SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

(Mark One)

  X      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES 
----
         EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 1996

                                       OR

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

For the transition period from                      to


                         Commission file number 33-81818


                       FIRST FAMILY FINANCIAL CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)

        Florida                                            59-3277352
        -------                                            ----------
(State or Other Jurisdiction                            (I.R.S. Employer
of Incorporation or Organization)                      Identification No.)



2801 South Bay Street, Eustis, Florida                     32726-6503
--------------------------------------                     ----------
(Address of Principal Executive Offices)                   (Zip Code)



Registrant's Telephone Number, Including Area Code  (352) 357-4171

--------------------------------------------------------------------------------
              Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report.


   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 90 days Yes X No
                                            ---  ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

   Indicate the number of shares  outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:


Common stock, par value $.01 per share  
--------------------------------------               
                                  545,000 shares outstanding at November 7, 1996
                                  ----------------------------------------------

                                                                  CONFORMED COPY







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<CAPTION>


                       FIRST FAMILY FINANCIAL CORPORATION


                                      INDEX


PART I. FINANCIAL INFORMATION

<S>                                                                                                            <C>      
   Item 1. Financial Statements                                                                                Page

      Condensed Consolidated Balance Sheets-
         September 30, 1996 (unaudited) and June 30, 1996........................................................2

      Condensed Consolidated Statements of Operations-
         Three months ended September 30, 1996 and 1995 (unaudited)..............................................3

      Condensed Consolidated Statement of Stockholders' Equity-
         Three months ended September 30, 1996 (unaudited).......................................................4

      Condensed Consolidated Statements of Cash Flows -
         Three months ended September 30, 1996 and 1995 (unaudited)..............................................5

      Notes to Condensed Consolidated Financial Statements (unaudited).........................................6-7

      Review by Independent Certified Public Accountants.........................................................8

      Report on Review by Independent Certified Public Accountants...............................................9

   Item 2. Management's Discussion and Analysis of Financial Condition
      and Results of Operations..............................................................................10-15

PART II. OTHER INFORMATION

   Item 1. Legal Proceedings....................................................................................16

   Item 2. Changes in Securities................................................................................16

   Item 3. Default upon Senior Securities.......................................................................16

   Item 4. Submission of Matters to a Vote of Security Holders..................................................16

   Item 5. Other Information....................................................................................16

   Item 6. Exhibits and Reports on Form 8-K.....................................................................16


SIGNATURES......................................................................................................17


</TABLE>

                                        1

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<CAPTION>



                                          FIRST FAMILY FINANCIAL CORPORATION

                                             PART I. FINANCIAL INFORMATION

                                             Item 1. Financial Statements

                                         Condensed Consolidated Balance Sheets
                                                    (In thousands)
                                                                                       September 30,        June 30,
                                                                                       -------------        --------
                                                                                           1996               1996
                                                                                           ----               ----
                  Assets                                                                (unaudited)

<S>                                                                                    <C>                 <C>  
Cash and due from banks                                                                $    1,937            1,752
Interest-bearing deposits with banks                                                        5,677            1,689
                                                                                         --------         --------

      Cash and cash equivalents                                                             7,614            3,441

Securities held to maturity                                                                39,753           29,863
Loans held for sale                                                                           454            1,991
Loans receivable, net                                                                     116,474          114,167
Accrued interest receivable:
      Securities                                                                              350              603
      Loans receivable                                                                        696              687
Premises and equipment                                                                      2,756            2,575
Other real estate owned                                                                        99               64
Restricted securities - Federal Home Loan Bank of
   Atlanta stock                                                                            1,112            1,112
Prepaid expenses and other assets                                                           1,410            1,387
                                                                                         --------         --------

        Total                                                                           $ 170,718          155,890
                                                                                        =========          =======

      Liabilities and Stockholders' Equity

Liabilities:
   Demand deposits                                                                          4,062            4,935
   Savings and NOW deposits                                                                15,532           15,070
   Money market deposits                                                                   18,430           19,092
   Other time deposits                                                                    120,012          104,265
                                                                                          -------          -------

        Total deposits                                                                    158,036          143,362

