FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

[X]               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                  OR

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

For the transition period from _______________ to _______________

Commission File No. 000-22255

                          MARKET FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

                                                        31-1462464
                Ohio                                   (I.R.S. Employer
   (State or other jurisdiction of                  Identification Number)
    incorporation of organization)

         7522 Hamilton Avenue
             Mt. Healthy, OH                                  45231
   (Address of principal executive                         (Zip Code)
               office)

Registrant's telephone number, including area code:  (513) 521-9772

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

Yes   X                                                No

As of August 11, 1998, the latest  practicable date,  1,335,725 common shares of
the registrant, no par value, were issued and outstanding.



                                  Page 1 of 15

<PAGE>



                                      INDEX

                          MARKET FINANCIAL CORPORATION

                                                                       Page
PART I  -  FINANCIAL INFORMATION

           Consolidated Statements of Financial Condition                 3
           Consolidated Statements of Earnings                            4
           Consolidated Statements of Cash Flows                          5
           Notes to Consolidated Financial Statements                     7
           Management's Discussion and Analysis of Financial
             Condition and Results of Operations                         10

PART II -  OTHER INFORMATION                                             14

SIGNATURES                                                               15
























                                  Page 2 of 15
<PAGE>


<TABLE>
                          Market Financial Corporation
<CAPTION>

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                        (In thousands, except share data)



                                                                                    June 30,         September 30,
                                                                                       1998                  1997
<S>                                                                                    <C>                  <C>
ASSETS
Cash and due from banks                                                            $    545             $      550
Federal funds sold                                                                    2,678                  1,494
Interest-bearing deposits in other financial institutions                               578                    204
                                                                                    -------                -------
          Cash and cash equivalents                                                   3,801                  2,248

Certificates of deposit in other financial institutions                               4,140                  6,690
Investment securities - at amortized cost, approximate market
   value of $9,437 and $17,316 at June 30, 1998 and
   September 30, 1997                                                                 9,400                 17,257
Investment securities designated as available for sale - at market                    1,373                  1,029
Mortgage-backed securities - at cost, approximate market value of $1,164
   and $1,338 at June 30, 1998 and September 30, 1997                                 1,103                  1,268
Loans receivable - net                                                               32,718                 26,502
Office premises and equipment - at depreciated cost                                     131                    147
Federal Home Loan Bank stock - at cost                                                  411                    390
Accrued interest receivable                                                             393                    520
Prepaid expenses and other assets                                                       183                     70
                                                                                    -------                -------
          Total assets                                                              $53,653                $56,121
                                                                                    =======                =======

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                            $36,927                $35,303
Advances by borrowers for taxes and insurance                                            17                     49
Accrued interest payable                                                                162                     99
Other liabilities                                                                       101                    137
Accrued federal income taxes                                                              5                     48
Deferred federal income taxes                                                           704                    590
                                                                                    -------                -------

          Total liabilities                                                          37,916                 36,226

Shareholders' equity
   Preferred stock - 1,000,000 shares without par value authorized; no
    shares issued                                                                         -                      -
   Common stock - 4,000,000 shares without par value authorized;
    1,335,725 shares issued and outstanding                                               -                      -
   Additional paid-in capital                                                         8,157                 12,832
   Retained earnings - substantially restricted                                       7,663                  7,472
   Shares acquired by Employee Stock Ownership Plan (ESOP)                             (971)                (1,069)
   Unrealized gain on securities designated as available for sale,
    net of related tax effects                                                          888                    660
                                                                                    -------                -------
          Total shareholders' equity                                                 15,737                 19,895
                                                                                    -------                -------

          Total liabilities and shareholders' equity                                $53,653                $56,121
                                                                                    =======                =======
</TABLE>


                                  Page 3 of 15
<PAGE>

<TABLE>

                          Market Financial Corporation
<CAPTION>

                       CONSOLIDATED STATEMENTS OF EARNINGS
                      (In thousands, except per share data)


                                                  Nine months ended June 30,           Three months ended June 30,
                                                    1998           1997                   1998           1997
<S>                                                  <C>           <C>                     <C>            <C>
Interest income
  Loans                                            $1,770         $1,477                $   624         $  516
  Mortgage-backed securities                           81             96                     25             29
  Investment securities                               728            429                    207            180
  Interest-bearing deposits and other                 370            563                    112            239
                                                   ------         ------                 ------          -----
    Total interest income                           2,949          2,565                    968            964

