UNITED STATES
                       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 period ended:          March 31, 2000

[ ]  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         000-22103

                         HEMLOCK FEDERAL FINANCIAL CORP.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified In Its Charter)

            Delaware                                              36-4126192
--------------------------------------------------------------------------------
(State or Other Jurisdiction of                                (IRS Employer
Incorporation or Organization)                              Identification No.)

      5700 West 159th Street                                        60452
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                         (Zip Code)

                                  708-687-9400
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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    ___

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

     Class                               Outstanding at April 3, 2000
--------------------------------------------------------------------------------
Common Stock, par value $.01                 1,040,479 shares


<PAGE>


                         HEMLOCK FEDERAL FINANCIAL CORP.
                                 AND SUBSIDIARY

                                      INDEX



Part I.  Financial Information

 Item 1. Financial Statements

   Condensed Consolidated Statements of Condition as of March 31, 2000
     and December 31, 1999.................................................  3

   Condensed Consolidated Statements of Income for the three months
     ended March 31, 2000 and 1999.........................................  4

   Condensed Consolidated Statements of Cash Flows for the three
     months ended March 31, 2000 and 1999..................................  5

   Condensed Consolidated Statements of Changes in Stockholders' Equity
     for the three months ended March 31, 2000 and 1999....................  8

   Notes to the Condensed Consolidated Financial Statements as of
     March 31, 2000........................................................ 10

 Item 2. Management's Discussion and Analysis of the Financial Condition
   and Results of Operation................................................ 12

 Item 3.  Quantitative and Qualitative Disclosures About Market Risk....... 17

Part II. Other Information................................................. 20



                                     - 2 -

<PAGE>

                 HEMLOCK FEDERAL FINANCIAL CORP. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
                        (In thousands, except share data)
--------------------------------------------------------------------------------

                                                        March 31,   December 31,
                                                          2000          1999
                                                       ----------- -------------

ASSETS

Cash and due from banks                                  $  6,581     $  9,813

Securities available-for-sale, at fair value               31,905       32,982

Securities held-to-maturity                                58,983       61,126

Loans receivable, net                                     118,752      116,998

Property, plant and equipment, net                          3,497        3,538
FHLB stock, at cost                                         2,325        2,325
Accrued interest and other assets                           1,607        1,675
                                                         --------     --------
Total Assets                                             $223,650     $228,457
                                                         ========     ========
LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits                                                 $152,664     $150,576
FHLB advances                                              46,000       49,500
Advances from borrowers for taxes and insurance               753        1,133
Note Payable                                                3,000            -
Accrued interest and other liabilities                      1,695        1,527
                                                         --------     --------
Total Liabilities                                         204,112      202,736

Stockholders' Equity
Common stock, $.01 par value; 3,100,000 shares
  authorized; 2,076,325 shares issued                          21           21
Surplus                                                    20,278       20,270
Unearned ESOP, (2000 - 112,122 shares; 1999
     - 116,274 shares)                                     (1,121)      (1,163)
Unearned stock awards                                        (794)        (859)
Retained earnings                                          14,529       14,235
Net unrealized gain on securities
  Available-for-sale, net of tax                              282          444
Treasury stock at cost ( 2000 - 877,709 ; shares 1999
     - 457,762 shares)                                    (13,657)      (7,227)
                                                         --------     --------
Total Stockholders' Equity                                 19,538       25,721
                                                         --------     --------
Total Liabilities and Stockholders'  Equity              $223,650     $228,457
                                                         ========     ========

     See accompanying notes to condensed consolidated financial statements.

--------------------------------------------------------------------------------
                                     - 3 -
<PAGE>
                 HEMLOCK FEDERAL FINANCIAL CORP. AND SUBSIDIARY
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)
--------------------------------------------------------------------------------

                                                         Three months ended
                                                              March 31,
                                                        --------------------
                                                          2000        1999
                                                        ---------   --------
Interest and Dividend Income
Loans                                                    $2,120      $1,866
Investment securities                                     1,624       1,405
Interest bearing deposits                                    56          72
                                                         ------      ------
Total Interest and Dividend Income                        3,800       3,343

Interest expense
Deposits                                                  1,397       1,410
FHLB advances                                               617         348
Other borrowings                                             16           -
                                                         ------      ------
Total Interest Expense                                    2,030       1,758

