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

              TRANSITION REPORT Pursuant to SECTION 13 or 15(d) of
                       THE SECURITIES EXCHANGE ACT of 1934
 
           For the transition period from July 31 to December 31, 1997
                       Commission File Number  0-21809
                              _____________________

                         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.  $3,094,000

     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 March 1, 1998, 904,590 common shares of the Registrant were 
outstanding.  The aggregate market value of the shares held by non-affiliates 
was $13,574,962 based upon the closing sale price of $18.625  per share as 
quoted by The Nasdaq Stock Market.

     Documents Incorporated by Reference

     The following sections of the definitive Proxy Statement for the 1998 
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 commercial and consumer loans, both 
secured and unsecured, 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 slightly lower than average levels of income and housing 
values and an improving lower 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.
                                     1
<PAGE>
Change in Fiscal Year

     In December 1997, the board of directors of HCFC and Home City determined 
to change the fiscal year end of HCFC and Home City from June 30, to December 
31, in order to have their fiscal year ends coincide with those of  the 
financial institutions to which their performance is compared.

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 and 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 December 31,                           At June 30, 
                                              ___________________       _____________________________________________
                                                     1997                      1997                      1996
                                              ___________________       ___________________       ___________________
                                                         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)     $40,409      62.48%       $37,739      64.61%       $31,580      64.89%
     Multifamily                                2,756       4.26          2,774       4.75          3,233       6.64
     Home equity (second mortgage)              1,553       2.40            452       0.77            313       0.64
Nonresidential real estate loans               10,315      15.95          8,127      13.91          7,255      14.91
Land loans                                      1,866       2.89          1,853       3.17          2,223       4.57   
Construction loans                              3,079       4.76          3,753       6.43          2,350       4.83
                                              _______     ______        _______     ______        _______     ______
          Total real estate loans              59,978      92.74         54,698      93.64         46,954      96.48
                              
Commercial loans                                  493       0.76            464       0.79             73       0.15
Consumer loans:                              
     Loans on deposits                            166       0.26            235       0.40            160       0.33
     Other consumer loans                       4,035       6.24          3,018       5.17          1,481       3.04
                                              _______     ______        _______     ______        _______     ______
          Total consumer loans                  4,201       6.50          3,253       5.57          1,641       3.37
                                              _______     ______        _______     ______        _______     ______
Total loans                                    64,672     100.00%        58,415     100.00%        48,668     100.00%
                                                          ______                    ______                    ______
     Less:  
     Unearned and deferred (income)                              
          expense, net                           (499)                     (487)                     (447)
     Loans in process                          (1,186)                   (1,448)                   (2,634)
     Allowance for loan losses                   (452)                     (445)                     (362)
                                              _______                   _______                   _______
Net loans                                     $62,535                   $56,035                   $45,225
                                              _______                   _______                   _______
</TABLE>
                                     2
<PAGE>
     Loan Maturity Schedule.  The following table sets forth certain 
information as of December 31, 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>

                                Due during the             Due 4-5        Due 6-10      Due 11-15     Due more than
                            year ending December 31,     years after    years after    years after    15 years after
                           __________________________        
                           1998       1999       2000      12/31/97       12/31/97       12/31/97        12/31/97      Total
                           ____       ____       ____      ________       ________       ________        ________      _____
                                                               (Dollars in thousands)
<S>                       <C>        <C>        <C>         <C>            <C>           <C>             <C>         <C>    
Mortgage loans:                                        
     Residential          $1,130     $  888     $  143      $  636         $4,151        $25,663         $10,789     $43,400
     Nonresidential          750        546        615          64          2,904          7,849           2,165      14,893
Consumer loans               302        269        188       1,156            825          1,461               0       4,201
Commercial loans              69          9         70          10            335              0               0         493
                          ______     ______     ______      ______         ______        _______         _______     _______
          Total loans     $2,251     $1,712     $1,016      $1,866         $8,215        $34,973         $12,954     $62,987
                          ======     ======     ======      ======         ======        =======         =======
</TABLE>

     Of the loans due more than one year after December 31, 1997, loans with 
aggregate balances of $32.6 million have fixed rates of interest, and loans 
with aggregate balances of $28.1 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 5 to 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 slightly 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- to three-year adjustment 
period. 
                                      3
<PAGE>
     The aggregate amount of Home City's one- to four-family residential real 
estate loans equaled approximately $40.4 million at December 31, 1997, and 
represented 62.48% of loans at such date.  The largest individual loan balance 
on a one- to four-family loan at such date was $291,000.  At such date, loans 
secured by one- to four-family residential real estate with outstanding 
balances of $217,000, or 0.54% of its one- to four-family 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 December 31, 1997, loans secured by multifamily properties totaled 
approximately $2.8 million, or 4.26% 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 December 31, 
1997, of approximately $648,000.

     Home Equity Loans.  Home City offers home equity loans secured by first 
or 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 mortgages are 
adjustable, with a maximum combined LTV for the first and second mortgage of 
100%.

     At December 31, 1997, home equity loans totaled approximately $1.6 
million, or 2.40% 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 December 31, 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 December 31, 1997, Home City had a total of $10.3 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 15.95% of Home City's total loans at such date.  At such date, 
Home City had no nonresidential loans  that were 90 days delinquent or 
non-accruing.  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 December 
31, 1997, Home City's nonresidential mortgage loans totaled 95.50% of Home 
City's tangible capital.
                                      4
<PAGE>
     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 fixed interest 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 to 80%.

     At December 31, 1997, land loans totaled approximately $1.9 million, or 
2.89% of Home City's total loan portfolio. The largest land loan at December 
31, 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, or 1.62%, of total loans 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 
or adjustable rates of interest and terms up to 30 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 December 31, 1997, a total of $3.1 million, or approximately 4.76% 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 December 31, 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 December 31, 1997, Home City had nine commercial loans in the 
aggregate amount of $493,000, 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 December 31, 1997, Home City had approximately $4.2 million, or 6.50% 
of its total loans, invested in consumer loans, and no such loans were more 
than 90 days delinquent or nonaccruing. See "Delinquent Loans, Non-performing 
Assets and Classified Assets."
                                      5
<PAGE>
     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 
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 
officials for approval or rejection if the loan amount does not exceed 
$400,000.  If the loan amount exceeds $400,000, 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. 













                                      6
<PAGE>
     The following table presents Home City's mortgage loan origination and 
participation activity for the periods indicated:
<TABLE>
<CAPTION>
                                            Six months ended December 31,     Year ended June 30,
                                            _____________________________    _____________________
                                                 1997          1996            1997         1996

                                                              (Dollars in thousands)
<S>                                            <C>           <C>             <C>          <C>
Loans originated:                                        
     One- to four-family residential <F1>      $ 7,238       $ 7,260         $14,872      $14,091
     Multifamily residential                       100           325             325          280
     Nonresidential                              3,298         1,399           2,451        2,210
     Commercial                                     74           369             546          133
     Consumer                                    1,737         1,631           2,975        1,797     
     Loans Purchased                                --            --             374           --
                                               _______       _______         _______      _______
                                        
          Total loans originated                12,447        10,984          21,543       18,511
                                               _______       _______         _______      _______
Reductions:                                        
     Principal repayments                       (5,643)       (5,754)        (10,902)      (9,287)
     Sales of loans                                 --            --              --       (2,760)
Increase (decrease) in other items, net <F2>      (304)          102             169         (199)
                                               _______       _______         _______      _______
          Net increase (decrease)              $ 6,500       $ 5,332         $10,810      $ 6,265
                                               =======       =======         =======      =======
</TABLE>
[FN]
<F1>     Includes construction loans.

<F2>     Consists of unearned and deferred fees, costs and the allowance 
         for loan losses.
</FN>

     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 $1.7 
million to one borrower at December 31, 1997.  The largest amount Home City 
had outstanding to one borrower at December 31, 1997, was $1.4 million.  Such 
loans were secured by commercial and agricultural use properties.  All of such 
loans were current at December 31, 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.
                                      7
<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 December 31,                                At June 30,
                           __________________________   __________________________________________________________
                                     1997                          1997                           1996
                           __________________________   ___________________________     __________________________
                                              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              21     $  567      0.90%      26     $  667      1.18%       17     $  565      1.24%
     60-89 days              15        574      0.91        5         92      0.16         4        170      0.37
     90 days and over        15        259      0.41       19        382      0.68        14        247      0.54
                            ___     ______      ____      ___     ______      ____       ___     ______      ____
Total delinquent loans       51     $1,400      2.22%      50     $1,141      2.02%       35     $  982      2.15%
                            ===     ======      ====      ===     ======      ====       ===     ======      ====
</TABLE>
-----------------------
[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>
<CAPTION>

                                                At December 31,        At June 30,
                                                _______________      ______________
                                                 1997      1996      1997      1996
                                                 ____      ____      ____      ____
                                                       (Dollars in thousands)
<S>                                           <C>         <C>         <C>         <C>
Loans accounted for on a nonaccrual basis:                    
     Real estate:                    
          Residential                            $259        $132        $211        $247
          Nonresidential                           --          99         171          -- 
     Commercial                                    --          --          --          -- 
     Consumer                                      --          --          --          -- 
                                                 ____        ____        ____        ____
          Total non-performing loans              259         231         382         247
                    
Real estate owned                                  --          --          --          --
                                                 ____        ____        ____        ____
          Total non-performing assets            $259        $231        $382        $247
                                                 ====        ====        ====        ====
          Total loan loss allowance              $452        $399        $445        $362
                    
          Total non-performing assets as                    
            a percentage of total assets         0.36%       0.34%       0.55%       0.44%
                    
Loan loss allowance as a percent                    
     of non-performing loans                   174.52%     172.73%     116.49%     146.56%
</TABLE>

     During the fiscal year ended December 31, 1997, $6,000 in interest income 
was recognized and an additional $23,000 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 
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.
                                      8
<PAGE>
     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 December 31,         At June 30,
                                        _______________       _______________
                                        1997       1996       1997       1996
                                        ____       ____       ____       ____
                                                (Dollars in thousands)
<S>                                    <C>        <C>        <C>        <C>
Classified assets:                    
     Substandard                        $377       $497       $438       $518
     Doubtful                             16         --         --         19
     Loss                                 77        101         81        102
                                        ____       ____       ____       ____
          Total classified assets       $470       $598       $519       $639
                                        ====       ====       ====       ====
</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 resid
ential 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 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.

     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 
                                      9
<PAGE>
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>
                                                            Six months ended
                                                               December 31,               Year ended June 30,
                                                            ___________________           ___________________
                                                            1997           1996           1997           1996
                                                            ____           ____           ____           ____
                                                                         (Dollars in thousands)
<S>                                                        <C>            <C>            <C>            <C>
Balance at beginning of period                              $445           $362           $362           $319
                    
Charge-offs                                                  (16)            --            (22)            (7)
Recoveries                                                    --             --             48             -- 
Provision for loan losses (charged to operations)             23             37             57             50
                                                            ____           ____           ____           ____
Balance at end of period                                    $452           $399           $445           $362
                                                            ====           ====           ====           ====
Ratio of net charge-offs (recoveries) to average net                    
     loans outstanding during the period                    0.03%          0.00%         (0.05)%         0.02%
Ratio of allowance for loan losses to total loans           0.72%          0.78%          0.79%          0.79%
</TABLE>

     For the fiscal year ended December 31, 1997, $42,000 of the allowance for 
loan losses was allocated to loans secured by nonresidential real estate, 
$198,000 was allocated to loans secured by one- to four-family real estate, 
and $60,000 was allocated to consumer loans.  For the fiscal year ended June 
30, 1997, $67,000,  of the allowance for loan losses was allocated to loans 
secured by nonresidential real estate, $220,000 was allocated to loans secured 
by one- to four-family real estate, and $35,000 was allocated to consumer 
loans.  The allowance was unallocated for the fiscal year ended June 30, 
1996. 

