FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20552

(Mark One)

[X]           QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended            June 30, 1999
                               -------------------------------------------

                                       OR

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

For the transition period from ____________ to _______________

Commission File No.  0-26248

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

Ohio                                                           31-1452807
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                           Identification Number)

2 East High Street
London, Ohio                                                      43140
(Address of principal                                          (Zip Code)
executive office)

Registrant's telephone number, including area code: (740)   852-0787

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports) and (2) has been subject to such filing  requirements for the past
90 days.

Yes   X                                                       No

As of August 12, 1999, the latest  practicable date, 479,450 of the registrant's
common shares, without par value, were issued and outstanding.









                               Page 1 of 16 pages

<PAGE>


                          London Financial Corporation

                                      INDEX

                                                                          Page

PART I  - FINANCIAL INFORMATION

            Consolidated Statements of Financial Condition                   3

            Consolidated Statements of Earnings                              4

            Consolidated Statements of Comprehensive Income                  5

            Consolidated Statements of Cash Flows                            6

            Notes to Consolidated Financial Statements                       7

            Management's Discussion and Analysis of
            Financial Condition and Results of
            Operations                                                       9


PART II - OTHER INFORMATION                                                 15

SIGNATURES                                                                  16



<PAGE>

<TABLE>

                          London Financial Corporation
<CAPTION>

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                        (In thousands, except share data)


                                                                            June 30,       September 30,
         ASSETS                                                                 1999                1998
<S>                                                                             <C>                 <C>
Cash and due from banks                                                      $   497             $   507
Interest-bearing deposits in other financial institutions                      2,598               1,271
                                                                              ------              ------
         Cash and cash equivalents                                             3,095               1,778

Investment securities designated as available
  for sale - at market                                                           113                 121
Mortgage-backed securities held to maturity - at amortized
  cost, approximate market value of $2,007 and $2,733
  as of June 30, 1999 and September 30, 1998                                   2,018               2,703
Loans receivable - net                                                        35,359              32,588
Office premises and equipment - at depreciated cost                              516                 374
Stock in Federal Home Loan Bank - at cost                                        257                 288
Accrued interest receivable                                                      305                 216
Prepaid expenses and other assets                                                 53                  60
Prepaid federal income taxes                                                      -                   16
                                                                              ------              ------

         Total assets                                                        $41,716             $38,144
                                                                              ======              ======

         LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                     $36,153             $31,300
Advances from the Federal Home Loan Bank                                         300               1,800
Other liabilities                                                                 77                 155
Accrued federal income taxes                                                      18                  -
Deferred federal income taxes                                                     27                  26
                                                                              ------              ------
         Total liabilities                                                    36,575              33,281

Shareholders' equity
  Common stock - authorized 5,000,000 shares without par
    value; 529,000 shares issued                                                  -                   -
  Additional paid-in capital                                                   2,398               2,391
  Retained earnings - substantially restricted                                 4,118               3,946
  Unrealized losses on securities designated as available
    for sale, net of related tax effects                                         (31)                (26)
  Shares acquired by Employee Stock Ownership Plan                              (327)               (381)
  Shares acquired by Management Recognition Plan                                (214)               (264)
  Less 49,550 treasury shares - at cost                                         (803)               (803)
                                                                              ------              ------
         Total shareholders' equity                                            5,141               4,863
                                                                              ------              ------

         Total liabilities and shareholders' equity                          $41,716             $38,144
                                                                              ======              ======
</TABLE>





                                        3



<PAGE>

<TABLE>

                          London Financial Corporation
<CAPTION>

                       CONSOLIDATED STATEMENTS OF EARNINGS

                        (In thousands, except share data)


                                                                         Nine months ended            Three months ended
                                                                               June 30,                     June 30,
                                                                         1999         1998            1999         1998
<S>                                                                      <C>          <C>              <C>         <C>
Interest income
  Loans                                                                $2,174       $1,916            $735         $626
  Mortgage-backed securities                                              108          155              31           46
  Investment securities, interest-bearing deposits and other               88          132              24           49
                                                                        -----        -----             ---          ---
         Total interest income                                          2,370        2,203             790          721

Interest expense
  Deposits                                                              1,146        1,115             389          376
  Borrowings                                                               49           40               7            6
                                                                        -----        -----             ---          ---
         Total interest expense                                         1,195        1,155             396          382
                                                                        -----        -----             ---          ---

