1998 ANNUAL REPORT


                             -------------------
                                    FFYF
                             -------------------
                             FFY Financial Corp.



Contents
------------------------------------------------------------------------------

Financial Highlights                          1

President's Letter                            2

Selected Consolidated Financial Information   4

Management's Discussion & Analysis            7

Financial Statements                         20

Officers & Directors                         43

Stockholder Information                      44


<TABLE>
<CAPTION>

1998 Financial Highlights
-------------------------------------------------------------------------------

FFY Financial Corp. and Subsidiaries
(Dollars in Thousands Except Per Share Data)


For the year                                          1998         1997      Change
------------------------------------------------------------------------------------

  <S>                                               <C>           <C>          <C>
  Net interest income                               $ 22,447      22,102       1.56%
  Net income                                           7,729       5,324      45.17%
  Dividends on common stock                            2,901       2,890       0.38%
  Average shares outstanding - basic                   3,758       4,325     -13.11%
  Average shares outstanding - diluted                 3,897       4,464     -12.70%

Per common share
------------------------------------------------------------------------------------
  Basic earnings per share                          $   2.06        1.23      67.48%
  Diluted earnings per share                            1.98        1.19      66.39%
  Cash dividends declared per share                     0.80        0.70      14.29%
  Tangible book value per share                        20.98       19.83       5.80%
  Market price at year end                             32.50       26.00      25.00%

At year end
------------------------------------------------------------------------------------
  Total assets                                      $651,746     599,249       8.76%
  Loans receivable, net                              482,463     460,712       4.72%
  Securities available for sale                      140,793     112,036      25.67%
  Deposits                                           444,017     450,224      -1.38%
  Securities sold under agreements to repurchase      64,388      32,307      99.30%
  Borrowed funds                                      33,985      27,455      23.78%
  Stockholders' equity                                84,216      82,174       2.48%

Average for the year
------------------------------------------------------------------------------------
  Total assets                                      $618,664     591,588       4.58%
  Loans receivable, net                              463,118     451,872       2.49%
  Securities available for sale                      124,764     102,661      21.53%
  Deposits                                           450,768     451,792      -0.23%
  Securities sold under agreements to repurchase      49,482      16,993     191.19%
  Borrowed funds                                      24,004      19,619      22.35%
  Stockholders' equity                                83,315      92,937     -10.35%

Financial ratios
------------------------------------------------------------------------------------
  Return on average assets                              1.25%       0.90%     38.89%
  Return on average equity                              9.28%       5.73%     61.95%
  Efficiency ratio                                     49.08%      62.01%    -20.85%
</TABLE>


                          ---------------------------
                         |  NOTE:  Photo of CEO is   |
                         |        shown with Letter  |
                          ---------------------------

To Our Shareholders:

      During the past year we continued our commitment to building a better 
organization for our shareholders, customers and employees.  Following our 
theme line of "The First Place to Bank", extensive employee education 
together with two new affiliations and a commitment to technology continued 
throughout the year.  Competitive pressures heightened this year with the 
increased presence of banks and thrifts in our market, as well as increased 
competition from mortgage brokers and securities firms.

      Intense competition for both deposits and loans, together with a 
difficult interest rate environment, led to pressure on our net interest 
margin.  In response to this increased competition, we reorganized our 
retail staff effective in March 1998, more clearly defining their focus and 
responsibility.  Where we formerly had branch managers and loan officers, we 
now have personal bankers and loan originators.  In addition to the 
administrative responsibilities of managing a branch office, our personal 
bankers are well trained in consumer loans, as well as checking and 
deposit products.  In short, our personal bankers focus on those services 
most frequently requested in our branch network.  Our loan originators are 
now responsible only for the origination of real estate loans, both for our 
portfolio and for sale in the secondary market.  This focus allows them to 
specialize in the origination of real estate loans, with delivery at a time 
and place convenient to our customers, home builders and real estate 
professionals.  This origination specialty is supported by a complete array 
of mortgage products as well as full time in-house loan processors, 
appraisers and legal staff.  Our confidence is supported by the marketplace 
wherein we were the leading provider of loans for the purchase of homes in 
Mahoning County for the first six months of 1998.

      Toward our goal of providing a broader line of financial services, FFY 
became a partner in David B. Roberts Real Estate in September 1997.  A full 
service real estate brokerage firm founded by our partner David Roberts in 
1982, David B. Roberts Real Estate offers both residential and commercial 
real estate brokerage services through a staff of 39 sales professionals 
operating from offices located in Poland Village, Canfield City and Liberty 
Township.  In April 1998, we became a founding partner in Daniel W. Landers 
Insurance.  Operating from a bank-owned facility adjacent to our home 
office, this independent insurance agency offers property and casualty 
insurance to individuals and commercial enterprises.  Ardent Service 
Corporation, a bank subsidiary, is a joint venture partner in "The 
Hedgerows", a 19 unit condominium development in New Middletown, Ohio. 
Late in the year we commenced a marketing campaign titled " Find It, 
Fund It, Insure It" relating to our capability of assisting our customers 
find, fund and insure their homes.  Our intent is to grow these businesses 
and add additional lines of affiliate businesses.

      In April 1998 we completed the installation of a new computer system 
for our core banking applications.  This comprehensive system 
contains modules for all deposit and lending products.  In addition to 
providing broader product functionality, this system is designed in such a 
way as not to be susceptible to Year 2000 problems.  We expect to be fully 
Year 2000 compliant by the end of this calendar year.  Before, during and 
after this conversion, our staff underwent extensive training not only in 
the use of the new system, but in the use of other personal computer 
applications as well as in sales and service training.

      While operating in a difficult competitive market, we have improved 
retail service, improved our loan origination capability both quantitatively 
and qualitatively, broadened our product line, reduced the level of non-
performing loans and provided solid technology to support our business.  I'm 
pleased to say that we have also focused on cost control.  Excluding the 
affiliates, we have maintained a sub-50% efficiency ratio and reduced the 
number of full time equivalent employees from 179.4 to 175.8 comparing the 
final pay period of fiscal 1997 and 1998.

      Lastly, I would encourage our Mahoning Valley shareholders to also be 
our customers.  From real estate to insurance to banking, our products are 
competitive and our staff is capable.  I invite you to find out why we are 
"The First Place to Bank."

                                       Sincerely,


                                       /s/ JEFFREY L. FRANCIS
                                       Jeffrey L. Francis
                                       President and CEO


<TABLE>
<CAPTION>

Selected Consolidated Financial Information
------------------------------------------------------------------------------------

FFY Financial Corp. and Subsidiaries
(Dollars in Thousands Except Per Share Data)
                                                                           June 30,
                                                  ----------------------------------------------------------
Selected Consolidated Financial Condition Data:      1998        1997        1996        1995         1994
                                                  ---------    --------    --------    ---------    --------

<S>                                               <C>           <C>         <C>          <C>         <C>
Total assets                                      $ 651,746     599,249     575,602      576,619     584,151
Loans receivable, net                               482,463     460,712     438,790      401,664     373,442
Allowance for loan losses                             2,740       2,962       3,439        3,159       2,801
Non-performing assets                                 3,324       3,993       4,673        4,352       4,930
Securities available for sale                       140,793     112,036     109,836      132,341           -
Securities held to maturity                               -           -           -       11,819     180,652
Deposits                                            444,017     450,224     456,541      461,979     456,134
Securities sold under agreements to repurchase:
  Short-term                                         13,088       7,307       6,640            -           -
  Long-term                                          51,300      25,000           -            -           -
Borrowed funds                                       33,985      27,455       1,200            -       8,125
Stockholders' equity                                 84,216      82,174     101,921      106,400     110,834

                                                                           Years ended June 30,
                                                           ---------------------------------------------------
Selected Consolidated Operations Data:                       1998        1997      1996       1995       1994
                                                           --------    -------   -------    -------    -------
Total interest income                                      $ 48,006     45,925    43,716     42,444     41,983
Total interest expense                                       25,559     23,823    22,133     19,730     18,940
                                                           ---------------------------------------------------
Net interest income                                          22,447     22,102    21,583     22,714     23,043
Provision for loan losses                                       565        688       325        403        409
                                                           ---------------------------------------------------
Net interest income after provision for loan losses          21,882     21,414    21,258     22,311     22,634
Service charges                                                 700        563       522        429        348
Gain (loss) on sale of securities                               247       (320)       30        (17)         -
Other non-interest income                                       818        375       548        428        352
Total non-interest expense                                  (11,771)   (14,288)  (11,991)   (11,789)   (11,277)
                                                           ---------------------------------------------------
Income before federal income taxes and cumulative
 effect of change in accounting for federal income taxes     11,876      7,744    10,367     11,362     12,057
Federal income taxes                                          4,147      2,420     3,465      3,872      4,315
                                                           ---------------------------------------------------
Income before cumulative effect of change in
 accounting for federal income taxes                          7,729      5,324     6,902      7,490      7,742
Cumulative effect as of July 1, 1993 of change in method
 of accounting for federal income taxes per SFAS No. 109          -          -         -          -        540
                                                           ---------------------------------------------------
Net income                                                 $  7,729      5,324     6,902      7,490      8,282
                                                           ===================================================


Basic earnings per share (1)                               $   2.06       1.23      1.43       1.39       1.43(2)
                                                           ===================================================

Diluted earnings per share (1)                             $   1.98       1.19      1.37       1.34       1.40(2)
                                                           ===================================================

Cash dividends declared per share                          $   0.80       0.70      0.60       0.50       0.40
                                                           ===================================================

--------------------
<F1>  Basic and diluted earnings per share were restated for years prior to 
      June 30, 1998 to conform with the disclosure requirements of SFAS 
      No. 128, Earnings per Share.
<F2>  Basic and diluted earnings per share would have been $1.33 per share 
      and $1.31 per share, respectively, without the cumulative effect of 
      change in accounting for federal income taxes.

</TABLE>

<TABLE>
<CAPTION>
                                                               At or for the years ended June 30,
                                                         ----------------------------------------------
Selected Financial Ratios and Other Data:                 1998       1997      1996      1995     1994
                                                         ----------------------------------------------
<S>                                                       <C>       <C>       <C>       <C>       <C>
Performance Ratios:
  Return on average assets (1)                             1.25%     0.90%     1.20%     1.31%     1.44%
  Return on average equity (2)                             9.28%     5.73%     6.58%     6.87%     7.42%
  Interest rate spread information:
    Average during the period (3)                          3.19%     3.16%     3.04%     3.28%     3.38%
    End of period (3)                                      2.94%     3.06%     2.95%     2.66%     3.06%
  Net interest margin (3) (4)                              3.81%     3.89%     3.89%     4.09%     4.16%
  Operating expense to average assets                      1.90%     2.42%     2.09%     2.06%     1.97%
  Efficiency ratio (5)                                    49.08%    62.01%    52.93%    49.60%    46.67%
  Dividend payout ratio (6)                               40.40%    58.82%    43.80%    37.59%    31.25%

Performance Ratios Excluding Affiliates (7):
  Return on average assets (1)                             1.27%     0.90%     1.20%     1.31%     1.44%
  Return on average equity (2)                             9.41%     5.73%     6.58%     6.87%     7.42%
  Operating expense to average assets                      1.84%     2.42%     2.09%     2.06%     1.97%
  Efficiency ratio (5)                                    47.92%    62.01%    52.93%    49.60%    46.67%

Quality Ratios:
  Non-performing assets to total assets                    0.51%     0.67%     0.81%     0.75%     0.84%
  Allowance for loan losses to non-performing assets      82.43%    74.18%    73.59%    72.59%    56.82%
  Allowance for loan losses to gross loans outstanding     0.56%     0.64%     0.77%     0.77%     0.74%

Capital Ratios:
  Equity to total assets at end of period                 12.92%    13.71%    17.71%    18.45%    18.97%
  Average equity to average assets                        13.47%    15.71%    18.29%    19.06%    19.45%
  Book value per share                                   $21.00     19.83     20.06     19.60     18.51
  Tangible book value per share                          $20.98     19.83     20.06     19.60     18.49
  Change in book value per share due to SFAS No. 115     $ 0.20      0.03     (0.17)    (0.06)      n/a
  Ratio of average interest-earning assets to average
   interest-bearing liabilities                            1.15x     1.17x     1.21x     1.22x     1.23x

<F1>  Ratio of net income to average total assets.
<F2>  Ratio of net income to average equity.
<F3>  Ratio is presented on a fully taxable equivalent basis using the 
      Company's federal statutory tax rate of 34%.
<F4>  Net interest income divided by average interest earning assets - 
      calculated without consideration of the unrealized gain on securities
      available for sale.
<F5>  Ratio is calculated without consideration to goodwill amortization and 
      gain (loss) on sale of securities.
<F6>  Cash dividends per share divided by diluted earnings per share.
<F7>  Ratios presented do not include the activity of the Company's real 
      estate and insurance affiliates which began operations in September 
      1997 and April 1998, respectively.

</TABLE>

Ratios and Other Financial Data

FFY Financial Corp. and Subsidiaries
At or for the years ended June 30


Return on Average Assets     Return on Average Equity      Net Interest Margin

1994               1.44%     1994              7.42%      1994            4.16%
1995               1.31%     1995              6.87%      1995            4.09%
1996               1.20%     1996              6.58%      1996            3.89%
1997               0.90%     1997              5.73%      1997            3.89%
1998               1.25%     1998              9.28%      1998            3.81%


   Operating Expense                                         Cash Dividends
   to Average Assets            Efficiency Ratio           Declared per Share

1994               1.97%     1994             46.67%      1994           $0.40
1995               2.06%     1995             49.60%      1995           $0.50
1996               2.09%     1996             52.93%      1996           $0.60
1997               2.42%     1997             62.01%      1997           $0.70
1998               1.90%     1998             49.08%      1998           $0.80


Allowance for Loan Losses                                     Tangible Book
to Non-Performing Assets     Equity to Total Assets          Value per Share

1994              56.82%     1994            18.97%       1994           $18.49
1995              72.59%     1995            18.45%       1995           $19.60
1996              73.59%     1996            17.71%       1996           $20.06
1997              74.81%     1997            13.71%       1997           $19.83
1998              82.34%     1998            12.92%       1998           $20.98


Note:  Certain 1997 ratios above would be positively affected without regard to
       the one-time SAIF special assessment.


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


General

FFY Financial Corp. (FFY or Holding Company) is a unitary savings and loan 
holding company formed at the direction of First Federal Savings Bank of 
Youngstown (First Federal or Bank) which converted from a federally 
chartered mutual savings bank to a federally chartered stock savings bank on 
June 28, 1993.  First Federal is a full service savings bank engaged 
primarily in mortgage and consumer lending and deposit account services 
including certificate, savings and checking accounts.  FFY Holdings, Inc., a 
wholly-owned subsidiary of the Holding Company, was formed in August 1997 
for the purpose of investing in entities offering expanded financial 
services to customers.  Real estate services are offered through the 
affiliation with First Real Estate, Ltd., also known as David B. Roberts 
Real Estate, and property and casualty insurance is offered through the 
affiliation with Daniel W. Landers Insurance Agency, Ltd.  First Real 
Estate, Ltd. and Daniel W. Landers Insurance Agency, Ltd. began operations 
in September 1997 and April 1998, respectively.  When used in this Annual 
Report, the phrase "the Company" refers to FFY Financial Corp. and its two 
subsidiaries, First Federal Savings Bank of Youngstown and FFY Holdings, 
Inc.

Management's discussion and analysis of financial condition and results of 
operations is intended to facilitate the understanding and assessment of 
changes in financial condition and results of operations of the Company.  
The following information should be read in conjunction with the financial 
statements and notes thereto.


Forward-Looking Statements

When used in this Annual Report, the words or phrases "will likely result", 
"are expected to", "will continue", "is anticipated", "estimate", "project" 
or similar expressions are intended to identify "forward-looking statements" 
within the meaning of the Private Securities Litigation Reform Act of 1995.  
Such statements are subject to certain risks and uncertainties including 
changes in economic conditions in the Company's market area, changes in 
policies by regulatory agencies, fluctuations in interest rates, demand for 
loans in the Company's market area and competition, that could cause actual 
results to differ materially from historical earnings and those presently 
anticipated or projected.  The Company wishes to caution readers not to 
place undue reliance on any such forward-looking statements, which speak 
only as of the date made.  The Company wishes to advise readers that the 
factors listed above could affect the Company's financial performance and 
could cause the Company's actual results for future periods to differ 
materially from any opinions or statements expressed with respect to future 
periods in any current statements.

              ------------------------------------------------
             |                    Photo of                    |
             |  Tony Fusco, Jerry Zetts, Connie Tarr-Bellino, |
             |     Rick Curry, Jane Hutchins, Jon Schmied,    |
             |     Mark Taylor, Frank Pasquale, Dan Kopp      |
              ------------------------------------------------
                                  "Fund It!"
        First Federal has a reputation of fast efficient and affordable
    mortgage lending. This year, we created the position of Loan Originator
                and expanded our line of mortgage offerings.
      Our staff of mortgage lenders can tailor financing to most any need.
                    The headline of the marketing campaign
              introducing our originators summed it up by saying, 
                "Meet Our Mortgage Team. Your Place Or Ours."

                   For real estate, banking, and insurance,
        "Find, Fund and Insure it" through affiliates of FFY Financial.


The Company does not undertake, and specifically disclaims any obligation, 
to publicly release the result of any revisions which may be made to any 
forward-looking statements to reflect events or circumstances after the date 
of such statements or to reflect the occurrence of anticipated or 
unanticipated events.


Changes in Financial Condition

General.  Total assets increased $52.5 million, or 8.8%, and totaled $651.7 
million at June 30, 1998 compared to $599.2 million at June 30, 1997.  The 
increase in assets was predominantly due to growth in loans receivable and 
securities available for sale funded by repurchase agreements and borrowed 
funds.  This current year asset increase compares to a $23.6 million, or 
4.1% asset increase during fiscal year 1997.

Loan Portfolio.  Overall loan growth during fiscal year 1998 was comparable 
to fiscal year 1997, however, most of the growth occurred in the consumer 
loan portfolio during the last month of the current fiscal year.  The 
increase in net loans receivable was $21.8 million for the current year 
compared to an increase of $21.9 million during prior the year.  Net loans 
receivable totaled $482.5 million at June 30, 1998 compared to $460.7 
million at June 30, 1997, an increase of 4.7%.  The largest area of growth 
was $17.1 million in gross consumer loans where $15.9 million was lent to 
customers in June 1998 to fund their stock subscriptions in an initial 
public offering by a local financial institution converting from a mutual to 
stock form of ownership.  Management anticipates that most of this growth in 
the consumer loan portfolio will be short-term due to the nature of the 
stock subscription loans.  Portfolio loan originations during the current 
year totaled $138.9 million compared to $118.9 million for the prior year 
for an increase of $20.0 million, including the $15.9 million in stock 
subscription loans mentioned above and loan refinances due to the low 
interest rate environment.  Loan repayments also increased from $97.8 
million for the year ended June 30, 1997 to $105.6 million for the current 
year, primarily due to refinances.  All mortgage loans originated by First 
Federal during the year were underwritten by the Bank's personnel and are 
secured primarily by properties in Mahoning, Trumbull or Columbiana counties 
in northeastern Ohio.  Mortgage loans secured by one-to-four family 
residences continued to be the largest component of the loan portfolio, 
representing 71.7% of the gross loan portfolio at June 30, 1998 compared to 
73.6% at June 30, 1997.  Gross consumer loans made up 14.5% of First 
Federal's loan portfolio at June 30, 1998 compared to 11.6% at June 30, 
1997.

