UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

|X|   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
      ACT OF 1934

      For the fiscal year ended December 31, 2004

                                       OR

|_|   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE  SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from __________________ to __________________

                         Commission File Number 0-26012

                         NORTHEAST INDIANA BANCORP, INC.
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

           Delaware                                                  35-1948594
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

648 North Jefferson Street, Huntington, Indiana                           46750
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code: (260) 356-3311
                                                    --------------

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      None
                                      ----

           Securities Registered Pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.01 per share
                     ---------------------------------------
                                (Title of class)

      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 past 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 |_|.

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of Regulation S-B contained herein, and no disclosure will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB |X|.

      Our revenues for the most recent fiscal year: $12.8 million.

      The  aggregate  market value of the voting  stock held by  non-affiliates,
computed by reference to the average of the bid and asked price of such stock as
of March 1, 2005, was $23.7 million.

      As of March 1,  2005,  there  were  1,429,279  shares  outstanding  of the
registrant's Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

      Parts I and II of Form  10-KSB - Annual  Report  to  Stockholders  for the
fiscal year ended December 31, 2004.

      Transitional Small Business Disclosure Format: YES |_|; NO |X|

<PAGE>

                                      INDEX

                                   FORM 10-KSB

<TABLE>
<CAPTION>
                                                                                             Page (s)
                                                                                             --------
<S>                                                                                             <C>
Part I

       Item 1.  Description of Business .....................................................    1

       Item 2.  Description of Property .....................................................   31

       Item 3.  Legal Proceedings ...........................................................   31

       Item 4.  Submission of Matters to a Vote of Security Holders .........................   31

Part II

       Item 5.  Market for Common Equity, Related Stockholder Matters and Small Business
                Issuer Purchases of Equity Securities .......................................   32

       Item 6.  Management's Discussion and Analysis or Plan of Operation ...................   32

       Item 7.  Financial Statements ........................................................   32

       Item 8.  Changes in and Disagreements with Accountants on Accounting and Financial
                Disclosure ..................................................................   33

       Item 8A. Controls and Procedures .....................................................   33

       Item 8B. Other Information ...........................................................   33

Part III

       Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance
                with Section 16(a) of the Exchange Act ......................................   34

       Item 10. Executive Compensation ......................................................   35

       Item 11. Security Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters .........................................................   39

       Item 12. Certain Relationships and Related Transactions ..............................   41

       Item 13. Exhibits ....................................................................   42

       Item 14. Principal Accountant Fees and Services ......................................   43

Signatures

Exhibits
</TABLE>


                                       i
<PAGE>

                                     PART I

Item 1. Description of Business
        -----------------------

      Northeast Indiana Bancorp, Inc. ("Northeast Indiana" or the "Company"),  a
Delaware  corporation,  is the holding  company for First  Federal  Savings Bank
("First  Federal" or the "Bank") and its  subsidiary  Northeast  Financial.  All
references  to  Northeast  Indiana  prior  to June 27,  1995,  the date of First
Federal's   conversion  from  mutual  to  stock  form,  except  where  otherwise
indicated,  are to First  Federal.  References in this Form 10-KSB to "we," "us"
and "our" refer to Northeast  Indiana  and/or  First  Federal  and/or  Northeast
Financial as the context requires.

      At December 31, 2004,  we had $228.7  million of assets and  stockholders'
equity of $26.0 million (or 11.4% of total assets).

      First  Federal  is  a  federally   chartered  stock  savings   association
headquartered in Huntington,  Indiana. Our deposits are insured up to applicable
limits by the Federal Deposit Insurance  Corporation (FDIC),  which is backed by
the full faith and credit of the United States Government.

      Northeast Indiana  Financial,  Inc.  ("Northeast  Financial"),  an Indiana
corporation,  was  established as a subsidiary of First  Federal.  In June 2004,
First  Federal  acquired  the  brokerage  firm  Innovative   Financial  Services
("Innovative") through Northeast Financial.  The staff of Innovative,  including
one broker and three support staff,  became  employees of First Federal  through
Northeast Financial.  Innovative offers non-FDIC insured products such as mutual
funds, stocks, bonds, life insurance, estate planning, retirement plans to small
businesses,  and brokerage  accounts to its customer base through an affiliation
with OneAmerica Securities (broker/dealer) and had roughly $60 million in assets
under management as of December 31, 2004.

      Our principal  business  consists of attracting  retail  deposits from the
general  public and investing  those funds  primarily in first mortgage loans on
owner-occupied,   single-family  residential  real  estate.  We  also  originate
commercial real estate, construction, consumer and commercial business loans. We
have in the past  purchased a limited number of loans and equipment  leases.  At
December  31,  2004,  substantially  all  of the  real  estate  mortgage  loans,
including commercial and multi-family, were secured by properties located in our
market area. We also invest in obligations of states and political subdivisions,
mutual funds and other permissible investments.

      Our revenues are derived  principally  from interest on loans,  investment
and other  securities and service fee income.  We do not originate loans to fund
leveraged  buyouts,  and have no loans to foreign  corporations  or governments.
While we generally solicit deposits only in our primary market area, at December
31, 2004, we had $11.9 million in brokered deposits.

      Our  executive   offices  are  located  at  648  North  Jefferson  Street,
Huntington,  Indiana  46750,  and our telephone  number at that address is (260)
356-3311.

<PAGE>

FORWARD-LOOKING STATEMENTS

      Northeast Indiana and its wholly-owned  subsidiary,  First Federal and its
wholly-owned subsidiary, Northeast Financial, may from time to time make written
or oral  "forward-looking  statements,"  including  statements  contained in its
filings  with  the  Securities  and  Exchange   Commission   (the  SEC).   These
forward-looking  statements may be included in this Annual Report on Form 10-KSB
and the exhibits attached to it, in Northeast  Indiana's reports to stockholders
and in other communications,  which are made in good faith by us pursuant to the
"safe harbor"  provisions  of the Private  Securities  Litigation  Reform Act of
1995.

      These  forward-looking  statements  include  statements about our beliefs,
plans, objectives, goals, expectations, anticipations, estimates and intentions,
that are  subject to  significant  risks and  uncertainties,  and are subject to
change based on various factors, some of which are beyond our control. The words
"may,"  "could,"  "should,"  "would,"   "believe,"   "anticipate,"   "estimate,"
"expect,"  "intend,"  "plan" and similar  expressions  are  intended to identify
forward-looking statements. The following factors, among others, could cause our
financial   performance  to  differ  materially  from  the  plans,   objectives,
expectations,   estimates  and  intentions   expressed  in  the  forward-looking
statements:

      o     the  strength  of the  United  States  economy  in  general  and the
            strength of the local economies in which we conduct operations;

      o     the effects of, and changes in, trade,  monetary and fiscal policies
            and laws,  including  interest rate policies of the Federal  Reserve
            Board;

      o     inflation, interest rate, market and monetary fluctuations;

      o     the timely  development  of and  acceptance  of our new products and
            services  and the  perceived  overall  value of these  products  and
            services  by users,  including  the  features,  pricing  and quality
            compared to competitors' products and services;

      o     the willingness of users to substitute our products and services for
            products and services of our competitors;

      o     our  success in gaining  regulatory  approval  of our  products  and
            services, when required;

      o     the impact of changes in financial  services'  laws and  regulations
            (including   laws   concerning   taxes,   banking,   securities  and
            insurance);

      o     the impact of technological changes;

      o     acquisitions;

      o     changes in consumer spending and saving habits; and

      o     our success at managing the risks involved in the foregoing.

      The list of important  factors  stated above is not  exclusive.  We do not
undertake to update any forward-looking statement, whether written or oral, that
may be made  from  time to time by or on  behalf  of  Northeast  Indiana,  First
Federal or Northeast Financial.


                                       2
<PAGE>

Risk Factors

      Like all  regulated  financial  institutions,  we are  exposed to numerous
risks that could adversely impact profits,  financial  condition and cash flows,
and, ultimately,  franchise value. In order to mitigate these risks somewhat, we
have various  policies,  personnel and committees that establish  limits for and
monitor various aspects of our risk profile. There can be no assurance that such
policies,  personnel and committees  will be effective in  controlling  these or
other risks.

      Geographic Risks. A significant  majority of our assets,  deposits and fee
income are generated in our local lending  area. As a result,  deterioration  of
local economic conditions in this area could expose us to losses associated with
higher loan default rates and lower asset collateral values, deposit withdrawals
and other  factors  that could  adversely  impact our  financial  condition  and
results of operations.

      Fluctuations  in Interest  Rates (Market Risk).  Significant  increases in
market  interest  rates,  or the  perception  that an increase may occur,  could
adversely  impact our ability to generate new variable loans and cause the value
of our fixed-rate  assets to decline.  An increase in market  interest rates may
also adversely impact the ability of adjustable rate borrowers to meet repayment
obligations,  thereby  causing  nonperforming  loans  and  loan  charge-offs  to
increase.  Significant  decreases  in market  interest  rates could result in an
acceleration  of loan  repayments  thereby  mitigating  the  positive  impact of
declining interest rates on fixed rate assets. Changes in market interest rates,
including  changes in the relationship  between  short-term and long-term market
interest  rates or between  different  rate  indices,  can impact  interest rate
spread.

      Competition Risk. We face significant  competitive pressure from local and
regional  banking  institutions as well as thrifts,  finance  companies,  credit
unions,  brokerage and insurance  companies and other financial  intermediaries.
Many of our  competitors  are  larger  and  have  greater  financial  and  other
resources. We compete on the basis of our reputation, localized decision-making,
interest rates, convenient locations and quality of customer service.

      Credit  Risk.  We are exposed to credit risk on the loans and other credit
instruments we have in our portfolio.  While the portfolio is closely  monitored
and an on-going  analysis and  evaluation of this risk is performed,  because of
the  nature of our  business,  unexpected  credit  losses  may  subsequently  be
identified  as a result of additional  analysis we perform or comments  received
from  regulatory  examiners.  In  addition,  collateral  values may  deteriorate
subsequent to the making of a loan so that a loss exposure develops.

      Legislative  and Regulatory  Risk. Our operations are subject to extensive
regulation by federal  banking  authorities and are also subject to various laws
and judicial and administrative decisions imposing requirements and restrictions
on our operations.  Policies adopted and positions taken by these regulatory and
administrative   entities  can  impact  our  operations.   In  addition,   these
authorities  periodically  examine us and may  impose  various  requirements  or
sanctions.  The regulatory  environment may periodically change significantly as
new  laws  and  regulations  are  promulgated.  As a  result  of  new  laws  and
regulations, the competitive environment may also change significantly.

      Dividend  Limitation Risk.  Northeast Indiana is a holding company and its
operations  are  conducted  primarily  through  First  Federal,   its  operating
subsidiary.   Thus,   Northeast  Indiana's  ability  to  pay  dividends  to  its
shareholders and to service its debt is dependent  primarily upon the ability of
First Federal to make dividend and other payments to Northeast Indiana.  Certain
laws and regulatory  requirements  restrict the ability of First Federal to make
such payments to Northeast  Indiana,  and Northeast  Indiana to make payments to
shareholders.

      Liquidity  Risk. We closely monitor our liquidity  position  including our
sources of funding and  commitments  to fund assets or deposit  withdrawals.  We
maintain  adequate  credit  facilities.  We  believe  that  we  have  sufficient
liquidity  to fund our  commitments.  However,  changes in the  stability of the
economic, social or political environments culminating in large withdrawals,  or
a deterioration  in the public's  confidence in the banking system in general or
in us in particular, could have an adverse impact on our liquidity position.


                                       3
<PAGE>

      Operational  Risk.  We rely on various  information  systems for operating
significant aspects of our business,  including loan and deposit information, as
well as internal management  systems.  These systems and our operations could be
adversely  affected by, among other things,  damage or interruption from natural
disasters, power loss, network failure, improper operations,  security breaches,
computer  viruses or sabotage.  Controls and procedures have been implemented to
minimize  these  risks,  but any  disruption  in the  operation  of our  various
information  systems could adversely  impact our operations which may affect our
results of operations and financial condition.

      Reputation  Risk. We strive to operate in a  professional  manner and have
implemented  various  personnel  policies and procedures,  including an employee
code of conduct  applicable to all employees,  to help ensure the maintenance of
integrity and professionalism.  Nevertheless, Northeast Indiana or its employees
may fail to perform in accordance with these policies and procedures,  or we may
find  ourselves  in a situation  that is  embarrassing  from a public  relations
perspective and, upon this  information  becoming public  knowledge,  may suffer
damage to our reputation. This damage could adversely impact customer confidence
and have an adverse impact on our financial condition and results of operations.

      Disintermediation.  In the  banking  and  financial  services  businesses,
disintermediation  is the process by which  customers  and  potential  customers
bypass banks and other  traditional  financial  institutions  thereby  depleting
anticipated revenue streams.  While we continue our efforts to make our products
and  services  an  integral,  valuable  component  of our  customers'  financial
transactions,  the possibility of  disintermediation  is an inherent risk in the
banking and traditional  financial services business as customers may migrate to
other financial intermediaries.

Market Area

      Our  office is  located  at 648  North  Jefferson  Street  in  Huntington,
Indiana. The City of Huntington is located in Huntington County, Indiana, and 25
miles  southwest of Fort Wayne,  Indiana.  The City of  Huntington is the County
Seat of Huntington  County and has a population of approximately  17,500.  Along
with an agricultural  base, the major employers in Huntington County are engaged
in the light manufacturing, education and health care industries and include the
following: United Technologies, CFM Majestic,  Wabash/Optek Sensor Group, Bendix
Commercial Vehicle System Co., Dana Corporation,  Hayes Lemmerz,  Square D, Good
Humor-Breyers Ice Cream, Our Sunday Visitor,  Huntington County Community School
Corporation and Parkview-Huntington Hospital.

Lending Activities

      Our loan  portfolio  consists  primarily of  conventional,  first mortgage
loans  secured  by one- to  four-family  residences  and,  to a  lesser  extent,
consumer  loans,  commercial  real  estate  loans,  commercial  business  loans,
construction or development loans and loans secured by multi-family real estate.
At December 31, 2004, gross loans outstanding  totaled $179.2 million,  of which
$97.9 million or 54.66% were one- to four-family  residential mortgage loans. Of
the one- to  four-family  mortgage loans  outstanding at that date,  59.79% were
fixed-rate  loans,  and 40.21% were  adjustable-rate  loans.  At that same date,
commercial real estate and  multi-family  loans totaled $26.3 million,  of which
65.54% were fixed-rate loans and 34.46% were adjustable-rate loans. Also at that
date,  construction  or  development  loans totaled $5.9 million or 3.31% of the
total loan portfolio,  18.61% of which were  adjustable-rate  loans. At December
31, 2004, commercial business loans totaled $25.7 million or 14.35% of the total
loan  portfolio,   of  which  36.79%  were  fixed-rate  loans  and  63.21%  were
adjustable-rate loans.

      At December 31, 2004, the balance of our consumer loans consisted of $23.3
million of loans, which represented  12.99% of the gross loan portfolio.  Of the
consumer  loans  outstanding,  69.67%  were  fixed-rate  loans and  30.33%  were
adjustable-rate loans.

      The  aggregate  amount of loans that First  Federal is  permitted  to make
under  applicable  federal  regulations to any one borrower,  including  related
entities,  is generally  equal to the greater of 15% of  unimpaired  capital and
surplus or  $500,000.  At December  31, 2004,  the maximum  amount,  which First
Federal could have lent to any one borrower and the borrower's related entities,
was approximately $3.8 million.  See "Regulation - Federal Regulation of Savings
Associations."  At  December  31,  2004,  we had no loans or  groups of loans to
related  borrowers  with


                                       4
<PAGE>

outstanding  balances in excess of this amount. Our largest lending relationship
at December 31, 2004 was $2.9  million in loans to one borrower  secured by real
estate, inventory, accounts receivable and equipment.


                                       5
<PAGE>

      Loan Portfolio  Composition.  The following  table sets forth  information
concerning  the  composition  of our loan  portfolio  in dollar  amounts  and in
percentages (before deductions for loans in process, deferred fees and discounts
and allowance for loan losses) as of the dates indicated.

<TABLE>
<CAPTION>
                                                                 December 31,
                                       -----------------------------------------------------------------
                                               2004                   2003                   2002
                                       -----------------------------------------------------------------
                                        Amount     Percent     Amount     Percent     Amount     Percent
                                       --------    -------    --------    -------    --------    -------
                                                            (Dollars in Thousands)
<S>                                    <C>         <C>        <C>         <C>        <C>         <C>
Real Estate Loans
-----------------

One- to four-family ...............    $ 97,943     54.66%    $ 91,637     54.10%    $ 86,489     54.47%
Multi-family ......................       4,328      2.42        4,709      2.78        3,709      2.34
Commercial ........................      21,978     12.27       20,424     12.06       19,482     12.27
Construction or development .......       5,931      3.31        9,469      5.59        6,074      3.82
                                       --------    ------     --------    ------     --------    ------
   Total real estate loans ........     130,180     72.66      126,239     74.53      115,754     72.90
                                       --------    ------     --------    ------     --------    ------

Other Loans:
------------
Consumer Loans:
Deposit account ...................         242       .14          153       .09          127       .08
Automobile ........................      10,275      5.73        9,591      5.66       10,409      6.55
Home equity .......................       6,520      3.64        6,148      3.63        6,140      3.87
Home improvement ..................       1,432       .80          628       .37        1,472       .93
Other .............................       4,808      2.68        4,664      2.76        5,620      3.54
                                       --------    ------     --------    ------     --------    ------
   Total consumer loans ...........      23,277     12.99       21,184     12.51       23,768     14.97
                                       --------    ------     --------    ------     --------    ------
Commercial business loans .........      25,719     14.35       21,956     12.96       19,263     12.13
                                       --------    ------     --------    ------     --------    ------
   Total loans ....................     179,176    100.00%     169,379    100.00%     158,785    100.00%
                                                   ======                 ======                 ======

Less:
-----
Undisbursed portion of
construction loans ................       2,684                  3,503                  1,455
Loans in process ..................          83                    134                    318
Deferred fees and discounts .......         252                    293                    316
Allowance for loan losses .........       1,357                  1,772                  2,136
                                       --------               --------               --------
   Total loans receivable, net ....    $174,800               $163,677               $154,560
                                       ========               ========               ========

<CAPTION>
                                                       December 31,
                                       ------------------------------------------
                                               2001                   2000
                                       ------------------------------------------
                                        Amount     Percent     Amount     Percent
                                       --------    -------    --------    -------
                                                  (Dollars in Thousands)
<S>                                    <C>         <C>        <C>         <C>
Real Estate Loans
-----------------

One- to four-family ...............    $ 95,777     57.03%    $117,683     57.61%
Multi-family ......................       3,625      2.16        4,377      2.14
Commercial ........................      20,199     12.03       24,519     12.00
Construction or development .......       6,363      3.79        7,188      3.52
                                       --------    ------     --------    ------
   Total real estate loans ........     125,964     75.01      153,767     75.27
                                       --------    ------     --------    ------

Other Loans:
------------
Consumer Loans:
Deposit account ...................          34       .02           53      0.03
Automobile ........................      12,788      7.61       14,098      6.90
Home equity .......................       5,821      3.47        6,961      3.41
Home improvement ..................       2,791      1.66        1,251      0.61
Other .............................       6,277      3.74        7,422      3.63
                                       --------    ------     --------    ------
   Total consumer loans ...........      27,711     16.50       29,785     14.58
                                       --------    ------     --------    ------
Commercial business loans .........      14,259      8.49       20,730     10.15
                                       --------    ------     --------    ------
   Total loans ....................     167,934    100.00%     204,282    100.00%
                                                   ======                 ======

Less:
-----
Undisbursed portion of
construction loans ................       2,217                  1,745
Loans in process ..................         641                    156
Deferred fees and discounts .......         291                    229
Allowance for loan losses .........       1,955                  2,001
                                       --------               --------
   Total loans receivable, net ....    $162,830               $200,151
                                       ========               ========
</TABLE>


                                       6
<PAGE>

      The following  table shows the composition of our loan portfolio by fixed-
and adjustable-rate at the dates indicated.

