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 MARCH 31, 1997

                                       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. 333-10347

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


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

     7522 Hamilton Avenue
       Mt. Healthy, OH                                  45231
    _____________________                             __________
    (Address of principal                             (Zip Code)
      executive 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 _____           No __X__

As of May 9, 1997, the latest  practicable date,  1,335,725 common shares of the
registrant, no par value, were issued and outstanding.


                                      -1-
<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                                          13

SIGNATURES                                                                14


                                      -2-
<PAGE>
<TABLE>

                          Market Financial Corporation

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


                                                              March 31,   September 30,
                                                                1997          1996
                                                              --------      --------
ASSETS                                                             (In thousands)
<S>                                                           <C>           <C>    
Cash and due from banks                                       $    879      $   512
Federal funds sold                                              12,020        2,627
Interest-bearing deposits in other financial institutions          467          943
                                                              --------      -------
         Cash and cash equivalents                              13,366        4,082

Certificates of deposit in other financial institutions          6,640        7,040
Investment securities - at amortized cost, approximate
  market value of $7,678 and $9,071 at March 31, 1997,
  and September 30, 1996                                         7,690        9,062
Investment securities designated as available for sale -           795          712
  at market
Mortgage-backed securities - at cost, approximate market
  value of $1,521 and $1,612 at March 31, 1997
  and September 30, 1996                                         1,482        1,549
Loans receivable - net                                          25,409       21,996
Office premises and equipment - at depreciated cost                155          168
Federal Home Loan Bank stock - at cost                             376          364
Accrued interest receivable                                        315          339
Prepaid expenses and other assets                                   79          196
Prepaid federal income taxes                                        36           39
                                                              --------      -------

         Total assets                                         $ 56,343      $45,547
                                                              ========      =======

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                      $ 36,114      $37,282
Advances by borrowers for taxes and insurance                       55           50
Accrued interest payable                                           129          117
Other liabilities                                                  133          273
Deferred federal income taxes                                      419          311
                                                              --------      -------

         Total liabilities                                      36,850       38,033

Shareholders' equity
  Preferred stock - 1,000,000 shares without par value
   authorized; no shares issued and outstanding                   --           --
  Common stock - 4,000,000 shares without par value
   authorized; 1,335,725 shares issued and outstanding at         --           --
   March 31, 1997
  Additional paid-in capital                                    12,832         --
  Shares acquired by Employee Stock Ownership Plan (ESOP)       (1,069)        --
  Retained earnings - substantially restricted                   7,224        7,063
  Unrealized gain on securities designated as available
   for sale, net of related tax effects                            506          451
                                                              --------      -------
         Total shareholders' equity                             19,493        7,514
                                                              --------      -------

         Total liabilities and shareholders' equity           $ 56,343      $45,547
                                                              ========      =======

</TABLE>
                                      -3-
<PAGE>
<TABLE>

                          Market Financial Corporation

                       CONSOLIDATED STATEMENTS OF EARNINGS


                                             Six months ended March 31,    Three months ended March 31,
                                                1997            1996           1997          1996
                                              --------        --------       --------      --------
                                                                   (In thousands)
<S>                                            <C>             <C>             <C>           <C> 
Interest income
 Loans                                         $  961          $  961          $501          $474
 Mortgage-backed securities                        67              87            33            39
 Investment securities                            249             270           102           130
 Interest-bearing deposits and other              324             318           167           158
                                               ------          ------          ----          ----
    Total interest income                       1,601           1,636           803           801

Interest expense
 Deposits                                         854             903           428           451
                                               ------          ------          ----          ----

    Net interest income                           747             733           375           350

Provision for losses on loans                    --                13           --              2
                                               ------          ------          ----          ----

    Net interest income after
      provision for                               747             720           375           348
      losses on loans

Other operating income                              3               4             1             2

General, administrative and other
expense
  Employee compensation and benefits              291             231           149           105
  Occupancy and equipment                          52              57            26            30
  Federal deposit insurance premiums               23              38             1            16
  Franchise taxes                                  54              49            30            22
  Other operating                                  86              87            38            41
                                               ------          ------          ----          ----
    Total general, administrative and
      other expense                               506             462           244           214
                                               ------          ------          ----          ----

       Earnings before income taxes               244             262           132           136

Federal income taxes
  Current                                           3              87            32             8
  Deferred                                         80               6            13            39
                                               ------          ------          ----          ----
    Total federal income taxes                     83              93            45            47
                                               ------          ------          ----          ----
       Net Earnings                            $  161          $  169          $ 87          $ 89
                                               ======          ======          ====          ====


