UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                          -----------------------------

                                   FORM 10-QSB

(Mark One)

[X]   QUARTERLY  REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES  EXCHANGE ACT
      OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

[_]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 FOR THE TRANSITION PERIOD FROM               TO
                                             -------------     ----------------

                        Commission File Number: 0-19609
                                                -------

                             FirstFed Bancorp, Inc.
         ---------------------------------------------------------------
        (Exact name of Small Business Issuer as specified in its charter)

           Delaware                                              63-1048648
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

1630 Fourth Avenue North
Bessemer, Alabama                                                   35020
-------------------------------                              -------------------
(Address of principal executive offices)                          (Zip Code)

Issuer's telephone number, including area code: (205) 428-8472
                                                --------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  preceding  12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

YES [X] NO [_]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

            Class                                 Outstanding at August 10, 2005
----------------------------                      ------------------------------
Common Stock, $.01 par value                             2,439,350 shares

Transitional Small Business Disclosure Format
(Check one):

YES [X] NO [_]

<PAGE>
<TABLE>
<CAPTION>

                                                   FIRSTFED BANCORP, INC.
                                                   ----------------------

                                                                                                               Page
                                                                                                               ----
<S>                                                                                                             <C>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS:

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  AS OF JUNE 30, 2005 AND DECEMBER 31, 2004.......................................................................2

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME  FOR THE THREE
 AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004......................................................................3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2005
AND 2004 .........................................................................................................4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
  SIX MONTHS ENDED JUNE 30, 2005 AND 2004.........................................................................5

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ...................................................6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
  OF OPERATION.................................................................................................. 11

ITEM 3.  CONTROLS AND PROCEDURES.................................................................................15

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.......................................................................................16

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.............................................16

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.........................................................................16

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....................................................16

ITEM 5.  OTHER INFORMATION.......................................................................................16

ITEM 6.  EXHIBITS................................................................................................17

SIGNATURES.......................................................................................................18

</TABLE>

THE CONDENSED  CONSOLIDATED FINANCIAL STATEMENTS FURNISHED HAVE NOT BEEN AUDITED
BY INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS,  BUT REFLECT,  IN THE OPINION OF
MANAGEMENT,  ALL  ADJUSTMENTS  NECESSARY  FOR A FAIR  PRESENTATION  OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS FOR THE PERIODS PRESENTED.


                                       i
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                             FIRSTFED BANCORP, INC.
                             ----------------------
       UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
       ------------------------------------------------------------------
                   As of June 30, 2005 and December 31, 2004
                         (Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                       June 30,   December 31,
ASSETS                                                                   2005         2004
                                                                      ---------    ---------
<S>                                                                   <C>          <C>
Cash and Cash Equivalents:
         Cash on hand and in banks                                    $   3,538    $   3,125
         Interest-bearing deposits in other banks                         5,634        1,489
         Federal funds sold                                               1,300          176
                                                                      ---------    ---------
                                                                         10,472        4,790
Securities available-for-sale, at fair value                              7,437       22,941
Loans held for sale                                                         301          739
Loans receivable, net                                                   162,170      161,841
Land, buildings and equipment, net                                        7,683        7,377
Bank owned life insurance                                                 6,555        6,368
Real estate owned                                                         1,509          986
Accrued interest receivable                                                 858        1,134
Goodwill and other intangibles                                            1,142        1,167
Other assets                                                              7,165        7,100
                                                                      ---------    ---------
                                                                      $ 205,292    $ 214,443
                                                                      =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
         Deposits                                                     $ 162,190    $ 157,545
         Borrowings                                                      17,000       31,494
         Subordinated debentures                                          6,000        6,000
         Accrued interest payable                                           243          238
         Dividends payable                                                  171          168
         Other liabilities                                                  661          580
                                                                      ---------    ---------
                                                                        186,265      196,025
Stockholders' Equity:
         Preferred stock, $.01 par value, 1,000,000 shares
                  authorized, none outstanding                               --           --
         Common stock, $.01 par value, 10,000,000 shares
                  authorized, 3,269,298 shares issued and 2,439,350
                  shares outstanding at June 30, 2005 and 3,230,955
                  shares issued and 2,401,007 shares outstanding at
                  December 31, 2004                                          33           32
         Paid-in capital                                                  8,809        8,590
         Retained earnings                                               16,604       15,976
         Deferred compensation obligation                                 2,105        2,114
         Deferred compensation treasury stock (239,548
                  shares at June 30, 2005 and 240,036 shares
                  at December 31, 2004)                                  (2,105)      (2,114)
         Treasury stock, at cost (829,948 shares at June 30, 2005
                  and December 31, 2004)                                 (6,088)      (6,088)
         Unearned compensation                                             (270)        (328)
         Accumulated other comprehensive income                             (61)         236
                                                                      ---------    ---------
                                                                         19,027       18,418
                                                                      ---------    ---------
                                                                      $ 205,292    $ 214,443
                                                                      =========    =========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       2
<PAGE>

                             FIRSTFED BANCORP, INC.
                             ----------------------
              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
              -----------------------------------------------------
           For the Three and Six Months Ended June 30, 2005 and 2004
             (Dollar amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                            Three Months Ended         Six Months Ended
                                                 June 30,                  June 30,
                                             2005         2004         2005         2004
                                          ----------   ----------   ----------   ----------
<S>                                       <C>          <C>          <C>          <C>
INTEREST INCOME:
         Interest and fees on loans       $    2,521   $    2,099   $    4,938   $    4,124
         Interest and dividends on
           securities                             65          285          170          591
         Other interest income                    28            4           47            7
                                          ----------   ----------   ----------   ----------
           Total interest income               2,614        2,388        5,155        4,722
                                          ----------   ----------   ----------   ----------

INTEREST EXPENSE:
         Interest on deposits                    829          710        1,616        1,430
         Interest on other borrowings            316          289          638          547
                                          ----------   ----------   ----------   ----------
           Total interest expense              1,145          999        2,254        1,977
                                          ----------   ----------   ----------   ----------

  Net interest income                          1,469        1,389        2,901        2,745
         Provision for loan losses                17          209           36          429
                                          ----------   ----------   ----------   ----------
  Net interest income after
    provision for loan losses                  1,452        1,180        2,865        2,316
                                          ----------   ----------   ----------   ----------

NONINTEREST INCOME:
         Fees and other noninterest
           income                              1,009          659        1,687        1,239
         Gain on sale of investments              --           --          354            7
         Bank owned life insurance                93           88          187          179
                                          ----------   ----------   ----------   ----------
           Total noninterest income            1,102          747        2,228        1,425
                                          ----------   ----------   ----------   ----------

