U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-KSB

                 ANNUAL REPORT Pursuant to SECTION 13 or 15(d) of
                        THE SECURITIES EXCHANGE ACT of 1934

                      For the fiscal year ended June 30, 1997
                        Commission File Number  333-12501
                               _____________________

                          HOME CITY FINANCIAL CORPORATION
                  (name of small business issuer in its charter)

             Ohio                                    34-1839475
   (State or other Jurisdiction                     (IRS Employer
    of incorporation or organization)                Identification Number)

   63 West Main Street, Springfield, Ohio            45502
  (Address of principal executive offices)           (zip code)
 
                     Issuer's telephone number  (937)324-5736
                               ____________________

       Securities registered under Section 12(b) of the Exchange Act:           
                                 not applicable
       Securities registered under Section 12(g) of the Exchange Act:
                         Common Shares (No Par Value)
                        Preferred Shares (No Par Value)

     Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such 
shorter period that the registrant was required to file such reports), and (2) 
has been subject to such filing requirements for the past 90 days. 
                                YES _X_  NO ___

     Check if there is no disclosure of delinquent filers in response to Item 
405 of Regulation S-B contained in this form, and no disclosure will be 
contained, to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.  [ X ]

     State issuer's revenues for the most recent fiscal year.  $5,372,000

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold or the average 
bid and asked prices of such stock, as of a specified date within the past 60 
days:  As of August 25, 1997, 904,590 common shares of the Registrant were
outstanding.  The aggregate market value of the shares held by non-affiliates 
was $11,371,684 based upon the closing price of $15.50 per share as quoted by
The Nasdaq Stock Market.

     Documents Incorporated by Reference

     The following sections of the definitive Proxy Statement for the 1997 
Annual Meeting of Shareholders of Home City Financial Corporation are 
incorporated by reference into Part III of this Form 10-KSB:

     1.   Proposal One - Election of Directors
     2.   Compensation of Directors and Executive Officers
     3.   Voting Securities and Ownership of Certain Beneficial Owners and 
          Management
     
     Transitional Small Business Disclosure Format     YES ___  NO _X_
<PAGE>
                                      PART I

ITEM 1.  Description of Business

General

     Home City Financial Corporation ("HCFC"), a unitary savings and loan 
holding company incorporated under the laws of the State of Ohio, owns all of 
the issued and outstanding common stock of Home City Federal Savings Bank of 
Springfield ("Home City"), a savings association chartered under the laws of the
United States.  In December 1996, HCFC acquired all of the common shares issued 
by Home City upon its conversion from a mutual savings association to a stock 
savings association (the "Conversion").  Since its formation, HCFC's activities
have been limited primarily to holding the common shares of Home City and 
investing excess funds from the Conversion in investment securities and savings 
deposits in Home City.

     Home City is a stock savings bank principally engaged in the business of 
making permanent first and second mortgage loans secured by one- to four-family
residential real estate and nonresidential real estate located in Home City's 
primary lending area and investing in U.S. Government and federal agency 
obligations, interest-bearing deposits in other financial institutions and 
mortgage-backed securities and municipal securities.  Home City also originates
loans for the construction of residential real estate and loans secured by 
multifamily real estate (over four units), commercial loans and consumer loans.
The origination of consumer loans, including unsecured loans and loans secured
by deposits, constitutes a growing portion of Home City's lending activities.
Funds for lending and investment activities are obtained primarily from 
deposits, which are insured up to applicable limits by the Federal Deposit 
Insurance Corporation (the "FDIC"), and loans and mortgage-backed and related 
securities repayments.  Home City conducts business from its office located in 
Springfield, Ohio.  Home City's primary lending area consists of Clark County, 
Ohio, and adjacent counties. 

     As a savings and loan holding company, HCFC is subject to regulation, 
supervision and examination by the Office of Thrift Supervision of the United 
States Department of the Treasury (the "OTS").  As a savings association 
chartered under the laws of the United States, Home City is subject to 
regulation, supervision and examination by the OTS and the FDIC.  Home City is 
also a member of the Federal Home Loan Bank (the "FHLB") of Cincinnati.
     
Market Area 

     Home City conducts business from its main office, located in Springfield, 
Ohio.  Springfield is located 25 miles east of Dayton, 40 miles west of 
Columbus and 80 miles north of Cincinnati.  Home City's primary market area 
consists of Clark County, Ohio, and adjacent counties.  Clark County, Ohio is 
characterized by lower than average levels of income and housing values and a 
slightly higher unemployment level.  Its strongest employment categories are 
wholesale/retail trade, services and manufacturing, with smaller numbers of 
residents employed in the finance, insurance and real estate industry 
categories.

Forward-Looking Statements

     When used in this Form 10-KSB, the words or phrases "will likely result," 
"are expected to," "will continue," "is anticipated," "estimated," 
"projected," or similar expressions are intended to identify "forward-looking 
statements" within the meaning of the Private Securities Litigation Reform Act 
of 1995.  Such statements are subject to certain risks and uncertainties 
including changes in economic conditions in  Home City's market area, changes 
in policies by regulatory agencies, fluctuations in interest rates, demand for 
loans in Home City's market area and competition, that could cause actual 
results to differ materially from historical earnings and those presently 
anticipated or projected.  Factors listed above could affect HCFC's financial 
performance and could cause HCFC's actual results for future periods to differ 
materially from any statements expressed with respect to future periods.  See 
Exhibit 99.2 hereto "Safe Harbor Under the Private Securities Litigation 
Reform Act of 1995," which is incorporated herein by reference.

     HCFC does not undertake, and specifically disclaims any obligation, to 
publicly revise any forward-looking statements to reflect events or 
circumstances after the date of such statements or to reflect the occurrence 
of anticipated or unanticipated events.
<PAGE>
Lending Activities

     General.  Home City's primary lending activity is the origination of 
conventional mortgage loans and home equity loans secured by one- to 
four-family homes and nonresidential real estate located in Home City's 
primary lending area.  Loans for the construction of one- to four-family homes 
and mortgage loans on multifamily properties containing five units or more  
are also offered by Home City.  Home City does not originate loans insured by 
the Federal Housing Administration or loans guaranteed by the Veterans 
Administration.  In addition to mortgage lending, Home City makes commercial 
loans secured by assets of the borrower other than real estate, secured and 
unsecured consumer loans.  Home City does not originate its loans in 
accordance with traditional secondary market guidelines.

     Loan Portfolio Composition.  The following table presents certain 
information with respect to the composition of Home City's loan portfolio at 
the dates indicated:
<TABLE>
<CAPTION>     
                                                                                At June 30,
                                                 ___________________________________________________________________________
                                                        1997                        1996                         1995
                                                 __________________          __________________           __________________
                                                            Percent                     Percent                      Percent
                                                           of total                    of total                     of total
                                                 Amount      loans           Amount      loans            Amount      loans
                                                 ______      _____           ______      _____            ______      _____
                                                                                  (Dollars in thousands)
<S>                                              <C>        <C>              <C>        <C>               <C>        <C>
Residential real estate loans:
   One- to four-family (first mortgage)          $37,739     64.61%          $31,580     64.89%           $24,724     58.85%
   Multifamily                                     2,774      4.75             3,233      6.64              3,288      7.82
   Home equity (second mortgage)                     452      0.77               313      0.64                232      0.55
Nonresidential real estate loans                   8,127     13.91             7,255     14.91              7,309     17.39
Land loans                                         1,853      3.17             2,223      4.57              1,684      4.01
Construction loans                                 3,753      6.43             2,350      4.83              4,582     10.90
                                                 _______    ______           _______    ______            _______    ______
      Total real estate loans                     54,698     93.64            46,954     96.48             41,819     99.52

Commercial loans                                     464      0.79                73      0.15                 --        --
Consumer loans:
   Loans on deposits                                 235      0.40               160      0.33                201      0.48
   Other consumer loans                            3,018      0.17             1,481      3.04                 --        --
                                                 _______    ______           _______    ______            _______    ______
       Total consumer loans                        3,253      5.57             1,641      3.37                201      0.48
                                                 _______    ______           _______    ______            _______    ______
Total loans                                       58,415    100.00%           48,668    100.00%            42,020    100.00%
                                                            ______                      ______                       ______
   Less:
   Unearned and deferred (income)
       expense, net                                 (487)                       (447)                        (420)
   Loans in process                               (1,448)                     (2,634)                      (2,321)
   Allowance for loan losses                        (445)                       (362)                        (319)
                                                 _______                     _______                      _______
Net loans                                        $56,035                     $45,225                      $38,960
                                                 _______                     _______                      _______
</TABLE>
<PAGE>
     Loan Maturity Schedule.  The following table sets forth certain 
information as of June 30, 1997, regarding the dollar amount of loans maturing 
in Home City's portfolio based on their contractual terms to maturity.  Demand 
loans and loans having no stated schedule of repayments and no stated maturity 
are reported as due in one year or less.
<TABLE>
<CAPTION>
                                 During the               Due 4-5      Due 6-10      Due 11-15    Due more than
                             year ending June 30,       years after   years after   years after   15 years after
                         __________________________
                         1998       1999       2000        6/30/97       6/30/97       6/30/97        6/30/97        Total
                         ____       ____       ____        _______       _______       _______        _______        _____
                                                                 (Dollars in thousands)
<S>                     <C>        <C>        <C>          <C>           <C>           <C>            <C>           <C>
Mortgage loans:
   Residential          $  785     $  253     $  317        $  691        $3,004       $22,717        $12,187       $39,954
   Nonresidential          684        256        376           154         2,499         6,621          2,219        12,809
Consumer loans             372        196        171           944           751           799             20         3,253
Commercial loans            45          7         13            90           309            --             --           464
                        ______     ______     ______        ______        ______       _______        _______       _______
      Total loans       $1,886     $  712     $  877        $1,879        $6,563       $30,137        $14,426       $56,480
                        ______     ______     ______        ______        ______       _______        _______       _______
</TABLE>

     Of the loans due more than one year after June 30, 1997, loans with 
aggregate balances of $28.3 million have fixed rates of interest, and loans 
with aggregate balances of $26.3 million have adjustable interest rates.

     One- to Four-family Residential Real Estate Loans.  The primary lending 
activity of Home City has been the origination of permanent conventional loans 
secured by one- to four-family residences, primarily single-family residences, 
located within Home City's designated lending area.  Home City also originates 
loans for the construction of one- to four-family residences and home equity 
loans.  Each of such loans is secured by a mortgage on the underlying real 
estate and improvements thereon, if any.

     OTS regulations limit the amount that Home City may lend in relationship 
to the appraised value of the real estate and improvements at the time of loan 
origination.  In accordance with such regulations, Home City makes fixed-rate 
first mortgage loans on single-family or duplex, owner occupied residences up 
to 95% of the value of the real estate and improvements (the "Loan-to-Value 
Ratio" or "LTV").  Low to moderate income loans are granted up to 95% on 
single-family or duplex, owner occupied residences.  Home Equity loans secured 
by first or second mortgages are made with a maximum combined LTV for the 
first and second mortgage of 100%.  Home City makes adjustable-rate first 
mortgage loans for investment purposes on one- to four-family, non-owner 
occupied residences in amounts up to 75% LTV.  Home City generally requires 
private mortgage insurance ("PMI") for the amount of loans in excess of 80% of 
the value of the real estate securing such loans.  PMI is required for the 
amount of any loan in excess of 85% of the value of the real estate and 
improvements for low-to-moderate income loans.  Fixed-rate residential real 
estate loans are offered by Home City for terms of up to 15 years.

     Home City has been originating adjustable-rate mortgage loans ("ARMs") 
for several years.  ARMs are offered by Home City for terms of up to 30 years 
and with various alternative features.  The interest rate adjustment periods 
on the ARMs are either one year, three years or a fixed rate for 10 years 
followed by one-year adjustment periods.  The interest rate adjustments on 
ARMs presently originated by Home City are tied to changes in the weekly 
average yield on the one- and three-year U.S. Treasury constant maturities 
index, respectively.  Rate adjustments are computed by adding a stated margin, 
typically 2.75%, to the index.  The maximum allowable adjustment at each 
adjustment date had been 1% with a maximum adjustment of 3% over the term of 
the loan, although Home City now offers an ARM with a 2% maximum adjustment at 
each adjustment date and a maximum adjustment of 6% over the term of the 
loan.  The initial rate is dependent, in part, on how often the rate can be 
adjusted.  Home City also offers ARMs on one- to four-family properties with a 
margin of 3.75% over the index and 2% and 6% maximum adjustments at each 
adjustment date and over the term of the loan, respectively.  Home City 
originates ARMs which have initial interest rates lower than the sum of the 
index plus the margin.  Such loans are subject to increased risk of 
delinquency or default due to increasing monthly payments as the interest 
rates on such loans increase to the fully-indexed level, although such 
increase is generally lower than industry standards and is considered in Home 
City's underwriting of any such loans with a one-year adjustment period. 

     The aggregate amount of Home City's one- to four-family residential real 
estate loans equaled approximately $37.7 million at June 30, 1997, and 
represented  64.61% of loans at such date.  The largest individual loan 
balance on a one- to four-family loan at such date was $284,000.  At such 
date, loans secured by one- to four-family residential real estate with 
outstanding balances of $215,000, or 0.57% of its one- to four-family 
<PAGE>
residential real estate loan balance, were more than 90 days delinquent or 
nonaccruing.  See "Delinquent Loans, Non-performing Assets and Classified 
Assets."

     Multifamily Residential Real Estate Loans.  In addition to loans on one- 
to four-family properties, Home City makes loans secured by multifamily 
properties containing over four units.  Such loans are made with adjustable 
interest rates, a maximum LTV of 75% and a maximum term of 15 years.

     Multifamily lending is generally considered to involve a higher degree of 
risk because the loan amounts are larger and the borrower typically depends 
upon income generated by the project to cover operating expenses and debt 
service.  The profitability of a project can be affected by economic 
conditions, government policies and other factors beyond the control of the 
borrower.  Home City attempts to reduce the risk associated with multifamily 
lending by evaluating the creditworthiness of the borrower and the projected 
income from the project and by obtaining personal guarantees on loans made to 
corporations and partnerships.  Home City currently requires that borrowers 
agree to submit financial statements, rent rolls and tax returns annually to 
enable Home City to monitor the loans.
     
     At June 30, 1997, loans secured by multifamily properties totaled 
approximately $2.8 million, or 4.75% of Home City's total loan portfolio, all 
of which were secured by property located within Home City's primary market 
area, and all of which were performing in accordance with their terms.  The 
largest loan secured by a multifamily property had a balance at June 30, 1997, 
of approximately $653,000.

     Home Equity Loans.  Home City offers home equity loans secured by second 
mortgages on one- to four-family residential real estate located in Clark 
County, Ohio, and adjacent counties.  Such loans are made for various 
purposes, including home improvement, debt consolidation and consumer 
purchases.  The interest rates on loans secured by such second mortgages are 
fixed, with a maximum combined LTV for the first and second mortgage of 100%.

     At June 30, 1997, home equity loans totaled approximately $452,000, or 
0.77% of Home City's total loan portfolio.  All of such loans were secured by 
property located within Home City's primary market area and all were 
performing in accordance with their terms.  The balance of the largest single 
home equity loan was $120,000 at June 30, 1997.

     Nonresidential Real Estate Loans.  Home City also makes loans secured by 
nonresidential real estate consisting of retail stores, office buildings and 
businesses.  Such loans generally are originated with terms of up to 15 
years,  a minimum loan amount of $10,000 and a maximum loan amount of $1.5 
million.  Such loans have a maximum LTV of 75%. 

     Nonresidential real estate lending is generally considered to involve a 
higher degree of risk than residential lending due to the relatively larger 
loan amounts and the effects of general economic conditions on the successful 
operation of income-producing properties.  If the cash flow on the property is 
reduced, for example, as leases are not obtained or renewed, the borrower's 
ability to repay may be impaired.  Home City has endeavored to reduce such 
risk by evaluating the credit history and past performance of the borrower, 
the location of the real estate, the quality of the management constructing 
and operating the property, the debt service ratio, the quality and 
characteristics of the income stream generated by the property and appraisals 
supporting the property's valuation.  Home City also requires personal 
guarantees on such loans.

     At June 30, 1997, Home City had a total of $8.1 million invested in 
nonresidential real estate loans, all of which were secured by property 
located within Home City's primary market area.  Such loans comprised 
approximately 13.91% of Home City's total loans at such date.  At such date, 
Home City had $171,000 in 90 days delinquent or non-accruing nonresidential 
real estate loans, or 0.30% of total loans.  See "Delinquent Loans, 
Non-performing Assets and Classified Assets."

     Federal regulations limit the amount of nonresidential mortgage loans 
which an association may make to 400% of its tangible capital.  At June 30, 
1997, Home City's nonresidential mortgage loans totaled 78.77% of Home City's 
tangible capital.

     Land Loans.  Home City makes two varieties of land loans.  Loans are made 
for the acquisition of land to be developed for construction.  Such loans are 
usually made for relatively short periods of time, generally not more than 
three years, with fixed interest rates.  Loans are also made to borrowers who 
purchase and hold land for various reasons, such as the future construction of 
a residence.  Such loans are generally originated with adjustable interest 
<PAGE>
rates and terms of up to 15 years.  Land loans are secured by the land being 
purchased with the loan proceeds and have maximum LTVs of 75%.

     At June 30, 1997, land loans totaled approximately $1.9 million, or 3.17% 
of Home City's total loan portfolio. The largest land loan at June 30, 1997, 
had a balance of approximately $421,000.  All of such loans were secured by 
property located within Home City's primary market area of which $30,000 were 
more than 90 days delinquent or non-accruing.  See "Delinquent Loans, 
Non-performing Assets and Classified Assets."

     Construction Loans.  Home City makes loans for the construction of 
residential and nonresidential real estate.  Such loans are structured as 
permanent loans with fixed rates of interest and for terms of up to 15 years.  
Most of the construction loans originated by Home City historically were made 
to owner-occupants for the construction of single-family homes by a general 
contractor.

     Construction loans generally involve greater underwriting and default 
risks than do loans secured by mortgages on existing properties due to the 
concentration of principal in a limited number of loans and borrowers and the 
effects of general economic conditions on real estate developments, 
developers, managers and builders.  In addition, such loans are more difficult 
to evaluate and monitor.  Loan funds are advanced upon the security of the 
project under construction, which is more difficult to value before the 
completion of construction.  Moreover, because of the uncertainties inherent 
in estimating construction costs, it is relatively difficult to evaluate 
accurately the LTV and the total loan funds required to complete a project.  
In the event a default on a construction loan occurs and foreclosure follows, 
Home City must take control of the project and attempt either to arrange for 
completion of construction or dispose of the unfinished project.  Additional 
risk exists with respect to loans made to developers who do not have a buyer 
for the property, as the developer may lack funds to pay the loan if the 
property is not sold upon completion.  Home City attempts to reduce such risks 
on loans to developers by requiring personal guarantees and reviewing current 
personal financial statements and tax returns and other projects undertaken by 
the developers.

     At June 30, 1997, a total of $3.8 million, or approximately 6.43% of Home 
City's total loans, consisted of construction loans.  All of Home City's 
construction loans are secured by property located within Home City's primary 
market area, and the economy of such lending area has been relatively stable.  
At June 30, 1997, all of such loans were performing in accordance with their 
terms.

     Commercial Loans.  Home City occasionally makes loans for commercial 
purposes.  Such loans may be secured by nonresidential real estate or by 
assets of the borrower other than real estate, such as equipment or 
receivables.  At June 30, 1997, Home City had nine commercial loans in the 
aggregate amount of $464,000, each of which was performing in accordance with 
its terms.
          
     Consumer Loans.  Home City makes various types of loans, including 
unsecured loans and loans secured by deposits.  Such loans are made only at 
fixed rates of interest for terms of up to 15 years.  Home City has been 
attempting to increase its consumer loan portfolio as part of its interest 
rate risk management efforts and because a higher rate of interest is received 
on consumer loans.  See  "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF 
OPERATIONS."

     Consumer loans may entail greater credit risk than do residential 
mortgage loans.  The risk of default on consumer loans increases during 
periods of recession, high unemployment and other adverse economic 
conditions.  Although Home City has not had significant delinquencies on 
consumer loans, no assurance can be provided that delinquencies will not 
increase.

     At June 30, 1997, Home City had approximately $3.3 million, or 5.57% of 
its total loans, invested in consumer loans, and none of such loans were more 
than 90 days delinquent or nonaccruing . 

     Loan Solicitation and Processing.  Loan originations are developed from a 
number of sources, including continuing business with depositors, borrowers 
and real estate developers, periodic newspaper solicitations by Home City's 
lending staff and walk-in customers.

     Loan applications for permanent mortgage loans are taken by loan 
personnel.  Home City obtains a credit report, verification of employment and 
other documentation concerning the credit-worthiness of the borrower.  Home 
City limits the ratio of mortgage loan payments to the borrower's income to 
25% and the ratio of the borrower's total debt payments to income to 35-42%.  
An appraisal of the fair market value of the real estate on which Home City 
<PAGE>
will be granted a mortgage to secure the loan is prepared by an independent 
fee appraiser approved by the Board of Directors.  

     Unless Home City is aware of factors which may lead to an environmental 
concern, Home City generally does not require any form of specific 
environmental study at the time a loan secured by one- to four-family 
residential real estate is made.  If, however, Home City is aware of any such 
factor at the time of loan origination, Home City requires the completion and 
satisfactory review of a Phase I Environmental Assessment before such loan is 
made.  For loans secured by multifamily and nonresidential real estate, a 
Phase I Environmental Assessment is generally completed and satisfactorily 
reviewed before the loan is made.

     Upon the completion of the appraisal and the receipt of information on 
the borrower, the application for a loan is submitted to various management offi
cials for approval or rejection if the loan amount does not exceed $300,000.  
If the loan amount exceeds $300,000, or if the application does not conform in 
all respects with Home City's underwriting guidelines, the application is 
submitted to the Executive Loan Committee or the Board of Directors for review 
and for final disposition.  If a mortgage loan application is approved, an 
attorney's opinion of title is obtained on the title to the real estate which 
will secure the mortgage loan.  Borrowers are required to carry satisfactory 
fire and casualty insurance and flood insurance, if applicable, and to name 
Home City as an insured mortgagee.

     The procedure for approval of construction loans is the same as for 
permanent mortgage loans, except that an appraiser evaluates the building 
plans, construction specifications and estimates of construction costs.  Home 
City also evaluates the feasibility of the proposed construction project and 
the experience and record of the builder.  Consumer loans are underwritten on 
the basis of the borrower's credit history and an analysis of the borrower's 
income and expenses, ability to repay the loan and the value of the 
collateral, if any.  Commercial loans are underwritten on the basis of the 
source of the cash flow required to service the debt and the value of the 
security for the loan.