</TABLE>


                                      -4-
<PAGE>


                          Market Financial Corporation

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                  Six months ended March 31,
                                                     1997           1997
                                                   --------       --------
                                                       (In thousands)

Cash flows from operating activities:
 Net earnings for the period                       $    161       $   169
 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                    (28)          (19)
   Depreciation and amortization                         15            19
   Amortization of deferred loan
     origination fees                                   (12)          (16)
   Provision for losses on loans                       --              13
   Federal Home Loan Bank stock                         (12)          (12)
     dividends
   Increase (decrease) in cash due to changes
     in:
     Accrued interest receivable                         24            11
     Accrued interest payable                            12            15
     Prepaid expenses and other assets                  117           (40)
     Other liabilities                                 (140)            1
     Federal income taxes
     Current                                              3             6
     Deferred                                            80             6
                                                   --------       -------
       Net cash provided by operating
       activities                                       220           153
Cash flows provided by (used in)
  investing activities:
 Principal repayments on
   mortgage-backed securities                            67           252
 Proceeds from maturity of investment
   securities                                         2,400         2,000
 Loan disbursements                                  (4,612)       (1,166)
 Principal repayments on loans                        1,211         1,580
 Purchase of investment securities
   designated as held to maturity                    (1,000)       (2,057)
 Purchase of office equipment                            (2)          (22)
 Decrease in certificates of deposits
    in other financial institutions -                   400           299
                                                   --------       -------
    net
       Net cash provided by (used in)
         investing activities                        (1,536)          886

Cash flows provided by (used in) financing
  activities:
  Net increase (decrease) in deposits                (1,168)          469
  Advances by borrowers for taxes and
    insurance                                             5             5
  Disbursement of loan to ESOP                       (1,069)         --
  Net proceeds from issuance of common
    shares                                           12,832          --
                                                   --------       -------
       Net cash provided by financing
       activities                                    10,600           474
                                                   --------       -------
       Net increase in cash and cash
         equivalents (balance carried
         forward)                                     9,284         1,513
                                                   --------       -------

                                      -5-
<PAGE>


                          Market Financial Corporation

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                  Six months ended March 31,
                                                     1997           1997
                                                   --------       --------
                                                       (In thousands)

       Net increase in cash and cash
         equivalents (balance brought
         forward)                                  $  9,284       $ 1,513
Cash and cash equivalents at beginning
  of period                                           4,082         4,013
                                                   --------       -------
Cash and cash equivalents at end of
  period                                           $ 13,366       $ 5,526
                                                   ========       =======
Supplemental disclosure of cash flow
  information: Cash paid during the
  period for:
    Federal income taxes                           $   --         $    51
                                                   ========       =======

    Interest on deposits                           $    842       $   887
                                                   ========       =======

Supplemental disclosure of noncash
   investing activities:
   Unrealized gain on securities
      designated as available for sale,
      net of related tax effects                   $     55       $    78
                                                   ========       =======


                                      -6-
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          MARKET FINANCIAL CORPORATION

        For the three and six month periods ended March 31, 1997 and 1996

        On April 16, 1996,  the Board of  Directors  of The Market  Building and
Saving Company (the  "Association")  unanimously adopted a Plan of Conversion to
convert the Association  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 the Association'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 the Association after giving
effect to the  conversion.  A subscription  offering of the shares of MFC to the
Association's members and to an employee 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.

        At the time of  conversion,  the  Association  established a liquidation
account in an amount equal to its  regulatory  capital as of September 30, 1996.
The  liquidation  account  will  be  maintained  for  the  benefit  of  eligible
depositors who continue to maintain their accounts at the Association  after the
conversion.  The  liquidation  account  will be reduced  annually  to the extent
eligible depositors have reduced their qualifying deposits. Subsequent increases
will not  restore an  eligible  account  holder's  interest  in the  liquidation
account.  In the event of complete  liquidation,  and only in such  event,  each
eligible  depositor  will  be  entitled  to  receive  a  distribution  from  the
liquidation  account  in  an  amount   proportionate  to  the  current  adjusted
qualifying  balances  for  accounts  then  held.  The  Association  may  not pay
dividends that would reduce  shareholders' equity below the required liquidation
account balance.

