UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB


[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

     For the quarterly period ended June 30, 1999

                                       OR

[ }  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the transition period from                       to
                               ---------------------    ------------------------
Commission file Number: 000-18464
                        ---------

                            EMCLAIRE FINANCIAL CORP.
        (Exact Name of small business issuer as specified in its charter)

PENNSYLVANIA                                                   25-1606091
(State or other jurisdiction of                               (IRS Employer
 incorporation or organization)                           Identification Number)

612 Main Street
Emlenton, PA                                                      16373
(Address of principal executive offices)                        (Zip Code)

Issuer's telephone number, including area code: (724) 867-2311

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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
                                                              ---        ---

As of August 12, 1999, there were 1,395,852  shares  outstanding of the issuer's
common stock, par value $1.25 per share.


                                       1


<PAGE>

                            Emclaire Financial Corp.
                    INDEX TO QUARTERLY REPORT OF FORM 10-QSB


<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>                                                                                             <C>
---
Part I            Financial Information

                  Item 1.           Consolidated Financial Statements (Unaudited)

                                    Consolidated Balance Sheet, June 30, 1999 and
                                    December 31, 1998                                                 3

                                    Consolidated Statement of Income
                                    Three months ended June 30, 1999 and 1998 and
                                    Six months ended June 30, 1999 and 1998                           4

                                    Consolidated Statement of Changes in
                                    Stockholders' Equity                                              5

                                    Consolidated Statement of Cash Flows
                                    Three months ended June 30, 1999 and 1998                         6

                                    Notes to Consolidated Financial Statements                    7 - 8


                  Item 2.           Management's Discussion and Analysis of Financial
                                    Condition and Results of Operations                          9 - 15


Part II           Other Information

                  Item 1.           Legal Proceedings                                                16

                  Item 2.           Changes in Securities                                            16

                  Item 3.           Defaults Upon Senior Securities                                  16

                  Item 4.           Submission of Matters to a Vote of Securities Holders            16

                  Item 5.           Other Information                                                16

                  Item 6.           Exhibits and Reports on Form 8-K                                 16

                  Signatures                                                                         17

</TABLE>

                                       2
<PAGE>


                            EMCLAIRE FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET
              (Unaudited - dollars in thousands, except share data)
<TABLE>
<CAPTION>

                                                                                            June 30,         December 31,
                                                                                              1999               1998
                                                                                        -----------------  -----------------
<S>                                                                                            <C>                <C>
ASSETS
     Cash and due from banks                                                                    $  7,562           $  8,989
     Time deposits with others                                                                         -                100
     Federal funds sold                                                                            9,550              9,700
     Investment securities:
         Available for sale                                                                       31,578             28,929
         Held to maturity (estimated market value
            of $3,329 and $3,419)                                                                  3,324              3,392
     Loans                                                                                       132,622            134,249
     Less allowance for loan losses                                                                1,361              1,336
                                                                                        -----------------  -----------------
         Net loans                                                                               131,261            132,913
     Premises and equipment                                                                        3,490              3,625
     Accrued interest and other assets                                                             5,960              6,484
                                                                                        -----------------  -----------------

            TOTAL ASSETS                                                                       $ 192,725          $ 194,132
                                                                                        =================  =================

LIABILITIES
     Deposits
         Non-interest bearing demand                                                           $  25,519          $  24,746
         Interest bearing demand                                                                  21,259             22,026
         Savings                                                                                  22,929             22,527
         Money market                                                                             21,354             21,381
         Time                                                                                     77,822             79,190
                                                                                        -----------------  -----------------
            Total deposits                                                                       168,883            169,870
     Obligation under capital lease                                                                    -                 19
     Borrowed funds                                                                                2,000              2,000
     Accrued interest and other liabilities                                                          772              1,142
                                                                                        -----------------  -----------------
            TOTAL LIABILITIES                                                                    171,655            173,031
                                                                                        -----------------  -----------------