NONINTEREST EXPENSE:
         Salaries and employee benefits          822          833        1,713        1,616
         Office building and equipment
           expenses                              210          222          414          461
         Other operating expenses                680          748        1,298        1,415
                                          ----------   ----------   ----------   ----------
           Total noninterest expense           1,712        1,803        3,425        3,492
                                          ----------   ----------   ----------   ----------

  Income before income taxes                     842          124        1,668          249
         Provision for income taxes              263           10          530           23
                                          ----------   ----------   ----------   ----------
  NET INCOME                              $      579   $      114   $    1,138   $      226
                                          ==========   ==========   ==========   ==========
AVERAGE NUMBER OF SHARES
         OUTSTANDING - BASIC               2,407,943    2,358,657    2,400,368    2,347,922
                                          ==========   ==========   ==========   ==========
BASIC EARNINGS PER SHARE                  $      .24   $      .05   $      .47   $      .10
                                          ==========   ==========   ==========   ==========
AVERAGE NUMBER OF SHARES
         OUTSTANDING - DILUTED             2,430,559    2,380,048    2,419,511    2,387,904
                                          ==========   ==========   ==========   ==========
DILUTED EARNINGS PER SHARE                $      .24   $      .05   $      .47   $      .09
                                          ==========   ==========   ==========   ==========
DIVIDENDS DECLARED PER SHARE              $      .07   $      .07   $      .21   $      .21
                                          ==========   ==========   ==========   ==========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       3
<PAGE>
<TABLE>
<CAPTION>
                                                        FIRSTFED BANCORP, INC.
                                                        ----------------------
                                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
                                 -----------------------------------------------------------------------
                                                         COMPREHENSIVE INCOME
                                                         --------------------
                                            For the Six Months Ended June 30, 2005 and 2004
                                        (Dollar amounts in thousands, except per share amounts)


                                                                                Deferred                       Accumulated
                                                                     Deferred    Compen-                          Other     Compre-
                                                                      Compen-    sation               Unearned   Compre-    hensive
                                     Common   Paid-In    Retained     sation   Treasury   Treasury     Compen-   hensive    Income
                                     Stock    Capital    Earnings   Obligation   Stock      Stock      sation    Income    (Note 1)
                                     -----    -------    --------   ----------   -----      -----      ------    ------    --------

<S>                                <C>       <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
BALANCE, December 31, 2003          $     32  $  8,426   $ 16,047   $  1,969   $ (1,969)  $ (6,088)  $   (416)  $    551

     Net income                           --        --        226         --         --         --         --         --   $    226
     Change in unrealized gain
         (loss) on securities
         available for sale, net
         of tax of ($181)                 --        --         --         --         --         --         --        324        324
                                                                                                                           --------
     Comprehensive income                 --        --         --         --         --         --         --         --   $    (98)
                                                                                                                           ========
     Amortization of unearned
         compensation                     --        --         --         --         --         --         58         --
     Dividends declared ($.21
         per share)                       --        --       (501)        --         --         --         --         --
     Exercise of stock options            --        10         --         --         --         --         --         --
     Purchase of deferred comp
         Treasury Shares                  --        --         --         78        (78)        --         --         --
     Stock issued under Dividend
         Reinvestment Plan                --        75         --         --         --         --         --         --
     Change in stock value of
         Employee Stock
         Ownership Plan                   --        (8)        --         --         --         --         --         --
                                    --------  --------   --------   --------   --------   --------   --------   --------

BALANCE, June 30, 2004              $     32  $  8,508   $ 15,772   $  2,047   $ (2,047)  $ (6,088)  $   (358)  $    227
                                    ========  ========   ========   ========   ========   ========   ========   ========


BALANCE, December 31, 2004          $     32  $  8,590   $ 15,976   $  2,114   $ (2,114)  $ (6,088)  $   (328)  $    236

     Net income                           --        --      1,138         --         --         --         --         --   $  1,138
Change in unrealized gain
         (loss) on securities
         available for sale, net
         of tax of ($171)                 --        --         --         --         --         --         --       (297)      (297)
                                                                                                                           --------
     Comprehensive income                 --        --         --         --         --         --         --         --   $    841
                                                                                                                           ========
     Amortization of unearned
         compensation                     --        --         --         --         --         --         58         --
     Dividends declared ($.21
         per share)                       --        --       (510)        --         --         --         --         --
     Exercise of stock options             1        53         --         --         --         --         --         --
     Purchase of Deferred Comp
         Treasury Shares                  --        --         --         24        (24)        --         --         --
     Distribution of Deferred Comp
         Treasury Shares                  --        --         --        (33)        33         --         --         --
     Stock issued under Dividend
         Reinvestment Plan                --        79         --         --         --         --         --         --
     Change in stock value of
         Employee Stock
         Ownership Plan                   --       (13)        --         --         --         --         --         --
                                    --------  --------   --------   --------   --------   --------   --------   --------

