio did not
contain securities of any issuer,  other than those issued by U.S. government or
its agencies,  with an aggregate book value in excess of 10% of the Registrant's
equity.

                                       13
<PAGE>

         Investment Portfolio. The following table sets forth the carrying value
of the Registrant's investment securities at the dates indicated.


                                                               At September 30,
                                                               ----------------
                                                                2002      2001
                                                                ----      ----
                                                                (In Thousands)
Investment Securities available for sale:
    U.S. government and federal agencies securities.........  $ 4,932  $  7,498
    FHLMC stock ............................................    4,309     5,011
    Mortgaged-backed securities ............................    8,034        --
                                                              -------   -------
  Total.....................................................   17,275    12,509
                                                              -------   -------
Investment securities held to maturity:
     U.S. government and federal agencies debt securities ..    2,007     3,037
     Municipal bonds .......................................      214       220
     Mortgaged-backed securities ...........................       --        23
                                                              -------   -------
 Total......................................................    2,221     3,280
                                                              -------   -------
 Total investment securities................................  $19,496   $15,789
                                                              =======   =======

                                       14
<PAGE>

         Investment  Portfolio  Maturities.   The  following  table  sets  forth
information  regarding the scheduled  maturities,  carrying values, market value
and weighted average yields for the Registrant's investment securities portfolio
at September 30, 2002. The following table does not take into  consideration the
effects of scheduled repayments or the effects of possible prepayments.

<TABLE>
<CAPTION>
                                                                   As of September 30, 2002
                                  --------------------------------------------------------------------------------------------------
                                                    More Than One    More Than Five      More than
                                   One Year or Less  to Five Years    to Ten Years       Ten Years       Total Investment Securities
                                  ----------------- ---------------- ---------------- ----------------   ---------------------------
                                  Carrying  Average Carrying Average Carrying Average Carrying Average     Carrying Average  Market
                                   Value     Yield    Value   Yield   Value    Yield    Value   Yield        Value   Yield   Value
                                   -------   -----   ------    ----   ------    ----     ----   -----       -------  -----  -------
                                                                     (Dollars in Thousands)
<S>                              <C>        <C>    <C>       <C>    <C>       <C>     <C>      <C>      <C>        <C>     <C>
Investments securities available
for  sale:
U.S. government and federal
    agencies debt securities...... $ 3,699    1.63%  $1,030    4.63%  $  203    5.15%   $  --      --%     $ 4,932    2.38% $ 4,932
FHLMC stock ......................   4,309    1.42       --      --       --      --       --      --        4,309    1.42    4,309
Mortgage-backed securities........   8,034    5.16       --      --       --      --       --      --        8,034    5.85    8,034
                                   -------           ------           ------             ----              -------          -------
     Total........................  16,042    3.55    1,030    4.63      203    5.15       --      --       17,275    3.63   17,275
                                   -------    ----   ------    ----   ------    ----     ----    ----      -------    ----  -------
Investment securities held to
maturity:
U.S. government and federal
   agencies debt securities.......      --      --    1,000    4.15    1,007     4.0       --      --        2,007    4.08    2,032
Municipal bonds...................      40    4.15       65    4.25       --      --      109    5.38          214    4.15      229
                                   -------           ------           ------             ----              -------          -------
  Total...........................      40    4.15    1,065    4.16    1,007     4.0      109    5.38        2,221    4.15    2,261
                                   -------    ----   ------    ----   ------    ----     ----    ----      -------    ----  -------
Total investment securities....... $16,082    3.55%  $2,095    4.52%  $1,210    4.19%    $109    5.38%     $19,496    3.69% $19,536
                                   =======    ====   ======    ====   ======    ====     ====    ====      =======    ====  =======
</TABLE>

                                                                 15
<PAGE>

Sources of Funds

         General.  Deposits are the major  external  source of the  Registrant's
funds for lending and other investment  purposes.  The Registrant  derives funds
from  amortization  and  prepayment  of  loans  and,  to a much  lesser  extent,
maturities of investment securities, borrowings,  mortgage-backed securities and
operations.  Scheduled loan principal  repayments are a relatively stable source
of  funds,   while  deposit  inflows  and  outflows  and  loan  prepayments  are
significantly influenced by general interest rates and market conditions.