     Home City's loans carry no prepayment penalties, but do provide the 
entire balance of the loan is due upon sale of the property securing the 
loan.  Home City generally enforces such due-on-sale provisions.

     Loan Originations, Purchases and Sales.  Home City originates almost an 
equal number of fixed-rate and adjustable-rate loans.  See "DESCRIPTION OF 
BUSINESS - Loan Maturity Schedule."  Home City occasionally participates in 
loans by other institutions. 
<PAGE>
     The following table presents Home City's mortgage loan origination and 
participation activity for the periods indicated:
<TABLE>
<CAPTION>
                                                      Year ended June 30,
                                               _________________________________
                                               1997          1996           1995
                                               ____          ____           ____
                                                     (Dollars in thousands)
<S>                                          <C>           <C>            <C>
Loans originated:
   One- to four-family residential <F1>      $14,872       $14,091        $ 9,269
   Multifamily residential                       325           280          1,468
   Nonresidential                              2,451         2,210          3,303
   Commercial                                    546           133             --
   Consumer                                    2,975         1,797             37
   Loans Purchased                               374            --             --
                                             _______       _______        _______

     Total loans originated                   21,543        18,511         14,077
                                             _______       _______        _______

Reductions:
   Principal repayments                      (10,902)       (9,287)        (5,623)
   Sales of loans                                  0        (2,760)          (338)
Increase (decrease) in other items,
   net  <F2>                                     169          (199)          (148)
                                             _______       _______        _______
     Net increase (decrease)                 $10,810       $ 6,265        $ 7,968
                                             _______       _______        _______
<FN>
<F1>
Includes construction loans.
<F2>
Consists of unearned and deferred fees, costs and the allowance for loan losses.
</FN>
</TABLE>

     OTS regulations generally limit the aggregate amount that a savings 
association may lend to any one borrower to an amount equal to 15% of the 
association's total capital under the regulatory capital requirements plus any 
additional loan reserve not included in total capital.  A savings association 
may lend to one borrower an additional amount not to exceed 10% of total 
capital plus additional reserves if the additional amount is fully secured by 
certain forms of "readily marketable collateral."  Real estate is not 
considered "readily marketable collateral."  In addition, the regulations 
require that loans to certain related or affiliated borrowers be aggregated 
for purposes of such limits.  An exception to these limits permits loans to 
one borrower of up to $500,000 "for any purpose."

     Based on such limits, Home City was able to lend approximately $1,614,000 
to one borrower at June 30, 1997.  The largest amount Home City had outstanding 
to one borrower at June 30, 1997, was $1,250,000.  Such loans were secured by 
several one- to four-family residential properties and a residential property 
under construction.  All of such loans were current at June 30, 1997.


     Delinquent Loans, Non-performing Assets and Classified Assets.  When a 
borrower fails to make a required payment on a loan, Home City attempts to 
cause the delinquency to be cured by contacting the borrower.  In most cases, 
delinquencies are cured promptly.

     When a loan is fifteen days or more delinquent, the borrower is sent a 
delinquency notice.  When a loan is thirty days delinquent, Home City generally 
telephones the borrower.  Depending upon the circumstances, Home City may also 
inspect the property and inform the borrower of the availability of credit 
counseling from Home City and counseling agencies.  Before a loan becomes 90 
days delinquent, Home City will make further contact with the borrower and, 
depending upon the circumstances, may arrange appropriate alternative payment 
arrangements.  After a loan becomes 90 days delinquent, Home City may refer the 
matter to an attorney for foreclosure.  A decision as to whether and when to 
initiate foreclosure proceedings is based on such factors as the amount of the 
outstanding loan in relation to the original indebtedness, the extent of the 
delinquency and the borrower's ability and willingness to cooperate in curing 
delinquencies.  If a foreclosure occurs, the real estate is sold at public 
sale and may be purchased by Home City.
<PAGE>
     Real estate acquired, or deemed acquired, by Home City as a result of 
foreclosure proceedings is classified as real estate owned ("REO") until it is 
sold.  When property is so acquired, or deemed to have been acquired, it is 
initially recorded by Home City at the lower of cost or fair value of the real 
estate, less estimated costs to sell.  Any reduction in fair value is reflected 
in a valuation allowance account established by a charge to income.  Costs 
incurred to carry other real estate are charged to expense.

     Home City places a loan on nonaccrual status when the principal and 
interest is delinquent 90 days or more and deducts from income the interest 
previously accrued.

     The following table reflects the amount of loans in a delinquent status 
as of the dates indicated:
<TABLE>
<CAPTION> 
                                                                          At June 30,
                                 _____________________________________________________________________________________________
                                             1997                             1996                             1995
                                 ___________________________       __________________________       __________________________
                                                    Percent                          Percent                          Percent
                                                    of total                         of total                         of total 
                                 Number     Amount    loans        Number    Amount    loans        Number    Amount    loans
                                 ______     ______    _____        ______    ______    _____        ______    ______    _____
                                                                      (Dollars in thousands)
<S>                              <C>       <C>      <C>            <C>      <C>      <C>            <C>      <C>      <C>
Loans delinquent for: <F1>
   30-59 days                      26       $  667     1.18%         17      $  565     1.24%         11      $  296     0.75%
   60-89 days                       5          133     0.23           4         170     0.37           4          83     0.21
   90 days and over                20          416     0.74          14         247     0.54          14         207     0.53
                                   __       ______     ____          __      ______     ____          __      ______     ____
Total delinquent loans             51       $1,216     2.15%         35      $  982     2.15%         29      $  586     1.49%
                                   __       ______     ____          __      ______     ____          __      ______     ____
<FN>
<F1>
The number of days a loan is delinquent is measured from the day the payment 
was due under the terms of the loan agreement.
</FN>

     The following table sets forth information with respect to the nonaccrual 
status of Home City's loans which are 90 days or more past due and other 
non-performing assets at the dates indicated:

</TABLE>
<TABLE>
<CAPTION>  
                                                           At June 30,
                                                 ________________________________
                                                 1997          1996          1995
                                                 ____          ____          ____
                                                       (Dollars in thousands)
<S>                                            <C>           <C>           <C>
Loans accounted for on a nonaccrual basis:
   Real estate:
     Residential                                 $245          $247          $207
     Nonresidential                               171            --            --  
   Commercial                                      --            --            --  
   Consumer                                        --            --            --  
                                                 ____          ____          ____
     Total non-performing loans                   416           247           207

Real estate owned                                  --            --            --
                                                 ____          ____          ____
     Total non-performing assets                 $416          $247          $207
                                                 ____          ____          ____

     Total loan loss allowance                   $445          $362          $319

     Total non-performing assets as
        a percentage of total assets             0.59%         0.44%         0.43%

Loan loss allowance as a percent
   of non-performing loans                     106.97%       146.56%       154.11%
</TABLE>

     During the year ended June 30, 1997, $2,000 in interest income was 
recognized and an additional $29,000 would have been recorded as interest 
income on nonaccruing loans had such loans been accruing pursuant to 
contractual terms.  During such period, Home City had no restructured loans 
within the meaning of SFAS No. 115.  There are no loans which are not 
<PAGE>
currently classified as nonaccrual, more than 90 days past due or restructured 
but which may be so classified in the near future because management has 
concerns as to the ability of the borrowers to comply with repayment terms.  
For additional information, see Note D of the Notes to Financial Statements.

     OTS regulations require that each thrift institution classify its own 
assets on a regular basis.  Problem assets are classified as "substandard," 
"doubtful," or "loss."  "Substandard" assets have one or more defined 
weaknesses and are characterized by the distinct possibility that the insured 
institution will sustain some loss if the deficiencies are not corrected.  
"Doubtful" assets have the same weaknesses as "substandard" assets, with the 
additional characteristics that (i) the weaknesses make collection or 
liquidation in full on the basis of currently existing facts, conditions and 
values questionable and (ii) there is a high possibility of loss.  An asset 
classified "loss" is considered uncollectible and of such little value that 
its continuance as an asset of the institution is not warranted.  The 
regulations also contain a "special mention" category, consisting of assets 
which do not currently expose an institution to a sufficient degree of risk to 
warrant classification but which possess credit deficiencies or potential 
weaknesses deserving management's close attention.

     Generally, Home City classifies as "substandard" all loans that are 
delinquent more than 90 days, unless management believes the delinquency 
status is short-term due to unusual circumstances.  Loans delinquent fewer 
than 90 days may also be classified if the loans have the characteristics 
described above rendering classification appropriate.

     The aggregate amount of Home City's classified assets at the dates 
indicated were as follows:
<TABLE>                                                                         
<CAPTION>       
                                                    At June 30,
                                        __________________________________
                                        1997           1996           1995
                                        ____           ____           ____
                                           (Dollars in thousands)
     <S>                               <C>            <C>            <C>
     Classified assets:
        Substandard                     $438           $518           $349
        Doubtful                          --             19             --
        Loss                              81            102            106
                                        ____           ____           ____
          Total classified assets       $519           $639           $455
                                        ____           ____           ____
</TABLE>

     Federal examiners are authorized to classify an association's assets.  If 
an association does not agree with an examiner's classification of an asset, 
it may appeal this determination to the Regional Director of the OTS.  Home 
City had no disagreements with the examiners regarding the classification of 
assets at the time of the last examination.

     OTS regulations require that Home City establish prudent general 
allowances for loan losses for any classified as substandard or doubtful.  If 
an asset, or portion thereof, is classified as loss, Home City must either 
establish specific allowances for losses in the amount of 100% of the portion 
of the asset classified loss, or charge-off such amount.


     Allowance for Loan Losses.  Home City maintains an allowance for loan 
losses based upon a number of relevant factors, including but not limited to, 
trends in the level of non-performing assets and classified loans, current and 
anticipated economic conditions in the primary lending area, past loss 
experience, possible losses arising from specific problem assets and changes 
in the composition of the loan portfolio.

     The single largest component of Home City's loan portfolio consists of 
one- to four-family residential real estate loans.  Substantially all of these 
loans are secured by residential real estate and required down payments of 20% 
of the lower of the sales price or appraisal value of the real estate.  In 
addition, these loans are secured by property in Home City's lending area of a 
100-mile radius from Springfield, Ohio.  Home City's practice of making loans 
only in their market area and requiring a 20% down payment have contributed to 
a low historical charge-off history.

     In addition to one- to four-family residential real estate loans, Home 
City makes additional real estate loans including home equity, multifamily 
residential real estate, nonresidential real estate and construction loans.  
These loans are secured by property in Home City's lending area and also 
require the borrower to provide a down payment.  Home City also makes a 
limited amount of commercial and consumer loans.  Although these types of 
loans are considered to involve a higher degree of risk than loans secured by 
one- to four-family residential real estate, Home City has experienced  
charge-offs only from loans secured by one- to four-family residential real 
estate.
<PAGE>
     The allowance for loan losses is reviewed quarterly by the Board of 
Directors.  The review process includes a credit analysis of loans on the 
"watch list," past due loans, new significant borrowings and random samples of 
new loans made.  The analysis of loans secured by multifamily and nonresidential
real estate and commercial loans includes a review of tax returns and financial 
statements, and the review of all loans includes an estimation of the value of 
the collateral.  The amounts of provisions for loan losses for the periods 
shown in the table below were determined based upon such loan review, past 
loss experience, anticipated growth and prevailing economic conditions.  While 
the Board of Directors believes that it uses the best information available to 
determine the allowance for loan losses, unforeseen market conditions could 
result in material adjustments, and net earnings could be significantly 
adversely affected, if circumstances differ substantially from the assumptions 
used in making the final determination.

     The following table sets forth an analysis of Home City's allowance for 
loan losses for the periods indicated:
<TABLE>
<CAPTION>
                                                             Year ended June 30,
                                                      __________________________________
                                                      1997           1996           1995
                                                      ____           ____           ____
                                                            (Dollars in thousands)
<S>                                                  <C>            <C>            <C>
Balance at beginning of period                        $362           $319           $229

Charge-offs                                            (22)            (7)           (19)
Recoveries                                              48             --             --
Provision for loan losses (charged to operations)       57             50            109
                                                      ____           ____           ____
Balance at end of period                              $445           $362           $319
                                                      ____           ____           ____

Ratio of net charge-offs (recoveries) to average net
   loans outstanding during the period               (0.05)%         0.02%          0.05%
Ratio of allowance for loan losses to total loans     0.79%          0.79%          0.81%
</TABLE>

     For the year ended June 30, 1997, $29,000 of the allowance for loan 
losses was allocated to loans secured by nonresidential real estate, $72,000 
was allocated to loans secured by one- to four-family real estate, and $48,000 
was allocated to consumer loans.  The allowance was unallocated for the years 
ended June 30, 1996 and 1995.  Home City's management anticipates that loan 
losses will not exceed $30,000 during the fiscal year 1998 and that all such 
losses will be experienced on loans secured by one- to four-family residential 
real estate.

Mortgage-Backed and Related Securities

     Home City maintains a portfolio of mortgage-backed securities in the form 
of Federal Home Loan Mortgage Corporation ("FHLMC") and Government National 
Mortgage Association ("GNMA") participation certificates, as well as two 
mortgage-backed securities not issued by government agencies.  Mortgage-backed 
securities generally entitle Home City to receive a portion of the cash flows 
from an identified pool of mortgages.  FHLMC and GNMA securities are each 
guaranteed by their respective agencies as to principal and interest.

     The FHLMC is a corporation chartered by the U.S. Government and 
guarantees the timely payment of interest and the ultimate return of principal 
on participation certificates.  Although FHLMC securities are not backed by 
the full faith and credit of the U.S. Government, these securities are 
generally considered among the highest quality investments with minimal credit 
risk.  GNMA is a government agency.  GNMA securities are backed by Federal 
Housing Authority-insured and Veterans Administration-guaranteed loans.  The 
timely payment of principal and interest on GNMA securities is guaranteed by 
the GNMA and backed by the full faith and credit of the U.S. Government.

     The following tables set forth the composition of Home City's 
mortgage-backed securities at the dates indicated:
<TABLE>
<CAPTION>
                                                 At June 30, 
                               _____________________________________________
                                       1997                       1996
                               __________________         __________________
                               Amortized    Fair          Amortized    Fair
                                 cost       value           cost       value
                                 ____       _____           ____       _____
<S>                            <C>        <C>             <C>        <C>
GNMA certificates               $  754     $  730          $3,020     $2,946
FHLMC certificates                  --         --              26         29
                                ______     ______          ______     ______
   Total mortgage-backed 
     and related securities     $  754     $  730          $3,046     $2,975
                                ______     ______          ______     ______
</TABLE>
<PAGE>
     The following table sets forth information regarding scheduled 
maturities, amortized costs, market value and weighted average yields of Home 
City's mortgage-backed and related securities at June 30, 1997.  Expected 
maturities will differ from contractual maturities due to scheduled repayments 
and because borrowers may have the right to call or prepay obligations with or 
without prepayment penalties.  The following table does not take into 
consideration the effects of scheduled repayments or the effects of possible 
prepayments.
<TABLE>
<CAPTION>
                                                              At June 30, 1997
              ____________________________________________________________________________________________________________________
                                                                                                         Total mortgage-backed
              One year or less   After one to five years  After five to ten years   After ten years        securities portfolio
              _________________  _______________________  _______________________  _________________   ___________________________
              Carrying  Average      Carrying  Average      Carrying  Average      Carrying  Average   Carrying  Market    Average
               value     yield        value     yield        value     yield        value     yield     value     value     yield  
               _____     _____        _____     _____        _____     _____        _____     _____     _____     _____     _____
                                                           (Dollars in thousands)
<S>           <C>       <C>          <C>       <C>          <C>       <C>          <C>       <C>       <C>       <C>       <C>
GNMA 
certificates   $ --       -- %        $ --       -- %        $185       6.69%       $545       6.85%    $730      $730       6.81%
FHLMC 
certificates     --       --            --       --            --         --          --         --       --        --         --
               ____       ____        ____       ____        ____       ____        ____       ____     ____      ____       ____
   Total       $ --       -- %        $ --       -- %        $185       6.69%       $545       6.85%    $730      $730       6.81%
               ____       ____        ____       ____        ____       ____        ____       ____     ____      ____       ____
</TABLE>
          For additional information, see Note C of the Notes to Consolidated 
Financial Statements.
<PAGE>
Investment Activities

     OTS regulations require that Home City maintain a minimum amount of 
liquid assets, which may be invested in U.S. Treasury obligations, securities 
of various federal agencies, certificates of deposit at insured banks, 
bankers' acceptances and federal funds.  Home City is also permitted to make 
investments in certain commercial paper, corporate debt securities rated in 
one of the four highest rating categories by one or more nationally recognized 
statistical rating organizations, and mutual funds, as well as other 
investments permitted by federal regulations.  See "REGULATION" and 
"MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS."

     The following table sets forth information concerning Home City's 
investments at the dates indicated:
<TABLE>
<CAPTION>
                                                                         At June 30,
                            _____________________________________________________________________________________________________
                                          1997                               1996                               1995
                            _______________________________    _______________________________     ______________________________
                            Carrying   % of  Market    % of   Carrying   % of  Market    % of     Carrying  % of  Market    % of
                             value   Total    value   Total    value    Total    value   Total     value   Total    value   Total
                             _____   _____    _____   _____    _____    _____    _____   _____     _____   _____    _____   _____
                                                                   (Dollars in thousands)
<S>                        <C>      <C>     <C>      <C>      <C>      <C>      <C>     <C>       <C>     <C>      <C>     <C>
Interest-bearing demand 
 deposits in other 
 financial institutions    $ 1,397   13.19% $ 1,397   13.20%  $  588    12.70%  $  588   12.72%   $  307    6.65%  $  307    6.64%
Federal funds sold             200    1.89      200    1.89      400     8.64      400    8.65     1,500   32.50    1,500   32.45
Time deposits in other 
 financial institutions        361    3.41      353    3.33    1,061    22.91    1,053   22.78       360    7.80      360    7.79
Investment securities:
 U.S. government and 
   federal agency 
   securities                6,993   66.02    6,993   66.07      997    21.53      997   21.57     1,496   32.42    1,496   32.36
 Municipal securities<F1>      749    7.07      749    7.08      883    19.07      883   19.10       405    8.78      413    8.93
 Equity securities:
   FHLMC stock                 420    3.97      420    3.97      270     5.83      270    5.84       221    4.79      221    4.78
   Investment in joint
     venture <F2>               29    0.27       29    0.27       18     0.39       18    0.39        18    0.39       18    0.39
   Service corporation<F3>      20    0.19       20    0.19       20     0.43       20    0.43        20    0.43       20    0.43
   FHLB stock                  423    3.99      423    4.00      394     8.51      394    8.52       288    6.24      288    6.23
                           _______  ______  _______  ______   ______   ______   ______  ______    ______  ______   ______  ______
Total investments          $10,592  100.00% $10,584  100.00%  $4,631   100.00%  $4,623  100.00%   $4,615  100.00%  $4,623  100.00%
                           _______  ______  _______  ______   ______   ______   ______  ______    ______  ______   ______  ______
<FN>
<F1>
Bonds issued by local school districts.
<F2>
Home City has a 50% ownership interest in a joint venture that is primarily 
involved in the development of low income housing.
<F3>
Home City  owns 100% of Homciti Service Corp., whose assets consist of common 
shares of Intrieve, Incorporated, a data service provider, and a 0.875% 
ownership in a joint venture which owns The Springfield Inn, a hotel in 
Springfield, Ohio.
</FN>
</TABLE>
<PAGE>          
     The following tables set forth the contractual maturities, carrying 
values, market values and average yields for Home City's investment securities 
at June 30, 1997:
<TABLE>
<CAPTION>
                                                         At June 30, 1997 
                                ___________________________________________________________________
                                One year or less      After one to five years      After five years
                                _________________     _______________________     _________________
                                Carrying  Average        Carrying  Average        Carrying  Average
                                  value     yield          value     yield          value     yield
                                  _____     _____          _____     _____          _____     _____
                                                        (Dollars in thousands)  
<S>                              <C>       <C>            <C>       <C>            <C>       <C>
Investment securities:
  U.S. government and federal 
    agency securities            $1,501      5.38%        $5,492      5.96%        $   --        --%
  Municipal securities              205      4.25            387      4.47            157      5.30
  Equity securities:
    FHLMC stock                      --        --             --        --            420      1.50
    Investment in joint venture      --        --             --        --             29        --
    Service corporation              --        --             --        --             20        --
    FHLB stock                       --        --             --        --            423      7.05
                                 ______      ____         ______      ____         ______      ____
Total investments                $1,706      5.24%        $5,879      5.86%        $1,049      4.24%
                                 ______      ____         ______      ____         ______      ____
</TABLE>
<TABLE>
<CAPTION>
                                              At June 30, 1997
                                _____________________________________________
                                Average                             Weighted-
                                  life       Carrying    Market      average
                                in years       value      value       yield
                                ________       _____      _____       _____
                                            (Dollars in thousands)
<S>                             <C>           <C>        <C>         <C>
Investment securities:
   U.S. government and federal
     agency securities            1.18        $6,993     $6,993        5.84%
   Municipal securities           3.25           749        749        4.58
   Equity securities                --           892        892        4.05   
                                              ______     ______
     Total                                    $8,634     $8,634
                                              ______     ______
</TABLE>

Deposits and Borrowings

     General.  Deposits have traditionally been the primary source of Home 
City's funds for use in lending and other investment activities.  In addition 
to deposits, Home City derives funds from FHLB advances, interest payments and 
principal repayments on loans and mortgage-backed and related securities, 
income on earning assets, service charges and gains on the sale of assets.  
See "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS."  Loan 
payments are a relatively stable source of funds, while deposit inflows and 
outflows fluctuate more in response to general interest rates and money market 
conditions. 

     Deposits.  Deposits are attracted principally from within Home City's 
primary market area through the offering of a broad selection of deposit 
instruments, including NOW accounts, money market accounts, statement savings 
accounts, passbook savings accounts and term certificate accounts.  Home City 
also offers individual retirement accounts ("IRA"), both in passbook and 
certificate form.  Interest rates paid, maturity terms, service fees and 
withdrawal penalties for the various types of accounts are established 
periodically by the management of Home City based on Home City's liquidity 
requirements, growth goals and interest rates paid by competitors.  Home City 
does not use brokers to attract deposits.