BALANCE, March 31, 2005             $     33  $  8,809   $ 16,604   $  2,105   $ (2,105)  $ (6,088)  $   (270)  $    (61)
                                    ========  ========   ========   ========   ========   ========   ========   ========
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       4
<PAGE>
<TABLE>
<CAPTION>
                                                FIRSTFED BANCORP, INC.
                                                ----------------------
                             UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             ---------------------------------------------------------
                                  For the Six Months Ended June 30, 2005 and 2004
                                           (Dollar amounts in thousands)
                                                                                      Six Months Ended
                                                                                          June 30,
                                                                                    --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:                                                 2005        2004
                                                                                    --------    --------
<S>                                                                                 <C>         <C>
  Net income                                                                        $  1,138    $    226
  Adjustments to reconcile net income
     to net cash provided by (used in) operating activities:
       Depreciation, amortization and accretion                                          238         288
       Loan fees (cost) deferred, net                                                     98         159
       Provision for loan losses                                                          36         429
       Gain on sale of investments                                                      (354)         (7)
       Gain on sale of fixed assets                                                       --          (9)
       Loss (gain) on sale of real estate, net                                            50          99
       Origination of loans held for sale                                             (2,960)     (5,283)
       Proceeds from loans held for sale                                               3,398       5,406
       Provision for deferred compensation                                                24          78
       Increase in surrender value of Bank Owned Life Insurance                         (187)       (179)
  Decrease (increase) in assets:
       Accrued interest receivable                                                       276          (3)
       Other assets                                                                       46         (62)
  Increase (decrease) in liabilities:
         Accrued interest payable                                                          5           2
       Other liabilities                                                                  87         179
                                                                                    --------    --------
         Net cash provided by (used in) operating activities                           1,895       1,323
                                                                                    --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from maturities, calls and repayments of securities available-for-sale        716       6,892
  Proceeds from sale of securities available-for-sale                                 15,169       3,000
  Purchase of securities available-for-sale                                             (500)     (5,563)
  Proceeds from sales of real estate and repossessed assets                              694         909
  Purchase of loans                                                                       --      (3,500)
  Net loan originations                                                               (1,378)    (18,117)
  Capital expenditures                                                                  (765)     (1,716)
                                                                                    --------    --------
         Net cash provided by (used in) investing activities                          13,936     (18,095)
                                                                                    --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (decrease) in deposits, net                                                 4,645       7,427
  Proceeds from borrowings                                                             7,304      62,650
  Repayment of borrowings                                                            (21,798)    (59,270)
  Proceeds from issuance of subordinated debentures                                       --       6,000
  Proceeds from exercise of stock options                                                153          15
  Dividends paid                                                                        (508)       (500)
  Proceeds from dividend reinvestment                                                     79          75
  Purchase of treasury stock for Deferred Compensation Plan                              (24)        (78)
                                                                                    --------    --------
         Net cash provided by (used in) financing activities                         (10,149)     16,319
                                                                                    --------    --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   5,682        (453)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                       4,790       7,621
                                                                                    --------    --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          $ 10,472    $  7,168
                                                                                    ========    ========

SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid during the period for -
       Income taxes                                                                 $     46    $    113
       Interest                                                                        2,173       1,983
  Non-cash transactions -
       Transfer of loans receivable to real estate owned                               1,208       1,044
       Transfer of leased real estate owned to other assets                               --       3,246

</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


                                       5
<PAGE>

                             FIRSTFED BANCORP, INC.
                             ----------------------
              NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
              ---------------------------------------------------
                                   STATEMENTS
                                   ----------

1. BASIS OF PRESENTATION:
   ---------------------

FirstFed  Bancorp,  Inc.  (the  "Company")  is  the  holding  company  and  sole
shareholder of First State Corp. ("FSC"),  which in turn is the sole shareholder
of First Financial Bank ("First Financial" or the "Bank").

The accompanying  unaudited condensed  consolidated  financial  statements as of
June 30, 2005,  and  December  31, 2004,  and for the three and six months ended
June 30, 2005 and 2004,  include the accounts of the Company,  FSC and the Bank.
All significant  intercompany  transactions and accounts have been eliminated in
consolidation.

In the  opinion of  management,  all  adjustments  (none of which are other than
normal recurring  accruals)  necessary for a fair presentation of the results of
such interim  periods have been included.  The results of operations for the six
months ended June 30, 2005,  are not  necessarily  indicative  of the results of
operations which may be expected for the entire year.

These unaudited  condensed  financial  statements  should be read in conjunction
with the Consolidated Financial Statements and the notes thereto incorporated in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 2004.
The accounting  policies followed by the Company are set forth in the Summary of
Significant Accounting Policies in the Company's December 31, 2004, Consolidated
Financial Statements.

2. SIGNIFICANT ACCOUNTING POLICIES:
   -------------------------------

Loans Held for Sale

Loans held for sale are recorded at the lower of  amortized  cost or fair value,
as such loans are not intended to be held to maturity.  As of June 30, 2005, and
December 31,  2004,  loans held for sale  consisted of mortgage  loans that have
been committed for sale to third-party investors.

Loans Receivable

Loans receivable are stated at unpaid principal  balances,  net of the allowance
for loan  losses and  deferred  loan  origination  fees and costs.  Interest  is
credited to income based upon the recorded investment.

The accrual of interest on loans is  discontinued  and an allowance  established
when a loan becomes 90 days past due and/or,  in the opinion of management,  the
ultimate  collection is in doubt. Upon such  discontinuance,  all unpaid accrued
interest is reversed  against  current income unless the collateral for the loan
is sufficient  to cover the accrued  interest.  Interest  received on nonaccrual
loans  generally  is either  applied  against  principal or reported as interest
income,   according  to  management's  judgment  as  to  the  collectibility  of
principal.  Generally,  loans are restored to accrual status when the obligation
is brought  current and the ultimate  collectibility  of the total  contractural
principal and interest is no longer in doubt.

Allowance for Loan Losses

The allowance for loan losses is maintained at levels which management considers
adequate to absorb  losses  currently in the loan  portfolio  at each  reporting
date.  Management's estimation of this amount includes a review of all loans for
which full  collectibility is not reasonably assured and considers,  among other
factors,  prior years' loss  experience,  economic  conditions,  distribution of
portfolio loans by risk class, the estimated value of underlying collateral, and
the balance of any impaired  loans  (generally  considered  to be  nonperforming
loans,  excluding  residential  mortgages and other homogeneous  loans).  Though
management  believes  the  allowance  for loan losses to be  adequate,  ultimate
losses may vary from estimations; however, the allowance is reviewed


                                       6
<PAGE>

periodically  and as adjustments  become necessary they are reported in earnings
in the periods in which they become  known.  Specific  allowances  for  impaired
loans  are  based on  comparisons  of the  carrying  values  of the loans to the
present  value  of the  loans'  estimated  cash  flows at each  loan's  original
effective  interest  rate,  the fair  value  of the  collateral,  or the  loans'
observable market prices.

3. EARNINGS AND DIVIDENDS PER SHARE:
   --------------------------------

Earnings per share  ("EPS") for the three and six months ended June 30, 2005 and
2004, were as follows:



<PAGE>
<TABLE>
<CAPTION>

                                                         Three Months                                    Three Months
                                                     Ended June 30, 2005                             Ended June 30, 2004
                                          ------------------------------------------      ------------------------------------------
                                                           Dilutive                                        Dilutive
                                                          Effect of                                       Effect of
                                                           Options                                         Options
                                            Basic           Issued          Diluted          Basic          Issued          Diluted
                                          ----------      ----------      ----------      ----------      ----------      ----------
<S>                                       <C>            <C>              <C>             <C>            <C>              <C>
Net income                                $  579,000              --      $  579,000      $  114,000              --      $  114,000

Shares available to
   common shareholders                     2,407,943          22,616       2,430,559       2,358,657          21,391       2,380,048
                                          ----------      ----------      ----------      ----------      ----------      ----------