         Net interest income before provision
           for losses on loans                                          1,175        1,048             394          339

Provision for losses on loans                                              27           14               9            6
                                                                        -----        -----             ---          ---

         Net interest income after provision
           for losses on loans                                          1,148        1,034             385          333

Other income
  Gain on investment securities transactions                               -            75              -            -
  Other operating                                                          64           44              24           13
                                                                        -----        -----             ---          ---
         Total other income                                                64          119              24           13

General, administrative and other expense
  Employee compensation and benefits                                      457          345             140          123
  Occupancy and equipment                                                  72           57              26           22
  Federal deposit insurance premiums                                       14           14               4            4
  Franchise taxes                                                          53           60              15           28
  Data processing                                                          52           43              18           13
  Other operating                                                         175          173              42           52
                                                                        -----        -----             ---          ---
         Total general, administrative and other expense                  823          692             245          242
                                                                        -----        -----             ---          ---

         Earnings before income taxes                                     389          461             164          104

Federal income taxes
  Current                                                                 128          154              58           16
  Deferred                                                                  4            3              (7)          23
                                                                        -----        -----             ---          ---
         Total federal income taxes                                       132          157              51           39
                                                                        -----        -----             ---          ---

         NET EARNINGS                                                  $  257       $  304            $113         $ 65
                                                                        =====        =====             ===          ===

         EARNINGS PER SHARE
           Basic                                                         $.57         $.64            $.25         $.14
                                                                          ===          ===             ===          ===

           Diluted                                                       $.55         $.62            $.24         $.13
                                                                          ===          ===             ===          ===
</TABLE>



                                        4


<PAGE>

<TABLE>

                          London Financial Corporation

<CAPTION>
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                     For the three months ended December 31,
                                 (In thousands)


                                                              For the nine months        For the three months
                                                                ended June 30,                 ended June 30,
                                                            1999            1998           1999           1998
<S>                                                          <C>            <C>            <C>             <C>
Net earnings                                                $257            $304           $113           $ 65

Other comprehensive income, net of tax:
  Unrealized holding gains (losses) on securities
    during the period                                         (5)              6              3            (14)

Reclassification adjustment for realized gains
  included in earnings                                        -              (50)            -              -
                                                             ---             ---            ---            ---

Comprehensive income                                        $252            $260           $116           $ 51
                                                             ===             ===            ===            ===

</TABLE>






























                                        5



<PAGE>

<TABLE>

                          London Financial Corporation
<CAPTION>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                       For the nine months ended June 30,
                                 (In thousands)

                                                                                 1999              1998
<S>                                                                               <C>               <C>
Cash flows provided by (used in) operating activities:
  Net earnings for the period                                                 $   257             $  304
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Gain on investment securities transactions                                     -                 (75)
    Amortization of deferred loan origination fees                               (107)               (96)
    Provision for losses on loans                                                  27                 14
    Depreciation and amortization                                                  26                 16
    Federal Home Loan Bank stock dividends                                        (14)               (15)
    Amortization expense of stock benefit plans                                   111                109
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable                                                 (89)                (4)
      Prepaid expenses and other assets                                             7                (51)
      Other liabilities                                                           (78)               (34)
      Federal income taxes
        Current                                                                    34               (140)
        Deferred                                                                    4                  3
                                                                               ------              -----
         Net cash provided by operating activities                                178                 31

Cash flows provided by (used in) investing activities:
  Proceeds from maturity of investment securities                                  -                 506
  Principal repayments on mortgage-backed securities                              685                692
  Proceeds from sale of investment securities                                      -                 177
  Purchase of investment securities                                                -                (160)
  Principal repayments on loans                                                11,568              7,180
  Loan disbursements                                                          (14,259)            (7,730)
  Purchase of office equipment                                                   (168)               (25)
  Proceeds from redemption of Federal Home Loan Bank stock                         45                 12
                                                                               ------              -----
         Net cash provided by (used in) investing activities                   (2,129)               652

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts                                              4,853              1,262
  Repayment of Federal Home Loan Bank advances                                 (1,500)                -
  Purchase of treasury shares                                                      -                (521)
  Distributions paid on common shares                                             (85)            (2,625)
                                                                               ------              -----
         Net cash provided by (used in) financing activities                    3,268             (1,884)
                                                                               ------              -----

Net increase (decrease) in cash and cash equivalents                            1,317             (1,201)

