EXHIBIT 13.a.

                               MARKET INFORMATION



COMMON STOCK

The Company's common stock is traded in the over-the-counter market under 
the NASDAQ symbol "FFBS" and is quoted on NASDAQ's National Market 
System.  The stock traded in a range from $19.75 to $24.50 during the 
fiscal year 1997, and dividends were declared semi-annually in June 
and December. 



                                 EXHIBIT 13.b.

                            SELECTED FINANCIAL DATA


                                     Years Ended June 30,
                    _____________________________________________________
INCOME DATA            1997       1996       1995       1994       1993  
                    _________  _________  _________  _________  _________ 
                                           (In Thousands)

Interest income     $   9,454  $   8,929  $   8,430  $   7,793  $   7,601
Interest expense        4,763      4,563      3,854      3,339      3,971
                    _________  _________  _________  _________  _________ 
 Net interest 
  income                4,691      4,366      4,576      4,454      3,630

Less Provision for 
 losses on loans            0          0        (50)       (52)       224
                    _________  _________  _________  _________  _________ 

Net interest 
 income after 
 provision for 
 losses on loans        4,691      4,366      4,626      4,506      3,406
                    _________  _________  _________  _________  _________ 

Non-interest 
 income:
  Loan fees & 
   service 
   charges                238        192        118        164        133
  NOW account 
   fees                   301        286        238        204        188
  Other                    95        111         83        102        140
                    _________  _________  _________  _________  _________ 

   Total non-
    interest 
    income                634        589        439        470        461
                    _________  _________  _________  _________  _________ 
 
Other expenses:
 Compensation & 
  benefits              1,434      1,415      1,331      1,277        896  
 Occupancy, 
  furniture &   
  equipment               189        173        131        123        130 
 Deposit insurance  
  premiums                731        215        206        205        174 
 Data processing          149        155        146        108        106 
 Provision for real 
  estate losses            -          10         -         295        186  
 Loss on 
  foreclosed real 
  estate                   -           8          6          5        108  
 Other                    576        513        570        502        316  
                    _________  _________  _________  _________  _________ 

  Total Other 
   Expenses             3,079      2,489      2,390      2,515      1,916
                    _________  _________  _________  _________  _________ 

Income before 
 taxes                  2,246      2,466      2,675      2,461      1,951
Income tax expense        768        804        909        729        678
                    _________  _________  _________  _________  _________ 

  Net Income        $   1,478  $   1,662  $   1,766  $   1,732  $   1,273
                    =========  =========  =========  =========  =========
   
NET INCOME PER 
 SHARE              $    0.97  $    1.09  $    1.14  $    1.04  $    N/A


FINANCIAL DATA

Shares 
 Outstanding            1,577      1,572      1,592      1,648      1,587
Total assets        $ 130,762  $ 125,228  $ 118,970  $ 116,601  $ 111,096
Loans Recv.,net        92,760     83,528     80,391     74,009     72,569
Int-bearing 
 deposits & 
 federal funds 
 sold                   5,059      4,223      3,421     11,719     23,065
Investment 
 securities            18,814     27,741     26,710     23,721      5,999
Mortgage-backed &
 related 
 securities             7,268      2,506      2,011      2,775      3,764
Foreclosed real 
 estate net of 
 related allowance
 for losses                -         555        -          -          299
Deposits              103,798     99,148     92,576     91,510     87,213
Total 
 stockholders'
 equity                25,142     24,638     25,141     24,361     22,946
Total number of 
 full service 
 offices                    3          3          3          2          2

SELECTED RATIOS

Return on avgerage 
 assets                 1.16%      1.37%      1.51%      1.54%      1.26%
Return on average 
 equity                 5.95%      6.89%      7.06%      7.13%     13.96%
Capital to assets      19.23%     19.67%     21.13%     21.08%     20.65%
Efficiency ratio       57.80%     50.23%     51.66%     51.08%     46.83%
Net interest 
 margin                 3.93%      3.79%      4.04%      3.97%      3.69%

PER SHARE DATA

Book value
 (end of year)      $   16.97  $   16.61  $   16.87  $   14.87       N/A
Earnings per share        .97       1.09       1.14       1.04       N/A
Cash dividends 
 declared                 .50       1.45        .40        .35       N/A

AVERAGE COMMON 
SHARES OUTSTANDING  1,475,279  1,528,840  1,545,277  1,667,267       N/A



                                 EXHIBIT 13.b.

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


GENERAL

FFBS Bancorp, Inc. (the "Company") was incorporated under the laws of the
State of Delaware in March 1993 to acquire all of the capital stock of
First Federal Bank for Savings (the "Bank") upon its conversion from the
mutual to stock form of ownership.  The Holding Company may acquire or
organize other operating subsidiaries, including other financial
institutions, although there are currently no specific plans regarding 
such activities by the Holding Company.

First Federal Bank for Savings descended from Columbus Building and Loan
Association, which dated back to 1892.  In 1934, First Federal was
organized as a federally chartered mutual savings association 
headquartered in Columbus, Mississippi.  Its deposits are insured up 
to the maximum allowable amount by the Federal Deposit Insurance
Corporation (the "FDIC").  First Federal offers a variety of financial
services to meet the financial service needs of its community through its
main office and two branch offices.  The Bank attracts deposits from the
general public and uses such deposits primarily to originate loans 
secured by first mortgages on owner-occupied, one-to-four family 
residences in its market area.

The following discussion reviews the Company's financial condition and
results of operations.  This discussion should be read in conjunction 
with the consolidated financial statements included in this Annual 
Report.


FINANCIAL CONDITION

The consolidated assets of the Company were $130.8 million at June 30,
1997, an increase of $5.5 million, or 4.42% over June 30, 1996. Total 
assets of the Company have increased $20.0 million, or 17.70%, over the
past five years.

Significant increases occurred in loans receivable as loan growth continues
to be impressive.  Loans receivable totalled $92.8 million at June 30, 1997.
The $9.2 million growth in the Company's loans outstanding represents the 
most significant growth component of interest-earning assets.  This 11.05%
gain is indicative of the strong loan demand that existed in the market for 
most of the year and the Company's focused efforts to add to its loan 
portfolio.  Total loan originations in fiscal 1997 were $59.6 million, an
increase of $15.0 million, or 33.6%, over total originations of $44.6 
million for fiscal 1996.  The Company prides itself in its conservative
lending policies which have consistently produced a good asset quality. 
During the five years noted in the summary, total loans have increased $20.2
million, or 27.8%.
     
The securities portfolio is utilized to provide a quality investment
alternative for available funds as well as a stable source of interest 
income.  Investment securities, along with mortgage-backed and related 
securities, totalled $26.1 million at June 30, 1997, a decrease of $4.2
million, or 13.8%, compared to June 30, 1996.  Securities were reinvested
in loans as they matured in order to partially fund the demand for loans.

Deposits are the Company's primary source of funds to support its earning
assets.  Total deposits were $103.8 million at June 30, 1997, an increase
of $4.7 million, or 4.7%, over June 30, 1996.  The deposit mix has remained
substantially unchanged with the exception of a slight shift toward more
time deposits.  Over the five years noted in the summary, deposits have 
increased $16.6 million, or 19%.

Stockholders' equity, particularly as it related to assets, has represented
a consistent strength of the Company throughout the years noted in the 
summary data.  At June 30, 1997, stockholders' equity amounted to $25.1
million, or 19.2% of assets.  The bank subsidiary is classified as well
capitalized under the Federal Deposit Insurance Corporation Improvement Act
of 1991 (FDICIA).

The book value per share amounted to $16.97 per share at June 30, 1997,
with the exclusion of 76,176 unallocated shares held by the Employee Stock 
Ownership Plan (ESOP).  At June 30, 1996, the book value per share amounted
to $16.61, which was after the payment of $1.00 per share special dividend
and excluding 88,872 unallocated shares held by the ESOP.  At June 30, 1995,
the book value per share was $16.87 with the exclusion of 101,568 unallocated
shares held by the ESOP.  At June 30, 1995, the book value per share was 
$16.87 with the exclusion of 101,568 unallocated shares held by the ESOP.


RESULTS OF OPERATIONS

The Company had consolidated net earnings of $1.5 million for the fiscal  
year ended June 30, 1997, representing a return on average assets of 1.16%
and earnings per share of $.97.  Return on average assets, a primary measure
of earnings strength, has been above $1.1% for all five years shown in the 
summary.  Results for the fiscal year ended June 30, 1997, were reduced
$599,000 (approximately $375,000 after taxes or $.25 per share) due to the
one-time assessment by the Federal Deposit Insurance Corporation "FDIC" to
fully capitalize the Savings Association Insurance Fund.  Net income would
have been approximately $1.9 million for the year ended June 30, 1997, a
$193,000 increase, or 11.6%, over fiscal year 1996, had the Bank not been 
charged with this assessment.  The Company's net income of $1.7 million 
for the fiscal year ended June 30, 1996, represented a decrease of $105,000,
or 5.9%, over fiscal 1995 due primarily to a decrease in net interest income.