<TABLE>
<CAPTION>
                                                                              December 31,
                                                   -----------------------------------------------------------------
                                                           2004                   2003                   2002
                                                   -----------------------------------------------------------------
                                                    Amount     Percent     Amount     Percent     Amount     Percent
                                                   -----------------------------------------------------------------
                                                                        (Dollars in Thousands)
<S>                                                <C>         <C>        <C>         <C>        <C>         <C>
Fixed-Rate Loans:
-----------------
Real estate:
  One- to four-family ...........................  $ 58,561     32.68%    $ 58,254     34.39%    $ 56,424     35.54%
  Multi-family ..................................     2,552      1.43        2,926      1.73        3,594      2.26
  Commercial ....................................    14,689      8.20       17,788     10.50       17,670     11.13
  Construction or development ...................     4,827      2.69        5,878      3.47        4,163      2.62
                                                   --------    ------     --------    ------     --------    ------
     Total real estate loans ....................    80,629     45.00       84,846     50.09       81,851     51.55
                                                   --------    ------     --------    ------     --------    ------
Consumer ........................................    16,216      9.05       14,472      8.54       16,419     10.34
Commercial business .............................     9,463      5.28       10,969      6.48        7,523      4.74
                                                   --------    ------     --------    ------     --------    ------
     Total fixed-rate loans .....................   106,308     59.33      110,287     65.11      105,793     66.63

Adjustable-Rate Loans:
----------------------
Real estate:
  One- to four-family ...........................    39,382     21.98       33,383     19.71       30,065     18.94
  Multi-family ..................................     1,776       .99        1,783      1.05          115       .07
  Commercial ....................................     7,289      4.07        2,636      1.56        1,812      1.14
  Construction or development ...................     1,104       .62        3,591      2.12        1,911      1.20
                                                   --------    ------     --------    ------     --------    ------
     Total real estate loans ....................    49,551     27.66       41,393     24.44       33,903     21.35
                                                   --------    ------     --------    ------     --------    ------
Consumer ........................................     7,061      3.94        6,712      3.96        7,349      4.63
Commercial business .............................    16,256      9.07       10,987      6.49       11,740      7.39
                                                   --------    ------     --------    ------     --------    ------
     Total adjustable-rate loans ................    72,868     40.67       59,092     34.89       52,992     33.37
                                                   --------    ------     --------    ------     --------    ------
     Total loans ................................   179,176    100.00%     169,379    100.00%     158,785    100.00%
                                                               ======                 ======                 ======

Less:
-----
  Undisbursed portion of construction loans .....     2,684                  3,503                  1,455
  Loans in process ..............................        83                    134                    318
  Deferred fees and discounts ...................       252                    293                    316
  Allowance for loan losses .....................     1,357                  1,772                  2,136
                                                   --------               --------               --------
     Total loans receivable, net ................  $174,800               $163,677               $154,560
                                                   ========               ========               ========
</TABLE>


                                       7
<PAGE>

      The following  schedule  illustrates the interest rate  sensitivity of our
loan  portfolio  at  December  31,  2004.  Mortgages  which have  adjustable  or
renegotiable interest rates are shown as maturing in the period during which the
contract  is due.  The  schedule  does  not  reflect  the  effects  of  possible
prepayments or enforcement of due-on-sale clauses.

<TABLE>
<CAPTION>
                                                         Real Estate
                         ----------------------------------------------------------------------------
                                                      Multi-Family and            Construction or
                           One- to Four-Family           Commercial                 Development
                         ----------------------------------------------------------------------------
                                       Weighted                   Weighted                   Weighted
                                        Average                    Average                    Average
                          Amount         Rate        Amount         Rate        Amount         Rate
                         ----------------------------------------------------------------------------
                                                   (Dollars in Thousands)
<S>                      <C>             <C>        <C>             <C>        <C>             <C>
Due During the
Period Ending
December 31,
2005 ..............      $     10        7.57%      $     22        9.09%      $  3,157        6.27%
2006 and 2007 .....           727        6.46          1,720        7.85            186        5.38
2008 and 2009 .....         2,588        6.53          4,271        5.76          2,000        5.42
2010 to 2014 ......        11,831        6.23          8,197        6.54             --         .00
2015 to 2034 ......        82,787        5.76         12,096        6.90            588        5.56
                         --------                   --------                   --------
                         $ 97,943        5.84%      $ 26,306        6.67%      $  5,931        5.89%
                         ========                   ========                   ========

<CAPTION>
                                Consumer             Commercial Business               Total
                         ----------------------------------------------------------------------------


                         ----------------------------------------------------------------------------
                                       Weighted                   Weighted                   Weighted
                                        Average                    Average                    Average
                          Amount         Rate        Amount         Rate        Amount         Rate
                         ----------------------------------------------------------------------------
                                                   (Dollars in Thousands)
<S>                      <C>             <C>        <C>             <C>        <C>             <C>
Due During the
Period Ending
December 31,
2005 ..............      $  4,593        8.73%      $  9,202        6.18%      $ 16,984        6.89%
2006 and 2007 .....         3,176        7.62          5,575        5.43         11,384        6.48
2008 and 2009 .....         7,345        6.09          4,255        6.09         20,459        6.01
2010 to 2014 ......         7,604        6.23          4,126        6.40         31,758        6.33
2015 to 2034 ......           559        7.69          2,561        6.68         98,591        5.93
                         --------                   --------                   --------
                         $ 23,277        6.90%      $ 25,719        6.09%      $179,176        6.14%
                         ========                   ========                   ========
</TABLE>

      The  total  amount  of loans  due  after  December  31,  2005  which  have
predetermined  interest rates is $99.0 million,  while the total amount of loans
due after such date which have  floating or adjustable  interest  rates is $63.2
million.


                                       8
<PAGE>

      All of our lending is subject to our written  underwriting  standards  and
loan  origination  procedures.  Decisions on loan  applications  are made on the
basis of detailed applications and property valuations. Properties securing real
estate loans made by us are generally  appraised by  Board-approved  independent
appraisers.  In the loan approval process,  we assess the borrower's  ability to
repay the loan, the adequacy of the proposed security,  the employment stability
of the borrower and the creditworthiness of the borrower.

      We require  evidence of marketable  title and lien position or appropriate
title insurance on all loans secured by real property.  We also require fire and
extended coverage casualty  insurance in amounts at least equal to the lesser of
the principal  amount of the loan or the value of  improvements on the property,
depending  on the type of loan.  As  required  by federal  regulations,  we also
require  flood  insurance to protect the property  securing its interest if such
property is located in a designated flood area.

      One-  to  Four-Family  Residential  Mortgage  Lending.   Residential  loan
originations  are generated by our  marketing  efforts,  our present  customers,
walk-in  customers and referrals from real estate  brokers.  We have focused our
lending efforts primarily on the origination of loans secured by first mortgages
on owner-occupied,  single-family residences in our market area. At December 31,
2004, one- to four-family  residential  mortgage loans totaled $97.9 million, or
54.66%, of the gross loan portfolio.

      We currently offer fixed-rate and adjustable-rate  mortgage loans. For the
year ended  December 31, 2004, we originated  $12.1 million of fixed-rate  loans
and $11.4  million  of  adjustable-rate  real  estate  loans,  all of which were
secured by one- to four-family residential real estate. Substantially all of our
one- to four-family  residential mortgage originations are secured by properties
located in our market area.

      We offer  adjustable-rate  mortgage loans at rates and on terms determined
in accordance with market and competitive factors. We originate  adjustable-rate
mortgage loans with terms of up to 30 years. We offer  one-year,  three-year and
five-year  adjustable-rate  mortgage  loans  (where  the terms are fixed for the
first one-year, three-years and five-years,  respectively, and thereafter adjust
annually)  with a stated  interest rate margin over the United States  Treasury.
Increases or decreases in the  interest  rate of our  adjustable-rate  loans are
generally limited to 1.0% at any adjustment date and, for example,  the one-year
adjustable-rate  mortgage product has limits of 5.0% over the life of a loan. As
a  consequence  of using caps,  the interest  rates on these loans may not be as
rate sensitive as is our cost of funds. Currently,  all adjustable-rate mortgage
loans  originated  do provide for a minimum  interest  rate based on margins and
caps over the life of the loans. At December 31, 2004, the total balance of one-
to  four-family  adjustable-rate  loans was $39.4 million or 21.98% of our gross
loan portfolio.

      We also offer fixed-rate mortgage loans with maturities of up to 30 years.
At December 31, 2004, the total balance of one- to four-family  fixed-rate loans
was $58.6 million or 32.68% of our gross loan portfolio.

      Currently  we will  lend up to 97% of the  lesser  of the  sales  price or
appraised  value  of  the  security  property  on  owner-occupied  single-family
residence  loans,  provided  that private  mortgage  insurance is obtained in an
amount  sufficient  to reduce our exposure to not more than 80% of the appraised
value or sales price, as applicable. Residential loans do not include prepayment
penalties,  are  non-assumable  (other  than  government-insured  or  guaranteed
loans), and do not produce negative  amortization.  Real estate loans originated
by us contain a "due on sale" clause allowing us to declare the unpaid principal
balance due and payable upon the sale of the security property.

      The  loans  currently  originated  by us are  typically  underwritten  and
documented  pursuant to the guidelines of Freddie Mac. Under our current policy,
we originate and hold all adjustable-rate  mortgage loans and most 10 through 20
year fixed-rate  mortgages in the portfolio while selling conforming  fixed-rate
mortgages with terms in excess of 20 years.

      Commercial and Multi-Family  Real Estate Lending.  We have also engaged in
commercial and multi-family  real estate lending in our market area. At December
31, 2004, we had $22.0 million and $4.3 million of commercial  and  multi-family
real  estate  loans,  which  represented  12.27%  and  2.42%,  of the gross loan
portfolio.


                                       9
<PAGE>

      The  commercial  and  multi-family  real estate loan  portfolio is secured
primarily by retail properties,  apartments, churches and real estate located in
Huntington and Allen Counties,  Indiana. Commercial and multi-family real estate
loans  generally  have  terms  that do not exceed 15 years and a variety of rate
adjustment features and other terms. Generally, the loans are made in amounts up
to 75% of the  lesser  of the  appraised  value or sales  price of the  security
property. We currently offer one-year,  three-year and five-year adjustable-rate
commercial and multi-family real estate loans (where the terms are fixed for the
first one-year, three-years and five-years,  respectively, and thereafter adjust
annually) with a margin over a designated index. In underwriting these loans, we
analyze the financial condition of the borrower,  the borrower's credit history,
and the  reliability  and  predictability  of the  cash  flow  generated  by the
property  securing the loan.  We generally  require  personal  guaranties of the
borrowers.  Appraisals  on  properties  securing  commercial  real estate  loans
originated by us are performed by independent appraisers, to the extent required
by federal regulations.

      Multi-family  and commercial real estate loans generally  present a higher
level of risk than loans secured by one- to four-family residences. This greater
risk is due to several  factors,  including the  concentration of principal in a
limited number of loans and borrowers, the effect of general economic conditions
on income  producing  properties and the increased  difficulty of evaluating and
monitoring these types of loans. Furthermore,  the repayment of loans secured by
multi-family  and  commercial  real  estate  is  typically  dependent  upon  the
successful  operation of the related real estate project.  If the cash flow from
the project is reduced (for example, if leases are not obtained or renewed, or a
bankruptcy  court  modifies a lease term, or a major tenant is unable to fulfill
its  lease  obligations),  the  borrower's  ability  to  repay  the  loan may be
impaired.

      Construction  or  Development  Lending.  At December 31, 2004, we had $5.9
million of  construction  or development  loans. We offer loans to both builders
and borrowers for the construction of one- to four-family  residences,  and to a
lesser extent,  commercial real estate and multi-family  properties.  Currently,
such loans are offered with fixed or adjustable  rates of interest.  At December
31, 2004, we had $4.8 million and $1.1 million of fixed-rate and adjustable-rate
construction or development  loans,  respectively,  which  represented 2.69% and
..62%,  respectively,  of our gross loan  portfolio.  Following the  construction
period,  these loans may become permanent  loans,  with terms for up to 25 years
for adjustable-rate loans and 20 years for fixed-rate loans.

      Construction  lending is generally considered to involve a higher level of
credit risk than one- to four-family  residential lending since the risk of loss
on  construction  loans is  dependent  largely  upon the accuracy of the initial
estimate of the individual  property's  value upon completion of the project and
the estimated  cost  (including  interest) of the project.  If the cost estimate
proves to be  inaccurate,  we may be required to advance funds beyond the amount
originally committed to permit completion of the project.

      Consumer Lending. We offer a variety of secured consumer loans,  including
automobile,  home equity lines of credit,  second  mortgage and loans secured by
savings deposits. We also offer unsecured consumer loans. We currently originate
substantially all of our consumer loans in our primary market area. We originate
consumer  loans  on a  direct  basis  and  on  an  indirect  basis  through  the
acquisition of installment  payment  contracts from dealers who extend credit to
their customers for the purchase of an automobile, both new and used.

      A  significant  component  of our  consumer  loan  portfolio  consists  of
automobile loans.  These loans generally have terms that do not exceed six years
and carry a variety of rate  adjustment  features  and other  terms.  Generally,
loans on new vehicles are made in amounts up to 100% of dealer cost and loans on
used  vehicles  are made in  amounts up to its  published  value,  less  certain
adjustments.  At December 31, 2004,  automobile  loans  totaled $10.3 million or
5.73% of the gross loan portfolio. Of this amount, approximately $3.7 million or
35.92%  and $6.6  million or 64.08%  were  originated  on a direct and  indirect
basis, respectively.

      We also originate  fixed rate second  mortgages and  adjustable  rate home
equity line of credit loans.  Home equity and second  mortgage  loans secured by
mortgages, together with loans secured by all prior liens, are generally limited
to 90% or less of the appraised  value (where we have the first mortgage) of the
property  securing the loan or 80% or less of  appraised  value (where we do not
have the first mortgage) or 75% or less of appraised value (where the collateral
property is non-owner occupied). Generally, such loans have a maximum term of up
to 10 years.  As of December 31, 2004,  home equity and second  mortgage  loans,
most of which are  secured  by  mortgages,  amounted  to $6.5  million  and $1.4
million, which represented 3.64% and .80% of the gross loan portfolio.


                                       10
<PAGE>

      At December 31, 2004, the consumer loan  portfolio  totaled $23.3 million,
or 12.99% of our gross loan portfolio. At December 31, 2004, approximately 9.05%
of consumer loans were short- and  intermediate-term,  fixed-rate consumer loans
and 3.94% were adjustable-rate consumer loans.

      Our  underwriting  standards for consumer loans include an application,  a
determination  of  the  applicant's  payment  history  on  other  debts  and  an
assessment of ability to meet existing  obligations and payments on the proposed
loan. Although creditworthiness of the applicant is a primary consideration, the
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount.

      Consumer loans may entail greater credit risk than do residential mortgage
loans,  particularly  in the case of consumer  loans which are  unsecured or are
secured  by  rapidly  depreciable  assets,  such as  automobiles.  In  addition,
consumer loan collections are dependent on the borrower's  continuing  financial
stability,  and  thus  are  more  likely  to be  affected  by  adverse  personal
circumstances.  Furthermore,  the application of various federal and state laws,
including  bankruptcy  and  insolvency  laws,  may limit the amount which can be
recovered on such loans.  At December 31, 2004,  $111,000 of our consumer  loans
were non-performing, representing .06% of the gross loan portfolio.

      Commercial Business Lending.  We also originate  commercial business loans
and  purchase  commercial  leases.  At  December  31, 2004  approximately  $25.7
million,  or 14.35% of our gross loan portfolio was commercial business lending.
The largest commercial  business loan at this date was a combination real estate
and equipment loan of $1.7 million to a foundry operation.

      Commercial  business  loans  typically  are  made  on  the  basis  of  the
borrower's  ability  to make  repayment  from  the cash  flow of the  borrower's
business. As a result, the availability of funds for the repayment of commercial
business  loans may be  substantially  dependent  on the success of the business
itself  (which,  in turn,  is likely to be dependent  upon the general  economic
environment). Our commercial business loans are usually, but not always, secured
by business assets.  However,  the collateral  securing the loans may depreciate
over time,  may be difficult to appraise and may fluctuate in value based on the
success of the business.

      Our commercial  business lending policy includes credit file documentation
and  analysis  of the  borrower's  character,  capacity  to repay the loan,  the
adequacy of the  borrower's  capital and  collateral as well as an evaluation of
conditions affecting the borrower.  Analysis of the borrower's past, present and
future  cash  flows  is  also  an  important  aspect  of  our  credit  analysis.
Nonetheless,  such loans carry a higher credit risk than more traditional thrift
lending.

Originations, Purchases and Sales of Loans

      Loan  originations are developed from continuing  business with depositors
and  borrowers,  soliciting  realtors,  builders,  walk-in  customers  and other
third-party sources.

      While we originate both  adjustable-rate and fixed-rate loans, our ability
to originate  loans to a certain extent is dependent upon the relative  customer
demand  for  loans  in its  market,  which  is  affected  by the  interest  rate
environment,  among other  factors.  For the year ended  December 31,  2004,  we
originated   $12.1   million   in   fixed-rate   loans  and  $11.4   million  in
adjustable-rate loans.