Cash and cash equivalents at beginning of period                                1,778              3,664
                                                                               ------              -----

Cash and cash equivalents at end of period                                    $ 3,095             $2,463
                                                                               ======              =====

Supplemental disclosure of cash flow information:
 Cash paid during the year for:
    Federal income taxes                                                      $   113             $  180
                                                                               ======              =====

    Interest on deposits and borrowings                                       $ 1,195             $1,155
                                                                               ======              =====

Supplemental disclosure of noncash investing activities:
  Unrealized losses on securities designated as available
    for sale, net                                                             $    (5)            $  (44)
                                                                               ======              =====
</TABLE>


                                        6


<PAGE>


                          London Financial Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

             For the nine month periods ended June 30, 1999 and 1998

1.  Basis of Presentation

The accompanying  unaudited  consolidated  financial statements were prepared in
accordance  with  instructions  for Form 10-QSB and,  therefore,  do not include
information or footnotes  necessary for a complete  presentation of consolidated
financial  position,  results of operations  and cash flows in  conformity  with
generally  accepted   accounting   principles.   Accordingly,   these  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes  thereto  of London  Financial  Corporation  ("LFC" or the
"Corporation")  included in the Annual  Report on Form 10-KSB for the year ended
September  30, 1998.  However,  in the opinion of  management,  all  adjustments
(consisting of only normal  recurring  accruals)  which are necessary for a fair
presentation of the consolidated  financial  statements have been included.  The
results of operations  for the nine and three month periods ended June 30, 1999,
are not  necessarily  indicative  of the results  which may be  expected  for an
entire fiscal year.

2.  Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of LFC
and  The  Citizens  Bank  of  London  ("Citizens"),   an  Ohio  commercial  bank
wholly-owned by LFC. Prior to January 4, 1998,  Citizens was an Ohio savings and
loan association. All significant intercompany items have been eliminated.

3.  Earnings Per Share

Basic  earnings  per share is computed  based upon the  weighted-average  shares
outstanding  during  the  period,  less  shares in the  London  Financial  Corp.
Employee  Stock  Ownership  Plan  (the  "ESOP")  that  are  unallocated  and not
committed to be released.  Weighted-average  common  shares  outstanding,  which
gives effect to 27,919 unallocated ESOP shares,  totaled 449,911 and 451,531 for
the nine and three month  periods ended June 30, 1999.  Weighted-average  common
shares deemed outstanding, which gives effect to 33,856 unallocated ESOP shares,
totaled  475,080 and 472,631 for the nine and three month periods ended June 30,
1998.

Diluted earnings per share is computed taking into  consideration  common shares
outstanding and dilutive  potential common shares to be issued under LFC's stock
option plan.  Weighted-average  common shares deemed outstanding for purposes of
computing  diluted  earnings per share totaled  463,626 and 465,246 for the nine
and three month  periods  ended June 30,  1999,  and 493,434 and 492,977 for the
nine and three month periods ended June 30, 1998.  Incremental shares related to
the assumed  exercise of stock options  included in the  computation  of diluted
earnings per share totaled  13,715 for each of the nine and three months periods
ended June 30, 1999,  and 18,354 and 20,346 for the nine and three month periods
ended June 30, 1998, respectively.

4.  Effects of Recent Accounting Pronouncements

In June 1997,  the  Financial  Accounting  Standards  Board (the "FASB")  issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting
Comprehensive  Income."  SFAS No. 130  established  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.  SFAS No. 130
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.  It does not require a specific format for that financial  statement
but  requires  that  an  enterprise   display  an  amount   representing   total
comprehensive income for the period in that financial statement.

                                        7


<PAGE>


                          London Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

             For the nine month periods ended June 30, 1999 and 1998


4.  Effects of Recent Accounting Pronouncements (continued)

SFAS  No.  130  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.  SFAS No. 130 is effective for fiscal
years  beginning  after  December  15,  1997.   Reclassification   of  financial
statements for earlier periods  provided for  comparative  purposes is required.
Management adopted SFAS No. 130 effective October 1, 1998, as required,  without
material impact on LFC's financial statements.

