<PAGE>

                                                                     EXHIBIT 13

2006                                                 Investing in our community
===============================================================================
                                        FFD Financial Corporation ANNUAL REPORT


                                            First Federal COMMUNITY BANK [LOGO]
<PAGE>

                                         Letter from the Chairman and President
===============================================================================

Dear Shareholder:

On behalf of the board of directors, management team and staff of FFD Financial
Corporation and its subsidiary, First Federal Community Bank, it is a pleasure
to present our 2006 Annual Report.

FFD Financial reported net earnings for the fiscal year ended June 30, 2006 of
$1.4 million ($1.13 per diluted share), a 22.8% increase compared to net
earnings of $1.1 million ($.92 per diluted share) in fiscal 2005. As expected,
our asset sensitive balance sheet responded favorably to rising interest rates
throughout the fiscal year. We also continued our trend of asset growth with 8%
growth in assets during fiscal 2006.

Highlights for the fiscal year ended June 30, 2006 include:

| | Loan originations were up over 15% from fiscal 2005 to $76.8 million.

| | Total loans receivable increased $12.5 million, or 9.9%

      o Residential real estate loan balances increased $4.6 million or 6.6%.

      o Business loans increased $5.5 million, or 9.4%, with most of the growth
        occurring in commercial real estate loans.

      o Consumer loans increased $1.1 million or 21.9%.

| | Residential loans sold and serviced totaled $77.2 million at June 30, 2006.

| | Total deposits increased $10.4 million or 9.3% for the year.

| | Net interest margin improved to 3.93% from 3.41% in the prior fiscal year.

| | Quarterly cash dividends totaling $.47 per share (an 8% increase over
    fiscal 2005) represent a 2.55% annual return based on the average of the
    low and high trading prices for the fiscal year.

                                                                              1
<PAGE>

Letter from the Chairman and President
===============================================================================

As we realized the benefits of rising interest rates, we also effectively
managed the challenges of rising rates. We achieved loan growth of
approximately 10%, continuing to diversify our loan portfolio. At June 30,
2006, residential loans comprised 51.3% of total loans, commercial real estate
were 33.1%, commercial loans were 11.4%, and consumer and other loans were
4.1%. As we have grown, our credit quality has remained strong. Non-performing
assets (which consisted solely of non-accruing loans) were .32% of average
assets at June 30, 2006, significantly below the recent average and median
ratios for publicly-traded Ohio banks and thrifts. Net charge-offs as a
percentage of average assets were .11%, slightly above recent average and
median ratios for publicly-traded Ohio thrifts but significantly below the
average for publicly-traded Ohio banks. Our overall loan delinquency ratio was
under one percent at .95% of total loans.

Deposit growth of over $10 million or 9.3% has kept pace with our loan
portfolio growth. During fiscal 2006, as consumers moved funds into higher
yielding time deposits, we pursued a disciplined pricing approach and were able
to maintain our core deposits at 49% of total deposits. This fiscal year
represented the first full year of operations at the Coshocton and Sugarcreek
lending centers and we have been pleased with their progress. We received
regulatory approval to take deposits at these locations, providing a new source
of funding to enable us to continue to grow and to manage our cost of funds.
These two offices have been accepting non-cash deposits since January as we
evaluate the prospects for full-service expansion in these new markets.

We continue to carefully monitor general and administrative expenses, which
increased 10.2% during the 2006 fiscal year, generally reflecting our growth
rate for the year. Most of this increase was expected due to our investment in
the Coshocton and Sugarcreek offices and additional staffing to support our
continuing growth. Despite the expense increase, we are operating more
efficiently than we were two years ago. Our efficiency ratio, the industry
standard which generally measures noninterest expense as a percent of net
interest income plus noninterest income, has declined in the last three fiscal
years to 65.4% in fiscal 2006 from 76.3% in fiscal 2004. For the twelve months
ended June 30, 2006, the median efficiency ratio for publicly-traded Ohio
thrifts and banks was 68.7% and 65.3%, respectively, as reported by SNL
Financial.

We remain committed to fulfilling our responsibilities as a public company. The
Securities and Exchange Commission has delayed the implementation of the
internal control requirements of Section 404 of the Sarbanes-Oxley Act for
companies our size, and revision of the requirements for smaller companies is
under consideration. We expect that the cost of complying with Section 404 will
be less than anticipated when the law was first enacted, and we are much more
comfortable that the regulation will be applied appropriately to smaller-cap
companies. We currently anticipate that our compliance date under Section 404
will be the June 30, 2008 fiscal year.


                                                                              2
<PAGE>
                                         Letter from the Chairman and President
===============================================================================

Our focus on Investing in our Community is not just a slogan - it is the way we
do business. Our associates accomplish that mission everyday by generously
giving their time, talents, and financial resources to improve the civic,
cultural, educational, and economic conditions of our area. There is a special
section on page __ of this Annual Report that highlights our significant
Investment in our Community.

Our growth and profitability confirm that the community bank business model is
working well in our market area. Our customers value the tailored, personal
attention we offer and that sets us apart from our larger competitors. We are
confident that our pursuit of excellence as a community bank will make your
investment in FFD Financial a stronger one. We remain committed to our
shareholders, our community, and our staff, and we express our appreciation to
you for your confidence and support.

Sincerely,

/s/ Trent B. Troyer                           /s/ E. L. Loader

    Trent B. Troyer                               E. L. Loader
    President & Chief Executive Officer           Chairman of the Board

                                                                              3
<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. Since its formation in 1996, FFD's activities have been limited
primarily to holding the common shares of First Federal.

First Federal's business involves attracting deposits from individual and
business customers and using such deposits to originate loans in its market
area, consisting of Tuscarawas and contiguous counties in Ohio. The Bank
provides a full array of deposit products including checking, savings, money
market, and individual retirement accounts, and certificates of deposit. First
Federal originates residential and home equity loans, construction loans,
commercial real estate loans, business loans and consumer loans. The Bank also
invests in securities consisting primarily of United States government and
government agency obligations 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,
loan sales and principal repayments on loans and mortgage-backed securities.
First Federal conducts business from its main office in Dover, Ohio, branches
in Dover and New Philadelphia, Ohio, and lending offices in Sugarcreek and
Coshocton, Ohio. Additionally, the Bank provides access to its products and
services via the Internet at www.onlinefirstfed.com.

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.

                                                                              4
<PAGE>

Market Price of FFD's Common Shares and Related Shareholder Matters
===============================================================================

There were 1,212,872 common shares of FFD outstanding on August 31, 2006. Price
information for FFD's common shares are listed on the Nasdaq Capital Market
("Nasdaq") under the symbol "FFDF."

The following table sets forth the high and low trading prices for FFD's common
shares on Nasdaq and the dividends declared per share, for each quarter of
fiscal years 2005 and 2006.

Fiscal 2005                 High Trade    Low Trade    Cash Dividends Declared
-----------                 ----------    ---------    -----------------------
  Quarter Ended
    September 30, 2004        $16.50        $13.05              $.105
    December 31, 2004          16.40         13.44               .110
    March 31, 2005             16.75         14.26               .110
    June 30, 2005              18.39         13.50               .110

Fiscal 2006                 High Trade    Low Trade    Cash Dividends Declared
-----------                 ----------    ---------    -----------------------
  Quarter Ended
    September 30, 2005        $17.78        $14.36              $.110
    December 31, 2005          20.50         14.91               .120
    March 31, 2006             22.46         18.50               .120
    June 30, 2006              21.90         16.89               .120

FFD's income consists primarily of dividends which may periodically be declared
and paid by the Board of Directors of First Federal on the shares held by FFD.
In addition to certain federal income tax considerations, OTS regulations limit
the payment of dividends and other capital distributions by savings
associations. First Federal is not permitted to pay a cash dividend on its
common shares if its regulatory capital 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 to stock form or applicable
regulatory capital requirements prescribed by the OTS.

                                                                              5
<PAGE>

Selected Consolidated Financial Information and Other Data
===============================================================================

The following table sets forth certain information concerning FFD's
consolidated financial condition, earnings and other data at the dates and for
the periods indicated.

<TABLE>
<CAPTION>
                                                                        At June 30,
Selected consolidated financial                ------------------------------------------------------------
condition data:                                    2006         2005         2004         2003         2002
                                                   ----         ----         ----         ----         ----
                                                                      (In thousands)

Total amount of:
<S>                                            <C>          <C>          <C>          <C>          <C>
Assets                                         $161,233     $148,595     $135,892     $136,408     $130,303
Interest-bearing deposits                         6,288        5,672        8,821       10,398       11,726
Investment securities available for sale -
 at market                                        3,353        3,485        4,402        1,502        2,047
Mortgage-backed securities available
 for sale - at market                               431          500          630          832        1,551
Mortgage-backed securities held to
 maturity - at cost                                 130          220          395          651        1,606
Loans receivable - net (1)                      144,556      131,493      114,505      115,966      107,055
Deposits                                        121,919      111,495      105,446      104,351       95,542
Advances from the FHLB                           18,428       17,880       12,669       13,891       17,553
Shareholders' equity, restricted                 18,363       17,438       16,738       16,918       16,541

<CAPTION>

                                                           For the year ended June 30,
                                               --------------------------------------------------
Summary of earnings:                             2006       2005       2004       2003       2002
                                                 ----       ----       ----       ----       ----
                                                      (In thousands, except per share data)

<S>                                            <C>        <C>        <C>        <C>        <C>
Interest income                                $9,475     $7,073     $6,360     $6,758     $8,005
Interest expense                                3,649      2,521      2,487      2,966      3,893
                                               ------     ------     ------     ------     ------
Net interest income                             5,826      4,552      3,873      3,792      4,112

Provision for losses on loans                     160         11         25        131        150
                                               ------     ------     ------     ------     ------
Net interest income after provision
 for losses on loans                            5,666      4,541      3,848      3,661      3,962

Other income                                      599        917        616      1,038        536
General, administrative and other
 expense                                        4,203      3,813      3,423      3,133      2,812
                                               ------     ------     ------     ------     ------
Earnings before income taxes                    2,062      1,645      1,041      1,566      1,686

Federal income taxes                              710        559        354        534        573
                                               ------     ------     ------     ------     ------
Net earnings                                   $1,352     $1,086     $  687     $1,032     $1,113
                                               ======     ======     ======     ======     ======
Earnings per share
  Basic                                        $1.15       $.94       $.59       $.88       $.94
                                               ======     ======     ======     ======     ======
  Diluted                                      $1.13       $.92       $.58       $.86       $.92
                                               ======     ======     ======     ======     ======

--------------------
(1) Includes loans held for sale.
</TABLE>

                                                                              6
<PAGE>

                     Selected Consolidated Financial Information and Other Data
===============================================================================

<TABLE>
<CAPTION>

                                                        At or for the year ended June 30,
                                               ---------------------------------------------------
Selected financial ratios and other data:        2006       2005       2004       2003       2002
                                                 ----       ----       ----       ----       ----

<S>                                            <C>        <C>        <C>        <C>        <C>
Return on average assets                         0.87%      0.78%      0.50%      0.77%      0.84%
Return on average equity                         7.56       6.39       4.05       6.17       6.75
Interest rate spread                             3.73       3.24       2.79       2.62       2.85
Net interest margin                              3.94       3.41       2.97       2.95       3.22
General, administrative and other
 expense to average assets                       2.70       2.73       2.50       2.34       2.13
Average equity to average
 assets                                         11.48      12.14      12.40      12.50      12.50
Nonperforming and impaired assets
 to total assets                                 0.79       0.82       0.84       1.76       0.48
Nonperforming and impaired loans to
 total loans                                     0.86       0.90       0.98       1.88       0.58
Delinquent loans to total loans (1)              0.93       1.02       1.18       1.28       2.57
Allowance for loan losses to
 total loans                                     0.51       0.57       0.67       0.68       0.66
Allowance for loan losses to
 nonperforming and impaired loans               59.17      62.99      68.09      36.45     114.63
Average interest-earning assets
 to average interest-bearing liabilities       108.46     108.86     109.27     114.63     112.05
Dividend payout ratio                           40.87      46.28      70.34      44.89      39.89
Number of full service offices                      3          3          3          3          3

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

                                                                              7
<PAGE>

Management's Discussion and Analysis of Financial Condition
 and Results of Operations
===============================================================================

General

FFD's principal business is owning all of the stock issued in First Federal's
1996 conversion from mutual to stock form. 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.

