Letter from the Chairman and President


It is with great pleasure that we present the 2001 Annual Report for FFD
Financial Corporation (the "Corporation"). In addition to improving
significantly upon 2000 financial performance, your Corporation has developed a
strategic plan that will provide a solid foundation for corporate performance in
coming years. As can be seen on the front cover of the report, we have changed
the name of our subsidiary bank from First Federal Savings Bank of Dover to
First Federal Community Bank (the "Bank") effective August 31, 2001. It is our
belief that this name better reflects the broad financial service product line
we offer in Tuscarawas and surrounding counties. Our goal is to continue
evaluating opportunities to expand our customer base within the community and to
become the premier bank in the area.

The Board has assembled a strong management team to achieve our strategic
objectives. Key members include E. L. Loader, Chairman, Trent Troyer, President,
and Robert Gerber serving as Vice President and Chief Financial Officer.
Important additions to our management team include Scott Finnell, Senior Vice
President and Chief Lending Officer, coming from a local commercial bank with 10
years experience. Jody Stoldt was named Assistant Vice President and was
transferred to the New Philadelphia office to oversee its continued growth.
Stephenie Wilson was hired as Branch Manager for the Dover office,
coming from a local commercial bank with 9 years experience. Mary Mitchell was
promoted to Banking Officer and continues in a key operations role. The
commercial bank background within the management team provides solid depth and
idea generation to improve future performance. We continue to be proud of the
entire bank staff, believing that we have the best in the area. Their efforts
are to be commended for the direct impact they have on our improving
performance.

Despite a slowing economy for more than half the fiscal year, your Corporation's
profitability improved by 19% with earnings reaching $1.1 million. Earnings per
share increased by 26% from $.68 to $.86 and is illustrated in the chart below.

[Graph plotting earnings per share as reported in above paragraph]

We are pleased to report that return on assets and return on equity continue to
improve and are progressing towards the goals of our strategic plan. Continued
focus on maintaining a well-capitalized institution, while striving to
effectively leverage excess capital will be accomplished with a strategy of
growth and stock repurchase activity.

<PAGE>

Asset quality remains strong as the ratio of non-performing loans to total loans
continues  to be  better  than  our  peer  group.  A  slight  increase  in  loan
delinquencies  can be  anticipated  over the  next  fiscal  year if the  economy
continues to slow.

[Graph plotting ratio of non-performing loans to total loans]

Although we experienced interest margin compression in the second half of the
fiscal year due to the rapid decline in interest rates, net interest margin has
increased over the last two months. The improvement is a result of our strategy
to change the mix of loan composition and reduce reliance on borrowings to fund
loan growth. The chart below shows the Bank's progress.


[Graph plotting net interest margin as referred to in above paragraph]


Net loans grew at a modest pace of 4.4% and were funded entirely with local
deposits. The mix changed as non-residential real estate and commercial loans
increased by $9 million, or 39%, and residential real estate declined by nearly
$4 million, or 5%. The Bank continues to be a strong home loan lender with
originations in fiscal 2001 totaling nearly $16 million. Most fixed rate
residential loans are sold in the secondary market to Freddie Mac. This is a
transparent transaction to the customer as we still service all loans locally.


[Graph plotting  residential,  non-residential and commercial and consumer loans
as referred to in above paragraph]


The table above identifies the loan composition change.

[Graph plotting deposit growth as referred to in the paragraph below]


Deposit growth for the year was exceptional with over $13 million or 17% in net
deposit gain, pushing our total deposits over the $90 million mark. The New
Philadelphia office continued to grow, reaching $19 million in deposits. In
addition to funding our loan needs, the deposit growth allowed us to repay $5.6
million in borrowings.

As part of our continuing strategy to maximize shareholder value, we repurchased
98,842 of the Corporation's shares during the last fiscal year. This represented

<PAGE>

approximately 7% of the outstanding stock as of July 1, 2000. This repurchase
program enhances earnings per share and reduces excess capital to levels that
will improve return on equity. Additionally, the dividend rate payable to
stockholders was increased by $.02 per share. We believe our stock continues to
be a good value and will continue to evaluate repurchase opportunities.

The Bank's commitment to our community remains strong with employees
volunteering their time and talents to leadership roles in the following
community service organizations: Tuscarawas County Chamber of Commerce; United
Way; American Red Cross; Big Brothers / Big Sisters; Junior Achievement; Dover
Rotary; New Philadelphia Kiwanis; American Heart Association; Tuscarawas County
Board of Realtors; East Central Ohio Builders Association; Tuscarawas Community
Improvement Corporation; Dover Exchange Club; and Main Street New Philadelphia.
In addition to volunteer service, First Federal has donated more than $10,000 to
area charitable organizations during the past fiscal year.

We have exciting plans for fiscal 2002 including the introduction of Internet
banking and bill payment, which will provide further opportunities to expand our
customer base. The change of our name to First Federal Community Bank is a
visible sign of the changes that have, and are continuing to take place within
your Corporation. Our continued corporate energy combined with strong business
development provides for guarded optimism as to our prospects in fiscal 2002. We
thank you for your continued support.




/s/E. L. Loader                     /s/Trent B. Troyer
E. L. Loader                        Trent B. Troyer
Chairman                            President and Chief
                                    Executive Officer


<PAGE>

                      BUSINESS OF FFD FINANCIAL CORPORATION

==============================================================================

FFD Financial Corporation ("FFD" or the "Corporation"), is the holding company
for First Federal Community Bank ("First Federal" or the "Bank"), a federal
savings bank. Prior to effecting a name change in August 2001, the Bank was
known as First Federal Savings Bank of Dover.

FFD was formed in 1996 in connection with the conversion of First Federal from a
mutual savings bank to a stock savings bank (the "Conversion"). Since its
formation, FFD's activities have been limited primarily to holding the common
shares of First Federal.

First Federal is principally engaged in the business of making fixed-rate and
adjustable-rate first mortgage loans, secured by one- to four-family residential
real estate located in Tuscarawas County, which is First Federal's primary
market area. First Federal also originates loans for the construction of
residential real estate, loans secured by multifamily real estate (over four
units), loans for commercial business purposes and nonresidential real estate
loans. The origination of consumer loans, including unsecured loans, passbook
loans, loans secured by motor vehicles and home improvement loans, constitutes a
small portion of First Federal's lending activities. In addition to originating
loans, First Federal invests in U.S. Government and agency obligations,
interest-bearing deposits in other financial institutions and mortgage-backed
securities. Funds for lending and investing activities are obtained primarily
from deposits, which are insured up to applicable limits by the Federal Deposit
Insurance Corporation ("FDIC"), from Federal Home Loan Bank ("FHLB") advances,
and from loan sales and loan and mortgage-backed securities repayments. First
Federal conducts business from two locations, one in Dover, Ohio and one in New
Philadelphia, Ohio.

FFD is subject to regulation, supervision and examination by the Office of
Thrift Supervision of the United States Department of the Treasury (the "OTS").
First Federal is subject to regulation, supervision and examination by the OTS
and the FDIC. First Federal is also a member of the FHLB of Cincinnati.


                              MARKET PRICE OF FFD'S
                  COMMON SHARES AND RELATED SHAREHOLDER MATTERS
=============================================================================

There were 1,218,541 common shares of FFD outstanding on August 31, 2001, held
of record by approximately 648 shareholders. Price information for FFD's common
shares is quoted on the Nasdaq SmallCap Market ("Nasdaq") under the symbol
"FFDF."











                                       1
<PAGE>


The following table sets forth the high and low trading prices for the common
shares of FFD, as quoted by Nasdaq, together with the dividends declared per
share, for each quarter of fiscal 2001 and 2000.
<TABLE>
<CAPTION>

                                          High Trade        Low Trade     Cash Dividends Declared
Fiscal 2000
<S>                                           <C>               <C>                    <C>
   Quarter Ended:
     September 30, 1999                     $15.750          $11.875                  $.085
     December 31, 1999                       12.563           10.500                   .085
     March 31, 2000                          11.500            9.125                   .085
     June 30, 2000                            9.875            8.625                   .085

Fiscal 2001
   Quarter Ended:
     September 30, 2000                      $10.75            $8.88                   $.09
     December 31, 2000                         9.75             7.75                    .09
     March 31, 2001                            9.25             7.00                    .09
     June 30, 2001                            10.75             8.38                    .09
</TABLE>

The income of FFD consists primarily of dividends which may periodically be
declared and paid by the Board of Directors of First Federal on the common
shares of First Federal held by FFD. In addition to certain federal income tax
considerations, OTS regulations impose limitations on the payment of dividends
and other capital distributions by savings associations. Under OTS regulations
applicable to converted savings associations, First Federal is not permitted to
pay a cash dividend on its common shares if the regulatory capital of First
Federal would, as a result of the payment of such dividend, be reduced below the
amount required for the liquidation account established in connection with the
Conversion or applicable regulatory capital requirements prescribed by the OTS.
































                                       2
<PAGE>


                              SELECTED CONSOLIDATED
                      FINANCIAL INFORMATION AND OTHER DATA

==============================================================================

The following table sets forth certain information concerning the consolidated
financial condition, earnings and other data regarding FFD at the dates and for
the periods indicated.
<TABLE>
<CAPTION>

  Selected consolidated financial                                        At June 30,
     condition data:                                 2001          2000          1999          1998         1997
                                                     ----          ----          ----          ----         ----
                                                                        (In thousands)
<S>                                                 <C>            <C>         <C>            <C>            <C>
  Total amount of:
    Assets                                       $133,097       $125,147     $112,293       $90,966       $88,000
    Interest-bearing deposits                       8,024          1,485        2,167           607         3,547
    Investment securities available for
       sale - at market                             1,000          2,875        2,924         2,655         9,924
    Investment securities held to maturity
       - at cost                                        -              -            -           977         1,469
    Mortgage-backed securities available
       for sale - at market                         7,799          9,135       10,978         5,935         7,944
    Mortgage-backed securities held to
       maturity - at cost                           3,721          4,189        4,779         5,960         7,165
    Loans receivable - net (1)                    107,467        102,939       87,382        70,990        55,504
    Deposits                                       91,018         77,987       72,025        61,956        57,090
    Advances from the FHLB and other
       borrowings                                  24,732         30,412       23,616        12,519         8,382

    Shareholders' equity, restricted               16,604         16,265      16,204         15,825        21,480
</TABLE>
>


<TABLE>
<CAPTION>
                                                                       For the year ended June 30,
  Summary of earnings:                            2001           2000            1999          1998          1997
                                                  ----           ----            ----          ----          ----
                                                                (In thousands, except per share data)
<S>                                               <C>            <C>             <C>           <C>           <C>
  Interest income                               $9,549         $8,323          $6,915        $6,460        $5,880
  Interest expense                               5,498          4,754           3,941         3,454         3,101
                                                 -----          -----           -----         -----         -----
  Net interest income                            4,051          3,569           2,974         3,006         2,779
  Provision for losses on loans                    201            106               -             -           125
                                                 -----          -----           -----         -----         -----
  Net interest income after provision
     for losses on loans                         3,850          3,463           2,974         3,006         2,654
  Other income                                     262            179             428           525         1,337
  General, administrative and other
     expense                                     2,451          2,262           2,317         2,044         1,859
                                                 -----          -----           -----         -----         -----
  Earnings before income taxes                   1,661          1,380           1,085         1,487         2,132
  Federal income taxes                             560            458             368           505           705
                                                 -----          -----           -----         -----         -----
  Net earnings                                  $1,101         $  922          $  717        $  982        $1,427
                                                 =====          =====           =====         =====         =====
  Earnings per share
    Basic                                         $.86           $.69            $.53          $.73         $1.07
                                                   ===            ===             ===           ===          ====
    Diluted                                       $.86           $.68            $.51          $.71         $1.06
                                                   ===            ===             ===           ===          ====
</TABLE>

-----------------------------------

(1)      Includes loans held for sale.







                                       3
<PAGE>


<TABLE>
<CAPTION>

Selected financial ratios                                    At or for the year ended June  30,
   and other data:                             2001          2000           1999           1998            1997
                                               ----          ----           ----           ----            ----
<S>                                             <C>            <C>           <C>           <C>              <C>
Return on average assets                        0.86%         0.77%          0.69%         1.06%           1.65%
Return on average equity                        6.69          6.07           5.11          4.65            6.65
Interest rate spread                            2.75          2.51           2.37          2.22            2.15
Net interest margin                             3.26          3.06           2.92          3.29            3.30
General, administrative and other expense
   to average assets                            1.91          1.90           2.25          2.20            2.15
Average equity to average
   assets                                      12.81         12.75          13.59         22.75           24.83
Nonperforming assets to
   total assets                                 0.08          0.18           0.01          0.09            0.07
Nonperforming loans to total loans              0.10          0.22           0.02          0.11            0.11
Delinquent loans to total loans (1)             0.96          0.61           0.39          0.51            0.69
Allowance for loan losses to
   total loans                                  0.52          0.36           0.30          0.37            0.47
Allowance for loan losses to
   nonperforming loans                        537.14        166.67       1,793.33        329.27          421.88
Average interest-earning
   assets to average interest-bearing
   liabilities                                111.49        113.53         114.24        128.34          131.46
Dividend payout ratio (2)                      41.86         49.28          56.60         41.10           21.03
Number of full service offices                  2             2              2             2               1
</TABLE>

----------------------------

(1)  Delinquent  loans are loans as to which a  scheduled  payment  has not been
     made within 30 days after the due date.