      One- to  four-family  loan  originations  decreased  for the year to $23.5
million  in  2004  from  $57.7  million  in  2003,  reflecting  the  decline  in
refinancing activity in 2004 compared to 2003.

      We  have  purchased   loans  from  time  to  time  from  other   financial
institutions  with whom we have developed a comfort level.  These  purchases are
typically  secured by  commercial  real estate or leased  equipment  and help in
managing First Federal's loan diversity and overall asset liability  management.
Management imposes similar underwriting  standards to these purchases that would
apply to its own  originations.  During the year ended December 31, 2004,  First
Federal purchased $7.9 million in loans from other financial institutions.


                                       11
<PAGE>

      First Federal began selling conforming  long-term  fixed-rate mortgages to
Freddie  Mac  during  2000.  The  intent  was to both  improve  First  Federal's
sensitivity to interest rate risk and to provide another source of liquidity. We
additionally  have sold  participations in our own loan originations on occasion
to other financial institutions.  The purpose of such sales would be to decrease
First Federal's  concentration  risk with any single  borrower.  During the year
ended  December 31, 2004,  First Federal  originated  $2.2 million in conforming
fixed-rate mortgages that were sold to Freddie Mac. There were two participation
loans sold during the same time frame for a total of $574,000.

Asset Quality

      The following table sets forth our loan  delinquencies  by type, by amount
and by  percentage  of type at December 31, 2004.  The amounts  presented in the
table  below  represent  the total  remaining  principal  balances of the loans,
rather than the actual payment amounts which are overdue.

<TABLE>
<CAPTION>
                                                                   Loans Delinquent For:
                               -------------------------------------------------------------------------------------------------
                                       30 to 89 Days                  90 Days and Over               Total Delinquent Loans
                               -------------------------------------------------------------------------------------------------
                                                    Percent of                       Percent of                       Percent of
                                                       Loan                             Loan                             Loan
                                Number     Amount    Category    Number     Amount    Category    Number     Amount    Category
                               -------------------------------------------------------------------------------------------------
                                                                   (Dollars in Thousands)
<S>                                  <C>  <C>            <C>          <C>  <C>            <C>         <C>   <C>            <C>
Real Estate:
One- to four-family .........        15   $    635       0.65%         2   $    272       0.28%        17   $    907       0.93%
Multi-family ................         1        302       6.98         --         --       0.00          1        302       6.98
Commercial ..................         1         38       0.17         64      1,321       6.01         65      1,359       6.18
Construction or development .        --         --       0.00          1          6       0.10          1          6       0.10
Consumer ....................        43        230       0.99         16        111       0.48         59        341       1.46
Commercial Business .........         4        489       1.90          1          3       0.01          5        492       1.91
                               --------   --------   --------   --------   --------   --------   --------   --------   --------
Total .......................        64   $  1,694       0.95%        84   $  1,713       0.95%       148   $  3,407       1.90%
                               ========   ========   ========   ========   ========   ========   ========   ========   ========

Total Loans by Category:
One- to four-family .........             $ 97,943
Multi-family ................                4,328
Commercial ..................               21,978
Construction or development .                5,931
Consumer ....................               23,277
Commercial Business .........               25,719
                                          --------
Total .......................             $179,176
</TABLE>

      When a borrower fails to make a required payment on a loan, we contact the
borrower in an attempt to cure the delinquency.  In the case of loans secured by
real  estate,  reminder  notices  are sent to  borrowers.  If  payment  is late,
appropriate  late charges are assessed,  and a notice of late charges is sent to
the borrower.  If the loan is in excess of 90 days delinquent,  the loan will be
referred to our legal counsel for  collection.  In all cases, if we believe that
collateral  is at risk and added  delay would  place the  collectibility  of the
balance of the loan in further question,  we may refer loans for collection even
sooner than the 90 days described above.

      When a loan  becomes  delinquent  90 days or more,  we  place  the loan on
non-accrual status and previously accrued interest income on the loan is charged
against current income.  The loan will remain on a non-accrual status as long as
the loan is 90 days delinquent.

      Delinquent  consumer  loans  are  handled  in a  similar  manner  as those
described  above;  however,  shorter  time frames for each step apply due to the
type of collateral generally associated with such types of loans. Our procedures
for  repossession  and  sale of  consumer  collateral  are  subject  to  various
requirements under Indiana consumer protection laws.


                                       12
<PAGE>

      Non-Performing  Assets.  The  table  below  sets  forth  the  amounts  and
categories of non-performing  assets in our loan portfolio.  Loans are placed on
non-accrual  status when the  collection of principal  and/or  interest  becomes
doubtful. For all years presented, we had no troubled debt restructurings (which
involve  forgiving  a portion of interest  or  principal  on any loans or making
loans at a rate  materially less than that of market rates).  Foreclosed  assets
include assets acquired in settlement of loans.

<TABLE>
<CAPTION>
                                                                December 31,
                                             --------------------------------------------------
                                              2004       2003       2002       2001       2000
                                             ------     ------     ------     ------     ------
                                                           (Dollars in Thousands)
<S>                                          <C>        <C>        <C>        <C>        <C>
Non-accruing loans:
   One- to four-family ..................    $  272     $   81     $  495     $  442     $  608
   Multi-family .........................        --         --         --         --         29
   Commercial real estate ...............     1,321      2,047      4,500      5,085        708
   Construction or  development .........         6         --        506         --        472
   Consumer .............................       111        207        510      1,125      1,691
   Commercial business ..................         3         78        207        267        198
                                             ------     ------     ------     ------     ------
      Total .............................     1,713      2,413      6,218      6,919      3,706
                                             ------     ------     ------     ------     ------

Foreclosed assets:
   One- to four-family ..................        54        146        420         46         --
   Commercial and land ..................       150         16         96        173        185
                                             ------     ------     ------     ------     ------
      Total .............................       204        162        516        219        185
                                             ------     ------     ------     ------     ------

Repossessed assets:
   Consumer and commercial ..............         7          3         12         83        539
                                             ------     ------     ------     ------     ------
      Total .............................         7          3         12         83        539
                                             ------     ------     ------     ------     ------

Total non-performing assets .............    $1,924     $2,578     $6,746     $7,221     $4,430
                                             ======     ======     ======     ======     ======
Total as a percentage of total assets ...      0.84%      1.13%      3.00%      3.03%      1.79%
                                             ======     ======     ======     ======     ======
</TABLE>

      Total  non-performing  assets  decreased from $2.6 million at December 31,
2003 to $1.9 million at December 31,  2004.  At December 31, 2004,  one borrower
comprised $678,000 or 35.2% of the $1.9 million in total non-performing  assets.
Management has already  established a specific reserve to cover potential losses
related to this borrower and does not anticipate any further loss at this time.

      For the year ended December 31, 2004,  gross  interest  income which would
have been recorded had the  non-accruing  loans been current in accordance  with
their  original  terms was  $183,000,  of which $81,000 was included in interest
income.

      Classified Assets.  Federal  regulations  classify loans and other assets,
such  as  debt  and  equity  securities  considered  by  the  Office  of  Thrift
Supervision  ("OTS") to be of lesser quality,  as  "substandard,"  "doubtful" or
"loss." An asset is considered  "substandard" if it is inadequately protected by
the  current net worth and paying  capacity of the obligor or of the  collateral
pledged,  if  any.  "Substandard"  assets  include  those  characterized  by the
"distinct  possibility" that the insured institution will sustain "some loss" if
the deficiencies are not corrected.  Assets classified as "doubtful" have all of
the  weaknesses  inherent  in those  classified  "substandard,"  with the  added
characteristic  that the weaknesses  present make  "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable."  Assets  classified as "loss" are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without the establishment of a specific loss reserve is not warranted.

      When  an  insured   institution   classifies   problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan losses in
an amount  deemed  prudent by  management.  General  allowances  represent  loss
allowances which have been established to recognize the inherent risk associated
with lending activities,  but which, unlike specific  allowances,  have not been
allocated to particular problem assets. When an insured  institution


                                       13
<PAGE>

classifies  problem  assets as  "loss," it is  required  either to  establish  a
specific  allowance  for  losses  equal to 100% of that  portion of the asset so
classified or to charge off such amount.  An  institution's  determination as to
the  classification of its assets and the amount of its valuation  allowances is
subject to review by the regulatory authorities, who may order the establishment
of additional general or specific loss allowances.

      In connection with the filing of our periodic  reports with the OTS and in
accordance with our  classification  of assets policy,  we regularly  review the
problem  assets  in our  portfolio  to  determine  whether  any  assets  require
classification in accordance with applicable regulations.  At December 31, 2004,
we had  classified  $1.7  million of our assets,  net of specific  reserves,  as
substandard,  representing  6.5% of the  stockholders'  equity  or 0.7% of total
assets. These figures represent significant  improvements over December 31, 2003
substandard  classified  assets,  net of  specific  reserves,  of $2.2  million,
representing 8.1% of stockholders' equity or 1.0% of total assets.

      Other  Loans  of  Concern.   Other  than  the  (i)  non-performing  loans,
repossessed  assets and  foreclosed  real  estate held for sale set forth in the
tables  above,  (ii)  impaired  loans  as  discussed  in Note 3 of the  Notes to
Consolidated  Financial  Statements  in the Annual Report to  Stockholders,  and
(iii) the  classified  assets,  there were no  classified  loans with respect to
which known  information  about the possible credit problems of the borrowers or
the cash flows of the security properties, have caused management to have doubts
as to the ability of the borrowers to comply with present loan  repayment  terms
and which may result in the future inclusion of such items in the non-performing
asset categories.

      Allowance for Loan Losses.  The  allowance for loan losses is  established
based on our  evaluation of the risk inherent in our loan  portfolio and changes
in the nature and volume of our loan activity,  including  those loans which are
being specifically monitored. Such evaluation,  which includes a review of loans
for which full  collectibility  may not be reasonably  assured,  considers among
other matters,  the loan  classifications  discussed  above,  the estimated fair
value of the underlying  collateral,  economic conditions,  historical loan loss
experience,  the amount of loans  outstanding  and other  factors  that  warrant
recognition in providing for an adequate loan loss allowance.

      There was $37,500 in provision for loan losses in 2004 compared to zero in
2003.  This  continued low trend in provisions was possible due to the Company's
improvement in  non-performing  loans as evidenced in Note 3 to the Consolidated
Financial  Statements  in our Annual Report to  Stockholders  for the year ended
December  31,   2004,   attached   hereto  as  Exhibit  13  (Annual   Report  to
Stockholders).  The increased provision for loan losses less net charge-offs for
the year resulted in a $415,000  decrease in the allowance for loan losses.  The
allowance  for loan  losses of $1.4  million at December  31,  2004  compared to
allowance for loan losses of $1.8 million at December 31, 2003.  Management will
continue to maintain the allowance for loan losses at a level deemed adequate by
management  based  on  its  quarterly   analysis  and  will  include  additional
consideration of non-performing loans.

      Although  we  believe  that  we use  the  best  information  available  to
determine  the  allowance,   unforeseen   market   conditions  could  result  in
adjustments and net earnings could be  significantly  affected if  circumstances
differ   substantially   from  the   assumptions   used  in  making   the  final
determination.  Future additions to the allowance will be the result of periodic
loan,  property and collateral  reviews and thus cannot be predicted in advance.
At December 31, 2004,  we had a total  allowance for loan losses of $1.4 million
or 79.2%  of  non-performing  loans.  See  Note 3 of the  Notes to  Consolidated
Financial Statements in the Annual Report to Stockholders.


                                       14
<PAGE>

           The distribution of the allowance for loan losses at the dates
indicated is summarized as follows:

<TABLE>
<CAPTION>
                                                            December 31,
                              ------------------------------------------------------------------------
                                              2004                                 2003
                              ------------------------------------------------------------------------
                                                        Percent                               Percent
                                                           of                                    of
                                                        Loans in                              Loans in
                               Amount         Loan        Each       Amount         Loan        Each
                               of Loan       Amounts    Category     of Loan       Amounts    Category
                                 Loss          by       to Total       Loss          by       to Total
                              Allowance     Category      Loans     Allowance     Category      Loans
                              ------------------------------------------------------------------------
                                                        (Dollars in Thousands)
<S>                            <C>          <C>          <C>         <C>          <C>          <C>
One- to four-family ......     $     80     $ 97,943      54.66%     $    107     $ 91,637      54.10%
Multi-family .............            6        4,328       2.42             7        4,709       2.78
Commercial real estate ...          483       21,978      12.27           578       20,424      12.06
Construction or
development ..............            5        5,931       3.31            15        9,469       5.59
Consumer .................          374       23,277      12.99           499       21,184      12.51
Commercial business ......          409       25,719      14.35           566       21,956      12.96
Unallocated ..............           --           --         --            --           --         --
                               --------     --------     ------      --------     --------     ------
   Total .................     $  1,357     $179,176     100.00%     $  1,772     $169,379     100.00%
                               ========     ========     ======      ========     ========     ======

<CAPTION>
                                                                            December 31,
                              ------------------------------------------------------------------------------------------------------
                                             2002                               2001                               2000
                              ------------------------------------------------------------------------------------------------------
                                                      Percent                            Percent                            Percent
                                                         of                                 of                                 of
                                                      Loans in                           Loans in                           Loans in
                               Amount        Loan       Each      Amount        Loan       Each      Amount        Loan       Each
                               of Loan      Amounts   Category    of Loan      Amounts   Category    of Loan      Amounts   Category
                                 Loss         by      to Total      Loss         by      to Total      Loss         by      to Total
                              Allowance    Category     Loans    Allowance    Category     Loans    Allowance    Category     Loans
                              ------------------------------------------------------------------------------------------------------
                                                                     (Dollars in Thousands)
<S>                            <C>         <C>         <C>        <C>         <C>         <C>        <C>         <C>         <C>
One- to four-family ......     $    112    $ 86,489     54.47%    $    108    $ 95,777     57.03%    $    172    $117,683     57.61%
Multi-family .............            7       3,709      2.34            6       3,625      2.16            9       4,377      2.14
Commercial real estate ...          986      19,482     12.27          825      20,199     12.03          595      24,519     12.00
Construction or
development ..............            8       6,074      3.82            8       6,363      3.79          182       7,188      3.52
Consumer .................          380      23,768     14.97          535      27,711     16.50          608      29,785     14.58
Commercial business ......          643      19,263     12.13          473      14,259      8.49          435      20,730     10.15
Unallocated ..............           --          --        --           --          --        --           --          --        --
                               --------    --------    ------     --------    --------    ------     --------    --------    ------
   Total .................     $  2,136    $158,785    100.00%    $  1,955    $167,934    100.00%    $  2,001    $204,282    100.00%
                               ========    ========    ======     ========    ========    ======     ========    ========    ======
</TABLE>


                                       15
<PAGE>

      The  following  table sets forth an  analysis  of the  allowance  for loan
losses.

<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                              --------------------------------------------------
                                               2004       2003       2002       2001       2000
                                              ------     ------     ------     ------     ------
                                                            (Dollars in Thousands)
<S>                                           <C>        <C>        <C>        <C>        <C>
Balance at beginning of period ...........    $1,772     $2,136     $1,955     $2,001     $1,767

Charge-offs:
   One- to four-family ...................         3         26         --         58          1
   Commercial real estate ................       258        236        109         --         --
   Commercial ............................        73        160         --        392      1,150
   Consumer ..............................       274        226        727        385        259
                                              ------     ------     ------     ------     ------
                                                 608        648        836        835      1,410
                                              ------     ------     ------     ------     ------

Recoveries:
   One- to four-family ...................        --         --         --          3         --
   Commercial real estate ................        --         --         --         --         --
   Commercial ............................        10         96         82        153          4
   Consumer ..............................       146        188        203         58         50
                                              ------     ------     ------     ------     ------
                                                 156        284        285        214         54
                                              ------     ------     ------     ------     ------

Net charge-offs ..........................       452        364        551        621      1,356
Additions charged to operations ..........        37         --        732        575      1,590
                                              ------     ------     ------     ------     ------
Balance at end of period .................    $1,357     $1,772     $2,136     $1,955     $2,001
                                              ======     ======     ======     ======     ======

Ratio of net charge-offs during the
period to average loans outstanding
during the period ........................      0.26%      0.23%      0.34%      0.34%      0.65%
                                              ======     ======     ======     ======     ======

Ratio of net charge-offs during the
period to average non-performing loans ...     24.59%     10.31%      8.63%      8.81%     51.77%
                                              ======     ======     ======     ======     ======
</TABLE>

Investment Activities

      Liquidity  may increase or decrease  depending  upon the  availability  of
funds and comparative  yields on investments in relation to the return on loans.
Our liquidity level is now higher than our peers. Historically we have generally
maintained liquid assets at levels above the minimum  requirements that had been
imposed  by  OTS  regulations  and at  levels  believed  adequate  to  meet  the
requirements  of normal  operations,  including  repayments of maturing debt and
potential  deposit  outflows.  At December 31, 2004, our liquidity ratio (liquid
assets  as a  percentage  of  net  withdrawable  savings  deposits  and  current
borrowings) was 9.6%.

      Federally  chartered savings  institutions have the authority to invest in
various types of liquid assets,  including  United States Treasury  obligations,
securities   of   various   federal   agencies,   obligations   of  states   and
municipalities,  certain  certificates  of deposit of insured  banks and savings
institutions,  certain bankers'  acceptances,  repurchase agreements and federal
funds. Subject to various restrictions, federally chartered savings institutions
may also invest their assets in commercial  paper,  investment  grade  corporate
debt securities and mutual funds whose assets conform to the investments  that a
federally  chartered  savings  institution  is  otherwise   authorized  to  make
directly.


                                       16
<PAGE>

      Generally,  our  investment  policy  is  to  invest  funds  among  various
categories  of  investments  and  maturities  based  upon our  liquidity  needs,
asset/liability  management  policies,  investment  quality,  marketability  and
performance objectives.

      Securities and Other  Interest-Earning  Assets.  At December 31, 2004, our
interest-earning  cash and cash  equivalents  totaled $1.1  million,  or .50% of
total  assets,  and our  securities,  consisting  of  obligations  of states and
political subdivisions,  money market mutual funds, and other securities totaled
$39.0 million,  or 17.0% of total assets.  Included in other  securities,  as of
such date,  we had a $5.5  million  investment  in Federal Home Loan Bank (FHLB)
stock, satisfying our requirement for membership in the FHLB of Indianapolis.

      At  December  31,  2004,  we had  $60,000 in  securities  held to maturity
consisting  of  obligations  of other  debt  securities,  and we had  securities
available for sale with a fair value of $38.9  million.  See Note 2 of the Notes
to Consolidated Financial Statements in the Annual Report to Stockholders.

      The following table sets forth the composition of our securities portfolio
at the dates indicated.