Net interest income is the largest component of the Company's net 
income and represents the income earned on interest earnings assets 
less the cost of interest bearing liabilities.  This major source of 
income represents the earnings from the Company's primary business of
gathering funds from deposit sources and investing those funds in 
loans and securities.  Changes in net interest income can be broken 
down into two components, the change in average earning assets and 
the change in net interest spread.  During the fiscal year ending 
June 30, 1997, the Company's level of net interest income amounted to
$4.7 million, an increase of $325,000, or 7.5%, when compared to fiscal
1996.  This increase can be attributed to the Company's yield on earning
assets increasing at a faster pace than its cost of funds.  The net 
interest margin for fiscal 1997 was 3.93%, an increase from the 3.79% 
for fiscal 1996 due primarily to increased spreads.  Average-earning 
assets for fiscal 1997 increased to $122.5 million from $118.2 million
for fiscal 1996, an increase of $4.3 million, or 3.7%.  Since fiscal
1993, the first year in the summary, average-earning assets have 
increased $29.0 million, or 31%.  During fiscal 1996, the Company's
level of net interest income dropped by 3.3% or $150,000 when compared
to fiscal 1995.  This decline can be attributed to the Company's cost 
of funds increasing at a faster pace than its yield on earning assets.

The Company maintains its reserve for loan losses at a level that is
considered sufficient to absorb potential losses in the loan portfolio. 
The Company's provision for loan losses is utilized to replenish its
reserve for loan losses on its balance sheet.  The reserve for loan 
losses amounted to $576,000 at June 30, 1997, or .62% of total loans
outstanding, which is an amount that management considers to be 
sufficient to protect against potential future loan losses.

Growth in non-interest related sources of income is one of the Company's 
key long-term strategies.  Non-interest income was $634,000 for fiscal 
1997 compared to $589,000 for fiscal 1996, an increase of $45,000, or
7.7%.  The significant items increasing non-interest income between 1996
and 1997 were documentation fees on loans, which increased $33,000, or
211%, and service charges on deposit accounts, which increased $16,000,
or 5.4%.  Non-interest income was $589,000 for fiscal 1996 compared to
$431,000 for fiscal 1995, an increase of $158,000, or 36.6%.  Loan fees
increased $50,000, or 35.3%, while NOW account fees increased $48,000, 
or 20.2%.

A key measure used in the banking industry to assess the level of non-
interest expense is the efficiency ratio, which is defined as non-interest
expense divided by the sum of net interest income plus non-interest income.
The efficiency ratio measures the level of expense required to generate one
dollar of revenue.  Until fiscal 1997, the efficiency ratio has been 
approximately 50% for the years noted in the summary.  For fiscal 1997, the
efficiency ratio rose to 57.8%, due to the impact of the FDIC one-time
assessment.  Excluding the one-time assessment, the efficiency ratio for
fiscal 1997 would have been 46.6%, which would have been the lowest in the
five year summary.

Non-interest expense increased $590,000, or 23.7%, to $3.1 million in 
fiscal 1997 compared to fiscal 1996.  Non-interest expense included the
FDIC one-time assessment of $599,000.  During fiscal 1996, total non-
interest expense amounted to $2.5 million, an increase of $168,000, or
7.3%, compared to fiscal 1995.  Compensation and benefits increased
$84,000 during fiscal 1996 due primarily to the adoption of Statement of
Position 93-6 "Employer's Accounting for Employee Stock Ownership Plans."
Also contributing to the increase is non-interest expense during fiscal 
1996 was an increase of $42,000 for occupancy, furniture, and equipment
expense related to the operation of another branch office.

The provision for income taxes was $768,000, $804,000, and $909,000 in
fiscal 1997, 1996, and 1995, respectively.  The changes in such respective
amounts primarily reflect the fluctuations in levels of income before
income taxes of the Company during those fiscal years of $2.2 million,
$2.5 million, and $2.7 million, respectively.  See Note J of the Notes to
Consolidated Financial Statements.


LIQUIDITY-ASSET/LIABILITY MANAGEMENT

A major objective of asset/liability management is to structure the
Company's assets and liabilities in such a way as to maximize and 
stabilize the spread between interest earned and interest paid while
maintaining an adequate liquidity position.  During each of the years 
noted in the summary, the Company has maintained a consistent
asset/liability management policy, which focuses on interest rate risk
and rate sensitivity.  The adherence to such a policy has an obvious
material impact on the structure of the Company's balance sheet, and, 
to a degree, on its liquidity position.

The Company is required to maintain minimum levels of liquid assets as
defined by OTS regulations.  This requirement, which may be varied at 
the direction of the OTS depending upon economic conditions and deposit
flow, is based upon a percentage of deposits and short-term borrowings. 
The required minimum liquidity ratio is currently 5.0%.  At June 30, 
1997, the Bank's liquidity ratio was 22.06%

The Company has experienced no problem meeting liquidity requirements
during any of the years noted in the summary and foresees no problems
meeting liquidity requirements in the future.  An adequate liquidity
position enables the Company to meet cash flow requirements created by
decreases in deposits and/or other sources of funds or increases in loan
demand.  The Company's traditional sources of funds from deposit 
increases, maturing loans and investments, and earnings have allowed it 
to consistently generate sufficient funds for liquidity needs.  The 
Company has no long-term debt which might represent a future demand for
liquidity.


REGULATORY CAPITAL

The banking subsidiary's current capital position is well in excess of the
minimum regulatory requirements.  The regulations require institutions to
have a minimum regulatory tangible capital equal to 1.5% of total assets
and a minimum 3% leverage (core) capital ratio.  At June 30, 1997, the
Bank's tangible and core capital was 16.2%.  Additionally, institutions
are required to meet a risk-based capital requirement equaling 8% of the
amount of risk-weighted assets.  At June 30, 1997, the Bank's risk-weighted
capital was 29.9%.


REGULATORY DEVELOPMENTS

See Note A-11 of the Notes to Consolidated Financial Statements.


COMMON STOCK MARKET INFORMATION

The Company's common stock is traded in the over-the-counter market under the
NASDAQ symbol "FFBS" and is quoted on NASDAQ's National Market System.  The
stock traded in a range from $19.75 to $24.50 per share during the fiscal 
year 1997, and dividends were declared semi-annually in June and December.
A special dividend of $1.00 per share was paid in August, 1995, and a $2.00
per share special dividend was paid in August, 1997.



                                 EXHIBIT 13.d.

                       CONSOLIDATED FINANCIAL STATEMENTS



 
                              FFBS BANCORP, INC.

                       CONSOLIDATED FINANCIAL STATEMENTS

                                      AND

               INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT

                            JUNE 30, 1996 AND 1996
               




                                   REPORT OF
                  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Stockholders
FFBS Bancorp, Inc.
Columbus, Mississippi


We have audited the accompanying consolidated statements of financial
condition of FFBS Bancorp, Inc., and Subsidiary as of June 30, 1997 and
1996, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for each of the years in the three-
year period ended June 30, 1997.  These consolidated financial statements
are the responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
FFBS Bancorp, Inc., and Subsidiary as of June 30, 1997 and 1996, and the
results of their operations and their cash flows for each of the years in
the three-year period ended June 30, 1997, in conformity with generally
accepted accounting principles.


                                       S/T. E. Lott & Company


Columbus, Mississippi
July 18, 1997



                               FFBS BANCORP, INC.                 

                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


                                                       June 30,
                                              __________________________  
      ASSETS                                       1997          1996   
                                              ____________  ____________

Cash                                          $  3,347,511  $  3,337,978
Interest-bearing deposits due from banks         5,058,945     3,673,244
Federal funds sold                                     -         550,000
                                              ____________  ____________
  Total cash and cash equivalents                8,406,456     7,561,222
Investment securities (approximate market 
  value of $18,758,223 at June 30, 1997, 
  and $27,517,628 at June 30, 1996) (Note B)    18,814,395    27,740,646
Mortgage-backed and related securities 
  (approximate market value of $7,256,822 
  at June 30, 1997, and $2,449,956 at 
  June 30, 1996) (Note B)                        7,267,626     2,506,359
Federal Home Loan Bank stock, at cost 
  (Note F)                                         801,900       756,500
Loans receivable, net (Note C)                  92,760,267    83,528,151
Properties and equipment (Note E)                1,354,677     1,095,423
Accrued interest receivable (Note G)             1,064,535     1,125,991
Foreclosed real estate, net (Note D)                   -         554,515
Other assets (Note H)                              292,445       359,551
                                              ____________  ____________

                                              $130,762,301  $125,228,358
                                              ============  ============ 

      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Deposits (Note I)                           $103,798,255  $ 99,148,108
  Advances from borrowers for taxes and 
    insurance                                      277,749       259,102
  Accrued interest payable on deposits             763,339       695,107
  Accrued expenses and other liabilities           781,370       643,581
                                              ____________  ____________

  Total liabilities                            105,620,713   100,745,898

Commitments and contingencies (Note M)

Stockholders' equity (Notes K, L and Q):
  Cumulative preferred stock, $.01 par 
    value, 500,000 shares authorized; 
    shares issued and outstanding - none               -             -   
  Common stock, $.01 par value, 2,000,000 
    shares authorized; 1,565,595 and 
    1,572,183 shares issued and outstanding
    at June 30, 1997 and 1996, respectively         15,656        15,722
  Additional paid in capital                    15,371,923    15,253,646
  Retained earnings                             10,692,318    10,104,145
  Unrealized gain (loss) on available-
    for-sale securities                              4,789        (2,333)
  Loan receivable from ESOP                       (761,760)     (888,720)
  Treasury stock, at cost (8,150 shares)          (181,338)          -
                                              ____________  ____________
    Total stockholders' equity                  25,141,588    24,482,460
                                              ____________  ____________

                                              $130,762,301  $125,228,358
                                              ============  ============ 

      The accompanying notes are an integral part of these statements.




                               FFBS BANCORP, INC.

