UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

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

        FOR THE FISCAL YEAR ENDED JUNE 30, 2002.

                               OR

 [ ]    TRANSITIONAL  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
        EXCHANGE ACT OF 1934

        For the transition period from _________ to ___________

                         Commission File Number: 0-18832

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

               KENTUCKY                                   61-1168311
 --------------------------------------------         -------------------
(State or other jurisdiction of incorporation          (I.R.S. Employer
              or organization)                        Identification No.)

2323 RING ROAD, ELIZABETHTOWN, KENTUCKY                     42701
----------------------------------------                  ---------
(Address of principal executive offices)                   Zip Code

Registrant's telephone number, including area code:   (270) 765-2131
                                                      --------------

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 $1.00 PER SHARE
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past ninety days. Yes X No ___

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K. [X]

The   aggregate   market  value  of  the   outstanding   voting  stock  held  by
non-affiliates  of the  registrant,  based  on the  closing  sales  price of the
Registrant's  Common Stock as quoted on The NASDAQ  National Market on September
16, 2002, was $62,171,384.  Solely for purposes of this calculation,  the shares
held  by  directors  and  executive  officers  of  the  registrant  and  by  any
stockholder  beneficially  owning more than 5% of the  registrant's  outstanding
common stock are deemed to be shares held by affiliates.

As of September 16, 2002, there were issued and outstanding  3,660,275 shares of
the  registrant's  common stock, of which directors and executive  officers held
634,839 shares and more than 5% beneficial owners held 199,464 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the  Registrant's  Definitive Proxy Statement for the 2002 Annual
Meeting  of  Shareholders  to be held  November  13,  2002 are  incorporated  by
reference into Part III.


                                       1
<PAGE>


                                     PART I

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements   by  First   Federal   Financial   Corporation   of  Kentucky   (the
"Corporation") contained in "Item 1--Business," "Item 7--Management's Discussion
and  Analysis  of  Financial  Condition  and Results of  Operations,"  and other
sections of this report that are not  statements of historical  fact  constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange  Act of  1934,  as  amended.  In  addition,  the  Corporation  may make
forward-looking  statements in future  filings with the  Securities and Exchange
Commission,  in press  releases,  and in oral and written  statements made by or
with the approval of the Corporation.  Forward-looking  statements include,  but
are not limited to: (1)  projections  of revenues,  income or loss,  earnings or
loss per share,  capital  structure and other financial items; (2) statements of
plans and objectives of the Corporation or its management or Board of Directors;
(3) statements regarding future events, actions or economic performance; and (4)
statements of assumptions underlying such statements.  Words such as "believes,"
"anticipates,"   "expects,"   "intends,"   "plans,"   "targeted,"   and  similar
expressions are intended to identify forward-looking  statements but are not the
exclusive means of identifying such statements.

Forward-looking statements involve risks and uncertainties that may cause actual
results  to  differ  materially  from  those  indicated  by the  forword-looking
statements. Some of the events or circumstances that could cause such difference
include,  but are not limited to, changes in economic  conditions in the markets
served by the  Corporation,  in Kentucky and the surrounding  region,  or in the
nation as a whole;  changes in interest  rates;  the impact of  legislation  and
regulation;  the Corporation's ability to offer competitive banking products and
services;  competition from other providers of financial services, the continued
growth of the markets in which the Corporation  operates;  and the Corporation's
ability to expand into new markets and to maintain profit margins in the face of
pricing pressure. All of these events and circumstances are difficult to predict
and many of them are beyond the Corporation's control.

ITEM 1.  BUSINESS

THE CORPORATION

First Federal Financial  Corporation of Kentucky was incorporated in August 1989
under the laws of the  Commonwealth  of Kentucky for the purpose of becoming the
holding company for First Federal Savings Bank of Elizabethtown ("First Federal"
or the "Bank"),  which became  effective on June 1, 1990.  Since that date,  the
Corporation has engaged in no significant  activity other than holding the stock
of First  Federal and  operating  the business of a savings  bank through  First
Federal.  Accordingly,  the  information  set  forth in this  report,  including
financial  statements and related data,  relates  primarily to First Federal and
its subsidiaries.

THE BANK

First  Federal  is  a  federally   chartered   savings  bank   headquartered  in
Elizabethtown,  Kentucky.  The business of First Federal  consists  primarily of
attracting  deposits from the general public and  originating  mortgage loans on
single-family  residences,  multi-family housing and commercial property.  First
Federal also makes home improvement loans,  consumer loans,  commercial business
loans,  FHA loans and through its  subsidiaries  offers  insurance  products and
brokerage  services to its  customers  and makes  qualified VA loans for sale to
investors on the  secondary  market.  The  principal  sources of funds for First
Federal's lending  activities include deposits received from the general public,
borrowings  from the Federal  Home Loan Bank  ("FHLB") of  Cincinnati,  and loan
repayments.   First  Federal's  primary  sources  of  income  are  interest  and
origination  fees on loans and interest on investments  such as various  federal
and government agency obligations and other investment  securities  permitted by
applicable laws and regulations. First Federal's principal expenses are interest
paid on deposit accounts and borrowed funds and operating expenses.

First Federal was originally  founded in 1923 as a  state-chartered  institution
and  became  federally  chartered  in 1940.  In 1987,  the Bank  converted  to a
federally  chartered  savings bank and converted  from mutual to stock form. The
Bank is a  member  of the  FHLB of  Cincinnati  and is  subject  to  regulation,
examination and  supervision by the Office of Thrift  Supervision  ("OTS").  The
Bank's deposits are insured by the Savings  Association  Insurance Fund ("SAIF")
and administered by the Federal Deposit Insurance Corporation ("FDIC").







                                        2

<PAGE>

The Bank's  primary  market area  consists of six counties in Central  Kentucky:
Hardin;  Hart;  Nelson;  Bullitt;  Meade;  and  Jefferson.  The following  table
provides demographic and economic information by county:
<TABLE>
<CAPTION>

                                                                             AVERAGE   MEDIAN   MEDIAN
                                % BELOW     NUMBER    UNEMPLOYMENT            WEEKLY   FAMILY    HOME
COUNTY     POPULATION  TREND    POVERTY    EMPLOYED       RATE%     TREND      WAGE    INCOME    PRICE
------     ----------  -----    -------    --------   ------------  -----    -------   ------   ------
<S>         <C>        <C>       <C>      <C>            <C>       <C>        <C>     <C>     <C>
 Hardin       95,070    1.0%      12.4      38,392        6.40      1.2%       527     48,100   86,000
 Hart         17,383    (.4)%     22.2       4,317        5.70      1.1%       390     33,400   45,000
 Nelson       38,592    3.0%      12.0      13,057        7.00      1.4%       485     48,100   71,375
 Bullitt      63,043    3.0%       9.2      11,680        3.50       .5%       450     56,300   93,250
 Meade        27,008    2.5%      10.3       3,833        5.00       .7%       473     40,200   70,100
 Jefferson   692,910    (.4)%     12.0     438,853        4.00       .4%       642     56,300  102,650
</TABLE>

The Bank  continues to seek and  evaluate  additional  expansion  opportunities,
either  through the  establishment  of de novo  banking  centers and/ or through
acquisitions of existing  institutions in the financial services  industry.  The
Bank intends to continue to consider various strategic  acquisitions of banks or
banking  assets in those  geographical  areas  that  management  believes  would
complement and increase the Bank's existing  business lines, or expansion in new
market areas or product lines that  management  determines  would be in the best
interest of the Bank and its shareholders.

LENDING ACTIVITIES

GENERAL.  The principal  lending activity of First Federal is the origination of
conventional first mortgage loans secured by residential property. The Bank also
engages in commercial  real estate,  consumer and commercial  business  lending.
Residential  mortgage  loans made by First  Federal  are  secured  primarily  by
single-family  homes and  include  construction  loans.  The  majority  of First
Federal's  mortgage loan  portfolio is secured by real estate located in Hardin,
Nelson, Hart, Meade, LaRue and Bullitt counties in the state of Kentucky.

The  following  table  presents a summary of the Bank's loan  portfolio,  net of
deferred  loan fees,  by type for each of the last five  years.  The Bank has no
foreign loans in its portfolio and other than the categories noted,  there is no
concentration of loans in any industry exceeding 10% of total loans.
<TABLE>
<CAPTION>

                                                                   JUNE 30,
                     -----------------------------------------------------------------------------------------------
                             2002                2001                2000               1999               1998
                             ----                ----                ----               ----               ----
                      AMOUNT      %       AMOUNT      %       AMOUNT      %      AMOUNT      %      AMOUNT      %
                      ------      -       ------      -       ------      -      ------      -      ------      -
  <S>               <C>        <C>     <C>         <C>     <C>         <C>     <C>        <C>     <C>        <C>
   Type of Loan:
   Real Estate:
      Residential(1) $308,384   58.86%  $328,297    63.12%  $308,507    65.16%  $297,574   73.94%  $282,503   79.18%
      Construction     10,662    2.03      9,079     1.75      8,975     1.89     11,430    2.84      5,960    1.67
      Commercial      112,528   21.48     88,938    17.10     64,828    13.69     32,729    8.13     22,169    6.21
   Consumer and
        home equity    51,797    9.88     54,189    10.42     59,692    12.61     48,281   12.00     45,136   12.65
   Indirect consumer   19,640    3.75     21,822     4.20     15,186     3.21        762     .19       -         -
   Commercial,
        other          20,985    4.00     17,727     3.41     16,295     3.44     11,692    2.90      1,020     .29
                     --------  ------    -------   ------   --------   ------   --------  ------   --------  ------
         Total loans $523,996  100.00%  $520,052   100.00%  $473,483   100.00%  $402,468  100.00%  $356,788  100.00%
                     ========  ======   ========   ======   ========   ======   ========  ======   ========  ======
</TABLE>


(1)      Includes loans held for sale.












                                        3


<PAGE>

LOAN MATURITY  SCHEDULE.  The following table sets forth certain  information at
June 30, 2002,  regarding the dollar amount of loans maturing in the Bank's loan
portfolio based on their contractual terms to maturity.
<TABLE>
<CAPTION>

                                                   DUE AFTER
                                  DUE DURING       1 THROUGH       DUE AFTER 5
                                THE YEAR ENDED   5 YEARS AFTER     YEARS AFTER
                                   JUNE 30,         JUNE 30,         JUNE 30,       TOTAL
                                     2003             2002             2002         LOANS
                                     ----             ----             ----         -----
                                                      (DOLLARS IN THOUSANDS)
   <S>                            <C>             <C>              <C>           <C>
    Residential mortgage (1)       $ 3,685         $  30,575        $274,124      $308,384
    Real estate construction         8,102             1,300           1,260        10,662
    Real estate commercial          12,515            72,969          27,044       112,528
    Consumer, home equity and
       indirect consumer             5,626            65,041             770        71,437
    Commercial, other                7,112            12,157           1,716        20,985
                                   -------          --------        --------      --------
          Total                    $37,040          $182,042        $304,914      $523,996
                                   =======          ========        ========      ========
   </TABLE>

    (1) Includes loans held for sale.

The following  table  reflects a breakdown of loans  maturing after one year, by
fixed and adjustable rates.

                                                 FLOATING OR
                                FIXED RATES    ADJUSTABLE RATES        TOTAL
                                -----------    ----------------        -----
                                            (DOLLARS IN THOUSANDS)

   Residential mortgage (1)      $242,725          $ 61,974          $304,699
   Real estate construction         1,843               717             2,560
   Real estate commercial          74,924            25,089           100,013
   Consumer, home equity and
     indirect consumer             46,460            19,351            65,811
   Commercial, other               12,135             1,738            13,873
                                 --------          --------          --------
         Total                   $378,087          $108,869          $486,956
                                 ========          ========          ========

(1)      Includes loans held for sale.

RESIDENTIAL  REAL ESTATE &  CONSTRUCTION  LENDING.  The Bank's  primary  lending
activity is the origination of loans on single-family residences,  which consist
of one-to-four  individual  dwelling units.  Fixed rate  residential real estate
loans  originated  by the Bank have  terms  ranging  from ten to  thirty  years.
Interest rates are competitively  priced within the primary  geographic  lending
market, and vary according to the term for which they are fixed.

In recent years,  the Bank has  emphasized the  origination  of  adjustable-rate
mortgage loans ("ARMs"). The Bank offers an ARM with an annual adjustment, which
is tied to various  national  indices with a maximum  adjustment of 2% annually,
and a  lifetime  cap of 15%.  As of June 30,  2002,  approximately  20.3% of the
Bank's  residential real estate loans were adjustable rate loans with adjustment
periods ranging from one to five years and balloon loans of seven years or less.
The  origination of these mortgage loans can be more difficult in a low interest
rate environment  where there is a significant  demand for fixed rate mortgages.
The  Bank  limits  the  maximum   loan-to-value   ratio  on   one-to-four-family
residential  first mortgages to 90% of the appraised value and generally  limits
the loan-to-value ratio on second mortgages on  one-to-four-family  dwellings to
90%.

Construction  loans involve  additional  risks as a result of the fact that loan
funds are advanced upon the security of the project under construction, which is
of uncertain value prior to the completion of construction. Moreover, because of
the uncertainties inherent in estimating construction costs, delays arising from
labor problems, material shortages, and other unpredictable contingencies, it is
relatively  difficult to evaluate  accurately  the total loan funds  required to
complete  a  project,  and  related   loan-to-value   ratios.  The  analysis  of
prospective construction loan projects thus requires an expertise that varies in
significant  respects  from that which is  required  for  permanent  residential
mortgage lending.




                                        4

<PAGE>

The Bank's underwriting  criteria is designed to evaluate and minimize the risks
of each construction  loan. Among other things,  the Bank considers  evidence of
the availability of permanent financing or a takeout commitment to the borrower;
the reputation of the borrower and his or her financial condition; the amount of
the borrower's equity in the project; independent appraisals and cost estimates;
pre-construction sale and leasing information;  and cash flow projections of the
borrower.

COMMERCIAL REAL ESTATE  LENDING.  First Federal  originates  loans for small and
medium-sized  businesses  from  its  various  locations.  Commercial  loans  are
primarilly real estate secured and are generated at banking centers primarily in
the  Bank's  market  area.  The Bank  makes  commercial  loans to a  variety  of
industries.  Substantially all of the commercial real estate loans originated by
First Federal have adjustable interest rates with maturities of 25 years or less
or are loans with fixed  interest rates and maturities of five years or less. At
June 30, 2002, the Bank had $112.5 million outstanding in commercial real estate
loans. The security for commercial real estate loans includes retail businesses,
warehouses,  churches,  apartment  buildings and motels.  The largest commercial
real estate loan originated  during the June 30, 2002, fiscal year had a balance
of $2.2 million.

First Federal's commercial real estate lending activities include  loans secured
by multi-family  residential  property,  consisting of properties with more than
four separate dwelling units.  These loans amounted to $15.1 million of the loan
portfolio at June 30, 2002.  First Federal  generally does not lend above 75% of
the appraised  values of multi-family  residences on first mortgage  loans.  The
mortgage  loans First Federal  currently  offers on  multi-family  dwellings are
generally one or five year ARMs with maturities of 25 years or less.

Commercial  real estate loans  typically  involve  large loan balances to single
borrowers  or groups of  related  borrowers  and may also  involve  higher  loan
principal  amounts  to  collateral  values  as  compared  to  loans  secured  by
residential real estate. In addition, the payment experience of loans secured by
income producing  properties is typically dependent on the successful  operation
of the related real estate  project and thus may be more  vulnerable  to adverse
conditions in the real estate market or in the economy generally.

CONSUMER  LENDING.   Federal   regulations  permit  federally  chartered  thrift
institutions to make secured and unsecured  consumer loans of up to 35% of their
assets.  This limit may be exceeded  for certain  consumer  loans,  such as home
equity loans, property improvement loans, mobile home loans and loans secured by
savings accounts.  The consumer loans granted by the Bank have included loans on
automobiles,  boats,  recreational vehicles and other consumer goods, as well as
loans secured by savings accounts,  home improvement  loans, and unsecured lines
of credit. As of June 30, 2002, consumer loans outstanding were $71.4 million or
approximately  13.6% of the Bank's  total  gross  loan  portfolio.  These  loans
involve  a higher  risk of  default  than  loans  secured by  one-to-four-family
residential  loans.  The Bank believes,  however,  that the shorter term and the
normally higher interest rates available on various types of consumer loans have
been helpful in maintaining a profitable  spread between the Bank's average loan
yield and its cost of funds. The Bank offers a home equity line of credit, which
is a revolving line of credit secured by the equity in a customer's  home. As of
June 30, 2002, these loans totaled $32.1 million.

The Bank's underwriting  standards reflect that consumer loans are considered to
have greater risk of loan losses than residential real estate loans. Among other
things,  the  capacity  of  individual  borrowers  to repay can change  rapidly,
particularly  during an economic  downturn,  collection  costs can be relatively
higher for  smaller  loans,  and the value of  collateral  may be more likely to
depreciate.  The Consumer  Lending Policy  establishes the appropriate  consumer
lending authority for all loan officers based on experience,  training, and past
performance   for  approving  high  quality  loans.   Loans  beyond   individual
authorities  must  be  approved  by  additional  officers,  the  Executive  Loan
Committee  or the Board of  Directors,  based on the size of the loan.  The Bank
requires  detailed  financial  information  and credit  bureau  reports for each
consumer  loan  applicant to  establish  the  applicant's  credit  history,  the
adequacy  of  income  for  debt  retirement,  and  job  stability  based  on the
applicant's employment records. Co-signers are required on applications that are
determined marginal for these standards,  or that fail to qualify  individually.
Adequate collateral is required on the majority of consumer loans. The Executive
Loan Committee  monitors and evaluates  unsecured  lending activity by each loan
officer.

In 1999,  the Bank  developed an indirect  consumer loan  program.  The indirect
consumer loan portfolio is comprised of new and used automobile,  motorcycle and
all terrain vehicle loans originated on the behalf of the Bank by a select group
of auto dealers within the service area.  Indirect consumer loans are considered
to have  greater  risk of loan losses than direct  consumer  loans due to, among
other  things:  borrowers  may have no  existing  relationship  with  the  Bank;
borrowers  may not be residents of the lending  area;  less  detailed  financial
statement information may be collected at application; collateral values can be
more difficult to determine; and the condition of vehicles securing the loan can
deteriorate  rapidly.  To address the additional  risks associated with indirect
consumer  lending,  the Executive  Loan  Committee  continually  evaluates  data
regarding the dealers  enrolled in the program,  including  monitoring turn down

                                        5

<PAGE>
and  delinquency  rates.  All  applications  are  approved by  specific  lending
officers, selected  based on experience in this field,  who obtain credit bureau
reports on each  application  to assist in the decision.  Aggressive  collection
procedures  encourage more timely  recovery of late payments.  At June 30, 2002,
total loans under the indirect consumer loan program totaled $19.6 million.

COMMERCIAL BUSINESS LENDING. The Bank is permitted to make secured and unsecured
loans for commercial,  corporate, business, and agricultural purposes, including
issuing  letters of credit and engaging in inventory  financing  and  commercial
leasing activities.  Commercial loans generally are made to small-to-medium size
businesses  located within the Bank's defined market area.  Commercial loans are
considered  to  involve a higher  degree of risk than  residential  real  estate
loans. The risks associated with commercial business lending include potentially
greater  volatility in the value of the assigned  collateral,  the need for more
technical analysis of the borrower's financial position, the potentially greater
impact of changing  economic  conditions may have on the  borrower's  ability to
retire  debt,  and the  additional  expertise  required for  commercial  lending
personnel.  The Bank has developed a new  commercial  lending policy and hired a
Chief Lending  Officer to reduce these risks and  coordinate the Bank's plans to
increase its  emphasis on  commercial  lending.  The Chief  Lending  Officer has
developed  guidelines  for the  Bank's  lending  staff to assist  this  process.
However,  commercial  loans  generally  carry a higher  yield and are made for a
shorter term than real estate loans.  Commercial  business loans  outstanding at
June 30, 2002 totaled $21.0 million

INVESTMENT SECURITIES

Interest on securities  provides the largest source of interest income for First
Federal after interest on loans, constituting 4.66% of the total interest income
for fiscal year 2002. First Federal has the authority to invest in various types
of liquid assets,  including  short-term United States Treasury  obligations and
securities  of  various  federal  agencies,  certificates  of deposit at insured
savings and loans and banks, bankers'  acceptances,  and federal funds. The Bank
may also  invest a  portion  of its  assets  in  certain  commercial  paper  and
corporate debt securities.  First Federal is also authorized to invest in mutual
funds and stocks whose assets conform to the  investments  that First Federal is
authorized to make  directly.  Securities  held-to-maturity  decreased in fiscal
year 2001 due to redemptions of bonds held in the Bank's  investment  portfolio.
As interest  rates  declined,  these bonds  ceased to be an  attractive  funding
vehicle for the issuer and were called for  redemption in accordance  with their
terms.  See Note 2 of Notes to  Consolidated  Financial  Statements  for further
information concerning the Bank's investment portfolio.

The  following  table sets  forth the  carrying  value of the Bank's  securities
portfolio  at the dates  indicated.  At June 30,  2002,  the market value of the
Bank's securities portfolio was $23.7 million.

                                                      AT JUNE 30
                                          ----------------------------------

                                           2002          2001        2000
                                           ----          ----        ----
                                                (DOLLARS IN THOUSANDS)
 Securities available-for-sale:
    Equity securities                   $   930        $   996     $ 1,105
    Obligations of states and political
       Subdivisions                       1,048          1,017         943
                                          -----        -------
    Total available-for-sale            $ 1,978        $ 2,013     $ 2,048
                                        =======        =======     =======

 Securities held-to-maturity:
    U.S. Treasury and agencies          $20,964        $19,917     $41,860
    Mortgage-backed securities              751          1,004       1,274
                                        -------        -------     -------
    Total held-to-maturity              $21,715        $20,921     $43,134
                                        =======        =======     =======


The following  table sets forth the scheduled  maturities,  amortized cost, fair
value and weighted average yields for the Bank's securities at June 30, 2002.

                                                                        WEIGHTED
                                                AMORTIZED      FAIR     AVERAGE
                                                   COST        VALUE     YIELD*
                                                   ----        -----     -----
                                                      (DOLLARS IN THOUSANDS)
   Securities available-for-sale:
      Due after one year through five years      $  777      $   810      4.39%
      Due after five years through ten years        233          238      4.46
      Equity securities                             385          930      3.57
                                                 ------      -------
             Total available-for-sale            $1,395      $ 1,978
                                                 ======      =======


                                        6

<PAGE>

                                                                        WEIGHTED
                                               AMORTIZED      FAIR      AVERAGE
                                                  COST        VALUE      YIELD*

                       (DOLLARS IN THOUSANDS)
   Securities held-to-maturity:
      Due in one year or less                   $ 1,964     $  2,000      6.09%
      Due after one year through five years      15,000       15,020      4.49
      Due after ten years                         4,000        4,002      5.33
      Mortgage-backed securities                    751          728      5.24
                                                -------      -------
                Total held-to-maturity          $21,715      $21,750
                                                =======      =======

      *The weighted  average  yields are  calculated on amortized  cost on a non
       tax-equivalent basis.

DEPOSITS

First Federal  attracts both short-term and long-term  deposits from the general
public by  offering a wide range of deposit  accounts  and  interest  rates.  In
recent  years  the  Bank  has  been  required  by  market   conditions  to  rely
increasingly on short-term  certificate  accounts and other deposit alternatives
that are more responsive to market interest rates. The Bank uses forecasts based
on interest rate risk simulations to assist  management in monitoring the Bank's
use of certificates of deposit and other deposit products as funding sources and
the impact of their use on interest  income and net  interest  margin in various
rate environments.