(2)  Dividend payout ratio for the year ended June 30, 1998,  excludes the $4.50
     per share special capital distribution.





















                                       4
<PAGE>


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

=============================================================================
                                     GENERAL

-----------------------------------------------------------------------------

FFD was incorporated for the purpose of owning all of First Federal's
outstanding stock. As a result, the discussion that follows focuses on First
Federal's financial condition and results of operations. The following
discussion and analysis of the financial condition and results of operations of
FFD and First Federal should be read in conjunction with and with reference to
the consolidated financial statements, and the notes thereto, included in this
Annual Report.


       CHANGES IN FINANCIAL CONDITION FROM JUNE 30, 2000 TO JUNE 30, 2001

------------------------------------------------------------------------------

The Corporation's assets at June 30, 2001, totaled $133.1 million, an $8.0
million, or 6.4%, increase over the total at June 30, 2000. This increase was
funded primarily through growth in deposits of $13.0 million, which was
partially offset by a $5.7 million decrease in advances from the Federal Home
Loan Bank.

Cash, interest-bearing deposits and investment securities totaled $10.3 million
at June 30, 2001, an increase of $5.0 million over June 30, 2000.
Interest-bearing deposits increased by $6.5 million while maturities of
investment securities totaled $2.0 million.

Mortgage-backed securities totaled $11.5 million at June 30, 2001, a $1.8
million, or 13.5%, decrease from the total at June 30, 2000. This decrease
resulted from principal repayments totaling $2.2 million, which was partially
offset by an increase in the fair value of available for sale securities of
$467,000.

Loans receivable, including loans held for sale, totaled $107.5 million at June
30, 2001, an increase of $4.5 million, or 4.4%, over the June 30, 2000 total.
Loan disbursements during fiscal 2001 totaled $44.7 million, which were
partially offset by principal repayments of $30.6 million and loans sold in the
secondary market totaling $9.3 million. Loan origination volume during the year
ended June 30, 2001, increased by $9.4 million, or 26.7%, compared to fiscal
2000. The growth in loans during fiscal 2001 consisted primarily of loans
secured by nonresidential real estate, which totaled $24.6 million at June 30,
2001 and $17.1 million at June 30, 2000. Commercial loans totaled $7.4 million
at June 30, 2001, compared to $5.9 million at June 30, 2000. Nonresidential real
estate and commercial lending is generally considered to involve a higher degree
of risk than residential real estate lending due to the relatively larger loan
amounts and the effects of general economic conditions on the successful
operation of the related business and/or income-producing properties. The Bank
has endeavored to reduce such risk by evaluating the credit history and past
performance of the borrower, the location of the real estate, the quality of the
borrowers' management, the debt service ratio, the quality and characteristics
of the income stream generated by the business or the property and appraisals
supporting the property's valuation, as applicable.

During fiscal 2001, management has continued to meet consumer preference for
fixed-rate loans in the declining interest rate environment, employing a

                                       5
<PAGE>

strategy of selling certain lower-yielding fixed-rate loans in the secondary
market. As a result, the portfolio of loans secured by one-to-four family
residential real estate declined by $4.3 million to $67.6 million at June 30,
2001.

The allowance for loan losses totaled $564,000 and $375,000 at June 30, 2001 and
2000, respectively, which represented .52% and .36% of total loans and 537.1%
and 166.7% of nonperforming loans at those respective dates. Nonperforming loans
amounted to $105,000 and $225,000 at June 30, 2001, and 2000, respectively.
Management believes the Bank's nonperforming loans at June 30, 2001 are
adequately collateralized and no loss is anticipated on such loans. Although
management believes that the allowance for loan losses at June 30, 2001, was
adequate based upon the available facts and circumstances, there can be no
assurance that additions to such allowance will not be necessary in future
periods, which could adversely affect the Corporation's net earnings.

Deposits totaled $91.0 million at June 30, 2001, a $13.0 million, or 16.7%,
increase over total deposits at June 30, 2000. This increase resulted primarily
from management's efforts to generate growth through advertising and pricing
strategies. Proceeds from deposit growth were used primarily to fund new loan
originations and to repay FHLB advances during the period.

FHLB advances totaled $24.7 million at June 30, 2001, a $5.7 million, or 18.7%,
decrease from June 30, 2000. The repayment of FHLB advances was funded primarily
by the increase in deposits.

Shareholders' equity totaled $16.6 million at June 30, 2001, an increase of
$339,000, or 2.1%, over June 30, 2000 levels, as net earnings of $1.1 million
and a $390,000 increase in the unrealized gain on securities designated as
available for sale were partially offset by dividends paid totaling $427,000 and
purchases of treasury shares totaling $912,000.


                         COMPARISON OF OPERATING RESULTS
                   FOR THE YEARS ENDED JUNE 30, 2001 AND 2000

------------------------------------------------------------------------------

The consolidated net earnings of FFD depend primarily on its level of net
interest income, which is the difference between interest earned on FFD's
interest-earning assets and the interest paid on interest-bearing liabilities.
Net interest income is substantially affected by FFD's interest rate spread,
which is the difference between the average yield earned on interest-earning
assets and the average rate paid on interest-bearing liabilities, as well as by
the average balance of interest-earning assets compared to interest-bearing
liabilities.

General. FFD's net earnings totaled $1.1 million for the fiscal year ended June
30, 2001, an increase of $179,000, or 19.4%, over the net earnings of $922,000
recorded in fiscal 2000. The increase in net earnings resulted primarily from a
$482,000 increase in net interest income and an $83,000 increase in other
operating income, which were partially offset by a $189,000 increase in general,
administrative and other expense, a $95,000 increase in the provision for losses
on loans, and a $102,000 increase in the provision for federal income taxes.

Net Interest Income. Total interest income increased by $1.2 million, or 14.7%,
to a total of $9.5 million for the year ended June 30, 2001, compared to $8.3
million for the year ended June 30, 2000. Interest income on loans increased by
$1.3 million, or 17.9%, due primarily to an $8.7 million, or 9.0%, increase in

                                       6
<PAGE>

the average loan portfolio balance outstanding, coupled with a 60 basis point
increase in the average yield, to 7.94% in fiscal 2001. The Bank experienced an
increase in its average yield generally due to the increase in higher yielding
nonresidential real estate and commercial loans as a percent of the Bank's total
portfolio. Interest income on mortgage-backed securities decreased by $90,000,
or 9.6%, due primarily to a $2.3 million, or 15.8%, decrease in the average
balance outstanding, which was partially offset by a 47 basis point increase in
the yield earned on such securities, to 6.88% in fiscal 2001. Interest income on
investment securities and interest-bearing deposits increased by $53,000, or
16.1%, due primarily to a $1.2 million, or 20.8%, increase in the average
balance outstanding year to year.

Interest expense on deposits increased by $758,000, or 23.9%, for the year ended
June 30, 2001, compared to fiscal 2000, due primarily to an $11.0 million, or
14.8%, increase in the average deposit portfolio balance outstanding and an
increase in the average cost of 34 basis points year to year.

Interest expense on borrowings decreased by $14,000, or .9%, due primarily to a
$2.3 million, or 8.2%, decrease in the average balance of advances outstanding,
which was partially offset by a 44 basis point increase in the average cost of
such borrowings, to 6.01% in fiscal 2001.

As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $482,000, or 13.5%, for the fiscal year ended
June 30, 2001, compared to fiscal 2000. The interest rate spread amounted to
2.75% for the fiscal year ended June 30, 2001, compared to 2.51% for the 2000
fiscal year, while the net interest margin was 3.26% in fiscal 2001, compared to
3.06% in fiscal 2000.

Provision for Losses on Loans. A provision for losses on loans is charged to
earnings to bring the total allowance for loan losses to a level considered
appropriate by management based on historical loss experience, the volume and
type of lending conducted by First Federal, the status of past due principal and
interest payments, general economic conditions, particularly as such conditions
relate to First Federal's market area, and other factors related to the
collectibility of First Federal's loan portfolio. The provision for losses on
loans totaled $201,000 for the year ended June 30, 2001, an increase of $95,000,
or 89.6%, over fiscal 2000. First Federal recorded the provision during fiscal
2001 primarily due to the growth in the commercial and nonresidential loan
portfolios. There can be no assurance that the loan loss allowance of First
Federal will be adequate to cover losses on nonperforming assets in the future.

Other Income. Other income totaled $262,000 for the year ended June 30, 2001, an
increase of $83,000, or 46.4%, over the 2000 total. The increase resulted
primarily from an $80,000, or 320.0%, increase in gain on sale of loans in
fiscal 2001 and a $4,000, or 2.6%, increase in other operating income, which
were partially offset by a $1,000 loss on the sale of real estate acquired
through foreclosure. The increase in gain on sale of loans was due primarily to
a $6.9 million, or 293.9%, increase in sales volume year to year. Other
operating income consists primarily of fees generated from ATM transactions,
late charges on loans, safety deposit box rentals and negotiable order of
withdrawal ("NOW") account fees.

General, Administrative and Other Expense. General, administrative and other
expense totaled $2.5 million for the year ended June 30, 2001, an increase of
$189,000, or 8.4%, compared to fiscal 2000. The increase resulted primarily from
a $38,000, or 3.5%, increase in employee compensation and benefits, a $52,000,
or 28.1%, increase in data processing and a $113,000, or 21.2%, increase in
other operating expenses.


                                       7
<PAGE>

The increase in employee compensation and benefits resulted primarily from
normal merit increases, which was partially offset by a decrease in costs
related to stock benefit plans due to fluctuations in the fair value of the
Corporation's stock. The increase in other operating expense included an
increase of $43,000 in fees paid for outsourcing of compliance and other
consulting services and approximately $19,000 in expense related to real estate
acquired through foreclosure. The remaining $51,000 increase in other operating
expense, as well as the increase in data processing expense, were comprised
primarily of pro-rata increases related to the Corporation's overall growth year
to year.

Federal Income Taxes. The provision for federal income taxes totaled $560,000
for the year ended June 30, 2001, an increase of $102,000, or 22.3%, over fiscal
2000. The increase resulted primarily from a $281,000, or 20.4%, increase in
earnings before taxes. The effective tax rates were 33.7% and 33.2% for the
years ended June 30, 2001 and 2000, respectively.


                         COMPARISON OF OPERATING RESULTS
                   FOR THE YEARS ENDED JUNE 30, 2000 AND 1999

-----------------------------------------------------------------------------

General. FFD's net earnings totaled $922,000 for the fiscal year ended June 30,
2000, an increase of $205,000, or 28.6%, over the net earnings of $717,000
recorded in fiscal 1999. The increase in net earnings resulted primarily from a
$595,000 increase in net interest income and a $55,000 decrease in general,
administrative and other expense, which were partially offset by a $249,000
decrease in other operating income, a $106,000 increase in the provision for
losses on loans, and a $90,000 increase in the provision for federal income
taxes.

Net Interest Income. Total interest income increased by $1.4 million, or 20.4%,
to a total of $8.3 million for the year ended June 30, 2000, compared to $6.9
million for the year ended June 30, 1999. Interest income on loans increased by
$1.5 million, or 26.8%, due primarily to a $16.6 million, or 20.9%, increase in
the average loan portfolio balance outstanding, coupled with a 34 basis point
increase in the average yield, to 7.34% in fiscal 2000. Interest income on
mortgage-backed securities decreased by $32,000, or 3.3%, due primarily to a
$706,000, or 4.6%, decrease in the average balance outstanding, which was
partially offset by a 9 basis point increase in the yield earned on such
securities, to 6.41% in fiscal 2000. Interest income on investment securities
and interest-bearing deposits decreased by $51,000, or 13.4%, due primarily to
an approximate $1.0 million, or 14.9%, decrease in the average balance
outstanding year to year.

Interest expense on deposits increased by $188,000, or 6.3%, for the year ended
June 30, 2000, compared to fiscal 1999, due primarily to a $4.9 million, or
7.0%, increase in the average deposit portfolio balance outstanding.

Interest expense on borrowings increased by $625,000, or 65.3%, due primarily to
an $8.8 million, or 44.7%, increase in the average balance of advances
outstanding, coupled with a 70 basis point increase in the average cost of such
borrowings, to 5.57% in fiscal 2000.

As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $595,000, or 20.0%, for the fiscal year ended
June 30, 2000, compared to fiscal 1999. The interest rate spread was


                                       8
<PAGE>

approximately 2.51% for the fiscal year ended June 30, 2000, compared to 2.37%
for fiscal 1999, while the net interest margin was 3.06% in fiscal 2000,
compared to 2.92% in fiscal 1999.

Provision for Losses on Loans. As a result of an analysis of historical loss
experience, the volume and type of lending conducted by First Federal, the
status of past due principal and interest payments, general economic conditions,
particularly as such conditions relate to First Federal's market area, and other
factors related to the collectibility of First Federal's loan portfolio,
management elected to record a provision for losses on loans totaling $106,000
for the fiscal year ended June 30, 2000. For the fiscal year ended June 30,
1999, management concluded that the allowance for loan losses was adequate and
did not record a provision for losses on loans. First Federal recorded the
provision during fiscal 2000 primarily due to the growth in the commercial and
nonresidential loan portfolios. There can be no assurance that the loan loss
allowance of First Federal will be adequate to cover losses on nonperforming
assets in the future.