In June 1997,  the FASB issued SFAS No. 131,  "Disclosures  about Segments of an
Enterprise and Related  Information." SFAS No. 131 significantly changed the way
that public business  enterprises report information about operating segments in
annual financial  statements and requires that those enterprises report selected
information  about reportable  segments in interim  financial  reports issued to
shareholders.  It also  established  standards  for  related  disclosures  about
products and services, geographic areas and major customers. SFAS No. 131 uses a
"management  approach" to disclose  financial and descriptive  information about
the way that management  organizes the segments within the enterprise for making
operating  decisions  and  assessing  performance.  For  many  enterprises,  the
management  approach  will likely  result in more segments  being  reported.  In
addition,  SFAS No. 131 requires  significantly more information to be disclosed
for each reportable segment than is presently being reported in annual financial
statements  and also requires that selected  information  be reported in interim
financial statements. SFAS No. 131 is effective for fiscal years beginning after
December 15, 1997. Management adopted SFAS No. 131 effective October 1, 1998, as
required, without material impact on LFC's financial statements.

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities,"  which requires  entities to recognize all
derivatives  in their  financial  statements  as either  assets  or  liabilities
measured at fair value.  SFAS No. 133 also  specifies  new methods of accounting
for hedging  transactions,  prescribes  the items and  transactions  that may be
hedged,  and  specifies  detailed  criteria  to be  met  to  qualify  for  hedge
accounting.

The definition of a derivative  financial instrument is complex, but in general,
it is an instrument  with one or more  underlyings,  such as an interest rate or
foreign exchange rate, that is applied to a notional  amount,  such as an amount
of currency,  to determine the settlement  amount(s).  It generally  requires no
significant initial investment and can be settled net or by delivery of an asset
that is  readily  convertible  to cash.  SFAS No.  133  applies  to  derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.

SFAS No.  133,  as amended  by SFAS No.  137,  is  effective  for  fiscal  years
beginning  after June 15, 2000. On adoption,  entities are permitted to transfer
held-to-maturity  debt securities to the  available-for-sale or trading category
without  calling into  question  their intent to hold other debt  securities  to
maturity in the future.  SFAS No. 133 is not expected to have a material  impact
on LFC's financial position or results of operations.



                                        8


<PAGE>


                          London Financial Corporation

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


Forward-Looking Statements

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

Some of the  forward-looking  statements  included  herein  are  the  statements
regarding management's determination of the amount and adequacy of the allowance
for  losses on  loans,  the  effects  of the year  2000 on  certain  information
technology systems and the effect of certain recent accounting pronouncements.


Discussion of Financial  Condition  Changes from  September 30, 1998 to June 30,
1999

At June 30,  1999,  LFC had total assets of $41.7  million,  an increase of $3.6
million,  or 9.4%,  over  September 30, 1998.  The increase in assets was funded
primarily by a $4.9 million increase in deposits,  which was partially offset by
a $1.5 million decline in borrowings.

Cash and interest-bearing deposits totaled $3.1 million at June 30, 1999, a $1.3
million, or 74.1%, increase over the total at September 30, 1998.

Investment securities and mortgage-backed securities decreased by $693,000, to a
total  of  $2.1  million  at  June  30,  1999,  primarily  reflecting  principal
repayments on mortgage-backed securities.

Loans receivable  increased by $2.8 million,  or 8.5%, as loan  disbursements of
$14.3 million exceeded principal repayments of $11.6 million. Loan disbursements
during  the nine  month  period  ended  June 30,  1999,  exceeded  the volume of
disbursements for the same period in 1998 by $6.5 million, or 84.5%.

At June 30, 1999, Citizens' allowance for loan losses totaled $228,000, compared
to the  $201,000  level  maintained  at  September  30,  1998.  Citizens  had no
nonperforming  loans  at June  30,  1999,  compared  to  nonperforming  loans of
$268,000, or .82% of the total loan portfolio at September 30, 1998. At June 30,
1999, Citizens' allowance for loan losses was comprised solely of a general loan
loss  allowance  which is  includible  as a component of  regulatory  risk-based
capital.  Although management of LFC believes that its allowance for loan losses
was adequate at June 30, 1999,  based on the available facts and  circumstances,
there can be no assurance  that the allowance  will be adequate to absorb actual
loan losses during the current  period or that  additions to such allowance will
not be necessary in future periods,  which could adversely  affect LFC's results
of operations.

Deposits totaled $36.2 million at June 30, 1999, an increase of $4.9 million, or
15.5%,  over the $31.3  million of deposits  outstanding  at September 30, 1998.
Such increase resulted primarily from management's  efforts to increase deposits
through marketing strategies.