Earnings per share                        $     0.24              --      $     0.24      $     0.05              --      $     0.05
                                          ==========      ==========      ==========      ==========      ==========      ==========
<CAPTION>

                                                          Six Months                                      Six Months
                                                     Ended June 30, 2005                             Ended June 30, 2004
                                          ------------------------------------------      ------------------------------------------
                                                           Dilutive                                        Dilutive
                                                          Effect of                                       Effect of
                                                           Options                                         Options
                                            Basic           Issued          Diluted          Basic          Issued          Diluted
                                          ----------      ----------      ----------      ----------      ----------      ----------
<S>                                       <C>            <C>              <C>             <C>            <C>              <C>
Net income                                $1,138,000              --      $1,138,000      $  226,000              --      $  226,000

Shares available to
   common shareholders                     2,400,368          19,143       2,419,511       2,347,922          39,982       2,387,904
                                          ----------      ----------      ----------      ----------      ----------      ----------

Earnings per share                        $     0.47              --      $     0.47      $     0.10              --      $     0.09
                                          ==========      ==========      ==========      ==========      ==========      ==========
</TABLE>

Options to  purchase  158,469 and  153,604  shares of common  stock at prices in
excess of the average  market price were  outstanding  during the quarter  ended
June 30, 2005 and 2004,  respectively,  but not included in the  computation  of
diluted earnings per share.

Options  to  purchase  158,469  and 11,099  shares of common  stock at prices in
excess of the average market price were outstanding  during the six months ended
June 30, 2005 and 2004,  respectively,  but not included in the  computation  of
diluted earnings per share.

There were 26,359 and 35,145  shares of common stock held by the Employee  Stock
Ownership Plan and  unallocated at June 30, 2005 and 2004,  respectively.  These
shares are  outstanding  but not  included in the  computation  of earnings  per
share.

Dividends declared for the quarter ended June 30, 2005,  consisted of a $.07 per
share quarterly dividend.

4. SEGMENT DISCLOSURE:
   ------------------

The holding company is considered a separate reportable segment from the banking
operations  since it does not  offer  products  or  services  or  interact  with
customers,  but  does  meet  the  quantitative  threshold  as  outlined  in  the
accounting  standards.  The Company's  segment  disclosure is as follows for the
three and six months ended June 30, 2005 and 2004.



                                       7
<PAGE>

                                          Three Months Ended June 30, 2005
                                  ----------------------------------------------
                                   Banking      Holding                   Total
                                  Operations    Company   Eliminations   Company
                                  ----------    -------   ------------   -------
                                                   (In thousands)

Net interest income (expense)      $  1,553    $    (84)    $     --    $  1,469
Provision for loan losses                17          --           --          17
Noninterest income                    1,075          27           --       1,102
Noninterest expense                   1,633          79           --       1,712
                                   --------    --------     --------    --------
     Income (loss) before income
         taxes                          978        (136)          --         842
Income tax expense (benefit)            323         (60)          --         263
                                   --------    --------     --------    --------
     Net income (loss)             $    655    $    (76)    $     --    $    579
                                   ========    ========     ========    ========
     Total assets                  $202,747    $ 24,907     $(22,362)   $205,292
                                   ========    ========     ========    ========
     Capital Expenditures          $    739    $     --     $     --    $    739
                                   ========    ========     ========    ========


                                          Three Months Ended June 30, 2004
                                  ----------------------------------------------
                                   Banking      Holding                   Total
                                  Operations    Company   Eliminations   Company
                                  ----------    -------   ------------   -------
                                                   (In thousands)

Net interest income (expense)      $  1,414    $    (25)    $     --    $  1,389
Provision for loan losses               209          --           --         209
Noninterest income                      717          30           --         747
Noninterest expense                   1,723          80           --       1,803
                                   --------    --------     --------    --------
     Income (loss) before income
         taxes                          199         (75)          --         124
Income tax expense (benefit)             47         (37)          --          10
                                   --------    --------     --------    --------
     Net income (loss)             $    152    $    (38)    $     --    $    114
                                   ========    ========     ========    ========
     Total assets                  $208,178    $ 24,441     $(21,878)   $210,741
                                   ========    ========     ========    ========
     Capital Expenditures          $    427    $     --     $     --    $    427
                                   ========    ========     ========    ========


                                           Six Months Ended June 30, 2005
                                  ----------------------------------------------
                                   Banking      Holding                   Total
                                  Operations    Company   Eliminations   Company
                                  ----------    -------   ------------   -------
                                                   (In thousands)
Net interest income (expense)      $  3,058    $   (157)    $     --    $  2,901
Provision for loan losses                36          --           --          36
Noninterest income                    2,174          54           --       2,228
Noninterest expense                   3,275         150           --       3,425
                                   --------    --------     --------    --------
     Income (loss) before income
         taxes                        1,921        (253)          --       1,668
Income tax expense (benefit)            642        (112)          --         530
                                   --------    --------     --------    --------
     Net income (loss)             $  1,279    $   (141)    $     --    $  1,138
                                   ========    ========     ========    ========
     Total assets                  $202,747    $ 24,907     $(22,362)   $205,292
                                   ========    ========     ========    ========
     Capital Expenditures          $    765    $     --     $     --    $    765
                                   ========    ========     ========    ========



                                       8
<PAGE>

                                          Six Months Ended June 30, 2004
                                  ----------------------------------------------
                                   Banking      Holding                   Total
                                  Operations    Company   Eliminations   Company
                                  ----------    -------   ------------   -------
                                                   (In thousands)
Net interest income (expense)      $  2,777    $    (32)    $     --    $  2,745
Provision for loan losses               429          --           --         429
Noninterest income                    1,370          55           --       1,425
Noninterest expense                   3,340         152           --       3,492
                                   --------    --------     --------    --------
     Income (loss) before income
         taxes                          378        (129)          --         249
Income tax expense (benefit)             89         (66)          --          23
                                   --------    --------     --------    --------
     Net income (loss)             $    289    $    (63)    $     --    $    226
                                   ========    ========     ========    ========
     Total assets                  $208,178    $ 24,441     $(21,878)   $210,741
                                   ========    ========     ========    ========
     Capital Expenditures          $  1,716    $     --     $     --    $  1,716
                                   ========    ========     ========    ========

5. STOCK-BASED COMPENSATION:
   ------------------------

In  accordance  with  provisions of Statement of Financial  Accounting  Standard
("SFAS")  123,  the  Company has elected to continue to apply APB Opinion 25 and
related Interpretations.  In December 2002, SFAS 148, Accounting for Stock-Based
Compensation - Transition and Disclosure,  was issued which provides alternative
methods of transition  for a voluntary  change to the fair value based method of
accounting for stock-based  compensation.  This Statement  amends the disclosure
requirements  of SFAS 123 to require  prominent  disclosures  in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee compensation and the effect of the method used on reported results.