STOCKHOLDERS' EQUITY
     Preferred stock, par value $1.00, 3,000,000 shares
         authorized; none issued
                                                                                                       -                  -
     Common stock, par value $1.25 per share;
         12,000,000 shares authorized, 1,395,852 shares issued and outstanding                     1,745              1,745
     Additional paid in capital                                                                   10,871             10,871
     Retained earnings                                                                             8,624              8,192
     Net unrealized gain on securities                                                              (170)               293
                                                                                        -----------------  -----------------
            TOTAL STOCKHOLDERS' EQUITY                                                            21,070             21,101
                                                                                        -----------------  -----------------

            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $ 192,725          $ 194,132
                                                                                        =================  =================
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       3
<PAGE>

                            EMCLAIRE FINANCIAL CORP.
                        CONSOLIDATED STATEMENT OF INCOME
            (Unaudited - dollars in thousands, except per share data)
<TABLE>
<CAPTION>

                                                     Three Months Ended June 30,            Six Months Ended June 30,
                                                     ---------------------------------------------------------------------
                                                          1999             1998               1999             1998
                                                     ---------------- ----------------   ---------------- ----------------
<S>                                                       <C>              <C>                <C>              <C>
INTEREST INCOME
     Loans, including fees                                  $  2,718         $  1,972           $  5,420         $  3,898
     Interest bearing deposits in other banks                     69                1                 94
     Federal funds sold                                          129               53                248               65
     Investment securities:
         Taxable                                                 420              484                849              997
         Exempt from federal income tax                           55               44                101               96
                                                     ---------------- ----------------   ---------------- ----------------
            Total interest income                              3,391            2,554              6,712            5,057
                                                     ---------------- ----------------   ---------------- ----------------

INTEREST EXPENSE
     Deposits                                                  1,388              974              2,817            1,932
     Borrowed funds                                               28               31                 56               60
     Lease obligation                                              -                1                  -                2
                                                     ---------------- ----------------   ---------------- ----------------
            Total interest expense                             1,416            1,006              2,873            1,994
                                                     ---------------- ----------------   ---------------- ----------------

NET INTEREST INCOME                                            1,975            1,548              3,839            3,063

Provision for loan losses                                         36               55                 80              100
                                                     ---------------- ----------------   ---------------- ----------------

NET INTEREST INCOME AFTER
     PROVISION FOR LOAN LOSSES                                 1,939            1,493              3,759            2,963
                                                     ---------------- ----------------   ---------------- ----------------

OTHER OPERATING INCOME
     Service fees on deposit accounts                            150              134                288              256
     Other                                                        59               46                105               83
                                                     ---------------- ----------------   ---------------- ----------------
            Total other operating income                         209              180                393              339
                                                     ---------------- ----------------   ---------------- ----------------

OTHER OPERATING EXPENSE
     Salaries and employee benefits                              744              618              1,433            1,202
     Occupancy, furniture and equipment                          224              201                483              384
     Other                                                       545              418              1,032              792
                                                     ---------------- ----------------   ---------------- ----------------
            Total other operating expense                      1,513            1,237              2,948            2,378
                                                     ---------------- ----------------   ---------------- ----------------

Income before income taxes                                       635              436              1,204              924
Income taxes                                                     200              134                381              283
                                                     ---------------- ----------------   ---------------- ----------------

NET INCOME                                                   $   435          $   302            $   823          $   641
                                                     ================ ================   ================ ================

EARNINGS PER SHARE                                          $   0.31         $   0.28           $   0.59         $   0.59
DIVIDENDS PER SHARE                                             0.14             0.12               0.28             0.24

AVERAGE SHARES OUTSTANDING                                 1,395,852        1,081,453          1,395,852        1,081,453
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       4
<PAGE>


                            EMCLAIRE FINANCIAL CORP.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
            (Unaudited - dollars in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                                   Net
                                                                Additional                     Unrealized
                                                   Common         Paid in        Retained      Gain (Loss) on
                                                   Stock          Capital        Earnings      Securities         Total
                                               --------------- -------------- --------------- -------------- ----------------

<S>                                                 <C>            <C>             <C>              <C>            <C>
Balance December 31, 1998                            $  1,745       $ 10,871        $  8,192         $  293         $ 21,101

Comprehensive income:
     Net income                                                                          823                             823
     Other comprehensive income, net
         unrealized losses on securities
         of $701                                                                                       (463)            (463)
                                                                                                             ----------------
Total comprehensive income                                                                                               360

Dividends declared
     ($.28 per share)                                                                   (391)                           (391)
                                               --------------- -------------- --------------- -------------- ----------------

Balance June 30, 1999                                $  1,745       $ 10,871        $  8,624         $ (170)        $ 21,070
                                               =============== ============== =============== ============== ================

</TABLE>


See accompanying notes to the consolidated financial statements.