                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
 


                                             Years Ended June 30,         
                                     __________________________________
                                        1997        1996        1995    
                                     __________  __________  __________   
                                              
INTEREST INCOME
  Interest and fees on loans         $7,466,019  $7,074,289  $6,523,628
  Interest on mortgage-backed and 
    related securities                  308,935     139,858     127,040
  Interest on investment securities   1,323,621   1,356,933   1,411,007 
  FHLB stock dividends                   45,492      45,137      40,435
  Interest on federal funds sold         10,624      60,051      72,086
  Interest on deposits due from 
    banks                               298,983     252,412     195,154
                                     __________  __________  __________   
                                      9,453,674   8,928,680   8,369,350

INTEREST EXPENSE
  Interest on deposits                4,762,604   4,562,988   3,854,017
                                     __________  __________  __________   

Net interest income                   4,691,070   4,365,692   4,515,333

Provision for losses on loans 
 (Note C)                                   -           -       (50,000)  
                                     __________  __________  __________   

Net interest income after provision 
  for losses on loans                 4,691,070   4,365,692   4,565,333

NON-INTEREST INCOME
  Loan fees and service charges         238,099     191,696     141,690
  NOW account fees                      301,361     285,826     237,567 
  Other                                  94,928     111,383      51,910 
                                     __________  __________  __________   
                                        634,388     588,905     431,167
NON-INTEREST EXPENSE
  Compensation and benefits           1,433,945   1,415,254   1,331,225
  Occupancy and equipment               189,155     172,615     130,555
  Deposit insurance premium
    (Note K)                            731,485     214,967     205,504
  Loss on foreclosed real estate, 
    net                                     447       7,641       6,379
  Data processing                       148,428     155,404     145,907
  Provision for losses on 
    foreclosed real estate 
    (Note D)                                -        10,452         - 
  Other                                 575,531     512,910     501,209
                                     __________  __________  __________   
                                      3,078,991   2,489,243   2,320,779
                                     __________  __________  __________   

Income before income taxes            2,246,467   2,465,354   2,675,721

Income tax expense (Note J): 
    Current                             618,199     733,257     768,097
    Deferred                            149,980      70,500     141,259
                                     __________  __________  __________   
                                        768,179     803,757     909,356
                                     __________  __________  __________   

Net Income                           $1,478,288  $1,661,597  $1,766,365
                                     ==========  ==========  ==========

Net Income Per Share (Note R)        $      .97  $     1.09  $     1.14

     The accompanying notes are an integral part of these statements.


<TABLE>
                               FFBS BANCORP, INC.

                                 AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                    YEARS ENDED JUNE 30, 1997 1996 AND 1995

<S>            <C>       <C>          <C>          <C>       <C>         <C>          <C>        <C>

                                                              Unrealized
                                                               Loss on
                          Additional                Unearned  Available-     Loan   
                Common     Paid in     Retained      Compen-   For-Sale   Receivable   Treasury
                Stock      Capital     Earnings      sation   Securities  From ESOP      Stock       Total  
               ________  ___________  ___________  _________  __________  ___________  _________  ___________
Balance, 
 July 1, 1994  $ 16,475  $15,755,117  $10,039,032  $(317,400) $  (10,786) $(1,142,640) $(134,483) $24,205,315
 
Net income          -            -      1,766,365        -           -            -          -      1,766,365

Retirement of 
 treasury 
 stock              (87)     (86,993)     (47,403)       -           -            -      134,483          -

Purchase and
 retirement of
 stock             (466)    (465,524)    (260,273)       -           -            -          -       (726,263)
 
Cash 
 dividends, 
 $.40 per 
 share              -            -       (639,306)       -           -            -          -       (639,306)
     
Amortization
 of unearned
 compensation 
 (Note L)           -            -            -      158,700         -            -          -        158,700

Reduction of 
 ESOP loan 
 (Note L)           -            -            -         -           -        126,960        -        126,960

Adjustment to 
 unrealized 
 gain (loss)
 on available-
 for-sale 
 securities         -            -            -         -        10,786          -          -         10,786

Excess of
 fair market
 value of
 allocated 
 ESOP shares
 over cost
 (Note L)           -         82,524          -         -           -            -          -         82,524
               ________  ___________  ___________  _________  __________  ___________  _________  __________
Balance,
 June 30,
 1995            15,922   15,285,124   10,858,415   (158,700)       -      (1,015,680)       -    24,985,081

Net income          -            -      1,661,597        -          -             -          -     1,661,597

Purchase and
 retirement
 of stock          (200)    (199,700)    (150,776)       -          -            -          -       (350,676)

Cash dividends,
 $1.45 per 
 share              -            -     (2,265,091)       -          -            -          -     (2,265,091)

Amortization 
 of unearned
 compensation
 (Note L)           -            -            -      158,700        -            -          -        158,700

Reduction of
 ESOP loan
 (Note L)           -            -            -          -          -        126,960        -        126,960

Adjustment 
 to unrealized
 gain (loss)
 on available-
 for-sale
 securities         -            -            -         -        (2,333)         -          -         (2,333)

Excess of 
 fair market 
 value of 
 allocated
 ESOP shares 
 over cost 
 (Note L)           -        168,222          -         -           -            -          -        168,222
               ________  ___________  ___________  ________  __________  ___________  _________  ___________
Balance, 
 June 30, 
 1996            15,722   15,253,646   10,104,145       -        (2,333)    (888,720)       -     24,482,460

Net income          -            -      1,478,288       -           -            -          -      1,478,288

Purchase and 
 retirement
 of stock          (106)    (105,444)    (117,292)      -           -            -          -       (222,842)

Cash 
 dividends,
 $.50 per
 share              -            -       (772,823)      -           -            -          -       (772,823)

Reduction of
 ESOP loan
 (Note L)           -            -            -         -           -        126,960        -        126,960

Adjustment to
 unrealized 
 gain (loss)
 on available-
 for-sale
 securities         -            -            -         -         7,122          -          -          7,122

Stock option
 shares
 exercised           40       39,630          -         -           -            -          -         39,670

Excess of 
 fair market
 value of
 allocated 
 ESOP shares
 (Note L)           -        184,091         -         -           -             -          -        184,091
               ________  ___________  ___________  ________  __________  ___________  _________  ___________

               $ 15,656  $15,371,923  $10,692,318  $   -     $    4,789  $  (761,760) $(181,338) $25,141,588
               ========  ===========  ===========  ========  ==========  ===========  =========  ===========

      The accompanying notes are an integral part of these statements.
</TABLE>




                                FFBS BANCORP, INC.

                                  AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                         Years Ended June 30,  
                             __________________________________________

                                  1997           1996           1995
                             ____________   ____________   ____________   
CASH FLOWS FROM 
OPERATING ACTIVITIES
 Net income                  $  1,478,288   $  1,661,597   $  1,766,365
Adjustments to reconcile 
  net income to net cash: 
   Depreciation of 
    properties and 
    equipment                      83,880         93,497         52,020
   Amortization of 
    unearned compensation             -          158,700        158,700
   Accretion of discount 
    on loans                      (12,218)       (10,965)        (9,971)
   Deferred income taxes          149,980         70,500        141,259
   FHLB stock dividends           (45,400)       (44,900)       (40,300)
   Provision for losses 
    on loans                          -              -          (50,000) 
   Provision for losses 
    on foreclosed real 
    estate                            -           10,452            -
   Sale of loans                4,656,000      5,655,000      1,844,000
   Loans originated for 
    sale                       (4,656,000)    (5,655,000)    (1,844,000)
   (Increase) decrease in
    accrued interest 
    receivable                     61,456       (105,876)      (186,248)
   (Increase) decrease 
    in other assets               164,082       (717,263)       349,103
   Increase in accrued
    interest payable on
    deposits                       68,232         97,098        176,030
   Increase (decrease) in 
    accrued expenses and 
    other liabilities              (8,506)       (40,049)       326,205
   Excess of fair market 
    value of allocated ESOP 
    shares over cost              184,091        168,222         82,524 
                             ____________   ____________   ____________   
 Net cash provided by 
  operating activities          2,123,885      1,341,013      2,765,687

CASH FLOWS FROM INVESTING 
ACTIVITIES
  Decrease in other 
   interest-bearing 
   deposits due from banks            -          100,000      1,376,000 
 Loan originations            (54,949,000)   (38,953,000)   (31,666,000)
 Purchase of loans                    -         (117,000)      (171,000)  
 Purchase of mortgage-
  backed and related 
  securities                   (5,522,800)      (984,900)           -
 Purchase of investment 
  securities                   (5,566,627)   (20,771,985)    (9,445,618)
 Principal repayment of 
  loans                        45,729,102     35,943,815     25,515,387
 Principal repayments of 
  mortgage-backed and 
  related securities              761,533        484,290        764,269
 Proceeds from calls and
  maturities of investment 
  securities                   14,500,000     19,744,348      6,474,104 
 Sale of foreclosed real 
  estate                          457,539        190,501            -
 Purchase of properties 
  and equipment                  (343,134)       (59,708)      (290,326)
 Repayment of ESOP loan           126,960        126,960        126,960
                             ____________   ____________   ____________   
 Net cash used in investing 
  activities                   (4,806,427)    (4,296,679)    (7,316,224)

CASH FLOWS FROM FINANCING 
ACTIVITIES
 Increase in deposits           4,650,147      6,571,941      1,065,791
 Increase (decrease) in 
  advances from borrowers 
  for taxes and insurance          18,647         (9,597)        18,144
 Acquisition of stock            (404,180)      (350,676)      (726,263)
 Cash dividends paid             (776,508)    (2,190,480)      (639,306)
 Exercise of stock options         39,670            -              -
                             ____________   ____________   ____________   
Net cash provided by (used 
 in) financing activities       3,527,776      4,021,188       (281,634)
                             ____________   ____________   ____________   
Net increase (decrease) in 
 cash and cash equivalents        845,234      1,065,522     (4,832,171)

Cash and cash equivalents 
 at beginning of period         7,561,222      6,495,700     11,327,871
                             ____________   ____________   ____________   
Cash and cash equivalents 
 at end of period            $  8,406,456   $  7,561,222   $  6,495,700
                             ============   ============   ============
Cash paid during the 
 period for:
  Interest on deposits       $  4,694,372   $  4,465,890   $  3,677,987
  Income taxes                    642,000        721,692        832,663

Supplemental disclosure 
of noncash activities:
 Acquisition of real 
  estate in settlement 
  of loans                            -           755,468        42,731


     The accompanying notes are an integral part of these statements.