Interest expense
  Deposits                                          1,283          1,281                    439            427
                                                   ------         ------                 ------          -----

     Net interest income                            1,666          1,284                    529            537

Other operating income                                  6              4                      2              1

General, administrative and other expense
   Employee compensation and benefits                 581            483                    169            192
   Occupancy and equipment                             92             82                     28             30
   Federal deposit insurance premiums                  19             29                      6              6
   Franchise taxes                                    145             78                     58             24
   Other operating                                    173            127                     53             41
                                                   ------         ------                 ------          -----
     Total general, administrative and
       other expense                                1,010            799                    314            293
                                                   ------         ------                 ------          -----

        Earnings before income taxes                  662            489                    217            245

Federal income taxes
   Current                                            227             55                     71             52
   Deferred                                            (2)           111                      3             31
                                                   ------         ------                 ------          -----
      Total federal income taxes                      225            166                     74             83
                                                   ------         ------                 ------          -----

        Net Earnings                               $  437         $  323                 $  143          $ 162
                                                   ======         ======                 ======          =====

        Earnings per share
              Basic                               $   .35            N/A                $  .11         $  .13
                                                  =======                               ======         ======
              Diluted                             $   .35            N/A                $  .11         $  .13
                                                  =======                               ======         ======
</TABLE>





                                  Page 4 of 15
<PAGE>


<TABLE>

                          Market Financial Corporation
<CAPTION>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


                                                                             Nine months ended June 30,
                                                                              1998               1997

<S>                                                                             <C>                <C>
Cash flows from operating activities:
  Net earnings for the period                                               $   437            $   323
  Adjustments to reconcile net earnings to net cash provided by (used
    in) operating activities
  Amortization of premiums and discounts on investments and
    mortgage-backed securities, net                                              (2)               (34)
  Depreciation and amortization                                                  26                 23
  Amortization of deferred loan origination fees                                 (7)               (17)
  Amortization of expense related to stock benefit plans                        132                  -
  Federal Home Loan Bank stock dividends                                        (21)               (19)
  Increase (decrease) in cash due to changes in:
    Accrued interest receivable                                                 127                (56)
    Accrued interest payable                                                     63                 19
    Prepaid expenses and other assets                                          (113)               135
    Other liabilities                                                           (36)              (108)
    Federal income taxes
      Current                                                                   (43)                56
      Deferred                                                                   (2)               111
                                                                             ------             ------
        Net cash provided by operating activities                               561                433

Cash flows provided by (used in) investing activities:
  Principal repayments on mortgage-backed securities                            164                263
  Proceeds from maturity of investment securities                            11,460              3,800
  Loan disbursements                                                        (10,791)            (5,663)
  Principal repayments on loans                                               4,582              1,816
  Purchase of investment securities designated as held to maturity           (3,600)           (10,658)
  Purchase of office equipment                                                  (10)                (4)
  Decrease in certificates of deposits in other financial
   institutions - net                                                         2,550                 50
                                                                             ------             ------
        Net cash provided by (used in) investing activities                   4,355            (10,396)

Cash flows provided by (used in) financing activities:
   Net increase (decrease) in deposits                                        1,624             (1,364)
   Advances by borrowers for taxes and insurance                                (32)               (39)
   Disbursement of loan to ESOP                                                   -             (1,069)
   Net proceeds from issuance of common shares                                    -             12,832
   Distributions paid on common stock                                        (4,955)                 -
                                                                             ------             ------
        Net cash provided by (used in) financing activities                  (3,363)            10,360
                                                                             ------             ------
        Net increase in cash and cash equivalents (balance carried
          forward)                                                            1,553                397
                                                                             ------             ------
</TABLE>




                                  Page 5 of 15

<PAGE>


<TABLE>
                          Market Financial Corporation

<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)


                                                                            Nine months ended June 30,
                                                                              1998              1997

<S>                                                                             <C>              <C>
        Net increase in cash and cash equivalents (balance brought
          forward)                                                           $1,553             $  397

Cash and cash equivalents at beginning of period                              2,248              4,082
                                                                             ------             ------

Cash and cash equivalents at end of period                                   $3,801             $4,479
                                                                             ======             ======

Supplemental  disclosure of cash flow  information:
  Cash paid during the period for:
     Federal income taxes                                                    $  320             $    -
                                                                             ======             ======

     Interest on deposits                                                    $1,220             $1,262
                                                                             ======             ======

