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   March 31, 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 rquirements for the past 90 days.  Yes  X        No
                                                              ---          ---

As of May 10, 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


Part I     Financial Information                                            Page
                                                                            ----

           Item 1.      Consolidated Financial Statements (Unaudited)
                        Consolidated Balance Sheet, March 31, 1999 and
                        December 31, 1998                                      3

                        Consolidated Statement of Income
                        Three months ended March 31, 1999 and 1998             4

                        Consolidated Statement of Changes in
                        Stockholders' Equity                                   5

                        Consolidated Statement of Cash Flows
                        Three months ended March 31, 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 - 14


Part II    Other Information

           Item 1.      Legal Proceedings                                     14

           Item 2.      Changes in Securities                                 14

           Item 3.      Defaults Upon Senior Securities                       14

           Item 4.      Submission of Matters to a Vote of Securities Holders 14

           Item 5.      Other Information                                     14

           Item 6.      Exhibits and Reports on Form 8-K                      14

           Signatures                                                         15







                                       2
<PAGE>

                            EMCLAIRE FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEET
              (Unaudited - dollars in thousands, except share data)
<TABLE>
<CAPTION>
                                                                                          March 31,       December 31,
                                                                                            1999              1998
                                                                                       ----------------  ----------------
<S>                                                                                         <C>               <C>      
ASSETS
     Cash and due from banks                                                                 $  22,165          $  8,989
     Time deposits with others                                                                       -               100
     Federal funds sold                                                                              -             9,700
     Investment securities:
         Available for sale                                                                     27,039            28,929
          Held to maturity (estimated market value
            of $3,354 and $3,419)                                                                3,334             3,392
      Loans                                                                                    132,914           134,249
      Less allowance for loan losses                                                             1,324             1,336
                                                                                       ----------------  ----------------
         Net loans                                                                                        
                                                                                               131,590           132,913
     Premises and equipment                                                                      3,553             3,625
     Accrued interest and other assets                                                           6,471             6,484
                                                                                       ----------------  ----------------

            TOTAL ASSETS                                                                     $ 194,152         $ 194,132
                                                                                       ================  ================

LIABILITIES
     Deposits
         Non-interest bearing demand                                                         $  25,119         $  24,746
         Interest bearing demand                                                                20,656            22,026
         Savings                                                                                22,614            22,527
         Money market                                                                           22,017            21,381
          Time                                                                                  79,533            79,190
                                                                                       ----------------  ----------------
            Total deposits                                                                                
                                                                                               169,939           169,870
     Obligation under capital lease                                                                  8                19
     Borrowed funds                                                                              2,000             2,000
     Accrued interest and other liabilities                                                      1,152             1,142
                                                                                       ----------------  ----------------
            TOTAL LIABILITIES                                                                             
                                                                                               173,099           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                                                                           8,385             8,192
     Net unrealized gain on securities                                                              52               293
                                                                                       ----------------  ----------------
            TOTAL STOCKHOLDERS' EQUITY                                                          21,053            21,101
                                                                                       ----------------  ----------------

            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $ 194,152         $ 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 March 31,
                                                            1999           1998
                                                       -----------    ----------
<S>                                                   <C>            <C>       
INTEREST INCOME
     Loans, including fees                             $    2,702     $    1,926
     Interest bearing deposits in other banks                  25           --   
     Federal funds sold                                       119             12
     Investment securities:
         Taxable                                              429            513
         Exempt from federal income tax                        46             52
                                                       ----------     ----------
            Total interest income                           3,321          2,503
                                                       ----------     ----------

INTEREST EXPENSE
     Deposits                                               1,429            958
     Borrowed funds                                            28             29
     Lease obligation                                        --                1
                                                       ----------     ----------
            Total interest expense                          1,457            988
                                                       ----------     ----------

NET INTEREST INCOME                                         1,864          1,515

Provision for loan losses                                      44             45
                                                       ----------     ----------

NET INTEREST INCOME AFTER
     PROVISION FOR LOAN LOSSES                              1,820          1,470
                                                       ----------     ----------

OTHER OPERATING INCOME
     Service fees on deposit accounts                         138            122
     Other                                                     46             37
                                                       ----------     ----------
            Total other operating income                      184            159
                                                       ----------     ----------

OTHER OPERATING EXPENSE
     Salaries and employee benefits                           689            584
     Occupancy, furniture and equipment                       259            183
     Other                                                    487            374
                                                       ----------     ----------
            Total other operating expense                   1,435          1,141
                                                       ----------     ----------