   Advance payments by borrowers for taxes and insurance                                    1,638            1,254
   Deferred income taxes                                                                       66               66
   Accrued expenses and other liabilities                                                   1,545              774
   Official checks                                                                            729            1,212
                                                                                          -------          -------

        Total liabilities                                                                 162,014          146,668
                                                                                          -------          -------

Stockholders' equity:
      Common stock                                                                              5                5
      Additional paid-in capital                                                            2,873            2,873
      Retained earnings                                                                     5,826            6,344
                                                                                         --------         --------

        Total stockholders' equity                                                          8,704            9,222
                                                                                         --------         --------

        Total                                                                            $ 170,718         155,890
                                                                                         =========         =======
</TABLE>



See accompanying Notes to Condensed Consolidated Financial Statements.

                                        2

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<CAPTION>



                                          FIRST FAMILY FINANCIAL CORPORATION

                                    Condensed Consolidated Statements of Operations
                                   (Dollars in Thousands, except Per Share Amounts)


                                                                                                     Three Months
                                                                                                 Ended September 30,
                                                                                                 -------------------
                                                                                                 1996          1995
                                                                                                 ----          ----
                                                                                                     (unaudited)
Interest income:
<S>                                                                                            <C>              <C>  
   Loans receivable                                                                            $   2,356        2,392
   Securities held to maturity                                                                       535          484
   Other interest-earning assets                                                                      76           45
                                                                                                 -------      -------

           Total interest income                                                                   2,967        2,921
                                                                                                 -------      -------

Interest expense:
   Deposits                                                                                        1,801        1,808
   Other borrowed funds                                                                                1            5
                                                                                                --------     --------

           Total interest expense                                                                  1,802        1,813
                                                                                                 -------      -------

           Net interest income                                                                     1,165        1,108

Provision for loan losses                                                                             30           30
                                                                                                 -------      -------

           Net interest income after provision for loan losses                                     1,135        1,078
                                                                                                 -------      -------

Noninterest income:
   Fees and service charges                                                                          114          137
   Gain on sale of loans                                                                              86          112
   Other                                                                                              20           37
                                                                                                 -------      -------

           Total noninterest income                                                                  220          286
                                                                                                 -------      -------

Noninterest expenses:
   Salaries and employee benefits                                                                    451          449
   Occupancy and equipment, net                                                                       96           85
   Data processing                                                                                    50           65
   Deposit insurance premiums                                                                         97          118
   SAIF recapitalization assessment                                                                  966           -
   Professional fees                                                                                  64           60
   Loan expense                                                                                       21           11
   Other                                                                                             128          182
                                                                                                 -------      -------

           Total noninterest expenses                                                              1,873          970
                                                                                                 -------      -------

(Loss) earnings before income tax provision                                                        (518)          394

Income tax provision                                                                                 -            143
                                                                                               ---------      -------

Net (loss) earnings                                                                           $    (518)          251
                                                                                                =======       =======

(Loss) earnings per share                                                                     $    (.95)          .46
                                                                                                =======       =======

Dividends per share                                                                           $      -            .04
                                                                                                ========      =======

Weighted average number of shares outstanding                                                   545,000       545,000
</TABLE>





See accompanying Notes to Condensed Consolidated Financial Statements.

                                        3

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<TABLE>
<CAPTION>


                                          FIRST FAMILY FINANCIAL CORPORATION

                               Condensed Consolidated Statement of Stockholders' Equity

                                  For the Three Month Period Ended September 30, 1996
                                                    (In thousands)




                                                                          Additional                        Total
                                                             Common        Paid-in         Retained      Stockholders'
                                                              Stock        Capital         Earnings         Equity
                                                              -----        -------         --------         ------

<S>                                                            <C>           <C>             <C>            <C>  
Balance at June 30, 1996                                       $ 5           2,873           6,344          9,222

Net loss for the three months ended
    September 30, 1996 (unaudited)                               -             -             (518)           (518)
                                                                --          ------          -----           -----

Balance at September 30, 1996 (unaudited)                      $ 5           2,873           5,826          8,704
                                                               ===           =====           =====          =====
                                                              
</TABLE>





See accompanying Notes to Condensed Consolidated Financial Statements.