Forward-Looking Statements

Certain statements contained in this Annual Report that are not historical
facts are forward looking statements that are subject to certain risks and
uncertainties. When used herein, the terms "anticipates," "plans," "expects,"
"believes," and similar expressions as they relate to FFD or its management are
intended to identify such forward looking statements. FFD's actual results,
performance or achievements may materially differ from those expressed or
implied in the forward-looking statements. Risks and uncertainties that could
cause or contribute to such material differences include, but are not limited
to, general economic conditions, interest rate environment, competitive
conditions in the financial services industry, changes in law, governmental
policies and regulations, and rapidly changing technology affecting financial
services.

Critical Accounting Policies

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to use judgments in making estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and expenses. The
following critical accounting policy is based upon judgments and assumptions by
management that includes inherent risks and uncertainties.

The allowance for loan losses is an accounting estimate of probable, but
unconfirmed, asset impairment that has occurred in the Corporation's loan
portfolio as of the date of the consolidated financial statements, but before
losses have been confirmed via a recorded charge-off or write-down. It is the
Corporation's policy to provide valuation allowances for estimated losses on
loans based upon past loss experience, adjusted for changes in trends and
conditions of certain items, including:

                                                                              8
<PAGE>

                    Management's Discussion and Analysis of Financial Condition
                                                      and Results of Operations
===============================================================================

o  Local market areas and national economic developments;
o  Levels of, and trends in, delinquencies and impaired loans;
o  Levels of, and trends in, recoveries of prior charge-offs;
o  Adverse situations that may affect specific borrowers' ability to repay;
o  Effects of any changes in lending policies and procedures;
o  Credit concentrations;
o  Volume and terms of loans; and
o  Current collateral values, where appropriate.

When the collection of a loan becomes doubtful, or otherwise troubled, the
Corporation records a loan loss provision 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 Corporation accounts for its allowance for losses on loans in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 5, "Accounting
for Contingencies," and SFAS No. 114, "Accounting by Creditors for Impairment
of a Loan." Both Statements require the Corporation to evaluate the
collectibility of both contractual interest and principal loan payments. SFAS
No. 5 requires the accrual of a loss when it is probable that a loan has been
impaired and the amount of the loss can be reasonably estimated. SFAS No. 114
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.

A loan is impaired under SFAS No. 114 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 Corporation considers its investment in one- to
four-family residential loans and consumer loans to be homogeneous and
therefore excluded from separate identification for evaluation of impairment.
These homogeneous loan groups are evaluated for impairment in accordance with
SFAS No. 5. With respect to nonresidential real estate and other loans,
management believes such loans are adequately collateralized and as a result
impaired loans are carried at the lower of cost or fair value.

It is the Corporation's policy to charge off unsecured credits that are more
than ninety days delinquent. Similarly, once a collateral dependent loan
becomes more than ninety days delinquent, it is considered to constitute more
than a minimum delay in repayment and is evaluated for impairment under SFAS
No. 114 at that time.

CHANGES IN FINANCIAL CONDITION FROM JUNE 30, 2005 TO JUNE 30, 2006
-------------------------------------------------------------------------------

The Corporation's assets at June 30, 2006, totaled $161.2 million, a $12.6
million, or 8.5%, increase from the June 30, 2005 total. The increases were
comprised primarily of increases of $13.1 million in loans receivable and
$616,000 in interest-bearing deposits, Federal Home Loan Bank stock, accrued
interest receivable and prepaid expenses, which were partially offset by a $1.3
million decrease in prepaid federal income taxes, non-interest bearing cash,
mortgage-backed securities and investment securities.

Cash and interest-bearing deposits totaled $7.7 million at June 30, 2006, a
decrease of $93,000, or 1.2%, from June 30, 2005. Investment securities totaled
$3.4 million at June 30, 2006, a decrease of $132,000. No investment securities
were called or matured during the fiscal year ended June 30, 2006.

                                                                              9
<PAGE>

Management's Discussion and Analysis of Financial Condition
 and Results of Operations
===============================================================================

Mortgage-backed securities totaled $561,000 at June 30, 2006, a $159,000, or
22.1%, decrease from the total at June 30, 2005, due primarily to principal
repayments.

Loans receivable, including loans held for sale, totaled $144.6 million at June
30, 2006, an increase of $13.1 million, or 9.9%, from the June 30, 2005 total.
Loan disbursements during fiscal 2006 totaled $76.9 million, which were
partially offset by principal repayments of $49.2 million and loans sold in the
secondary market totaling $11.0 million. Loan origination volume during the
year ended June 30, 2006, increased by $10.3 million, or 15.5%, compared to
fiscal 2005. During fiscal 2006, management continued to meet consumer
preference for fixed-rate loans in the prevailing low interest rate environment
by selling lower-yielding fixed-rate mortgage loans in the secondary market.
The volume of loans sold during fiscal 2006 increased by approximately
$535,000, or 5.1%, from fiscal 2005. The portfolio of loans secured by one- to
four-family residential real estate increased by $3.6 million to $64.8 million
at June 30, 2006. Loans secured by nonresidential real estate and land totaled
$48.3 million at June 30, 2006, compared to $42.8 million at June 30, 2005.
Commercial loans totaled $16.7 million at June 30, 2006, unchanged from the
June 30, 2005 total.

The allowance for loan losses totaled $752,000 and $766,000 at June 30, 2006
and 2005, respectively, which represented .51% and .57% of total loans and
59.2% and 63.0% of nonperforming and impaired loans at those respective dates.
Nonperforming and impaired loans amounted to $1.3 million and $1.2 million at
June 30, 2006 and 2005, respectively. Management believes that the Bank's
nonperforming and impaired loans at June 30, 2006 are adequately collateralized
and no unreserved loss is anticipated on such loans. Although management
believes that the allowance for loan losses at June 30, 2006, was adequate
based upon the available facts and circumstances, there can be no assurance
that additions to the allowance will not be necessary in future periods, which
could adversely affect the Corporation's net earnings.

Deposits totaled $121.9 million at June 30, 2006, a $10.4 million, or 9.3%,
increase over total deposits at June 30, 2005. This increase resulted primarily
from management's efforts to generate deposit growth through advertising and
pricing strategies. Proceeds from deposit growth were used primarily to fund
new loan originations.

FHLB advances totaled $18.4 million at June 30, 2006, a $548,000, or 3.1%,
increase from June 30, 2005. The increase in FHLB advances was primarily used
to fund loan growth.

Shareholders' equity totaled $18.4 million at June 30, 2006, an increase of
$925,000, or 5.3% from June 30, 2005 levels. This increase was due primarily to
net earnings of $1.4 million, $220,000 of amortization of shares acquired by
benefit plans, and $64,000 in proceeds from the exercise of stock options,
which were partially offset by dividends paid totaling $561,000 and purchases
of treasury shares totaling $64,000.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2006 AND 2005
-------------------------------------------------------------------------------

FFD's consolidated net earnings 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.

                                                                             10
<PAGE>

                    Management's Discussion and Analysis of Financial Condition
                                                      and Results of Operations
===============================================================================

General

FFD's net earnings totaled $1.4 million for the fiscal year ended June 30,
2006, an increase of $266,000 or 24.5% compared to fiscal 2005. The increase in
net earnings resulted primarily from a $1.3 million increase in net interest
income, which was partially offset by increases of $390,000 in general,
administrative and other expense, $149,000 in the provision for losses on loans
and $151,000 in the provision for federal income taxes and a $318,000 decrease
in other income.

Net Interest Income

Total interest income increased by $2.4 million, or 34.0%, to a total of $9.5
million for the year ended June 30, 2006, compared to $7.1 million for the
fiscal year ended June 30, 2005. Interest income on loans increased by $2.3
million, or 33.9%, due primarily to a 102 basis point increase in the average
yield, to 6.53% in fiscal 2006, and a $15.7 million, or 12.9%, increase in the
average loan portfolio balance outstanding year to year. Interest income on
mortgage-backed securities decreased by $1,000, or 2.8%, due primarily to a
$188,000, or 22.2%, decrease in the average balance outstanding, which was
partially offset by a 106 basis point increase in the average yield earned on
such securities, to 5.31% in fiscal 2006. Interest income on investment
securities decreased by $19,000 due primarily to a $631,000 decrease in the
average balance outstanding, which was partially offset by a 22 basis point
increase in the average yield earned on such securities, to 4.39%. Interest
income on interest-bearing deposits increased by $156,000, or 84.8% due
primarily to a 250 basis point increase in the average yield, which was
partially offset by a $565,000, or 7.7%, decrease in the average balance
outstanding year to year. Increases in the average yields on interest-earning
assets were due primarily to the overall increase interest rates in the
economy.

Interest expense on deposits increased by $927,000, or 48.4%, for the year
ended June 30, 2006, compared to fiscal 2005, due primarily to an increase in
the average cost of deposits of 64 basis points to 2.40% and an increase in the
average deposit portfolio balance outstanding year to year of $9.8 million, or
9.0%.

Interest expense on borrowings increased by $201,000, or 33.3%, due primarily
to a $3.8 million, or 27.4%, increase in the average balance of advances
outstanding and a 20 basis point increase in the average cost of such
borrowings, to 4.55% in fiscal 2006.

As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $1.3 million, or 28.0%, for the fiscal year
ended June 30, 2006, compared to fiscal 2005. The interest rate spread was
3.73% for the fiscal year ended June 30, 2006, compared to 3.25% for fiscal
2005, while the net interest margin was 3.94% in fiscal 2006, compared to 3.41%
in fiscal 2005.

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 $160,000 for the year
ended June 30, 2006, an increase of $149,000 compared to fiscal 2005. First
Federal's fiscal 2006 provision was predicated primarily on growth in the loan
portfolio year over year. There can be no assurance that First Federal's loan
loss allowance will be adequate to cover losses on nonperforming assets in the
future.

                                                                             11
<PAGE>

Management's Discussion and Analysis of Financial Condition
 and Results of Operations
===============================================================================

Other Income

Other income totaled $599,000 for the fiscal year ended June 30, 2006, a
decrease of $318,000 or 34.7% from fiscal 2005. This decrease resulted
primarily from the absence of a $329,000 pre-tax gain recorded in 2005 from the
redemption of stock of Intrieve, Incorporated in conjunction with the
acquisition of Intrieve by Harland Financial Solutions, Inc., which was
partially offset by a $35,000 additional pre-tax gain in fiscal 2006 from hold
back payments from the same transaction and a decrease in gain on sale of loans
of $37,000, or 16.4%, which were partially offset by a $13,000, or 3.6%,
increase in other operating income.