Supplemental disclosure of noncash investing activities:
    Unrealized gain on securities designated as available for sale,
       net of related tax effects                                            $  228             $ 204
                                                                             ======             =====

</TABLE>















                                  Page 6 of 15

<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          MARKET FINANCIAL CORPORATION

                        For the nine month periods ended
                             June 30, 1998 and 1997

         On April 16, 1996,  the Board of  Directors of The Market  Building and
Saving Company  ("Market")  unanimously  adopted a Plan of Conversion to convert
Market  from a mutual  savings  and loan  association  under Ohio law to a stock
savings and loan association under Ohio law with the concurrent formation of the
newly chartered  holding company,  Market  Financial  Corporation  ("MFC").  The
conversion  was  accomplished   through   amendment  of  Market's   Articles  of
Incorporation  and Constitution and the sale of MFC's common shares in an amount
equal to the pro  forma  market  value of  Market  after  giving  effect  to the
conversion. A subscription offering of the shares of MFC to Market's members and
to a stock benefit plan was conducted.

         The  conversion  was  completed on March 27, 1997,  and resulted in the
issuance  of  1,335,725  common  shares of MFC  which,  after  consideration  of
offering  expenses totaling  approximately  $525,000 and shares purchased by the
ESOP of approximately $1.1 million, resulted in net proceeds of $11.8 million.

         Under OTS  regulations,  limitations  have been imposed on all "capital
distributions", including cash dividends by savings institutions. 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.

         The financial statements for periods prior to March 27, 1997, contained
herein,  are those of Market prior to the  completion of its conversion to stock
form.

1.       Basis of Presentation

         The  accompanying  unaudited  consolidated  financial  statements  were
prepared in accordance with instructions for Form 10-QSB, and, therefore, do not
include  information  or  footnotes  necessary  for a complete  presentation  of
financial  position,  results of operations  and cash flows in  conformity  with
generally  accepted   accounting   principles.   Accordingly,   these  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes  thereto of MFC for the year  ended  September  30,  1997.
However,  in the opinion of  management,  all  adjustments  (consisting  of only
normal  recurring  accruals) which are necessary for a fair  presentation of the
consolidated  financial statements have been included. The results of operations
for the  three-month  and  nine-month  periods  ended  June  30,  1998,  are not
necessarily indicative of the results which may be expected for an entire fiscal
year.

2.       Principles of Consolidation

         The accompanying consolidated financial statements include the accounts
of MFC and Market. All significant intercompany items have been eliminated.

3.       Effects of Recent Accounting Pronouncements

         In October 1995, the Financial  Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based  Compensation,"  establishing financial accounting and reporting
standards  for  stock-based  compensation  plans.  SFAS No. 123  encourages  all
entities to adopt a new method of accounting to measure the compensation cost of
all stock  compensation  plans based on the estimated fair value of the award at
the date it is granted.  Companies are, however,  allowed to continue to measure
compensation  cost for those plans  using the  intrinsic  value based  method of
accounting,  which generally does not result in compensation expense recognition
for most plans.  Companies that elect to remain with the existing accounting are
required to disclose in a footnote  to the  financial  statements  pro forma net



                                  Page 7 of 15
<PAGE>

earnings  and, if  presented,  earnings  per share,  as if SFAS No. 123 had been
adopted.  The  accounting  requirements  of  SFAS  No.  123  are  effective  for
transactions  entered  into during  fiscal  years that begin after  December 15,
1995; however, companies are required to disclose information for awards granted
in their first fiscal year  beginning  after  December 15, 1994.  Management has
determined  that MFC will  account  for  stock-based  compensation  pursuant  to
Accounting  Principles  Board  Opinion  No. 25, and  therefore,  the  disclosure
provisions  of SFAS No.  123 will have no effect on its  consolidated  financial
condition or results of operations.

         In June 1996, the FASB issued SFAS No. 125,  "Accounting  for Transfers
and Servicing of Financial  Assets and  Extinguishments  of  Liabilities,"  that
provides  accounting  guidance on transfers of  financial  assets,  servicing of
financial assets and  extinguishment of liabilities.  SFAS No. 125 introduces an
approach to accounting  for transfers of financial  assets that provides a means
of dealing with more complex transactions in which the seller disposes of only a
partial  interest in the assets,  retains  rights or  obligations,  makes use of
special  purpose  entities  in the  transaction,  or  otherwise  has  continuing
involvement  with  the  transferred  assets.  The  new  accounting  method,  the
financial  components  approach,  provides  that  the  carrying  amount  of  the
financial assets transferred be allocated to components of the transaction based
on their relative fair values.  SFAS No. 125 provides  criteria for  determining
whether control of assets has been relinquished and whether a sale has occurred.
If the transfer  does not qualify as a sale,  it is  accounted  for as a secured
borrowing. Transactions subject to the provisions of SFAS No. 125 include, among
others, transfers involving repurchase agreements,  securitizations of financial
assets, loan participations, factoring arrangements and transfers of receivables
with recourse.