                                        9


<PAGE>


                          London Financial Corporation

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


Discussion of Financial  Condition  Changes from  September 30, 1998 to June 30,
1999 (continued)

Advances  from the Federal Home Loan Bank (the  "FHLB")  amounted to $300,000 at
June 30, 1999, a decrease of $1.5 million,  or 83.3%,  from  September 30, 1998.
Proceeds from deposit growth were used to repay such advances during the period.

Shareholders'  equity  totaled  $5.1  million at June 30,  1999,  an increase of
$278,000,  or 5.7%,  over  September  30, 1998,  levels.  The increase  resulted
primarily  from net  earnings  of  $257,000,  coupled  with the  effects  of the
amortization  of stock benefit  plans,  which were  partially  offset by regular
dividends totaling $85,000, or $.18 per share.

At  June  30,  1999,  Citizens  was  required  to  maintain  regulatory  capital
sufficient to meet certain minimum capital standards  promulgated by the Federal
Deposit Insurance Corporation. As of June 30, 1999, Citizens' regulatory capital
was well in excess of such minimum capital requirements.


Comparison  of Operating  Results For the Nine Month Periods Ended June 30, 1999
and 1998

General

Net earnings for the nine month period ended June 30, 1999, totaled $257,000,  a
decrease of $47,000,  or 15.5%, from the comparable 1998 period. The decrease in
earnings resulted  primarily from a $13,000 increase in the provision for losses
on loans, a $55,000 decrease in other income and a $131,000 increase in general,
administrative  and other  expense,  which were  partially  offset by a $127,000
increase in net  interest  income and a $25,000  decrease in the  provision  for
federal income taxes.

Net Interest Income

Interest  income on loans for the nine months ended June 30, 1999,  increased by
$258,000,  or 13.5%,  compared  to the nine  months  ended  June 30,  1998.  The
increase was primarily due to an approximate $4.4 million, or 14.9%, increase in
the  weighted-average  balance  outstanding.  Interest income on mortgage-backed
securities  decreased by $47,000,  or 30.3%,  due primarily to a decrease in the
weighted-average  portfolio balance outstanding year to year. Interest income on
investment securities and other interest-earning assets decreased by $44,000, or
33.3%,  due  primarily  to an  $899,000,  or  25.1%,  decrease  in  the  average
outstanding balance year to year.

Interest  expense on deposits  increased  by $31,000,  or 2.8%,  during the nine
months ended June 30, 1999. This increase resulted primarily from an approximate
$3.3 million,  or 10.6%,  increase in the weighted  average  balance of deposits
outstanding, which was offset by a decrease in the cost of deposits.

Interest expense on borrowings  increased by $9,000,  or 22.5%,  during the nine
months ended June 30, 1999. The increase was primarily due to an increase in the
weighted-average balance of advances outstanding.


                                       10


<PAGE>


                          London Financial Corporation

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


Comparison  of Operating  Results For the Nine Month Periods Ended June 30, 1999
and 1998 (continued)

Net Interest Income (continued)

As a result of the foregoing  changes in interest  income and interest  expense,
net interest  income  increased by  $127,000,  or 12.1%,  during the nine months
ended June 30, 1999, compared to the nine months ended June 30, 1998.

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for loan losses to a level considered  appropriate by management based
on historical experience,  the volume and type of lending conducted by Citizens,
the status of past due principal  and interest  payments,  and general  economic
conditions,  particularly as such conditions relate to Citizens' loan portfolio.
As a result of such analysis,  management  elected to record a $27,000 provision
for losses on loans  during the  nine-month  period  ended  June 30,  1999.  The
current  period  provision was  attributable  to growth in the  commercial  loan
portfolio.  There can be no  assurance  that the  allowance  for loan  losses of
Citizens will be adequate to cover losses on nonperforming assets in the future.

Other Income

Other  income  totaled  $64,000  during the nine months  ended June 30,  1999, a
decrease of $55,000,  or 46.2%,  from the nine month period ended June 30, 1998.
The decrease  resulted  primarily  from a $75,000 gain on investment  securities
transactions  recorded  in the 1998  period,  which  was  partially  offset by a
$20,000, or 45.5%, increase in other operating income. Other operating income is
comprised  primarily of service fees on deposit  accounts,  late charges on loan
accounts and rental income on leased office space and safety deposit boxes.