<TABLE>
<CAPTION>
                                                       2004                        2003                       2002
                                                --------------------       --------------------       --------------------
                                                Carrying       % of        Carrying       % of        Carrying       % of
                                                 Value        Total         Value        Total         Value        Total
                                                --------     -------       --------     -------       --------     -------
                                                                          (Dollars in Thousands)
<S>                                             <C>           <C>          <C>           <C>          <C>           <C>
Debt securities:
   States and Political Subdivisions .....      $ 3,570         9.16%      $ 3,167         7.22%      $   396          .92%
   Mortgage-backed securities ............       12,651        32.47        17,628        40.21        16,408        38.10
   U.S. Government agencies ..............        9,677        24.84         9,767        22.28         6,137        14.25
   Corporate bonds .......................           60          .15           115          .26           115          .27
   Mutual funds ..........................        4,250        10.91         4,180         9.54        11,106        25.79
                                                -------      -------       -------      -------       -------      -------
      Total debt securities ..............       30,208        77.53        34,857        79.51        34,162        79.33

Equity securities:
   Equity securities .....................        8,756        22.47         8,980        20.49         8,901        20.67
                                                -------      -------       -------      -------       -------      -------
      Total securities ...................      $38,964       100.00%      $43,837       100.00%      $43,063       100.00%
                                                =======      =======       =======      =======       =======      =======
</TABLE>

      The following  table sets forth the carrying  value of debt  securities by
maturity and weighted average yield for each range of maturities at December 31,
2004.

<TABLE>
<CAPTION>
                                                                                  Maturity
                                              -------------------------------------------------------------------------------
                                                                           (Dollars in Thousands)

                                               Within One Year       1 to 5 years         5 to 10 years        Over 10 years
                                              ----------------     ----------------     ----------------     ----------------
                                              Amount     Yield     Amount     Yield     Amount     Yield     Amount     Yield
                                              ------    ------     ------    ------     ------    ------     ------    ------
<S>                                           <C>         <C>      <C>         <C>      <C>         <C>      <C>         <C>
States and Political Subdivisions(1) .....    $   20      4.35%    $  383      3.87%    $3,042      3.49%    $  125      4.00%
Mortgage-backed securities ...............         0        --      1,440      3.99      3,375      4.24      7,836      4.80
U.S. Government agencies(1) ..............     5,003      3.72      1,976      3.19      2,698      4.40         --        --
Corporate bonds ..........................        60      8.55         --        --         --        --         --        --
                                              ------    ------     ------    ------     ------    ------     ------    ------
   Total .................................    $5,083      3.73%    $3,799      3.56%    $9,115      4.04%    $7,961      4.79%
                                              ======    ======     ======    ======     ======    ======     ======    ======
</TABLE>

----------
(1)   Yields are not presented on a tax equivalent basis.

      Northeast  Indiana  also has $4.3  million  in  mutual  funds,  backed  by
short-term  debt  securities,  that contain no  contractual  maturity  date. The
weighted average rates are based on coupon rates for securities purchased at par
value and on  effective  rates  considering  amortization  or  accretion  if the
securities were purchased at a premium or discount.


                                       17
<PAGE>

Sources of Funds

      Our  primary  sources  of funds are  deposits,  payment of  principal  and
interest  on  loans,   interest   earned  on  securities,   interest  earned  on
interest-earning   deposits  with  other  banks,  FHLB  advances,  the  sale  of
fixed-rate  mortgages  to the  secondary  market and other funds  provided  from
operations.

      FHLB advances are used to support lending  activities and to assist in our
asset/liability  management  strategy.  Typically,  we do not use other forms of
borrowings.  At December 31, 2004,  we had total FHLB  advances of $68.8 million
with the capacity to borrow as of December 31, 2004 an additional  $2.4 million,
based  on  collateral  currently  pledged  to FHLB.  See Note 8 of the  Notes to
Consolidated Financial Statements in the Annual Report to Stockholders.

      Deposits.  We offer a variety of deposit  accounts  having a wide range of
interest rates and terms.  Deposits consist of passbook savings,  NOW, checking,
money  market  deposit and time  deposit  accounts.  The time  deposit  accounts
currently range in terms from 182 days to five years.

      We  rely  primarily  on  advertising,  competitive  pricing  policies  and
customer  service to attract and retain these  deposits.  We  generally  solicit
deposits from our market area and occasionally  accept brokered funds and out of
area jumbos as a source of deposits.  Total  deposits  increased $1.9 million or
1.6% to $123.9  million at  December  31,  2004  compared  to $122.0  million at
December  31,  2003.  Noninterest  bearing  demand,  savings,  and NOW  accounts
increased  $2.8 million or 9.4% to $32.6 million at December 31, 2004 while time
deposits  increased $2.9 million to $75.7 million at the same time frame.  These
increases  were  partially  offset by a decline in MMDA balances of $3.8 million
due primarily to one significant municipal deposit relationship that transferred
a large amount of funds to their sweep  account  towards the end of 2004.  Those
funds  continued to remain with First Federal and comprise a portion of borrowed
funds on the  consolidated  balance  sheet.  The flow of deposits is  influenced
significantly  by  general  economic  conditions,  changes  in money  market and
prevailing interest rates and competition.

      We remain  susceptible  to  short-term  fluctuations  in deposit  flows as
customers  have become more interest rate  conscious.  We endeavor to manage the
pricing of our  deposits in keeping  with our  profitability  objectives  giving
consideration  to our  asset/liability  management.  Our  ability to attract and
maintain  savings accounts and time deposit accounts and the rates paid on these
deposits,  has been and will  continue  to be  significantly  affected by market
conditions.


                                       18
<PAGE>

      The  following  table  sets forth our  deposit  flows  during the  periods
indicated.

                                             Year Ended December 31,
                                     -----------------------------------------
                                        2004            2003            2002
                                     ---------       ---------       ---------
                                              (Dollars in Thousands)
Opening balance ................     $ 122,010       $ 122,357       $ 137,030
Deposits .......................       748,075         609,904         659,547
Withdrawals ....................      (748,651)       (613,263)       (678,535)
Interest credited ..............         2,517           3,012           4,315
                                     ---------       ---------       ---------

Ending Balance .................     $ 123,951       $ 122,010       $ 122,357
                                     =========       =========       =========

Net change .....................     $   1,941       $    (347)      $ (14,673)
                                     =========       =========       =========

Percent change .................          1.59%           (.28%)        (10.71%)
                                     =========       =========       =========

      The  following  table  sets  forth the dollar  amount of  deposits  in the
various types of deposit programs we offered for the periods indicated.

<TABLE>
<CAPTION>
                                                                          December 31,
                                           ---------------------------------------------------------------------------
                                                    2004                       2003                       2002
                                           ---------------------------------------------------------------------------
                                                       Percent of                 Percent of                 Percent of
                                            Amount        Total        Amount        Total        Amount        Total
                                           ---------------------------------------------------------------------------
                                                                      (Dollars in Thousands)
<S>                                        <C>            <C>         <C>            <C>         <C>            <C>
Transactions and savings deposits:
----------------------------------
Passbook Accounts (.50%)(1) ..........     $ 11,830         9.54%     $ 10,917         8.95%     $ 10,397         8.50%
Demand and NOW Accounts (.30%)(1) ....       20,813        16.79        18,951        15.53        17,871        14.60
Money Market Accounts (1.19%)(1) .....       15,586        12.58        19,335        15.85        18,085        14.78
                                           --------     --------      --------     --------      --------     --------

Total non-time deposits ..............       48,229        38.91        49,203        40.33        46,353        37.88
                                           --------     --------      --------     --------      --------     --------

Time deposits:
--------------

Less than 1.0% .......................           --         0.00           283         0.23            --           --
1.00 - 1.99% .........................        9,630         7.77        11,851         9.71         2,815         2.30
2.00 - 3.99% .........................       64,108        51.72        51,591        42.28        46,529        38.03
4.00 - 5.99% .........................          666          .54         5,997         4.92        19,062        15.58
6.00 - 7.99% .........................        1,318         1.06         3,085         2.53         7,598         6.21
                                           --------     --------      --------     --------      --------     --------

Total time deposits ..................       75,722        61.09        72,807        59.67        76,004        62.12
                                           --------     --------      --------     --------      --------     --------

Total deposits .......................     $123,951       100.00%     $122,010       100.00%     $122,357       100.00%
                                           ========     ========      ========     ========      ========     ========
</TABLE>

----------
(1)   End of year 2004 average interest rates.


                                       19
<PAGE>

      The  following  table  shows rate and  maturity  information  for our time
deposit accounts as of December 31, 2004.

<TABLE>
<CAPTION>
                                     Less
                                     than         1.00-        2.00-        4.00-        6.00-                    Percent
                                     1.00%        1.99%        3.99%        5.99%        7.99%        Total       of Total
                                    --------------------------------------------------------------------------------------
                                                                   (Dollars in Thousands)
<S>                                 <C>          <C>          <C>          <C>          <C>          <C>            <C>
Time deposit accounts
maturing in quarter ending:
---------------------------

March 31, 2005 ................     $    --      $ 5,028      $11,985      $   246      $    --      $17,259        22.79%
June 30, 2005 .................                    2,281        7,573           57           --        9,911        13.09
September 30, 2005 ............          --        1,113        9,602           48          543       11,306        14.93
December 31, 2005 .............          --          317        6,106          109          775        7,307         9.65
March 31, 2006 ................          --          260        5,657           30           --        5,947         7.85
June 30, 2006 .................          --          631        8,251           --           --        8,882        11.73
September 30, 2006 ............          --           --        4,608           --           --        4,608         6.09
December 31, 2006 .............          --           --        4,375           --           --        4,375         5.78
March 31, 2007 ................          --           --        2,724           66           --        2,790         3.68
June 30, 2007 .................          --           --        2,438           10           --        2,448         3.23
September 30, 2007 ............          --           --          313          100           --          413         0.55
December 31, 2007 .............          --           --           17           --           --           17         0.02
Thereafter ....................                       --          459           --           --          459          .61

                                    -------------------------------------------------------------------------------------
      Total ...................     $    --      $ 9,630      $64,108      $   666      $ 1,318      $75,722       100.00%
                                    =====================================================================================
      Percent of total ........        0.00%       12.72%       84.66%        0.88%        1.74%      100.00%
                                    =======      =======      =======      =======      =======      =======
</TABLE>

      The following table  indicates the amount of our time deposit  accounts by
time remaining until maturity as of December 31, 2004.

<TABLE>
<CAPTION>
                                                                  Maturity
                                          --------------------------------------------------------
                                          3 Months      Over        Over        Over
                                             or        3 to 6      6 to 12       12
                                            Less       Months      Months      Months       Total
                                          --------------------------------------------------------
                                                            (Dollars in Thousands)
<S>                                        <C>         <C>         <C>         <C>         <C>
BALANCES
Time deposits less than $100,000 .....     $ 9,747     $ 5,922     $11,385     $19,394     $46,448
Time deposits of $100,000 or more ....       5,274       3,717       7,127      10,545      26,663
Public funds (1) .....................       2,238         272         101          --       2,611
                                           -------------------------------------------------------
Total time deposits ..................     $17,259     $ 9,911     $18,613     $29,939     $75,722
                                           =======================================================

<CAPTION>
                                                                  Maturity
                                          --------------------------------------------------------
                                          3 Months      Over        Over        Over
                                             or        3 to 6      6 to 12       12
                                            Less       Months      Months      Months       Total
                                          --------------------------------------------------------
<S>                                            <C>         <C>         <C>       <C>         <C>
NUMBER OF ACCOUNTS
Time deposits less than $100,000 .....         575         394         712       1,029       2,710
Time deposits of $100,000 or more ....          44          32          52          94         222
Public funds (1) .....................           4           2           1          --           7
                                           -------------------------------------------------------
Total time deposits ..................         623         428         765       1,123       2,939
                                           =======================================================
</TABLE>

----------
(1)   Deposits from governmental and other public entities, all over $100,000.


                                       20
<PAGE>

      Borrowings.  Although deposits are our primary source of funds, our policy
has been to utilize  borrowings  when they are a less costly  source of funds or
can be invested at a positive  rate of return.  We may obtain  advances from the
FHLB of  Indianapolis  upon the  security  of our  capital  stock in the FHLB of
Indianapolis  and certain of our  residential  mortgage  loans and  multi-family
mortgage loans.  Such advances may be made pursuant to several  different credit
programs,  each of which has its own interest rate and range of  maturities.  At
December  31,  2004,  we had $68.8  million in FHLB  advances  outstanding.  For
additional  information regarding the term to maturity and the interest rates on
FHLB advances,  see Note 8 of the Notes to Consolidated  Financial Statements in
the Annual Report to Stockholders and "- Borrowed Funds."

      The following table sets forth the maximum  month-end  balance and average
balance of FHLB advances for the periods indicated.

                                                  December 31,
                                         -----------------------------
                                           2004       2003       2002
                                         -----------------------------
                                             (Dollars in Thousands)
               Maximum Balance:
               ----------------
                  FHLB advances .....    $68,750    $67,000    $67,000

               Average Balance:
               ----------------
                  FHLB advances .....    $63,719    $64,819    $65,926

Service Corporation Activities

      At  December  31,  2004,  First  Federal  had  one  subsidiary,  Northeast
Financial,  which  is now  functioning  as our  brokerage  subsidiary  with  one
registered  representative.  As was discussed  previously in the  description of
business under Item 1, First Federal acquired a local independent brokerage firm
during 2004 through  Northeast  Financial.  The combined assets under management
were  roughly $60 million at December 31, 2004.  This  acquisition  strengthened
Northeast Financial's product offerings and reinforced  management's  commitment
to being a leader in the financial services industry within our market.

Regulation

      General. First Federal is a federally chartered savings bank, the deposits
of which are  federally  insured  and backed by the full faith and credit of the
U.S.  government up to applicable limits set by the FDIC. The Bank is subject to
broad  federal  regulation  and  oversight  extending to all of its  operations,
principally by its primary federal regulator, the OTS. First Federal is a member
of the FHLB of Indianapolis and is subject to certain limited  regulation by the
Board of Governors of the Federal Reserve System ("Federal  Reserve Board").  As
the savings and loan holding company of the Bank, the Company also is subject to
federal  regulation  and  oversight,  principally by the OTS. The purpose of the
regulation of the Company and other holding  companies is to protect  subsidiary
savings associations.  The Bank is a member of the Savings Association Insurance
Fund  ("SAIF"),  which together with the Bank Insurance Fund (the "BIF") are the
two deposit insurance funds  administered by the FDIC. As a result, the FDIC has
certain  regulatory and  examination  authority over the Bank.  Certain of these
regulatory  requirements  and  restrictions  are discussed below or elsewhere in
this document.

      The  Financial  Services  Modernization  Act. On November  12,  1999,  the
Gramm-Leach-Bliley  Financial  Services  Modernization  Act of 1999 ("GLBA") was
signed into law. The purpose of this  legislation was to modernize the financial
services   industry  by  establishing  a   comprehensive   framework  to  permit
affiliations among commercial banks,  insurance companies,  securities firms and
other financial service providers. Generally, the Act:

(a)   repealed the historical restrictions and eliminates many federal and state
      law barriers to  affiliations  among banks,  securities  firms,  insurance
      companies and other financial service providers;


                                       21
<PAGE>

(b)   provided  a  uniform  framework  for  the  functional  regulation  of  the
      activities of banks, savings institutions and their holding companies;

(c)   broadened the activities that may be conducted by national banks,  banking
      subsidiaries of bank holding companies and their financial subsidiaries;

(d)   provided  an enhanced  framework  for  protecting  the privacy of consumer
      information; and

(e)   addressed  a  variety  of other  legal  and  regulatory  issues  affecting
      day-to-day operations and long-term activities of financial institutions.

      The GLBA also imposed  certain  obligations on financial  institutions  to
develop privacy policies,  restrict the sharing of nonpublic  customer data with
nonaffiliated  parties at the customer's request,  and establish  procedures and
practices to protect and secure  customer data.  These privacy  provisions  were
implemented by regulations that were effective on November 12, 2000.  Compliance
with the privacy provisions was required by July 1, 2001.

      USA Patriot Act of 2001. In October 2001,  the USA Patriot Act of 2001 was
enacted in  response  to the  terrorist  attacks in New York,  Pennsylvania  and
Washington,  D.C.,  which  occurred on September  11,  2001.  The Patriot Act is
intended to strengthen U.S. law enforcement's and the intelligence  communities'
abilities to work  cohesively  to combat  terrorism on a variety of fronts.  The
potential  impact of the Patriot Act on financial  institutions  of all kinds is
significant  and wide  ranging.  The Patriot Act  contains  sweeping  anti-money
laundering  and financial  transparency  laws and imposes  various  regulations,
including standards for verifying client  identification at account opening, and
rules to promote  cooperation among financial  institutions,  regulators and law
enforcement entities in identifying parties that may be involved in terrorism or
money laundering.

      Among  other  requirements,  Title III of the USA  Patriot Act imposes the
following requirements:

o     All financial  institutions must establish anti-money  laundering programs
      that include (i) internal policies, procedures and controls, (ii) specific
      designation of an anti-money laundering compliance officer,  (iii) ongoing
      employee  training programs and (iv) an independent audit function to test
      the anti-money laundering program.

o     Financial  institutions that establish,  maintain,  administer,  or manage
      private banking  accounts or  correspondent  accounts in the United States
      for  non-United  States  persons or their  representatives  must establish
      appropriate,  specific,  and,  where  necessary,  enhanced  due  diligence
      policies,  procedures,  and  controls  designed to detect and report money
      laundering.

o     Financial  institutions  are prohibited  from  establishing,  maintaining,
      administering or managing  correspondent  accounts for foreign shell banks
      that do not have a physical  presence in any country,  and will be subject
      to certain  record  keeping  obligations  with  respect  to  correspondent
      accounts of foreign banks.

o     Bank regulators are directed to consider a holding company's effectiveness
      in combating money  laundering when ruling on Federal Reserve Act and Bank
      Merger Act applications.

The  Company's  policies  and  procedures  have  been  updated  to  reflect  the
requirements of the USA Patriot Act.

      Sarbanes-Oxley  Act of 2002. On July 30, 2002,  President Bush signed into
law the Sarbanes-Oxley Act of 2002, or the SOA. The SOA is the most far-reaching
U.S. securities legislation enacted in many years, and includes many substantive
and disclosure-based  requirements.  The stated goals of the SOA are to increase
corporate  responsibility,  to provide for enhanced penalties for accounting and
auditing  improprieties at publicly traded companies and to protect investors by
improving the accuracy and reliability of corporate  disclosures pursuant to the
securities  laws.  The SOA  generally  applies to all  companies,  both U.S. and
non-U.S., that file or are required to file periodic reports with the Securities
and Exchange  Commission ("SEC") under the Securities  Exchange Act of 1934 (the
"Exchange Act").