There were no options  granted  during the quarter and six months ended June 30,
2005.

If the Company had elected to recognize  compensation  cost for options  granted
during the quarter and six months ended June 30,  2004,  based on the fair value
of the options as required by SFAS 123,  net income and earnings per share would
have been reduced to the pro forma amounts indicated below:

                                             Three Months     Six Months
                                                Ended           Ended
                                             June 30, 2004  June 30, 2004
                                             -------------  -------------
                                        (In thousands, except per share amounts)

Net income - as reported                         $   114       $   226
Stock-based compensation expense                       3             3
                                                 -------       -------
Net income - proforma                                111           223
                                                 =======       =======

Earnings per share - as reported
     Basic                                       $   .05       $   .10
     Diluted                                     $   .05       $   .09

Earnings per share - pro forma
     Basic                                       $   .05       $   .09
     Diluted                                     $   .05       $   .09

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes option pricing model using the following assumptions:

                                                          2004
                                                          ----

                Expected dividend yield                  4.67%
                Expected stock price volitility            30%
                Risk-free interest rate                  3.62%
                Expected life of options               5 Years


                                       9
<PAGE>

6. PENSION DISCLOSURES:
   -------------------

The Company  terminated  the  Defined  Benefit  Pension  Plan  ("Pension  Plan")
effective June 8, 2005. By terminating the Pension Plan, the Company anticipates
incurring a  termination  expense of  approximately  $810,000,  during the three
months ended September 30, 2005.  Termination of the Pension Plan,  distribution
to participants of its assets, and recording  termination expense will not occur
until  termination  approval  is  received  from the  Pension  Benefit  Guaranty
Corporation.

The Financial Accounting Standards Board ("FASB") issued SFAS 132 (revised 2003)
in December of 2003. The Statement revises employers'  disclosures about pension
plans and other postretirement  benefits by requiring additional  disclosures to
those in the  original  SFAS 132  about the  assets,  obligations,  cash  flows,
investment  strategy,  and net periodic  benefit cost of defined benefit pension
plans and other defined benefit  postretirement plans. The Company does not have
any postretirement  benefits. The effect of the required interim information for
the Defined Benefit Pension Plan is reflected in the following table:

                                    Three Months Ended        Six Months Ended
                                          June 30,               June 30,
                                    -------------------    --------------------
                                      2005       2004        2005        2004
                                    --------   --------    --------    --------
                                                  (In thousands)
Service cost                        $     --   $     44    $     41    $     88
Interest cost                             --         31          28          62
Expected return on plan assets            --        (25)        (22)        (50)
Amortization of transitional asset        --         (1)         (8)         (2)
Recognized actuarial loss                 --          6          --          12
                                    --------   --------    --------    --------
Net periodic benefit cost           $     --   $     55    $     47    $    110
                                    ========   ========    ========    ========

The Company will  contribute the necessary  funds for  termination.  The Company
contributed  $264,000  during the three month period  ended June 30,  2005,  and
anticipates  contributing an additional  $50,000 prior to the termination of the
plan.

7. PENDING ACCOUNTING PRONOUNCEMENTS:
   ---------------------------------

In December 2004, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 123(R),  Share-Based Payment. SFAS No. 123(R) revises SFAS No. 123 and calls
for  companies  to expense  the fair value of employee  stock  options and other
forms of stock-based compensation. SFAS No. 123(R) requires companies to (1) use
fair value to measure  stock-based  compensation  awards and (2) cease using the
"intrinsic value" method of accounting, which APB No. 25 allowed and resulted in
no expense for many awards of stock options for which the exercise  price of the
option equaled the price of the underlying  stock at the grant date.  Under SFAS
No.  123(R),  the fair value of a stock-based  compensation  award is recognized
over the employee's  service  period.  The Company is required to adopt SFAS No.
123(R) as of January 1, 2006.

On March 25, 2005, the SEC issued Staff Accounting Bulletin No. 107 ("SAB 107").
SAB 107  provides  guidance  regarding  the  valuation  of  share-based  payment
arrangements,  the  classification of compensation  expense,  non-GAAP financial
measures,  first-time  adoption  of  SFAS  No.  123(R)  in  an  interim  period,
capitalization of compensation cost related to share-based payment arrangements,
the accounting for income tax effects of share-based  payment  arrangements upon
adoption of SFAS No. 123(R), the modification of employee share options prior to
adoption of SFAS No.  123(R) and  disclosures  in  Management's  Discussion  and
Analysis subsequent to adoption of SFAS No. 123(R).

8. SUBORDINATED DEBT:
   -----------------

On June 8, 2004, the Company established FirstFed Statutory Trust I ("Trust"), a
wholly-owned  statutory  business trust.  The Company is the sole sponsor of the
Trust and acquired the Trust's  common  securities  for $186,000.  The Trust was
created for the exclusive  purpose of issuing 30-year  capital trust  securities
("Trust  Preferred  Securities") in the aggregate amount of $6,000,000 and using
proceeds to purchase junior subordinated debentures ("Subordinated  Debentures")
issued by the Company. The assets of the Trust consist


                                       10
<PAGE>

primarily of the Subordinated  Debentures.  The Company's $186,000 investment in
the Trust is included in other assets in the accompanying  consolidated  balance
sheet and the $6,000,000  obligation of the Company is included in  subordinated
debt.

The Trust Preferred  Securities bear a floating  interest rate based on a spread
over  3-month  LIBOR which is set each  quarter  and  matures on June 17,  2034.
Distributions are payable quarterly.  The Trust Preferred Securities are subject
to mandatory  redemption upon repayment of the Subordinated  Debentures at their
stated  maturity  date or their  earlier  redemption in an amount equal to their
liquidation  amount plus  accumulated  and unpaid  distributions  to the date of
redemption. The Company guarantees the payment of distributions and payments for
redemption or  liquidation  of the Trust  Preferred  Securities to the extent of
funds  held by the  Trust.  The  Company's  obligation  under  the  Subordinated
Debentures  together  with  the  guarantee  and  other  back-up  obligation,  in
aggregate,  constitute a full and unconditional  guarantee by the Company of the
obligations of the Trust under the Trust Preferred Securities.