During the fiscal year ended June 30, 2001, the Bank relied on  certificates  of
deposit for much of its funding  needs.  During that  period,  the stock  market
remained an attractive investment option for depositors, and rates being paid by
competitors on deposit products had yet to decrease significantly in response to
substantial  interest rate reductions in 2001. During the fiscal year ended June
30, 2002,  equity  investments have become much less attractive,  resulting in a
substantial shift of investment funds from the stock market to deposit products,
specifically savings and money market accounts. The steady decline in rates paid
on certificates of deposit has led to increased  balances for  transactional and
immediate availability products. To evaluate  the funding  needs of the Bank in
light of deposit trends resulting from these changing conditions, management and
Board committees evaluate simulated performance reports that forecast changes in
margins.  The Bank is offering attractive  certificate rates for longer terms to
allow the Bank to retain deposit  customers and reduce interest rate risk during
the current  low-rate  environment,  while  protecting  the margin when interest
rates increase as the economy recovers.

First Federal  offers  statement and passbook  savings  accounts,  NOW accounts,
money  market  accounts and fixed and variable  rate  certificates  with varying
maturities.   First  Federal  also  offers  tax-deferred  individual  retirement
accounts.  The flow of deposits is influenced  significantly by general economic
conditions, changes in interest rates and competition. The Bank relies primarily
on customer service and  long-standing  relationships  with customers to attract
and retain these deposits;  however,  market interest rates and rates offered by
competing  financial  institutions  significantly  affect the Bank's  ability to
attract and retain deposits.

As of June 30, 2002,  approximately  41.3% of the Bank's  deposits  consisted of
various  savings and demand deposit  accounts from which customers are permitted
to  withdraw  funds at any time  without  penalty.  Interest  earned on  savings
accounts  is paid  from  the  date of  deposit  to the  date of  withdrawal  and
compounded  quarterly.  Interest earned on NOW accounts is paid from the date of
deposit to the date of  withdrawal,  compounded and credited  monthly.  Interest
rates  paid,  maturity  terms,   service  fees  and  withdrawal   penalties  are
established by management on a periodic basis.

First Federal also makes available to its depositors a number of certificates of
deposit with various terms and interest  rates to be  competitive  in its market
area. These certificates have minimum deposit  requirements as well. The variety
of deposit  accounts by First Federal has permitted it to be more competitive in
obtaining funds and has allowed it to respond with more  flexibility to the flow
of funds away from depository  institutions into direct investment vehicles such
as government  and  corporate  securities.  However,  the ability of the Bank to
attract and maintain deposits and its cost of funds have been, and will continue
to be, significantly affected by market conditions.

The  holders of the Bank's  certificates  of  deposits in amounts of $100,000 or
more are all  non-brokered  depositors,  most of who reside  within our  service
areas. The Bank does not accept brokered deposits,  which are funds deposited by
an investment dealer on behalf of a third-party  investor.  The Bank's policy is
to maintain  certificate of deposit  accounts in amounts of $100,000 or more, to
the extent  practical,  only when the  depositor  uses other  bank  products  to
increase the total customer  relationship.  The objective is to provide the Bank
with a stable deposit base of large account  balances  while  increasing the fee
income and lower funding costs through other products and services.


                                        7
<PAGE>
The following  table sets forth the breakdown of the Bank's  deposits as of June
30, 2002.


                    DOLLARS IN THOUSANDS
                                                                       PERCENT
                                                                          OF
                          CATEGORY                    BALANCES         DEPOSITS
                          --------                    --------         --------
        Non-interest bearing demand accounts         $ 28,341            5.35%
        NOW demand accounts                            64,479            12.17
        Savings accounts                               78,143            14.75
        Money market deposit accounts                  47,936             9.05
        Certificates of deposit                       274,305            51.77
        Individual Retirement Accounts                 36,678             6.91
                                                     --------           ------
                                                     $529,882           100.00%
                                                     ========           =======

The  following  table  indicates  at June 30,  2002  the  amount  of the  Bank's
certificates of deposit of $100,000 or more by time remaining until maturity.



                                               CERTIFICATES
                MATURITY PERIOD                 OF DEPOSIT
                ---------------                 ----------
                                              (IN THOUSANDS)

          Three months or less                   $ 23,061
          Three through six months                  8,246
          Six through twelve months                28,747
          Over twelve months                       40,015
                                                 --------
                   Total                         $100,069
                                                 ========


BORROWINGS

Deposits  are the  primary  source  of funds  for First  Federal's  lending  and
investment  activities and for its general business purposes.  The Bank can also
use advances  (borrowings)  from the FHLB of Cincinnati to supplement its supply
of lendable funds, meet deposit  withdrawal  requirements and to extend the term
of its  liabilities.  Advances  from the FHLB are secured by the Bank's stock in
the FHLB and  substantially  all of the Bank's first mortgage loans. At June 30,
2002 First Federal had $77.8 million in advances  outstanding  from the FHLB and
the capacity to increase its borrowings an additional $153.7 million.

The FHLB of Cincinnati  functions as a central reserve bank providing credit for
savings  banks and certain  other member  financial  institutions.  As a member,
First  Federal is required to own capital stock in the FHLB and is authorized to
apply  for  advances  on the  security  of such  stock and  certain  of its home
mortgages and other assets (principally, securities which are obligations of, or
guaranteed  by,  the  United  States)  provided  certain  standards  related  to
credit-worthiness  have been met.  For  further  information,  see Note 6 of the
Notes to Consolidated Financial Statements in the Annual Report.

The  following  table sets forth certain  information  regarding the Bank's FHLB
advances during the periods indicated.

                                                       AT JUNE 30,
                                          ------------------------------------

                                           2002          2001          2000
                                           ----          ----          ----

                                                   (DOLLARS IN THOUSANDS)


 Average balance outstanding              $77,709        $91,418      $52,419
 Maximum amount outstanding at
    any month-end during the period        80,377        111,026       80,339
 Year end balance                          77,778         77,298       80,339
 Weighted average interest rate:
    At end of year                           4.94%          4.97%        5.44%
    During the year                          4.81%          5.80%        5.34%



                                        8

<PAGE>

SUBSIDIARY ACTIVITIES

In 1978,  the Bank formed First Service  Corporation  of  Elizabethtown  ("First
Service").  First  Service acts as a broker for the purpose of selling  mortgage
life, credit life and accident and disability insurance to the Bank's customers.
In January  1999  First  Service  entered  into a contract  with  Raymond  James
Financial Services,  Inc. to provide investment services to the Bank's customers
in the area of  tax-deferred  annuities,  government  securities  and stocks and
bonds. First Service employs four full-time employees to perform these services.
This investment function operates under licenses held by First Service.  The net
income of First Service was $165,000 during fiscal year 2002.

In July 1999, the Bank formed First Heartland  Mortgage Company of Elizabethtown
("First  Heartland")  through  which the  secondary  market  lending  department
originates qualified VA loans on the behalf of the investors,  thereby providing
necessary  liquidity  to the  Bank  and  needed  loan  products  to  the  Bank's
customers.  The Bank has  continued  to  experience  good growth in the level of
mortgages  being  processed  by  First  Heartland.  As of June 30,  2002,  First
Heartland originated $41.5 million in loans on the behalf of investors. The net
income of First Heartland Mortgage was $91,000 during fiscal year 2002.

COMPETITION

First  Federal  experiences  substantial  competition  both  in  attracting  and
retaining  deposits  and in the  making  of  mortgage  and other  loans.  Direct
competition  for  deposits  comes from other  savings  institutions,  commercial
banks,  and  credit  unions  located  in  north-central   Kentucky.   Additional
significant  competition  for deposits  comes from money market mutual funds and
corporate and government debt securities.

The  primary  factors  in  competing  for  loans  are  interest  rates  and loan
origination  fees and the range of  services  offered by the  various  financial
institutions.  Competition  for  origination of real estate loans normally comes
from other savings institutions,  commercial banks,  mortgage bankers,  mortgage
brokers, and insurance  companies.  Retail  establishments  compete for loans by
offering credit cards and retail installment contracts for the purchase of goods
and  merchandise.  First Federal is able to compete  effectively  in its primary
market area.

First Federal has offices in nine cities in six contiguous counties. In addition
to the  financial  institutions,  which have  offices in these  counties,  First
Federal  competes  with several  commercial  banks and savings  institutions  in
surrounding counties, many of which have assets substantially greater than First
Federal.  These competitors attempt to gain market share through their financial
product  mix,  pricing  strategies  and banking center  locations.  In addition,
Kentucky's  interstate  banking  statute,  which  permits banks in all states to
enter the Kentucky market if they have reciprocal  interstate  banking statutes,
has  further  increased  competition  for  the  Bank.  It  is  anticipated  that
competition from both bank and non-bank  entities will continue to remain strong
in the near future.

The  following  table sets forth the  Bank's  market  share and rank in terms of
deposits in the Kentucky county where it has offices. The Bank has one office in
Jefferson County, which is Louisville,  Kentucky, with a population of more than
650,000.

                            NUMBER OF
           COUNTY         INSTITUTIONS      FFKY MARKET SHARE %      FFKY RANK
           ------         ------------      -------------------     ---------
           Hardin             14                    18.45               1
           Nelson              7                    10.37               3
           Hart                3                    19.45               3
           Bullitt             5                    16.95               4
           Meade               2                    55.82               1
           Jefferson           1                    <1.00              N/M


EMPLOYEES

As of June 30, 2002,  the Bank had 218 employees of which 200 were full-time and
18  part-time.  None  of  the  Bank's  employees  are  subject  to a  collective
bargaining  agreement and the Bank believes that it enjoys good  relations  with
its personnel.

                                        9

<PAGE>

REGULATION

GENERAL. As a federally chartered savings association,  First Federal is subject
to extensive  regulation by the OTS. The OTS periodically  examines the Bank for
compliance  with  various  regulatory  requirements  and the  FDIC  also has the
authority to conduct special  examinations of institutions  insured by the SAIF.
The Bank must file reports,  at least  quarterly,  with the OTS  describing  its
activities and financial condition.  The Bank is also subject to certain reserve
requirements promulgated by the Board of Governors of the Federal Reserve System
(the "Federal  Reserve  Board").  This  supervision  and  regulation is intended
primarily for the protection of depositors.

FEDERAL  HOME LOAN BANK SYSTEM.  The Bank is a member of the FHLB System,  which
consists of 12  regional  Federal  Home Loan Banks  subject to  supervision  and
regulation by the Federal  Housing  Finance  Board.  The Federal Home Loan Banks
provide a Central Credit facility primarily for member institutions. As a member
of the FHLB, the Bank is required to acquire and hold shares of capital stock in
the FHLB in an amount at least equal to 1% of the aggregate  unpaid principal of
its home mortgage loans, home purchase contracts, and similar obligations at the
beginning  of each year,  or 1/20 of its  advances  (borrowings)  from the FHLB,
whichever is greater. First Federal was in compliance with this requirement with
investment in the FHLB stock at June 30, 2002, of $6.2 million.

The FHLB serves as a reserve or central bank for its member  institutions within
its assigned region.  It is funded primarily from proceeds derived from the sale
of consolidated  obligations of the FHLB System. It makes advances to members in
accordance with policies and procedures established by the FHFB and the Board of
Directors of the FHLB.  As of June 30, 2002,  First Federal had $77.8 million in
advances  outstanding from the FHLB. For further information  regarding advances
from the FHLB see Note 6 of the Notes to  Consolidated  Financial  Statements in
the Annual Report.

QUALIFIED THRIFT LENDER TEST. The Bank is currently  subject to the Home Owners'
Loan Act,  which uses the  qualified  thrift  lender  ("QTL")  test to determine
eligibility  for Federal Home Loan Bank advances and for certain other purposes.
To qualify as a QTL, a savings  association  must  maintain  at least 65% of its
"portfolio" assets in qualified thrift investments. Portfolio assets are defined
as total assets less goodwill and other intangibles,  property used by a savings
association in its business and liquidity investments in an amount not exceeding
20% of total assets.  Qualified thrift investments consist of: (i) loans, equity
positions,  or  securities  related  to  domestic,  residential  real  estate or
manufactured housing, credit card and education loans; (ii) property used by the
savings association in the conduct of its business; and (iii) stock in a Federal
Home Loan Bank or the Federal National Mortgage  Association or the Federal Home
Loan  Mortgage  Corporation.  Qualified  thrift  investments  may  also  include
liquidity investments and 50% of the dollar amount of residential mortgage loans
subject  to sale  under  certain  conditions.  To  qualify  as a QTL,  a savings
association  must maintain its status as a QTL on a monthly basis in nine out of
every 12 months.  Failure to qualify as a QTL results in a number of  sanctions,
including the imposition of certain operating  restrictions  imposed on national
banks and a restriction on obtaining  additional  advances from the Federal Home
Loan Bank  System.  Upon  failure to  qualify as a QTL for two years,  a savings
association must convert to a commercial  bank. At June 30, 2002,  approximately
91.60% of the Bank's assets were invested in qualified thrift investments.

LENDING LIMITS.  Under regulations of the OTS, loans and extensions of credit to
a person  outstanding  at one time and not fully  secured  cannot  exceed 15% of
capital and surplus.  Loans and  extensions  of credit fully  secured by readily
marketable collateral (as defined) may comprise an additional 10% of capital and
surplus. At June 30, 2002, the Bank complied with its regulatory lending limits.
The aggregate amount of loans a federally chartered savings association may make
on the security of liens on non-residential real property may not exceed 400% of
the  institution's  capital,  though the  Director of OTS has the  authority  to
permit  savings  associations  to exceed  the 400% of  capital  limit in certain
circumstances.

REGULATORY CAPITAL REQUIREMENTS. OTS regulations require savings associations to
satisfy  various   different   capital   requirements.   Specifically,   savings
associations  must maintain a 6% Tier I leverage  ratio,  a 6% Tier I risk-based
capital ratio and a 10% total  risk-based  capital  ratio to be considered  well
capitalized.  OTS regulations  restrict savings  associations  that have capital
below these amounts.  As of June 30, 2002, the Bank's ratio of Total  risk-based
capital  to total  risk-weighted  assets  was  11.5%,  Tier I  capital  to total
risk-weighted  assets  was10.6%,  and Tier I capital to total average assets was
7.4%.  For  additional  information  see  Note 9 of the  Notes  to  Consolidated
Financial Statements in the Annual Report.

For  purposes of the OTS's  regulatory  capital  regulations,  Tier I capital is
defined  as  common   stockholders'   equity  (including   retained   earnings),
noncumulative perpetual preferred stock and related surplus,  minority interests
in  the   equity   accounts   of  fully   consolidated   subsidiaries,   certain
nonwithdrawable  accounts  and  pledged  deposits  and  "qualifying  supervisory
goodwill."  Tier I capital is  generally  reduced  by the amount of the  savings
association's  intangible assets for which no market exists.  Limited exceptions
to the  deduction  of  intangible  assets are provided  for  purchased  mortgage
servicing rights and qualifying supervisory goodwill held by an eligible savings
association.
                                       10

<PAGE>

In determining  compliance with the risk-based  capital  requirement,  a savings
association  is allowed  to use both Tier 1 capital  and  supplementary  capital
provided  the amount of  supplementary  capital used does not exceed the savings
association's  Tier 1  capital.  Supplementary  capital  is  defined  to include
certain  preferred stock issues,  nonwithdrawable  accounts and pledged deposits
that do not  qualify  as Tier 1 capital;  certain  approved  subordinated  debt,
certain other  capital  instruments  and a portion of the savings  association's
general loss allowances.  Total Tier 1 and supplementary  capital are reduced by
an amount equal to the savings association's high loan-to-value ratio land loans
and  non-residential  construction  loans and the amount of capital  instruments
held by other  depository  institutions  pursuant to reciprocal  arrangements as
well  as by  an  increasing  percentage  of  the  savings  association's  equity
investments.

The risk-based  capital  requirement is measured against  risk-weighted  assets,
which  equals  the sum of each  asset and the  credit-equivalent  amount of each
off-balance sheet item after being multiplied by an assigned risk weight.  Under
the OTS risk-weighted  system,  one-to four-family first mortgages not more than
90 days past due with loan-to-value  ratios under 80% are assigned a risk weight
of 50%.  Consumer  and  commercial  loans are  assigned  a risk  weight of 100%.
Mortgage-backed  securities  issued,  or fully  guaranteed  as to principal  and
interest,  by the FNMA or FHLMC are  assigned a 20% risk  weight.  Cash and U.S.
Government securities backed by the full faith and credit of the U.S. Government
are given a 0% risk weight.

In determining compliance with capital standards, all of a savings association's
investments  in,  and  extensions  of  credit  to,  any  subsidiary  engaged  in
activities not  permissible for a national bank are also to be deducted from the
savings  association's  capital.  Certain  subsidiaries  are exempted  from this
treatment,  including any subsidiary engaged in impermissible  activities solely
as agent for its customers (unless the FDIC determined otherwise),  subsidiaries
engaged  solely in mortgage  banking,  and depository  institution  subsidiaries
acquired prior to May 1, 1989. In addition, the capital deduction is not applied
to federal savings  associations  existing as of August 9, 1989 that were either
chartered as a state savings bank or state cooperative bank prior to October 10,
1982 or that acquired their principal  assets from such an association.  At June
30, 2002, the Bank's  investment in First Service,  a wholly owned subsidiary of
the Bank engaged in  activities  which are not  permitted  for a national  bank,
amounted to $788,000.  Accordingly,  on June 30, 2002, the Bank deducted 100% of
this investment from its Tier1 and tangible capital.

The OTS risk-based capital  requirements  require savings institutions with more
than a  "normal"  level of  interest  rate  risk to  maintain  additional  total
capital. A savings institution's  interest rate risk is measured in terms of the
sensitivity  of its "net  portfolio  value" to changes in  interest  rates.  Net
portfolio  value is defined,  generally,  as the present  value of expected cash
inflows from existing  assets and  off-balance  sheet contracts less the present
value of expected cash outflows from existing liabilities. A savings institution
is  considered  to have a "normal"  level of interest  rate risk exposure if the
decline in its net portfolio  value after an immediate 200 basis point  increase
or decrease in market interest rates (whichever  results in the greater decline)
is less than two percent of the current estimated  economic value of its assets.
A savings  institution with a greater than normal interest rate risk is required
to deduct from total capital, for purposes of calculating its risk-based capital
requirement,  an amount (the "interest rate risk  component")  equal to one-half
the difference  between the  institution's  measured  interest rate risk and the
normal level of interest  rate risk,  multiplied  by the  economic  value of its
total assets.

The OTS will calculate the sensitivity of a savings  institution's net portfolio
value ("NPV") based on data  submitted by the  institution  in a schedule to its
quarterly  Thrift  Financial Report and using the interest rate risk measurement
model  adopted by the OTS. The amount of the interest  rate risk  component,  if
any, for any quarter is based on the institution's Thrift Financial Report filed
three  quarters  earlier.  The Bank does not have  more  than a normal  level of
interest  rate risk under the new rule and is not required to increase its total
capital as a result of the rule.

Presented  below as of June 30, 2002 is an analysis of the Bank's  interest rate
risk  ("IRR") as  measured  by changes in NPV for  instantaneous  and  sustained
parallel  shifts of upward  300 basis  points to  downward  100 basis  points in
market interest rates.

                                   AS OF JUNE 30, 2002
                                   -------------------
                     NET PORTFOLIO VALUE               NPV AS % OF PV OF ASSETS
                     -------------------               ------------------------
        IN RATES    $ AMOUNT    $ CHANGE    % CHANGE    NPV RATIO       CHANGE
        --------    --------    --------    --------    ---------       ------

          +300 bp     61,692    (19,365)        (24)         9.22     (233 bp)
          +200 bp     69,604    (11,453)        (14)        10.23     (133 bp)
          +100 bp     76,457     (4,600)         (6)        11.05      (50 bp)
             0 bp     81,056                                11.55
          -100 bp     81,635        579           1         11.53       (3 bp)


                                       11

<PAGE>

While the Bank complies with its currently  applicable capital  requirements and
expects to continue to comply with the requirements,  any failure to comply with
the capital  requirements  in the future  would result in severe  penalties.  In
addition  to  requiring  generally  applicable  capital  standards  for  savings
associations,  applicable regulations authorize the Director of OTS to establish
the minimum level of capital for a savings institution at such amount or at such
ratio  of  capital-to-assets  as the  Director  determines  to be  necessary  or
appropriate for such institution in light of the particular circumstances of the
institution.  The  Director  of  OTS  may  treat  the  failure  of  any  savings
institution  to maintain  capital at or above such level as an unsafe or unsound
practice  and may issue a directive  requiring  any savings  institution,  which
fails to  maintain  capital  at or above  the  minimum  level,  required  by the
Director to submit and adhere to a plan for  increasing  capital.  Such an order
may be enforced in the same manner as an order issued by the FDIC.

The OTS staff  policies  specify  that savings  institutions  failing any one of
their  minimum  regulatory  capital  requirements  may not increase  their total
assets during any quarter in excess of an amount equal to net interest  credited
during the  quarter.  Under these  policies,  institutions  that have  submitted
capital  plans  that are  rejected  by the  District  Director  or that have had
capital  plans  approved  but do not meet the  targets  or  requirements  of the
capital  plan may not make any new loans or  investments  except  with the prior
written  approval of the District  Director.  Such approval will only be granted
when the  proposed  loan or  investment  is  reasonable  in the  context  of the
institution's operations and does not significantly increase the risk profile of
the savings institution.

The Director of OTS must restrict the asset growth of savings  associations  not
in regulatory capital compliance,  subject to a limited exception for growth not
exceeding  interest  credited.  In addition,  savings  associations  not in full
compliance with applicable capital standards are subject to a capital directive,
which may include such  restrictions,  including  restrictions on the payment of
dividends and on compensation, as deemed appropriate by the Director of OTS. The
Director  of OTS must  treat as an unsafe  and  unsound  practice  any  material
failure  by a savings  association  to comply  with a  capital  plan or  capital
directive.  The  sanctions  and  penalties  that  could be  imposed  range  from
restrictions  on  branching  or  on  the  activities  of  the  institution,   to
restrictions on the ability to obtain FHLB advances, to termination of insurance
of  accounts  following  appropriate  proceedings,   to  the  appointment  of  a
conservator or receiver.

PROMPT CORRECTIVE REGULATORY ACTION

Under  the  Federal  Deposit  Insurance  Corporation  Improvement  Act  of  1991
("FDICIA"), the federal banking regulators must take prompt corrective action if
an insured  depository  institution  fails to satisfy  certain  minimum  capital
requirements.  All  institutions,   regardless  of  their  capital  levels,  are
restricted from making any capital distribution or paying any management fees if
the institution  would  thereafter fail to satisfy the minimum levels for any of
its capital  requirements.  An institution  that fails to meet the minimum level
for any relevant capital measure (an "undercapitalized institution") may be: (i)
subject to increased  monitoring by the appropriate  federal banking  regulator;
(ii) required to submit an acceptable  capital  restoration plan within 45 days;
(iii)  subject  to asset  growth  limits;  and (iv)  required  to  obtain  prior
regulatory approval for acquisitions, branching and new lines of businesses. The
capital  restoration plan must include a guarantee by the institution's  holding
company  that the  institution  will  comply  with  the  plan  until it has been
adequately capitalized on average for four consecutive quarters, under which the
holding  company  would be  liable up to the  lesser of 5% of the  institution's
total  assets or the amount  necessary  to bring the  institution  into  capital
compliance as of the date it failed to comply with its capital restoration plan.
A "significantly  undercapitalized" institution, as well as any undercapitalized
institution that did not submit an acceptable  capital  restoration plan, may be
subject to  regulatory  demands for  recapitalization,  broader  application  of
restrictions on transactions with affiliates, limitations on interest rates paid
on  deposits,  asset  growth  and  other  activities,  possible  replacement  of
directors and officers,  and  restrictions on capital  distributions by any bank
holding  company  controlling  the  institution.  Any  company  controlling  the
institution  could also be required to divest the institution or the institution
could also be required to divest subsidiaries.  The senior executive officers of
a  significantly   undercapitalized  institution  may  not  receive  bonuses  or
increases  in  compensation  without  prior  approval  and  the  institution  is
prohibited  from making  payments of principal  or interest on its  subordinated
debt. In their  discretion,  the federal banking  regulators may also impose the
foregoing  sanctions  on  an  undercapitalized  institution  if  the  regulators
determine  that such  actions  are  necessary  to carry out the  purposes of the
prompt  corrective  action  provisions.  If an  institution's  ratio of tangible
capital to total assets falls below a "critical  capital level," the institution
will be  subject  to  conservatorship  or  receivership  within  90 days  unless
periodic  determinations are made that forbearance from such action would better
protect  the  deposit   insurance   fund.   Unless   appropriate   findings  and
certifications are made by the appropriate federal bank regulatory  agencies,  a
critically  undercapitalized  institution  must be placed in  receivership if it
remains  critically  undercapitalized  on average  during the  calendar  quarter
beginning 270 days after the date it became  critically  undercapitalized.