                                       22
<PAGE>

      The SOA creates an independent  auditing-oversight board under the SEC. It
also  increases  penalties  for  corporate  wrongdoers,  forces  faster and more
extensive  financial  disclosure,  and creates avenues of recourse for aggrieved
shareholders.  The SOA also contains  separate  provisions  that require  signed
certifications to be made by the chief executive officer and the chief financial
officer of all public companies,  and provides criminal  penalties of up to $5.0
million  and  imprisonment  of up to 20  years  for an  officer  that  willfully
provides a certification knowing it to be untrue.

      The SOA also addresses functions and  responsibilities of audit committees
of public  companies.  Each audit  committee  is  directly  responsible  for the
appointment,  compensation  and oversight of the work of the  Company's  outside
auditors,  and the auditors must report  directly to the audit  committee.  Each
audit committee member must be independent, which under the Act means that he or
she  cannot  (other  than  in his or  her  capacity  as a  member  of the  audit
committee,  the board or any  other  board  committee)  accept  any  consulting,
advisory or other  compensatory  fees from the Company or be affiliated with the
Company  or  any  of its  subsidiaries.  Each  audit  committee  must  establish
procedures to receive and respond to any complaints  and concerns  regarding the
Company's accounting,  accounting controls or auditing matters. These procedures
would include enabling the Company's  employees to transmit  concerns  regarding
questionable   accounting  or  auditing  matters  by   confidential,   anonymous
submission.  In recognition of the audit committee's  independent  status,  each
audit committee is authorized to engage independent  counsel and other advisors.
The Company must also provide the  appropriate  funding,  as  determined  by the
audit committee, for payment of compensation to the auditors and advisors of the
audit committee.

      Northeast  Indiana  management and directors have been  investigating  the
possibility of de-listing its stock and de-registering with the SEC. The Company
is primarily  concerned with the escalating  costs and additional  allocation of
management's  time that is becoming  necessary  under the SOA.  This  concern is
further  heightened  under the pending  implementation  of Section 404 that will
impact the Company  beginning with the fiscal year ended December 31, 2006. This
de-registering  strategy  would  reduce  future  expenses  associated  with  SEC
reporting  requirements  as well as NASDAQ filing fees, but would also result in
the Company's common stock no longer being quoted on the NASDAQ Stock Market. In
order to de-register, the Company must first have fewer than 300 shareholders of
record.  The Company  currently has 450  shareholders of record.  The Company is
currently exploring possible methods of reducing  shareholders below 300 and the
costs of any such possible transactions. The Company's shares trade infrequently
and residents of Indiana hold many shares.  Therefore, it is management's belief
that  any  negative  impact  on the  liquidity  of the  shares  as a  result  of
de-registering and de-listing would be minimal.

      Federal  Regulation  of  Savings  Associations.   The  OTS  has  extensive
authority over the operations of savings banks,  such as First Federal.  As part
of this  authority,  the Bank is required to file periodic  reports with the OTS
and is  subject  to  periodic  examinations  by the OTS and the  FDIC.  The last
regular OTS and FDIC  examinations of the Bank were as of December 2003 and June
2004  respectively.  Under  agency  scheduling  guidelines,  another  review  is
expected as of June 2005. When these  examinations  are conducted by the OTS and
the FDIC,  the examiners  may require the Bank to provide for higher  general or
specific  loan loss  reserves  and take other  corrective  actions.  All savings
associations  are subject to a  semi-annual  assessment,  based upon the savings
association's  total assets,  to fund the  operations of the OTS. The Bank's OTS
assessment for fiscal 2004 was $60,731.

      The  OTS  also  has  extensive  enforcement  authority  over  all  savings
institutions  and their holding  companies,  including the Bank and the Company.
This enforcement  authority includes,  among other things, the ability to assess
civil  money  penalties,  to issue  cease-and-desist  or  removal  orders and to
initiate  injunctive  actions.  In  general,  these  enforcement  actions may be
initiated  for  violations  of  laws  and  regulations  and  unsafe  or  unsound
practices.  Other  actions or  inactions  may provide the basis for  enforcement
action,  including  misleading or untimely  reports  filed with the OTS.  Except
under certain  circumstances,  public disclosure of final enforcement actions by
the OTS is required.

      In addition,  the investment,  lending and branching authority of the Bank
is  prescribed  by  federal  law,  and it is  prohibited  from  engaging  in any
activities not permitted by such laws.  For example,  the  permissible  level of
investment   by  federal   associations,   subject   to  safety  and   soundness
restrictions,  (1) in loans  secured by  non-residential  real  property may not
exceed  400% of total  capital,  (2) in  commercial  loans may not exceed 20% of


                                       23
<PAGE>

assets,  provided  that  amounts  in excess  of 10% of assets  may only be small
business loans,  (3) in loans related to leasing of tangible  personal  property
may not  exceed  10% of  assets,  and (4) in  loans  for  personal,  family  and
household  purposes,  when combined  with  commercial  paper and corporate  debt
securities,  may not exceed 35% of assets.  The Bank is in  compliance  with the
noted restrictions.  Federal savings  associations are also generally authorized
to branch nationwide.  Federal  associations such as First Federal may designate
under which  investment  authority  (or basket) it made a loan or  investment if
that loan or investment is authorized under different sections of the law.

      The Bank's general permissible lending limit for loans-to-one  borrower is
equal to the  greater of  $500,000  or 15% of  unimpaired  capital  and  surplus
(except for loans fully secured by certain  readily  marketable  collateral,  in
which case this limit is increased to 25% of unimpaired capital and surplus). At
December  31,  2004,  the  Bank's  lending  limit  under  this  restriction  was
approximately $3.8 million. At December 31, 2004, we had no lending relationship
to a single borrower in excess of our loans-to-one borrower limit.

      The OTS,  as well as the  other  federal  banking  agencies,  has  adopted
guidelines  establishing  safety and soundness standards on such matters as loan
underwriting and  documentation,  asset quality,  earnings  standards,  internal
controls and audit  systems,  interest rate risk exposure and  compensation  and
other  employee  benefits.  Any  institution  which  fails to comply  with these
standards must submit a compliance plan. A failure to submit a plan or to comply
with an  approved  plan will  subject  the  institution  to further  enforcement
action.

      Insurance  of Accounts  and  Regulation  by the FDIC.  First  Federal is a
member of the SAIF,  which is administered by the FDIC.  Deposits are insured up
to applicable  limits by the FDIC and such insurance is backed by the full faith
and  credit  of the  U.S.  government.  As  insurer,  the FDIC  imposes  deposit
insurance  premiums and is authorized to conduct  examinations of and to require
reporting by FDIC-insured  institutions.  It also may prohibit any  FDIC-insured
institution  from engaging in any activity the FDIC  determines by regulation or
order  to pose a  serious  risk to the SAIF or the  BIF.  The FDIC  also has the
authority to initiate  enforcement actions against savings  associations,  after
giving the OTS an opportunity to take such action, and may terminate the deposit
insurance if it determines that the institution has engaged in unsafe or unsound
practices, or is in an unsafe or unsound condition.

      The FDIC's deposit  insurance  premiums are assessed  through a risk-based
system under which all insured  depository  institutions  are placed into one of
nine  categories  and  assessed  insurance  premiums  based upon their  level of
capital and supervisory evaluation. Under the system, institutions classified as
well  capitalized  (i.e., a core capital ratio of at least 5%, a ratio of Tier 1
or core capital to  risk-weighted  assets  ("Tier 1  risk-based  capital") of at
least 6% and a risk-based  capital ratio of at least 10%) and considered healthy
pay the  lowest  premium  while  institutions  that  are  less  than  adequately
capitalized (i.e., core or Tier 1 risk-based capital ratios of less than 4% or a
risk-based  capital  ratio  of less  than  8%)  and  considered  of  substantial
supervisory concern pay the highest premium.  Risk classification of all insured
institutions will be made by the FDIC for each semi-annual assessment period. As
of December 31, 2004, the Bank was classified as a well-capitalized institution.

      The FDIC is  authorized  to increase  assessment  rates,  on a semi-annual
basis, if it determines that the reserve ratio of the SAIF will be less than the
designated  reserve  ratio of 1.25% of SAIF insured  deposits.  In setting these
increased  assessments,  the FDIC must seek to restore the reserve ratio to that
designated  reserve  level,  or such higher  reserve ratio as established by the
FDIC.  The FDIC may also impose  special  assessments  on SAIF  members to repay
amounts borrowed from the U.S. Treasury or for any other reason deemed necessary
by the FDIC.

      Since  January 1, 1997,  the  premium  schedule  for BIF and SAIF  insured
institutions  has  ranged  from  0  to  27  basis  points.  However,  SAIF-  and
BIF-insured  institutions are required to pay a Financing Corporation assessment
in order to fund the interest on bonds issued to resolve thrift  failures in the
1980s equal to approximately 1.5 basis points for each $100 in domestic deposits
annually.  These  assessments,  which may be revised based upon the level of BIF
and SAIF deposits, will continue until the bonds mature.

      Under the Federal Deposit  Insurance Act ("FDIA"),  the FDIC may terminate
deposit  insurance upon a finding that the  institution has engaged in unsafe or
unsound practices,  is in an unsafe or unsound condition to continue  operations
or has violated any applicable law, regulation, rule, order or condition imposed
by the FDIC or the OTS.  Management  of the Bank does not know of any  practice,
condition or violation that might lead to termination of deposit insurance.


                                       24
<PAGE>

      Regulatory Capital  Requirements.  Federally insured savings associations,
such as the  Bank,  are  required  to  maintain  a minimum  level of  regulatory
capital. The OTS has established capital standards, including a tangible capital
requirement,  a leverage  ratio (or core capital)  requirement  and a risk-based
capital  requirement  applicable  to such savings  associations.  These  capital
requirements   must  be  generally  as  stringent  as  the  comparable   capital
requirements  for national  banks.  The OTS is also authorized to impose capital
requirements  in excess  of these  standards  on  individual  associations  on a
case-by-case basis.

      The  capital  regulations  require  tangible  capital  of at least 1.5% of
adjusted total assets (as defined by  regulation).  Tangible  capital  generally
includes  common   stockholders'   equity  and  retained  income,   and  certain
noncumulative  perpetual  preferred stock and related income.  In addition,  all
intangible  assets,  other than a limited amount of purchased mortgage servicing
rights,  must be deducted from tangible capital for calculating  compliance with
the  requirement.  At December  31, 2004,  the Bank had  $595,000 of  intangible
assets and no purchased mortgage servicing rights.

      The OTS regulations  establish  special  capitalization  requirements  for
savings associations that own subsidiaries.  In determining  compliance with the
capital requirements,  all subsidiaries engaged solely in activities permissible
for national  banks or engaged in certain other  activities  solely as agent for
its customers are  "includable"  subsidiaries  that are consolidated for capital
purposes in proportion to the association's  level of ownership.  For excludable
subsidiaries the debt and equity  investments in such  subsidiaries are deducted
from  assets  and  capital.   All   subsidiaries  of  the  Bank  are  includable
subsidiaries.

      At December 31, 2004, the Bank had tangible  capital of $24.4 million,  or
10.7% of adjusted total assets,  which is approximately  $21.0 million above the
minimum requirement of 1.5% of adjusted total assets in effect on that date.

      The capital  standards also  effectively  require core capital equal to at
least 3% to 4% of adjusted  total  assets.  Core capital  generally  consists of
tangible capital plus certain intangible  assets,  including a limited amount of
purchased  credit  card  receivables.  At  December  31,  2004,  the Bank had no
intangible  assets which were subject to these tests.  At December 31, 2004, the
Bank had core capital equal to $24.4 million, or 10.7% of adjusted total assets,
which is $15.3 million above the minimum leverage ratio  requirement of 4% as in
effect on that date.

      The OTS risk-based requirement requires savings associations to have total
capital of at least 8% of risk-weighted  assets.  Total capital consists of core
capital,  as defined above, and  supplementary  capital.  Supplementary  capital
consists of certain  permanent  and  maturing  capital  instruments  that do not
qualify as core capital and general  valuation loan and lease loss allowances up
to a maximum of 1.25% of risk-weighted assets. Supplementary capital may be used
to satisfy the risk-based  requirement  only to the extent of core capital.  The
OTS is  also  authorized  to  require  a  savings  association  to  maintain  an
additional  amount of total capital to account for  concentration of credit risk
and the risk of non-traditional  activities.  At December 31, 2004, the Bank had
$1.1 million of capital instruments that qualify as supplementary  capital,  and
$1.1  million  of  general  loss   reserves,   which  was  less  than  1.25%  of
risk-weighted assets. Certain exclusions from capital and assets are required to
be made for the  purpose of  calculating  total  capital.  First  Federal had no
exclusions  from  capital and assets at December 31, 2004.  In  determining  the
amount of risk-weighted assets, all assets,  including certain off-balance sheet
items,  will be multiplied by a risk weight,  ranging from 0% to 100%,  based on
the risk inherent in the type of asset.

      On  December  31,  2004,  the  Bank had  total  capital  of $25.5  million
(including  $24.4  million  in core  capital  and  $1.1  million  in  qualifying
supplementary  capital) and  risk-weighted  assets of $152.5 million  (including
$4.2 million in converted  off-balance sheet assets);  or total capital of 16.7%
of risk-weighted  assets. This amount was $13.3 million above the 8% requirement
in effect on that date.

      Prompt Corrective  Action.  The OTS and the FDIC are authorized and, under
certain  circumstances   required,  to  take  certain  actions  against  savings
associations that fail to meet their capital requirements.  The OTS is generally
required to take  action to  restrict  the  activities  of an  "undercapitalized
association"  (generally  defined  to be one  with  less  than  either a 4% core
capital  ratio,  a 4% Tier 1  risked-based  capital  ratio  or an 8%  risk-based
capital ratio). Any such association must submit a capital  restoration plan and
until such plan is approved  by the OTS may not  increase  its  assets,  acquire
another  institution,  establish a branch or engage in any new  activities,  and
generally


                                       25
<PAGE>

may  not  make  capital  distributions.  The OTS is  authorized  to  impose  the
additional  restrictions  that are applicable to significantly  undercapitalized
associations.  As a condition to the approval of the capital  restoration  plan,
any company controlling an undercapitalized  association must agree that it will
enter  into  a  limited  capital  maintenance  guarantee  with  respect  to  the
institution's achievement of its capital requirements.

      Any savings  association  that fails to comply with its capital plan or is
"significantly undercapitalized" (i.e., Tier 1 risk-based or core capital ratios
of less  than 3% or a  risk-based  capital  ratio of less  than 6%) must be made
subject  to  one  or  more  of  additional   specified   actions  and  operating
restrictions, which may cover all aspects of its operations and include a forced
merger  or  acquisition  of  the   association.   An  association  that  becomes
"critically  undercapitalized" (i.e., a tangible capital ratio of 2% or less) is
subject to further mandatory restrictions on its activities in addition to those
applicable to significantly  undercapitalized associations. In addition, the OTS
must appoint a receiver (or conservator  with the concurrence of the FDIC) for a
savings  association,  with certain limited exceptions,  within 90 days after it
becomes critically  undercapitalized.  Any undercapitalized  association is also
subject to the general enforcement  authority of the OTS and the FDIC, including
the  appointment  of a  conservator  or a  receiver.  The OTS is also  generally
authorized to reclassify an association into a lower capital category and impose
the  restrictions  applicable to such category if the  institution is engaged in
unsafe or unsound practices or is in an unsafe or unsound condition.

      The  imposition  by the OTS or the  FDIC of any of these  measures  on the
Company  or the Bank may have a  substantial  adverse  effect  on the  Company's
operations and profitability.

      Limitations on Dividends and Other Capital Distributions.  OTS regulations
impose  various  restrictions  on  savings  associations  with  respect to their
ability  to make  distributions  of  capital,  which  include  dividends,  stock
redemptions or repurchases,  cash-out mergers and other transactions  charged to
the capital account.  OTS regulations  also prohibit a savings  association from
declaring or paying any dividends or from repurchasing any of its stock if, as a
result,  the regulatory  capital of the  association  would be reduced below the
amount  required to be maintained  for the  liquidation  account  established in
connection with its mutual to stock conversion.

      Assuming the absence of supervisory  problems,  savings  associations that
before and after the proposed  distribution  remain  well-capitalized,  may make
capital  distributions  during any calendar year equal to the greater of 100% of
net income for the  year-to-date  plus retained net income for the two preceding
years (less any dividends paid). However, an institution deemed to be in need of
more  than  normal  supervision  by the  OTS may  have  its  dividend  authority
restricted  by the OTS.  The Bank may pay  dividends  in  accordance  with  this
general authority.

      Savings associations  proposing to make any capital distribution need only
submit  written  notice to the OTS 30 days prior to such  distribution.  Savings
associations  that do not,  or would  not meet  their  current  minimum  capital
requirements following a proposed capital distribution, however, must obtain OTS
approval  prior  to  making  such  distribution.  The  OTS  may  object  to  the
distribution during that 30-day period based on safety and soundness concerns.

      Qualified  Thrift  Lender Test.  All savings  associations,  including the
Bank,  are  required to meet a qualified  thrift  lender  ("QTL")  test to avoid
certain  restrictions  on  their  operations.   This  test  requires  a  savings
association  to have  at  least  65% of its  portfolio  assets  (as  defined  by
regulation) in qualified thrift investments on a monthly average for nine out of
every 12 months on a rolling basis. As an alternative,  the savings  association
may maintain 60% of its assets in those assets specified in Section  7701(a)(19)
of the Internal  Revenue  Code of 1986,  as amended  (the  "Code").  Such assets
primarily  consist of  residential  housing  related loans and  investments.  At
December 31,  2004,  the Bank met the test and has always met the test since its
effectiveness.

      Any savings  association that fails to meet the QTL test must convert to a
national bank charter,  unless it requalifies as a QTL and thereafter  remains a
QTL. If an  association  does not  requalify  and  converts  to a national  bank
charter,  it must remain  SAIF-insured  until the FDIC permits it to transfer to
the BIF.  If such an  association  has not yet  requalified  or  converted  to a
national  bank,  its  new  investments  and  activities  are  limited  to  those
permissible  for both a  savings  association  and a  national  bank,  and it is
limited to national bank branching  rights in its home state.  In addition,  the
association is immediately  ineligible to receive any new FHLB borrowings and is
subject to national  bank limits for payment of dividends.  If such  association
has not requalified or converted to a national bank within three years after the
failure,   it  must  divest  of  all   investments   and  cease  all  activities
impermissible  for a


                                       26
<PAGE>

national  bank.  In  addition,  it must  repay  promptly  any  outstanding  FHLB
borrowings,  which may result in prepayment  penalties.  If any association that
fails the QTL test is  controlled  by a holding  company,  then  within one year
after the failure,  the holding  company must register as a bank holding company
and become subject to all restrictions on bank holding companies.  See " Holding
Company Regulation."