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 December 31,                                   At June 30,
                                  ________________________        ________________________________________________________
                                             1997                            1997                            1996
                                  ________________________        ________________________        ________________________
                                  Amortized          Fair         Amortized          Fair         Amortized          Fair
                                     cost            value           cost            value           cost            value
                                     ____            _____           ____            _____           ____            _____
<S>                                 <C>             <C>             <C>             <C>             <C>             <C>
GNMA certificates                   $  703          $  700          $  754          $  730          $3,020          $2,946
FHLMC certificates                      --              --              --              --              26              29
                                    ______          ______          ______          ______          ______          ______
     Total mortgage-backed     
         and related securities     $  703          $  700          $  754          $  730          $3,046          $2,975  
                                    ======          ======          ======          ======          ======          ======
</TABLE>
                                      10
<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 December 31, 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 December 31, 1997
                    _________________________________________________________________________________________________________
                                            After one          After five                            Total mortgage-backed
                    One year or less      to five years        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    $  --      -- %     $  --      -- %     $ 183     6.69%     $ 517    6.87%     $ 700     $ 700    6.82%
FHLMC certificates      --      --          --      --          --       --         --      --         --        --      --
                     _____     ___       _____     ___       _____     ____      _____    ____      _____     _____    ____
     Total           $  --      -- %     $  --      -- %     $ 183     6.69%     $ 517    6.87%     $ 700     $ 700    6.82%
                     =====     ===       =====     ===       =====     ====      =====    ====      =====     =====    ====
</TABLE>
     For additional information, see Note C of the Notes to Consolidated 
Financial Statements.




                                      11
<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 December 31,                                          At June 30,  
                          ________________________________    _____________________________________________________________________
                                        1997                                1997                                 1996
                          ________________________________    _________________________________   _________________________________
                          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            $   591   10.31%   $  591   10.32%  $ 1,397   13.19%  $ 1,397   13.20%  $   588   12.70%  $   588   12.72%
Federal funds sold            100    1.74       100    1.75       200    1.89       200    1.89       400    8.64       400    8.65
Time deposits in  
    other financial 
    institutions               23    0.40        18    0.31       361    3.41       353    3.34     1,061   22.91     1,053   22.78
Investment securities:
  U.S. government and 
    federal agency 
    securities              3,098   54.05     3,098   54.09     6,993   66.02     6,993   66.07       997   21.53       997   21.57
  Municipal 
    securities<F1>            930   16.22       930   16.24       749    7.07       749    7.08       883   19.07       883   19.10
  Equity securities:   
    FHLMC stock               503    8.78       503    8.78       420    3.97       420    3.97       270    5.83       270    5.84
    Investment in 
      joint venture<F2>        29    0.51        29    0.51        29    0.27        29    0.27        18    0.39        18    0.39
    Service 
      corporation<F3>          20    0.35        20    0.35        20    0.19        20    0.19        20    0.43        20    0.43
    FHLB stock                438    7.64       438    7.65       423    3.99       423    3.99       394    8.51       394    8.52
                          _______  ______   _______  ______   _______  ______   _______  ______   _______  ______   _______  ______
Total investments         $ 5,732  100.00%  $ 5,727  100.00%  $10,592  100.00%  $10,584  100.00%  $ 4,631  100.00%  $ 4,623  100.00%
                          =======  ======   =======  ======   =======  ======   =======  ======   =======  ======   =======  ======
</TABLE>
------------------                                                    
[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>

                                      12
<PAGE>
     The following tables set forth the contractual maturities, carrying 
values, market values and average yields for Home City's investment securities 
at December 31, 1997:
<TABLE>
<CAPTION>
                                                           At December 31, 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             $1,498     5.61%         $1,600     5.94%         $   --       --%
     Municipal securities                  221     4.26             550     4.50             159     5.30   
     Equity securities: <F1>                              
          FHLMC stock                       --       --              --       --             503     0.95
          Investment in joint venture       --       --              --       --              29       --
          Service corporation               --       --              --       --              20       --
          FHLB stock                        --       --              --       --             438     7.19
                                        ______     ____          ______     ____          ______     ____
Total investments                       $1,719     5.43%         $2,150     5.57%         $1,149     3.89%
                                        ======     ====          ======     ====          ======     ====
------------------
<FN>
<F1>   By their nature, Equity securities have no maturity date.
</FN>
<CAPTION>
                                              At December 31, 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          1.06      $3,098      $3,098       5.78%
     Municipal securities            2.86         930         930       4.58%
     Equity securities                            990         990       3.66%
                                               ______      ______
          Total                                $5,018      $5,018
                                               ======      ======
</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.

                                      13
<PAGE>
     At December 31, 1997, Home City's certificates of deposit totaled $42.3 
million, or 81.81% of total deposits.  Of such amount, approximately $16.9 
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.

     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 December 31,                        At June 30,
                                       ___________________     ___________________________________________
                                             1997                    1997                    1996
                                       ___________________     ___________________     ___________________
                                                  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                                 $   763       1.48%     $   540       1.08%     $   302       0.64%
NOW accounts <F1>                          774       1.50          675       1.34          395       0.84
Passbook savings accounts <F2>           7,863      15.21        7,863      15.66        9,561      20.27
                                       _______     ______      _______     ______      _______     ______
     Total transaction accounts          9,400      18.19        9,078      18.08       10,258      21.75
                              
Certificates of deposit:                              
________________________
     4.01 - 6.00%                       14,742      28.52       16,027      31.91       15,810      33.51
     6.01 - 8.00%                       27,547      53.29       25,120      50.01       21,106      44.74
                                       _______     ______      _______     ______      _______     ______
     Total certificates of deposit      42,289      81.81       41,147      81.92       36,916      78.25
                                       _______     ______      _______     ______      _______     ______
Total deposits <F3>                    $51,689     100.00%     $50,225     100.00%     $47,174     100.00%
                                       =======     ======      =======     ======      =======     ======
</TABLE>
------------------
[FN]
<F1>     Home City's weighted-average interest rate paid on NOW accounts 
         fluctuates with the general movement of interest rates.  At December 
         31, 1997 and June 30, 1997 and 1996, the weighted-average rates on NOW
         accounts were 1.83%, 1.73%,  and 1.71%, 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 2.31%, 2.45%, and 2.58%,
         at December 31, 1997 and June 30, 1997 and 1996, respectively.

<F3>     IRAs are included in the various certificates of deposit balances.  
         IRAs totaled $6.4 million, $6.0 million, and $5.5 million as of 
         December 31, 1997 and June 30, 1997 and 1996.
</FN>

     The following table shows rate and maturity information for Home City's 
certificates of deposit as of December 31, 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>
              4.01 - 6.00%             $12,315     $ 2,258     $   164      $     6     $14,743
              6.01 - 8.00%               4,541       7,400      14,715          890      27,546
                                       _______     _______     _______      _______     _______
     Total certificates of deposit     $16,856     $ 9,658     $14,879      $   896     $42,289
                                       =======     =======     =======      =======     =======
</TABLE>
                                      14
<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 
December 31, 1997: 
<TABLE>
<CAPTION>

       Maturity                           Amount
       ________                           ______
                                 (Dollars in thousands)
<S>                                       <C>
Three months or less                      $  605
Over 3 months to 6 months                  1,981
Over 6 months to 12 months                 1,074
Over 12 months                             4,219
                                          ______
     Total                                $7,879
                                          ======
</TABLE>

          The following table sets forth Home City's deposit account balance 
activity for the periods indicated:
<TABLE>
<CAPTION>
                             Six months ended December 31,      Year ended June 30,
                             _____________________________      ___________________
                                   1997        1996              1997        1996        
                                   ____        ____              ____        ____
                                            (Dollars in thousands)
<S>                              <C>         <C>               <C>         <C>
Beginning balance                $50,225     $47,174           $47,174     $40,936
                    
Deposits                          20,458      10,097            28,783      42,110
Withdrawals                      (20,437)     (9,043)          (28,418)    (38,242)
                                 _______     _______           _______     _______
Net increase (decrease) before                    
     interest credited                21       1,054               365       3,868
                    
Interest credited                  1,443       1,331             2,686       2,370
                                 _______     _______           _______     _______
Ending balance                   $51,689     $49,559           $50,225     $47,174
                                 =======     =======           =======     =======
     Net increase                $ 1,464     $ 2,385           $ 3,051     $ 6,238
                    
     Percentage increase            2.91%       5.06%             6.47%      15.24%
</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 December 31, 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>
                                               Six months ended December 31,     Year ended June 30,
                                               _____________________________     ___________________
                                                      1997        1996             1997        1996   
                                                      ____        ____             ____        ____
                                                                (Dollars in thousands)
<S>                                                 <C>         <C>              <C>         <C>
Average balance outstanding                         $ 4,452     $ 3,050          $ 3,564     $ 2,582
                         
Maximum amount outstanding at any month end                         
     during the period                                5,712       4,155            5,108       3,564
                         
Balance outstanding at end of period                  5,712       4,101            5,108       2,903
                         
Weighted average interest rate during the period       6.39%       6.62%            6.50%       6.66%
                         
Weighted average interest rate at end of period        6.24%       6.49%            6.29%       6.49%
</TABLE>
                                      15
<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 December 31, 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, 1997, Home City had approximately 3.98% 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 December 31, 1997, Home City had fifteen 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.

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 
                                      16
<PAGE>
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 December 31, 1997, was 15.20%.   For information concerning 
Home City's capital, see "ITEM SIX. Management's Discussion and Analysis or 
Plan of  Operation - Liquidity and 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 December 31, 1997, met the standards 
for the highest level, a " well-capitalized association".

     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 
                                      17
<PAGE>
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 4% 
of its net withdrawable savings deposits plus borrowings payable in one year 
or less.  Monetary penalties may be imposed upon member institutions failing 
to meet its liquidity requirements.  The eligible liquidity of Home City, as 
computed under current regulations, at December 31, 1997, was approximately 
$4.0 million, or 7.3%.

     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").  Prior to September 30, 1996, the QTL 
Test required savings associations to maintain a specified level of 
investments in assets that are designated as QTIs, which are generally related 
to domestic residential real estate and manufactured housing and include stock 
issued by any FHLB, the FHLMC or the FNMA.  Uner this test  65% of an 
institution's "portfolio assets" (total assets less goodwill and other 
intangibles, property used to conduct business and 20% of liquid assets) must 
consist of QTIs on a monthly average basis in 9 out of every 12 months.  
Congress created a second QTL Test, effective September 30, 1996, pursuant to 
which a savings association may also qualify as a QTL thrift if at least 60% 
of the association assets (on a tax basis) consist of specified assets 
(generally loans secured by residential real estate or deposits, educational 
loans, cash and certain governmental obligations). The OTS may grant 
exceptions to the QTL Test under certain circumstances.  If a savings 
association fails to meet the QTL Test, the association 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."  At 
December 31, 1997, Home City had QTIs equal to approximately 80.1% of its 
total portfolio assets.

     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 $1,688,000 to one borrower at December 31, 1997.  Notwithstanding the 
                                      18
<PAGE>
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 December 31, 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 December 
31, 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 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 
                                      19
<PAGE>
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 December 31, 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 the association 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.  The reserves of the BIF met the level required by law in May 1995.

     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 
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 associations effective in mid-1995. 
                                      20
<PAGE>
     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 is now being shared 
by both the SAIF and the BIF.  As a result of such cost sharing, BIF 
assessments for healthy banks in 1998 are $.013 per $100 in deposits and SAIF 
assessments for healthy institutions in 1998 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 $47.8 million (subject to an exemption of up to $4.7 million), and to 
maintain reserves of 10% of deposits in net transaction accounts against that 
portion of total transaction accounts in excess of $47.8 million.  These 
percentages are subject to adjustment by the FRB.  At December 31, 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 $438,000 at December 31, 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 December 31, 1997, Home 
City's maximum limit on advances was approximately $8.8 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.

     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.
                                      21
<PAGE>
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 may be 
subject to alternative minimum 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.  Although the 
Taxpayers 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.  HCFC's average gross receipts for the three 
years ending December 31, 1997, is $5 million.

     Certain thrift institutions such as Home City were, prior to the 
enactment of the Small Business Jobs Protection Act, which was signed into law 
on August 21, 1996, 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.

     Under Section 593, 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 because such method provided a higher bad 
debt deduction than the experience method.

     The Small Business Jobs Protection Act eliminated the percentage of 
taxable income reserve method of accounting for bad debts by thrift 
institutions, effective for taxable years beginning after 1995.  Thrift 
institutions that would be treated 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.  Any adjustments under Section 481(a) of the Code 
required to be recaptured with respect to such change generally 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 becomes 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 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 
                                      22
<PAGE>
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 Small Business Jobs Protection Act, which 
require 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 shareholder (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 Home City's gross income 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 December 
31, 1997, Home City's pre-1988 reserves 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 December 31, 1997, 
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 compu
ted Ohio taxable income and 8.9% of computed Ohio taxable income in excess of 
$50,000 or (ii) 0.582% times taxable net worth.