                                       5
<PAGE>

                            EMCLAIRE FINANCIAL CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                       (Unaudited - dollars in thousands)
<TABLE>
<CAPTION>

                                                                                            Six Months Ended June 30,
                                                                                             1999               1998
                                                                                       -----------------  -----------------
<S>                                                                                            <C>                <C>
OPERATING ACTIVITIES
     Net income                                                                                 $   823            $   641
     Adjustments to reconcile net income to net
         cash provided by operating activities:
            Depreciation and amortization                                                           489                303
            Net amortization of investment security
                discounts and premiums                                                               69                 71
            Provision for loan losses                                                                80                100
            (Increase) decrease in accrued interest receivable                                     (673)                32
            Increase in accrued interest payable                                                      1                 46
            Other, net                                                                              753                (44)
                                                                                       -----------------  -----------------
                Net cash provided by operating activities                                         1,542              1,149
                                                                                       -----------------  -----------------

INVESTING ACTIVITIES
     Proceeds from maturities and repayments of investment securities:
            Available for sale                                                                    4,252              2,000
            Held to maturity                                                                         50              1,720
     Purchases of investment securities available for sale                                       (7,654)              (295)
     Net loan (originations) repayments                                                           1,506             (6,215)
     Purchases of premises and equipment                                                            (70)              (641)
     Other                                                                                          194                  -
                                                                                       -----------------  -----------------
                Net cash used for investing activities                                           (1,722)            (3,431)
                                                                                       -----------------  -----------------

FINANCING ACTIVITIES
     Net increase (decrease) in deposits                                                           (987)             5,429
     Decrease in short-term borrowings                                                                -               (200)
     Payments for obligation under capital lease                                                    (19)               (22)
     Cash dividends paid                                                                           (391)              (260)
                                                                                       -----------------  -----------------
                Net cash provided by financing activities                                        (1,397)             4,947
                                                                                       -----------------  -----------------

                Increase in cash and cash equivalents                                            (1,577)             2,665

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                                   18,689              4,975
                                                                                       -----------------  -----------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                    $  17,112           $  7,640
                                                                                       =================  =================
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       6
<PAGE>

                            EMCLAIRE FINANCIAL CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. GENERAL

The accounting and financial  reporting polices of Emclaire  Financial Corp. and
its  wholly-owned  subsidiary The Farmers  National Bank of Emlenton  ("Bank" or
"Farmers"),  conform to generally accepted accounting  principles and to general
practice  within  the  banking  industry.  In the  opinion  of  management,  the
accompanying  unaudited  consolidated financial statements of Emclaire Financial
Corp.  ("Company" or  "Emclaire")  contain all  adjustments,  consisting of only
normal and recurring  adjustments,  necessary for the fair  presentation  of the
Company's  financial  position,  results  of  operations  and cash flows for the
periods  presented.  The results of operations  for the interim  periods are not
necessarily indicative of the results to be expected for the full year.

2. EARNINGS PER SHARE

The  Company  maintains  a simple  capital  structure;  therefore  there  are no
dilutive effects on earnings per share. As such earnings per share  computations
are based on the weighted average number of shares  outstanding of 1,395,852 and
1,081,453 for 1999 and 1998, respectively.

3. COMPREHENSIVE INCOME

The  components of  accumulated  other  comprehensive  income for the six months
ended  June 30,  1999,  consist of the items  presented  under the  heading  Net
Unrealized  Gain on  Securities  as presented in the  Consolidated  Statement of
Changes in Stockholders'  Equity. For the six months ended June 30, 1998 the net
unrealized  gain on  securities  had a  beginning  balance  of  $222,000,  a net
unrealized  gain  of  $2,000,  and an  ending  balance  of  $224,000.  This  net
unrealized loss on securities  resulted from total  comprehensive  net income of
$4,000, for the six months ended June 30, 1998.