Other Income. Other income totaled $179,000 for the fiscal year ended June 30,
2000, a decrease of $249,000, or 58.2%, from the fiscal 1999 total. The decrease
resulted primarily from the absence of a $210,000 gain on sales of securities
recorded during fiscal 1999, and an $83,000, or 76.9%, decrease in gain on sale
of loans, which were partially offset by a $44,000, or 40.0%, increase in other
operating income. Other operating income consists primarily of fees generated
from ATM transactions, late charges on loans, safety deposit box rentals and NOW
account fees.

General, Administrative and Other Expense. General, administrative and other
expense totaled $2.3 million for the fiscal year ended June 30, 2000, a decrease
of $55,000, or 2.4%, compared to fiscal 1999. The decrease resulted primarily
from a $41,000, or 3.7%, decrease in employee compensation and benefits and a
$52,000, or 19.5%, decrease in franchise taxes, which were partially offset by a
$55,000, or 11.5%, increase in other operating expenses.

The decrease in employee compensation and benefits was due primarily to the
decrease in expense associated with stock benefit plans. The decrease in
franchise taxes resulted from a reduction in the tax rate. The increase in other
operating expense consisted primarily of a $40,000 increase in ATM related costs
and pro-rata increases in other expenses due to the Corporation's overall growth
year to year.

Federal Income Taxes. The provision for federal income taxes totaled $458,000
for the fiscal year ended June 30, 2000, an increase of $90,000, or 24.5%, over
fiscal 1999. The increase resulted primarily from a $295,000, or 27.2%, increase
in earnings before taxes. The effective tax rates were 33.2% and 33.9% for the
fiscal years ended June 30, 2000 and 1999, respectively.




















                                       9
<PAGE>


                  AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA

-----------------------------------------------------------------------------

The following table sets forth certain information relating to FFD's average
balance sheet and reflects the average yield on interest-earning assets and the
average cost of interest-bearing liabilities for the periods indicated. Such
yields and costs are derived by dividing income or expense by the average
monthly balance of interest-earning assets or interest-bearing liabilities,
respectively, for the periods presented. Average balances are derived from
month-end balances, which include nonaccruing loans in the loan portfolio, net
of the allowance for loan losses.
<TABLE>
<CAPTION>

                                                                    Year ended June 30,
                                -----------------------------------------------------------------------------------------
                                               2001                         2000                         1999
                                -----------------------------  ----------------------------  ----------------------------
                                   Average   Interest            Average  Interest            Average   Interest
                                outstanding  earned/   Yield/  outstanding earned/   Yield/ outstanding  earned/   Yield/
                                   balance     paid     rate     balance    paid      rate    balance      paid     rate
                                 ----------  --------  ------  ----------  -------   ------  ----------  --------  ------
                                                                   (Dollars in thousands)
<S>                                  <C>        <C>       <C>     <C>        <C>       <C>        <C>     <C>       <C>
Interest-earning assets:
  Loans receivable                 $104,771   $8,321     7.94% $  96,101   $7,058      7.34% $  79,497   $5,567      7.00%
  Mortgage-backed securities         12,295      846     6.88     14,599      936      6.41     15,305      968      6.32
  Investment securities               2,338      142     6.07      3,000      191      6.37      2,902      177      6.10
  Interest-bearing deposits
    and other                         4,737      240     5.07      2,858      138      4.82      3,978      203      5.10
                                    -------    -----     ----    -------    -----      ----    -------    -----      ----
  Total interest-earning assets     124,141    9,549     7.69    116,558    8,323      7.14    101,682    6,915      6.80

  Non-interest-earning assets         4,412                        2,516                         1,517
                                    -------                      -------                       -------

    Total assets                   $128,553                     $119,074                      $103,199
                                    =======                      =======                       =======

Interest-bearing liabilities:
  Deposits                         $ 85,249    3,930     4.61   $ 74,254    3,172      4.27   $ 69,374    2,984      4.30
  Borrowings                         26,094    1,568     6.01     28,413    1,582      5.57     19,637      957      4.87
                                    -------    -----     ----    -------    -----      ----    -------    -----      ----
    Total interest-bearing
      liabilities                   111,343    5,498     4.94    102,667    4,754      4.63     89,011    3,941      4.43
                                               -----     ----               -----      ----               -----      ----

Non-interest-bearing liabilities        741                        1,222                           166
                                    -------                      -------                       -------

  Total liabilities                 112,084                      103,889                        89,177

Shareholders' equity                 16,469                       15,185                        14,022
                                    -------                      -------                       -------

    Total liabilities and
      shareholders' equity         $128,553                     $119,074                      $103,199
                                    =======                      =======                       =======

Net interest income                           $4,051                       $3,569                        $2,974
                                               =====                        =====                         =====

Interest rate spread                                     2.75%                         2.51%                         2.37%
                                                         ====                          ====                          ====

Net interest margin (net interest
  income as a percent of average
  interest-earning assets)                               3.26%                         3.06%                         2.92%
                                                         ====                          ====                          ====

Average interest-earning assets to
  average interest-bearing liabilities                 111.49%                       113.53%                       114.24%
                                                       ======                        ======                        ======
</TABLE>

The table on the following page describes the extent to which changes in
interest rates and changes in volume of interest-earning assets and
interest-bearing liabilities have affected FFD's interest income and expense
during the years indicated. 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 prior year rate), (ii)
changes in rate (changes in rate multiplied by prior year volume) and (iii)
total changes in rate and volume. The combined effects of changes in both volume
and rate, which cannot be separately identified, have been allocated
proportionately to the change due to volume and the change due to rate.





                                       10
<PAGE>


<TABLE>
<CAPTION>
                                                                    Year ended June 30,
                                                      2001 vs. 2000                     2000 vs. 1999
                                             ------------------------------      ----------------------------
                                                  Increase                           Increase
                                                 (decrease)                         (decrease)
                                                   due to                            due to
                                             -----------------                   -------------

                                             Volume        Rate       Total      Volume      Rate        Total
                                             ------        ----       -----      ------      ----        -----
                                                                       (In thousands)
<S>                                             <C>         <C>        <C>         <C>         <C>       <C>
Interest income attributable to:
   Loans receivable                            $661         $602     $1,263      $1,210       $281     $1,491
   Mortgage-backed securities                  (156)          66        (90)        (45)        13        (32)
   Investment securities                        (40)          (9)       (49)          6          8         14
   Interest-bearing deposits and other
                                                 95            7        102         (54)       (11)       (65)
                                                ---          ---      -----       -----        ---      -----
Total interest income                           560          666      1,226       1,117        291      1,408
                                                ---          ---      -----       -----        ---      -----

Interest expense attributable to:
   Deposits                                     493          265        758         208        (20)       188
   Borrowings                                  (134)         120        (14)        473        152        625
                                                ---          ---      -----       -----        ---      -----

Total interest expense                          359          385        744         681        132        813
                                                ---          ---      -----       -----        ---      -----

Increase in net interest income                $201         $281     $  482      $  436       $159     $  595
                                                ===          ===      =====       =====        ===      =====
</TABLE>


                         ASSET AND LIABILITY MANAGEMENT

------------------------------------------------------------------------------

First Federal, like other financial institutions, is subject to interest rate
risk to the extent that its interest-earning assets reprice differently than its
interest-bearing liabilities. As part of its effort to monitor and manage
interest rate risk, First Federal uses the "net portfolio value" ("NPV")
methodology adopted by the OTS. Generally, NPV is the discounted present value
of the difference between incoming cash flows on interest-earning and other
assets and outgoing cash flows on interest-bearing and other liabilities. The
application of the methodology attempts to quantify interest rate risk as the
change in the NPV, which would result from a theoretical change in market
interest rates. Both an increase in market interest rates and a decrease in
market interest rates are considered.




















                                       11
<PAGE>


Presented below, as of June 30, 2001 and 2000, is an analysis of First Federal's
interest rate risk as measured by changes in NPV for instantaneous and sustained
parallel shifts of 200 and 300 basis points in market interest rates. The table
also contains the policy limits set by the Board of Directors of First Federal
as the maximum change in NPV that the Board of Directors deems advisable in the
event of various changes in interest rates. Such limits have been established
with consideration of the dollar impact of various rate changes and First
Federal's strong capital position.
<TABLE>
<CAPTION>


                                                                            June 30, 2001
 Change in interest rate               Board limit                $ change                 % change
    (basis points)                      % change                   in NPV                   in NPV
 -----------------------               ---------                  --------                   ------
                                                                        (Dollars in thousands)
<S>                                        <C>                       <C>                      <C>
         +300                             +30.0%                   $1,028                      7.05%
         +200                             +20.0                       993                      6.81
           -                                -                           -                       -
         -200                             -20.0                    (1,389)                    (9.53)
         -300                             -30.0                    (1,831)                   (12.56)

                                                                            June 30, 2000
 Change in interest rate               Board limit                $ change                 % change
    (basis points)                      % change                   in NPV                   in NPV
 -----------------------               ---------                  --------                   ------
                                                                         (Dollars in thousands)

         +300                             +30.0%                    $(472)                    (3.14)%
         +200                             +20.0                      (137)                    (0.91)
           -                                -                           -                       -
         -200                             -20.0                      (495)                    (3.30)
         -300                             -30.0                      (964)                    (6.42)
</TABLE>

As with any method of measuring interest rate risk, certain shortcomings are
inherent in the NPV approach. For example, although certain assets and
liabilities may have similar maturities or periods of 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. Further, in the event of a change in interest
rates, expected rates of prepayment on loans and mortgage-backed securities and
early withdrawal levels from certificates of deposit would likely deviate
significantly from those assumed in making the risk calculations.

















                                       12
<PAGE>


                         LIQUIDITY AND CAPITAL RESOURCES

-----------------------------------------------------------------------------

First Federal's principal sources of funds are deposits, loan sales, loan and
mortgage-backed securities repayments, maturities of securities and other funds
provided by operations. First Federal also has the ability to borrow from the
FHLB of Cincinnati. While scheduled loan repayments and maturing investments are
relatively predictable, deposit flows, loan sales and loan and mortgage-backed
securities prepayments are more influenced by interest rates, general economic
conditions and competition. First Federal maintains investments in liquid assets
based upon management's assessment of (i) the need for funds, (ii) expected
deposit flows, (iii) the yields available on short-term liquid assets and (iv)
the objectives of the asset/liability management program. At June 30, 2001,
First Federal had commitments to originate loans, including unused lines of
credit, totaling $14.8 million and commitments to sell loans totaling $467,000.
Management anticipates that such loan commitments will be funded from normal
cash flows from operations and existing excess liquidity.

Cash and cash equivalents, which is a component of liquidity, is a result of the
funds used in or provided by First Federal's operating, investing and financing
activities. These activities are summarized below for the years ended June 30,
2001, 2000 and 1999:
<TABLE>
<CAPTION>

                                                                           Year ended June 30,
                                                             -----------------------------------------------
                                                              2001                 2000                 1999
                                                              ----                 ----                 ----
                                                                              (In thousands)
<S>                                                           <C>                  <C>                  <C>
Net earnings                                                $1,101               $   922              $   717
Adjustments to reconcile net earnings to
   net cash from operating activities                          901                   608                 (965)
                                                             -----                ------               ------
Net cash from operating activities                           2,002                 1,530                 (248)
Net cash used in investing activities                       (1,093)              (13,894)             (19,213)
Net cash from financing activities                           6,012                11,772               20,839
                                                             -----                ------               ------
Net change in cash and cash equivalents                      6,921                  (592)               1,378
Cash and cash equivalents at
   beginning of year                                         2,419                 3,011                1,633
                                                             -----                ------               ------
Cash and cash equivalents at
   end of year                                              $9,340               $ 2,419              $ 3,011
                                                             =====                ======               ======
</TABLE>


First Federal is required by applicable law and regulation to meet certain
minimum capital standards, which include a tangible capital requirement, a core
capital requirement, or leverage ratio, and a risk-based capital requirement.

The tangible capital requirement requires a savings association to maintain
"tangible capital" of not less than 1.5% of the association's adjusted total
assets. Tangible capital is defined in OTS regulations as core capital minus any
intangible assets.

"Core capital" is comprised of common shareholders' equity (including retained
earnings), noncumulative preferred stock and related surplus, minority interests
in consolidated subsidiaries, certain nonwithdrawable accounts and pledged
deposits of mutual associations. OTS regulations generally require savings
associations to maintain core capital of at least 4% of the association's total
assets, except for those associations with the highest examination rating and
acceptable levels of risk.


                                       13
<PAGE>

OTS regulations require that savings associations maintain "risk-based capital"
in an amount not less than 8% of risk-weighted assets. Risk-based capital is
defined as core capital plus certain additional items of capital, which in the
case of First Federal includes a general loan loss allowance of $564,000 at June
30, 2001.

First Federal exceeded all of its capital requirements at June 30, 2001. The
following table summarizes First Federal's regulatory capital requirements and
regulatory capital at June 30, 2001:
<TABLE>
<CAPTION>
                                                                                Excess over current
                             Regulatory capital       Current requirement           requirement
                            Amount      Percent       Amount      Percent      Amount         Percent
                             (Dollars in thousands)
<S>                           <C>         <C>           <C>        <C>            <C>           <C>
Tangible capital            $14,733      11.2%         $1,979      1.5%         $12,754         9.7%
Core capital                $14,733      11.2%         $5,278      4.0%         $ 9,455         7.2%
Risk-based capital          $15,297      16.6%         $7,366      8.0%         $ 7,931         8.6%

</TABLE>


                   EFFECT OF Recent ACCOUNTING PRONOUNCEMENTS

------------------------------------------------------------------------------

In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which requires entities to
recognize all derivatives in their financial statements as either assets or
liabilities measured at fair value. SFAS No. 133 also specifies new methods of
accounting for hedging transactions, prescribes the items and transactions that
may be hedged, and specifies detailed criteria to be met to qualify for hedge
accounting.