     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 
litter tax is equal to 0.11% of the first $50,000 of computed Ohio taxable 
income and 0.22% 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 
0.014% times taxable net worth.

     Ohio corporation franchise tax law is scheduled to change markedly as a 
consequence of legislative reforms enacted July 1, 1997.  Tax liability, 
however, continues to be measured by both net income and net worth.  In 
general, tax liability will be 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 or (ii) 0.40% of taxable net worth.  The minimum tax will 
still be $50 per year and maximum tax liability as measured by net worth will 
be limited to $150,000 per year.  The special litter taxes remain in effect.  
Various other changes in the tax law may affect HCFC.

     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, less any statutory deductions.  
This rate is scheduled to decrease in each of the years 1999 and 2000.  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.
                                      23
<PAGE>
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.

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 
                                      24
<PAGE>
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 December 31, 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                  $362,000
</TABLE>
------------------                                                    
[FN]
<F1>   At December 31, 1997, Home City's properties and equipment had a 
       total net book value of $493,000.  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 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.







                                      25
<PAGE>
                                   PART II


ITEM 5. Market for Common Equity and Related Stockholder Matters

     There were 904,590 common shares of HCFC outstanding on December 31, 
1997, held of record by  approximately 339 shareholders.  Price information 
with respect to HCFC's common shares is quoted on The Nasdaq SmallCap 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, May 20, 
1997, and August 18, 1997, as well as $0.09 per share on October 20,1997.
<TABLE>
<CAPTION>
      March 31, 1997     June 30, 1997     September 30, 1997      December 31, 1997
      ______________     _____________     __________________      _________________
<S>      <C>                <C>                 <C>                     <C>
High     $14.250            $14.438             $16.250                 $18.500
Low      $12.000            $12.750             $14.188                 $15.250
</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.





                                      26
<PAGE>
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 mutual federal savings bank to a 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.  

     At the time of the Conversion the fiscal year end for  both HCFC and Home 
City was June 30.  In December 1997 the Board of Directors resolved that the 
fiscal year end of Home City Financial Corporation be changed to December 31 
from June 30.   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.  Unaudited consolidated 
financial statements for the six-month period ended December 31, 1996, have 
been included in the Annual Report for comparison purposes.

     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 Six Months Ended December
         31, 1997 and 1996," and "Comparison of Results of Operations for the 
         Fiscal Years Ended June 30, 1997 and 1996;"

     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 $71.9 million at 
December 31, 1997, an increase of $1.9 million, or 2.70%, over the $70.0 
million in total assets at June 30, 1997.  Such increase in assets was funded 
primarily by the $1.5 million net increase in deposits, $604,000 net increase 
in advances from the Federal Home Loan Bank (the "FHLB"), and undistributed 
net earnings of $341,000.

     Cash and cash equivalents, time deposits and investment securities 
totaled $6.6 million at December 31, 1997, a decrease of $4.5 million, or 
40.66%, under June 30, 1997 levels.  During the six months ended December 31, 
1997, $3.6 million of investment securities matured, which consisted primarily 
                                      27
<PAGE>
of U.S. government obligations totaling $500,000, U. S. federal agency 
obligations totaling $3.0 million, and tax-free securities totaling $70,000.  
The proceeds were used primarily to fund the increased demand for loans and 
the repurchase of common shares.

     Mortgage-backed securities totaled $700,000 at December 31, 1997, a 
decrease of $30,000 from June 30, 1997.  Due to the composition of the 
mortgage-backed securities portfolio coupled with the current loan demand, no 
additional purchases were made.  

     Loans receivable totaled $63.0 million at December 31, 1997, an increase 
of $6.5 million, or 11.52%, from the $56.5 million total at June 30, 1997.  
During the six months ended December 31, 1997, loan disbursements amounted to 
$12.4 million.  Such disbursements were partially offset by principal 
repayments of $5.6 million.

     Home City's allowance for loan losses totaled $452,000 at December 31, 
1997, which represented 0.72% of total loans and 174.52% of non-performing 
loans.  At June 30, 1997, the allowance for loan losses totaled $445,000, 
which represented 0.79% of total loans and 116.49% of non-performing loans.

     Non-performing loans amounted to $259,000 and $382,000 at December 31, 
1997 and June 30, 1997, respectively, and represented 0.36% and 0.55% of total 
assets at each date.  The decrease in six months ended December 31, 1997 was 
due primarily to $230,000 in loans that were paid off, plus $123,000 in loans 
that became classified as non-performing, less $15,000 in loans that became 
classified as performing and $1,000 in principal reductions, for a net  
reduction of $123,000.  All loans classified as non-performing at December 31, 
1997, were either under a workout plan or  being refinanced elsewhere, the 
underlying collateral was in the process of being sold or foreclosure action 
was being initiated.  Although management believes that its allowance for loan 
losses at December 31, 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 $51.7 million at December 31, 1997, an increase of $1.5 
million, or 2.91%, from  $50.2 million at June 30, 1997.  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.  Advances 
from the FHLB increased from $4.1 million at December 31, 1996, to $5.7 
million at December 31, 1997, an increase of 39.28%, as advances were used to 
fund loan originations.

Comparison of Results of Operations for the Six Months Ended December 31, 1997 
and 1996

     The following discussion and analysis of the 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.  Due to the change in fiscal year ends from June 30 to December 
31, the following focuses on the comparison of the results of operations for 
the six-month periods ended December 31, 1997 and 1996.  The unaudited 
consolidated financial statements for the six-month period ended December 31, 
1996, have been included in the Annual Report for comparative purposes.

     General .  Net income for the six months ended December 31, 1997, 
amounted to $494,000, an increase of $311,000, or 169.95%, over the $183,000 
recorded in the same six-month period ended December 31, 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 $453,000 increase in net interest income, and a $14,000 
decrease in the provision for loan losses, which was partially offset by a 
$16,000 increase in noninterest expense, and a $140,000 increase in federal 
income tax expense.

     Net Interest Income.  Net interest income totaled $1.5 million for the 
six months ended December 31, 1997, an increase of $453,000, or 42.30%, over 
the $1.1 million recorded in the same six-month period in 1996.  Interest 
income on loans increased by $578,000, or 25.70%, during the six months ended 
December 31, 1997 due primarily to an increase in the average balance of the 
loans outstanding of $11.9 million, or 24.63%, coupled with an 8 basis point 
(100 basis points equals one percent) increase in yield from 9.29% in the 
six-month period in 1996 to 9.37% in 1997.  Interest income on mortgage-backed 
securities decreased by $75,000, or 76.53%, due primarily to a $2.2 million, 
or 74.69%, decrease in the average balance of mortgage-backed securities 
outstanding, coupled with a decrease in the weighted-average yield 
period-to-period, from 6.76% in 1996 to 6.34% in 1997.  Interest income on 
                                      28
<PAGE>
investment securities  increased by $97,000, or 119.75%, for the six months 
ended December 31, 1997, compared to the same period in 1996, as the average 
balance increased by $3.5 million year to year and the related yield decreased 
by 84 basis points to 6.08% in 1997.  Interest income on interest-bearing 
demand deposits in other banks, federal funds sold, and time deposits 
decreased by $3,000, $13,000, and $33,000, respectively, for the six months 
ended December 31, 1997, compared to the same six-month period in 1996.  The 
average balance of interest-bearing demand deposits decreased $120,000, or 
15.98%.  The average balance invested in federal funds sold decreased by 
$556,000, or 64.20%, compared to 1996, while the average balance of time 
certificates decreased $882,000, or 72.77%.  The yield on interest-bearing 
deposits decreased 15 basis points to 4.72%, while the yield on federal funds 
sold increased 34 basis points to 5.45% and the time deposit yield decreased 
215 basis points to 4.45%.

     Interest expense on deposits increased by $57,000, or 4.27%, for the six 
months ended December 31, 1997, due primarily to an increase in the average 
balance of deposits outstanding of $1.6 million, or 3.29%, coupled with an 
increase in the weighted-average rate paid from 5.46% for the six months ended 
December 31, 1996, to 5.51% in the same six months in 1997.  Interest expense 
on FHLB advances increased by $41,000, or 40.59%, primarily due to an increase 
in the average balance of advances outstanding of $1.4 million, or 45.97%, 
partially offset by  a decrease in weighted-average rate from 6.61% during the 
six months ended December 31, 1996 to 6.39% in the same six months in 1997.

     As a result of the foregoing changes in interest income and interest 
expense, the net interest rate spread increased by 4 basis points, to 3.39% 
for the six months ended December 31, 1997, as compared to 3.35% for the six 
months ended December 31, 1996, while the net interest margin increased by 68 
basis points to 4.47% for the six months ended December 31, 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 
requirements regarding asset classifications.  As a result of its analysis, 
management concluded that the allowance was adequate as of December 31, 1997.  
There can be no assurance that the allowance will be adequate to cover future 
losses on non-performing assets.

     Home City had net charge-offs of $16,000 during the six months ended 
December 31, 1997, net recoveries of  $26,000 during the fiscal year ended 
June 30, 1997  and net charge-offs of $7,000 during the fiscal year ended June 
30, 1996.  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 93% 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 December 31, 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 
$23,000 and $37,000 for the six months ended December 31, 1997 and 1996, 
respectively.  The provision for loan losses was $57,000 and $50,000 for the 
fiscal years ended June 30, 1997 and 1996, respectively.  The ratio of 
non-performing loans to total loans decreased to 0.41% in the six months ended 
December 31, 1997 from 0.45% in the same six-month period in 1996, and 
increased from 0.54% in the fiscal year ended June 30, 1996 to 0.68% in the 
fiscal year ended June 30, 1997.  At December 31, 1997, and 1996, 
respectively, Home City had ratios of allowance for loan losses to total loans 
of 0.72% and 0.78%, and ratios of allowance for loan losses to non-performing 
loans of 174.52% and 172.73%.  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 $23,000  and $37,000 made in 
the six-month periods ended December 31, 1997 and 1996, were deemed 
appropriate by management to absorb reasonably foreseeable loan losses.   
                                      29
<PAGE>
     Noninterest Income.  Noninterest income totaled $35,000 for the six 
months ended December 31, 1997, the same as for the six months ended December 
31, 1996.  Service charges on deposit accounts and security gains increased 
$1,000 each while income from life insurance decreased $4,000.  A $2,000 
increase was also experienced in other income compared to the same six-month 
period ended December 31, 1996.

     Noninterest Expense.  Noninterest expense increased by $16,000, or 1.92%, 
to a total of $850,000 for the six months ended December 31, 1997, as compared 
to same six-month period in 1996.  The increase resulted primarily from a 
$201,000 increase in salary and benefit expense, and a $64,000 increase in 
professional fees (legal, accounting and examination fees).  Conversely, a 
significant decrease was noted in the FDIC deposit insurance expense and 
assessments.  During the third calendar quarter of 1996 the Company was 
subject to a "Special SAIF Assessment" (a deposit insurance assessment paid as 
a result of legislation enacted to recapitalize the Savings Association 
Insurance Fund) equal to $263,000.  In addition, franchise taxes increased by 
$48,000 during the six months ended December 31, 1997, compared to the same 
period in 1996.  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 
$192,000 for the six months ended December 31, 1997, an increase of $140,000, 
or 269.23%, from the $52,000 provision recorded for the same period in  1996. 
HCFC's effective tax rate increased from 22.13% for the six months ended 
December 31, 1996 to 28.00% in fiscal 1997 which was primarily the result of 
tax-exempt income from investments and deferred loan costs.  

Comparison of Results of Operations for the Fiscal 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.
                                      30
<PAGE>
     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 had net recoveries of $26,000 
during the fiscal year ended June 30, 1997, and net charge-offs of  $7,000 
during the fiscal year ended June 30, 1996.  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 made up 93% of Home City's loan portfolio, and loans secured by first 
mortgages on one- to four-family residential real estate made 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 and $50,000 for the fiscal years ended 
June 30, 1997 and 1996, respectively.  The ratio of non-performing loans to 
total loans increased to 0.68% in fiscal 1997 from 0.54% in fiscal 1996.  At 
June 30, 1997 and 1996, Home City had a ratio of allowance for loan losses to 
total loans of 0.79%, and ratios of allowance for loan losses to 
non-performing loans of 116.49% and 146.56%.  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 and $50,000 made in 1997 and 1996, 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.