Net interest income                                       1,770       1,585
Provision for loan losses                                     0           0
                                                         ------      ------
Net interest income after provision for loan losses       1,770       1,585

Non-interest income
Service fees                                                127         128

Other income                                                 41          37
Gain/(loss) on sale of available for sale securities        (13)         33
                                                         ------      ------
Total Non-interest Income                                   155         198

Non-interest expenses
Salaries and employee benefits                              610         592
Occupancy and equipment expense                             239         224
Computer service fees                                        83          69

Other expenses                                              260         255
                                                         ------      ------
Total Non-interest Expense                                1,192       1,140
                                                         ------      ------
Income before Income Taxes                                  733         643

Provision for Income Taxes                                  261         248
                                                         ------      ------
Net Income                                               $  472      $  395
                                                         ======      ======
Earnings per share - Basic and Diluted                   $ 0.35      $ 0.25
                                                         ======      ======

     See accompanying notes to condensed consolidated financial statements.
--------------------------------------------------------------------------------

                                     - 4 -
<PAGE>
                 HEMLOCK FEDERAL FINANCIAL CORP. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
--------------------------------------------------------------------------------


                                                             Three months ended
                                                             -------------------
                                                             March 31, March 31,
                                                               2000       1999
                                                             --------  --------
Cash flows from operating activities
Net income                                                   $    472  $   395
Adjustments to reconcile net income to net
  cash from operating activities
      Provision for depreciation                                   60       57
     Net amortization of  security
       premiums/discounts                                          15       64
     Change in deferred loan fees                                 (15)     (54)
     (Gain)/Loss on sale of securities                             13      (33)

    Change in accrued interest receivable
       and other assets                                            68        4
     Change in accrued interest payable and
        other liabilities                                         271      221
   Stock awards expense                                            65       65
    ESOP compensation                                              50       56
                                                             --------  -------
Net cash provided by operating activities                         999      775

Cash flows from investing activities
Purchase of securities                                         (3,709)  (3,262)
available-for-sale
Proceeds from sales of securities available for   sale
                                                                3,659       34
Principal payments of mortgage-backed
   securities and collateralized mortgage                       3,059   13,227

obligations
Proceeds from maturities and calls of securities                    -    1,174

Net increase in loans                                          (1,739)  (8,450)
Purchases of securities held-to-maturity                          (82)  (5,997)
Purchases of property, plant and equipment, net                   (19)     (77)
                                                             --------  -------
Net cash provided by (used in) investing activities             1,169   (3,351)

Cash flows from financing activities
Net increase in deposits                                        2,088    3,540
Change in advance payments by borrowers
  for taxes and insurance                                        (380)    (365)
Purchase of treasury shares                                    (6,430)       -
Change in FHLB advances                                        (3,500)  (4,000)
Change in note payable                                          3,000        -

Dividends paid                                                   (178)    (160)
                                                             --------  -------
Net cash provided by financing activities                      (5,400)    (985)
                                                             ========  =======
Net decrease in cash and cash equivalents                      (3,232)  (3,561)


     (Continued)
--------------------------------------------------------------------------------

                                     - 5 -
<PAGE>


                 HEMLOCK FEDERAL FINANCIAL CORP. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
--------------------------------------------------------------------------------


Cash and due from banks at beginning of period                  9,813    6,036
                                                             --------  -------
Cash and due from banks at end of period                     $  6,581  $ 2,475
                                                             ========  =======



Supplemental disclosure of cash flow information
Cash paid during period for
Interest                                                     $  2,007  $ 1,748
Income taxes                                                       38       18


















     See accompanying notes to condensed consolidated financial statements.
--------------------------------------------------------------------------------

                                     - 6 -
<PAGE>
                 HEMLOCK FEDERAL FINANCIAL CORP. AND SUBSIDIARY
                   CONDENSED CONSOLIDATED STATEMENT OF CHANGES
                             IN STOCKHOLDERS EQUITY
                  FOR NINE MONTHS ENDED MARCH 31, 2000 AND 1999
                        (In thousands except share data)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                          Accumulated
                                                            Other                        Unearned                  Total
                                Common          Retained Comprehensive Unearned Treasury  Stock    Stockholders Comprehensive
                                Stock  Surplus  Earnings    Income       ESOP    Stock    Awards      Equity    Income (Loss)
                                -----  -------  -------- ------------- -------- --------  ------   ------------ -------------
<S>                             <C>    <C>       <C>       <C>         <C>      <C>      <C>          <C>            <C>
Balance at December 31, 1998    $  21  $20,208   $13,207   $ 1,082     $(1,329) $(4,863) $(1,120)     $27,206        $   -