General, Administrative and Other Expense

General, administrative and other expense totaled $4.2 million for the fiscal
year ended June 30, 2006, an increase of $390,000, or 10.2%, compared to fiscal
2005. The increase resulted from increases of $143,000, or 8.1%, in employee
compensation and benefits, $192,000, or 16.3%, in other operating expense,
$26,000, or 6.8%, in occupancy and equipment, $22,000, or 7.6%, in data
processing and $7,000, or 3.3%, in franchise tax.

The increase in employee compensation and benefits included increases of
$168,000 in wages, bonus and related benefit expenses and $3,000 in employee
stock ownership and stock option plan expense, which were partially offset by a
$31,000 increase in deferred loan origination costs and a decrease of $2,000 in
the cost of the recognition and retention plan. The increase in wages and
related expenses was due to increases in staff, salaries, and benefit plans.
The increase in employee stock ownership and stock option expense was the
result of higher average stock trading prices and the adoption of SFAS No.
123(R) in the fourth quarter of fiscal 2006. The increase in deferred loan
origination costs was related to the increase in the number of loans
originated. The decrease in the cost of recognition and retention plan occurred
because benefits have fully vested. The increase in other operating expenses
was primarily attributable to costs related to the Corporation's growth year to
year, as well as discretionary increases in advertising, increased legal costs
associated with the termination of the going private transaction, and increased
ATM transactions.

Federal Income Taxes

The provision for federal income taxes totaled $710,000 for the fiscal year
ended June 30, 2006, an increase of $151,000, or 27.0%, compared to fiscal
2005. The increase resulted primarily from a $417,000, or 25.3%, increase in
earnings before taxes. FFD's effective tax rates were 34.4% and 34.0% for both
of the fiscal years ended June 30, 2006 and 2005.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2005 AND 2004
-------------------------------------------------------------------------------

General

FFD's net earnings totaled $1.1 million for the fiscal year ended June 30,
2005, an increase of $399,000, or 58.1%, compared to fiscal 2004. The increase
in net earnings resulted primarily from a $679,000 increase in net interest
income, a $329,000 gain on redemption of securities, and a $93,000 increase in
other operating income, which were partially offset by a $390,000 increase in
general, administrative and other expense, a $128,000 decrease in gain on sale
of loans, and a $205,000 increase in the provision for federal income tax.

Net Interest Income

Total interest income increased by $713,000, or 11.2%, to a total of $7.1
million for the year ended June 30, 2005, compared to $6.4 million for the
fiscal year ended June 30, 2004. Interest income on loans increased by
$640,000, or 10.6%, due primarily to a 24 basis point increase in the average
yield, to 5.51% in fiscal 2005, and a $6.7 million, or 5.9%, increase in the
average loan portfolio balance outstanding year

                                                                             12
<PAGE>

                    Management's Discussion and Analysis of Financial Condition
                                                      and Results of Operations
===============================================================================

to year. Interest income on mortgage-backed securities decreased by $22,000, or
37.9%, due primarily to a $405,000, or 32.4%, decrease in the average balance
outstanding, and a 34 basis point decrease in the average yield earned on such
securities, to 4.29% in fiscal 2005. Interest income on investment securities
increased by $38,000 due primarily to a 23 basis point increase in the average
yield earned on such securities, to 4.17%, and a $725,000 increase in the
average balance outstanding. Interest income on interest-bearing deposits
increased by $57,000, or 44.9%, due primarily to a 136 basis point increase in
the average yield, which was partially offset by a $4.0 million, or 35.1%,
decrease in the average balance outstanding year to year. Increases in the
average yields on interest-earning assets were due primarily to the overall
increase interest rates in the economy.

Interest expense on deposits increased by $18,000, or 0.9%, for the year ended
June 30, 2005, compared to fiscal 2004, due primarily to a $3.9 million, or
3.8%, increase in the average deposit portfolio balance outstanding year to
year, partially offset by a decrease in the average cost of deposits of 5 basis
points to 1.76% for fiscal 2005.

Interest expense on borrowings increased by $16,000, or 2.7%, due primarily to
a 32 basis point increase in the average cost of such borrowings, to 4.35% in
fiscal 2005, partially offset by a $706,000, or 4.8%, decrease in the average
balance of advances outstanding.

As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $679,000, or 17.5%, for the fiscal year ended
June 30, 2005, compared to fiscal 2004. The interest rate spread amounted to
3.24% for the fiscal year ended June 30, 2005, compared to 2.79% for fiscal
2004, while the net interest margin was 3.41% in fiscal 2005, compared to 2.97%
in fiscal 2004.

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 $11,000 for the year
ended June 30, 2005, a decrease

                                                                             13

<PAGE>

Management's Discussion and Analysis of Financial Condition
 and Results of Operations
===============================================================================

of $14,000, or 56.0%, compared to fiscal 2004. First Federal's fiscal 2005
provision was predicated primarily on industry loss ratio analysis applied to
the loan portfolio in accordance with SFAS No. 5 and SFAS No. 114. There can be
no assurance that First Federal's loan loss allowance will be adequate to cover
losses on nonperforming assets in the future.

Other Income

Other income totaled $917,000 for the fiscal year ended June 30, 2005, an
increase of $301,000 or 48.9% from fiscal 2004. This increase resulted from the
gain on redemption of securities and an increase in other operating income,
which were partially offset by a $128,000, or 36.2%, decrease in gain on sale
of loans. The gain on redemption of securities resulted from a $329,000 pre-tax
gain on the sale of Intrieve, Incorporated shares to Harland Financial
Solutions. The increase in other operating income of $93,000 consisted
primarily of a decrease in the amortization of mortgage servicing rights and
increases in miscellaneous operating income.

General, Administrative and Other Expense

General, administrative and other expense totaled $3.8 million for the fiscal
year ended June 30, 2005, an increase of $390,000, or 11.4%, compared to fiscal
2004. The increase resulted from increases of $218,000, or 14.2%, in employee
compensation and benefits and $177,000, or 17.7%, in other operating expense,
which were slightly offset by a $7,000 decrease in occupancy and equipment.

The increase in employee compensation and benefits included increases of
$90,000 in wages and related benefit expenses, $50,000 in employee stock
ownership and stock option plans, and an $82,000 decrease in deferred loan
origination costs, which were slightly offset by a decrease of $4,000 in the
cost of the reward and recognition plan. The increase in wages and related
expenses was due to increases in staff, salaries, and benefit plans. The
increase in employee stock ownership and stock option expense was the result of
higher average stock trading prices and increased administrative expense. The
reduction in deferred loan origination costs was related to the reduction in
the number of loans originated. The decrease in the cost of reward,
recognition, and stock option plans occurred because benefits have fully vested
or have been forfeited. The remaining $177,000 increase in other operating
expenses was comprised primarily of pro-rata increases related to the
Corporation's overall growth year to year, including the opening of two new
loan production offices.

Federal Income Taxes

The provision for federal income taxes totaled $559,000 for the fiscal year
ended June 30, 2005, an increase of $205,000, or 57.9%, compared to fiscal
2004. The increase resulted primarily from a $604,000, or 58.0%, increase in
earnings before taxes. The effective tax rates were 34.0% for both of the
fiscal years ended June 30, 2005 and 2004.

                                                                             14
<PAGE>

                    Management's Discussion and Analysis of Financial Condition
                                                      and Results of Operations
===============================================================================

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,
                                ---------------------------------------------------------------------------------------------------
                                              2006                              2005                              2004
                                -------------------------------   -------------------------------   -------------------------------
                                    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                 $136,953     $8,949    6.53%      $121,282     $6,683    5.51%      $114,573     $6,043    5.27%
  Mortgage-backed securities            659         35    5.31            847         36    4.25          1,252         58    4.63
  Investment securities               3,441        151    4.39          4,072        170    4.17          3,347        132    3.94
  Interest-bearing deposits
   and other                          6,804        340    5.00          7,369        184    2.50         11,360        127    1.12
                                   --------     ------  ------       --------     ------  ------       --------     ------  ------
  Total interest-earning
   assets                           147,857      9,475    6.41        133,570      7,073    5.30        130,532      6,360    4.87
  Non-interest-earning assets         7,857                             6,287                             6,220
                                   --------                          --------                          --------
    Total assets                   $155,714                          $139,857                          $136,752
                                   ========                          ========                          ========
Interest-bearing liabilities:
  Deposits                         $118,644      2,844    2.40       $108,820      1,917    1.76       $104,872      1,899    1.81
  Borrowings                         17,683        805    4.55         13,882        604    4.35         14,588        588    4.03
                                   --------     ------  ------       --------     ------  ------       --------     ------  ------
    Total interest-bearing
     liabilities                    136,327      3,649    2.68        122,702      2,521    2.05        119,460      2,487    2.08
                                                ------  ------                    ------  ------                    ------  ------
Non-interest-bearing liabilities      1,512                               170                               334
                                   --------                          --------                          --------
  Total liabilities                 137,839                           122,872                           119,794

Shareholders' equity                 17,875                            16,985                            16,958
                                   --------                          --------                          --------
    Total liabilities and
     shareholders' equity          $155,714                          $139,857                          $136,752
                                   ========                          ========                          ========
Net interest income                             $5,826                            $4,552                            $3,873
                                                ======                            ======                            ======

Interest rate spread                                      3.73%                             3.25%                             2.79%
                                                        ======                            ======                            ======

Net interest margin (net
 interest income as a percent
 of average interest-earning
 assets)                                                  3.94%                             3.41%                             2.97%
                                                        ======                            ======                            ======

Average interest-earning assets
 to average interest-bearing
 liabilities                                            108.46%                           108.86%                           109.27%
                                                        ======                            ======                            ======
</TABLE>

                                                                             15
<PAGE>

Management's Discussion and Analysis of Financial Condition
 and Results of Operations
===============================================================================

The table below 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.

<TABLE>
<CAPTION>

                                                               Year ended June 30,
                                           ----------------------------------------------------------
                                                  2006 vs. 2005                   2005 vs. 2004
                                           Increase (decrease) due to      Increase (decrease) due to
                                           --------------------------      --------------------------
                                           Volume      Rate     Total      Volume      Rate     Total
                                           ------      ----     -----      ------      ----     -----
                                                                           (In thousands)
<S>                                          <C>     <C>       <C>           <C>       <C>        <C>
Interest income attributable to:
  Loans receivable                           $929    $1,337    $2,266        $360      $280       $640
  Mortgage-backed securities                   (9)        8        (1)        (18)       (4)       (22)
  Investment securities                       (27)        8       (19)         30         8         38
  Interest-bearing deposits and other         (15)      171       156         (57)      114         57
                                             ----    ------    ------        ----      ----       ----
    Total interest income                     878     1,524     2,402         315       398        713
                                             ----    ------    ------        ----      ----       ----

Interest expense attributable to:
  Deposits                                    185       742       927          71       (53)        18
  Borrowings                                  173        28       201         (29)       45         16
                                             ----    ------    ------        ----      ----       ----
    Total interest expense                    358       770     1,128          42        (8)        34
                                             ----    ------    ------        ----      ----       ----
    Increase in net interest income          $520    $  754    $1,274        $273      $406       $679
                                             ====    ======    ======        ====      ====       ====
</TABLE>

                                                                             16
<PAGE>

                    Management's Discussion and Analysis of Financial Condition
                                                      and Results of Operations
===============================================================================

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 interest income" ("NII") and
"net portfolio value" ("NPV") methodologies. 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. Interest rate risk is estimated as the percent and dollar changes
in NII and NPV projected to occur should the yield curve instantaneously shift
up or down in a parallel fashion from its beginning or base position. The base
case rate scenario is defined by the rate environment and is held constant
throughout the simulation. Rate shock scenarios are derived by adding to or
subtracting from base case rates.