                                      31
<PAGE>
Yields Earned and Rates Paid

     The following tables present 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>
                                                                   Six months ended December 31, 
                                                 ______________________________________________________________
                                                               1997                             1996
                                                 _____________________________    _____________________________
                                                   Average   Interest               Average   Interest
                                                 outstanding  earned/   Yield/    outstanding  earned/   Yield/
                                                   balance     paid      rate       balance     paid      rate
                                                   _______     ____      ____       _______     ____      ____
                                                                      (Dollars in thousands)
<S>                                                <C>        <C>      <C>          <C>        <C>      <C>  
Interest-earning assets:                              
     Interest-bearing demand deposits              $   631    $   15     4.72%      $   751    $   18     4.87%
     Federal funds sold                                310         9     5.45           866        22     5.11
     Time deposits                                     330         7     4.45         1,212        40     6.60
     Investment securities                           5,872       178     6.08         2,341        81     6.92
     Mortgage-backed and related securities            730        23     6.34         2,884        98     6.76
     Loans receivable <F1>                          60,327     2,827     9.37        48,404     2,249     9.29
                                                   _______    ______                _______    ______
          Total interest-earning assets             68,200     3,059     8.97        56,458     2,508     8.88
                              
Noninterest-earning assets:                              
     Cash and due from banks                           646                              576          
     Less: Allowance for loan losses                  (453)                            (340)          
     Properties and equipment                          499                              488          
     Other non-earning assets                        1,188                            1,636          
                                                   _______                          _______
          Total assets                             $70,080                          $58,818          
                                                   =======                          =======
Interest-bearing liabilities:                              
     NOW accounts                                  $   409    $    4     1.83       $   251    $    2     1.72
     Money market accounts                             379         7     3.48           165         3     3.37
     Passbook accounts                               7,799        90     2.31         9,768       122     2.50
     Certificates of deposit                        41,940     1,292     6.16        38,734     1,209     6.24
                                                   _______    ______                _______    ______
          Total deposits                            50,527     1,393     5.51        48,918     1,336     5.46
                              
     FHLB advances                                   4,452       142     6.39         3,050       101     6.61
                                                   _______    ______                _______    ______
          Total interest-bearing liabilities        54,979     1,535     5.58        51,968     1,437     5.53   
                              
Noninterest-bearing liabilities                      1,343                            1,362
                                                   _______                          _______
          Total liabilities                         56,322                           53,330
                              
Unrealized gain on securities                          277                              161
Additional paid-in capital                           9,095                                0  
Treasury stock                                        (711)                               0 
Common shares acquired by ESOP                        (749)                               0 
Common shares acquired by RRP                          (20)                               0
Retained earnings                                    5,866                            5,327
                                                   _______                          _______
Total liabilities and shareholders' equity         $70,080                          $58,818 
                                                   =======                          =======
Net interest income; net interest rate spread                 $1,524     3.39%                 $1,071     3.35%
                                                              ======   ======                  ======   ======
Net interest margin (net interest income as a                              
     percent of average interest-earning assets)                         4.47%                            3.79%
                                                                       ======                           ======
Average interest-earning assets to interest-                              
     bearing liabilities                                               124.05%                          108.64%
                                                                       ======                           ======
</TABLE>
------------------
[FN]
<F1>   Calculated net of deferred loan fees, loan discounts, loans in process 
       and allowance for loan losses.
</FN>
                                      32
<PAGE>
<TABLE>
<CAPTION>
                                                                        Year ended June 30,
                                                 _____________________________________________________________
                                                               1997                             1996
                                                 ____________________________     ____________________________
                                                   Average   Interest               Average   Interest
                                                 outstanding  earned/  Yield/     outstanding  earned/  Yield/
                                                   balance     paid     rate        balance     paid     rate
                                                   _______     ____     ____        _______     ____     ____
                                                                    (Dollars in thousands)
<S>                                                <C>        <C>      <C>          <C>        <C>      <C>
Interest-earning assets:                              
     Interest-bearing demand deposits              $   899    $   43     4.78%      $   648    $   32     4.89%
     Federal funds sold                                763        39     5.13           682        37     5.39
     Time deposits                                   1,785       102     5.72           691        24     3.48
     Investment securities                           4,655       259     5.55         1,868       111     5.96
     Mortgage-backed and related securities          1,989       134     6.74         3,368       209     6.19
     Loans receivable <F1>                          51,373     4,734     9.22        43,702     4,094     9.37
                                                   _______    ______                _______    ______
          Total interest-earning assets             61,464     5,311     8.64        50,959     4,507     8.84
                              
Noninterest-earning assets:                              
     Cash and due from banks                           628                              561 
     Less: Allowance for loan losses                  (387)                            (314)
     Properties and equipment                          488                              481          
     Other non-earning assets                        1,499                              734          
                                                   -------                          _______
          Total assets                             $63,692                          $52,421          
                                                   =======                          =======
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
     Certificates of deposit                        39,567     2,458     6.21        34,225     2,116     6.18
                                                   _______    ______                _______    ______
          Total deposits                            48,884     2,686     5.50        44,122     2,370     5.37
                              
     FHLB advances                                   3,564       232     6.50         2,586       172     6.64
                                                   _______    ______                _______    ______
          Total interest-bearing liabilities        52,449     2,918     5.56        46,708     2,542     5.44
                              
Noninterest-bearing liabilities                      1,369                              525
                                                   _______                          _______
          Total liabilities                         53,818                           47,233 
                              
Unrealized gain on securities                          183                              140 
Additional paid-in capital                           4,505                               -- 
Common shares acquired by ESOP                        (378)                              --
Retained earnings                                    5,564                            5,048
                                                   _______                          _______
Total liabilities and shareholders' equity         $63,692                          $52,421
                                                   =======                          =======
Net interest income; net interest rate spread                 $2,393     3.08%                 $1,965     3.40%
                                                              ======   ======                  ======   ======
Net interest margin (net interest income as a                              
     percent of average interest-earning assets)                         3.89%                            3.86%
                                                                       ======                           ======
Average interest-earning assets to interest-                              
     bearing liabilities                                               117.19%                          109.10%
                                                                       ======                           ======
</TABLE>
------------------
[FN]
<F1>   Calculated net of deferred loan fees, loan discounts, loans in process 
       and allowance for loan losses.
</FN>
                                      33
<PAGE>
     The tables below describe 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 
periods 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>
                                                                  Six months ended December 31,
                                                                  _____________________________
                                                          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               $  (3)    $  --      $  (3)    $   1     $  --      $   1
     Federal funds sold                               (15)        1        (14)        7        (3)         4
     Time deposits                                    (29)       (4)       (33)       14        20         34
     Investment securities                            123       (25)        98        18         6         24
     Mortgage-backed and related securities           (73)       (2)       (75)      (18)       15         (3)
     Loans receivable                                 553        25        578       299        (9)       290
                                                    _____     _____      _____     _____     _____      _____
          Total interest income                       556        (5)       551       321        29        350
                                                    _____     _____      _____     _____     _____      _____
Interest expenses attributable to:                              
     NOW accounts                                       2        --          2         1        --          1
     Money market accounts                              4        --          4        --         3          3
     Passbook savings accounts                        (25)       (7)       (32)       (2)       (9)       (11)
     Certificates of deposit                          100       (17)        83       206        (8)       198
     Borrowed funds                                    46        (5)        41        11        (1)        10
                                                    _____     _____      _____     _____     _____      _____
          Total interest expense                      127       (29)        98       216       (15)       201
                                                    _____     _____      _____     _____     _____      _____
     Increase (decrease) in net interest income     $ 429     $  24      $ 453     $ 105     $  44      $ 149
                                                    =====     =====      =====     =====     =====      =====
<CAPTION>
                                                                         Years 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 
                                      34
<PAGE>
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 December 31, 1997, 2% of the discounted present value of Home City's 
assets was approximately $1.5 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 points decrease) was $880,000 at December 31, 1997, 
Home City would not have been required to deduct from its capital in 
determining whether Home City met its risk-based capital requirement.

     Presented below, as of December 31, 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 December 31, 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)%           $(2,169)          (17)%
              +300                  (55)             (1,493)          (11)   
              +200                  (35)               (880)           (7)  
              +100                  (17)               (358)           (3)   
                 0                    0                   0             0    
              -100                   17                 191             1     
              -200                   35                 403             3     
              -300                   55                 703             5    
              -400                   70               1,102             8 
</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 
                                      35
<PAGE>
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.
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>
                                                        Six months ended     
                                                           December 31,        Year ended June 30,
                                                           ____________        ___________________
                                                         1997        1996        1997        1996
                                                         ____        ____        ____        ____
                                                                  (Dollars in thousands)
<S>                                                    <C>         <C>         <C>         <C>
Net income                                             $   494     $   183     $   577     $   514
Adjustments to reconcile net income to net cash                    
     from operating activities                             314         345          52          29
                                                       _______     _______     _______     _______
Net cash provided by operating activities                  808         528         629         543
Net cash provided by (used in) investing activities     (2,483)     (4,487)    (13,843)     (7,585)
Net cash provided by (used in) financing activities      1,135      11,955      13,429       6,508
                                                       _______     _______     _______     _______
Net change in cash and cash equivalents                   (540)      7,996         215        (534)
Cash and cash equivalents at beginning of period         2,058       1,843       1,843       2,377
                                                       _______     _______     _______     _______
Cash and cash equivalents at end of period             $ 1,518     $ 9,839     $ 2,058     $ 1,843
                                                       =======     =======     =======     =======
</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 4% 
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 December 31, 1997, Home 
City's regulatory liquidity ratio was 7.30%.  At such date, Home City had 
commitments to originate loans totaling $3.2 million and no commitments to 
purchase or sell loans.  Home City considers its liquidity and capital 
reserves sufficient to meet itort- and long-term needs.  Adjustments to 
liquidity and capital reserves may be necessary, however, if loan demand 
increases more than expected or if deposits decrease substantially.  See Note 
O 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 December 
31, 1997, June 30, 1997 and June 30, 1996.
                                      36
<PAGE>
     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 
from 4% to 5%, except for those associations with the highest examination 
rating and acceptable levels of risk. 

     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 $452,000 at December 31, 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 December 31, 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      $10,801     15.20%     $ 1,066     1.50%     $ 9,735     13.70%      $71,068
Core capital           10,801     15.20        2,132     3.00        8,669     12.20        71,068
Risk-based capital     11,253     26.59        3,386     8.00        7,867     18.59        42,321
</TABLE>

     At December 31, 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, HCFC 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.
                                      37
<PAGE>
ITEM 7. Financial Statements
                                   (Company Logo)
                                    ROBB,DIXON
                         FRANCIS, DAVIS, ONESON & COMPANY
================================================================================
                          CERTIFIED PUBLIC ACCOUNTANTS
              1205 WEAVER DRIVE - GRANVILLE, OHIO  43023 - 740-321-1000
--------------------------------------------------------------------------------


                           INDEPENDENT AUDITOR'S REPORT


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


     We have audited the consolidated balance sheets of Home City Financial 
Corporation and subsidiaries as of December 31, 1997, June 30, 1997 and June 
30,1996, and the related consolidated statements of income, shareholders' 
equity, and cash flows for the six months ended December 31, 1997, and for 
each of the years in the two-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 financial statements referred to above present 
fairly, in all material respects, the consolidated financial position of Home 
City Financial Corporation and subsidiaries as of December 31, 1997, June 30, 
1997 and June 30, 1996, and the consolidated results of their operations and 
their cash flows for the six months ended December 31, 1997, and for each of 
the years in the two-year period ended June 30, 1997, in conformity with 
generally accepted accounting principles.

     We have compiled the accompanying consolidated balance sheet of Home City 
Financial Corporation as of December 31, 1996 and the related consolidated 
statements of income, changes in shareholders' equity and cash flows for the 
six months then ended, in accordance with Statements on Standards for 
Accounting and Review Services issued by the American Institute of Certified 
Public Accountants.

     A compilation is limited to presenting in the form of financial 
statements information that is the representation of Management.  We have not 
audited or reviewed the accompanying financial statements and, accordingly, do 
not express an opinion or any other form of assurance on them.