4. LOANS

Major classifications of loans are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                      June 30,        December 31,
                                                                                        1999              1998
                                                                                  ----------------- -----------------

<S>                                                                                     <C>               <C>
Commercial and industrial                                                                $  14,923         $  14,223
Real estate mortgages
     Residential                                                                            84,471            87,137
     Commercial and other                                                                   18,874            18,381
Consumer                                                                                    14,354            14,508
                                                                                  ----------------- -----------------
                                                                                           132,622           134,249
Less allowance for loan losses                                                               1,361             1,336
                                                                                  ----------------- -----------------
                                                                                         $ 131,261         $ 132,913
                                                                                  ================= =================
</TABLE>

                                       7
<PAGE>


The Bank's primary business  activity is with customers  located within Venango,
Clarion,   Butler,   Elk,   Clearfield  and  Jefferson   Counties.   Commercial,
residential, personal, and agricultural loans are granted. Although the Bank has
a  diversified  loan  portfolio at June 30, 1999 and  December  31, 1998,  loans
outstanding to individuals  and businesses are dependent upon the local economic
conditions within the immediate trade area.


                                       8
<PAGE>



MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

Emclaire  Financial  Corp.  ("Emclaire"  or the "Company") is the parent holding
company for the Farmers National Bank of Emlenton ("Farmers" or the "Bank"). The
following  discussion and analysis is intended to provide  information about the
financial  condition  and results of operation of the Company and should be read
in conjunction with the Consolidated  Financial Statements and the related notes
thereto appearing elsewhere in this quarterly report.

Certain  information  presented in this report and other  statements  concerning
future  performance,  developments or events,  and  expectations  for growth and
market forecasts  constitute  forward-looking  statements which are subject to a
number of risks and uncertainties, including interest rate fluctuations, changes
in local or national economic conditions,  and government and regulatory actions
which might cause actual results to differ  materially from stated  expectations
or estimates.

Comparison of the Three Months Ended June 30, 1999 and 1998
-----------------------------------------------------------

Net  Income - Net  income  for the three  months  ended  June 30,  1999  totaled
$435,000 or $.31 per share,  as compared to $302,000 or $.28 per share  recorded
during the same  period in 1998.  The 1999  quarterly  earnings  represent a 44%
increase  from those  reported in 1998,  due to the rise in net interest  income
related to the increase in the volume of net earning  assets due  principally to
the acquisition of Peoples Savings Bank ("Peoples  Savings") in August 1998. The
increase in net interest income offset the rise in overhead  associated with the
additional branch operations.

The net income  reported  resulted in annualized  returns on average  assets and
average  equity  of .90% and 8.20%  for the  quarter  ended  June 30,  1999,  as
compared to returns of .87% and 8.72% for the same period in 1998.

Interest  Income - Interest  income  for the three  months  ended June 30,  1999
increased approximately $837,000 or 33% from the same period in 1998, due to the
increase in average earning assets, specifically the loan portfolio. The average
balance of the loan portfolio for the quarter ended increased $42.0 million from
the  same  period  in  1998  to  $132.5  million.  The  acquisition  of  Peoples
represented  approximately  $35.5 million of the total average loan growth.  The
remainder  of  the  increase  is  attributed  largely,  to the  increase  in the
origination  of  residential  mortgage  loans  experienced  during 1998. The tax
equivalent yield on the loan portfolio for the quarter decreased 53 basis points
to 8.31%  from the same  period in 1998,  due to the impact of  generally  lower
interest  rates.  The prime  interest rate was reduced three times,  totaling 75
basis points during 1998, with the first reduction  occurring in September 1998.
The lower interest rate environment  affected  existing variable rate loans, and
reduced the rates of return on new loan originations and refinancings. Effective
July 1, 1999, the prime  interest rate  increased 25 basis points,  which should
result in a slightly  higher return on variable rate  commercial  loans based on
the prime interest rate.

Average investment  securities for the second quarter of 1999 were $31.7 million
resulting in a tax-equivalent yield of 6.37% for the quarter,  compared to $34.6
million and 6.39% during the same period in 1998.  As a result of the slowing of
loan growth  over the past  several  months,  management  began to place  excess
liquidity  back  into the  investment  portfolio,  purchasing  $7.7  million  of
securities  during the second quarter.  These  purchases were  principally U. S.
government agency and bank qualified tax-free municipal securities.