                                FFBS BANCORP, INC.

                                  AND SUBSIDIARY

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE A - SUMMARY OF ACCOUNTING POLICIES

  FFBS Bancorp, Inc., (the Company), and its wholly-owned subsidiary, First
  Federal Bank for Savings (the Bank), follow generally accepted accounting
  principles, including, where applicable, general practices within the 
  thrift industry.

  A summary of the significant accounting policies consistently applied 
  in the preparation of the accompanying consolidated financial statements
  follows.

  1. Principles of Consolidation

  The consolidated financial statements include the accounts of the
  Company and the Bank.  Significant intercompany accounts and transactions
  have been eliminated in consolidation.

  2. Nature of Operations

  The Company is a holding company which was formed for the purpose of
  acquiring all of the capital stock of the Bank as part of the Bank's
  conversion from a mutual to a federally chartered stock savings bank 
  on June 30, 1993.  Its most significant asset is its investment in the
  capital stock of the Bank.

  The Bank's principal business activity is to provide deposit account
  services to the general public and investing those deposits, together 
  with funds from operations, primarily in family residential mortgage 
  loans and, to a lesser extent, consumer loans, securities, and other
  assets.

  3. Use of Estimates

  The preparation of financial statements in conformity with generally
  accepted accounting principles requires management to make estimates 
  and assumptions that affect the reported amounts of assets and 
  liabilities and disclosures of contingent assets and liabilities at 
  the date of the financial statements and that affect the reported 
  amounts of revenues and expenses during the reporting period.  Actual
  results could differ from those estimates.

  4. Securities

  Investments in securities are classified in accordance with Financial 
  Accounting Standards Board (FASB) Statement No. 115, "Accounting for
  Certain Investments in Debt and Equity Securities.  Statement No. 115
  requires that securities be classified as either trading, available-
  for-sale, or held-to-maturity.  The Company and the Bank have classifed
  all of its securities, with the exception of its investment in marketable
  equity securities, as held-to-maturity.  Marketable equity securities are
  classified as available-for-sale.  Management determines the appropriate
  classification at the time of purchase. 

  Trading securities are held for resale for profit and are accounted 
  for at their fair values.  Realized and unrealized gains and losses 
  are reported in earnings.  At June 30, 1997 and 1996, the Company 
  and the Bank had no securities classified as trading.

  Securities available-for-sale are carried at their fair values.  Any
  unrealized difference between the amortized cost and the fair value 
  is reported as a component of stockholders' equity, net of deferred
  income taxes.

  Securities classified as held-to-maturity are carried at amortized 
  cost and includes those securities which management has the positive 
  intent and the Company and the Bank have the ability to hold until
  maturity.

  Amortization of premiums and accretion of discounts are determined 
  using the level yield method.  The adjusted cost of the specific 
  security sold is used to compute any gain or loss on securities sold.
 
  The yield on, and recoverability of, the carrying value of mortgage-
  backed and related securities may be affected by changes in interest 
  rates and prepayments.  Management periodically evaluates the effects
  of matters such as rate changes and prepayments and adjusts yields as 
  necessary.

  5. Loans Receivable, Net 

  Loans receivable, net are stated at unpaid principal balances, less 
  the allowance for loan losses, and net deferred loan-origination 
  fees and discounts.  

  Discounts on first mortgage loans are amortized to income using the
  interest method over the remaining period to contractual maturity, 
  adjusted for anticipated prepayments.  Discounts on consumer loans 
  are recognized over the lives of the loans using methods that 
  approximate the interest method.

  The allowance for loan losses is increased by charges to income and
  decreased by charge-offs (net of recoveries).  The allowance for loan 
  losses is maintained at a level considered adequate by management.  
  Management performs quarterly reviews of the Bank's loan portfolio 
  to evaluate the adequacy of the allowance with any adjustments being 
  made through provisions for loan losses.  These reviews take into
  consideration the Bank's past due and nonperforming loans, prior 
  years' loss experience, economic conditions, underlying loan 
  collateral and the distribution of loans in the portfolio by risk 
  class.  Amounts of the allowance are assigned to specific loans and
  loan categories based upon these factors.  Allowances for any 
  impaired loans are generally determined based on collateral values. 
  Although management believes the allowance for loan losses to be 
  adequate, ultimate losses may vary from estimates used in manage-
  ment's evaluation.

  Interest on loans that are contractually past due 90 or more days 
  is generally charged off, or an allowance is established based on 
  management's periodic evaluation unless the obligation is well 
  secured and in the process of collection.  The allowance is 
  established by a charge to interest income equal to all interest 
  previously accrued.  Additionally, an allowance is established for
  interest on loans delinquent less than 90 days, but which in
  management's opinion may become uncollectible in part or in full.

  Mortgage loans originated and intended for sale in the secondary 
  market are carried at the lower of cost or estimated market value 
  in the aggregate. Mortgage loans held for sale at June 30, 1997 
  and 1996, were immaterial.

  6. Foreclosed Real Estate

  Real estate acquired in settlement of loans is reported in accordance
  with AICPA Statement of Position 92-3 ("SOP 92-3") Accounting for
  Foreclosed Assets.  SOP 92-3 requires that other real estate be 
  carried at the lower of (i) fair value minus estimated cost to sell 
  or (ii) cost (the recorded investment in the related loan or loans 
  plus acquisition costs).  An allowance for losses is maintained to
  reflect declines, if any, in net fair values below the recorded 
  amounts.  Additions to the allowance are charged to operations.  
  Costs of holding real estate acquired in settlement of loans are
  reflected as expense currently.  Subsequent gains or losses on 
  foreclosed real estate are reported in other operating income or
  expenses.

  7. Properties and Equipment

  Properties and equipment are stated at cost less accumulated
  depreciation.  Depreciation is computed primarily on a straight-
  line basis over the estimated useful life of each type of asset.
  Expenditures for maintenance and repairs which do not materially 
  prolong the useful life of the assets are charged to operating 
  expenses as incurred, and improvements are capitalized.  Gains 
  and losses on sale of assets are reflected in current operations.

  8. Deferred Income Taxes

  Deferred income taxes are accounted for in accordance with FASB
  Statement No. 109, Accounting for Income Taxes.  Statement No. 109
  requires the asset-and-liability method of accounting for income 
  taxes.  Under the asset-and-liability method, deferred income taxes 
  are recognized for the tax consequences of "temporary differences" 
  by applying enacted statutory tax rates applicable to future years 
  to differences between the financial statement carrying amounts 
  and the tax bases of existing assets and liabilities.  Under 
  Statement No. 109, the effect on deferred taxes of a change in 
  tax rates is recognized in income in the period that includes the 
  enactment date. 

  9. Stock-Based Compensation

  The Company and the Bank have elected not to adopt the recognition
  provisions of FASB Statement No. 123, Accounting for Stock-Based
  Compensation which requires a fair-value based method of accounting for
  stock options and similar equity awards.  The Company and the Bank 
  elected to continue applying Accounting Principles Board Opinion No. 25,
  Accounting for Stock Issued to Employees and related interpretations in
  accounting for its stock compensation plans and, accordingly, do not 
  recognize compensation cost.

  10. Statement of Cash Flows

  For purposes of the consolidated statement of cash flows, all highly
  liquid debt instruments with an original maturity of three months or 
  less are considered to be cash equivalents. Cash equivalents consist 
  of balances due from banks and federal funds sold.

  11. Off-Balance Sheet Financial Instruments

  In the ordinary course of business the Bank enters into off-balance
  sheet financial instruments consisting of commitments to extend 
  credit, commercial letters of credit and commitments to purchase 
  securities.  Such financial instruments are recorded in the financial 
  statements when they are exercised.

  12. Accounting Pronouncements

  In February, 1997, the FASB issued Statement No. 128, Earnings Per Share
  which establishes new standards for computing and presenting earnings per
  share and is applicable to periods ending after December 15, 1997.  The
  Statement replaces the presentation of primary earnings per share with a
  presentation of basic earnings per share.  It also requires a dual 
  presentation of basic and diluted earnings per share on the face of the
  income statement.  The impact of the adoption of this Statement is not
  expected to be material on earnings per share data.

  The FASB also issued Statement No. 129, Disclosure of Information About
  Capital Structure, in February, 1997.  This Statement establishes standards
  for disclosing information about an entity's capital structure and is 
  applicable to periods ending after December 15, 1997.  The adoption of this
  Statement will not have an impact on the consolidated financial condition 
  or consolidated results of operations of the Company.  
   
  13. Financial Statement Reclassification

  The financial statements for prior years have been reclassified in 
  order to conform with the 1997 financial statement presentation.  
  The reclassification did not change total assets or net income.