Net income for three months
 ended March 31, 1999               -        -       395         -           -        -        -          395          395

ESOP shares earned                  -       14         -         -          42        -        -           56            -

Stock award earned                  -        -         -         -           -        -       65           65            -

Change in unrealized
Gain on securities
Available for sale                  -        -         -      (177)          -        -        -         (177)        (177)

Treasury Stock Purchase-net         -        -         -         -           -        -        -            -            -

Dividends declared                  -        -      (215)        -           -        -        -         (215)           -
                                -----  -------   -------   -------     -------  -------  -------      -------        -----
Balance at March 31, 1999       $  21  $20,222   $13,387   $   905     $(1,287) $(4,863) $(1,055)     $27,330        $ 218
                                =====  =======   =======   =======     =======  =======  =======      =======        =====
</TABLE>

     (Continued)
--------------------------------------------------------------------------------

                                     - 7 -
<PAGE>

                 HEMLOCK FEDERAL FINANCIAL CORP. AND SUBSIDIARY
                  CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
                             IN STOCKHOLDERS EQUITY
                 FOR THREE MONTHS ENDED MARCH 31, 2000 AND 1999
                        (In thousands except share data)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                          Accumulated
                                                            Other                          Unearned                  Total
                                Common          Retained Comprehensive Unearned Treasury    Stock    Stockholders Comprehensive
                                Stock  Surplus  Earnings    Income       ESOP    Stock      Awards      Equity    Income (Loss)
                                -----  -------  -------- ------------- -------- ---------   ------   ------------ -------------
<S>                             <C>    <C>       <C>       <C>         <C>      <C>        <C>          <C>            <C>
Balance at December 31, 1999     $ 21  $20,270   $14,235    $  444     $(1,163) $ (7,227)  $  (859)     $25,721        $   -

Net income for three months
 ended March 31, 2000               -        -       472         -           -         -         -          472          472

ESOP shares earned                  -        8         -         -          42         -         -           50            -

Stock award earned                  -        -         -         -           -         -        65           65            -

Change in unrealized
   Gain on securities
   Available for sale               -        -         -      (162)          -         -         -         (162)        (162)

Treasury stock purchase-net         -        -         -         -           -    (6,430)        -       (6,430)           -

Dividends declared                  -        -      (178)        -           -         -         -         (178)           -
                                -----  -------   -------   -------     -------  --------   -------      -------        -----
Balance at March 31, 2000       $  21  $20,278   $14,529   $   282     $(1,121) $(13,657)  $  (794)     $19,538        $ 310
                                =====  =======   =======   =======     =======  ========   =======      =======        =====
</TABLE>

     See accompanying notes to condensed consolidated financial statements.
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                                     - 8 -
<PAGE>


              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------
                 Notes to the consolidated financial statements


NOTE 1

Hemlock  Federal  Financial  Corp.  (Corporation)  is a unitary  thrift  holding
company which owns 100% of the voting stock of Hemlock  Federal Bank for Savings
(Bank),  a  federally  chartered  thrift  located in Oak Forest,  Illinois.  The
Corporation  was  incorporated  under  Delaware law in December of 1996.  In the
opinion  of  management,   the  accompanying  condensed  consolidated  financial
statements  contain all  adjustments  (consisting of normally  recurring  items)
necessary to present fairly the Corporation's consolidated financial position as
of March 31, 2000 and  December 31,  1999,  and the results of its  consolidated
operations,  for the three month period  ended March 31, 2000 and 1999,  and its
consolidated cash flows and changes in stockholders'  equity for the three month
periods ended March 31, 2000 and 1999.  The results of operations for the period
ended  March  31,  2000 are not  necessarily  indicative  of the  results  to be
expected for the full year.

The financial  statements  and notes are presented as permitted by Form 10-Q and
do  not  contain  certain  information  included  in  the  Corporation's  annual
financial statements and notes thereto.