                                        4

<PAGE>

<TABLE>
<CAPTION>


                                          FIRST FAMILY FINANCIAL CORPORATION

                                    Condensed Consolidated Statements of Cash Flows
                                                    (In Thousands)
                                                                                                   Three Months
                                                                                               Ended September 30,
                                                                                               -------------------
                                                                                               1996           1995
                                                                                               ----           ----
                                                                                                   (unaudited)
<S>                                                                                         <C>             <C>    
Cash flows from operating activities:
   Net (loss) earnings                                                                     $   (518)           251
   Adjustments to reconcile net (loss) earnings to net cash provided by
      operating activities:
        Depreciation and amortization                                                            32             41
        Amortization of deferred loan fees, net                                                   1            (20)
        Provision for loan losses                                                                30             30
        Decrease in accrued interest receivable                                                 244             48
        Increase in prepaid expenses and other assets                                           (23)            (5)
        Increase (decrease) in accrued expenses and other liabilities                           771           (388)
        Decrease in official checks                                                            (483)           (68)
        Proceeds from sale of loans held-for-sale                                             1,250          1,725
        Origination of loans held-for-sale, net of repayments                                   373           (931)
        Gain on sale of loans                                                                   (86)          (112)
        Gain on sale of other real estate owned                                                 (21)            -
                                                                                            -------           -----

             Net cash provided by operating activities                                        1,570            571
                                                                                             ------          -----

Cash flows from investing activities:
   Net increase in loans                                                                     (2,469)        (1,562)
   Purchases of securities held to maturity                                                 (10,268)            -
   Principal payments received on securities                                                    379            261
   Proceeds from sale of real estate owned                                                      117             37
   Purchases of premises and equipment                                                         (214)           (74)
                                                                                             ------         ------

             Net cash used in investing activities                                          (12,455)        (1,338)
                                                                                             ------          -----

Cash flows from financing activities:
   Net (decrease) increase in noninterest bearing demand,
      savings and NOW deposit accounts                                                       (1,073)         3,021
   Net increase (decrease) in time deposits                                                  15,747         (5,331)
   Proceeds from Federal Home Loan Bank advances                                              1,500          2,000
   Repayments of Federal Home Loan Bank advances                                             (1,500)        (1,500)
   Payment of cash dividends                                                                    -              (22)
   Increase in advance payments by borrowers for taxes and insurance                            384            474
                                                                                             ------         ------

             Net cash provided by (used in) financing activities                             15,058         (1,358)
                                                                                             ------          -----

Increase (decrease) in cash and cash equivalents                                              4,173         (2,125)

Cash and cash equivalents at beginning of period                                              3,441          4,361
                                                                                             ------          -----

Cash and cash equivalents at end of period                                                 $  7,614          2,236
                                                                                             ======          =====

Supplemental  disclosures of cash flow information:  Cash paid during the period
   for:
      Income taxes                                                                         $    115             46
                                                                                             ======          =====

      Interest                                                                             $  1,779          1,836

   Noncash investing and financing activities:
      Transfers of loans receivable to real estate owned                                   $    167             35
                                                                                             ======          =====

      Loans originated for the sale of real estate owned                                  $      36            123
                                                                                            =======          =====

      Transfer of loans receivable to loans held-for-sale                                $      -              411
                                                                                           ========          =====
</TABLE>


See accompanying Notes to Condensed Consolidated Financial Statements.

                                        5

<PAGE>



                       FIRST FAMILY FINANCIAL CORPORATION

        Notes to Condensed Consolidated Financial Statements (Unaudited)


1. General. First Family Financial Corporation (the "Holding Company") owns 100%
   of the  outstanding  stock of First Family Bank,  fsb and  Subsidiaries  (the
   "Bank") (collectively the "Company"). The Bank is a federal chartered savings
   bank and is insured by the Federal Deposit Insurance Corporation. The Holding
   Company operates as a unitary savings and loan holding  company.  The Holding
   Company's only business activities is the operation of the Bank.

