UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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 June 30, 1998
                                       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 0-22034

                               WOOD BANCORP, INC.
--------------------------------------------------------------------------------
           (Name of small business issuer as specified in its charter)

          Delaware                                     34-1742860
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   124 East Court, Bowling Green, Ohio                    43402-2259
--------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code:  (419) 352-3502

           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 $.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  Exchange  Act during the past 12 months (or for such
shorter period that the issuer was required to file such  reports),  and (2) has
been subject to such 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. [ ]

         State  the  issuer's   revenues  for  its  most  recent   fiscal  year:
$14,692,111.
<PAGE>
         The aggregate  market value of the voting and non-voting  common equity
held by  non-affiliates,  computed  by  reference  to the average of the bid and
asked  prices of such common  equity on the Nasdaq  Stock Market as of September
23, 1998, was $28.4 million. (The exclusion from such amount of the market value
of the  shares  owned by any  person  shall not be deemed  an  admission  by the
registrant that such person is an affiliate of the registrant.)

         As of September 23, 1998,  there were issued and outstanding  2,684,740
shares of the Registrant's  Common Stock (including 106,718 shares of restricted
stock issued pursuant to the Registrant's Recognition and Retention Plan).

                       DOCUMENTS INCORPORATED BY REFERENCE

         Part II of Form 10-KSB - Annual Report to  Stockholders  for the fiscal
year ended June 30, 1998.

         Part III of Form 10-KSB - Proxy  Statement  for 1998 Annual  Meeting of
Stockholders.

         Transitional Small Business Disclosure Format: YES [  ]  NO [ X ]
<PAGE>
                                     PART I

Item 1.  Description of Business

General

         Wood Bancorp,  Inc. (the "Company") is a Delaware corporation which was
formed at the direction of First Federal Bank ("First Federal" or the "Bank") in
May 1993 for the purpose of becoming  the  savings and loan  holding  company of
First Federal (the "Conversion"). At June 30, 1998, the Company had total assets
of $166.1 million, deposits of $130.1 million, and shareholders' equity of $22.6
million.  All  references  to the Company at or before  August 31, 1993 refer to
First Federal.

         First  Federal  is  a  federally   chartered  stock  savings  and  loan
association  headquartered in Bowling Green,  Ohio. First Federal was originally
organized  in  1923 as a state  chartered  savings  institution  and,  in  1937,
converted to a federal savings and loan association. First Federal has been, and
intends to continue to be, a community-oriented financial institution offering a
variety of financial  services to meet the needs of the  communities  it serves.
The Bank  attracts  deposits  from the  general  public and uses such  deposits,
together  with  borrowings  and other funds,  to originate  one- to  four-family
residential  mortgage  loans  and  short-term  consumer  loans.  The  Bank  also
originates  residential  construction  loans in its market  area and  commercial
loans and loans secured by multi-family and non-residential real estate. At June
30, 1998,  substantially all of the Bank's real estate mortgage loans (excluding
mortgage-backed  securities)  and consumer  loans were secured by  properties or
collateral located in northwest Ohio. See generally "Lending Activities."

         The Bank also invests in mortgage-backed  securities, most of which are
insured or  guaranteed by federal  agencies as well as securities  issued by the
U.S. government or agencies thereof. See "Investment Activities."

         Like all federally  chartered  savings  associations,  First  Federal's
operations are regulated by the Office of Thrift Supervision (the "OTS").  First
Federal is a member of the Federal Home Loan Bank System  ("FHLB  System") and a
stockholder  in the Federal Home Loan Bank ("FHLB") of  Cincinnati.  The Bank is
also a member of the Savings Association Insurance Fund ("SAIF") and its deposit
accounts are insured up to applicable  limits by the Federal  Deposit  Insurance
Corporation ("FDIC"). See "Regulation."

         The Bank's  revenues are derived  primarily  from  interest on mortgage
loans,  consumer and commercial  loans,  securities,  including  mortgage-backed
securities,  income from service  charges,  and gain on sales of loans. The Bank
does not  originate  loans to fund  leveraged  buyouts,  has no loans to foreign
corporations  or  governments  and  is  not  engaged  in  land   development  or
construction activities through joint ventures or subsidiaries.

         The Bank  offers a variety of deposit  accounts  having a wide range of
interest rates and terms, which generally include passbook accounts,  NOW, money
market checking and regular  checking  accounts,  and certificate  accounts with
terms of 91 days to 60  months.  The Bank  primarily  solicits  deposits  in its
primary  market area and does not accept  brokered  deposits.  However,  in June
1997,  the Bank began  using a national  listing  service to attract  additional
deposits.
<PAGE>
Forward-Looking Statements

         When used in this Form 10-KSB and in future filings by the Company with
the  Securities  and Exchange  Commission  (the "SEC"),  in the Company's  press
releases or other public or shareholder  communications,  and in oral statements
made with the approval of an authorized  executive officer, the words or phrases
"will likely  result,"  "are expected to," "will  continue,"  "is  anticipated,"
"estimate,"   "project"  or  similar   expressions   are  intended  to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995. Such statements are subject to certain risks and
uncertainties,  including, among other things, changes in economic conditions in
the  Company's  market  area,  changes  in  policies  by  regulatory   agencies,
fluctuations  in interest rates,  demand for loans in the Company's  market area
and  competition,  that could cause  actual  results to differ  materially  from
historical  earnings and those presently  anticipated or projected.  The Company
wishes  to  caution   readers   not  to  place   undue   reliance  on  any  such
forward-looking  statements,  which speak only as of the date made.  The Company
wishes  to advise  readers  that the  factors  listed  above  could  affect  the
Company's financial performance and could cause the Company's actual results for
future periods to differ  materially  from any opinions or statements  expressed
with respect to future periods in any current statements.

         The  Company  does  not   undertake--and   specifically   declines  any
obligation--to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or  unanticipated
events.

Impact of Year 2000

         As the year 2000 approaches,  significant  concerns have been expressed
with respect to the ability of existing computer software programs and operating
systems to function  properly with respect to data containing  dates in the year
2000 and  thereafter.  Many existing  applications  were designed to accommodate
only a two digit year (e.g.,  1998 is reflected a "98"). Any of the applications
using a two digit year may  recognize  a date using "00" as the year 1900 rather
than the year 2000.  This could result in mistakes,  errors or system  failures,
which may have a material effect upon the operations of the Company.  Due to the
fact that rapid and accurate  data  processing is essential to  operations,  the
Company is working to resolve the potential impact of the "Year 2000" issue.

         The  Company  has  conducted  a  comprehensive  review of its  computer
systems to  identify  applications  that could be  affected  by the "Year  2000"
issue,  and has been in contact with third party  vendors to resolve this issue.
Additionally,  to  prevent  potential  credit  quality  issues,  management  has
supplied  information  to the Company's  commerical  loan customers to make them
aware of possible "Year 2000" problems.

         While the Company is currently  working with its third party vendors to
resolve this issue, no assurance can be given that such third-party vendors will
be "Year  2000"  complaint.  Management  believes  that such  vendors are taking
appropriate steps to address the issues on a timely basis. If the Company or its
third-party vendor are unable to become a "Year 2000" complaint, the Company may
experience  significant  data  processing  delays,  mistakes or failures.  These
delays,  mistakes or failures  could have a  significant  adverse  impact on the
financial  condition  and results of  operations  of the Company.  Management is
prepared to hire temporary help to complete  manual  processes or to be utilized
as couriers  should the need arise.  Nevertheless,  based on current costs spent
addressing the "Year 2000" issue,  the Company does not believe that the cost of
addressing this issue in the future will be a material event.
<PAGE>
         Management  believes  that  appropriate  actions  have  been  taken  to
evaluate the "Year 2000" risks and to implement  procedures necessary to address
those  risks.  Management  is also  developing  a formal  contingency  plan that
outlines  possible  courses of actions that would be followed should the company
encounter computer processing or general  operational  problems arising from the
"Year 2000" issue.

Market Area

         The main office of the Bank is located in Bowling Green, Ohio, which is
located in Wood County,  Ohio. The Bank operates  seven offices:  two in Bowling
Green, and one in each of Grand Rapids, North Baltimore, Rossford, Woodville and
Pemberville.  All branches are located in Wood County with the  exception of the
Woodville  branch,  which is located  four miles  from Wood  County in  Sandusky
County, Ohio. The Bank considers Wood County its primary market area.

         Wood County is located in northwest Ohio. Toledo, Ohio, 20 miles to the
north, is a major midwest  industrial  city with a commercial  airport served by
major  airlines  and  several  commuter  affiliates.  Wood  County  has a  mixed
agricultural  and  industrial  economy.  Wood County is also the home of Bowling
Green  State   University,   a  four-year  public   undergraduate  and  graduate
institution.

         The  executive  offices of the  Company  are  located at 124 East Court
Street,  Bowling  Green,  Ohio  43402-2259  and its  telephone  number  is (419)
352-3502.  Unless the context otherwise  requires,  all references herein to the
Bank or the Company include the Company and the Bank on a consolidated basis.

Lending Activities

         General.  Historically,  the Bank primarily originated fixed-rate, one-
to four-family  mortgage loans.  In the early 1980s,  the Bank began to focus on
the origination of  adjustable-rate  one- to four-family  mortgage ("ARM") loans
and short-term consumer and other loans for retention in its portfolio, in order
to increase  the  percentage  of loans with more  frequent  repricing or shorter
maturities,  and  in  some  cases  higher  yields,  than  fixed-rate,   one-  to
four-family  mortgage  loans.  While the Bank's current loan portfolio  consists
mainly of ARM loans and  short-term  consumer  loans,  in 1993 the Bank began to
originate  fixed-rate mortgage loans in response to customer demand. Under First
Federal's  current  policy,  virtually  all  fixed-rate  loans  are  sold in the
secondary market. See also "- One- to Four-Family  Residential Mortgage Lending"
and "Originations, Purchases, Sales and Servicing of Loans."

         The Bank also originates  consumer (including  automobile),  commercial
and multi-family real estate,  commercial business, and residential construction
loans  in its  primary  market  area.  At June 30,  1998,  the  Bank's  net loan
portfolio totaled $135.6 million.