The definition of a derivative financial instrument is complex, but in general,
it is an instrument with one or more underlyings, such as an interest rate or
foreign exchange rate that is applied to a notional amount, such as an amount of
currency, to determine the settlement amount(s). It generally requires no
significant initial investment and can be settled net or by delivery of an asset
that is readily convertible to cash. SFAS No. 133 applies to derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

SFAS No. 133, as amended by SFAS No. 137, was effective for fiscal years
beginning after June 15, 2000. On adoption, entities were permitted to transfer
held-to-maturity debt securities to the available-for-sale or trading category
without calling into question their intent to hold other debt securities to
maturity in the future. FFD adopted SFAS No. 133 effective July 1, 2000, as
required, without material effect on FFD's financial condition and results of
operations.

In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," which revises
the standards for accounting for securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but carries
over most of the provisions of SFAS No. 125 without reconsideration. SFAS No.
140 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The Statement is


                                       14
<PAGE>

effective for recognition and reclassification of collateral and for disclosures
relating to securitization transactions and collateral for fiscal years ending
after December 15, 2000. Management adopted SFAS No. 140 effective April 1,
2001, as required, without material effect on the Corporation's financial
position or results of operations.

In June 2001, the FASB issued SFAS No. 141 "Business Combinations," which
requires that all business combinations initiated after June 30, 2001 be
accounted for using the purchase method. The pooling-of-interests method of
accounting is prohibited except for combinations initiated before June 30, 2001.
The remaining provisions of SFAS No. 141 relating to business combinations
accounted for by the purchase method, including identification of intangible
assets, accounting for negative goodwill, financial statement presentation and
disclosure, are effective for combinations completed after June 30, 2001.
Management adopted SFAS No. 141 effective July 1, 2001, as required, without
material effect on the Corporation's financial position or results of
operations.

In June 2001, the FASB issued SFAS No. 142 "Goodwill and Intangible Assets,"
which prescribes accounting for all purchased goodwill and intangible assets.
Pursuant to SFAS No. 142, acquired goodwill is not amortized, but is tested for
impairment at the reporting unit level annually and whenever an impairment
indicator arises. All goodwill should be assigned to reporting units that are
expected to benefit from the goodwill. When an entity reorganizes its reporting
structure, goodwill should be reallocated to reporting units based on the
relative fair values of the units. Goodwill impairment should be tested with a
two-step approach. First, the fair value of the reporting unit should be
compared to its carrying value, including goodwill. If the reporting unit's
carrying value exceeds its fair value, then any goodwill impairment should be
measured as the excess of the goodwill's carrying value over its implied fair
value. The implied fair value of goodwill should be calculated in the same
manner as goodwill is calculated for a business combination, using the reporting
unit's fair value as the "purchase price." Therefore, the goodwill's implied
fair value will be the excess of the "purchase price" over the amounts allocated
to assets, including unrecognized intangible assets, and liabilities of the
reporting unit. Goodwill impairment losses should be reported in the income
statement as a separate line item within operations, except for such losses
included in the calculation of a gain or loss from discontinued operations.

An acquired intangible asset, other than goodwill, should be amortized over its
useful economic life. The useful life of an intangible asset is indefinite if it
extends beyond the foreseeable horizon. If an asset's life is indefinite, the
asset should not be amortized until the life is determined to be finite.
Intangible assets being amortized should be tested for impairment in accordance
with SFAS No. 121. Intangible assets not being amortized should be tested for
impairment annually and whenever there are indicators of impairment, by
comparing the asset's fair value to its carrying amount.

SFAS No. 142 is effective for fiscal years beginning after December 15, 2001.
Early adoption is permitted for companies with fiscal years beginning after
March 15, 2001, but only if the first quarter financial statements have not
previously been issued. SFAS No. 142 is not expected to have a material effect
on the Corporation's financial position or results of operations.
















                                       15
<PAGE>


                         REPORT OF INDEPENDENT CERTIFIED
                             PUBLIC ACCOUNTANTS AND
                        CONSOLIDATED FINANCIAL STATEMENTS

=============================================================================

                                    CONTENTS

                                                                         Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                         17


FINANCIAL STATEMENTS

  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION                           18

  CONSOLIDATED STATEMENTS OF EARNINGS                                      19

  CONSOLIDAED STATEMENTS OF COMPREHENSIVE INCOME                           20

  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY                          21

  CONSOLIDATED STATEMENTS OF CASH FLOWS                                    22

  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                               24























                                       16
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
FFD Financial Corporation

We have audited the accompanying consolidated statements of financial condition
of FFD Financial Corporation as of June 30, 2001 and 2000, and the related
consolidated statements of earnings, comprehensive income, shareholders' equity
and cash flows for each of the three years in the period ended June 30, 2001.
These consolidated financial statements are the responsibility of the
Corporation'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 auditing standards generally accepted
in the United States of America. 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of FFD Financial
Corporation as of June 30, 2001 and 2000, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
June 30, 2001, in conformity with accounting principles generally accepted in
the United States of America.




/s/GRANT THORNTON LLP

Cincinnati, Ohio
August 9, 2001






                                       17
<PAGE>


                            FFD Financial Corporation
<TABLE>
<CAPTION>

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                    June 30,
                        (In thousands, except share data)


         ASSETS                                                                                2001                2000
<S>                                                                                            <C>                 <C>
Cash and due from banks                                                                    $  1,316            $    934
Interest-bearing deposits in other financial institutions                                     8,024               1,485
                                                                                            -------             -------
         Cash and cash equivalents                                                            9,340               2,419

Investment securities designated as available
  for sale - at market                                                                        1,000               2,875
Mortgage-backed securities designated as available for
  sale - at market                                                                            7,799               9,135
Mortgage-backed securities held to maturity - at amortized cost,
  approximate market value of $3,804 and $4,188 as of June 30,
  2001 and 2000                                                                               3,721               4,189
Loans receivable - net                                                                      107,227             102,118
Loans held for sale - at lower of cost or market                                                240                 821
Office premises and equipment - at depreciated cost                                           1,171               1,253
Stock in Federal Home Loan Bank - at cost                                                     1,786               1,652
Accrued interest receivable                                                                     451                 429
Prepaid expenses and other assets                                                               205                 181
Prepaid federal income taxes                                                                    157                  61
Deferred federal income taxes                                                                    -                   14
                                                                                            -------             -------

         Total assets                                                                      $133,097            $125,147
                                                                                            =======             =======

         LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                                   $ 91,018            $ 77,987
Advances from the Federal Home Loan Bank                                                     24,732              30,412
Accrued interest payable                                                                        147                 202
Other liabilities                                                                               397                 281
Deferred federal income taxes                                                                   199                  -
                                                                                            -------             -------
         Total liabilities                                                                  116,493             108,882

Commitments                                                                                      -                   -

Shareholders' equity
  Preferred stock - authorized 1,000,000 shares without par
    value; no shares issued                                                                      -                   -
  Common stock - authorized 5,000,000 shares without par or
    stated value; 1,454,750 shares issued                                                        -                   -
  Additional paid-in capital                                                                  7,861               7,850
  Retained earnings - substantially restricted                                               10,962              10,288
  Accumulated comprehensive income (loss); unrealized gains (losses) on
    securities designated as available for sale, net of related tax effects                      55                (335)
  Shares acquired by stock benefit plans                                                       (852)             (1,028)
  Less 141,209 and 42,367 treasury shares at June 30, 2001 and 2000,
    respectively - at cost                                                                   (1,422)               (510)
                                                                                            -------             -------
         Total shareholders' equity                                                          16,604              16,265
                                                                                            -------             -------

         Total liabilities and shareholders' equity                                        $133,097            $125,147
                                                                                            =======             =======
</TABLE>


The accompanying notes are an integral part of these statements.

                                       18
<PAGE>


                            FFD Financial Corporation
<TABLE>
<CAPTION>

                       CONSOLIDATED STATEMENTS OF EARNINGS

                               Year ended June 30,
                      (In thousands, except per share data)

                                                                                      2001            2000         1999
<S>                                                                                   <C>             <C>           <C>
Interest income
  Loans                                                                             $8,321          $7,058       $5,567
  Mortgage-backed securities                                                           846             936          968
  Investment securities                                                                142             191          177
  Interest-bearing deposits and other                                                  240             138          203
                                                                                     -----           -----        -----
         Total interest income                                                       9,549           8,323        6,915

Interest expense
  Deposits                                                                           3,930           3,172        2,984
  Borrowings                                                                         1,568           1,582          957
                                                                                     -----           -----        -----
         Total interest expense                                                      5,498           4,754        3,941
                                                                                     -----           -----        -----

         Net interest income                                                         4,051           3,569        2,974

Provision for losses on loans                                                          201             106           -
                                                                                     -----           -----        -----

         Net interest income after provision for losses on loans                     3,850           3,463        2,974

Other income
  Gain on sale of loans                                                                105              25          108
  Loss on sale of real estate acquired through foreclosure                              (1)             -            -
  Gain on sale of investment securities designated
    as available for sale                                                               -               -           210
  Other operating                                                                      158             154          110
                                                                                     -----           -----        -----
         Total other income                                                            262             179          428

General, administrative and other expense
  Employee compensation and benefits                                                 1,114           1,076        1,117
  Occupancy and equipment                                                              227             229          237
  Franchise taxes                                                                      210             214          266
  Federal deposit insurance premiums                                                    18              26           38
  Data processing                                                                      237             185          182
  Other operating                                                                      645             532          477
                                                                                     -----           -----        -----
         Total general, administrative and other expense                             2,451           2,262        2,317
                                                                                     -----           -----        -----

         Earnings before income taxes                                                1,661           1,380        1,085

Federal income taxes
  Current                                                                              549             463          249
  Deferred                                                                              11              (5)         119
                                                                                     -----           -----        -----
         Total federal income taxes                                                    560             458          368
                                                                                     -----           -----        -----

         NET EARNINGS                                                               $1,101          $  922       $  717
                                                                                     =====           =====        =====

         EARNINGS PER SHARE
           Basic                                                                      $.86            $.69         $.53
                                                                                       ===             ===          ===

           Diluted                                                                    $.86            $.68         $.51
                                                                                       ===             ===          ===
</TABLE>



The accompanying notes are an integral part of these statements.

                                       19
<PAGE>


                            FFD Financial Corporation
<TABLE>
<CAPTION>

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                               Year ended June 30,
                                 (In thousands)


                                                                                    2001            2000           1999
<S>                                                                                 <C>             <C>             <C>
Net earnings                                                                      $1,101           $ 922          $ 717

Other comprehensive income (loss), net of tax:
  Unrealized holding gains (losses) on securities during
    the period, net of taxes (benefits) of $201, $(61)
    and $(112) in 2001, 2000 and 1999, respectively                                  390            (119)          (217)

Reclassification adjustment for realized gains
  included in earnings, net of tax of $71 in 1999                                     -               -            (139)
                                                                                   -----             ---           ----

Comprehensive income                                                              $1,491           $ 803          $ 361
                                                                                   =====            ====           ====

Accumulated comprehensive income (loss)                                           $   55           $(335)         $(216)
                                                                                   =====            ====           ====
</TABLE>































The accompanying notes are an integral part of these statements.

                                       20
<PAGE>


                            FFD Financial Corporation
<TABLE>
<CAPTION>
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                For the years ended June 30, 2001, 2000 and 1999
                      (In thousands, except per share data)


                                                                                     Unrealized
                                                                                 gains (losses)        Shares
                                                                                  on securities   acquired by
                                                           Additional                designated         stock  Treasury
                                                  Common      paid-in   Retained   as available       benefit   shares-
                                                   stock      capital   earnings       for sale         plans   at cost      Total
<S>                                                 <C>          <C>        <C>          <C>            <C>        <C>        <C>

Balance at July 1, 1998                             $ -        $7,705    $ 9,536          $140       $(1,411)  $  (145)    $15,825

Net earnings for the year ended June 30, 1999         -            -         717            -             -         -          717
Amortization of stock benefit plan expense            -           141         -             -            204        -          345
Unrealized losses on securities designated as
  available for sale, net of related tax effects      -            -          -           (356)           -         -         (356)
Exercise of stock options                             -           (48)        -             -             -        124          76
Dividends of $.30 per share                           -            -        (403)           -             -         -         (403)
                                                     ---        -----     ------           ---        ------    ------      ------

Balance at June 30, 1999                              -         7,798      9,850          (216)       (1,207)      (21)     16,204

Net earnings for the year ended June 30, 2000         -            -         922            -             -         -          922
Purchase of treasury shares                           -            -          -             -             -       (529)       (529)
Amortization of stock benefit plan expense            -            65         -             -            179        -          244
Unrealized losses on securities designated as
  available for sale, net of related tax effects      -            -          -           (119)           -         -         (119)
Exercise of stock options                             -           (13)        -             -             -         40          27
Dividends of $.34 per share                           -            -        (484)           -             -         -         (484)
                                                     ---        -----     ------           ---        ------    ------      ------

Balance at June 30, 2000                              -         7,850     10,288          (335)       (1,028)     (510)     16,265

Net earnings for the year ended June 30, 2001         -            -       1,101            -             -         -        1,101
Purchase of treasury shares                           -            -          -             -             -       (912)       (912)
Amortization of stock benefit plan expense            -            11         -             -            176        -          187
Unrealized gains on securities designated as
  available for sale, net of related tax effects      -            -          -            390            -         -          390
Dividends of $.36 per share                           -            -        (427)           -             -         -         (427)
                                                     ---        -----     ------           ---        ------    ------      ------

Balance at June 30, 2001                            $ -        $7,861    $10,962          $ 55       $  (852)  $(1,422)    $16,604
                                                     ===        =====     ======           ===        ======    ======      ======
</TABLE>



The accompanying notes are an integral part of these statements.