         An  institution  that  undertakes an  obligation  to service  financial
assets  recognizes  either a  servicing  asset or  liability  for the  servicing
contract (unless related to a securitization of assets,  and all the securitized
assets are retained and  classified as held to maturity).  A servicing  asset or
liability  that is  purchased  or assumed is  initially  recognized  at its fair
value.  Servicing assets and liabilities are amortized in proportion to and over
the period of  estimated  net  servicing  income or net  servicing  loss and are
subject to subsequent assessments for impairment based on fair value.

         SFAS No. 125  provides  that a  liability  is removed  from the balance
sheet  only if the  debtor  either  pays the  creditor  and is  relieved  of its
obligations  for the  liability  or is legally  released  from being the primary
obligor. SFAS No. 125 supersedes SFAS No. 122 and is effective for transfers and
servicing of financial assets and extinguishment of liabilities  occurring after
December 31, 1997,  and is to be applied  prospectively.  Earlier or retroactive
application is not permitted.  Management adopted SFAS No. 125 effective January
1, 1998, as required, without material effect on Market's consolidated financial
position or results of operations.

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
Income."  SFAS No.  130  establishes  standards  for  reporting  and  display of
comprehensive income and its components (revenue, expenses, gains and losses) in
a full set of general-purpose  financial statements.  SFAS No. 130 requires that
all items that are  required to be  recognized  under  accounting  standards  as
components of comprehensive  income be reported in a financial statement that is
displayed with the same  prominence as other financial  statements.  It does not
require a specific  format for that  financial  statement  but requires  that an
enterprise  display an amount  representing total  comprehensive  income for the
period in the financial statement.

         SFAS No. 130 requires  that an enterprise  (a) classify  items of other
comprehensive  income by their nature in a financial  statement  and (b) display
the accumulated balance of other  comprehensive  income separately from retained
earnings and additional  paid-in capital in the equity section of a statement of
financial condition.  SFAS No, 130 is effective for fiscal years beginning after
December 15, 1997.  Reclassification of financial statements for earlier periods
is required.  SFAS No. 130 is not expected to have a material  adverse effect on
MFC's consolidated financial statements.

         In June 1997, the FASB issued SFAS No. 131," Disclosures about Segments
of an Enterprise and Related  Information."  SFAS No. 131 significantly  changes
the way that public  business  enterprises  report  information  about operating
segments in annual  financial  statements  and requires  that those  enterprises
report  selected  information  about  reportable  segments in interim  financial
reports  issued to  shareholders.  It also  establishes  standards  for  related
disclosures  about products and services,  geographic areas and major customers.
SFAS No. 131 uses a "management  approach" to disclose financial and descriptive
information  about the way that  management  organizes  the segments  within the
enterprise for making operating  decisions and assessing  information.  For many
enterprises,  the management  approach will likely result in more segments being
reported. In addition,  SFAS No. 131 requires  significantly more information to
be disclosed for each  reportable  segment than is presently  being  reported in
annual  financial  statements  and also requires that  selected  information  be
reported in interim financial  statements.  SFAS No. 131 is effective for fiscal
years beginning  after December 15, 1997. The disclosure  provisions of SFAS No.
131 are not  expected to have a material  adverse  effect on MFC's  consolidated
financial statements.


                                  Page 8 of 15

<PAGE>
4.       Pending Legislative Changes

         Congress  has  enacted   legislation   that  would  merge  the  Savings
Association  Insurance Fund (the "SAIF") and the Bank Insurance Fund (the "BIF")
on January 1, 2000. The  legislation  currently  provides for the elimination of
the thrift charter or separate thrift  regulation under federal law prior to the
merger of the deposit insurance funds.  Market then might be regulated as a bank
under federal law and be subject to the more restrictive activity limits imposed
on national banks.