                                          ROBB, DIXON,
                                     FRANCIS, DAVIS, ONESON
                                           & COMPANY

Granville, Ohio
February 6, 1998
                                      38
<PAGE>
                          HOME CITY FINANCIAL CORPORATION
                                SPRINGFIELD,  OHIO
                            CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      (Dollars in thousands)
     
                                                                  At December 31,                At June 30,
                                                                 __________________           __________________
                                                                 1997          1996           1997          1996
                                                                 ____          ____           ____          ____
                                                                           (Unaudited)
<S>                                                           <C>           <C>            <C>           <C>
ASSETS
Cash and cash equivalents:                    
     Cash and due from banks                                   $   827       $ 1,519        $   461       $   855
     Interest-bearing demand deposits in other banks               591         7,320          1,397           588
     Federal funds sold                                            100         1,000            200           400
                                                               _______       _______        _______       _______
          Total cash and cash equivalents                        1,518         9,839          2,058         1,843
                    
Time deposits with original maturities of 90 days or more           23           361            361         1,061
Investment securities available-for-sale, at fair value          5,018         2,642          8,634         2,582
Mortgage-backed and related securities available-for-sale,                     
  at fair value                                                    700         2,748            730         2,975
Loans, net                                                      62,535        50,558         56,035        45,225
Accrued interest receivable                                        409           313            407           273
Properties and equipment                                           493           485            488           488
Cash surrender value of life insurance                           1,085         1,070          1,070         1,044
Other assets                                                        73           124            181           237
                                                               _______       _______        _______       _______
          TOTAL ASSETS                                         $71,854       $68,140        $69,964       $55,728
                                                               =======       =======        =======       =======
LIABILITIES AND SHAREHOLDERS' EQUITY                    
Liabilities:                    
Deposits                                                       $51,689       $49,559        $50,225       $47,174
Advances from Federal Home Loan Bank                             5,712         4,101          5,108         2,903
Accrued interest payable                                            79            65             59            49
Advance payments by borrowers for taxes and insurance               71            69             21            20
Deferred income taxes                                               68            70            100            68
Other liabilities                                                  231           283            172           116
                                                               _______       _______        _______       _______
          TOTAL LIABILITIES                                     57,850        54,147         55,685        50,330
                                                               _______       _______        _______       _______
Shareholders' equity:                    
Preferred shares of no par value; 1,000,000 shares                    
  authorized; no shares issued and outstanding                       0             0              0             0
Common shares of no par value; 5,000,000 shares                    
  authorized; 952,200 shares issued                                  0             0              0             0
Additional paid-in capital                                       9,150         9,085          9,085             0
Retained earnings, substantially restricted                      6,037         5,454          5,696         5,271
Treasury stock, 47,610 common shares; at cost                     (711)            0              0             0
Unrealized gain on securities available-for-sale,                    
  net of applicable deferred income taxes                          332           216            260           127
Common shares purchased by:                    
  Employee Stock Ownership Plan                                   (686)         (762)          (762)            0
  Recognition and Retention Plan                                  (118)            0              0             0
                                                               _______       _______        _______       _______
          TOTAL SHAREHOLDERS' EQUITY                            14,004        13,993         14,279         5,398
                                                               _______       _______        _______       _______
     TOTAL LIABILITIES AND SHAREHOLDERS'                    
              EQUITY                                           $71,854       $68,140        $69,964       $55,728
                                                               =======       =======        =======       =======
</TABLE>
-----------------------
See accompanying notes.
                                      39
<PAGE>
                        HOME CITY FINANCIAL CORPORATION
                              SPRINGFIELD, OHIO
                       CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      (Dollars in thousands)
                    
                                                          Six months ended               Year ended
                                                             December 31,                  June 30,
                                                          __________________          __________________
                                                          1997          1996          1997          1996
                                                          ____          ____          ____          ____
                                                                    (Unaudited)
<S>                                                     <C>           <C>           <C>           <C>
INTEREST INCOME:                    
Loans                                                    $2,827        $2,249        $4,734        $4,094
Mortgage-backed securities                                   23            98           134           209
Investment securities                                       178            81           259           111
Federal funds sold                                            9            22            39            37
Time deposits                                                 7            40           102            24
Interest-bearing demand deposits in other banks              15            18            43            32
                                                         ______        ______        ______        ______
     TOTAL INTEREST INCOME                                3,059         2,508         5,311         4,507
                                                         ______        ______        ______        ______
INTEREST EXPENSE:                    
Deposits                                                  1,393         1,336         2,686         2,370
Advances from Federal Home Loan Bank                        142           101           232           172
                                                         ______        ______        ______        ______
     TOTAL INTEREST EXPENSE                               1,535         1,437         2,918         2,542
                                                         ______        ______        ______        ______
     NET INTEREST INCOME                                  1,524         1,071         2,393         1,965
Provision for loan losses                                    23            37            57            50
                                                         ______        ______        ______        ______
     NET INTEREST INCOME AFTER PROVISION                    
          FOR LOAN LOSSES                                 1,501         1,034         2,336         1,915
                    
NONINTEREST INCOME:                    
Service charges on deposits                                   4             3             5             2
Life insurance                                               26            30            61            46
Gain (loss) on sale of securities, net                        1             0           (19)            0
Other income                                                  4             2            14            10
                                                         ______        ______        ______        ______
     TOTAL NONINTEREST INCOME                                35            35            61            58
                                                         ______        ______        ______        ______
NONINTEREST EXPENSE:                    
Salaries and employee benefits                              447           246           620           532
Supplies, telephone and postage                              19            22            47            44
Occupancy and equipment                                      58            50           101           102
FDIC deposit insurance                                       16           311           328            96
Data processing                                              45            34            69            54
Legal, accounting and examination                           115            51           154           110
Franchise taxes                                              86            38           126            72
Other expenses                                               64            82           163           206
                                                         ______        ______        ______        ______
     TOTAL NONINTEREST EXPENSE                              850           834         1,608         1,216
                                                         ______        ______        ______        ______
     NET INCOME BEFORE FEDERAL INCOME                    
          TAX EXPENSE                                       686           235           789           757
                    
Federal income tax expense                                  192            52           212           243
                                                         ______        ______        ______        ______
     NET INCOME                                          $  494        $  183        $  577        $  514
                                                         ======        ======        ======        ======
Earnings per common share - basic                        $  .59        $  .21           N/A           N/A
Earnings per common share - diluted                      $  .53        $  .21           N/A           N/A
</TABLE>
-----------------------
See accompanying notes.
                                      40
<PAGE>
                           HOME CITY FINANCIAL CORPORATION
                                  SPRINGFIELD, OHIO
             CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                     (Dollars in thousands)
                                                                            Unrealized
                                                                           gain (loss)
                                                                          on securities
                                                                             available-
                                                                              for-sale
                                                                               net of       Common     Common    Total
                                Common    Additional                        applicable       shares     shares   share-
                                stock       paid-in    Retained  Treasury     deferred     purchased  purchased  holders'
                             # of shares    capital    earnings    stock    income taxes    by ESOP    by RRP    equity
                             ___________    _______    ________    _____    ____________    _______    ______    ______
<S>                            <C>          <C>        <C>         <C>        <C>           <C>        <C>       <C>
Balances at June 30, 1995             0     $    0      $4,757     $   0       $ 128         $   0      $   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         0         127             0          0       5,398

Net income                                                 577                                                        577
Issuance of 952,200 
  common shares                 952,200      9,085                                            (762)                 8,323
Change in unrealized 
  gain (loss) on securities
  available-for-sale, net of
  applicable deferred income
  taxes of $67                                                                   133                                  133
Dividends declared
  ($.16 per common share)                                 (152)                                                      (152)
                                _______     ______      ______     _____       _____         _____      _____     _______
Balances at June 30, 1997       952,200      9,085       5,696         0         260          (762)         0      14,279

Net income                                                 494                                                        494
Purchase of 47,610 common
  shares in treasury                                                (711)                                            (711)
Change in unrealized 
  gain (loss) on securities
  available-for-sale, net of
  applicable deferred income
  taxes of $37                                                                    72                                   72
Amortization of deferred
  compensation - Employee
  Stock Ownership Plan                          65                                              76                    141
Purchase of 6,800 common
  shares by Recognition
  and Retention Plan                                                                                     (118)       (118)
Dividends declared
  ($.17 per common share)                                (153)                                                       (153)
                                _______     ______     ______      _____       _____         _____      _____     _______       
Balances at December 31, 1997   952,200     $9,150     $6,037      $(711)      $ 332         $(686)     $(118)    $14,004
                                =======     ======     ======      =====       =====         =====      =====     =======
</TABLE>
-----------------------
See accompanying notes.
                                      41
<PAGE>
                        HOME CITY FINANCIAL CORPORATION
                              SPRINGFIELD, OHIO
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                            (Dollars in thousands)
                                                                  Six months ended            Year ended
                                                                     December 31,               June 30,
                                                                   ________________        ________________
                                                                   1997        1996        1997        1996
                                                                   ____        ____        ____        ____
                                                                            (Unaudited)
<S>                                                              <C>         <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                       $   494     $   183     $   577     $   514
Adjustments to reconcile net income to net cash                    
  provided by operating activities:                    
     Premium amortization, net of discount accretion                   8          13           0          42
     Provision for loan losses                                        23          37          57          50
     (Gain) loss on sale of securities                                (1)          0          19           0
     Depreciation                                                     42          20          40          39
     Deferred income taxes                                           (69)         45         (35)         89
     Life insurance income, net of expenses                          (14)        (26)        (26)        (19)
     Employee Stock Ownership Plan compensation expense              141           0           0           0
        Changes in operating assets and liabilities:                    
        Increase in accrued interest receivable                       (2)        (40)       (134)       (103)
        (Increase) decrease in other assets                          107         113          57        (129)
        Increase in accrued interest payable                          20          16          10           7
        Increase in other liabilities                                 59         167          56          53
                                                                 _______     _______     _______     _______
  Net cash provided by operating activities                          808         528         621         543
                                                                 _______     _______     _______     _______
CASH FLOWS FROM INVESTING ACTIVITIES:                    
Net (increase) decrease in time deposits                             337         700         700        (700)
Proceeds from maturities of held-to-maturity securities                0           0           0         500
Principal collections on mortgage-backed securities,                     
  held-to-maturity                                                     0         214           0         278
Purchases of available-for-sale securities                          (267)        (14)     (6,997)       (602)
Proceeds from sales of available-for-sale securities                 400           0           0           0
Proceeds from maturities of available-for-sale securities          3,570           0       1,136          20
Proceeds from sales of mortgage-backed securities,                    
  available-for-sale                                                   0           0       1,891           0
Principal collections on mortgage-backed securities,                    
  available-for-sale                                                  46           0         342         319
Proceeds from sales of loans                                           0           0           0       2,760
Net increase in loans                                             (6,523)     (5,370)    (10,867)     (9,075)
Purchases of properties and equipment                                (46)        (17)        (40)        (60)
Purchase of life insurance contracts                                   0           0           0      (1,025)
                                                                 _______     _______     _______     _______
  Net cash used in investing activities                           (2,483)     (4,487)    (13,835)     (7,585)
                                                                 _______     _______     _______     _______
CASH FLOWS FROM FINANCING ACTIVITIES:                    
Net increase in deposits                                           1,463       2,385       3,051       6,238
Net increase in short-term FHLB advances                             800           0         700         500
Proceeds from new long-term FHLB advances                              0       1,825       1,825           0
Payments on long-term FHLB advances                                 (196)       (627)       (319)       (216)
Net increase (decrease) in advance payments by borrowers                    
  for taxes and insurance                                             50          49           1         (14)
Proceeds from sale of common shares                                    0       8,323       8,323           0
Purchase of common shares by Recognition and Retention Plan         (118)          0           0           0
Purchase of treasury shares                                         (711)          0           0           0
Dividends paid                                                      (153)          0        (152)          0
                                                                 _______     _______     _______     _______
  Net cash provided by financing activities                        1,135      11,955      13,429       6,508
                                                                 _______     _______     _______     _______
  Net increase (decrease) in cash and cash equivalents              (540)      7,996         215        (534)
                    
CASH AND CASH EQUIVALENTS AT BEGINNING                    
      OF PERIOD                                                    2,058       1,843       1,843       2,377
                                                                 _______     _______     _______     _______
CASH AND CASH EQUIVALENTS AT END OF PERIOD                       $ 1,518     $ 9,839     $ 2,058     $ 1,843
                                                                 =======     =======     =======     =======
</TABLE>
-----------------------
See accompanying notes.
                                      42
<PAGE>
                       HOME CITY FINANCIAL CORPORATION
                                SPRINGFIELD, OHIO
                 Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
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 inter-company accounts and transactions 
have been eliminated.

Use 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 particularly 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.




