|[X]   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 
|----- | -----------------------------------------------------------------------------------------
|      | For the quarterly period ended   **September 30, 2001**                                  
|OR   
|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
|      | For the transition period from ________ to ________                                      

|**MONTGOMERY FINANCIAL CORPORATION**(Exact Name of Small Business Issuer in its Charter)
|----------------------------------------------------------------------------------------
|**Indiana**(State or other jurisdiction of
Incorporation or organization)               
|**119 East Main StreetCrawfordsville, Indiana**(Address of Principal Executive Offices) 
|**(765) 362-4710**(Registrant's telephone number, including area code)                  

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|**PART I.**  | **FINANCIAL INFORMATION**                                                                                | Page No.
|------------ | -------------------------------------------------------------------------------------------------------- | --------
|Item 1.      | Financial Statements                                                                                     |         
|             | Consolidated Condensed Statement of Financial Condition   As of September 30, 2001 and June 30, 2001     | 3       
|             | Consolidated Condensed Statement of Income for the Three   Months Ended September 30, 2001 and 2000      | 4       
|             | Consolidated Condensed Statement of Cash Flows for the   Three Months Ended September 30, 2001 and 2000  | 5       
|             | Consolidated Condensed Statement of Stockholders'   Equity for the Three Months Ended September 30, 2001 | 7       
|             | Notes to Consolidated Condensed Financial Statements                                                     | 8       
|Item 2.      | Management's Discussion and Analysis of Financial Condition   And Results of Operations                  | 7       
|             |                                                                                                          |         
|**PART II.** | **OTHER INFORMATION**                                                                                    |         
|Item 1.      | Legal Proceedings                                                                                        | 15      
|Item 2.      | Changes in Securities and Use of Proceeds                                                                | 15      
|Item 3.      | Defaults Upon Senior Securities                                                                          | 15      
|Item 4.      | Submission of Matters to a Vote of Security Holders                                                      | 15      
|Item 5.      | Other Information                                                                                        | 15      
|Item 6.      | Exhibits and Reports on Form 8-K                                                                         | 15      
|Signatures   |                                                                                                          | 16      

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|                         |                                                             |                                           |                                            | September 30,2001 | June 30,2001
|------------------------ | ----------------------------------------------------------- | ----------------------------------------- | ------------------------------------------ | ----------------- | ------------
|**Assets**               | (Unaudited)                                                 |                                          
|                         | Cash                                                        | $518,811                                  | $486,822                                  
|                         | Short-term interest-bearing deposits                        | 14,205,702                                | 7,477,130                                 
|                         |                                                             | Total cash and cash equivalents           | 14,724,513                                 | 7,963,952        
|                         | Interest-bearing deposits                                   | 239,628                                   | 239,420                                   
|                         | Investment securities available for sale                    | 331,179                                   | 323,644                                   
|                         | Loans                                                       | 120,152,074                               | 120,482,405                               
|                         | Allowance for loan losses                                   | (279,000)                                 | (279,000)                                 
|                         |                                                             | Net loans                                 | 119,873,074                                | 120,203,405      
|                         | Premises and equipment                                      | 3,129,482                                 | 3,180,024                                 
|                         | Federal Home Loan Bank stock                                | 1,893,300                                 | 1,893,300                                 
|                         | Foreclosed assets and real estate held for development, net | 2,000,547                                 | 1,783,671                                 
|                         | Interest receivable                                         | 791,778                                   | 787,800                                   
|                         | Other assets                                                | 418,161                                   | 479,469                                   
|                         |                                                             |                                           | Total assets                               | $143,401,662      | $136,854,685
|                         |                                                             |                                           |                                            |                   |             
|**Liabilities**          |                                                             |                                          
|                         | Deposits                                                    |                                           |                                           
|                         |                                                             | Noninterest bearing                       | $2,401,306                                 | $2,475,314       
|                         |                                                             | Interest bearing                          | 104,733,095                                | 98,159,878       
|                         |                                                             |                                           | Total deposits                             | 107,134,401       | 100,635,192 
|                         | Federal Home Loan Bank advances                             | 17,629,678                                | 17,629,678                                
|                         | Interest payable                                            | 556,282                                   | 571,042                                   
|                         | Other liabilities                                           | 1,148,206                                 | 1,109,477                                 
|                         |                                                             |                                           | Total liabilities                          | 126,468,567       | 119,945,389 
|                         |                                                             |                                           |                                            |                   |             
|**Stockholders' Equity** |                                                             |                                          
|                         | Preferred stock, $.01 par value                             |                                           |                                           
|                         |                                                             | authorized and unissued--2,000,000 shares |                                            |                  
|                         | Common stock, $.01 par value--8,000,000 shares              |                                           |                                           
|                         |                                                             | authorized;  1,207,698 issued             | 12,077                                     | 12,077           
|                         | Paid-in capital                                             | 9,882,078                                 | 9,873,737                                 
|                         | Retained earnings - substantially restricted                | 8,139,361                                 | 8,159,612                                 
|                         | Unearned ESOP shares                                        | (951,628)                                 | (971,860)                                 
|                         | Unearned compensation                                       | (167,918)                                 | (178,845)                                 
|                         | Accumulated other comprehensive income                      | 19,125                                    | 14,575                                    
|                         |                                                             |                                           |                                            |                   |             
|                         |                                                             |                                           | Total stockholders' equity                 | 16,933,095        | 16,909,296  
|                         |                                                             |                                           |                                            |                   |             
|                         |                                                             |                                           | Total liabilities and stockholders' equity | $143,401,662      | $136,854,685