First Federal has historically been a portfolio lender, however, during the 
current year management put in place a secondary market mortgage lending 
operation designed to originate and sell qualifying loans to the Federal 
National Mortgage Association (FNMA).  Currently, First Federal only sells 
fixed-rate loans to FNMA.  First Federal sold 66 loans totaling $5.0 million 
during the last half of the current year resulting in a pre-tax gain of 
$134,000.  Management anticipates increased activity in secondary market 
mortgage lending as long as market conditions dictate it to be profitable.

                    -----------------------------------
                   | Photo of Lori Taylor, Dennis Sell |
                    -----------------------------------
   To meet the competitive challenge of more mortgage lenders in our market,
       we expanded our loan operation by entering the secondary market.
By originating loans eligible for sale, we are able to offer our customers the
                    most comprehensive loan solutions. Since
       we continue to service these loans, we are also enhancing income.


Securities Portfolio.  Funds not utilized in lending programs or for 
operations are invested in securities available for sale or held in 
interest-bearing deposits.  Securities available for sale increased $28.8 
million, or 25.7%, and totaled $140.8 million at June 30, 1998 compared to 
$112.0 million at June 30, 1997.  The increase over the prior year primarily 
consisted of increases in tax-exempt securities, federal agency obligations 
and mortgage-backed securities, funded by additional repurchase agreements 
and borrowed funds.

The securities portfolio consists largely of fixed and adjustable rate 
mortgage-backed securities, all of which are underwritten to the standards 
of and guaranteed by the government-sponsored agencies of FNMA, the Federal 
Home Loan Mortgage Corporation (FHLMC) and the Government National Mortgage 
Association (GNMA).  These securities differ from traditional debt 
securities in that they have uncertain maturity dates and are priced based 
on estimated prepayment rates on the underlying mortgages.

Other Assets.  Other assets increased $1.0 million over the prior year and 
totaled $1.9 million at June 30, 1998 due to the Bank's investment in a real 
estate joint venture where condominium units are being constructed for 
future sale.  As of June 30, 1998, no condominiums have been completed or 
sold and there has been no effect on the Company's consolidated statement of 
operations.  The Bank accounts for this investment under the equity method 
of accounting.

Deposits.  Deposits declined $6.2 million, or 1.4%, and totaled $444.0 
million at June 30, 1998 compared to $450.2 million at June 30, 1997.  Most 
of the current year decline occurred in June 1998 as a result of customers 
funding their stock subscriptions in the initial public offering by a local 
financial institution, mentioned above.  The average balance of deposits 
only declined $1.0 million and averaged $450.8 million for the current year.  
In order to be competitive in obtaining funds and to respond to changes in 
consumer demand, First Federal introduced a new money market product in 
November 1997 for customers who are generally interest rate conscious and 
want to keep their funds liquid.  At June 30, 1998, this new money market 
product had a balance of $11.5 million and a weighted average rate of 4.27%.

Securities Sold Under Agreements to Repurchase.  Short- and long-term 
securities sold under agreements to repurchase (repurchase agreements) 
increased $32.1 million and totaled $64.4 million at June 30, 1998 compared 
to $32.3 million at June 30, 1997.  Funds provided by these repurchase 
agreements were primarily used to fund loan growth and to purchase 
securities, enabling the Company to leverage its excess capital.

Borrowed Funds.  Borrowed funds increased $6.5 million and totaled $34.0 
million at June 30, 1998 compared to $27.5 million at June 30, 1997.  
Borrowed funds are short-term and consist of advances from the Federal Home 
Loan Bank of Cincinnati.  Such borrowings are generally used for liquidity 
purposes and other earning asset growth not funded by core deposits.  
Borrowed funds are managed within the Company's guidelines for 
asset/liability management, profitability and overall growth objectives.

Other Liabilities.  Other payables and accrued expenses increased $17.7 
million over the prior year and totaled $22.5 million at June 30, 1998.  The 
increase was primarily the result of securities purchases recorded on the 
trade date in June 1998 that did not settle until July 1998.

Stockholders' Equity.  Stockholders' equity increased $2.0 million, or 2.5%, 
and totaled $84.2 million at June 30, 1998 compared to $82.2 million at June 
30, 1997.  This increase was mainly attributable to net income for the year 
totaling $7.7 million and other increases totaling $2.4 million consisting 
of increased unrealized gains on available-for-sale securities, stock option 
exercises, amortization and tax benefits associated with employee benefits 
and ESOP accounting pursuant to Statement of Position (SOP) 93-6.  Stock 
repurchases and dividends paid to shareholders totaled $5.2 million and $2.9 
million, respectively, partially offset the aforementioned increases.  
Tangible book value per share totaled $20.98 and $19.83 per share, 
respectively, at June 30, 1998 and 1997.  At June 30, 1998, the ratio of 
stockholders' equity to total assets was 12.9% compared to 13.7% at June 30, 
1997.


Results of Operations

The Company's results of operations depend primarily on the level of net 
interest income, which is the difference, or "spread", between the average 
yield earned on interest-earning assets and the average rate paid on 
interest-bearing liabilities.  Interest-earning assets consist primarily of 
loans receivable and securities, whereas interest-bearing liabilities 
consist primarily of deposits, repurchase agreements and borrowed funds.  
The ratio of average interest-earning assets to average interest-bearing 
liabilities during the current year was 1.15:1 compared to 1.17:1 during the 
prior year.  Net interest income is affected by both changes in the level of 
interest rates and changes in the amount and composition of interest-earning 
assets and interest-bearing liabilities.  Results of operations are also 
dependent upon, among other things,  the provision for loan losses, non-
interest income, non-interest expense and federal income taxes.


             ---------------------------------------------------
            |                     Photo of                      |
            |  Kathy Sherman, Shary Watson, Rhonda Hilderhoff,  |
            |   Adriane Morgan, Sheri McConnell, Aaron Frank    |
            |  Joni Fiorpiselli, Ann Martin, Jennifer Baillie   |
             ---------------------------------------------------
        Building customer relationships is our primary focus.
   Our ongoing commitment to this is evidenced by multiple training programs
            this year to assist our employees sharpen their skills
                     and expand valuable relationships.


Comparison of Years Ended June 30, 1998 and 1997

General.  Net income for the year ended June 30, 1998 totaled $7.7 million, 
an increase of $2.4 million from net income of $5.3 million for the year 
ended June 30, 1997.  The increase over the prior year was largely 
attributable to the one-time SAIF special assessment of $2.0 million, net of 
taxes, recorded in the prior fiscal year.  Basic and diluted earnings per 
share for the year ended June 30, 1998 totaled $2.06 per share and $1.98 per 
share, respectively, compared to $1.23 per share and $1.19 per share, 
respectively, for the year ended June 30, 1997.

Net Interest Income.  Net interest income increased $346,000, or 1.6%, and 
totaled $22.4 million for the year ended June 30, 1998 compared to $22.1 
million for the year ended June 30, 1997.  The net interest margin for the 
years ended June 30, 1998 and 1997 was 3.81% and 3.89%, respectively.  
Although net interest income increased over the prior year, the net interest 
margin dropped 8 basis points due mainly to a higher average outstanding 
balance of repurchase agreements and borrowings during the current year that 
were used to fund the growth in the loan and securities portfolios.  These 
sources of funds tend to have a higher cost than core deposits.  Refer to 
"Changes in Financial Condition - General" above.


                    ------------------------------------
                   |              Photo of              |
                   |      Don Creed, Judy Schenker.     |
                   |  Ann Massullo-Sabella, Dick Davis  |
                    ------------------------------------
                                  "Find It!"
       Our goal is to provide one-stop shopping for financial services,
and in September 1997 we made our first move toward that goal by joining forces
 with David B. Roberts Real Estate, a full service real estate brokerage firm.
  Through our affiliation we are able to offer both residential and commercial
     real estate brokerage services with a staff of 39 sales professionals
       operating from offices located in Poland, Canfield and Liberty.

                   For real estate, banking, and insurance,
       "Find, Fund, and Insure it" through affiliates of FFY Financial.


Interest income from loans increased $1.4 million, or 3.6%, and totaled 
$39.8 million for the year ended June 30, 1998 compared to $38.4 million for 
the year ended June 30, 1997.  This increase was the result of an increase of 
$11.2 million in the average balance of loans outstanding and a 9 basis 
point increase in the average yield on loans, from 8.50% to 8.59%, despite a 
relatively flat yield curve throughout the year.  The average yield on loans 
increased due to growth in the consumer loan portfolio, primarily home 
equity loans and short-term notes, which tend to have higher interest rates 
than traditional mortgage loans.

Interest income from securities increased $1.0 million, or 16.3%, and 
totaled $7.6 million for the year ended June 30, 1998 compared to $6.6 
million for the year ended June 30, 1997.  This increase was the result of a 
$22.1 million increase in the average balance of securities.  The increase 
in the average balance of securities was partially offset by a 10 basis 
point decline in the average yield on securities, from 6.51% to 6.41%.  The 
decline in the weighted average yield was largely the result of a decline in 
the yield on mortgage-backed securities caused by high loan prepayments over 
the last six months of the current year, primarily loan refinances due to 
the low interest rate environment.

Interest expense increased $1.8 million, or 7.3%, and totaled $25.6 million 
for the year ended June 30, 1998 compared to $23.8 million for the year 
ended June 30, 1997.  Interest expense increased due to more repurchase 
agreements and borrowings partially offset by a decline in interest on 
deposit accounts.  Interest expense on short- and long-term repurchase 
agreements increased $389,000 and $1.5 million, respectively, mainly due to 
volume to fund the growth in securities and loans.  Interest expense on 
borrowed funds increased $280,000, primarily due to volume.  Interest 
expense on deposits declined $417,000, or 1.9%, as a result of a decrease in 
the average balance of interest-bearing deposits totaling $3.3 million from 
$450.2 million at June 30, 1997 to $446.9 million at June 30, 1998 and a 6 
basis point decrease in the average cost on deposits from 4.82% to 4.76%.

Provision for Loan Losses.  The provision for loan losses declined $122,000 
from $688,000 for the year ended June 30, 1997 and totaled $566,000 for the 
year ended June 30, 1998.  This decline reflected management's evaluation of 
the underlying credit risk of the Bank's loan portfolio to provide for 
an adequate level of allowance for loan losses.  The allowance for loan 
losses totaled 82.4% of non-performing assets at June 30, 1998, up from 
74.2% and 73.6% at June 30, 1997 and 1996, respectively.  Future additions 
to the allowance for loan losses will be dependent on a number of factors 
including the performance of the Bank's loan portfolio, the economy, changes 
in interest rates and the effect of such changes on real estate values, 
inflation and the view of regulatory authorities toward adequate reserve 
levels.  Management believes that the allowance for loan losses is adequate 
at June 30, 1998.

Non-Interest Income.  Total non-interest income increased $1.1 million over 
the prior year and totaled $1.8 million for the year ended June 30, 1998.  
Service charges totaled $700,000 for the year ended June 30, 1998, an 
increase of $137,000, or 24.3% compared to the year ended June 30, 1997 due 
to increases in fees associated with NOW accounts, automated teller machines 
and debit cards.  Sales of securities available for sale resulted in a 
$246,000 gain for the year ended June 30, 1998 compared to a $320,000 loss 
for the year ended June 30, 1997.  The prior year loss was the result of 
securities sold to fund a stock repurchase program (tender offer) in late 
1996.  Other non-interest income increased $443,000 over the prior year and 
totaled $818,000 for the year ended June 30, 1998, primarily reflecting the 
activities of FFY Holdings, Inc., which include real estate brokerage 
services and insurance sales through its two respective affiliations.  Also 
contributing to the current year increase was a gain on sale of loans from 
First Federal's secondary market mortgage operation which began in January 
1998.

Non-Interest Expense.  Non-interest expense declined $2.5 million, or 17.6% 
from the prior year and totaled $11.8 million for the year ended June 30, 
1998.  This decline was primarily due to prior year expenses that include 
the one-time SAIF assessment of $3.0 million.  Partially offsetting the SAIF 
assessment were expenses related to the activities of FFY Holding's real 
estate and insurance affiliates and increased professional services at the 
Bank.  The Company's efficiency ratio totaled 49.1% for the year ended June 
30, 1998 compared to 62.0% (or 48.9% without the affect of the SAIF 
assessment) for the year ended June 30, 1997.

Federal Income Taxes.  Federal income taxes increased $1.7 million over the 
prior year and totaled $4.1 million for the year ended June 30, 1998.  The 
increase in federal income taxes was due to the increase in net income 
before tax resulting from the SAIF assessment recorded in the prior year and 
the difference in the gain/loss on sale of securities.


Comparison of Years Ended June 30, 1997 and 1996

General.  Net income for the year ended June 30, 1997 totaled $5.3 million, 
a decline of $1.6 million from net income of $6.9 million for the year ended 
June 30, 1996.  The decline of $1.6 million was primarily attributable to an 
increase in the provision for loan losses of $363,000, the one-time SAIF 
special assessment of $3.0 million and a loss of $320,000 from security 
sales compared to a gain of $30,000 during fiscal year 1996.  These declines 
were partially offset by an increase in net interest income of $519,000 and 
a reduction in federal income taxes of $1.0 million.  Basic earnings per 
share for the year ended June 30, 1997 totaled $1.23 per share, a decline of 
$0.20 per share from basic earnings per share of $1.43 for the year ended 
June 30, 1996.  Diluted earnings per share for the year ended June 30, 1997 
totaled $1.19 per share, a decline of $0.18 per share from diluted earnings 
per share of $1.37 for the year ended June 30, 1996.  These declines were  
the result of a decrease in net income partially offset by a decline in the 
number of weighted average shares outstanding.

Net Interest Income.  Net interest income increased $519,000, or 2.4%, and 
totaled $22.1 million for the year ended June 30, 1997 compared to $21.6 
million for the prior year.  The net interest margin was 3.89% for fiscal 
year 1997 as well as for fiscal year 1996.

Interest income from loans increased $2.8 million, or 7.7%, and totaled 
$38.4 million for the year ended June 30, 1997 compared to $35.7 million for 
the previous year.  This increase was the result of an increase of $33.5 
million in the average balance of loans outstanding, reflecting continued 
growth in the loan portfolio, partially offset by a 2 basis point decline, 
from 8.52% to 8.50%, in the average yield on loans.


        --------------------------------------------------------------
       |                          Photo of                            |
       |     Peter Noll, Marilyn Burros, Dan Kopp, Susan Thompson,    |
       |        Robin Stock, Eleanor Hardy, Karen Franczkowski,       |
       |  Teresa Norris David Gebhardt, Maryann Nanosky, Mark Taylor  |
        --------------------------------------------------------------
                  Expert in customer service and specialists
             in consumer lending, our personal bankers are able to
              concentrate more fully on those areas thanks to a 
               realignment of responsibilities this past March.
                       Customers visiting our branches
               can expect a full complement of banking services
                       in a professional environment.


Interest income from securities declined $894,000, or 12.0%, and totaled 
$6.6 million for the year ended June 30, 1997 compared to $7.4 million for 
the previous year.  This decline was the result of a $21.9 million decrease 
in the average balance of securities which resulted from the use of proceeds 
from the sale and maturity of securities to fund loan growth, deposit 
outflows and stock repurchases.  The decline in the average balance of 
securities was partially offset by an increase of 51 basis points in the 
average yield on securities, from 6.00% to 6.51%, primarily the result of 
investing in higher-yield securities, particularly mortgage-backed 
securities.  At June 30, 1997 and 1996, mortgage-backed securities totaled 
$75.7 million and $16.4 million, respectively, with a weighted average yield 
of 7.0% and 6.4%, respectively.

Interest expense increased $1.7 million, or 7.6%, and totaled $23.8 million 
for the year ended June 30, 1997 compared to $22.1 million for the previous 
year.  Interest expense increased due to more borrowings and repurchase 
agreements partially offset by a decline in interest associated with deposit 
accounts.  Interest expense on deposits declined $363,000, or 1.6%, as a 
result of a decrease in the average balance of interest-bearing deposits 
totaling $6.7 million from $456.9 million at June 30, 1996 to $450.2 million 
at June 30, 1997 and a decrease of 1 basis point in the average cost on 
deposits from 4.83% to 4.82%.  Interest expense on short- and long-term 
repurchase agreements increased $1.0 million due to volume.  Interest 
expense on borrowed funds increased $1.1 million, primarily due to volume.

Provision for Loan Losses.  The Bank's provision for loan losses increased 
$363,000 from $325,000 for the year ended June 30, 1996 and totaled $688,000 
for the year ended June 30, 1997.  The increase over fiscal year 1996 
principally reflects the performance of the Bank's indirect auto loan 
portfolio.  During fiscal year 1997, the Bank wrote off $998,000 in indirect 
auto loans.  At June 30, 1997, nonperforming indirect auto loans totaled 
$400,000, down from $1.1 million at December 31, 1996 and $812,000 at March 
31, 1997.  The allowance for loan losses on the indirect auto loan portfolio 
was 102.7% of nonperforming loans in this portfolio at June 30, 1997.  The 
Bank's allowance for loan losses, including the indirect auto loans 
mentioned above, totaled 74.2% of non-performing assets at June 30, 1997, up 
from 73.6% and 72.6% at June 30, 1996 and 1995, respectively.  Management 
believes that the allowance for loan losses was adequate at June 30, 1997.

Non-Interest Income.  Service charges, which are a major component of non-
interest income increased $41,000, or 7.9% over fiscal year 1996 and totaled 
$563,000 for the year ended June 30, 1997.  Increases in this category were 
attributable to debit card fees and automated teller machine charges.  Loss 
on sale of securities for the year ended June 30, 1997 totaled $320,000 
compared to a gain of $30,000 for the previous year.  The loss during fiscal 
year 1997 was primarily the result of securities sold to fund the tender 
offer completed in December 1996.  Other non-interest income declined 
$173,000 and totaled $375,000 for the year ended June 30, 1997.

Non-Interest Expense.  Non-interest expense increased $2.3 million, or 19.2% 
over the year ended June 30, 1996 and totaled $14.3 million for the year 
ended June 30, 1997.  This increase was primarily attributable to the one-
time assessment of $3.0 million on SAIF deposits.  Refer to Note 10 of the 
Notes to Consolidated Financial Statements included in this Annual Report 
regarding the SAIF special assessment.  Following the Bank's $3.0 million 
assessment, First Federal experienced lower deposit insurance premiums, 
thus, insurance and bonding expense increased a net of $2.6 million over the 
previous year.  Salaries and employee benefits declined $379,000, or 6.1% 
from the previous year and totaled $5.9 million for the year ended June 30, 
1997.  This decline was generally due to a decrease of $368,000 in severance 
pay for two executive officers who announced their retirement in fiscal year 
1996.  Other non-interest expense increased $117,000 due mainly to increased 
advertising in an effort to stimulate lending and deposit programs.