         The aggregate  amount of loans that the Bank is permitted to make under
applicable federal regulations to any one borrower,  including related entities,
or the aggregate amount that the Bank could have invested in any one real estate
project is  generally  the greater of 15% of  unimpaired  capital and surplus or
$500,000. See "Regulation - Federal Regulation of Savings Associations." At June
30, 1998,  the maximum amount which the Bank could have lent to any one borrower
and the borrower's related entities was approximately $2.1 million.  At June 30,
1998, the Bank had one loan relationship with an outstanding  balance to any one
<PAGE>
borrower (or related  entities) in excess of this amount.  The principal balance
for this relationship was approximately  $2.1 million at June 30, 1998. The Bank
was in compliance with its  loans-to-one-borrower  limitation at August 1, 1998,
after principal repayments were made on the loan for July and income of the Bank
for  July  increased  the   loans-to-one-borrower   limitation.   The  Bank  may
discontinue,  adjust or create new lending  programs to respond to its needs and
to competitive factors.
<PAGE>
         Loan  Portfolio  Composition.  The following  information  presents the
composition  of the Bank's loan  portfolio in dollar  amounts and in percentages
(before deductions for loans in process,  net deferred loan origination fees and
allowances for losses) as of the dates indicated.
<TABLE>
<CAPTION>
                                                                     Year Ended June 30,
                                        -------------------------------------------------------------------------------  
                                                  1998                       1997                         1996
                                        -------------------------------------------------------------------------------   
                                           Amount      Percent      Amount         Percent         Amount       Percent
                                           ------      -------      ------         -------         ------       -------
                                                                      (Dollars in thousands)
<S>                                     <C>             <C>       <C>                <C>          <C>            <C>         
Real Estate Loans:
 One- to four-family................    $  87,924        62.55%   $  93,538          69.63 %      $ 85,387        73.43%      
 Secured by other properties(1).....       10,578         7.52        7,296           5.43           4,813         4.14      
 Construction.......................        6,403         4.55        4,516           3.36           6,397         5.50      
 Home equity........................       10,679         7.60        8,335           6.20           4,112         3.54 
                                        ---------       ------    ---------         ------        --------       ------       
      Total real estate loans........      115,584       82.22      113,685          84.62         100,709        86.61      
                                                                                                                             
Other Loans:                                                                                                                 
 Consumer Loans:                                                                                                             
  Automobile........................        7,667         5.45        7,696           5.73           7,013         6.03      
  Other.............................        6,858         4.88        4,925           3.67           4,462         3.84 
                                        ---------       ------    ---------         ------        --------       ------       
     Total consumer loans...........       14,525        10.33       12,621           9.40          11,475         9.87 
                                        ---------       ------    ---------         ------        --------       ------       
 Commercial business loans..........       10,463         7.45        8,035           5.98           4,098         3.52 
                                        ---------       ------    ---------         ------        --------       ------       
     Total other loans..............       24,988        17.78       20,656          15.38          15,573        13.39 
                                        ---------       ------    ---------         ------        --------       ------       
     Total loans....................      140,572       100.00%     134,341         100.00%        116,282       100.00%      
                                        ---------       ======     --------         ======        --------       ======       
                                                                                                                             
Less:                                                                                                                        
 Loans in process...................        4,105                     2,246                          4,104                   
 Net deferred loan origination fees.          195                       201                            209                   
 Allowance for losses...............          654                       576                            513                   
                                         --------                  --------                       --------                   
     Total loans receivable, net....     $135,618                  $131,318                       $111,456                   
                                         ========                  ========                       ========                      
</TABLE>              
         (1)Includes   multi-family,   commercial  real  estate,  land  lot  and
agricultural loans.
<PAGE>
         The following  table shows the composition of the Bank's loan portfolio
by fixed and adjustable rates at the dates indicated.
<TABLE>
<CAPTION>
                                                                      Year Ended June 30,
                                          ---------------------------------------------------------------------  
                                                  1998                     1997                  1996
                                          ----------------------------------------------------------------------   

                                          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...............   $    9,983         7.10%    $  9,892        7.37%  $ 13,355        11.48%
  Secured by other properties(1)....        1,007         0.71          703         .52      2,198         1.89
                                       ----------       ------      -------      ------   -------        ------ 
    Total...........................       10,990         7.81       10,595        7.89     15,553        13.37
  Home equity and consumer..........       14,284        10.16       12,842        9.56     11,965        10.29
  Commercial business...............        3,387         2.41        3,363        2.50      3,181         2.74
                                       ----------       ------      -------      ------   -------        ------ 
    Total fixed-rate loans..........       28,661        20.38       26,800       19.95     30,699        26.40

Adjustable-Rate Loans:
 Real estate:
  One- to four-family...............       77,941        55.45       83,646       62.26     72,032        61.95
  Secured by other properties(1)....        9,571         6.81        6,593        4.91      2,615         2.25
  Construction......................        6,403         4.55        4,516        3.36      6,397         5.50
                                       ----------       ------      -------      ------   -------        ------ 
    Total...........................       93,915        66.81       94,755       70.53     81,044        69.70
  Home equity and consumer..........       10,920         7.77        8,114        6.04      3,622         3.11
  Commercial business...............        7,076         5.04        4,672        3.48        917          .79
                                       ----------       ------      -------      ------   -------        ------ 
    Total adjustable-rate loans.....      111,911        79.62      107,541       80.05     85,583        73.60
                                       ----------       ------      -------      ------   -------        ------ 
    Total loans.....................      140,572      100.00%      134,341      100.00%   116,282       100.00%
                                        ---------      ======       -------       ======  --------       ======

Less:
 Loans in process...................        4,105                     2,246                  4,104
 Net deferred loan origination fees.          195                       201                    209
 Allowance for loan losses..........          654                       576                    513
                                        ---------                  --------               --------
    Total loans receivable, net.....     $135,618                  $131,318               $111,456
                                         ========                  ========               ========

</TABLE>

     (1)  Includes   multi-family,   commercial   real  estate,   land  lot  and
agricultural loans.
<PAGE>
         The following schedule sets forth certain  information at June 30, 1998
regarding the net dollar amount of loans maturing in First Federal's  portfolio,
based on  contractual  terms to  maturity.  The  schedule  does not  reflect the
effects of possible prepayments or enforcement of due-on-sale clauses.
<TABLE>
<CAPTION>


         Due During
         Years Ending                                                                      Consumer on(2)        on(2)
          June 30,               Real Estate(1)(4)      Commercial     Construction(2)    and Other on(2)        Total
          --------               -----------------      ----------     ---------------    ---------------        -----
                                                                    (Dollars in Thousands)

<S>                                <C>                <C>                 <C>                <C>             <C>    
1999(3).....................       $     48            $ 3,337            $ 6,403           $ 4,405          $14,193
2000........................            318              2,008               ---              1,623            3,949
2001........................            722                765               ---              2,471            3,958
2002 and 2003...............          1,454              2,217               ---              5,266            8,937
2004 to 2013 ...............         34,290              2,136               ---                720           37,146
2014 and following..........         72,349                ---               ---                 40           72,389
                                    -------            -------           -------           --------         --------
                                   $109,181            $10,463           $ 6,403            $14,525         $140,572
                                    =======            =======           =======            =======         ========

</TABLE>
------------
(1)  Includes one- to four-family,  multi-family,  commercial real estate,  land
     lot, agricultural and home equity loans.
(2)  Construction loans are written for a nine month construction  period,  with
     interest only payments due monthly.  At the end of the construction  period
     the loan  automatically  converts to a monthly payment,  30-year  permanent
     loan.
(3)  Includes demand loans, loans having no stated maturity and overdraft loans.
(4)  Home equity loans totaling $10.7 million do not have a stated payment.  The
     borrower is billed 1% of the outstanding balance monthly.

         At June 30,  1998,  the total  amount of loans due after June 30,  1999
which  have  predetermined  interest  rates was $24.6  million,  while the total
amount of loans due after such date which have floating or  adjustable  interest
rates was $101.8 million.

         One- to Four-Family  Residential  Mortgage  Lending.  Residential  loan
originations  of this type are generated by the Bank's  marketing  efforts,  its
present  customers,  walk-in customers and referrals from real estate agents and
builders.  The Bank focuses its lending efforts  primarily on the origination of
loans  secured  by  first  mortgages  on  owner-occupied,  one-  to  four-family
residences.  At June  30,  1998,  the  Bank's  one- to  four-family  residential
mortgage loans totaled  approximately  $87.9 million,  or approximately 62.6% of
the Bank's total gross loan  portfolio.  Of this portfolio,  approximately  $6.4
million  constituted loans secured by one- to four-family  residential  property
that is rented.

         The Bank currently  offers  fixed-rate or ARM payment loans. The Bank's
one- to four-family  residential  mortgage  originations are secured by property
located in its market and surrounding areas.
<PAGE>
         The Bank currently offers one and three year ARM loans with an interest
rate margin over the one and three year Treasury rates.  These loans provide for
a 200 basis  point cap on any  adjustment  date and a lifetime  cap of 600 basis
points  over  the  initial  rate.  The  Bank's  ARMs  do  not  permit   negative
amortization  of  principal.  The Bank  qualifies  one year ARM borrowers on the
maximum  second year rate and three year ARM  borrowers on the initial rate plus
100 basis points.

         Interest  rates  charged  on  fixed-rate  and  adjustable-rate  one- to
four-family   mortgage  loans  are  competitively  priced  according  to  market
conditions.  Residential  loans generally do not include  prepayment  penalties.
During the last three fiscal years,  the Bank has not  purchased any loans.  See
"Originations, Purchases, Sales and Servicing of Loans."

         In  underwriting  one- to  four-family  residential  real estate loans,
First Federal evaluates both the borrower's ability to make monthly payments and
the value of the property securing the loan. Currently, virtually all properties
securing real estate loans made by First  Federal are  appraised by  independent
fee appraisers  approved and qualified by the Board of Directors.  First Federal
generally  requires  borrowers to obtain an  attorney's  title  opinion or title
insurance,  and fire and  property  insurance  (including  flood  insurance,  if
necessary) in an amount not less than the amount of the loan.  Real estate loans
originated by the Bank generally contain an option "due on sale" clause allowing
the Bank the option to declare the unpaid principal balance due and payable upon
the sale of the security property.

         Consumer  Lending.  First Federal offers a variety of secured  consumer
loans,  including  automobile  and  truck,  motorcycle,  boat  and  recreational
vehicle,  home  equity,  home  improvement  loans and loans  secured  by savings
deposits. In addition, First Federal offers other secured and unsecured consumer
loans,  including  an  overdraft  checking  line-of-credit.  The Bank  currently
originates  substantially  all of its consumer  loans in its primary market area
and surrounding areas. The Bank originates  consumer loans primarily on a direct
basis,  by extending  credit directly to the borrower.  Indirect loans,  such as
those  involving  the  purchase of loan  contracts  from  retailers  of goods or
services  which have  extended  credit to their  customers,  are also made, to a
lesser extent. Typically,  automobile loans are made for up to 60 months for new
vehicles,  and  up  to  48  months  for  used  vehicles.  Used  vehicle  lending
predominates  over new vehicle lending.  Almost all consumer loans are made on a
fixed-rate basis,  except for home equity loans,  which are either fixed-rate or
tied to one year Treasury rates.