NOTE B - SECURITIES

  The carrying values and estimated market values of investment 
  securities and mortgage-backed and related securities are as 
  follows:
 
                                           June 30, 1997
                          _______________________________________________
                                         Gross      Gross      Estimated
                           Carrying   Unrealized  Unrealized     Market
         Description         Value       Gains      Losses       Value 
  _______________________ ___________ ___________ ___________ ___________

  Held-to-Maturity:
   Securities of other 
    U.S. Government
    obligations           $15,586,350 $     2,024 $    51,905 $15,536,469
   Obligations of states 
    and political sub-
    divisions               2,006,540         249       6,540   2,000,249
   Mortgage-backed and 
    related securities      7,267,626      15,847      26,651   7,256,822
                          ___________ ___________ ___________ ___________
   Total held-to-
    maturity 
    securities             24,860,516      18,120      85,096  24,793,540

   Available-for-Sale:
    Marketable equity
     securities             1,221,505         -           -     1,221,505
                          ___________ ___________ ___________ ___________

   Total securities       $26,082,021 $    18,120 $    85,096 $26,015,045
                          =========== =========== =========== ===========


                                           June 30, 1996
                          _______________________________________________
                                         Gross      Gross      Estimated
                           Carrying   Unrealized  Unrealized     Market
         Description         Value       Gains      Losses       Value 
  _______________________ ___________ ___________ ___________ ___________

  Held-to-Maturity:
   U. S. Treasury 
    securities            $ 2,011,521 $     1,438 $     5,094 $ 2,007,865
   Securities of other 
    U.S. Government
    obligations            22,577,276         411     217,879  22,359,808
   Obligations of states 
    and political
    subdivisions            2,008,600       3,686       5,580   2,006,706
   Mortgage-backed and 
    related securities      2,506,359         992      57,395   2,449,956
                          ___________ ___________ ___________ ___________
   Total held-to-
    maturity securities    29,103,756       6,527     285,948  28,824,335

  Available-for-Sale:
   Marketable equity 
    securities              1,143,249         -           -     1,143,249
                          ___________ ___________ ___________ ___________

  Total securities        $30,247,005 $     6,527 $   285,948 $29,967,584
                          =========== =========== =========== ===========

  Investment securities with a carrying value of $925,000 and $968,200 at 
  June 30, 1997 and 1996, were pledged for various purposes as required by
  law.

  The carrying values and estimated market values of investment debt
  securities by contractual maturities as of June 30, 1997, are shown below.
  The equity securities have been excluded from the maturity table because 
  they do not have contractual maturities associated with debt securities. 
  Expected maturities will differ from contractual maturities because 
  borrowers may have the right to call or prepay obligations with or without
  call or prepayment penalties.


                                                         June 30, 1997         
                                                     _______________________  
                                                                  Estimated  
                                                      Carrying      Market   
                                                        Value       Value     
                                                     ___________ ___________

  Due in one year or less                            $ 4,149,880 $ 4,142,061
  Due after one year through five years               12,436,470  12,394,657
  Due after ten years                                  1,006,540   1,000,000
                                                     ___________ ___________
                                                      17,592,890  17,536,718
  Mortgage-backed and related securities               7,267,626   7,256,822
                                                     ___________ ___________

                                                     $24,860,516 $24,793,540
                                                     =========== ===========

  The carrying values of mortgage-backed and related securities are
  summarized as follows:
                                                    June 30,
                                 ___________________________________________
                                         1997                 1996
                                 ______________________ ____________________
                                             Estimated             Estimated
                                  Carrying     Market   Carrying    Market
     Description                    Value      Value      Value      Value
  _________________              __________ ___________ _________ __________

  FNMA certificates              $2,014,775 $2,007,796 $1,013,115 $  984,402
  FNMA REMIC                            -          -       20,371     20,290
  FHLMC certificates              5,252,851  5,249,026  1,472,873  1,445,264
                                 __________ __________ __________ __________

                                 $7,267,626 $7,256,822 $2,506,359 $2,449,956
                                 ========== ========== ========== ==========
   
  Mortgage-backed and related securities were issued or are guaranteed by
  an agency of the U. S. Government.  Although mortgage-backed and related
  securities are initially issued with a stated maturity date, the under-
  lying mortgage collateral may be prepaid by the mortgagee and, therefore,
  such securities may not reach their maturity date.  At June 30, 1997 and 
  1996, there were no material concentrations of credit risk.

  There were no sales of securities during the years ended June 30, 1997,
  1996 and 1995.


NOTE C - LOANS RECEIVABLE, NET

 Loans receivable, net are summarized as follows:
                                                      (In Thousands)
                                                          June 30,  
                                                     __________________
                                                       1997      1996 
                                                     ________  ________
  Mortgage Loans                                     

    Principal balances:
     One-to-four family residential                  $ 67,198  $ 61,077
     Multi-family                                         982     1,021
     Commercial real estate                             8,706     7,867
     Construction and land                              4,834     4,218
                                                     ________  ________
        Total mortgage loans                           81,720    74,183
                                                     ________  ________

  Consumer and Other Loans

    Principal balances:
     Loans on deposit accounts                          1,090     1,592
     Home improvement and education                        43        83
     Automobile                                         4,271     3,680
     Commercial - collateralized                        1,678       974
     Commercial - unsecured                               333       479
     Other                                              4,215     3,230
                                                     ________  ________
      Total consumer and other loans                   11,630    10,038
                                                     ________  ________

  Total loans receivable                               93,350    84,221

  Less unearned discount and deferred loan fees            14        27

  Less allowance for loan losses                          576       666
                                                     ________  ________

  Loans receivable, net                              $ 92,760  $ 83,528
                                                     ========  ========


  Activity in the allowance for loan losses is as follows:

                                                      (In Thousands)
                                                        Years Ended
                                                          June 30,    
   
                                                      1997  1996  1995
                                                      ____  ____  ____      

   Balance at beginning of period                     $666  $705  $803

   Additions:
     Provision for losses on loans                      -     -    (50) 
     Recoveries                                          7     5     4
                                                      ____  ____  ____ 
                                                       673   710   757
   Deductions:
     Loans charged off                                  97    44    52 
                                                      ____  ____  ____ 

   Balance at end of period                           $576  $666  $705
                                                      ====  ====  ====

  The Bank adopted FASB Statement No. 114, Accounting by Creditors for
  Impairment of a Loan and Statement No. 118, Accounting by Creditors 
  for Impairment of a Loan - Income Recognition and Disclosures as of 
  July 1, 1995.  These Statements require that loans determined to be 
  impaired be measured based on the present value of expected future 
  cash flows or, as a practical expedient, on the loan's observable
  market price or the fair value of the collateral if the loan is
  collateral dependent.  If the measurement of the impaired loan is 
  less than the recorded investment in the loan, a valuation allowance 
  is recorded.  The Bank had previously determined its allowance for 
  loan losses using methods similar to those prescribed in the 
  statements.  The Bank's loan portfolio consists principally of family
  residential mortgage loans and consumer installment loans, which are  
  exempt from the requirements of the Statements if evaluated 
  collectively, as is done by the Bank.  As a result, the adoption of 
  these Statements had no impact on the consolidated financial 
  statements, and at June 30, 1997 and 1996, any loans designated as 
  impaired were not significant.  

  Loans receivable delinquent are as follows:
                                                         (In Thousands)
                                                             June 30,  
                                                          1997    1996   
                                                         ______  ______

   Past due 30-89 days and still accruing                $6,511  $5,836
   Past due 90 days or more and still accruing              446     675
                                                         ______  ______
                                                          6,957   6,511
   Nonaccrual loans                                          -      495
                                                         ______  ______

                                                         $6,957  $7,006 
                                                         ======  ======

  If interest on nonaccrual loans had been recognized at the original
  interest rates, the effect on consolidated net income in each of the
  three years ended June 30, 1997, would not have been material.

  The Bank is not committed to lend additional funds to borrowers of
  impaired or nonaccrual loans.


NOTE D - FORECLOSED REAL ESTATE

  Activity in the allowance for losses on foreclosed real estate is as
  follows:

                                                     (In Thousands)
                                                      Years Ended
                                                        June 30,      
   
                                                  1997    1996    1995   
                                                 ______  ______  ______

    Beginning balance                            $   -   $   -   $   -   
    Provision charged to operations                  -       10      -
    Losses charged to allowance                      -       -       -
                                                 ______  ______  ______

    Ending balance                               $   -   $   10  $   -
                                                 ======  ======  ======
  
NOTE E - PROPERTIES AND EQUIPMENT

  Properties and equipment consist of the following:
                                                           June 30,   
   
                                                        1997       1996  
                                                    __________  __________  

   Land                                             $  518,789  $  331,217
   Buildings                                         1,139,652   1,047,587
   Furniture and equipment                             571,195     522,597
                                                    __________  __________  
                                                     2,229,636   1,901,401
   Less accumulated depreciation                       874,959     805,978
                                                    __________  __________

                                                    $1,354,677  $1,095,423
                                                    ==========  ==========
  Depreciation expense totaled $83,880, $93,497, and $52,020 for the years
  ended 1997, 1996 and 1995, respectively.  


NOTE F - FEDERAL HOME LOAN BANK STOCK

  The Bank is a member of the Federal Home Loan Bank system.  Investment
  in stock of a Federal Home Loan Bank is required by law of every
  federally chartered savings bank.  No ready market exists for the
  stock, and it has no quoted market value; therefore, the stock is
  assumed to have a market value which is equal to its cost.