                                       21
<PAGE>


                            FFD Financial Corporation

<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                               Year ended June 30,
                                 (In thousands)

                                                                                    2001            2000           1999
<S>                                                                                  <C>             <C>            <C>
Cash flows from operating activities:
  Net earnings for the year                                                      $ 1,101         $   922        $   717
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of premiums and discounts
      on investments and mortgage-backed securities - net                             23              40             53
    Amortization of deferred loan origination fees                                    (6)            (25)           (57)
    Gain on sale of loans                                                            (31)             (8)           (46)
    Loans originated for sale in the secondary market                             (8,676)         (2,206)        (8,398)
    Proceeds from sale of mortgage loans in the secondary market                   9,288           2,358          7,479
    Loss on sale of real estate acquired through foreclosure                           1              -              -
    Depreciation and amortization                                                    118             138            131
    Gain on sale of investment securities designated as available
     for sale                                                                         -               -            (210)
    Provision for losses on loans                                                    201             106             -
    Amortization of stock benefit plan expense                                       187             244            345
    Federal Home Loan Bank stock dividends                                          (134)           (104)           (74)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable                                                    (22)           (100)           (50)
      Prepaid expenses and other assets                                              (24)             28             12
      Other liabilities                                                              116              31             (8)
      Accrued interest payable                                                       (55)             56             52
      Federal income taxes
        Current                                                                      (96)             55           (313)
        Deferred                                                                      11              (5)           119
                                                                                  ------          ------         ------
         Net cash provided by (used in) operating activities                       2,002           1,530           (248)

Cash flows provided by (used in) investing activities:
  Purchase of investment securities designated as available
    for sale                                                                          -               -          (3,000)
  Proceeds from maturity of investment securities                                  2,000              -           3,477
  Proceeds from sale of investment securities designated
    as available for sale                                                             -               -             212
  Purchase of mortgage-backed securities designated
    as available for sale                                                             -               -          (9,633)
  Principal repayments on mortgage-backed securities                               2,248           2,262          5,407
  Purchase of Federal Home Loan Bank stock                                            -             (347)          (194)
  Loan principal repayments                                                       30,639          17,338         17,172
  Loan disbursements                                                             (36,068)        (33,120)       (32,542)
  Proceeds from sale of real estate acquired through foreclosure                     124              -              -
  Purchase of office premises and equipment                                          (36)            (27)          (115)
  Proceeds from sale of office premises and equipment                                 -               -               3
                                                                                  ------          ------         ------
         Net cash used in investing activities                                    (1,093)        (13,894)       (19,213)
                                                                                  ------          ------         ------

         Net cash provided by (used in) operating and investing
           activities (subtotal carried forward)                                     909         (12,364)       (19,461)
                                                                                  ------          ------         ------
</TABLE>






                                       22
<PAGE>


                            FFD Financial Corporation

<TABLE>
<CAPTION>
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                               Year ended June 30,
                                 (In thousands)


                                                                                    2001            2000           1999
<S>                                                                                 <C>             <C>            <C>
         Net cash provided by (used in) operating and investing
           activities (subtotal brought forward)                                 $   909        $(12,364)      $(19,461)

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts                                                13,031           5,962         10,069
  Proceeds from Federal Home Loan Bank advances                                   24,000          39,491         11,133
  Repayments of Federal Home Loan Bank advances                                  (29,680)        (32,695)           (36)
  Proceeds from exercise of stock options                                             -               27             76
  Purchase of treasury shares                                                       (912)           (529)            -
  Cash dividends paid on common stock                                               (427)           (484)          (403)
                                                                                  ------         -------        -------
         Net cash provided by financing activities                                 6,012          11,772         20,839
                                                                                  ------         -------        -------

Net increase (decrease) in cash and cash equivalents                               6,921            (592)         1,378

Cash and cash equivalents at beginning of year                                     2,419           3,011          1,633
                                                                                  ------         -------        -------

Cash and cash equivalents at end of year                                         $ 9,340        $  2,419       $  3,011
                                                                                  ======         =======        =======


Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Federal income taxes                                                         $   651        $    442       $    182
                                                                                  ======         =======        =======

    Interest on deposits and borrowings                                          $ 5,553        $  4,698       $  3,889
                                                                                  ======         =======        =======


Supplemental disclosure of noncash investing activities:
  Unrealized gains (losses) on securities designated as
    available for sale, net of applicable tax effects                            $   390        $   (119)      $   (356)
                                                                                  ======         =======        =======

  Recognition of mortgage servicing rights in accordance
    with SFAS No. 140                                                            $    74        $     17       $     62
                                                                                  ======         =======        =======

  Transfers of loans to real estate acquired through foreclosure                 $   125        $     -        $     -
                                                                                  ======         =======        =======
</TABLE>









The accompanying notes are an integral part of these statements.


                                       23
<PAGE>


                            FFD Financial Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    FFD Financial Corporation (the "Corporation") is a savings and loan holding
    company whose activities are primarily limited to holding the stock of its
    wholly-owned subsidiary, First Federal Savings Bank of Dover. Effective
    August, 2001, First Federal changed its name to First Federal Community Bank
    (hereinafter the "Bank"). The Bank conducts a general banking business in
    north central Ohio which consists of attracting deposits from the general
    public and applying those funds to the origination of loans for residential,
    consumer and nonresidential purposes. The Bank's profitability is
    significantly dependent on net interest income, which is the difference
    between interest income generated from interest-earning assets (i.e. loans
    and investments) and the interest expense paid on interest-bearing
    liabilities (i.e. customer deposits and borrowed funds). Net interest income
    is affected by the relative amount of interest-earning assets and
    interest-bearing liabilities and the interest received or paid on these
    balances. The level of interest rates paid or received by the Bank can be
    significantly influenced by a number of environmental factors, such as
    governmental monetary policy, that are outside of management's control.

    The consolidated financial information presented herein has been prepared in
    accordance with accounting principles generally accepted in the United
    States of America ("U. S. GAAP") and general accounting practices within the
    financial services industry. In preparing consolidated financial statements
    in accordance with U. S. GAAP, management is required to make estimates and
    assumptions that affect the reported amounts of assets and liabilities and
    the disclosure of contingent assets and liabilities at the date of the
    financial statements and revenues and expenses during the reporting period.
    Actual results could differ from such estimates.

    A summary of significant accounting policies which have been consistently
    applied in the preparation of the accompanying consolidated financial
    statements follows:

    1.  Principles of Consolidation

    The accompanying consolidated financial statements include the accounts of
    the Corporation, the Bank, and its wholly-owned subsidiary, Dover Service
    Corporation ("Dover"). At June 30, 2001 and 2000, Dover's principal assets
    consisted of an investment in the stock of the Bank's data processor and a
    deposit account in the Bank. All intercompany balances and transactions have
    been eliminated in the accompanying consolidated financial statements.

    2.  Investment Securities and Mortgage-backed Securities

    The Corporation accounts for investment and mortgage-backed securities in
    accordance with Statement of Financial Accounting Standards ("SFAS") No. 115
    "Accounting for Certain Investments in Debt and Equity Securities." SFAS No.
    115 requires that investments be categorized as held-to-maturity, trading,
    or available for sale. Securities classified as held-to-maturity are carried
    at cost only if the Corporation has the positive intent and ability to hold
    these securities to maturity. Trading securities and securities designated
    as available for sale are carried at fair value with resulting unrealized
    gains or losses recorded to operations or shareholders' equity,
    respectively. The Corporation's shareholders' equity reflected a net
    unrealized gain on securities designated as available for sale totaling
    $55,000 at June 30, 2001, and a net unrealized loss totaling $335,000 at
    June 30, 2000.




                                       24
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    2.  Investment Securities and Mortgage-backed Securities (continued)

    Realized gains and losses on sales of securities are recognized using the
    specific identification method.

    3.  Loans Receivable

    Loans are stated at the principal balance outstanding, reduced by deferred
    loan origination fees and the allowance for loan losses. Interest is accrued
    as earned unless the collectibility of the loan is in doubt. Interest on
    loans that are contractually past due is charged off, or an allowance is
    established based on management's periodic evaluation. The allowance is
    established by a charge to interest income equal to all interest previously
    accrued, and income is subsequently recognized only to the extent that cash
    payments are received until, in management's judgment, the borrower's
    ability to make periodic interest and principal payments has returned to
    normal, in which case the loan is returned to accrual status. If the
    ultimate collectibility of the loan is in doubt, in whole or in part, all
    payments received on nonaccrual loans are applied to reduce principal until
    such doubt is eliminated.

    Loans held for sale are carried at the lower of cost or market, determined
    in the aggregate. In computing cost, deferred loan origination fees are
    deducted from the principal balances of the related loan. At June 30, 2001
    and 2000, loans held for sale were carried at cost.

    The Bank retains the servicing on loans sold and agrees to remit to the
    investor loan principal and interest at agreed-upon rates. The Bank
    recognizes rights to service mortgage loans for others pursuant to SFAS No.
    140, "Accounting for Transfers and Servicing of Financial Assets and
    Extinguishments of Liabilities." In accordance with SFAS No. 140, an
    institution that acquires mortgage servicing rights through either the
    purchase or origination of mortgage loans and sells those loans with
    servicing rights retained must allocate some of the cost of the loans to the
    mortgage servicing rights.

    Capitalized mortgage servicing rights and capitalized excess servicing
    receivables are required to be assessed for impairment. Impairment is
    measured based on fair value. The mortgage servicing rights recorded by the
    Bank were segregated into pools for valuation purposes, using as pooling
    criteria the loan term and coupon rate. Once pooled, each grouping of loans
    was evaluated on a discounted earnings basis to determine the present value
    of future earnings that a purchaser could expect to realize from each
    portfolio. Earnings were projected from a variety of sources including loan
    servicing fees, interest earned on float, net interest earned on escrows,
    miscellaneous income, and costs to service the loans. The present value of
    future earnings is the "economic" value for the pool, i.e., the net
    realizable present value to an acquirer of the acquired servicing.

    The Bank recorded amortization related to mortgage servicing rights totaling
    approximately $15,000, $10,000 and $5,000 for the fiscal years ended June
    30, 2001, 2000 and 1999, respectively. At June 30, 2001 and 2000, the fair
    value of the Corporation's mortgage servicing rights approximated the
    carrying value of $124,000 and $65,000, respectively.



                                       25
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    4.  Loan Origination Fees

    The Bank accounts for loan origination fees in accordance with SFAS No. 91
    "Accounting for Nonrefundable Fees and Costs Associated with Originating or
    Acquiring Loans and Initial Direct Costs of Leases". Pursuant to the
    provisions of SFAS No. 91, origination fees received from loans, net of
    certain direct origination costs, are deferred and amortized to interest
    income using the level-yield method, giving effect to actual loan
    prepayments. Additionally, SFAS No. 91 generally limits the definition of
    loan origination costs to the direct costs attributable to originating a
    loan, i.e., principally actual personnel costs. Fees received for loan
    commitments that are expected to be drawn upon, based on the Bank's
    experience with similar commitments, are deferred and amortized over the
    life of the loan using the level-yield method. Fees for other loan
    commitments are deferred and amortized over the loan commitment period on a
    straight-line basis.

    5.  Allowance for Loan Losses

    It is the Bank's policy to provide valuation allowances for estimated losses
    on loans based on past loan loss experience, changes in the composition of
    the loan portfolio, trends in the level of delinquent and problem loans,
    adverse situations that may affect the borrower's ability to repay, the
    estimated value of any underlying collateral and current and anticipated
    economic conditions in the primary lending area. When the collection of a
    loan becomes doubtful, or otherwise troubled, the Bank records a charge-off
    equal to the difference between the fair value of the property securing the
    loan and the loan's carrying value. Major loans and major lending areas are
    reviewed periodically to determine potential problems at an early date. The
    allowance for loan losses is increased by charges to earnings and decreased
    by charge-offs (net of recoveries).

    The Bank accounts for impaired loans in accordance with SFAS No. 114,
    "Accounting by Creditors for Impairment of a Loan," which requires that
    impaired loans be measured based upon the present value of expected future
    cash flows discounted at the loan's effective interest rate or, as an
    alternative, at the loan's observable market price or fair value of the
    collateral if the loan is collateral dependent.

    A loan is defined under SFAS No. 114 as impaired when, based on current
    information and events, it is probable that a creditor will be unable to
    collect all amounts due according to the contractual terms of the loan
    agreement. In applying the provisions of SFAS No. 114, the Bank considers
    its investment in one- to four-family residential loans and consumer
    installment loans to be homogeneous and therefore excluded from separate
    identification for evaluation of impairment. With respect to the Bank's
    investment in nonresidential, commercial and multi-family residential real
    estate loans, and its evaluation of impairment thereof, such loans are
    generally collateral-dependent and, as a result, are carried as a practical
    expedient at the lower of cost or fair value.

    Collateral-dependent loans which are more than ninety days delinquent are
    considered to constitute more than a minimum delay in repayment and are
    evaluated for impairment under SFAS No. 114 at that time.