     At June 30, 1997, Home City's certificates of deposit totaled $41.1 
million, or 81.92% of total deposits.  Of such amount, approximately $26.3 
million in certificates of deposit mature within one year.  Based on past 
experience and Home City's prevailing pricing strategies, management believes 
that a substantial percentage of such certificates will renew with Home City 
at maturity.  If there is a significant deviation from historical experience, 
Home City can utilize borrowings from the FHLB as an alternative to this 
source of funds.
<PAGE>
     The following table sets forth the dollar amount of deposits in the 
various types of savings programs offered by Home City at the dates indicated:
<TABLE>
<CAPTION>
                                                                  At June 30
                                   ____________________________________________________________________________
                                          1997                        1996                        1995             
                                   ____________________        ____________________        ____________________
                                               Percent                     Percent                     Percent
                                               of total                    of total                    of total
                                   Amount      deposits        Amount      deposits        Amount      deposits
                                   ______      ________        ______      ________        ______      ________
                                                              (Dollars in thousands)
<S>                                <C>         <C>             <C>         <C>             <C>         <C>
Transaction accounts:
_____________________
Demand                             $   540        1.08%        $   302        0.64%        $    --          --%
NOW accounts <F1>                      675        1.34             395        0.84              --          --
Passbook savings accounts <F2>       7,863       15.66           9,561       20.27          10,500       25.65
                                   _______      ______         _______      ______         _______      ______
   Total transaction accounts        9,078       18.08          10,258       21.75          10,500       25.65

Certificates of deposit:
________________________
   2.01 - 4.00%                         --          --              --          --             600        1.47
   4.01 - 6.00%                     16,027       31.91          15,810       33.51          13,287       32.46
   6.01 - 8.00%                     25,120       50.01          21,106       44.74          16,549       40.42
                                   _______      ______         _______      ______         _______      ______
   Total certificates of deposit    41,147       81.92          36,916       78.25          30,436       74.35
                                   _______      ______         _______      ______         _______      ______
Total deposits <F3>                $50,225      100.00%        $47,174      100.00%        $40,936      100.00%
                                   _______      ______         _______      ______         _______      ______
<FN>
<F1>
Home City's weighted-average interest rate paid on NOW accounts fluctuates with 
the general movement of interest rates.  At June 30, 1997, 1996 and 1995, the 
weighted-average rates on NOW accounts were 1.73%, 1.71%,  and 0%, respectively.
<F2>
Home City's weighted-average rate on passbook savings accounts fluctuates with 
the general movement of interest rates.  The weighted-average interest rate on 
passbook accounts was 2.45%, 2.58%, and 3.12%, at June 30, 1997, 1996 and 1995,
respectively.
<F3>
IRAs are included in the various certificates of deposit balances.  IRAs totaled
$6.0 million, $5.5 million, and $4.4 million as of June 30, 1997, 1996 and 1995.
</FN>
</TABLE>

     The following table shows rate and maturity information for Home City's 
certificates of deposit as of June 30, 1997:
<TABLE>
<CAPTION>
                                              Amount Due
                       ________________________________________________________
                                    Over          Over     
                       Up to      1 year to    2 years to     Over
     Rate              1 year      2 years      3 years      3 years      Total
     ____              ______      _______      _______      _______      _____
                                         (Dollars in thousands) 
<S>                   <C>          <C>          <C>          <C>        <C>
  2.01 - 4.00%        $    --      $    --      $    --      $    --    $    --
  4.01 - 6.00%         12,090        3,715           50          172     16,027
  6.01 - 8.00%         14,249        6,433        3,946          492     25,120
                      _______      _______      _______      _______    _______
Total certificates
   of deposit         $26,339      $10,148      $ 3,996      $   664    $41,147
                      _______      _______      _______      _______    _______
</TABLE>
<PAGE>
     The following table presents the amount of Home City's certificates of 
deposit of $100,000 or more by the time remaining until maturity as of June 
30, 1997: 
<TABLE>
<CAPTION>
               Maturity                            Amount
               ________                            ______
                                           (Dollars in thousands)
               <S>                                 <C>
               Three months or less                $3,194
               Over 3 months to 6 months            1,241
               Over 6 months to 12 months           1,614
               Over 12 months                       1,598
                                                   ______
                    Total                          $7,647
                                                   ______
</TABLE>

          The following table sets forth Home City's deposit account balance 
activity for the periods indicated:
<TABLE>
<CAPTION>
                                                     For the Year ended June 30,
                                                 _________________________________
                                                 1997           1996          1995
                                                 ____           ____          ____
                                                        (Dollars in thousands)
     <S>                                       <C>            <C>           <C>
     Beginning balance                         $47,174        $40,936       $34,816
     Deposits                                   28,783         42,110        24,327
     Withdrawals                               (28,418)       (38,242)      (20,052)
                                               _______        _______       _______
     Net increases before interest credited        365          3,868         4,275
     Interest credited                           2,686          2,370         1,845
                                               _______        _______       _______
     Ending balance                            $50,225        $47,174       $40,936
                                               _______        _______       _______

          Net increase                         $ 3,051        $ 6,238       $ 6,120

          Percentage increase                     6.47%         15.24%        17.58%
</TABLE>

     Borrowings.  The FHLB System functions as a central reserve bank 
providing credit for its member institutions and certain other financial 
institutions.  See "REGULATION - Federal Home Loan Banks."  As a member in 
good standing of the FHLB of Cincinnati, Home City is authorized to apply for 
advances from the FHLB of Cincinnati, provided certain standards of credit 
worthiness have been met.  Under current regulations, an association must meet 
certain qualifications to be eligible for FHLB advances.  The extent to which 
an association is eligible for such advances will depend on whether it meets 
the Qualified Thrift Lender Test (the "QTL Test").  See "REGULATION - OTS 
Regulations -- Qualified Thrift Lender Test."  If an association meets the QTL 
Test, it will be eligible for 100% of the advances it would otherwise be 
eligible to receive.  If an association does not meet the QTL Test, it will be 
eligible for such advances only to the extent it holds specified QTL Test 
assets.  At June 30, 1997, Home City was in compliance with the QTL Test.

     Home City obtained advances from the FHLB of Cincinnati, as set forth in 
the following table:
<TABLE>
<CAPTION>
                                               Year ended June 30,
                                         ________________________________
                                         1997          1996          1995
                                         ____          ____          ____
                                              (Dollars in thousands)
<S>                                    <C>           <C>           <C>
Average balance outstanding             $3,564        $2,582        $1,628   

Maximum amount outstanding at
   any month end during the period       5,108         3,564         2,715   
       _________
Balance outstanding at end of period     5,108         2,903         2,618   

Weighted average interest rate 
   during the period                      6.50%         6.66%         6.57%

Weighted average interest rate 
   at end of period                       6.29%         6.49%         6.69%
</TABLE>
<PAGE>
Subsidiaries

     Home City owns all of the outstanding shares of Homciti Service 
Corp., an Ohio corporation ("Homciti").  Homciti owns common stock in 
Intrieve, Incorporated ("Intrieve"), a data processing company which services 
Home City, and an 0.875% ownership interest in a joint venture which owns the 
Springfield Inn, a local hotel.  At June 30, 1997, the aggregate value of the 
Intrieve stock and the joint venture investment equaled approximately $49,000.

Competition

     Home City competes for deposits with other savings associations, 
commercial banks and credit unions and with the issuers of commercial paper 
and other securities, such as shares in money market mutual funds.  The 
primary factors in competing for deposits are interest rates and convenience 
of office location.  In making loans, Home City competes with other savings 
associations, commercial banks, consumer finance companies, credit unions, 
leasing companies, mortgage companies and other lenders.  Home City competes 
for loan originations primarily through the interest rates and loan fees 
offered and through the efficiency and quality of services provided.  
Competition is affected by, among other things, the general availability of 
lendable funds, general and local economic conditions, current interest rate 
levels and other factors which are not readily predictable.  Three savings 
associations, seven banks and seven credit unions have offices in Clark 
County.  At June 30, 1996, Home City had approximately 3.62% of all financial 
institution deposits in Clark County.

     The size of financial institutions competing with Home City is likely to 
increase as a result of changes in statutes and regulations eliminating 
various restrictions on interstate and inter-industry branching and 
acquisitions.  Such increased competition may have an adverse effect upon Home 
City.

Personnel

     As of June 30, 1997, Home City had fourteen full-time employees and one 
part-time employee.  Home City believes that relations with its employees are 
good.  Home City offers health and life insurance benefits.  None of the 
employees of Home City is represented by a collective bargaining unit.

Regulation

     General.  As a savings association organized under the laws of the United 
States, Home City is subject to regulatory oversight by the OTS.  Because Home 
City's deposits are insured by the FDIC, Home City is also subject to 
examination and regulation by the FDIC.  Home City must file periodic reports 
with the OTS concerning its activities and financial condition.  Examinations 
are conducted periodically by the OTS to determine whether Home City is in 
compliance with various regulatory requirements and is operating in a safe and 
sound manner.  Home City is a member of the FHLB of Cincinnati. 

     HCFC is also subject to regulation, examination and oversight by the 
OTS as the holding company of Home City and is required to submit periodic 
reports to the OTS.

     Legislation to recapitalize the Savings Association Insurance Fund 
("SAIF") became effective September 30, 1996.  See "FDIC Regulations -- 
Assessments."  Congress is considering proposed legislation which would 
require Home City to convert to a state thrift charter or to a bank charter, 
after which it would be regulated under federal law in the same fashion as 
banks.  As a result, Home City may become subject to additional regulation, 
examination and oversight by the FDIC.  In addition, HCFC might become subject 
to more restrictive holding company requirements, including greater activity 
and capital requirements than imposed on it by the OTS.
<PAGE>
OTS Regulations

     General.  The OTS is an office in the Department of the Treasury and is 
responsible for the regulation and supervision of all savings associations the 
deposits of which are insured by the FDIC in the SAIF and all 
federally-chartered savings institutions.  The OTS issues regulations 
governing the operation of savings associations, regularly examines such 
institutions and imposes assessments on savings associations based on their 
asset size to cover the costs of this supervision and examination.  It also 
promulgates regulations that prescribe the permissible investments and 
activities of federally-chartered savings associations, including the type of 
lending that such associations may engage in and the investments in real 
estate, subsidiaries and securities they may make.  The OTS also may initiate 
enforcement actions against savings associations and certain persons 
affiliated with them for violations of laws or regulations or for engaging in 
unsafe or unsound practices.  If the grounds provided by law exist, the OTS 
may appoint a conservator or receiver for a savings association.

     Federally-chartered savings associations are subject to regulatory 
oversight by the OTS under various consumer protection and fair lending laws.  
These laws govern, among other things, truth-in-lending disclosure, equal 
credit opportunity, fair credit reporting and community reinvestment.  Failure 
to abide by federal laws and regulations governing community reinvestment 
could limit the ability of an association to open a new branch or engage in a 
merger transaction.  Community reinvestment regulations evaluate how well and 
to what extent an institution lends and invests in its designated service 
area, with particular emphasis on low-to-moderate income areas and borrowers.  
Home City has received a "Satisfactory" examination rating under those 
regulations.

     Regulatory Capital Requirements.  Home City is required by OTS 
regulations to meet certain minimum capital requirements.  These requirements 
call for tangible capital of 1.5% of adjusted total assets, core capital 
(which for Home City is equal to tangible capital) of 3% of adjusted total 
assets, and risk-based capital (which for Home City consists of core capital 
and general valuation allowances) equal to 8% of risk-weighted assets.  Assets 
and certain off-balance-sheet items are weighted at percentage levels ranging 
from 0% to 100% depending on their relative risk.    

     The OTS has proposed to amend the core capital requirement so that those 
associations that do not have the highest examination rating and exceed an 
acceptable level of risk will be required to maintain core capital of from 4% 
to 5%, depending on the association's examination rating and overall risk.  
Home City does not anticipate that it will be adversely affected if the core 
capital requirement regulation is amended as proposed.  Home City's core 
capital ratio at June 30, 1997, was 15.5%.  For information concerning Home 
City's capital, see "ITEM SIX. Management's Discussion and Analysis or Plan of 
Operation - Liquidity an Capital Resources."

     The OTS has adopted an interest rate risk component to the risk-based 
capital requirement, though the implementation of that component has been 
delayed.  Pursuant to that requirement, a savings association would have to 
measure the effect of an immediate 200 basis point change in interest rates on 
the value of its portfolio as determined under the methodology of the OTS.  If 
the measured interest rate risk is above the level deemed normal under the 
regulation, Home City will be required to deduct one-half of such excess 
exposure from its total capital when determining its risk-based capital.  In 
general, an association with less than $300 million in assets and a risk-based 
capital ratio in excess of 12% will not be subject to the interest rate risk 
component, and Home City currently qualifies for such exemption.  Pending 
implementation of the interest rate risk component, the OTS has the authority 
to impose a higher individualized capital requirement on any savings 
association it deems to have excess interest rate risk.  The OTS also may 
adjust the risk-based capital requirement on an individualized basis to take 
into account risks due to concentrations of credit and non-traditional 
activities.

      The OTS has adopted regulations governing prompt corrective action to 
resolve the problems of capital deficient and otherwise troubled savings 
associations.  At each successively lower capital category, an institution is 
subject to more restrictive and numerous mandatory or discretionary regulatory 
actions or limits, and the OTS has less flexibility in determining how to 
resolve the problems of the institution.  In addition, the OTS can downgrade 
an association's designation notwithstanding its capital level, based on less 
than satisfactory examination ratings in areas other than capital or, after 
notice and an opportunity for hearing, if the institution is deemed to be in 
an unsafe or unsound condition or to be engaging in an unsafe or unsound 
practice.  Each undercapitalized association must submit a capital restoration 
plan to the OTS within 45 days after it becomes undercapitalized.  Such 
institution will be subject to increased monitoring and asset growth 
restrictions and will be required to obtain prior approval for acquisitions, 
branching and engaging in new lines of business.  A critically 
undercapitalized institution must be placed in conservatorship or receivership 
within 90 days after reaching such capitalization level, except under limited 
circumstances.  Home City's capital at June 30, 1997, met the standards for 
a well-capitalized association.
<PAGE>
     Federal law prohibits an insured institution from making a capital 
distribution to anyone or paying management fees to any person having control 
of the institution if, after such distribution or payment, the institution 
would be undercapitalized.  In addition, each company controlling an 
undercapitalized institution must guarantee that the institution will comply 
with the terms of an OTS-approved capital plan until the institution has been 
adequately capitalized on an average during each of four consecutive calendar 
quarters and must provide adequate assurances of performance.  The aggregate 
liability pursuant to such guarantee is limited to the lesser of (a) an amount 
equal to 5% of the institution's total assets at the time the institution 
became undercapitalized or (b) the amount which is necessary to bring the 
institution into compliance with all capital standards applicable to such 
institution at the time the institution fails to comply with its capital 
restoration plan.

     Limitations on Capital Distributions.  The OTS imposes various 
restrictions or requirements on the ability of associations to make capital 
distributions according to ratings of associations based on their capital 
level and supervisory condition.  Capital distributions, for purposes of such 
regulation, include, without limitation, payments of cash dividends, 
repurchases and certain other acquisitions by an association of its shares and 
payments to stockholders of another association in an acquisition of such 
other association.

     The first rating category is Tier 1, consisting of associations that, 
before and after the proposed capital distribution, meet their fully phased-in 
capital requirement.  Associations in this category may make capital 
distributions during any calendar year equal to the greater of 100% of its net 
income, current year-to-date, plus 50% of the amount by which the lesser of 
Home City's tangible, core or risk-based capital exceeds its fully phased-in 
capital requirement for such capital component, as measured at the beginning 
of the calendar year, or the amount authorized for a Tier 2 association.  The 
second category, Tier 2, consists of associations that, before and after the 
proposed capital distribution, meet their current minimum, but not fully 
phased-in capital requirement.  Associations in this category may make capital 
distributions up to 75% of their net income over the most recent four 
quarters.  Tier 3 associations do not meet their current minimum capital 
requirement and must obtain OTS approval of any capital distribution.  A Tier 
1 association deemed to be in need of more than normal supervision by the OTS 
may be treated as a Tier 2 or a Tier 3 association.

     Home City meets the requirements for a Tier 1 association and has not 
been notified of any need for more than normal supervision.  As a subsidiary 
of HCFC, Home City is required to give the OTS 30 days' notice prior 
to declaring any dividend on its common shares.  The OTS may object to the 
dividend during that 30-day period based on safety and soundness concerns.  
Moreover, the OTS may prohibit any capital distribution otherwise permitted by 
regulation if the OTS determines that such distribution would constitute an 
unsafe or unsound practice.

     Liquidity.  OTS regulations require that each savings association 
maintain an average daily balance of liquid assets (cash, certain time 
deposits, bankers' acceptances and specified United States government, state 
or federal agency obligations) equal to a monthly average of not less than 5% 
of its net withdrawable savings deposits plus borrowings payable in one year 
or less.  Federal regulations also require each member institution to maintain 
an average daily balance of short-term liquid assets of 1% of the total of its 
net withdrawable savings accounts and borrowings payable in one year or less.  
Monetary penalties may be imposed upon member institutions failing to meet 
these liquidity requirements.  The eligible liquidity of Home City, as 
computed under current regulations, at June 30, 1997, was approximately $5.9 
million, or 11.5%.

     Qualified Thrift Lender Test.  Savings associations are required to 
maintain a specified level of investments in assets that are designated as 
qualifying thrift investments ("QTIs").  Such investments are generally 
related to domestic residential real estate and manufactured housing and 
include stock issued by any FHLB, the FHLMC or the FNMA.  The QTL Test 
requires that 65% of an institution's "portfolio assets" (total assets less 
goodwill and other intangibles, property used to conduct business and 20% of 
liquid assets) consist of QTIs on a monthly average basis in 9 out of every 12 
months.  The OTS may grant exceptions to the QTL Test under certain 
circumstances.  If a savings association fails to meet the QTL Test, Home City 
and its holding company will be subject to certain operating restrictions.  A 
savings association that fails to meet the QTL Test will not be eligible for 
FHLB advances to the fullest possible extent.  See "Federal Home Loan Banks."  
Under recently enacted legislation, QTI's were expanded to include credit card 
and education loans without restriction, and the QTL Test could be met by 
qualifying as a "domestic building and loan" under the Code.  Under this test, 
at least 60% of an institution's assets (on a tax basis) must consist of 
specified assets (generally loans secured by residential property or deposits, 
education loans, cash and certain government obligations).  At June 30, 1997, 
Home City had QTIs equal to approximately 78.4% of its total portfolio assets.
<PAGE>
     Lending Limit.  OTS regulations generally limit the aggregate amount that 
a savings association can lend to one borrower to an amount equal to 15% of 
such association's total capital under the regulatory capital requirements 
plus any additional loan reserve not included in total capital.  A savings 
association may loan to one borrower an additional amount not to exceed 10% of 
total capital plus additional reserves if the additional loan amount is fully 
secured by certain forms of "readily marketable collateral."  Real estate is 
not considered "readily marketable collateral."  Certain types of loans are 
not subject to these limits.  In applying these limits, loans to certain 
borrowers may be aggregated.  Based on such limits, Home City was able to lend 
up to $1,614,000 to one borrower at June 30,1997.  Notwithstanding the specified
limits, an association may lend to one borrower up to $500,000 "for any 
purpose."  See "Description of Business  - Lending Activities."

     Transactions with Insiders and Affiliates.  Loans to executive officers, 
directors and principal shareholders and their related interests must conform 
to the lending limits on loans to one borrower and the total of such loans 
cannot exceed an association's total regulatory capital plus additional loan 
reserves (or 200% of such capital amount for qualifying institutions with less 
than $100 million in deposits).  Most loans to directors, executive officers and
principal shareholders must be approved in advance by a majority of the 
"disinterested" members of the board of directors of the association with any 
"interested" director not participating.  All loans to directors, executive 
officers and principal shareholders must be made on terms substantially the 
same as offered in comparable transactions to the general public or as offered
to all employees in a company-wide benefit program, and loans to executive 
officers are subject to additional limitations.  Home City was in 
compliance with such restrictions at June 30, 1997.   
 
     Savings associations must comply with Sections 23A and 23B of the Federal 
Reserve Act (the "FRA") pertaining to transactions with affiliates.  An 
affiliate of a savings association is any company or entity that controls, is 
controlled by or is under common control with the savings association.  HCFC 
is an affiliate of Home City.  Generally, Sections 23A and 23B of the FRA (i) 
limit the extent to which the savings institution or its subsidiaries may 
engage in "covered transactions" with any one affiliate to an amount equal to 
10% of such institution's capital stock and surplus, (ii) limit the aggregate 
of all such transactions with all affiliates to an amount equal to 20% of such 
capital stock and surplus, and (iii) require that all such transactions be on 
terms substantially the same, or at least as favorable to the institution, as 
those provided in transactions with a non-affiliate.  The term "covered 
transaction" includes the making of loans, purchase of assets, issuance of a 
guarantee and other similar types of transactions.  In addition to the limits 
in Sections 23A and 23B, a savings association may not make any loan or other 
extension of credit to an affiliate unless the affiliate is engaged only in 
activities permissible for a bank holding company and may not purchase or 
invest in securities of any affiliate except shares of a subsidiary.  Home City 
was in compliance with these requirements and restrictions at June 30, 1997.

     Holding Company Regulation.  HCFC is a savings and loan holding company 
within the meaning of the Home Owners' Loan Act (the "HOLA").  As such, HCFC 
has registered with the OTS and is subject to OTS regulations, examination, 
supervision and reporting requirements, in addition to the reporting 
requirements of the Securities and Exchange Commission (the "SEC").  Congress 
is considering legislation which may require that HCFC become subject to more 
restrictive holding company requirements, including capital requirements similar
to those imposed on Home City and more restrictive activity and investment 
limits than savings and loan holding companies.  No assurances can be given 
that such legislation will be enacted, and HCFC cannot be certain of the 
legislation's impact on its future operations until it is enacted.

     The HOLA generally prohibits a savings and loan holding company from 
controlling any other savings association or savings and loan holding company 
without prior approval of the OTS, or from acquiring or retaining more than 5% 
of the voting shares of a savings association or holding company thereof which 
is not a subsidiary.  Under certain circumstances, a savings and loan holding 
company is permitted to acquire, with the approval of the OTS, up to 15% of 
the previously unissued voting shares of an undercapitalized savings 
association for cash without such savings association being deemed to be 
controlled by the holding company.  Except with the prior approval of the OTS, 
no director or officer of a savings and loan holding company or person owning 
or controlling by proxy or otherwise more than 25% of such company's stock may 
also acquire control of any savings institution, other than a subsidiary 
institution, or any other savings and loan holding company.

     HCFC is a unitary savings and loan holding company.  There are generally 
no restrictions on the activities of a unitary savings and loan holding company,
and such companies are the only financial institution holding companies which 
may engage in commercial, securities and insurance activities without 
limitation.  Congress is considering, however, either limiting unitary savings 
and loan holding companies to the same activities as other financial institution
holding companies or permitting certain bank holding companies to engage in 
commercial activities and expanded securities and insurance activities.  HCFC 
<PAGE>
cannot predict if and in what form these proposals might become law.  The broad
latitude to engage in activities under current law can be restricted, however, 
if the OTS determines that there is reasonable cause to believe that the 
continuation by a savings and loan holding company of an activity constitutes 
a serious risk to the financial safety, soundness or stability of its 
subsidiary savings association.  The OTS may impose such restrictions as 
deemed necessary to address such risk, including limiting (i) payment of 
dividends by the savings association, (ii) transactions between the savings 
association and its affiliates, and (iii) any activities of the savings 
association that might create a serious risk that the liabilities of the 
holding company and its affiliates may be imposed on the savings association.  
Notwithstanding the foregoing rules as to permissible business activities of a 
unitary savings and loan holding company, if the savings association 
subsidiary of a holding company fails to meet the QTL Test, then such unitary 
holding company would become subject to the activities restrictions applicable 
to multiple holding companies.  At June 30, 1997, Home City met the QTL Test.  
See "Qualified Thrift Lender Test."