A review of salary and benefits expense in the first quarter of fiscal year 
1997 indicated that the Bank's retirement expense was significantly higher 
than financial institution industry averages.  This was primarily due to a 
required accounting change which caused ESOP expense to be recorded at the 
market value of Holding Company shares, not the original $10 cost per share 
as was allowed under previous accounting.  In order to reduce retirement 
costs, the board of directors approved implementation of a 401(k) plan, 
termination of the existing defined benefit pension plan and, subject to 
approval by the Internal Revenue Service (IRS), restructuring of the ESOP 
loan.  A 401(k) plan was adopted January 1, 1997 and the pension plan 
termination was completed during fiscal year 1998, resulting in retirement 
cost savings of approximately $130,000.  To date, no change has been made to 
the ESOP loan and the IRS has advised the Company that it is currently 
reviewing its procedures regarding such issues.

Federal Income Taxes.  Federal income taxes decreased $1.0 million from the 
previous year and totaled $2.4 million for the year ended June 30, 1997.  
The decline in federal income taxes was primarily due to decreased net 
income before taxes, mainly the result of the one-time SAIF assessment.


The following table presents for the periods indicated average balance 
sheets, the total dollar amount of interest income from average interest-
earning assets and the resultant yields, as well as the interest expense on 
the average interest-bearing liabilities, and the resultant costs, expressed 
both in dollars and rates.  Average balances for all years presented are 
daily average balances.  Interest on non-accruing loans has been included in 
the table to the extent received.

Average Balances, Interest Rates and Yields
(Dollars in Thousands)

<TABLE>
<CAPTION>

                                                                        Years ended June 30,
                                    --------------------------------------------------------------------------------------------
                                                1998                            1997                           1996
                                    -----------------------------   -----------------------------  -----------------------------
                                      Average    Interest             Average    Interest            Average    Interest  
                                    Outstanding  Earned/   Yield/   Outstanding  Earned/   Yield/  Outstanding  Earned/   Yield/
                                      Balance      Paid     Rate      Balance      Paid     Rate     Balance      Paid     Rate
                                    --------------------------------------------------------------------------------------------

<S>                                  <C>          <C>      <C>       <C>          <C>      <C>      <C>          <C>      <C>
Interest-Earning Assets:
  Loans receivable (1)               $463,118     39,785   8.59%     $451,872     38,417   8.50%    $418,370     35,664   8.52%
  Securities available for sale,
   net (2)(3)                         124,764      7,916   6.41%      102,661      6,708   6.51%     124,593      7,493   6.00%
  FHLB Stock                            4,284        312   7.28%        3,935        279   7.09%       3,675        258   7.02%
  Other                                 5,556        287   5.17%       13,356        676   5.06%       9,054        347   3.83%
                                     -------------------             -------------------            -------------------
  Total interest-earning assets(2)    597,722     48,300   8.10%      571,824     46,080   8.05%     555,692     43,762   7.87%
                                                  ------                          ------                         ------
Noninterest-earning assets             20,942                          19,764                         17,560
                                     --------                        --------                       --------
Total assets                         $618,664                        $591,588                       $573,252
                                     ========                        ========                       ========
Interest-Bearing Liabilities:
  Demand and NOW deposits            $ 54,962      1,399   2.55%     $ 53,259      1,355   2.54%    $ 56,047      1,433   2.56%
  Savings deposits                    100,125      2,683   2.68%      110,177      3,302   3.00%     115,467      3,472   3.01%
  Certificate accounts                291,841     17,200   5.89%      286,796     17,042   5.94%     285,354     17,157   6.01%
  Short-term repurchase agreements     15,241        872   5.72%        7,916        483   6.10%       1,006         42   4.17%
  Long-term repurchase agreements      34,241      2,043   5.97%        9,077        559   6.16%           -          -      -
  Short-term borrowings                24,004      1,362   5.67%       19,619      1,082   5.52%         496         29   5.85%
                                     -------------------             -------------------            -------------------
   Total interest-bearing
    liabilities                       520,414     25,559   4.91%      486,844     23,823   4.89%     458,370     22,133   4.83%
                                                  ------                          ------                         ------
Noninterest-bearing liabilities (4)    14,935                          11,807                         10,050
                                     --------                        --------                       --------
Total liabilities                     535,349                         498,651                        468,420
Stockholders' equity                   83,315                          92,937                        104,832
                                     --------                        --------                       --------
Total liabilities and equity         $618,664                        $591,588                       $573,252
                                     ========                        ========                       ========
Net interest income                               22,741                          22,257                         21,629
Less fully taxable equivalent
 adjustment                                         (294)                           (155)                           (46)
                                                  ------                          ------                         ------
Net interest income per statement
 of income                                        22,447                          22,102                         21,583
                                                  ======                          ======                         ======
Net interest rate spread                                   3.19%                           3.16%                          3.04%
                                                          =====                           =====                          =====
Net earning assets                   $ 77,308                        $ 84,980                       $ 97,322
                                     ========                        ========                       ========
Net yield on average
 interest-earning assets (2)                               3.81%                           3.89%                          3.89%
                                                          =====                           =====                          =====
Average interest-earning assets
 to average interest-bearing
 liabilities                                        1.15x                           1.17x                          1.21x
                                                   =====                           =====                          =====

--------------------
<F1>  Calculated net of deferred loan fees, loan discounts, loans in process 
      and loss reserves.
<F2>  Yield is calculated without consideration of the unrealized gain 
      (loss) on securities available for sale.
<F3>  Interest is presented on a fully taxable equivalent basis using the 
      Company's federal statutory tax rate of 34%.
<F4>  Includes noninterest-bearing checking accounts.

</TABLE>

The following table presents the dollar amount of changes in interest income 
and interest expense for major components of interest-earning assets and 
interest-bearing liabilities.  For each category of interest-earning assets 
and interest-bearing liabilities, information is provided on changes 
attributable to (i) changes in volume (changes in volume multiplied by old 
rate) and (ii) changes in rate (changes in rate multiplied by old volume).  
For purposes of this table, changes attributable to both rate and volume, 
which cannot be segregated, have been allocated proportionately to the 
change due to volume and the change due to rate.

Rate/Volume Analysis
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                   Years ended June 30,
                                          ----------------------------------------------------------------------
                                                    1998 vs. 1997                        1997 vs. 1996
                                          ---------------------------------    ---------------------------------
                                          Increase (Decrease)      Total       Increase (Decrease)      Total
                                                Due to            Increase           Due to            Increase
                                            Volume     Rate      (Decrease)      Volume     Rate      (Decrease)
                                          ----------------------------------------------------------------------

<S>                                         <C>        <C>         <C>           <C>        <C>         <C>
Interest-earning assets:                                                    
  Loans receivable                          $  960      408         1,368         2,837      (84)        2,753
  Securities (1)                             1,313     (105)        1,208        (1,385)     600          (785)
  FHLB stock                                    26        7            33            18        3            21
  Other                                       (404)      15          (389)          197      132           329
                                            ------------------------------------------------------------------
    Total interest-earning assets           $1,895      325         2,220         1,667      651         2,318
                                            ==================================================================

Interest-bearing liabilities:
  Demand and NOW deposits                   $   44        -            44           (30)     (48)          (78)
  Savings deposits                            (285)    (334)         (619)         (158)     (12)         (170)
  Certificate accounts                         301     (143)          158            86     (201)         (115)
  Short-term repurchase agreements             421      (32)          389           414       27           441
  Long-term repurchase agreements            1,502      (18)        1,484           559        -           559
  Short-term borrowings                        250       30           280         1,055       (2)        1,053
                                            ------------------------------------------------------------------
    Total interest-bearing liabilities      $2,233     (497)        1,736         1,926     (236)        1,690
                                            ==================================================================
Net interest income                                                $  484                                  628
                                                                   ======                               ======

--------------------
<F1>  Presented on a fully taxable equivalent basis.

</TABLE>

Asset/Liability Management

Asset/liability management is the measurement and analysis of the Company's 
exposure to changes in the interest rate environment.  Management analyzes 
the effects of interest rate changes on net interest income over specified 
periods of time by projecting the Company's mix of interest-earning assets 
and interest-bearing liabilities in varied interest rate environments.  The 
Company is also subject to interest rate risk to the extent its liabilities 
reprice at different times than its assets.  The Company manages this risk 
on a continuing basis through the use of a number of strategies as an 
ongoing part of its business plan.  The objective of the Company's 
asset/liability management is to maintain consistent growth in net interest 
income within the Company's policy guidelines.  Management considers 
interest rate risk to be the Company's most significant market risk.

The Company employs various measurement techniques to identify and manage 
its exposure to interest rate risk.  Income simulation techniques are used 
to determine the Company's sensitivity to changes in interest rates, while 
gap analysis is used to determine the repricing characteristics of interest-
earning assets and interest-bearing liabilities.  The models are based on 
actual cash flows and repricing characteristics for on and off balance sheet 
instruments and incorporate market-based assumptions regarding the impact of 
changing interest rates on certain assets and liabilities.  Actual results 
will differ from simulated results due to timing, magnitude and frequency of 
interest rate changes.  Actual results may also differ due to changes in 
market conditions and management strategies.

The simulation modeling employed by the Company measures changes in net 
interest income over the next 12- and 24-month periods resulting from 
hypothetical rising and declining interest rates.  Key assumptions used in 
this model include (i) balance sheet growth, (ii) reinvestment of security 
and mortgage cash flows, (iii) loan prepayment speeds, (iv) reinvestment of 
certificate of deposit maturities and (v) deposit pricing strategies.  As of 
June 30, 1998, the Company's simulation modeling indicated that with a 200 
basis point (bp) increase in interest rates, the Company's net interest 
income would be 2.15 percent and 1.18 percent less than if rates remained 
constant over the next 12- and 24-month periods, respectively.  As of the 
same date and a 200 bp decrease in interest rates, the Company's net 
interest income would be 0.01 percent and 11.54 percent less than if rates 
remained constant over the next 12- and 24-month periods, respectively.

<TABLE>
<CAPTION>

Gap Analysis
----------------------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)                                         Six Months    One Year    Three Years
                                                    Within         to         through      through        Over
                                                  Six Months    One Year    Three Years   Five Years   Five Years     Total
----------------------------------------------------------------------------------------------------------------------------

<S>                                                <C>           <C>          <C>           <C>         <C>          <C>
Total interest-earning assets (1)                  $119,650       85,885      182,266       86,555      163,989      638,345
Total interest-bearing liabilities                  169,819      105,143      195,244       72,185            -      542,391
                                                   -------------------------------------------------------------------------
Periodic gap                                       $(50,169)     (19,258)     (12,978)      14,370      163,989       95,954
Cumulative gap                                     $(50,169)     (69,427)     (82,405)     (68,035)      95,954
                                                   ============================================================     
Cumulative gap as a % of assets at June 30, 1998       (7.7%)      (10.7%)      (12.6%)     (10.4%)        14.7%
                                                   ============================================================ 
Cumulative gap as a % of assets at June 30, 1997                    (7.9%)
                                                                 =========
Cumulative gap as a % of assets at June 30, 1996                   (16.5%)
                                                                 =========

--------------------
<F1>  Adjustable rate loans are shown at repricing dates and securities 
      available for sale are shown at amortized cost for gap analysis 
      purposes.

</TABLE>

Gap analysis measures the difference between the amount of interest-earning 
assets maturing or repricing within a specified time period and the amount 
of interest-bearing liabilities maturing or repricing within that same time 
period.  A negative gap means the amount of interest-bearing liabilities 
exceeds the amount of interest-earning assets maturing or repricing in a 
given period and a positive gap means the amount of interest-earning assets 
exceeds the amount of interest-bearing liabilities maturing or repricing in 
a given period.  The table above sets forth the repricing dates of the 
Company's interest-earning assets and interest-bearing liabilities at June 
30, 1998 and the interest rate sensitivity "gap" percentages at the dates 
indicated.  Assets and liabilities are included in the table based on their 
maturities or period of repricing subject to the assumptions that follow.  
Management has anticipated prepayments for mortgage-backed securities and 
mortgage and consumer loans according to standard industry prepayment 
assumptions in effect at June 30, 1998.  Passbook accounts, money market 
deposit accounts and transaction accounts are assumed to decay at an annual 
rate of 40% each year for the periods shown.  Loan amounts are calculated 
gross of deferred loan fees and loss reserves.

The effect of these assumptions is to quantify the dollar amount of items 
that are interest-sensitive and can be repriced within each of the periods 
specified.  Such repricing can occur in one of three ways:  (1) the rate of 
interest to be paid on an asset or liability may adjust periodically based 
on an index; (2) an asset, such as a mortgage loan, may amortize, permitting 
reinvestment of cash flows at the then-prevailing interest rates; or (3) an 
asset or liability may mature, at which time the proceeds can be reinvested 
at current market rates.

Certain shortcomings are inherent in the method of analysis presented in the 
foregoing table.  For example, although certain assets and liabilities may 
have similar maturities or periods to repricing, they may react in different 
degrees to changes in market interest rates.  Also, the interest rates on 
certain types of assets and liabilities may fluctuate in advance of changes 
in market interest rates, while interest rates on other types may lag behind 
changes in market rates.  Additionally, certain assets, such as adjustable 
rate loans, have features that restrict changes in interest rates on a 
short-term basis and over the life of the asset.  Further, in the event of a 
change in interest rates, prepayment and early withdrawal levels would 
likely deviate significantly from those assumed in calculating the table.  
Finally, the ability of many borrowers to service their debt may decrease in 
the event of an interest rate increase.

The Bank measures the effect of interest rate changes on its net portfolio 
value (NPV), which is the difference between the market value of the Bank's 
assets and liabilities, under different interest rate scenarios.  Changes in 
NPV are measured using interest rate shocks rather than changes in interest 
rates over a period of time.  At June 30, 1998, the Bank's change in NPV, 
using interest rate shocks ranging from a 400bp rise in rates to a 400bp 
decline in rates, was within limits established by the board of directors.

A significant part of First Federal's asset/liability management is focusing 
on originating adjustable-rate mortgage loans (ARMs).  Despite the decline 
in ARM originations prior to fiscal year 1996 as a result of the decline in 
market interest rates, which creates a greater demand for fixed-rate loans, 
ARM originations totaled 37.2% and 28.4% of total originations in fiscal 
years 1998 and 1997, respectively, compared to 13.2% of total originations 
in fiscal year 1996.  Largely contributing to the increase in ARM 
originations over the past two fiscal years was the introduction of a new 
7/1-year ARM in 1996.  This new product, which is fixed for seven years and 
adjusts every year thereafter, accounted for 56.6% of total ARM originations 
during the current year compared to 35.4% of total ARM originations during 
the year ended June 30, 1997.  At June 30, 1998, loans with an adjustable 
rate feature totaled $160.4 million, or 32.5% of the gross loan portfolio 
compared to $110.6 million, or 23.3% of the gross loan portfolio at June 30, 
1997.

                            ---------------------
                           |      Photo of       |
                           |  Daniel W. Landers  |
                            ---------------------
                                 "Insure It!"
     As consumers become increasingly pressed for time, the convenience of
      multiple financial services in one location is even more important.
               In April 1998, we became a founding partner in
Daniel W. Landers Insurance Agency which offers property and casualty insurance
            to individuals and commercial enterprises. The office is
               conveniently located adjacent to our home office.

                    For real estate, banking and insurance,
       "Find, Fund, and Insure it" through affiliates of FFY Financial.


In order to consolidate its customer base and reduce interest rate risk 
while maintaining adequate returns, First Federal has increased its 
investment in consumer loans over the past several years.  While consumer 
loans are believed to have a greater risk of default than mortgage loans, 
consumer loans are typically much shorter in duration than mortgage loans 
which serves to reduce interest rate risk.  Over the past five years, the 
fixed-rate consumer loan portfolio has grown from $30.6 million, or 8.9% of 
gross loans at June 30, 1993 to $67.2 million, or 13.6% of gross loans at 
June 30, 1998.  Furthermore, First Federal began offering a variable-rate 
home-equity line of credit product during fiscal year 1994 which had grown 
to an outstanding balance of $4.6 million at June 30, 1998.  Refer to 
"Changes in Financial Condition - Loan Portfolio" on page 8 regarding the 
increase in the consumer loan portfolio over the past year.  Management 
intends to continue to expand the Bank's consumer loan portfolio over the 
next several years.

Over the past two fiscal years, the Company increased its investments in 
adjustable-rate securities in an attempt to reduce interest rate risk.  At 
June 30, 1998, the market value of adjustable-rate mortgage-backed 
securities totaled $29.2 million, or 20.7% of the total securities portfolio 
compared to a market value of $694,000, or 0.6% of the total securities 
portfolio at June 30, 1996.

The Company's management may, at times, place greater emphasis on maximizing 
net interest margin rather than merely concentrating on interest rate risk 
depending on the relationship between short- and long-term interest rates, 
market conditions and consumer preference.  Management believes that 
increased net income resulting from a moderate contrast between the maturity 
of its assets and liabilities can provide high enough returns to justify the 
increased risk exposure during periods of stable interest rates.  Management 
has established limits on the amount of its interest rate risk exposure, 
however, there can be no assurance that management's efforts to limit 
interest rate risk will be successful.


Liquidity and Cash Flows

In general terms, liquidity is a measurement of the Company's ability to 
meet its cash needs.  For example, the Company's objective is to maintain 
the ability to meet loan commitments, purchase securities or to repay 
deposits and other liabilities in accordance with their terms without an 
adverse impact on current or future earnings.  The Company's principal 
sources of funds are deposits, amortization and prepayments of loans, 
maturities, sales and principal receipts of securities, borrowings, 
repurchase agreements and operations.

New federal regulations, which became effective November 24, 1997,  require 
the Bank to maintain minimum levels of liquid assets in each calendar 
quarter of not less than 4% of either (i) its liquidity base at the end of 
the preceding quarter, or (ii) the average daily balance of its liquidity 
base during the preceding quarter.  The new federal regulations decreased 
the minimum liquidity requirement from 5%, removed the 1% short-term 
liquidity requirement, expanded categories of liquid assets and reduced the 
liquidity base.  The Bank's liquidity substantially exceeded the applicable 
liquidity requirement at June 30, 1998.  Simply meeting the liquidity 
requirement does not automatically mean the Bank has sufficient liquidity 
for a safe and sound operation.  The new final rule includes a separate 
requirement that each thrift must maintain sufficient liquidity to ensure 
its safe and sound operation.  Thus, adequate liquidity may vary depending 
on the Bank's overall asset/liability structure, market conditions, the 
activities of competitors, and the requirements of its own deposit and loan 
customers.  Management believes the Bank's liquidity is sufficient.