5.       Earnings Per Share

         Basic  earnings per share is computed  based upon the weighted  average
shares  outstanding  during  the  period,  less  shares  in the  ESOP  that  are
unallocated  and not committed to be released.  Weighted  average  common shares
outstanding,  which  give  effect to 97,144  unallocated  ESOP  shares,  totaled
1,238,581 shares for the three-month and nine-month periods ended June 30, 1998.
Weighted  average  common  shares  outstanding,  which  gives  effect to 106,858
unallocated ESOP shares,  totaled  1,228,867  shares for the three-month  period
ended  June 30,  1997.  Diluted  earnings  per  share is  computed  taking  into
consideration  common shares  outstanding and dilutive  potential common shares.
Weighted-average  shares deemed  outstanding  for purposes of computing  diluted
earnings per share totaled  1,238,581 for the three months and nine months ended
June 30, 1998,  and  1,228,867  for the three  months  ended June 30, 1997.  The
provisions  of SFAS No. 128  "Earnings  Per  Share," are not  applicable  to the
nine-month  period ended June 30, 1997, as the  conversion  from mutual to stock
form was completed in March 1997.






















                                  Page 9 of 15
<PAGE>


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                          MARKET FINANCIAL CORPORATION

                    Note Regarding Forward-Looking Statements

         In addition to historical  information  contained herein, the following
discussion   contains   forward-looking   statements   that  involve  risks  and
uncertainties. Economic circumstances, MFC's operations and actual results could
differ  significantly  from those discussed in the  forward-looking  statements.
Some of the  factors  that could cause or  contribute  to such  differences  are
discussed  herein but also include  changes in the economy and interest rates in
the nation and MFC's market area generally.

         Some  of  the  forward-looking   statements  included  herein  are  the
statements  regarding  management's  determination of the amount and adequacy of
the allowance for losses on loans,  the adequacy of collateral on  nonperforming
loans,  the  effect  of  the  year  2000  on  information   technology  systems,
legislative changes with respect to the federal thrift charter and the effect of
certain recent accounting pronouncements.

Discussion  of  Financial  Condition  Changes  from  September  30,  1997  to 
June 30, 1998

         MFC's assets at June 30, 1998, totaled  approximately  $53.7 million, a
$2.5  million,  or 4.4%,  decrease from the $56.1 million total at September 30,
1997. The decrease was primarily  attributable to a special cash distribution to
shareholders  of $4.7 million paid on April 30, 1998, to  shareholders of record
on April 15,  1998,  which was  partially  offset  by a $1.6  million  growth in
deposits,  net  earnings  for the  period  and  unrealized  gains on  securities
designated as available for sale.

         Liquid assets (cash and cash  equivalents,  certificates of deposit and
investment  securities)  totaled  $18.7  million at June 30, 1998, a decrease of
$8.5 million  from the total at  September  30,  1997.  This  decrease  resulted
primarily from the use of proceeds from  maturities of investment  securities to
fund the special cash  distribution as well as loan portfolio  growth during the
nine months ended June 30, 1998. Repayments from mortgage-backed  securities and
an increase in deposits also  provided  funds for the growth in loans during the
period.

         Loans receivable totaled $32.7 million at June 30, 1998, an increase of
$6.2  million,  or 23.5%,  over  September  30,  1997.  This  increase  resulted
primarily  from loan  originations  of $10.8 million,  which exceeded  principal
repayments of $4.6 million.  MFC's  allowance for loan losses totaled $52,000 at
both June 30, 1998, and September 30, 1997. The allowance  represented  .16% and
 .20% of total loans at June 30, 1998,  and  September  30,  1997.  Nonperforming
loans totaled  $211,000 and $191,000,  or .64% and .72% of total loans,  at June
30, 1998, and September 30, 1997, respectively.

         Although management believes that its allowance for loan losses at June
30, 1998, was adequate based upon the available facts and  circumstances,  there
can be no assurances  that  additions to such allowance will not be necessary in
future periods, which could adversely affect MFC's results of operations.

         Deposits  totaled  $36.9  million at June 30, 1998, an increase of $1.6
million, or 4.6% over the total at September 30, 1997. Demand accounts decreased
by  approximately  $586,000,  while  certificates  of deposit  increased by $2.2
million  during  the  nine  months  ended  June  30,  1998.  At June  30,  1998,
certificates  of deposit that will mature within one year accounted for 54.1% of
MFC's deposit liabilities.