NOTE 2

The Corporation  completed its repurchase of 419,947 shares of common stock at a
cost of $6.30 million, plus expenses of $130,000, through a Dutch auction tender
offer  during  the  quarter  ended  March  31,  2000.  The  Corporation's  stock
repurchase  was funded  with $3.0  million  in  borrowings  and $3.0  million in
dividends from the Bank.







--------------------------------------------------------------------------------

                                      - 9 -

<PAGE>

              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------


NOTE 3

A  reconciliation  of the  numerators and  denominators  for earnings per common
share computations is presented below.

                                               Three months ended
                                                   March 31,
                                               ------------------
                                                 2000      1999
                                               --------  --------

Basic earnings per share
  Net income available to common stockholders    $  472    $  395
                                                 ======    ======

Weighted average common shares outstanding        1,337     1,595

  Basic earnings per share                       $  .35    $  .25
                                                 ======    ======

The Corporation's outstanding stock options and stock awards were not considered
in the computations of earnings per common share - assuming dilution because the
effects of assumed exercise would have been antidilutive.


NOTE 4

In March 2000, the  Corporation  established a secured  revolving line of credit
with LaSalle National Bank.  Interest  payments are due quarterly with principal
due at  maturity  on March 7,  2001.  The note is  secured by 100% of the Bank's
outstanding  common stock.  The line of credit bears interest at a variable rate
equal to prime or three-month LIBOR plus 1.75% at the  Corporation's  option. In
March  2000,  the  Corporation  drew on its line to finance  the  repurchase  of
Corporation common stock in a Dutch auction tender offer.


NOTE 5

On January 10, 2000, the Bank announced the execution of a definitive  agreement
providing  for the purchase and merger of Midwest  Savings Bank  (Midwest)  into
Hemlock  Federal Bank for Savings.  Total assets of Midwest at December 31, 1999
were approximately  $48.6 million.  The transaction is valued on a current basis
at $3.36 million. In the transaction, Midwest stockholders will receive cash for
each share of Midwest common stock  approximately equal to the book value of the
stock as of December 31, 1999 plus net income through the month end prior to the
closing  date  and  subject  to  certain  other  transaction  adjustments.   The
transaction is subject to the approval of the  stockholders of Midwest,  as well
as banking regulators, and is expected to close in the second quarter of 2000.


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                                     - 10 -

<PAGE>

              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------

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

The following  discussion  focuses on the  consolidated  financial  condition of
Hemlock  Federal  Financial  Corp.  and  Subsidiary  at March  31,  2000 and the
consolidated  results of  operations  for the three months ended March 31, 2000,
compared  to the same  period in 1999.  The  purpose  of this  discussion  is to
provide  a  better  understanding  of  the  condensed   consolidated   financial
statements and the operations of the  Corporation  and its  subsidiary,  Hemlock
Federal Bank for Savings (Bank).  This discussion  should be read in conjunction
with the interim condensed  consolidated  financial statements and notes thereto
included herein.


Results of Operations

Consolidated net income of the Corporation for the first quarter of 2000 totaled
$472,000,  or $.35 per share, as compared to net income of $395,000, or $.25 per
share earned for the first quarter of 1999.

Net Interest Income

Net interest  income before  provision for loan losses was $1.77 million for the
three month period ended March 31,  2000,  as compared to $1.59  million for the
same period in 1999.  For the three month period ended March 31, 2000,  interest
income increased to $3.80 million,  from $3.34 million for the same period ended
March 31,  1999.  This  increase is due  primarily to an increase in the average
balance of loans  receivable,  funded by an increase in the average  balances of
deposits and FHLB advances.  Interest expense increased to $2.03 million for the
three  months ended March 31,  2000,  from $1.76  million for the same period in
1999.  This increase is attributable to increases in the balance of deposits and
FHLB advances, as well as an increase in the cost of funds.

Provision for Loan Losses

The  Corporation's  allowance for loan losses was $795,000 as of March 31, 2000,
equal  to .67% of total  loans.  The Bank  had  non-performing  assets  totaling
$213,000 as of March 31, 2000.  No provision for loan losses was made during the
three  months  ended March 31,  2000,  nor was a provision  made during the same
period ended March 31, 1999.  Management believes the existing level of reserves
is adequate,  given current  economic  conditions as well as loss experience and
credit demand.