         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 such
cases, any repossessed  collateral for a defaulted consumer loan may not provide
an adequate source of repayment of the  outstanding  loan balance as a result of
the greater likelihood of damage,  loss or depreciation.  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.  Consumer  loan terms also vary  according  to the type and value of
collateral, length of contract and creditworthiness of the borrower. At June 30,
1998,  $260,000,  or  approximately  1.79% of the consumer loan  portfolio,  was
delinquent 30 days or more.  There can be no assurance that  delinquencies  will
not increase in the future.
<PAGE>
         At June 30, 1998,  the Bank's  consumer  loan  portfolio  totaled $14.5
million, or 10.3% of its gross loan portfolio. Of the consumer loan portfolio at
June  30,  1998,   approximately  93.53%  were  short-  and   intermediate-term,
fixed-rate loans and 6.47% were adjustable-rate loans.

         The  largest  component  of First  Federal's  consumer  loan  portfolio
consists of automobile  loans. At June 30, 1998,  automobile  loans totaled $7.7
million,  or  approximately  52.78% and 5.45%,  of the Bank's consumer and gross
loan portfolios, respectively.

         Loans secured by deposit accounts at the Bank are generally  originated
for up to 90%  of  the  account  balance  with  a  hold  placed  on the  account
restricting  the  withdrawal of the account  balance.  The interest rate on such
loans is from 100 to 300 basis points above the deposit contract rate.

         The  underwriting  standards  employed by the Bank 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.

         Construction  Lending.  The Bank  engages  in  construction  lending to
individuals for the  construction of their residences as well as to builders for
the  construction of  single-family  homes and other types of real estate in the
Bank's primary market area and surrounding areas. At June 30, 1998, the Bank had
$6.4 million of gross  construction  loans,  most of which were to borrowers who
intended to live in the properties  upon completion of  construction.  Currently
all of the Bank's construction loans have adjustable rates of interest.

         Construction  loans for residences  are  structured as permanent  loans
with  interest  only  payable  for  up to  the  first  nine  months  during  the
construction  phase.  Construction  loans are underwritten  pursuant to the same
guidelines used for originating permanent real estate loans.

         Construction  lending is generally considered to involve a higher level
of credit risk than permanent one- to four-family  residential  lending,  due to
the concentration of principal in a limited number of loans and borrowers and/or
the effects of general economic conditions on development projects,  real estate
developers,  managers or homebuilders. In addition, the nature of these loans is
such that they are more  difficult to evaluate  and monitor.  The Bank's risk of
loss on a  construction  loan is  dependent  largely  upon the  accuracy  of the
initial  estimate of the property's value upon completion of the project and the
estimated  cost  (including  interest) of the project.  If the estimate of value
proves to be inaccurate, the Bank may be confronted, at or prior to the maturity
of the loan,  with a project having a value which is insufficient to assure full
repayment.  When loan payments  become due,  borrowers may experience  cash flow
from the property  which is not adequate to service  total debt.  In such cases,
the Bank may be  required  to modify  the  terms of the  loan.  The Bank has not
experienced a loss on this portfolio during the last three years.

         Commercial  and  Multi-Family  Real Estate  Lending.  The Bank has also
engaged in limited  commercial and multi-family  real estate lending in the Wood
County  market  area.  At  June  30,  1998,  all of the  Bank's  commercial  and
multi-family  real estate loan  portfolio was secured by  properties  located in
Ohio,  except for one loan valued at  $1,237,258,  secured by a nursing  home in
Indiana.
<PAGE>
         Loans secured by commercial and multi-family real estate properties are
generally  larger  and  involve  a greater  degree  of credit  risk than one- to
four-family  residential  mortgage loans.  Because  payments on loans secured by
commercial  real  estate  properties  are  often  dependent  on  the  successful
operation  or  management  of the  properties,  repayment  of such  loans may be
subject to adverse  conditions in the real estate market or the economy.  If the
cash flow from the project is reduced (for  example,  if leases are not obtained
or renewed), the borrower's ability to repay the loan may be impaired.

         The Bank's  commercial and  multi-family  real estate loan portfolio is
secured  primarily  by  apartment  buildings  and,  to a lesser  extent,  office
buildings,  hotels,  restaurants,  retail stores,  multi-family  real estate and
churches.  Commercial and  multi-family  real estate loans  generally have terms
that do not exceed 25 years. The Bank has a variety of rate adjustment  features
and other terms in its commercial and  multi-family  real estate loan portfolio.
Generally, the loans are made in amounts up to 75% of the appraised value of the
security  property.  Commercial  real estate  loans  provide for a margin over a
designated  index which is generally the one year  Treasury bill rate.  The Bank
currently  analyzes 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.  In addition to the  collateral
securing  the loan,  the Bank  generally  requires  personal  guaranties  of the
borrowers.  Appraisals  on  properties  securing  commercial  real estate  loans
originated by the Bank are performed by independent appraisers.

         Commercial  Business  Lending.  The  Bank  also  originates  commercial
business loans. At June 30, 1998,  approximately  $10.5 million, or 7.45% of the
Bank's total gross loan portfolio, was comprised of commercial business loans.

         Unlike  residential  mortgage  loans,  which  generally are made on the
basis of the borrower's ability to make repayment from his or her employment and
other income and which are secured by real property whose value tends to be more
easily ascertainable,  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).  The Bank's commercial business loans are usually, but not always,
secured by real estate or 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.  At June 30, 1998,  $203,000,  or
approximately 1.94%, of the commercial business loan portfolio was delinquent 30
days or more.

         First Federal's 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 First
Federal's current credit analysis.  Nonetheless,  there are generally  increased
credit risks associated with commercial business lending.

         Management anticipates that this segment of the Bank's portfolio, which
consists of inventory,  receivable and working capital loans,  may increase over
the foreseeable future to levels  approximating ten percent of total gross loans
outstanding.
<PAGE>
Originations, Purchases, Sales and Servicing of Loans

         Real estate loans are generally  originated by First Federal's staff of
salaried  loan  officers.  The Bank  presently has three  commission-based  loan
officers  as part of its  effort  to  increase  loan  origination  volume.  Loan
applications  are taken and  processed  in the  branches  and main office of the
Bank.

         While the Bank originates both  adjustable-rate  and fixed-rate  loans,
its ability to originate  loans is dependent upon the relative  customer  demand
for loans in its market. Demand is affected by the interest rate environment.

         In fiscal 1998, the Bank originated $91.9 million of loans, compared to
$71.4 million in fiscal 1997. In fiscal 1998, $51.5 million of loans were repaid
compared with $39.2 million in 1997.

         When loans are sold by the Bank,  the Bank  retains the  responsibility
for collecting and remitting loan payments,  making certain that real estate tax
payments are made on behalf of borrowers, and otherwise servicing the loans. The
Bank receives a servicing fee for performing  these services.  The servicing fee
is recognized as income over the life of the loans.  The Bank services  mortgage
loans that it originated  and sold amounting to  approximately  $60.1 million at
June 30, 1998. See also Note 6 of the Notes to Consolidated Financial Statements
in the Annual Report to  Stockholders  filed herewith as Exhibit 13 (the "Annual
Report").

         In periods of economic  uncertainty,  the Bank's  ability to  originate
large  dollar  volumes  of real  estate  loans may be  substantially  reduced or
restricted,  with a resultant  decrease in related loan origination  fees, other
fee income and operating earnings. In addition, the Bank's ability to sell loans
may substantially decrease as potential buyers (principally government agencies)
reduce their purchasing activities. The Bank will make fixed-rate loans for sale
in the secondary market as demand dictates.
<PAGE>
         The following table shows the loan origination,  purchase and repayment
activities of the Bank for the periods indicated.
<TABLE>
<CAPTION>
                                                     Year Ended June 30,
                                            -----------------------------------
                                               1998          1997         1996
                                            --------      --------     --------
                                                       (In thousands)
<S>                                         <C>           <C>          <C>     
Originations by type:
 Adjustable-rate ......................     $ 39,512      $ 46,948     $ 29,597
 Fixed-rate ...........................       52,368        24,455       31,005
                                            --------      --------     --------
         Total loans originated .......       91,880        71,403       60,602

Purchases:
 Total loans purchased ................         --            --           --

Sales and Repayments:
 Total loans sold .....................       34,155        14,183       18,497
 Principal repayments .................       51,492        39,161       38,785
                                            --------      --------     --------
         Total increase ...............        6,233        18,059        3,320

 (Increase) decrease in other items,
  net .................................       (1,933)        1,803       (2,681)
                                            --------      --------     --------
         Net increase .................     $  4,300      $ 19,862     $    639
                                            ========      ========     ========
</TABLE>

Non-Performing Assets and Classified Assets

         Generally,  when a borrower  fails to make a  required  payment on real
estate secured loans and consumer loans within 20 days after the payment is due,
the Bank  institutes  collection  procedures  by  mailing a  computer  generated
delinquency  notice.  The customer is contacted  again,  by notice or telephone,
when the  payment  is 30 days  past due and 60 days  past  due.  In most  cases,
delinquencies are cured promptly;  however,  if a loan secured by real estate or
other  collateral  has been  delinquent for more than 60 days, a final letter is
sent demanding  payment.  The customer is requested to acknowledge the status of
the loan and to make  arrangements  to bring the loan current.  If  satisfactory
arrangements are not made, a personal visit may be made to initiate repossession
on  collateral  for consumer  loans.  At 90 days past due, a 30-day  foreclosure
notice  is  sent,  and if the  loan is 120  days  overdue,  unless  satisfactory
arrangements have been made,  immediate  repossession or foreclosure  procedures
will commence.
<PAGE>
         The  following  table  sets  forth  information  concerning  delinquent
mortgage and other loans at June 30, 1998. The amounts  presented  represent the
total remaining  principal balances of the related loans, rather than the actual
payment amounts which are overdue.
<TABLE>
<CAPTION>
                                                                      Loans Delinquent For:
                                     ---------------------------------------------------------------------------------------- 
                                             30-59 Days                     60-89 Days                90 Days and Over
                                     ---------------------------------------------------------------------------------------- 
                                                         Percent                        Percent                       Percent
                                                         of Loan                        of Loan                       of 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 .......         41     $1,791       2.0%        7     $  226       0.3%        4     $  198       0.2%
   Home equity ...............         40        573       5.4         3         38       0.4        --         --       --
   Secured by other properties          2         47       0.4        --         --       --         --         --       --
Commercial ...................          6        193       1.8        --         --       --          1         10       0.1
Consumer .....................         31        174       1.2        13         49       0.3         8         36       0.2
                                   ------     ------       ---      ----     ------       ---       ---     ------       ---