                                       12

<PAGE>

Under FDICIA,  regulations  implementing the prompt corrective action provisions
of a depository  institution's  capital adequacy is measured on the basis of the
institution's  total risk-based capital ratio (the ratio of its total capital to
risk-weighted  assets), Tier 1 capital ratio (the ratio of its Tier 1 capital to
risk-weighted  assets)  and  leverage  ratio (the  ratio of its core  capital to
adjusted total assets). Under the regulations, a savings association that is not
subject to an order or written  directive to meet or maintain a specific capital
level will be deemed "well  capitalized" if it also has: (i) a total  risk-based
capital ratio of 10% or greater;  (ii) a Tier 1 risk-based capital ratio of 6.0%
or  greater;  and (iii) a  leverage  ratio of 5.0% or  greater.  An  "adequately
capitalized" savings association is a savings association that does not meet the
definition of well capitalized and has: (i) a total risk-based  capital ratio of
8.0% or greater;  (ii) a Tier 1 capital risk-based ratio of 4.0% or greater; and
(iii) a  leverage  ratio of 4.0% or greater  (or 3.0% or greater if the  savings
association   has  a  composite  of  1  MACRO  rating).   An   "undercapitalized
institution" is a savings  association that has (i) a total  risk-based  capital
ratio less than 8.0%;  or (ii) a Tier 1  risk-based  capital  ratio of less than
4.0%;  or (iii) a leverage  ratio of less than 4.0% (or 3.0% if the  association
has a composite 1 MACRO rating). A "significantly  undercapitalized" institution
is defined as a savings  association  that has: (i) a total  risk-based  capital
ratio of less than 6.0%; or (ii) a Tier 1 risk-based  capital ratio of less than
3.0%;   or  (iii)  a   leverage   ratio  of  less  than  3.0%.   A   "critically
undercapitalized"  savings association defined as a savings association that has
a ratio  of  core  capital  to  total  assets  of less  than  2.0%.  The OTS may
reclassify a well capitalized savings association as adequately  capitalized and
may require an adequately capitalized or undercapitalized  association to comply
with the  supervisory  actions  applicable  to  associations  in the next  lower
opportunity  for a  hearing,  that the  savings  association  is in an unsafe or
unsound  condition or that the  association  has  received  and not  corrected a
less-than-satisfactory  rating for any MACRO rating  category.  First Federal is
classified as "well capitalized" under these regulations.

DEPOSIT INSURANCE

Under  FDICIA,  the FDIC has  established  a  risk-based  assessment  system for
insured  depository  institutions.  Under the system, the assessment rate for an
insured  depository  institution  depends on the assessment risk  classification
assigned  to the  institution  by the  FDIC,  which  will be  determined  by the
institution's  capital  level  and  supervisory  evaluations.  Institutions  are
assigned  to  one  of  three  capital  groups;   well  capitalized,   adequately
capitalized  or  undercapitalized,  based on the data reported to regulators for
date  closest to the last day of the seventh  month  preceding  the  semi-annual
assessment period.  Within each capital group,  institutions are assigned to one
of  the  three  subgroups  on  the  basis  of  supervisory  evaluations  by  the
institution's  primary  supervisory  authority and such other information as the
FDIC determines to be relevant to the institution's  financial condition and the
risk posed to the deposit  insurance  fund.  Subgroup A consists of  financially
sound  institutions  with only a few minor  weaknesses.  Subgroup B consists  of
institutions that demonstrate weaknesses,  which, if not corrected, could result
in significant  deterioration  of the fund.  Subgroup C consists of institutions
that pose a substantial probability of loss to the deposit insurance fund unless
effective corrective action is taken.

FEDERAL RESERVE SYSTEM

Pursuant to regulations of the Federal Reserve Board, a thrift  institution must
maintain  average  daily  reserves  equal to 3% on the first  $51.9  million  of
transaction accounts,  plus 10% on the remainder.  This percentage is subject to
adjustment  by the Federal  Reserve  Board.  Because  required  reserves must be
maintained in the form of vault cash or in a non-interest  bearing  account at a
Federal  Reserve Bank,  the effect of the reserve  requirement  is to reduce the
amount of the  institution's  interest-earning  assets.  As of June 30,  2002, a
reserve of $5.1 million was required as deposits with the Federal  Reserve or as
cash on hand.

SAVINGS AND LOAN HOLDING COMPANY  REGULATIONS.  The Corporation is a savings and
loan  holding  company  within the  meaning  of the Home  Owners'  Loan Act,  as
amended.  As  such,  it is  registered  with  the  OTS  and  is  subject  to OTS
regulations,   examinations,   supervision  and  reporting  requirements.  As  a
subsidiary  of a savings and loan holding  company,  First Federal is subject to
certain  restrictions  in its  dealings  with  the  Corporation  and  affiliates
thereof.

The Home  Owners' Loan Act, as amended,  generally  prohibits a savings and loan
holding  company,  without  prior  approval  of the  Director  of OTS,  from (i)
acquiring  control of any other savings  institution or savings and loan holding
company or  controlling  the assets  thereof or (ii) acquiring or retaining more
than 5% of the voting shares of a savings institution or holding company thereof
which is not a subsidiary.

                                       13

<PAGE>

Additionally, under certain circumstances, a savings and loan holding company is
permitted  to acquire,  with the  approval of the  Director of OTS, up to 15% of
previously  unissued voting shares of an  under-capitalized  savings association
for cash without that savings association being deemed controlled by the holding
company.  Except with the prior  approval of the Director of OTS, no director or
officer of a savings and loan holding company or person owning or controlling by
proxy or  otherwise  more  than 25% of such  company's  stock  may also  acquire
control of any savings institution,  other than a subsidiary  institution or any
other savings and loan holding company.

The Bank Holding Company Act of 1956 specifically authorizes the Federal Reserve
Board and the  Director of the OTS to approve an  application  by a bank holding
company  to  acquire  control  of any  savings  institution.  Pursuant  to rules
promulgated  by the Federal  Reserve Board,  owning,  controlling or operating a
savings institution is a permissible activity for bank holding companies, if the
savings  institution  engages only in deposit-taking  activities and lending and
other  activities  that are  permissible  for the  bank  holding  companies.  In
approving  such as  application,  the Federal  Reserve  Board may not impose any
restriction  on  transaction  between  the savings  institution  and its holding
company  affiliates  except as required  by Sections  23A and 23B of the Federal
Reserve Act.

A bank  holding  company  that  controls  a  savings  institution  may  merge or
consolidate  the assets and  liabilities  of the savings  institution  with,  or
transfer assets and liabilities  to, any subsidiary  bank,  which is a member of
the BIF with the  approval of the  appropriate  federal  banking  agency and the
Federal  Reserve  Board.  The resulting bank will be required to continue to pay
assessments to the SAIF at the rates prescribed for SAIF members on the deposits
attributable to the merged savings institution plus an annual growth increment.

Transactions  between  savings  associations  and any  affiliate are governed by
Sections  23A and 23B of the  Federal  Reserve  Act. An  affiliate  of a savings
association  is any company or entity,  which  controls,  is controlled by or is
under common control with the savings association. In a holding company context,
the parent holding company of a savings  association  (such as the  Corporation)
and any companies,  which are  controlled,  by such parent  holding  company are
affiliates of the savings association. Generally, Sections 23A and 23B (i) limit
the extent to which the savings  institution or its  subsidiaries  may engage in
"covered  transactions" with any one affiliate to an amount equal to 10% of such
institution's  capital stock and surplus,  and contain an aggregate limit on all
such  transactions with all affiliates to an amount equal to 20% of such capital
stock  and  surplus  and (ii)  require  that all such  transactions  be on terms
substantially  the  same,  or at  least  as  favorable,  to the  institution  or
subsidiary as those provided to a non-affiliate.  The term "covered transaction"
includes the making of loans,  purchase of assets,  issuance of a guarantee  and
similar other types of transactions.  In addition to the restrictions imposed by
Sections 23A and 23B, no savings  association  may (i) loan or otherwise  extend
credit  to an  affiliate,  except  for  any  affiliate  which  engages  only  in
activities which are permissible for bank holding companies, or (ii) purchase or
invest in any stocks,  bonds,  debentures,  notes or similar  obligations of any
affiliate,   except  for  affiliates  which  are  subsidiaries  of  the  savings
association.

Savings  associations are also subject to the restrictions  contained in Section
22 (h) of the Federal Reserve Act on loans to executive officers,  directors and
principal shareholders.  Under Section 22 (h), loans to an executive officer and
to a greater than 10% shareholder of a savings  association  (18% in the case of
institutions  located  in an area  with less than  30,000  in  population),  and
certain  affiliated  entities of either,  may not exceed together with all other
outstanding loans to such person and affiliated  entities the association's loan
to one borrower limit as established  by FIRREA  (generally  equal to 15% of the
institution's unimpaired capital and surplus, for loans fully secured by certain
readily marketable collateral, an additional 10% of the institution's unimpaired
capital  and  surplus).  Section  22(h)  also  prohibits  loans,  above  amounts
prescribed by the appropriate  federal banking agency,  to directors,  executive
officers and greater than 10%  shareholders  of savings  association,  and their
respective affiliates,  unless such loan is approved in advance by a majority of
the board of directors of the  association  with any  "interested"  director not
participating  in the voting.  The Federal Reserve Board has prescribed the loan
amount (which includes all other outstanding loans to such person),  as to which
such prior  board of  director  approval  if  required,  as being the greater of
$25,000 or 5% of capital  and  surplus (up to  $500,000).  Further,  the Federal
Reserve  Board  pursuant  to Section  22(h)  requires  that loans to  directors,
executive officers and principal shareholders be made on terms substantially the
same as offered in comparable transactions to other persons.

The Board of  Directors  of the  Corporation  presently  intends to operate  the
Corporation as a unitary savings and loan holding  company.  There are generally
no  restrictions  on the  activities  of a  unitary  savings  and loan  company.
However,  if the Director of OTS  determines  that there is reasonable  cause to
believe  that the  continuation  by a savings  and loan  holding  company  of an
activity  constitutes  a serious  risk to the  financial  safety,  soundness  or




                                       14
<PAGE>
stability of its subsidiary savings association,  the Director of OTS may impose
such  restrictions  as deemed  necessary  to address  such risk and limiting (i)
payment of dividends by the savings  association,  (ii) transactions between the
savings association and its affiliates,  and (iii) any activities of the savings
association that might create a serious risk that the liabilities of the holding
company and its affiliates may be imposed on the savings association.

Notwithstanding the above rules as to permissible business activities of unitary
savings and loan holding  companies,  if the savings  association  subsidiary of
such a holding  company  fails to meet (in three out to every four  quarters and
two out of every three years) the QTL test, see  "Qualified  Thrift Lender Test"
above,  then such  unitary  holding  company  shall also  become  subject to the
activities  restrictions  applicable to multiple holding  companies  (additional
restrictions on securing advances from the FHLB also apply).

If the Corporation were to acquire control of another savings  institution other
than through  merger or other  business  combinations  with First  Federal,  the
Corporation  would thereupon become a multiple savings and loan holding company.
Except where such acquisition is pursuant to the authority to approve  emergency
thrift  acquisitions and where each subsidiary savings institution meets the QTL
test, the activities of the Corporation and any of its subsidiaries  (other than
First Federal or other  subsidiary  savings  institutions)  would  thereafter be
subject to further restrictions. The Home Owners' Loan Act, as amended, provides
that,  among other  things,  no multiple  savings  and loan  holding  company or
subsidiary thereof which is not a savings institution shall commence or continue
for more than a limited  period of time after  becoming a multiple  savings  and
loan holding company or subsidiary thereof, any business activity other than (i)
furnishing  or  performing   management   services  for  a  subsidiary   savings
institution,  (ii)  conducting  an insurance  agency or escrow  business,  (iii)
holding,  managing, or liquidating assets owned by or acquired from a subsidiary
savings  institution,  (iv) holding or managing properties used or occupied by a
subsidiary savings institution, (v) acting as trustee under deeds of trust, (vi)
those activities  previously  directly authorized by the FSLIC by regulations as
of March 5, 1987 to be engaged in by multiple  holding  companies or (vii) those
activities  authorized  by the Federal  Reserve  Board as  permissible  for bank
holding companies,  unless the Director of OTS by regulation prohibits or limits
such  activities  for  savings  and loan  holding  companies.  Those  activities
described  in (vii) above must also be approved by the  Director of OTS prior to
being engaged in by a multiple holding company.

The Director of OTS may only approve acquisitions  resulting in the formation of
a multiple savings and loan holding company which controls savings  institutions
in more  than one  state,  if the  multiple  savings  and loan  holding  company
involved  controls a savings  institution which operated a home or branch office
in the state of the  institution  to be acquired as of March 5, 1987,  or if the
laws  of  the  state  in  which  the  institution  to  be  acquired  is  located
specifically  permit institution to be acquired by state-chartered  institutions
or savings and loan holding  companies  located in the state where the acquiring
entity is located (or by a holding  company that controls  such  state-chartered
savings institutions).  The Director of OTS may approve an acquisition resulting
in a multiple savings and loan holding company controlling savings  institutions
in more than one state in the case of certain emergency thrift acquisitions.

No  subsidiary  savings  association  of a savings and loan holding  company may
declare or pay a dividend on its  permanent or  nonwithdrawable  stock unless it
first gives the Director of OTS 30 day advance  notice of such  declaration  and
payment.  Any dividend declared during such period or without the giving of such
notice shall be invalid.

FEDERAL AND STATE TAXATION

The  Corporation  and the Bank  currently file  consolidated  federal income tax
returns based on a fiscal year ending June 30.

Earnings  appropriated  to the  Bank's  bad debt  reserve  and  claimed as a tax
deduction  will  not be  allowable  for the  payment  of cash  dividends  or for
distribution to  shareholders  (including  distributions  made on dissolution or
liquidation),  without  payment of federal  income  taxes on such  dividends  or
distributions  by the Bank at the then  current  tax rates on the amount  deemed
removed  to  the  Bank  which  would  include  not  only  the  amount   actually
distributed, but would also be increased (subject to certain limitations) by the
amount of the tax payable by reason of such distribution.

The  Commonwealth  of  Kentucky  imposes no income tax on savings  institutions.
Nonetheless,  First  Federal  must pay a Kentucky  ad valorem  tax.  This tax is
1/10th of 1% of First Federals total savings accounts, common stock, capital and
retained income with certain  deductions for amounts  borrowed by depositors and
for securities guaranteed by the U.S. Government or certain of its agencies. The
Bank's subsidiary must pay a state income tax, as well as a tax on capital.  The
tax on income is 4% for the first  $25,000  of taxable  income,  5% for the next
$25,000,  6% for the next  $50,000,  7% for the next  $150,000 and 8.25% for all
income over  $250,000.  The tax on capital is .0021  times the capital  employed
with  a  credit  of  .0014  times  the  first  $350,000  of  capital  for  those
corporations  with gross income of under  $500,000.  For  information  regarding
federal  income  taxes,  see  Note  8 of the  Notes  to  Consolidated  Financial
Statements in the Annual Report.



                                       15

<PAGE>

ITEM 2.     PROPERTIES

The Corporation's executive offices, principal support and operational functions
are located at 2323 Ring Road in Elizabethtown, Kentucky. All of First Federal's
banking centers are located in Kentucky. The location of the 13 banking centers,
their form of occupancy and their respective  approximate  square footage is set
forth in the following table.

                                                                   APPROXIMATE
                                             OWNED OR                SQUARE
                   BANKING CENTERS            LEASED                 FOOTAGE

ELIZABETHTOWN
2323 Ring Road                                 Owned                 55,000
325 West Dixie Avenue                          Owned                  1,764
101 Wal-Mart Drive                            Leased                    984

RADCLIFF, 475 West Lincoln Trail               Owned                  2,728

BARDSTOWN
401 East John Rowan Blvd.                     Leased                  4,500
315 North Third Street                         Owned                  1,271

MUNFORDVILLE, 925 Main Street                  Owned                  2,928

SHEPHERDSVILLE, 395 N. Buckman Street          Owned                  7,600

MT. WASHINGTON, 279 Bardstown Road             Owned                  2,500

BRANDENBURG
416 East Broadway                             Leased                  4,395
50 Old Mill Road                              Leased                    575

FLAHERTY, 4055 Flaherty Road                  Leased                  1,216

LOUISVILLE, 11901 Standiford Plaza Drive      Leased                    650


ITEM 3.     LEGAL PROCEEDINGS

Although the Bank is, from time to time,  involved in various legal  proceedings
in  the  normal  course  of  business,  there  are  no  material  pending  legal
proceedings to which the Corporation,  the Bank, or its subsidiaries is a party,
or to which any of their property is subject.

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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year ended June 30, 2002.


                                     PART II

ITEM 5.     MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS

The  information  captioned  "MARKET AND DIVIDEND  INFORMATION"  included in the
Corporation's  Annual Report to Shareholders  for the fiscal year ended June 30,
2002 is incorporated on page 29 of the Form 10-K.

The Common Stock of First Federal  Financial  Corporation  of Kentucky is traded
over the  counter  and quoted on The  NASDAQ  National  Market  under the symbol
"FFKY.  It is currently  the policy of the  Corporation's  Board of Directors to
continue to pay quarterly dividends, but any future dividends are subject to the
Board's  discretion based on its  consideration of the  Corporation's  operating
results,  financial condition,  capital,  income tax considerations,  regulatory
restrictions and other factors.



                                       16

<PAGE>

ITEM 6.     SELECTED FINANCIAL DATA

The  information  captioned  "Selected  Consolidated  Financial  and Other Data"
included in the Corporation's  Annual Report to Shareholders for the fiscal year
ended June 30, 2002 is incorporated on page 18 of the Form 10-K.


ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS


The Management's  Discussion and Analysis of Financial  Condition and Results of
Operations  included in the Corporation's  Annual Report to Shareholders for the
fiscal year ended June 30, 2002 is incorporated on pages 19-29 of the Form-10-K.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  information  included  under the caption  "ASSET/LIABILITY  MANAGEMENT  AND
MARKET RISK" included in the Corporation's Annual Report to Shareholders for the
fiscal year ended June 30, 2002 is incorporated on pages 27-28 of the Form 10-K.


ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                                TABLE OF CONTENTS

      Selected Consolidated Financial and Other Data                     18
      Management Discussion & Analysis                                  19-29
      Audited Consolidated Financial Statements:
      o    Report of Independent Auditors                                30
      o    Consolidated Statements of Financial Condition                31
      o    Consolidated Statements of Income                             32
      o    Consolidated Statements of Comprehensive Income               33
      o    Consolidated Statements of Changes in Stockholders' Equity    34
      o    Consolidated Statements of Cash Flows                         35
      o    Notes to Consolidated Financial Statements                   36-53












                                       17

<PAGE>

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
<TABLE>
<CAPTION>

                                                       AT JUNE 30,
                                 2002         2001        2000       1999        1998
                                 ----         ----        ----       ----        ----
FINANCIAL CONDITION DATA:                          (Dollars in thousands)
<S>                           <C>          <C>         <C>        <C>         <C>
Total assets                   $679,110     $606,726    $560,785   $488,304    $409,651
Net loans outstanding (1)       520,261      517,145     471,231    400,360     354,935
Interest bearing deposits        64,000         -           -          -           -
Investments                      23,693       22,934      45,182     47,340      26,574
Deposits                        529,882      468,825     423,759    399,443     306,703
Borrowings                       87,493       77,298      80,339     25,894      43,249
Stockholders' equity             58,615       54,592      51,681     57,862      54,688

Number of:
Real estate loans outstanding     7,577        7,618       7,154      6,968       6,709
Deposit accounts                 49,726       49,615      47,238     45,425      37,764
Offices                              13           13          13         12           8
Full time equivalent employees      227          203         170        155         110
</TABLE>

<TABLE>
<CAPTION>

                                                   YEAR ENDED JUNE 30,
                                 2002          2001       2000        1999       1998
                                 ----          ----       ----        ----       ----
OPERATIONS DATA:                                    (Dollars in thousands)
<S>                            <C>          <C>         <C>        <C>         <C>
Interest income                 $44,100      $45,392     $38,542    $35,496     $31,182
Interest expense                 21,426       27,429      20,873     18,481      16,059
Net interest income              22,674       17,963      17,669     17,015      15,123
Provision for loan losses         1,604        1,086         400        314         265
Non-interest income               5,398        5,145       3,877      3,954       2,860
Non-interest expense (2)         15,281       13,570      12,691     11,706       8,082
Income tax expense                3,729        2,803       2,792      2,970       3,302
Net income                        7,458        5,649       5,663      5,979       6,334

Earnings per share:
    Basic                          1.99         1.50        1.45       1.45        1.53
    Diluted                        1.98         1.50        1.44       1.44        1.52
Book value per share              15.72        14.53       13.76      14.04       13.24
Dividends paid per share           0.72         0.72        0.72       0.63        0.56
Dividend payout ratio                36%          48%         49%        43%         37%
Return on average assets           1.19%         .95%       1.08%      1.25%       1.60%
Average equity to average
   assets                          9.10%        8.97%      10.28%     11.85%      13.55%
Return on average equity          13.08%       10.62%      10.52%     10.53%      11.81%

</TABLE>

(1)  Includes loans held for sale.

(2)  Non-interest  expense in 1999 includes one time  acquisition and conversion
     costs in the amount of $789,000, pretax.






                                       18

<PAGE>

            MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of First Federal Financial  Corporation of
Kentucky are in accordance with accounting  principles generally accepted in the
United State and conform to general practices within the banking  industry.  The
accounting  policy  relating to the allowance for loan losses is critical to the
understanding of the  Corporation's  results of operations since the application
of this policy requires  significant  management  assumptions and estimates that
could result in  materially  different  amounts to be reported if  conditions or
underlying  circumstances  were to change. See "ALLOWANCE AND PROVISION FOR LOAN
LOSSES"  herein  for a  complete  discussion  of  the  First  Federal  Financial
Corporation's accounting  methodologies related to the allowance.  Also refer to
Note 1 in the "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" for details regarding
all of the Corporation's critical and significant accounting policies.

The following  discussion and analysis covers the primary factors  affecting the
Corporation's  performance  and  financial  condition.  It  should  be  read  in
conjunction  with the accompanying  audited  consolidated  financial  statements
included in this report.


OVERVIEW

The Bank  reported net income of $7.5  million  during 2002  compared  with $5.6
million for 2001, an increase of 32%.  Diluted earnings per share also increased
32% from $1.50 during 2001 to $1.98 for 2002.  The increase in earnings for 2002
was primarily  attributable to increased net interest income, service charges on
deposit   accounts  and  gain  on  sale  of  mortgage  loans.  The  Bank's  2001
restructuring  of $75  million  of its  Federal  Home  Loan Bank  advances  from
overnight to 10-year maturities at lower interest rates coupled with declines in
interest rates will continue to have a positive impact on future  earnings.  The
Bank's  book value per common  share  increased  from $14.53 at June 30, 2001 to
$15.72 at June 30, 2002. Net income for 2002 generated  return on average assets
of 1.19% and return on average  equity of 13.08%.  These  compare with return on
average  assets of .95% and  return  on  average  equity of 10.62%  for the 2001
period.

The Bank's  total  assets at June 30,  2002 grew to $679.1  million  compared to
$606.7  million at June 30, 2001. The increase in assets was due to the increase
in the Bank's interest bearing deposits, a direct result of the growth in retail
deposits.  Net loans (including loans held for sale) increased $3.1 million from
June 30, 2001 to $520.3  million at June 30, 2002.  Residential  mortgage  loans
decreased by $21.2 million during the 2002 period as declining  market  interest
rates caused an increase in 1-4 family  refinancing  activity  into  fixed-rate,
secondary market loan products.  The commercial real estate  portfolio  remained
strong,  increasing  by $23.6 million to $112.5  million at June 30, 2002.  This
growth is a result of the Bank's  continued  emphasis  on the active  pursuit of
lending opportunities.