         Shareholders'  equity  totaled  $15.7  million at June 30, 1998, a $4.2
million,  or 21.4%,  decrease from the September 30, 1997,  amount. The decrease
was primarily attributable to the $4.7 million, or $3.50 per share, special cash
distribution paid to shareholders in April 1998,  coupled with regular quarterly
dividends  totaling  $280,000,  which were  partially  offset by net earnings of
$437,000.


                                 Page 10 of 15

<PAGE>
         Market is required to meet minimum capital standards promulgated by the
Office of Thrift Supervision (the "OTS"),  hereinafter described as the tangible
capital  requirement,  the core capital  requirement and the risk-based  capital
requirement.  The tangible capital  requirement  provides for the maintenance of
tangible  capital  equal to 1.5% of  adjusted  total  assets.  The core  capital
requirement  provides  for the  maintenance  of  shareholder's  equity  less all
intangible  assets plus certain  forms of  supervisory  goodwill  equal to 3% of
adjusted  total  assets,  while  the  risk-based  capital  requirement  mandates
maintenance  of core capital plus  general loan loss  allowances  equal to 8% of
risk-weighted  assets  as  defined  by OTS  regulations.  As of June  30,  1998,
Market's  tangible and core capital totaled $13.5 million,  or 25.8% of adjusted
total  assets.  As of June 30,  1998,  Market's  risk-based  capital  was  $13.5
million, or 60.1% of risk-weighted assets.


Comparison of Operating Results for the Three-Month Periods Ended June 30, 1998
and 1997

General

         Net earnings totaled $143,000 for the three months ended June 30, 1998,
a $19,000, or 11.7%, decrease from the $162,000 of net earnings recorded for the
three months ended June 30, 1997.  The decrease in earnings  resulted  primarily
from a $21,000  increase in general,  administrative  and other  expenses and an
$8,000 decrease in net interest income,  which were partially offset by a $9,000
decrease in the provision for federal income taxes.

Net Interest Income

         Interest income increased by $4,000, or .4%, for the three months ended
June 30, 1998,  compared to the three  months ended June 30, 1997.  The increase
resulted  primarily from a $108,000,  or 20.9%,  increase in interest  income on
loans, due to an increase in the weighted  average balance of loans  outstanding
during the  period,  which more than offset a  $104,000,  or 23.2%,  decrease in
interest income on mortgage-backed  securities,  investment securities and other
interest-earning  assets following the $4.7 million special cash distribution in
April 1998.  Interest  expense on deposits  increased by $12,000,  or 2.8%,  due
primarily  to an increase  in the  weighted  average  balance of  deposits.  Net
interest  income  decreased by $8,000,  or 1.5%, for the three months ended June
30, 1998, compared to the same quarter in 1997.

Provision for Losses on Loans

         A  provision  for losses on loans is charged to  earnings  to bring the
total  allowance  to a level  considered  appropriate  by  management  based  on
historical  experience,  the volume and type of lending conducted by Market, the
status of past due principal and interest payments, general economic conditions,
particularly as such conditions relate to market area, and other factors related
to the collectibility of Market's loan portfolio.  As a result of such analysis,
management  decided no  additional  provision  for losses on loans was necessary
during the quarter ended June 30, 1998. There can be no assurance, however, that
the  allowance  for loan losses of Market  will be  adequate to cover  losses on
nonperforming assets in the future.

Other Operating Income

         Other  operating  income,  primarily  service  fees on money orders and
travelers'  checks,  totaled $2,000 and $1,000 for the three-month periods ended
June 30, 1998 and 1997, respectively.

General, Administrative and Other Expense

         General,  administrative  and other expenses  increased by $21,000,  or
7.2%, for the quarter ended June 30, 1998, compared to the same quarter in 1997.
The increase resulted primarily from a $34,000, or 141.7%, increase in franchise
taxes due to an increase  in  shareholders'  equity as a result of the  proceeds
from the stock  conversion  in 1997,  and an increase of $12,000,  or 29.3%,  in
other operating  expenses primarily due to operating expenses of MFC in the 1998
quarter.  These increases were partially offset by a $23,000, or 12.0%, decrease
in employee compensation and benefits,  which resulted from a change in staffing
levels year to year.

Federal Income Tax

         The  provision for federal  income taxes totaled  $74,000 for the three
months  ended June 30,  1998,  compared  to $83,000  for the 1997  quarter.  The
$9,000,  or 10.8%,  decrease  resulted  from a $28,000,  or 11.4%,  decrease  in
earnings  before  taxes.  The  effective  tax rates were 34.1% and 33.9% for the
three months ended June 30, 1998 and 1997, respectively.