                                      43
<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 in other 
banks and federal funds sold to be cash equivalents.  The following are 
supplemental disclosures for the consolidated statements of cash flows for the 
six months ended December 31, 1997, and for the years ended June 30, 1997 and 
1996.
<TABLE>
<CAPTION>
                                                      (Dollars in thousands)
                                               Six months          
                                                  ended          
                                               December 31,    Year ended June 30,
                                               ___________     ___________________
                                                   1997          1997       1996   
                                                   ____          ____       ____
<S>                                               <C>           <C>        <C>
Cash paid during the period for interest          $1,515        $2,908     $2,535
Cash paid during the period for income taxes         240           147        283
</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 
adoption of 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.
                                      44
<PAGE>
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.

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.  

Earnings per Share
The weighted-average number of shares of common stock used in calculating 
earnings per share was determined by reducing outstanding shares by 
unallocated ESOP shares and unvested Recognition and Retention Plan (the 
"RRP") shares.  The effect of stock options on weighted-average shares 
outstanding is calculated using the Treasury Stock method.  Fully diluted 
shares outstanding include the maximum dilutive effect of stock issuable upon 
exercise of common stock options and unallocated ESOP and RRP shares of common 
stock.  Earnings per share information for periods prior to 1997 are not 
presented because the bank did not complete its Reorganization until December 
30, 1996.

Reclassifications
Certain amounts 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.
                                      45
<PAGE>
NOTE C - INVESTMENT SECURITIES

Securities available-for-sale consist of the following:
<TABLE>
<CAPTION>
                                                 (Dollars in thousands)     
                    
                                                   At December 31, 1997  
                                      _____________________________________________
                                                     Gross       Gross     
                                      Amortized   Unrealized   Unrealized    Fair
                                         Cost        Gains       Losses      Value
                                         ____        _____       ______      _____
<S>                                     <C>          <C>         <C>         <C>
U.S. government & federal agencies      $3,098       $  2         $ (3)      $3,097
                    
State & local governments                  917         14           (1)         930
                    
Mortgage-backed securities                 703          0           (3)         700
                    
Equity securities                          499        492            0          991
                                        ______       ____         ____       ______
Total                                   $5,217       $508         $ (7)      $5,718
                                        ======       ====         ====       ======
<CAPTION>
                                                     At June 30, 1997
                                      _____________________________________________
                                                    Gross        Gross
                                      Amortized   Unrealized   Unrealized    Fair
                                         Cost       Gains        Losses      Value
                                         ____       _____        ______      _____
<S>                                     <C>          <C>         <C>         <C>
U.S. government & federal agencies      $6,995       $  5         $ (7)      $6,993
                    
State & local governments                  739         11           (1)         749
                    
Mortgage-backed securities                 754          0          (24)         730
                    
Equity securities                          484        408            0          892
                                        ______       ____         ____       ______
Total                                   $8,972       $424         $(32)      $9,364
                                        ======       ====         ====       ======
<CAPTION>
                                                      At June 30, 1996    
                                      _____________________________________________
                                                    Gross        Gross
                                      Amortized   Unrealized   Unrealized    Fair
                                         Cost       Gains        Losses      Value
                                         ____       _____        ______      _____
<S>                                     <C>          <C>         <C>         <C>
U.S. government & federal agencies      $1,001       $  0         $ (4)      $  997
                    
State & local governments                  879          6           (2)         883
                    
Mortgage-backed securities               3,046          5          (76)       2,975
                    
Equity securities                          459        243            0          702
                                        ______       ____         ____       ______
Total                                   $5,385       $254         $(82)      $5,557
                                        ======       ====         ====       ======
</TABLE>
                                      46
<PAGE>
The following is a summary of maturities of securities available-for-sale as 
of December 31, 1997:              
<TABLE>
<CAPTION>
                                       (Dollars in thousands)
     
                                         Amortized      Fair
Amounts maturing in :                       Cost        Value   
                                            ____        _____
<S>                                        <C>          <C>
One year or less                           $1,499       $1,497
After one year through five years           2,364        2,371
After five years through ten years            152          159
                                           ______       ______
     Total investment securities            4,015        4,027
          
Corporate equity securities                   499          991
Mortgage-backed securities                    703          700
                                           ______       ______
     Total                                 $5,217       $5,718
                                           ======       ======
</TABLE>
Interest income on investment securities for the six months ended December 31, 
1997 and for each of the two years ended June 30, was as follows:
<TABLE>
<CAPTION>
                                              (Dollars in thousands)
                                        Six months
                                           ended
                                        December 31,   Year ended June 30,  
                                        ___________    ___________________
                                            1997         1997       1996 
                                            ____         ____       ____
<S>                                        <C>          <C>        <C>
U.S. government and federal agencies        $142         $187       $ 61
State & local governments                     18           39         24
Mortgage-backed securities                    23          134        209
Equity securities                             18           33         26
                                            ____         ____       ____
Total                                       $201         $393       $320
                                            ====         ====       ====
</TABLE>
For the six months ended December 31, 1997, the corporation sold securities 
available-for-sale for total proceeds of approximately $400,000 resulting in 
gross realized gains of $1,000 and no gross realized losses.  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. 

There were no securities transferred between classifications for the six 
months ended December 31, 1997, or 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. 

Investment securities with a carrying value of approximately $500,000, 
$499,000 and $906,000 at December 31, 1997 and June 30, 1997 and 1996, 
respectively,  were pledged to secure deposits as required or permitted by law.
                                      47
<PAGE>
NOTE D - LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans at December 31, 1997 and June 30, 1997 and 1996 are summarized as 
follows:                                                                  
<TABLE>
<CAPTION>
                                                        (Dollars in thousands)
               
                                              December 31,            June 30,
                                                                 ____________________
                                                 1997            1997          1996
                                                 ____            ____          ____
<S>                                             <C>             <C>           <C>
Loans secured by real estate:               
     1-4 family residential properties          $40,669         $36,953       $28,812
     5 or more dwelling units                     2,731           2,749         3,233
     Non-residential properties                  10,124           7,762         7,255
     Land                                         1,690           1,546         2,223
     Construction                                 3,079           3,753         2,350
Consumer                                          4,201           3,253         1,641
Commercial                                          493             464            73
                                                _______         _______       _______
                                                 62,987          56,480        45,587
Allowance for loan losses                          (452)           (445)         (362)
                                                _______         _______       _______
Total                                           $62,535         $56,035       $45,225
                                                =======         =======       =======
</TABLE>
An analysis of the allowance for loan losses is as follows: 
<TABLE>
<CAPTION>
                                                         (Dollars in thousands)
                                            Six months ended
                                               December 31,       Year ended June 30,
                                                                  ___________________
                                                   1997           1997           1996
                                                   ____           ____           ____
<S>                                               <C>            <C>            <C>
Balance, beginning of period                       $445           $362           $319
Provision for loan losses                            23             57             50
Loans charged off                                   (16)           (22)            (7)
Recoveries                                            0             48              0
                                                   ____           ____           ____
Balance, end of period                             $452           $445           $362
                                                   ====           ====           ====
</TABLE>
At December 31, 1997 and June 30, 1997 and 1996, the bank had loans amounting 
to approximately $102,000, $0 and $72,000, respectively, that were 
specifically classified as impaired.  The average balance of those loans 
amounted to approximately $179,000, $2,000 and $104,000 for the six months 
ended December 31, 1997, and the years ended June 30, 1997, and 1996, 
respectively.  The allowance related to impaired loans amounted to 
approximately $8,000, $0 and $2,000 at December 31, 1997 and June 30, 1997 and 
1996, respectively.  Interest income on impaired loans of $6,000, $2,000 and 
$23,000  was recognized for cash payments received for the six months ended 
December 31, 1997, and for the years ended June 30, 1997 and 1996.

In addition, at December 31, 1997 and June 30, 1997 and 1996, the bank had 
other nonaccrual loans of approximately $164,000, $416,000 and $175,000, 
respectively, for which impairment had not been recognized.

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

At December 31, 1997 and June 30, 1997 and 1996, the bank serviced loans for 
others with principal balances of $2,395,000, $2,632,000 and $3,358,000, 
respectively.


                                      48
<PAGE>
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, 1997             $1,523     
           New loans                              12     
           Payments                              (31)
                                              ______
           Balance, December 31, 1997         $1,504
                                              ======
</TABLE>

NOTE E - PROPERTIES AND EQUIPMENT
 
A summary of properties and equipment at December 31, 1997 and June 30, 1997 
and 1996, follows:
<TABLE>
<CAPTION>
                                                    (Dollars in thousands)
               
                                               December 31,        June 30,
                                                                ______________
                                                   1997         1997      1996
                                                   ____         ____      ____
<S>                                               <C>          <C>       <C> 
           Land                                    $113         $113      $113
           Buildings and improvements               437          435       424
           Furniture, fixtures, and equipment       328          304       275
                                                   ____         ____      ____
                                                    878          852       812
           Accumulated depreciation                (385)        (364)     (324)
                                                   ____         ____      ____
           Total                                   $493         $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 December 31, 1997 and June 30, 1997 and 1996, there were 
no notes payable to the insurance company.


NOTE G - DEPOSITS

Deposit account balances at December 31,  1997 and June 30, 1997 and 1996, are 
summarized as follows:
<TABLE>
<CAPTION>
                                                                     (Dollars in thousands)
                              
                                             December 31, 1997            June 30, 1997             June 30, 1996
                                             __________________        __________________        __________________
                                             Amount     Percent        Amount     Percent        Amount     Percent
                                             ______     _______        ______     _______        ______     _______
<S>                                         <C>         <C>           <C>         <C>           <C>         <C>
Noninterest-bearing checking accounts       $   763        1.5%       $   540        1.1%       $   302        0.6%
NOW and money market accounts                   774        1.5            675        1.3            395        0.8
Savings accounts                              7,863       15.2          7,863       15.7          9,561       20.3
Certificates of deposit                      42,289       81.8         41,147       81.9         36,916       78.3
                                            _______      _____        _______      _____        _______      _____
Totals                                      $51,689      100.0%       $50,225      100.0%       $47,174      100.0%
                                            =======      =====        =======      =====        =======      =====
</TABLE>
                                      49
<PAGE>
The aggregate amount of jumbo certificates of deposit, each with a minimum 
denomination of $100,000, was approximately $7,879,000, $7,647,000 and 
$7,216,000 at December 31, 1997 and June 30, 1997 and 1996, respectively.  
Deposits in excess of $100,000 are not insured by the FDIC.  

At December 31, 1997, the scheduled maturities of certificates of deposit are 
as follows:
<TABLE>
<CAPTION>                                    
                                            (Dollars in thousands)
<S>                                                  <C>          
            1998                                     $16,856     
            1999                                       9,658     
            2000                                      14,879
            2001                                         215     
            After 2001                                   681     
                                                     _______
            Total                                    $42,289     
                                                     =======
</TABLE>
The bank held deposits of approximately $532,000, $552,000 and $806,000 for 
related parties at December 31, 1997 and June 30, 1997 and 1996, respectively.


NOTE H - ADVANCES FROM FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank (the "FHLB") consisted of the 
following at December 31, 1997 and June 30, 1997 and 1996, respectively:
<TABLE>
<CAPTION>
                                                                       (Dollars in thousands)
                                                         Current
                                                         Interest   December 31,         June 30,
                                                                    ____________     _______________
                                                            Rate        1997         1997       1996
                                                            ____        ____         ____       ____
<S>                                                        <C>        <C>           <C>        <C>
Federal Home Loan Bank advances
Variable-rate advances, with monthly interest payments:
         Advance due September, 1996                        5.80%      $    0       $    0     $  500
         Advance due September, 1997                        6.65            0        1,200          0
         Advance due January, 1998                          5.87          500            0          0
         Advance due March, 1998                            5.87        1,500            0          0

Fixed-rate advances, with monthly principal
and interest payments:
         Advance due October , 2001                         6.30          258          287          0
         Advance due February, 2003                         6.05           89           96        110
         Advance due March, 2003                            5.85          191          206        236
         Advance due December , 2004                        8.35          420          450        510
         Advance due January, 2005                          8.32          766          812        904
         Advance due November, 2006                         6.35        1,379        1,436          0
         Advance due January, 2010                          3.30          609          621        643
                                                                       ______       ______     ______
Total                                                                  $5,712       $5,108     $2,903
                                                                       ======       ======     ======
</TABLE>
FHLB advances are collateralized by all shares of  FHLB stock owned by the 
bank (totaling $438,000) and by 100% of the bank's qualified mortgage loan 
portfolio (totaling approximately $40,699,000).  Based on the carrying amount 
of FHLB stock owned by the bank, total FHLB advances are limited to 
approximately $8,760,000.
                                      50
<PAGE>
The aggregate minimum future annual principal payments on borrowings are as 
follows:
<TABLE>
<CAPTION>
                                 (Dollars in thousands)
<S>                                     <C>
            1998                        $2,402     
            1999                           417     
            2000                           432     
            2001                           436     
            After 2001                   2,025
                                        ______
            Total                       $5,712     
                                        ======
</TABLE>

NOTE I - EMPLOYEE BENEFITS

401(k) Profit Sharing Plan
In 1994, the bank initiated a 401(k) 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 six months 
ended December 31, 1997, and for the years ended June 30, 1997 and 1996, were 
$5,000, $9,000 and $8,000, 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 $7,000, $4,000 and $25,000 for the six months ended December 31, 1997, and 
for the years ended June 30, 1997 and 1996, 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 six months ended December 31, 1997, and the 
years ended June 30, 1997 and 1996, contributions to the plan charged to 
operations were $7,000, $12,000 and $56,000, respectively.