     Total ...................        120     $2,778       2.0%       23     $  313       0.2%       13     $  244       0.2%
                                   ======     ======       ===      ====     ======       ===       ===     ======       ===
</TABLE>

         There were no delinquent construction loans at June 30, 1998. The ratio
of delinquent loans to total loans was 2.4% at June 30, 1998.
<PAGE>
         The table below sets forth the amounts and categories of non-performing
assets in the Bank's loan portfolio. Loans are placed on non-accrual status when
the collection of principal and/or interest become seriously doubtful.
Foreclosed assets include assets acquired in settlement of loans.
<TABLE>
<CAPTION>
                                                          Year Ended June 30,
                                                       ------------------------- 

                                                       1998      1997       1996
                                                       -------------------------   

                                                         (Dollars in Thousands)
<S>                                                     <C>       <C>       <C>
Non-accruing loans:
  One- to four-family .............................     $--       $--       $--
  Secured by other ................................      --        --         28
  Construction ....................................      --        --        --
  Consumer ........................................      --        --          2
  Commercial business .............................      --        --        --
                                                        ----      ----      ----
     Total ........................................      --        --         30
                                                        ----      ----      ----

Accruing loans delinquent more than 90 days:
  One- to four-family .............................      198       330       116
  Secured by other ................................      --        --         39
  Construction ....................................      --        --        --
  Consumer ........................................       36        17        30
  Commercial business .............................       10        24       --
                                                        ----      ----      ----
     Total ........................................      244       371       185
                                                        ----      ----      ----

Foreclosed assets:
  One- to four-family .............................      --        --        --
  Secured by other ................................       30        30        30
  Construction ....................................      --        --        --
  Consumer ........................................      --        --        --
  Commercial business .............................      --        --        --
                                                        ----      ----      ----
     Total ........................................       30        30        30
                                                        ----      ----      ----

Total non-performing assets(1) ....................     $274      $401      $245
                                                        ====      ====      ====
Total as a percentage of total                          
 assets ...........................................     0.16%     0.24%     0.17%
                                                        ====      ====      ====
</TABLE>
------------
         (1) In addition,  the Bank had one troubled debt  restructuring at June
30, 1996 with a balance at those dates of $62,524.


         For the year ended June 30, 1998 gross interest income which would have
been recorded had the non-accruing  loans and troubled debt  restructuring  been
current in accordance  with their  original  terms  amounted to $0. None of such
amount was included in interest income on such loans for the year ended June 30,
1998.
<PAGE>
         As of June 30,  1998,  there were no other  loans not  included  on the
table or  discussed  above where known  information  about the  possible  credit
problems of borrowers caused  management to have doubts as to the ability of the
borrower to comply with  present  loan  repayment  terms and which may result in
disclosure of such loans in the future.

         Classified Assets.  Federal  regulations provide for the classification
of loans and other assets such as debt and equity  securities  considered by the
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 savings  association  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  a  savings  association   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 a savings  association  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   association's   determination   as  to  the
classification  of its  assets  and the amount of its  valuation  allowances  is
subject to review by the  association's  District  Director at the  regional OTS
office,  who may order the establishment of additional  general or specific loss
allowances.

         In connection with the filing of its periodic  reports with the OTS and
in accordance  with its  classification  of assets  policy,  the Bank  regularly
reviews  the loans in its  portfolio  to  determine  whether  any loans  require
classification  in  accordance  with  applicable  regulations.  On the  basis of
management's  review of its assets,  at June 30, 1998, the Bank had classified a
total of $737,029 of its assets as substandard,  none as doubtful and $32,154 as
loss.

         At June 30, 1998, total classified assets comprised $769,183,  or 3.41%
of the Company's capital, or 0.46% of the Company's total assets.

         Allowance for Loan Losses. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the risk
inherent in its loan  portfolio and changes in the nature and volume of its loan
activity.  Such  evaluation,  which  includes  a review of loans for which  full
collectibility may not be reasonably assured, considers among other matters, the
estimated  fair  value  of  the  underlying  collateral,   economic  conditions,
historical  loan loss  experience and other factors that warrant  recognition in
providing for an adequate loan allowance.
<PAGE>
         Real estate  properties  acquired  through  foreclosure are recorded at
fair  value,  less  estimated  costs  to  sell.  If fair  value  at the  date of
foreclosure is lower than the balance of the related loan,  the difference  will
be  charged-off  to the  allowance  at the  time  of  transfer.  Valuations  are
periodically  updated  by  management  and if the  value  declines,  a  specific
provision for losses on such property is established by a charge to operations.

         Although   management  believes  that  it  uses  the  best  information
available to determine the allowances, 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 Bank's  allowances will be the result of
periodic loan,  property and collateral  reviews and thus cannot be predicted in
advance.  At June 30, 1998,  the Bank had a total  allowance  for loan losses of
$654,350  or 0.48% of total  loans  receivable,  before the  allowance  for loan
losses. See also Notes 1 and 4 of the Notes to Consolidated Financial Statements
in the Annual Report.
<PAGE>
         The following table sets forth an analysis of the Bank's  allowance for
loan losses for the periods indicated.
<TABLE>
<CAPTION>

                                                        Year Ended June 30,
                                                   ----------------------------- 
                                                   1998        1997        1996
                                                   ----        ----        ----- 
                                                      (Dollars in Thousands)
<S>                                             <C>         <C>         <C> 
Balance at beginning of period .............       $576        $513        $409

Charge-offs:
  One- to four-family ......................        --          --          --
  Secured by other properties ..............        --           58         --
  Construction .............................        --          --          --
  Consumer and commercial ..................         53          32          17
                                                   ----        ----        ----
     Total charge-offs .....................         53          90          17
                                                   ----        ----        ----

Recoveries:
  One- to four-family ......................        --          --          --
  Secured by other properties ..............        --           23         --
  Construction .............................        --          --          --
  Consumer and commercial ..................         11          10           1
                                                   ----        ----        ----
     Total recoveries ......................         11          33           1
                                                   ----        ----        ----

Net charge-offs ............................         42          57          16

Additions charged to operations ............        120         120         120
                                                   ----        ----        ----
Balance at end of period ...................       $654        $576        $513
                                                   ====        ====        ====

Ratio of net charge-offs during the
 period to average loans outstanding
 during the period .........................        .03%        .05%        .02%
                                                   ====        ====        ====

Ratio of allowance to non-performing
 loans .....................................     268.11%     155.26%     238.60%
                                                 ======      ======      ======
</TABLE>
<PAGE>
         The  distribution  of the Bank's  allowance  for losses on loans at the
dates indicated is summarized as follows:
<TABLE>
<CAPTION>
                                                                     Year Ended June 30,
                                           ---------------------------------------------------------------------------- 
                                                   1998                      1997                       1996    
                                           ---------------------------------------------------------------------------- 
                                                         Percent                    Percent                    Percent
                                                        of Loans                   of Loans                   of Loans
                                                         in Each                    in Each                    in Each
                                                         Category                   Category                   Category
                                                         to Total                   to Total                   to Total
                                            Amount         Loans      Amount         Loans       Amount         Loans
                                            ------         -----      ------         -----       ------         -----
                                                                       (Dollars in Thousands)

<S>                                          <C>           <C>          <C>           <C>          <C>           <C>   
One- to four-family................          $100          62.55%       $100          69.63%       $102          73.43%
Secured by other properties........           178           7.52         160           5.43         191           4.14
Construction.......................           ---           4.55         ---           3.36         ---           5.50
Home equity........................            27           7.60          21           6.20          10           3.54
Consumer...........................           127          10.33         128           9.40          88           9.87
Commercial business................           131           7.45         120           5.98          82           3.52
Unallocated........................            91            ---          47            ---          40           ----
                                             ----         ------        ---          ------        ----         ------ 
     Total.........................          $654         100.00%       $576         100.00%       $513         100.00%
                                             ====         ======        ====         ======        ====         ======
</TABLE>
Investment Activities

         First Federal must maintain  minimum levels of investments that qualify
as liquid  assets  under OTS  regulations.  Liquidity  may  increase or decrease
depending upon the  availability of funds and comparative  yields on investments
in relation to the return on loans.  Historically,  the Bank has  maintained its
liquid assets above the minimum  requirements imposed by the OTS regulations and
at a level believed  adequate to meet  requirements of normal daily  activities,
repayment of maturing debt and potential deposit outflows. The Bank's investment
policy  objective in this regard  currently  sets the Bank's  desired  liquidity
between 6% and 12%. As of June 30,  1998,  the Bank's  liquidity  ratio  (liquid
assets  as a  percentage  of  net  withdrawable  savings  deposits  and  current
borrowings) was 15.48%. See "Regulation Liquidity."

         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,  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.

         Generally,  the investment policy of the Bank, as set by the Investment
Committee,  is to invest  funds among  various  categories  of  investments  and
maturities  based  upon the Bank's  need for  liquidity,  to achieve  the proper
balance  between  its desire to minimize  risk and  maximize  yield,  to provide
collateral for borrowings,  and to fulfill the Bank's asset/liability management
policies.
<PAGE>
         Securities.  At June 30, 1998, the Company's cash and cash  equivalents
totaled $5.2 million,  or 3.1% of its total assets,  and  securities,  including
mortgage-backed  securities  (includes a $1.5 million  investment  in the common
stock  of the  FHLB of  Cincinnati  in  order to  satisfy  the  requirement  for
membership in such  institution)  totaled $20.7  million,  or 12.4% of its total
assets.  It is the Bank's general policy to purchase  securities  which are U.S.
government securities and federal agency obligations, state and local government
obligations,  commercial paper, mutual funds, interest-bearing deposits in other
institutions,  and overnight  federal funds.  See also Notes 1 and 3 to Notes to
Consolidated Financial Statements in the Annual Report.