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                                     - 11 -

<PAGE>


              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------

Changes In Non-Interest Income and Non-Interest Expense

Non-interest income decreased to $155,000 for the three month period ended March
31, 2000, as compared to $198,000 for the same period ended March 31, 1999.  The
decrease  is due  primarily  to a net loss of $13,000 on the sale of  securities
from the available for sale  portfolio  incurred  during the first quarter ended
March 31, 2000,  as compared to a net gain of $33,000 on the sale of  securities
from the available for sale portfolio during the same period one year ago.

Non-interest  expense for the three month period ended March 31, 2000  increased
to $1.19  million,  as compared to $1.14 million for the same period ended March
31,  1999.  The  increase in expenses of $50,000 is due  primarily  to increased
compensation,   occupancy,   and  equipment  expenses   associated  with  branch
operations.

Provision for Income Taxes

The Corporation's federal and state income tax expense increased to $261,000 for
the three month period ended March 31, 2000, from $248,000,  for the same period
ended March 31,  1999.  The increase in income tax was the result of an increase
in income before income taxes.

Financial Condition

Consolidated  total assets  decreased  to $223.65  million as of March 31, 2000,
from  $228.46  million as of December  31,  1999,  a decrease in total assets of
$4.81 million.  Cash on hand decreased to $6.58 million as of March 31, 2000, as
compared to $9.81 million as of December 31, 1999, a decrease of $3.22  million.
In addition, total securities held in portfolio decreased by $3.22 million, from
$94.13  million as of December 31, 1999, to $90.89  million as of March 31, 2000
due to principal pay down of mortgage related  securities.  These decreases were
partially  offset by an increase in loans  receivable  to $118.75  million as of
March 31, 2000 from $117.00  million as of December  31,  1999,  due to new loan
originations resulting from the commissioned loan officer program.

Total  liabilities  increased  to  $204.11  million as of March 31,  2000,  from
$202.74  million  as of  December  31,  1999.  The  $1.37  million  increase  in
liabilities is due in part to an increase in total  deposits to $152.66  million
as of March 31, 2000 from $150.58  million as of December 31, 1999,  an increase
of $2.08  million,  as well as an increase in other  liabilities,  which rose to
$4.70 million as of March 31, 2000,  from $1.53 million as of December 31, 1999.
This  increase was due  principally  to a $3.00  million  borrowing  made by the
holding  company.  These  increases were partially  offset by a decrease in FHLB
advances, which fell to $46.00 million as of March 31, 2000, from $49.50 million
as of December 31, 1999, a decrease of $3.50  million.  The increase in deposits
is attributable to increases in both the Oak Lawn and Lemont branches. The $3.00
million  borrowing  by the  holding  company  was  used to  partially  fund  the
Company's Dutch auction tender offer.

Stockholders'  equity  decreased  to $19.54  million  as of March 31,  2000 from
$25.72  million as of  December  31,  1999,  a decrease of $6.18  million.  This
decrease  is   attributable   to

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                                     - 12 -
<PAGE>

              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------

the repurchase of 419,947 shares of the Corporation's  common stock at a cost of
$6.30  million plus expenses of $130,000  through a dutch  auction  tender offer
which occurred  during the three month period ended March 31, 2000. In addition,
the  Corporation  paid  dividends  of $178,000  during the first three months of
2000, which was partially offset by net income.

Capital Resources and Commitments

The Bank is subject to two capital to asset requirements in accordance with bank
regulations.  The  following  table  summarizes  the Bank's  regulatory  capital
requirements versus actual capital as of March 31, 2000 and December 31, 1999.

                                                               Actual
                               Regulatory Requirement     -----------------
                          to be adequately capitalized    3/31/00  12/31/99
                          -----------------------------   -------  --------

 Core capital                         4.0%                20.22%     28.86%
 Risk-based capital                   8.0%                21.41%     24.14%


Liquidity

Liquidity  measures the ability of the Corporation to meet maturing  obligations
and its existing  commitments,  to withstand  fluctuations in deposit levels, to
fund  operations,  and to provide for customers'  credit needs. The liquidity of
the  Corporation  principally  depends on cash flows from operating  activities,
investment  in and  maturity of assets,  changes in  balances  of  deposits  and
borrowings, and its ability to borrow funds in the money or capital markets.

The Bank's regulatory liquidity ratio at March 31, 2000 was 12.79%, a portion of
which  includes  interest-earning  assets  with  terms of 5 years or less.  Loan
commitments outstanding totaled $2.86 million at March 31, 2000.