                                 Page 11 of 15

<PAGE>
Comparison of Operating  Results for the  Nine-Month Periods Ended June 30, 1998
and 1997

General

         Net earnings  totaled $437,000 for the nine months ended June 30, 1998,
a $114,000,  or 35.3%,  increase over the $323,000 of net earnings  recorded for
the nine months ended June 30, 1997. The increase in earnings resulted primarily
from a $382,000 increase in net interest income, which was partially offset by a
$211,000  increase in general,  administrative  and other  expense and a $59,000
increase in the provision for federal income taxes.

Net Interest Income

         Interest income  increased by $384,000,  or 15.0%,  for the nine months
ended June 30,  1998,  compared  to the nine  months  ended June 30,  1997.  The
increase resulted primarily from an increase in the balance of loans outstanding
during the period.  Interest expense on deposits  increased by $2,000,  or 0.2%,
due primarily to a slight  increase in the average cost of funds during the 1998
period. Net interest income increased by $382,000, or 29.8%, for the nine months
ended June 30, 1998, compared to the same period in 1997.

Provision for Losses on Loans

         A  provision  for losses on loans is charged to  earnings  to bring the
total  allowance  to a level  considered  appropriate  by  management  based  on
historical  experience,  the volume and type of lending conducted by Market, the
status of past due principal and interest payments, general economic conditions,
particularly  as such  conditions  relate to  Market's  market  area,  and other
factors related to the collectibility of Market's loan portfolio. As a result of
such analysis,  management  decided no additional  provision for losses on loans
was  necessary  during  the nine  months  ended June 30,  1998.  There can be no
assurance,  however,  that the  allowance  for loan  losses  of  Market  will be
adequate to cover losses on nonperforming assets in the future.

         The  foregoing  statement may be deemed a  "forward-looking"  statement
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the  Securities  Exchange Act of 1934,  as amended.  Factors that
could  affect  the  adequacy  of the loan loss  allowance  include,  but are not
limited to, the  following:  (1) changes in the national and local economy which
may  negatively  impact the ability of  borrowers to repay their loans and which
may cause the value of real estate and other properties that secure  outstanding
loans to decline;  (2) unforeseen  adverse changes in circumstances with respect
to uncertain  large loan  borrowers;  (3)  decreases in the value of  collateral
securing  consumer  loans  to  amounts  equal to or less  than  the  outstanding
balances of the consumer loans;  and (4)  determinations  by various  regulatory
agencies that Market must recognize  additions to its loan loss allowance  based
on such  regulators'  judgment of  information  available to them at the time of
their examinations.

Other Operating Income

         Other  operating  income,  primarily  service  fees on money orders and
travelers' checks, totaled $6,000 and $4,000 for the  nine-month  periods  ended
June 30, 1998 and 1997, respectively.

General, Administrative and Other Expense

         General,  administrative  and other expense  increased by $211,000,  or
26.4%,  for the nine months ended June 30, 1998,  compared to the same period in
1997.  The increase  resulted  primarily from a $98,000,  or 20.3%,  increase in
employee  compensation  and benefits due to normal merit  increases and expenses
related to the stock  benefit plan, a $67,000,  or 85.9%,  increase in franchise
taxes due to an increase  in  shareholders'  equity as a result of the  proceeds
from the stock  conversion in 1997, and a $46,000,  or 36.2%,  increase in other
operating  expenses  primarily  due to  operating  expenses  of MFC in the  1998
period.

                                 Page 12 of 15

<PAGE>
Federal Income Tax

         The  provision for federal  income taxes totaled  $225,000 for the nine
months ended June 30, 1998,  compared to $166,000 for the same 1997 period.  The
$59,000,  or 35.5%,  increase  resulted from a $173,000,  or 35.4%,  increase in
earnings before taxes. The effective tax rates were 34.0% and 33.9% for the nine
months ended June 30, 1998 and 1997, respectively.


Other Matters

         Market's operations, like those of most financial institutions,  depend
almost entirely on computer systems. Market is addressing the potential problems
associated  with the  possibility  that the  computers  which control or operate
Market's operating systems,  facilities and infrastructure may not be programmed
to read  four-digit date codes and, upon arrival of the year 2000, may recognize
the two-digit code "00" as the year 1900, causing systems to fail to function or
to generate  erroneous data. Market is working with the companies that supply or
service its  computer-operated  or -dependent systems to identify and remedy any
year-2000 related problems.