                                       9
<PAGE>

As noted during the first  quarter of 1999,  despite the growth in the volume of
average earning assets,  which increased $51.2 million for the second quarter of
1999 as compared to 1998, the tax equivalent  yield on earning assets  continues
to fall.  During the second quarter of 1999, the tax equivalent yield slipped to
7.67% as  compared to 8.08%  during the same period in 1998,  due to the general
decline in interest rates, previously discussed.

Interest expense - Interest expense increased  $410,000 or 41% during the second
quarter of 1999, as compared to the same period in 1998.  The average  volume of
interest bearing  liabilities  during the quarter increased $43.8 million or 43%
during the comparative periods.  Approximately $35.0 million of this increase is
attributable  to the  acquisition  of Peoples  Savings.  During the  comparative
quarters  the overall rate paid on these  liabilities  fell to 3.89% from 3.95%.
This lower cost of funds is due principally to the generally lower interest rate
environment.

Despite the generally low interest rate environment, the ongoing competition for
deposit  customers  by  traditional  and   non-traditional   financial  services
providers,  continues  to affect the  overall  cost of funds.  Furthermore,  any
increase in market rates of interest can raise the cost of such funds.

Net Interest  Income - As a result of the increase in interest income due to the
increased  volume of earning  assets  which more than  offset  the  increase  in
interest  expense,  net  interest  income  rose  $427,000  or 28% for the second
quarter of 1999, as compared to the same period in 1998.  The net tax equivalent
yield on earning assets for the quarter was 4.52%, a 43 basis point decline from
the 4.95% yield earned during the same period in 1998.

Provision for Loan Losses - Based upon  management's  ongoing  assessment of the
quality of the loan portfolio, and considering the slowing of loan demand during
the quarter, the provision for loan losses for the first quarter of 1999 totaled
$36,000, as compared to $55,000 provided during the same period in 1998.

Other operating income - Other operating income increased $29,000 or 16% for the
second  quarter  of 1999,  due  principally  to the  impact  of fees on  deposit
accounts,  particularly overdraft fees, related to the increase in the number of
deposit accounts. In addition,  ATM convenience fees and fees generated from the
MasterMoney(TM) debit card increased due to increased customer usage.
Combined,  these  fees  accounted  for  $27,000 of the total  increase  in other
operating income.

Other  Operating  Expense  - During  the  first  quarter  of 1999,  total  other
operating  expenses  increased  $276,000  or 22% to $1.5  million  from the same
period in 1998. The rise in other  operating  expenses is due principally to the
additional  overhead  associated with the branch office operations added through
the Peoples Savings  acquisition,  the opening of a de novo branch office during
the first quarter of 1998, and the overhead associated with the operation of the
data center which was occupied in August 1998.

Due primarily to the expansion of the branch office network, salary and employee
benefit costs  increased  $126,000 or 20% to $744,000 for the second  quarter of
1999 as compared to $618,000  during the same period in 1998.  In  addition,  no
accrual was made for employee  profit sharing during the second quarter of 1999,
while  $30,000  was  provided  for during the same  period in 1998.  The Company
continues to use temporary employees to provide support in the data center

                                       10
<PAGE>

and in providing certain administrative functions related to human resources and
employee  training.  The total cost for temporary  employees amounted to $39,000
during the three months ended June 30, 1999.  Management  intends to continue to
use  temporary   employees  to  supplement   certain  staff  and  administrative
functions.  The balance of the increase in employee  related costs is related to
periodic salary  adjustments and scheduled  employee  health  insurance  premium
adjustments.  During the third  quarter  of 1999,  the  Company  expects to fill
several management positions as a result of the ongoing organization assessment.
It is expected  these new  employees  will  result in  additional  salaries  and
benefits of approximately $160,000 annually.

Occupancy and equipment costs increased approximately $23,000 or 11% to $224,000
during the second  quarter of 1999, as compared to the same period in 1998.  The
acquisition of the three Peoples Savings  branches and the operation of the data
center account for the increase. These costs are considered to be recurring, and
can be  expected to be subject to  periodic  increases  for such items as annual
maintenance  contract  adjustments,  office  rent  escalation  and  other  costs
normally subject to inflationary or pricing increases.