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|                                 |                                               |                                    | Three Months EndedSeptember 30,
|-------------------------------- | --------------------------------------------- | ---------------------------------- | -------------------------------
|                                 |                                               |                                    | 2001                           
|**Interest and Dividend Income** |                                               |                                   
|                                 | Loans                                         | $2,348,398                         | $2,360,812                     
|                                 | Investment securities                         | 3,424                              | 5,518                          
|                                 | Deposits with financial institutions          | 101,845                            | 197,366                        
|                                 | Federal Home Loan Bank stock                  | 34,958                             | 40,453                         
|                                 |                                               | Total interest and dividend income | 2,488,265                      
|                                 |                                               |                                    |                                
|**Interest Expense**             |                                               |                                   
|                                 | Deposits                                      | 1,289,704                          | 1,327,277                      
|                                 | Federal Home Loan Bank advances               | 260,317                            | 408,418                        
|                                 |                                               | Total interest expense             | 1,550,021                      
|                                 |                                               |                                    |                                
|**Net Interest Income**          | 938,244                                       | 868,454                           
|                                 | Provision for losses on loans                 | ---                                | ---                            
|                                 |                                               |                                    |                                
|**Net Interest Income After**    |                                               |                                   
|                                 | **Provision for Losses on Loans**             | 938,244                            | 868,454                        
|                                 |                                               |                                    |                                
|**Other Income**                 |                                               |                                   
|                                 | Service charges on deposit accounts           | 31,096                             | 15,910                         
|                                 | Loss on sale of available for sale securities | ---                                | (535)                          
|                                 | Other income                                  | 42,456                             | 13,957                         
|                                 |                                               | Total other income                 | 73,552                         
|                                 |                                               |                                    |                                
|**Other Expenses**               |                                               |                                   
|                                 | Salaries and employee benefits                | 449,352                            | 419,186                        
|                                 | Net occupancy expense                         | 49,290                             | 46,910                         
|                                 | Equipment expense                             | 63,168                             | 55,666                         
|                                 | Data processing expense                       | 43,374                             | 43,911                         
|                                 | Deposit insurance expense                     | 5,019                              | 4,649                          
|                                 | Advertising expense                           | 20,768                             | 20,173                         
|                                 | Real estate operations, net                   | 9,155                              | (6,203)                        
|                                 | Merger-related expenses                       | 91,016                             | ---                            
|                                 | Other expenses                                | 163,727                            | 151,735                        
|                                 |                                               | Total other expenses               | 894,869                        
|                                 |                                               |                                    |                                
|**Income Before Income Tax**     | 116,927                                       | 161,759                           
|                                 | Income tax expense                            | 76,100                             | 54,885                         
|                                 |                                               |                                    |                                
|**Net Income**                   | $40,827                                       | $106,874                          
|                                 |                                               |                                    |                                
|**Net Income Per Share**         |                                               |                                   
|                                 | Basic                                         | $0.04                              | $0.10                          
|                                 | Diluted                                       | 0.04                               | 0.10                           
|                                 |                                               |                                    |                                
|**Dividends Per Share**          | 0.055                                         | 0.055                             