         As of June 30, 1998,  management  has developed an estimate of expenses
which  are  reasonably  likely to be  incurred  by  Market  in  connection  with
year-2000 issues;  however,  Market does not expect to incur significant expense
to  implement  corrective  measures.  No  assurance  can be given at this  time,
however, that significant expense will not be incurred in future periods. In the
event that  Market is  ultimately  required  to  purchase  replacement  computer
systems, programs and equipment, or that substantial expense must be incurred to
make Market's current systems, programs and equipment year-2000 compliant, MFC's
net earnings and financial condition could be adversely  affected.  While Market
is  endeavoring to ensure that its  computer-dependent  operations are year-2000
compliant,  no  assurance  can be given that some  year-2000  problems  will not
occur.

         In addition to possible  expense related to its own systems,  MFC could
incur  losses if  year-2000  issues  adversely  affect  Market's  depositors  or
borrowers.  Such problems  could include  delayed loan payments due to year-2000
problems  affecting  any of Market's  significant  borrowers  or  impairing  the
payroll  systems of large  employers in Market's  primary  market area.  Because
Market's  loan  portfolio  is  highly  diversified  with  regard  to  individual
borrowers  and types of  businesses  and  Market's  primary  market  area is not
significantly  dependent  upon one employer or industry,  Market does not expect
any significant or prolonged year-2000 related difficulties that will affect net
earnings or cash flow.















                                 Page 13 of 15
<PAGE>



                                     PART II
                          MARKET FINANCIAL CORPORATION

Item 1.  Legal Proceedings

         Not applicable.

Item 2.  Changes in Securities and Use of Proceeds

         Not applicable.

Item 3.  Defaults Upon Senior Securities

         Not applicable.

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

         On June 30,  1998,  MFC held a  Special  Meeting  of  Shareholders.  In
connection therewith, two matters were submitted to the shareholders for a vote.
First,  shareholders approved the Market Financial Corporation 1998 Stock Option
and Incentive Plan:

   FOR: 733,216    AGAINST: 156,056    ABSTAIN: 10,849   BROKER NON-VOTES: 502
        -------             -------             ------                    -----

         The  shareholders  also  approved  the  Market  Financial   Corporation
Recognition  and Retention Plan and Trust  Agreement,  pursuant to the following
vote:

   FOR: 715,737    AGAINST: 172,356    ABSTAIN: 12,530   BROKER NON-VOTES:  0
        -------             -------             ------                     ---

Item 5.  Other Information

         Any  proposals of  shareholders  intended to be included in MFC's proxy
statement and proxy card for the 1999 Annual Meeting of  Shareholders  should be
sent to MFC by certified  mail and must be received by MFC not later than August
31, 1998.  In addition,  if a  shareholder  intends to present a proposal at the
1999 Annual  Meeting  without  including  the  proposal  in the proxy  materials
related to that  meeting,  and if the  proposal is not  received by November 12,
1998, then the proxies  designated by the Board of Directors of MFC for the 1999
Annual Meeting of Shareholders  of MFC may vote in their  discretion on any such
proposal any shares for which they have been appointed  proxies  without mention
of such matter in the proxy statement or on the proxy card for such meeting.

Item 6.  Exhibits and Reports on Form 8-K

         Exhibit 10.1 - Market  Financial  Corporation  1998  Stock  Option  and
                        Incentive  Plan   (Incorporated  by  reference  to   the
                        Definitive  Proxy  Statement  for the Special Meeting of
                        Shareholders in June 1998).

         Exhibit 10.2 - Market  Financial  Corporation Recognition and Retention
                        Plan and Trust Agreement   (Incorporated by reference to
                        the  Definitive  Proxy Statement for the Special Meeting
                        of Shareholders in June 1998).

         Exhibit 27 - Financial Data Schedule for the Nine Months Ended 
                      June 30, 1998.








                                 Page 14 of 15
<PAGE>


                                   SIGNATURES

                          MARKET FINANCIAL CORPORATION


         Pursuant to the  requirements  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.


Date: August 12, 1998                     By: /s/ John T. Larimer
                                              -------------------
                                               John T. Larimer, President and
                                                  Managing Officer



Date:  August 12, 1998                    By: /s/ Julie M. Bertsch
                                              --------------------
                                               Julie M. Bertsch 
                                               Chief Financial Officer































                                 Page 15 of 15