Deposits  increased by $61.1 million to $529.9 million at June 30, 2002 compared
to $468.8 million at June 30, 2001. The growth in retail  deposits was primarily
in savings and money market  accounts  caused in part by a shift  during  recent
quarters in funds from the stock market to more conservative investments such as
bank  deposits.  FHLB advances  increased from $77.3 million at June 30, 2001 to
$77.8 million at June 30, 2002. On March 26, 2002, the Corporation  issued $10.0
million of Trust Preferred Securities through First Federal Statutory Trust I, a
subsidiary of the Corporation.  The Corporation  undertook the issuance of these
securities to enhance its regulatory capital position.  The Corporation  intends
to utilize the capital for general  business  purposes and to support the Bank's
future opportunities for growth.

The Bank experienced remarkable technological innovations during 2002 to improve
operating  efficiency and to enhance  customer  service.  The Bank implemented a
check imaging service for its customers.  Imaged checks are also integrated with
the Bank's internet  banking service to allow customers the benefit of reviewing
their canceled checks online.  Customers also have the option of receiving their
bank statements  through e-mail, a service delivery  improvement to the customer
and an operational efficiency to the Bank. "Powerdraft",  an overdraft privilege
plan, was introduce in February 2002, and has been widely accepted by the Bank's
retail customer base.


                                       19

<PAGE>

For the past  four  years,  the  Bank  has  implemented  the  strategic  goal of
transitioning to a commercial bank by making operational enhancements, expanding
its product mix, and developing a sales-oriented  culture.  Total assets grew in
response to increased  commercial  and consumer  lending  using a variety of new
product  lines.  For fiscal year 2001,  increased  interest rates created margin
decreases  due to the  Bank's  substantial  balances  in fixed  rate  mortgages.
Additional  margin  pressures  resulted  from  increased  deposit and  wholesale
funding  rates.  The  restructuring  of the Bank's  loan  portfolio  had not yet
positioned  the Bank to absorb the higher  rates.  During the same  period,  new
deposit  products  were  developed  to  attract  more  transactional,   low-cost
customers.  The Bank continued to offer higher certificate of deposit rates from
time to time to retain deposits for funding loan growth and  maintaining  market
share in our service areas.  The Bank's  strategy has been to offer higher rates
on  certificates  of deposit as a means to  cross-sell  additional  products and
services  that would  eventually  provide  fee income and low  yielding  deposit
accounts.

RESULTS OF OPERATIONS

NET INTEREST INCOME - The principal source of the Bank's revenue is net interest
income.  Net  interest  income  is the  difference  between  interest  income on
interest-earning  assets,  such as loans and securities and the interest expense
on liabilities used to fund those assets, such as interest-bearing  deposits and
borrowings.  Net  interest  income is impacted by both changes in the amount and
composition of interest-earning assets and interest-bearing  liabilities as well
as market interest rates.

For 2002, net interest income was $22.7 million,  up $4.7 million from the $18.0
million  attained  during  2001.  The Bank was able to increase its net interest
income through an improved interest rate margin compared to 2001. The Bank's net
interest  margin  increased from 3.22% during 2001 to 3.83% for the 2002 period.
The net interest rate spread  increased from 2.81% during 2001 to 3.48% in 2002.
The net interest spread and margin  benefited from a significant  decline in the
Bank's cost of funds due to a reduction in short-term  market  interest rates by
the  Federal   Reserve  which  occurred   principally   during   calendar  2001.
Substantially all categories of interest income and interest expense declined as
a result, but more so with interest-bearing liabilities. During the 2002 period,
average  interest-earning  assets  were  $593.4  million,  an  increase of $35.7
million over the same period in 2001. Total average interest bearing liabilities
increased  from $514.8 million during 2001 to $540.9 million for the same period
in 2002. The 2002 period includes Trust Preferred  Securities  which were issued
in March 2002.

For 2001, net interest income increased by $293,000 to $18.0 million as compared
to $17.7 million in 2000 in spite of a declining net interest margin. The Bank's
net interest  margin declined to 3.22% for the year ended June 30, 2001 compared
to 3.61% for the 2000  period.  An  increase  in the cost of funds over the past
fiscal year,  offset by an increase in the average  earning assets of commercial
real estate and residential mortgage loans, reduced the net interest margin.

Average  interest  earning assets increased by $68.2 million from $489.5 million
for the 2000  period  to $557.7  million  for the 2001  period  due to the large
growth of the Bank's loan  portfolio.  Average loans,  which comprise 90% of the
total interest  earning  assets,  were $66.8 million higher and averaged  $504.4
million  during  2001,  while the average  yield on loans  increased by 26 basis
points to 8.33%. Average interest-bearing liabilities increased by $68.1 million
to an average  balance of $514.8 million for 2001.  Customer  deposits  averaged
$423.4  million  during 2001,  a $29.1  million  increase  from the 2000 average
balance of $394.3  million.  Average  Federal Home Loan Bank advances  increased
$39.0 million for the 2001 period to fund the Bank's increased  lending activity
that exceeded its deposit growth during certain periods throughout the year. The
Bank's  cost of funds  averaged  5.33%  during  2001 which was an increase of 66
basis  points from the 2000  average  cost of funds of 4.67% due to higher rates
paid on short-term customer deposits.

                                       20

<PAGE>

AVERAGE BALANCE SHEET

The  following  table  sets forth  information  relating  to the Bank's  average
balance  sheet and  reflects  the average  yield on assets and  average  cost of
liabilities for the periods indicated. Dividing income or expense by the average
monthly balance of assets or liabilities,  respectively, derives such yields and
costs for the periods presented.
<TABLE>
<CAPTION>

                                                                            YEAR ENDED JUNE 30,
                                  -------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)                          2002                                2001                               2000
                                                ----                                ----                               ----

                                   AVERAGE               AVERAGE     AVERAGE               AVERAGE     AVERAGE             AVERAGE
ASSETS                             BALANCE   INTEREST   YIELD/COST   BALANCE   INTEREST   YIELD/COST   BALANCE  INTEREST  YIELD/COST
                                   -------   --------   ----------   -------   --------   ----------   -------  --------  ----------
<S>                               <C>        <C>          <C>      <C>        <C>           <C>       <C>       <C>          <C>
Interest earning assets:
   Equity securities               $   952   $    34       3.57%    $  1,005   $    34       3.38%    $  1,432  $    43      3.00%
   State and political subdivision
      securities (1)                 1,022        71       6.95          980        67       6.84          960       67      6.98
   U.S. Treasury and agencies       10,741       589       5.48       37,207     2,552       6.86       41,507    2,711      6.53
   Mortgage-backed securities          854        54       6.32        1,115        83       7.44        1,403       93      6.63
   Loans receivable (2) (3) (4)    523,559    42,045       8.03      504,404    41,996       8.33      437,640   35,317      8.07
   FHLB stock                        5,995       325       5.42        5,257       385       7.32        3,354      237      7.07
   Interest bearing deposits        50,260     1,006       2.00        7,736       297       3.84        3,221       97      3.01
                                   -------    ------       ----      -------    ------       ----      -------   ------      ----
   TOTAL INTEREST EARNING ASSETS   593,383    44,124       7.44      557,704    45,414       8.14      489,517   38,565      7.88
                                              ------       ----                 ------       ----                ------      ----
Less:  Allowance for loan losses    (3,273)                           (2,537)                           (2,221)
Non-interest earning assets         36,371                            37,457                            36,383
                                  --------                          --------                          --------
     TOTAL ASSETS                 $626,481                          $592,624                          $523,679
                                  ========                          ========                          ========

LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest bearing liabilities:
   Savings accounts               $ 54,165   $ 1,190       2.20%      $33,964  $   925       2.72%    $ 36,115  $ 1,047      2.90%
   NOW and money market accounts    97,339     1,764       1.81        79,792    2,161       2.71       78,222    1,871      2.39
   Certificates of deposit and
     other time deposits           308,747    14,585       4.72       309,651   19,039       6.15      279,941   15,155      5.41
   FHLB Advances                    77,709     3,741       4.81        91,418    5,304       5.80       52,419    2,800      5.34
   Trust Preferred Securities        2,987       146       4.89          -         -           -           -        -          -
                                   -------     -----       ----       -------   ------       ----      -------   ------      ----
   TOTAL INTEREST BEARING
    LIABILITIES                    540,947    21,426       3.96       514,825   27,429       5.33      446,697   20,873      4.67
                                              ------       ----                 ------       ----                ------      ----
Non-interest bearing liabilities:
   Non-interest bearing deposits    22,996                             18,427                           16,896
   Other liabilities                 5,531                              6,195                            6,231
                                    ------                              -----                            -----
     TOTAL LIABILITIES             569,474                            539,447                          469,824
Stockholders' equity                57,007                             53,177                           53,855
                                   -------                            -------                          -------
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY        $626,481                           $592,624                         $523,679
                                   =======                           ========                         ========
NET INTEREST INCOME                          $22,698                            $17,985                         $17,692
                                             =======                            =======                         =======
NET INTEREST SPREAD                                        3.48%                             2.81%                           3.21%
                                                           =====                             =====                           =====
NET INTEREST MARGIN                                        3.83%                             3.22%                           3.61%
                                                           =====                             =====                           =====
Ratio of average interest earning
   assets to average interest bearing
   liabilities                                            109.69%                           108.33%                        109.59%
                                                          =======                           =======                        =======
</TABLE>

--------------------------------------------------
(1) Taxable  equivalent yields are calculated  assuming a 34% federal income tax
    rate.
(2) Includes loan fees, immaterial in amount, in  both  interest  income and the
    calculation of yield on loans.
(3) Calculations  include   non-accruing  loans  in  the  average  loan  amounts
    outstanding.
(4) Includes loans held for sale.



                                       21

<PAGE>

RATE/VOLUME ANALYSIS

The table below sets forth  certain  information  regarding  changes in interest
income and  interest  expense of the Bank for the  periods  indicated.  For each
category   of   interest-earning   assets  and   interest-bearing   liabilities,
information is provided on changes  attributable to (1) changes in rate (changes
in rate  multiplied  by old  volume);  (2)  changes in volume  (change in volume
multiplied  by old  rate);  and  (3)  changes  in  rate-volume  (change  in rate
multiplied  by change in volume).  Changes in  rate-volume  are  proportionately
allocated between rate and volume variance.
<TABLE>
<CAPTION>

                                                                          YEAR ENDED JUNE 30,
                                  ----------------------------------------------------------------------------------------------

                                           2002 VS. 2001                    2001 VS. 2000                    2000 VS. 1999
                                        INCREASE (DECREASE)              INCREASE (DECREASE)              INCREASE (DECREASE)
                                         DUE TO CHANGE IN                  DUE TO CHANGE IN                 DUE TO CHANGE IN

                                                          NET                              NET                              NET
                                     RATE     VOLUME     CHANGE        RATE     VOLUME    CHANGE        RATE     VOLUME    CHANGE
                                     ----     ------     ------        ----     ------    ------        ----     ------    ------
                                                                        (DOLLARS IN THOUSANDS)
<S>                             <C>        <C>         <C>         <C>          <C>       <C>       <C>         <C>      <C>
INTEREST INCOME:
  Equity securities               $    2    $   (2)     $   -       $    5       $(14)     $ (9)    $    26     $ (11)   $   15
  State and political subdivision
    securities                         1         3           4          (1)         1         -           1        (2)       (1)
  U.S. Treasury and agencies        (432)   (1,531)     (1,963)        131       (290)     (159)        (86)       67       (19)
  Mortgage-backed securities         (11)      (18)        (29)         11        (21)      (10)         (5)      (26)      (31)
  Loans                           (1,517)    1,566          49       1,150      5,529     6,679        (750)    4,171     3,421
  FHLB stock                        (109)       49         (60)          9        139       148           2        19        21

  Interest bearing deposits         (205)      914         709          33        167       200        (147)     (213)     (360)
                                 -------    ------     -------      ------     ------    ------     -------    ------    -------

  TOTAL INTEREST EARNING ASSETS  $(2,271)   $  981     $(1,290)     $1,338     $5,511    $6,849     $  (959)   $4,005    $3,046
                                 =======    ======     =======      ======     ======    ======     =======    ======    ======

INTEREST EXPENSE:
   Savings accounts              $  (205)   $  470     $   265      $  (62)    $  (60)   $ (122)    $   126    $  (63)   $   63
   NOW and money market accounts    (809)      412        (397)        252         38       290         216       133       349
   Certificates  of deposit and
    other time deposits           (4,399)      (55)     (4,454)      2,180      1,704     3,884        (246)      727       481
   FHLB advances                    (831)     (732)     (1,563)        260      2,244     2,504         (44)    1,543     1,499
   Trust preferred securities         -        146         146          -          -        -            -         -         -
                                 -------    ------     -------      ------     ------    ------        ----    ------    ------
  TOTAL INTEREST BEARING
    LIABILITIES                  $(6,244)   $  241     $(6,003)     $2,630     $3,926    $6,556     $    52    $2,340    $2,392
                                 =======    ======     =======      ======     ======    ======     =======    ======    ======

 NET INTEREST INCOME             $ 3,973    $  740     $ 4,713     $(1,292)    $1,585    $  293     $(1,011)   $1,665    $  645
                                 =======    ======     =======     =======     ======    ======     =======    ======    ======

</TABLE>


NON-INTEREST  INCOME - Non-interest  income was $5.4 million  during 2002,  $5.1
million  during 2001,  and $3.9  million  during 2000.  The  increased  level of
non-interest  income during 2002 was primarily due to increased  service fees on
deposit  accounts and to a lesser extent,  gain on sale of mortgage  loans.  The
increase from 2000 to 2001 occurred in all categories with the most  significant
increases in service fees on deposit accounts and gains from investment sales.

Service charges on deposit accounts increased by $715,000 or 28% during 2002 due
to growth in fee-related customer  transactions and growth in deposits, a result
of the general  shift in funds from the stock market to bank  deposits.  Service
charges  on  deposit  accounts  were  positively  affected  by  the  Bank's  new
"Powerdraft"  program.  The  "Powerdraft"  program permits  selected  clients to
overdraft  their  accounts up to $600 for the Bank's  customary fee. At June 30,
2002, the Bank had nearly 14,000 accounts eligible for the "Powerdraft" program.






                                       22
<PAGE>

Gain on sale of mortgage loans increased by $125,000 or 24% for 2002 compared to
2001 as  declining  market  interest  rates  prompted  an  increase  in consumer
refinance  activity of 1-4 family fixed-rate  residential  loans, which the Bank
sells into the secondary market through its subsidiary, First Heartland Mortgage
Company.  Mortgage  banking  income is dependent  upon loan demand and refinance
volume which management  anticipates will continue at or near current levels for
at least the next  quarter.  During  2002 the Bank did not report any gains from
investment  sales compared to reported  gains of $696,000 for 2001.  Income from
brokerage  commissions and insurance  sales  decreased  $96,000 as a result of a
decline in demand for these products.

The increase in  non-interest  income from 2000 to 2001 was $1.3 million or 33%.
Gains from investment sales were $696,000 in 2001 compared to $457,000 for 2000,
an increase of $239,000.  Gains on sale of mortgage loans  increased by $172,000
or 48% during the fiscal year due to increased  refinancing  activity.  Customer
service  fees  charged on deposit  accounts  increased by $610,000 or 31% during
2001 due to several  operational  changes made by the Bank, the most significant
of which was an  increase  in  overdraft  fees  from $20 to $25 per  occurrence.
Commercial  checking  accounts  became  subject to fees assessed on the basis of
account analysis. Insufficient funds, foreign ATM transactions, returned checks,
and daily overdraft fees were all increased during 2001. Brokerage and insurance
commissions  increased by $175,000 or 38% during the 2001 period due as a result
of  increased  demand and an improved  emphasis on  insurance  sales  within the
Bank's lending area.  Other sources of income such as trust,  and other customer
transaction fees also increased during the 2001 period by $104,000.

NON-INTEREST  EXPENSE -  Non-interest  expense  increased by $1.7 million or 13%
during 2002  compared  to 2001.  Significant  factors  impacting  this  increase
included an increase in staffing  levels,  increased  marketing  efforts for the
Bank's promotional products as well as increases in other expense.  Non-interest
expense  increased  from  $12.7  million in 2000 to $13.6  million in 2001.  The
increase  in 2001  was  primarily  attributable  to  compensation  and  employee
benefits.  Moderate  increases  in  non-interest  expense are likely to continue
going forward as the Bank  anticipates  future  remodeling  and expansion of its
banking  centers.  Non-interest  expense  levels  are  often  measured  using an
efficiency ratio (non-interest expense divided by the sum of net interest income
and non-interest income). A lower efficiency ration is indicative of higher bank
performance. The Bank's efficiency ratio was 54% in 2002 compared to 59% in 2001
and 59% in 2000.

Employee  compensation  and  benefits  increased  $845,000 or 13% for 2002.  The
increase  reflects  growth in the  overall  staffing  level  from 203  full-time
equivalent  employees  at June 30,  2001 to 227 at June  30,  2002.  The  Bank's
continued  emphasis on building its  commercial  and retail staff to reflect its
commercial bank philosophy was the largest contributing factor.

Marketing and advertising  costs  increased  during 2002 by $107,000 or 21%. The
increase is attributable  to the Bank's  television  marketing  campaign for the
"Simply  Free  Checking"   product,   enhanced  marketing  for  the  Bank's  new
"Powerdraft" program and the Bank's commercial business campaign.

Data  processing  costs  increased  during 2002 by $125,000 or 9%. The  increase
reflects the  implementation  of the Bank's cash  management  product,  internet
banking, the creation of the Bank's new imaging department and processor charges
relating to an increase in the number of users.

The remainder of non-interest  expense categories increased by a net of $556,000
or 23% during 2002. The increase is primarily attributable to increases in costs
associated with the new  "Powerdraft"  program,  costs  associated with postage,
stationary and supplies and other customer account expenses.

The increase in non-interest  expense from 2000 to 2001 was primarily related to
employee  compensation and benefits.  The increase includes  inflationary salary
adjustments and reflects  growth in the overall  staffing level from 170 at June
30, 2000, to 203 at June 30, 2001. Additional staffing was required to achieve a
new  strategic  plan adopted by the Bank in 1999 to develop a bank-wide  service
and sales culture.  The plan emphasizes expanding account  relationships,  which
requires  increasing the number of associates in banking  centers,  relationship
bankers,  business development officers,  stockbrokers,  and loan officers.  The
transition  has been  responsible  for much of the renewed growth in lending and
certificates of deposit.  Office  occupancy and equipment  expense  increased by
$94,000 in 2001  compared  to 2000 due to costs  associated  with the Bank's new
Customer  Service Center,  which became  operational in July 2000 and the second
Bardstown, Kentucky banking center, which reopened in early 2000.



                                       23

<PAGE>

ALLOWANCE AND PROVISION FOR LOAN LOSSES

The  allowance  for loan losses is  evaluated  quarterly by the  Executive  Loan
Committee  and  maintained  at a level that is  considered  sufficient to absorb
probable  incurred  credit  losses  existing  in the  loan  portfolio.  Periodic
provisions  to the  allowance are made as needed.  An  appropriate  level of the
general  allowance is determined based on the application of loss percentages to
graded loans by categories.  In addition,  specific reserves are established for
individual  loans when deemed  necessary.  The amount of the  provision for loan
losses necessary to maintain an adequate  allowance is based upon an analysis of
various  factors,   including   changes  in  lending  policies  and  procedures;
underwriting standards; collection;  charge-off and recovery history; changes in
national and local economic business conditions and developments; changes in the
characteristics  of the portfolio;  ability and depth of lending  management and
staff;  changes in the trend of the volume and severity of past due, non-accrual
and classified loans;  troubled debt restructuring and other loan modifications;
and results of regulatory examinations.

The methodology for allocating the allowance for loan and lease losses has taken
into account the Bank's  strategic  plan to increase its emphasis on  commercial
and consumer lending. The Bank has increased the amount of the reserve allocated
to  commercial  in 2002 and consumer  loans in 2001 in response to the growth of
the commercial and consumer loan portfolios and management's  recognition of the
higher risks and loan losses in these lending areas. The indirect  consumer loan
program was a new product in 1999 and is comprised  of new and used  automobile,
motorcycle and all terrain vehicle loans originated on the behalf of the Bank by
a select  group of auto  dealers  within the service  area.  The  indirect  loan
program  involves  a  greater  degree  of risk and is  evaluated  quarterly  and
monitored by the Board of Directors.  In light of the greater  charge-offs  from
indirect consumer loans compared to direct consumer loans,  proportionally  more
of the allowance for consumer  loans is allocated for indirect loans than direct
loans.   As  the  indirect  loan  program  has  evolved,   dealer  analysis  and
underwriting  standards have been refined to improve the loan loss experience of
the program. Estimating the reserve is a continuous process. In this regard, the
Executive  Loan  Committee  continues  to monitor  the  performance  of indirect
consumer  loans as well as the  Bank's  other  loan  products  and  updates  its
estimates as the evidence warrants.

The  following  table sets forth an analysis of the Bank's loan loss  experience
for the periods indicated.
<TABLE>
<CAPTION>

                                                                 YEAR ENDED JUNE 30,
<S>                                  <C>             <C>             <C>              <C>             <C>
(DOLLARS IN THOUSANDS)                  2002            2001            2000            1999            1998
                                        ----            ----            ----            ----            ----

Balance at beginning of period         $2,906          $2,252          $2,108          $1,853          $1,715
                                       ------          ------          ------          ------          ------
Loans charged-off:
   Real estate mortgage                    25               2              36              42              16
   Consumer                               635             482             147             248             132
   Commercial                             256              15              82              -               -
                                          ---             ---             ---             ---             ---
Total charge-offs                         916             499             265             290             148
                                          ---             ---             ---             ---             ---
Recoveries:
   Real estate mortgage                     6               4               1               5               -
   Consumer                                97              63               8              21              21
   Commercial                              38              -                -               -               -
Total recoveries                          141              67               9              26              21
                                          ---             ---             ---             ---             ---

Net loans charged-off                     775             432             256             264             127
                                          ---             ---             ---            ----             ---

Acquired reserves                          -               -               -              205              -
Provision for loan losses               1,604           1,086             400             314             265
                                        -----           -----             ---             ---             ---

Balance at end of period               $3,735          $2,906          $2,252          $2,108          $1,853
                                       ======          ======          ======          ======          ======

Allowance for loan losses to net loans    .72%            .56%            .48%            .52%            .52%
Net charge-offs to average
   loans outstanding                      .15%            .09%            .06%            .07%            .04%
Allowance for loan losses to
    total non-performing loans            100%             88%            130%             68%             87%

</TABLE>



                                       24

<PAGE>

The  provision  for loan losses was $1.6  million  during 2002  compared to $1.1
million during 2001. The total allowance for loan losses  increased  $829,000 to
$3.7  million  from June 30, 2001 to June 30,  2002.  Management  increased  the
provision and  allowance  for loan losses due to the increase in  non-performing
loans and charge-offs for the period, continued strong growth in commercial real
estate lending and the increase in charge-offs and non-performing loans which is
commensurate with the generally recognized slowing in the U.S. economy. Net loan
charge-offs  increased  $343,000  to $775,000  during 2002  compared to $432,000
during 2001. The increase in charge-offs is primarily  related to charge-offs of
indirect consumer loans and commercial real estate loans during the 2002 period.