Other operating expense increased  $127,000 or 30% during the three months ended
June 30, 1999, as compared to the same period in 1998 and totaled $545,000.  The
increase  in the  branch  network  accounted  for  approximately  $85,000 of the
increase,   of  which  approximately   $46,000  resulted  from  amortization  of
intangible assets.  Recurring costs increased during the comparative quarter due
to items such as:  increased ATM and debit card  processing fees which increased
$16,000  or  43%  to  $52,000;   Pennsylvania   shares  tax  expense   increased
approximately  $8,000,  due to the  increased  Bank capital  resulting  from the
Peoples Savings  acquisition;  while  correspondent  bank fees and courier costs
increased  approximately  $16,000  due  to  the  expanded  branch  network.  The
remaining  increase in this cost is related to the costs of the data  processing
center and the costs of maintaining the frame relay network  established  during
the fourth quarter of 1998.

Income Taxes - The  provision  for income taxes of $200,000 for the three months
ended June 30, 1999,  represented  a $66,000 or 49%  increase  from the $134,000
recorded during the same period of 1998. Income taxes as a percentage of pre-tax
earnings were  approximately  31.5% for the three months ended June 30, 1999, as
compared to 30.7% during the same period in 1998. The slight increase in the tax
rate  is  attributable  to  effect  of  nondeductible  expenses  related  to the
amortization   of  intangible   assets   resulting  from  the  Peoples   Savings
acquisition.

Six Months Ended June 30, 1999
------------------------------

Net income for the first six months of 1999  totaled  $823,000  an  increase  of
$182,000 or 28% from 1998. On a per share basis,  earnings of $.59 for the first
half of 1999, equaled that reported in 1998.

Net interest  income  increased  $776,000 or 25% for the  comparative  six month
periods due to the increase in the volume of earning assets and interest bearing
liabilities  previously  discussed.  For the six  months  ended  June 30,  1999,
average  earning  assets  increased  $51.7  million or 41% and average  interest
bearing  liabilities  rose $44.9  million or 44%. The net tax  equivalent  yield
totaled  4.41% for the first half of 1999,  as compared to 4.93% during the same
period in 1998.

                                       11
<PAGE>

As detailed  during the  discussion  of the  quarterly  earnings,  other  income
increased  due to the  increase in fees related to the increase in the number of
accounts.  For the six months ended,  other income  increased  $54,000 or 16% to
$393,000.

Employee  expenses  reflect the addition of the employees added from the Peoples
Savings  acquisition  and the impact of  temporary  employees.  Through June 30,
1999,  these costs have risen  $231,000 or 19% to $1.4 million.  These costs are
expected to increase further when the management positions discussed earlier are
filled.

Other operating  expenses for the first six months of 1999 totaled $1.0 million,
an increase of  $240,000  or 30% from the same period in 1998.  Amortization  of
intangible  assets  related to the Peoples  Savings  acquisition  accounted  for
$91,000 of the total increase.  In addition costs discussed earlier,  related to
telephone  and data  services,  and ATM  network  costs,  as well as  additional
overhead costs related to servicing the Peoples  Savings  offices  accounted for
the increase.

For the first six months of 1999,  income taxes  totaling  $381,000  represented
31.6% of pretax  income,  as compared to $283,000,  or 30.6% or pretax income in
1998.

Financial Condition
-------------------

At June 30,  1999,  the Company  reported  total  consolidated  assets of $192.7
million,  a decrease of 1.2% from the $194.1  million  reported at December  31,
1998. The slowing of loan demand is the primary cause for this decline

Total loans  decreased  $1.6 million or 1%, to $132.6  million.  The decrease is
attributed to the lower interest rate environment during the first half of 1999,
and its impact on loan  refinancings.  The  historically low interest rates have
caused  customers  to seek out the  lowest  rate  available  when  obtaining  or
refinancing  mortgage loans.  While the Company  continues to offer  competitive
interest  rates,  the interest rate risk  associated  with long-term  fixed rate
mortgage  loans has  limited the  Company's  ability to match some of the lowest
rates offered by competing  lenders.  As a result,  residential  mortgage  loans
declined  $2.7  million or 3.1%  during the first half of 1999,  while  consumer
loans  fell  $154,000  or 1.1%  during  the same  period.  Commercial  and other
mortgage  loans  increased  $493,000 or 2.7%,  while  commercial and other loans
increased $700,000 or 4.9% since the beginning of the year. The actions taken by
the Federal  Reserve  Board and other market  factors have  resulted in a recent
rise in interest rates. This increase should provide the Company  opportunity to
recapture some of its loan market share.