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

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

FDIC Regulations

     Deposit Insurance.  The FDIC is an independent federal agency that 
insures the deposits, up to prescribed statutory limits, of federally insured 
banks and thrifts and safeguards the safety and soundness of the bank and 
thrift industries.  The FDIC administers two separate insurance funds, the BIF 
for commercial banks and state savings banks and the SAIF for savings 
associations and banks that have acquired deposits from savings associations.  
The FDIC is required to maintain designated levels of reserves in each fund.  

     Prior to October 1, 1996, the reserves of the SAIF were below the level 
required by law because a significant portion of the assessments paid into the 
fund have been and are being used to pay the cost of prior thrift failures, 
while the reserves of the BIF met the level required by law in May 1995.  This 
resulted in a significant disparity between BIF and SAIF assessments during 
1996.

     Home City is a member of the SAIF and its deposit accounts are insured by 
the FDIC up to the prescribed limits.  The FDIC has examination authority over 
all insured depository institutions, including Home City, and has authority to 
initiate enforcement actions against federally-insured savings associations if 
the FDIC does not believe the OTS has taken appropriate action to safeguard 
safety and soundness and the deposit insurance fund.

     Assessments.  The FDIC is authorized to establish separate annual 
assessment rates for deposit insurance for members of the BIF and members of 
the SAIF.  The FDIC may increase assessment rates for either fund if necessary 
<PAGE>
to restore the fund's ratio of reserves to insured deposits to the target 
level within a reasonable time and may decrease such rates if such target 
level has been met.   

     Because of the differing reserve levels of the funds, deposit insurance
assessments paid by healthy savings associations were reduced significantly 
below the level paid by healthy savings associations effecitve in mid-1995. 
Assessments paid by healthy savings associations exceeded those paid by healthy
commercial banks by approximately $.19 per $100 in deposits in lat 1995.  Such
excess equaled approximately $.23 per $100 in deposits beginning in 1996.  This
premium disparity had a negative competitive impact on institutions insured in
the SAIF.

     Federal legislation, which was effective September 30, 1996, provided for
the recapitalization of the SAIF by means of a special assessment of $.657 per 
$100 of SAIF deposits held at March 31, 1995, in order to increase SAIF reserves
to the level required by law.  Certain banks holding SAIF deposits were required
to pay the same special assessment on 80% of deposits at March 31, 1995.  In
addition, the cost of prior thrift failures will be shared by both the SAIF and
the BIF.  As a result of such cost sharing, BIF assessments for healthy banks
in 1997 are $.013 per $100 in deposits and SAIF assessments for healthy 
institutions in 1997 are $.064 per $100 in deposits.

     Home City had $40.1 million in deposits at March 31, 1995.  Home City paid
a special assessment of $263,000 on November 27, 1996, which was recorded as of
September 30, 1996.  This assessment is tax-deductible and reduced income by 
$174,000 for the year ended June 30, 1997.

     The recapitalization plan also provides for the merger of the SAIF and 
BIF effective January 1, 1999, assuming there are no savings associations 
under federal law.  Under separate proposed legislation, Congress is 
considering the elimination of the federal thrift charter and the separate 
federal regulation of thrifts.  As a result, Home City would have to convert 
to a different financial institution charter and would be regulated under 
federal law as a bank, including being subject to the more restrictive 
activity limitations imposed on national banks.

     In addition, HCFC might become subject to more restrictive holding 
company requirements, including activity limits and capital requirements 
similar to those imposed on Home City.  HCFC cannot predict the impact of the 
conversion of Home City to, or regulation of Home City as, a bank until the 
legislation requiring such change is enacted.

FRB Regulations

     Reserve Requirements.  FRB regulations require savings associations to 
maintain reserves against their transaction accounts (primarily NOW accounts) 
of 3% of deposits in net transaction accounts for that portion of accounts 
up to $49.3 million (subject to an exemption of up to $4.4 million), and to 
maintain reserves of 10% of deposits in net transaction accounts against that 
portion of total transaction accounts in excess of $49.3 million.  These 
percentages are subject to adjustment by the FRB.  At June 30, 1997, Home City 
was in compliance with its reserve requirements.

Federal Home Loan Banks

     The FHLBs, under the regulatory oversight of the Federal Housing 
Financing Board, provide credit to their members in the form of advances.  
Home City is a member of the FHLB of Cincinnati and must maintain an 
investment in the capital stock of the FHLB of Cincinnati in an amount equal 
to the greater of 1.0% of the aggregate outstanding principal amount of Home 
City's residential mortgage loans, home purchase contracts and similar 
obligations at the beginning of each year, or 5% of its advances from the 
FHLB.  Home City is in compliance with this requirement with an investment in 
FHLB of Cincinnati stock of $423,000 at June 30, 1997. 

     FHLB advances to members such as Home City who meet the QTL Test are 
generally limited to the lower of (i) 25% of the member's assets or (ii) 20 
times the member's investment in FHLB stock.  At June 30, 1997, Home City's 
maximum limit on advances was approximately $8.5 million.  The granting of 
advances is subject also to the FHLB's collateral and credit underwriting 
guidelines.   

     Upon the origination or renewal of a loan or advance, the FHLB of 
Cincinnati is required by law to obtain and maintain a security interest in 
collateral in one or more of the following categories:  fully disbursed, whole 
first mortgage loans on improved residential property or securities 
representing a whole interest in such loans; securities issued, insured or 
guaranteed by the United States government or an agency thereof; deposits in 
any FHLB; or other real estate related collateral (up to 30% of the member 
association's capital) acceptable to the applicable FHLB, if such collateral 
has a readily ascertainable value and the FHLB can perfect its security 
interest in the collateral.
<PAGE>
     Each FHLB is required to establish standards of community investment or 
service that its members must maintain for continued access to long-term 
advances from the FHLBs.  The standards take into account a member's 
performance under the Community Reinvestment Act and its record of lending to 
first-time home buyers.  All long-term advances by each FHLB must be made only 
to provide funds for residential housing finance.

Taxation

Federal Taxation

     HCFC is subject to the federal tax laws and regulations which apply to 
corporations generally.  Home City is also subject to the federal tax laws and 
regulations which apply to corporations generally.  In addition to the regular
income tax, HCFC and Home City are subject to a minimun tax.  An alternative
minimum tax is imposed at a minimum tax rate of 20% on "alternative minimum
taxable income" (which is the sum of a corporation's regular taxable income, 
with certain adjustments, and tax preference items), less any available 
exemption.  Such tax preference items include interest on certain tax-exempt 
bonds issued after August 7, 1986.  In addition, 75% of the amount by which a
corporation's "adjusted current earnings" exceeds its alternative minimum 
taxable income computed without regard to this preference item and prior to 
reduction by net operating losses, is included in alternative minimum taxable
income.  Net operating losses can offset no more than 90% of alternative
minimum taxable income.  The alternative minimum tax is imposed to the extent
it exceeds the corporation's regular income tax.  Payments of alternative 
minimum tax may be used as credits against regular tax liabilities in future
years.  However, the Taxpayer Relief Act of 1997 repealed the alternative
minimum tax for certain "small corporations" for tax years beginning after 
December 31, 1997.  A corporation initially qualifies as a small corporation
if it had average gross receipts of $5 million or less for the three tax years
ending with its first tax year beginning after December 31, 1996.  Once a
corporation is recognized as a small corporation, it will continue to be exempt 
from the alternative minimum tax for as long as its average gross receipts for
the prior three-year period does not exceed $7.5 million.  In determining if a
corporation meets this requirement, the first year that it achieved small
corporation status is not taken into consideration.

     Home City's average gross receipts for the tax years ending on December
31, 1996, is $4.3 million, and as a result, Home City does qualify as a small 
corporation exempt from the alternative minimum tax.

     Prior to the enactment of the Small Business Jobs Protection Act, which 
was signed into law on August 21, 1996, certain institutions, such as Home City,
were allowed deductions for bad debts under methods more favorable to those 
granted to other taxpayers.  Qualified thrift institutions could compute 
deductions for bad debts using either the specific charge-off method of 
Section 166 of the Code or the reserve method of Section 593 of the Code.
The reserve methods under Section 593 of the Code permitted a thrift institution
annually could elect to deduct bad debts under either (i) the "percentage of 
taxable income" method applicable only to thrift institutions, or (ii) the 
"experience" method that also was available to small banks.  Under the 
"percentage of taxable income" method, a thrift institution generally was 
allowed a deduction for an addition to its bad debt reserve equal to 8% of its 
taxable income (determined without regard to this deduction and with additional 
adjustments).  Under the experience method, a thrift institution was generally 
allowed a deduction for an addition to its bad debt reserve equal to the greater
of (i) an amount based on its actual average experience for losses in the 
current and five preceding taxable years, or (ii) an amount necessary to restore
the reserve to its balance as of the close of the base year.  A thrift 
institution could elect annually to compute its allowable addition to bad debt 
reserves for qualifying loans either under the experience method or the 
percentage of taxable income method.  For tax years 1993, 1992 and 1991, Home 
City used the percentage of taxable income method.

     The Act eliminated the percentage of taxable income method of accounting
for bad debts by thrift institutions, effective for taxable years beginning 
after 1995.  Thrift institutions that are trreated as small banks are allowed
to utilize the experience method applicable to such institutions, while thrift
institutions that are treated as large banks are required to use only the 
specific charge off method.

     A thrift institution required to change its method of computing reserves 
for bad debt will treat such change as a change in the method of accounting, 
initiated by the taxpayer, and having been made with the consent of the 
Secretary of the Treasury.  Section 481(a) of the Code requires amounts to be 
recaptured with respect to such change.   Generally, the amounts to be 
recaptured will be determined solely with respect to the "applicable excess 
reserves" of the taxpayer.  The amount of the applicable excess reserves will 
be taken into account ratably over a six-taxable-year period, beginning with 
the first taxable year beginning after 1995, subject to the residential loan 
requirement described below.  In the case of a thrift institution that becomes 
a large bank, the amount of the institution's applicable excess reserves 
generally is the excess of (i) the balances of its reserve for losses on 
qualifying real property loans (generally loans secured by improved real estate)
and its reserve for losses on nonqualifying loans (all other types of loans) as 
of the close of its last taxable year beginning before January 1, 1996, over 
(ii) the balances of such reserves as of the close of its last taxable year 
beginning before January 1, 1988 (i.e., the "pre-1988 reserves").  In the case 
of a thrift institution that is treated as a small bank, like Home City, the 
amount of the institution's applicable excess reserves generally is the excess 
of (i) the balances of its reserve for losses on qualifying real property loans
<PAGE>
and its reserve for losses on nonqualifying loans as of the close of its last 
taxable year beginning before January 1, 1996, over (ii) the greater of the 
balance of (a) its pre-1988 reserves or (b) what the thrift's reserves would 
have been at the close of its last year beginning before January 1, 1996, had 
the thrift always used the experience method.

     For taxable years that begin after December 31, 1995, and before January 
1, 1998, if a thrift meets the residential loan requirement for a tax year, 
the recapture of the applicable excess reserves otherwise required to be taken 
into account as a Code Section 481(a) adjustment for the year will be 
suspended.  A thrift meets the residential loan requirement if, for the tax 
year, the principal amount of residential loans made by the thrift during the 
year is not less then its base amount.  The "base amount" generally is the 
average of the principal amounts of the residential loans made by the thrift 
during the six most recent tax years beginning before January 1, 1996.  A 
residential loan is a loan as described in Section 7701(a)(19)(C)(v) 
(generally a loan secured by residential real and church property and certain 
mobile homes), but only to the extent that the loan is made to the owner of 
the property to acquire, construct or improve the property.

     The balance of the pre-1988 reserves is subject to the provisions of 
Section 593(e) as modified by the Act,  which requires recapture in the case 
of certain excessive distributions to shareholders.  The pre-1988 reserves may 
not be utilized for payment of cash dividends or other distributions to a share-
holder (including distributions in dissolution or liquidation) or for any other 
purpose (except to absorb bad debt losses).  Distribution of a cash dividend 
by a thrift institution to a shareholder is treated as made:  first, out of the 
institution's post-1951 accumulated earnings and profits; second, out of the 
pre-1988 reserves; and third, out of such other accounts as may be proper.  To 
the extent a distribution by Home City to HCFC is deemed paid out of its 
pre-1988 reserves under these rules, the pre-1988 reserves would be reduced and 
the income of Home City for tax purposes would be increased by the amount which,
when reduced by the income tax, if any, attributable to the inclusion of such 
amount in its gross income, equals the amount deemed paid out of the pre-1988 
reserves.  As of June 30, 1996, the pre-1988 reserves of Home City for tax 
purposes totaled approximately $1.1 million.  Home City believes it had 
approximately $4.4 million of accumulated earnings and profits for tax purposes 
as of June 30, 1996, which would be available for dividend distributions, 
provided regulatory restrictions applicable to the payment of dividends are met.
No representation can be made as to whether Home City will have current or 
accumulated earnings and profits in subsequent years.

     The tax returns of Home City have been audited or closed without audit 
through fiscal year 1993.  In the opinion of management, any examination of 
open returns would not result in a deficiency which could have a material 
adverse effect on the financial condition of Home City.

Ohio Taxation

     HCFC is subject to the Ohio corporation franchise tax, which, as applied 
to HCFC, is a tax measured by both net earnings and net worth.  The rate of 
tax is the greater of (i) 5.1% on the first $50,000 of computed Ohio taxable 
income and 8.9% of computed Ohio taxable income in excess of $50,000 or (ii) 
0.582% times taxable net worth.  For tax year beginning after December 31, 1998,
the rate of tax is the greater of (i) 5.1% on the first $50,000 of computed
Ohio taxable income and 8.5% of computed Ohio taxable income in excess of 
$50,000 of (ii) 0.4000% time taxable net worth.

     In computing its tax under the net worth method, HCFC may exclude 100% of 
its investment in the capital stock of Home City, as reflected on the balance 
sheet of HCFC, in computing its taxable net worth as long as it owns at least 
25% of the issued and outstanding capital stock of Home City.  The calculation 
of the exclusion from net worth is based on the ratio of the excludable 
investment (net of any appreciation or goodwill included in such investment) to 
total assets multiplied by the net value of the stock.  As a holding company, 
HCFC may be entitled to various other deductions in computing taxable net worth 
that are not generally available to operating companies.

     A special litter tax is also applicable to all corporations, including 
HCFC, subject to the Ohio corporation franchise tax other than "financial 
institutions."  If the franchise tax is paid on the net income basis, the 
<PAGE>
litter tax is equal to .11% of the first $50,000 of computed Ohio taxable 
income and .22% of computed Ohio taxable income in excess of $50,000.  If the 
franchise tax is paid on the net worth basis, the litter tax is equal to .014% 
times taxable net worth.

     Home City is a "financial institution" for State of Ohio tax purposes.  
As such, it is subject to the Ohio corporate franchise tax on "financial 
institutions," which is imposed annually at a rate of 1.5% of Home City's book 
net worth determined in accordance with GAAP.  For tax year 1999, however,
the franchise tax on financial institutions will be 1.4% of the book net worth
and for tax year 2000 and years thereafter the tax will be 1.3% of the book net
worth.  As a "financial institution," Home City is not subject to any tax based 
upon net income or net profits imposed by the State of Ohio.

Impact of Recent Accounting Pronouncements

     SFAS No. 128, "Earnings Per Share."  In February 1997, the Financial 
Accounting Standards Board ("FASB") issued SFAS No. 128, "Earnings Per 
Share."  This statement established standards for computing and presenting 
earnings per share ("EPS") and applies to entities with publicly held common 
stock or potential common stock.  This statement simplifies the standards for 
computing earnings per share previously in APB Opinion No. 15, "Earnings Per 
Share", and makes them comparable to international EPS standards.  It replaces 
the presentation of primary EPS with presentation of basic EPS.  It also 
requires dual presentation of basic and diluted EPS on the face of the income 
statement for all entities with complex capital structures and requires a 
reconciliation of the numerator and the denominator of the basic EPS 
computation to the numerator and denominator of the diluted EPS computation.  
This statement is effective for financial statements issued for periods ending 
after December 15, 1997, including interim periods; earlier application is not 
permitted.  This statement requires restatement of all prior period EPS data 
presented.  HCFC has not yet determined the effect, if any, the adoption of 
this statement will have on its EPS disclosure.

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

     The statement also requires that an enterprise (a) classify items of 
other comprehensive income by their nature in a financial statement and (b) 
display the accumulated balance of other comprehensive income separately from 
retained earnings and additional paid-in capital in the equity section of 
statements of financial position.

     This statement is effective for fiscal years beginning after December 15, 
1997.  Reclassification of financial statements for earlier periods provided 
for comparative purposes is required.

     SFAS No. 131, "Disclosures about Segments of an Enterprise and Related 
Information."  In June 1997, the FASB issued SFAS No. 131, "Disclosures about 
Segments of an Enterprise and Related Information."  This statement 
establishes standards for the way that public business enterprises report 
information about operating segments in annual financial statements and 
requires that those enterprises report selected information about operating 
segments in interim financial reports issued to shareholders.  It also 
establishes standards for related disclosures about products and services, 
geographic areas, and major customers.  

     This statement requires that a public business enterprise report 
financial and descriptive information about its reportable segments and 
requires that a public business enterprise report a measure of segment profit 
or loss, certain specific revenue and expense items, and segment assets.  It 
also requires a reconciliation of segment information presented to 
corresponding amounts in the enterprise's general-purpose financial 
statements.

     This statement is effective for financial statements for periods 
beginning after December 15, 1997.  In the initial year of application, 
comparative information for earlier years is to be restated.  This statement 
need not be applied to interim financial statements in the initial year of its 
application, but comparative information for interim periods in the initial 
year of application is to be reported in financial statements for interim 
periods in the second year of application.
<PAGE>
Impact of Inflation and Changing Prices 

     The consolidated financial statements and notes thereto included herein 
have been prepared in accordance with GAAP, which requires HCFC to measure 
financial position and operating results in terms of historical dollars, with 
the exception of investment securities available-for-sale, which are carried 
at fair value.  Changes in the relative value of money due to inflation or 
recession are generally not considered.

     In management's opinion, changes in interest rates affect the financial 
condition of a financial institution to a far greater degree than changes in 
the rate of inflation.  While interest rates are greatly influenced by changes 
in the rate of inflation, they do not change at the same rate or in the same 
magnitude as the rate of inflation.  Rather, interest rate volatility is based 
on changes in the expected rate of inflation, as well as changes in monetary 
and fiscal policies.


ITEM 2. Properties

     Home City's office is located at 63 West Main Street, Springfield, Ohio 
45502.  Such property is owned by Home City.  HCFC operates out of Home City's 
office.  HCFC reimburses Home City for the fair value of the space occupied.

     The following table sets forth certain information at June 30, 1997, 
regarding the ownership by Home City of the land, building, and improvements 
at 63 West Main Street, Springfield, Ohio, the office of Home City:
<TABLE>
<CAPTION>
              Year               Square                  Net
            acquired             footage             book value <F1>
            ________             _______             _______________
<S>         <C>                  <C>                 <C>
              1975                5,839                  $366,000
<FN>                                                    
<F1>
At June 30, 1997, Home City's properties and equipment had a total net book 
value of $488,000.  For additional information regarding Home City's properties
and equipment, see Notes A and E of Notes to Financial Statements.
</FN>


ITEM 3. Legal Proceedings

     On September 23, 1996, a civil suit was filed in the Common Pleas Court 
of Clark County, Ohio, against Home City, Douglas L. Ulery, President of Home 
City, and two other individuals (the "Other Individuals") by a Springfield, 
Ohio, church (the "church"), which obtained a mortgage loan from Home City, 
and two members of the Church.  Among other allegations in the lawsuit, the 
plaintiffs allege that the Other Individuals wrongfully represented to Mr. 
Ulery that they were the newly elected officers of the Church; that Mr. Ulery 
allowed the Other Individuals access to confidential information about the 
Church; and that, as a result, Church membership and income decreased.  The 
plaintiffs are seeking damages in an amount not less than $10,000.  Home City 
and Mr. Ulery filed an Answer to the Complaint on October 24, 1996, denying 
the substantive allegations contained in the Complaint and raising a number of 
affirmative defenses.

     Neither Home City nor HCFC is not presently involved in any other legal 
proceedings of a material nature.  From time to time, Home City is party to 
legal proceedings incidental to its business to enforce its security interest 
in collateral pledged to secure loans made by Home City.


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

     Not Applicable.
<PAGE>

                                      PART II


ITEM 5. Market for Common Equity and Related Stockholder Matters

    There were 904,590 common shares of HCFC outstanding on August 31, 1997, 
held of record by approximately 364 shareholders.  Price information with 
respect to HCFC's common shares is quoted on The Nasdaq Small Cap Market 
("Nasdaq") under the symbol "HCFC."  The high and low trading prices for the 
common shares of HCFC, as quoted by Nasdaq, by quarter are shown below.  HCFC 
declared a cash dividend of $0.08 per share on each of March 18, 1997, and 
May 20, 1997.

</TABLE>
<TABLE>
<CAPTION>
        December 31, 1996         March 31, 1997         June 30, 1997     
        _________________         ______________         _____________
<S>     <C>                       <C>                    <C>
High         $13.250                  $14.250                $14.438
Low          $12.000                  $12.000                $12.750
</TABLE>

     The income of HCFC consists of dividends that may periodically be 
declared and paid by the Board of Directors of Home City on the common shares 
of Home City held by HCFC and earnings on the $3.8 million in net proceeds 
retained by HCFC from the sale of HCFC's common shares in connection with the 
Conversion.  In addition to certain federal income tax considerations, OTS 
regulations impose limitations on the payment of dividends and other capital 
distributions by savings associations.

     Under OTS regulations applicable to converted savings associations, Home 
City is not permitted to pay a cash dividend on its common shares if the 
regulatory capital of Home City would, as a result of the payment of such 
dividend, be reduced below the amount required for the liquidation account 
(which was established for the purpose of granting a limited priority claim on 
the assets of Home City, in the event of a complete liquidation, to those 
members of Home City before the Conversion who maintain a savings account at 
Home City after the Conversion) or applicable regulatory capital requirements 
prescribed by the OTS.