         Deposits.  Consumer and commercial  deposits are attracted  principally
from  within the  Registrant's  primary  market area  through the  offering of a
selection of deposit  instruments  including  regular  savings  accounts,  money
market  accounts,  and term  certificate  accounts.  Deposit  account terms vary
according to the minimum balance required, the time period the funds must remain
on deposit,  and the interest rate, among other factors.  At September 30, 2002,
the Registrant had no brokered accounts.

         Jumbo Certificates of Deposit. The following table indicates the amount
of the  Registrant's  certificates  of  deposit  of  $100,000  or  more  by time
remaining until maturity as of September 30, 2002.


                                                            Certificates
                                                             of Deposit
                                                             ----------
      Maturity Period                                      (In Thousands)
      Three months or less.............................       $ 4,115
      More than three through six months...............        10,671
      More than six through twelve months..............         4,544
      Over twelve months...............................         4,158
                                                              -------
         Total.........................................       $23,488
                                                              =======

         The following table sets forth the average  balances and interest rates
based on  month-end  balances  for  interest-bearing  demand  deposits  and time
deposits as of the dates indicated.

                                              Year Ended September 30,
                                     -------------------------------------------
                                           2002                     2001
                                     --------------------     ------------------
                                     Average      Average     Average   Average
                                     Balance       Rate       Balance    Rate
                                     -------       ----       -------    ----
                                              (Dollars in Thousands)
Deposit Category:

Demand Accounts(1).............     $ 16,173       1.41%      $11,500     2.36%
Passbook Accounts..............        6,982       2.01         6,765     2.79
Certificates...................       92,385       3.98        73,406     5.98
                                    --------       ----       -------     ----
                                    $115,540       3.50%      $91,671     5.29%
                                    ========       ====       =======     ====

-------------
(1)  Includes  non-interest  bearing accounts,  which represent less than 10% of
     total deposits.

         Borrowings.   Deposits  are  the  primary  source  of  funds  of  First
Financial's  lending and  investment  activities  and for its  general  business
purposes.  First  Financial  may obtain  advances from the FHLB of Cincinnati to
supplement  its supply of lendable  funds.  Advances from the FHLB of Cincinnati
are

                                       16

<PAGE>

typically  secured  by a  pledge  of  First  Financial's  stock  in the  FHLB of
Cincinnati and a portion of their first mortgage loans and certain other assets.
First  Financial and Citizens,  if the need arises,  may also access the Federal
Reserve Bank discount  window to supplement  its supply of lendable funds and to
meet deposit  withdrawal  requirements.  At September 30, 2002,  the  Registrant
borrowings  totaled $5.0  million,  which $4.0 million was  short-term  and $1.0
million was long-term.

Personnel

         As of September 30, 2002, the Registrant had 34 full-time employees and
2 part-time employees.  None of the Registrant's  employees are represented by a
collective  bargaining group. The Registrant believes that its relationship with
its employees is good.

Regulation of the Company

         General.  The Company is a registered  bank holding  company subject to
regulation  under the Bank  Holding  Company Act of 1956,  as amended  (the "BHC
Act").  In  addition,  the Company is subject to the  provisions  of  Kentucky's
banking laws regulating bank acquisitions and various  activities of controlling
bank  shareholders.  As a bank  holding  company,  the  Company  is  subject  to
regulation,  supervision,  and  examination  by the  Board of  Governors  of the
Federal Reserve System (the "FRB") and is required to file periodic reports with
the FRB. The Kentucky  Department  of  Financial  Institutions  may also conduct
examinations  of the  Company  to  determine  whether it is in  compliance  with
applicable  Kentucky  banking laws and  regulations.  In  addition,  the FRB has
enforcement  authority  over  the  Company  and any non-  financial  institution
subsidiaries of the Company. This regulation and oversight is intended primarily
for the protection of the depositors of the Banks and not for the benefit of the
Company's stockholders.

         Regulatory Capital  Requirements.  The FRB has adopted capital adequacy
guidelines  pursuant to which it assesses  the  adequacy of capital in examining
and supervising a bank holding company and in analyzing applications to it under
the Bank Holding Company Act. The FRB's capital adequacy  guidelines are similar
to those imposed on the Banks by the OTS and the FDIC.  See  "Regulation  of the
Banks - Regulatory Capital Requirements."