The  following  table shows  management's  allocation  of the allowance for loan
losses by loan type.  Allowance  funding and allocation is based on management's
current  evaluation of risk in each  category,  economic  conditions,  past loss
experience, loan volume, past due history and other factors. Since these factors
and  management's  assumptions  are  subject to change,  the  allocation  is not
necessarily predictive of future portfolio performance.
<TABLE>
<CAPTION>

                                      2002                          2001                          2000
                                      ----                          ----                          ----

                            AMOUNT OF      PERCENT OF     AMOUNT OF     PERCENT OF      AMOUNT OF      PERCENT OF
                            ALLOWANCE      TOTAL LOANS    ALLOWANCE    TOTAL LOANS      ALLOWANCE     TOTAL LOANS
(DOLLARS IN THOUSANDS)
<S>                         <C>              <C>          <C>             <C>           <C>              <C>
Residential mortgage         $  738            61%         $  884          65%           $1,116            67%
Consumer                        930            14             953          15               603            16
Commercial                    2,067            25           1,069          20               533            17
                             ------           ---          ------         ---            ------           ---
      Total                  $3,735           100%         $2,906         100%           $2,252           100%
                             ======           ===          ======         ===            ======           ===

</TABLE>

Federal regulations require insured institutions to classify their own assets on
a regular  basis.  The  regulations  provide for three  categories of classified
loans -- substandard,  doubtful and loss. The regulations also contain a special
mention and a specific allowance  category.  Special mention is defined as loans
that do not currently  expose an insured  institution to a sufficient  degree of
risk to warrant  classification but do possess credit  deficiencies or potential
weaknesses deserving management's close attention. Specific allowance is defined
as  loans  for  which  the  Bank  has  designated  specific  reserves  to  cover
specifically  identified  losses.  Assets  classified as substandard or doubtful
require the institution to establish  general  allowances for loan losses. If an
asset or portion  thereof is classified as loss,  the insured  institution  must
either establish  specified  allowances for loan losses in the amount of 100% of
the portion of the asset classified loss, or charge off such amount. At June 30,
2002, on the basis of management's review of the Bank's loan portfolio, the Bank
had $3.5  million  of assets  classified  substandard,  $206,000  classified  as
specific  allowance,  and $100,000 of assets  classified as loss.  There were no
assets classified as doubtful.

Classified  loan ranges of estimated  loss are as follows:  Substandard-2.5%  to
35%;  Doubtful-5%  to 50%;  Loss-100%;  Special  Mention-2%  to 6%; and Specific
Allowance-50%  to 100%. The Bank  additionally  provides a reserve  estimate for
incurred losses in  non-classified  loans ranging from .20% to 2.00%.  Allowance
estimates are developed by the Bank in consultation with regulatory authorities,
actual loss  experience  and peer group loss  experience  and are  adjusted  for
current  economic  conditions.  Allowance  estimates  are  considered  a prudent
measurement  of the  risk  of the  Bank's  loan  portfolio  and are  applied  to
individual loans based on loan type.

NON-PERFORMING ASSETS

Non-performing  assets consist of loans on which interest is no longer  accrued,
real estate acquired through  foreclosure and repossessed  assets. The Bank does
not have any loans  greater  than 90 days past due still on  accrual.  All loans
considered  impaired under SFAS 114 are included in non-performing  loans. Loans
are  considered  impaired  if  full  principal  or  interest  payments  are  not
anticipated in accordance  with the contractual  loan terms.  Impaired loans are
carried at the present  value of expected  future cash flows  discounted  at the
loans effective interest rate or at the fair value of the collateral if the loan
is collateral dependent.






                                       25

<PAGE>

Loans are  reviewed  on a regular  basis and normal  collection  procedures  are
implemented  when a borrower fails to make a required  payment on a loan. If the
delinquency  on a mortgage loan exceeds 90 days and is not cured through  normal
collection  procedures or an acceptable  arrangement  is not worked out with the
borrower,  the  Bank  institutes  measures  to  remedy  the  default,  including
commencing a foreclosure action. Consumer loans generally are charged off when a
loan is deemed uncollectible by management and any available collateral has been
disposed of. Commercial  business and real estate loan delinquencies are handled
on an  individual  basis by  management  with the  advice  of the  Bank's  legal
counsel.  The Bank anticipates that the increase in  non-performing  real estate
loans will continue due to the growth of the Bank's loan portfolio.

Interest  income on loans is  recognized  on the accrual  basis except for those
loans in a  nonaccrual  of income  status.  The  accrual of interest on impaired
loans is discontinued when management believes,  after consideration of economic
and business  conditions  and collection  efforts that the borrowers'  financial
condition is such that  collection of interest is doubtful,  typically after the
loan becomes 90 days delinquent. When interest accrual is discontinued, interest
income is subsequently recognized only to the extent cash payments are received.

Real estate  acquired by the Bank as a result of  foreclosure or by deed in lieu
of foreclosure is classified as real estate owned until such time as it is sold.
When such  property  is  acquired  it is  recorded  at the  lower of the  unpaid
principal  balance of the related loan or its fair market value.  Any write-down
of the property at the time of  acquisition is charged to the allowance for loan
losses. Subsequent gains and losses are included in non-interest income.

The  following  table  sets  forth   information  with  respect  to  the  Bank's
non-performing assets for the periods indicated.
<TABLE>
<CAPTION>

                                                                   AT JUNE 30
                                         2002          2001           2000           1999         1998
                                         ----          ----           ----           ----         ----
                                                             (DOLLARS IN THOUSANDS)
<S>                                    <C>           <C>           <C>           <C>          <C>
Restructured                            $3,350        $  -          $    -        $    -       $   -
Past due 90 days still on accural           -            -               -             -           -
Loans on non-accrual status                386         3,309          1,728         3,082        2,128
                                         -----         -----          -----         -----        -----
   Total non-performing loans            3,736         3,309          1,728         3,082        2,128
Real estate acquired through
   foreclosure                             660           296             -            109          134
Other repossessed assets                   119            70             -            -            -
                                        ------        ------          ------       ------       ------
   Total non-performing assets          $4,515        $3,675          $1,728       $3,191       $2,262
                                        ======        ======          ======       ======       ======

Interest income that would have
  been earned on non-accrual loans      $  300        $  276         $   139       $  255       $  182
Interest income recognized
  on non-accrual loans                      32            26               7           29           16

Ratios:  Non-performing loans
               to  net loans               .72%          .64%            .37%         .77%         .60%
             Non-performing assets
               to net loans                .86%          .71%           .37%          .80%         .64%

</TABLE>


LIQUIDITY

The Bank maintains  sufficient liquidity to fund loan demand and routine deposit
withdrawal activity.  Liquidity is managed by retaining sufficient liquid assets
such as cash and cash  equivalents,  interest-bearing  deposits,  principal  and
interest  payments from loans and securities.  If large  certificate  depositors
shift to the Bank's competitors or the stock market in response to interest rate
changes,  the Bank has the ability to replenish them through alternative funding
sources.  While the Bank  utilizes  numerous  funding  sources  in order to meet
liquidity   requirements,   FHLB  borrowings  remain  a  material  component  of
management's  balance  sheet  strategy.  Also,  the proceeds of trust  preferred
securities  held  by the  Corporation  are on  deposit  with a third  party  and
available to the  Corporation or Bank if needed.  At June 30, 2002, the Bank had
an unused  approved  line of credit in the amount of $45 million and  sufficient
collateral to borrow an additional $153.7 million in advances from the FHLB.





                                       26


<PAGE>



CAPITAL

In  November  2001  the   Corporation's   Board  of  Directors   authorized  the
establishment of an additional stock repurchase program pursuant to which 10% of
the Corporation's  outstanding stock may be repurchased from time to time in the
open market.  The  programs,  which began in 1995,  have  repurchased a total of
645,321  shares.  The Board will  continue  to evaluate  earnings  per share and
monitor the success of the repurchase  plan to maintain an attractive  return to
stockholders.  The current plan expires in May 2003, when the Board will analyze
the Bank's capital position and future earnings potential.

On March 26, 2002, First Federal  Statutory Trust I, a trust subsidiary of First
Federal  Financial  Corporation of Kentucky (the  "Corporation"),  completed the
private placement of 10,000 shares of cumulative trust preferred securities with
a liquidation  preference  of $1,000 per security.  The proceeds of the offering
were loaned to the Corporation in exchange for floating rate junior subordinated
deferrable  interest  debentures.  Distributions  on the  securities are payable
quarterly  at a rate per  annum  equal to the  3-month  LIBOR  plus  3.60%.  The
Corporation undertook the issuance of these securities to enhance its regulatory
capital  position  as they  are  considered  as  Tier I  capital  under  current
regulatory  guidelines.  The  Corporation  intends to utilize the  proceeds  for
general  business  purposes and to support the Bank's future  opportunities  for
growth.

Regulatory  agencies  measure  capital  adequacy  within a framework  that makes
capital  requirements,  in part,  dependent on the  individual  risk profiles of
financial  institutions.  The  Corporation on a consolidated  basis and the Bank
continue to exceed the regulatory  requirements  for Tier I, Tier I leverage and
total risk-based capital. Management intends to maintain a capital position that
meets or exceeds the "well capitalized" requirements as defined by the FDIC. The
Bank's  average  stockholders'  equity to average  assets ratio was 9.10% during
2002 compared to 8.97% during 2001.

ASSET/LIABILITY MANAGEMENT AND MARKET RISK

To minimize the volatility of net interest  income and exposure to economic loss
that may result from  fluctuating  interest rates, the Bank manages its exposure
to adverse  changes in interest  rates through  asset and  liability  management
activities  within  guidelines  established  by its  Asset  Liability  Committee
("ALCO").  The ALCO, which includes senior management  representatives,  has the
responsibility  for  approving  and  ensuring  compliance  with  asset/liability
management  polices of the  Corporation.  Interest  rate risk is the exposure to
adverse changes in the net interest income as a result of market fluctuations in
interest  rates.  The ALCO,  on an ongoing  basis,  monitors  interest  rate and
liquidity  risk in order to  implement  appropriate  funding and  balance  sheet
strategies.  Management  considers  interest  rate  risk to be the  Bank's  most
significant market risk.

The Bank utilizes an earnings  simulation  model to analyze net interest  income
sensitivity.  Potential  changes in market  interest rates and their  subsequent
effects on net interest income are then evaluated. The model projects the effect
of  instantaneous  movements in interest rates of both 100 and 200 basis points.
Assumptions  based on the  historical  behavior of the Bank's  deposit rates and
balances in relation to changes in interest rates are also incorporated into the
model.  These assumptions are inherently  uncertain and, as a result,  the model
cannot  precisely  measure future net interest  income or precisely  predict the
impact of fluctuations in market interest rates on net interest  income.  Actual
results will differ from the model's simulated results due to timing,  magnitude
and frequency of interest  rate changes as well as changes in market  conditions
and the application and timing of various management strategies.

The Bank's interest  sensitivity  profile remained liability sensitive from June
30, 2001 to June 30, 2002.  Given a sustained 100 basis point  downward shock to
the yield  curve used in the  simulation  model,  the Bank's  base net  interest
income  would  increase by an  estimated  .56% at June 30,  2002  compared to an
increase  of 3.92% at June 30,  2001.  Given a 100 basis  point  increase in the
yield curve the Bank's base net interest  income would  decrease by an estimated
4.89% at June 30, 2002 compared to a decrease of 4.30% at June 30, 2001.










                                       27

<PAGE>



The  interest  sensitivity  of the  Corporation  at any  point  in time  will be
affected  by a number of  factors.  These  factors  include  the mix of interest
sensitive assets and liabilities as well as their relative pricing schedules. It
is also influenced by market interest rates,  deposit growth,  loan growth,  and
decay rates and  prepayment  speed  assumptions.  Based on  simulations  for the
current  balance sheet,  the Bank continues to be liability  sensitive.  Savings
products  have  increased  dramatically  over the past  year due to the shift of
funds from the stock market to immediate  availability  and  re-pricing  savings
products.  The Bank's loan portfolio  retains a level of fixed rate products for
both   mortgages  and   commercial   real  estate  that  does  not  provide  the
corresponding  movement in interest  income as rates change.  Strategic goals of
moving to variable  rate loan  products  and  comparing  wholesale  funding with
savings  products  will be the  emphasis  for  management  to  accomplish a less
liability sensitive balance sheet. The table below is representative only and is
not a precise measurement of the effect of changing interest rates on the
Corporation's net interest income in the future.
<TABLE>
<CAPTION>

                                                                JUNE 30, 2002
                                    DECREASE IN RATES                                 INCREASE IN RATES
                                   ------------------                                 -----------------
                                  200              100                              100              200
                              BASIS POINTS     BASIS POINTS        BASE         BASIS POINTS    BASIS POINTS

                                                           (Dollars in thousands)
<S>                             <C>             <C>              <C>             <C>              <C>
PROJECTED INTEREST INCOME
     Loans                       $37,225         $38,685          $40,926         $40,881          $41,889
     Investments                   2,918           3,118            3,509           3,906            3,992
                                  ------          ------          -------          ------           ------
TOTAL INTEREST INCOME             40,143          41,803           44,435          44,787           45,881

PROJECTED INTEREST EXPENSE
     Deposits                     10,630          12,497           15,259          16,822           18,471
     Borrowed funds                4,336           4,342            4,350           4,354            4,361
                                  ------          ------          -------          ------           ------
TOTAL INTEREST EXPENSE            14,966          16,839           19,609          21,176           22,832

NET INTEREST INCOME              $25,177         $24,964          $24,826         $23,611          $23,049
Change from base                    $351            $138                          $(1,215)         $(1,777)
% Change from base                  1.41%            .56%                           (4.89)%          (7.16)%

</TABLE>

<TABLE>
<CAPTION>
                                                               JUNE 30, 2001

                                       DECREASE IN RATES                              INCREASE IN RATES
                                      ------------------                              -----------------
                                    200             100                             100              200
                               BASIS POINTS     BASIS POINTS       BASE         BASIS POINTS     BASIS POINTS

                                                           (Dollars in thousands)
<S>                             <C>             <C>              <C>             <C>              <C>
PROJECTED INTEREST INCOME
     Loans                       $40,259         $41,873          $43,221         $44,342          $45,361
     Investments                   2,068           2,184            2,271           2,507            2,628
                                 -------         -------           ------          ------           ------
TOTAL INTEREST INCOME             42,327          44,057           45,492          46,849           47,989

PROJECTED INTEREST EXPENSE
     Deposits                     16,858          19,092           21,326          23,560           25,149
     Borrowed funds                3,734           3,735            3,736           3,738            3,785
                                  ------          ------           ------          ------           ------
TOTAL INTEREST EXPENSE            20,592          22,827           25,062          27,298           28,934

NET INTEREST INCOME              $21,735         $21,230          $20,430         $19,551          $19,055
Change from base                  $1,305            $800                            $(879)         $(1,375)
% Change from base                  6.39%           3.92%                           (4.30)%          (6.73)%

</TABLE>








                                       28
<PAGE>

IMPACT OF INFLATION & CHANGING PRICES

The financial statements and related data presented herein have been prepared in
accordance  with generally  accepted  accounting  principles,  which require the
measurement of financial  position and operating  results in historical  dollars
without  considering changes in the relative purchasing power of money over time
due to inflation.

The Bank has an asset and liability  structure that is  essentially  monetary in
nature. As a result interest rates have a more significant  impact on the Bank's
performance  than the effects of general  levels of  inflation.  Periods of high
inflation are often  accompanied by relatively higher interest rates and periods
of low inflation are  accompanied by relatively  lower interest rates. As market
interest  rates rise or fall in relation to the rates earned on the Bank's loans
and investments, the value of these assets decreases or increases respectively.



MARKET AND DIVIDEND INFORMATION

The Common  Stock of the  Corporation  is traded on the Nasdaq  National  Market
System (NASDAQ) under the symbol "FFKY". The following table sets forth the high
and low closing prices of the Corporation's  Common Stock and the dividends paid
during the last two years.
                                    QUARTER ENDED

FISCAL 2002:        9/30          12/31        3/31         6/30
                    ----         -----        ----         ----

High              $ 18.50       $ 18.00     $ 20.50      $ 23.85
Low                 14.95         16.10       17.25        20.25
Cash dividends       0.18          0.18        0.18         0.18


FISCAL 2001:        9/30         12/31        3/31         6/30
                    ----         -----        ----         ----

High              $ 17.63       $ 16.50     $ 15.50      $ 18.25
Low                 15.00         13.25       14.25        13.50
Cash dividends       0.18          0.18        0.18         0.18




It is currently the policy of the  Corporation's  Board of Directors to continue
to pay quarterly dividends,  but any future dividends are subject to the Board's
discretion based on its  consideration of the Corporation's  operating  results,
financial condition, capital, income tax considerations, regulatory restrictions
and other factors.











                                       29
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS



Board of Directors and Stockholders
First Federal Financial Corporation of Kentucky
Elizabethtown, Kentucky

We have audited the accompanying  consolidated statements of financial condition
of First Federal Financial  Corporation of Kentucky as of June 30, 2002 and 2001
and the related consolidated statements of income, comprehensive income, changes
in stockholders' equity and cash flows for each of the three years in the period
ending June 30, 2002. These financial  statements are the  responsibility of the
Corporation's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of First  Federal
Financial  Corporation  of Kentucky as of June 30, 2002 and 2001 and the results
of its  operations  and its cash flows for each of the three years in the period
ending June 30, 2002 in conformity with accounting principles generally accepted
in the United States of America.




                                           Crowe, Chizek and Company LLP

Louisville, Kentucky
July 19, 2002






                                       30
<PAGE>


                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                                               JUNE 30,
                               ASSETS                  2002              2001
                                                       ----              ----
Cash and cash equivalents                       $  40,016,230      $  35,464,388
Interest bearing deposits                          64,000,000              -
Securities available-for-sale                       1,977,794          2,013,107
Securities held-to-maturity: fair value of
   $21,750,149 (2002) and $20,954,198 (2001)        21,715,391        20,920,760
Loans held for sale                                  1,511,285           632,321
Loans receivable, less allowance for loan losses
   of $3,734,752 (2002) and $2,906,356 (2001)      518,749,701       516,512,836
Federal Home Loan Bank stock                         6,169,600         5,845,000
Premises and equipment                              11,486,617        11,453,601
Real estate owned:
  Acquired through foreclosure                         659,966           295,989
  Held for development                                 720,683           720,683
Other repossessed assets                               119,504            70,050
Acquisition intangibles                              8,383,574         9,215,373
Accrued interest receivable                          1,925,331         2,024,554
Other assets                                         1,674,181         1,557,078
                                                  ------------      ------------

          TOTAL ASSETS                            $679,109,857      $606,725,740
                                                  ============      ============

                     LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Deposits:
   Non-interest bearing                         $  28,340,904      $  21,208,411
   Interest bearing                               501,541,338        447,616,786
                                                 ------------        -----------
             Total Deposits                       529,882,242        468,825,197
Advances from Federal Home Loan Bank               77,778,070         77,297,658
Trust Preferred Securities                          9,714,500              -
Accrued interest payable                              516,122          1,969,545
Accounts payable and other liabilities              1,573,944          2,475,687
Deferred income taxes                               1,030,424          1,565,376
                                                  -----------        -----------

      TOTAL LIABILITIES                           620,495,302        552,133,463
                                                  -----------        -----------

STOCKHOLDERS' EQUITY:
 Serial preferred stock, 5,000,000 shares
     authorized and unissued                            -                 -
 Common stock, $1 par value per share;
      authorized 10,000,000 shares; issued and
      outstanding, 3,729,400 shares in 2002 and
      3,758,491 shares in 2001                      3,729,400          3,758,491
 Additional paid-in capital                            18,015             20,527
 Retained earnings                                 54,482,567         50,405,481
 Accumulated other comprehensive
      income, net of tax                              384,573            407,778
                                                   ----------       ------------

     TOTAL STOCKHOLDERS' EQUITY                    58,614,555         54,592,277
                                                   ----------       ------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $679,109,857       $606,725,740
                                                 ============       ============

                 See notes to consolidated financial statements.

                                       31
<PAGE>


                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                        CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                                          YEAR ENDED JUNE 30,
                                                           ---------------------------------------------

                                                              2002             2001            2000
                                                              ----             ----            ----
<S>                                                       <C>             <C>             <C>
INTEREST INCOME:
  Interest and fees on loans                               $42,044,646     $41,996,226     $35,316,819
  Interest and dividends on investments and deposits         2,055,097       3,395,588       3,225,633
                                                            ----------     -----------       ---------
          Total interest income                             44,099,743      45,391,814      38,542,452
                                                            ----------      ----------      ----------
INTEREST EXPENSE:
  Deposits                                                  17,538,838      22,125,115      18,073,392
  Federal Home Loan Bank advances                            3,740,701       5,304,192       2,800,076
  Trust Preferred Securities                                   146,284           -                -
                                                            ----------      ----------      ----------
          Total interest expense                            21,425,823      27,429,307      20,873,468
                                                            ----------      ----------      ----------
Net interest income                                         22,673,920      17,962,507      17,668,984
Provision for loan losses                                    1,603,887       1,086,100         399,500
                                                            ----------      ----------      ----------
Net interest income after provision for loan losses         21,070,033      16,876,407      17,269,484
                                                            ----------      ----------      ----------
NON-INTEREST INCOME:
  Customer service fees on deposit accounts                  3,282,865       2,567,780       1,957,445
  Gain on sale of mortgage loans                               651,045         526,304         354,391
  Gain on sale of investments                                     -            696,041         456,926
  Brokerage and insurance commissions                          543,250         639,637         464,388
  Other income                                                 921,043         715,715         643,973
                                                             ---------       ---------       ---------
          Total non-interest income                          5,398,203       5,145,477       3,877,123
                                                             ---------       ---------       ---------
NON-INTEREST EXPENSE:
  Employee compensation and benefits                         7,261,772       6,416,848       5,644,270
  Office occupancy expense and equipment                     1,487,896       1,456,721       1,362,424
  FDIC insurance premiums                                       84,726          84,653         158,117
  Marketing and advertising                                    612,496         505,418         524,349
  Outside services and data processing                       1,544,970       1,420,324       1,259,148
  State franchise tax                                          472,016         424,663         403,869
  Amortization of acquisition intangibles                      831,799         831,799         831,799
  Other expense                                              2,985,060       2,429,330       2,506,928
                                                            ----------      ----------       ---------
          Total non-interest expense                        15,280,735      13,569,756      12,690,904
                                                            ----------      ----------      ----------
  Income before income taxes                                11,187,501       8,452,128       8,455,703
  Income taxes                                               3,729,085       2,802,693       2,792,361
                                                            ----------       ---------       ---------
NET INCOME                                                  $7,458,416      $5,649,435      $5,663,342
                                                            ==========      ==========      ==========
Earnings per share:
          Basic                                             $     1.99      $     1.50      $     1.45

          Diluted                                           $     1.98      $     1.50      $     1.44

</TABLE>

                 See notes to consolidated financial statements.


                                       32
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<TABLE>
<CAPTION>

                                                                 YEAR ENDED JUNE 30,

                                                       2002              2001              2000
                                                       ----              ----              ----
<S>                                                <C>               <C>               <C>
NET INCOME                                          $7,458,416        $5,649,435        $5,663,342
Other comprehensive income (loss), net of tax:
     Change in unrealized gain (loss)
       on securities                                   (23,205)          422,994          (352,242)
     Reclassification of realized amount                  -             (459,387)         (301,571)
                                                    ----------       -----------        ----------
     Net unrealized gain (loss) recognized in
        comprehensive income                           (23,205)          (36,393)         (653,813)
                                                    ----------        ----------        ----------

COMPREHENSIVE INCOME                                $7,435,211        $5,613,042        $5,009,529
                                                    ==========        ==========        ==========
</TABLE>





















                 See notes to consolidated financial statements.