Liquidity management is both a daily and long-term responsibility of 
management.  The Bank adjusts its investments in liquid assets based upon 
management's assessment of (i) expected loan demand, (ii) expected deposit 
flows, (iii) yields available on interest-earning deposits and securities 
and (iv) the objective of its asset/liability management program.  Along 
with its liquid assets, the Bank has additional sources of liquidity 
available including, but not limited to, loan repayments, the ability to 
obtain deposits through offering above market interest rates and access to 
advances from the Federal Home Loan Bank (FHLB).

The primary investing activities of the Bank and/or Company are originating 
loans and purchasing securities.  Increases in the Bank's loans receivable 
used $21.6 million, $22.1 million and $36.6 million of funds during fiscal 
years 1998, 1997 and 1996, respectively.  The growth in the Company's 
securities portfolio used $11.5 million and $1.4 million during fiscal years 
1998 and 1997, respectively, and the decline in the securities portfolio 
provided $33.0 million during fiscal year 1996.  During periods of general 
interest rate declines, the Bank would be expected to experience increased 
loan prepayments, which would likely be reinvested at lower interest rates.  
During a period of increasing interest rates, loan prepayments would be 
expected to decline, reducing funds available for investment at higher 
interest rates.

The primary financing activities of the Bank are deposits, repurchase 
agreements and borrowings.  Declines in deposit accounts used $6.1 million, 
$6.1 million and $5.6 million during fiscal years 1998, 1997 and 1996, 
respectively.  Repurchase agreements provided $32.1 million, $25.7 million 
and $6.6 million during fiscal years 1998, 1997 and 1996, respectively.  
Borrowed funds provided $6.5 million, $26.3 million and $1.2 million during 
fiscal years 1998, 1997 and 1996, respectively.


Capital Resources

Total stockholders' equity increased $2.0 million during the year ended June 
30, 1998.  Components of the increase largely consisted of current year 
earnings partially offset by share repurchases of the Holding Company's 
stock and dividends paid. Total stockholders' equity declined $19.7 million 
during the year ended June 30, 1997 primarily due to share repurchases and 
dividends paid partially offset by net income and other smaller increases to 
stockholders' equity.  Share repurchases during fiscal year 1997 included a 
Modified Dutch Auction Tender Offer in December 1996 whereby the Holding 
Company purchased 808,000 shares at $26.00 per share.  See "Changes in 
Financial Condition - Stockholders' Equity" and "Consolidated Statements of 
Changes in Stockholders' Equity" contained in this Annual Report for a 
detailed analysis of stockholders' equity for fiscal years 1998, 1997 and 
1996.

Federal regulations require savings institutions to maintain certain minimum 
levels of regulatory capital.  Regulations require tangible capital divided 
by total tangible assets to be at least 1.5%; core capital divided by total 
adjusted tangible assets to be at least 3.0%; and total capital divided by 
risk-weighted assets must be at least 8.0%.  The regulations define 
tangible, core and total capital as well as tangible assets, adjusted 
tangible assets and risk-weighted assets.  At June 30, 1998, the Bank's 
tangible, core and total capital ratios were 8.5%, 8.5% and 14.2%, 
respectively, each in excess of the minimum levels required by regulation 
(see Note 8 of the Notes to Consolidated Financial Statements contained in 
this Annual Report.).

Dividends paid by the Holding Company are substantially provided from 
dividends from the Bank, which, in certain circumstances, must be approved 
by the Office of Thrift Supervision (OTS).  During the year ended June 30, 
1998, the Bank received OTS approval for cash dividends to the Holding 
Company totaling $9.9 million of which $4.9 million was paid during fiscal 
year 1998 and $5.0 million was paid in July 1998.  This compares to fiscal 
year 1997 dividends totaling $4.5 million in cash and fiscal year 1996 
dividends totaling $4.0 million, comprised of $3.1 million in securities and 
related accrued interest and $900,000 in cash.


             ---------------------------------------------------
            |                     Photo of                      |
            |  Cheryl Warfield, Janice Elias, Michelle Barnett  |
            |  Jill Mayfield, Dominic Mancini, Debbie Seinkner  |
            |                   Todd Humphrey                   |
             ---------------------------------------------------
  Employees from all areas of the institution dedicated their time and energy
       in converting a new, year 2000 compliant computer system in April.
The new system provides efficient, cost effective solutions to our information
system needs and allows us to offer a wider range of products to our customers.


Year 2000

First Federal is highly dependent on computers and computer programs.  The 
operations of First Federal are critical to the accuracy of computers and 
computer programs.  Year 2000 presents the possibility that First Federal or 
its customers, vendors or correspondent banks may experience processing 
difficulties or may be subject to errors unless systems and programs are 
reconfigured to handle the change to the Year 2000.  The Company has been 
addressing and continues to address the Year 2000 issues.  The Company's 
Year 2000 problem resolution process includes such phases as awareness of 
the problem, assessment of its complexity, renovation, validation and 
implementation.  The resolution process includes contacting third party 
vendors who are required to provide evidence of their efforts to become Year 
2000 compliant.  The Company has evaluated and will continue to evaluate 
each vendor's Year 2000 compliance progress and, if not satisfied, will 
consider other vendors or other means for obtaining such products or 
services.  Many vendors have provided the Company with a certification or 
commitment letter noting they are or will be Year 2000 compliant within the 
Company's specified time frame.  The project is headed by First Federal's 
Vice President of Operations and consists of members from the Bank's 
internal audit, information systems and facilities departments.

A significant part of Year 2000 compliance was converting the Bank's 
financial computer system to a new comprehensive software system to run the 
core banking operation.  The conversion was successfully completed on April 
27, 1998.  In addition to being Year 2000 compliant, this new system allows 
First Federal to enhance its current services.  It was determined that the 
Bank's previous financial computer system would be too costly to make Year 
2000 compliant and would hinder other program development.  The capital 
expenditure for the Bank's new software system was approximately $429,000.

Management believes that the conversion to the new banking system, vendor 
delivery of compliant systems and modifications to other existing systems 
will be resolved on a timely basis.  Management does not anticipate that the 
Company's additional efforts regarding Year 2000 compliance will have a 
material impact on the Company's financial condition, results of operations, 
liquidity and capital resources, although no assurance can be given in this 
regard.

The ability of First Federal's loan customers to repay their obligations 
could be affected by business interruptions caused by Year 2000 problems.  
The potential impact to First Federal of such problems has not been 
determined, but could be significant in that customers may be unable to 
repay their obligations.


Impact of Inflation and Changing Prices

The Consolidated Financial Statements and Notes thereto presented herein 
have been prepared in accordance with generally accepted accounting 
principles, which require the measurement of financial position and 
operating results in terms of historical dollars without considering the 
change in the relative purchasing power of money over time due to inflation.  
The impact of inflation is reflected in the increased cost of the Bank's 
operations.  Unlike most industrial companies, nearly all the assets and 
liabilities of the Company are monetary.  As a result, interest rates have a 
greater impact on the Company's performance than do the effects of general 
levels of inflation.  Interest rates do not necessarily move in the same 
direction or to the same extent as the price of goods and services.


Market Prices and Dividends Declared

The common stock of FFY Financial Corp. trades on The Nasdaq Stock Market 
under the symbol "FFYF".  As of July 31, 1998, there were 3,998,435 shares 
outstanding held by approximately 1,397 shareholders of record (not 
including the number of persons or entities holding stock in nominee or 
street name through various brokerage firms).  The table below shows the 
reported high and low trade prices of the common stock and cash dividends 
per share declared during the years ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>

          June 30, 1998:     High      Low    Dividends
          ---------------------------------------------

          <S>               <C>       <C>       <C>
          First quarter     28 7/8    25 1/2    $0.20
          Second quarter    33 1/8    27 5/8    $0.20
          Third quarter     36  -     31 7/8    $0.20
          Fourth quarter    35 1/4    32 3/8    $0.20


<CAPTION>

          June 30, 1997:
          ---------------------------------------------

          <S>               <C>       <C>       <C>
          First quarter     24 1/4    23 1/2    $0.175
          Second quarter    25 7/8    24  -     $0.175
          Third quarter     25 5/8    25  -     $0.175
          Fourth quarter    26 1/2    25 1/2    $0.175

</TABLE>

<TABLE>
<CAPTION>

Quarterly Earnings Summary
--------------------------------
FFY Financial Corp. and Subsidiaries
(Dollars in Thousands Except Per Share Data)


Quarter ended fiscal 1998                            September 30   December 31   March 31    June 30
                                                     ------------------------------------------------
<S>                                                    <C>            <C>          <C>         <C>
Total interest income                                  $11,958        12,004       12,074      11,969
Total interest expense                                   6,475         6,351        6,317       6,416
                                                       ----------------------------------------------
Net interest income                                      5,483         5,653        5,757       5,553
Provision for loan losses                                  142           184          115         124
                                                       ----------------------------------------------
Net interest income after provision for loan losses      5,341         5,469        5,642       5,429
Service charges                                            170           183          162         186
Gain on sale of securities available for sale               48            51           54          93
Other non-interest income                                  110           145          294         269
Non-interest expense                                    (2,761)       (2,920)      (3,056)     (3,033)
                                                       ----------------------------------------------
Income before federal income taxes                       2,908         2,928        3,096       2,944
Federal income tax expense                               1,005           988        1,128       1,026
                                                       ----------------------------------------------
Net income                                             $ 1,903         1,940        1,968       1,918
                                                       ==============================================
Basic earnings per share                               $  0.50          0.51         0.53        0.51
                                                       ==============================================
Diluted earnings per share                             $  0.49          0.50         0.51        0.50
                                                       ==============================================

<CAPTION>

Quarter ended fiscal 1997                            September 30   December 31   March 31    June 30
                                                     ------------------------------------------------
<S>                                                    <C>            <C>          <C>         <C>
Total interest income                                  $11,209        11,588       11,418      11,709
Total interest expense                                   5,596         5,957        6,051       6,219
                                                       ----------------------------------------------
Net interest income                                      5,613         5,631        5,367       5,490
Provision for loan losses                                  155           198          208         126
                                                       ----------------------------------------------
Net interest income after provision for loan losses      5,458         5,433        5,159       5,364
Service charges                                            129           140          135         159
Gain (loss) on sale of securities available for sale      (543)          173           24          25
Other non-interest income                                   90            79           97         109
Non-interest expense                                    (5,923)       (2,984)      (2,617)     (2,764)
                                                       ----------------------------------------------
Income (loss) before federal income taxes                 (789)        2,841        2,798       2,893
Federal income tax expense (benefit)                      (293)          940          887         886
                                                       ----------------------------------------------
Net income (loss)                                      $  (496)        1,901        1,911       2,007
                                                       ==============================================
Basic earnings (loss) per share                        $ (0.10)         0.40         0.48        0.52
                                                       ==============================================
Diluted earnings (loss) per share                      $ (0.10)         0.39         0.47        0.50
                                                       ==============================================

</TABLE>

--------------------
Note:  Certain amounts in the 1998 and 1997 quarterly earnings data have 
       been reclassified to conform with the presentation of the Selected
       Consolidated Financial Information included in this Annual Report.



FFY Financial Corp. and Subsidiaries

Consolidated Financial Statements

June 30, 1998 and 1997


(With Independent Auditors' Report Thereon)


                    FFY FINANCIAL CORP. AND SUBSIDIARIES

                              Table of Contents
                              -----------------


Consolidated Statements of Financial Condition
June 30, 1998 and 1997
Consolidated Statements of Income
  Years ended June 30, 1998, 1997, and 1996
Consolidated Statements of Changes in Stockholders' Equity
  Years ended June 30, 1998, 1997, and 1996
Consolidated Statements of Cash Flows
  Years ended June 30, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
  June 30, 1998, 1997, and 1996
Independent Auditors' Report


                    FFY FINANCIAL CORP. AND SUBSIDIARIES
               Consolidated Statements of Financial Condition
                           June 30, 1998 and 1997

<TABLE>
<CAPTION>
                      Assets                                           1998           1997
                      ------                                           ----           ----

<S>                                                                <C>             <C>
Cash                                                               $  4,362,127      3,631,798
Interest-bearing deposits                                             5,713,055      6,215,957
Short-term investments                                                        -        160,000
                                                                   ---------------------------
      Total cash and cash equivalents                                10,075,182     10,007,755
Securities available for sale                                       140,793,201    112,036,159
Loans receivable, net of allowance for loan losses of 
 $2,740,169 and $2,961,810, respectively                            482,463,396    460,711,635
Interest and dividends receivable on securities                       1,421,574      1,239,988
Interest receivable on loans                                          2,698,117      2,524,542
Federal Home Loan Bank stock, at cost                                 4,511,500      4,094,500
Office properties and equipment, net                                  7,920,660      7,797,721
Other assets                                                          1,862,863        837,075
                                                                   ---------------------------
      Total assets                                                 $651,746,493    599,249,375
                                                                   ===========================

               Liabilities and Stockholders' Equity
               ------------------------------------

Deposits                                                           $444,017,422    450,223,793
Securities sold under agreements to repurchase
  Short-term                                                         13,088,323      7,307,248
  Long-term                                                          51,300,000     25,000,000
Borrowed funds                                                       33,985,000     27,455,000
Advance payments by borrowers for taxes and insurance                 2,621,514      2,313,090
Other payables and accrued expenses                                  22,518,533      4,776,028
                                                                   ---------------------------
      Total liabilities                                             567,530,792    517,075,159
                                                                   ---------------------------

Commitments and contingencies

Stockholders' equity
  Preferred stock, $.01 par value; authorized 5,000,000 shares, 
   none outstanding                                                           -              -
  Common stock, $.01 par value; authorized 15,000,000 shares, 
   issued 6,630,000 shares                                               66,300         66,300
  Additional paid-in capital                                         65,118,141     64,506,573
  Retained earnings, substantially restricted                        79,428,438     74,599,977
  Treasury stock, at cost (2,619,010 and 2,485,160 shares, 
   respectively)                                                    (57,893,563)   (53,387,258)
  Net unrealized holding gain on securities available for sale, 
   net of deferred federal income tax of $419,000 and $57,000, 
   respectively                                                         812,737        111,796
  Common stock purchased by
   Employee Stock Ownership and 401(k) Plan                          (3,034,562)    (3,441,382)
   Recognition and Retention Plans                                     (281,790)      (281,790)
                                                                   ---------------------------
      Total stockholders' equity                                     84,215,701     82,174,216
                                                                   ===========================
      Total liabilities and stockholders' equity                   $651,746,493    599,249,375
                                                                   ===========================
</TABLE>


See accompanying notes to consolidated financial statements.


                    FFY FINANCIAL CORP. AND SUBSIDIARIES
                      Consolidated Statements of Income
                  Years ended June 30, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                                             1998           1997          1996
                                                             ----           ----          ----

<S>                                                       <C>            <C>           <C>
Interest income
  Loans                                                   $39,785,064    38,417,621    35,663,968
  Securities available for sale                             7,622,185     6,552,936     7,072,955
  Securities held to maturity                                       -             -       374,084
  Federal Home Loan Bank stock                                312,213       278,841       257,749
  Other interest-earning assets                               286,969       675,843       347,498
                                                          ---------------------------------------
      Total interest income                                48,006,431    45,925,241    43,716,254
                                                          ---------------------------------------

Interest expense
  Deposits                                                 21,282,008    21,699,053    22,061,881
  Securities sold under agreements to repurchase 
    Short-term                                                871,761       483,448        41,941
    Long-term                                               2,043,340       559,167             -
  Borrowed funds                                            1,361,933     1,082,015        29,887
                                                          ---------------------------------------
      Total interest expense                               25,559,042    23,823,683    22,133,709
                                                          ---------------------------------------
      Net interest income                                  22,447,389    22,101,558    21,582,545

Provision for loan losses                                     565,521       687,642       324,870
                                                          ---------------------------------------
      Net interest income after provision for 
       loan losses                                         21,881,868    21,413,916    21,257,675
                                                          ---------------------------------------

Noninterest income
  Service charges                                             700,445       563,443       522,201
  Gain (loss) on sale of securities available for sale        246,473      (320,290)       29,901
  Other                                                       818,058       375,217       548,082
                                                          ---------------------------------------
      Total noninterest income                              1,764,976       618,370     1,100,184
                                                          ---------------------------------------

Noninterest expense
  Salaries and employee benefits                            6,076,824     5,883,557     6,262,755
  Net occupancy and equipment                               1,805,939     1,644,858     1,676,561
  Insurance and bonding                                       493,752     3,839,783     1,289,153
  State and local taxes                                     1,077,154     1,085,987     1,045,661
  Other                                                     2,316,964     1,834,158     1,716,747
                                                          ---------------------------------------
      Total noninterest expense                            11,770,633    14,288,343    11,990,877
                                                          ---------------------------------------
      Income before federal income taxes                   11,876,211     7,743,943    10,366,982
Federal income taxes                                        4,147,000     2,420,000     3,465,000
                                                          ---------------------------------------
      Net income                                          $ 7,729,211     5,323,943     6,901,982
                                                          =======================================
Basic earnings per share                                  $      2.06          1.23          1.43
                                                          =======================================
Diluted earnings per share                                $      1.98          1.19          1.37
                                                          =======================================
</TABLE>


See accompanying notes to consolidated financial statements.