      If the Bank fails the QTL test,  the Company  must obtain the  approval of
the OTS prior to continuing  after such  failure,  directly or through its other
subsidiaries,  any  business  activity  other than those  approved  for multiple
savings and loan holding companies or their  subsidiaries.  In addition,  within
one year of such failure,  the Company must register as, and will become subject
to, the  restrictions  applicable  to bank  holding  companies.  The  activities
authorized  for a bank holding  company are more limited than are the activities
authorized for a unitary or multiple savings and loan holding company.

      Community  Reinvestment Act. Under the Community Reinvestment Act ("CRA"),
every FDIC insured  institution  has a  continuing  and  affirmative  obligation
consistent  with safe and sound banking  practices to help meet the credit needs
of its entire community,  including low and moderate income  neighborhoods.  The
CRA does not establish  specific lending  requirements or programs for financial
institutions nor does it limit an institution's  discretion to develop the types
of products  and  services  that it believes  are best suited to its  particular
community, consistent with the CRA. The CRA requires the OTS, in connection with
the examination of the Bank, to assess the  institution's  record of meeting the
credit  needs of its  community  and to take such  record  into  account  in its
evaluation of certain  applications,  such as a merger or the establishment of a
branch, by the Bank. An  unsatisfactory  rating may be used as the basis for the
denial of an application by the OTS.

      The federal banking agencies, including the OTS, have recently revised the
CRA regulations and the methodology for determining an institution's  compliance
with the CRA. Due to the heightened attention being given to the CRA in the past
few years,  the Bank may be required to devote  additional  funds for investment
and lending in its local community. The Bank was examined for CRA compliance for
June 2003 and received a rating of "outstanding."

      Activities  of  Associations  and  Their  Subsidiaries.   When  a  savings
institution  establishes  or acquires a subsidiary  or elects to conduct any new
activity  through  a  subsidiary  that the  association  controls,  the  savings
institution  must notify the FDIC and the OTS 30 days in advance and provide the
information each agency may, by regulation,  require.  Savings institutions also
must  conduct  the  activities  of  subsidiaries  in  accordance  with  existing
regulations and orders.

      The OTS may determine that the  continuation  by a savings  institution of
its ownership,  control of, or its relationship to, the subsidiary constitutes a
serious risk to the safety, soundness or stability of the savings institution or
is inconsistent  with sound banking  practices or with the purposes of the FDIC.
Based upon that  determination,  the FDIC or the OTS has the  authority to order
the savings institution to divest itself of control of the subsidiary.  The FDIC
also may  determine by regulation  or order that any specific  activity  poses a
serious  threat to the SAIF. If so, it may require that no SAIF member engage in
that activity directly.

      Transactions  with  Affiliates.  Savings  institutions  must  comply  with
Sections 23A and 23B of the Federal  Reserve Act relative to  transactions  with
affiliates  in the  same  manner  and  to  the  same  extent  as if the  savings
institution were a Federal Reserve member Savings Bank. Generally,  transactions
between  a  savings  institution  or its  subsidiaries  and its  affiliates  are
required to be on terms as favorable to the  association  as  transactions  with
non-affiliates.  In addition, certain of these transactions, such as loans to an
affiliate,  are  restricted  to  a  percentage  of  the  association's  capital.
Affiliates  of the Bank include the Company and any company that is under common
control with the Bank. In addition,  a savings  institution  may not lend to any
affiliate  engaged in activities not  permissible for a savings and loan holding
company or acquire the securities of most affiliates. The OTS has the discretion
to treat  subsidiaries  of savings  institutions as affiliates on a case-by-case
basis.

      On  April  1,   2003,   the   Federal   Reserve's   Regulation   W,  which
comprehensively  amends  sections 23A and 23B of the Federal Reserve Act, became
effective.  The Federal  Reserve Act and  Regulation W are applicable to savings
institutions  such  as the  Bank.  The  Regulation  unifies  and  updates  staff
interpretations  issued over the years,  incorporates several new interpretative
proposals  (such as to clarify when  transactions  with an unrelated third party
will be attributed to an affiliate) and addresses new issues arising as a result
of the  expanded  scope of  nonbanking


                                       27
<PAGE>

activities  engaged in by banks and bank  holding  companies in recent years and
authorized  for  financial  holding  companies  under  the  Financial   Services
Modernization Act of 1999.

      Certain  transactions with directors,  officers or controlling persons are
also  subject to  conflict of interest  regulations  enforced by the OTS.  These
conflict of interest  regulations and other statutes also impose restrictions on
loans to such persons and their  related  interests.  Among other  things,  such
loans must be made on terms  substantially the same as for loans to unaffiliated
individuals.

      Regulatory  and  Criminal  Enforcement  Provisions.  The OTS  has  primary
enforcement  responsibility  over savings  institutions and has the authority to
bring   action   against   all   "institution-affiliated   parties,"   including
stockholders,  and any attorneys,  appraisers and  accountants  who knowingly or
recklessly participate in wrongful action likely to have an adverse effect on an
insured institution.  Formal enforcement action may range from the issuance of a
capital directive or cease and desist order to removal of officers or directors,
receivership,   conservatorship  or  termination  of  deposit  insurance.  Civil
penalties cover a wide range of violations and can amount to $25,000 per day, or
$1.1 million per day in especially  egregious  cases. The FDIC has the authority
to recommend to the  Director of the OTS that  enforcement  action be taken with
respect to a  particular  savings  institution.  If the  Director  does not take
action, the FDIC has authority to take such action under certain  circumstances.
Federal law also establishes criminal penalties for certain violations.

      Holding  Company  Regulation.  The  Company is a unitary  savings and loan
holding company subject to regulatory oversight by the OTS. As such, the Company
is  required  to  register  and  file  reports  with the OTS and is  subject  to
regulation  and  examination  by the OTS. In addition,  the OTS has  enforcement
authority over the Company and its non-savings  association  subsidiaries  which
also permits the OTS to restrict or prohibit  activities  that are determined to
be a serious risk to the subsidiary savings association.

      As a unitary  savings and loan holding  company that has been in existence
prior  to May  4,  1999,  the  Company  generally  is not  subject  to  activity
restrictions.  If the Company acquires control of another savings association as
a separate  subsidiary,  it would  become a multiple  savings  and loan  holding
company,  and the activities of the Company and any of its  subsidiaries  (other
than  the Bank or any  other  SAIF-insured  savings  association)  would  become
subject to such restrictions.

      Federal  Securities  Law. The stock of the Company is registered  with the
SEC under the  Exchange  Act. The Company is subject to the  information,  proxy
solicitation,  insider trading  restrictions  and other  requirements of the SEC
under the Exchange Act.

      Company  stock held by persons  who are  affiliates  (generally  officers,
directors and principal  stockholders)  of the Company may not be resold without
registration or unless sold in accordance with certain resale restrictions.  For
example, if the Company meets specified current public information requirements,
each  affiliate  of the  Company is able to sell in the public  market,  without
registration, a limited number of shares in any three-month period.

      Federal Reserve System.  The Federal Reserve Board requires all depository
institutions  to maintain  non-interest  bearing  reserves at  specified  levels
against  their  transaction  accounts  (primarily  checking,  NOW and  Super NOW
checking accounts).  At December 31, 2004, the Bank was in compliance with these
reserve  requirements.  The balances maintained to meet the reserve requirements
imposed  by  the  Federal  Reserve  Board  may  be  used  to  satisfy  liquidity
requirements that may be imposed by the OTS.

      Savings  associations  are  authorized to borrow from the Federal  Reserve
Bank  "discount   window,"  but  Federal  Reserve  Board   regulations   require
associations to exhaust other reasonable alternative sources of funds, including
FHLB borrowings, before borrowing from the Federal Reserve Bank.

      Federal  Home  Loan  Bank  System.  The  Bank is a  member  of the FHLB of
Indianapolis,  which  is one of 12  regional  FHLBs  that  administer  the  home
financing credit function of savings associations. Each FHLB serves as a reserve
or central  bank for its  members  within its  assigned  region.  Each is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB  System.  It makes loans to members  (i.e.,  advances) in  accordance  with
policies  and  procedures,  established  by the board of  directors of the FHLB,
which are subject to


                                       28
<PAGE>

the oversight of the Federal Housing  Finance Board.  All advances from the FHLB
are required to be fully secured by  sufficient  collateral as determined by the
FHLB.

      As a member,  the Bank is required to purchase and  maintain  stock in the
FHLB of  Indianapolis.  At December 31, 2004,  the Bank had $5.3 million in FHLB
stock, which was in compliance with this requirement.  For fiscal 2004 and 2003,
dividends paid by the FHLB of Indianapolis to First Federal totaled $236,000 and
$256,000  respectively.  In addition,  each of the four quarterly dividends from
the FHLB in 2004 were paid in the form of additional FHLB stock.

      Under  federal  law,  the  FHLB  is  required  to  provide  funds  for the
resolution  of  troubled  savings  institutions  and to  contribute  to low  and
moderately priced housing programs through direct loans or interest subsidies on
advances targeted for community investment and low- and moderate-income  housing
projects.  These  contributions  have  affected  adversely  the  level  of  FHLB
dividends  paid and could continue to do so in the future.  These  contributions
also could have an adverse  effect on the value of FHLB stock in the future.  In
addition,  the federal agency that regulates the FHLBs has required each bank to
register its stock with the SEC,  which will increase the costs of each bank and
may have other effects that are not possible to predict at this time.

Taxation

      Federal  Taxation.  We file  consolidated  federal income tax returns on a
fiscal year basis using the accrual method of accounting.  Savings  institutions
that met certain  definitional  tests relating to the  composition of assets and
other conditions  prescribed by the Internal Revenue Code, had been permitted to
establish  reserves  for bad debts and to make  annual  additions  which  could,
within specified  formula limits,  be taken as a deduction in computing  taxable
income for  federal  income  tax  purposes.  The amount of the bad debt  reserve
deduction is now computed under the experience method.

      In addition to the regular  income tax,  corporations,  including  savings
institutions, generally are subject to a minimum tax. An alternative minimum tax
is imposed at a minimum tax rate of 20% on alternative  minimum  taxable income,
which  is the  sum of a  corporation's  regular  taxable  income  (with  certain
adjustments)  and tax  preference  items,  less  any  available  exemption.  The
alternative  minimum tax is imposed to the extent it exceeds  the  corporation's
regular  income  tax and net  operating  losses  can  offset no more than 90% of
alternative minimum taxable income.

      To the extent earnings  appropriated to a savings  institution's  bad debt
reserves for  "qualifying  real property  loans" and deducted for federal income
tax purposes  exceed the allowable  amount of such reserves  computed  under the
experience method and to the extent of the institution's  supplemental  reserves
for losses on loans, such excess may not, without adverse tax  consequences,  be
utilized  for  the  payment  of  cash  dividends  or  other  distributions  to a
shareholder (including distributions on redemption,  dissolution or liquidation)
or for any other purpose (except to absorb bad debt losses).  As of December 31,
2004,  First  Federal's  excess  for tax  purposes  totaled  approximately  $1.3
million.

      We have not been  audited  by the IRS  recently  with  respect  to federal
income tax returns. In our opinion,  any examination of still open returns would
not result in a  deficiency  which could have a material  adverse  effect on our
financial condition.

      Indiana  Taxation.  The State of Indiana  imposes an 8.5% franchise tax on
the net income of financial (including thrift) institutions, exempting them from
the current gross income,  supplemental  net income and  intangible  taxes.  Net
income for franchise tax purposes will constitute  federal taxable income before
net  operating  loss  deductions  and special  deductions,  adjusted for certain
items,  including Indiana income taxes, tax exempt interest and bad debts. Other
applicable Indiana taxes include sales, use and property taxes.

      Delaware  Taxation.  As a company  incorporated  under Delaware state law,
Northeast Indiana is exempted from Delaware corporate income tax but is required
to file an annual report with,  and pay an annual fee to, the State of Delaware.
We are also subject to an annual franchise tax imposed by the State of Delaware.


                                       29
<PAGE>

Competition

      We face strong  competition,  both in originating real estate loans and in
attracting  deposits.   Competition  in  originating  real  estate  loans  comes
primarily from commercial banks,  mortgage companies,  credit unions and savings
institutions located in our market area.  Commercial banks, savings institutions
and credit unions provide vigorous  competition in consumer lending.  We compete
for real  estate  and other  loans  principally  on the basis of the  quality of
services we provide to  borrowers,  the interest  rates and loan fees we charge,
and the types of loans we originate. See "- Lending Activities."

      We  attract  most of our  deposits  through  our retail  banking  offices,
primarily  from the  communities  in which  those  retail  banking  offices  are
located.  Therefore,  competition for those deposits is principally  from retail
brokerage  offices,  commercial  banks,  savings  institutions and credit unions
located  in these  communities.  We compete  for these  deposits  by  offering a
variety of account alternatives at competitive rates and by providing convenient
business  hours,   branch  locations  and  interbranch  deposit  and  withdrawal
privileges.

      We primarily serve Huntington  County,  Indiana.  There are six commercial
banks, no savings  institutions other than First Federal,  and six credit unions
which compete for deposits and loans in Huntington  County. We estimate that our
share  of the  savings  market  in  Huntington  County  based  on  FDIC  insured
institutions  is  approximately  29% and our share of the  residential  mortgage
market is approximately 30%.

Employees

      At December 31, 2004, we had a total of 51  full-time,  7 part-time and no
seasonal  employees.  Our  employees  are  not  represented  by  any  collective
bargaining group. Management considers its employee relations to be good.

      The following  information as to the business  experience  during the past
five years is supplied with respect to executive officers of the Company and the
Bank  who do not  serve  on the  Company's  Board  of  Directors.  There  are no
arrangements  or  understandings  between the persons named and any other person
pursuant to which such officers were selected.

<TABLE>
<CAPTION>
                                                        Position held with
      Name               Age(1)                First Federal and Northeast Indiana
-----------------------------------------------------------------------------------------------
<S>                       <C>      <C>
Randy J. Sizemore         34       Senior Vice President, Treasurer and Chief Financial Officer
DeeAnn Hammel             52       Senior Vice President, Secretary and Chief Operating Officer
Thomas P. Frantz          50       Senior Vice President and Chief Lending Officer
</TABLE>

----------
(1)   At December 31, 2004.

      The  business  experience  of the  executive  officers  who are  not  also
directors is set forth below.

      Randy J. Sizemore is Senior Vice President,  Treasurer and Chief Financial
Officer, positions he has held since April 2002. Prior to joining First Federal,
Mr.  Sizemore  held  positions in a similar  capacity  with another bank holding
company and its subsidiary  since 1999,  and prior to that he performed  similar
job functions for another bank holding  company.  Mr. Sizemore has a total of 11
years experience working with financial institutions.

      DeeAnn Hammel is Senior Vice  President,  Secretary  and Chief  Operations
Officer,  positions she has held since March 1995. Ms. Hammel first joined First
Federal  in 1975 as a  teller.  Ms.  Hammel is  responsible  for  directing  and
controlling First Federal's daily activities.

      Thomas P.  Frantz is Senior  Vice  President  and Chief  Lending  Officer,
positions he has held since October 2001.  Prior to joining First  Federal,  Mr.
Frantz held  positions in a lending  capacity  for another bank since 1995.  Mr.
Frantz has a total of 29 years experience working with financial institutions.


                                       30
<PAGE>

Item 2. Description of Property
        -----------------------

      We conduct our business through three offices, all of which are located in
Huntington,  Indiana and are owned by First  Federal.  The following  table sets
forth  information  relating to each of our offices as of December 31, 2004. The
total net book value of our premises and equipment  (including  land,  buildings
and leasehold  improvements  and furniture,  fixtures and equipment) at December
31, 2004 was approximately $2.2 million. See Note 5 of the Notes to Consolidated
Financial Statements in the Annual Report to Stockholders.

<TABLE>
<CAPTION>
                                                                Total
                                                  Owned       Approximate
                                       Year         or          Square       Net Book Value at
           Location                  Acquired     Leased        Footage      December 31, 2004
----------------------------------------------------------------------------------------------
<S>                                    <C>         <C>           <C>            <C>
Main Office:
   648 North Jefferson Street
   Huntington, Indiana 46750           1974        Owned         1,700          $  891,479

Branch Offices:
   1240 South Jefferson Street
   Huntington, Indiana 46750           1981        Owned         1,700          $  215,411

   100 Frontage Road
   Huntington, Indiana 46750           1995        Owned         5,000          $1,069,091
</TABLE>

      We believe  that our current and planned  facilities  are adequate to meet
our present and foreseeable  needs. We also maintain an on-line database with an
independent service bureau servicing financial institutions.

Item 3. Legal Proceedings
        -----------------

      We are  involved,  from time to time, as plaintiff or defendant in various
legal  actions  arising  in the  normal  course of their  businesses.  While the
ultimate outcome of these proceedings cannot be predicted with certainty,  it is
the opinion of management,  after  consultation with counsel  representing us in
the  proceedings,  that the  resolution of these  proceedings  should not have a
material effect on our results of operations on a consolidated basis.

Item 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

      No  matter  was  submitted  to a vote of  security  holders,  through  the
solicitation  of proxies or  otherwise,  during the quarter  ended  December 31,
2004.


                                       31
<PAGE>

                                     PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business
        ------------------------------------------------------------------------
        Issuer Purchases of Equity Securities
        -------------------------------------

      Page 54 of the attached 2004 Annual Report to Stockholders is incorporated
herein by reference.

      The following  table provides  information  about purchases by the Company
during the quarter ended Decmeber 31, 2004, of its common shares:

                      Issuer Purchases of Equity Securities

<TABLE>
<CAPTION>
                               (a)              (b)              (c)              (d)
                           ------------     ----------       ------------    ---------------

                                                             Total Number        Maximum
                                                              of Shares         Number of
                                                             Purchased as      Shares That
                                                               Part of          May Yet Be
                                                              Publicly          Purchased
                           Total Number       Average         Announced      Under the Plans
                            of Shares       Price Paid         Plans or        or Programs
Period                      Purchased        Per Share       Programs (1)          (1)
-------------------        ------------     ----------       ------------    ---------------
<S>                           <C>              <C>              <C>              <C>
10/01/04 - 10/31/04               --               --               --           71,268
11/01/04 - 11/31/04           12,630           $22.28           12,630           58,638
12/01/04 - 12/31/04            3,500           $22.11            3,500           55,138

     Total                    16,130           $22.24           16,130           55,138
</TABLE>

On  September  29,  2004 our board of  directors  announced  a new common  stock
repurchase  program  allowing  for the  repurchase  of  71,268  shares  prior to
expiration  on  September  29,  2005.  There are 51,638  shares  remaining to be
purchased under that previously announced program.