                                       33
<PAGE>


                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                   YEARS ENDING JUNE 30, 2002, 2001, AND 2000

<TABLE>
<CAPTION>


                                                                                               ACCUMULATED
                                                                                                  OTHER
                                                             ADDITIONAL                       COMPREHENSIVE
                                     COMMON STOCK            PAID - IN       RETAINED            INCOME,
                                 SHARES        AMOUNT         CAPITAL        EARNINGS          NET OF TAX            TOTAL
                                 ------        ------         -------        --------          ----------            -----
<S>                            <C>           <C>            <C>            <C>                  <C>              <C>
BALANCE, JUNE 30, 1999          4,121,112     $4,121,112     $3,055,644     $49,587,422          $1,097,984       $57,862,162
Net income                          -              -              -           5,663,342               -             5,663,342
Exercise of stock
  options, net of redemptions       1,553          1,553          4,209           -                   -                 5,762
Net change in unrealized
  gains (losses) on
  securities available-
  for-sale, net of tax              -              -              -               -                (653,813)         (653,813)
Cash dividends declared
  ($.72 per share)                  -              -              -         (2,802,833)               -            (2,802,833)
Stock repurchased                (366,904)      (366,904)    (3,059,853)    (4,966,782)               -            (8,393,539)
                                ---------      ---------     ----------     ----------             --------        ----------
BALANCE, JUNE 30, 2000          3,755,761      3,755,761          -         47,481,149              444,171        51,681,081
Net income                          -              -              -          5,649,435                -             5,649,435
Exercise of stock
  options                           4,730          4,730         27,788           -                   -                32,518
Net change in unrealized
  gains (losses) on
  securities available-
  for-sale, net of tax              -              -              -               -                 (36,393)          (36,393)
Cash dividends declared
  ($.72 per share)                  -              -              -         (2,704,364)               -            (2,704,364)
Stock repurchased                  (2,000)        (2,000)        (7,261)       (20,739)               -               (30,000)
                                ---------      ---------      ---------     ----------            ---------        ----------

BALANCE, JUNE 30, 2001          3,758,491      3,758,491         20,527     50,405,481              407,778        54,592,277
Net income                          -              -              -          7,458,416                -             7,458,416
Exercise of stock
  options, net of redemptions       2,549          2,549         (2,512)          -                   -                    37
Net change in unrealized
  gains (losses) on
  securities available-
  for-sale, net of tax              -              -              -               -                 (23,205)          (23,205)
Cash dividends declared
  ($.72 per share)                  -              -              -         (2,700,917)               -            (2,700,917)
Stock repurchased                (31,640)        (31,640)         -           (680,413)               -              (712,053)
                               ---------      ----------      ---------     ----------           ----------       -----------

BALANCE, JUNE 30, 2002         3,729,400      $3,729,400      $  18,015     $ 54,482,567         $  384,573       $58,614,555
                               =========      ==========      =========     ============         ==========       ===========

</TABLE>







                 See notes to consolidated financial statements.

                                       34
<PAGE>


                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                         YEAR ENDED JUNE 30,

                                                                 2002            2001          2000
                                                                 ----            ----          ----
<S>                                                          <C>             <C>            <C>
OPERATING ACTIVITIES:
 Net income                                                   $7,458,416      $5,649,435     $5,663,342
 Adjustments to reconcile net income to net
  cash provided by operating activities:
    Provision for loan losses                                  1,603,887       1,086,100        399,500
    Depreciation on premises and equipment                     1,052,329       1,136,143      1,022,327
    Federal Home Loan Bank stock dividends                      (324,600)       (384,600)      (237,300)
    Amortization of acquired intangible assets                   831,799         831,799        831,799
    Net accretion                                                (42,037)        (71,922)       (61,435)
    Gain on sale of investments available-for-sale                  -           (696,041)      (456,926)
    Gain on sale of mortgage loans                              (651,045)       (526,304)      (354,391)
    Origination of loans held for sale                       (41,461,141)    (29,515,839)   (23,607,548)
    Proceeds on sale of loans held for sale                   41,233,222      30,150,248     24,610,167
    Deferred taxes                                              (522,998)       (330,781)       353,014
    Changes in:
      Interest receivable                                         99,223           7,323       (428,363)
      Other assets                                               379,841        (122,810)      (197,941)
      Interest payable                                        (1,453,423)        840,755        259,950
      Accounts payable and other liabilities                    (901,743)        513,144       (373,960)
                                                              ----------       ---------      ---------
Net cash provided by operating activities                      7,301,730       8,566,650      7,422,235
                                                              ----------       ---------      ---------
INVESTING ACTIVITIES:
  Change in interest bearing deposits                        (64,000,000)           -              -
  Sales of securities available-for-sale                            -            707,607        461,782
  Purchases of securities available-for-sale                        -            (32,325)      (107,300)
  Purchases of securities held-to-maturity                   (24,000,000)           -        (5,000,000)
  Maturities of securities held-to-maturity                   23,263,876      22,285,284      6,332,014
  Net increase in loans                                       (4,751,127)    (47,830,192)   (71,810,035)
  Purchase of Federal Home Loan Bank stock                          -         (1,379,600)      (643,500)
  Net purchases of premises and equipment                     (1,085,345)       (880,476)    (1,137,226)
  Purchase of real estate held for development                      -           (275,000)          -
                                                             -----------     -----------    -----------
Net cash used in investing activities                        (70,572,596)    (27,404,702)   (71,904,265)
                                                             -----------     -----------    -----------
FINANCING ACTIVITIES:
  Net increase in deposits                                    61,057,045      45,066,242     24,315,516
  Advances from Federal Home Loan Bank                           723,712      76,090,434     79,647,360
  Repayments to Federal Home Loan Bank                          (243,300)    (79,131,326)   (25,202,937)
  Proceeds from stock options exercised                               37          32,518          5,762
  Net proceeds from issuance of trust preferred securities     9,698,184            -              -
  Dividends paid                                              (2,700,917)     (2,704,364)    (2,802,833)
  Common stock repurchased                                      (712,053)        (30,000)    (8,393,539)
                                                              ----------      ----------     ----------
Net cash provided by financing activities                     67,822,708      39,323,504     67,569,329
                                                              ----------      ----------     ----------

INCREASE IN CASH AND CASH EQUIVALENTS                          4,551,842      20,485,452      3,087,299
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                  35,464,388      14,978,936     11,891,637
                                                             -----------     -----------    -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                       $40,016,230     $35,464,388    $14,978,936
                                                             ===========     ===========    ===========
</TABLE>


                See notes to consolidated financial statements.


                                       35
<PAGE>

                FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The following is a description of the significant  accounting  policies
         which  First  Federal  Financial  Corporation  of  Kentucky  follows in
         preparing and presenting its consolidated financial statements:

              PRINCIPLES  OF  CONSOLIDATION  AND  BUSINESS  -  The  consolidated
              financial   statements  include  the  accounts  of  First  Federal
              Financial  Corporation  of  Kentucky  (the  Corporation)  and  its
              wholly-owned   subsidiaries,   First   Federal   Savings  Bank  of
              Elizabethtown  (the Bank) and First Federal Statutory Trust I. The
              Bank has two  wholly-owned  subsidiaries,  First  Service Corp. of
              Elizabethtown  and  First  Heartland  Mortgage.   All  significant
              intercompany transactions and balances have been eliminated.

              The business of the Bank consists primarily of attracting deposits
              from  the  general  public  and  originating   mortgage  loans  on
              single-family  residences.  To a  lesser  extent,  the  Bank  also
              originates loans on multi-family  housing and commercial property.
              The Bank also makes home  improvement  loans,  consumer  loans and
              commercial  business  loans.  The Bank's primary lending area is a
              region  within North  Central  Kentucky.  The economy  within this
              region  is  based  on  agriculture,  a  variety  of  manufacturing
              industries and Ft. Knox, a military installation.

              The  principal  sources  of  funds  for  the  Bank's  lending  and
              investment activities are deposits, repayment of loans and Federal
              Home Loan Bank advances.  The Bank's principal source of income is
              interest on loans. In addition,  other income is derived from loan
              origination   fees,   service   charges,   returns  on  investment
              securities,  secondary  mortgage market fees, and trust department
              and brokerage services.

              ESTIMATES  AND  ASSUMPTIONS  -  The  preparation  of  consolidated
              financial  statements in  conformity  with  accounting  principles
              generally  accepted  in the  United  States  of  America  requires
              management  to make  estimates  and  assumptions  that  affect the
              reported  amounts  of assets and  liabilities  and  disclosure  of
              contingent  assets and liabilities at the date of the consolidated
              financial  statements  and the  reported  amounts of revenues  and
              expenses during the reporting period.  Actual results could differ
              from those  estimates.  The allowance for loan losses and the fair
              value of financial instruments are particularly subject to change.

              CASH FLOWS - For  purposes of the  statement  of cash  flows,  the
              Corporation considers all highly liquid debt instruments purchased
              with an  original  maturity  of  three  months  or less to be cash
              equivalents.  Cash  and  cash  equivalents  include  cash on hand,
              amounts due from banks, and certain interest bearing deposits. Net
              cash flows are reported for loans and deposits.

              INTEREST BEARING  DEPOSITS - Deposits with original  maturities of
              greater  than 90 days are reported  separately.  At June 30, 2002,
              interest-bearing  deposits included time deposits with the Federal
              Home Loan Bank with original maturities of 60 to 180 days at rates
              of 1.65 % to 2.03%.

              SECURITIES  - The  Corporation  classifies  its  investments  into
              held-to-maturity and available-for-sale.  Debt securities in which
              the  Corporation  has a positive  intent  and  ability to hold are
              classified  as  held-to-maturity  and are carried at cost adjusted
              for the  amortization of premiums and discounts using the interest
              method over the terms of the securities.

              Debt and equity securities,  which do not fall into this category,
              nor  held  for the  purpose  of  selling  in the  near  term,  are
              classified  as  available-for-sale.  Unrealized  holding gains and
              losses, net of tax, on available-for-sale  securities are reported
              as a net amount in a separate  component of  stockholders'  equity
              until realized.






                                       36
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

              LOANS RECEIVABLE - Loans receivable are stated at unpaid principal
              balances, less undistributed construction loans, net deferred loan
              origination  fees and allowance  for loan losses.  The Bank defers
              loan   origination  fees  and  discounts  net  of  certain  direct
              origination costs. These net deferred fees are amortized using the
              level yield method on a  loan-by-loan  basis over the lives of the
              underlying loans.

              The  allowance  for loan losses is  increased by charges to income
              and decreased by  charge-offs  (net of  recoveries).  Management's
              periodic  evaluation  of the adequacy of the allowance is based on
              the Bank's past loan loss experience,  known and inherent risks in
              the portfolio,  adverse  situations that may affect the borrower's
              ability to repay,  estimated  value of any underlying  collateral,
              and current economic conditions.

              Loans  are  considered  impaired  if full  principal  or  interest
              payments are not  anticipated in accordance  with the  contractual
              loan terms.  Impaired  loans are  carried at the present  value of
              expected  future  cash flows  discounted  at the loan's  effective
              interest  rate or at the fair value of the  collateral if the loan
              is  collateral  dependent.  A portion  of the  allowance  for loan
              losses is allocated  to impaired  loans if the value of such loans
              is less than the unpaid balance.  If these  allocations  cause the
              allowance for loan losses to require an increase, such increase is
              reported in the provision for loan losses.

              Interest income on loans is recognized on the accrual basis except
              for those loans in nonaccrual  status.  The accrual of interest is
              discontinued when a loan becomes 90 or more days delinquent.  When
              interest accrual is discontinued,  interest income is subsequently
              recognized only to the extent cash payments are received.

              LOANS HELD FOR SALE - Loans held for sale include  mortgage  loans
              originated  and intended for sale in the secondary  market and are
              carried  at the  lower of  aggregate  cost or  market  value.  The
              Corporation  controls  its  interest  rate  risk with  respect  to
              mortgage  loans  held for sale and loan  commitments  expected  to
              close by entering into "best efforts" forward sales contracts on a
              loan for loan basis.  The aggregate market value of mortgage loans
              held for sale considers the sales prices of such  agreements.  The
              Corporation also provides for any losses on uncovered  commitments
              to lend or sell. Gain on sale of loans is recognized when the loan
              is delivered to the investor and is sold with servicing released.

              FEDERAL HOME LOAN BANK STOCK - Investment in stock of Federal Home
              Loan Bank is carried at cost.

              PREMISES AND EQUIPMENT - Premises and equipment are stated at cost
              less  accumulated  depreciation.  Depreciation  is computed by the
              straight-line  method for buildings and improvements and furniture
              and  fixtures,  over the  estimated  useful  lives of the  related
              assets.

              REAL  ESTATE  OWNED  - Real  estate  properties  acquired  through
              foreclosure and in settlement of loans are stated at lower of cost
              or  fair  value  less  estimated  selling  costs  at the  date  of
              foreclosure. The excess of cost over fair value less the estimated
              costs  to  sell at the  time  of  foreclosure  is  charged  to the
              allowance  for loan  losses.  Costs  relating to  development  and
              improvement of property are capitalized, whereas costs relating to
              holding  property  are not  capitalized  and are  charged  against
              operations in the current period.

              Real estate  properties  held for development and sale are carried
              at  the  lower  of  cost,   including  cost  of  development   and
              improvement   subsequent  to  acquisition,   or  fair  value  less
              estimated selling costs. The portion of interest costs relating to
              the development of real estate is capitalized.

              OTHER  REPOSSESSED  ASSETS  -  Consumer  assets  acquired  through
              repossession  and in settlement of loans,  typically  automobiles,
              are  carried  at  lower  of  cost  or fair  value  at the  date of
              repossession.   The  excess  cost  over  fair  value  at  time  of
              repossession is charged to the allowance for loan losses.



                                       37
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

                  BROKERAGE  AND INSURANCE  COMMISSIONS - Brokerage  commissions
                  are  recognized  as  income  on  settlement  date.   Insurance
                  commissions  on loan  products  (credit life,  mortgage  life,
                  accidental   death,   and  guaranteed  auto   protection)  are
                  recognized as income over the life of the loan.

                  STOCK OPTION PLANS - Employee compensation expense under stock
                  option  plans is reported if options are granted  below market
                  price at grant date.  Pro-forma  disclosures of net income and
                  earnings  per share are shown  using the fair value  method of
                  SFAS No. 123 to measure expense, using an option pricing model
                  to estimate fair value.

                  INCOME TAXES - Deferred  income tax assets and liabilities are
                  determined using the liability method.  Under this method, the
                  net deferred tax asset or liability is determined based on the
                  tax effects of the differences  between the book and tax basis
                  of the various balance sheet assets and liabilities.

                  EARNINGS PER COMMON SHARE - Basic earnings per common share is
                  net income  divided by the weighted  average  number of common
                  shares  outstanding  during the period.  Diluted  earnings per
                  common  share  include  the  dilutive   effect  of  additional
                  potential common shares issuable under stock options. Earnings
                  and  dividends  per share are  restated  for all stock  splits
                  through the date of issuance of the financial statements.

                  COMPREHENSIVE  INCOME -  Comprehensive  income consists of net
                  income and other  comprehensive  income.  Other  comprehensive
                  income  includes  unrealized  gains and  losses on  securities
                  available-for-sale,  which are also  recognized  as a separate
                  component of equity.

                  NEW  ACCOUNTING  PRONOUNCEMENTS  - A new  accounting  standard
                  requires all business  combinations  to be recorded  using the
                  purchase  method of accounting for any  transaction  initiated
                  after  June  30,  2001.   Under  the  purchase   method,   all
                  identifiable tangible and intangible assets and liabilities of
                  the acquired company must be recorded at fair value at date of
                  acquisition,  and the  excess of cost  over fair  value of net
                  assets   acquired  is  recorded  as   goodwill.   Identifiable
                  intangible   assets   must   be   separated   from   goodwill.
                  Identifiable  intangible  assets with finite useful lives will
                  be amortized under the new standard,  whereas  goodwill,  both
                  amounts previously recorded and future amounts purchased, will
                  cease being amortized starting July 1, 2002. Annual impairment
                  testing will be required for goodwill  with  impairment  being
                  recorded  if the  carrying  amount  of  goodwill  exceeds  its
                  implied fair value. As a result of adopting this standard,  on
                  July 1, 2002, the  Corporation  ceased annual  amortization of
                  $240,000  on  remaining  goodwill  assets of $1.8  million.  A
                  separately   identified  core  deposit  intangible  and  other
                  unidentified  intangible  assets of $6.6 million will continue
                  to be amortized over their remaining lives. The new accounting
                  standard  requires  the  lives  of  existing   intangibles  be
                  reevaluated  upon  adoption.  Collectively,  these amounts are
                  reported   together  on  the  balance  sheet  as   acquisition
                  intangibles.

                  INDUSTRY  SEGMENTS - Segments are parts of a company evaluated
                  by  management  with  separate  financial   information.   The
                  Corporation's  internal  information is reported and evaluated
                  in three  lines of  business-banking,  mortgage  banking,  and
                  brokerage  and  insurance.  These  segments  are  dominated by
                  banking at a magnitude for which separate  individual  segment
                  disclosures are not required.

                  RECLASSIFICATIONS  -  Certain  amounts  for 2001 and 2000 have
                  been reclassified to conform to the presentation for 2002.





                                       38
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

2.       SECURITIES

         The  amortized  cost basis and fair values of securities at June 30 are
         as follows:

<TABLE>
<CAPTION>
                                                                     GROSS              GROSS
                                               AMORTIZED           UNREALIZED         UNREALIZED
                                                 COST                GAINS             LOSSES          FAIR VALUE
 <S>                                         <C>                 <C>                <C>              <C>
  Securities available-for-sale:
    June 30, 2002:
       Equity securities                      $  385,484          $ 544,607          $    -           $  930,091
       Obligation of states and political
          subdivisions                         1,009,619             38,084               -            1,047,703
                                              ----------          ---------          ---------        ----------
            Total available-for-sale          $1,395,103          $ 582,691          $    -           $1,977,794
                                              ==========          =========          =========        ==========

    June 30, 2001:
       Equity securities                      $  385,484          $ 616,676          $ (5,625)        $  996,535
       Obligation of states and political
          subdivisions                         1,009,773              6,799               -            1,016,572
                                              ----------          ---------          --------         ----------
            Total available-for-sale          $1,395,257          $ 623,475          $ (5,625)        $2,013,107
                                              ==========          =========          ========         ==========

  Securities held-to-maturity:
    June 30, 2002:
       U.S. Treasury and agencies            $20,964,000          $  58,060          $    -          $21,022,060
       Mortgage-backed securities                751,391              7,188           (30,490)           728,089
                                             -----------          ---------          ---------       -----------
          Total held-to-maturity securities  $21,715,391          $  65,248          $ (30,490)      $21,750,149
                                             ===========          =========          =========        ==========

    June 30, 2001:
       U.S. Treasury and agencies            $19,917,029          $ 150,470          $(103,869)      $19,963,630
       Mortgage-backed securities              1,003,731              4,235            (17,398)          990,568
                                             -----------         ----------          ---------       -----------
          Total held-to-maturity securities  $20,920,760          $ 154,705          $(121,267)      $20,954,198
                                             ===========          =========          =========       ===========
</TABLE>

         The  amortized  cost and fair value of  securities at June 30, 2002, by
         contractual maturity, are shown below.
<TABLE>
<CAPTION>

                                                  AVAILABLE-FOR-SALE                      HELD-TO-MATURITY
                                             ----------------------------          -----------------------------
 <S>                                        <C>              <C>                  <C>               <C>
                                             AMORTIZED            FAIR               AMORTIZED           FAIR
                                                COST              VALUE                 COST             VALUE
   Due in one year or less                   $    -           $     -              $ 1,964,000       $ 1,999,880
   Due after one year through five years       776,365           809,628            15,000,000        15,020,300
   Due after five years through ten years      233,254           238,075                 -                 -
   Due after ten years                            -                 -                4,000,000         4,001,880
   Mortgage-backed securities                     -                 -                  751,391           728,089
   Equity securities                           385,484           930,091                 -                 -
                                            ----------        ----------           -----------       -----------
                                            $1,395,103        $1,977,794           $21,715,391       $21,750,149
                                            ==========        ==========           ===========       ===========
</TABLE>










                                       39
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)


2.       SECURITIES - (CONTINUED)

         The   following   schedule  sets  forth  the  proceeds  from  sales  of
         available-for-sale  securities  and the gross  realized  gains on those
         sales for the fiscal years ended June 30:

                                         2002          2001           2000
                                         ----          ----           ----

          Proceeds from sales           $  -         $707,607       $461,782
          Gross realized gains             -          696,041        456,926

         Investment  securities  having an amortized cost of $1,964,000 and fair
         value of  $1,999,880  at June 30,  2002 were  pledged to secure  public
         deposits.

3.       LOANS RECEIVABLE:

         Loans receivable at June 30 are summarized as follows:

                                                   2002               2001
                                                   ----               ----

         Commercial                            $ 21,129,501       $ 17,843,459
         Real estate commercial                 112,528,113         88,937,849
         Real estate construction                10,662,026          9,079,184
         Residential mortgage                   308,689,702        329,855,679
         Consumer and home equity                51,796,395         54,189,225
         Indirect consumer                       19,640,208         21,822,325
                                                -----------        -----------
                                                524,445,945        521,727,721
         Less:
           Net deferred loan origination fees    (1,961,492)        (2,308,529)
           Allowance for loan losses             (3,734,752)        (2,906,356)
                                                 -----------        ----------
                                                 (5,696,244)        (5,214,885)
                                                 ----------         ----------
         Loans Receivable                      $518,749,701       $516,512,836
                                               ============       ============

         The Bank utilizes eligible real estate loans to collateralize  advances
         and letters of credit from the Federal Home Loan Bank. At June 30, 2002
         and 2001, the Bank had  approximately  $292 million and $313 million in
         one-to-four  family  residential  mortgage  loans  pledged  under  this
         arrangement.

         The allowance for losses on loans is summarized as follows:

                                                YEAR ENDED JUNE 30,
                                     ------------------------------------------
                                        2002          2001          2000
                                        ----          ----          ----

         Balance, beginning of year  $2,906,356    $2,252,062    $2,107,994
         Provision for loan losses    1,603,887     1,086,100       399,500
         Charge-offs                   (916,543)     (498,796)     (265,302)
         Recoveries                     141,052        66,990         9,870
                                     ----------    ----------    ----------
         Balance, end of year        $3,734,752    $2,906,356    $2,252,062
                                     ==========    ==========    ==========










                                       40
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

3.       LOANS RECEIVABLE - (CONTINUED)

         Investment  in  impaired  loans  is  summarized  below.  There  were no
         impaired  loans  for  the  periods   presented   without  an  allowance
         allocation.
<TABLE>
<CAPTION>
                                                              JUNE 30,
                                             -----------------------------------------
                                                 2002          2001           2000
                                                 ----          ----           ----
        <S>                                 <C>            <C>           <C>
         Year-end impaired loans             $3,736,000     $3,309,000    $1,728,000
         Amount of allowance for loan
           loss allocated                       511,000        324,000       117,000
         Average impaired loans outstanding   3,507,000      2,499,000     2,688,000
         Interest income recognized             201,000         93,000       111,000
         Interest income received               201,000         93,000       111,000
</TABLE>


4.       PREMISES AND EQUIPMENT

         Premises and equipment consist of the following:
                                                            JUNE 30,
                                                -------------------------------
                                                    2002              2001
                                                    ----              ----
         Land                                   $   953,765       $   953,765
         Buildings                               10,205,523        10,055,266
         Furniture, fixtures and equipment        6,854,502         5,924,356
                                                  ---------         ---------
                                                 18,013,790        16,933,387
         Less accumulated depreciation           (6,527,173)       (5,479,786)
                                                 ----------        ----------
                                                $11,486,617       $11,453,601
                                                ===========       ===========

         Certain  premises are leased under  various  operating  leases.  Rental
         expense was  $263,000,  $256,000  and $259,600 for the years ended June
         30, 2002,  2001, and 2000,  respectively.  Future  minimum  commitments
         under these leases are:

                     YEAR ENDED
                       JUNE 30
                       -------
                        2003                       $  266,028
                        2004                          269,228
                        2005                          242,728
                        2006                          242,728
                     Thereafter                     1,224,017
                                                    ---------
                                                   $2,244,729
                                                   ==========
5.       DEPOSITS

         Time Deposits of $100,000 or more were $100,069,000 and $102,577,000 at
         June 30,  2002 and  2001,  respectively.  At June 30,  2002,  scheduled
         maturities of time deposits are as follows:

                                                       AMOUNT
                                                       ------
                       2003                         $183,016,089
                       2004                           80,040,668
                       2005                           32,738,582
                       2006                            4,451,563
                       Thereafter                      9,782,100
                                                    ------------
                                                    $310,029,002
                                                    ============







                                       41
<PAGE>


                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)


6.       ADVANCES FROM FEDERAL HOME LOAN BANK

         Advances  from the  Federal  Home Loan Bank  (FHLB) of  Cincinnati  are
         collateralized by FHLB stock and a blanket pledge of one-to-four family
         residential mortgage loans equivalent to 125 percent of the outstanding
         advances  and  letters  of  credit.  At June  30,  2002,  the  Bank has
         available  collateral to borrow an additional  $153.7  million from the
         FHLB.  During  January  2001,  the Bank  entered  into $75  million  in
         convertible  fixed rate  advances  with a maturity of ten years.  These
         advances are fixed for periods of two to three years. At the end of the
         fixed term and quarterly thereafter,  the FHLB has the right to convert
         these advances to variable rate advances tied to the three-month  LIBOR
         index.  At June 30, 2002 and 2001, the Bank had  $22,160,000  and $0 in
         letters  of  credit  from  the  FHLB  issued  to  collateralize  public
         deposits. Advances from the FHLB at year-end are as follows:
<TABLE>
<CAPTION>

                                                                     JUNE 30,
                                          -------------------------------------------------------------

                                                     2002                                2001
                                                     ----                                ----
                                            WEIGHTED-                       WEIGHTED-
                                          AVERAGE RATE      AMOUNT        AVERAGE RATE         AMOUNT
                                          ------------      ------        ------------         ------
        <S>                                  <C>        <C>                  <C>            <C>
         Fixed rate advances:
          Mortgage matched advances
           with interest rates from
           5.30% to 7.80%                     6.36%         384,738           6.52%             559,864
          Convertible fixed rate advances     4.92%      75,000,000           4.92%          75,000,000
          Other fixed rate advances           5.45%       2,393,332           6.76%           1,737,794
                                                          ---------                         -----------

        Total borrowings                                $77,778,070                         $77,297,658
                                                        ===========                         ===========
</TABLE>

         The aggregate  minimum  annual  repayments of borrowings as of June 30,
         2002 is as follows:

                       2003                         $ 448,495
                       2004                           134,577
                       2005                           138,928
                       2006                           143,570
                       2007                           144,710
                       Thereafter                  76,767,790
                                                   ----------
                                                  $77,778,070
                                                  ===========

7.       TRUST PREFERRED SECURITIES

         On March 26, 2002,  the  Corporation  issued $10.0  million of Floating
         Rate Capital  Securities  (Trust  Preferred  Securities)  through First
         Federal Statutory Trust I (Trust), a subsidiary of the Corporation. The
         proceeds of the offering were loaned by the Trust to the Corporation in
         exchange for subordinated debentures with terms that are similar to the
         Trust Preferred Securities and is the sole asset of the Trust. Issuance
         costs of  $301,816  paid  from the  proceeds  are  being  amortized  to
         maturity.  The  Corporation  has  guaranteed  that the Trust  will make
         distributions  to the holders of the Trust Preferred  Securities if the
         Trust has available funds to make such distribution  which is reflected
         as  a  liability   on  the  balance   sheet  net  of  issuance   costs.
         Distributions on the Trust Preferred  Securities are payable  quarterly
         in arrears at the annual rate (adjusted quarterly) of three-month LIBOR
         plus  3.60%  (5.47% as of the last  adjustment),  and are  included  in
         interest expense.  The annual rate cannot exceed 11% prior to March 26,
         2007.