Presented below, as of June 30, 2006 and 2005, is an analysis of First
Federal's interest rate risk as measured by changes in NII and NPV for
instantaneous and sustained parallel shifts of +100, +200, +300 and -100, -200,
-300 basis points in market interest rates.

<TABLE>
<CAPTION>

June 30, 2006                    Net Interest Income                              Net Portfolio Value
                 ---------------------------------------------------      ----------------------------------
                     Projected                  Change       Percent                    Change       Percent
                 interest rate    Estimated       from        change      Estimated       from        change
                      scenario          NII       base     from base          value       base     from base
                 -------------    ---------     ------     ---------      ---------     ------     ---------
                                                    (dollars in thousands)

                          <S>        <C>       <C>           <C>            <C>        <C>            <C>
                          +300       $7,086    $   663        10.32%        $21,531    $   (22)       (0.10)%
                          +200        6,956        532         8.28          21,767        214         0.99
                          +100        6,740        316         4.92          21,890        337         1.56
                          Base        6,424          -            -          21,553          -            -
                          -100        6,143       (281)       (4.37)         21,778        225         1.04
                          -200        5,799       (624)       (9.71)         21,418       (135)       (0.63)
                          -300        5,326     (1,098)      (17.09)         20,710       (843)       (3.91)

                                                                             17
<PAGE>

Management's Discussion and Analysis of Financial Condition
 and Results of Operations
===============================================================================

<CAPTION>

June 30, 2005                    Net Interest Income                              Net Portfolio Value
                 ---------------------------------------------------      ----------------------------------
                     Projected                  Change       Percent                    Change       Percent
                 interest rate    Estimated       from        change      Estimated       from        change
                      scenario          NII       base     from base          value       base     from base
                 -------------    ---------     ------     ---------      ---------     ------     ---------
                                                    (dollars in thousands)

                          <S>        <C>       <C>           <C>            <C>        <C>            <C>
                          +300       $6,218    $ 1,168        23.13%        $22,827    $ 3,125         15.86%
                          +200        5,917        867        17.17          22,107      2,406         12.21
                          +100        5,508        458         9.08          21,102      1,401          7.11
                          Base        5,050          -            -          19,702          -             -
                          -100        4,575       (475)       (9.41)         18,003     (1,699)        (8.62)
                          -200        3,911     (1,139)      (22.55)         16,008     (3,694)       (18.75)
                          -300        3,239     (1,811)      (35.86)         14,003     (5,699)       (28.93)
</TABLE>

As with any method of measuring interest rate risk, certain shortcomings are
inherent in the NII and NPV approaches. 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.

                                                                             18
<PAGE>

                    Management's Discussion and Analysis of Financial Condition
                                                      and Results of Operations
===============================================================================

Liquidity and Capital Resources
-------------------------------------------------------------------------------

First Federal's principal sources of funds are deposits, proceeds from loan
sales, principal repayments on loan and mortgage-backed securities, maturities
of investment 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 principal 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, 2006, First Federal had commitments to
originate loans, including unused lines of credit, totaling $31.4 million.
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, 2006, 2005 and 2004:

<TABLE>
<CAPTION>

                                                          Year ended June 30,
                                                  -----------------------------------
                                                    2006          2005          2004
                                                    ----          ----          ----
                                                             (In thousands)

<S>                                               <C>           <C>           <C>
Net earnings                                      $  1,352      $  1,086      $   687
Adjustments to reconcile net earnings to
 net cash from operating activities                 4,200          3,630        1,621
                                                  --------      --------      -------
Net cash from operating activities                   5,552         4,716        2,308
Net cash used in investing activities              (16,059)      (18,386)      (2,645)
Net cash from (used in) financing activities        10,414        10,635       (1,086)
                                                  --------      --------      -------
Net change in cash and cash equivalents                (93)       (3,035)      (1,423)

Cash and cash equivalents at beginning of year       7,785        10,820       12,243
                                                  --------      --------      -------

Cash and cash equivalents at end of year          $  7,692      $  7,785      $10,820
                                                  ========      ========      =======
</TABLE>

                                                                             19
<PAGE>

Management's Discussion and Analysis of Financial Condition
 and Results of Operations
===============================================================================

The following table sets forth information regarding the Bank's obligations and
commitments including undisbursed loans in process, to make future payments
under contract as of June 30, 2006:

<TABLE>
<CAPTION>

                                                                      Payments due by period
                                                ------------------------------------------------------------------
                                                Less than        1-2        2-3       3-4    More than
                                                   1 year      years      years     years      4 years       Total
                                                ---------      -----      -----     -----    ---------       -----
                                                                           (In thousands)

<S>                                               <C>        <C>        <C>        <C>          <C>       <C>
Contractual obligations:
  Advances from the Federal Home Loan Bank        $ 7,500    $ 5,315    $ 1,176    $2,500       $1,937    $ 18,428
  Certificates of deposit                          33,183     17,347      9,904     1,391          447      62,272

Amount of commitments expiring per period
 Commitments to originate loans:
  Overdraft lines of credit                           901          -          -         -            -         901
  Home equity lines of credit                      14,205          -          -         -            -      14,205
  Commercial lines of credit                       10,917          -          -         -            -      10,917
  One- to four-family and multi-family loans        2,402          -          -         -            -       2,402
  Non-residential real estate and land loans        2,974          -          -         -            -       2,974
  Non-mortgage loans                                  130          -          -         -            -         130
  Standby letters of credit                           852          -          -         -            -         852
                                                  -------    -------    -------    ------       ------    --------
Total contractual obligations                     $73,064    $22,662    $11,080    $3,891       $2,384    $113,081
                                                  =======    =======    =======    ======       ======    ========
</TABLE>

                                                                             20
<PAGE>

                    Management's Discussion and Analysis of Financial Condition
                                                      and Results of Operations
===============================================================================

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 institution to maintain
"tangible capital" of not less than 1.5% of the institution'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 institutions to maintain core capital of at least 4% of the
institution's total assets, except for those institutions with the highest
examination rating and acceptable levels of risk.

OTS regulations require that savings institutions 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 for
First Federal includes a general loan loss allowance of $752,000 at June 30,
2006.

First Federal exceeded all of its capital requirements and was
"well-capitalized" under OTS regulations at June 30, 2006. The following table
summarizes First Federal's regulatory capital requirements and regulatory
capital at June 30, 2006:

<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        $17,677      10.9%       $2,423        1.5%      $15,254        9.4%
Core capital            $17,677      10.9%       $6,462        4.0%      $11,215        6.9%
Risk-based capital      $18,429      14.6%      $10,098        8.0%       $8,331        6.6%
</TABLE>

                                                                             21
<PAGE>

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                                                                             22
<PAGE>

                        Consolidated Financial Statements and
                        Report of Independent Registered Public Accounting Firm

                        FFD Financial Corporation, June 30, 2006, 2005 and 2004

CONTENTS

Report of Independent Registered Public Accounting Firm                      25

Financial Statements

  Consolidated Statements of Financial Condition                             26

  Consolidated Statements of Earnings                                        27

  Consolidated Statements of Comprehensive Income                            28

  Consolidated Statements of Shareholder's Equity                            29

  Consolidated Statements of Cash Flows                                      30

  Notes to Consolidated Financial Statements                                 32

                                                                             23
<PAGE>

This Page Has Been Intentionally Left Blank

                                                                             24
<PAGE>
Grant Thornton [LOGO]
Grant Thornton LLP
The US Member Firm of
Grant Thornton International


Report of Independent Registered Public Accounting Firm
-------------------------------------------------------------------------------

Board of Directors
FFD Financial Corporation

We have audited the accompanying consolidated statements of financial condition
of FFD Financial Corporation as of June 30, 2006 and 2005, 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, 2006.
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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Corporation is not
required to have, nor were we engaged to perform an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Corporation's internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of FFD Financial
Corporation as of June 30, 2006 and 2005, and the results of its operations and
its cash flows for each of the three years in the period ended June 30, 2006,
in conformity with accounting principles generally accepted in the United
States of America.

As more fully described in Note A-11, the Corporation adopted the provisions of
SFAS No. 123(R) "Share-Based Payment" during the year ended June 30, 2006


/s/GRANT THORNTON LLP


Cincinnati, Ohio
September 5, 2006

                                                                             25
<PAGE>

                           FFD Financial Corporation

                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                             June 30, 2006 and 2005
                       (In thousands, except share data)

<TABLE>
<CAPTION>

                                                                                2006        2005
                                                                                ----        ----

<S>                                                                           <C>         <C>
ASSETS
Cash and due from banks                                                       $  1,404    $  2,113
Interest-bearing deposits in other financial institutions                        6,288       5,672
                                                                              --------    --------
      Cash and cash equivalents                                                  7,692       7,785

Investment securities designated as available for sale - at market               3,353       3,485
Mortgage-backed securities designated as available for sale - at market            431         500
Mortgage-backed securities held to maturity - at amortized cost,
 approximate market value of $131 and $225 as of June 30,
 2006 and 2005, respectively                                                       130         220
Loans receivable - net                                                         143,642     131,168
Loans held for sale - at lower of cost or market                                   914         325
Office premises and equipment - at depreciated cost                              1,970       2,031
Stock in Federal Home Loan Bank - at cost                                        2,260       2,140
Accrued interest receivable                                                        571         450
Prepaid expenses and other assets                                                  270         239
Prepaid federal income taxes                                                         -         252
                                                                              --------    --------

      Total assets                                                            $161,233    $148,595
                                                                              ========    ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits                                                                      $121,919    $111,495
Advances from the Federal Home Loan Bank                                        18,428      17,880
Accrued interest payable                                                           173         155
Other liabilities                                                                1,551       1,385
Accrued federal income taxes                                                       537           -
Deferred federal income taxes                                                      262         242
                                                                              --------    --------
      Total liabilities                                                        142,870     131,157

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                                                     8,108       7,987
  Retained earnings - restricted                                                13,745      12,954
  Accumulated comprehensive  loss; unrealized  losses on
   securities designated as available for sale, net of related tax effects         (95)         (9)
  Shares acquired by stock benefit plans                                          (225)       (334)
  Less 262,497 and 264,773 treasury shares at June 30, 2006 and 2005,
   respectively - at cost                                                       (3,170)     (3,160)
                                                                              --------    --------
      Total shareholders' equity                                                18,363      17,438
                                                                              --------    --------

      Total liabilities and shareholders' equity                              $161,233    $148,595
                                                                              ========    ========
</TABLE>

        The accompanying notes are an intregal part of these statements

                                                                             26
<PAGE>

                           FFD Financial Corporation

                      CONSOLIDATED STATEMENTS OF EARNINGS

                    Years ended June 30, 2006, 2005 and 2004
                     (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                   2006      2005       2004
                                                                   ----      ----       ----

<S>                                                               <C>       <C>        <C>
Interest income
  Loans                                                           $8,949    $6,683     $6,043
  Mortgage-backed securities                                          35        36         58
  Investment securities                                              151       170        132
  Interest-bearing deposits and other                                340       184        127
                                                                  ------    ------     ------
      Total interest income                                        9,475     7,073      6,360

Interest expense
  Deposits                                                         2,844     1,917      1,899
  Borrowings                                                         805       604        588
                                                                  ------    ------     ------
      Total interest expense                                       3,649     2,521      2,487
                                                                  ------    ------     -----

      Net interest income                                          5,826     4,552      3,873

Provision for losses on loans                                        160        11         25
                                                                  ------    ------     ------

      Net interest income after provision for losses on loans      5,666     4,541      3,848

Other income
  Gain on sale of loans                                              189       226        354
  Loss on sale of real estate acquired through foreclosure             -         -         (7)
  Gain on redemption of securities                                    35       329          -
  Other operating                                                    375       362        269
                                                                  ------    ------     ------
      Total other income                                             599       917        616