        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  consolidated  financial  statements  for periods prior to March 27,
1997, contained herein, are those of the Association  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  complete   presentation  of
consolidated  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 financial statements
and notes thereto of The Market  Building and Saving  Company for the year ended
September  30, 1996.  However,  in the opinion of  management,  all  adjustments
(consisting  of only normal  recurring  accruals)  which are  necessary for fair
presentation of the consolidated  financial  statements have been included.  The
results of operations  for the three month and six month periods ended March 31,
1997 and  1996,  are not  necessarily  indicative  of the  results  which may be
expected for an entire fiscal year.

2.      Principles of Consolidation

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

3.      Effects of Recent Accounting Pronouncements

        In May 1995,  the FASB  issued  SFAS No. 122  "Accounting  for  Mortgage
Servicing  Rights,"  which requires that the  Association  recognize as separate
assets  rights to service  mortgage  loans for others,  regardless  of how those
servicing rights are acquired.  An institution that acquires mortgage  servicing
rights  through  either the purchase or  origination of mortgage loans and sells
those loans with  servicing  rights  retained would allocate some of the cost of
the  loans  to the  mortgage  servicing  rights.  SFAS  No.  122  requires  that
securitizations  of mortgage  loans be accounted for as sales of mortgage  loans
and  acquisitions  of  mortgage-backed  securities.  Additionally,  SFAS No. 122

                                      -7-
<PAGE>

requires that  capitalized  mortgage  servicing  rights and  capitalized  excess
servicing  receivables be assessed for impairment.  Impairment is measured based
on fair value.  SFAS No. 122 was  effective  for fiscal  years  beginning  after
December 15, 1995 (October 1, 1996, as to the  Association),  to transactions in
which an entity acquires mortgage servicing rights and to impairment evaluations
of all capitalized  mortgage  servicing rights and capitalized  excess servicing
receivables  whenever  acquired.  Retroactive  application  is  prohibited,  and
earlier  adoption  is  encouraged.  Management  adopted  SFAS No. 122  effective
October 1, 1996,  as  required,  without  material  effect on the  Association's
financial position or results of operations.

        In  October  1995,  the  FASB  issued  SFAS  No.  123,  "Accounting  for
Stock-Based  Compensation,"  establishing  financial  accounting  and  reporting
standards for stock-based  employee  compensation plans. SFAS No. 123 encourages
all  entities to adopt a new method of  accounting  to measure the  compensation
cost of all employee 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 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  continue to 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 of
Financial  Assets,  Servicing Rights and  Extinguishment  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  does not believe  that the adoption of SFAS No. 125
will have a material adverse effect on the Association's  financial  position or
results of operations.

     In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share," which
requires  companies  to present  basic  earnings  per share and, if  applicable,
diluted  earnings per share,  instead of primary and fully diluted  earnings per
share,  respectively.  Basic  earnings per share is computed  without  including
potential common shares, i.e., no dilutive effect. Diluted earnings per share is
computed  taking into  consideration  common  shares  outstanding  and  dilutive
potential common shares, including options, warrants, convertible securities and
contingent stock agreements.  SFAS No. 128 is effective for periods ending after
December 15, 1997.  Early  application is not permitted.  The provisions of SFAS
No. 128 are not  applicable  to MFC's  three month and six month  periods  ended
March 31, 1997 and 1996, as the conversion was completed in March 1997.


                                      -8-
<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, 1999. 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. The Association then might be regulated
as a bank under federal law and subject to the more restrictive  activity limits
imposed on national banks.

5.      Earnings Per Share

        The provisions of Accounting  Principles  Board Opinion No. 15 "Earnings
Per Share," are not  applicable  to the six and three month  periods ended March
31, 1997 and 1996, as the conversion  from mutual to stock form was completed in
March 1997.




                                      -9-
<PAGE>



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

                          MARKET FINANCIAL CORPORATION

        In addition to historical  information  contained herein,  the following
discussion   contains   forward-looking   statements   that  involve  risks  and
uncertainties.  Economic circumstances,  the Association'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 the Association's market area generally.

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

Discussion of Financial Condition Changes from September 30, 1996 to March 31,
1997

        The Association's assets at March 31, 1997, totaled  approximately $56.3
million,  a $10.8  million,  or 23.7%,  increase over the $45.5 million total at
September 30, 1996. The increase was funded through the proceeds of the issuance
of common shares of MFC in March of 1997.