Item 6. Management's Discussion and Analysis or Plan of Operation
        ---------------------------------------------------------

      Pages 3  through  18 of the  Annual  Report  to  Stockholders  are  herein
incorporated by reference.

Item 7. Financial Statements
        --------------------

      The following  information  appearing in the Annual Report to Stockholders
is incorporated herein by reference.

<TABLE>
<CAPTION>
                                                                                                Pages in
                                                                                                 Annual
Annual Report Section                                                                            Report
---------------------                                                                            ------
<S>                                                                                               <C>
Report of Independent Registered Public Accounting Firm                                            19
Consolidated Balance Sheets as of December 31, 2004 and 2003                                       20
Consolidated Statements of Income for the Years Ended December 31, 2004, 2003 and 2002             21
Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31,       22-23
2004, 2003 and 2002
Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002         24
Notes to Consolidated Financial Statements                                                        25-52
</TABLE>


                                       32
<PAGE>

      With the  exception of the  aforementioned  information  in Part II of the
Form 10-KSB,  the Annual Report to  Stockholders  is not deemed filed as part of
this annual report on Form 10-KSB.

Item  8.  Changes  In and  Disagreements  With  Accountants  on  Accounting  and
          ----------------------------------------------------------------------
          Financial Disclosure
          --------------------

      There has been no Current  Report on Form 8-K filed within 24 months prior
to the  date of the most  recent  financial  statements  reporting  a change  of
accountants and/or reporting disagreements on any matter of accounting principle
or financial statement disclosure.

Item 8A. Controls and Procedures
         -----------------------

      Any control system, no matter how well designed and operated,  can provide
only  reasonable  (not  absolute)  assurance  that its  objectives  will be met.
Furthermore,  no evaluation of controls can provide absolute  assurance that all
control issues and instances of fraud, if any, have been detected.

Disclosure Controls and Procedures

      The Company's  management,  with the  participation of the Company's Chief
Executive Officer and Chief Financial  Officer,  has evaluated the effectiveness
of the Company's  disclosure controls and procedures (as such term is defined in
Rules  13a-15(e)  and  15d-15(e)  under the  Exchange  Act) as of the end of the
period covered by this report.  Based on such  evaluation,  the Company's  Chief
Executive Officer and Chief Financial Officer have concluded that, as of the end
of such period, the Company's  disclosure  controls and procedures are effective
in  recording,  processing,  summarizing  and  reporting,  on  a  timely  basis,
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act.

Internal Control Over Financial Reporting

      There have not been any changes in the  Company's  internal  control  over
financial  reporting  (as such term is defined in Rules  13a-15(f) and 15d-15(f)
under the Exchange Act) during the fiscal year to which this report relates that
have materially  affected,  or are reasonably likely to materially  affect,  the
Company's internal control over financial reporting.

Item 8B. Other Information
         -----------------

      Not applicable.


                                       33
<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        ------------------------------------------------------------------------
        with Section 16(a) of the Exchange Act
        --------------------------------------

Directors
---------

      Our Board of Directors currently consists of six members,  each of whom is
also a  director  of the Bank.  Directors  are  generally  elected  to serve for
three-year  staggered  terms or until  their  respective  successors  have  been
elected and  qualified.  Approximately  one-third of the  directors  are elected
annually.

      The following table sets forth certain information  regarding the Board of
Directors, including each director's age and term of office.

<TABLE>
<CAPTION>
                                                                                                 Director         Term
Name                        Position(s) Held with Northeast Indiana Bancorp           Age(1)     Since(2)       Expires
----                        -----------------------------------------------           ------     --------       -------
<S>                  <C>                                                                <C>        <C>            <C>
J. David Carnes      Director                                                           53         1991           2005

William A. Zimmer    Director                                                           52         2003           2005

Randall C. Rider     Director                                                           54         1989           2006

Dan L. Stephan       Director                                                           57         1987           2007

Michael S. Zahn      Director and Senior Vice President                                 35         2000           2006

Stephen E. Zahn      Chairman of the Board, President and Chief Executive Officer       62         1965           2007
</TABLE>

----------
(1)   At December 31, 2004.

(2)   Includes service as a director of First Federal.

      The business experience of each director is set forth below. All directors
have held their present  positions  for at least the past five years,  except as
otherwise indicated.

      J. David Carnes,  MD. Dr. Carnes has,  since 1981,  practiced  medicine in
Huntington, Indiana.

      Stephen E. Zahn.  Mr. S. Zahn is the Chairman of the Board,  President and
Chief  Executive  Officer of NEIB and Chairman of the Board and Chief  Executive
Officer  of the Bank.  Mr. S. Zahn has  served in such  capacities  for over ten
years and also served as President of the Bank since 1980, until Michael S. Zahn
assumed  that  position  in 2005.  Mr. S. Zahn is the father of Michael S. Zahn,
Director of NEIB and Director and President of the Bank.

      Michael S. Zahn.  Mr. M. Zahn became  President  of the Bank on January 1,
2005.  Mr.  M.  Zahn  joined  the Bank in 1996 as a loan  officer.  Prior to his
employment with the Bank, Mr. Zahn worked as a Senior Underwriter for a regional
insurance  carrier.  Mr. M. Zahn is the son of Stephen E. Zahn,  Chairman of the
Board, President and Chief Executive Officer of NEIB and the Bank.


                                       34
<PAGE>

      Randall C. Rider. Mr. Rider is President of Lime City  Manufacturing  Co.,
Inc., a position he has held since 1983.

      Dan L.  Stephan.  Mr.  Stephan is a retired  State  Representative  to the
Indiana  Legislature,  a position he was first elected to in 1980 and retired at
end of 1998.  Mr.  Stephan is also  employed as a sales  representative  for the
Variable Annuity Life Insurance Company.

      William  A.  Zimmer.  Mr.  Zimmer  founded  the W.A.  Zimmer  Co.,  a home
improvement  company based in Huntington,  Indiana, in 1976 and currently serves
as President.

Executive Officers
------------------

      Information regarding the business experience of the executive officers of
the Company and the Bank  contained in Part I under the caption  "Employees"  of
this Form 10-KSB is incorporated herein by reference.

Compliance with Section 16(a)
-----------------------------

      Section  16(a) of the Exchange Act requires our  directors  and  executive
officers,  and persons who own more than 10% of Northeast Indiana's  outstanding
shares of common  stock,  to file with the SEC initial  reports of ownership and
reports of changes in ownership of common stock of Northeast Indiana.  Officers,
directors and greater than 10%  stockholders  are required by SEC  regulation to
furnish us with copies of all Section 16(a) forms they file.

      To our  knowledge,  based solely on a review of the copies of such reports
furnished  to us and the  written  representations  that no other  reports  were
required,  all Section  16(a) filing  requirements  applicable  to our officers,
directors and greater than 10%  beneficial  owners were complied with during the
fiscal year ended December 31, 2004.

Audit Committee Financial Expert
--------------------------------

      The Audit  Committee of  Northeast  Indiana's  Board of Directors  reviews
audit reports and related  matters with respect to compliance  with  regulations
and  internal  policies and  procedures.  This  committee  also engages and sets
compensation  for an  accounting  firm to perform the annual audit and acts as a
liaison  between  the  auditors  and the  Board.  The  current  members  of this
committee are Directors Rider  (Chairman),  Stephan,  Carnes,  and Zimmer.  This
Committee met four times during fiscal 2004.

      Northeast  Indiana  does  not  have an audit  committee  financial  expert
serving on the Audit  Committee.  It is difficult  for Northeast  Indiana,  as a
small public company, to identify,  recruit and add an audit committee financial
expert to the Audit Committee.

      There have been no changes in the  procedures  by which  stockholders  may
recommend  director  nominees since the time the Company provided  disclosure of
such procedures in its last definitive proxy statement mailed to stockholders.

Code of Ethics
--------------

      We have adopted a code of ethics that applies to the  principal  executive
officer and all professionals serving in a finance, accounting,  treasury or tax
role at Northeast Indiana and its subsidiaries.  We have previously filed a copy
of this Code of Ethics as  Exhibit 14 to the Form  10-KSB  filed with the SEC on
March 26, 2004.

Item 10. Executive Compensation
         ----------------------

Director Compensation

      Directors of Northeast Indiana are paid $200 per regular meeting for their
service in such capacity.


                                       35
<PAGE>

Directors  of the Bank receive a retainer fee of $2,250 per quarter and $400 per
regular  monthly  meeting.   Directors  do  not  receive  any  compensation  for
participation on the committees of the Boards of Directors of Northeast  Indiana
and the Bank.

      Deferred  Compensation  Program.  The  Bank  has a  deferred  compensation
program for the benefit of its  directors.  This program  permits  participating
directors to defer up to a maximum of $400 of Board fees per month or $4,800 per
year,  over a five year  period  which  ended  December  31,  1996,  except  for
Directors Michael Zahn and William Zimmer. Director Michael Zahn may defer up to
a maximum of $500 of Board  fees per month or $6,000 per year,  over a five year
period which will end July 31, 2005, and Director William Zimmer may defer up to
$500 of Board fees per month or $6,000 per year,  over a five year period  which
will end October 31, 2008.  Generally upon attaining age 65, the director (or in
the event of death, his designated  beneficiary) receives a monthly cash payment
based  upon the amount of fees  deferred  for a period of up to 120  months.  In
addition, the designated beneficiary of each participating director will receive
a $10,000  burial  fee.  In order to balance  the  expected  payments  under the
deferred  compensation  plan, the Bank has purchased life insurance  policies on
the lives of the participating directors. Although the insurance policies do not
generate  periodic  payments  to cover the  monthly  payments  owed to  retiring
directors,  the death  benefits  payable  on the  insurance  policies  have been
selected to  actuarially  approximate  the future  monthly  payment  obligation.
During  fiscal 2004,  Director  Michael Zahn deferred a total of $6,000 in Board
fees and Director  Zimmer  deferred a total of $6,000 in Board fees  pursuant to
this program. No other director deferred his Bank Board fees in fiscal 2004.

      The following table provides  information  relating to option exercises by
directors of Northeast  Indiana during the last fiscal year. Value realized upon
exercise is the difference  between the closing price on the Nasdaq Stock Market
of the  underlying  stock on the exercise date and the exercise or base price of
the option.

Name                    Shares Acquired on Exercise (#)       Value Realized ($)
----                    -------------------------------       ------------------

J. David Carnes                      2,000                         $ 22,330
Randall C. Rider                    13,202                         $157,203
Dan L. Stephan                       7,000                         $ 83,320
Michael S. Zahn                      1,500                         $ 14,193
William A. Zimmer                    1,000                         $  1,490

Executive Compensation

      Our  executive  officers  do not  receive any  compensation  for  services
performed  in their  capacity  as such.  The  following  table  sets  forth  the
compensation  paid by the Bank  during  fiscal  2004 to the  Chairman  and Chief
Executive  Officer of Northeast Indiana and the Bank. No other executive officer
earned salary and bonus exceeding $100,000 in fiscal 2004.


                                       36
<PAGE>

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                           Long Term Compensation
                            Annual Compensation                                                     Awards

                                                                     Other
                                                                     Annual     Restricted
                                  Fiscal                             Compen        Stock      Options/     LTIP         All Other
 Name and Principal Position       Year  Salary($)(1)  Bonus($)     sation($)   Award(s)($)   SARs(#)   Payouts($)  Compensation($)
 ---------------------------       ----  ------------  --------     ---------   -----------   -------   ----------  ---------------
<S>                                <C>     <C>         <C>             <C>           <C>         <C>        <C>       <C>
Stephen E. Zahn, Chairman of       2004    $179,600    $ 17,500        --            --          --         --        $171,285(2)
the Board and Chief Executive
Officer                            2003     172,100      17,500        --            --          --         --         148,486(3)

                                   2002     167,500      12,500        --            --          --         --         128,850(4)
</TABLE>

----------
(1)   Includes directors' fees of $14,600 for 2003 and $13,100 for 2002.

(2)   Includes:  (i) $10,469 of life, health and disability  insurance  premiums
      paid by the  Bank;  (ii)  $5,084  of  contributions  by the Bank to Mr. S.
      Zahn's  401(k) plan account;  (iii) $83,263  accrued by the Bank under the
      Executive  Supplemental  Retirement  Income Plan on behalf of Mr. S. Zahn;
      (iv)  $29,809  accrued by the Bank under the  Stockholder  Benefit Plan on
      behalf of Mr. S. Zahn; (v) $38,993 of  contributions to Mr. S. Zahn's ESOP
      account;  and  (vi)  $3,667  allocated  based  on the  personal  use of an
      automobile by Mr. S. Zahn.

(3)   Includes:  (i) $11,796 of life, health and disability  insurance  premiums
      paid by the  Bank;  (ii)  $4,206  of  contributions  by the Bank to Mr. S.
      Zahn's  401(k) plan account;  (iii) $55,416  accrued by the Bank under the
      Executive  Supplemental  Retirement  Income Plan on behalf of Mr. S. Zahn;
      (iv)  $31,573  accrued by the Bank under the  Stockholder  Benefit Plan on
      behalf of Mr. S. Zahn; (v) $41,660 of  contributions to Mr. S. Zahn's ESOP
      account;  and  (vi)  $3,835  allocated  based  on the  personal  use of an
      automobile by Mr. S. Zahn.

(4)   Includes:  (i) $11,725 of life, health and disability  insurance  premiums
      paid by the  Bank;  (ii)  $4,431  of  contributions  by the Bank to Mr. S.
      Zahn's  401(k) plan account;  (iii) $49,041  accrued by the Bank under the
      Executive  Supplemental  Retirement  Income Plan on behalf of Mr. S. Zahn;
      (iv)  $32,409  accrued by the Bank under the  Stockholder  Benefit Plan on
      behalf of Mr. S. Zahn; (v) $26,988 of  contributions to Mr. S. Zahn's ESOP
      account;  and  (vi)  $4,256  allocated  based  on the  personal  use of an
      automobile by Mr. S. Zahn.

      The following  table  provides  information as to the value of the options
held by our President and Chief Executive Officer on December 31, 2004. No stock
appreciation rights were granted during fiscal 2004.


                                       37
<PAGE>

       AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
                                  OPTION VALUES

<TABLE>
<CAPTION>
                                                                                                           Value of
                                                                   Number of                              Unexercised
                                                                  Unexercised                            In-the-Money
                                                                   Options at                             Options at
                                                              Fiscal Year End ($)                  Fiscal Year End ($)(1)
                                                    -------------------------------------   -----------------------------------
                   Shares
                   Acquired on     Value
Name               Exercise (#)    Realized ($)     Exercisable (#)     Unexercisable (#)   Exercisable ($)   Unexercisable ($)
----               ------------    ------------     ---------------     -----------------   ---------------   -----------------
<S>                     <C>             <C>              <C>                    <C>             <C>                  <C>
Stephen E. Zahn         --              --               37,565                 --              $423,733             --
</TABLE>

----------
(1)   Represents  the  aggregate  market value (market price of the common stock
      less the  exercise  price) of the options  granted  based upon the closing
      price of $20.99 per share of the common  stock as  reported  on the NASDAQ
      National Market on January 3, 2005.

Employment Agreement

      In December 1995, the Bank entered into an employment contract with Mr. S.
Zahn.  The employment  contract  provides for an annual base salary in an amount
established  by the  Board of  Directors.  The  initial  term of the  employment
contract was for three years. The contract  provides for extensions of one year,
in addition to the then-remaining term under the agreement,  on each anniversary
of  the  effective  date  of  the  contract,  subject  to a  formal  performance
evaluation  performed by disinterested  members of the Board of Directors of the
Bank,  and the contract has been renewed each year since the  expiration  of the
initial term. The contract  provides for  termination  upon Mr. S. Zahn's death,
for  cause,  or in  certain  events  specified  by Office of Thrift  Supervision
regulations.  The employment  contract is also terminable by Mr. S. Zahn upon 90
days notice to the Bank.

      The employment contract provides for payment to Mr. S. Zahn of the greater
of his salary for the  remainder  of the term of the  agreement,  or 299% of his
base compensation, in the event there is a "change in control" of the Bank where
employment terminates involuntarily in connection with such change in control or
within twelve months thereafter.  For the purposes of the employment contract, a
"change in control" is defined as any event which would require the filing of an
application for  acquisition of control or notice of change in control  pursuant
to Office of Thrift Supervision regulations. Such events are generally triggered
by the  acquisition  of control of more than 10% of Northeast  Indiana's  common
stock.  Based on his current salary,  if Mr. S. Zahn was terminated in December,
2004 under  circumstances  entitling him to severance pay as described above, he
would have been  entitled  to receive a lump sum cash  payment of  approximately
794,000.

Executive Supplemental Retirement Income Plan.

      The Bank maintains a supplemental  retirement  income plan  established in
1992 for the benefit of Mr. S. Zahn. This plan was subsequently amended in 1996,
2002, and 2004 pursuant to an agreement entered into with Mr. S. Zahn.  Payments
made by the Bank are placed into a secular  trust  account  with an  independent
administrator through another financial institution.  Upon continuous service to
the Bank  through age 65, Mr. S. Zahn (or in the event of Mr. S.  Zahn's  death,
his  beneficiary)  will become entitled to monthly cash payments for a period of
180 months of up to 60% of Mr. S.  Zahn's  final base  compensation  paid by the
Bank  annually  of  approximately  $43,500  after tax.  This  amount will become
payable  at the time Mr. S. Zahn  reaches  age 67. In the event that Mr. S. Zahn
voluntarily  leaves  employment with the Bank before attaining the age of 65, he
would be eligible to receive  commencing at age 67 the  after-tax  contributions
made by the Bank into the secular trust  account up to the point of  termination
of service.  The Bank has purchased a life insurance policy with respect to this
program  which is  comparable  to the  policies  described  herein  for the Bank
directors' deferred  compensation  program. In addition,  to


                                       38
<PAGE>

the  extent  that  the  proceeds  realized  by the Bank on said  life  insurance
policies  owned  by the  Bank  exceed  the  cash  surrender  values  of the same
policies, Mr. S. Zahn's designated beneficiary will receive a $30,000 burial fee
from this plan. All expenses related to this program are paid by the Bank.

Stockholder Benefit Plan.

      In January of 2000, the Bank set up a deferred  compensation  plan for Mr.
S.  Zahn  based  on the  savings  to the  institution.  In  connection  with the
establishment of this plan, Mr. S. Zahn relinquished  shares of stock granted to
him pursuant to the Northeast  Indiana  Recognition and Retention Plan. The Bank
agreed to accrue a benefit for Mr. S. Zahn based on the  difference  between the
income derived from the Bank's investment in a no-load, no-surrender charge life
insurance  policy and the Bank's  after-tax  cost of funds as  determined by the
last available quarterly rate of the 6th District Cost of Funds from the Federal
Home Loan Bank in Indianapolis plus fifty basis points.