        In  the  opinion  of  the   management,   the   accompanying   condensed
        consolidated financial statements contain all adjustments (consisting of
        normal  recurring  accruals)  necessary to present  fairly the financial
        position  of the  Company  at  September  30,  1996 and the  results  of
        operations and cash flows for the  three-month  periods ended  September
        30, 1996 and 1995. The results of operations for the three-month  period
        ended September 30, 1996 are not  necessarily  indicative of the results
        to be expected for the full year.

2. Loan  Impairment  and Losses.  The Company had no impaired loans at September
   30, 1996 or 1995 or for the three month  periods then ended.  The activity in
   the  allowance  for loan losses is as  follows:  
                                                        For the Three
                                                        Months  Ended
                                                         September 30,
                                                         -------------
                                                     1996          1995
                                                     ----          ----
                                                       (In thousands)

        Balance, beginning of period                $ 723          783

        Provision charged to earnings                  30           30

        Charge-offs                                    (9)         (37)
                                                      ----          ---

        Balance, end of period                      $ 744          776
                                                      ===          ===

3.      Interest on Deposit Accounts.  Interest expense on deposit accounts was
          as follows:

                                                      For the Three
                                                       Months Ended
                                                       September 30,
                                                       -------------
                                                    1996          1995
                                                    ----          ----
                                                       (In thousands)

        NOW and money market deposit accounts    $   223          147
        Passbook and statement accounts               55           57
        Certificate accounts                       1,529        1,612
        Early withdrawal penalties                    (6)          (8)
                                                    -----        -----

             Total interest on deposit accounts  $ 1,801        1,808
                                                   =====        =====

4. Earnings  (Loss) Per Share.  Earnings  (loss) per share has been  computed by
   dividing the net earnings  (loss) by the  weighted  average  number of shares
   outstanding  during the period.  The dilutive effect of stock options was not
   material.

                                                                     (continued)

                                        6

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<CAPTION>



                       FIRST FAMILY FINANCIAL CORPORATION

   Notes to Condensed Consolidated Financial Statements (Unaudited), Continued


5.      Regulatory Capital.  In connection with the insurance of deposit accounts, the Bank is required
   to maintain certain minimum regulatory capital requirements.  The following is a summary
   of the regulatory capital requirements, the Bank's capital and the amounts and percentages
   in excess of such requirements as of September 30, 1996:

                                                 Core                   Tangible                Risk-Based
                                                                 (Dollars in thousands)                  % of Risk
                                                        % of                     % of                     weighted
                                         Amount       Assets       Amount      Assets       Amount        Assets
                                         ------       ------       ------      ------       ------        ------

           <S>                          <C>             <C>      <C>             <C>      <C>              <C>  
           Regulatory capital           $ 8,548         5.0%     $ 8,548         5.0%     $ 9,292          11.2%
           Requirement                    5,115         3.0        2,558         1.5        6,645           8.0
                                          -----         ---        -----         ---        -----           ---
                     

           Excess                       $ 3,433         2.0%     $ 5,990         3.5%     $ 2,647           3.2%
                                        =======         ===      =======         ===      =======           === 
</TABLE>

6. SAIF  Recapitalization  Assessment.  The FDIC has  enacted  a  one-time  SAIF
   recapitalization  assessment.  The rate is 65.7  cents  per $100 of  domestic
   deposits  held as of March 31,  1995.  The effect on the Bank as of September
   30, 1996 is a pretax charge of $966,000 (.657% on deposits of $147,032,000 at
   March 31,  1995).  The  amount is  included  in  accrued  expenses  and other
   liabilities as of September 30, 1996.



                                                           7

<PAGE>



                       FIRST FAMILY FINANCIAL CORPORATION

               Review by Independent Certified Public Accountants


Hacker,  Johnson,  Cohen & Grieb,  the Company's  independent  certified  public
accountants,  have made a limited  review of the financial data at September 30,
1996,  and for the  three  month  periods  ended  September  30,  1996  and 1995
presented in this  document,  in accordance  with  standards  established by the
American Institute of Certified Public Accountants.

Their report,  furnished  pursuant to Article 10 of Regulation  S-X, is included
herein.