                                       26
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    5.  Allowance for Loan Losses (continued)

    At June 30, 2001 and 2000, the Bank had no loans that would be defined as
    impaired under SFAS No. 114.

    6.  Real Estate Acquired through Foreclosure

    Real estate acquired through foreclosure is carried at the lower of the
    loan's unpaid principal balance (cost) or fair value less estimated selling
    expenses at the date of acquisition. Real estate loss provisions are
    recorded if the properties' fair value subsequently declines below the value
    determined at the recording date. In determining the lower of cost or fair
    value at acquisition, costs relating to development and improvement of
    property are capitalized. Costs relating to holding real estate acquired
    through foreclosure, net of rental income, are charged against earnings as
    incurred.

    7.  Office Premises and Equipment

    Office premises and equipment are carried at cost and include expenditures
    which extend the useful lives of existing assets. Maintenance, repairs and
    minor renewals are expensed as incurred. For financial reporting,
    depreciation and amortization are provided on the straight-line method over
    the useful lives of the assets, estimated to be between twenty and thirty
    years for buildings, ten to thirty years for building improvements and five
    to ten years for furniture and equipment. An accelerated method is used for
    tax reporting purposes.

    8.  Federal Income Taxes

    The Corporation accounts for federal income taxes pursuant to SFAS No. 109,
    "Accounting for Income Taxes." In accordance with SFAS No. 109, a deferred
    tax liability or deferred tax asset is computed by applying the current
    statutory tax rates to net taxable or deductible temporary differences
    between the tax basis of an asset or liability and its reported amount in
    the consolidated financial statements that will result in net taxable or
    deductible amounts in future periods. Deferred tax assets are recorded only
    to the extent that the amount of net deductible temporary differences or
    carryforward attributes may be utilized against current period earnings,
    carried back against prior years' earnings, offset against taxable temporary
    differences reversing in future periods, or utilized to the extent of
    management's estimate of future taxable income. A valuation allowance is
    provided for deferred tax assets to the extent that the value of net
    deductible temporary differences and carryforward attributes exceeds
    management's estimates of taxes payable on future taxable income. Deferred
    tax liabilities are provided on the total amount of net temporary
    differences taxable in the future.

    The Corporation's principal temporary differences between pretax financial
    income and taxable income result primarily from the different methods of
    accounting for deferred loan origination fees, Federal Home Loan Bank stock
    dividends, general loan loss allowances, percentage of earnings bad debt
    deductions and certain components of retirement expense. A temporary
    difference is also recognized for depreciation expense computed using
    accelerated methods for federal income tax purposes.




                                       27
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    9.  Benefit Plans

    The Corporation has an Employee Stock Ownership Plan ("ESOP"), which
    provides retirement benefits for substantially all employees who have
    completed one year of service and have attained the age of 21. The
    Corporation accounts for the ESOP in accordance with Statement of Position
    ("SOP") 93-6, "Employers' Accounting for Employee Stock Ownership Plans."
    SOP 93-6 requires the measure of compensation expense recorded by employers
    to equal the fair value of ESOP shares allocated to participants during a
    fiscal year. Expense recognized related to the ESOP totaled approximately
    $119,000, $145,000 and $261,000 for the fiscal years ended June 30, 2001,
    2000 and 1999, respectively.

    Additionally, during fiscal 1997, the Bank adopted a Recognition and
    Retention Plan ("RRP"). The Bank funded the RRP through the purchase of
    40,600 shares of the Corporation's common stock in the open market. The Bank
    has awarded 31,022 shares under the RRP which vest over a five year period.
    A provision of $66,000, $62,000 and $110,000 related to the RRP was charged
    to expense for the fiscal years ended June 30, 2001, 2000 and 1999,
    respectively.

    10.  Earnings Per Share

    Basic earnings per share is computed based upon weighted-average common
    shares outstanding less shares in the ESOP which are unallocated and not
    committed to be released. Weighted-average shares outstanding, which gives
    effect to a reduction for 79,035, 92,209 and 105,383 unallocated shares held
    by the ESOP, totaled 1,278,968, 1,343,818 and 1,355,501 for the fiscal years
    ended June 30, 2001, 2000 and 1999, respectively.

    Diluted earnings per share is computed taking into consideration common
    shares outstanding and dilutive potential common shares to be issued under
    the Corporation's stock option plan. Weighted-average common shares deemed
    outstanding for purposes of computing diluted earnings per share totaled
    1,279,195, 1,356,727 and 1,397,814 for the fiscal years ended June 30, 2001,
    2000 and 1999, respectively. Incremental shares related to the assumed
    exercise of stock options included in the computation of diluted earnings
    per share totaled 227, 12,909 and 42,313 for the fiscal years ended June 30,
    2001, 2000 and 1999, respectively.

    Options to purchase 105,563 and 5,952 shares of common stock with a
    respective weighted-average exercise price of $9.24 and $12.89 were
    outstanding at June 30, 2001 and 2000, respectively, but were excluded from
    the computation of common share equivalents because the exercise prices were
    greater than the average market price of the common shares.

    11.  Cash and Cash Equivalents

    For purposes of reporting cash flows, cash and cash equivalents includes
    cash and due from banks and interest-bearing deposits in other financial
    institutions with original terms to maturity of less than ninety days.


                                       28
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    12.  Fair Value of Financial Instruments

    SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
    requires disclosure of fair value of financial instruments, both assets and
    liabilities, whether or not recognized in the consolidated statement of
    financial condition, for which it is practicable to estimate that value. For
    financial instruments where quoted market prices are not available, fair
    values are based on estimates using present value and other valuation
    methods.

    The methods used are greatly affected by the assumptions applied, including
    the discount rate and estimates of future cash flows. Therefore, the fair
    values presented may not represent amounts that could be realized in an
    exchange for certain financial instruments.

    The following methods and assumptions were used by the Corporation in
    estimating its fair value disclosures for financial instruments at June 30,
    2001 and 2000:

                  Cash and cash equivalents: The carrying amounts presented in
                  the consolidated statements of financial condition for cash
                  and cash equivalents are deemed to approximate fair value.

                  Investment and mortgage-backed securities: For investment and
                  mortgage-backed securities, fair value is deemed to equal the
                  quoted market price.

                  Loans receivable: The loan portfolio has been segregated into
                  categories with similar characteristics, such as one- to
                  four-family residential, multi-family residential and
                  nonresidential real estate. These loan categories were further
                  delineated into fixed-rate and adjustable-rate loans. The fair
                  values for the resultant loan categories were computed via
                  discounted cash flow analysis, using current interest rates
                  offered for loans with similar terms to borrowers of similar
                  credit quality. For loans on deposit accounts and consumer and
                  other loans, fair values were deemed to equal the historic
                  carrying values. The historical carrying amount of accrued
                  interest on loans is deemed to approximate fair value.

                  Federal Home Loan Bank stock: The carrying amount presented in
                  the consolidated statements of financial condition is deemed
                  to approximate fair value.

                  Deposits: The fair value of NOW accounts, passbook and club
                  accounts, and money market deposits is deemed to approximate
                  the amount payable on demand. Fair values for fixed-rate
                  certificates of deposit have been estimated using a discounted
                  cash flow calculation using the interest rates currently
                  offered for deposits of similar remaining maturities.

                  Advances from the Federal Home Loan Bank: The fair value of
                  these advances is estimated using the rates currently offered
                  for similar advances of similar remaining maturities or, when
                  available, quoted market prices.



                                       29
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

    12.  Fair Value of Financial Instruments (continued)

                  Commitments to extend credit: For fixed-rate and
                  adjustable-rate loan commitments, the fair value estimate
                  considers the difference between current levels of interest
                  rates and committed rates. The difference between the fair
                  value and notional amount of outstanding loan commitments at
                  June 30, 2001 and 2000 was not material.

    Based on the foregoing methods and assumptions, the carrying value and fair
    value of the Corporation's financial instruments at June 30 are as follows:
<TABLE>
<CAPTION>
                                                                         2001                               2000
                                                               Carrying         Fair              Carrying         Fair
                                                                  value        value                 value        value
                                                                                    (In thousands)
<S>                                                              <C>            <C>                 <C>            <C>
    Financial assets
      Cash and cash equivalents                                $  9,340     $  9,340              $  2,419     $  2,419
      Investment securities                                       1,000        1,000                 2,875        2,875
      Mortgage-backed securities                                 11,520       11,603                13,324       13,323
      Loans receivable                                          107,467      106,684               102,939      103,425
      Federal Home Loan Bank stock                                1,786        1,786                 1,652        1,652
                                                                -------      -------               -------      -------

                                                               $131,113     $130,413              $123,209     $123,694
                                                                =======      =======               =======      =======

    Financial liabilities
      Deposits                                                 $ 91,018     $ 91,518              $ 77,987     $ 77,401
      Advances from the Federal Home Loan Bank                   24,732       24,783                30,412       30,177
                                                                -------      -------               -------      -------

                                                               $115,750     $116,301              $108,399     $107,578
                                                                =======      =======               =======      =======
</TABLE>

    13.  Advertising

    Advertising costs are expensed when incurred. The Corporation's advertising
    expense for the fiscal years ended June 30, 2001, 2000 and 1999 totaled
    $49,000, $56,000 and $65,000, respectively.

    14.  Reclassifications

    Certain prior year amounts have been reclassified to conform to the 2001
    consolidated financial statement presentation.









                                       30
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES

    The amortized cost, gross unrealized gains, gross unrealized losses and
    estimated fair values of investment securities at June 30, 2001 and 2000,
    are as follows:

<TABLE>
<CAPTION>

                                                                                     June 30, 2001
                                                                               Gross               Gross      Estimated
                                                            Amortized     unrealized          unrealized           fair
                                                                 cost          gains              losses          value
                                                                                     (In thousands)
<S>                                                             <C>             <C>                 <C>            <C>
    Available for sale:
      U.S. Government agency obligations                       $1,000            $-                  $-          $1,000
                                                                =====             ==                  ==          =====


                                                                                     June 30, 2000
                                                                               Gross               Gross      Estimated
                                                            Amortized     unrealized          unrealized           fair
                                                                 cost          gains              losses          value
                                                                                     (In thousands)
    Available for sale:
      U.S. Government agency obligations                       $3,000            $-                 $125         $2,875
                                                                =====             ==                 ===          =====
</TABLE>

    The U. S.  Government  agency  obligations  designated as available for sale
    at June 30, 2001, are scheduled to mature in the fiscal year ended June 30,
    2006.




























                                       31
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES (continued)

    The amortized cost, gross unrealized gains, gross unrealized losses and
    estimated fair value of mortgage-backed securities at June 30, 2001 and
    2000, are shown below:
<TABLE>
<CAPTION>

                                                                                          2001
                                                                                 Gross             Gross      Estimated
                                                            Amortized       unrealized        unrealized           fair
                                                                 cost            gains            losses          value
                                                                                      (In thousands)
<S>                                                            <C>                 <C>              <C>           <C>
    Held to maturity:
      Federal Home Loan Mortgage
        Corporation participation certificates                $ 3,397             $ 61               $-         $ 3,458
      Government National Mortgage
        Association participation certificates                    324               22                -             346
                                                               ------              ---                --         ------
         Total mortgage-backed securities
           held to maturity                                     3,721               83                -           3,804

    Available for sale:
      Federal National Mortgage
        Association participation certificates                  6,509               63                -           6,572
      Federal Home Loan Mortgage
        Corporation participation certificates                    161                4                -             165
      Government National Mortgage
        Association participation certificates                  1,045               17                -           1,062
                                                               ------              ---                --         ------
         Total mortgage-backed securities
           available for sale                                   7,715               84                -           7,799
                                                               ------              ---                --         ------

         Total mortgage-backed securities                     $11,436             $167               $-         $11,603
                                                               ======              ===                ==         ======

                                                                                          2000
                                                                                 Gross             Gross      Estimated
                                                            Amortized       unrealized        unrealized           fair
                                                                 cost            gains            losses          value
                                                                                      (In thousands)
    Held to maturity:
      Federal Home Loan Mortgage
        Corporation participation certificates                $ 3,779             $ 19              $ 34        $ 3,764
      Government National Mortgage
        Association participation certificates                    410               14                -             424
                                                               ------              ---               ---         ------
         Total mortgage-backed securities
           held to maturity                                     4,189               33                34          4,188

    Available for sale:
      Federal National Mortgage
        Association participation certificates                  7,435               -                347          7,088
      Federal Home Loan Mortgage
        Corporation participation certificates                    189               -                  1            188
      Government National Mortgage
        Association participation certificates                  1,894               -                 35          1,859
                                                               ------              ---               ---         ------
         Total mortgage-backed securities
           available for sale                                   9,518               -                383          9,135
                                                               ------              ---               ---         ------

         Total mortgage-backed securities                     $13,707             $ 33              $417        $13,323
                                                               ======              ===               ===         ======
</TABLE>




                                       32
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE B - INVESTMENTS AND MORTGAGE-BACKED SECURITIES (continued)

    The amortized cost of mortgage-backed securities, including those designated
    as available for sale at June 30, 2001, by contractual term to maturity are
    shown below. Expected maturities will differ from contractual maturities
    because borrowers may generally prepay obligations without prepayment
    penalties.

                                                                  Amortized
                                                                    cost
                                                               (In thousands)

    Due within five years                                         $    178
    Due within five to ten years                                       640
    Due after ten years                                             10,618
                                                                    ------

                                                                   $11,436
                                                                    ======

    As of June 30, 2001, mortgage-backed securities totaling $677,000 were
    pledged to secure public deposits.