         OTS  regulations  restrict  investments  in  corporate  debt and equity
securities  by  the  Bank.  These  restrictions   include  prohibitions  against
investments  in the debt  securities  of any one  issuer in excess of 15% of the
Bank's  unimpaired   capital  and  unimpaired  surplus  as  defined  by  federal
regulations,  which totaled approximately $2.1 million as of June 30, 1998, plus
an additional  10% if the  investments  are fully secured by readily  marketable
collateral.  See "Regulation - Federal Regulation of Savings Associations" for a
discussion of additional restrictions on the Bank's investment activities.
<PAGE>
         The following table sets forth the composition of the Bank's securities
portfolio at the dates indicated.
<TABLE>
<CAPTION>
                                                                   Year Ended June 30,
                                        --------------------------------------------------------------------------- 
                                                1998                      1997                         1996
                                        --------------------------------------------------------------------------- 

                                        Carrying       % of      Carrying        % of        Carrying       % of
                                         Value        Total        Value         Total         Value        Total
                                         -----        -----        -----         -----         -----        -----
                                                                 (Dollars in thousands)
<S>                                    <C>            <C>         <C>            <C>          <C>           <C>      
Interest bearing time deposits in
  other financial institutions ...     $   731        100.00%     $ 2,229        100.00%      $    78       100.00%  
                                        ======       =======       ======        ======       =======       ======   
                                                                                                                     
 Securities available for sale:                                                                                      
    U.S. Treasury securities .....     $   766          3.71%     $   693          2.84%      $   839         3.13%  
    Mutual funds .................       2,779         13.44        2,716         11.13         2,625         9.78   
    Mortgage-backed securities ...       8,234         39.83        8,844         36.26         9,648        35.94   
    U.S. Government agency step up                                                                                   
     bonds .......................         299          1.45          791          3.24         1,499         5.58   
    Equity securities ............          40          0.20           40          0.16            40         0.15   
    Municipal bonds ..............         172          0.83           --            --            --           --   
    U.S. Government agency                                                                                           
       securities .................      6,873         33.25        9,909         40.62        10,883        40.54   
                                       -------        ------      -------        ------       -------       ------   
      Subtotal ...................      19,163         92.71       22,993         94.25        25,534        95.12   
                                       -------        ------      -------        ------       -------       ------   
                                                                                                                     
  FHLB stock .....................       1,508          7.29        1,403          5.75         1,309         4.88   
                                       -------        ------      -------        ------       -------       ------   
                                                                                                                     
Total securities and FHLB stock ..     $20,671        100.00%     $24,396        100.00%      $26,843       100.00%  
                                       =======        ======      =======        =======      =======       ======   
Average remaining life of                                                                    
    U.S. Treasury securities, U.S.
    Government Agency securities, and
    Municipal Bonds...................         4.7 years                 5.5 years                    5.3 years
</TABLE>

------------------
     See also Note 3 of the Notes to  Consolidated  Financial  Statements in the
Annual Report.
<PAGE>
         The composition and maturities of the securities  portfolio,  excluding
FHLB stock, are indicated in the following table.
<TABLE>
<CAPTION>
                                                                    At June 30, 1998
                                                     -------------------------------------------------
                                                     Amortized          Estimated          Weighted
                                                       Cost           Market Value       Average Yield
                                                       ----           ------------       -------------
                                                                  (Dollars in thousands)
<S>                                                   <C>                <C>                  <C>  
Available for sale:
  Due in one year or less...................          $  1,300           $  1,295             4.57%
  Due after one through                                                                           
   five years...............................             3,178              3,307             7.03
  Due after five years                                                                            
   through ten years........................             3,499              3,508             7.16

  Mortgage-backed securities................             8,199              8,234             6.56
  Mutual funds..............................             2,855              2,779             5.10
  Equity securities.........................                40                 40             6.50
                                                      --------          ---------             ----
    Total investment                                  
      securities available for sale..........          $19,071            $19,163             6.41%
                                                      ========          =========             ====
</TABLE>

         The Bank's  portfolio at June 30, 1998  contained no  securities of any
issuer with an aggregate book value in excess of the Bank's  retained  earnings,
excluding those securities issued by the U.S. government or its agencies.

         Mortgage-Backed   Securities.   First   Federal  has  a  portfolio   of
mortgage-backed   securities   which  it  holds  as  available  for  sale.  Such
mortgage-backed  securities can serve as collateral for borrowings and,  through
repayments, as a source of liquidity. For information regarding the carrying and
market values of First Federal's mortgage-backed  securities portfolio, see Note
3 of the Notes to Consolidated  Financial Statements in the Annual Report. Under
the Bank's risk-based  capital  requirement,  mortgage-backed  securities have a
risk weight of 20% (or 0% in the case of GNMA securities) in contrast to the 50%
risk weight carried by residential  loans. See  "Regulation--Regulatory  Capital
Requirements."

         Consistent with the Bank's  asset/liability  policy, most of the Bank's
mortgage-backed securities carry adjustable interest rates.

Sources of Funds

         General. The Bank's primary sources of funds are deposits,  borrowings,
amortization  and  repayment of loan  principal  (including  interest  earned on
mortgage-backed securities),  interest earned on or maturation of securities and
short-term investments,  and funds provided from operations.  FHLB advances have
been used to compensate for seasonal  reductions in deposits or deposit  inflows
at less  than  projected  levels,  and  will be used on a  longer-term  basis to
support expanded lending activities.
<PAGE>
         Deposits.  First Federal offers a variety of deposit  accounts having a
wide range of interest rates and terms.  The Bank's deposits consist of passbook
savings accounts,  NOW accounts,  money market checking,  individual  retirement
accounts,  Christmas  and  vacation  club  accounts,  and  certificate  accounts
generally  ranging  in  terms  from 91 days to 60  months.  The  Bank  primarily
solicits  deposits from its market area.  However,  in June 1997, the Bank began
using a national rate listing service to attract additional  deposits.  The Bank
relies  primarily on  competitive  pricing  policies,  advertising  and customer
service to attract and retain these deposits.

         The flow of deposits is influenced  significantly  by general  economic
conditions,   changes  in  money  market  and  prevailing  interest  rates,  and
competition.

         The variety of deposit  accounts  offered by the Bank has allowed it to
be competitive in obtaining funds and to respond with  flexibility to changes in
consumer demand. The Bank has become more susceptible to short-term fluctuations
in deposit  flows,  as customers have become more interest rate  conscious.  The
Bank  endeavors  to manage the  pricing  of its  deposits  in  keeping  with its
asset/liability   management  and   profitability   objectives.   Based  on  its
experience,  the Bank believes that its passbook savings, NOW accounts and money
market checking are relatively stable sources of deposits.

         The following table sets forth the savings flows at the Bank during the
periods indicated.
<TABLE>
<CAPTION>
                                                  Year Ended June 30,
                                       -----------------------------------------  
                                         1998            1997           1996
                                       --------        --------        --------
                                                 (Dollars in Thousands)

<S>                                    <C>             <C>             <C>     
Opening balance ................       $120,546        $115,830        $104,845
Deposits .......................        453,212         380,868         310,235
Withdrawals ....................        448,866         380,743         303,783
Interest credited ..............          5,195           4,591           4,533
                                       --------        --------        --------

Ending balance .................       $130,087        $120,546        $115,830
                                       ========        ========        ========

Net increase (decrease) ........       $  9,541        $  4,716        $ 10,985
                                       ========        ========        ========

Percent increase (decrease) ....           7.91%           4.07%          10.48%
                                       ========        ========        ========
</TABLE>
<PAGE>
         The following table sets forth the dollar amount of savings deposits in
the  various  types  of  deposit  programs  offered  by the  Bank  at the  dates
indicated.  See also Note 7 of the Notes to Consolidated Financial Statements in
the Annual Report.
<TABLE>
<CAPTION>
                                                                              At June 30,                              
                                            ------------------------------------------------------------------------------ 
                                                   1998                         1997                        1996
                                             ----------------------       ---------------------     -----------------------
                                                          Percent                     Percent                     Percent
                                             Amount       of Total       Amount       of Total     Amount         of Total
                                             ------       --------       ------       --------     ------         --------
                                                                         (Dollars in thousands)
<S>                                        <C>              <C>          <C>             <C>      <C>               <C>       
Transactions and Savings Deposits:

Demand and NOW Accounts(1)                 $ 16,922         13.01%       $ 15,119        12.54%   $  13,605         11.74%
Passbook Accounts ........                   21,306         16.38          21,307        17.68       20,117         17.37     
Money Market Accounts ....                   21,421         16.46          19,944        16.54       22,008         19.00   
                                           --------         -----        --------        -----    ---------         -----   
                                                                                               
Total Non-Certificates ...                   59,649         45.85          56,370        46.76       55,730         48.11   
                                           --------         -----        --------        -----    ---------         -----   
                                                                                                                           
Certificates:                                                                                                               
                                                                                                                            
 0.00 -  3 99%                                   40          0.03             168          .14          473           .41   
 4.00 -  5 99%                               55,049         42.32          52,469        43.53       49,998         43.16   
 6.00 -  7 99%                               15,344         11.79          11,526         9.56        9,611          8.30   
 8.00 -  9 99%                                    5          0.01              13          .01           18           .02   
                                           --------         -----        --------        -----    ---------         -----   
                                                                                                                            
Total Certificates .......                   70,438         54.15          64,176        53.24       60,100         51.89  
                                           --------         -----        --------        -----    ---------         -----    
                                           $130,087        100.00%       $120,546       100.00%    $115,830        100.00%  
                                           ========        ======        ========       ======     ========        ======   
Total Deposits ...........                   
                                                
</TABLE>
-----------------------------

(1)  Includes  non-interest  bearing  deposits of  $1,500,731,  $1,033,148,  and
     $928,463 at June 30, 1998, 1997 and 1996, respectively.
<PAGE>
         The following table indicates the amount of the Bank's  certificates of
deposit and other deposits by time remaining until maturity as of June 30, 1998.
<TABLE>
<CAPTION>
                                                                               Maturity      
                                                 ------------------------------------------------------------------ 
                                                                  Over           Over
                                                 3 Months        3 to 6        6 to 12         Over
                                                  or Less        Months         Months       12 months        Total
                                                  -------        ------         ------       ---------        -----
                                                                          (Dollars in Thousands)
Certificates of deposit less
<S>                                                <C>            <C>           <C>            <C>           <C>    
 than $100,000.............................        $12,891        $8,872        $18,445        $22,392       $62,600

Certificates of deposit of
 $100,000 or more..........................          1,870           957          2,188          2,161         7,176

Public funds(1)............................            180           300            ---            182           662
                                                ----------    ----------   ------------     ----------    ----------

Total certificates of deposit..............        $14,941       $10,129        $20,633        $24,735       $70,438
                                                   =======       =======        =======        =======       =======
</TABLE>

          (1) Deposits from governmental and other public entities.


         Borrowings.  Although  deposits are the Bank's primary source of funds,
the Bank's  policy has been to utilize  borrowings  when they are a less  costly
source of funds, can be invested at a positive  interest rate spread or when the
Bank  desires  additional  capacity to fund loan demand or meet other  liquidity
needs.

         First Federal's borrowings historically have consisted of advances from
the FHLB of Cincinnati upon the security of a blanket collateral  agreement of a
percentage of unencumbered  loans. Such advances can be made pursuant to several
different credit programs,  each of which has its own interest rate and range of
maturities.