General, Administrative and Other Expense

General,  administrative  and other  expense  increased by  $131,000,  or 18.9%,
during the nine months ended June 30, 1999,  compared to 1998.  The increase was
primarily comprised of a $112,000,  or 32.5%,  increase in employee compensation
and  benefits,  due  primarily  to an  increase in  staffing  levels  related to
Citizens'  implementation of the commercial  lending function,  and normal merit
increases, coupled with a $15,000, or 26.3%, increase in occupancy and equipment
expense year to year.

Federal Income Taxes

The provision for federal income taxes decreased by $25,000,  or 15.9%,  for the
nine month period ended June 30, 1999,  compared to the same period in 1998, due
primarily to a $72,000, or 15.6%,  decrease in pretax earnings.  LFC's effective
tax rates amounted to 33.9% and 34.1% during the nine months ended June 30, 1999
and 1998, respectively.



                                       11



<PAGE>


                          London Financial Corporation

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


Comparison of Operating  Results For the Three Month Periods Ended June 30, 1999
and 1998

General

Net earnings for the three month period ended June 30, 1999,  totaled  $113,000,
an increase of $48,000,  or 73.8%, over the comparable 1998 period. The increase
in earnings  resulted  primarily from a $55,000  increase in net interest income
and an $11,000 increase in other income, which were partially offset by a $3,000
increase in the  provision  for losses on loans,  a $3,000  increase in general,
administrative  and other  expense and a $12,000  increase in the  provision for
federal income taxes.

Net Interest Income

Interest income on loans for the three months ended June 30, 1999,  increased by
$109,000,  or 17.4%,  compared  to the three  months  ended June 30,  1998.  The
increase was primarily due to an approximate $5.2 million, or 17.4%, increase in
the  weighted-average  balance  outstanding.  Interest income on mortgage-backed
securities  decreased by $15,000,  or 32.6%,  due primarily to a decrease in the
weighted-average  portfolio balance outstanding year to year. Interest income on
investment securities and other interest-earning assets decreased by $25,000, or
51.0%.

Interest  expense on deposits  increased by $13,000,  or 3.5%,  during the three
months ended June 30, 1999. This increase resulted primarily from an approximate
$4.4 million,  or 14.0%,  increase in the weighted  average  balance of deposits
outstanding, which was offset by a decrease in the cost of deposits.

Interest expense on borrowings  increased by $1,000, or 16.7%,  during the three
months ended June 30, 1999. The increase was primarily due to an increase in the
weighted-average balance of advances outstanding.

As a result of the foregoing  changes in interest  income and interest  expense,
net  interest  income  increased by $55,000,  or 16.2%,  during the three months
ended June 30, 1999, compared to the three months ended June 30, 1998.

Provision for Losses on Loans

Management  elected  to record a $9,000  provision  for loan  losses  during the
three-month  period ended June 30, 1999,  compared to the $6,000 recorded in the
1998 quarter.  The current period  provision was  attributable  to growth in the
commercial  loan portfolio.  There can be no assurance that Citizens'  allowance
for loan losses will be adequate to cover losses on nonperforming  assets in the
future.

Other Income

Other income  totaled  $24,000  during the three months ended June 30, 1999,  an
increase of $11,000,  or 84.6%, over the three month period ended June 30, 1998.
The increase  resulted  primarily  from an increase in other  operating  income,
comprised  primarily of service fees on deposit  accounts,  late charges on loan
accounts and rental income on leased office space and safety deposit boxes.


                                       12


<PAGE>


                          London Financial Corporation

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


Comparison of Operating  Results For the Three Month Periods Ended June 30, 1999
and 1998 (continued)

General, Administrative and Other Expense

General,  administrative  and other expense increased by $3,000, or 1.2%, during
the three months ended June 30, 1999,  compared to the same period in 1998.  The
increase  was  primarily  due to an increase of $17,000,  or 13.8%,  in employee
compensation and benefits,  due primarily to an increase in staffing levels year
to year,  coupled with normal  merit  increases,  partially  offset by a $10,000
decrease in other operating expense year to year.

Federal Income Taxes

The provision for federal income taxes increased by $12,000,  or 30.8%,  for the
three month period ended June 30, 1999, compared to the same period in 1998, due
primarily to a $60,000, or 57.7%,  increase in pretax earnings.  LFC's effective
tax rates  amounted to 31.1% and 37.5%  during the three  months  ended June 30,
1999 and 1998, respectively.