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|                         |                                                        |                                               |                                                  | Three Months EndedSeptember 30,
|------------------------ | ------------------------------------------------------ | --------------------------------------------- | ------------------------------------------------ | -------------------------------
|                         |                                                        |                                               |                                                  | 2001                           
|**Operating Activities** |                                                        |                                              
|                         |                                                        |                                               |                                                 
|                         | Net income                                             | $40,827                                       | $106,874                                        
|                         | Adjustments to reconcile net income to net cash        |                                               |                                                 
|                         |                                                        | provided by operating activities              |                                                  |                                
|                         |                                                        | Depreciation                                  | 80,912                                           | 76,376                         
|                         |                                                        | Loss on sale of securities available for sale |                                                  | 535                            
|                         |                                                        | ESOP stock amortization                       | 29,412                                           | 19,324                         
|                         |                                                        | Amortization of unearned compensation         | 10,088                                           | 10,088                         
|                         |                                                        | Change in                                     |                                                  |                                
|                         |                                                        |                                               | Interest receivable                              | (3,978)                        
|                         |                                                        |                                               | Interest payable                                 | (14,760)                       
|                         |                                                        |                                               | Other assets                                     | 61,308                         
|                         |                                                        |                                               | Other liabilities                                | 35,744                         
|                         |                                                        |                                               |                                                  |                                
|                         |                                                        |                                               | Net cash provided by operating activities        | 239,553                        
|                         |                                                        |                                               |                                                  |                                
|                         |                                                        |                                               |                                                  |                                
|                         |                                                        |                                               |                                                  |                                
|                         |                                                        |                                               |                                                  |                                
|Investing Activities     |                                                        |                                              
|                         |                                                        |                                               |                                                 
|                         | Net change in interest bearing deposits                | (208)                                         | 19,376                                          
|                         | Proceeds from sale of securities                       |                                               |                                                 
|                         |                                                        | available for sale                            |                                                  | 8,495                          
|                         | Purchase of securities available for sale              |                                               | (50,000)                                        
|                         | Net change in loans                                    | 113,740                                       | (163,104)                                       
|                         | Additions to real estate owned and held for investment | (145,583)                                     | (55,173)                                        
|                         | Proceeds from real estate owned sales                  | 137,543                                       | 94,742                                          
|                         | Purchases of premises and equipment                    | (22,615)                                      | (65,111)                                        
|                         |                                                        |                                               |                                                  |                                
|                         |                                                        |                                               | Net cash provided (used) by investing activities | 82,877                         

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|                                                   |                                                |                                                  |                                           | Three Months EndedSeptember 30,
|-------------------------------------------------- | ---------------------------------------------- | ------------------------------------------------ | ----------------------------------------- | -------------------------------
|                                                   |                                                |                                                  |                                           | 2001                           
|**Financing Activities**                           |                                                |                                                 
|                                                   | Net change in                                  |                                                  |                                          
|                                                   |                                                | Noninterest-bearing, interest-bearing demand and |                                           |                                
|                                                   |                                                |                                                  | savings deposits                          | $3,159,091                     
|                                                   |                                                | Certificates of deposit                          | 3,340,118                                 | 6,471,673                      
|                                                   | Repayment of FHLB advances                     |                                                  | (5,000,000)                              
|                                                   | Dividends paid                                 | (61,078)                                         | (63,743)                                 
|                                                   |                                                |                                                  |                                           |                                
|                                                   |                                                |                                                  | Net cash provided by financing activities | 6,438,131                      
|                                                   |                                                |                                                  |                                           |                                
|**Net Change in Cash and Cash Equivalents**        | 6,760,561                                      | 2,419,250                                       
|                                                   |                                                |                                                  |                                           |                                
|**Cash and Cash Equivalents, Beginning of Period** | 7,963,952                                      | 10,526,266                                      
|                                                   |                                                |                                                  |                                           |                                
|**Cash and Cash Equivalents, End of Period**       | $14,724,513                                    | $12,945,516                                     
|                                                   |                                                |                                                  |                                           |                                
|                                                   |                                                |                                                  |                                           |                                
|                                                   |                                                |                                                  |                                           |                                
|                                                   |                                                |                                                  |                                           |                                
|                                                   |                                                |                                                  |                                           |                                
|                                                   |                                                |                                                  |                                           |                                
|Additional Cash Flow and Supplementary Information |                                                |                                                 
|                                                   |                                                |                                                  |                                           |                                
|                                                   | Interest Paid                                  | $1,564,781                                       | $1,590,399                               
|                                                   | Income Tax Paid                                | 114,500                                          | 102,000                                  
|                                                   | Transfer from Loans to Other Real Estate Owned | 216,591                                          | 316,941                                  
|                                                   | Cash Dividends Payable                         | 61,078                                           | 62,659                                   