On January 10, 2000,  the Company  announced it had entered into an agreement to
acquire  Midwest Savings Bank located in  Bolingbrook,  Illinois,  at a price of
approximately  $3.36  million.  The  transaction is expected to close during the
second quarter of 2000.


Impact of New Accounting Standards

Statement of Financial Accounting  Standards  (Statement) No. 133 on derivatives
will,  in 2001,  require  all  derivatives  to be  recorded at fair value in the
balance  sheet,  with  changes in fair value  charged or credited to income.  If
derivatives are documented and effective as hedges, the change in the derivative
fair  value  will be offset by an equal  change in the fair  value of the hedged
item.  Under  the new  standard,  securities  held-to-maturity  can no longer be
hedged,  except for changes in the issuer's  creditworthiness.  Therefore,  upon
adoption of Statement No. 133,  companies will have another  one-time  window of
opportunity  to  reclassify  held-to-maturity  securities  to either  trading or
available-for-sale,  provided  certain  criteria are met. This

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                                     - 13 -
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              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------

Statement  may be adopted  early at the start of a calendar  quarter.  Since the
Company  has  no  significant  derivative  instruments  or  hedging  activities,
adoption of Statement  No. 133 is not expected to have a material  impact on the
Company's financial statements.

Forward Looking Statements

When used in this Form 10-Q or future filings made by the  Corporation  with the
Securities and Exchange Commission, in the Corporation's press releases or other
public shareholder communications,  or in oral statements made with the approval
of an authorized  executive officer,  the words or phrases "will likely result",
"are expected to," "will continue," "is anticipated,"  "estimate," "project," or
similar expressions are intended to identify "forward-looking statements" within
the  meaning  of the  Private  Securities  Litigation  Reform  Act of 1995.  The
Corporation  wishes  to  caution  readers  not to place  undue  reliance  on any
forward-looking statements,  which speak only as of the date made, and to advise
readers  that  various  factors  -  including  regional  and  national  economic
conditions,  changes in levels of market interest rates, credit risks of lending
activities,  and  competitive  and regulatory  factors - could affect the Bank's
financial  performance  and could  cause the  Corporation's  actual  results for
future periods to differ materially from those anticipated or projected.

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

Quantitative and Qualitative Disclosures About Market Risk

In an attempt to manage its  exposure to changes in interest  rates,  management
monitors the  Company's  interest rate risk.  The Board of Directors  reviews at
least  quarterly the Bank's interest rate risk position and  profitability.  The
Board of Directors  also  reviews the Bank's  portfolio,  formulates  investment
strategies and oversees the timing and  implementation of transactions to assure
attainment of the Bank's  objectives in the most effective  manner. In addition,
the Board anticipates reviewing on a quarterly basis the Bank's  asset/liability
position,  including  simulations of the effect on the Bank's capital of various
interest rate scenarios.

In  managing  its  asset/liability  mix,  Hemlock  Federal,   depending  on  the
relationship  between long- and short-term interest rates, market conditions and
consumer  preference,  at times  places more  emphasis on managing  net interest
margin than on better  matching the interest rate  sensitivity of its assets and
liabilities  in an effort to enhance net interest  income.  Management  believes
that the increased net interest income resulting from a mismatch in the maturity
of its asset and liability portfolios can, during periods of declining or stable
interest rates, provide high enough returns to justify the increased exposure to
sudden and unexpected increases in interest rates.

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                                     - 14 -
<PAGE>

              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------


Management  utilizes  the net  portfolio  value  ("NPV")  analysis  to  quantify
interest rate risk. In essence,  this approach calculates the difference between
the present value of liabilities, expected cash flows from assets and cash flows
from off  balance  sheet  contracts.  Under OTS  regulations,  an  institution's
"normal"  level of interest rate risk in the event of an immediate and sustained
200 basis point change in interest rates is a decrease in the  institution's NPV
in an amount not  exceeding 2% of the present  value of its assets.  Pursuant to
this regulation,  thrift  institutions  with greater than "normal" interest rate
exposure must take a deduction from their total capital  available to meet their
risk-based capital requirement.  The amount of that deduction is one-half of the
difference between (a) the institution's  actual calculated  exposure to the 200
basis point interest rate increase or decrease (whichever results in the greater
pro forma decrease in NPV) and (b) its "normal" level of exposure which is 2% of
the present value of its assets.  Savings institutions,  however, with less than
$300  million  in assets  and a total  capital  ratio in excess of 12%,  will be
exempt from this requirement  unless the OTS determines  otherwise.  The OTS has
postponed the  implementation  of the rule until further notice.  Based upon its
asset size and capital  level at March 31, 2000,  the Bank would  qualify for an
exemption from this rule; management believes that the Bank would be required to
make a deduction from capital of $507,000 if it were subject to this rule.