NOTE G - ACCRUED INTEREST RECEIVABLE  

  Accrued interest receivable consisted of interest accrued on the
  following:

                                                          June 30,    

                                                       1997       1996  
                                                   __________  __________

    Loans                                          $  821,643  $  732,947
    Mortgage-backed and related securities             37,512      13,419
    Investment securities                             205,380     379,625
                                                   __________  __________

                                                   $1,064,535  $1,125,991
                                                   ==========  ==========

NOTE H - OTHER ASSETS

  Other assets consist of the following:
                                                           June 30,    
                                                   ______________________   
                                                       1997        1996  
                                                   __________  __________

    Recognition and retention plans contribution   $  158,700  $  158,700
    Organization costs                                  6,767      13,534
    Prepaid income taxes                               45,724      25,335
    Prepaid expenses and other assets                  81,254     161,982
                                                   __________  __________

                                                   $  292,445  $  359,551
                                                   ==========  ==========   

NOTE I - DEPOSITS

  Approximate deposit balances by interest rates are summarized as 
  follows:
                                       ($ In Thousands)
                                            June 30,          
                      ___________________________________________________
                                  1997                     1996
                      __________________________ ________________________ 
                                       Weighted                  Weighted
                              Percent   Average         Percent   Average
                              Of Total  Nominal         Of Total  Nominal
                       Amount Deposits   Rate   Amount  Deposits   Rate
                      _______ ________ ________ _______ ________ ________   
      
    Demand accounts:
     Checking         $ 3,557    3.43%    0.00% $ 2,851    2.88%    0.00%
     NOW                9,350    9.00%    2.07%  10,383   10.47%    2.26%
     Savings            6,186    5.96%    2.84%   6,330    6.38%    2.76%
     Money market       5,626    5.42%    3.57%   6,057    6.11%    3.46%
                      _______ ________ ________ _______ ________ ________   
                       24,719   23.81%    2.31%  25,621   25.84%    2.42%
                      _______ ________ ________ _______ ________ ________   
    Certificate 
     accounts:
      Maturing 0-3 
       months          17,486   16.85%    5.33%  20,250   20.42%    5.36%
      Maturing 3-6 
       months          16,288   15.69%    5.53%  15,573   15.71%    5.36%
      Maturing 6-12 
       months          27,621   26.61%    5.59%  24,842   25.06%    5.45%
      Maturing 1-2 
       years           12,374   11.92%    6.01%  10,291   10.38%    5.54%
      Maturing 2-3 
       years            2,886    2.78%    6.27%   1,763    1.78%    5.87%
      Maturing 3-4 
       years            1,948    1.88%    6.37%     652     .66%    6.53%
      Maturing over
       4 years            476     .46%    6.70%     156     .15%    5.95%
                      _______ ________ ________ _______ ________ ________   
                       79,079   76.19%    5.64%  73,527   74.16%    5.44%
                      _______ ________ ________ _______ ________ ________   

  Total deposits     $103,798  100.00%    4.85% $99,148  100.00%    4.66%
                      =======  ======= ======== ======= ======== ========
    
  A summary of certificate accounts by interest rate follows:

                           June 30, 1997              June 30, 1996    
                   ___________________________ __________________________
                                      Average                     Average
   Interest Rate   Number   Balance   Balance  Number   Balance   Balance 
  _______________  ______ ___________ ________ ______ ___________ _______
 
  Less than 3.00%      11 $   338,000 $ 30,727     14 $   394,000 $28,143
  3.01% - 4.00%        -          -        -        3      60,000  20,000
  4.01% - 5.00%     1,054  14,654,000   13,903  1,119  18,354,000  16,402
  5.01% - 6.00%     1,787  49,926,000   27,938  1,756  46,398,000  26,423
  6.01% - 7.00%       283  13,383,000   47,290    228   7,455,000  32,697
  7.01% - 8.00%        11     778,000   70,727     12     866,000  72,167
                   ______ ___________ ________ ______ ___________ _______

                    3,146 $79,079,000 $ 25,136  3,132 $73,527,000 $23,476
                   ====== =========== ======== ====== =========== =======
   
  The aggregate amount of certificates of deposit with a minimum  
  denomination of $100,000 was approximately $17,086,000 and $13,755,000 
  at June 30, 1997 and 1996, respectively.  

  Interest expense on deposits is summarized as follows:

                                                       (In Thousands)
                                                         Years Ended
                                                           June 30,     
                                                   ______________________  
                                                    1997    1996    1995
                                                   ______  ______  ______   

   NOW accounts                                    $  194  $  203  $  222
   Savings                                            175     168     179
   Money market                                       198     227     228
   Certificate accounts                             4,196   3,965   3,225  
                                                   ______  ______  ______

                                                   $4,763  $4,563  $3,854
                                                   ======  ======  ======

NOTE J - INCOME TAXES

  The provision for federal income taxes differs from that computed at
  the statutory 34 percent federal corporate tax rate as follows:

                                                        Years Ended
                                                          June 30,      
                                                     __________________   
                                                     1997   1996   1995 
                                                     ____   ____   ____

    Federal income tax rates                          34%    34%    34%
    Change in taxes resulting from:
      Nontaxable income                               (5%)   (3%)   (4%)
      State income tax, net                            1%     2%     2%
      Excess of fair market value of 
        allocated ESOP shares over cost                3%     2%     1%
      Other                                            1%    (2%)    1%
                                                     ____   ____   ____

                                                      34%    33%    34% 
                                                     ====   ====   ====
    
  The sources of timing differences and the resulting deferred income tax
  expense (benefit) follow:

                                                       (In Thousands)  
                                                        Years Ended
                                                           June 30,      
   
                                                      1997   1996   1995 
                                                      ____   ____   ____

    Provision for losses on loans
      and foreclosed real estate                      $ 59   $ 51   $105
    Discount accretion                                   5    (10)    10
    Installment sale                                    -      -      (5)  
    Stock option plans                                  59     -     -  
    Depreciation                                         8     15      6
    FHLB stock                                          17     17     15
    Other, net                                           2     (2)    10
                                                      ____   ____   ____

                                                      $150   $ 71   $141
                                                      ====   ====   ====

  Significant components of the net deferred income tax asset (liability)
  included in other liabilities at June 30, 1997 and 1996, are as follows:

                                                        1997      1996   
                                                    _________  _________
    Deferred income tax assets:
      Stock options                                 $      -   $  59,195
      Other                                                -         870
                                                    _________  _________
       Total deferred income tax assets                    -      60,065
                                                    _________  _________

    Deferred income tax liabilities:
      Premises and equipment                           30,235     22,117
      Allownace for loan losses                       140,920     82,266
      Securities                                        8,030      5,840
      Loans                                            28,504     24,485
      FHLB stock                                      124,060    107,126
                                                    _________  _________
        Total deferred income tax liabilities         331,749    241,834
                                                    _________  _________

    Net deferred income tax liability               $(331,749) $(181,769)
                                                    =========  =========

  In October, 1996, Congress passed the Small Business Job Protection Act 
  ("the Act") which included a provision repealing the tax bad debt reserve
  method that had been available to thrift institutions in determining 
  income subject to income tax.  Because of the repeal, institutions must
  recapture the post-1987 tax bad debt reserve into taxable income over a
  six-year period. The recapture can be deferred for a two year period if
  the institution meets a residential loan portfolio test.  The Bank
  satisfies the residential loan portfolio requirements and is expected to
  recapture the tax bad debt reserve of $954,000 over a six-year period
  beginning in the year ended June 30, 1999.  The recapture will not have
  an effect on net income since the related tax expense has been accrued.
  The pre-1988 tax bad debt reserve that is not recaptureable under the 
  Act is subject to recapture at a later date only if certain events occur.
  These events include, but are not limited to, a conversion to a type of
  institution that is not a commercial bank.  Management does not 
  anticipate engaging in any transaction that would require recapture of 
  its pre-1988 tax bad debt reserve of approximately $1,600,000.


NOTE K - REGULATORY MATTERS 

  The Bank is subject to various regulatory capital requirements 
  administered by federal banking agencies.  Failure to meet minimum 
  capital requirements can initiate certain mandatory, and possibly 
  additional discretionary actions by regulators that, if undertaken, 
  could have a direct material effect on the consolidated financial
  statements.  Under capital adequacy guidelines and the regulatory
  framework for prompt corrective action, the Bank must meet specific 
  capital guidelines that involve quantitative measures of the Bank's
  assets, liabilities, and certain off-balance sheet items as 
  calculated under regulatory accounting practices.  The Bank's capital
  amounts and classification are also subject to qualitative judgments 
  by the regulators about components, risk weighing, and other factors.

  To ensure capital adequacy, quantitative measures have been established
  by the Bank's primary regulator, the Office of Thrift Supervision (OTS).
  Current OTS standards require that the Bank maintain tangible capital 
  (as defined) equal to at least 1.5% of tangible assets, core capital 
  (as defined) equal to at least 3% of adjusted tangible assets, and  
  risk-based capital (as defined) equal to at least 8% of risk-weighted 
  assets. Management believes, as of June 30, 1997, that the Company and
  the Bank exceed all capital adequacy requirements.

  At June 30, 1997, the Bank was categorized by regulators as well-
  capitalized under the regulatory framework for prompt corrective 
  action.  A financial institution is deemed to be well-capitalized 
  if it has total risk-based capital of 10% or more, has a Tier 1
  risk-based capital ratio of 6% or more, and has a Tier 1 leverage
  capital ratio of 5% or more.  At June 30, 1997, the Bank's capital
  exceeded all of the capital standards of a well-capitalized 
  institution.  There are no conditions or anticipated events that, 
  in the opinion of management, would change the category.

  The Bank's actual capital amounts and ratios at June 30, 1997 and 
  1996, are presented in the following table.  No amount was deducted 
  from capital for interest-rate risk exposure.

                                                 ($ In Thousands)
                                           June 30, 1997   June 30, 1996
                                           ______________  ______________
                                           Amount   Ratio  Amount   Ratio
                                           _______  _____  _______  _____ 
  
    Tangible capital                       $20,548  16.2%  $19,080  15.9%
    Core/leverage capital                   20,548  16.2%   19,080  15.9%
    Tier 1 risk-based capital               21,114  29.9%   19,665  30.1%
    Total risk-based capital                21,114  29.9%   19,665  30.1%
   
  Regulations also include restrictions on loans to one borrower, on
  certain types of investments and loans, on loans to officers, 
  directors, and principal shareholders, on brokered deposits and on 
  transactions with affiliates.