        Liquid assets (cash and cash  equivalents,  certificates  of deposit and
investment  securities)  totaled $28.5 million at March 31, 1997, an increase of
$7.6 million  over the total at  September  30,  1996.  This  increase  resulted
primarily  from the net proceeds from the offering of MFC common shares in March
1997,  which  was  partially  offset  by the use of  liquid  assets to fund loan
originations  during  the six  months  ended  March 31,  1997.  Repayments  from
mortgage-backed  securities  also provided  funds for the growth in loans during
the period.

        Loans receivable totaled $25.4 million at March 31, 1997, an increase of
$3.4  million,  or 15.5%,  over  September  30,  1996.  This  increase  resulted
primarily  from loan  originations  of $4.6 million,  which  exceeded  principal
repayments of $1.2 million. The Association's  allowance for loan losses totaled
$52,000 at March 31, 1997,  and  September 30, 1996.  The allowance  represented
 .20%  and .24% of  total  loans at March  31,  1997,  and  September  30,  1996.
Nonperforming  loans totaled  $500,000 and $139,000,  or 1.97% and .63% of total
loans, at March 31, 1997, and September 30, 1996, respectively.  The increase of
$361,000 in nonperforming  loans was primarily  attributable to a nonresidential
real estate loan with an outstanding balance of $325,000.  Management  believes,
however,  that the  collateral on such property is adequate and  anticipates  no
loss on this loan.

        Although management believes that its allowance for loan losses at March
31, 1997, 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 the  Association's  results of
operations.

        Deposits  totaled  $36.1  million at March 31,  1997, a decrease of $1.2
million, or 3.1%, from the total at September 30, 1996, primarily as a result of
depositors  withdrawing  funds to purchase common shares in the  conversion.  At
March 31,  1997,  certificates  of  deposit  that will  mature  within  one year
accounted for 52.7% of the Association's deposit liabilities.

        Shareholders'  equity increased $12.0 million, or 159.4%, as a result of
net  conversion  proceeds of $12.8  million and net earnings of $161,000 for the
six months  ended  March 31,  1997,  which were  partially  offset by the Market
Financial Corporation Employee Stock Ownership Plan (the "ESOP") purchase of MFC
common shares totaling $1.1 million.

        The  Association  is  required  to meet  each of three  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  shareholders'  equity  less all
intangible  assets  equal to 1.5% of adjusted  total  assets.  The core  capital
requirement  provides for the maintenance of tangible capital 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 March 31, 1997, the Association's  tangible and core capital

                                      -10-
<PAGE>


totaled $12.6 million,  or 22.6%,  of adjusted total assets,  which exceeded the
minimum  requirements  of $834,000 and $1.7  million by $11.7  million and $10.9
million,  respectively.  As of March  31,  1997,  the  Association's  risk-based
capital was $12.6  million,  or 68.8% of  risk-weighted  assets,  exceeding  the
minimum requirement by $11.2 million.

Comparison of Operating Results for the Three-Month Periods Ended March 31, 1997
and 1996

        General.  Net earnings  totaled $87,000 for the three months ended March
31, 1997, a $2,000, or 2.2%,  decrease from the $89,000 of net earnings recorded
for the three  months ended March 31,  1996.  The decrease in earnings  resulted
primarily from a $30,000 increase in general,  administrative and other expense,
which was  partially  offset by a $25,000  increase in net  interest  income,  a
$2,000  decrease in the provision  for losses on loans and a $2,000  decrease in
the provision for federal income taxes.

        Net Interest Income.  Interest income  increased by $2,000,  or .2%, for
the three months ended March 31, 1997,  compared to the three months ended March
31,  1996.  The  increase  resulted  primarily  from an increase in the weighted
average  balance of loans  outstanding  during the period.  Interest  expense on
deposits  decreased  by $23,000,  or 5.1%,  due  primarily  to a decrease in the
deposit  portfolio,  resulting  primarily  from  customers' use of  deposits  to
purchase common shares in the conversion in March 1997,  coupled with a decrease
in the cost of deposits.  Net interest income increased by $25,000, or 7.1%, for
the three months ended March 31, 1997, compared to the same quarter in 1996.

        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 the  Association,  the status of past due  principal  and
interest payments, general economic conditions,  particularly as such conditions
relate to the  Association's  market  area,  and other  factors  related  to the
collectibility  of  the  Association's  loan  portfolio.  As a  result  of  such
analysis,  management  decided no  additional  provision for losses on loans was
necessary  during the quarter  ended March 31, 1997.  There can be no assurance,
however,  that the allowance for loan losses of the Association 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  $1,000  and  $2,000 for the
three-month periods ended March 31, 1997 and 1996, respectively.