General, administrative and other expense
  Employee compensation and benefits                               1,898     1,755      1,537
  Occupancy and equipment                                            410       384        391
  Franchise taxes                                                    216       209        210
  Data processing                                                    310       288        285
  Other operating                                                  1,369     1,177      1,000
                                                                  ------    ------     ------
      Total general, administrative and other expense              4,203     3,813      3,423
                                                                  ------    ------     ------

      Earnings before income taxes                                 2,062     1,645      1,041

Federal income taxes
  Current                                                            644       569        311
  Deferred                                                            66       (10)        43
                                                                  ------    ------     ------
      Total federal income taxes                                     710       559        354
                                                                  ------    ------     ------

      NET EARNINGS                                                $1,352    $1,086     $  687
                                                                  ======    ======     ======

      EARNINGS PER SHARE
        Basic                                                     $ 1.15    $  .94     $  .59
                                                                  ======    ======     ======
        Diluted                                                   $ 1.13    $  .92     $  .58
                                                                  ======    ======     ======
</TABLE>

        The accompanying notes are an intregal part of these statements

                                                                             27
<PAGE>

                           FFD Financial Corporation

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                    Years ended June 30, 2006, 2005 and 2004
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                   2006        2005       2004
                                                                   ----        ----       ----

<S>                                                               <C>         <C>         <C>
Net earnings                                                      $1,352      $1,086      $687

Other comprehensive income, net of tax:
  Unrealized holding gains (losses) on securities during
   the period, net of taxes (benefits) of $(44), $29 and $(38)
   in 2006, 2005 and 2004, respectively                              (86)         57       (74)
                                                                  ------      -------     ----

Comprehensive income                                              $1,266      $1,143      $613
                                                                  ======      ======      ====

Accumulated comprehensive loss                                    $  (95)     $   (9)     $(66)
                                                                  ======      ======      ====
</TABLE>

        The accompanying notes are an intregal part of these statements

                                                                             28
<PAGE>

                           FFD Financial Corporation

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                For the years ended June 30, 2006, 2005 and 2004
                     (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                    Unrealized
                                                                                         Gains
                                                                                      (Losses)     Shares
                                                                                 On Securities   Acquired
                                                          Additional                Designated   By 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, 2003                             $ -       $7,889    $12,202        $     8      $(559)    $(2,622)   $16,918

Net earnings for the year ended June 30, 2004         -            -        687              -          -           -        687
Purchase of treasury shares                           -            -          -              -                   (769)      (769)
Amortization expense of stock benefit plans           -           51          -              -        115           -        166
Unrealized losses on securities designated
 as available for sale, net of related
 tax benefits                                         -            -          -            (74)         -           -        (74)
Exercise of stock options                             -          (30)                        -          -         344        314
Dividends of $.415 per share                          -            -       (504)             -          -           -       (504)
                                                    ---       ------    -------           ----      -----     -------    -------

Balance at June 30, 2004                              -        7,910     12,385            (66)      (444)     (3,047)    16,738

Net earnings for the year ended June 30, 2005         -            -      1,086              -          -           -      1,086
Purchase of treasury shares                           -            -          -              -          -        (411)      (411)
Amortization expense of stock benefit plans           -           72          -              -        110           -        182
Unrealized gains on securities designated
 as available for sale, net of related
 tax effects                                          -            -          -             57          -           -         57
Exercise of stock options                             -            5          -              -          -         298        303
Dividends of $.435 per share                          -            -       (517)             -          -           -       (517)
                                                    ---       ------    -------           ----      -----     -------    -------

Balance at June 30, 2005                              -        7,987     12,954             (9)      (334)     (3,160)    17,438

Net earnings for the year ended June 30, 2006         -            -      1,352              -          -           -      1,352
Purchase of treasury shares                           -            -          -              -          -         (64)       (64)
Amortization expense of stock benefit plans           -          111          -              -        109           -        220
Unrealized losses on securities designated
 as available for sale, net of related
 tax benefits                                         -            -          -            (86)         -           -        (86)
Exercise of stock options                             -           10          -              -          -          54         64
Dividends of $.47 per share                           -            -       (561)             -          -           -       (561)
                                                    ---       ------    -------           ----      -----     ------     -------
Balance at June 30, 2006                            $ -       $8,108    $13,745           $(95)     $(225)    $(3,170)   $18,363
                                                    ===       ======    =======           ====      =====     =======    =======
</TABLE>

        The accompanying notes are an intregal part of these statements

                                                                             29
<PAGE>

                           FFD Financial Corporation

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                    Years ended June 30, 2006, 2005 and 2004
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                              2006           2005          2004
                                                                              ----           ----          ----

<S>                                                                       <C>            <C>           <C>
Cash flows from operating activities:
  Net earnings for the year                                               $  1,352       $  1,086      $    687
  Adjustments to reconcile net earnings to net cash provided by
   operating activities:
    Amortization of premiums and discounts on investments and
     mortgage-backed securities - net                                            1             -              5
    Amortization of deferred loan origination costs                             51             48            39
    Depreciation and amortization                                              159            175           187
    Gain on redemption of investment securities                                (35)          (329)            -
    Provision for losses on loans                                              160             11            25
    Gain on sale of loans                                                      (69)           (65)          (62)
    Loans originated for sale                                              (11,542)       (10,530)      (28,202)
    Proceeds from sale of mortgage loans in the secondary market            11,022         10,487        29,814
    Proceeds from sale of loans to other financial institutions              3,469          2,921             -
    Loss on sale of real estate acquired through foreclosure                     -              -             7
    Amortization expense of stock benefit plans                                220            182           166
    Federal Home Loan Bank stock dividends                                    (120)           (93)          (80)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable                                             (121)           (69)            5
      Prepaid expenses and other assets                                        (31)            21           (24)
      Other liabilities                                                        166            666          (216)
      Accrued interest payable                                                  18             58             1
      Federal income taxes
        Current                                                                786            157           (87)
        Deferred                                                                66            (10)           43
                                                                          --------       --------      --------
          Net cash provided by operating activities                          5,552          4,716         2,308

Cash flows used in investing activities:
  Purchase of investment securities designated as available for sale             -              -        (5,500)
  Proceeds from maturity of investment securities                                -           1,000        2,500
  Proceeds from redemption of investment securities                             35            344             -
  Principal repayments on mortgage-backed securities                           158            308           442
  Loan principal repayments                                                 49,200         36,188        41,633
  Loan disbursements                                                       (65,354)       (56,048)      (41,639)
  Purchase of office premises and equipment                                    (98)          (178)          (81)
                                                                          --------       --------      --------
          Net cash  used in investing activities                           (16,059)       (18,386)       (2,645)
                                                                          --------       --------      --------

          Net cash  used in operating and investing
           activities (subtotal carried forward)                           (10,507)       (13,670)         (337)
                                                                          --------       --------      --------

The accompanying notes are an integral part of these statements.

                                                                             30
<PAGE>

                           FFD Financial Corporation

               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                    Years ended June 30, 2006, 2005 and 2004
                                 (In thousands)

<CAPTION>

                                                                              2006           2005          2004
                                                                              ----           ----          ----

<S>                                                                       <C>            <C>           <C>
         Net cash  used in operating and investing
           activities (subtotal brought forward)                          $(10,507)      $(13,670)     $   (337)

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts                                          10,424          6,049         1,095
  Proceeds from Federal Home Loan Bank advances                             27,000         10,495         1,525
  Repayments of Federal Home Loan Bank advances                            (26,452)        (5,284)       (2,747)
  Tax benefit of stock options exercised                                         3             36            32
  Proceeds from exercise of stock options                                       64            267           282
  Purchase of treasury shares                                                  (64)          (411)         (769)
  Cash dividends paid on common stock                                         (561)          (517)         (504)
                                                                          --------       --------      --------
          Net cash provided by (used in) financing activities                10,414        10,635        (1,086)
                                                                          --------       --------      --------

Net decrease in cash and cash equivalents                                      (93)        (3,035)       (1,423)

Cash and cash equivalents at beginning of year                               7,785         10,820        12,243
                                                                          --------       --------      --------

Cash and cash equivalents at end of year                                  $  7,692       $  7,785      $ 10,820
                                                                          ========       ========      ========


Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Federal income taxes                                                  $     85       $    376      $    390
                                                                          ========       ========      ========
    Interest on deposits and borrowings                                   $  3,631       $  2,463      $  2,486
                                                                          ========       ========      ========

Supplemental disclosure of noncash investing activities:
  Unrealized gains (losses) on securities designated as
   available for sale, net of applicable tax effects                      $    (86)      $     57      $    (74)
                                                                          ========       ========      ========

  Recognition of mortgage servicing rights in accordance
   with SFAS No. 140                                                      $    120       $    161      $    292
                                                                          ========       ========      ========

  Loans originated upon sale of real estate acquired through
   foreclosure                                                            $      -       $      -      $    147
                                                                          ========       ========      ========
</TABLE>

The accompanying notes are an integral part of these statements.

                                                                             31
<PAGE>

                           FFD Financial Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 2006, 2005 and 2004

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 Community Bank (the "Bank"). The Bank
conducts a general banking business in north central Ohio which consists
primarily 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, with the exception of the
policy described in Note A-11, have been consistently applied in the
preparation of the accompanying consolidated financial statements follows:

1. Principles of Consolidation

The consolidated financial statements include the accounts of the Corporation,
the Bank, and Dover Service Corporation ("Dover Service"), the Bank's
wholly-owned subsidiary. All significant intercompany balances and transactions
have been eliminated.

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.

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

In addition to investment securities, Dover Service was incorporated for the
primary purpose of holding shares in the Bank's data processing provider,
Intrieve Incorporated ("Intrieve"). In fiscal 2005, Intrieve was acquired by
Harland Financial Solutions. As a result, Dover received cash consideration of
approximately $344,000 for its shares of Intrieve, Inc. resulting in a pretax
gain on redemption totaling $329,000. In fiscal 2006, the Corporation received
an additional $35,000 of contingent consideration related to the sale
transaction.

                                                                             32
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

3. Loans Receivable

Loans are stated at the principal balance outstanding, increased by net
deferred loan origination costs and reduced by 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 costs (fees) are
added (deducted) from the principal balance of the related loan. At both June
30, 2006 and 2005, 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 $128,000, $108,000 and $175,000 for the fiscal years ended June
30, 2006, 2005 and 2004, respectively. At June 30, 2006 and 2005, the carrying
value of the Corporation's mortgage servicing rights, which approximated fair
value totaled $679,000 and $687,000, respectively.

4. Loan Origination Fees

The Bank accounts for loan origination fees and costs 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, which are principally actual
personnel costs. Fees received for

                                                                             33
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

4. Loan Origination Fees (continued)

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.

The Bank's impaired loan information is as follows at June 30:

                                                    2006      2005
                                                    ----      ----
                                                    (In thousands)

Impaired loans with related allowance               $692      $266
Impaired loans with no related allowance             196       707
                                                    ----      ----

Total impaired loans                                $888      $973
                                                    ====      ====

                                                                             34
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

5. Allowance for Loan Losses (continued)

The Bank's average balance of impaired loans totaled $915,000, $914,000 and
$929,000 for fiscal 2006, 2005 and 2004, respectively. Interest income
recognized on impaired loans totaled $60,000, $50,000 and $49,000 for the
fiscal years ended June 30, 2006, 2005 and 2004, respectively. The Bank
allocated $104,000 and $197,000 of its general loan loss allowance to impaired
loans at June 30, 2006 and 2005, respectively. During fiscal 2006, the Bank
recorded a provision of $34,000 related to losses on impaired loans and
recorded charge-offs of $127,000 relating to impaired loans.