                                       42
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

  7.       TRUST PREFERRED SECURITIES - (CONTINUED)

         The Trust  Preferred  Securities,  which mature March 26, 2032,  are
         subject to mandatory redemption, in whole or in part, upon repayment of
         the subordinated  debentures at maturity or their earlier redemption at
         the liquidation preference.  The subordinated debentures are redeemable
         prior to the maturity date at the option of the Corporation on or after
         March 26, 2007 at their  principal  amount plus accrued  interest.  The
         subordinated  debentures  are also  redeemable in whole or in part from
         time to time, upon the occurrence of specific events defined within the
         trust debenture.  The Corporation has the option to defer distributions
         on the  subordinated  debentures  from time to time for a period not to
         exceed 20 consecutive quarters.

         Trust  Preferred  Securities  are  considered as Tier I capital for the
         Corporation under current regulatory guidelines.

  8.     INCOME TAXES

         The Corporation and its subsidiaries file a consolidated federal income
         tax return and income tax is apportioned  among all companies  based on
         their taxable income or loss.

         Provision for income taxes for the years ended June 30, are as follows:

                                       2002           2001            2000
                                       ----           ----            ----

         Current                    $4,252,083     $3,133,474      $2,439,347
         Deferred                     (522,998)      (330,781)        353,014
                                    ----------    -----------     -----------
         Total income tax expense   $3,729,085     $2,802,693      $2,792,361
                                    ==========     ==========      ==========

         The provision for income taxes differs from the amount  computed at the
         statutory rates as follows:

                                             2002         2001        2000
                                             ----         ----        ----

         Federal statutory rate              34.0%        34.0%       34.0%
              Tax-exempt interest income      (.2)         (.2)        (.2)
              Acquisition intangibles          .7          1.0         1.0
              Dividends to ESOP               (.4)         (.6)        (.6)
              Other                           (.8)        (1.0)       (1.2)
                                             -----        ----       -----
         Effective rate                      33.3%        33.2%      33.0%
                                             =====        =====      =====

         Temporary differences between the financial statements carrying amounts
         and tax bases of assets and  liabilities  that give rise to significant
         portions of deferred income taxes at June 30, relate to the following:

                                                        2002          2001
                                                        ----          ----
          Deferred tax assets:
             Allowance for loan losses             $  966,137      $ 532,644
             Investment securities                     12,240         26,928
             Accrued liabilities and other            284,468        262,244
                                                    ---------       --------
                                                    1,262,845        821,816
                                                    ---------       --------










                                       43

<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

8.       INCOME TAXES - (CONTINUED)

                                                        2002           2001
                                                        ----           ----
           Deferred tax liabilities:
              Depreciation                         $  905,056     $   872,006
              Net unrealized gain on securities
                 available-for-sale                   198,118         210,072
              Federal Home Loan Bank stock            955,283         844,919
              Other                                   234,812         460,195
                                                   ----------      ----------
                                                    2,293,269       2,387,192
                                                   ----------      ----------
           Net deferred tax liability              $1,030,424      $1,565,376
                                                   ==========      ==========

         Federal income tax laws provided savings banks with additional bad debt
         deductions through 1987, totaling $9.3 million for the Bank. Accounting
         standards  do not require a deferred  tax  liability  to be recorded on
         this amount,  which would otherwise total $3.2 million at June 30, 2002
         and 2001. If the Bank was  liquidated or otherwise  ceased to be a bank
         or if tax laws were to change,  the $3.2  million  would be recorded as
         expense.

9.       STOCKHOLDERS' EQUITY

            (A)   LIQUIDATION ACCOUNT - In connection with the Bank's conversion
                  from mutual to stock form of ownership  during 1987,  the Bank
                  established a "liquidation  account",  currently in the amount
                  of $728,208  for the  purpose of granting to eligible  deposit
                  account holders a priority in the event of future liquidation.
                  Only  in  such  an  event,  an  eligible  account  holder  who
                  continues  to maintain a deposit  account  will be entitled to
                  receive a distribution from the liquidation account. The total
                  amount  of the  liquidation  account  decreases  in an  amount
                  proportionately  corresponding  to  decreases  in the  deposit
                  account balances of the eligible account holders.

            (B)   REGULATORY CAPITAL REQUIREMENTS - The Corporation and the Bank
                  must  meet  various  regulatory  capital  requirements.  If  a
                  requirement is not met, regulatory  authorities may take legal
                  or administrative actions, including restrictions on growth or
                  operations or, in extreme cases, seizure. As of June 30, 2002,
                  both the  Corporation  on a  consolidated  basis and Bank were
                  categorized  as well  capitalized.  The  actual  and  required
                  capital amounts and ratios are presented below:

<TABLE>
<CAPTION>

                                                                                                      TO BE CONSIDERED
                                                                                                      WELL CAPITALIZED
                                                                                                        UNDER PROMPT
                                                                              FOR CAPITAL                CORRECTION
                                                       ACTUAL              ADEQUACY PURPOSES          ACTION PROVISIONS
                                                 ------------------------------------------------------------ ---------
         AS OF JUNE 30, 2002:                     AMOUNT      RATIO         AMOUNT     RATIO        AMOUNT        RATIO
                                                  ------      -----         ------     -----        ------        -----
          <S>                                 <C>            <C>        <C>            <C>       <C>             <C>
           Total risk-based capital (to risk-
             weighted assets)
                Consolidated                   $62,770,000    13.5%      $37,216,000    8.0%      $46,520,000     10.0%
                Bank                            53,049,000    11.5        37,012,000    8.0        46,265,000     10.0
           Tier I capital (to risk-weighted
            assets)
                 Consolidated                   58,773,000    12.6        18,608,000    4.0        27,912,000      6.0
                 Bank                           49,082,000    10.6        18,506,000    4.0        27,759,000      6.0
           Tier I capital (to average assets)
                 Consolidated                   58,773,000     8.9        26,485,000    4.0        33,106,000      5.0
                 Bank                           49,082,000     7.4        26,191,000    4.0        32,739,000      5.0

</TABLE>








                                       44
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)


9.       STOCKHOLDERS' EQUITY - (CONTINUED)
<TABLE>
<CAPTION>


         AS OF JUNE 30, 2001:
          <S>                                  <C>            <C>       <C>            <C>       <C>            <C>
           Total risk-based capital (to risk-
             weighted assets)
                Consolidated                    $47,534,000    11.1%     $34,334,000    8.0%      $42,918,000    10.0%
                Bank                             46,945,000    11.0       34,280,000    8.0        42,850,000    10.0
           Tier I capital (to risk-weighted
             assets)
                Consolidated                     44,347,000    10.3       17,167,000    4.0        25,751,000     6.0
                Bank                             43,722,000    10.2       17,140,000    4.0        25,710,000     6.0
           Tier I capital (to average assets)
                Consolidated                     44,347,000     7.3       24,168,000    4.0        30,210,000     5.0
                Bank                             43,722,000     7.3       23,925,000    4.0        29,907,000     5.0
</TABLE>

            (C)  DIVIDEND  RESTRICTIONS - Under  OTS  regulations,  limitations
                 have been  imposed  on all "capital  distributions" by savings
                 institutions,    including  cash  dividends.   The  regulation
                 establishes  a three-tiered  system of restrictions,  with the
                 greatest  flexibility   afforded  to  thrifts  which  are both
                 well-capitalized and given  favorable qualitative  examination
                 ratings by the OTS. For example,  a thrift  which is given one
                 of the  two  highest  examination  ratings  and has  "capital"
                 equal to  its fully  phased-in regulatory capital requirements
                 (a "tier  one  institution")  could,  if  a   subsidiary  of a
                 holding  company,  after  prior  notice  but without the prior
                 approval of the OTS, make  capital  distributions in  any year
                 to the  extent  not  in  excess  of  its  net  income  for the
                 calendar  year-to-date   plus  retained   net  income  for the
                 previous two  calendar  years (less  any dividends  previously
                 paid),   provided   that   the   thrift   remains   adequately
                 capitalized  following  the distribution.  Other thrifts would
                 be  subject  to  more  stringent  procedural  and  substantive
                 requirements,  the  most  restrictive being prior OTS approval
                 of  any  capital   distribution.  The   Bank  is  a  tier  one
                 institution.  Under  the  most  restrictive  of  the  dividend
                 limitations  described  above, at  June 30, 2002, the Bank was
                 able to declare  $10.3 million in  additional dividends to the
                 holding  company without  obtaining  the prior approval of the
                 OTS.

            (D)   QUALIFIED  THRIFT LENDER - The Qualified Thrift Lender ("QTL")
                  test requires that  approximately  65% of assets be maintained
                  in  housing-related  finance and other specified areas. If the
                  QTL test is not met,  limits are placed on growth,  branching,
                  new investments, FHLB advances and dividends, or the Bank must
                  convert to a commercial bank charter. Management believes that
                  the QTL test has been met.










                                       45
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

10.       EARNINGS PER SHARE

            The  reconciliation  of the numerators and denominators of the basic
            and diluted EPS is as follows:

                                                 YEAR ENDED JUNE 30,
                                          2002           2001         2000
                                          ----           ----         ----
 Net income available to common
   shareholders                        $7,458,416    $5,649,435   $5,663,342
                                       ==========    ==========   ==========
 Basic EPS:
   Weighted average common shares       3,752,937     3,755,688    3,906,197
                                       ==========     =========    =========
 Diluted EPS:
   Weighted average common shares       3,752,937     3,755,688    3,906,197
   Dilutive effect of stock options        16,533         5,348       16,766
                                       ----------    ----------    ---------
   Weighted average common and
   incremental shares                   3,769,470     3,761,036    3,922,963
                                       ==========     =========    =========
 Earnings Per Share:

   Basic                                    $1.99         $1.50        $1.45
                                       ==========     =========    =========
   Diluted                                  $1.98         $1.50        $1.44
                                       ==========     =========    =========

                  Stock options for 60,000,  79,500, and 65,000 shares of common
                  stock  were  not  included  in  the  2002,   2001,   and  2000
                  computation of diluted  earning per share because their impact
                  was anti-dilutive.

11.      EMPLOYEE BENEFIT PLANS:

            (A)   PENSION  PLANS - The Bank is a  participant  in the  Financial
                  Institutions  Retirement  Fund,  a  multiple-employer  defined
                  benefit  pension plan covering  substantially  all  employees.
                  Employees  are 100% vested at the  completion of five years of
                  participation  in the plan. The Bank's policy is to contribute
                  annually the minimum funding amounts.  Employer  contributions
                  and  administrative  expenses  charged to operations for 2002,
                  2001 and 2000 totaled $6,501, $0, and $5,418, respectively.

                  The  Bank  has  a  contributory   thrift  plan,  which  covers
                  substantially  all of the  employees.  Under  the terms of the
                  plan, voluntary employee contributions are matched by up to 6%
                  of the employee base pay and employees are immediately vested.
                  Employer contributions and administrative  expenses charged to
                  operations for 2002,  2001 and 2000 were  $222,645,  $184,331,
                  and $166,577, respectively.

            (B)   EMPLOYEE  STOCK   OWNERSHIP  PLAN  -  The  Corporation  has  a
                  non-contributory employee stock ownership plan (ESOP) in which
                  employees are eligible to participate  upon  completion of one
                  year of service.  Employees  are vested in  accordance  with a
                  schedule,  which provides for 100% vesting upon  completion of
                  seven years of service.

                  Shares  of the  Corporation's  common  stock are  acquired  in
                  non-leveraged  transactions.  At the  time  of  purchase,  the
                  shares  are  released  and  allocated  to  eligible  employees
                  determined  by a  formula  specified  in the  plan  agreement.
                  Shares  in the  plan at June 30 and the fair  value of  shares
                  released during the year charged to compensation  expense were
                  as follows:

                                                  2002        2001       2000
                                                  ----        ----       ----
                        ESOP shares              199,464     207,045    211,503
                        Compensation expense     $54,000     $56,000    $66,000






                                       46

<PAGE>


                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

11.      EMPLOYEE BENEFIT PLANS - (CONTINUED)

         (C)  STOCK  OPTION  PLAN - Under the 1998 Stock  Option  and  Incentive
              Plan, the Corporation may grant either  incentive or non-qualified
              stock options to key employees for an aggregate of 166,000  shares
              of the  Corporation's  common  stock at not less than fair  market
              value at the date such options are granted. The option to purchase
              shares vest over periods of one to five years and expire ten years
              after the date of grant.  At June 30, 2002 options  available  for
              future grant under the 1998 Stock Option Plan totaled  79,000.  Of
              the options  outstanding  at June 30,  2002,  18,000 were  granted
              under a  previous  plan.  A summary of option  transactions  is as
              follows:

<TABLE>
<CAPTION>
                                                                            JUNE 30,
                                      ---------------------------------------------------------------------------
                                               2002                      2001                      2000
                                               ----                      ----                      ----
                                                    WEIGHTED                  WEIGHTED                   WEIGHTED
                                       NUMBER       AVERAGE       NUMBER      AVERAGE       NUMBER       AVERAGE
                                         OF         EXERCISE        OF        EXERCISE        OF         EXERCISE
                                       OPTIONS       PRICE        OPTIONS      PRICE        OPTIONS       PRICE
                                       -------      -------       -------     -------       -------      --------
<S>                                   <C>          <C>          <C>          <C>          <C>           <C>
 Outstanding, beginning of year        104,500      $19.18       102,230      $19.13        55,064       $15.52
 Granted during year                    10,000       16.23        12,000       17.00        52,500        22.53
 Forfeited during year                     -           -          (5,000)      24.50          (500)       17.13
 Exercised during the year              (9,500)      14.32        (4,730)       6.88        (4,834)       15.10
                                       -------                   -------                   -------
 Outstanding, end of year              105,000      $19.34       104,500      $19.18       102,230       $19.13
                                       =======                   =======                   =======

 Eligible for exercise at year end      57,300                    47,900                    32,230
 Weighted average fair value of
   options granted during the year     $  3.79                   $  4.71                   $  7.06

</TABLE>

             The  following  table  summarizes  information  about stock options
             outstanding at June 30, 2002:
<TABLE>
<CAPTION>
                                         OPTIONS OUTSTANDING                       OPTIONS EXERCISABLE
                                         -------------------                       -------------------
                                                                  WEIGHTED                        WEIGHTED
                                           WEIGHTED AVERAGE       AVERAGE                         AVERAGE
  RANGE OF EXERCISE         NUMBER             REMAINING          EXERCISE         NUMBER         EXERCISE
        PRICES            OUTSTANDING      CONTRACTUAL LIFE        PRICE        EXERCISABLE        PRICE
        ------            -----------      ----------------        -----        -----------        -----
  <S>                     <C>                    <C>              <C>             <C>            <C>
        $12.50              20,000                1.2 years        $12.50          20,000         $ 12.50
   $16.00 to $17.00         25,000                8.1               16.57           7,800           16.62
   $22.38 to $22.63         52,500                7.6               22.53          25,000           22.58
        $24.50               7,500                6.8               24.50           4,500           24.50
                           -------                                                 ------
                           105,000                6.4              $19.34          57,300         $18.40
                           =======                                                 ======

</TABLE>








                                       47
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)


10.      EMPLOYEE BENEFIT PLANS - (CONTINUED)

                The  pro-forma  effect on net income and earnings per share is
                as follows:


                                                    YEAR ENDED JUNE 30,
                                                    -------------------
                                           2002           2001           2000
                                           ----           ----           ----

     Net income:  As reported           $7,458,416     $5,649,435     $5,663,342
                  Pro-forma              7,340,473      5,544,858      5,600,975
     Earnings per share:
                  Basic   As reported   $     1.99     $     1.50     $     1.45
                          Pro-forma           1.96           1.48           1.43

                  Diluted As reported   $     1.98     $     1.50     $     1.44
                          Pro-forma           1.95           1.47           1.43



                  The fair value of each stock  option  granted is  estimated on
                  the date of grant using the Black-Scholes option-pricing model
                  with the following assumptions for grants in 2002: 1) expected
                  dividend  yields  at 4.44%,  2)  risk-free  interest  rates at
                  4.94%, 3) expected  volatility at 28%, and 4) expected life of
                  options  at 10 years.  Future  pro-forma  net  income  will be
                  negatively impacted to the extent more options are granted.

12.      CASH FLOW ACTIVITIES

                  The  following   information  is  presented  as   supplemental
                  disclosures  to the statement of cash flows for the year ended
                  June 30.

                  (a)      Cash paid for:
                                          2002          2001         2000
                                          ----          ----         ----

                    Interest expense  $22,879,246    $26,588,552   $20,613,518
                                      ===========    ===========   ===========

                    Income taxes      $ 4,257,000    $ 3,127,940   $ 2,973,347
                                      ===========    ===========   ===========

                  (b)      Supplemental disclosure of non-cash activities:

                                                   2002        2001       2000
                                                   ----        ----       ----
                   Loans to facilitate sales of
                   real estate owned            $  508,889   $120,766   $783,075
                                                ==========   ========   ========

                   Transfers from loans to
                   real estate acquired through
                   foreclosure and repossessed
                   assets                       $1,419,264   $842,915   $674,465
                                                ==========   ========   ========










                                       48
<PAGE>


                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

13.      CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

         The following  condensed  statements  summarize the financial position,
         operating results and cash flows of First Federal Financial Corporation
         of Kentucky (Parent Company only).

                      CONDENSED STATEMENTS OF FINANCIAL CONDITION

                                                      JUNE 30,
                                              ----------------------
                                               2002           2001
                                               ----           ----
                            ASSETS
 Cash and interest bearing deposits        $ 9,363,205      $ 312,275
 Investment in subsidiary                   58,619,520     54,003,275
 Securities available-for-sale                 405,362        396,355
 Receivable from Bank                          266,241        260,426
 Other assets                                   38,019          6,685
                                           -----------    -----------
                                           $68,692,347    $54,979,016
                                           ===========    ===========

             LIABILITIES AND STOCKHOLDERS' EQUITY
 Trust Preferred Securities                $ 9,714,500    $     -
 Deferred income taxes                         363,292        386,739
 Stockholders' equity                       58,614,555     54,592,277
                                           ----------      ----------
                                           $68,692,347    $54,979,016
                                           ===========    ===========


                             CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                        YEAR ENDED JUNE 30,
                                          ----------------------------------------------
                                              2002             2001             2000
                                              ----             ----             ----
<S>                                       <C>              <C>              <C>
 Dividend from subsidiary                  $2,940,000       $4,900,000       $7,000,000
 Interest income                               69,733           20,916           52,695
 Interest expense                            (146,284)            -               -
 Other expenses                              (197,360)        (169,816)        (164,893)
                                            ---------        ---------       ----------
 Income before income tax benefit           2,666,089        4,751,100        6,887,802
 Income tax benefit                           146,932          104,764           93,942
                                            ---------        ---------       ----------
 Income before equity in undistributed
   net income of subsidiary                 2,813,021        4,855,864        6,981,744
 Equity in undistributed net income of
   subsidiary (distributions in excess
   of net income)                           4,645,395          793,571       (1,318,402)
                                           ----------       ----------       ----------
 Net income                                $7,458,416       $5,649,435       $5,663,342
                                           ==========       ==========       ==========

</TABLE>








                                       49
<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)


13.      CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) - (CONTINUED)

                             CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                       YEAR ENDED JUNE 30,
                                                        ------------------------------------------------
                                                             2002             2001             2000
                                                             ----             ----             ----
<S>                                                      <C>              <C>              <C>
   Operating Activities:
     Net income                                           $7,458,416       $5,649,435       $5,663,342
     Adjustments to reconcile net income to
       cash provided by operating activities:
        (Equity in undistributed net income
          from subsidiary) distributions in
          excess of net income                            (4,645,395)       (793,571)       1,318,402
        Amortization                                          16,316           -                -
        Decrease (increase) in other assets                  (31,334)        (25,252)          22,344
       (Decrease) increase in deferred income taxes          (26,509)        250,995          135,744
                                                           ---------       ---------        ---------
   Net cash provided by operating activities               2,771,494       5,081,607        7,139,832
                                                           ---------       ---------        ---------
   Investing Activities:
     Purchases of securities available-for-sale                 -            (32,325)        (107,300)
     Net change in receivable from Bank                      (5,815)           -                -
                                                           --------        ---------        ---------
   Net cash provided (used) by investing
     activities                                              (5,815)         (32,325)        (107,300)
                                                           --------        ---------        ---------
   Financing Activities:
      Proceeds from stock options exercised                      37           32,518            5,762
      Net proceeds from issuance of
        Trust Preferred Securities                        9,698,184            -                -
      Dividends paid                                     (2,700,917)      (2,704,364)      (2,802,833)
      Common stock repurchases                             (712,053)         (30,000)      (8,393,539)
      Net change in payable to Bank                            -          (2,246,261)       3,773,540
                                                          -- ----------   ----------
   Net cash used by financing activities                  6,285,251       (4,948,107)      (7,417,070)
                                                       -  ---------       ----------       ----------

   Net increase (decrease) in cash                        9,050,930          101,175         (384,538)
   Cash and interest bearing deposits,
      beginning of year                                     312,275          211,100          595,638
                                                        ----- -------     ----------      -----------
   Cash and interest bearing deposits,
      end of year                                      $  9,363,205       $  312,275      $   211,100
                                                       ============       ==========      ===========

</TABLE>








                                       50

<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

14.      FAIR VALUE OF FINANCIAL INSTRUMENTS

         The estimated fair value of the Corporation's financial instruments are
         as follows:
<TABLE>
<CAPTION>

                                                        JUNE 30, 2002                              JUNE 30, 2001
                                            -------------------------------------------------------------------------------
                                                CARRYING               FAIR               CARRYING               FAIR
                                                  VALUE                VALUE                VALUE                VALUE
                                                  -----                -----                -----                -----
        <S>                                   <C>                  <C>                 <C>                  <C>
         Financial assets:
           Cash and cash equivalents           $ 40,016,230         $ 40,016,000        $ 35,464,388         $ 35,464,000
           Interest bearing deposits             64,000,000           64,000,000              -                    -
           Investment securities:
             Securities available-for-sale        1,977,794            1,978,000           2,013,107            2,013,000
             Securities held-to-maturity         21,715,391           21,750,000          20,920,760           20,954,000
           Loans held for sale                    1,511,285            1,534,000             632,321              642,000
           Loans, net                           518,749,701          533,665,000         516,512,836          526,238,000
           Federal Home Loan Bank stock           6,169,600            6,170,000           5,845,000            5,845,000
           Accrued interest receivable            1,925,331            1,925,000           2,024,554            2,025,000
         Financial liabilities:
           Deposits                            (529,882,242)        (535,586,000)       (468,825,197)        (469,719,000)
           Advances from Federal
             Home Loan Bank                     (77,778,070)         (79,105,000)        (77,297,658)         (81,923,000)
           Trust Preferred Securities            (9,714,500)         (10,000,000)              -                    -
           Accrued interest payable                (516,122)            (516,000)         (1,969,545)          (1,970,000)

</TABLE>


         The methods and  assumptions  used by the Corporation in estimating its
         fair value disclosures for financial instruments are presented below:

         Carrying  amount  is  the  estimated  fair  value  for  cash  and  cash
         equivalents,  interest bearing deposits,  Federal Home Loan Bank stock,
         accrued interest receivable and payable,  demand deposits, and variable
         rate loans or deposits that reprice frequently and fully. Security fair
         values  are based on market  prices  or dealer  quotes,  and if no such
         information  is  available,  on the rate and term of the  security  and
         information about the issuer. The value of loans held for sale is based
         on the underlying  sale  commitments.  For fixed rate loans or deposits
         and for variable  rate loans or deposits with  infrequent  repricing or
         repricing  limits,  fair value is based on discounted  cash flows using
         current  market rates  applied to the  estimated  life and credit risk.
         Fair values for impaired loans are estimated using discounted cash flow
         analysis or underlying  collateral values. Fair values of advances from
         Federal Home Loan Bank is based on current rates for similar financing.
         The principal amount of the Trust Preferred Securities is the estimated
         fair value. The fair value of  off-balance-sheet  items is based on the
         current  fees or cost that would be charged to enter into or  terminate
         such arrangements and is not material.