                                        8

<PAGE>


          Report on Review by Independent Certified Public Accountants



The Audit Committee of the Board of Directors
   of First Family Financial Corporation
Eustis, Florida:

   We have  reviewed the  condensed  consolidated  balance sheet of First Family
Financial Corporation and subsidiaries (the "Company") as of September 30, 1996,
and the related condensed  consolidated  statements of operations and cash flows
for the three- month periods ended September 30, 1996 and 1995 and the condensed
consolidated  statement of stockholders' equity for the three-month period ended
September 30, 1996.  These financial  statements are the  responsibility  of the
Company's management.

   We conducted  our review in  accordance  with  standards  established  by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

   Based on our  review,  we are not aware of any  material  modifications  that
should be made to the condensed  consolidated  financial  statements referred to
above  for  them  to  be  in  conformity  with  generally  accepted   accounting
principles.

   We have previously  audited,  in accordance with generally  accepted auditing
standards,  the consolidated  balance sheet as of June 30, 1996, and the related
consolidated statements of earnings, stockholders' equity and cash flows for the
year then ended (not presented  herein);  and in our report dated July 17, 1996,
except  for Note 18,  as to which  the  date is July 19,  1996 we  expressed  an
unqualified opinion on those consolidated financial statements.  In our opinion,
the information set forth in the  accompanying  condensed  consolidated  balance
sheet as of June 30,  1996,  is fairly  stated,  in all  material  respects,  in
relation to the consolidated balance sheet from which it has been derived.






HACKER, JOHNSON, COHEN & GRIEB
Tampa, Florida
October 24, 1996



                                        9

<PAGE>



                       FIRST FAMILY FINANCIAL CORPORATION

                  Item 2. Management's Discussion and Analysis
                of Financial Condition and Results of Operations

               Comparison of September 30, 1996 and June 30, 1996


Liquidity and Capital Resources

   The Company's  primary sources of cash and cash equivalents are from loan and
   securities principal repayments,  sales of loans originated for sale, deposit
   account  inflows,  and borrowings  from the Federal Home Loan Bank of Atlanta
   ("FHLB").  During the three months  ending  September  30,  1996,  securities
   principal  repayments  were $379,000,  proceeds from sales of loans were $1.3
   million,  deposit  account  inflows  totalled $14.7 million and proceeds from
   FHLB advances were $1.5 million.

   Cash and cash equivalents were used to originate and purchase loans, purchase
   securities and to payoff FHLB advances. Loans originated and purchased net of
   principal  repayments  amounted to $2.5  million,  the purchase of securities
   totalled $10.3 million and repayments of FHLB advances totalled $1.5 million.
   At September 30, 1996, the Company had  outstanding  commitments to originate
   loans of $943,000 and loans in process of $3.3  million.  It is expected that
   these commitments will be funded from the sources described above.

   The  Bank is  required  under  applicable  federal  regulations  to  maintain
   specified levels of liquid investments in qualifying types of U.S. Government
   securities,  federal agency securities,  and other  investments.  Regulations
   currently in effect  require the Bank to maintain  liquid  assets of not less
   than 5% of its average  daily balance of its net  withdrawable  accounts plus
   short-term borrowings during the preceding calendar month;  short-term liquid
   assets  must  consist  of not  less  than 1% of that  amount.  The  Bank  has
   consistently exceeded these requirements.

   During the three months ended  September  30, 1996 the Bank did not declare a
   cash dividend.


                                       10

<PAGE>
<TABLE>
<CAPTION>



                                          FIRST FAMILY FINANCIAL CORPORATION

                                     Item 2. Management's Discussion and Analysis
                              of Financial Condition and Results of Operations, Continued



   The  following  shows  selected  ratios for the periods ended or at the dates
indicated:

                                                                         Three Months              Three Months
                                                                             Ended      Year Ended    Ended
                                                                        September 30,    June 30,  September 30,
                                                                        -------------    --------  -------------
                                                                              1996         1996        1995
                                                                            -------      -------     -------

<S>                                                                         <C>           <C>         <C>   
Return on average assets                                                     (1.30)%        .91%        .64%

Return on average equity                                                    (22.62)%      16.98%      12.55%