     OTS regulations applicable to all savings associations provide that a 
savings association that immediately prior to, and on a pro forma basis after 
giving effect to, a proposed capital distribution (including a dividend) has 
total capital (as defined by OTS regulations) that is equal to or greater than 
the amount of its capital requirements is generally permitted without OTS 
approval (but subsequent to 30 days' prior notice to the OTS) to make capital 
distributions, including dividends, during a calendar year in an amount not to 
exceed the greater of (1) 100% of its net earnings to date during the calendar 
year, plus an amount equal to one-half the amount by which its total capital 
to assets ratio exceeded its required capital to assets ratio at the beginning 
of the calendar year, or (2) 75% of its net earnings for the most recent 
four-quarter period.  Savings associations with total capital in excess of the 
capital requirements that have been notified by the OTS that they are in need 
of more than normal supervision will be subject to restrictions on dividends.  
A savings association that fails to meet current minimum capital requirements 
is prohibited from making any  capital distributions  without prior approval 
of the OTS.  Home City currently meets all of its regulatory capital 
requirements and, unless the OTS determines that Home City is an institution 
requiring more than normal supervision, Home City may pay dividends in 
accordance with the foregoing provisions of the OTS regulations.

     
ITEM 6. Management's Discussion and Analysis or Plan of Operation

General

     Home City Federal Savings Bank of Springfield ("Home City" or the 
"Company") converted from a federally insured mutual federal savings bank to a 
federally insured stock federal savings bank (the "Conversion") on December 
30, 1996.  In connection with the Conversion, 952,200 common shares of Home 
City Financial Corporation ("HCFC" or the "Corporation") were sold, generating 
net proceeds of $8.3 million after conversion expenses.  Of this amount, $4.6 
million was utilized to purchase 100% of the common stock of the Company, and 
the balance was utilized to purchase investments, loan funds to the Home City 
Financial Corporation Employee Stock Ownership Plan (the "ESOP"), and for 
other purposes.

     The following discussion and analysis of the financial condition and 
results of operations of HCFC and Home City should be read in conjunction with 
and with reference to the consolidated financial statements, and the notes 
thereto, presented in the Annual Report.
<PAGE>
     HCFC was incorporated for the purpose of owning all of the outstanding 
common shares of Home City  following the Conversion.  As a result, the 
discussion and analysis that follows pertains primarily to the financial 
condition of HCFC on a consolidated basis and to the results of operations of 
Home City.

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

     Without limiting the generality of the foregoing, some of the statements 
in the referenced sections of this discussion and analysis are forward-looking 
and are, therefore, subject to such risks and uncertainties:

     1.Management's determination of the amount of the allowance for loan 
losses as set forth under the captions "Financial Condition," "Comparison of 
Results of Operations for the Years Ended June 30, 1997 and 1996," and 
"Comparison of Results of Operations for the Years Ended June 30, 1996 and 
1995;"
     
     2.Management's discussion of the liquidity of Home City's assets and the 
regulatory capital of Home City as set forth under "Liquidity and Capital 
Resources;"

     3.Management's analysis of the interest rate risk of Home City as set 
forth under "Asset and Liability Management;" and

     4.The discussion of the anticipated effect of legislation that may be 
enacted as set forth under "Impact of Pending Legislation."

Financial Condition

     The Corporation's consolidated total assets amounted to $70.0 million at 
June 30, 1997, an increase of $14.2 million, or 25.55%, over the $55.7 million 
in total assets at June 30, 1996.  Such increase in assets was funded 
primarily by the $8.3 million in net proceeds from the Corporation's offering 
of common shares in connection with the Conversion, $3.1 million net increase 
in deposits, $2.2 million increase in advances from the Federal Home Loan Bank 
(the "FHLB"), and undistributed net earnings of $358,000.

     Cash and cash equivalents, time deposits and investment securities 
totaled $11.1 million at June 30, 1997, an increase of $5.6 million, or 
101.48%, over June 30, 1996, levels.  During the fiscal year ended June 30, 
1997, $7.0 million of investment securities were purchased, which consisted 
primarily of U.S. government obligations totaling $1.5 million, U. S. federal 
agency obligations totaling $5.5 million, and  equity securities totaling 
$28,000.  These purchases were funded primarily with the proceeds from the 
Conversion and $1.1 million from maturing investment securities.

     Mortgage-backed securities totaled $730,000 at June 30, 1997, a decrease 
of $2.2 million from June 30, 1996.  Due to the composition of the 
mortgage-backed securities portfolio, a large number of issues with a 
relatively small dollar value, the majority of the issues were sold and the 
proceeds utilized to fund current loan demand.

     Loans receivable totaled $56.0 million at June 30, 1997, an increase of 
$10.8 million, or 23.90%, from the $45.2 million total at June 30, 1996.  
During fiscal 1997, loan disbursements amounted to $21.5 million.  Such 
disbursements were partially offset by principal repayments of $10.9 million.

     Home City's allowance for loan losses totaled $445,000 at June 30, 1997, 
which represented 0.79% of total loans and 106.97% of non-performing loans.  
At June 30, 1996, the allowance for loan losses totaled $362,000, which 
represented 0.79% of total loans and 146.56% of non-performing loans.
   
     Non-performing loans amounted to $416,000 and $247,000 at June 30, 1997 
and 1996, respectively, and represent 0.59% and 0.44% of total assets at each 
date.  The increase in fiscal 1997 was due primarily to $325,000 in loans that 
became classified as non-performing, less $100,000 in loans that were paid 
off, $52,000 in loans that became classified as performing and $4,000 in 
principal reductions, for a net of $169,000.  All loans classified as 
non-performing at June 30, 1997, were either under a workout plan or  being 
refinanced elsewhere, the underlying collateral was in the process of being 
<PAGE>
sold or foreclosure action was being initiated.  Although management believes 
that its allowance for loan losses at June 30, 1997, was adequate based upon 
the facts and circumstances available to it, there can be no assurance that 
additions to such allowance will not be necessary in future periods, which 
could affect the Corporation's results of operations.

     Deposits totaled $50.2 million at June 30, 1997, an increase of $3.1 
million, or 6.47%, from $47.2 million at June 30, 1996.  The increase is 
consistent with the deposit growth trends that the Company has been 
experiencing over the past several years net of the funds on deposit utilized 
by customers to purchase common shares of HCFC in the Conversion.  Home City 
has generally not engaged in sporadic increases or decreases in interest rates 
paid or offered the highest rates available in its deposit market.


Comparison of Results of Operations for the Years Ended June 30, 1997 and 1996


     General .  Net income for the fiscal year ended June 30, 1997, amounted 
to $577,000, an increase of $63,000, or 12.26%, over the $514,000 in net 
income recorded in fiscal 1996.  The overall increase in net interest income 
reflects primarily  management's deployment of the net proceeds from the 
Conversion. The increase in net income resulted primarily from a $428,000 
increase in net interest income, a $3,000 increase in noninterest income and a 
$31,000 decrease in federal income tax expense, which was partially offset by 
a $392,000 increase in noninterest expense.

     Net Interest Income.  Net interest income totaled $2.4 million for the 
fiscal year ended June 30, 1997, an increase of $428,000, or 21.78%, over the 
$2.0 million recorded in fiscal 1996.  Interest income on loans increased by 
$640,000, or 15.63%, during fiscal 1997 due primarily to an increase in the 
average balance of the loans outstanding of $7.7 million, or 17.55%, coupled 
with a 15 basis point (100 basis points equals one percent) decrease in yield 
from 9.37% in fiscal 1996 to 9.22% in fiscal 1997.  Interest income on 
mortgage-backed securities decreased by $75,000, or 35.89%, due primarily to a 
$1.4 million, or 40.94%, decrease in the average balance of mortgage-backed 
securities outstanding, coupled with an increase in the weighted-average yield 
year-to-year, from 6.19% in fiscal 1996 to 6.74% in fiscal 1997.  Interest 
income on investment securities  increased by $148,000, or 133.33%, for the 
fiscal year ended June 30, 1997, compared to fiscal 1996, as the average 
balance increased by $2.8 million year to year and the related yield decreased 
by 41 basis points to 5.55% in fiscal 1997.  Interest income on 
interest-bearing deposits, federal funds sold, and time deposits increased by 
$11,000, $2,000, and $78,000, respectively, for the fiscal year ended June 30, 
1997, compared to 1996.  The average balance of interest-bearing demand 
deposits increased $251,000, or 38.73%.  The average balance invested in 
federal funds sold increased by $81,000, or 11.88%, compared to fiscal 1996, 
while the average balance of time certificates increased $1.1 million, or 
158.32%.  The yield on interest-bearing deposits decreased 11 basis points to 
4.78%, while the yield on federal funds sold decreased 26 basis points to 
5.13% and the time deposit yield increased 224 basis points to 5.72%.

     Interest expense on deposits increased by $316,000, or 13.33%, during 
fiscal 1997, due primarily to an increase in the average balance of deposits 
outstanding of $4.8 million, or 10.79%, coupled with an increase in the 
weighted-average rate from 5.37% in fiscal 1996 to 5.50% in fiscal 1997.  
Interest expense on FHLB advances increased by $60,000, or 34.88%, primarily 
due to an increase in the average balance of advances outstanding of $978,000, 
or 37.82%, coupled with a decrease in weighted-average rate from 6.64% in 
fiscal 1996 to 6.50% in fiscal 1997.

     As a result of the foregoing changes in interest income and interest 
expense, net interest income increased by $428,000, or 21.78%, during fiscal 
1997, as compared to fiscal 1996.  The interest rate spread decreased by 32 
basis points, to 3.08% for fiscal 1997, as compared to 3.40% for fiscal 1996, 
while the net interest margin increased by 3  basis points to 3.89% for fiscal 
year ended June 30, 1997. 

     Provision for Loan Losses.  Home City maintains an allowance for loan 
losses in an amount which, in management's judgment, is adequate to absorb 
reasonably foreseeable losses inherent in the loan portfolio.  The provision 
for loan losses is determined by management as the amount to be added to the 
allowance for loan losses, after net charge-offs have been deducted, to bring 
the allowance to a level which is considered adequate to absorb losses 
inherent in the loan portfolio in accordance with generally accepted 
accounting practices ("GAAP").  The amount of the provision is based on 
management's regular review of the loan portfolio and consideration of such 
factors as historical loss experience, generally prevailing economic 
conditions, changes in the size and composition of the loan portfolio and 
considerations relating to specific loans, including the ability of the 
borrower to repay the loan and the estimated value of the underlying 
collateral.  Although management utilizes its best judgment and information 
available, the ultimate adequacy of the allowance is dependent upon a variety 
of factors, including the performance of Home City's loan portfolio, the 
economy, changes in real estate values and interest rates and regulatory 
<PAGE>
requirements regarding asset classifications.  As a result of its analysis, 
management concluded that the allowance was adequate as of June 30, 1997.  
There can be no assurance that the allowance will be adequate to cover future 
losses on non-performing assets.

     Home City had net recoveries of $26,000 during the fiscal year ended June 
30, 1997, and net charge-offs of  $7,000 and $19,000 during the fiscal years 
ended June 30, 1996  and 1995, respectively.  Home City's charge-off history 
is a product of a variety of factors, including Home City's underwriting 
guidelines and the composition of its loan portfolio.  Loans secured by real 
estate make up 95% of Home City's loan portfolio, and loans secured by first 
mortgages on one- to four-family residential real estate make up 65% of total 
loans at June 30, 1997.  Such loans typically present less risk to a lender 
than loans which are not secured by real estate.  Substantially all of Home 
City's loans are secured by properties in its primary market area.  The 
provision for loan losses was $57,000, $50,000 and $109,000 for the fiscal 
years ended June 30, 1997, 1996 and 1995, respectively.  The ratio of 
non-performing loans to total loans increased to 0.74% in fiscal 1997 from 
0.54% in fiscal 1996, and from  0.53% in fiscal 1995.  At June 30, 1997, 1996 
and 1995, respectively, Home City had ratios of allowance for loan losses to 
total loans of 0.79%, 0.79%, and 0.81% and ratios of allowance for loan losses 
to non-performing loans of 106.97%, 146.56%, and 154.11%.  Due to such ratios 
of non-performing loans to total loans, historical charge-offs, delinquency 
history, and the addition of  consumer installment lending the provisions of 
$57,000,  $50,000 and $109,000 made in 1997, 1996 and 1995, were deemed 
appropriate by management to absorb reasonably foreseeable loan losses.   
 
     Noninterest Income.  Noninterest income totaled $61,000 for the fiscal 
year ended June 30, 1997, an increase of $3,000, or 5.17%, from the $58,000 
recorded in fiscal 1996.  The increase resulted primarily from increases of 
$15,000 in income from life insurance policies, $3,000 in service charges on 
deposit accounts, and $4,000 of other miscellaneous fee income offset by an 
increase of $19,000 in losses recognized on the sale of mortgage-backed 
securities.

     Noninterest Expense.  Noninterest expense increased by $392,000, or 
32.24%, to a total of $1.6 million for the fiscal year ended June 30, 1997, as 
compared to fiscal 1996.  The increase resulted primarily from a $263,000 
deposit insurance assessment paid as a result of legislation enacted to 
recapitalize the Savings Association Insurance Fund, coupled with an $88,000, 
or 16.54%, increase in salaries and employee benefits, a $54,000, or 75.00%, 
increase in franchise taxes, and a $44,000, or 40.00%, increase in legal, 
accounting and examination expenses.  The increase in salaries and employee 
benefits resulted primarily from costs associated with staff additions, the 
Home City Financial Corporation Employee Stock Ownership Plan, and normal 
merit increases for existing employees.  The increase in noninterest expense 
was due primarily to additional taxes, professional fees and printing, and 
other expenses related to the reporting requirements of a public company.

     Federal Income Taxes.  The provision for federal income taxes totaled $ 
212,000 for the fiscal year ended June 30, 1997, a decrease of $31,000, or 
12.76%, from the $243,000 provision recorded in fiscal 1996. HCFC's effective 
tax rate declined from 32.10% in 1996 to 26.66% in 1997 which was primarily 
the result of tax-exempt income from investments and deferred loan costs.  


Comparison of Results of Operations for the Years Ended June 30, 1996 and 1995


     General .  Home City's net income for the fiscal year ended June 30, 
1996, amounted to $514,000, a decrease of $41,000, or 7.39%, from the $555,000 
in net income recorded in fiscal 1995, reflecting primarily increases in 
loans, deposits and the weighted average rate paid on deposits.  The decrease 
in net income resulted primarily from a $218,000 increase in noninterest 
expense, which was partially offset by a $72,000 increase in net interest 
income and a $59,000 decrease in provision for loan losses.  

     Net Interest Income.  Net interest income totaled $2.0 million for the 
fiscal year ended June 30, 1996, an increase of $72,000, or 3.80%, over the 
$1.9 million recorded in fiscal 1995, reflecting primarily an increase in 
loans and an increase in deposits and an increase in the weighted-average 
rates paid on deposits.  Interest income on loans increased by $750,000, or 
22.43%, during fiscal 1996 due primarily to an increase in the average balance 
of the loans outstanding of $8.6 million, or 24.37%, coupled with a 15 basis 
point decrease in yield from 9.52% in fiscal 1995 to 9.37% in fiscal 1996.  
Interest income on mortgage-backed securities decreased by $65,000, or 23.72%, 
due primarily to a $579,000, or 14.67%, decrease in the average balance of 
mortgage-backed securities outstanding, coupled with a decrease in the 
weighted-average yield year-to-year, from 6.94% in fiscal 1996 to 6.19% in 
fiscal 1996.  Interest income on investment securities decreased $20,000, or 
15.27%, as the average balance decreased by $810,000, or 30.25%, being offset 
by the increase in yield of 107 basis points to 5.96% from 4.89 %.  Time 
deposit income increased by $18,000, or 300.00%, as a result of the average 
balance increase of $507,000, or 275.54%, and the yield on time deposits also 
<PAGE>
increased by 20 basis points to 3.48%.  The average balance of federal funds 
sold decreased by $478,000, or 41.21%, with the yield on federal funds sold 
decreased by 2 basis points to 5.39%.  The average balance of  
interest-bearing demand deposits increased by $330,000, or 103.77%, for the 
fiscal year ended June 30, 1996, compared to fiscal 1995, as the yield 
declined to 4.89% from 5.35%.  

     Interest expense on deposits increased by $535,000, or 29.16%, during 
fiscal 1996, due primarily to an increase in the average balance of deposits 
outstanding of $5.9 million, or 15.56%, coupled with an increase in the 
weighted-average rate from 4.81% in fiscal 1995 to 5.37% in fiscal 1996.  
Interest expense on FHLB advances increased by $65,000, or 60.75%, due 
primarily to an increase in the average balance of advances outstanding of 
$958,000, or 58.85%, as FHLB advances were used to fund loan demand, coupled 
with an increase in weighted-average rate from 6.57% to 6.64% in fiscal 1996.

     As a result of the foregoing changes in interest income and interest 
expense, net interest income increased by $72,000, or 3.80%, during fiscal 
1996, as compared to fiscal 1995.  The net interest rate spread decreased by 
55 basis points, to 3.40% for fiscal 1996, as compared to 3.95% for fiscal 
1995, while the net interest margin decreased by 50 basis points to 3.86% for 
the fiscal year ended June 30, 1996.  

     Noninterest Income.  Noninterest income totaled $58,000 for the fiscal 
year ended June 30, 1996, an increase of $49,000, or 544.44%, from the $9,000 
recorded in fiscal 1995.  The increase resulted primarily from an increase of 
$46,000 in income from life insurance policies which Home City maintains on 
four directors to fund a deferred compensation plan for directors' fees, and 
an increase of $3,000 in other miscellaneous fee income.  

     Noninterest Expense.  Noninterest expense increased by $218,000, or 
21.84%, to a total of $1.2 million for the fiscal year ended June 30, 1996, as 
compared to fiscal 1995.  The increase resulted primarily from a $134,000, or 
33.67%, increase in salaries and employee benefits, and a $27,000, or 32.53%, 
increase in legal, accounting and examination expenses.  The increase in 
salaries and employee benefits resulted primarily from the adoption in 
September 1995, of a deferred compensation plan for directors' fees, an 
increase in Home City's required payment toward the funding of a 
multi-employer pension plan due to such pension plan no longer being 
overfunded, as it was in 1995, staff expansion and normal pay increases of 2% 
to 3%.  Federal deposit insurance premiums increased $13,000 to $96,000 
primarily as a result of an increase in Home City's deposit base.  

     Federal Income Taxes.  The provision for federal income taxes totaled $ 
243,000 for the fiscal year ended June 30, 1996, an increase of $3,000, or 
1.25%, over the $240,000 provision recorded in fiscal 1995.  The effective tax 
rates were 32.10% and 30.20% for the fiscal years ended June 30, 1996 and 
1995, respectively.
<PAGE>
Yields Earned and Rates Paid

     The following table presents certain information relating to HCFC's 
average balance sheet information and reflects the average yield on interest-
earning assets and the average cost of customer deposits and FHLB advances for 
the periods indicated.  Such yields and costs are derived by dividing annual 
income or expense by the average monthly balance of interest-earning assets or 
customer deposits and FHLB advances, respectively, for the years presented.  
Average balances are derived from daily balances, which included nonaccruing 
loans in the loan portfolio, net of the allowance for loan losses.
<TABLE>
<CAPTION>
                                                                       Year ended June 30,
                                   ___________________________________________________________________________________________
                                                 1997                           1996                           1995
                                   _____________________________  _____________________________  _____________________________
                                     Average    Interest            Average    Interest            Average    Interest
                                   outstanding   earned/  Yield/  outstanding   earned/  Yield/  outstanding   earned/  Yield/
                                     balance     paid     rate      balance     paid     rate      balance     paid     rate
                                     _______     ____     ____      _______     ____     ____      _______     ____     ____
                                                                           (Dollars in thousands)
<S>                                 <C>        <C>       <C>      <C>         <C>       <C>      <C>         <C>       <C>
Interest-earning assets:
   Interest-bearing demand 
     deposits                       $   899     $   43     4.78%   $   648     $   32     4.89%   $   318     $   17     5.35%
   Federal funds sold                   763         39     5.13        682         37     5.39      1,160         63     5.41
   Time deposits                      1,785        102     5.72        691         24     3.48        184          6     3.28
   Investment securities              4,655        259     5.55      1,868        111     5.96      2,678        131     4.89
   Mortgage-backed and related 
     securities                       1,989        134     6.74      3,368        209     6.19      3,947        274     6.94
   Loans receivable <F1>             51,373      4,734     9.22     43,702      4,094     9.37     35,139      3,344     9.52
                                    _______     ______             _______     ______             _______     ______   
     Total interest-earning assets   61,464      5,311     8.64     50,959      4,507     8.84     43,426      3,835     8.83   

Noninterest-earning assets:
   Cash and due from banks              628                            561                            672
   Less: Allowance for loan 
     losses                            (387)                          (314)                          (283)
   Properties and equipment             488                            481                            468
   Other non-earning assets           1,499                            734                            575
                                    _______                        _______                        _______
     Total assets                   $63,692                        $52,421                        $44,858
                                    _______                        _______                        _______

Interest-bearing liabilities:
   NOW accounts                     $   270     $    5     1.73    $   146     $    2     1.71    $    --     $   --       --
   Money market accounts                223          8     3.37         19          1     2.92         --         --       --
   Passbook accounts                  8,825        216     2.45      9,732        251     2.58     12,678        395     3.12
   Certificates of deposit           39,567      2,458     6.21     34,225      2,116     6.18     25,504      1,440     5.65
                                    _______     ______             _______     ______             _______     ______
     Total deposits                  48,884      2,686     5.50     44,122      2,370     5.37     38,182      1,835     4.81

   FHLB advances                      3,564        232     6.50      2,586        172     6.64      1,628        107     6.57
                                    _______     ______             _______     ______             _______     _______
     Total interest-bearing 
       liabilities                   52,449      2,918     5.56     46,708      2,542     5.44     39,810      1,942     4.88

Noninterest-bearing liabilities       1,369                            525                            467
                                    _______                        _______                        _______
     Total liabilities               53,818                         47,233                         40,277

Unrealized gain on securities           183                            140                             32
Additional paid-in capital            4,505                             --                             --
Common shares acquired by ESOP         (378)                            --                             --
Retained earnings                     5,564                          5,048                          4,549
                                    _______                        _______                        _______
Total liabilities and
   shareholders' equity             $63,692                        $52,421                        $44,858
                                    _______                        _______                        _______
Net interest income; net interest 
   rate spread                                  $2,393     3.08%               $1,965     3.40%               $1,893      3.95%
                                                ______   ______                ______   ______                ______    ______
Net interest margin (net interest 
   income as a percent of average 
   interest-earning assets)                                3.89%                          3.86%                           4.36%
                                                         ______                         ______                          ______
Average interest-earning assets to 
   interest-bearing liabilities                          117.19%                        109.10%                         109.08%
                                                         ______                         ______                          ______
<FN>
<F1>
Calculated net of deferred loan fees, loan discounts, loans in process and 
allowance for loan losses.
</FN>
</TABLE>
<PAGE>
          The table below describes the extent to which changes in interest 
rates and changes in volume of interest-earning assets and interest-bearing 
liabilities have affected HCFC's interest income and expense during the years 
indicated.  For each category of interest-earning assets and interest-bearing 
liabilities, information is provided on changes attributable to (i) changes in 
volume (change in volume multiplied by prior year rate), (ii) changes in rate 
(change in rate multiplied by prior year volume) and (iii) total changes in 
rate and volume.  The combined effects of changes in both volume and rate, 
which cannot be separately identified, have been allocated proportionately to 
the change due to volume and the change due to rate:
<TABLE>
<CAPTION>
                                                                    Year ended June 30,
                                                ____________________________________________________________
                                                      1997 vs. 1996                      1996 vs. 1995
                                                _________________________          ________________________
                                                     Increase                          Increase
                                                    (decrease)                        (decrease)
                                                      due to                            due to
                                                _______________                    _______________
                                                Volume     Rate     Total          Volume     Rate     Total
                                                ______     ____     _____          ______     ____     _____
                                                                  (Dollars in thousands)
<S>                                            <C>       <C>       <C>            <C>       <C>       <C>
Interest income attributable to:
   Interest-bearing demand deposits             $ 12      $ (1)     $ 11           $ 18      $ (3)     $ 15
   Federal funds sold                              4        (2)        2            (26)       --       (26)
   Time deposits                                  38        40        78             16         2        18
   Investment securities                         166       (18)      148            (44)       24       (20)
   Mortgage-backed and related securities        (85)       10       (75)           (40)      (25)      (65)
   Loans receivable                              719       (79)      640            816       (66)      750
                                                ____      ____      ____           ____      ____      ____
     Total interest income                       854       (50)      804            740       (68)      672
                                                ____      ____      ____           ____      ____      ____

Interest expenses attributable to:
   NOW accounts                                    2        --         2              2        --         2
   Money market accounts                           6         1         7              1        --         1
   Passbook savings accounts                     (23)      (12)      (35)           (91)      (53)     (144)
   Certificates of deposit                       330        12       342            491       185       676
   Borrowed funds                                 65        (5)       60             63         2        65
                                                ____      ____      ____           ____      ____      ____
     Total interest expense                      380        (4)      376            466       134       600
                                                ____      ____      ____           ____      ____      ____
   Increase (decrease) in net interest income   $474      $(46)     $428           $274     $(202)     $ 72
</TABLE>
Asset and Liability Management

     Home City, like other financial institutions, is subject to interest rate 
risk to the extent that its interest-earning assets reprice differently than 
its interest-bearing liabilities.  As part of its effort to monitor and manage 
interest rate risk, Home City uses the net portfolio value ("NPV") methodology 
recently adopted by the OTS as part of its capital regulations.  Although Home 
City is not currently subject to the NPV regulation because such regulation 
does not apply to institutions with less than $300 million in assets and 
risk-based capital in excess of 12%, the application of the NPV methodology 
may illustrate Home City's interest rate risk.