                    FFY FINANCIAL CORP. AND SUBSIDIARIES
         Consolidated Statements of Changes in Stockholders' Equity
                  Years ended June 30, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                                                                       Common Stock
                                                                                  ----------------------
                                                                                    Shares
                                                                                  Outstanding    Amount
                                                                                  -----------    ------

<S>                                                                                <C>           <C>
Balance at June 30, 1995                                                           5,427,712     $66,300

Net income                                                                                 -           -
Dividends paid, $.575 per share                                                            -           -
Treasury stock purchased                                                            (524,315)          -
Stock options exercised                                                              179,801           -
Common stock used to exercise options                                                 (2,000)          -
Amortization of ESOP expense                                                               -           -
Amortization of RRP stock awards                                                           -           -
Tax benefit related to RRP stock awards                                                    -           -
Tax benefit related to exercise of stock options                                           -           -
Difference between average fair value per share and cost per 
 share on ESOP shares committed to be released                                             -           -
Change in unrealized holding (loss) on securities available for sale, net                  -           -
                                                                                   ---------------------
Balance at June 30, 1996                                                           5,081,198      66,300

Net income                                                                                 -           -
Dividends paid, $.675 per share                                                            -           -
Treasury stock purchased                                                            (994,210)          -
Stock options exercised                                                               59,352           -
Common stock used to exercise options                                                 (1,500)          -
Amortization of KSOP expense                                                               -           -
Amortization of RRP stock awards                                                           -           -
Tax benefit related to RRP stock awards                                                    -           -
Tax benefit related to exercise of stock options                                           -           -
Difference between average fair value per share and cost per 
 share on KSOP shares committed to be released                                             -           -
Change in unrealized holding gain (loss) on securities available for sale, net             -           -
                                                                                   ---------------------

Balance at June 30, 1997                                                           4,144,840      66,300

Net income                                                                                 -           -
Dividends paid, $.775 per share                                                            -           -
Treasury stock purchased                                                            (167,543)          -
Stock options exercised                                                               33,693           -
Amortization of KSOP expense                                                               -           -
Tax benefit related to exercise of stock options                                           -           -
Difference between average fair value per share and cost per 
 share on KSOP shares committed to be released                                             -           -
Change in unrealized holding gain on securities available for sale, net                    -           -
                                                                                   ---------------------

Balance at June 30, 1998                                                           4,010,990     $66,300
                                                                                   =====================

<CAPTION>
                                                 Net                 Common Stock
                                             Unrealized              Purchased By
                                            Holding Gain     ----------------------------
                                              (Loss) on       Employee
Additional                                   Securities      Stock Own-      Recognition
 Paid-In       Retained       Treasury      Available for    ership and     and Retention
 Capital       Earnings        Stock            Sale         401(k) Plan        Plans           Total
----------     --------       --------      -------------    -----------    -------------       -----

<C>           <C>           <C>               <C>            <C>             <C>             <C>
64,141,649    68,045,469    (19,929,218)      (327,626)      (4,308,372)     (1,288,104)     106,400,098
         -     6,901,982              -              -                -               -        6,901,982
         -    (2,781,473)             -              -                -               -       (2,781,473)
         -             -    (11,783,245)             -                -               -      (11,783,245)
(1,464,270)            -      3,262,280              -                -               -        1,798,010
         -             -        (42,000)             -                -               -          (42,000)
         -             -              -              -          442,680               -          442,680
         -             -              -              -                -         674,814          674,814
   224,508             -              -              -                -               -          224,508
   101,932             -              -              -                -               -          101,932
   525,382             -              -              -                -               -          525,382
         -             -              -       (541,835)               -               -         (541,835)
--------------------------------------------------------------------------------------------------------
63,529,201    72,165,978    (28,492,183)      (869,461)      (3,865,692)       (613,290)     101,920,853
--------------------------------------------------------------------------------------------------------
         -     5,323,943              -              -                -               -        5,323,943
         -    (2,889,944)             -              -                -               -       (2,889,944)
         -             -    (25,982,802)             -                -               -      (25,982,802)
  (532,457)            -      1,125,977              -                -               -          593,520
         -             -        (38,250)             -                -               -          (38,250)
         -             -              -              -          424,310               -          424,310
         -             -              -              -                -         331,500          331,500
   296,657             -              -              -                -               -          296,657
   575,301             -              -              -                -               -          575,301
   637,871             -              -              -                -               -          637,871
         -             -              -        981,257                -               -          981,257
--------------------------------------------------------------------------------------------------------
64,506,573    74,599,977    (53,387,258)       111,796       (3,441,382)       (281,790)      82,174,216
--------------------------------------------------------------------------------------------------------
         -     7,729,211              -              -                -               -        7,729,211
         -    (2,900,750)             -              -                -               -       (2,900,750)
         -             -     (5,239,911)             -                -               -       (5,239,911)
  (396,676)            -        733,606              -                -               -          336,930
         -             -              -              -          406,820               -          406,820
   152,987             -              -              -                -               -          152,987
   855,257             -              -              -                -               -          855,257
         -             -              -        700,941                -               -          700,941
--------------------------------------------------------------------------------------------------------
65,118,141    79,428,438    (57,893,563)       812,737       (3,034,562)       (281,790)      84,215,701
========================================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                    FFY FINANCIAL CORP. AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                  Years ended June 30, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                                                        1998           1997           1996
                                                                        ----           ----           ----

<S>                                                                 <C>             <C>            <C>
Cash flows from operating activities
  Net income                                                        $  7,729,211      5,323,943      6,901,982
  Adjustments to reconcile net income to net cash provided by 
   operating activities
    Depreciation                                                         969,042        909,632        954,646
    Amortization and accretion                                           381,801        406,691        936,630
    Deferred federal income taxes                                        261,000        696,000        (74,000)
    Net (gain) loss on sale of securities                               (246,473)       320,290        (29,901)
    Gain on sale of loans                                               (134,211)             -              - 
    Loans originated held for sale                                    (4,988,080)             -              -
    Proceeds from sales of loans originated for sale                   5,077,069              -              -
    Provision for loan losses                                            565,521        687,642        324,870
    Federal Home Loan Bank stock dividend                               (304,700)      (270,400)      (250,100)
    (Increase) decrease in interest receivable                          (355,161)       393,880        194,029
    Tax benefits related to employee plans                               152,987        871,958        326,440
    Other, net                                                           555,641        895,238        566,563
                                                                    ------------------------------------------
      Net cash provided by operating activities                        9,663,647     10,234,874      9,851,159
                                                                    ------------------------------------------

Cash flows from investing activities
  Proceeds from maturity of securities available for sale             16,727,605     30,000,000     56,000,000
  Proceeds from sales of securities available for sale                41,929,782     44,044,024      5,350,377
  Purchase of securities available for sale                          (99,324,173)   (83,710,035)   (26,867,259)
  Purchase of securities held to maturity                                      -              -     (4,099,233)
  Purchase of Federal Home Loan Bank stock                              (112,300)       (50,300)             -
  Principal receipts on securities available for sale                 29,165,393      8,308,925      1,400,719
  Principal receipts on securities held to maturity                            -              -      1,227,662
  Net increase in loans                                              (21,563,866)   (22,119,550)   (36,575,292)
  Purchase of office properties and equipment                         (1,136,981)      (747,167)      (877,912)
  Investment in real estate development joint venture                   (766,241)             -              -
  Other, net                                                              (6,017)        14,466         46,122
                                                                    ------------------------------------------
      Net cash used in investing activities                          (35,086,798)   (24,259,637)    (4,394,816)
                                                                    ------------------------------------------

Cash flows from financing activities
  Net decrease in deposits                                            (6,138,251)    (6,138,675)    (5,606,561)
  Net increase in securities sold under agreements to repurchase
    Short-term                                                         5,781,075        667,695      6,639,553
    Long-term                                                         26,300,000     25,000,000              -
  Net increase in borrowed funds                                       6,530,000     26,255,000      1,200,000
  Treasury stock purchases                                            (5,239,911)   (25,982,802)   (11,783,245)
  Dividends paid                                                      (2,900,750)    (2,889,944)    (2,781,473)
  Proceeds from stock options exercised                                  336,930        555,270      1,756,010
  Increase (decrease) in amounts due to bank                             695,939     (1,551,024)     1,452,469
  Other, net                                                             125,546       (145,399)       195,050
                                                                    ------------------------------------------
      Net cash provided by (used in) financing activities             25,490,578     15,770,121     (8,928,197)
                                                                    ------------------------------------------
Net increase (decrease) in cash and cash equivalents                      67,427      1,745,358     (3,471,854)
Cash and cash equivalents at beginning of year                        10,007,755      8,262,397     11,734,251
                                                                    ------------------------------------------
Cash and cash equivalents at end of year                            $ 10,075,182     10,007,755      8,262,397
                                                                    ==========================================
Supplemental disclosure of cash flow information
  Cash payments of interest expense                                 $ 25,095,614     23,716,934     21,986,359
  Cash payments of income taxes                                        4,150,000        780,000      2,855,000
                                                                    ==========================================

Supplemental schedule of noncash investing activities
  Real estate acquired through foreclosure                          $    643,725        479,854        251,849
  Real estate sales by loan issuance                                     543,500        455,400        282,000
                                                                    ==========================================
</TABLE>


See accompanying notes to consolidated financial statements.


                    FFY FINANCIAL CORP. AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements
                        June 30, 1998, 1997 and 1996

(1)   Summary of Significant Accounting Policies
      ------------------------------------------

      (a)   Principles of Consolidation
            ---------------------------

            The consolidated financial statements of the Company include 
            the accounts of FFY Financial Corp. (FFY or Holding Company) 
            and its wholly owned subsidiaries, First Federal Savings Bank 
            of Youngstown (First Federal or Bank) and FFY Holdings, Inc.  
            All significant intercompany balances and transactions have 
            been eliminated in consolidation.

      (b)   Basis of Presentation
            ---------------------

            The consolidated financial statements have been prepared in 
            conformity with generally accepted accounting principles.  The 
            preparation of the consolidated 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 the 
            disclosure of contingent assets and liabilities, and the 
            disclosure of contingent assets and liabilities at the date of 
            the consolidated statement of financial condition and the 
            reported amounts of revenues and expenses during the reporting 
            period.  Actual results could differ from those estimates.

      (c)   Cash and Cash Equivalents
            -------------------------

            The Company considers all highly liquid debt instruments with 
            purchased maturities of three months or less to be cash 
            equivalents.  Cash equivalents include interest-bearing 
            deposits and short-term investments.

      (d)   Securities
            ----------

            Management determines the appropriate classification of 
            securities at the time of purchase.  Debt and equity 
            securities, including mortgage-backed securities, are 
            classified as available for sale and reported at fair value, 
            with unrealized gains and losses excluded from earnings and 
            reported in a separate component of stockholders' equity, net 
            of tax.  Available-for-sale securities are those which 
            management may decide to sell, if needed, for liquidity, 
            asset/liability management, or other reasons.  Unrealized 
            holding gains and losses, net of the related tax effect, are 
            excluded from earnings and reported as a separate component of 
            stockholders' equity until realized.  Gain or loss on the sale 
            of securities is recognized using the specific identification 
            method.  Premiums and discounts are amortized using the 
            interest method over the estimated life.  A decline in the fair 
            value of any security below cost that is deemed other than 
            temporary is charged to earnings resulting in the establishment 
            of a new cost basis for the security.  Premiums and discounts 
            are amortized or accreted over the life of the related security 
            as an adjustment to yield using the interest method.  Dividends 
            and interest income are recognized when earned.

      (e)   Loans and Related Fees and Costs
            --------------------------------

            Loans receivable originated with the intent to hold to maturity 
            are carried at unpaid principal balances, less the allowance 
            for loan losses and net deferred loan origination fees.  
            Interest on loans is accrued and credited to income as earned.  
            The accrual of interest is discontinued generally when a loan 
            is more than 90 days delinquent or otherwise doubtful of 
            collection.  Such interest ultimately collected is credited to 
            income in the period of recovery.  Loans are returned to 
            accrual status when both principal and interest are current, 
            and the loan is determined to be performing in accordance with 
            the applicable loan terms.

            Loan origination fees and certain direct loan origination costs 
            are deferred, and the net amounts are amortized as an 
            adjustment of the related loan's yield.  The Bank is amortizing 
            these amounts using the interest method over the contractual 
            life of the related loans.

            The Company currently sells loans to Federal National Mortgage 
            Association in the secondary market and delivers shortly after 
            funding.  Mortgage loans held for sale are carried at the lower 
            of cost or market value, determined on a net aggregate basis.

            Mortgage servicing rights associated with loans originated and 
            sold, where servicing is retained, are capitalized and included 
            in other assets in the statement of financial condition.  The 
            servicing rights capitalized are amortized in proportion to and 
            over the period of estimated servicing income.  Management 
            measures impairment of servicing rights based on prepayment 
            trends and external market factors.  Any impairment is recorded 
            as a valuation allowance.  The Company accounts for mortgage 
            servicing rights under Statement of Financial Accounting 
            Standards (SFAS) No. 125, Accounting for Transfers and 
            Servicing of Financial Assets and Extinguishments of 
            Liabilities.  The adoption of SFAS No. 125 on January 1, 1997 
            did not have a material impact on the Company's financial 
            condition or results of operations.

      (f)   Provision for Loan Losses
            -------------------------

            The provision for loan losses charged to expense is based on 
            management's judgment taking into consideration past 
            experience, current and estimated future economic conditions, 
            known and inherent risks in the loan portfolio, and the 
            estimated value of underlying collateral.  While management 
            uses the best information available to make these evaluations, 
            future adjustments to the allowances may become necessary if 
            economic conditions change substantially from the assumptions 
            used in making the evaluations.  Additionally, various 
            regulatory agencies, as an integral part of their examination 
            process, periodically review the reserve for loan losses.  Such 
            agencies may require the recognition of additions to the 
            reserve based on their judgments of information available to 
            them at the time of their examination.

            Management considers a loan impaired when, based on current 
            information and events, it is probable that the Company will be 
            unable to collect all amounts of principal and interest under 
            the original terms of the loan agreement.  Significant factors 
            impacting management's judgment in determining when a loan is 
            impaired include an evaluation of compliance with repayment 
            program, condition of collateral, deterioration in financial 
            strength of borrower or any case when the expected future cash 
            payments may be less than the recorded amount.  Accordingly, 
            the Company measures impaired loans based on the present value 
            of expected future cash flows, discounted at the loan's 
            effective interest rate, or at the loan's observable market 
            price or fair value of collateral if the loan is collateral 
            dependent.  Management excludes large groups of smaller balance 
            homogeneous loans such as residential mortgages and consumer 
            loans which are collectively evaluated.

      (g)   Office Properties and Equipment
            -------------------------------

            Land is carried at cost.  Office properties and equipment are 
            stated at cost less accumulated depreciation.  Depreciation is 
            computed on the straight-line method over the estimated useful 
            lives of the assets.  Estimated lives are 10 to 40 years for 
            office properties, including improvements, and 3 to 10 years 
            for equipment.  Leasehold improvements are depreciated using 
            the straight-line method over the terms of the related leases.

      (h)   Repurchase Agreements
            ---------------------

            The Bank enters into sales of securities under agreements to 
            repurchase securities of the same agency bearing the identical 
            contract rate and similar remaining weighted average maturities 
            as the original securities that result in approximately the 
            same market yield.

      (i)   Income Taxes
            ------------

            The Company files a consolidated federal income tax return.
            The Company accounts for income taxes under the asset and 
            liability method.  Deferred tax assets and liabilities are 
            recognized for the future tax consequences attributable to 
            differences between the financial statement carrying amounts of 
            existing assets and liabilities and their respective tax bases.  
            Deferred tax assets and liabilities are measured using enacted 
            tax rates expected to apply to taxable income in the years in 
            which those temporary differences are expected to be recovered 
            or settled.  The effect on deferred tax assets and liabilities 
            of a change in tax rates is recognized in income in the period 
            that includes the enactment date.

      (j)   Earnings Per Share
            ------------------

            In February 1997, the Financial Accounting Standards Board 
            (FASB) issued SFAS No. 128, Earnings Per Share.  This statement 
            requires the presentation of basic and diluted earnings per 
            share which supersedes the presentation of primary and fully 
            diluted earnings per share under Accounting Principles Board 
            (APB) Opinion No. 15.  The Company adopted SFAS No. 128 
            effective December 31, 1997 and all prior periods have been 
            restated to comply with SFAS No. 128.  The computation of basic 
            and diluted earnings per share is shown in the following table.

<TABLE>
<CAPTION>
                                                                Years Ended June 30,
                                                        ------------------------------------
                                                           1998         1997         1996
                                                           ----         ----         ----

      <S>                                               <C>           <C>          <C>
      Basic earning per share computation:
        Numerator - Net income                          $7,729,211    5,323,943    6,901,982
        Denominator - 
          Weighted average common shares
           outstanding                                   3,757,945    4,325,228    4,837,468
      Basic earnings per share                          $     2.06         1.23         1.43
                                                        ====================================

      Diluted earnings per share computation:
        Numerator - Net income                           7,729,211    5,323,943    6,901,982
        Denominator - 
          Weighted average common shares
           outstanding                                   3,757,945    4,325,228    4,837,468
          Dilutive effect of stock options                 139,081      138,591      204,419
                                                        ------------------------------------
            Weighted average common shares and
             common stock equivalents                    3,897,026    4,463,819    5,041,887
      Diluted earnings per share                        $     1.98         1.19         1.37
                                                        ====================================
</TABLE>


      (k)   Effect of New Financial Accounting Standards
            --------------------------------------------

            In June 1997, the FASB issued SFAS No. 130, Reporting 
            Comprehensive Income.  This statement establishes standards for 
            businesses to disclose comprehensive income and its components 
            in their general purpose financial statements.  SFAS No. 130 
            requires the reporting of all items of comprehensive income in 
            a financial statement that is displayed with the same 
            prominence as other financial statements.  This statement also 
            requires that an enterprise classify items of other 
            comprehensive income by their nature in a financial statement 
            and display the accumulated balance of other comprehensive 
            income separately from retained earnings and additional paid in 
            capital in the equity section of the statement of financial 
            condition.  SFAS No. 130 is effective for fiscal years 
            beginning after December 15, 1997 and reclassification of 
            comparative financial statements is required for interim 
            periods.  Implementation of SFAS No. 130 will require a revised 
            presentation in future financial statements but will not 
            otherwise affect the Company.

            In June 1997, the FASB issued SFAS No. 131, Disclosures about 
            Segments of an Enterprise and Related Information.  SFAS No. 
            131 requires public business enterprises to report certain 
            financial and descriptive information about operating segments.  
            This statement also establishes standards for related 
            disclosures about products and services, any major customers, 
            and geographic areas in which an enterprise operates.  SFAS No. 
            131 is effective for financial statements for periods beginning 
            after December 15, 1997.  Management does not believe the 
            implementation of SFAS No. 131 will result in the 
            identification of other reportable business segments.

            In February 1998, the FASB issued SFAS No. 132, Employers' 
            Disclosures about Pensions and Other Postretirement Benefits, 
            an Amendment of FASB Statements No. 87, 88 and 106.  This 
            statement amends disclosure requirements with respect to 
            pensions and other postretirement benefits.  It does not change 
            any of the current guidance on measurement or recognition 
            related to these areas.  SFAS No. 132 is effective for fiscal 
            years beginning after December 15, 1997.  Implementation of 
            SFAS No. 132 will require revised disclosure in future 
            financial statements but will not otherwise affect the Company.

            In June 1998, the FASB issued SFAS No. 133, Accounting for 
            Derivative Instruments and Hedging Activities.  This statement 
            standardizes the accounting for derivative contracts, by 
            requiring that an entity recognize those items as assets or 
            liabilities in the statement of financial condition and measure 
            them at fair value.  SFAS No. 133 is effective for fiscal years 
            beginning after June 15, 1999.  Management is currently 
            evaluating the effects SFAS No. 133 will have on the Company's 
            financial condition or results of operations.

      (l)   Reclassifications
            -----------------

            Certain amounts in the prior year consolidated financial 
            statements have been reclassified to conform with the current 
            year's presentation.