         The  following  table  sets forth the  maximum  month-end  balance  and
average balance of FHLB advances.
<TABLE>
<CAPTION>
                                                                 Year Ended June 30,
                                                        -------------------------------------
                                                         1998            1997          1996
                                                        -------        -------        -------
                                                                      (In Thousands)
<S>                                                     <C>            <C>            <C>    
Maximum Balance:
  FHLB advances........................................ $22,775        $26,792        $11,045
                                                        

Average Balance:
  FHLB advances........................................ $16,661        $19,706        $  6,868
</TABLE>
<PAGE>
Subsidiary Activities

         As  a  federally  chartered  savings  institution,   First  Federal  is
permitted by OTS  regulations to invest up to 2% of its assets,  or $3.3 million
at  June  30,  1998,  in  the  stock  of,  or  loans  to,  service   corporation
subsidiaries.  In July  1995,  First  Federal  organized  a service  corporation
subsidiary,  Wood Service Corp.,  Inc., which offers financial planning services
and related products, including mutual funds and annuities, through an agreement
with a third party.  As of June 30, 1998,  First  Federal's  investment  in Wood
Service  Corp.,  Inc.  was  $12,256.  In  addition  to  investments  in  service
corporations,  federal  associations are permitted to invest an unlimited amount
in  operating   subsidiaries  engaged  solely  in  activities  which  a  federal
association may engage in directly.

Regulation

         General.  First  Federal  is a  federally  chartered  savings  and loan
association  and,  accordingly,  First  Federal  is  subject  to  broad  federal
regulation  and oversight  extending to all its  operations.  First Federal is a
member of the FHLB of Cincinnati and is subject to certain limited regulation by
the Board of Governors of the Federal Reserve System ("Federal  Reserve Board").
First Federal is a member of the Savings Association Insurance Fund ("SAIF") and
the deposits of First Federal are insured by the FDIC. As a result, the FDIC has
certain regulatory and examination authority over First Federal.

         As the savings and loan holding  company of First Federal,  the Company
also is subject to OTS regulation  and oversight.  The purpose of the regulation
of the Company and other  holding  companies  is to protect  subsidiary  savings
associations.

         Certain of these regulatory requirements and restrictions are discussed
below or elsewhere in this document.

         Federal  Regulation  of Savings  Associations.  The OTS,  as the Bank's
primary federal regulator and chartering authority, and the FDIC, as the insurer
of its  deposits,  have  extensive  authority  over the  operations  of  savings
associations.  As part of this  authority,  First  Federal 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 examination of First Federal was performed as
of March 31, 1996 and the last regular  FDIC  examination  of First  Federal was
performed  jointly with the OTS as of December  31, 1992.  The OTS and FDIC have
entered into a joint examination agreement which provides for joint examinations
by the FDIC with the OTS unless compelling reasons otherwise dictate. When these
examinations  are  conducted by the OTS and the FDIC,  the examiners may require
First  Federal to provide  for higher  general or specific  loan loss  reserves.
Financial  institutions in various regions of the United States have been called
upon by  examiners  to write down assets and to  establish  increased  levels of
reserves,  primarily as a result of perceived  weaknesses  in real estate values
and a more restrictive regulatory climate.

         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 general assessment,  to be paid on a semi-annual basis, is computed upon the
savings  association's  total assets,  as reported in the  association's  latest
quarterly thrift financial report. First Federal's OTS assessment for the fiscal
year ended June 30, 1998 was $48,630.
<PAGE>
         The OTS also  has  extensive  enforcement  authority  over all  savings
institutions  and their  holding  companies,  including  First  Federal  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 and the FDIC is required.

         In addition,  the investment,  lending and branching authority of First
Federal is prescribed by federal laws, and it is prohibited from engaging in any
activities not permitted by such laws. For instance,  no savings institution may
invest in  non-investment  grade  corporate debt  securities.  In addition,  the
permissible  level of  investment  by federal  associations  in loans secured by
non-residential real property may not exceed 400% of total capital,  except with
approval of the OTS. Federal savings  association are also generally  authorized
to  branch   nationwide.   First  Federal  is  in  compliance   with  the  noted
restrictions.

         First Federal's 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
June 30, 1998,  First  Federal's  lending limit under this  restriction was $2.1
million.  At  June  30,  1998,  the  Bank  had  one  loan  relationship  with an
outstanding  balance to any one borrower (or related entities) in excess of this
amount.  The principal  balance for this  relationship  was  approximately  $2.1
million   at  June   30,   1998.   The   Bank   was  in   compliance   with  its
loans-to-one-borrower  limitation at August 1, 1998, after principal  repayments
were made on its largest loan for July and income of the Bank for July increased
the loans-to-one-borrower limitation. The Bank may discontinue, adjust or create
new lending programs to respond to its needs and to competitive factors.

         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,  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.
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 United States 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 FDIC.  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.
<PAGE>
         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,  ranging from .00% to .27% of
deposits,  based upon their level of capital and supervisory  evaluation.  Under
the system, institutions classified as well capitalized (i.e., those with 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., those with 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.

         The FDIC is authorized to increase  assessment  rates,  on a semiannual
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 United States Treasury or for any other reason deemed
necessary by the FDIC.

         Effective  January  1,  1997,  the  premium  schedule  for BIF and SAIF
insured  institutions  ranged from 0 to 27 basis points.  However,  SAIF-insured
institutions are required to pay a Financing  Corporation (FICO) assessment,  in
order to fund the  interest on bonds  issued to resolve  thrift  failures in the
1980s,  equal to  approximately  6.48  basis  points  for each $100 in  domestic
deposits,   while   BIF-insured   institutions   pay  an  assessment   equal  to
approximately  1.52  basis  points  for  each  $100 in  domestic  deposits.  The
assessment  is expected to be reduced to 2.43 basis points no later than January
1, 2000,  when BIF insured  institutions  fully  participate in the  assessment.
These  assessments,  which may be  revised  based upon the level of BIF and SAIF
deposits will continue until the bonds mature in the year 2017.

         Regulatory    Capital    Requirements.    Federally   insured   savings
associations, such as First Federal, 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 June 30, 1998 the Bank had no intangible  assets subject to
these tests.
<PAGE>
         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.  The Bank's  service  corporation  is an  includable
subsidiary. See "Subsidiary Activities" above.

         At June 30, 1998,  First Federal had tangible capital of $13.9 million,
or 8.47% of adjusted total assets,  which is  approximately  $11.4 million above
the minimum requirement of 1.5% of adjusted total assets in effect on that date.

         The capital standards also require core capital equal to at least 3% of
adjusted total assets.  Core capital generally consists of tangible capital plus
certain intangible assets,  including  supervisory goodwill (which is phased-out
over a  five-year  period),  and a  limited  amount  of  purchased  credit  card
relationships.  As a result of the prompt corrective action provisions of FDICIA
discussed  below,  however,  a savings  association must maintain a core capital
ratio  of at  least  4% to  be  considered  adequately  capitalized  unless  its
supervisory  condition  is such to allow it to maintain a 3% ratio.  At June 30,
1998, First Federal had no intangibles which were subject to these tests.

         At June  30,  1998,  First  Federal  had  core  capital  equal to $13.9
million,  or 8.47% of adjusted  total  assets,  which is $9.0 million  above the
minimum leverage ratio requirement of 3% 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.  At
June 30, 1998,  First Federal had $622,000 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.  Such  exclusions  consist of equity
investments  (as  defined  by  regulation)  and that  portion  of land loans and
nonresidential construction loans in excess of an 80% loan-to-value ratio (these
items were excluded on a sliding  scale through June 30, 1994,  after which they
must be excluded  in their  entirety)  and  reciprocal  holdings  of  qualifying
capital  instruments.  First  Federal had no such  exclusions  from  capital and
assets at June 30, 1998.

         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.  For
example,  the OTS has assigned a risk weight of 50% for  prudently  underwritten
permanent  one- to  four-family  first lien mortgage loans not more than 90 days
delinquent  and having a loan to value ratio of not more than 80% at origination
unless insured to such ratio by an insurer approved by FNMA or FHLMC.

         OTS regulations also require that savings  associations  with more than
normal interest rate risk exposure  deduct from its total capital,  for purposes
of determining  compliance with such requirement,  an amount equal to 50% of its
interest-rate risk exposure  multiplied by the present value of its assets. This
<PAGE>
exposure is a measure of the potential  decline in the net portfolio  value of a
savings  association,  greater than 2% of the present value of its assets, based
upon a  hypothetical  200 basis point  increase  or  decrease in interest  rates
(whichever  results in a greater  decline).  Net portfolio  value is the present
value of expected  cash flows from assets,  liabilities  and  off-balance  sheet
contracts.  The rule  will not  become  effective  until the OTS  evaluates  the
process by which savings associations may appeal an interest rate risk deduction
determination.  It is uncertain as to when this evaluation may be completed. Any
savings association with less than $300 million in assets and a total risk-based
capital  ratio in excess of 12% is exempt from this  requirement  unless the OTS
determines otherwise.  At the present time, the proposal is not expected to have
a material impact on the Association.

         On June 30, 1998, First Federal had total  risk-based  capital of $14.5
million  (including  $13.9  million in core capital and  $622,000 in  qualifying
supplementary  capital) and risk-weighted assets of $107.7 million (including no
converted off-balance sheet assets); or total capital of 13.45% of risk-weighted
assets.  This amount was $5.9 million above the 8% requirement in effect on that
date.

         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 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.
<PAGE>
         The  imposition by the OTS or the FDIC of any of these  measures on the
Association  may  have  a  substantial  adverse  effect  on its  operations  and
profitability.

         Limitations   on  Dividends  and  Other  Capital   Distributions.   OTS
regulations  impose various  restrictions or  requirements on associations  with
respect  to their  ability  to pay  dividends  or make  other  distributions  of
capital.  OTS regulations  prohibit an 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.

         The OTS utilizes a three-tiered approach to permit associations,  based
on their capital level and supervisory condition,  to make capital distributions
which include dividends, stock redemptions or repurchases,  cash-out mergers and
other  transactions  charged to the capital  account (see "- Regulatory  Capital
Requirements").

         Generally, Tier 1 associations,  which are associations that before and
after the proposed distribution meet their fully phased-in capital requirements,
may make capital  distributions during any calendar year equal to the greater of
100% of net  income  for the  year-to-date  plus 50% of the  amount by which the
lesser of the  association's  tangible,  core or risk-based  capital exceeds its
fully phased-in capital  requirement for such capital component,  as measured at
the  beginning  of the  calendar  year,  or the amount  authorized  for a Tier 2
association.  However,  a Tier 1  association  deemed to be in need of more than
normal  supervision  by  the  OTS  may  be  downgraded  to a  Tier  2 or  Tier 3
association  as a  result  of such a  determination.  First  Federal  meets  the
requirements  for a Tier 1  association  and has not been notified of a need for
more than normal supervision.  Tier 2 associations,  which are associations that
before and after the proposed  distribution  meet their current  minimum capital
requirements, may make capital distributions of up to 75% of net income over the
most recent four quarter period.