Stockholders' equity of $21.1 million at June 30, 1999, equaled that reported at
December 31, 1998. At June 30, 1999,  the Company had Tier 1  risk-based,  total
risk-based   and  leverage   capital   ratios  of  14.56%,   15.71%  and  9.02%,
respectively.  Each of these ratios exceeds the minimum  ratios  mandated by law
and banking regulations.

Liquidity
---------

Operating  activities,  particularly  net income of $823,000,  depreciation  and
amortization of $243,000, and the provision for loan losses of $80,000, provided
cash  totaling  $1,542,000  which  was  used to fund  financing  activities  and
contributed  to the increase in cash and cash  equivalents  during the first six
months of 1999. During the same period in 1998,  operating  activities  provided
$1.1 million.

                                       12
<PAGE>
As a result of purchases of approxiately  $7.7 million of investment  securities
available for sale,  financing  activities  used  approximately  $1.7 million in
funds  during the six months  ended June 30,  1999,  as compared to $1.0 million
used  during the same period in 1998.  During the first six months of 1999,  net
loan repayments of $1.5 million,  along with investment  security  repayments of
$4.3 million, were used to fund the securities purchases. By comparison,  during
the first six months of 1998, net loan originations totaled $6.2 million,  which
was  partially  funded by net  investment  maturities  and sales  totaling  $3.7
million.

Financing activities for the first half of 1999 used approximately $1.6 million,
due  principally  to a net  reduction in deposits of $987,000 and the payment of
regular  quarterly  dividends.   During  the  same  period  of  1998,  financing
activities  provided  approximately  $4.9 million of funds due to a $5.4 million
net increase in deposits.

Aside from  liquidity  available  from  customer  deposits or through  sales and
maturities of the investment  portfolio,  the Company has alternative sources of
funds such as a line of credit available with a correspondent  bank. At June 30,
1999,  a  short-term  revolving  credit  facility of $10  million was  available
through the Federal Home Loan Bank.

Management  is  not  aware  of  any   conditions,   including   any   regulatory
recommendations  or requirements,  which would adversely affect its liquidity or
its ability to meet funding needs in the ordinary course of business.

Risk Elements
-------------

At June 30, 1999,  non-performing loans, including those past due ninety days or
more, and loans on nonaccrual status totaled approximately $988,000.

Of the  non-performing  loan total,  $515,000 is  considered  to be impaired for
financial  reporting  purposes.  These impaired loans consist of four commercial
loans to a single borrower,  secured by real estate.  The borrower  continues to
operate under Chapter 11 bankruptcy protection.  As part of management's ongoing
assessment  of the loan  portfolio,  $40,000 of the allowance for loan losses at
June 30, 1999, has been allocated for these loans.  During the second quarter of
1999, the borrower provided  payments  totaling $13,000,  which were recorded as
interest income.  Management  believes the Company is adequately  secured by the
underlying collateral.

                                       13
<PAGE>

The following  table presents the components of  non-performing  loans and other
non-performing assets as of the five most recent quarters ended:
<TABLE>
<CAPTION>
                                                             1999                                1998
                                                             ----                                ----
                                                    June 30,       March 31,    December 31,  September 30,    June 30,
<S>                                                 <C>            <C>           <C>            <C>            <C>
Non-performing loans
    Loans past due 90 days or more                   $  114         $  238        $  287         $  204         $  55
    Non-accrual loans                                   874          1,032         1,022            941           667
                                                      -----          -----         -----          -----          ----
      Total non-performing loans                        988          1,270         1,309          1,145           722
Other non-performing assets
Repossessed assets                                        3              -             -              -             -
Real estate acquired through
    foreclosure                                          25             56            80            337             -
                                                      -----          -----         -----          -----          ----
      Total other non-performing assets                  28             56            80            337             -
                                                      -----          -----         -----          -----          ----