Income before income taxes                                    569            488
Income taxes                                                  181            149
                                                       ----------     ----------

NET INCOME                                             $      388     $      339
                                                       ==========     ==========

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

AVERAGE SHARES OUTSTANDING                              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)
                                                   Stock          Capital        Earnings     on 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                                                                          388                            388
     Other comprehensive income, net
         Unrealized losses on securities
         of $365                                                                                       (241)           (241)
                                                                                                             ---------------
Total comprehensive income                                                                                              147

Dividends declared
     ($.14 per share)                                                                   (195)                          (195)
                                               --------------  -------------- --------------- -------------- ---------------

Balance March 31, 1999                              $  1,745        $ 10,871        $  8,385         $   52        $ 21,053
                                               ==============  ============== =============== ============== ===============
</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>
                                                                       Three Months Ended March 31,
                                                                            1999         1998
                                                                        ----------  --------------
<S>                                                                     <C>         <C>     

OPERATING ACTIVITIES
     Net income                                                          $    388    $    339
     Adjustments to reconcile net income to net
         cash provided by operating activities:
            Depreciation and amortization                                     243         153
            Net amortization of investment security
                discounts and premiums                                         35          32
            Provision for loan losses                                          44          45
            (Increase) decrease in accrued interest receivable                 59        (107)
            Increase in accrued interest payable                               19          25
            Other, net                                                        (79)        174
                                                                         --------    --------
                Net cash provided by operating activities                     709         661
                                                                         --------    --------

INVESTING ACTIVITIES
     Proceeds from maturities and repayments of investment securities:
            Available for sale                                              1,500       1,000
            Held to maturity                                                   48       1,488
     Net loan (originations) repayments                                     1,258      (3,113)
     Purchases of premises and equipment                                      (26)       (377)
     Other                                                                    124        --
                                                                         --------    --------
                Net cash used for investing activities                      2,904      (1,002)
                                                                         --------    --------

FINANCING ACTIVITIES
     Net increase in deposits                                                  69       2,017
     Decrease in short-term borrowings                                       --          (200)
     Payments for obligation under capital lease                              (11)        (11)
     Cash dividends paid                                                     (195)       (130)
                                                                         --------    --------
                Net cash provided by financing activities                    (137)      1,676
                                                                         --------    --------

                Increase in cash and cash equivalents                       3,476       1,335

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

CASH AND CASH EQUIVALENTS AT END OF PERIOD                               $ 22,165    $  6,310
                                                                         ========    ========
</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 three months
ended  March 31,,  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 three months ended March 31, 1998 the
net  unrealized  gain on securities had a beginning  balance of $222,000,  a net
unrealized  loss  of  $7,000,  and an  ending  balance  of  $215,000.  This  net
unrealized  loss on  securities  resulted in total  comprehensive  net income of
$332,000, for the three months ended March 31, 1998.

4. LOANS

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

                                     March 31,      December 31,
                                       1999            1998
                                  --------------- -----------------

Commercial and industrial              $  15,479         $  14,223
Real estate mortgages
     Residential                          84,950            87,137
     Commercial and other                 17,906            18,381
Consumer                                  14,579            14,508
                                  --------------- -----------------
                                         132,914           134,249
Less allowance for loan losses                     
                                           1,324             1,336
                                  --------------- -----------------

                                       $ 131,590         $ 132,913
                                  =============== =================

                                       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 March 31, 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 March 31, 1999 and 1998
------------------------------------------------------------

Net  Income - Net income  for the three  months  ended  March 31,  1999  totaled
$388,000 or $.28 per share,  as compared to $339,000 or $.31 per share  recorded
during the same period in 1998.  Net income showed a modest  increase of 14% 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 reported net income  resulted in  annualized  returns on average  assets and
average  equity of .81% and 7.43%  for the  quarter  ended  March 31,  1999,  as
compared to returns of 1.02% and 10.01% for the same period in 1998. The decline
in these returns is related to the increase in  stockholders'  equity and shares
outstanding as a result of the Peoples Savings acquisition.

Interest  Income - Interest  income for the three  months  ended  March 31, 1999
increased approximately $818,000 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 $45.6 million from
the  same  period  in  1998  to  $133.6  million.  The  acquisition  of  Peoples
represented  approximately  $35.5 million of the total average loan growth.  The
remainder of the increase is attributable largely to the increase in residential
mortgage loans.  The tax equivalent  yield on the loan portfolio for the quarter
decreased  73 basis  points to 8.28%  from the same  period in 1998,  due to the
impact of the decline in interest  rates.  The prime  interest  rate was reduced
three times,  totaling 75 basis points  during  1998,  with the first  reduction
occurring in September  1998.  This lower  interest  rate  environment  affected
existing  variable  rate  loans,  and  reduced  the  rates of return on new loan
originations and refinancings.