15.      CONTINGENCIES

         In the normal course of business,  there are various  outstanding legal
         proceedings   and  claims.   In  the  opinion  of   management,   after
         consultation  with  legal  counsel,   the  disposition  of  such  legal
         proceedings  and claims will not  materially  affect the  Corporation's
         consolidated financial position, results of operations or liquidity.






                                       51

<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

16.      FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

         The Bank is a party to  financial  instruments  with  off-balance-sheet
         risk in the normal  course of business to meet the  financing  needs of
         its  customers.  These  financial  instruments  include  commitments to
         extend credit and involve,  to varying degrees,  elements of credit and
         interest-rate  risk in excess of the amount  recognized  in the balance
         sheet.  The contract or notional amounts of those  instruments  reflect
         the extent of the Bank's involvement in particular classes of financial
         instruments.

         The Bank's  exposure to credit loss in the event of  nonperformance  by
         the other party to the financial  instrument for  commitments to extend
         credit  is  represented  by the  contractual  notional  amount of those
         instruments.   The  Bank  uses  the  same  credit  policies  in  making
         commitments and conditional obligations as it does for on-balance-sheet
         instruments.

         Commitments  to extend  credit are  agreements to lend to a customer as
         long as there  is no  violation  of any  condition  established  in the
         contract.  Commitments  generally have fixed  expiration dates or other
         termination clauses and may require payment of a fee. Since many of the
         commitments  are expected to expire without being drawn upon, the total
         commitment   amounts  do  not   necessarily   represent   future   cash
         requirements. The Bank evaluates each customer's credit worthiness. The
         amount of collateral  obtained,  if it is deemed  necessary by the Bank
         upon extension of credit, is based on management's credit evaluation of
         the counterparty.

         Commitments to make loans,  excluding  undisbursed portions of loans in
         process, at June 30 were as follows:
<TABLE>
<CAPTION>

                                               2002                             2001
                                     --------------------------     ----------------------------
                                       FIXED          VARIABLE         FIXED          VARIABLE
                                       RATE             RATE           RATE             RATE
                                       ----             ----           ----             ----
        <S>                         <C>            <C>              <C>            <C>
         Commitments to make loans   $ 627,667      $    -           $ 4,231,215    $   389,500
         Unused lines of credit          -           45,108,356           -          38,257,649
         Standby letters of credit       -            4,791,802           -           3,846,000
                                     ---------      -----------      -----------    -----------

                                     $ 627,667      $49,900,158      $ 4,231,215    $42,493,149
                                     =========      ===========      ===========     ==========
</TABLE>

         Fixed rate loan  commitments  at June 30,  2002 were at  current  rates
         ranging from 7.25% to 7.75%, 4.50% to 17.90% for unused lines of credit
         and  primarily  at the national  prime rate of interest  plus 50 to 200
         basis points for standby letters of credit.

         At June 30, 2002, a reserve of $5,138,000 was required as deposits with
         the  Federal  Reserve  or as cash on  hand.  The  reserves  do not earn
         interest.

         At June 30, 2002 and 2001, the Bank had  $22,160,000  and $0 in letters
         of credit  from the  Federal  Home Loan  Bank  issued to  collateralize
         public  deposits.  These  letters  of credit  are  secured by a blanket
         pledge of eligible  one-to-four family residential mortgage loans. (For
         additional  information  see Note 3 on Loans  Receivable  and Note 6 on
         Advances from the Federal Home Loan Bank.)

         At  June  30,  2002  and  2001,  the  Corporation's   mortgage  banking
         activities   included   commitments   to   extend   credit,   primarily
         representing fixed rate mortgage loans, totaling approximately $3.4 and
         $2.3 million.  The  commitments  are generally for a period of 30 to 60
         days and are at market  rates.  To deliver these loans to the secondary
         market,  the Corporation has entered into "best efforts"  forward sales
         contracts on a loan for loan basis.  The  Corporation  provides for any
         losses on  uncovered  loans and  commitments  to lend or sell.  For all
         periods presented, no such provisions were required.







                                       52

<PAGE>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)

17.      RELATED PARTY TRANSACTIONS

         Certain directors, executive officers and principal shareholders of the
         Company,  including  associates of such  persons,  are loan and deposit
         customers.  Related party  deposits at June 30, 2002 and 2001 were $2.9
         million and $3.6 million. A summary of the related party loan activity,
         for loans  aggregating  $60,000 or more to any one related party, is as
         follows:
                                             JUNE 30,
                                ---------------------------------
                                    2002                2001
                                    ----                ----

          Beginning of year      $1,389,460          $1,283,427
               New loans            643,888               7,726
               Repayments          (548,452)            (68,823)
               Other changes       (294,085)            167,130
                                 ----------          ----------
          End of year            $1,190,811          $1,389,460
                                 ==========          ==========

         Other changes include adjustments for loans applicable to one reporting
         period that are excludable from the other reporting period. These loans
         were made in the ordinary  course of business at market  interest rates
         and normal credit terms.


18.      SUMMARY OF QUARTERLY FINANCIAL DATA - (UNAUDITED)

         (Dollars in thousands except per share data)
<TABLE>
<CAPTION>

         FISCAL 2002:                      SEPTEMBER 30       DECEMBER 31       MARCH 31       JUNE 30
                                           ------------       -----------       --------       -------
            <S>                             <C>               <C>              <C>            <C>
             Total interest income           $11,486           $11,046          $10,735        $10,833
             Total interest expense            6,166             5,368            4,883          5,009
             Net interest income               5,320             5,678            5,852          5,824
             Provision for loan losses           300               460              415            429
             Non-interest income               1,234             1,407            1,328          1,429
             Non-interest expense              3,623             3,657            3,913          4,088
             Net income                        1,752             1,978            1,925          1,803
             Earnings per share:
                 Basic                          0.47              0.53             0.51           0.48
                 Diluted                        0.47              0.53             0.51           0.47

         FISCAL 2001:                      SEPTEMBER 30       DECEMBER 31       MARCH 31       JUNE 30
                                           ------------       -----------       --------       -------

             Total interest income           $10,818           $11,301          $11,662        $11,611
             Total interest expense            6,603             7,177            6,933          6,716
             Net interest income               4,215             4,124            4,729          4,895
             Provision for loan losses           195               306              285            300
             Non-interest income               1,313             1,464            1,112          1,256
             Non-interest expense              3,256             3,349            3,447          3,518
             Net income                        1,389             1,305            1,404          1,551
             Earnings per share:
                 Basic                          0.37              0.35             0.37           0.41
                 Diluted                        0.37              0.35             0.37           0.41

</TABLE>




                                       53

<PAGE>




         ITEM 9.  CHANGES  IN  AND DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

                     None

                                    PART III

         ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information  contained under the sections  captioned  "Proposal I -
         Election  of  Directors"  and  "Section  16(a)   Beneficial   Ownership
         Reporting  Compliance" in the Corporation's  definitive proxy statement
         for the  Corporation's  2002 Annual Meeting of Shareholders (the "Proxy
         Statement") is incorporated herein by reference.

         ITEM 11.    EXECUTIVE COMPENSATION

         The  information   contained  under  the  sections  captioned  "Summary
         Compensation  Table,"  "Option  Exercises  and Year-end  Value  Table,"
         "Directors  Compensation," and "Retirement Plan" in the Proxy Statement
         is incorporated herein by reference.


         ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                     MANAGEMENT

                  (a)      Security Ownership of Certain Beneficial Owners

                           Information  required  by this  item is  incorporated
                           herein by reference to the section  captioned "Voting
                           Securities  and  Principal  Holders  Thereof"  in the
                           Proxy Statement

                  (b)      Security Ownership of Management

                           Information  required  by this  item is  incorporated
                           herein  by  reference   to  the  sections   captioned
                           "Proposal  I - Election  of  Directors"  and  "Voting
                           Securities  and  Principal  Holders  Thereof"  in the
                           Proxy Statement.

                  (c)      Changes in Control

                           Management   of   the   Corporation   knows   of   no
                           arrangements,  including  any pledge by any person of
                           securities of the Corporation, the operation of which
                           may  at a  subsequent  date  result  in a  change  of
                           control of the Corporation.

                  (d)      Securities   Authorized  for  Issuance  Under  Equity
                           Compensation Plans

<TABLE>
<CAPTION>
                                                                                           NUMBER OF SECURITIES
                                      NUMBER OF SECURITIES                                REMAINING AVAILABLE FOR
                                          TO BE ISSUED           WEIGHTED-AVERAGE          FUTURE ISSUANCE UNDER
                                        UPON EXERCISE OF         EXERCISE PRICE OF       EQUITY COMPENSATION PLANS
                                      OUTSTANDING OPTIONS,      OUTSTANDING OPTIONS,       (EXCLUDING SECURITIES
          PLAN CATEGORY                WARRANTS AND RIGHTS      WARRANTS AND RIGHTS      REFLECTED IN COLUMN (1))
          -------------                -------------------      -------------------      ------------------------
         <S>                               <C>                       <C>                         <C>
          Equity compensation
            plans approved by
            security holders                 105,000                  $19.34                      79,000

          Equity compensation
            plans not approved by
            security holders                    -                        -                           -
                                             -------                  ------                      ------
          Total                              105,000                  $19.34                      79,000
                                             =======                  ======                      ======
</TABLE>

                           Additional  information  required  by  this  item  is
                           incorporated  herein by  reference  to Note 11 of the
                           Notes to  Consolidated  Financial  Statements  in the
                           Annual Report.



                                       54

<PAGE>

       ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       The information required by this item is incorporated herein by reference
       to the section captioned "Transactions with the Corporation and the Bank"
       in the Proxy Statement.


                                     PART IV


       ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         1.      Financial Statements Filed

                  (a) (1)  Report of Independent Auditors-Crowe, Chizek and
                           Company LLP
                  (b)      Consolidated Statements of Financial Condition at
                           June 30, 2002 and 2001.
                  (c)      Consolidated Statements of Income for the years ended
                           June 30, 2002, 2001, and 2000.
                  (d)      Consolidated  Statements of Comprehensive Income for
                           the years ended June 30, 2002, 2001, and 2000.
                  (e)      Consolidated  Statements of Changes in Stockholders'
                           Equity for the years ended June 30, 2002, 2001, and
                           2000.
                  (f)      Consolidated Statements of Cash Flows for the years
                           ended June 30, 2002, 2001, and 2000.
                  (g)      Notes to Consolidated Financial Statements

         2.       All financial  statement  schedules have been omitted,  as the
                  required information is either inapplicable or included in the
                  financial statements or related notes.

         3.       Exhibits
                   (3)(a)  Articles of Incorporation *
                   (3)(b)  Bylaws *
                  (10)(b)  First Federal Savings Bank of Elizabethtown
                           Stock Option and Incentive Plan, as amended**
                  (16)     Letter re Change in Auditor***
                  (21)     Subsidiaries of the Registrant
                  (23)(a)  Consent of Crowe, Chizek and Company LLP, Certified
                           Public Accountants
                  (99)(a)  Certification of Principal Executive Officer and
                  (99)(b)   Principal Financial Officer Pursuant to Section 906
                            of Sarbanes-Oxley Act

         4.       The  Registrant  has  filed  no  reports  on  Form 8-K for the
                  quarter ending June 30, 2002.




















*        Incorporated by reference to the Corporation's Form S-4 Registration
         Statement (No. 33-30582).
**       Incorporated by reference to Exhibit 10(b) of the Corporation's 1998
         definitive proxy statement.
***      Incorporated by reference to the Corporation's Form 8-K filed
         April 20, 1999.



                                       55

<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.

                                  FIRST FEDERAL FINANCIAL CORPORATION
                                  OF KENTUCKY

     Date: 9/17/02
                                  By:  /s/ B. Keith JOHNSON
                                       -----------------------------
                                       B. Keith Johnson
                                       President and Chief Executive Officer
                                       Duly Authorized Representative


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


   By:   /s/ B. Keith Johnson                By:    /s/ Bob Brown
         --------------------------                 -----------------------
          B. Keith Johnson                          Bob Brown
          Principal Executive Officer               Director
          & Director

   Date:  9/17/02                            Date:  9/17/02


   By:    /s/ Wreno M. Hall                  By:    /s/  Diane E. Logsdon
          ------------------------                  -----------------------
          Wreno M. Hall                             Diane E. Logsdon
          Director                                  Director

   Date:  9/17/02                            Date:  9/17/02


   By:    /s/ J. Alton Rider                 By:    /s/ John L. Newcomb, Jr.
          -----------------------                   ------------------------
          J. Alton Rider                            John L. Newcomb, Jr.
          Director                                  Director

   Date:  9/17/02                            Date:  9/17/02


   By:    /s/ Walter D. Huddleston           By:    /s/ Michael Thomas, DVM
          ------------------------                  ------------------------
          Walter D. Huddleston                      Michael Thomas, DVM
          Director                                  Director

   Date:  9/17/02                            Date:  9/17/02


   By:    /s/ Stephen Mouser                 By:    /s/ Charles Chaney
          ------------------------                  ------------------------
          Stephen Mouser                            Charles Chaney
          Director                                  Chief Operating Officer,
                                                    Chief Financial Officer &
                                                    Principal Accounting Officer

   Date:  9/17/02                            Date:  9/17/02










                                       56
<PAGE>


                                 CERTIFICATIONS

Certification of Principal Executive Officer and Principal Financial Officer for
10-K for Fiscal Ending June 30, 2002

         I,  B. Keith Johnson,  President  &  Chief  Executive  Officer of First
Federal Financial Corporation of Kentucky, certify that:

         1. I have reviewed this  annual  report  on Form 10-K of First  Federal
Financial Corporation of Kentucky;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;



Date: September 27, 2002             By:  /s/ B. Keith Johnson
                                          ----------------------
                                           B. Keith Johnson
                                           President and Chief Executive Officer



I, Charles Chaney, Chief Operating Officer,  Chief Financial Officer & Principal
Accounting Officer of First Federal Financial  Corporation of Kentucky,  certify
that:

         1. I have  reviewed this  annual report  on Form 10-K of First  Federal
Financial Corporation of Kentucky;

         2. Based on my  knowledge,  this  annual  report  does not  contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;



Date: September 27, 2002             By:  /s/ Charles Chaney
                                          ------------------------
                                          Charles Chaney
                                          Chief Operating Officer,
                                          Chief Financial Officer &
                                          Principal Accounting Officer


















                                       57
<PAGE>

                                INDEX TO EXHIBITS



EXHIBIT NO.           DESCRIPTION
-----------           -----------
  (3) (a)             Articles of Incorporation *

  (3) (b)             Bylaws*

  (10)(b)             First Federal Savings Bank of Elizabethtown  Stock  Option
                      and Incentive Plan, as amended **

  (16)                Letter re Change in Auditor***

  (21)                Subsidiaries of the Registrant

  (23)(a)             Consent of Crowe, Chizek and Company LLP, Certified Public
                      Accountants

  (99)(a)             Certification of Principal Executive Officer and Principal
  (99)(b)               Financial  Officer  Pursuant  to  Section  906  of
                        Sarbanes-Oxley Act






































*        Incorporated by reference to the Corporation's Form S-4 Registration
         Statement (No. 33-30582).
**       Incorporated by reference to Exhibit 10(b) of the Corporation's 1998
         definitive proxy statement.
***      Incorporated by reference to the Corporation's Form 8-K filed
         April 20, 1999.



                                       58
<PAGE>

                                   EXHIBIT 21


                         SUBSIDIARIES OF THE REGISTRANT



           PARENT
           ------
           First Federal Financial Corporation of Kentucky



                                                STATE OF            PERCENTAGE
           SUBSIDIARIES                      INCORPORATION             OWNED
           ------------                      -------------          -----------
           First Federal Savings Bank        United States              100%
             of Elizabethtown

           First Service Corporation            Kentucky                100%
             of Elizabethtown (a)

           First Heartland Mortgage             Kentucky                100%
             of Elizabethtown (a)

          (a)    Wholly-owned subsidiaries of First Federal Savings Bank of
                 Elizabethtown.
































                                       59


<PAGE>

EXHIBIT 23(A) - CONSENT OF CROWE, CHIZEK AND COMPANY LLP


We hereby consent to the incorporation by reference in the Form S-8 Registration
Statement No. 33-30582 of First Federal Financial Corporation of Kentucky of our
report dated July 19, 2002 on the  consolidated  financial  statements  of First
Federal  Financial  Corporation of Kentucky as of June 30, 2002 and 2001 and for
each of the three  years in the period  ending  June 30, 2002 as included in the
registrant's annual report on Form 10-K.

Crowe, Chizek and Company LLP

Louisville, Kentucky
September 27, 2002

















                                       60
<PAGE>

                                 CERTIFICATIONS

  Certification of Principal Executive Officer and Principal Financial Officer



         I, B. Keith Johnson, certify that:

         1.       I  have  reviewed  this  annual  report  on Form 10-K of First
 Federal Financial Corporation of Kentucky;

         2.       Based on my knowledge, this annual report does not contain any
untrue statement  of a  material fact or omit to state a material fact necessary
to  make  the  statements made, in light  of t he circumstances under which such
statements were made,  not misleading with respect to the period covered by this
annual report;

         3.       Based  on  my  knowledge,  the financial statements, and other
financial  information  included  in  this  annual report, fairly present in all
material  respects the financial condition, results of operations and cash flows
of the  registrant  as of, and for, the periods presented in this annual report;

         4.       The   registrant's   other  certifying  officers   and  I  are
responsible for  establishing and maintaining disclosure controls and procedures
(as  defined  in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and
have:

                  a)       designed such disclosure controls and procedures to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

                  b)       evaluated  the   effectiveness  of  the  registrant's
disclosure  controls and  procedures  as  of  a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and

                  c)       presented in this annual report our conclusions about
the  effectiveness  of  the  disclosure  controls  and  procedures  based on our
evaluation as of the Evaluation Date;

         5.       The   registrant's   other  certifying  officers  and  I  have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the  audit  committee  of registrant's board of directors (or persons performing
the equivalent functions):

                  a)       all   significant   deficiencies  in  the  design  or
operation  of  internal  controls  which could adversely affect the registrant's
ability to  record,  process,  summarize  and  report  financial  data  and have
identified  for  the  registrant's  auditors any material weaknesses in internal
controls; and

                  b)       any  fraud,  whether  or  not material, that involves
management  or  other  employees who have a significant role in the registrant's
internal controls; and

         6.       The   registrant's   other  certifying  officers  and  I  have
indicated  in  this  annual  report  whether  there  were significant changes in
internal  controls or  in other factors that could significantly affect internal
controls  subsequent  to the  date of our  most recent evaluation, including any
corrective  actions  with   regard  to  significant  deficiencies  and  material
weaknesses.


Date: September 27, 2002             By:  /s/ B. Keith Johnson
                                          ---------------------------
                                          B. Keith Johnson
                                          President and Chief Executive Officer




                                       61

<PAGE>

                                 CERTIFICATIONS

  Certification of Principal Executive Officer and Principal Financial Officer


         I, Charles Chaney, certify that:

         1.       I  have  reviewed  this  annual  report  on Form 10-K of First
 Federal Financial Corporation of Kentucky;

         2.       Based on my knowledge, this annual report does not contain any
untrue statement  of a  material fact or omit to state a material fact necessary
to  make  the  statements made, in light  of t he circumstances under which such
statements were made,  not misleading with respect to the period covered by this
annual report;

         3.       Based  on  my  knowledge,  the financial statements, and other
financial  information  included  in  this  annual report, fairly present in all
material  respects the financial condition, results of operations and cash flows
of the  registrant  as of, and for, the periods presented in this annual report;

         4.       The   registrant's   other  certifying  officers   and  I  are
responsible for  establishing and maintaining disclosure controls and procedures
(as  defined  in  Exchange  Act  Rules 13a-14 and 15d-14) for the registrant and
have:

                  a)       designed such disclosure controls and procedures to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this annual report is being prepared;

                  b)       evaluated  the   effectiveness  of  the  registrant's
disclosure  controls and  procedures  as  of  a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and

                  c)       presented in this annual report our conclusions about
the  effectiveness  of  the  disclosure  controls  and  procedures  based on our
evaluation as of the Evaluation Date;

         5.       The   registrant's   other  certifying  officers  and  I  have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the  audit  committee  of registrant's board of directors (or persons performing
the equivalent functions):

                  a)       all   significant   deficiencies  in  the  design  or
operation  of  internal  controls  which could adversely affect the registrant's
ability to  record,  process,  summarize  and  report  financial  data  and have
identified  for  the  registrant's  auditors any material weaknesses in internal
controls; and
                  b)       any  fraud,  whether  or  not material, that involves
management  or  other  employees who have a significant role in the registrant's
internal controls; and

         6.       The   registrant's   other  certifying  officers  and  I  have
indicated  in  this  annual  report  whether  there  were significant changes in
internal  controls or  in other factors that could significantly affect internal
controls  subsequent  to the  date of our  most recent evaluation, including any
corrective  actions  with   regard  to  significant  deficiencies  and  material
weaknesses.

Date: September 27, 2002            By:  /s/ Charles Chaney
                                         -----------------------
                                         Charles Chaney
                                         Chief Operating Officer,
                                         Chief Financial Officer &
                                         Principal Accounting Officer




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