         Restrictions on Dividends. The FRB has issued a policy statement on the
payment of cash dividends by bank holding  companies,  which expresses the FRB's
view that a bank holding  company  should pay cash  dividends only to the extent
that the holding  company's  net income for the past year is sufficient to cover
both the cash dividends and a rate of earnings retention that is consistent with
the holding  company's  capital  needs,  asset  quality  and  overall  financial
condition.  The FRB also indicated that it would be inappropriate  for a company
experiencing  serious  financial  problems  to  borrow  funds to pay  dividends.
Furthermore, under the federal prompt corrective action regulations, the FRB may
prohibit a bank  holding  company  from  paying  any  dividends  if the  holding
company's bank subsidiary is classified as "undercapitalized."

         Acquisition of Banks.  The BHC Act also requires a bank holding company
to obtain  prior  approval  from the FRB  before  acquiring  direct or  indirect
ownership  or control of more than 5% of the voting  shares of any bank which is
not  already  majority  owned  or  controlled  by  that  bank  holding  company.
Acquisition of any  additional  banks would require prior approval from both the
FRB and the Kentucky Department of Financial Institutions.

                                       17
<PAGE>

         Non-Banking  Activities.  The business  activities of the Company, as a
bank holding  company,  are restricted by the BHC Act. The Company is authorized
by the BHC Act and the FRB's  Regulation  Y to acquire  ownership  or control of
non-banking companies,  provided the activities of the non-banking companies are
so closely  related to banking or  managing  or  controlling  banks that the FRB
considers  the  activities  to be proper to the  operation and control of banks.
Regulation Y sets forth a lengthy list of activities (including the operation of
a savings institution such as First Financial) that the FRB has determined to be
so closely related to the business of banking as to be a proper incident thereto
regarded as closely  related to banking or managing  or  controlling  banks and,
thus, are permissible activities for bank holding companies.

         The  Gramm-Leach-Bliley  Act,  which  became  effective  in March 2001,
permits greater affiliation among banks,  securities firms, insurance companies,
and other  companies under a new type of financial  services  company known as a
"financial  holding company." A financial holding company  essentially is a bank
holding company with significantly expanded powers.  Financial holding companies
are  authorized  by  statute  to  engage  in a number  of  financial  activities
previously  impermissible  for  bank  holding  companies,  including  securities
underwriting,  dealing and market making; sponsoring mutual funds and investment
companies;  insurance  underwriting and agency; and merchant banking activities.
The act also permits the FRB and the Treasury Department to authorize additional
activities for financial  holding companies if they are "financial in nature" or
"incidental"  to  financial  activities.  A bank  holding  company  may become a
financial  holding company if each of its subsidiary banks is well  capitalized,
well managed,  and has at least a "satisfactory" CRA rating. A financial holding
company  must  provide  notice  to the  FRB  within  30  days  after  commencing
activities  previously determined by statute or by the FRB and the Department of
the Treasury to be permissible.  The Company has not submitted notice to the FRB
of its intent to be deemed a financial holding company.

Regulation of the Banks

         General.  Set forth below is a brief  description  of certain laws that
relate to the regulation of the Banks.  The  description  does not purport to be
complete and is qualified  in its entirety by reference to  applicable  laws and
regulations.  First  Financial,  as  a  federal  savings  bank,  is  subject  to
regulation,  supervision and regular examination by the OTS. Citizens Financial,
as a  Kentucky  commercial  bank that is not a member of the FRB,  is subject to
regulation,  supervision and regular examination both by the Kentucky Department
of Financial  Institutions  and the FDIC. The deposits of both Banks are insured
by the FDIC to the maximum  extent  provided  by law (a maximum of $100,000  for
each insured depositor).

         Federal and Kentucky banking laws and regulations control,  among other
things,  the  Banks'  required  reserves,   investments,   loans,   mergers  and
consolidations,  issuance of securities,  payment of dividends and other aspects
of the Banks'  operations.  The  regulatory  structure also gives the respective
regulatory authorities extensive discretion in connection with their supervisory
and enforcement  activities and  examination  policies,  including  polices with
respect to the  classification  of assets and the establishment of adequate loan
loss reserves for regulatory purposes.  Supervision,  regulation and examination
of First Financial and Citizens  Financial by the bank  regulatory  agencies are
intended  primarily for the protection of depositors  rather than for holders of
the Company's stock or for the Company as the holder of the stock of the Banks.