         Tier 3 associations  (which are  associations  that do not meet current
minimum capital  requirements) that propose to make any capital distribution and
Tier 2 associations that propose to make a capital distribution in excess of the
noted  safe  harbor  level  must  obtain  OTS  approval  prior  to  making  such
distribution.  Tier 2  associations  proposing  to make a  capital  distribution
within the safe harbor provisions and Tier 1 associations  proposing to make any
capital distribution need only submit written notice to the OTS 30 days prior to
such  distribution.  As a subsidiary of the Company,  First Federal will also be
required to give the OTS 30 days' notice prior to declaring  any dividend on its
stock. The OTS may object to the distribution during that 30-day period based on
safety and soundness concerns. See "- Regulatory Capital Requirements."

         The OTS has proposed  regulations that would revise the current capital
distribution restrictions.  The proposal eliminates the current tiered structure
and the  safe-harbor  percentage  limitations.  Under  the  proposal  a  savings
association may make a capital distribution without notice to the OTS (unless it
is a  subsidiary  of a  holding  company)  provided  that  it has a CAMEL 1 or 2
rating, is not in troubled condition (as defined by regulation) and would remain
adequately   capitalized  (as  defined  in  the  OTS  prompt  corrective  action
regulations)  following the proposed  distribution.  Savings  associations  that
would remain adequately  capitalized  following the proposed distribution but do
not meet the other  noted  requirements  must  notify  the OTS 30 days  prior to
declaring a capital  distribution.  The OTS stated it will  generally  regard as
<PAGE>
permissible that amount of capital  distributions  that do not exceed 50% of the
institution's  excess  regulatory  capital  plus net  income to date  during the
calendar year. A savings association may not make a capital distribution without
prior approval of the OTS and the FDIC if it is undercapitalized before, or as a
result of, such a distribution. As under the current rule, the OTS may object to
a capital distribution if it would constitute an unsafe or unsound practice.  No
assurance  may be given as to  whether  or in what form the  regulations  may be
adopted.

         Liquidity.  All savings  associations,  including  First  Federal,  are
required  to  maintain  an average  daily  balance of liquid  assets  equal to a
certain  percentage of the sum of its average daily balance of net  withdrawable
deposit accounts and borrowings payable in one year or less. For a discussion of
what the Bank  includes  in liquid  assets,  see  "Management's  Discussion  and
Analysis of  Financial  Condition  and  Results of  Operations  - Liquidity  and
Capital  Resources."  This liquid asset ratio  requirement may vary from time to
time (between 4% and 10%) depending  upon economic  conditions and savings flows
of all savings associations. At the present time, the minimum liquid asset ratio
is 5%.

         Penalties may be imposed upon associations for violations of the liquid
asset ratio requirement.  At June 30, 1998, First Federal was in compliance with
the requirement, with an overall liquid asset ratio of 15.48%.

         Accounting.   An  OTS  policy  statement   applicable  to  all  savings
associations  clarifies and  re-emphasizes  that the investment  activities of a
savings   association  must  be  in  compliance  with  approved  and  documented
investment policies and strategies, and must be accounted for in accordance with
GAAP. Under the policy statement,  management must support its classification of
and accounting for loans and securities (i.e., whether held for investment, sale
or trading) with appropriate documentation.  First Federal is in compliance with
these amended rules.

         The OTS has adopted an amendment to its accounting  regulations,  which
may be made more stringent than GAAP by the OTS, to require that transactions be
reported in a manner that best reflects their underlying  economic substance and
inherent risk and that financial  reports must  incorporate any other accounting
regulations or orders prescribed by the OTS.

         Qualified Thrift Lender Test. All savings associations, including First
Federal,  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. Such assets primarily consist of residential
housing related loans and  investments.  At June 30, 1998, First Federal 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
<PAGE>
failure,  it must  divest  of all  investments  and  cease  all  activities  not
permissible  for a  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."

         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 First Federal, 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 First Federal.  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,  First Federal may be required to devote additional funds
for  investment and lending in its local  community.  First Federal was examined
for CRA compliance as of November 4, 1996 and received a rating of satisfactory.

         Transactions with Affiliates. Generally, transactions between a savings
association 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  affiliates,  are
restricted to a percentage  of the  association's  capital.  Affiliates of First
Federal  include the Company and any company which is under common  control with
First Federal. In addition,  a savings association may not lend to any affiliate
engaged in activities not  permissible for a bank holding company or acquire the
securities of most affiliates.

         Certain  transactions with directors,  officers and 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.

         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.
<PAGE>
         As a unitary savings and loan holding company, 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  unless such other  associations each
qualify as a QTL and were acquired in a supervisory acquisition.

         If First  Federal  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. See "- Qualified Thrift Lender Test."

         The Company must obtain approval from the OTS before acquiring  control
of  any  other  SAIF-insured   association.   Such  acquisitions  are  generally
prohibited  if they  result  in a  multiple  savings  and loan  holding  company
controlling  savings  associations  in  more  than  one  state.   However,  such
interstate  acquisitions are permitted based on specific state  authorization or
in a supervisory acquisition of a failing savings association.

         Federal Securities Law. The stock of the Company is registered with the
SEC under the Securities  Exchange Act of 1934, as amended (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.  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 June 30, 1998, First Federal 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. See "- Liquidity."

         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. First Federal is a member of the FHLB of
Cincinnati,  which  is one of 12  regional  FHLBs,  that  administers  the  home
financing credit function of savings associations. Each FHLB serves as a reserve
or  central  bank for its  members  within  its  assigned  region.  It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
<PAGE>
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 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.  In addition,  all  long-term  advances are required to
provide funds for residential home financing.

         As a member,  First Federal is required to purchase and maintain  stock
in the FHLB of Cincinnati.  At June 30, 1998,  First Federal had $1.5 million in
FHLB stock, which was in compliance with this requirement.  In past years, First
Federal has received substantial dividends on its FHLB stock. Over the past five
fiscal years such  dividends  have averaged 6.52% and were 7.25% for fiscal year
1998.

         Under  federal  law the FHLBs are  required  to  provide  funds for the
resolution  of  troubled  savings  associations  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
could also have an adverse  effect on the value of FHLB stock in the  future.  A
reduction in value of First  Federal's FHLB stock may result in a  corresponding
reduction in First Federal's capital.

         For the  year  ended  June  30,  1998,  dividends  paid by the  FHLB of
Cincinnati to First Federal totaled $104,528, which constitute a $9,771 increase
over the amount of dividends  received in fiscal year 1997. The $26,768 dividend
received  for the quarter  ended June 30, 1998  reflects an  annualized  rate of
7.25% which was the same rate paid for the quarter ended June 30, 1997.

Federal and State Taxation

         Savings  associations  such as the Bank,  that meet certain  conditions
prescribed by the Code, are permitted to establish reserves for bad debts and to
make annual  additions  thereto which may, 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 was computed  under the
experience  method.  Under the experience method, the bad debt reserve deduction
is an amount  determined  under a  formula  based  generally  upon the bad debts
actually sustained by the savings association over a period of years.

         In August 1996, legislation was enacted that repealed the percentage of
taxable  income  method used by many  thrifts,  including the Bank, to calculate
their bad debt  reserve  for federal  income tax  purposes.  As a result,  small
thrifts such as the Bank must recapture that portion of the reserve that exceeds
the amount that could have been taken under the experience  method for tax years
beginning  after  December 31, 1987.  The  recapture  will occur over a six-year
period,  the  commencement of which will be delayed until the first taxable year
beginning  after  December 31,  1997,  provided the  institution  meets  certain
residential lending  requirements.  At June 30, 1998, the Bank had approximately
$631,000  in bad debt  reserves  subject to  recapture  for  federal  income tax
purposes.  The  deferred  tax  liability  related  to  the  recapture  has  been
previously established so there will be no effect on future net income.
<PAGE>
         In addition to the regular income tax, corporations,  including savings
associations  such as the Company  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.

         A portion of the Bank's  reserves for losses on loans 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 June 30, 1998, the portion of the Bank's reserves subject to this
treatment for tax purposes totaled approximately $2.3 million.

         The Company and the Bank filed consolidated  federal income tax returns
on a fiscal year basis using the accrual method of  accounting.  The Company has
been  audited by the IRS,  or the  statute of  limitations  for  assessment  has
closed,  with respect to federal income tax returns  through June 30, 1994. With
respect  to years  examined  by the  IRS,  either  all  deficiencies  have  been
satisfied or  sufficient  reserves  have been  established  to satisfy  asserted
deficiencies.  In the  opinion  of  management,  any  examination  of still open
returns  (including  returns of subsidiaries  and  predecessors  of, or entities
merged into,  the Company)  would not result in a deficiency  which could have a
material adverse effect on the financial condition of the Company.

         Ohio Taxation.  The Bank conducts its business in Ohio and consequently
is subject to the Ohio corporate franchise tax. A financial  institution subject
to the Ohio  corporate  franchise tax levied by the Ohio Revised Code pays a tax
equal to 0.014  times  its  apportioned  net  worth.  The  apportionment  factor
consists  of a gross  receipts  factor,  determined  by  reference  to the total
receipts of the  financial  institution  from all  sources,  a property  factor,
determined  by  reference  to the net book  value of all loans and fixed  assets
owned by the financial institution and a payroll factor.

         Delaware  Taxation.  As a  Delaware  holding  company,  the  Company 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.  The Company is also
subject to an annual franchise tax imposed by the State of Delaware. The Company
also files an Ohio franchise tax return and pays tax on its Ohio taxable income.

Competition

         First Federal faces strong competition, both in originating real estate
and other loans and in attracting  deposits.  Competition  in  originating  real
estate loans comes primarily from other commercial banks, savings  associations,
credit unions and mortgage  bankers  making loans secured by real estate located
in the Bank's  market  area.  Commercial  banks and  finance  companies  provide
vigorous  competition in consumer lending. The Bank competes for real estate and
other loans  principally  on the basis of the quality of services it provides to
borrowers,  interest  rates and loan fees it charges,  and the types of loans it
originates.
<PAGE>
         The Bank  attracts  most of its  deposits  through  its retail  banking
offices,  primarily from the  communities in which those retail banking  offices
are located; therefore, competition for those deposits is principally from other
commercial  banks,  savings  associations  and credit unions located in the same
communities.  The Bank  competes  for these  deposits  by  offering a variety of
deposit accounts at competitive rates, convenient business hours, and convenient
branch locations with interbranch deposit and withdrawal privileges at each.