     Generally, NPV is the discounted present value of the difference between 
incoming cash flows on interest-earning and other assets and outgoing cash 
flows on interest-bearing and other liabilities.  The application of the 
methodology attempts to quantify interest rate risk as the change in the NPV 
that would result from a theoretical 200 basis point (1 basis point equals 
 .01%) change in market interest rates.  Both a 200 basis point increase in 
market interest rates and a 200 basis point decrease in market interest rates 
are considered.  If the NPV would decrease more than 2% of the present value 
of the institution's assets with either an increase or decrease in market 
rates, the institution must deduct 50% of the amount of the decrease in excess 
of such 2% in the calculation of the institution's risk-based capital.  See 
"Liquidity and Capital Resources."

     At June 30, 1997, 2% of the economic value of Home City's assets was 
approximately $1.4 million.  Because the interest rate risk of a 200 basis 
point increase in market rates (which was greater than the interest rate risk 
of a 200 basis decrease) was $1.6 million at June 30, 1997, Home City would 
have been required to deduct approximately $100,000 (half of the approximate 
$200,000 difference) from its capital in determining whether Home City met its 
risk-based capital requirement.  Regardless of such deduction, however, Home 
City's risk-based capital at June 30, 1997, would have still exceeded the 
regulatory requirement by approximately $7.6 million.
<PAGE>
     Presented below, as of June 30, 1997, is an analysis of Home City's 
interest rate risk as measured by changes in NPV for instantaneous and 
sustained parallel shifts of 100 basis points in market interest rates.  The 
table also contains the policy limits set by the Board of Directors of Home 
City as the maximum changes in NPV that the Board of Directors deems advisable 
in the event of various changes in interest rates.  Such limits have been 
established with consideration of the dollar impact of various rate changes 
and Home City's strong capital position.

     As illustrated in the table, Home City's NPV is more sensitive to rising 
rates than declining rates.  Such difference in sensitivity occurs principally 
because, as rates rise, borrowers do not prepay fixed-rate loans as quickly as 
they do when interest rates are declining.  As a result, in a rising interest 
rate environment, the amount of interest Home City would receive on its loans 
would increase relatively slowly as loans are slowly repaid and new loans at 
higher rates are made.  Moreover, the interest Home City would pay on its 
deposits would increase rapidly because Home City's deposits generally have 
shorter periods to repricing.  Because Home City has not originated loans in 
accordance with traditional secondary market guidelines, the sale of 
fixed-rate loans may be difficult.  In addition, increases in interest rates 
can also result in the flow of funds away from savings institutions into 
direct investments or other investment vehicles, such as mutual funds, which 
may pay higher rates of return than savings institutions.  Assumptions used in 
calculating the amounts in this table are OTS assumptions.
<TABLE>
<CAPTION>
                                                                 At June 30, 1997
                                                           ____________________________
        Change in interest rate       Board limit          $ change            % change
            (basis points)             % change             in NPV              in NPV 
            _____________              ________             _____               ______
                                                    (Dollars in thousands)
<S>          <C>                       <C>                <C>                  <C>
                +400                     (70)%            $(3,650)               (29)%
                +300                     (55)              (2,621)               (21)
                +200                     (35)              (1,629)               (13)
                +100                     (17)                (722)                (6)
                   0                       0                    0                  0
                -100                      17                  342                  3
                -200                      35                  477                  4
                -300                      55                  831                  7
                -400                      70                1,309                 10
</TABLE>

     The NPV table indicates that at each 100 basis point increment, the 
change in Home City's NPV that would have been caused by an increase in 
interest rates was within the policy limits set by the Board of Directors.  
The Board of Directors considers the results of each quarterly analysis and 
factors the information into its decisions in adjusting the pricing of loans 
and deposits in the future.

     As with any method of measuring interest rate risk, certain shortcomings 
are inherent in the NPV approach.  For example, although certain assets and 
liabilities may have similar maturities or periods of repricing, they may 
react in different degrees to changes in market rates.  Also, the interest 
rates on certain types of assets and liabilities may fluctuate in advance of 
changes in market rates, while interest rates on other types may lag behind 
changes in market rates.  Further, in the event of a change in interest rates, 
expected rates of prepayment on loans and mortgage-backed securities and early 
withdrawal levels from certificates of deposit would likely deviate 
significantly from those assumed in making the risk calculations.  

     If interest rates continue to rise from the recent levels, Home City's 
net interest income will be negatively affected.  Moreover, rising interest 
rates may negatively affect Home City's earnings due to diminished loan 
demand.
<PAGE>
Liquidity and Capital Resources

     Home City's liquidity, primarily represented by cash and cash equivalents,
is a result of its operating, investing and financing activities.  These 
activities are summarized below for the periods presented:
<TABLE>
<CAPTION>
                                                     Year ended June 30,
                                              ________________________________
                                              1997          1996          1995
                                              ____          ____          ____
                                                   (Dollars in thousands)
<S>                                         <C>           <C>           <C>
Net income                                  $   577       $   514       $   555
Adjustments to reconcile net income 
   to net cash from operating activities         52            29            43
                                            _______       _______       _______
Net cash provided by operating activities       629           543           598
Net cash provided by (used in) 
   investing activities                     (13,843)       (7,585)       (7,522)
Net cash provided by (used in) 
   financing activities                      13,429         6,508         8,314
                                            _______       _______       _______
Net change in cash and cash equivalents         215          (534)        1,390
Cash and cash equivalents at 
   beginning of period                        1,843         2,377           987
                                            _______       _______       _______
Cash and cash equivalents at end of period  $ 2,058       $ 1,843       $ 2,377
                                            _______       _______       _______
</TABLE>

     Home City's principal sources of funds are deposits, loan and mortgage-
backed securities repayments, maturities of securities and other funds provided
by operations.  Home City also has the ability to borrow from the FHLB of 
Cincinnati.  While scheduled loan repayments and maturing investments are 
relatively predictable, deposit flows and early loan and mortgage-backed 
security prepayments are more influenced by interest rates, general economic 
conditions and competition.  Home City maintains investments in liquid assets 
based upon management's assessment of (i) the need for funds, (ii) expected 
deposit flows, (iii) the yields available on short-term liquid assets and (iv) 
the objectives of the asset/liability management program.  In the ordinary 
course of business, part of such liquid investments portfolio is composed of 
deposits at correspondent banks.  Although the amount on deposit at such banks 
often exceeds the $100,000 limit covered by FDIC insurance, Home City monitors 
the capital of such institutions to ensure that such deposits do not expose 
Home City to undue risk of loss.

     OTS regulations presently require Home City to maintain an average daily 
balance of liquid assets, which may include, but are not limited to, investments
in United States Treasury, federal agency obligations and other investments 
having maturities of five years or less in an amount equal to 5% of the sum of 
Home City's average daily balance of net withdrawable deposit accounts and 
borrowings payable in one year or less.  The liquidity requirement, which may 
be changed from time to time by the OTS to reflect changing economic conditions,
is intended to provide a source of relatively liquid funds upon which Home City 
may rely if necessary to fund deposit withdrawals or other short-term funding 
needs.  At June 30, 1997, Home City's regulatory liquidity ratio was 11.54%.  
At such date, Home City had commitments to originate loans totaling $1.4 
million and no commitments to purchase or sell loans.  Home City considers its 
liquidity and capital reserves sufficient to meet its outstanding short- and 
long-term needs.  See Note M of the Notes to Consolidated Financial Statements.

     Home City is required by applicable law and regulation to meet certain 
minimum capital standards.  Such capital standards include a tangible capital 
requirement, a core capital requirement or leverage ratio and a risk-based 
capital requirement.  See "REGULATION - OTS Regulations -- Regulatory Capital 
Requirements."  Home City exceeded all of its capital requirements at June 30,
1997, June 30, 1996 and June 30, 1995.

     Savings associations are required to maintain "tangible capital" of not 
less than 1.5% of the association's adjusted total assets.  Tangible capital 
is defined in OTS regulations as core capital less intangible assets.
          
     "Core capital" is comprised of common stockholders' equity (including 
retained earnings), noncumulative preferred stock and related surplus, minority
interests in consolidated subsidiaries, certain nonwithdrawable accounts and 
pledged deposits of mutual associations.  OTS regulations require savings 
associations to maintain core capital of at least 3% of the association's total 
assets.  The OTS has proposed to increase such requirement to 4% to 5%, except 
for those associations with the highest examination rating and acceptable levels
of risk. 
<PAGE>
      OTS regulations require that savings associations maintain "risk-based 
capital" in an amount not less than 8% of risk-weighted assets.  Assets are 
weighted at percentage levels ranging from 0% to 100% depending on their 
relative risk.  Risk-based capital is defined as core capital plus certain 
additional items of capital, which in the case of Home City includes a 
general loan loss allowance of $445,000 at June 30, 1997.

      The following table summarizes Home City's regulatory capital 
requirements and actual capital (see Note L of the Notes to Consolidated 
Financial Statements for a reconciliation of capital under GAAP and regulatory 
capital amounts) at June 30, 1997:
<TABLE>
<CAPTION> 
                                                                                  Excess of actual
                                                                                capital over current
                           Actual capital           Current requirement              requirement             Applicable
                         __________________         ___________________          __________________          
                         Amount     Percent          Amount     Percent          Amount     Percent          asset total  
                         ______     _______          ______     _______          ______     _______          ___________
                                                                 (Dollars in thousands)
<S>                     <C>         <C>             <C>         <C>             <C>         <C>              <C>
Tangible capital        $10,317       15.45%        $ 1,002        1.5%         $ 9,315       13.95%           $66,778
Core capital             10,317       15.45           2,003        3.0            8,314       12.45             66,778
Risk-based capital       10,762       28.44           3,027        8.0            7,735       20.44             37,836
</TABLE>

     At June 30, 1997, Home City had no material commitments for capital 
expenditures.

Impact of Pending Legislation

     The deposit accounts of Home City and other savings associations are 
insured up to applicable limits by the FDIC in the SAIF.  Legislation to 
recapitalize the SAIF was enacted on September 30, 1996.  Such legislation 
provided that the SAIF will be merged into the Bank Insurance Fund if there 
are no longer any federally chartered savings associations.  Such legislation 
also requires the Department of Treasury to submit a report to Congress on the 
development of a common charter for all financial institutions.  In addition, 
legislation has been introduced to address this charter unification by 
elimination of the federal thrift charter and the separate federal regulation 
of savings associations.

     Pursuant to such legislation, Congress may eliminate the OTS, and 
Home City may be regulated under federal law as a bank or may be required to 
change its charter.  Such change in regulation or charter would likely change 
the range of activities in which Home City may engage and may subject Home 
City to additional regulation by the FDIC.  In addition, Home City might 
become subject to a different form of holding company regulation, which may 
limit the activities in which HCFC may engage, and subject HCFC to other 
additional regulatory requirements, including separate capital requirements.  
HCFC cannot predict at this time when or whether Congress may actually pass 
legislation regarding HCFC's and Home City's regulatory requirements or 
charter.  Although such legislation may change the activities in which HCFC 
and Home City may engage, it is not anticipated that the current activities of 
HCFC or Home City will be materially affected by those activity limits.
<PAGE>
ITEM 7. Financial Statements


                          INDEPENDENT AUDITOR'S REPORT




The Board of Directors and Shareholders
Home City Financial Corporation
Springfield, Ohio


     We have audited the accompanying consolidated balance sheets of Home City 
Financial Corporation as of June 30, 1997 and 1996, and the related 
consolidated statements of income, cash flows and shareholders' equity for 
each of the years in the three-year period ended June 30, 1997.  These 
consolidated financial statements are the responsibility of the Corporation's 
management.  Our responsibility is to express an opinion on these financial 
statements based on our audits.

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

     In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of Home City 
Financial Corporation as of June 30, 1997 and 1996, and the results of its 
operations and its cash flows for each of the years in the three-year period 
ended June 30, 1997, in conformity with generally accepted accounting 
principles.



 
                                                   ROBB, DIXON,
                                              FRANCIS, DAVIS, ONESON
                                                    & COMPANY



Granville, Ohio
July 23, 1997


<PAGE>
<TABLE>
<CAPTION>

                                     HOME CITY FINANCIAL CORPORATION 
                                           SPRINGFIELD,  OHIO

                                       CONSOLIDATED BALANCE SHEETS
______________________________________________________________________________________________________________

                                                                               (Dollars in thousands)
                                                                                     At June 30,
                                                                               1997              1996
                                                                               ____              ____
<S>                                                                          <C>               <C>
ASSETS
Cash and cash equivalents
     Cash and due from banks                                                  $   461           $   855
     Interest-bearing demand deposits in other banks                            1,397               588
     Federal funds sold                                                           200               400
                                                                              _______           _______
          Total cash and cash equivalents                                       2,058             1,843

Time deposits with original maturities of 90 days or more                         361             1,061
Investment securities available-for-sale, at fair value                         8,634             2,582
Mortgage-backed and related securities available-for-sale, at fair value          730             2,975
Loans, net                                                                     56,035            45,225
Accrued interest receivable                                                       407               273
Properties and equipment                                                          488               488
Cash surrender value of life insurance                                          1,070             1,044
Other assets                                                                      181               237
                                                                              _______           _______
          TOTAL ASSETS                                                        $69,964           $55,728


LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits                                                                      $50,225           $47,174
Advances from Federal Home Loan Bank                                            5,108             2,903
Accrued interest payable                                                           59                49
Advance payments by borrowers for taxes and insurance                              21                20
Deferred income taxes                                                             100                68
Other liabilities                                                                 172               116
                                                                              _______           _______
          TOTAL LIABILITIES                                                    55,685            50,330
                                                                              _______           _______

SHAREHOLDERS' EQUITY                                   
Preferred shares of no par value; 1,000,000 shares
     authorized; no shares issued and outstanding                                   0                 0
Common shares of no par value; 5,000,000 shares
     authorized; 952,200 issued and outstanding                                     0                 0
Additional paid-in capital                                                      9,085                 0
Retained earnings, substantially restricted                                     5,696             5,271
Unrealized gain on securities available-for-sale,
     net of applicable deferred income taxes                                      260               127
Common shares purchased by                                    
     Employee Stock Ownership Plan                                               (762)                0
                                                                              _______           _______     
          TOTAL SHAREHOLDERS' EQUITY                                           14,279             5,398
                                                                              _______           _______
          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          $69,964           $55,728
                                                                              _______           _______
_______________________
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           HOME CITY FINANCIAL CORPORATION  
                                                   SPRINGFIELD, OHIO

                                          CONSOLIDATED STATEMENTS OF INCOME
______________________________________________________________________________________________________________
                                                                                
                                                                        (Dollars in thousands)
                                                                          Year ended June 30,
                                                                      1997           1996           1995
                                                                      ____           ____           ____
<S>                                                                 <C>            <C>            <C>
INTEREST INCOME:
Loans                                                                $4,734         $4,094         $3,344
Mortgage-backed securities                                              134            209            274
Investment securities                                                   259            111            131
Federal funds sold                                                       39             37             63
Time deposits                                                           102             24              6
Interest-bearing demand deposits in other banks                         145             56             17
                                                                     ______         ______         ______
          TOTAL INTEREST INCOME                                       5,311          4,507          3,835
                                                                     ______         ______         ______

INTEREST EXPENSE:
Deposits                                                              2,686          2,370          1,835
Advances from Federal Home Loan Bank                                    232            172            107
                                                                     ______         ______         ______
          TOTAL INTEREST EXPENSE                                      2,918          2,542          1,942
                                                                     ______         ______         ______

          NET INTEREST INCOME                                         2,393          1,965          1,893
Provision for loan losses                                                57             50            109
                                                                     ______         ______         ______
          NET INTEREST INCOME AFTER PROVISION
               FOR LOAN LOSSES                                        2,336          1,915          1,784

NONINTEREST INCOME:
Service charges on deposits                                               5              2              2
Life insurance                                                           61             46              0
Loss on sale of mortgage-backed securities                              (19)             0              0
Other income                                                             14             10              7
                                                                     ______         ______         ______
          TOTAL NONINTEREST INCOME                                       61             58              9
                                                                     ______         ______         ______

NONINTEREST EXPENSE:
Salaries and employee benefits                                          620            532            398
Supplies, telephone and postage                                          47             44             29
Occupancy and equipment                                                 101            102            104
FDIC deposit insurance                                                  328             96             83
Data processing                                                          69             54             47
Legal, accounting and examination                                       154            110             83
Franchise taxes                                                         126             72             63
Other expenses                                                          163            206            191
                                                                     ______         ______         ______
          TOTAL NONINTEREST EXPENSE                                   1,608          1,216            998
                                                                     ______         ______         ______
          NET INCOME BEFORE FEDERAL INCOME 
                         TAX EXPENSE                                    789            757            795
Federal income tax expense                                              212            243            240
                                                                     ______         ______         ______
          NET INCOME                                                 $  577         $  514         $  555
                                                                     ______         ______         ______
_______________________
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                         HOME CITY FINANCIAL CORPORATION
                                                 SPRINGFIELD, OHIO

                          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
__________________________________________________________________________________________________________________________
                                               (Dollars in thousands)
                                                                                
                                                                            Unrealized 
                                                                           Gain (Loss)
                                                                           on Securities
                                                                        Available-for-Sale        Common        Total
                                Common        Additional                 Net of Applicable        Shares        Share-
                                 Stock          Paid-in      Retained         Deferred           Purchased      holders'
                              # of Shares       Capital      Earnings       Income Taxes          by ESOP       Equity
                              ___________       _______      ________       ____________          _______       ______
<S>                           <C>               <C>          <C>            <C>                   <C>           <C>
Balances at June 30, 1994            0          $     0       $4,202         $   113              $     0       $ 4,315

Net income                                                       555                                                555

Change in unrealized 
gain (loss) on securities 
available-for-sale, net of 
applicable deferred income 
taxes of $8                                                                       15                                 15
                               _______          _______       ______         _______              _______       _______
Balances at June 30, 1995            0                0        4,757             128                    0         4,885

Net income                                                       514                                                514

Change in unrealized 
gain (loss) on securities 
available-for-sale, net of 
applicable deferred income 
taxes                                                                             (1)                                (1)
                               _______          _______       ______         _______              _______       _______
Balances at June 30, 1996            0                0        5,271             127                    0         5,398

Net income                                                       577                                                577

Issuance of 952,200 
shares of common stock         952,200            9,085                                              (762)        8,323

Dividends declared
($0.16 per share)                                              (152)                                               (152)

Change in unrealized
gain (loss) on securities 
available-for-sale, net of 
applicable deferred income 
taxes of $67                                                                     133                                133
                               _______          _______      ______          _______              _______       _______
Balances at June 30, 1997      952,200          $ 9,085      $5,696          $   260              $  (762)      $14,279
                               _______          _______      ______          _______              _______       _______
_______________________
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           HOME CITY FINANCIAL CORPORATION
                                                   SPRINGFIELD, OHIO

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
______________________________________________________________________________________________________________
                                                                                (Dollars in thousands)
                                                                                   Year ended June 30,
                                                                            1997         1996          1995
                                                                            ____         ____          ____
<S>                                                                       <C>          <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                 $   577      $   514       $   555
Adjustments to reconcile net income to net cash
   provided by operating activities:
      Premium amortization, net of discount accretion                            0           42           (17)
      Provision for loan losses                                                 57           50           109
      Loss on sale of mortgage-backed securities                                19            0             0
      Depreciation                                                              40           39            33
      Deferred income taxes                                                    (35)          89             7
      Life insurance income, net of expenses                                   (26)         (19)            0
      Changes in operating assets and liabilities:
         Increase in accrued interest receivable                              (134)        (103)          (52)
         (Increase) decrease in other assets                                    57         (129)          (66)
         Increase in accrued interest payable                                   10            7            25
         Increase in other liabilities                                          56           53             4
                                                                           _______      _______       _______
    Net cash provided by operating activities                                  621          543           598
                                                                           _______      _______       _______

CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in time deposits                                       700         (700)         (361)
Purchases of held-to-maturity securities                                         0            0        (3,880)
Proceeds from maturities of held-to-maturity securities                          0          500         4,120
Principal collection on mortgage-backed securities, held-to-maturity             0          278           564
Purchases of available-for-sale securities                                  (6,997)        (602)          (45)
Proceeds from sales of available-for-sale securities                             0            0            80
Proceeds from maturities of available-for-sale securities                    1,136           20             0
Proceeds from sales of mortgage-backed securities, available-for-sale        1,891            0             0
Principal collections on mortgage-backed securities, available-for-sale        342          319             0
Proceeds from sales of loans                                                     0        2,760           338
Net increase in loans                                                      (10,867)      (9,075)       (8,306)
Purchases of properties and equipment                                          (40)         (60)          (35)
Proceeds from sale of real estate held for investment                            0            0             3
Purchase of life insurance contracts                                             0       (1,025)            0
                                                                           _______      _______       _______
   Net cash used in investing activities                                   (13,835)      (7,585)       (7,522)
                                                                           _______      _______       _______

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits                                                     3,051        6,238         6,120
Net increase in short-term FHLB advances                                       700          500             0
Proceeds from new long-term FHLB advances                                    1,825            0         2,310
Payments on long-term FHLB advances                                           (319)        (216)         (116)
Net increase (decrease) in advance payments 
   by borrowers for taxes and insurance                                          1          (14)            0
Issuance of common stock                                                     8,323            0             0
Dividends paid                                                                (152)           0             0
                                                                           _______      _______       _______
   Net cash provided by financing activities                                13,429        6,508         8,314
                                                                           _______      _______       _______
   Net increase (decrease) in cash and cash equivalents                        215         (534)        1,390

CASH AND CASH EQUIVALENTS AT BEGINNING 
      OF YEAR                                                                1,843        2,377           987
                                                                           _______      _______       _______
CASH AND CASH EQUIVALENTS AT END OF YEAR                                   $ 2,058      $ 1,843       $ 2,377
                                                                           _______      _______       _______
_______________________
See accompanying notes.
</TABLE>
<PAGE>

                            HOME CITY FINANCIAL CORPORATION

                                   SPRINGFIELD, OHIO

                       Notes to Consolidated Financial Statements 
________________________________________________________________________________

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Home City Financial Corporation (the "corporation") is a financial services 
company which was organized in August of 1996 and is a unitary savings and 
loan holding company. The principal assets of the corporation are the capital 
stock of Home City Federal Savings Bank of Springfield (the "bank"), a loan 
made to the Home City Financial Corporation Employee Stock Ownership Plan (the 
"ESOP") for the purchase of common shares of the corporation, and investment 
securities.  The bank provides a variety of financial services to individuals 
and corporate customers, through its office in Springfield, Ohio, which is 
primarily a small industrial area.  The bank's primary deposit products are 
savings accounts and certificates of deposit.  Its primary lending products 
are single-family residential loans and consumer loans.  The bank owns 100% of
its subsidiary, Homciti Service Corp., which invests in stock of the bank's 
data service provider, and a local joint venture, in both of which it has 
minority interests.