         Insurance  of Deposit  Accounts.  The  deposit  accounts  held by First
Financial  and  Citizens  Financial  are  insured  by  the  SAIF  and  the  BIF,
respectively,  to a maximum of $100,000 for each  insured  member (as defined by
law and regulation).  Insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe or unsound  practices,  is in
an unsafe or unsound

                                       18
<PAGE>

condition to continue operations or has violated any applicable law, regulation,
rule,  order  or  condition  imposed  by the FDIC or the  institution's  primary
regulator.

         The Banks are required to pay insurance  premiums based on a percentage
of their  insured  deposits to the FDIC for  insurance of their  deposits by the
SAIF and the BIF. The FDIC's current deposit insurance assessment rates for SAIF
and BIF member  institutions are in a range from 0% to .027% of insured deposits
on an annualized  basis, with the assessment rate for most banks and thrifts set
at 0%.

         In addition, all FDIC-insured institutions are required through 2017 to
pay  assessments  to the FDIC to fund  interest  payments on bonds issued by the
Financing Corporation ("FICO"), an agency of the Federal government  established
to  recapitalize  the  predecessor  to the SAIF.  For calendar 2002, the average
annual assessment rate was .0190% of insured deposits and, for 2002, the average
annual assessment rate will be approximately .0175% of insured deposits.

         Regulatory  Capital  Requirements.  The OTS and the FDIC  have  adopted
regulations requiring institutions under their respective jurisdictions maintain
specified minimum ratios of capital to total assets and capital to risk-weighted
assets.  Specifically,  all savings  institutions  and banks must  maintain  the
following ratios: (1) "Tier 1" or "core" capital equal to at least 4% (3% if the
institution has received the highest  rating,  "composite 1 CAMELS," on its most
recent  examination) of total adjusted assets; and (2) total capital (defined as
Tier 1  capital  plus  supplementary  (Tier  2)  capital)  equal  to 8% of total
risk-weighted  assets.  In addition,  savings  institutions  are required  under
applicable  federal law to maintain  tangible  equity  capital equal to at least
1.5% of total adjusted assets.  The Banks were in compliance with the respective
capital requirements of the FDIC and the OTS as of September 30, 2002.

         Dividend and Other Capital  Distribution  Limitations.  The OTS and the
Kentucky Department of Financial Institutions impose restrictions on the ability
of federal savings institutions and Kentucky commercial banks, respectively,  to
pay dividends and to make other capital distributions. In general, the Banks are
prohibited  from paying any dividends or other capital  distributions  if, after
the distribution, they would be undercapitalized under applicable federal law.

         The  prior  approval  of the OTS  would  be  required  for any  capital
distribution  (including a dividend) by First Financial if: (i) the total of its
capital distributions,  including the proposed distribution,  were to exceed its
net income for the  calendar  year to date plus its  retained net income for the
preceding  two  calendar  years;  (ii)  First  Financial  was not  eligible  for
expedited  treatment of applications  under  applicable OTS  regulations;  (iii)
First Financial would not remain adequately  capitalized,  as defined, after the
distribution;  or (iv) the  capital  distribution  would  violate  an  agreement
between the OTS and First Financial or any OTS regulation.  In addition, even if
the above application  requirement were  inapplicable,  First Financial would be
required to give the OTS prior  notice of any capital  distribution  if it would
not remain well capitalized after the distribution.

         In addition,  under  applicable  provisions  of Kentucky law, the prior
approval of the Kentucky Department of Financial Institutions is required if the
total of all  dividends  declared by Citizens  Financial  in any  calendar  year
exceeds  Citizens  Financial's net profits,  as defined,  for that year combined
with its retained net profits for the  preceding  two calendar  years,  less any
required  transfers  to surplus or a fund for the  retirement  of any  preferred
stock.

         Federal Home Loan Bank System.  First Financial and Citizens  Financial
are members of the FHLB of  Cincinnati,  which is one of 12 regional  FHLBs that
administers  the home financing  credit function of savings  associations.  Each
FHLB serves as a reserve or central bank for its members within

                                       19
<PAGE>

its assigned region.  It is funded primarily from proceeds derived from the sale
of consolidated obligations of the FHLB System. It makes loans to members (i.e.,
advances) in accordance with policies and procedures established by the Board of
Directors of the FHLB.