(2)   Securities
      ----------

      A summary of securities available for sale is as follows:

<TABLE>
<CAPTION>
                                                   Gross         Gross
                                  Amortized      Unrealized    Unrealized
                                     Cost          Gains         Losses      Fair Value
                                 -------------------------------------------------------

<S>                              <C>             <C>           <C>           <C>
June 30, 1998
  Federal agency obligations     $ 35,049,270      234,661       (1,374)      35,282,557
  Mortgage-backed securities       81,580,115      150,652     (287,033)      81,443,734
  Tax-exempt securities            20,778,093      310,930      (39,747)      21,049,276
  Equity securities                   637,000      622,156            -        1,259,156
  Other securities                  1,516,986      261,674      (20,182)       1,758,478
                                 -------------------------------------------------------
      Totals                     $139,561,464    1,580,073     (348,336)     140,793,201
                                 =======================================================

June 30, 1997
  U.S. Government obligations    $  2,004,933            -       (5,245)       1,999,688
  Federal agency obligations       24,975,178       42,456     (135,597)      24,882,037
  Mortgage-backed securities       75,718,129      178,522     (222,344)      75,674,307
  Tax-exempt securities             7,415,773       67,346       (7,567)       7,475,552
  Equity securities                   753,350      177,550      (25,325)         905,575
  Other securities                  1,000,000       99,000            -        1,099,000
                                 -------------------------------------------------------
      Totals                     $111,867,363      564,874     (396,078)     112,036,159
                                 =======================================================
</TABLE>


      Federal agency obligations consist of Federal National Mortgage 
      Association (FNMA), Federal Home Loan Bank (FHLB), and Federal Home 
      Loan Mortgage Corporation (FHLMC) securities.  Mortgage-backed 
      securities consist of FNMA, FHLMC, and Government National Mortgage 
      Association (GNMA) pass-through certificates.  Tax-exempt securities 
      consist of obligations of school and city districts and general 
      obligations of various cities and municipalities.  Other securities 
      consist of equity investments in limited partnerships.

      The amortized cost and fair values of debt securities available for 
      sale at June 30, 1998, by contractual maturity, are shown below. 
      Expected maturities will differ from contractual maturities because 
      issuers may have the right to call or prepay obligations with or 
      without call or prepayment penalties.  Equity securities do not have a 
      contractual maturity.

<TABLE>
<CAPTION>
                                                   Amortized
                                                      Cost        Fair Value
                                                   ---------      ----------

            <S>                                   <C>             <C>
            Within one year                       $ 11,620,295     11,695,474
            After one year through five years       31,628,937     31,826,729
            After five years through ten years      24,348,977     24,442,503
            After ten years                         71,326,255     71,569,339
                                                  ---------------------------
                                                  $138,924,464    139,534,045
                                                  ===========================
</TABLE>


      The weighted average tax-equivalent annual yield of securities 
      available for sale at June 30, 1998 and 1997, was 6.28 percent and 
      6.88 percent, respectively.

      Gross proceeds from sales of securities available for sale during the 
      years ended June 30, 1998, 1997, and 1996 totaled $41,929,782; 
      $44,044,024; and $5,350,377, respectively.  Gross realized gains and 
      losses on sales of securities available for sale totaled $324,487 and 
      $78,014, respectively, for the year ended June 30, 1998; $133,222 and 
      $453,512, respectively, during the year ended June 30, 1997; and 
      $37,874 and $7,973, respectively, during the year ended June 30, 1996.

(3)   Loans Receivable
      ----------------

      Following is a summary of loans receivable at June 30, 1998 and 1997:

<TABLE>
<CAPTION>
                                                              1998           1997
                                                              ----           ----

            <S>                                           <C>             <C>
            First mortgage loans 
              Secured by one-to-four family residences    $354,202,256    349,052,874
              Secured by other properties                   15,658,952     16,294,053
              Commercial                                    28,606,137     30,996,899
              Construction and development loans,
               primarily residential                        23,998,473     23,179,215
                                                          ---------------------------

                                                           422,465,818    419,523,041

            Consumer and other loans
              Automobile                                    12,161,179     16,349,407
              Home equity                                   37,911,516     33,269,070
              90-day notes                                  17,677,306      1,322,589
              Other                                          4,132,170      3,886,376
                                                          ---------------------------
                                                            71,882,171     54,827,442
                                                          ---------------------------
                                                           494,347,989    474,350,483

            Less
              Undisbursed loans in process                   6,556,642      7,861,460
              Net deferred loan origination fees             2,587,782      2,815,578
              Allowance for loan losses                      2,740,169      2,961,810
                                                          ---------------------------

                                                            11,884,593     13,638,848
                                                          ---------------------------

                                                          $482,463,396    460,711,635
                                                          ===========================

            Weighted average annual yield at year-end            8.21%          8.28%
</TABLE>


      Activity in the allowance for loan losses for the years ended June 30, 
      1998, 1997, and 1996 is summarized as follows:

<TABLE>
<CAPTION>
                                                  1998         1997          1996
                                                  ----         ----          ----

            <S>                                <C>           <C>           <C>
            Balance at beginning of year       $2,961,810     3,439,305    3,159,022
            Provision charged to operations       565,521       687,642      324,870
            Charge-offs                          (839,704)   (1,198,867)     (77,017)
            Recoveries                             52,542        33,730       32,430
                                               -------------------------------------
            Balance at end of year             $2,740,169     2,961,810    3,439,305
                                               =====================================
</TABLE>


      Real estate owned, troubled debt restructurings, and nonaccrual loans, 
      as well as the related impact on income in the accompanying 
      consolidated statements of income, were immaterial for 1998, 1997, and 
      1996.  At June 30, 1998 and 1997, non-accrual loans consisted 
      primarily of one-to-four family residences and amounted to $2,733,572 
      and $3,255,207, respectively.  Impaired loans under SFAS No. 114 were 
      immaterial at June 30, 1998 and 1997.

      Mortgage loans serviced for others are not included in the 
      accompanying consolidated statements of financial condition.  The 
      outstanding principal balance of loans serviced for others totaled 
      $4,970,433 at June 30, 1998.  Capitalized net mortgage servicing 
      rights were approximately $48,000 at June 30, 1998.  The Bank did not 
      sell loans to outside investors prior to the fiscal year ended June 
      30, 1998.

      In the normal course of business, the Bank extends loans to directors 
      and executive officers of the Company and their affiliates.  All of 
      these loans were made on substantially the same terms as loans to 
      other individuals and businesses of comparable creditworthiness.  The 
      aggregate balance of loans greater than $60,000 was $569,000 and 
      $467,000 at June 30, 1998 and 1997, respectively.

(4)   Office Properties and Equipment
      -------------------------------

      Following is a summary of office properties and equipment by major 
      classifications as of June 30, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                 1998           1997
                                                                 ----           ----

            <S>                                               <C>            <C>
            Land                                              $ 1,617,581     1,662,581
            Buildings                                           8,486,417     8,401,966
            Furniture and equipment                             2,662,966     2,451,774
            Computer equipment and software                     3,535,201     2,734,521
            Automobiles                                           113,697        91,261
            Leasehold improvements                                401,822       401,822
                                                              -------------------------

                                                               16,817,684    15,743,925
            Less accumulated depreciation and amortization      8,897,024     7,946,204
                                                              -------------------------
                                                              $ 7,920,660     7,797,721
                                                              =========================
</TABLE>


(5)   Deposits
      --------

      Following is an analysis of interest-bearing deposits, which consist 
      of various savings and certificate accounts with varying interest 
      rates, as of June 30, 1998 and 1997:

<TABLE>
<CAPTION>
                                                     1998                      1997
                 Account Type               ----------------------    ----------------------
           and Stated Interest Rate            Amount         %          Amount         %
           ------------------------            ------        ---         ------        ---
       
      <S>                                   <C>             <C>       <C>             <C>
      NOW accounts, up to 2.50%             $ 34,381,993      7.74    $ 31,235,718      6.94
      Money market accounts, up
       to 4.41%                               28,058,912      6.32      22,822,047      5.07
      Passbook accounts, 2.50 % to 3.00%      93,276,617     21.01     107,575,383     23.89
                                            ------------------------------------------------
                                             155,717,522     35.07     161,633,148     35.90

      Certificate accounts
        4.00% to 4.99%                        29,483,863      6.64       8,808,465      1.96
        5.00% to 5.99%                       141,125,055     31.78     146,339,271     32.50
        6.00% to 6.99%                       109,895,025     24.75     124,649,185     27.69
        7.00% to 7.99%                         7,795,957      1.76       8,793,724      1.95
                                            ------------------------------------------------
                                             288,299,900     64.93     288,590,645     64.10
                                            ------------------------------------------------
                                            $444,017,422    100.00    $450,223,793    100.00
                                            ================================================
</TABLE>


      At June 30, 1998 and 1997, scheduled maturities of certificate 
      accounts are as follows:

<TABLE>
<CAPTION>
                                                     1998                      1997
                                            ----------------------    ----------------------
                                               Amount         %          Amount         %
                                               ------        ---         ------        ---

            <S>                             <C>             <C>       <C>             <C>
            Less than 12 months             $163,691,247     56.78    $132,906,239     46.05
            13 to 24 months                   67,829,342     23.53      78,474,344     27.19
            25 to 36 months                   19,414,656      6.73      44,962,940     15.58
            37 to 48 months                   18,091,111      6.27      11,976,052      4.15
            49 to 60 months                   15,967,370      5.54      19,103,375      6.62
            Over 60 months                     3,306,174      1.15       1,167,695       .41
                                            ------------------------------------------------
                                            $288,299,900    100.00    $288,590,645    100.00
                                            ================================================
</TABLE>


      The 1998 amounts above include callable certificate accounts totaling 
      $9,681,669.  Management may decide to call such certificates if market 
      conditions dictate.  Call options are 12 months for 36-month accounts 
      and 24 months for 60- and 84-month accounts.

      Following is a summary of certificate accounts of $100,000 or more by 
      remaining maturities at June 30, 1998:

<TABLE>

            <S>                           <C>
            Three months or less          $ 6,597,782
            Over three to six months       11,476,932
            Over six to twelve months      10,700,606
            Over twelve months             19,775,033
                                          -----------
                                          $48,550,353
                                          ===========
</TABLE>


      At June 30, 1998 and 1997, certificate accounts included $1,524,648 
      and $5,000,000, respectively, in customer deposits for which U.S. 
      Government obligations, federal agency obligations and/or mortgage-
      backed securities with a market value, including accrued interest, 
      totaling $2,773,972 and $6,089,960, respectively, were pledged as 
      collateral.  The weighted average rate of the certificate accounts was 
      5.45 percent and 4.85 percent, respectively, at June 30, 1998 and 
      1997.  The certificates at June 30, 1998 for which securities are 
      pledged are scheduled to mature from July 1998 to April 2002.  The 
      certificate at June 30, 1997 for which securities were pledged matured 
      in July 1997.

      Interest expense on deposits for the years ended June 30, 1998, 1997, 
      and 1996 is summarized below:

<TABLE>
<CAPTION>
                                     1998            1997           1996
                                     ----            ----           ----

        <S>                       <C>             <C>            <C>
        NOW accounts              $   636,915        620,759        577,515
        Money market accounts         762,231        734,075        855,795
        Passbook accounts           2,683,094      3,302,590      3,471,378
        Certificate accounts       17,199,768     17,041,629     17,157,193
                                  -----------------------------------------
                                  $21,282,008     21,699,053     22,061,881
                                  =========================================
</TABLE>


      The weighted average interest rate on deposits was 4.63 percent and 
      4.81 percent at June 30, 1998 and 1997, respectively.

(6)   Securities Sold Under Agreements to Repurchase
      ----------------------------------------------

      At June 30, 1998 and 1997, securities sold under agreements to 
      repurchase were as follows:

<TABLE>
<CAPTION>
                                                               1998           1997
                                                               ----           ----

      <S>                                                   <C>            <C>
      Short-term
        Repurchase agreements                               $13,088,323     7,307,248
        Federal agency obligations
         pledged as collateral
          Book value, including accrued interest             15,376,953     8,179,608
          Market value, including accrued interest           15,490,196     8,153,268
        Average balance outstanding during the year          15,240,783     7,915,988
        Maximum amount outstanding at any month-end          22,656,754    11,628,633
        Weighted average interest rate                            5.76%         5.96%
      Long-term
        Repurchase agreements                               $51,300,000    25,000,000
        Mortgage-backed securities pledged as collateral
          Book value, including accrued interest             56,146,814    28,553,417
          Market value, including accrued interest           55,984,488    28,627,181
        Average balance outstanding during the year          34,241,398     9,077,381
        Maximum amount outstanding at any month-end          51,300,000    25,000,000
        Weighted average interest rate                            5.76%         6.10%
</TABLE>


      Short- and long-term repurchase agreements are treated as financings, 
      and the obligations to repurchase securities sold are reflected as a 
      liability in the consolidated statements of financial condition.  The 
      pledged securities, although held in safekeeping outside the Bank, 
      remain in the asset accounts.  A summary of individual long-term 
      repurchase agreements at June 30, 1998 with respect to maturity and 
      call dates is summarized in the table below.  The call dates renew 
      every three months and are at the option of the buyer.

<TABLE>
<CAPTION>
            Maturity     Earliest Call        1998            1997
            --------     -------------        ----            ----

            <C>             <C>            <C>             <C>
            2/19/02         2/19/00        $25,000,000     25,000,000
            1/16/03         1/16/01         10,000,000             --
            3/19/01         3/19/99         16,300,000             --
</TABLE>


(7)   Borrowed Funds
      --------------

      Borrowed funds at June 30, 1998 and 1997 are summarized as follows:

<TABLE>
<CAPTION>
                                           1998                       1997
                                  -----------------------    -----------------------
                                                 Weighted                   Weighted
                                                 Average                    Average
                                    Amount         Rate        Amount         Rate
                                    ------       --------      ------       --------

<S>                               <C>             <C>        <C>             <C>
Advances from the Federal Home
  Loan Bank of Cincinnati
  Line of credit advances         $ 2,985,000     6.02%      $ 2,455,000     5.80%
  Repo-based advances              31,000,000     5.56%       25,000,000     5.59%
                                  -----------------------------------------------
                                  $33,985,000     5.60%      $27,455,000     5.68%
                                  ===============================================
</TABLE>


      Advances from the Federal Home Loan Bank (FHLB) of Cincinnati are 
      secured by a blanket mortgage collateral agreement for 150 percent of 
      outstanding advances, amounting to $50,977,500.  The FHLB line of 
      credit advances have rates that are either fixed or adjust daily.  
      Fixed-rate line of credit advances must be repaid at the end of the 
      commitment term whereas adjustable-rate line of credit advances can be 
      repaid all or in-part daily.  All the line of credit advances 
      outstanding at June 30, 1998 and 1997 were adjustable.  The repo-based 
      advances have 30-day fixed-rate terms.  These advances require 
      interest payments at maturity.

(8)   Compliance with Regulatory Capital Requirements
      -----------------------------------------------

      Office of Thrift Supervision (OTS) regulations require savings 
      institutions to maintain certain minimum levels of regulatory capital.  
      An institution that fails to comply with its regulatory capital 
      requirements must obtain OTS approval of a capital plan and can be 
      subject to a capital directive and certain restrictions on its 
      operations.  At June 30, 1998, the minimum regulatory capital 
      regulations require institutions to have tangible capital to total 
      tangible assets of 1.5 percent; a minimum leverage ratio of core (Tier 
      1) capital to total adjusted tangible assets of 3.0 percent; and a 
      minimum ratio of total capital (core capital and supplementary 
      capital) to risk weighted assets of 8.0 percent, of which 4.0 percent 
      must be core capital.

      Under the prompt corrective action regulations, the OTS is required to 
      take certain supervisory actions (and may take additional 
      discretionary actions) with respect to an undercapitalized 
      institution.  Such actions could have a direct material effect on an 
      institution's financial statements.  The regulations establish a 
      framework for the classification of savings institutions into five 
      categories:  well capitalized, adequately capitalized, 
      undercapitalized, significantly undercapitalized, and critically 
      undercapitalized.  Generally, an institution is considered well 
      capitalized if it has a core (Tier 1) capital ratio of at least 5.0% 
      (based on average total assets); a core (Tier 1) risk-based capital 
      ratio of at least 6.0%; and a total risk-based capital ratio of at 
      least 10.0%.

      The foregoing capital ratios are based in part on specific 
      quantitative measures of assets, liabilities and certain off-balance 
      sheet items as calculated under regulatory accounting practices.  
      Capital amounts and classifications are also subject to qualitative 
      judgments by the OTS about capital components, risk weightings and 
      other factors.

      Management believes that, as of June 30, 1998 and 1997, the Bank meets 
      all capital adequacy requirements to which it is subject.  Further, 
      the most recent OTS notification categorized by the Bank as a well-
      capitalized institution under the prompt corrective action 
      regulations.  There have been no conditions or events since that 
      notification that management believes have changed the Bank's capital 
      classification.

      The following is a reconciliation of the Bank's GAAP and Regulatory 
      capital, and a summary of the Bank's actual capital ratios compared 
      with the OTS minimum bank capital adequacy requirements and their 
      requirements for classification as well capitalized at June 30, 1998 
      and 1997:

<TABLE>
<CAPTION>
                                                                        Tier-1         Tier-1          Total
                                          Equity        Tangible         Core        Risk-Based     Risk-Based
      June 30, 1998                      Capital         Equity         Capital        Capital        Capital
      -------------                      -------        --------        -------      ----------     ----------

      <S>                              <C>             <C>            <C>            <C>            <C>
      GAAP capital                     $ 53,382,413     53,382,413     53,382,413     53,382,413     53,382,413
      Unrealized appreciation or
       gain on securities available
       for sale, net                                       (37,549)       (37,549)       (37,549)       (37,549)
      General loan valuation 
       allowances                                                -              -              -      2,037,651
      Other, net                                           (48,565)       (48,565)       (48,565)      (517,443)
                                                       --------------------------------------------------------
      Regulatory capital                                53,296,299     53,296,299     53,296,299     54,865,072
                                                       --------------------------------------------------------
      Total assets                      629,186,295
                                       ------------
      Adjusted total assets                            629,278,873    629,278,873
                                                       --------------------------
      Risk-weighted assets                                                           383,853,411    383,853,411
                                                                                     --------------------------
      Actual capital ratio                    8.48%          8.47%          8.47%         13.88%         14.29%
      Minimum capital adequacy 
       requirements                                          1.50%          3.00%                         8.00%
      Regulatory capital category
        Well capitalized - equal to
         or greater than                                                    5.00%          6.00%         10.00%


<CAPTION>
                                                                         Core/         Tier-1          Total
                                          Equity        Tangible       Leverage      Risk-Based     Risk-Based
      June 30, 1997                      Capital         Capital        Capital        Capital        Capital
      -------------                      -------        --------       --------      ----------     ----------

      <S>                              <C>             <C>            <C>            <C>            <C>
      GAAP capital                     $ 55,262,513     55,262,513     55,262,513     55,262,513     55,262,513
      Unrealized depreciation or
       loss on securities available
       for sale, net                                        67,287         67,287         67,287         67,287
      General loan valuation 
       allowances                                                -              -              -      2,621,993
                                                       --------------------------------------------------------
      Regulatory capital                                55,329,800     55,329,800     55,329,800     57,951,793
                                                       --------------------------------------------------------
      Total assets                      578,810,029
                                       ------------
      Adjusted total assets                            579,055,549    579,055,549
                                                       --------------------------
      Risk-weighted assets                                                           340,085,000    340,085,000
                                                                                     --------------------------
      Actual capital ratio                    9.55%          9.56%          9.56%         16.27%         17.04%
      Minimum capital adequacy
       requirements                                          1.50%          4.00%                         8.00%
      Regulatory capital category
        Well capitalized - equal to 
         or greater than                                                    5.00%          6.00%         10.00%
</TABLE>


(9)   Pension Plan
      ------------

      The Bank had a defined benefit pension plan that covered substantially 
      all of its employees.  On November 15, 1996, the Board of Directors 
      approved the termination of the pension plan due to significantly high 
      retirement cost.  Upon termination, all participants in the plan 
      became fully vested.  At June 30, 1997, the plan assets were not yet 
      distributed to participants in the pension plan.  Plan assets 
      consisted primarily of a fixed income fund with an insurance company, 
      at June 30, 1997.