NOTE C - LOANS RECEIVABLE

    The composition of the loan portfolio at June 30 is as follows:
<TABLE>
<CAPTION>

                                                                              2001           2000
                                                                                 (In thousands)
<S>                                                                          <C>             <C>
    Residential real estate
      One- to four-family                                                 $ 67,643       $ 71,960
      Multi-family                                                           7,603          7,233
    Nonresidential real estate and land                                     24,645         17,092
    Commercial loans - secured                                               6,939          4,899
    Commercial loans - unsecured                                               471          1,040
    Consumer and other loans                                                 1,623          1,515
    Deferred loan origination costs                                              1             -
                                                                           -------        -------
                                                                           108,925        103,739
    Less:
      Undisbursed portion of loans in process                                1,134          1,200
      Deferred loan origination fees                                            -              46
      Allowance for loan losses                                                564            375
                                                                           -------        -------

                                                                          $107,227       $102,118
                                                                           =======        =======
</TABLE>






                                       33
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE C - LOANS RECEIVABLE (continued)

    The Bank's lending efforts have historically focused on one- to four-family
    and multi-family residential real estate loans, which comprise approximately
    $74.1 million, or 69%, of the total loan portfolio at June 30, 2001, and
    approximately $78.0 million, or 76%, of the total loan portfolio at June 30,
    2000. Generally, such loans have been underwritten on the basis of no more
    than an 80% loan-to-value ratio, which has historically provided the Bank
    with adequate collateral coverage in the event of default. Nevertheless, the
    Bank, as with any lending institution, is subject to the risk that real
    estate values could deteriorate in its primary lending area of north central
    Ohio, thereby impairing collateral values. However, management is of the
    belief that real estate values in the Bank's primary lending area are
    presently stable.

    As discussed previously, the Bank has sold whole loans and participating
    interests in loans in the secondary market, generally retaining servicing on
    the loans sold. Loans sold and serviced for others totaled approximately
    $17.2 million and $9.1 million at June 30, 2001 and 2000, respectively.

    In the ordinary course of business, the Bank has made loans to some of its
    directors and officers and their related business interests. In the opinion
    of management, such loans are consistent with sound lending practices and
    are within applicable regulatory lending limitations. The balance of such
    loans totaled approximately $298,000 and $294,000 at June 30, 2001 and 2000,
    respectively.


NOTE D - ALLOWANCE FOR LOAN LOSSES

    The activity in the allowance for loan losses is summarized as follows for
the years ended June 30:
<TABLE>
<CAPTION>

                                                        2001           2000           1999
                                                                 (In thousands)
<S>                                                     <C>            <C>           <C>
    Beginning balance                                   $375           $269           $270
    Provision for losses on loans                        201            106             -
    Loan charge-offs                                     (12)            -              (1)
                                                         ---            ---            ---

    Ending balance                                      $564           $375           $269
                                                         ===            ===            ===
</TABLE>

    As of June 30, 2001, the Bank's allowance for loan losses was comprised
    solely of a general loan loss allowance, which is includible as a component
    of regulatory risk-based capital.

    Nonperforming and nonaccrual loans at June 30, 2001, 2000 and 1999, totaled
    $105,000, $225,000 and $15,000, respectively. Interest income that would
    have been recognized had nonaccrual loans performed pursuant to contractual
    terms totaled approximately $3,000, $12,000 and $1,000 for the years ended
    June 30, 2001, 2000 and 1999, respectively.





                                       34
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE E - OFFICE PREMISES AND EQUIPMENT

    Office premises and equipment at June 30 is comprised of the following:
<TABLE>
<CAPTION>

                                                           2001           2000
                                                              (In thousands)
<S>                                                       <C>             <C>
    Land                                                $   323        $   323
    Buildings and improvements                              844            836
    Furniture and equipment                                 634            606
                                                         ------         ------
                                                          1,801          1,765
      Less accumulated depreciation and
        amortization                                        630            512
                                                         ------         ------

                                                         $1,171         $1,253
                                                          =====          =====
</TABLE>































                                       35
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE F - DEPOSITS

    Deposits consist of the following major classifications at June 30:
<TABLE>
<CAPTION>

    Deposit type and weighted-
    average interest rate                                                2001                           2000
                                                               Amount          %                  Amount         %
                                                                          (Dollars in thousands)
<S>                                                              <C>         <C>                    <C>          <C>
    NOW accounts
      2001 - 0.25%                                            $13,482        14.8%
      2000 - 0.40%                                                                               $ 9,543        12.3%
    Passbook
      2001 - 3.34%                                             26,467        29.1
      2000 - 4.08%                                                                                24,666        31.6
                                                               ------       -----                 ------       -----
    Total demand, transaction and
      passbook deposits                                        39,949        43.9                 34,209        43.9

    Certificates of deposit
      Original maturities of:
        One year or less
          2001 - 5.14%                                         10,025        11.0
          2000 - 5.87%                                                                            14,316        18.3
        12 months to 36 months
          2001 - 6.31%                                         35,409        38.9
          2000 - 6.30%                                                                            24,469        31.4
      Individual retirement accounts
        2001 - 6.07%                                            5,635         6.2
        2000 - 5.79%                                                                               4,993         6.4
                                                               ------       -----                 ------       -----

    Total certificates of deposit                              51,069        56.1                 43,778        56.1
                                                               ------       -----                 ------       -----

    Total deposit accounts                                    $91,018       100.0%               $77,987       100.0%
                                                               ======       =====                 ======       =====
</TABLE>

    The Bank had certificate of deposit accounts with balances in excess of
    $100,000 totaling $6.6 million and $3.9 million at June 30, 2001 and 2000,
    respectively.

    Interest expense on deposits for the year ended June 30 is summarized as
    follows:

                                            2001            2000           1999
                                                      (In thousands)

    Passbook                              $  960          $  885         $  737
    NOW accounts                              39              68             81
    Certificates of deposit                2,931           2,219          2,166
                                           -----           -----          -----

                                          $3,930          $3,172         $2,984
                                           =====           =====          =====




                                       36
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE F - DEPOSITS (continued)

    Maturities of outstanding certificates of deposit at June 30 are summarized
    as follows:

                                                     2001                2000
                                                          (In thousands)

    Less than one year                            $37,145             $28,650
    One year to two years                          10,764              12,736
    Two years to three years                        3,160               2,392
                                                   ------              ------

                                                  $51,069             $43,778
                                                   ======              ======


NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK

    Advances from the Federal Home Loan Bank, collateralized at June 30, 2001 by
    a pledge of certain residential mortgage loans totaling $30.9 million and
    the Bank's investment in Federal Home Loan Bank stock, are summarized as
    follows:
<TABLE>
<CAPTION>

    Interest                 Maturing in year
    rate                     ending June 30,                                2001                2000
                                                                             (Dollars in thousands)
<S>                                 <C>                                      <C>                 <C>
    6.83% - 7.35%                  2001                                 $     -              $12,000
    5.52%                          2002                                    4,000                  -
    6.58%                          2004                                       -                2,500
    3.90% - 8.15%                  2005                                    2,512                  14
    5.06% - 5.65%                  2009                                    5,814               5,898
    4.36% - 6.31%                  After 2009                             12,406              10,000
                                                                          ------              ------

                                                                         $24,732             $30,412
                                                                          ======              ======

    Weighted-average interest rate                                          4.78%               6.48%
                                                                            ====                ====
</TABLE>


















                                       37
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE H - FEDERAL INCOME TAXES

    Federal income taxes differ from the amounts computed at the statutory
    corporate tax rate for the years ended June 30 as follows:
<TABLE>
<CAPTION>

                                                                  2001           2000           1999
                                                                        (Dollars in thousands)
<S>                                                               <C>             <C>           <C>
    Federal income taxes at statutory rate                        $565           $469           $369
    Decrease in taxes resulting primarily from
      nontaxable interest income                                    (5)           (11)            (1)
                                                                   ---            ---            ---
    Federal income taxes per consolidated
      financial statements                                        $560           $458           $368
                                                                   ===            ===            ===

    Effective tax rate                                            33.7%          33.2%          33.9%
                                                                  ====           ====           ====
</TABLE>

    The composition of the Corporation's net deferred tax asset (liability) at
    June 30 is as follows:
<TABLE>
<CAPTION>


    Taxes (payable) refundable on temporary                                   2001         2000
    differences at statutory rate:                                             (In thousands)
<S>                                                                            <C>          <C>
    Deferred tax assets:
      Deferred loan origination fees                                         $  -          $ 15
      Retirement expense                                                        44           46
      General loan loss allowance                                              192          124
      Unrealized losses on securities designated as
        available for sale                                                      -           173
      Other                                                                      2            3
                                                                              ----          ---
         Deferred tax assets                                                   238          361

    Deferred tax liabilities:
      Financed loan origination fees                                           (66)         (70)
      Federal Home Loan Bank stock dividends                                  (222)        (179)
      Difference between book and tax depreciation                             (38)         (20)
      Unrealized gains on securities designated as available
        for sale                                                               (29)          -
      Percentage of earnings bad debt deduction                                (40)         (56)
      Mortgage servicing rights                                                (42)         (22)
                                                                              ----          ---
         Deferred tax liabilities                                             (437)        (347)
                                                                              ----          ---

         Net deferred tax asset (liability)                                  $(199)        $ 14
                                                                              ====          ===
</TABLE>

    Prior to fiscal 1997, the Bank was allowed a special bad debt deduction
    generally limited to 8% of otherwise taxable income and subject to certain
    limitations based on aggregate loans and deposit account balances at the end
    of the year. If the amounts that qualified as deductions for federal income
    taxes are later used for purposes other than bad debt losses, including
    distributions in liquidation, such distributions will be subject to federal
    income taxes at the then current corporate income tax rate. Retained
    earnings at June 30, 2001, include approximately $1.7 million for which
    federal income taxes have not been provided. The amount of unrecognized
    deferred tax liability relating to the cumulative bad debt deduction was
    approximately $550,000 at June 30, 2001.




                                       38
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE H - FEDERAL INCOME TAXES (continued)

    The Bank is required to recapture as taxable income approximately $281,000
    of its tax bad debt reserve, which represents the post-1987 additions to the
    reserve, and will be unable to utilize the percentage of earnings method to
    compute its bad debt deduction in the future. The Bank has provided deferred
    taxes for this amount and began to amortize the recapture of the bad debt
    reserve into taxable income over a six year period in fiscal 1998.


NOTE I - LOAN COMMITMENTS

    The Bank is a party to financial instruments with off-balance-sheet risk in
    the normal course of business to meet the financing needs of its customers,
    including commitments to extend credit. Such commitments involve, to varying
    degrees, elements of credit and interest-rate risk in excess of the amount
    recognized in the consolidated statement of financial condition. The
    contract or notional amounts of the commitments reflect the extent of the
    Bank's involvement in such financial instruments.

    The Bank's exposure to credit loss in the event of nonperformance by the
    other party to the financial instrument for commitments to extend credit is
    represented by the contractual notional amount of those instruments. The
    Bank uses the same credit policies in making commitments and conditional
    obligations as those utilized for on-balance-sheet instruments.

    At June 30, 2001, the Bank had outstanding commitments of approximately $1.1
    million to originate loans. Additionally, the Bank was obligated under
    unused lines of credit under home equity loans totaling $9.1 million and
    unused lines of credit under commercial loans of $4.6 million. In the
    opinion of management, all loan commitments equaled or exceeded prevailing
    market interest rates as of June 30, 2001, and will be funded from normal
    cash flow from operations. As of June 30, 2001, the Bank had commitments to
    sell loans to the FHLMC totaling $467,000.


NOTE J - REGULATORY CAPITAL

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







                                       39
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE J - REGULATORY CAPITAL (continued)

    The minimum capital standards of the OTS generally require the maintenance
    of regulatory capital sufficient to meet each of three tests, hereinafter
    described as the tangible capital requirement, the core capital requirement
    and the risk-based capital requirement. The tangible capital requirement
    provides for minimum tangible capital (defined as shareholders' equity less
    all intangible assets) equal to 1.5% of adjusted total assets. The core
    capital requirement provides for minimum core capital (tangible capital plus
    certain forms of supervisory goodwill and other qualifying intangible
    assets) generally equal to 4.0% of adjusted total assets, except for those
    associations with the highest examination rating and acceptable levels of
    risk. The risk-based capital requirement provides for the maintenance of
    core capital plus general loss allowances equal to 8.0% of risk-weighted
    assets. In computing risk-weighted assets, the Bank multiplies the value of
    each asset on its statement of financial condition by a defined
    risk-weighting factor, e.g., one- to four-family residential loans carry a
    risk-weighted factor of 50%.

    During the 2001 fiscal year, the Bank was notified by the OTS that it was
    categorized as "well-capitalized" under the regulatory framework for prompt
    corrective action. To be categorized as "well-capitalized" the Bank must
    maintain minimum capital ratios as set forth in the following tables.