         As members,  First  Financial  and Citizens  Financial  are required to
purchase and maintain  stock in the FHLB of  Cincinnati in an amount equal to at
least 1% of aggregate unpaid residential mortgage loans, home purchase contracts
or similar obligations at the beginning of each year.

         Federal  Reserve  System.   The  Federal  Reserve  Board  requires  all
depository  institutions to maintain  non-interest bearing reserves at specified
levels against their transaction  accounts (primarily  checking,  NOW, and Super
NOW checking  accounts) and non-personal  time deposits.  At September 30, 2002,
the  First  Financial  was  in  compliance  with  these  Federal  Reserve  Board
requirements.

Item  2.  Description of Properties
--------  -------------------------

         (a)      Properties

         The  Registrant  operates  from two main  offices and two full  service
branch  offices.  The  following  table sets  forth  information  regarding  the
Registrant's properties:


                                                                    Original
                                                                      Date
                                                      Leased        Acquired
Location                                             or Owned       or Leased
--------                                             --------       ---------

First Financial
---------------
MAIN OFFICE:
104 South Chiles Street                                Owned          1964
Harrodsburg, Kentucky 40330

BRANCH OFFICE:                                         Owned          1973
216 South Main Street
Lawrenceburg,Kentucky 40342 (1)

BRANCH OFFICE:                                         Owned          1998
1015 Cross Road Drive
Lawrenceburg, Kentucky 40342

Citizens Financial
------------------

MAIN OFFICE:                                          Leased          2001
113 West Public Square
Glasgow, Kentucky 42142

------------------
(1)  As of December 27, 2002, this branch office was closed.

                                       20
<PAGE>

     (b) Investment Policies.  See "Item 1. Description of Business" above for a
general  description of the Registrant's  investment policies and any regulatory
or Board of  Directors'  percentage  of  assets  limitations  regarding  certain
investments.  The  Registrant's  investments  are primarily  acquired to produce
income, and to a lesser extent, possible capital gain.


                  (1)    Investments in Real Estate or Interests in Real Estate.
See "Item 1.  Description  of Business - Lending  Activities and - Regulation of
the Bank," and "Item 2. Description of Property."

                  (2)    Investments  in  Real  Estate  Mortgages.  See "Item 1.
Description of Business - Lending Activities and - Regulation of the Bank."

                  (3)    Investments  in  Securities  of or Interests in Persons
Primarily  Engaged  in Real  Estate  Activities.  See  "Item 1.  Description  of
Business - Lending Activities and - Regulation of the Bank."

         (c)     Description of Real Estate and Operating Data.  Not Applicable.

Item 3.  Legal Proceedings
-------  -----------------

         The  Registrant,  from  time to time,  is a party to  ordinary  routine
litigation,  which arises in the normal  course of  business,  such as claims to
enforce  liens,  condemnation  proceedings on properties in which the Registrant
holds  security  interests,  claims  involving  the making and servicing of real
property  loans,  and other issues  incident to the business of the  Registrant.
There were no material lawsuits pending or known to be contemplated  against the
Banks or the Company at September 30, 2002.

Item 4.  Submission of Matters to a Vote of Security Holders
-------  ---------------------------------------------------

         None.

                                     PART II

Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
-------  -----------------------------------------------------------------------
         Matters
         -------

         The  information  contained  under the  section  captioned  "Market and
Dividends  Information" in the 2002 Annual Report to  Stockholders  (the "Annual
Report") is incorporated herein by reference.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
------- ------------------------------------------------------------------------
        of Operations
        -------------

         The  information  contained  in  the  section  captioned  "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
Annual Report is incorporated herein by reference.

                                       21
<PAGE>

Item 7.  Financial Statements
-------  --------------------

         The Registrant's  financial  statements listed under Item 13 herein are
incorporated herein by reference.

Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
-------  -----------------------------------------------------------------------
         Financial Disclosure
         --------------------

         Information  regarding the change in accountants is incorporated herein
to Form 8-K filed on August 26, 2002.

                                    PART III


Item 9. Directors, Executive Officers, Promoters and Control Persons: Compliance
-------  -----------------------------------------------------------------------
        with Section 16(a) of the Exchange Act.
        ---------------------------------------

         The  information  required  under this item is  incorporated  herein by
reference  to the  Proxy  Statement  for the 2002  Annual  Meeting  (the  "Proxy
Statement")  contained under the sections  captioned  "Section 16(a)  Beneficial
Ownership  Reporting  Compliance,"  "Proposal I - Election of Directors," and "-
Biographical Information."