      The following table sets forth the plan's funded status and the 
      amounts recognized in the consolidated statements of financial 
      condition at June 30, 1998 and 1997:

<TABLE>
<CAPTION>
                                                           1998       1997
                                                           ----       ----

        <S>                                               <C>       <C>
        Actuarial present value of benefit obligations
          Accumulated benefit obligation, including 
           vested benefits of $1,661,216 and 
           $1,243,186, respectively                       $    -    1,661,216
                                                          ===================

          Projected benefit obligation for services 
           rendered to date                               $    -    1,661,216
        Plan assets at fair value                              -    1,730,581
                                                          -------------------

              Plan assets in excess of 
               projected benefit obligation                    -       69,365
        Unrecognized net gain from past experience 
         different from that assumed                           -     (202,913)
                                                          -------------------

              Accrued pension cost                        $    -     (133,548)
                                                          ===================
</TABLE>


      Components of net pension cost for the years ended June 30, 1998, 
      1997, and 1996 are as follows:

<TABLE>
<CAPTION>
                                                           1998        1997        1996
                                                           ----        ----        ----

        <S>                                              <C>          <C>        <C>
        Service cost - benefits earned during 
         the period                                      $       -     52,471     141,422
        Interest cost on projected benefit obligation       50,820    114,296     214,786
        Actual return on plan assets                         8,589    (86,732)    (97,476)
        Net amortization and deferral                         (832)   (42,229)   (110,313)
        Effects of settlement and curtailment             (192,125)    85,016           -
                                                         --------------------------------
              Net pension cost (credit)                  $(133,548)   122,822     148,419
                                                         ================================
</TABLE>


      Assumptions used in the accounting for the pension plan were as follows:

<TABLE>
<CAPTION>
                                                           1998        1997        1996
                                                           ----        ----        ----
        <S>                                                <C>         <C>         <C>
        Weighted average discount rate
          Preretirement                                    N/A         6.00%       7.50%
          Postretirement                                   N/A         5.56        5.56
        Rate of increase in compensation levels            N/A         N/A         4.00
        Expected long-term rate of return on assets        N/A         7.00        7.00
                                                           ===         ====        ====
</TABLE>


(10)  SAIF Special Assessment
      -----------------------

      On June 30, 1997, the President signed into law an omnibus 
      appropriations act for fiscal year 1997 that included, among other 
      things, the recapitalization of the Savings Association Insurance Fund 
      (SAIF) in a  section entitled the Deposit Insurance Funds Act of 1996.  
      The Act included a provision where all insured depository institutions 
      would be charged a one-time special assessment on their SAIF 
      assessable deposits as of March 31, 1995.  The Bank recorded a pretax 
      charge of $3,010,964, which represented 65.7 basis points of the March 
      31, 1995 assessable deposits.  This charge was recorded upon enactment 
      on September 30, 1996, and later paid on November 27, 1996.

(11)  Federal Income Taxes
      --------------------

      Federal income taxes (credit) include current and deferred amounts as 
      follows:

<TABLE>
<CAPTION>
                                                     1998         1997         1996
                                                     ----         ----         ----

        <S>                                       <C>           <C>          <C>
        Current                                   $3,886,000    1,724,000    3,539,000
        Deferred                                     261,000      696,000      (74,000)
                                                  ------------------------------------
        Applicable income tax expense              4,147,000    2,420,000    3,465,000
        Deferred federal tax expense (benefit)
         on unrealized gains (losses) on
         securities available for sale               362,000      505,000     (280,000)
                                                  ------------------------------------
                                                  $4,509,000    2,925,000    3,185,000
                                                  ====================================
</TABLE>


      Actual income tax expense differed from the amounts computed by 
      applying the federal income tax rate of 35 percent to income before 
      federal income taxes as a result of the following:

<TABLE>
<CAPTION>
                                    1998                    1997                    1996
                            --------------------    --------------------    --------------------

      <S>                   <C>           <C>       <C>           <C>       <C>           <C>
      Expected income
       tax expense at
       statutory rate       $4,156,674    35.00%    $2,710,380    35.00%    $3,628,444    35.00%
      Other                     (9,674)   (0.08)      (290,380)   (3.75)      (163,444)   (1.58)
                            -------------------------------------------------------------------
      Actual tax expense    $4,147,000    34.92%    $2,420,000    31.25%    $3,465,000    33.42%
                            ===================================================================
</TABLE>


      The net tax effect of temporary differences that give rise to
      significant portions of the deferred tax assets and deferred tax
      liabilities at June 30, 1998 and 1997, is as follows:

<TABLE>
<CAPTION>
                                                              1998         1997
                                                              ----         ----
        <S>                                                <C>           <C>
        Deferred tax assets
          Deferred loan fees                               $  768,000      814,000
          Employee benefits                                   113,000      191,000
          Bad debts reserves                                  932,000    1,007,000
          Interest on nonaccrual loans                         49,000       52,000
          Other                                                57,000       45,000
                                                           -----------------------
              Total gross deferred tax assets               1,919,000    2,109,000
                                                           -----------------------
        Deferred tax liabilities
          FHLB stock dividends                                838,000      734,000
          Basis difference in fixed assets                    213,000      265,000
          Excess of tax reserves over base year amounts     1,153,000    1,153,000
          Unrealized appreciation on securities
           available for sale                                 419,000       57,000
          Other                                                45,000       26,000
                                                           -----------------------

              Total gross deferred tax liabilities          2,668,000    2,235,000
                                                           -----------------------
              Net deferred tax liability                   $  749,000      126,000
                                                           =======================
</TABLE>


      A valuation allowance is established to reduce the deferred tax asset 
      if it is more likely than not that the related tax benefits will not 
      be realized.  In management's opinion, it is more likely than not that 
      the tax benefits will be realized; consequently, no valuation 
      allowance has been established as of June 30, 1998 and 1997.

      Retained earnings at June 30, 1998 includes approximately $17,254,000 
      for which no provision for federal income tax has been made.  These 
      amounts represent allocations of income to bad debt deductions for tax 
      purposes only.  These qualifying and nonqualifying base year reserves 
      and supplemental reserves will be recaptured into income in the event 
      of certain distributions and redemptions.  Such recapture would create 
      income for tax purposes only, which would be subject to the then 
      current corporate income tax rate. Recapture would not occur upon the
      reorganization, merger, or acquisition of the Bank, nor if the Bank is 
      merged or liquidated tax-free into a bank or undergoes a charter change.
      If the Bank fails to qualify as a bank or merges into a nonbank entity, 
      these reserves will be recaptured into income.

      The favorable reserve method previously afforded to thrifts was 
      repealed for tax years beginning after December 31, 1995.  Large 
      thrifts must switch to the specific charge-off method of Section 166.  
      In general, a thrift is required to recapture its qualifying and 
      nonqualifying reserves in excess of its qualifying and nonqualifying 
      base year reserves.  As the Bank has previously provided deferred 
      taxes on the recapture amount, no additional financial statement tax 
      expense should result from this legislation.

(12)  Commitments, Contingencies, and Credit Risk
      -------------------------------------------

      In the normal course of business, the Bank is party to financial 
      instruments with off-balance sheet risk to meet the financing needs of 
      its customers and to minimize exposure to fluctuations in interest 
      rates.  These financial instruments primarily include commitments to 
      extend credit and unused lines of credit.  Currently the Bank does not 
      enter into forward contracts for future delivery of residential 
      mortgage loans.  These instruments involve elements of credit risk and 
      interest rate risk in excess of the amount recognized in the 
      consolidated statements of financial condition.  The Bank's exposure 
      to credit loss in the event of nonperformance by the other party to 
      the commitment is represented by the contractual amount of the 
      commitment.  The Bank uses the same credit policies in making 
      commitments as it does for on-balance sheet instruments.  Interest 
      rate risk on commitments to extend credit results from the possibility 
      that interest rates may have moved unfavorably from the position of 
      the Bank since the time the commitment was made.

      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 of 45 to 
      180 days or other termination clauses and may require payment of a 
      fee.  Since some of the commitments may expire without being drawn 
      upon, the total commitment amounts do not necessarily represent future 
      cash requirements.  Following is a table of financial instruments 
      whose contract amounts represent credit risk:

<TABLE>
<CAPTION>
                                                 Amount        Interest Rates
                                                 ------        --------------

            <S>                                <C>              <C>
            June 30, 1998
              Fixed rate mortgage loans        $12,099,824      6.875-10.00%
              Variable rate mortgage loans       2,434,541      6.625- 8.50%
              Fixed rate consumer loans          2,058,147      6.50 -15.00%
              Variable rate consumer loans          60,000         9.50%
              Undisbursed lines of credit        4,083,442      9.50 -18.00%
                                               -----------
                                               $20,735,954
                                               ===========

            June 30, 1997
              Fixed rate mortgage loans        $ 4,333,864      8.25 -11.00%
              Variable rate mortgage loans       4,410,230      7.00 - 9.25%
              Fixed rate consumer loans            846,495      6.50 -15.00%
              Variable rate consumer loans          20,000         9.50%
              Undisbursed lines of credit        3,415,731      9.50 -18.00%
                                               -----------
                                               $13,026,320
                                               ===========
</TABLE>


      The Bank evaluates each customer's creditworthiness on a case-by-case 
      basis.  The amount of collateral obtained by the Bank upon extension 
      of credit is based on management's credit evaluation of the applicant.  
      Collateral held is generally single-family residential real estate.

      The Bank's primary lending area is in Mahoning, Trumbull and 
      Columbiana counties in the state of Ohio.  Accordingly, the ultimate 
      collectibility of a substantial portion of the loan portfolio is 
      susceptible to changes in market conditions in that area.

      In the ordinary course of business, the Bank has various outstanding 
      commitments and contingent liabilities that are not reflected in the 
      accompanying consolidated financial statements.  In addition, the Bank 
      is a defendant in certain claims and legal actions arising in the 
      ordinary course of business.  In the opinion of management, after 
      consultation with legal counsel, the ultimate disposition of these 
      matters is not expected to have a material adverse effect on the 
      consolidated financial statements of the Bank.

(13)  Director and Employee Plans
      ---------------------------

      (a)   Stock Option and Incentive Plan
            -------------------------------

            In conjunction with the Bank's conversion, FFY adopted a stock 
            option and incentive plan for the benefit of directors and 
            employees of the Company.  The number of shares of common stock 
            authorized under the plan is 663,000, equal to 10 percent of the 
            total number of shares issued in the conversion.  Directors and 
            employees of the Bank are vested in options issued in connection 
            with the conversion over a two and one-half year period 
            beginning with the date of grant.  The option exercise price 
            must be at least 100 percent of the fair value of the common 
            stock on the date of the grant, and the option term cannot 
            exceed 10 years.  Outstanding options can be exercised over a 
            10-year period from the date of the grant.

            Following is activity under the plan during the years ended June 
            30, 1998, 1997, and 1996:

<TABLE>
<CAPTION>
                                                           1998       1997        1996
                                                           ----       ----        ----

              <S>                                         <C>        <C>        <C>
              Options outstanding, beginning of year      265,545    314,952     494,963
              Exercised at $10.00 per share               (33,693)   (59,352)   (179,801)
              Forfeited                                         -          -      (2,210)
              Granted                                           -      9,945       2,000
                                                          ------------------------------
              Options outstanding, end of year            231,852    265,545     314,952
                                                          ==============================

              Exercisable
                At $10.00 per share                       219,907    253,600     312,952

                From $23.19 to $24.00 per share            11,945      3,981           -

              Options available for grant, end of year    129,274    129,274     139,219
</TABLE>


            The Company applies Accounting Principles Board (APB) No. 25 for 
            its stock option and incentive plan.  Accordingly, no 
            compensation cost has been recognized.  Had compensation cost 
            for this plan been determined consistent with SFAS No. 123, the 
            Company's net income and earnings per share pro forma amounts 
            for the years ended June 30, 1998, 1997, and 1996 would be as 
            follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                1998                 1997                 1996
                                          -----------------    -----------------    -----------------
                                             As        Pro        As        Pro        As        Pro
                                          Reported    Forma    Reported    Forma    Reported    Forma
                                          --------    -----    --------    -----    --------    -----

            <S>                            <C>        <C>       <C>        <C>       <C>        <C>
            Net income                     $7,729     7,715     5,324      5,309     6,902      6,858
            Basic earnings per share       $ 2.06      2.05      1.23       1.23      1.43       1.42
            Diluted earnings per share     $ 1.98      1.98      1.19       1.19      1.37       1.36
</TABLE>


            The above results may not be representative of the effects of 
            SFAS No. 123 on net income for future years.

            The Company applied the Black-Scholes option pricing model to 
            determine the fair value of each option granted.  Below is a 
            summary of the assumptions used in the calculation:

<TABLE>
                  <S>                         <C>
                  Dividend yield              2.59 - 3.20 percent
                  Expected volatility               13.34 percent
                  Risk-free interest rate     5.12 - 6.64 percent
                  Expected option life           5.01 -7.21 years
</TABLE>


      (b)   Employee Stock Ownership and 401(k) Plan
            ----------------------------------------

            In June 1993, the Company established the FFY Financial Corp. 
            Employee Stock Ownership Plan (ESOP) for the benefit of its 
            employees.  The ESOP covers substantially all employees with 
            more than one year of employment and who have attained the age 
            of 21.  The ESOP borrowed $5,304,000 from FFY and purchased 
            530,400 shares in conjunction with the Bank's conversion.  
            Effective January 1, 1997, the Company amended the ESOP to 
            include 401(k) provisions under Section 401(k) of the Internal 
            Revenue Code, thus forming the FFY Financial Corp. Employee 
            Stock Ownership and 401(k) Plan (KSOP).  The eligibility 
            requirements of the KSOP did not change pursuant to the 
            amendment.  Under the 401(k) provisions of the KSOP, employees 
            may elect to make pretax contributions of up to 10 percent of 
            compensation as defined in the plan document.  The Company 
            matches up to 6 percent of employee compensation in the form of 
            stock from the shares that are committed to be released to 
            participants for that year.  The remaining shares after the 
            401(k) match are released to participants' accounts using the 
            shares allocated method.  Dividends on allocated and unallocated 
            shares are used for debt service.

            The Company follows SOP 93-6, Employers' Accounting for Employee 
            Stock Ownership Plans which requires that (1) compensation cost 
            be recognized based on the fair value of the KSOP shares when 
            committed to be released; (2) dividends on unallocated shares 
            used for debt service do not reduce compensation expense and are 
            not considered dividends for financial reporting purposes; and 
            (3) KSOP shares that have not been committed to be released are 
            not considered outstanding for purposes of computing earnings 
            per share.

            KSOP compensation expense for the years ended June 30, 1998, 
            1997, and 1996 totaled $1,131,374; $976,059 and $912,288, 
            respectively.  The fair value of unearned KSOP shares at June 
            30, 1998 and 1997, totaled $9,862,320 and $9,012,114, 
            respectively.  Following is a summary of KSOP shares at June 30, 
            1998 and 1997:

<TABLE>
<CAPTION>
                                   1998        1997
                                   ----        ----

                  <S>             <C>         <C>
                  Allocated       226,944     186,262
                  Unallocated     303,456     344,138
                                  -------     -------
                                  530,400     530,400
                                  =======     =======
</TABLE>


      (c)   Recognition and Retention Plans (RRPs)
            --------------------------------------

            In conjunction with the Bank's conversion, the Company formed 12 
            RRPs, which were authorized to acquire 4 percent of the shares 
            of common stock issued in the conversion.  The Bank contributed 
            $2,652,000 to the RRPs to enable each of the RRP trustees to 
            acquire 22,100 shares of the common stock in the conversion for 
            each RRP at $10.00 per share.  A total of 238,680 shares were 
            awarded to directors and employees in key management positions 
            in order to provide them with a proprietary interest in the 
            Company in a manner designed to encourage such employees to 
            remain with the Company.

            Subsequent to the conversion, the shares of common stock 
            required to fund the RRPs were purchased by the RRP trustees in 
            the open market.  The RRP trustees purchased the shares at 
            prices ranging from a low of $12.69 to a high of $12.81 per 
            share.  The 265,200 shares not purchased at conversion were 
            reflected in stockholders' equity as additional paid-in capital 
            at the conversion price of $10.00 per share.  As the shares were 
            purchased by the RRP trustees, additional paid-in capital was 
            reduced at the actual purchase price, which totaled $3,394,679.

            The RRP shares awarded to the Bank's directors and employees 
            were amortized to compensation expense using the straight-line 
            method at the conversion price of $10.00 per share over 3-1/2
            years as they performed the related future services and became 
            vested in those shares.  The final distribution was made in 
            December 1996 except for 1,659 unvested shares that were 
            forfeited due to the retirement of a director.  At June 30, 
            1998, the 28,179 unawarded and unvested shares remain in the RRP 
            trusts.  The unamortized cost, which is comparable to deferred 
            compensation, is reflected as a reduction of stockholders' 
            equity.  Total expense of the RRPs was $-0-; $331,500; and 
            $674,814 for the years ended June 30, 1998, 1997, and 1996, 
            respectively.

(14)  Stockholders' Equity
      --------------------

      In accordance with federal regulations, at the time the Bank converted 
      from a federal mutual savings bank to a federal stock savings bank, 
      the Bank restricted a portion of retained earnings by establishing a 
      liquidation account.  The liquidation account is maintained for the 
      benefit of eligible account holders who continue to maintain their 
      accounts at the Bank.  The liquidation account is reduced annually to 
      the extent that eligible account holders have reduced their qualifying 
      deposits.  Subsequent increases will not restore an eligible account 
      holder's interest in the liquidation account.  In the event of a 
      complete liquidation, each eligible account holder is entitled to 
      receive a distribution from the liquidation account in an amount 
      proportionate to the current adjusted qualifying balances for accounts 
      then held.  Under current regulations, the Bank is not permitted to 
      pay dividends on its stock if the effect would reduce its regulatory 
      capital below the liquidation account.