The  Subordinated  Debentures  are  unsecured,  bear an interest rate based on a
spread over a 3 month LIBOR  (equal to the spread paid by the Trust on the Trust
Preferred  Securities)  which is set each  quarter and matures on June 17, 2034.
Interest is payable quarterly.  The Company may defer the payment of interest at
any time for a period  not  exceeding  20  consecutive  quarters  provided  that
deferral  period  does not  extend  past the  stated  maturity.  During any such
deferral period,  distributions  on the Trust Preferred  Securities will also be
deferred and the Company's ability to pay dividends on the common shares will be
restricted.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Management's Discussion and Analysis includes certain forward-looking statements
addressing,  among other  things,  the Company's  prospects for earnings,  asset
growth and net interest margin.  Forward-looking  statements are accompanied by,
and  identified  with,  such  terms  as  "anticipates,"  "believes,"  "expects,"
"intends,"  and similar  phrases.  Management's  expectations  for the Company's
future necessarily  involve a number of assumptions and estimates.  Factors that
could cause  actual  results to differ from the  expectations  expressed  herein
include:  changes in interest rates, changes in the general economy,  changes in
the  Company's  strategies  for  credit-risk   management,   interest-rate  risk
management and investment activities, change in accounting principals,  policies
or guidelines,  legislative or regulatory changes, changes in monetary or fiscal
policies,  and  other  economic,  competitive,   governmental,   regulatory  and
technological  factors.  Accordingly,  any  forward-looking  statements included
herein do not purport to be  predictions of future events or  circumstances  and
may not be realized.

Comparison of Financial Condition as of June 30, 2005, and December 31, 2004
----------------------------------------------------------------------------

All dollar amounts, except per share amounts, included hereafter in Management's
Discussion and Analysis are in thousands.

Cash,  interest-bearing  deposits,  and federal funds sold increased  $5,682, or
118.6%,  to $10,472 at June 30, 2005. The increase was  substantially the result
of increased deposits.

Securities available-for-sale decreased $15,504, or 67.6%, to $7,437 at June 30,
2005. During the six months ended June 30, 2005,  investments totaling $716 were
called or matured, $500 were purchased and $15,169 were sold.

Loans receivable,  net, at June 30, 2005, were $162,170, an increase of $329, or
0.20%, from $161,841 at December 31, 2004.

The Company's consolidated allowance for loan losses decreased to $1,524 at June
30, 2005,  from $1,684 at December 31, 2004.  This decrease was partially due to
charge-offs  over  recoveries  of $196,  net of a provision to the allowance for
loan losses of $36 for the six months ended June 30, 2005.  Nonperforming  loans
at June 30, 2005, decreased to $86, or 0.05% of loans receivable,  from $961, or
0.66% of loans receivable, at December


                                       11
<PAGE>

31,  2004.  At June 30,  2005,  there were no  material  loans not  included  in
nonperforming  loans which  represented  material credits about which management
was aware of any information  which caused  management to have serious doubts as
to the ability of such borrowers to comply with the loan repayment terms.

Land,  buildings and equipment,  net, increased $306, or 4.1%, to $7,683 at June
30, 2005. The increase was  substantially  the result of the purchase of land in
McCalla, Alabama, for a new branch facility.

Real estate owned was $1,509 at June 30, 2005,  an increase of $523 from $986 at
December 31, 2004.  The  increase  was  substantially  the result of eight homes
under  construction  by one builder  acquired by  foreclosure  prior to June 30,
2005.

Deposits  increased $4,645, or 2.9%, to $162,190 at June 30, 2005, from $157,545
at December 31, 2004. The increase was  substantially the result of increases in
commercial  checking  accounts  and, to a lesser  extent,  increases  in savings
accounts.

Borrowings  decreased  by  $14,494,  or  46.0%,  to  $17,000  at June 30,  2004,
substantially  as a result of the  repayment  of overnight  borrowings  with the
proceeds of investment sales.

The Company had stockholders' equity of $19,027 as of June 30, 2005, an increase
of $609, or 3.3%,  from $18,418 as of December 31, 2004.  Net income for the six
months ended June 30,  2005,  was $1,138.  Equity was  decreased by dividends of
$.21 per share,  or $510.  Included in such dividends was a special  dividend of
$.07 per share,  which was  declared  during  the first  quarter.  In  addition,
accumulated  other  comprehensive  income  decreased $297, or 125.8%,  due to an
unrealized  loss of $61 at June 30, 2005, as a result of decreases in fair value
of the  securities  available-for-sale.  This was primarily due to higher market
rates of interest and the sale of $15,504 in available-for-sale securities.

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

Liquidity  refers  to  the  ability  of  the  Company  to  meet  its  cash  flow
requirements  in the normal  course of  business,  including  loan  commitments,
deposit withdrawals,  and liability maturities, and ensuring that the Company is
in a position to take  advantage  of  investment  opportunities  in a timely and
cost-efficient manner.  Management monitors the Company's liquidity position and
reports to the Board of Directors  monthly.  The Company may achieve its desired
liquidity  objectives  through  management of assets and liabilities and through
funds   provided  by  operations.   Funds  invested  in  short-term   marketable
instruments,  the  continuous  maturing of other  interest-earning  assets,  the
possible  sale of  available-for-sale  securities  and the ability to securitize
certain types of loans provide  sources of liquidity from an asset  perspective.
The liability base provides sources of liquidity through deposits.  In addition,
the Bank has  borrowing  ability  from the Federal Home Loan Bank of Atlanta and
correspondent  banks if the need for additional funds arises.  At June 30, 2005,
the Bank had commitments to originate and fund loans of $19.9 million.  The Bank
anticipates  that it will have  sufficient  funds  available to meet its current
commitments.


                                       12
<PAGE>

Under applicable regulations, First Financial and the Company are each required
to maintain minimum capital ratios. Set forth below are actual capital ratios
and the minimum regulatory capital requirements as of June 30, 2005.