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 range from 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, mortgage servicing rights, general loan loss allowances and certain
components of retirement expense. A temporary difference is also recognized for
depreciation expense computed using accelerated methods for federal income tax
purposes.

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

                                                                             35
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

9. Benefit Plans (continued)

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 related to the ESOP totaled approximately $244,000, $202,000 and
$191,000 for the fiscal years ended June 30, 2006, 2005 and 2004, respectively.

Additionally, the Bank has 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 had previously awarded
30,871 shares under the RRP which vested over a five year period. RRP expense
totaled $1,000, $3,000 and $7,000 for the fiscal years ended June 30, 2006,
2005 and 2004, 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 gives effect to a reduction
for 13,183, 26,339 and 39,513 unallocated shares held by the ESOP for the
fiscal years ended June 30, 2006, 2005 and 2004, 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. The computations are as follows:

                                               2006          2005          2004
                                               ----          ----          ----
Weighted-average common shares
 outstanding (basic)                      1,172,109     1,153,561     1,162,085
Dilutive effect of  assumed exercise
 of stock options                            24,859        20,464        29,016
                                          ---------     ---------     ---------
Weighted-average common shares
 outstanding (diluted)                    1,196,968     1,174,025     1,191,101
                                          =========     =========     =========

                                                                             36
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

11. Stock Option Plan

The FFD Financial Corporation 1996 Stock Option and Incentive Plan, as amended,
(the "Plan") provided for the issuance of 169,838 adjusted shares of authorized
but unissued shares of common stock.

Prior to fiscal 2006, the Corporation had accounted 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 measures
compensation cost at the grant date based on the fair value of the award.
Compensation was then recognized over the service period, which was usually the
vesting period. Alternatively, SFAS No. 123 permitted 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 continued to account for stock options using APB
Opinion No. 25 were 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. 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, 2005 and 2004, would have been reduced to the pro forma amounts
indicated below:

(In thousands)                              2005      2004
                                            ----      ----

Net earnings             As reported      $1,086      $687
                                          ======      ====
                           Pro-forma      $1,062      $654
                                          ======      ====

Earnings per share
  Basic                  As reported      $  .94      $.59
                                          ======      ====
                           Pro-forma      $  .92      $.56
                                          ======      ====

  Diluted                As reported      $  .92      $.58
                                          ======      ====
                           Pro-forma      $  .90      $.55
                                          ======      ====

In December 2004, the Financial Accounting Standards Board ("FASB") issued a
revision to SFAS No. 123 which establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services, primarily on accounting for transactions in which an entity obtains
employee services in share-based transactions. This Statement, SFAS No. 123(R)
"Share Based Payment", requires an entity to measure the cost of employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award, with limited exceptions. That cost is
recognized over the period during which an employee is required to provide
services in exchange for the award - the requisite service period. No
compensation cost is recognized for equity instruments for which employees do
not render the requisite service.

During the fourth quarter of fiscal 2006, the Corporation adopted SFAS No.
123(R), accelerated the vesting period for all unvested options, and recognized
total pre-tax compensation expense of $30,000 ($27,000 after-tax). The adoption
of SFAS No. 123(R) had a negative $.02 per share difference on reported basic
and diluted earnings per share for fiscal 2006.

                                                                             37
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

11. Stock Option Plan (continued)

Excess tax benefits, as defined by SFAS No. 123(R), will be recognized as an
addition to additional paid-in capital. Cash retained as a result of those
excess tax benefits will be presented in the statement of cash flows as
financing cash inflows. The write-off of deferred tax assets relating to
unrealized tax benefits associated with recognized compensation cost will be
recognized as income tax expense unless there are excess tax benefits from
previous awards remaining in additional paid-in capital to which it can be
offset.

The fair value of each option grant is estimated on the date of grant using the
modified Black-Scholes options-pricing model. The fair value of modification
grants in fiscal 2006 is based on the fair value of the original grant which
exceeded the fair value at modification. No options were granted in fiscal
2005.

The following weighted-average assumptions were used for grants in fiscal 2004:
dividend yield of 3.0%; expected volatility of 38.2% ; a risk-free interest
rate of 4.3%, respectively, and an expected life of ten years.

A summary of the status of the Plan as of June 30, 2006, 2005 and 2004, and
changes during the years then ended are presented below:

<TABLE>
<CAPTION>

                                             2006                     2005                     2004
                                     --------------------    ---------------------    ---------------------
                                                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     60,618        $10.17     89,998        $ 9.84    115,183        $ 9.47
Granted                               8,958         10.11          -             -      4,500         14.87
Exercised                            (5,997)        10.71    (29,305)         9.15    (28,365)         9.15
Forfeited                            (8,958)       (10.11)       (75)        12.48     (1,320)         9.54
                                     ------        ------    -------        ------    -------         ------

Outstanding at end of year           54,621        $10.11     60,618        $10.17     89,998        $ 9.84
                                     ======        ======    =======        ======    =======        ======

Options exercisable at year-end      54,621        $10.11     46,831        $ 9.66     68,755        $ 9.33
                                     ======        ======    =======        ======    =======        ======
Weighted-average fair value of
  options granted during the year                  $ 4.04                      N/A                   $ 4.36
                                                   ======                   ======                   ======
</TABLE>

The following information applies to options outstanding at June 30, 2006:

Number outstanding                                                 43,621
Range of exercise prices                                   $8.38 - $10.10
Number outstanding                                                 11,000
Range of exercise prices                                  $12.00 - $14.88
Weighted-average exercise price                                    $10.11
Weighted-average remaining contractual life in years            3.7 years

                                                                             38
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

12. 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.

At June 30, 2006 and 2005, compensating balance restrictions related to cash
and cash equivalents was approximately $430,000 and $560,000, respectively.

13. 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,
2006 and 2005:

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.

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 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.

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 fair value of outstanding loan commitments at June 30, 2006 and 2005
was not material.

                                                                             39
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

13. Fair Value of Financial Instruments (continued)

Based on the foregoing methods and assumptions, the carrying value and fair
value of the Corporation's financial instruments at June 30, 2006 and 2005 were
as follows:

<TABLE>
<CAPTION>

                                                       2006                       2005
                                              ---------------------      ---------------------
                                                          Estimated                  Estimated
                                              Carrying         Fair      Carrying         Fair
                                                 Value        Value         Value        Value
                                              --------    ---------      --------    ---------
                                                               (In thousands)
<S>                                           <C>          <C>           <C>          <C>
Financial assets
  Cash and cash equivalents                   $  7,692     $  7,692      $  7,785     $  7,785
  Investment securities                          3,353        3,353         3,485        3,485
  Mortgage-backed securities                       561          562           720          725
  Loans receivable                             144,556      142,468       131,493      129,109
  Federal Home Loan Bank stock                   2,260        2,260         2,140        2,140
                                              --------     --------      --------     --------

                                              $158,442     $156,335      $145,623     $143,244
                                              ========     ========      ========     ========

Financial liabilities
  Deposits                                    $121,919     $115,911      $111,495     $106,605
  Advances from the Federal Home Loan Bank      18,428       18,100        17,880       18,003
                                              --------     --------      --------     --------

                                              $140,347     $134,011      $129,375     $124,608
                                              ========     ========      ========     ========
</TABLE>

14. Advertising

Advertising costs are expensed when incurred. The Corporation's advertising
expense for the fiscal years ended June 30, 2006, 2005 and 2004 was $166,000,
$122,000 and $99,000, respectively.

15. Investment in Federal Home Loan Bank Stock

The Bank is required as a condition of membership in the Federal Home Loan Bank
of Cincinnati ("FHLB") to maintain an investment in FHLB common stock. The
stock is redeemable at par and, therefore, its cost is equivalent to its
redemption value. The Bank's ability to redeem FHLB shares is dependent on the
redemption practices of the FHLB. At June 30, 2006, the FHLB placed no
restrictions on redemption of shares in excess of a member's required
investment in the stock.

                                                                             40
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note A - Summary of Significant Accounting Policies (Continued)

16. Effects of Recent Accounting Pronouncements

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets - an amendment of SFAS No. 140," to simplify the accounting
for separately recognized servicing assets and servicing liabilities.
Specifically, SFAS No. 156 amends SFAS No. 140 to require an entity to take the
following steps:

o  Separately recognize financial assets as servicing assets or servicing
   liabilities, each time it undertakes an obligation to service a financial
   asset by entering into certain kinds of servicing contracts;

o  Initially measure all separately recognized servicing assets and liabilities
   at fair value, if practicable; and

o  Separately present servicing assets and liabilities subsequently measured at
   fair value in the statement of financial condition and additional
   disclosures for all separately recognized servicing assets and servicing
   liabilities.

Additionally, SFAS No. 156 permits, but does not require, an entity to choose
either the amortization method or the fair value measurement method for
measuring each class of separately recognized servicing assets and servicing
liabilities. SFAS No. 156 also permits a servicer that uses derivative
financial instruments to offset risks on servicing to use fair value
measurement when reporting both the derivative financial instrument and related
servicing asset or liability.

SFAS No. 156 applies to all separately recognized servicing assets and
liabilities acquired or issued by the Corporation after July 1, 2008, with
earlier application permitted. The Corporation is currently evaluating the
impact of SFAS No. 156. Based on preliminary assessments, management does not
believe adoption of SFAS No. 156 will have a material adverse effect on the
Corporation's financial condition and results of operations.

17. Reclassifications

Certain prior year amounts have been reclassified to conform to the 2006
consolidated financial statement presentation.

                                                                             41
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

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, 2006 and 2005, were
as follows:

<TABLE>
<CAPTION>

                                                             June 30, 2006
                                          --------------------------------------------------
                                                            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         $3,500            $-          $147       $3,353
                                             ======            ==          ====       ======

<CAPTION>

                                                             June 30, 2005
                                          --------------------------------------------------
                                                            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         $3,500            $-          $ 15       $3,485
                                             ======            ==          ====       ======
</TABLE>

The U. S. Government agency obligations designated as available for sale at
June 30, 2006 and 2005, are scheduled to mature in fiscal 2014 and thereafter.

The amortized cost, gross unrealized gains, gross unrealized losses and
estimated fair value of mortgage-backed securities at June 30, 2006 and 2005,
are shown below:

<TABLE>
<CAPTION>

                                                                    2006
                                             --------------------------------------------------
                                                               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         $113          $  1            $-         $114
  Government National Mortgage
   Association participation certificates           17             -             -           17
                                                  ----          ----            --         ----
    Total mortgage-backed securities
     held to maturity                              130             1             -          131

Available for sale:
  Federal National Mortgage
   Association participation certificates          341             2             -          343
  Government National Mortgage
   Association participation certificates           88             -             -           88
                                                  ----          ----            --         ----
    Total mortgage-backed securities
     available for sale                            429             2             -          431
                                                  ----          ----            --         ----

    Total mortgage-backed securities              $559          $  3            $-         $562
                                                  ====          ====            ==         ====
</TABLE>

                                                                             42
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note B - Investments and Mortgage-Backed Securities (Continued)

<TABLE>
<CAPTION>

                                                                    2005
                                             --------------------------------------------------
                                                               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         $184          $  3            $-         $187
  Government National Mortgage
   Association participation certificates           36             2             -           38
                                                  ----          ----            --         ----
    Total mortgage-backed securities
     held to maturity                              220             5             -          225

Available for sale:
  Federal National Mortgage
   Association participation certificates          380             -             -          380
  Government National Mortgage
   Association participation certificates          120             -             -          120
                                                  ----          ----            --         ----
    Total mortgage-backed securities
     available for sale                            500             -             -          500
                                                  ----          ----            --         ----

     Total mortgage-backed securities             $720          $  5            $-         $725
                                                  ====          ====            ==         ====
</TABLE>

                                                                             43
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note B - Investments and Mortgage-backed Securities (Continued)

The tables below indicates the length of time individual securities had been in
a continuous unrealized loss position at June 30, 2006 and 2005.