The accounting and reporting policies of the corporation and its subsidiaries 
conform to generally accepted accounting principles and general practices 
within the financial services industry.  The more significant accounting 
policies are summarized below.


Basis of Consolidation
The consolidated financial statements include the accounts of the corporation 
and all subsidiaries.  Significant intercompany accounts and transactions have 
been eliminated.


Uses of Estimates
The preparation of financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements and 
the reported amounts of revenues and expenses during the reporting period.  
Actual results could differ from those estimates.

Material estimates that are particulary susceptible to significant change 
relate to the determination of the allowance for losses on loans.  In 
connection with the determination of the allowance for loan losses, management 
obtains independent appraisals for significant properties.

A majority of the bank's loan portfolio consists of single-family residential 
loans in the Springfield, Ohio area.  The regional economy depends heavily on 
some 200 diversified industries.  Accordingly, the ultimate collectibility of 
a substantial portion of the bank's loan portfolio is susceptible to changes 
in local market conditions.

While management uses available information to recognize losses on loans, 
future additions to the allowance for loan losses may be necessary based on 
changes in local economic conditions.  In addition, regulatory agencies, as an 
integral part of their examination process, periodically review the bank's 
allowance for losses on loans.  Such agencies may require the bank to recognize
additions to the allowance based on their judgments about information available
to them at the time of their examination.  Because of these factors, it is 
reasonably possible that the allowance for loan losses may change materially 
in the near term.  However, the amount of the change that is reasonably 
possible cannot be estimated.
<PAGE>


Consolidated Statements of Cash Flows
For purposes of the consolidated statements of cash flows, the corporation 
considers cash and due from banks, interest-bearing demand deposits with banks 
and federal funds sold to be cash equivalents.  The following are supplemental 
disclosures for the consolidated statements of cash flows for the years ended 
June 30, 1997, 1996 and 1995:
<TABLE>
<CAPTION>                                                                                
                                                          (Dollars in thousands)
                                                                                
                                                     1997          1996          1995
                                                     ____          ____          _____
<S>                                                <C>           <C>           <C> 
Cash paid during the year for interest              $2,908        $2,535        $1,927
Cash paid during the year for income taxes             147           283           272

</TABLE>


Investment Securities
All investment and mortgage-backed securities are classified as available-for-
sale. Mortgage-backed securities represent participating interests in pools of 
long-term first mortgage loans originated and serviced by issuers of the 
securities. Unrealized holding gains and losses, net of deferred tax, on 
available-for-sale securities are reported as a net amount in a separate 
component of equity until realized.  Gains and losses on the sale of available-
for-sale securities are determined using the specific-identification method.
The amortization of premiums and the accretion of discounts are recognized in 
interest income using methods approximating the interest method over the period
to maturity.  No investment securities are considered derivative securities.


Loans
Loans are stated at unpaid principal balances, less the allowance for loan 
losses, net deferred loan fees and loans-in-process.  Interest income is 
recognized on an accrual basis.  Loans are placed on nonaccrual status when 
principal or interest is delinquent for 90 days or more.  Any unpaid interest 
previously accrued on those loans is reversed from income.  Interest income on 
nonaccrual loans is recognized only to the extent of interest payments received.

Effective January 1, 1995, the corporation adopted Statement of Financial 
Accounting Standards No. 114, "Accounting by Creditors for Impairment of a Loan"
and Statement of Financial Accounting Standards No. 118, "Accounting by 
Creditors for Impairment of a Loan - Income Recognition and Disclosures" 
("SFAS No. 114 and 118").  Under the corporation's credit policies and 
practices, all loans with specific reserves meet the definition of impaired 
loans under SFAS No. 114 and 118.  Loan impairment is measured based on the 
present value of expected future cash flows discounted at the loan's effective 
interest rate or, as a practical expedient, at the observable market price of 
the loan or the fair value of the collateral if the loan is collateral 
dependent.  The adoptionof SFAS No. 114 and 118 did not have a material effect 
on the corporation's financial position or results of operations.

Loan origination fees, as well as certain direct origination costs, are deferred
and amortized as a yield adjustment over the contractual lives of the related 
loans using the interest method.  Amortization of deferred loan fees is 
discontinued when a loan is placed on nonaccrual status.


Allowance for Loan Losses
The allowance for loan losses is maintained at a level which, in management's 
judgment, is adequate to absorb credit losses inherent in the loan portfolio.  
The amount of the allowance is based on management's evaluation of the 
collectibility of the loan portfolio, including the nature of the portfolio, 
credit concentrations, trends in historical loss experience, specific impaired 
loans, and economic conditions.  The allowance is increased by a provision for 
loan losses, which is charged to expense, and reduced by charge-offs, net of 
recoveries.  


Properties and Equipment
Properties and equipment are stated at cost less accumulated depreciation.  
Depreciation of property and equipment is computed principally on the 
straight-line method over their estimated useful lives.  The estimated lives 
of buildings and improvements ranged from 10 to 50 years.  The estimated lives 
of equipment ranged from 5 to 25 years.


Real Estate Owned
Real estate owned is stated at fair value less estimated costs to sell.  When 
a property is acquired, the excess of the recorded investment in the property 
over fair value, if any, is charged to the allowance for loan losses.  
Subsequent declines in the estimated fair value, net operating results and 
gains or losses on disposition of the property are included in other expenses.
<PAGE>


Derivative Financial Instruments
The corporation has no derivative financial instruments.


Income Taxes
The corporation files a non-consolidated federal income tax return on a 
calendar year basis.  The bank and Homciti Service Corp. file a consolidated 
federal income tax return also on a calendar year basis.  The effects of 
current or deferred taxes are recognized as a current and deferred tax 
liability or asset based on current tax laws.  Accordingly, income tax expense 
in the consolidated statements of income includes charges or credits to properly
reflect the current and deferred tax asset or liability. 


Stock-based Compensation
The Board of Directors of the corporation expects to adopt a Stock Option Plan,
subject to approval by the shareholders of the corporation.  At that time, the 
corporation will account for its stock incentive plan in accordance with 
Accounting Principles Board Opinion No. 25 and related Interpretations.  The 
corporation will then also adopt Statement of Financial Accounting Standards 
No. 123, "Accounting for Stock-Based Compensation."  The corporation will there-
after include in the footnotes the impact of the fair value of employee stock-
based compensation plans on net income and earnings per share on a pro forma 
basis.


Recognition and Retention Plan
It is anticipated that the shareholders will adopt a recognition and retention 
plan at the 1997 annual shareholders' meeting.  The purpose of the plan is to 
reward and retain the directors and employees of the corporation, the bank and 
the subsidiary who are in the key positions of responsibility by providing such
directors and employees with an equity interest in the corporation as 
reasonable compensation for their contributions to the corporation, the bank 
and the subsidiary.


Earnings Per Share
The provisions of Accounting Principles Board Opinion No. 15, "Earnings Per 
Share," is not applicable for the fiscal years ended June 30, 1997, 1996 and 
1995, as the corporation completed its conversion to the stock form of 
ownership in December 1996.


Reclassifications 
Certain amounts in 1996 and 1995 have been reclassified to conform with the 
1997 presentation.


NOTE B - BUSINESS COMBINATION

In September 1996, the bank's Board of Directors adopted a Plan of Conversion 
(the "conversion") whereby the bank would convert to the stock form of 
ownership, followed by the issuance of all the bank's outstanding common stock 
to a newly formed holding company, Home City Financial Corporation.

On December 30, 1996, the bank completed its conversion to the stock form of 
ownership, and issued all of the bank's outstanding common shares to the 
corporation.

In connection with the conversion, the corporation sold 952,200 shares at a 
price of $10.00 per share which, after consideration of offering expenses 
totaling approximately $437,000, and shares purchased by employee benefit 
plans totaling $762,000, resulted in net cash proceeds of approximately $8.3 
million.

At the date of the conversion, the bank established a liquidation account in 
an amount equal to retained earnings reflected in the balance sheet used in 
the conversion offering circular.  The liquidation account will be maintained 
for the benefit of eligible savings account holders who maintained deposit 
accounts in the bank after conversion.
<PAGE>


NOTE C - INVESTMENT SECURITIES

Securities available-for-sale consist of the following:
<TABLE>
<CAPTION>                                                                                
                                                          (Dollars in thousands)
                                    At June 30, 1997                                      At June 30, 1996
                     _______________________________________________       ______________________________________________
                                    Gross       Gross                                     Gross       Gross
                     Amortized   Unrealized   Unrealized       Fair        Amortized   Unrealized   Unrealized      Fair
                       Cost         Gains       Losses         Value         Cost         Gains       Losses        Value
                       ____         _____       ______         _____         ____         _____       ______        _____
<S>                  <C>         <C>          <C>             <C>          <C>         <C>          <C>            <C>
U.S.
government
& federal
agencies              $6,995       $    5       $   (7)       $6,993        $1,001       $    0       $   (4)      $  997

State & local
governments              739           11           (1)          749           879            6           (2)         883

Mortgage-
backed 
securities               754            0          (24)          730         3,046            5          (76)       2,975

Equity
securities               484          408            0           892           459          243            0          702
                      ______       ______       ______        ______        ______       ______       ______       ______
                      $8,972       $  424       $  (32)       $9,364        $5,385       $  254       $  (82)      $5,557
                      ______       ______       ______        ______        ______       ______       ______       ______
</TABLE>

The following is a summary of maturities of securities available-for-sale as 
of June 30, 1997:
<TABLE>
<CAPTION>
                                                     (Dollars in thousands)
                                                                                
                                                 Securities available-for-sale
                                                 _____________________________
Amounts maturing in:                                Amortized             Fair
                                                      Cost                Value 
                                                      ____                _____
<S>                                                 <C>                 <C>
One year or less                                     $1,706              $1,706
After one year through five years                     5,876               5,879
After five years through ten years                      342                 342
After ten years                                         564                 545
Equity securities                                       484                 892
                                                     ______              ______
                                                     $8,972              $9,364
                                                     ______              ______
</TABLE>

Interest income on investment securities for each of the three years ended 
June 30 was as follows:
<TABLE>
<CAPTION> 
                                                  (Dollars in thousands)
                                                                                
                                             1997          1996          1995
                                             ____          ____          ____
<S>                                         <C>           <C>           <C>
U.S. government and federal agencies         $187          $ 61          $ 96
State & local governments                      39            24            15
Mortgage-backed securities                    134           209           274
Equity securities                              33            26            20
                                             ____          ____          ____
Total investment securities                  $393          $320          $405
                                             ____          ____          ____
</TABLE>
<PAGE>


For the year ended June 30, 1997, the bank sold securities available-for-sale 
for total proceeds of approximately $1,891,100 resulting in gross realized 
losses of approximately $19,000 and no gross realized gains.  For the year 
ended June 30, 1996, the bank sold no securities.  For the year ended June 30, 
1995, the bank sold securities available-for-sale for total proceeds of 
approximately $78,000 resulting in no gross realized gains or losses.

There were no securities transferred between classifications for the year 
ended June 30, 1997.  For the year ended June 30, 1996, securities with an 
amortized cost of $4,763,000 were transferred from held-to-maturity to 
available-for-sale because of favorable tax treatment and to improve the 
corporation's asset liability management.  The securities had an unrealized 
gain of approximately $44,000.  There were no securities transferred between 
classifications for the year ended June 30, 1995.  

Investment securities with a carrying value of approximately $499,000 and 
$906,000 at June 30, 1997 and 1996, respectively,  were pledged to secure 
deposits as required or permitted by law.


NOTE D - LOANS

Loans at June 30, 1997 and 1996, are summarized as follows:
<TABLE>
<CAPTION>           
                                                           (Dollars in thousands)
                                                       
                                                             1997           1996
                                                             ____           ____
<S>                                                        <C>            <C>
Loans secured by first mortgages on real estate:
     1-4 family dwelling units                             $38,191        $31,893
     5 or more dwelling units                                2,774          3,233
     Non-residential properties                              8,127          7,255
     Land                                                    1,853          2,223
     Construction                                            3,753          2,350
Consumer                                                     3,253          1,641
Commercial                                                     464             73
                                                           _______        _______
                                                            58,415         48,668
Loans in proces                                             (1,448)        (2,634)
Net deferred loan origination fees                            (487)          (447)
Allowance for loan losses                                     (445)          (362)
                                                           _______        _______
Total                                                      $56,035        $45,225
                                                           _______        _______
</TABLE>

An analysis of the allowance for loan losses is as follows:
<TABLE>
<CAPTION>   
                                              (Dollars in thousands)
                                                                                
                                        1997           1996           1995
                                        ____           ____           ____
<S>                                   <C>            <C>            <C>
Balance, beginning of year              $362           $319           $229
Provision for loan losses                 57             50            109
Loans charged off                        (22)            (7)           (19)
Recoveries                                48              0              0     
                                        ____           ____           ____
Balance, end of year                    $445           $362           $319
                                        ____           ____           ____
</TABLE>

At June 30, 1997 and 1996, the bank had loans amounting to approximately $0 
and $72,000, respectively, that were specifically classified as impaired.  The 
average balance of those loans amounted to approximately $2,000, $104,000, and 
$16,000 for the years ended June 30, 1997, 1996 and 1995, respectively.  The 
allowance for loan losses related to impaired loans amounted to approximately 
$0 and $2,000 at June 30, 1997 and 1996, respectively.  Interest income on 
impaired loans of $2,000, $23,000 and $33,000 was recognized for cash payments 
received for the years ended June 30, 1997, 1996 and 1995, respectively.

In addition, at June 30, 1997 and 1996, the bank had other nonaccrual loans of 
approximately $416,000 and $175,000, respectively, for which impairment has 
not been recognized.
<PAGE>


The bank has no commitments to loan additional funds to the borrowers of 
impaired or nonaccrual loans.  

At June 30, 1997 and 1996, the bank serviced loans for others with principal 
balances of $2,632,000 and $3,358,000, respectively.

In the ordinary course of business, the bank has and expects to continue to 
have transactions, including borrowings, with its officers, directors, 
shareholders, and their affiliates.  In the opinion of management, such 
transactions were on substantially the same terms, including interest rates 
and collateral, as those prevailing at the time of comparable transactions 
with other persons and did not involve more than a normal risk of 
collectibility or present any other unfavorable features to the bank.  All 
loans to such borrowers are summarized as follows:
<TABLE>
<CAPTION>
                                                  (Dollars in thousands)
<S>                                                      <C>
Balance, June 30, 1996                                    $1,192
New loans                                                    608
Payments                                                    (587)     
                                                          ______   
Balance, June 30, 1997                                    $1,213
                                                          ______
</TABLE>


NOTE E - PROPERTIES AND EQUIPMENT
 
A summary of properties and equipment at June 30, 1997 and 1996,  follows:
<TABLE>
<CAPTION>         
                                                   (Dollars in thousands)

                                                   1997              1996
                                                   ____              ____
<S>                                              <C>               <C>
Land                                               $113              $113
Buildings and improvements                          435               424
Furniture, fixtures, and equipment                  304               275
                                                   ____              ____
                                                    852               812
Accumulated depreciation                           (364)             (324)
                                                   ____              ____ 
Total                                              $488              $488
                                                   ____              ____
</TABLE>


NOTE F - CASH SURRENDER VALUE OF LIFE INSURANCE

In September 1995, the bank purchased life insurance policies on each of its 
directors other than the President of the bank.  The bank is the beneficiary 
of such policies.  At June 30, 1997 and 1996, there were no notes payable to 
the insurance company.


NOTE G - DEPOSITS

Deposit account balances at June 30, 1997 and 1996, are summarized as follows:
<TABLE>
<CAPTION>
                                               (Dollars in thousands)
                                                                                
                                                        1997                             1996
                                                        ____                             _____                        
                                                 Amount      Percent              Amount      Percent
                                                 ______      _______              ______      _______
<S>                                             <C>         <C>                  <C>         <C>
Noninterest-bearing checking accounts           $   540         1.1%             $   302          .6%
Now and money market accounts                       675         1.3                  395          .8
Savings accounts                                  7,863        15.7                9,561        20.3
Certificates of deposit                          41,147        81.9               36,916        78.3
                                                _______       _____              _______       _____
Totals                                          $50,225       100.0%             $47,174       100.0%
                                                _______       _____              _______       _____
</TABLE>
<PAGE>

The aggregate amount of jumbo certificates of deposit, each with a minimum 
denomination of $100,000, was approximately $7,647,000 and $7,216,000 at June 
30, 1997 and 1996, respectively.  Deposits in excess of $100,000 are not 
insured by the FDIC.

At June 30, 1997, the scheduled maturities of certificates of deposit are as 
follows:
<TABLE>
<CAPTION>
                                                (Dollars in thousands)
<S>                                                    <C>
July 1, 1997 to June 30, 1998                          $26,339
July 1, 1998 to June 30, 1999                            7,335
July 1, 1999 to June 30, 2000                            6,809
July 1, 2000 to June 30, 2001                              387
After June 30, 2001                                        277     
                                                       _______
Totals                                                 $41,147
                                                       ________
</TABLE>

The bank held deposits of approximately $552,000 and $806,000 for related 
parties at June 30, 1997 and 1996, respectively.


NOTE H - ADVANCES FROM FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank consisted of the following at June 
30, 1997 and 1996, respectively:
<TABLE>
<CAPTION>      
                                              (Dollars in thousands)
                                                           Current 
                                                           Interest                Balance
                                                                             __________________
                                                             Rate            1997          1996
                                                             ____            ____          ____
<S>                                                        <C>             <C>           <C>
Federal Home Loan Bank advances
Fixed rate advances, with monthly interest payments:
     Advance due September 25, 1996                          5.80%          $     0       $   500
     Advance due September 15, 1997                          6.65%              500             0
     Advance due September 23, 1997                          6.65%              700             0

Fixed rate advances, with monthly principal
and interest payments:
     Advance due October 1, 2001                             6.30%              287             0
     Advance due February 1, 2003                            6.05%               96           110
     Advance due March 1, 2003                               5.85%              206           236
     Advance due December 1, 2004                            8.35%              450           510
     Advance due January 1, 2005                             8.35%              281           303
     Advance due January 1, 2005                             8.30%              531           601
     Advance due November 1, 2006                            6.35%            1,436             0
     Advance due February 1, 2010                            3.30%              621           643
                                                                            _______       _______
          Totals                                                            $ 5,108       $ 2,903
                                                                            _______       _______
</TABLE>

Federal Home Loan Bank ("FHLB") advances are collateralized by all shares of  
FHLB stock owned by the bank (totaling $423,000) and by 100% of the bank's 
qualified mortgage loan portfolio (totaling approximately $38,191,000).  Based 
on the carrying amount of FHLB stock owned by the bank, total FHLB advances 
are limited to approximately $8,450,000.

The aggregate minimum future annual principal payments on borrowings are as 
follows:
<TABLE>
<CAPTION>

                                                 (Dollars in thousands)
<S>                                                      <C>
July 1, 1997 to June 30, 1998                             $1,629
July 1, 1998 to June 30, 1999                                410
July 1, 1999 to June 30, 2000                                426
July 1, 2000 to June 30, 2001                                442
After June 30, 2001                                        2,201
                                                          ______
Totals                                                    $5,108
                                                          ______
</TABLE>
<PAGE>

NOTE I - EMPLOYEE BENEFITS


401K Profit Sharing Plan
In 1994, the bank initiated a 401K Profit Sharing Plan.  The plan covers all 
of the bank's employees who are over 21 years old with at least one year of 
service.  Participants may make salary savings contributions up to 15% of 
their compensation, 50% of which will be matched by the bank, up to 6% of each 
employee's salary.  Contributions charged to operations for the years ended 
June 30, 1997, 1996 and 1995, were $9,000, $8,000 and $5,000, respectively.