<TABLE>
<CAPTION>

                                                                           June 30, 2005
                                             -----------------------------------------------------------------------
                                                                   (Dollar amounts in thousands)
                                                                                                      To Be Well
                                                                                                  Capitalized Under
                                                                          For Capital             Prompt Corrective
                                                    Actual             Adequacy Purposes          Action Provisions
                                             ----------------          -----------------         ------------------
                                              Amount     Rate            Amount    Rate            Amount      Rate
                                             --------    ----          ---------   ----          ---------     ----
<S>                                          <C>         <C>           <C>         <C>           <C>         <C>
Tier 1 Risk-Based Capital
     Consolidated                            $ 23,893    13.6%                N/A    N/A               N/A      N/A
     First Financial Bank                      19,945    11.6%         $    6,903   4.0%         $  10,355     6.0%

Total Risk-Based Capital
     Consolidated                            $ 25,416    14.5%                N/A   N/A                N/A      N/A
     First Financial Bank                      21,468    12.4%         $  13,806    8.0%         $  17,258    10.0%

Tier 1 Leverage
     Consolidated                            $ 23,893    11.9%               N/A    N/A                N/A      N/A
     First Financial Bank                      19,945     9.9%         $    8,024   4.0%         $  10,029     5.0%

</TABLE>

As of June  30,  2005,  management  was  not  aware  of any  trends,  events  or
uncertainties  that will have or are reasonably likely to have a material effect
on the Company's or the Bank's liquidity, capital resources or operations.

Results of Operations - Comparison of the Three Months Ended June 30, 2005 and
------------------------------------------------------------------------------
2004
----

Net income for the three months ended June 30,  2005,  was $359,  an increase of
$245,  or 214.9%,  from net income of $114 for the three  months  ended June 30,
2004.  The  increase  was  primarily  the result of an increase in net  interest
income and reduced loan loss provision partially resulting from recoveries.

Interest Income
---------------

Total interest  income  increased  $226, or 9.5%, to $2,614 for the three months
ended June 30, 2005. This increase was  substantially  due to an increase in the
average  yield on  interest-earnings  assets to 5.8% for the three  months ended
June 30, 2005, compared to 5.2% for the same quarter a year ago, offset slightly
by a decrease in the average balance on  interest-earnings  assets for the three
months ended June 30, 2005, compared to the same quarter a year ago.

Interest Expense
----------------

Interest expense for the quarter ended June 30, 2005, was $1,145, an increase of
$146, or 14.6%,  from $999 for the quarter ended June 30, 2004. The increase was
substantially   the  result  of  an  increase  in  the  average   rate  paid  on
interest-bearing  liabilities  to 2.5% for the three months ended June 30, 2005,
compared to 2.2% for the  corresponding  quarter of the previous year,  somewhat
offset  by  a  slight  decrease  in  the  average  balance  of  interest-bearing
liabilities compared to the same quarter a year ago. Net Interest Income

Net interest income for the quarter ended June 30, 2005, increased $80, or 5.8%,
to $1,469 from the quarter  ended June 30, 2004,  level of $1,389.  The increase
was  primarily  the result of an increase in the average net interest  spread to
3.3% for the quarter ended June 30, 2005, compared to 3.1% for the same period a
year ago. The net interest  margin also  increased to 3.3% for the quarter ended
June 30, 2005, from 3.1% for the same quarter a year ago.


                                       13
<PAGE>

Provision for Loan Losses
-------------------------

Management  increased the Company's  total allowance for loan losses by a charge
to the provision of $17 during the quarter ended June 30, 2005, compared to $209
for the quarter  ended June 30, 2004.  The allowance for loan losses is based on
management's  evaluation of losses inherent in the loan portfolio and considers,
among  other  factors,  prior  years'  loss  experience,   economic  conditions,
distribution  of portfolio  loans by risk class and the  estimated  value of the
underlying  collateral.  The Bank segregates its loan portfolio into problem and
non-problem  loans. The Bank then determines the allowance for loan losses based
on specific review of all problem loans by internal loan review committees. This
detailed  analysis  primarily  determines  the  allowance  on  problem  loans by
specific  evaluation of  collateral  fair value.  The allowance for  non-problem
loans considers historical losses and other relevant factors. The allowances are
reviewed  throughout  the year to  consider  changes in the loan  portfolio  and
classification of loans which results in a self-correcting mechanism.

Noninterest Income
------------------

Noninterest  income during the quarter ended June 30, 2005,  increased  $355, to
$1,102 from the June 30, 2004,  level of $747.  The  increase is  primarily  the
result  of a gain  on the  sale  of an  equity  investment  in the  Bank's  data
processing company of $363.

Noninterest Expenses
--------------------

Noninterest  expenses during the quarter ended June 30, 2005,  decreased $91, or
5.0%,  to $1,712,  from the June 30, 2004,  quarter of $1,803.  This decrease is
primarily the result of reduced salary and benefit  expense  associated with the
Board of Director's approval of the termination of the Pension Plan coupled with
less operating expense from reduced real estate owned expense.

Income Taxes
------------

The  provision  for income taxes  increased  $253, to $263 for the quarter ended
June 30, 2005, as compared to $10 for the corresponding  quarter in the previous
year.  The  increased  tax  expense was due  primarily  to an increase in pretax
income.

Results of Operations - Comparison of the Six Months Ended June 30, 2005 and
----------------------------------------------------------------------------
2004
----

Net income for the six months  ended June 30, 2005,  was $1,138,  an increase of
$912, or 403.5%, from net income of $226 for the six months ended June 30, 2004.
The increase was primarily the result of an increase in net interest  income and
a reduction in loan loss provision partially resulting from recoveries. Included
in the six months ended June 30, 2005, was a gain on sale of investments of $354
and a gain on the sale of an equity  investment  in the Bank's  data  processing
company.

Interest Income
---------------

Total  interest  income  increased  $433,  or 9.2%, to $5,155 for the six months
ended June 30, 2005. This increase was  substantially  the result of an increase
in the  average  yield on the  interest-earning  assets to 5.7%  during  the six
months ended June 30, 2005, from 5.3% during the six months ended June 30, 2004,
in addition to a slight  increase  in the  average  balance on  interest-earning
assets for the six months  ended June 30,  2005,  compared to the same quarter a
year ago.

Interest Expense
----------------

Interest  expense for the six months ended June 30,  2005,  increased  $277,  or
14.0%,  to $2,254,  from $1,977 during the six months ended June 30, 2005.  This
increase was primarily  attributable  to an increase in the average rate paid on
interest-bearing  liabilities  to 2.4% for the six month  period  ended June 30,
2005,  compared  to 2.2%  for the same  period a year  ago,  in  addition  to an
increase in the average balance of interest-bearing liabilities.


                                       14
<PAGE>

Net Interest Income
-------------------

Net interest  income for the six months ended June 30, 2005,  increased $156, or
5.7 %, to  $2,901,  from  $2,745 for the six months  ended June 30,  2004.  This
increase was due primarily to an increase in the average net interest  spread to
3.3% for the six  months  ended  June 30,  2005,  compared  to 3.0% for the same
period a year ago. The net interest margin  increased to 3.2% for the six months
ended June 30, 2005, from 3.1% for the six months ended June 30, 2004.