Item 10.  Executive Compensation
--------  ----------------------

         The  information  required by this item is incorporated by reference to
the  Proxy  Statement  contained  under  the  section  captioned  "Director  and
Executive Officer Compensation."

Item 11.  Security Ownership of Certain Beneficial Owners and Management
--------  --------------------------------------------------------------

         (a)      Security Ownership of Certain Beneficial Owners
         (b)      Security Ownership of Management
                  The information  required by items (a) and (b) is incorporated
                  herein by reference to the Proxy Statement contained under the
                  sections  captioned  "Principal  Holders"  and  "Proposal  I -
                  Election of Directors."
         (c)      Management of the Company knows of no arrangements,  including
                  any pledge by any person of  securities  of the  Company,  the
                  operation of which may at a subsequent date result in a change
                  in control of the Company.

         (d)      Securities Authorized for Issuance Under Equity Compensation
                  Plans

                                       22
<PAGE>

         Set forth below is information as of September 30, 2002 with respect to
compensation   plans  under  which  equity  securities  of  the  Registrant  are
authorized for issuance.

<TABLE>
<CAPTION>
                                           EQUITY COMPENSATION PLAN INFORMATION
                                                (a)                      (b)                         (c)
                                                                                             Number of securities
                                       Number of securities        Weighted-average        remaining available for
                                         to be issued upon        exercise price of         future issuance under
                                            exercise of              outstanding          equity compensation plans
                                       outstanding options,       options, warrants         (excluding securities
                                       warrants and rights           and rights           reflected in column (a))
                                       -------------------           ----------           ------------------------
<S>                                         <C>                      <C>                          <C>
Equity compensation plans
approved by shareholders:
1996 Stock Option Plan..............          185,000                  $ 16.42                        15,000
Restricted Stock Plan...............               --                       --                        85,000
Equity compensation plans
not approved by
shareholders(1).....................              n/a                      n/a                           n/a
                                              -------                  -------                       -------
     TOTAL.........................           185,000                  $ 16.42                       100,000
                                              =======                  =======                       =======
</TABLE>

-----------
(1)  Not applicable.


Item 12.  Certain Relationships and Related Transactions
--------  ----------------------------------------------

         The  information  required  by this  item  is  incorporated  herein  by
reference to the Proxy Statement  contained under the section captioned "Certain
Relationships and Related Transactions."

Item 13.  Exhibits, Financial Statements, and Reports on Form 8-K
--------  -------------------------------------------------------

        (a)  Listed below are all financial  statements  and exhibits filed as
             part of this report, and are incorporated by reference.

         1.       The consolidated balance sheets of Harrodsburg First Financial
                  Bancorp,  Inc.  as of  September  30,  2002 and 2001,  and the
                  related   consolidated   statements  of  income,   changes  in
                  stockholders'  equity and cash flows for the years then ended,
                  together with the related notes and the independent  auditor's
                  report of EKW & Associates, llp, independent accountants.

         2.       Schedules omitted as they are not applicable.

                                       23
<PAGE>


         3.       Exhibits

         (a)      The following exhibits are filed as part of this report.

          3.1     Certificate of Incorporation of Harrodsburg First Financial
                    Bancorp, Inc.*
          3.2     Bylaws of Harrodsburg First Financial Bancorp, Inc.*
         10.1     1996 Stock Option Plan**
         10.2     Restricted Stock Plan and Trust Agreement**
         10.3     Employment Agreement Arthur L. Freeman***
         13.0     Portions of the 2002 Annual Report to Stockholders
         21.0     Subsidiary Information (See Item 1 - Description of Business)
         99       Certification pursuant to 18 U.S.C. Section 1350, as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         (b)      Reports on Form 8-K.

                  Report  on Form  8-K,  dated  August  26,  2002  was  filed to
                  disclose the change in Registrants' independent accountants.

---------------
*        Incorporated  herein by reference  into this document from the Exhibits
         to Form S-1, Registration Statement,  initially filed on June 14, 1995,
         Registration No. 33-93458.
**       Incorporated  herein by reference  into this document from the Exhibits
         to the Form 10-K filed on December 29, 1997.
***      Incorporated herein by reference to exhibit 10.4 to the Form 10-KSB
         filed on December 20, 2001.