Average equity as a percentage of
         average assets                                                       5.77%        5.36%       5.13%

Equity to total assets at end of period                                       5.10%        5.92%       5.21%

Noninterest expense to average assets                                         2.89%        2.50%       2.49%

Nonperforming loans and other assets
         to total assets at end of period                                      .46%         .51%        .75%
</TABLE>

The  following  table  shows  weighted  average  interest  rates  at  the  dates
indicated:
<TABLE>
<CAPTION>

                                                                                        At          At          At
                                                                                   September 30, June 30,  September 30,
                                                                                       1996        1996        1995
                                                                                     -------     -------   -------------
Weighted average interests rates:
  Interest-earning assets:
<S>                                                                                    <C>         <C>         <C>  
      Loans                                                                            8.10%       8.18%       8.22%
      Mortgage-backed securities                                                       6.64%       6.53%       7.29%
      Investment securities                                                            6.51%       6.37%       5.12%
      Other interest-earning assets                                                    6.04%       6.10%       7.12%

        Total interest-earnings assets                                                 7.64%       7.78%       7.89%

  Interest-bearing liabilities:
      Deposit accounts                                                                 5.00%       4.82%       4.91%
      Borrowed funds                                                                     --%         --%       6.75%

        Total interest-bearing liabilities                                             5.00%       4.82%       4.92%

   Interest-rate spread                                                                2.64%       2.96%       2.97%

</TABLE>

                                       11

<PAGE>
<TABLE>
<CAPTION>



                                          FIRST FAMILY FINANCIAL CORPORATION

                                     Item 2. Management's Discussion and Analysis
                              of Financial Condition and Results of Operations, Continued

   The  following  table sets forth  information  with respect to the  Company's
   nonperforming assets as of the date indicated ($ in thousands):

                                                                                                    At
                                                                                       --------------------------
                                                                                       September 30,     June 30,
                                                                                       -------------     --------
                                                                                            1996           1996
                                                                                            ----           ----
<S>                                                                                       <C>              <C>
         Loans accounted for on a nonaccrual basis:
              Real estate mortgage:
                  Single-family residential                                               $ 351             272
                  Multi-family and commercial                                               236             403
              Consumer and other loans                                                       -               10
                                                                                          -----             ---

                      Total                                                                 587             685
                                                                                            ---             ---

         Accruing loans which are contractually past due 90 days or more:
                  Single family residential                                                  48              -
                  Consumer and other loans                                                   -               -
                                                                                          -----            ---

                      Total                                                                  48              -
                                                                                            ---            ---

              Total of nonaccrual and 90 days past due loans                              $ 635            685
                                                                                            ===            ===

              Percentage of total loans                                                     .54%           .57%

         Other nonperforming assets (1)                                                   $ 144            108
                                                                                            ===            ===

         Total nonperforming assets                                                       $ 779            793
                                                                                            ===            ===

         Percentage of total assets                                                         .46%           .51%
                                                                                            ===            === 

</TABLE>


         (1)      Other nonperforming  assets represent property acquired by the
                  Company through foreclosure or repossession.  This property is
                  carried  at the lower of fair  value  less  estimated  selling
                  costs or the principal balance of the loan.

   The  following  table sets forth  information  with respect to the  Company's
   interest on the nonaccruing loans that would have been reported as additional
   income had the loans been fully  accruing  during the periods  indicated  (in
   thousands):
<TABLE>
<CAPTION>

                                                                                                    Three Months Ended
                                                                                                       September 30,
                                                                                                       -------------
                                                                                                    1996         1995
                                                                                                    ----         ----

<S>                                                                                                 <C>             <C>
         Interest income that would have been recorded                                              $ 17            6
         Interest income recognized                                                                    3            -
                                                                                                      --          ---

         Interest income foregone                                                                   $ 14            6
                                                                                                      ==            =
</TABLE>


                                       12

<PAGE>
<TABLE>
<CAPTION>



                       FIRST FAMILY FINANCIAL CORPORATION

         The following table sets forth, for the periods indicated,  information
for the Company  regarding (i) the average balances of  interest-earning  assets
and interest-bearing  liabilities;  (ii) the total dollar amount of interest and
dividend income from  interest-earning  assets and the resultant average yields;
(iii)  the  total  dollar  amount  of  interest   expense  on   interest-bearing
liabilities and the resultant average rate; (iv) net  interest/dividend  income;
(v) interest-rate spread; and (vi) net interest margin.