Provision for Loan Losses
-------------------------

Management  increased the Company's  total allowance for loan losses by a charge
to the  provision of $36 during the six months ended June 30, 2005,  compared to
$429 for the six months ended June 30, 2004.  The  allowance  for loan losses is
based on  management's  evaluation of losses  inherent in the loan portfolio and
considers,   among  other  factors,  prior  years'  loss  experience,   economic
conditions,  distribution  of  portfolio  loans by risk class and the  estimated
value of the underlying collateral.  The Bank segregates its loan portfolio into
problem and non-problem  loans.  The Bank then determines the allowance for loan
losses  based on specific  review of all problem  loans by internal  loan review
committees. This detailed analysis primarily determines the allowance on problem
loans by specific  evaluation  of  collateral  fair  value.  The  allowance  for
non-problem loans considers  historical  losses and other relevant factors.  The
allowances  are  reviewed  throughout  the year to consider  changes in the loan
portfolio  and  classification  of  loans  which  results  in a  self-correcting
mechanism.

Noninterest Income
------------------

Noninterest  income for the six months ended June 30, 2005,  totaled $2,228,  as
compared to $1,425 for the six months  ended June 30,  2004.  The  increase  was
primarily the result of a gain on the sale of  investments of $354 and a gain on
the sale of an equity investment in the Bank's data processing  company of $363.
In  addition,  a  curtailment  gain of $68 was recorded in  connection  with the
termination of the Pension Plan.

Noninterest Expenses
--------------------

Noninterest expenses during the six months ended June 30, 2005, decreased $67 to
$3,425 from the 2004 level of $3,492.  The decrease is  primarily  the result of
reduced  salary and  benefit  expense  associated  with the Board of  Director's
approval of the termination of the Pension Plan and less other operating expense
resulting from less real estate owned expense.

Income Taxes
------------

The provision for income taxes  increased $507, to $530 for the six months ended
June 30,  2005,  as  compared to $23 for the  corresponding  period of the prior
year. The increased tax expense was due to the increase in pretax income.

ITEM 3.  CONTROLS AND PROCEDURES

The  Company  carried  out an  evaluation  under  the  supervision  and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive   Officer  and  the  Company's   Chief  Financial   Officer,   of  the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures  as of June 30, 2005,  pursuant to Exchange Act Rule  13a-15(b).
Based upon that  evaluation,  the  Company's  Chief  Executive  Officer  and the
Company's  Chief  Financial  Officer  concluded  that the  Company's  disclosure
controls and procedures, as designed and implemented,  are effective in alerting
them  in a  timely  manner  to  material  information  relating  to the  Company
(including  its  consolidated  subsidiaries)  required  to be  included  in  the
Company's periodic SEC filings.

In  addition,  the Company  reviewed its  internal  controls.  There has been no
change in the Company's  internal  control over financial  reporting  during the
last fiscal quarter that has  materially  affected,  or is reasonably  likely to
materially affect the Company's internal control over financial reporting.


                                       15
<PAGE>

Disclosure  controls  and  procedures  are  designed to ensure that  information
required to be disclosed in reports  filed by the Company  under the  Securities
Exchange Act of 1934 is recorded, processed,  summarized and reported within the
time  periods  specified in the SEC's rules and forms.  Disclosure  controls are
also  designed  with  the  objective  of  ensuring  that  such   information  is
accumulated and  communicated to the Company's  management,  including the Chief
Executive  Officer and the Chief Financial  Officer,  as  appropriate,  to allow
timely decisions  regarding required  disclosures.  Disclosure  controls include
internal  controls  that are  designed  to  provide  reasonable  assurance  that
transactions   are  properly   authorized,   assets  are   safeguarded   against
unauthorized  or  improper  use  and  transactions  are  properly  recorded  and
reported.

Any control system, no matter how well conceived and operated,  can provide only
reasonable  assurance that its objectives are achieved.  The design of a control
system  inherently  has  limitations,  including the controls'  cost relative to
their benefits.  Additionally,  controls can be circumvented.  No cost-effective
control  system can  provide  absolute  assurance  that all  control  issues and
instances of fraud, will be detected.

Effective  in 2006,  the  Company  will  become  subject to  Section  404 of The
Sarbanes-Oxley Act of 2002. Section 404 requires management to assess and report
on  the  effectiveness  of  the  Company's   internal  controls  over  financial
reporting. Additionally, it requires the Company's independent registered public
accounting  firm to report on  management's  assessment as well as report on its
own  assessment of the  effectiveness  of the Company's  internal  controls over
financial  reporting.   Management  is  currently   establishing   policies  and
procedures to assess and report on internal controls, and will retain an outside
firm to assist it in determining  the  effectiveness  of the Company's  internal
controls over financial reporting.

                            PART II-OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

From time to time, the Company and Bank are parties to routine legal proceedings
occurring in the ordinary  course of business.  At June 30, 2005,  there were no
legal  proceedings to which the Company and/or the Bank were a party or parties,
or to which any of their property was subject, which were expected by management
to result in a material loss.

ITEM 2.  CHANGES IN  SECURITIES AND SMALL  BUSINESS  ISSUER  PURCHASES OF EQUITY
SECURITIES

Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On April 26, 2005, the Company held the 2005 Annual Meeting of Stockholders. The
election  of James B.  Koikos  and E. H.  Moore,  Jr. as  directors,  each for a
three-year term, was submitted to a vote of the  stockholders.  The following is
the result of the vote:
                                    For         Withheld
                                    ---         --------
James B. Koikos                  1,979,092       19,279
E. H. Moore, Jr.                 1,979,092       19,279

There were no abstentions or broker non-votes.


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ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

Exhibit 31.1 - Certifications of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2 - Certifications of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 - Certification  Pursuant to Section 906 of the  Sarbanes-Oxley Act
of 2002




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<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                               FIRSTFED BANCORP, INC.


Date: August 22, 2005                          \s\ B. K. Goodwin , III
      ---------------                          -------------------------
                                               B. K. Goodwin, III,
                                               Chairman of the Board,
                                               Chief Executive Officer,
                                               and President



Date: August 22, 2005                          \s\ Lynn J. Joyce
      ---------------                          -------------------------
                                               Lynn J. Joyce
                                               Chief Financial Officer,
                                               Executive Vice President,
                                               Secretary and Treasurer

                                       18