Pension Plan
In connection with the Financial Institutions' Retirement Fund, the bank 
participates with other companies in the financial institution industry in a 
defined benefit plan.  The plan covers all of the bank's employees who are 
over 21 years old with at least one year of service.  Pension expense amounted 
to $4,000, $25,000 and $8,000 for the years ended June 30, 1997, 1996 and 
1995, respectively.


Incentive Compensation Plan
The bank has an incentive compensation plan that covers all employees who are 
normally scheduled to work 1,040 hours or more per year.  The bank's 
contributions pursuant to the plan are based on a formula contained in the 
plan which incorporates factors relating to the bank's performance and are 
contingent upon the bank's attainment of certain levels of earnings, as 
defined in the plan.  During the years ended June 30, 1997, 1996 and 1995, 
contributions to the plan charged to operations were $12,000, $56,000 and 
$38,000, respectively.


Employee Stock Ownership Plan ("ESOP")
In conjunction with the bank's conversion in December 1996, the corporation 
formed the ESOP, which covers all full-time employees who have completed one 
year of service and have attained the age of 21.  The ESOP borrowed $762,000 
from the corporation and purchased 76,176 common shares, equal to 8 percent of 
the total number of shares issued in the conversion.  The bank makes 
discretionary contributions to the ESOP sufficient to service the debt.  The 
cost of shares not committed to be released and unallocated shares are 
reported as a reduction of shareholders' equity.  Shares are released to 
participants' accounts under the shares allocated method.  Dividends on 
unallocated shares are used for debt service.  Expense recognized related to 
the ESOP totaled approximately $26,000 for the year ended June 30, 1997.


NOTE J - INCOME TAXES

Components of income tax expense for the years ended June 30, 1997, 1996 and 
1995, were:
<TABLE>
<CAPTION>   
                                                    (Dollars in thousands)
                                                                                
                                          1997          1996           1995
                                          ____          ____           ____
<S>                                     <C>           <C>            <C>
Current federal tax expense               $247          $154           $233
Deferred federal tax expense               (35)           89              7
                                          ____          ____           ____
     Total                                $212          $243           $240
                                          ____          ____           ____
</TABLE>
<PAGE>

The net deferred tax liability included the following major temporary 
differences at June 30:
<TABLE>
<CAPTION>  
                                                 (Dollars in thousands)
                                                 1997              1996
                                                 ____              ____
<S>                                            <C>               <C>
Deferred tax liabilities:
  Accumulated depreciation                       $ 21              $ 19
  Net deferred loan costs                          17                 0
  Net unrealized appreciation on
     available-for-sale securities                133                69
                                                 ____              ____
Total deferred tax liabilities                    171                88
                                                 ____              ____

Deferred tax assets:
  Net deferred loan fees                            0                (5)     
  Nonaccrual loan interest                         (4)               (6)
  Allowance for loan losses                       (50)               (6)
  Employee benefits                               (14)               (3)
  Other                                            (3)                0
                                                 ____              ____
Total deferred tax assets                         (71)              (20)
                                                 ____              ____
Total net deferred tax liability                 $100              $ 68
                                                 ____              ____
</TABLE>

A reconciliation of the federal income tax rate to effective income tax rates 
follows for the years ended June 30:
<TABLE>
<CAPTION>       
                                       1997          1996          1995
                                       ____          ____          ____
<S>                                  <C>           <C>           <C>
Federal income tax rate               34.00%        34.00%        34.00%
Adjusted for:
   Tax-exempt income                  (3.12)        (4.10)        (1.38)
   Other                              (4.22)         2.20         (2.42)
                                      _____         _____         _____
Effective tax rate                    26.66%        32.10%        30.20%
                                      _____         _____         _____
</TABLE>

Included in retained earnings at June 30, 1997 and 1996, is approximately  
$1,804,000 in bad debt reserves for which no deferred federal income tax 
liability has been recorded.  These amounts represent allocations of income to 
bad debt deductions for tax purposes before 1988. Reduction of these reserves 
for purposes other than tax bad debt losses or adjustments arising from 
carryback of net operating losses would create income for tax purposes, which 
would be subject to the then-current corporate income tax rate.  The 
unrecorded deferred liability on these amounts was approximately $613,000.


NOTE K - DIVIDEND RESTRICTION

The bank, as a federally chartered savings bank, is subject to the dividend 
restrictions set forth by the Office of Thrift Supervision ("OTS").  Under 
regulations of the OTS applicable to converted savings associations, the bank 
will not be permitted to pay a cash dividend on its capital stock after the 
conversion if its regulatory capital would, as a result of the payment of such 
dividend, be reduced below the amount required for the Liquidation Account or 
the applicable regulatory capital requirements prescribed by the OTS.  
<PAGE>

As disclosed in Note L, the bank meets the requirements for a Tier I 
association and has not been notified of any need for more than normal 
supervision.  As a subsidiary of the corporation, the bank is required to give 
the OTS 30 days notice prior to declaring any dividend on its common shares.  
The OTS may object to the dividend during that 30-day period based on safety 
and soundness concerns.  Moreover, the OTS may prohibit any capital 
distribution otherwise permitted by regulation if the OTS determines that such 
distribution would constitute an unsafe or unsound practice.


NOTE L - REGULATORY MATTERS

The bank is subject to various regulatory capital requirements administered by 
its primary federal regulator, the Office of Thrift Supervision.  Failure to 
meet minimum capital requirements can initiate certain mandatory, and possible 
additional discretionary, actions, by regulators that, if undertaken, could 
have a direct material effect on the bank and the consolidated financial 
statements.  Under the regulatory capital adequacy guidelines and the 
regulatory framework for prompt corrective action, the bank must meet specific 
capital guidelines that involve quantitative measures of the bank's assets, 
liabilities, and certain off-balance-sheet items as calculated under 
regulatory accounting practices.  The bank's capital amounts and 
classification under the prompt corrective action guidelines are also subject 
to qualitative judgements by the regulators about components, risk-weightings, 
and other factors.

The capital adequacy regulations of the OTS require that the bank maintain 
tangible capital equal to at least 1.5% of adjusted total assets, core capital 
of at least 3.0% of adjusted total assets, and risk-based capital of at least 
8.0% of risk-weighted assets.  At June 30, 1997, the bank's capital exceeded 
all of such requirements.

As of June 30, 1997, the most recent notification from the OTS, the bank was 
categorized as well capitalized under the regulatory framework for prompt 
corrective action.  To be categorized as adequately capitalized under the 
prompt corrective action regulations, the bank must maintain minimum total 
risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the 
table below.  There are no conditions or events since the most recent 
notification that management believes have changed the bank's prompt 
corrective action category.

The following reconciliation compares the bank's capital under GAAP to its 
regulatory capital, at June 30, 1997:
<TABLE>
<CAPTION>
                                              (Dollars in thousands)

                                             Total               Tier I
                                            Capital              Capital
                                            _______              _______
<S>                                        <C>                  <C>
Equity per GAAP                             $10,624              $10,624
Less unrealized gain on securities
     available-for-sale, net of
     applicable income taxes                   (257)                (257)
Less advance to subsidiary                      (50)                 (50)
Plus allowance for loan losses                  445                    0
                                            _______              _______
Regulatory capital                          $10,762              $10,317
                                            _______              _______
</TABLE>
<PAGE> 
<TABLE>
<CAPTION>
                                             (Dollars in thousands)  
                                                                                       To Be Well
                                                                                    Capitalized Under
                                                             For Capital            Prompt Corrective
                                        Actual            Adequacy Purposes         Action Provisions
                                   ________________       _________________         _________________
                                   Amount     Ratio        Amount     Ratio         Amount      Ratio
                                   ______     _____        ______     _____         ______      _____
<S>                                <C>        <C>          <C>        <C>           <C>         <C>
As of June 30, 1997:
   Total Risk-Based Capital
     (to Risk-Weighted Assets)     $10,762     28.4%        $ 3,027     8.0%        $ 3,784      10.0%
   Tier I Capital
     (to Risk-Weighted Assets)      10,317     27.3            N/A      N/A           2,270       6.0   
   Tier I Capital
     (to Total Assets)              10,317     15.5           2,003     3.0           3,339       5.0
   Tangible Capital
     (to Total Assets)              10,317     15.5           1,002     1.5            N/A        N/A   
     
As of June 30, 1996:
   Total Risk-Based Capital
     (to Risk-Weighted Assets)     $ 5,633     18.8%        $ 2,400     8.0%        $ 2,999      10.0%
   Tier I Capital
     (to Risk-Weighted Assets)       5,271     17.6            N/A      N/A           1,800       6.0
   Tier I Capital          
     (to Total Assets)               5,271      9.5           1,668     3.0           2,779       5.0
   Tangible Capital          
     (to Total Assets)               5,271      9.5             834     1.5            N/A        N/A
</TABLE>


NOTE M - COMMITMENTS AND CONTINGENCIES

In the normal course of business, the bank has various outstanding commitments 
and contingent liabilities that are not reflected in the accompanying 
consolidated financial statements.  The principal commitments of the bank are 
as follows:

The bank had outstanding commitments to originate loans as follows:
<TABLE>
<CAPTION>
                                                        (Dollars in thousands)
                                    At June 30, 1997                            At June 30, 1996 
                           __________________________________          __________________________________
                           Fixed-rate  Adjustable-rate  Total          Fixed-rate  Adjustable-rate  Total
                           __________  _______________  _____          __________  _______________  _____
<S>                          <C>          <C>          <C>               <C>          <C>          <C>
First mortgage loans         $  831        $  292      $1,123            $  837        $  169      $1,006
Consumer and other loans        232             0         232               292             0         292
                             ______        ______      ______            ______        ______      ______
                             $1,063        $  292      $1,355            $1,129        $  169      $1,298
                             ______        ______      ______            ______        ______      ______
</TABLE>

Interest rates on commitments at June 30, 1997, ranged from 8.375% to 10.25%.  
Interest rates on commitments at June 30, 1996, ranged from 7.75% to 10.00%.  
Loan commitments generally expire after 30 days.

In addition, the bank is periodically a defendant in various legal proceedings 
arising in connection with its business.  It is the best judgment of 
management that neither the financial position nor results of operations of 
the bank will be materially affected by the final outcome of these legal 
proceedings.
<PAGE>


NOTE N - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The bank is a party to financial instruments with off-balance-sheet risk in 
the normal course of business to meet the financing needs of its customers.  
These financial instruments include commitments to extend credit and standby 
letters of credit.  These instruments involve, to varying degrees, elements of 
credit and interest rate risk in excess of the amounts recognized in the 
consolidated balance sheets.

The bank's exposure to credit loss in the event of non-performance by the 
other party to the financial instruments for commitments to extend credit is 
represented by the contractual notional amount of those instruments (see NOTE 
M).  The bank uses the same credit policies in making commitments and 
conditional obligations as it does for on-balance-sheet instruments.

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

At June 30, 1997, the bank had deposits with the following banks in excess of 
FDIC insurance of $100,000:
<TABLE>
<CAPTION>
                                                    (Dollars in thousands)
     <S>                                                  <C>
     Huntington National Bank                              $ 1,552
     Federal Home Loan Bank                                    161
     Springfield Federal Savings Bank                          338
</TABLE>


NOTE O - FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of the corporation's financial instruments are as 
follows:
<TABLE>
<CAPTION> 
                                                 (Dollars in thousands)
                                    At June 30, 1997                 At June 30, 1996
                                 ______________________           _______________________
                                 Carrying         Fair            Carrying          Fair
                                  amount          value            amount           value
                                  ______          _____            ______           _____
<S>                              <C>             <C>              <C>              <C>
Financial assets: 
   Cash and cash equivalents     $ 2,058         $ 2,058          $ 1,843          $ 1,843
   Time deposits                     361             353            1,061            1,053
   Investment securities           8,634           8,634            2,582            2,582
   Mortgage-backed securities        730             730            2,975            2,975
   Loans                          56,035          56,380           45,225           45,364
   Accrued interest receivable       407             407              273              273
   Life insurance                  1,070           1,070            1,044            1,044

Financial liabilities:
   Deposits                       50,225          50,322           47,174           47,311
   Advances from FHLB              5,108           5,050            2,903            2,954
   Accrued interest payable           59              59               49               49
</TABLE>

The carrying amounts in the preceding table are included in the consolidated 
balance sheets.
<PAGE>

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair 
Value of Financial Instruments" ("SFAS No. 107"), requires disclosure of fair 
value information about financial instruments, whether or not recognized in the 
statement of financial condition.  In cases where quoted market prices are not 
available, fair values are based on estimates using present value or other 
valuation techniques.  Those techniques are significantly affected by the 
assumptions used, including the discount rate and estimates of future cash 
flows.  In that regard, the derived fair value estimates cannot be substantiated
by comparison to independent markets and, in many cases, could not be realized 
in immediate settlement of the instruments.  SFAS No. 107 excluded certain 
financial instruments and all nonfinancial instruments from its disclosure 
requirements.  Accordingly, the aggregate fair value amounts presented do not 
represent the underlying value of the company.

The following methods and assumptions were used by the corporation in 
estimating its fair value disclosures for financial instruments:

   Cash and cash equivalents:  The carrying amounts reported in the consolidated
   balance sheets for cash and cash equivalents approximate those assets' fair 
   values.

   Time deposits:  Fair values for time deposits are estimated using a 
   discounted cash flow analysis that applies interest rates currently being 
   offered on certificates to a schedule of aggregated contractual maturities on
   such time deposits.

   Investment securities:  Fair values for investment securities are based on 
   quoted market prices, where available.  If quoted market prices are not 
   available, fair values are based on quoted market prices of comparable 
   instruments.

   Loans:  For adjustable-rate loans that reprice frequently and with no 
   significant change in credit risk, fair values are based on carrying amounts.
   The fair values for other loans (for example, fixed-rate commercial real 
   estate and rental property mortgage loans and commercial and industrial 
   loans) are estimated using discounted cash flow analysis, based on interest 
   rates currently being offered for loans with similar terms to borrowers of 
   similar credit quality.  Loan fair value estimates include judgments 
   regarding future expected loss experience and risk characteristics.  Fair 
   values for impaired loans are estimated using discounted cash flow analysis 
   or underlying collateral values, where applicable.  The carrying amount of 
   accrued interest receivable approximates its fair value.

   Deposits:  The fair values disclosed for demand deposits are, by definition, 
   equal to the amount payable on demand at the reporting date (that is, their 
   carrying amounts).  The carrying amounts of variable-rate, fixed-term 
   money-market accounts and certificates of deposit approximate their fair 
   values.  Fair values for fixed-rate certificates of deposit are estimates 
   using a discounted cash flow calculation that applies interest rates 
   currently offered on certificates to a schedule of aggregated contractual 
   expected monthly maturities on time deposits.  The carrying amount of accrued
   interest payable approximates fair value.

   Advances from Federal Home Loan Bank: The fair value for FHLB advances are 
   estimated using a discounted cash flow calculation that applies interest 
   rates currently being offered on FHLB advances of aggregated contractual 
   maturities of such advances.
<PAGE>

NOTE P - PARENT COMPANY FINANCIAL INFORMATION

Condensed financial information for Home City Financial Corporation (parent 
company only) follows:
<TABLE>
<CAPTION>
Balance Sheets
                                                                                
                                                             (Dollars in thousands)
                                                                   At June 30,
                                                               1997          1996
                                                               ____          ____
<S>                                                          <C>           <C>
Assets:
Interest-bearing savings deposit with subsidiary bank        $   585       $     0
Investment in subsidiary                                      10,624             0
Investment securities available-for-sale                       3,000             0
Other assets                                                     106             0
                                                             _______       _______
   Total assets                                              $14,315       $     0
                                                             _______       _______

Liabilities and Shareholders' Equity:
Accrued expenses and other liabilities                       $    36       $     0
Shareholders' equity                                          14,279             0
                                                             _______       _______
   Total liabilities and shareholders' equity                $14,315       $     0
                                                             _______       _______ 
</TABLE>
<TABLE>
<CAPTION>
Statements of Income
                                                                                
                                                        (Dollars in thousands)
                                                          Year ended June 30,
                                                     1997          1996          1995
                                                     ____          ____          ____
<S>                                                <C>           <C>           <C>
Income:
Interest from subsidiary                             $ 25          $  0          $  0
Interest on securities available-for-sale              55             0             0
Income on ESOP loan                                    36             0             0
                                                     ____          ____          ____
     Total income                                     116             0             0
                                                     ____          ____          ____

Expense:
Legal, consulting and examination                      33             0             0
Franchise tax                                          11             0             0
Other                                                  30             0             0
                                                     ____          ____          ____
     Total expense                                     74             0             0
                                                     ____          ____          ____

Income before income taxes and equity in
   undistributed earnings of subsidiary                42             0             0
Income tax provision                                    6             0             0
Income before equity in undistributed earnings     
   of subsidiary                                       36             0             0
Equity in undistributed earnings of subsidiary        358             0             0
                                                     ____          ____          ____
Net income                                           $394          $  0          $  0
                                                     ____          ____          ____
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Cash Flows
                                                             (Dollars in thousands)
                                                               Year ended June 30,
                                                        1997          1996          1995
                                                        ____          ____          ____
<S>                                                   <C>           <C>           <C>
Cash flows from operating activities:
Net income                                            $  394        $    0        $    0
Adjustments to reconcile net income to net cash
   flows from operating activities:
Equity in undistributed earnings of subsidiary          (358)            0             0
Discount accretion                                        (1)            0             0
Net increase in other assets                            (106)            0             0
Net increase in other liabilities                         36             0             0
                                                      ______        ______        ______
Net cash flows from operating activities                 (35)            0             0
                                                      ______        ______        ______

Cash flows from investing activities:
Purchase of securities available-for-sale             (2,996)            0             0
Purchase of common stock of subsidiary                (4,555)            0             0
                                                      ______        ______        ______
Net cash flows from investing activities              (7,551)            0             0
                                                      ______        ______        ______

Cash flows from financing activities:
Issuance of common stock                               8,323             0             0
Dividends paid                                          (152)            0             0
                                                      ______        ______        ______
Net cash flows from financing activities               8,171             0             0
                                                      ______        ______        ______
Net increase in cash and cash equivalents                585             0             0

Cash and cash equivalents:
   Beginning of year                                       0             0             0
                                                      ______        ______        ______
   End of year                                        $  585        $    0        $    0
                                                      ______        ______        ______
</TABLE>


NOTE Q - SUBSEQUENT EVENT

On June 16, 1997, the Board of Directors authorized management of the 
corporation to cause the corporation to repurchase up to 5% of the outstanding 
shares of the corporation in the over-the-counter market during the next 
twelve months, with the amount of shares, price and dates of repurchase to be 
determined at the discretion of management.  On July 21, 1997, management made 
the first trade with the intent to repurchase a total of 5% of the outstanding 
shares before August 31, 1997.  The shares acquired will be held as treasury 
stock.
<PAGE>
ITEM 8.  Changes in and Disagreements with Accountants on Accounting and 
         Financial Disclosure.

     None.


                                  PART III



ITEM 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16 (a) of the Exchange Act of the Registrant

     The information set forth under the caption "PROPOSAL ONE - ELECTION OF
DIRECTORS" of the Definitive Proxy Statement of the Corporation date September
19, 1997, filed with the United States Securities and Exchange Commission (the
"Proxy") is incorporated by reference herein.

ITEM 10. Executive Compensation

     The information set forth under the caption "COMPENSATION OF DIRECTORS AND
EXECUTIVE OFFICERS" of the Proxy Statement is incorporated by reference herein.

ITEM 11.  Security Ownership of Certain Beneficial Owners and Management

     The information set forth under the caption "VOTING SECURITIES AND 
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" of the Proxy Statement is
incorporated by reference herein.

ITEM 12.   Certain Relationships and Related Transactions

     The information set forth under the caption "COMPENSATION OF DIRECTORS AND
EXECUTIVE OFFICERS - Certain Transactions with Home City" of the Proxy Statement
is incorporated by reference herein.

ITEM 13.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

            3.1      Articles of Incorporation (Incorporated by reference)
            3.2      Code of Regulations (Incorporated by reference)    
           10.1      Employment Agreement with Mr. Ulery
           21        Subsidiaries
           27        Financial Date Schedule
           99.1      Proxy Statement (Incorporated by reference)
           99.2      Safe Harbor Under the Private Securities Litigation Reform
                     Act of 1995

     (b)  Reports on Form 8-K
 
          HCFC has not filed any reports on Form 8-k during the last quarter of 
          1997.
<PAGE>
SIGNATURES

     In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

     HOME CITY FINANCIAL CORPORATION

     /s/ Douglas L. Ulery
    
    ________________________________
    Douglas L. Ulery
    President and Chief Executive Officer

    In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities on the 
dates indicated.



                                             /s/ P. Clark Engelmeier
    _______________________________          _________________________________
    John D. Conroy                           P. Clark Engelmeier
    Director                                 Chairman of the Board

    /s/ September 26, 1997                   /s/ September 26, 1997    
    _______________________________          _________________________________
    Date                                     Date

    /s/ James Foreman                        /s/ Terry A. Hoppes
    _______________________________          _________________________________
    James Foreman                            Terry A. Hoppes
    Director                                 Director

    /s/ September 26, 1997                   /s/ September 26, 1997
    _______________________________          _________________________________
    Date                                     Date

    /s/ Douglas L. Ulery                     /s/ Gary E. Brown
    _______________________________          _________________________________
    Douglas L. Ulery                         Gary E. Brown
    Director                                 Treasurer
    President and Chief Executive Officer    (Principal financial and accouting
                                             officer)

    /s/ September 26, 1997                   /s/ September 26, 1997
    _______________________________          _________________________________
    Date                                     Date

<PAGE>
<TABLE>
<CAPTION>
                              INDEX TO EXHIBITS

EXHIBIT
NUMBER            DESCRIPTION
_______           ___________
<S>               <C>                                    <C>
  3.1             Articles of Incorporation              Incorporated by reference to the Registrant's
                  of Home City Financial Corporation     Quarterly Report on Form 10-QSB for the
                                                         Quarter Ended March 31, 1997 (the "March
                                                         31, 1997, 10-QSB"), Exhibit 3(i)

  3.2             Code of Regulations of Home City       Incorporated by reference to the March 31,
                  Financial Corporation                  1997, 10-QSB, Exhibit 3(ii)

 10.1             Employment Agreement with Mr. Ulery

 21               Subsidiaries of Home City
                  Financial Corporation

 27               Financial Data Schedule

 99.1             Proxy Statement                        Incorporated by reference to the definitive
                                                         Proxy Statement of the Registrant for the
                                                         1997 Annual Meeting of Shareholders of 
                                                         Home City Financial Corporation, filed with
                                                         the Securities and Exchange Commisssion.

 99.2             Safe Harbor Under the Private
                  Securities Litigation Reform 
                  Act of 1995


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