NOTE J - STOCK REPURCHASE PROGRAM

During 1997, the corporation received regulatory approval to repurchase up to 
5% of its outstanding shares.  During the six months ended December 31, 1997, 
47,610 common shares were repurchased at an average price of $14.93.

Repurchased shares are treated as treasury shares and are available for 
general corporate purposes, including issuance in connection with stock-based 
compensation plans.


NOTE K - STOCK-BASED COMPENSATION PLANS

As part of the conversion transaction (see NOTE B), an ESOP was established 
for the benefit of employees of the corporation and bank, age 21 or older, who 
have completed at least one year of full-time service.  The ESOP borrowed 
$762,000 from the corporation and used those funds to acquire 76,176 common 
shares of the corporation at $10 per share.
                                      51
<PAGE>
Shares issued to the ESOP are allocated to ESOP participants based on 
principal and interest payments made by the ESOP on the loan.  The loan is 
secured by shares purchased with the loan proceeds and will be repaid by the 
ESOP with funds from the corporation's discretionary contributions to the ESOP 
and earnings on ESOP assets.  Principal payments are scheduled to occur in 
even annual amounts over a ten-year period.  However, in the event 
contributions exceed the minimum debt service requirements, additional 
principal payments will be made.  During 1997, 7,618 common shares with a fair 
value of $18.50 were committed to be released, resulting in ESOP compensation 
expense of $141,000.  Shares held by the ESOP at December 31, 1997 and June 
30, 1997 and 1996, are as follows:
<TABLE>
<CAPTION>
                                           December 31,     June 30,    June 30,
                                           ____________
                                              1997           1997         1996
                                              ____           ____         ____
<S>                                       <C>            <C>              <C>
Allocated shares                                7,618              0        0
Unallocated shares                             68,558         76,176        0
                                           __________     __________       __
Total ESOP shares                              76,176         76,176        0
                                           ==========     ==========       ==
Fair value of unallocated shares           $1,268,000     $1,100,000       $0
</TABLE>

A Stock Option and Incentive Plan (the "SOP") and RRP were authorized by the 
shareholders at the October 20, 1997, annual meeting.  The RRP is a restricted 
stock award plan.  The SOP and RRP are administered by a Committee of 
Directors of the corporation.  This committee selects recipients and terms of 
awards pursuant to the plans.  Total shares made available under the SOP and 
RRP plans were 95,220 and 38,088, respectively.

RRP awards vest in five equal annual installments, subject to the continuous 
employment of the recipients as defined under such plans.  SOP options vest in 
five equal annual installments and expire ten years from the date of grant.  
No compensation expense is being recognized in connection with the grant of 
the options for which the exercise prices equal the corporation's stock price 
at the dates of grant.  Compensation expense for the RRP is based upon market 
price at the date of grant and is recognized on a pro rata basis over the 
vesting period of the awards.  Compensation cost charged against income for 
the RRP was $0 for the six months ended December 31, 1997, and $0 for each of 
the years in the two-year period ended June 30, 1997.  The unamortized 
unearned compensation value of the RRP is shown as a reduction to 
shareholders' equity in the accompanying consolidated balance sheets.

Statement of Financial Accounting Standards No. 123, Accounting for 
Stock-Based Compensation ("SFAS No. 123") which became effective for 1996, 
requires pro forma disclosures for companies that do not adopt its fair value 
accounting method for stock-based employee compensation.  Accordingly, the 
following pro forma information presents net income and earnings per share had 
the standard's fair value method been used to measure compensation cost for 
the SOP.  In future years, the pro forma effect of not applying this standard 
is expected to increase as additional options are granted.  The compensation 
cost charged against income for the RRP is the same as if the provisions of 
SFAS No. 123 had been applied.
<TABLE>
<CAPTION>              
                                                (Dollars in thousands)
     
                                                    Six months ended 
                                                    December 31, 1997
                                                    _________________
<S>                                                     <C>
            Net income as reported                        $494
            Pro forma net income                           486
</TABLE>
The Black-Scholes option-pricing model was used to determine the grant-date 
fair-value of options in fiscal 1997.  Significant assumptions used in the 
model included weighted-average assumptions: risk-free interest rate of 6.23%, 
expected life of 10 years, expected volatility of stock price of 24% and 
expected dividends of 2.54% per year.
                                      52
<PAGE>
Information pursuant to the SOP at December 31, 1997, is as follows:
<TABLE>
<CAPTION>
                                                                               Weighted-
                                                 Weighted-       Range of       Average
                                   Number         Average        Exercise      Fair Value
                                 of Options    Exercise Price      Price        of Grants
                                 __________    ______________      _____        _________
<S>                               <C>             <C>            <C>            <C>
Outstanding, June 30, 1997              0          $     0
Granted                            71,415           16.125                 
                                   ______          _______
Outstanding, December 31, 1997     71,415          $16.125         $16.125        $16.125
                                   ======          =======         =======        =======
</TABLE>
No options are exercisable at December 31, 1997.

At December 31, 1997, the weighted-avera.8 years.


NOTE L  - INCOME TAXES

Components of income tax expense for the six months ended December 31, 1997, 
and for the years ended June 30, 1997  and 1996 were:
<TABLE>
<CAPTION>
                                             (Dollars in thousands)
          
                                     December 31,            June 30,
                                     ____________       ___________________
                                         1997           1997           1996
                                         ____           ____           ____
<S>                                     <C>            <C>            <C>
Current federal tax expense              $261           $247           $154
Deferred federal tax expense              (69)           (35)            89
                                         ____           ____           ____
Total                                    $192           $212           $243
                                         ====           ====           ====
</TABLE>
The net deferred tax liability included the following major temporary 
differences at December 31, 1997 and June 30, 1997 and 1996:
<TABLE>
<CAPTION>
                                             (Dollars in thousands)
               
                                     December 31,            June 30,
                                                        ___________________
                                         1997           1997           1996
                                         ____           ____           ____
<S>                                     <C>            <C>            <C>
Deferred tax liabilities:               
  Accumulated depreciation               $ 27           $ 21           $ 19
  Net deferred loan costs                  37             17              0
  Net unrealized appreciation on               
      available-for-sale securities       170            133             69
  Other                                    33              0              0
                                         ____           ____           ____
Total deferred tax liabilities            267            171             88
                                         ____           ____           ____
Deferred tax assets:               
  Net deferred loan fees                    0              0             (5)
  Nonaccrual loan interest                 (8)            (4)            (6)
  Allowance for loan losses              (110)           (50)            (6)
  Employee benefits                       (81)           (14)            (3)
  Other                                     0             (3)             0
                                         ____           ____           ____
Total deferred tax assets                (199)           (71)           (20)
                                         ____           ____           ____
Total net deferred tax liability         $ 68           $100           $ 68
                                         ====           ====           ====
</TABLE>
                                      53
<PAGE>
A reconciliation of the federal income tax rate to effective income tax rates 
follows for the six months ended December 31, 1997, and for each of the years 
in the two-year period ended June 30, 1997:
<TABLE>
<CAPTION>          
                                December 31,            June 30,
                                                  ___________________
                                   1997           1997           1996
                                   ____           ____           ____
<S>                              <C>            <C>            <C>
Federal income tax rate           34.00%         34.00%         34.00%
Adjusted for:
  Tax-exempt income               (3.20)         (3.12)         (4.10)
  Other                           (2.80)         (4.22)          2.20
                                  _____          _____          _____
Effective tax rate                28.00%         26.66%         32.10%
                                  =====          =====          =====
</TABLE>
Included in retained earnings at December 31, 1997, June 30, 1997 and 1996, is 
approximately  $1,084,000 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 
$368,000.


NOTE M - DIVIDEND RESTRICTION

The bank, as a federally chartered savings bank, is subject to the dividend 
restrictions set forth by the Office of Thrift Supervision (the "OTS").  Under 
regulations of the OTS applicable to converted savings associations, the bank 
is not permitted to pay a cash dividend on its capital stock 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.  

As disclosed in NOTE N, 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 N - REGULATORY MATTERS

The bank is subject to various regulatory capital requirements administered by 
its primary federal regulator, the OTS.  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 December 31, 1997, the bank's capital 
exceeded all of such requirements.

As of December 31, 1997, the most recent notification from the OTS, the bank 
was categorized as well capitalized under the regulatory framework for prompt 
                                      54
<PAGE>
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 December 31, 1997:
<TABLE>
<CAPTION>
                                                           (Dollars in thousands)
                                                             Total         Tier 1
                                                            Capital       Capital
                                                            _______       _______
<S>                                                         <C>           <C> 
Equity per GAAP                                             $11,180       $11,180
Less unrealized gain on securities available-for-sale,
     net of applicable income taxes                            (329)         (329)
Less advance to subsidiary                                      (50)          (50)
Plus allowance for loan losses                                  452             0
                                                            _______       _______
Regulatory capital                                          $11,253       $10,801
                                                            =======       =======
<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 December 31, 1997:
  Total Risk-Based Capital
     (to Risk-Weighted Assets)        $11,253     26.6%      $3,386      8.0%       $4,232     10.0%
  Tier I Capital
     (to Risk-Weighted Assets)         10,801     25.5          N/A      N/A         2,539      6.0
  Tier I Capital
     (to Total Assets)                 10,801     15.2        2,132      3.0         3,553      5.0
  Tangible Capital
     (to Total Assets)                 10,801     15.2        1,066      1.5           N/A      N/A

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)          5,721     17.6          N/A      N/A         1,800      6.0
  Tier I Capital
     (to Total Assets)                  5,721      9.5        1,668      3.0         2,779      5.0
  Tangible Capital
     (to Total Assets)                  5,721      9.5          834      1.5           N/A      N/A
</TABLE>
                                      55
<PAGE>
NOTE O - 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 bank had outstanding commitments to originate loans as follows:
<TABLE>
<CAPTION>
                                                  (Dollars in thousands)
                                             
                    At December 31, 1997            At June 30, 1997               At June 30, 1996 
                 _________________________      _________________________      _________________________
                 Fixed-  Adjustable-            Fixed-  Adjustable-            Fixed-  Adjustable-
                  rate      rate     Total       rate      rate     Total       rate      rate     Total
                  ____      ____     _____       ____      ____     _____       ____      ____     _____
<S>              <C>       <C>       <C>        <C>       <C>       <C>        <C>       <C>       <C>
First mortgage                                             
loans            $2,175     $574     $2,749     $  831     $292     $1,123     $  837     $169     $1,006
                                             
Consumer and                                              
other loans        498         0        498        232        0        232        292        0        292
                ______      ____     ______     ______     ____     ______     ______     ____     ______
                $2,673      $574     $3,247     $1,063     $292     $1,355     $1,129     $169     $1,298
                ======      ====     ======     ======     ====     ======     ======     ====     ======
</TABLE>
Interest rates on commitments at December 31, 1997, ranged from 7.75% to 10.75%.
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.