                                                                Three Months Ended September 30,
                                                                --------------------------------
                                                             1996                               1995
                                               ---------------------------------- ---------------------------------
                                                            Interest      Average              Interest      Average
                                               Average       and           Yield/ Average        and          Yield/
                                               Balance     Dividends        Rate  Balance      Dividends      Rate
                                               -------     ---------        ----  -------      ---------      ----
                                                                           (Dollars in Thousands)
<S>                                            <C>             <C>          <C>   <C>             <C>         <C>  
Interest-earning assets:
   Loans                                       $114,101        2,356        8.26% $117,334        2,392       8.15%
   Mortgage-backed securities                     8,512          140        6.58%   20,045          356       7.10%
   Investment securities                         23,762          395        6.65%    9,270          128       5.52%
   Other interest-earning assets (1)              5,460           76        5.57%    2,807           45       6.41%
                                                -------        -----               -------        -----       ---- 
                                                 

       Total interest-earning assets            151,835        2,967        7.82%  149,456        2,921       7.82%
                                                -------        -----               -------        -----       ---- 
                                             

Interest-bearing liabilities:
   Deposit accounts                             147,219        1,801        4.89%  144,659        1,808       4.99%
   Borrowed funds                                    98            1        4.08%      326            5       6.14%
                                                -------        -----               -------        -----       ---- 
                                              

       Total interest-bearing liabilities       147,317        1,802        4.89%  144,985        1,813       5.00%
                                                -------        -----               -------        -----       ---- 

Net interest income                                         $  1,165                           $  1,108
                                                            ========                           ========
                                                                                               
Interest-rate spread (2)                                                    2.93%                             2.82%
                                                                            ====                              ==== 

Net average interest-earning assets, net
   interest margin (3)                         $  4,518                     3.07% $  4,471                    2.97%
                                               ========                     ====  ========                    ==== 

Ratio of average interest-earning assets to
   average interest-bearing liabilities            1.03                              1.03
                                                   ====                              ====

</TABLE>


(1)        Includes interest-bearing deposits and Federal Home Loan Bank stock.
(2)        Interest-rate  spread  represents the difference  between the average
           yield  on   interest-earning   assets   and  the   average   rate  of
           interest-bearing liabilities.
(3)        Net interest margin is net interest income divided by average
           interest-earning assets.











                                       13

<PAGE>



                       FIRST FAMILY FINANCIAL CORPORATION

       Comparison of Three-Month Periods Ended September 30, 1996 and 1995


Results of Operations

General. Net loss for the  three-month  period ended  September  30,  1996,  was
     $518,000 or $(.95) per share  compared to net  earnings of $251,000 or $.46
     per share for the 1995  period.  The  decrease in net earnings for the 1996
     period  is  primarily  attributable  to a  one-time  SAIF  recapitalization
     assessment  partially  offset by an increase in net  interest  income and a
     decrease in the provision for income taxes.

Interest Income.  Interest on loans for the  three-month  period ended September
     30, 1996, decreased $36,000 from $2.39 million for the 1995 period to $2.36
     million  for the 1996  period,  primarily  as a result of a decrease in the
     average  balance  from  $117.3  million  during  the 1995  period to $114.1
     million in 1996 partially offset by an increase in the average yield earned
     from 8.15% in 1995 to 8.26% in 1996.

     Interest  on  mortgage-backed  securities  decreased  $216,000  during  the
     three-month period ending September 30, 1996 compared to the same period in
     1995.  This decrease was due primarily to a decrease in the average balance
     from $20.0 million during the  three-month  period ended September 30, 1995
     to $8.5 million during the 1996 period.  The decrease is also attributed to
     a decrease  in the rate  earned on  mortgage-backed  securities  from 7.10%
     during the 1995 period to 6.58% for the 1996 period.