        Total non-performing assets                  $1,016         $1,326        $1,389         $1,482         $ 722
                                                      =====          =====         =====          =====          ====

Non-performing loans as a percentage
    of total loans                                      .74%           .96%          .98%           .87%          .78%
Non-performing assets to assets                         .53            .68           .72            .79           .52

</TABLE>

Year 2000
---------

The following discussion of the implications of the Year 2000 ("Y2K") compliance
issue for the Company  contains  numerous  forward-looking  statements  based on
inherently uncertain information.  The cost of the project and the date on which
the  Company  plans to  complete  various  aspects of the  project  are based on
management's   best  estimates,   which  were  derived  utilizing  a  number  of
assumptions of future events  including the continued  availability  of internal
and external resources, third party modifications and other factors.

Management  continues to work toward  attaining  Year 2000  ("Y2K")  compliance.
During the first quarter of 1999,  testing,  and  validation of the test results
were  completed on the core software  applications.  In addition,  the Company's
independent  accountants  reviewed the results of the Company's testing program.
The contingency plan developed by the Company was also updated.

During the second  quarter  of 1999,  the  Company  focused on  maintaining  Y2K
compliance  by testing  any  equipment  or  software  upgrades,  continuing  its
customer  communication program, and refining and testing its contingency plans.
These  procedures will continue  throughout the balance of the year.  During the
second quarter costs of approximately $4,000 were incurred for the production of
several customer Y2K communications.

Direct costs incurred in achieving and  maintaining Y2K compliance have not been
significant.  However,  the time  devoted by  employees to this project has been
significant.  During the first week of August 1999, the installation and testing
of a back-up generator at the data processing center was successfully completed.
The total capitalized cost for this equipment was $32,000.


                                       14
<PAGE>

Despite the best efforts of management in addressing this issue, the vast number
of external entities that have direct and indirect business  relationships  with
the Company,  such as customers,  vendors,  payment  system  providers and other
financial  institutions  makes it impossible to assure that a failure to achieve
or  maintain  compliance  by one or more of  these  entities  would  not  have a
material adverse impact on the operations of the Company.


                                       15
<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

         (None)

Item 2. Changes in Securities

         (None)

Item 3. Defaults Upon Senior Securities

         (None)

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

(a)  The annual  meeting of  stockholders  was held May 10,  1999.  Of 1,395,852
     shares  eligible  to vote,  1,127,216  or 80.8%  were voted in person or by
     proxy.

(b)  The following  Class B directors were elected to a three year term expiring
     in 2002:

          Name                 Shares For   Shares Withheld     Abstained
          ----                 ----------   ---------------     ---------
     Bernadette H. Crooks      1,077,739        22,544           26,933
       Robert L. Hunter        1,094,055         6,228           26,933
        John B. Mason          1,006,540        93,743           26,933

In addition, to the above listed individuals,  the following persons continue to
serve as directors:

Ronald L. Ashbaugh                           J. Michael King
David L. Cox                                 Brian C. McCarrier
George W. Freeman                            Elizabeth C. Smith
Rodney C. Hunter

(c)  The  recommendation  of the Board of Directors to ratify the appointment of
     S. R. Snodgrass,  A.C. as the Company's  independent auditors, as described
     in the Proxy Statement for the Annual Meeting,  was approved with 1,117,483
     shares in favor, and 9,733 shares against.


Item 5. Other Information

         (None)

Item 6. Exhibits and Reports on Form 8-K

         (a) Exhibit 27 - Financial  Data Schedule (in  electronic  filing only)
         (b) Reports on Form 8-K

         (None)



                                       16
<PAGE>

                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

Emclaire Financial Corp.
------------------------
(Registrant)


Date: August 13, 1999                                By: /s/ David L. Cox
      ---------------                                    -----------------------
                                                         David L. Cox
                                                         President and CEO


Date: August 13, 1999                                By: /s/ John J. Boczar
      ---------------                                    -----------------------
                                                         John J. Boczar, CPA
                                                         Treasurer

                                       17