    As of June 30, 2001 and 2000, management believes that the Bank met all
    capital adequacy requirements to which it was subject.
<TABLE>
<CAPTION>

                                                                As of June 30, 2001
                                                                                                 To be "well-
                                                                                              capitalized" under
                                                                     For capital               prompt corrective
                                             Actual                adequacy purposes          action provisions
                                         Amount    Ratio           Amount    Ratio             Amount     Ratio
                                                               (Dollars in thousands)
<S>                                       <C>       <C>             <C>        <C>              <C>          <C>
    Tangible capital                    $14,733    11.2%         =>$1,980    =>1.5%          =>$6,599     => 5.0%

    Core capital                        $14,733    11.2%         =>$5,279    =>4.0%          =>$7,919     => 6.0%

    Risk-based capital                  $15,297    16.6%         =>$7,366    =>8.0%          =>$9,207     =>10.0%

                                                                As of June 30, 2000
                                                                                                 To be "well-
                                                                                              capitalized" under
                                                                     For capital               prompt corrective
                                             Actual                adequacy purposes          action provisions
                                         Amount    Ratio           Amount    Ratio             Amount     Ratio
                                                               (Dollars in thousands)

    Tangible capital                    $15,519    12.3%         =>$1,897    =>1.5%          =>$6,323     => 5.0%

    Core capital                        $15,519    12.3%         =>$5,058    =>4.0%          =>$7,587     => 6.0%

    Risk-based capital                  $15,885    19.4%         =>$6,550    =>8.0%          =>$8,188     =>10.0%
</TABLE>





                                       40
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE J - REGULATORY CAPITAL (continued)

    The Bank's management believes that, under the current regulatory capital
    regulations, the Bank will continue to meet its minimum capital requirements
    in the foreseeable future. However, events beyond the control of the Bank,
    such as increased interest rates or a downturn in the economy in the Bank's
    market area, could adversely affect future earnings and, consequently, the
    ability to meet future minimum regulatory capital requirements.


NOTE K- CONDENSED FINANCIAL STATEMENTS OF FFD FINANCIAL CORPORATION

    The following condensed financial statements summarize the financial
    position of FFD Financial Corporation as of June 30, 2001 and 2000, and the
    results of its operations and its cash flows for the years ended June 30,
    2001, 2000 and 1999.

                            FFD Financial Corporation
<TABLE>
<CAPTION>
                        STATEMENTS OF FINANCIAL CONDITION
                                    June 30,
                                 (In thousands)

         ASSETS                                                                                2001                2000
<S>                                                                                         <C>                    <C>
    Cash and due from banks                                                                 $   924             $   136
    Loan receivable from ESOP                                                                   740                 838
    Investment in First Federal Community Bank                                               14,800              15,190
    Accrued interest receivable                                                                  12                  12
    Prepaid federal income taxes                                                                125                  57
    Prepaid expenses and other assets                                                             3                  32
                                                                                             ------              ------

         Total assets                                                                       $16,604             $16,265
                                                                                             ======              ======

         SHAREHOLDERS' EQUITY

    Shareholders' equity
      Common stock and additional paid-in capital                                           $ 7,861             $ 7,850
      Retained earnings                                                                      10,962              10,288
      Unrealized gains (losses) on securities designated as available
        for sale, net of related tax effects                                                     55                (335)
      Shares acquired by stock benefit plans                                                   (852)             (1,028)
      Treasury shares - at cost                                                              (1,422)               (510)
                                                                                             ------              ------

         Total shareholders' equity                                                         $16,604             $16,265
                                                                                             ======              ======
</TABLE>








                                       41
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999

NOTE K - CONDENSED FINANCIAL STATEMENTS OF FFD FINANCIAL CORPORATION (continued)

                            FFD Financial Corporation
<TABLE>
<CAPTION>
                             STATEMENTS OF EARNINGS
                               Year ended June 30,
                                 (In thousands)
                                                                                2001             2000              1999
<S>                                                                             <C>               <C>              <C>
    Revenue
      Interest income                                                         $   34           $   60              $ 54
      Equity in earnings of subsidiary                                         1,233            1,002               833
                                                                               -----            -----               ---
         Total revenue                                                         1,267            1,062               887

    General and administrative expenses                                          234              181               229
                                                                               -----            -----               ---

         Earnings before income tax credits                                    1,033              881               658

    Federal income tax credits                                                   (68)             (41)              (59)
                                                                               -----            -----               ---

         NET EARNINGS                                                         $1,101           $  922              $717
                                                                               =====            =====               ===
</TABLE>

                            FFD Financial Corporation
<TABLE>
<CAPTION>
                            STATEMENTS OF CASH FLOWS
                               Year ended June 30,
                                 (In thousands)

                                                                                2001             2000              1999
<S>                                                                             <C>               <C>              <C>
    Cash provided by (used in) operating activities:
      Net earnings for the year                                               $1,101           $  922            $  717
      Adjustments to reconcile net earnings to net
      cash provided by (used in) operating activities:
        Distributions from subsidiary in excess of earnings                      967               -                567
        Undistributed earnings of subsidiary                                      -            (1,001)               -
        Increase (decrease) in cash due to changes in:
          Prepaid expenses and other assets                                       29              (13)                6
          Other liabilities                                                       -                -                 (4)
          Prepaid federal income taxes                                           (68)              15               (72)
                                                                               -----            -----             -----
          Net cash provided by (used in) operating activities                  2,029              (77)            1,214

    Cash flows provided by (used in) investing activities:
      Proceeds from repayment of loan to ESOP                                     98               93               116

    Cash flows provided by (used in) financing activities:
      Proceeds from other borrowed money                                         225               -                 -
      Repayments of other borrowed money                                        (225)              -                 -
      Proceeds from exercise of stock options                                     -                27                76
      Purchase of treasury shares                                               (912)            (529)               -
      Cash dividends paid on common stock                                       (427)            (484)             (403)
                                                                               -----            -----             -----
          Net cash used in financing activities                               (1,339)            (986)             (327)
                                                                               -----            -----             -----

    Net increase (decrease) in cash and cash equivalents                         788             (970)            1,003

    Cash and cash equivalents at beginning of year                               136            1,106               103
                                                                               -----            -----             -----

    Cash and cash equivalents at end of year                                  $  924           $  136            $1,106
                                                                               =====            =====             =====
</TABLE>








                                       42
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE K - CONDENSED FINANCIAL STATEMENTS OF FFD FINANCIAL CORPORATION (continued)

    Regulations of the OTS impose limitations on the payment of dividends and
    other capital distributions by savings associations. Generally, the Bank's
    payment of dividends is limited, without prior OTS approval, to net earnings
    for the current calendar year plus the two preceding calendar years, less
    capital distributions paid over the comparable time period. The Bank is
    required to submit a notice of dividends payable with the OTS prior to
    payment. Insured institutions are required to file an application with the
    OTS for capital distributions in excess of this limitation.


    NOTE L - STOCK OPTION PLAN

    The FFD Financial Corporation 1996 Stock Option and Incentive Plan (the
    "Plan") provides for the issuance of 145,475 shares of authorized but
    unissued shares of common stock.

    The Corporation accounts for the Plan in accordance with SFAS No. 123,
    "Accounting for Stock-Based Compensation," which contains a fair value-based
    method for valuing stock-based compensation that entities may use, which
    measures compensation cost at the grant date based on the fair value of the
    award. Compensation is then recognized over the service period, which is
    usually the vesting period. Alternatively, SFAS No. 123 permits entities to
    continue to account for stock options and similar equity instruments under
    Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
    Issued to Employees." Entities that continue to account for stock options
    using APB Opinion No. 25 are required to make pro forma disclosures of net
    earnings and earnings per share, as if the fair value-based method of
    accounting defined in SFAS No. 123 had been applied.

    The Corporation applies APB Opinion No. 25 and related Interpretations in
    accounting for its Plan. Accordingly, no compensation cost has been
    recognized with respect to the Plan. Had compensation cost for the Plan been
    determined based on the fair value at the grant date in a manner consistent
    with the accounting method utilized in SFAS No. 123, then the Corporation's
    consolidated net earnings and earnings per share for the fiscal years ended
    June 30, 2001, 2000 and 1999, would have been reduced to the pro forma
    amounts indicated below:


















                                       43
<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2001, 2000 and 1999


NOTE L - STOCK OPTION PLAN (continued)
<TABLE>
<CAPTION>

                                                                       2001         2000         1999
<S>                                   <C>                               <C>         <C>          <C>

    Net earnings (In thousands)      As reported                     $1,101         $922         $717
                                                                      =====          ===          ===

                                       Pro-forma                     $1,083         $906         $698
                                                                      =====          ===          ===

    Earnings per share
      Basic                          As reported                       $.86         $.69         $.53
                                                                        ===          ===          ===

                                       Pro-forma                       $.85         $.67         $.51
                                                                        ===          ===          ===

      Diluted                        As reported                       $.86         $.68         $.51
                                                                        ===          ===          ===

                                       Pro-forma                       $.85         $.67         $.50
                                                                        ===          ===          ===
</TABLE>

    The fair value of each option grant is estimated on the date of grant using
    the modified Black-Scholes options-pricing model with the following
    weighted-average assumptions used for grants in fiscal 2001, 2000 and 1999:
    dividend yield of 6.55%, expected volatility of 20.0%, a risk-free interest
    rate of 6.0% and an expected life of ten years.

    A summary of the status of the Corporation's stock option plan as of June
    30, 2001, 2000 and 1999, and changes during the years then ended are
    presented below:
<TABLE>
<CAPTION>
                                                    2001                     2000                       1999
                                                       Weighted-                Weighted-                   Weighted-
                                                         average                  average                     average
                                                        exercise                 exercise                    exercise
                                             Shares        price       Shares       price         Shares        price
<S>                                            <C>          <C>         <C>          <C>           <C>         <C>
    Outstanding at beginning of year        109,538        $ 9.36     117,883       $10.26       130,329      $10.15
    Granted                                   3,000          8.38      18,635        10.11         3,000       14.63
    Exercised                                    -              -      (2,967)        9.14        (8,066)       9.38
    Forfeited                                (3,975)        12.43     (24,013)       14.38        (7,380)      11.07
                                            -------         -----     -------        -----       -------       -----

    Outstanding at end of year              108,563        $ 9.22     109,538       $ 9.36       117,883      $10.26
                                            =======         =====     =======        =====       =======       =====

    Options exercisable at year-end          73,612        $ 9.14      52,017       $ 9.20        41,096      $ 9.86
                                            =======         =====     =======        =====       =======       =====
    Weighted-average fair value of
      options granted during the year                      $ 1.59                   $ 1.18                    $ 1.71
                                                            =====                    =====                     =====
</TABLE>


    The following information applies to options outstanding at June 30, 2001:

    Number outstanding                                                  108,563
    Range of exercise prices                                     $8.38 - $14.63
    Weighted-average exercise price                                       $9.22
    Weighted-average remaining contractual life in years                    5.9



                                       44
<PAGE>


                            FFD FINANCIAL CORPORATION
                                       AND
                          FIRST FEDERAL COMMUNITY BANK
                        DIRECTORS AND EXECUTIVE OFFICERS

=============================================================================
<TABLE>
<CAPTION>

         Board of Directors of                           Executive Officers of
    FFD Financial Corporation and                       FFD Financial Corporation
    First Federal Community Bank
<S>                                                           <C>
                                                             Trent B. Troyer
          Stephen G. Clinton                         President & Chief Executive Officer
            Vice-President
         Young and Associates                               Scott C. Finnell
                                                          Senior Vice President
            J. Richard Gray
                Chairman                                    Robert R. Gerber
          Hanhart Agency, Inc.              Vice President, Treasurer and Chief Financial Officer

          Richard J. Herzig                                Shirley A. Wallick
          Chairman - Retired                              Corporate Secretary
    Toland-Herzig Funeral Homes, Inc.

           Enos L. Loader                                Executive Officers of
      Chairman of the Board and                        First Federal Community Bank
      Retired Senior Bank Officer
                                                             Trent B. Troyer
         Roy O. Mitchell, Jr.                       President & Chief Executive Officer
     Managing Officer - Retired
  First Federal Savings Bank of Dover                        Scott C. Finnell
                                                          Senior Vice President
         Robert D. Sensel
President and Chief Executive Officer                      Robert R. Gerber
       Dover Hydraulics, Inc.               Vice President, Treasurer and Chief Financial Officer

                                                           Shirley A. Wallick
                                                        Secretary and Treasurer

                                                           Other Officers of
                                                     First Federal Community Bank

                                                            Michele L. Larkin
                                                              Vice President

                                                             Jody P. Stoldt
                                                        Assistant Vice President

                                                            Mary M. Mitchell
                                                             Banking Officer

                                                        Kimberly Law-Montgomery
                                                           Assistant Secretary
</TABLE>



                                       45
<PAGE>
                              SHAREHOLDER SERVICES

=============================================================================

Registrar and Transfer Company serves as transfer agent and dividend
distributing agent for FFD's shares. Communications regarding change of address,
transfer of shares, lost certificates and dividends should be sent to:

                         Registrar and Transfer Company
                                10 Commerce Drive
                         Cranford, New Jersey 07016-3572
                                 (800) 368-5948


                                 ANNUAL MEETING

==============================================================================

The Annual Meeting of Shareholders of FFD Financial Corporation will be held on
October 16, 2001, at 1:00 p.m., Eastern Time, at the Toland-Herzig Monarch
Center, 831 Boulevard, Dover, Ohio 44622. Shareholders are cordially invited to
attend.


                          ANNUAL REPORT ON FORM 10-KSB

=============================================================================

A copy of FFD's Annual Report on Form 10-KSB, as filed with the Securities and
Exchange Commission, will be available at no charge to shareholders upon request
to:

                            FFD Financial Corporation
                            321 North Wooster Avenue
                                Dover, Ohio 44622
                              Attention: Secretary





















                                       46