Average  investment  securities for the first quarter of 1999 were $31.4 million
resulting in a tax-equivalent yield of 6.44% for the quarter,  compared to $37.4
million and 6.41% during the same period in 1998.  As a result of the slowing of
loan growth over the past several months,  management  expects excess  liquidity
and  investment  securities  maturities  will be  reinvested  in the  investment
portfolio.



                                       9
<PAGE>

Despite the growth in the volume of average earning assets which increased $52.8
million for the first  quarter of 1999 as compared to 1998,  the tax  equivalent
yield on earning assets fell to 7.63%as compared to 8.21% during the same period
in 1998, due to the general decline in interest rates, previously discussed.

Interest expense - Interest expense  increased  $469,000 or 48% during the first
quarter of 1999, as compared to the same period in 1998.  The average  volume of
interest bearing  liabilities  during the quarter increased $45.7 million or 45%
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  rose from 3.97% to 4.03%.
This higher cost of funds is due  principally to the higher cost of funds of the
deposit  liabilities  assumed in the merger,  due to the concentration in higher
yielding certificates of deposit.

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.

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 $349,000 or 23% for the first quarter
of 1999, as compared to the same period in 1998. The net tax equivalent yield on
earning  assets for the quarter was 4.23%,  a 71 basis  point  decline  from the
5.04% 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
$44,000, as compared to $45,000 provided during the same period in 1998.

Other operating income - Other operating income increased $25,000 or 16% for the
first  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  $24,000  of the total  increase  in other  operating
income.

Other  Operating  Expense  - During  the  first  quarter  of 1999,  total  other
operating  expenses  increased  $294,000  or 26% to $1.4  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 in March
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  $105,000 or 18% to $689,000 for the first  quarter of
1999 as compared to $584,000  during the same period in 1998.  In  addition,  no
accrual was made for employee  profit  sharing during the first quarter of 1999,
while  $30,000  was  provided  for during the same  period in 1998.  The de novo
office and former Peoples' offices resulted in a net direct increase in employee
related costs of  approximately  $99,000.  During the first quarter of 1999, the
Company used  temporary  employees to provide  support in the data center and in
providing  certain  other 



                                       10
<PAGE>

administrative costs. The total cost for temporary employees amounted to $12,000
during the first  three  months of 1999.  Management  intends to continue to use
temporary  employees to supplement certain staff and  administrative  functions.
Their use is  expected to be  increased  during the second  quarter of 1999,  to
assist with human resources management and employee training. The balance of the
increase in employee related costs is related to periodic salary adjustments and
scheduled employee health insurance premium  adjustments.  Specifically,  health
insurance costs rose approximately 12% from 1998.

Occupancy and equipment costs increased approximately $76,000 or 42% to $259,000
during the first  quarter of 1999,  as compared to the same period in 1998.  The
acquisition  of the three Peoples  Savings  branches along with the operation of
the Clarion Mall office resulted in approximately  $41,000 of additional  direct
operating  expenses  during the first quarter of 1999.  The remaining  costs are
related to the  operation  of the data  processing  center,  the  upgraded  data
processing and computer networking  equipment,  and approximated  $28,000 during
the first quarter of 1999.  These costs are considered to be recurring,  and can
be  expected to be subject to  periodic  increases  for such items as salary and
benefit adjustments,  office rent escalation and other costs normally subject to
inflationary  or pricing  increases.  The balance of the  increase is related to
normal periodic adjustments for recurring costs.

Other operating  expense  increased  $113,000 or 30% during the first quarter of
1999, as compared to the same period in 1998 and totaled $487,000.  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  $10,000 or 31% to
$42,000;  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.  Telephone expense increased approximately $30,000,
with $21,000 being directly attributed to the additional branch operations.  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 $181,000 for the three months
ended March 31, 1999,  represented  a $32,000 or 21% increase  from the $149,000
recorded during the same period of 1998. Income taxes as a percentage of pre-tax
earnings was  approximately  32% for the first three months of 1999, as compared
to 31% 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.

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

At March 31, 1999,  the Company  reported  total  consolidated  assets of $194.2
million,  a slight  increase  from the $194.1  million  reported at December 31,
1998.  The slowing of loan demand is attributed to the lack of growth during the
first quarter of 1999.