     Interest on investment  securities increased $267,000 from $128,000 for the
     three months ended September 30, 1995 to $395,000 for the comparable period
     in 1996.  This  increase  can be  attributed  to an increase in the average
     balance from $9.3 million  during 1995 to $23.8 million for the  comparable
     period in 1996.  The increase is also due to an increase in the rate earned
     from 5.52% for the  three-months  ended September 30, 1995 to 6.65% for the
     comparable period in 1996.

     Other  interest  and  dividends  increased  $31,000  from  $45,000  for the
     three-month period ended September 30, 1995, to $76,000 for the three-month
     period ended  September  30, 1996.  The increase was the result of a higher
     average balance of such assets, partially offset by a decrease in the yield
     earned on these assets.

Interest Expense.  Interest expense on deposit accounts  decreased  slightly for
     the three-month  period ended September 30, 1996 compared to the comparable
     period in 1995.  The decrease was  primarily  due to a decrease in the rate
     paid  partially  offset by an increase  in the  average  balance of deposit
     accounts.



                                                                     (continued)

                                       14

<PAGE>



                       FIRST FAMILY FINANCIAL CORPORATION


Provision for Loan Losses.  The provision for loan losses is charged to earnings
     to bring the total  allowance to a level deemed  appropriate  by management
     and is based  upon  historical  experience,  the volume and type of lending
     conducted by the Company,  industry standards,  the amount of nonperforming
     loans,  general  economic  conditions,  particularly  as they relate to the
     Company's market areas, and other factors related to the  collectibility of
     the Company's loan portfolio.  The Company recorded a $30,000 provision for
     loan losses for the three-month  periods ended September 30, 1996 and 1995.
     Management  believes the allowance for loan losses of $744,000 at September
     30, 1996 is adequate.

Noninterest Income.  Noninterest income decreased $66,000 during the three-month
     period ended  September 30, 1996 from the  comparable  period in 1995.  The
     decrease is primarily attributed to a decrease in the gain on sale of loans
     as well as a decrease in fees and service charges.

Noninterest Expense.  Noninterest expense increased  $903,000,  from $970,000 to
     $1.9  million  during the  three-month  period  ending  September  30, 1996
     compared  with the same period in 1995.  The increase was due  primarily to
     the one-time SAIF  recapitalization  assessment of $966,000 recorded during
     the three-months ended September 30, 1996.

Income Tax  Provision.  There was no income tax  provision  for the three  month
     period ended  September 30, 1996 compared to $143,000 (an effective rate of
     36.3%) for the same 1995 period.







                                       15

<PAGE>



                       FIRST FAMILY FINANCIAL CORPORATION




Part II - OTHER INFORMATION

Item 1.      Legal Proceedings

     There are no material  pending  legal  proceedings  to which  First  Family
     Financial Corporation or any of its subsidiaries is a party or to which any
     of their property is subject.

Item 2.      Changes in Securities

     Not applicable

Item 3.      Default upon Senior Securities

     Not applicable

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

     Not applicable

Item 5.      Other Information

     Not applicable

Item 6.      Exhibits and Reports on Form 8-K

     a.  Exhibits - not applicable

     b.  The  Company  filed one  report on Form 8-K during  the  quarter  ended
         September 30, 1996, as follows:

         Form 8-K dated July 19, 1996 and filed August 8, 1996,  relating to the
         Company  entering  into an Agreement  and Plan of Merger to provide for
         the  merger  of the  Company  with and into  Colonial  BancGroup  in an
         exchange for common stock of Colonial BancGroup and cash.




                                       16

<PAGE>



                       FIRST FAMILY FINANCIAL CORPORATION


                                   SIGNATURES


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.

                                         FIRST FAMILY FINANCIAL CORPORATION
                                                 (Registrant)




Date:         November 7, 1996           By:/s/David M. Shepherd
              ----------------              --------------------
                                            David M. Shepherd, President and
                                            Chief Executive Officer


Date:         November 7, 1996           By:/s/ Bradley R. Meredith
              ----------------              -----------------------
                                            Bradley R. Meredith, 
                                            Executive Vice President
                                            and Chief Financial Officer
                                            (Principal Financial Officer)


                                       17

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