  To qualify under the Qualified Thrift Lender (QTL) test, approximately
  65% of assets must be maintained in housing related finance and other
  specified areas.  If the QTL test is not met, limits are placed on
  growth, branching, new investments, FHLB advances, and dividends or 
  the Bank must convert to a commercial bank charter.  

  In September, 1996, banking legislation was enacted requiring that all
  institutions with SAIF (Savings Association Insurance Fund) deposits pay
  a one-time special assessment.  This assessment was $598,653 and is 
  included in deposit insurance premiums in the statement of income for the
  year ended June 30, 1997.
  

NOTE L - EMPLOYEE BENEFITS AND STOCK OPTIONS

  The Bank participates in a multiemployer, noncontributory defined
  benefit pension plan for substantially all of its full-time employees 
  by being a member of the Financial Institutions Retirement Fund, a
  non-profit, tax-exempt pension trust which is administered by a Board
  of Directors comprised of presidents of FHLB and officers of various
  participating associations.  The Fund invests the contributions made 
  to it and, under its Comprehensive Retirement Program, it pays out
  retirement, disability and death benefits.  The multiemployer plan's
  assets exceed the actuarially computed value of vested benefits at 
  June 30, 1996, the most recent valuation date.  There is no unfunded
  liability for past service.  Plan benefits are fully vested after 
  five years of service and are based on an employee's years of service
  and a percentage of the employee's average salary, using the five 
  highest consecutive years preceding retirement.  The Bank's funding 
  policy is to make contributions to the plan equal to the amount
  accrued as pension expense.  The plan was fully funded for 1997, 1996 
  and 1995; and accordingly, no contributions were made.

  The Bank also provides a profit sharing plan with a (401-K) provision
  which allows eligible employees to defer up to 15% of their compensa-
  tion, as defined, by making a contribution to the plan.  The plan 
  allows the Bank to make a matching contribution equal to the deferred
  compensation of the participants, but not in excess of 50% of each
  participant's contribution and also provides for an "Excess Contri-
  bution" which can be made at the discretion of the Board of Directors.
  The expense for the plan included in the accompanying financial 
  statements was $23,940, $11,205 and $12,416 for the years ended 
  June 30, 1997, 1996 and 1995, respectively. 

  The Bank has an Employee Stock Ownership Plan (ESOP) for eligible
  employees.  Upon formation, the ESOP borrowed $1,269,600 from the 
  Company to purchase 126,960 shares of Company common stock. The ESOP
  shares were pledged as collateral for the debt.  The loan obligation
  is considered unearned employee benefit expense and, as such, is 
  recorded  as a reduction of the Company's stockholders' equity.  Both
  the loan obligation and the unearned benefit expense are reduced by the
  amount of any loan repayments made by the ESOP. Cash contributions to 
  the ESOP are determined based on its total debt service less any
  dividends paid on ESOP shares.  All dividends paid on the shares held 
  by the ESOP are used to service the debt. The Bank has adopted Statement
  of Position 93-6 (SOP 93-6), Employer's Accounting for Employee Stock
  Ownership Plans.  As the debt is repaid, shares are released from 
  collateral and allocated to qualified employees, based on the proportion
  of debt service paid for the year.  As shares are released from
  collateral, an expense is recorded equal to the current fair market 
  value of the shares, and the shares become outstanding for earnings per
  share computations.  Dividends on allocated ESOP shares are recorded as a
  reduction of retained earnings, while dividends on unallocated shares 
  are recorded as a reduction of debt.  The tax benefit of tax-deductible 
  dividends are reported as a reduction of income tax expense.  ESOP 
  expense for the years ended June 30, 1997, 1996 and 1995, totaled 
  $311,052, $295,180, and $209,484, respectively.  The ESOP shares as of
  June 30, 1997 and 1996, were as follows:

                                                           June 30,    
                                                   ______________________   
                                                       1997       1996  
                                                   __________  __________
 
    Allocated shares                                   38,088      25,392
    Shares released for allocation                     12,696      12,696
    Unreleased shares                                  76,176      88,872
                                                   __________  __________

    Total ESOP shares                                 126,960     126,960
                                                   ==========  ==========

    Fair value of unreleased shares at June 30     $1,866,312  $2,066,274

  The Company has various stock option plans covering specified employees
  and outside directors of the Company and the Bank.  Under the 1993
  Incentive Stock Option Plan (the "Option Plan"), 79,350 of authorized
  but unissued shares of common stock have been reserved for issuance to
  specified employees of the Company and its subsidiary bank.  The Option
  Plan is administered by a committee of outside directors.  The Option 
  Plan authorizes the grant of (i) options to purchase Company Common 
  Stock intended to qualify as incentive stock options, (ii) options that
  do not so qualify ("non-statutory options") and (iii) limited rights
  which are exercisable only upon a change in control of the Company.  
  The exercise price is at least 100% of the fair market value at the time
  of the grant of the underlying common stock.  Options become exercisable
  in whole or in part at such times (no later than 10 years from the date
  of grant) as the committee determines.  In 1993, options to purchase
  47,608 shares were granted, and during the year ended June 30, 1997,
  3,967 were exercised. 

  The 1993 Stock Option Plan for Outside Directors (the "Directors'
  Option Plan") of the Company and its subsidiary provides for the
  granting of 79,350 shares of Common stock shares.  Authorized but
  unissued shares or treasury shares may be used to satisfy an exercise
  of an option, resulting in an increase in the number of shares 
  outstanding.  The exercise price per share of each option is equal to
  the fair market value of the shares of Common Stock on the date the
  option is granted.  All options granted expire upon the earlier of 10
  years following the date of grant or one year following the date the
  optionee ceases to be a director.  In 1993, 52,688 shares were granted,
  and at June 30, 1997, none had been exercised.

  The Bank has established Recognition and Retention Plans as a method
  of providing directors of the Bank with a proprietary interest in the 
  Company in a manner designed to encourage such persons to remain 
  with the Bank.  The terms of each Plan are identical, only the 
  participants vary.   Awards to directors are fixed and are granted 
  in the form of shares of Common Stock to be held in trust.  Awards 
  are nontransferable and nonassignable.  When shares become vested and
  are actually distributed in accordance with the Plans, the participants
  also receive amounts equal to any accrued dividends with respect thereto.
  Upon establishment of the plans in 1993, 63,480 shares of Company common
  stock were made available, of which 47,610 shares have been awarded and
  are vested.  For each of the two years ended June 30, 1996, $158,700 was
  reported as expense.  No expense was reported for the year ended June 30,
  1997.

  FASB Statement No. 123, Accounting for Stock Based Compensation requires
  a fair value method of accounting for stock-based compensation arrange-
  ments.  However, the adoption of the fair value method was not required,
  and if Statement No. 123 had been adopted for the years ended June 30,
  1997 and 1996, there would have been no impact on pro forma net income
  or net income per share.  No shares were granted during these years,
  and Statement No. 123 pro forma disclosure requirements are applicable
  to awards granted in fiscal years beginning after December 15, 1994.  
  However, the pro forma effect upon net income and net income per share
  may not be representative of that to be expected in future years.


NOTE M - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

  The Bank is a party to financial instruments with off-balance-sheet 
  risk in the normal course of business to meet the financing needs of 
  its customers.  These financial instruments include commitments to 
  extend credit and standby letters of credit.  These instruments 
  involve, to varying degrees, elements of credit and interest rate 
  risk in excess of the amount recognized in the statements of 
  financial condition.

  The Bank's exposure to credit loss in the event of nonperformance 
  by the other party to the financial instrument for commitments to 
  extend credit and standby letters of credit is represented by the 
  contractual notational amount of these instruments.  The Bank uses 
  the same credit policies in making commitments and conditional 
  obligations as it does for balance sheet instruments.

  Commitments to extend credit are agreements to lend to a customer 
  as long as there is no violation of any condition established in 
  the contract.  Commitments generally have fixed expiration dates or
  other termination clauses and may require payment of a fee.  Standby
  letters of credit and financial guarantees written are conditional 
  commitments issued by the Bank to guarantee the performance of a 
  customer to a third party.  The credit risk involved in issuing 
  letters of credit is essentially the same as that involved in
  extending loans to customers.

  Approximate contract or notational amounts of financial instruments
  whose contract amounts represent credit risk are:
                                                        June 30,
                                                  ______________________
                                                     1997        1996  
                                                  __________  __________
   Commitments to extend credit secured by
     mortgages on dwelling units:
       Adjustable rate                            $  857,850  $  873,400
       Fixed rate                                  1,983,394     946,433
   Commitments to extend other credit                    -           -   

  The commitments to originate fixed rate mortgage loans represent amounts
  the Bank plans to fund within a period of 60 to 120 days.  These
  commitments were made with interest rates ranging from 7.875% to 8.50%.

  
NOTE N - CONCENTRATION OF CREDIT RISK

  Ninety-eight percent of the Bank's loans and commitments have been
  granted to customers in the Bank's market area.  Generally, such 
  customers are also depositors of the Bank.  The concentrations of 
  credit by type of loan are set forth in Note C.  The distribution 
  of commitments to extend credit approximates the distribution of 
  loans outstanding.  

  At June 30, 1997, the Company and the Bank had deposits with financial
  institutions in excess of federally insured limits by approximately 
  $6,939,000.  Of this amount, approximately $4,989,000 was on deposit 
  at The Federal Home Loan Bank of Dallas, an instrumentality of the U. S.
  Government.