Total loans  decreased  $1.3 million or 1%, to $132.9  million.  The decrease is
attributed  to the  lower  interest  rate  environment  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 


                                       11
<PAGE>

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 $2.2 million
or 2.5% during the first quarter of 1999,  while  commercial  and other mortgage
loans fell $475,000 or 2.6% during the same period.  Commercial  and other loans
increased  $1.3  million or 8.8% during the  quarter.  A recent rise in interest
rates  should  provide the Company  opportunity  to  recapture  some of its loan
market share.

Stockholders'  equity of $21.1  million  at March 31,  1999,  and  equaled  that
reported  at  December  31,  1998.  At March 31,  1999,  the  Company had Tier 1
risk-based,  total  risk-based and leverage  capital ratios of 14.4%,  15.5% and
8.8%, respectively.  Each of these ratios exceeds the minimum ratios mandated by
law and banking regulations.

Liquidity
---------

Operating  activities,  particularly  net income of $388,000,  depreciation  and
amortization of $243,000, and the provision for loan losses of $44,000, provided
cash  totaling  $709,000  which  was  used  to  fund  financing  activities  and
contributed to the increase in cash and cash equivalents  during the first three
months of 1999.

As a result of the decline in loan originations previously discussed,  financing
activities provided  approximately $2.9 million in funds during the three months
ended March 31, 1999, as compared to $1.0 million used during the same period in
1998. During the first three months of 1999, net loan repayments of $1.3 million
were received,  along with investment  security  repayments of $2.5 million.  By
comparison, during the first three months of 1998, net loan originations totaled
$3.1 million,  which was partially funded by net investment maturities and sales
totaling $2.5 million.

Financing  activities  for the first  three  months  of 1999 used  approximately
$137,000,  due  principally  to the payment of the regular  quarterly  dividend.
During the same period of 1998, financing activities provided approximately $1.7
million of funds due to a $2.0 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 March 31,
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 March 31, 1999, non-performing loans, including those past due ninety days or
more, and loans on nonaccrual status totaled approximately $1,270,000.

Of  the  non-performing  loans,  $515,000  are  considered  to be  impaired  for
financial  reporting  purposes.  These impaired loans consist of four commercial
loans to a single borrower,  secured by 


                                       12
<PAGE>

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 March 31, 1999,  has been  allocated
for these  loans.  During  the first  quarter  of 1999,  the  borrower  provided
payments  totaling  $4,000 which were  recorded as interest  income.  Management
believes the Company is adequately secured by the underlying collateral.

The following  table presents the components of  non-performing  loans and other
non-performing assets as the five most recent quarters ended:
<TABLE>
<CAPTION>

                                                  1999                                        1998
                                              -------------  -----------------------------------------------------   
                                               March 31,     December 31,  September 30,    June 30,     March 31,

<S>                                         <C>            <C>            <C>            <C>           <C>   
Non-performing loans
    Loans past due 90 days or more               $  238         $  287         $  204         $  55        $  132
    Non-accrual loans                             1,032          1,022            941           667           828
                                            -----------    -----------    -----------    ----------    ----------
      Total non-performing loans                  1,270          1,309          1,145           722           960

Other non-performing assets
Repossessed assets                                    -              -              -             -             -
Real estate acquired through
    foreclosure                                      56             80            337             -             -
                                            -----------    -----------    -----------    ----------    ----------
      Total other non-performing assets              56             80            337             -             -
                                            -----------    -----------    -----------    ----------    ----------
        Total non-performing assets             $ 1,326        $ 1,389        $ 1,482        $  722        $  960
                                            ===========    ===========    ===========    ==========    ==========

Non-performing loans as a percentage
    of total loans                                  .96%           .98%           .87%          .78%         1.08%
Non-performing assets to total assets               .68            .72            .79           .52           .71
</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.

For the remainder of 1999, the Company will focus on maintaining  Y2K compliance
by  testing  any  equipment  or  software  upgrades,   continuing  its  customer
communication program, and refining and testing its contingency plans.





                                       13
<PAGE>

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  quarter of 1999,  the  Company  entered  into a
contract for the  installation  of a back-up  generator  at its data  processing
center.  It is expected the  installation  will be completed  early in the third
quarter.  The capitalized cost of the generator and installation is estimated to
be approximately $50,000.

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.

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

         (None)

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)



                                       14
<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: May 14, 1999                        By: /s/ David L. Cox
      ---------------------                   ----------------------------------
                                              David L. Cox
                                              President and CEO


Date: May 14, 1999                        By: /s/ John J. Boczar
      ---------------------                   ----------------------------------
                                              John J. Boczar, CPA
                                              Treasurer







                                       15