<TABLE>
<CAPTION>

                                                                  June 30, 2006
                                      --------------------------------------------------------------------
                                       Less Than 12 Months       12 - 24 Months               Total
                                      --------------------    --------------------    --------------------
                                       Fair     Unrealized      Fair    Unrealized      Fair    Unrealized
Description of securities             Value         Losses     Value        Losses     Value        Losses
                                      -----     ----------     -----    ----------     -----    ----------
                                                             (Dollars in thousands)

<S>                                   <C>              <C>    <C>             <C>     <C>             <C>
U.S. Government agency obligations       $-             $-    $3,353          $147    $3,353          $147
                                         ==             ==    ======          ====    ======          ====

<CAPTION>

                                                                  June 30, 2005
                                      --------------------------------------------------------------------
                                       Less Than 12 Months       12 - 24 Months               Total
                                      --------------------    --------------------    --------------------
                                        Fair    Unrealized      Fair    Unrealized      Fair    Unrealized
Description of securities              Value        Losses     Value        Losses     Value        Losses
                                       -----    ----------     -----    ----------     -----    ----------
                                                              (Dollars in thousands)

<S>                                   <C>              <C>    <C>             <C>     <C>             <C>
U.S. Government agency obligations    $3,485           $15        $-            $-    $3,485           $15
                                      ======           ===        ==            ==    ======           ===
</TABLE>

Management has the intent to hold these securities for the foreseeable future
and the declines in the fair value are primarily due to continuing increases in
market interest rates. The fair values are expected to recover as securities
approach the maturity date.

                                                                             44
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

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, 2006, 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                                 $ 31
Due within five to ten years                            11
Due after ten years                                    517
                                                      ----
Total                                                 $559
                                                      ====

Mortgage-backed securities and investment securities totaling $2.9 million were
pledged to secure public deposits at both June 30, 2006 and 2005.

Note C - Loans Receivable

The composition of the loan portfolio at June 30, 2006 and 2005 was as follows:

                                                 2006          2005
                                                 ----          ----
                                                 (In thousands)

Residential real estate
  One- to four-family                        $ 64,781      $ 61,157
  Multi-family                                 10,120         9,082
Nonresidential real estate and land            48,337        42,763
Commercial loans - secured                     16,408        16,388
Commercial loans - unsecured                      273           279
Consumer and other loans                        5,969         4,896
Deferred loan origination costs                   153           139
                                             --------      --------
                                              146,041       134,704
Less:
  Undisbursed portion of loans in process       1,647         2,770
  Allowance for loan losses                       752           766
                                             --------      --------
                                             $143,642      $131,168
                                             ========      ========

The Bank's lending efforts have historically focused on one- to four-family and
multi-family residential real estate loans, which comprise approximately $73.3
million, or 51%, of the total loan portfolio at June 30, 2006, and
approximately $67.5 million, or 51% of the total loan portfolio at June 30,
2005,. 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 believes that real estate
values in the Bank's primary lending areas 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 $77.2
million and $74.9 million at June 30, 2006 and 2005, 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 made on market terms, are consistent with sound
lending practices and are within applicable regulatory lending limitations. The
balance of such loans totaled approximately $2.2 million at both June 30, 2006
and 2005.

                                                                             45
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note D - Allowance for Loan Losses

The activity in the allowance for loan losses is summarized as follows for the
years ended June 30, 2006, 2005 and 2004:

                                    2006     2005     2004
                                    ----     ----     ----
                                        (In thousands)

Beginning balance                  $ 766     $779     $818
Provision for losses on loans        160       11       25
Loan charge-offs                    (174)     (24)     (64)
                                   -----     ----     ----

Ending balance                     $ 752     $766     $779
                                   =====     ====     ====

As of June 30, 2006, the Bank's allowance for loan losses was primarily
comprised of a general loan loss allowance which is includible as a component
of regulatory risk-based capital.

Nonperforming and impaired loans totaled $1.3 million, $1.2 million, and $1.1
million, respectively at June 30, 2006, 2005 and 2004. Interest income that
would have been recognized had nonaccrual loans performed pursuant to
contractual terms totaled approximately $46,000, $37,000 and $49,000 for the
fiscal years ended June 30, 2006, 2005 and 2004, respectively.

Note E - Office Premises and Equipment

Office premises and equipment at June 30, 2006 and 2005 was comprised of the
following:

                                          2006        2005
                                          ----        ----
                                          (In thousands)

Land                                    $  488      $  488
Buildings and improvements               1,533       1,518
Furniture and equipment                  1,139       1,148
                                        ------      ------
                                         3,160       3,154
  Less accumulated depreciation and
   amortization                          1,190       1,123
                                        ------      ------
                                        $1,970      $2,031
                                        ======      ======

                                                                             46
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note F - Deposits

Deposits consist of the following major classifications at June 30, 2006 and
2005:

                                          2006                 2005
Deposit Type and Weighted-         -----------------    -----------------
 Average Interest Rate               Amount        %      Amount        %
                                     ------        -      ------        -
                                           (Dollars in thousands)

Demand deposit accounts            $ 10,114      8.3%   $  9,386      8.4%
NOW accounts
  2006 - 0.84%                       16,546     13.5
  2005 - 0.38%                                            13,998     12.6
Passbook
  2006 - 1.16%                       32,987     27.1
  2005 - 1.14%                                            32,253     28.9
                                   --------    -----    --------    -----
  Total demand, transaction and
   passbook deposits                 59,647     48.9      55,637     49.9

Certificates of deposit
Original maturities of:
  Less than 12 months
    2006 - 4.30%                      3,522      2.9
    2005 - 2.28%                                           1,885      1.7
  12 months to 29 months
    2006 - 3.91%                     21,443     17.6
    2005 - 2.75%                                          17,532     15.7
  30 months to 47 months
    2006 - 4.05%                     10,750      8.8
    2005 - 3.99%                                          13,343     12.0
  48 months to 60 months
    2006 - 3.88%                      4,177      3.4
    2005 - 3.81%                                           3,915      3.5
  Balances in excess of $100,000
    2006 - 4.21%                     14,757     12.1
    2005 - 3.37%                                          12,562     11.3
  Individual retirement accounts
    2006 - 3.94%                      7,623      6.3
    2005 - 3.21%                                           6,621      5.9
                                   --------    -----    --------    -----

    Total certificates of deposit    62,272     51.1      55,858    50.17
                                   --------    -----    --------    -----

    Total deposit accounts         $121,919    100.0%   $111,495    100.0%
                                   ========    =====    ========    =====

                                                                             47

<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note F - Deposits (Continued)

Interest expense on deposits for the years ended June 30, 2006, 2005 and 2004
is summarized as follows:

                                  2006        2005        2004
                                  ----        ----        ----
                                        (In thousands)

Passbook                        $  592      $  316      $  300
NOW accounts                        79          33          20
Certificates of deposit          2,173       1,568       1,579
                                ------      ------      ------

                                $2,844      $1,917      $1,899
                                ======      ======      ======

Maturities of outstanding certificates of deposit at June 30, 2006 and 2005 are
summarized as follows:

                                   2006        2005
                                   ----        ----
                                   (In thousands)

Less than one year              $33,183     $27,831
One year to two years            17,347      14,711
Two years to three years          9,904       9,889
Three to four years               1,391       2,262
More than four years                447       1,165
                                -------     -------
                                $62,272     $55,858
                                =======     =======

At June 30, 2006 and 2005, FFD had $16.4 million and $13.7 million,
respectively, in certificates of deposit with balances greater than $100,000.

Note G - Advances From the Federal Home Loan Bank

Advances from the Federal Home Loan Bank, collateralized at June 30, 2006 and
2005, by a pledge of certain residential mortgage loans totaling $23.1 million
and $22.4 million, respectively, and the Bank's investment in Federal Home Loan
Bank stock, are summarized as follows:

                       Maturing in Year
Interest Rate           Ending June 30,        2006           2005
-------------          ----------------        ----           ----

                                            (Dollars in thousands)

3.53%                              2006     $     -        $ 2,000
3.35%-5.43%                        2007       7,500          1,500
5.06%-5.65%                        2009       5,315          5,424
3.23%-4.89%                        2010       1,176          1,285
3.26%-4.75%                        2011       2,500          5,500
4.43%-6.1%                         2014         704            775
4.06%-4.63%                  After 2014       1,233          1,396
                                            -------        -------

                                            $18,428        $17,880
                                            =======        =======

    Weighted-average interest rate             5.22%          4.32%
                                            =======        =======

                                                                             48
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note H - Other Borrowings

During fiscal 2006, the Corporation negotiated a $2.5 million line of credit
with another financial institution. The line, when drawn upon, will be
collateralized by the Bank's common stock held by the Corporation. The
Corporation had not drawn upon this line of credit as of June 30, 2006.

Note I - Federal Income Taxes

Federal income taxes differ from the amounts computed at the statutory
corporate tax rate for the years ended June 30, 2006, 2005 and 2004 as follows:

                                               2006     2005     2004
                                               ----     ----     ----
                                               (Dollars in thousands)

Federal income taxes at statutory rate         $701     $559     $354
Increase in taxes resulting primarily from:
  Other                                           9        -        -
                                               ----     ----     ----
Federal income taxes per consolidated
 financial statements                          $710     $559     $354
                                               ====     ====     ===

Effective tax rate                             34.4%    34.0%    34.0%
                                               ====     ====     ====

The composition of the Corporation's net deferred tax liability at June 30,
2006 and 2005 is as follows:

<TABLE>
<CAPTION>

Taxes (payable) refundable on temporary                               2006       2005
 differences at statutory rate:                                       ----       ----
                                                                      (In thousands)

<S>                                                                  <C>        <C>
Deferred tax assets:
  Retirement expense                                                 $ 115      $ 106
  General loan loss allowance                                          256        261
  Unrealized loss on securities designated as available for sale        49          5
  Other                                                                  6         17
                                                                     -----      -----
    Deferred tax assets                                                426        389

Deferred tax liabilities:
  Deferred loan origination costs                                      (52)       (56)
  Federal Home Loan Bank stock dividends                              (383)      (342)
  Difference between book and tax depreciation                         (22)         -
  Mortgage servicing rights                                           (231)      (233)
                                                                     -----      -----
    Deferred tax liabilities                                          (688)      (631)
                                                                     -----      -----
    Net deferred tax liability                                       $(262)     $(242)
                                                                     =====      =====
</TABLE>

                                                                             49
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note I - Federal Income Taxes (Continued)

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, 2006,
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, 2006.

Note J - 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 and collateral requirements in issuing
commitments and conditional obligations as those utilized for on-balance-sheet
instruments.

At June 30, 2006, the Bank had outstanding commitments to originate loans,
including loans-in-process, of approximately $5.5 million. Additionally, the
Bank was obligated under unused lines of credit under home equity loans
totaling $14.2 million, unused lines of credit under commercial loans of $10.9
million and overdraft lines of credit totaling $901,000. In addition, the Bank
has $852,000 in outstanding standby letters of credit which are fully
collateralized. In the opinion of management, all loan commitments equaled or
exceeded prevailing market interest rates as of June 30, 2006, such commitments
were underwritten in accordance with normal underwriting policies, and will be
funded from normal cash flow from operations and excess liquidity.