        General,  Administrative and Other Expense. General,  administrative and
other expense  increased by $30,000,  or 14.0%,  for the quarter ended March 31,
1997, compared to the same quarter in 1996. The increase resulted primarily from
a $44,000,  or 41.9%,  increase in employee  compensation  and  benefits  due to
increased  staffing and normal merit increases,  which was partially offset by a
$15,000, or 93.8%, decrease in federal deposit insurance premiums..

        Federal  Income Tax. The  provision  for federal  income  taxes  totaled
$45,000 for the three months  ended March 31, 1997,  compared to $47,000 for the
1996 quarter.  The $2,000, or 4.3%,  reduction  resulted from a $4,000, or 2.9%,
decline in earnings  before taxes.  The effective tax rates were 34.1% and 34.6%
for the three months ended March 31, 1997 and 1996, respectively.

Comparison of Operating Results for the Six-Month Periods Ended March 31, 1997
and 1996

        General.  Net earnings  totaled  $161,000 for the six months ended March
31,  1997,  an $8,000,  or 4.7%,  decrease  from the  $169,000  of net  earnings
recorded  for the six months  ended  March 31,  1996.  The  decrease in earnings
resulted primarily from a $44,000 increase in general,  administrative and other
expense,  which  was  partially  offset by a $14,000  increase  in net  interest
income,  a $13,000  decrease in the  provision for losses on loans and a $10,000
decrease in the provision for federal income taxes.

        Net Interest Income.  Interest income decreased by $35,000, or 2.1%, for
the six months ended March 31, 1997,  compared to the six months ended March 31,
1996. The decrease  resulted  primarily from a decrease in the weighted  average
balances of  mortgage-backed  securities  and investment  securities  during the
period.  Interest  expense  on  deposits  decreased  by  $49,000,  or 5.4%,  due
primarily  to a decrease  in the  deposit  portfolio,  due to  customers' use of
deposits to purchase common shares in the conversion in March 1997, coupled with
a decrease in the cost of deposits. Net interest income increased by $14,000, or
1.9%,  for the six months ended March 31,  1997,  compared to the same period in
1996.


                                      -11-
<PAGE>


        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 the  Association,  the status of past due  principal  and
interest payments, general economic conditions,  particularly as such conditions
relate to the  Association's  market  area,  and other  factors  related  to the
collectibility  of  the  Association's  loan  portfolio.  As a  result  of  such
analysis,  management  decided no  additional  provision for losses on loans was
necessary during the six months ended March 31, 1997. There can be no assurance,
however,  that the allowance for loan losses of the Association 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  $3,000  and  $4,000 for the
six-month periods ended March 31, 1997 and 1996, respectively.

        General,  Administrative and Other Expense. General,  administrative and
other expense increased by $44,000,  or 9.5%, for the six months ended March 31,
1997,  compared to the same period in 1996. The increase resulted primarily from
a $60,000,  or 26.0%,  increase in employee  compensation  and benefits,  due to
increased  staffing and normal merit increases,  which was partially offset by a
$15,000, or 39.5%, decrease in federal deposit insurance premiums.

        Federal  Income Tax. The  provision  for federal  income  taxes  totaled
$83,000  for the six months  ended March 31,  1997,  compared to $93,000 for the
1996 period. The $10,000, or 10.8%, reduction resulted from an $18,000, or 6.9%,
decline in earnings  before taxes.  The effective tax rates were 34.0% and 35.5%
of the six months ended March 31, 1997 and 1996, respectively.


                                      -12-
<PAGE>



                                     PART II
                          MARKET FINANCIAL CORPORATION



Item 1. Legal Proceedings

        Not applicable.

Item 2. Changes in Securities

        Not applicable.

Item 3. Defaults Upon Senior Securities

        Not applicable.

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

        Not applicable.

Item 5. Other Materially Important Events

        Not applicable.

Item 6. Exhibits and Reports on Form 8-K

        Exhibit 27 - Financial Data Schedule.


                                      -13-
<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:  May 13, 1997                         By: /s/ John T. Larimer
                                                ________________________________
                                                John T. Larimer, President and
                                                Chief Executive Officer


Date:  May 13, 1997                         By: /s/ Julie M. Bertsch
                                                ________________________________
                                                Julie M. Bertsch