The following  table sets forth, at December 31, 1999, an analysis of the Bank's
interest  rate risk as measured by the estimated  changes in NPV resulting  from
instantaneous  and  sustained  parallel  shifts in the yield curve (+/-300 basis
points,  measured in 100 basis point increments) as compared to tolerance limits
under the Bank's current policy.





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                                     - 15 -
<PAGE>

              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------


    Change in                                           Estimated Increase
    Interest       Estimated   Ratio of NPV             (Decrease) in NPV
      Rates          NPV             to            -----------------------------
 (Basis Points)    Amount       PV of Assets           Amount        Percent
--------------------------------------------------------------------------------
                             (Dollars in Thousands)

    +300          14,800            7.09               (10,579)         (42)
    +200          18,827            8.77                (6,553)         (26)
    +100          22,504           10.20                (2,876)         (11)
     ---          25,380           11.24                    ---          ---
    -100          27,646           12.00                  2,267            9
    -200          29,135           12.42                  3,755           15
    -300          30,075           12.62                  4,696           19



Certain  assumptions  utilized in  assessing  the  interest  rate risk of thrift
institutions  were employed in preparing the preceding table.  These assumptions
relate to interest rates,  loan prepayment  rates,  deposit decay rates, and the
market values of certain assets under the various  interest rate  scenarios.  It
was also assumed that  delinquency  rates will not change as a result of changes
in interest rates although there can be no assurance that this will be the case.
Even if  interest  rates  change  in the  designated  amounts,  there  can be no
assurance  that the Bank's  assets and  liabilities  would  perform as set forth
above. In addition,  a change in U.S.  Treasury rates in the designated  amounts
accompanied  by a change in the shape of the  Treasury  yield  curve would cause
significantly different changes to the NPV than indicated above.

While the above  estimates  are based on data  provided as of December 31, 1999,
management  believes that the Bank's interest rate risk as of March 31, 2000 has
not significantly changed from the level indicated in the above table.

Annual Meeting

The Company's  Annual  Meeting for the fiscal year ending  December 31, 1999 was
held on May 10, 2000 at 10:30 a.m. at the Oak Forest office of the Company.


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                                     - 16 -
<PAGE>

              HEMLOCK FEDERAL FINANCIAL CORPORATION AND SUBSIDIARY

--------------------------------------------------------------------------------





Part II Other Information

     Item 1. Legal Proceedings
             None

     Item 2. Changes in Securities and Use of Proceeds
             None

     Item 3. Defaults upon Senior Securities
             None

     Item 4. Submission of Matters to a vote of Security Holders
             None

     Item 5. Other Information


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

             a.  Exhibits -   27      Financial Data Schedule

             b.  Reports on Form 8-K

                 Filed with the Securities and Exchange Commission on
                    January 19, 2000:

                    On January 10, 2000, Hemlock Federal Financial  Corporation,
                    a Delaware  corporation,  and Midwest  Savings Bank issued a
                    joint press release announcing the execution of a definitive
                    agreement  as of  January  7,  2000 by and  between  Hemlock
                    Federal Bank for Savings,  the  wholly-owned  subsidiary  of
                    Hemlock, and Midwest.

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                                     - 17 -
<PAGE>



                                   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.


      HEMLOCK FEDERAL FINANCIAL CORP.
      (Registrant)


       /s/ Maureen G. Partynski
     ---------------------------------------
      Maureen G. Partynski
      Chief Executive Officer
      May 11 , 2000



       /s/ Michael R. Stevens
     ---------------------------------------
      Michael R. Stevens
      President
      May 11, 1999



       /s/ Jean M. Thornton
     ---------------------------------------
      Jean M. Thornton
      Chief Financial Officer
      May 11, 1999



                                     - 18 -