At June 30, 2006, the Bank had no outstanding commitments to purchase loans and
outstanding commitments to sell $914,000 of loans.

The Corporation has entered into lease agreements during the current fiscal
year for office premises under operating leases which expire at various dates
through the fiscal year ended June 30, 2008. The following table summarizes
minimum annual payments due under lease agreements by year:

      Year ending June 30,
      --------------------
                                        (In thousands)

      2006                                         $20
      2007                                          18
      2008                                          13
                                                   ---
                                                   $51
                                                   ===

                                                                             50
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note J - Commitments (Continued)

Rental expense under operating leases totaled approximately $26,000 and $5,000
for the years ended June 30, 2006 and 2005, respectively. There was no rent
expense for the year ended June 30, 2004.

Note K - 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.

OTS minimum capital standards generally require the maintenance of regulatory
capital sufficient to meet a tangible capital requirement, a core capital
requirement and a 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 fiscal 2006, the Bank was notified by the OTS that it was categorized as
"well-capitalized" under the regulatory framework for prompt corrective action.
Management does not believe there have been any changes in facts and
circumstances that would change the Bank's capital category. To be categorized
as "well-capitalized" the Bank must maintain minimum capital ratios as set
forth in the following tables.

                                                                             51
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note K - Regulatory Capital (Continued)

As of June 30, 2006 and 2005, management believes that the Bank met all capital
adequacy requirements to which it was subject.

<TABLE>
<CAPTION>

                                                                     To Be "Well-
                                                                 Capitalized" Under
                                              For Capital         Prompt Corrective
As of June 30, 2006         Actual         Adequacy Purposes      Action Provisions
                       ---------------    ------------------     -------------------
                        Amount   Ratio       Amount    Ratio        Amount     Ratio
                        ------   -----       ------    -----        ------     -----
                                           (Dollars in thousands)

<S>                    <C>        <C>     <C>          <C>       <C>          <C>
Tangible capital       $17,677    10.9%   =>$ 2,423    =>1.5%    =>$ 8,077    => 5.0%

Core capital           $17,677    10.9%   =>$ 6,462    =>4.0%    =>$ 9,693    => 6.0%

Risk-based capital     $18,429    14.6%   =>$10,098    =>8.0%    =>$12,623    =>10.0%

<CAPTION>

                                                                     To Be "Well-
                                                                 Capitalized" Under
                                              For Capital         Prompt Corrective
As of June 30, 2005         Actual         Adequacy Purposes      Action Provisions
                       ---------------    ------------------     -------------------
                        Amount   Ratio       Amount    Ratio        Amount     Ratio
                        ------   -----       ------    -----        ------     -----
                                           (Dollars in thousands)

<S>                    <C>        <C>      <C>         <C>       <C>          <C>
Tangible capital       $16,471    11.1%    =>$2,225    =>1.5%    =>$ 7,418    => 5.0%

Core capital           $16,471    11.1%    =>$5,934    =>4.0%    =>$ 8,901    => 6.0%

Risk-based capital     $17,036    14.8%    =>$9,222    =>8.0%    =>$11,527    =>10.0%
</TABLE>

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.


                                                                             51
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note L - Condensed Financial Statements of Ffd Financial Corporation

The following condensed financial statements summarize the financial position
of FFD Financial Corporation as of June 30, 2006 and 2005, and the results of
its operations and its cash flows for the years ended June 30, 2006, 2005 and
2004.

                           FFD FINANCIAL CORPORATION
                  CONDENSED STATEMENTS OF FINANCIAL CONDITION
                             June 30, 2006 and 2005
                                 (In thousands)

<TABLE>
<CAPTION>

ASSETS                                                            2006        2005
                                                                  ----        ----

<S>                                                            <C>         <C>
Cash and due from banks                                        $   200     $   167
Loan receivable from ESOP                                          143         278
Investment in First Federal Community Bank                      17,650      16,531
Accrued interest receivable                                          1           3
Prepaid federal income taxes                                       359         445
Prepaid expenses and other assets                                   10          14
                                                               -------     -------
      Total assets                                             $18,363     $17,438
                                                               =======     =======

SHAREHOLDERS' EQUITY

Shareholders' equity
  Common stock and additional paid-in capital                  $ 8,108     $ 7,987
  Retained earnings                                             13,745      12,954
  Unrealized losses on securities designated as available
   for sale, net of related tax effects                            (95)         (9)
  Shares acquired by stock benefit plans                          (225)       (334)
  Treasury shares - at cost                                     (3,170)     (3,160)
                                                               -------     -------

      Total shareholders' equity                               $18,363     $17,438
                                                               =======     =======
</TABLE>

                           FFD FINANCIAL CORPORATION
                        CONDENSED STATEMENTS OF EARNINGS
                    Years ended June 30, 2006, 2005 and 2004
                                 (In thousands)

                                                2006       2005     2004
                                                ----       ----     ----
Revenue
  Interest income                             $    9     $    7     $  6
  Equity in earnings of subsidiary             1,570      1,228      813
                                              ------     ------     ----
      Total revenue                            1,579      1,235      819

General and administrative expenses              330        223      197
                                              ------     ------     ----

      Earnings before income tax credits       1,249      1,012      622

Federal income tax credits                      (103)       (74)     (65)
                                              ------     ------     ----

      NET EARNINGS                            $1,352     $1,086     $687
                                              ======     ======     ====

                                                                             53
<PAGE>

                           FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                          June 30, 2006, 2005 and 2004

Note L - Condensed Financial Statements of Ffd Financial Corporation (Continued)

                           FFD FINANCIAL CORPORATION
                       CONDENSED STATEMENTS OF CASH FLOWS
                    Years ended June 30, 2006, 2005 and 2004
                                 (In thousands)
<TABLE>
<CAPTION>

                                                           2006       2005      2004
                                                           ----       ----      ----

<S>                                                      <C>        <C>         <C>
Cash provided by (used in) operating activities:
  Net earnings for the year                              $1,352     $1,086      $687
  Adjustments to reconcile net earnings to net
   cash provided by (used in) operating activities:
    Undistributed earnings of subsidiary                   (985)      (466)      (86)
    Increase (decrease) in cash due to changes in:
      Prepaid expenses and other assets                       6         52        32
      Prepaid federal income taxes                           86        (73)      (97)
                                                         ------     ------      ----
      Net cash provided by operating activities             459        599       536

Cash flows provided by investing activities:
  Proceeds from repayment of loan to ESOP                   135        126       119

Cash flows used in financing activities:
  Proceeds from exercise of stock options                    64        267       314
  Treasury shares                                           (64)      (411)     (769)
  Cash dividends paid on common stock                      (561)      (517)     (504)
                                                         ------     ------      ----
      Net cash used in financing activities                (561)      (661)     (959)
                                                         ------     ------      ----

Net increase (decrease) in cash and cash equivalents         33         64      (304)

Cash and cash equivalents at beginning of year              167        103       407
                                                         ------     ------      ----

Cash and cash equivalents at end of year                 $  200     $  167      $103
                                                         ======     ======      ====
</TABLE>

OTS regulations 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. At June 30, 2006, the Bank was able
to dividend approximately $1.5 million to the Corporation without prior OTS
approval.

                                                                             54
<PAGE>

FFD Financial Corporation and First Federal Community Bank
Directors and Executive Officers
===============================================================================

Board of Directors of FFD Financial Corporation
and First Federal Community Bank

Richard A. Brinkman, Jr.
Chief Executive Officer
AAA of Tuscarawas County

Stephen G. Clinton
President
Capital Market Securities

Leonard L. Gundy
President
Benchmark Construction, Inc.

Enos L. Loader
Chairman of the Board
Retired Senior Bank Officer

Robert D. Sensel
President and Chief Executive Officer
Dover Hydraulics, Inc.

Directors Emeritus FFD Financial Corporation
 and First Federal Community Bank

J. Richard Gray
Chairman
Hanhart Agency, Inc.

Richard J. Herzig
Chairman - Retired
Toland-Herzig Funeral Homes, Inc.

Roy O. Mitchell, Jr.
Managing Officer - Retired
First Federal Community Bank

===============================================================================
Executive Officers of FFD Financial Corporation

Trent B. Troyer
President and Chief Executive Officer

Scott C. Finnell
Executive Vice President

Robert R. Gerber
Vice President, Treasurer and Chief
Financial Officer

Sally K. O'Donnell
Senior Vice President and Corporate Secretary

                                                                             55
<PAGE>

FFD Financial Corporation and First Federal Community Bank
Directors and Executive Officers
===============================================================================

Executive Officers of First Federal Community Bank

Trent B. Troyer
President and Chief Executive Officer

Scott C. Finnell
Executive Vice President

Robert R. Gerber
Vice President,
Treasurer and Chief Financial Officer

Sally K. O'Donnell
Senior Vice President and Corporate Secretary

Other Officers of First Federal Community Bank
===============================================================================

Michele L. Larkin
Vice President

Mary M. Mitchell
Banking Officer

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 17, 2006, at 1:00 p.m., local time, at the McDonald Marlite Conference
Center, 143 McDonald Drive, S.W., New Philadelphia, Ohio 44663. Shareholders
are cordially invited to attend.

Annual Report On Form 10-Ksb
===============================================================================

A copy of FFD's Annual Report on Form 10-KSB will be available at no charge to
shareholders upon request to:

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

                                                                             56
<PAGE>

                                                     Investing In Our Community
===============================================================================

Investing in our community...
It's not just a slogan, it's the way we do business at First Federal Community
Bank.

In addition to providing a wide array of financial services, the people at
First Federal invest in our community through their involvement and support of
many organizations, projects and initiatives.

First Federal team members have held leadership and volunteer roles in the
following organizations:
===============================================================================

American Red Cross, Muskingum Lakes Chapter, Board of Directors
Coshocton County Chamber of Commerce
Dover Public Library Board of Directors
Dover Rotary Club
East Central Ohio Building Industry Association
Holmes County Chamber of Commerce
Kent State University Tuscarawas Campus Board
Leadership Tuscarawas
Main Street New Philadelphia
Muskingum College Board of Trustees
New Philadelphia Kiwanis Club
New Philadelphia Rotary Club
Ohio Bankers League Board of Directors
Ohio Small Business Development Center Advisory Board
Sugarcreek Business Association
Tuscarawas AAA Board of Directors
Tuscarawas Center for the Arts
Tuscarawas County Board of Realtors
Tuscarawas County Chamber of Commerce
Tuscarawas County CIC Board of Trustees
Tuscarawas County Port Authority Business Incubator Board
Tuscarawas County Rainbow Connection Board of Directors
United Way of Tuscarawas County Board of Trustees
Union Hospital Development and Community Relations Committee

First Federal team members contributed $12,042 in employee donations and funds
raised for:
===============================================================================

American Cancer Society
American Red Cross
Big Brothers Big Sisters
COMPASS
Dress a Child
Harbor House, Tuscarawas County
Hospice of Tuscarawas County
Hurricane Katrina Relief Fund
Leadership Tuscarawas
Salvation Army
Share-A-Christmas
Tuscarawas County Rainbow Connection
Union Hospital Breast Cancer Awareness Campaign
United Way

                                                                             57
<PAGE>

FFD FINANCIAL CORPORATION
First Federal Community Bank

321 N. Wooster Ave
P.O. Box 38
Dover, Ohio 44622

Phone: 330.364.7777
Toll Free: 866.849.3560
www.onlinefirstfed.com

NASDAQ SmallCap Symbol: FFDF