NOTE P - 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 nonperformance 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 
O).  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 December 31, 1997, the bank had deposits with the following banks in excess 
of Federal Deposit Insurance Corporation (the "FDIC") insurance of $100,000:
<TABLE>
<CAPTION>
                                      (Dollars in thousands)
<S>                                         <C>
            Huntington National Bank         $1,085
            Federal Home Loan Bank              120     
</TABLE>
                                      56
<PAGE>
NOTE Q - FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of the corporation's financial instruments are as 
follows:
<TABLE>
<CAPTION>
                                                     (Dollars in thousands)
                              
                                  December 31, 1997       June 30, 1997         June 30, 1996 
                                  _________________     _________________     _________________
                                  Carrying     Fair     Carrying     Fair     Carrying     Fair
                                   Amount     Value      Amount     Value      Amount     Value
                                   ______     _____      ______     _____      ______     _____
<S>                               <C>        <C>        <C>        <C>        <C>         <C>
Financial assets:
  Cash and cash equivalents       $ 1,518    $ 1,518    $ 2,058    $ 2,058    $ 1,843     $ 1,843
  Time deposits                        23         18        361        353      1,061       1,053
  Investment securities             5,018      5,018      8,634      8,634      2,582       2,582
  Mortgage-backed securities          700        700        730        730      2,975       2,975
  Loans                            62,535     63,176     56,035     56,380     45,225      45,364
  Accrued interest receivable         409        409        407        407        273         273
  Life insurance                    1,085      1,085      1,070      1,070      1,044       1,044
                              
Financial liabilities:                              
  Deposits                         51,689     51,828     50,225     50,322     47,174      47,311
  Advances from FHLB                5,712      5,617      5,108      5,050      2,903       2,954
  Accrued interest payable             79         79         59         59         49          49
</TABLE>
The carrying amounts in the preceding table are included in the consolidated 
balance sheets.

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 bank.

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

    Cash and cash equivalents:  The carrying amounts reported in the statement 
    of financial condition 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.
                                      57
<PAGE>
    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.

    Advance 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.


NOTE R - PARENT COMPANY FINANCIAL INFORMATION

Condensed financial information for Home City Financial Corporation (parent 
company only) follows:
<TABLE>
<CAPTION>
Balance Sheets
                                                                (Dollars in thousands)
               
                                                        At December 31,      At June 30,
                                                        _______________   ________________
                                                              1997        1997        1996
                                                              ____        ____        ____
<S>                                                         <C>         <C>         <C>
Assets               
Interest-bearing savings deposit with subsidiary bank       $   147     $   585     $     0
Interest-bearing time deposit with subsidiary bank            2,027           0           0
Investment in subsidiary                                     11,213      10,624           0
Investment securities available-for-sale                        601       3,000           0
Other assets                                                     37         106           0
                                                            _______     _______     _______
      Total assets                                          $14,025     $14,315     $     0
                                                            =======     =======     =======
Liabilities and Shareholders' Equity               
Accrued expenses and other liabilities                      $    21     $    36     $     0
Shareholders' equity                                         14,004      14,279           0
                                                            _______     _______     _______
      Total liabilities and shareholders' equity            $14,025     $14,315     $     0
                                                            =======     =======     =======
</TABLE>






                                      58
<PAGE>
<TABLE>
<CAPTION.
Statements of Income
                                                         (Dollars in thousands)
               
                                                   Six months
                                                     ended
                                                   December 31,   Year ended June 30,
                                                   ____________   ___________________
                                                      1997          1997       1996
                                                      ____          ____       ____
<S>                                                  <C>           <C>        <C>
Income               
Interest from subsidiary deposits                     $ 33          $ 25       $  0
Interest on securities available-for-sale               48            55          0
Income on ESOP loan                                     35            36          0
                                                      ____          ____       ____
    Total income                                       116           116          0
                                                      ____          ____       ____
Expense               
Legal, consulting and examination                       58            33          0
Franchise tax                                           11            11          0
Other                                                   84            30          0
                                                      ____          ____       ____
    Total expense                                      153            74          0
                                                      ____          ____       ____
Income before income taxes and equity in               
  undistributed earnings of subsidiary                 (37)           42          0
Income tax provision                                   (16)            6          0
Income before equity in undistributed earnings        ____          ____       ____
  of subsidiary                                        (21)           36          0
Equity in undistributed earnings of subsidiary         515           358          0
                                                      ____          ____       ____
     Net income                                       $494          $394       $  0
                                                      ====          ====       ====
</TABLE>









                                      59
<PAGE>
<TABLE>
<CAPTION>
Statements of Cash Flows
                                                             (Dollars in thousands)

                                                         Six months
                                                            ended
                                                          December 31, Year ended June 30,
                                                          ____________ ___________________
                                                             1997        1997        1996
                                                             ____        ____        ____
<S>                                                        <C>         <C>         <C>
Cash flows from operating activities:
Net income                                                  $  494      $  394      $    0
Adjustments to reconcile net income to net cash
  flows from operating activities:
Equity in undistributed earnings of subsidiary                (515)       (358)          0
Discount accretion                                              (1)         (1)          0
Amortization of deferred compensation - ESOP                   141           0           0
Net (increase) decrease in other assets                         69        (106)          0
Net increase (decrease) in other liabilities                    (17)         36           0
                                                            ______      ______      ______
Net cash flows from operating activities                       171         (35)          0
                                                            ______      ______      ______
Cash flows from investing activities:
Net increase in time deposits                               (2,027)          0           0
Purchase of securities available-for-sale                        0      (2,996)          0
Sale of securities available for-sale                          400           0           0
Maturities of securities available-for-sale                  2,000           0           0
Purchase of common shares of subsidiary                          0      (4,555)          0
                                                            ______      ______      ______
Net cash flows from investing activities                       373      (7,551)          0
                                                            ______      ______      ______
Cash flows from financing activities:
Proceeds from sale of common shares                              0       8,323           0
Purchase of treasury shares                                   (711)          0           0
Purchase of common shares by RRP                              (118)          0           0
Dividends paid                                                (153)       (152)          0
                                                            ______      ______      ______
Net cash flows from financing activities                      (982)      8,171           0
                                                            ______      ______      ______
Net increase (decrease) in cash and cash equivalents          (438)        585           0

Cash and cash equivalents:
   Beginning of period                                         585           0           0
                                                            ______      ______      ______
   End of period                                            $  147      $  585      $    0
                                                            ======      ======      ======
</TABLE>







                                      60
<PAGE>
NOTE S - EARNINGS PER SHARE

The following data show the amounts used in computing earnings per share and 
the effect on income and the weighted-average number of shares of dilutive 
potential common shares.
<TABLE>
<CAPTION>
                                              (Dollars in thousands)
<S>                                                 <C>     
Net income                                           $    494     
                                                     ========
Weighted-average number of common                     832,920
  shares used in basic EPS          
Effect of dilutive securities:
  Stock options                                         3,800     
  ESOP                                                 76,135
  RRP                                                  23,802     
                                                     ________
Weighted number of common shares and          
  dilutive potential common shares used           
  in dilutive EPS                                     936,657 
                                                     ========
</TABLE>

NOTE T - QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
                                (Dollars in thousands,except per share data)
          
                                            First         Second
                                           Quarter        Quarter
                                           _______        _______
<S>                                        <C>            <C>
Six months ended December 31, 1997:          
Interest income                            $  1,512       $  1,547
Interest expense                                771            764
                                           ________       ________
   Net interest income                          741            783
          
Provision for loan losses                         8             15
Other income                                     18             17
Operating expense                               384            466
Provision for income taxes                      124             68
                                           ________       ________
Net income                                 $    243       $    251
                                           ========       ========
Earnings per share                         $   0.29       $   0.30
Weighted-average common          
   shares outstanding                       839,507        826,334
</TABLE>





                                      61
<PAGE>
<TABLE>
<CAPTION>
                                                 (Dollars in thousands)

                                         First     Second      Third       Fourth
                                        Quarter    Quarter    Quarter     Quarter
                                        _______    _______    _______     _______
<S>                                  <C>        <C>        <C>         <C>
Year ended June 30, 1997:
Interest income                         $1,219     $1,289     $1,388      $1,415
Interest expense                           691        746        733         748
                                        ______     ______     ______      ______
   Net interest income                     528        543        655         667

Provision for loan losses                    1         36         20           0
Other income                                17         18          3          23
Operating expense                          557        277        371         403
Provision (benefit) for income taxes        (3)        55         89          71
                                        ______     ______     ______      ______
   Net income                           $  (10)    $  193     $  178      $  216
                                        ======     ======     ======      ======
Earnings per share                         N/A     $ 0.22     $ 0.20      $ 0.25
Weighted-average common 
   shares outstanding                      N/A    876,024    876,024     876,024

<CAPTION>
                                                 (Dollars in thousands)

                                         First     Second      Third      Fourth
                                        Quarter    Quarter    Quarter     Quarter
                                        ______     _______    ______      _______
<S>                                   <C>        <C>        <C>         <C>
Year ended June 30, 1996:
Interest income                         $1,069     $1,102     $1,151      $1,185
Interest expense                           600        633        653         656
                                        ______     ______     ______      ______
   Net interest income                     469        469        498         529

Provision for loan losses                    0          0          0          50
Other income                                 1         17         17          23
Operating expense                          295        310        296         315
Provision for income taxes                  57         57         70          59
                                        ______     ______     ______      ______
   Net income                           $  118     $  119     $  149      $  128
                                        ======     ======     ======      ======
Earnings per share                         N/A        N/A        N/A         N/A
Weighted-average common
   shares outstanding                      N/A        N/A        N/A         N/A

</TABLE>

                                      62
<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 dated March 
25, 1998, filed with the United States Securities and Exchange Commission (the 
"Proxy Statement") is incorporated by reference herein.

ITEM 10. Executive Compensation

     The information set forth under the caption "COMPENSATION OF DIRECTORS 
AND EXECUTIVE OFFICERS" of the Definitive 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 Definitive 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 
Definitive 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 (Incorporated by 
                          reference)
              10.2        Home City Financial Corporation 1997 Stock Option and 
                          Incentive Plan (Incorporated by reference)
              10.3        Home City Financial Corporation Recognition and 
                          Retention Plan and Trust Agreement (Incorporated by 
                          reference)
              21          Subsidiaries (Incorporated by reference)
              27          Financial Data 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 dated December 15 , 1997, 
declaring the change in fiscal years for HCFC and Home City from June 30, to 
December 31.

                                      63
<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/ John D. Conroy                    /s/ P. Clark Engelmeier
     ____________________________          _____________________________
     John D. Conroy                        P. Clark Engelmeier
     Director                              Chairman of the Board
     /s/ March 23, 1998                    /s/ March 23, 1998
     ____________________________          _____________________________
     Date                                  Date

     /s/ James Foreman                     /s/ Terry A. Hoppes
     ____________________________          _____________________________
     James Foreman                         Terry A.  Hoppes
     Director                              Director
     /s/ March 23, 1998                    /s/ March 23, 1998
     ____________________________          _____________________________
     Date                                  Date

     /s/ Douglas L. Ulery                  /s/ Charles A. Mihal
     ____________________________          _____________________________
     Douglas L. Ulery                      Charles A. Mihal
     Director                              Treasurer and Chief Financial Officer
     President and Chief Executive Officer
     /s/ March 23, 1998                    /s/ March 23, 1998
     ____________________________          _____________________________
     Date                                  Date




                                      64
<PAGE>
                             INDEX TO EXHIBITS


EXHIBIT
NUMBER          DESCRIPTION

          
  3.1           Articles of Incorporation       Incorporated by reference to the
                of Home City Financial          Registrant's Quarterly Report 
                Corporation                     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     Incorporated by reference to the
                City Financial Corporation      March 31, 1997, 10-QSB, Exhibit 
                                                3 (ii)

 10.1           Employment Agreement with       Incorporated by reference to the
                Mr. Ulery                       June 30, 1997, 10-KSB, Exhibit 
                                                10.1

 10.2           Home City Financial              Incorporated by reference to 
                Corporation 1997 Stock Option    the Registrant's 1997 
                and Incentive Plan               Definitive Proxy Statement 
                                                 dated September
                                                 19, 1997, Exhibit A

 10.3           Home City Financial              Incorporated by reference to 
                Corporation Recognition and      the Registrant's 1997 
                Retention Plan                   Definitive Proxy Statement  
                and Trust Agreement              dated September 19, 1997, 
                                                 Exhibit B

 21             Subsidiaries of Home City        Incorporated by reference to 
                Financial Corporation            the June 30, 1997, 10-KSB, 
                                                 Exhibit 21

 27             Financial Data Schedule

 99.1           Proxy Statement                  Incorporated by reference to 
                                                 the definitive Proxy Statement
                                                 of the Registrant for the 
                                                 1998 Annual Meeting of 
                                                 Shareholders of Home City 
                                                 Financial Corporation, filed 
                                                 with the Securities and 
                                                 Exchange Commission

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


                                      65