      OTS regulations also provide that an institution that exceeds all 
      fully phased-in capital requirements before and after a proposed 
      capital distribution could, after prior notice but without approval by 
      the OTS, make capital distributions during the calendar year of up to 
      100 percent of its net income to date during the calendar year plus 
      the amount that would reduce by one-half its "surplus capital ratio" 
      (the excess capital over its fully phased-in capital requirements) at 
      the beginning of the calendar year.  Any additional capital 
      distributions would require prior regulatory approval.  During the 
      years ended June 30, 1998, 1997, and 1996, the Bank paid dividends to 
      the Holding Company as follows:

<TABLE>
<CAPTION>
            Date            Amount       Composition
            ----            ------       -----------

      <C>                  <C>           <S>
      June 17, 1996        4,000,000     Federal agency obligations (FNMA), 
                                         related accrued interest, cash
      May 16, 1997         4,500,000     Cash
      October 16, 1997     1,630,583     Cash
      January 23, 1998     1,577,312     Cash
      April 13, 1998       1,713,029     Cash
</TABLE>


      At June 30, 1998, dividends payable from the Bank to the Holding 
      Company totaled $5,009,984.

      After the dividends, the Bank's regulatory capital exceeds all of the 
      fully phased-in capital requirements imposed by the Financial 
      Institutions Reform, Recovery and Enforcement Act of 1989 as well as 
      the aforementioned liquidation account.

      Unlike the Bank, the Holding Company is not subject to these 
      regulatory restrictions on the payment of dividends to its 
      stockholders.  However, the source of future dividends may depend upon 
      dividends from the Bank.

(15)  Fair Value of Financial Instruments
      -----------------------------------

      The following disclosure of the estimated fair value of financial 
      instruments is made in accordance with the requirements of SFAS No. 
      107, Disclosures About Fair Value of Financial Instruments.  The 
      estimated fair value amounts have been determined by the Company using 
      available market information and appropriate valuation methodologies.  
      However, considerable judgment is necessarily required to interpret 
      market data to develop the estimates of fair value.  Accordingly, the 
      estimates presented herein are not necessarily indicative of the 
      amounts the Company could realize in a current market exchange.  The 
      use of different market assumptions and/or estimation methodologies 
      may have a material effect on the estimated fair value amounts.

<TABLE>
<CAPTION>
                                                June 30, 1998                 June 30, 1997
                                         ---------------------------    -------------------------- 
                                           Carrying       Estimated      Carrying       Estimated
                                            Amount       Fair Value       Amount       Fair Value
                                           --------      ----------      --------      ----------

      <S>                                <C>             <C>            <C>            <C>
      Assets
        Cash and cash equivalents        $ 10,075,182     10,075,182     10,007,755     10,007,755
        Securities available for sale     140,793,201    140,793,201    112,036,159    112,036,159    
        Loans receivable                  482,463,396    490,430,000    460,711,635    458,932,000
        Federal Home Loan Bank 
         stock                              4,511,500      4,511,500      4,094,500      4,094,500    
        Accrued interest receivable         4,119,691      4,119,691      3,764,530      3,764,530

      Liabilities
        Deposits
          Certificate accounts            288,299,900    290,971,000    288,590,645    289,079,000
          Other deposit accounts          155,717,522    155,717,522    161,633,148    161,633,148
        Securities sold under 
         agreements to repurchase
          Short-term                       13,088,323     13,088,323      7,307,248      7,307,248    
          Long-term                        51,300,000     51,884,000     25,000,000     25,077,000
        Borrowed funds                     33,985,000     33,985,000     27,455,000     27,455,000
        Accrued interest payable            1,064,546      1,064,546        535,672        535,672
</TABLE>


      The fair value estimates are based on the following methods and 
      assumptions:

      *  Cash and cash equivalents.  The carrying amounts of cash and cash 
         equivalents approximate their fair value.

      *  Securities available for sale.  Fair values for securities are 
         based on quoted market prices or dealer quotes; where such quotes 
         are not available, fair values are based on quoted market prices of 
         comparable instruments.

      *  Loans receivable.  The fair values of loans receivable are 
         estimated using a discounted cash flow calculation that applies 
         estimated discount rates reflecting the credit and interest rate 
         risk inherent in the loans to homogeneous categories of loans with 
         similar financial characteristics.  Loans are segregated by types, 
         such as residential mortgage, commercial, and consumer.  Each loan 
         category is further segmented into fixed and adjustable rate 
         interest terms.

      *  Federal Home Loan Bank stock.  This item is valued at cost, which 
         represents redemption value and approximates fair value.

      *  Accrued interest receivable.  The carrying amount of accrued 
         interest receivable approximates its fair value.

      *  Deposits.  The fair values of fixed maturity certificate accounts 
         are estimated using a discounted cash flow calculation that applies 
         interest rates currently offered for deposits of similar remaining 
         maturities.  The fair values of other deposit accounts (passbook, 
         NOW, and money market accounts) equal their carrying values.

      *  Short-term securities sold under agreements to repurchase.  The 
         carrying amount of short-term securities sold under agreements to 
         repurchase approximates its fair value.

      *  Long-term securities sold under agreements to repurchase.  Fair 
         value is estimated using a discounted cash flow calculation that 
         applies interest rates currently available to the Bank for debt 
         with similar terms and maturity.

      *  Borrowed funds.  Borrowed funds reprice frequently and are assumed 
         to have a short duration period; therefore, the carrying amount 
         approximates its fair value.

      *  Accrued interest payable.  The carrying amount of accrued interest 
         payable approximates its fair value.

      *  Off-balance sheet instruments.  The fair value of commitments is 
         estimated using the fees currently charged to enter similar 
         agreements, taking into account the remaining terms of the 
         agreements and the counterparties' credit standing.  For fixed-rate 
         loan commitments, fair value also considers the difference between 
         current levels of interest rates and the committed rates.  The fair 
         value of undisbursed lines of credit is based on fees currently 
         charged for similar agreements or on estimated cost to terminate 
         them or otherwise settle the obligations with the counterparties at 
         the reporting date.  The carrying amount and fair value of off-
         balance sheet instruments is not significant as of June 30, 1998 
         and 1997.

      The fair value estimates are presented for on-balance sheet financial 
      instruments without attempting to estimate the value of the Bank's 
      long-term relationships with depositors and the benefit that results 
      from low-cost funding provided by deposit liabilities.  In addition, 
      significant assets which are not considered financial instruments and 
      are, therefore, not a part of the fair value estimates include office 
      properties and equipment.

(16)  Condensed Parent-Company-Only Financial Statements
      --------------------------------------------------

      The following condensed statements of financial condition as of June 
      30, 1998 and 1997, and related condensed statements of income and cash 
      flows for the years ended June 30, 1998, 1997, and 1996 for FFY 
      Financial Corp. should be read in conjunction with the consolidated 
      financial statements and the notes thereto.

<TABLE>
<CAPTION>
      Condensed Statements of Financial Position                                   1998           1997
      ------------------------------------------                                   ----           ----

      <S>                                                                      <C>              <C>
      Assets
        Cash                                                                   $    106,443        188,406
        Short-term investments                                                      895,000      2,765,050
                                                                               ---------------------------
            Total cash and cash equivalents                                       1,001,443      2,953,456
        Securities available for sale                                            21,827,325     19,982,325
        Note receivable - KSOP                                                    3,447,600      3,801,200
        Equity in net assets of the Bank                                         53,382,413     55,262,513
        Interest receivable on investments                                          236,393        183,817
        Dividend receivable from Bank                                             5,009,984              -
        Other assets                                                                607,155         72,233
                                                                               ---------------------------
            Total assets                                                       $ 85,512,313     82,255,544
                                                                               ===========================
      Liabilities and stockholders' equity
        Other liabilities                                                      $  1,296,612         81,328
        Stockholders' equity                                                     84,215,701     82,174,216
                                                                               ---------------------------
            Total liabilities and stockholders' equity                         $ 85,512,313     82,255,544
                                                                               ===========================

<CAPTION>
      Condensed Statements of Income                               1998            1997           1996
      ------------------------------                               ----            ----           ----

      <S>                                                      <C>                <C>            <C>
      Income
        Equity in earnings of the Bank and subsidiary          $  6,389,428       4,091,892      5,135,572
        Interest income                                           1,587,602       2,143,876      3,028,903
        Gain (loss) on sale of securities                           266,002         (98,314)           971
                                                               -------------------------------------------
            Total income                                          8,243,032       6,137,454      8,165,446

      Expenses
        State and local taxes                                       116,271         167,882        177,524
        Other                                                       181,550         177,629        225,940
                                                               -------------------------------------------
            Total expenses                                          297,821         345,511        403,464
                                                               -------------------------------------------
            Income before federal income taxes                    7,945,211       5,791,943      7,761,982
      Federal income taxes                                          216,000         468,000        860,000
                                                               -------------------------------------------
            Net income                                         $  7,729,211       5,323,943      6,901,982
                                                               ===========================================


<CAPTION>
      Condensed Statements of Cash Flows                           1998            1997           1996
      ----------------------------------                           ----            ----           ----

      <S>                                                      <C>              <C>            <C>
      Cash flows from operating activities
        Net income                                             $  7,729,211       5,323,943      6,901,982
        Adjustments to reconcile net income to net cash 
         provided by operating activities
          Equity in earnings of the Bank and subsidiary          (6,389,428)     (4,091,892)    (5,135,572)
          Amortization and accretion                                 77,419          70,246        229,753
          (Increase) decrease in interest receivable                (85,268)        449,649        136,455
          Other, net                                               (191,303)            780        (35,116)
                                                               -------------------------------------------
            Net cash provided by operating activities             1,140,631       1,752,726      2,097,502
                                                               -------------------------------------------

      Cash flows from investing activities
        Proceeds from
          Maturity of securities available for sale                       -      10,000,000     18,000,000
          Sales of securities available for sale                 13,648,851      28,254,806      2,295,572
        Purchase of securities available for sale               (14,101,273)    (23,875,482)    (8,733,625)
        Principal receipts on securities available for sale         595,851         441,346              -
        KSOP loan repayment                                         353,600         353,600        353,600
        Dividend from the Bank                                    4,920,924       4,500,000        933,818
        Loan to subsidiary                                         (686,500)              -              -
        Other                                                          (500)              -         17,500
                                                               -------------------------------------------
            Net cash provided by investing activities             4,730,953      19,674,270     12,866,865
                                                               -------------------------------------------

      Cash flows from financing activities
        Purchase of treasury stock                               (5,239,911)    (25,982,802)   (11,783,245)
        Dividends paid                                           (2,900,750)     (2,889,944)    (2,781,473)
        Proceeds from stock options exercised                       336,930         555,270      1,756,010
        Other                                                       (19,866)              -              -
                                                               -------------------------------------------
            Net cash used in financing activities                (7,823,597)    (28,317,476)   (12,808,708)
                                                               -------------------------------------------
      Net increase (decrease) in cash and cash equivalents       (1,952,013)     (6,890,480)     2,155,659
      Cash and cash equivalents at beginning of year              2,953,456       9,843,936      7,688,277
                                                               -------------------------------------------
      Cash and cash equivalents at end of year                 $  1,001,443       2,953,456      9,843,936
                                                               ===========================================
      Supplemental schedule of noncash investing activities
        Dividend of noncash assets from Bank                              -               -      3,066,182
        Dividend receivable from Bank                          $  5,009,984               -              -
                                                               ===========================================
</TABLE>


                        Independent Auditors' Report
                        ----------------------------


The Board of Directors
FFY Financial Corp.:

We have audited the accompanying consolidated statements of financial 
condition of FFY Financial Corp. and subsidiaries as of June 30, 1998 and 
1997, and the related consolidated statements of income, changes in 
stockholders' equity, and cash flows for each of the years in the three-year 
period ended June 30, 1998.  These consolidated financial statements are the 
responsibility of the Company's management.  Our responsibility is to 
express an opinion on these consolidated 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 audit 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 consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of FFY 
Financial Corp. and subsidiaries as of June 30, 1998 and 1997, and the 
results of their operations and their cash flows for each of the years in 
the three-year period ended June 30, 1998, in conformity with generally 
accepted accounting principles.

KPMG Peat Marwick, LLP
Cleveland, Ohio
August 5, 1998


<TABLE>
<CAPTION>

Officers and Directors
----------------------------------------------------------------------------------------------------------------------------

<S>                             <C>                                <C>                           <C>
Board of Directors of           Board of Directors of              Officers of                   Officers of
FFY Financial Corp. and         FFY Holdings, Inc.                 First Federal Savings Bank    First Federal Savings Bank 
First Federal Savings Bank                                         of Youngstown                 of Youngstown, continued
of Youngstown

A. Gary Bitonte, MD             Jeffrey L. Francis                  Jeffrey L. Francis           Janet Byrne
  Private Practice                President and CEO                   President and CEO            Assistant Secretary
  Urologic Surgeon                of FFY Financial Corp. and
                                  First Federal Savings Bank        Therese Ann Liutkus, CPA     Christine Chasko
Jack R. Brownlee                  of Youngstown                       Treasurer and CFO            Assistant Controller
  Former Owner of
  Brownlee Pontiac, Inc.        Mark Makoski                        Shirley A. Reighard          Richard Curry
                                  Vice President of First Federal     Vice President               Assistant Secretary
Marie Izzo Cartwright             Savings Bank of Youngstown          and Secretary
  Vice President                                                                                 Dominic Mancini
  Glimcher Properties           Henry P. Nemenz                     J. Craig Carr                  Assistant Secretary
  Limited Partnership             President,                          Vice President
                                  H.P. Nemenz Food Stores, Inc.       and General Counsel        Frank Pasquale
Jeffrey L. Francis                                                                                 Assistant Secretary
  President and CEO             W. Terry Patrick                    David S. Hinkle
  of FFY Financial Corp. and      Partner, Friedman & Rummell         Vice President             Jeanne G. Yankle
  First Federal Savings Bank      Attorneys at Law                                                 Assistant Treasurer
  of Youngstown                                                     Mark Makoski
                                Myron S. Roh                          Vice President             Jerome D. Zetts
Daniel J. Mirto                   Chairman of the Board of                                         Assistant Treasurer
  Chairman of the Board           FFY Financial Corp. and           Joseph R. Sainato
  Rhiel Supply Company            First Federal Savings Bank          Vice President
                                  of Youngstown and                                              Officers of 
Henry P. Nemenz                   President and Treasurer           Timm B. Schreiber            FFY Holdings, Inc.
  President                       Scholl Choffin Co.                  Vice President
  H.P. Nemenz Food Stores, Inc.                                                                  Jeffrey L. Francis
                                Robert L. Wagmiller                 Randy Shaffer                  President
W. Terry Patrick.                 Partner/Principal of                Vice President
  Partner, Friedman & Rummell     Hill, Barth & King, Inc.                                       Therese Ann Liutkus, CPA
  Attorneys at Law                                                  Jeffrey L. DeRose, CPA         Treasurer
                                                                      Controller
Myron S. Roh                    Officers of                                                      J. Craig Carr
  Chairman of the Board of      FFY Financial Corp.                 Robert Campolito               Vice President
  FFY Financial Corp. and                                             Assistant Vice President
  First Federal Savings Bank    Jeffrey L. Francis                                               Randy Shaffer
  of Youngstown and               President and CEO                 Jane Hutchins                  Vice President
  President  and Treasurer                                            Assistant Vice President
  Scholl Choffin Co.            Therese Ann Liutkus, CPA                                         Shirley A. Reighard
                                  Treasurer and CFO                 Jon Schmied                    Secretary
Randy Shaffer                                                         Assistant Vice President
  Vice President of             Shirley A. Reighard
  FFY Financial Corp. and         Vice President                    Dennis Sell
  First Federal Savings Bank      and Secretary                       Assistant Vice President
  of Youngstown
                                Randy Shaffer                       Joanne Harrold
Ronald P. Volpe, Ph.D.            Vice President                      Internal Auditor
  Professor of Finance
  Williamson College of         J. Craig Carr                       Marilyn Burrows
  Business Administration         Vice President                      Assistant Treasurer    
  Youngstown State University     and General Counsel

</TABLE>

Annual Report on Form 10-K
A copy of the Annual Report on Form 10-K filed with the Securities and 
Exchange Commission will be available September 28, 1998 without charge upon 
written request to:
      Therese Ann Liutkus, CPA
      Treasurer and CFO
      FFY Financial Corp.
      724 Boardman-Poland Road
      P.O. Box 3300
      Youngstown, Ohio  44513
      Phone:  (330) 726-3396
      Fax:  (330) 758-1356    
      E-mail:  ffyinfo@ffytown.com
      Web page:  www.ffytown.com


Annual Meeting
The Annual Meeting of Stockholders of FFY Financial Corp. will be held at 
10:00 a.m. on Wednesday, October 21, 1998 at:
      The Holiday Inn
      7410 South Avenue
      Youngstown, Ohio, 44512


Stockholder Services
The Fifth Third Bank serves as transfer agent for FFY Financial Corp.'s 
shares.  Communications regarding change of address, transfer of shares, 
lost certificates or dividend reinvestment should be sent to:
      The Fifth Third Bank
      Corporate Trust Operations
      38 Fountain Square Plaza
      Mail Drop 1090F5
      Cincinnati, Ohio  45263
      (800) 837-2755


Market Makers
      McDonald & Company Securities, Inc.
      Herzog, Heine, Geduld, Inc.
      Robert W. Baird & Co, Inc.
      Sandler O'Neill & Partners
      Keefe, Bruyette & Woods, Inc.
      Friedman, Billings, Ramsey & Co.
      Stifel Nicholaus & Co.
      Chicago Capital, Inc.
      Parker/Hunter Inc.


Affiliations
      First Real Estate, Ltd.
      DBA David B. Roberts Real Estate
      20 East McKinley Way
      Poland, Ohio 44514
      Phone:  (330) 757-0777
      Fax:  (330) 757-0796 
      E-mail: davidbrobertsco@cboss.com 

      Daniel W. Landers Insurance Agency, Ltd.
      700 Boardman-Poland Road
      Youngstown, Ohio 44512
      Phone:  (330) 726-4636
      Fax:  (330) 726-4635


First Federal Savings Bank of Youngstown Office Locations

Phone Number       (330) 726-3396 connects all offices except
                   Howland (330) 856-5566

Main Office        724 Boardman-Poland Road
                   P.O. Box 3300
                   Youngstown, Ohio 44513-3300

Branch Offices     Downtown
                   25 Market Street
                   Suite 3
                   Youngstown, Ohio 44503

                   Westside
                   4390 Mahoning Avenue
                   Youngstown, Ohio 44515

                   Southside
                   3900 Market Street
                   Youngstown, Ohio 44512

                   Northside
                   600 Gypsy Lane
                   Youngstown, Ohio 44505

                   Logan Way
                   4423 Logan Way
                   Youngstown, Ohio 44505

                   Poland
                   30 South Main Street
                   Poland, Ohio 44514

                   Canfield
                   2 South Broad Street
                   Canfield, Ohio 44406

                   Canfield Drive-up
                   352 W. Main Street
                   Canfield, Ohio 44406

                   Cornersburg
                   3516 S. Meridian Road
                   Youngstown, Ohio 44511

                   New Middletown
                   10416 Main Street
                   New Middletown, Ohio 44442

                   Howland Loan Office
                   5000 E. Market Street, Suite 16
                   Warren, Ohio 44484

                   ----
                   FFYF
                   ----

                   FFY Financial Corp.
                   724 Boardman-Poland Road
                   P.O. Box 3300
                   Youngstown, Ohio 4513-3300