Year 2000 Compliance Matters

As with most providers of financial services,  Citizens'  operations are heavily
dependent  on  information  technology  systems.   Citizens  is  addressing  the
potential  problems  associated  with the  possibility  that the computers  that
control or operate Citizens'  information  technology system and  infrastructure
may not be  programmed  to read  four-digit  date codes and, upon arrival of the
year 2000,  may  recognize  the  two-digit  code "00" as the year 1900,  causing
systems to fail to function or to generate  erroneous  data.  Citizens  has been
working with the  companies  that supply or service its  information  technology
systems to identify and remedy any year 2000 related problems.

Citizens'  primary data  processing  applications  are handled by a  third-party
service bureau,  Fiserv.  Fiserv has advised  Citizens that it has migrated to a
fully Year 2000  compliant  processing  system that had been fully  tested as of
July 1, 1999.  Management has also reviewed Citizens' ancillary equipment and is
in the  process  of  providing  the  appropriate  remedial  measures,  including
requesting  service providers to assure Citizens that their systems and products
are fully  year 2000  compliant.  Citizens  has  upgraded  its  existing  teller
operating  system  with a  capital  expenditure  of  approximately  $65,000.  No
assurance can be given,  however,  that significant expense will not be incurred
in future periods. In the unlikely event that Citizens is ultimately required to
purchase  replacement  computer  systems,   programs  and  equipment,  or  incur
substantial  expense to make Citizens'  current systems,  programs and equipment
year 2000  compliant,  LFC's  net  earnings  and  financial  condition  could be
adversely affected.






                                       13



<PAGE>


                          London Financial Corporation

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


Year 2000 Compliance Matters (continued)

Citizens has developed a contingency plan in case  mission-critical  systems are
not  successfully  renovated in a timely manner or if they actually fail at Year
2000  critical  dates.  The  contingency  plan  states that  Citizens  deems the
likelihood of failure of the service  provider's  efforts to implement Year 2000
changes to the on-line core account  processing system to be remote;  however, a
more  likely  scenario is that the  service  provider's  system will be down for
several days or weeks upon arrival of Year 2000. The plan, therefore,  primarily
addresses  action  to deal  with  the  latter  possibility  rather  than  with a
catastrophic event, including Citizens' ability to process transactions manually
over a short-term period, if necessary, upon arrival of the year 2000.

In addition to possible expense related to its own systems, Citizens could incur
losses if loan  payments  are delayed due to year 2000  problems  affecting  any
major  borrowers  in  Citizens'  primary  market area.  Because  Citizens'  loan
portfolio is highly diversified with regard to individual borrowers and types of
businesses and Citizens' primary market area is not significantly dependent upon
one employer or industry,  Citizens does not expect any significant or prolonged
difficulties that will affect net earnings or cash flow.

In addition,  financial  institutions may experience  increases in problem loans
and credit losses in the event that borrowers fail to prepare  properly for Year
2000,  and higher  funding  costs could result if  consumers  react to publicity
about the issue by withdrawing deposits.  Citizens is assessing such risks among
its customers.  LFC could also be materially  adversely  affected if other third
parties, such as governmental  agencies,  clearing houses,  telephone companies,
utilities  and other service  providers  fail to prepare  properly.  Citizens is
therefore  attempting  to assess  these risks and take action to minimize  their
effect.




















                                       14



<PAGE>


                          London Financial Corporation

                                     PART II


ITEM 1.  Legal Proceedings

         Not applicable


ITEM 2.  Changes in Securities and Use of Proceeds

         Not applicable


ITEM 3.  Defaults Upon Senior Securities

         Not applicable


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

         None

ITEM 5.  Other Information

         None


ITEM 6.  Exhibits and Reports on Form 8-K

         Reports on Form 8-K:           None.

         Exhibit 27:                    Financial Data Schedule for the nine
                                        months ended June 30, 1999.


















                                       15



<PAGE>




                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.





Date:   August 13, 1999                    By: /s/John J. Bodle
     -----------------------                   -------------------------------
                                                 John J. Bodle
                                                 President and
                                                 Chief Executive Officer



Date:   August 13, 1999                    By: /s/Joyce E. Bauerle
     -----------------------                   -------------------------------
                                                 Joyce E. Bauerle
                                                 Treasurer and
                                                 Principal Accounting Officer

































                                       16