NOTE O - RELATED PARTY TRANSACTIONS

  In the normal course of business, the Bank makes loans to its directors
  and executive officers and to companies in which they have a significant
  ownership interest.  These loans, totaling $869,067 at June 30, 1997, 
  and $321,498 at June 30, 1996, are made on substantially the same terms,
  including interest rates and collateral, as those prevailing at the time
  for comparable transactions with other persons.


NOTE P - FINANCIAL INSTRUMENTS

  At June 30, 1996, the Company and its subsidiary adopted FASB Statement
  No. 107, Disclosures About Fair Value of Financial Instruments.  The 
  Statement requires disclosure of fair value information about financial
  instruments, whether or not recognized in the financial statement.  In
  cases where quoted market prices are not available, fair values are 
  based on estimates using present value or other valuation techniques. 
  Those techniques are significantly affected by the assumptions used, 
  including the discount rate and estimates of future cash flows.  In 
  that regard, the derived fair value estimates cannot be substantiated 
  by comparison to independent markets and, in many cases, could not be
  realized in immediate settlement of the instruments.  Statement No. 107
  excludes certain financial instruments and all nonfinancial instruments
  from its disclosure requirements.  Accordingly, the aggregate fair 
  value amounts presented do not represent the underlying value of the
  Company and its subsidiary.  The carrying amounts presented are the
  amounts at which the financial instruments are reported in the 
  consolidated financial statements.

  The following methods and assumptions were used in estimating fair
  value disclosures for financial instruments:

   Cash and cash equivalents:  The carrying amounts reported in the
   statement of financial condition for cash and cash equivalents
   approximate those assets' fair value.
 
   Investment securities (including mortgage-backed securities):  Fair
   values for investment securities are based on quoted market prices, 
   where available.  If quoted market prices are not available, fair 
   values are based on quoted market prices of comparable instruments.

   Loans:  For variable-rate loans that reprice frequently and with no
   significant change in credit risk, fair values are based on carrying
   amounts.  The fair values for other loans (for example, fixed rate
   commercial real estate and rental property mortgage loans and 
   commercial and industrial loans) are estimated using discounted cash
   flow analysis, based on interest rates currently being offered for 
   loans with similar terms to borrowers of similar credit quality.  
   Loan fair value estimates include judgments regarding future expected
   loss experience and risk characteristics.

   Deposits:  The fair values disclosed for demand deposits (for example,
   interest-bearing checking accounts) are, by definition, equal to the 
   amount payable on demand at the reporting date (that is, their 
   carrying amounts).  The fair values for certificates of deposit are
   estimated using a discounted cash flow calculation that applies 
   interest rates currently being offered on certificates to a schedule 
   of aggregated contractual maturities on such time deposits.

   Off-Balance Sheet Financial Instruments:  Off-balance sheet
   instruments consist of any commitments to extend credit, letters 
   of credit, etc.  Generally, these commitments have a term of 30 
   to 120 days.  Management is of the opinion the estimated fair 
   value is not significantly different than the contractual or 
   notational amounts.

  The estimated fair values of the financial instruments at June 30,
  1997 and 1996, are as follows:

                                    1997                    1996
                          _________________________ ________________________
                                         Estimated               Estimated
                             Carrying      Fair       Carrying      Fair
                              Value        Value       Value        Value  
                          ____________ ____________ ___________ ___________ 
   Financial assets:
     Cash and cash
      equivalents         $  8,406,456 $  8,406,456 $ 7,561,222 $ 7,561,222
     Investment
      securities            18,814,395   18,758,223  27,740,646  27,517,628
     Mortgage-backed
      securities             7,267,626    7,256,822   2,506,359   2,449,956
     Federal Home Loan
      Bank stock               801,900      801,900     756,500     756,500
     Loans, net of
      allowance             92,760,267   93,168,412  83,528,151  84,139,507

   Financial liabilities:
     Deposits              103,798,255  103,402,600  99,148,108  99,361,405

   Commitments to extend 
    credit                   2,841,244    2,841,244   1,819,833   1,819,833


NOTE Q - CONVERSION TO STOCK FORM OF OWNERSHIP

  On June 30, 1993, the Bank converted from a federally-chartered mutual
  institution to a federally-chartered stock savings bank with 100% of 
  the stock of the Bank issued to the Company which was formed in 
  connection with the conversion.  Sources of cash flow to the Company 
  are dependent upon earnings from investment of net proceeds retained 
  by it in the conversion and any dividends received from the Bank.

  At conversion, the Bank established a liquidation account in an amount
  equal to the total net worth of the Bank as of the date of the latest
  balance sheet contained in the final offering circular.  Each eligible
  account holder will be entitled to a proportionate share of this 
  account in the event of a complete liquidation of the Bank, and only 
  in such event.  This share will be reduced if the account holders'
  deposit falls below the amount on the dates of record and will cease 
  to exist if the account is closed.  The liquidation account is not
  increased despite any increase after conversion in the related 
  deposit balance of an eligible account holder. 
  
  The Bank may not declare or pay cash dividends on any of its stock 
  if the effect thereof would cause the Bank's net worth to be reduced
  below the amount required for federal regulatory capital requirements.
  The Company, as a Delaware Corporation, is subject to Delaware law 
  which limits dividends to an amount equal to the excess of the Company's
  net assets over its statutory capital or, if there is no excess, to its
  net profits for the current and/or immediately preceding fiscal year.


NOTE R - NET INCOME PER SHARE

  Net income per share is computed on the basis of the weighted average 
  shares of common stock outstanding plus common stock equivalents arising
  from the effect of stock options, using the treasury stock method.  The 
  following is a reconciliation of the weighted average number of shares
  of common stock actually outstanding with the number of shares used in 
  the computation of net income per share.  Total shares outstanding for 
  fully diluted income per share computations were not significantly 
  different.

                                        1997        1996        1995  
                                     __________  __________  __________

   Weighted number of shares 
     actually outstanding             1,475,279   1,478,209   1,495,192
   Common stock equivalent 
    (stock options)                      43,180      50,631      54,022
                                     __________  __________  __________
   
     Total shares                     1,518,459   1,528,840   1,549,214 
                                     ==========  ==========  ==========


NOTE S - CONDENSED PARENT COMPANY STATEMENTS

  Balance sheets as of June 30, 1997 and 1996, and statements of income
  and cash flows for the years then ended, of FFBS Bancorp, Inc. (parent
  company only) are presented below.

                                                      June 30,      
   Balance Sheets                             ________________________
                                                  1997        1996   
     Assets:                                  ___________  ___________   
       Cash                                   $   396,399  $   416,522
       Interest-bearing deposit due 
         from bank                              2,275,485          -
       Federal funds sold                             -        550,000
       Investment securities                    1,500,000    4,008,874
       Investment in First Federal Bank 
         for Savings                           20,509,549   19,041,705
       Other assets                               805,255      979,158
                                              ___________  ___________

                                              $25,486,688  $24,996,259
                                              ===========  ===========

     Liabilities and Stockholders' Equity:
       Accounts payable                       $       -    $       -   
       Dividend payable                           389,361      393,046
       Other liabilities                              -          1,200
       Stockholders' equity                    25,097,327   24,602,013
                                              ___________  ___________
  
                                              $25,486,688  $24,996,259
                                              ===========  ===========
   Statements of Income                           
                                                  
     Income:
       Dividend income                        $       -    $ 1,500,000
       Interest on investment securities          153,816      180,286
       Other                                      137,634      120,992
                                              ___________  ___________
                                                  291,450    1,801,278

     Expense                                       51,458       52,361
                                              ___________  ___________
     Income before income taxes and equity 
       in undistributed earnings of 
       subsidiary                                 239,992    1,748,917

     Income taxes                                  67,250       36,352
                                              ___________  ___________

     Income before equity in undistributed 
       earnings of subsidiary                     172,742    1,712,565

     Equity in undistributed earnings of
       subsidiary                               1,305,546          -   

     Equity in dividends in excess of 
       earnings                                       -        (50,968)
                                              ___________  ___________

     Net Income                               $ 1,478,288  $ 1,661,597
                                              ===========  ===========


   Statements of Cash Flows                                
                                                     
     Cash flows from operating activities:
       Net income                             $ 1,478,288  $ 1,661,597
       Equity in earnings of subsidiary        (1,305,546)         -   
       Equity in subsidiary dividends 
         received in excess of earnings               -         50,968
       Decrease in other assets                    46,941       14,459
       Increase (decrease) in accounts 
         payable                                   (1,200)      (2,760)
                                              ___________  ___________
     Net cash provided by operating 
       activities                                 218,483    1,724,264

     Cash flows from investing activities:
       Repayment on ESOP loan                     126,960      126,960
       Purchase of securities                  (1,491,126)    (986,126)
       Proceeds from maturities of 
         securities                             4,000,000    1,000,000
                                              ___________  ___________
     Net cash provided by investing 
       activities                               2,635,834      140,834

     Cash flows from financing activities:
       Exercise of stock options                   39,670          -
       Treasury stock acquisition                (404,180)    (350,676)
       Cash dividends paid                       (784,445)  (2,226,804)
                                              ___________  ___________

     Net cash used in financing activities     (1,148,955)  (2,577,480)
                                              ___________  ___________

   Net increase (decrease) in cash and
     cash equivalents                           1,705,362     (712,382)

   Cash and cash equivalents at beginning  
     of period                                    966,522    1,678,904
                                              ___________  ___________
   Cash and cash equivalents at end of 
     period                                   $ 2,671,884  $   966,522
                                              ===========  ===========