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|                                 |                                  |                               | Paid-inCapital | Compre-hensiveIncome | RetainedEarnings | UnearnedESOPShares | UnearnedCompen-sation | Accumu-latedOtherCompre-hensiveIncome | Total      
|-------------------------------- | -------------------------------- | ----------------------------- | -------------- | -------------------- | ---------------- | ------------------ | --------------------- | ------------------------------------- | -----------
|                                 |                                  |                              
|                                 |                                  | Common Stock                 
|                                 |                                  | Shares                        | Amount        
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|Balance July 1, 2001             | 1,207,698                        | $12,077                       | $9,873,737     |                      | $8,159,612       | $(971,860)         | $(178,845)            | $14,575                               | $16,909,296
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|Net income for the three months  |                                  |                               |                |                      |                  |                    |                       |                                       |            
|                                 | ended September 30, 2001         |                               |                |                      | $40,827          | 40,827             |                       |                                       |            
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|Other comprehensive income,      |                                  |                               |                |                      |                  |                    |                       |                                       |            
|                                 | net of tax                       |                               |                |                      |                  |                    |                       |                                       |            
|                                 | Unrealized holding gains arising |                               |                |                      |                  |                    |                       |                                       |            
|                                 |                                  | during the period, net of tax |                |                      |                  |                    |                       |                                       |            
|                                 |                                  | expense of $2,985             |                |                      |                  | 4,550              | 4,550                 |                                       |            
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|Other comprehensive income       |                                  |                               |                | $45,377              |                  |                    |                       |                                       |            
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|Cash dividends ($.055 per share) |                                  |                               |                |                      | (61,078)         |                    |                       |                                       | (61,078)   
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|ESOP shares earned               |                                  |                               | 9,180          |                      |                  | 20,232             |                       |                                       | 29,412     
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|Amortization of unearned         |                                  |                               |                |                      |                  |                    |                       |                                       |            
|                                 | compensation expense             |                               |                | (839)                |                  |                    |                       | 10,927                                |            
|                                 |                                  |                               |                |                      |                  |                    |                       |                                       |            
|Balance September 30, 2001       | 1,207,698                        | $12,077                       | $9,882,078     |                      | $8,139,361       | $(951,628)         | $(167,918)            | $19,125                               | $16,933,095

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|For the Three Months Ended       | September 30, 2001     | September 30, 2000
|-------------------------------- | ---------------------- | ------------------
|                                 |                        | Income            
|Basic Net Income Per Share:      |                        |                   
|                                 | Net Income Available   |                   
|                                 | to Common Stockholders | $40,827           
|                                 |                        |                   
|Effect of Dilutive Stock Options |                        |                   
|                                 | and Grants             | 0                 
|                                 |                        |                   
|Diluted Net Income Per Share:    |                        |                   
|                                 | Net Income Available   |                   
|                                 | To Common Stockholders | $40,827           

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|                                 | 2001                            
|-------------------------------- | --------------------------------
|Three months ended September 30, | Before-TaxAmount                
|                                 |                                 
|Unrealized gains on securities   |                                 
|                                 | Unrealized holding gains arising
|                                 |                                 

|                                        | 2000                                  
|--------------------------------------- | --------------------------------------
|Three months ended September 30,        | Before-TaxAmount                      
|                                        |                                       
|Unrealized gains (losses) on securities |                                       
|                                        | Unrealized holding gains arising      
|                                        |                                       
|                                        | Less: reclassifications adjustment for
|                                        |                                       
|                                        |                                       
|Net unrealized gains                    | $104,243                              

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|                                             |                          | At June 30, 2001 | At June 30,2000
|-------------------------------------------- | ------------------------ | ---------------- | ---------------
|AssumedChange inInterest Rates(Basis Points) | BoardLimit% Changein NPV | $ Changein NPV   | % Changein NPV 
|(Dollars in Thousands)                      
|+300                                         | -60                      | -8,092           | -37            
|+200                                         | -50                      | -5,331           | -24            
|+100                                         | -30                      | -2,439           | -11            
|0                                            | 0                        | 0                | 0              
|-100                                         | -30                      | +1,529           | +7             
|-200                                         | -50                      | +2,454           | +11            
|-300                                         | -60                      | +3,307           | +15            

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|Item 1. | Legal Proceedings       None.                                                                                                                                                                                                                                                                                                             
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       
|Item 2. | Changes in Securities and Use of Proceeds       None.                                                                                                                                                                                                                                                                                     
|       
|Item 3. | Defaults Upon Senior Securities       None.                                                                                                                                                                                                                                                                                               
|       
|Item 4. | Submission of Matters to a Vote of Security Holders       None.                                                                                                                                                                                                                                                                           
|       
|Item 5. | Other Information       None.                                                                                                                                                                                                                                                                                                             
|       
|Item 6. | Exhibits and Reports on Form 8-K                                                                                                                                                                                                                                                                                                          
|       
|(a)     | Exhibits                                                                                                                                                                                                                                                                                                                                  
|        | None                                                                                                                                                                                                                                                                                                                                      
|       
|(b)     | Reports on Form 8-K                                                                                                                                                                                                                                                                                                                       
|        | Montgomery filed a current report on Form 8-K during the quarter ended September 30,
2001.  This Form 8-K, filed on July 24, 2001, announced the signing of a definitive
agreement to merge Montgomery Financial Corporation with and into Union Community
Bancorp.  A copy of the definitive agreement is attached to the current report.

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|      |                   |  | Montgomery Financial Corporation
|----- | ----------------- |  | --------------------------------
|      |                   |  |                                 
|Date: | November 13, 2001 |  | By:                             
|      |                   |  |                                 
|      |                   |  |                                 
|      |                   |  |                                 
|Date: | November 13, 2001 |  | By:                             
|      |                   |  |                                 

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