Item 14.  Controls and Procedures
--------  -----------------------

         (a) Evaluation of disclosure  controls and  procedures.  Based on their
             --------------------------------------------------
evaluation  as of a date within 90 days of the filing date of this Annual Report
on Form 10-KSB,  the  Registrant's  principal  executive  officer and  principal
financial officer have concluded that the Registrant's  disclosure  controls and
procedures  (as defined in Rules  13a-14(c) and 15d-14(c)  under the  Securities
Exchange  Act of 1934  (the  "Exchange  Act"))  are  effective  to  ensure  that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded,  processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.

         (b) Changes in internal controls.  There were no significant changes in
             ----------------------------
the Registrant's  internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,  including any
corrective  actions  with  regard  to  significant   deficiencies  and  material
weaknesses.

                                       24
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized  as of December 23,
2002.

                                       HARRODSBURG FIRST FINANCIAL BANCORP, INC.


                                       By: /s/Arthur L. Freeman
                                           ------------------------------------
                                           Arthur L. Freeman
                                           President and Chief Executive Officer
                                           (Duly Authorized Representative)

         Pursuant to the  requirement  of the  Securities  Exchange Act of 1934,
this Report has been signed below by December 23, 2002, by the following persons
on behalf of the Registrant and in the capacities indicated.

<TABLE>
<CAPTION>
<S>                                                         <C>
By:      /s/Arthur L. Freeman                                 By:      /s/Jack D. Hood
         ----------------------------------------                      ----------------------------------------
         Arthur L. Freeman                                             Jack D. Hood
         President and Chief Executive Officer,                        Secretary, Treasurer and Director
         and Chairman of the Board                                     (Chief Financial and Accounting Officer)
         (Duly Authorized Representative)

By:      /s/Wickliffe T. Asbury, Sr.                          By:      /s/Thomas Les Letton
         ----------------------------------------                      ----------------------------------------
         Wickliffe T. Asbury, Sr.                                      Thomas Les Letton
         Vice President and Director                                   Director


By:      Jack L. Coleman, Jr.                                 By:      /s/W. Dudley Shryock
         ----------------------------------------                      ----------------------------------------
         Jack L. Coleman, Jr.                                          W. Dudley Shryock
         Director                                                      Director



By:      /s/James W. Dunn
         ----------------------------------------
         James W. Dunn
         Director
</TABLE>


                                       25
<PAGE>

                            SECTION 302 CERTIFICATION


         I, Arthur L. Freeman,  President and Chief Executive  Officer,  certify
that:

1.       I have reviewed this annual report on Form 10-KSB of Harrodsburg  First
         Financial Bancorp, Inc.;

2.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual report is being prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this annual report (the "Evaluation Date"); and

          (c)  presented  in  this  annual  report  our  conclusions  about  the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.       The registrant's other certifying  officer and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent functions):

<PAGE>

          (a)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          (b)  any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.       The registrant's  other certifying officer and I have indicated in this
         annual  report  whether  there were  significant  changes  in  internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.



Date:    December 23, 2002                 /s/Arthur L. Freeman
                                           -------------------------------------
                                           Arthur L. Freeman
                                           President and Chief Executive Officer




<PAGE>

                            SECTION 302 CERTIFICATION


         I, Jack D. Hood, Treasurer, certify that:

1.       I have reviewed this annual report on Form 10-KSB of Harrodsburg  First
         Financial Bancorp, Inc.;

2.       Based on my  knowledge,  this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this annual report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included  in this  annual  report,  fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this annual report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

          (a)  designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               annual report is being prepared;

          (b)  evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this annual report (the "Evaluation Date"); and

          (c)  presented  in  this  annual  report  our  conclusions  about  the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.       The registrant's other certifying  officer and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent functions):

          (a)  all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record, process, summarize and report

<PAGE>
               financial data and have identified for the registrant's  auditors
               any material weaknesses in internal controls; and

          (b)  any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.       The registrant's  other certifying officer and I have indicated in this
         annual  report  whether  there were  significant  changes  in  internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.



Date:    December 23, 2002              /s/Jack D. Hood
                                        ----------------------------------------
                                        Jack D. Hood
                                        Treasurer
                                        (Chief Financial and Accounting Officer)