      This benefit  accrues over the working life of Mr. S. Zahn such that, upon
reaching  the age of 65, he shall be  entitled  to the  annuitized  value of the
accrued benefit payable over a fifteen year period. Should Mr. S. Zahn die prior
to reaching age 65, his beneficiary is entitled to a Survivor's  Benefit payable
over a  fifteen  year  period.  In the event  that Mr. S. Zahn is  involuntarily
terminated,  including  termination  coincident  with or within three years of a
change in control of the Bank (as defined), Mr. S. Zahn is entitled to receive a
benefit as if he had continued to be employed with the Bank until his retirement
age of 65. If Mr. S. Zahn  voluntarily  terminates his employment with the Bank,
he is entitled to the accrued benefit determined as of the date of termination.

Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          ----------------------------------------------------------------------
          Related Stockholder Matters
          ---------------------------

Voting Securities and Principal Holders Thereof

      The following table sets forth as of March 21, 2005, information regarding
beneficial  share  ownership  of: (i) those  persons or entities  known by us to
beneficially own more than five percent of Northeast  Indiana common stock; (ii)
each member of the Northeast Indiana Board of Directors; (iii) certain executive
officers of Northeast  Indiana;  and (iv) all current  directors  and  executive
officers of Northeast  Indiana as a group. The address of each of the beneficial
owners,  except  where  otherwise  indicated,  is the same  address as Northeast
Indiana.  Northeast  Indiana  only has one class of voting  security,  Northeast
Indiana  common  stock.  Information  in the table below is being  provided with
respect to beneficial ownership of Northeast Indiana common stock.

<TABLE>
<CAPTION>
                                                                   Shares           Percent
Beneficial Owner                                             Beneficially Owned    of Class
-------------------------------------------------------------------------------------------
<S>                                                              <C>                 <C>
Northeast Indiana Bancorp, Inc. Employee Stock                   147,890(1)          10.3%
  Ownership Plan ("ESOP")

First Manhattan Co.                                              111,290(2)           7.8%
437 Madison Avenue
New York, New York 10022

Stephen E. Zahn, Chairman of the Board, President and            175,894(3)          12.0%
  Chief Executive Officer

Dan L. Stephan, Director                                          11,802(4)            .8%

J. David Carnes, Director                                         27,584(5)           1.9%

Randall C. Rider, Director                                         8,998(6)            .6%

William A. Zimmer, Director                                        3,350(7)            .2%

Michael S. Zahn, Director and Senior Vice President               27,296(8)           1.9%

Directors and executive officers as a group (9 persons)          295,265(9)          19.8%
</TABLE>


                                       39
<PAGE>

----------
(1)   Pursuant to a filing on Schedule 13G filed on February 7, 2005, the amount
      reported  represents  147,890  shares  of common  stock  held by the ESOP,
      120,405 of which have been allocated to accounts of participants as of the
      record date.  Peoples  Federal Savings Bank is the trustee of the ESOP and
      may be deemed to  beneficially  own the shares held by the ESOP which have
      not been allocated to accounts of  participants.  Participants in the ESOP
      are  entitled to instruct  the ESOP trustee as to the voting of the shares
      allocated  to their  ESOP  accounts.  For  each  issue  voted  upon by the
      stockholders of Northeast Indiana, the unallocated shares held by the ESOP
      are voted by the ESOP trustee in the same  proportion as the  participants
      who directed the trustee as to the voting of the shares allocated to their
      plan accounts.  Allocated  shares as to which the ESOP trustee receives no
      voting instructions are voted by the trustee in its discretion.

(2)   As reported on Schedule 13G/A filed on February 8, 2005.  First  Manhattan
      Co. reports that it has sole voting and dispositive  power over 108,290 of
      the shares listed  above,  and shared  voting and  dispositive  power over
      3,000 shares.

(3)   The  amount of shares  beneficially  owned by Mr.  S. Zahn  includes:  (i)
      27,667  shares owned  directly;  (ii) 39,009 shares held jointly by Mr. S.
      Zahn and his wife;  (iii) 4,673  shares held by Mr. S. Zahn's  wife;  (iv)
      26,908  shares  allocated to Mr. S. Zahn's ESOP account as of December 31,
      2004;  (v)  37,565  shares  which Mr.  S.  Zahn has the  right to  acquire
      pursuant to stock options that are exercisable at or within 60 days of the
      record date;  (vi) 2,890 shares held in Mr. S. Zahn's 401(k) account as of
      December 31, 2004; and (vii) 37,182 shares held in a revocable trust as to
      which Mr. S. Zahn is a trustee.  On  November  17,  2003,  Mr. S. Zahn and
      certain  associated family members including Alyce M. Zahn, Michael S. and
      Susan E.  Zahn,  Jamie M. and  Jodie Z.  Groves,  Michael  C. and Julie A.
      Jennings,  and Scott and Cherie Z. Axelrod,  received  permission from the
      Office of Thrift  Supervision  ("OTS") to acquire up to  nineteen  percent
      (19%) of the issued and  outstanding  shares of Northeast  Indiana  common
      stock.

(4)   The  amount of shares  beneficially  owned by Mr.  Stephan  includes:  (i)
      10,000 shares owned  directly and (ii) 1,802 shares which Mr.  Stephan has
      the right to acquire  pursuant to stock options that are exercisable at or
      within 60 days of the record date.

(5)   The amount of shares beneficially owned by Dr. Carnes includes: (i) 11,307
      shares owned  directly;  (ii) 9,075 shares held jointly by Dr.  Carnes and
      his wife; and (iii) 7,202 shares which Dr. Carnes has the right to acquire
      pursuant to stock options that are exercisable at or within 60 days of the
      record date.

(6)   These shares are beneficially owned directly by Mr. Rider.

(7)   The  amount of shares  beneficially  owned by Mr.  Zimmer  includes  1,000
      shares of  restricted  stock,  1,350 shares held jointly by Mr. Zimmer and
      his spouse, and 1,000 shares subject to options exercisable within 60 days
      of the record date.  This amount does not include 8,000 shares  subject to
      options that are not exercisable within 60 days of the record date.

(8)   The  amount of shares  beneficially  owned by Mr.  M. Zahn  includes:  (i)
      13,220 shares owned directly; (ii) 5,896 shares allocated to Mr. M. Zahn's
      ESOP account as of December 31, 2004; (iii) 7,380 shares which Mr. M. Zahn
      has the right to acquire pursuant to stock options that are exercisable at
      or within 60 days of the record  date,  and (iv) 800 shares of  restricted
      stock.  The amount does not include  500 shares  subject to stock  options
      which are not exercisable within 60 days of the record date.

(9)   The amount includes  shares held directly,  as well as jointly with family
      members,  shares held in retirement accounts,  in a fiduciary capacity, by
      certain  family  members or by trusts of which the  director or  executive
      officer is a trustee or substantial beneficiary, with respect to which the
      individual may be deemed to have sole or shared voting and/or  dispositive
      power.  The amount  also  includes an  aggregate  of 59,949  shares  which
      directors  and  executive  officers  as a group  have the right to acquire
      pursuant to stock options that are exercisable at or within 60 days of the
      record  date and an  aggregate  of  48,321  shares  allocated  to the ESOP
      accounts  of the  executive  officers  as of  December  31,  2004,  and an
      aggregate  of 5,004  shares  allocated  to the  401(k)  plan  accounts  of
      executive  officers as of December 31,  2004.  The amount does not include
      15,000  shares  subject to options not  exercisable  within 60 days of the
      record date.


                                       40
<PAGE>

      The following  table provides  information as of December 31, 2004 related
to our equity compensation plans in effect at that time.

<TABLE>
<CAPTION>
======================================================================================================
                                    Equity Compensation Plan Information
------------------------------------------------------------------------------------------------------
    Plan Category          Number of Securities to       Weighted-average        Number of securities
                           be Issued Upon Exercise      Exercise Price of      Remaining Available for
                           of Outstanding Options,     Outstanding Options,     Future Issuance Under
                             Warrants and Rights       Warrants and Rights       Equity Compensation
                                                                                        Plans
------------------------------------------------------------------------------------------------------
                                     (a)                        (b)                      (c)
------------------------------------------------------------------------------------------------------
<S>                               <C>                         <C>                     <C>
 Equity Compensation
  Plans Approved by
  Security Holders                100,604(1)                  $11.92                  155,600(2)
------------------------------------------------------------------------------------------------------
 Equity Compensation                   --                         --                       --
Plans Not Approved by
  Security Holders
------------------------------------------------------------------------------------------------------
        Total                     100,604(1)                  $11.92                  155,600(2)
======================================================================================================
</TABLE>

      (1) Restated to reflect the 10% stock dividends paid in both November 1998
and  November  1999.  Includes  outstanding  options to  purchase  shares of the
Company's  Common Stock under our 1995 Stock Option and  Incentive  Plan and our
2002 Omnibus Incentive Plan.

      (2) Includes  shares  available for future issuance under our 2002 Omnibus
Incentive  Plan and our  Recognition  and Retention  Plan;  excludes  securities
reflected  in  column  (a).  In  addition  to stock  options,  the 2002  Omnibus
Incentive Plan and the  Recognition  and Retention Plan provide for the issuance
of stock appreciation  rights,  restricted stock, or performance  awards.  1,450
shares remain available under our 1995 Stock Option and Incentive Plan,  140,024
shares remain available under our 2002 Omnibus Incentive Plan, and 14,126 remain
available  under our  Recognition  and Retention  Plan for the issuance of stock
options, stock appreciation rights, restricted stock or performance awards.

Item 12. Certain Relationships and Related Transactions
         ----------------------------------------------

Certain Transactions

      The Bank has  followed a policy of granting  loans to eligible  directors,
officers, employees and members of their immediate families for the financing of
their personal residences, for consumer purposes and general business loans. All
loans to  senior  officers  and  directors  are  subject  to  Office  of  Thrift
Supervision regulations restricting loans and other transactions with affiliated
persons of the Bank.  Under applicable law, all loans or extensions of credit to
executive  officers and directors must be made on  substantially  the same terms
and conditions,  including interest rates and collateral, as those prevailing at
the time  for  comparable  transactions  with the  general  public  and must not
involve  more than the normal risk of  repayment  or present  other  unfavorable
features.

      In this regard,  all outstanding  loans to directors have been made in the
ordinary  course of  business  and on the same terms and  conditions,  including
interest rates and  collateral,  as those  prevailing at the time for comparable
transactions and do not involve more than the normal risk of  collectibility  or
present other unfavorable features. Although, all outstanding loans to executive
officers  have been made in the  ordinary  course of business and do not involve
more  than the  normal  risk of  collectibility,  as  employees,  the  executive
officers are eligible for a 1/2%  discount  from the current rate offered  after
one year of service and a 1%  discount  from the current  rate  offered  after 5
years of service on one consumer loan.  They also receive a waiver of 50% ($250)
of the origination fee on one residential loan.


                                       41
<PAGE>

Item 13. Exhibits.
         ---------

<TABLE>
<CAPTION>
                                                                                            Reference to
Regulation                                                                                Prior Filing or
S-B Exhibit                                                                               Exhibit Number
Number            Document                                                                Attached Hereto
---------------------------------------------------------------------------------------------------------
<S>               <C>                                                                      <C>
     2            Plan of acquisition, reorganization, arrangement, liquidation
                  or succession                                                                None
   3(i)           Certificate of Incorporation, including amendments thereto                     *
   3(ii)          By-Laws     *
     4            Instruments defining the rights of security holders, including
                  debentures                                                                     *
     9            Voting trust agreement                                                       None
    10            Executive Compensation Plans and Arrangements
                  (a)   Employment Contract between Stephen E. Zahn and First
                        Federal                                                                  *
                  (b)   Employment Contract between Randy J. Sizemore and First
                        Federal                                                                 ***
                  (c)   Employment Contract between Dee Ann Hammel and First
                        Federal                                                                  *
                  (d)   1995 Stock Option and Incentive Plan                                     *
                  (e)   Recognition and Retention Plan                                           *
                  (f)   Shareholder Benefit Plan                                                **
                  (g)   2002 Omnibus Incentive Plan                                             ***
                  (h)   Amended Change of Control Agreement with Michael Zahn                  10(h)
                  (i)   Amended Change of Control Agreement with Randy J.
                        Sizemore                                                               10(i)
    11            Statement re: computation of per share earnings                              ****
    13            Annual Report to Stockholders                                                 13
    14            Code of Ethics                                                               *****
    16            Letter on change in certifying accountants                                   None
    18            Letter on change in accounting principles                                    None
    20            Other documents or statements to security holders                            None
    21            Subsidiaries of registrant                                                    21
    22            Published report regarding matters submitted to vote                         None
    23            Consents of experts                                                           23
    24            Power of attorney                                                        Not required
   31.1           Certification of Principal Executive Officer Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002                                31.1
   31.2           Certification of Principal Financial Officer Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002                                31.2
    32            Certification Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002                                                                   32
</TABLE>

----------
*           Filed as an exhibit to our Form S-1 Registration Statement (File No.
            33-90558).  All  of  such  previously  filed  documents  are  hereby
            incorporated  herein by  reference  in  accordance  with Item 601 of
            Regulation S-B.

**          Filed as an exhibit to our Form 10-KSB filed on April 2, 2001.  Such
            previously filed document is hereby incorporated herein by reference
            in accordance with Item 601 of Regulation S-B.

***         Filed as an exhibit to our Form 10-KSB filed on March 27, 2003. Such
            previously filed document is hereby incorporated herein by reference
            in accordance with Item 601 of Regulation S-B.

****        See Note 1 of the Notes to Consolidated  Financial Statements in the
            Annual Report to Stockholders attached hereto as Exhibit 13.

*****       Filed as an exhibit to our Form 10-KSB filed on March 26, 2004. Such
            previously filed document is hereby incorporated herein by reference
            in accordance with Item 601 of Regulation S-B.


                                       42
<PAGE>

Item 14. Principal Accountant Fees and Services
         --------------------------------------

      Crowe Chizek and Company LLC were our independent  auditors for the fiscal
year ending December 31, 2004.

      Audit Fees. The aggregate fees billed to Northeast Indiana by Crowe Chizek
and Company LLC for  professional  services  rendered for the audit of Northeast
Indiana's  consolidated  financial  statements  for fiscal 2003 and 2004 and the
reviews of the consolidated financial statements included in Northeast Indiana's
Forms 10-QSB for those years were $53,550 and $59,300 respectively.

      Audit-Related  Fees.  The  aggregate  fees billed to Northeast  Indiana by
Crowe  Chizek and  Company LLC for  assurance  and  related  services  that were
reasonably  related  to the  performance  of the  audit of  Northeast  Indiana's
consolidated  financial statements and the reviews of the consolidated financial
statements included in Northeast Indiana's Forms 10-QSB for fiscal 2003 and 2004
were $1,550 and $2,458, respectively.

      Tax Fees. The aggregate  fees billed to Northeast  Indiana by Crowe Chizek
and Company LLC for professional  services  rendered by Crowe Chizek and Company
LLC for tax  compliance,  tax advice,  and tax planning for fiscal 2003 and 2004
were $0 and $2,625, respectively.

      All  Other  Fees.  The  aggregate  fees for all other  services  billed to
Northeast  Indiana by Crowe Chizek and Company LLC for fiscal 2003 and 2004 were
$0 and $875, respectively.

      Financial  Information Systems Design and Implementation  Fees. There were
no fees for financial  information  systems design and implementation  billed to
Northeast Indiana by Crowe Chizek and Company LLC for fiscal 2003 or 2004.

The  Audit   Committee's   policy  is  to  approve  or  pre-approve  all  audit,
audit-related,  tax and  permitted  non-audit  services  performed for Northeast
Indiana by our  independent  auditors in accordance  with Section  10A(i) of the
Securities  Exchange Act of 1934, as amended,  and the  Securities  and Exchange
Commission's rules adopted thereunder. In 2003, the Audit Committee pre-approved
the audit services provided by Crowe Chizek and Company LLC, which  approximated
97.2% of the total fees paid.  In 2003,  the de minimus  exception  was used for
audit-related services that were not approved in advance by the Audit Committee.
These  services  approximated  2.8% of the total fees paid.  In 2004,  the Audit
Committee pre-approved all services provided by Crowe Chizek and Company LLC.


                                       43
<PAGE>

                                   SIGNATURES
                                   ----------

      In  accordance  with Section 13 of 15(d) of the  Exchange  Act, the Issuer
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                      NORTHEAST INDIANA BANCORP, INC.


Date: March 23, 2005                    By:   /s/ Stephen E. Zahn
                                              ----------------------------------
                                              Stephen E. Zahn
                                              (Duly Authorized Representative)

      In accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the Issuer and in the  capacities and on the
dates indicated.


By:      /s/ Stephen E. Zahn            By:      /s/ Randy J. Sizemore
      --------------------------------        ----------------------------------
      Stephen E. Zahn, Chairman of            Randy J. Sizemore, Senior Vice
      the Board, President and Chief          President, Treasurer and Chief
      Executive Officer                       Financial Officer
      (Principal Executive and                (Principal Financial and
      Operating Officer)                      Accounting Officer)

Date: March 23, 2005                    Date: March 23, 2005


By:      /s/ Michael S. Zahn            By:
      --------------------------------        ----------------------------------
      Michael S. Zahn,                        Randall C. Rider, Director
      Director and Vice President

Date: March 23, 2005                    Date: March 23, 2005


By:      /s/ Dan L. Stephan             By:      /s/ J. David Carnes
      --------------------------------        ----------------------------------
      Dan L. Stephan, Director                J. David Carnes, MD, Director

Date: March 23, 2005                    Date: March 23, 2005


By:      /s/ William A. Zimmer
      --------------------------------
      William A. Zimmer, Director

Date: March 23, 2005


                                       44
<PAGE>

                                INDEX TO EXHIBITS

      Exhibit No.     Document
      -----------     --------
--------------------------------------------------------------------------------
         10(h)        Amended Change of Control Agreement with Michael Zahn

         10(i)        Amended Change of Control Agreement with Randy J. Sizemore

          13          Annual Report to Stockholders

          21          Subsidiaries of the Registrant

          23          Consent of Crowe Chizek and Company LLC

         31.1         Certification of the Principal Executive Officer Pursuant
                      to Section 302 of the Sarbanes-Oxley Act of 2002

         31.2         Certification of the Principal Financial Officer Pursuant
                      to Section 302 of the Sarbanes-Oxley Act of 2002

          32          Certification Pursuant to Section 906 of the
                      Sarbanes-Oxley Act of 2002