         The  Bank's  primary  market  area  is  Wood  County.  There  are  nine
commercial banks and two savings associations, other than First Federal, and six
credit unions which compete for deposits and loans in Wood County.


Executive Officers of the Company and the Bank

         Certain  information  with  respect  to the  executive  officer  of the
Company  and/or the Bank who is not also a director,  at June 30,  1998,  is set
forth below.

         David A. Weaks.  Mr.  Weaks,  age 52, has been a Vice  President of the
Bank since 1975 and Vice  President  of the Company  since its  formation in May
1993. His primary  responsibilities include overall administration of the Bank's
savings and marketing operations, and human resources department. Mr. Weaks also
oversees  the  Bank's  liability  activities  and  is  responsible  for  overall
supervision of office services and property management for the Bank.

         John H. Bick.  Mr.  Bick,  age 49, is Vice  President  of  Lending  and
Operations  and is also an Executive  Officer of the Company.  He is responsible
for all facets of lending, loan processing and new product development. Mr. Bick
began his career in banking at a community  bank in Amsterdam,  Ohio in 1977. He
received  his  MBA  from  the   Universisity  of  Steubenville  and  has  taught
accounting,  financing and other bank related  subjects in local  colleges for a
number of years.

Employees

         At June 30,  1998,  the Bank had a total of 49  employees,  including 5
part-time employees.  The Bank's employees are not represented by any collective
bargaining group. Management considers its employee relations to be good.

Item 2.  Description of Property

         The Bank  conducts  its  business  at its  main  office  and six  other
locations in its primary market area. The following table sets forth information
relating to each of the Bank's offices as of June 30, 1998.

         The Bank owns all of its  offices as of June 30,  1998,  except for the
Pemberville, Ohio branch, which leases its space in the local IGA. The total net
book value of the Bank's premises and equipment  (including  land,  building and
leasehold  improvements and furniture,  fixtures and equipment) at June 30, 1998
was $2.4 million.  See Note 5 of Notes to Consolidated  Financial  Statements in
the Annual Report.
<PAGE>
<TABLE>
<CAPTION>
                                                                             Total
                                                                      Approximate Square      Net Book Value at
                                                    Date Acquired           Footage              June 30, 1998
                                                    -------------           -------              -------------
Location
<S>                                                      <C>                 <C>                    <C>     
Main Office:
124 E. Court Street, Bowling Green, Ohio                 1968                10,208                 $153,337

Branch Offices:
601 Superior Street, Rossford, OH                        1976                 2,844                  100,218

125 W. Main Street, Woodville, OH                        1979                 4,458                  141,771

201 S. Main Street, N. Baltimore, OH                     1984                 2,430                  115,754

525 W. Wooster Street, Bowling Green, OH                 1985                   980                   38,553

24215 Front Street, Grand Rapids, OH                     1986                   925                      ---

130/134 E. Court Street(1), Bowling Green, OH            1980                 2,850                      ---
</TABLE>
------------------

     (1) The property the Bank owns at 130/134 E. Court Street,  Bowling  Green,
         Ohio, was purchased for future  development.  It currently  contains an
         older frame house built in the 1880s and a small one-story brick office
         building.  Both of these  structures have been fully  depreciated.  The
         property is rented,  with current gross income of $1,125 per month. The
         Bank also owns land for future  development  at 525 W. Wooster  Street,
         Bowling  Green,  Ohio, 629 W/S Boundary,  Perrysburg,  Ohio, and SR 20,
         Perrysburg, Ohio.

         First Federal believes that its current  facilities,  while adequate to
meet its present  needs,  are not adequate to meet its needs in the  foreseeable
future. The Bank is considering alternatives to expand its facilities.  The Bank
has purchased  land located  behind and adjacent to its 525 West Wooster  Street
office. First Federal is currently considering construction of a new branch. The
Bank also acquired two parcels of land in Perrysburg,  Ohio for possible  branch
offices and opened an office in Pemberville,  Ohio in July 1997. The Pemberville
location is a leased office inside a grocery store.

         The Bank maintains an outside service bureau for depositor and borrower
customer  information.  The net book value of the data  processing  and computer
equipment utilized by the Bank at June 30, 1998 was approximately $188,020.

Item 3.  Legal Proceedings

         First  Federal is involved  from time to time as plaintiff or defendant
in various legal actions arising in the normal course of its business. While the
ultimate outcome of these proceedings cannot be predicted with certainty,  it is
the opinion of management,  after  consultation with counsel  representing First
Federal in the proceedings,  that the resolution of these proceedings should not
have a material adverse effect on First Federal's  financial position or results
of operations.

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 June 30, 1998.
<PAGE>
                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

         The  information  provided under the captions  "Dividends"  and "Market
Information"  on page 49 of the attached 1998 Annual Report to  Stockholders  is
herein incorporated by reference.

Item 6.  Management's Discussion and Analysis and Selected Financial data

         Pages 2 through 17 of the attached 1998 Annual  Report to  Stockholders
is herein incorporated by reference.

Item 7.  Financial Statements

         The following  information  appearing in the Company's Annual Report to
Stockholders  for the year ended June 30, 1998, is  incorporated by reference in
this Annual Report on Form 10-KSB as Exhibit 13.

Annual Report Section                                    Pages in Annual Report
---------------------                                    ----------------------

Report of Independent Auditors                                    18

Consolidated Balance Sheets
(June 30, 1998 and 1997)                                          19

Consolidated Statements of Income
(Years Ended June 30, 1998, 1997 and 1996)                        20

Consolidated Statements of Changes in
Shareholders' Equity (Years Ended
June 30, 1998, 1997, and 1996)                                 21-23

Consolidated Statements of Cash Flows
(Years Ended June 30, 1998, 1997, and 1996)                    24-25

Notes to Consolidated Financial Statements                     26-48

All schedules are omitted as the required  information  is not  applicable or is
contained in the notes to the consolidated financial statements.

         With the exception of the aforementioned information, the Corporation's
Annual  Report to  Stockholders  for the year ended June 30,  1998 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.
<PAGE>
                                    PART III

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

Directors

         Information  concerning Directors of the Company is incorporated herein
by reference  from the  definitive  Proxy  Statement  for the Annual  Meeting of
Stockholders  to be held in 1998,  a copy of which  will be filed not later than
120 days after the close of fiscal year.

Executive Officers

         Information regarding the business experience of each executive officer
of the Company and/or the Bank who is not also a director contained in Part I of
this Form 10-KSB is incorporated herein by reference.

Item 10. Executive Compensation

         Information concerning executive compensation is incorporated herein by
reference  from  the  definitive  Proxy  Statement  for the  Annual  Meeting  of
Stockholders  to be held in 1998,  a copy of which  will be filed not later than
120 days after the close of the fiscal year.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         Information  concerning security ownership of certain beneficial owners
and management is  incorporated  herein by reference  from the definitive  Proxy
Statement for the Annual Meeting of  Stockholders  to be held in 1998, a copy of
which will be filed not later than 120 days after the close of the fiscal year.

Item 12. Certain Relationships and Related Transactions

         Information  concerning certain  relationships and related transactions
is incorporated  herein by reference from the definitive Proxy Statement for the
Annual Meeting of Stockholders to be held in 1998, a copy of which will be filed
not later than 120 days after the close of the fiscal year.
<PAGE>
Item 13.          Exhibits and Reports on Form 8-K

         (a)  Exhibits
                                                                  Reference to
                                                                  Prior Filing
                                                                   or Exhibit
  Regulation                                                         Number
  S-K Exhibit                                                       Attached
    Number                    Document                               Hereto
    ------                    --------                               ------
      2      Plan of acquisition, reorganization,                     None
             arrangement, liquidation, or succession

      3(a)   Articles of Incorporation                                 *

      3(b)   By-Laws                                                   *

      4      Instruments defining the rights of                        *
             security holders, including debentures

      9      Voting Trust Agreement                                   None

     10      Material Contracts

             (a) 1993 Stock Option and Incentive Plan                  *
             (b) Recognition and Retention Plan                        *
             (c) Employment Agreements                                 *

     11      Statement re:  computation of per share earnings         None

     12      Statement re:  computation of ratios                 Not required

     13      Annual Report to Security Holders                         13

     16      Letter on change in certifying accountants               None

     18      Letter on change in accounting principles                None

     21      Subsidiaries of the Registrant                            21

     22      Published report regarding
             matters submitted to vote                                 None

     23      Consents of Experts and Counsel                           23

     24      Power of Attorney                                    Not required

     27      Financial Data Schedule                                   27

     99      Additional exhibits                                      None
----------------
         * Filed as exhibits to the Company's  Form S-1  registration  statement
filed  on May  28,  1993  (File  No.  33-63594)  pursuant  to  Section  5 of the
Securities  Act of 1933.  All of such  previously  filed  documents  are  hereby
incorporated herein by reference in accordance with Item 601 of Regulation S-B.

     (b)  Reports on Form 8-K

         During the quarter  ended June 30,  1998,  the Company did not file any
Current Reports on Form 8-K.
<PAGE>

                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                           WOOD BANCORP, INC.



Date:   September ___, 1998                By:  /s/ Richard L. Gordley
                                                ----------------------
                                                Richard L. Gordley
                                                President, Chief Executive
                                                Officer and Director
                                                (Duly Authorized Representative)

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this report has been signed below by the following persons in the capacities and
on the dates indicated.


/s/ Richard L. Gordley                    /s/ David L. Nagel
----------------------                    ------------------
Richard L. Gordley, President,            David L. Nagel, Executive Vice
Chief Executive Officer and               President, Chief Financial Officer,
 Director (Principal Executive            Secretary and Director (Principal
 and Operating Officer)                    Financial and Accounting Officer)


Date:  September ____, 1998               Date:   September ____, 1998
       


/s/ Robert E. Spitler                     /s/ Michael A. Miesle
---------------------                     ---------------------
Robert E. Spitler                         Michael A. Miesle, Director
Chairman of the Board


Date:  September ____, 1998               Date:   September ____, 1998
       

/s/ Dale L. Myers                         /s/ Randal R. Huber
-----------------                         -------------------
Dale L. Myers, Director                   Randal R. Huber, Director


Date:  September ____, 1998               Date:  September ____, 1998
 <PAGE>
<PAGE>



                                Index to Exhibits






 Exhibit
 Number
 ------


  13              Annual Report to Security Holders

  21              Subsidiaries of the Registrant

  23              Consent of Crowe, Chizek and Company

  27              Financial Data Schedule