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 December 31, 1996

                                       OR

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

For the transition period from ____________ to _______________

Commission File No. 0-26248

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

             OHIO                                        34-1800830
_______________________________                    ______________________
(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)

Issuer's telephone number, including area code: (614) 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 January 31, 1997, the latest practicable date, 529,000 of the registrant's
common shares, without par value, were issued and outstanding.


                               Page 1 of 12 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 Cash Flows                  5

                Notes to Consolidated Financial Statements             6

                Management's Discussion and Analysis of
                Financial Condition and Results of
                Operations                                             8


PART II -    OTHER INFORMATION                                        11

SIGNATURES                                                            12


                                      -2-
<PAGE>
<TABLE>

                          London Financial Corporation


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


                                                                       December 31,    September 30,
         ASSETS                                                            1996            1996
                                                                       ------------    -------------
<S>                                                                      <C>             <C>     
Cash and due from banks                                                  $  1,616        $    319
Interest-bearing deposits in other financial institutions                   1,834           2,324
                                                                         --------        --------
         Cash and cash equivalents                                          3,450           2,643

Investment securities designated as available for sale - at market            253             220
Investment securities - at amortized cost, approximate market
  value of $1,002 and $1,991 at December 31, 1996
  and September 30, 1996, respectively                                      1,000           2,000
Mortgage-backed securities - at cost, approximate market
  value of $3,951 and $3,944 at December 31, 1996 and
  September 30, 1996, respectively                                          3,952           4,032
Loans receivable - net                                                     27,859          27,031
Office premises and equipment - at depreciated cost                           348             354
Stock in Federal Home Loan Bank - at cost                                     266             261
Accrued interest receivable                                                   166             178
Prepaid expenses and other assets                                              13              21
Deferred federal income taxes                                                   6              77
                                                                         --------        --------

         TOTAL ASSETS                                                    $ 37,313        $ 36,817
                                                                         ========        ========

         LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits                                                                 $ 28,795        $ 28,195
Advances from the Federal Home Loan Bank                                      300             300
Other liabilities                                                             125             279
Accrued federal income taxes                                                  101             136
                                                                         --------        --------
Total liabilities                                                          29,321          28,910

Shareholders' Equity
  Common shares - authorized 5,000,000 shares without par value;
    529,000 shares issued and outstanding                                    --              --
  Additional paid-in capital                                                4,910           4,910
  Shares acquired by Employee Stock Ownership Plan                           (423)           (423)
  Retained earnings - substantially restricted                              3,479           3,416
  Unrealized gains on securities designated as available for
    sale, net of related tax effects                                           26               4
                                                                         --------        --------
         Total shareholders' equity                                         7,992           7,907
                                                                         --------        --------

         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                      $ 37,313        $ 36,817
                                                                         ========        ========

</TABLE>

                                      -3-
<PAGE>
<TABLE>


                          London Financial Corporation


                       CONSOLIDATED STATEMENTS OF EARNINGS

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


                                                                1996         1995
                                                               ------       ------
<S>                                                            <C>          <C>  
Interest income
  Loans                                                        $ 576        $ 591
  Mortgage-backed securities                                      56           27
  Investment securities                                           29            6
  Interest-bearing deposits and other                             32           37
                                                               -----        -----
         Total interest income                                   693          661

Interest expense
  Deposits                                                       349          387
  Borrowings                                                       7            7
                                                               -----        -----
         Total interest expense                                  356          394
                                                               -----        -----

         Net interest income                                     337          267

Other operating income                                            15           15

General, administrative and other expense
  Employee compensation and benefits                             107          102
  Occupancy and equipment                                         17           17
  Federal deposit insurance premiums                              18           25
  Franchise taxes                                                  5           11
  Data processing                                                 14           14
  Other                                                           47           44
                                                               -----        -----
         Total general, administrative and other expense         208          213
                                                               -----        -----

         Earnings before income taxes                            144           69

Federal income taxes
  Current                                                       (109)          26
  Deferred                                                        60         --
                                                               -----        -----
         Total federal income taxes                              (49)          26
                                                               -----        -----

         NET EARNINGS                                          $  95        $  43
                                                               -----        -----

         EARNINGS PER SHARE                                    $ .20          N/A
                                                               =====        =====

</TABLE>

                                      -4-
<PAGE>
<TABLE>

                          London Financial Corporation


                      CONSOLIDATED STATEMENTS OF CASH FLOWS

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


                                                               1996            1995
                                                              ------          ------
<S>                                                          <C>            <C>    
Cash flows provided by (used in) operating activities:
  Net earnings for the period                                $    95        $    43
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of deferred loan origination fees               (18)           (23)
    Depreciation and amortization                                  6              4
    Federal Home Loan Bank stock dividends                        (5)            (4)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable                                 12             (3)
      Prepaid expenses and other assets                            8            (58)
      Other liabilities                                         (154)            14
      Federal income taxes
        Current                                                  (35)             6
        Deferred                                                  60           --
                                                             -------        -------
         Net cash used in operating activities                   (31)           (21)

Cash flows provided by (used in) investing activities:
  Proceeds from maturity of investment securities              1,000           --
  Principal repayments on mortgage-backed securities              80             37
  Principal repayments on loans                                1,368          1,567
  Loan disbursements                                          (2,178)        (1,319)
                                                             -------        -------
         Net cash provided by investing activities               270            285

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts                               600            395
  Dividends on common stock                                      (32)          --
                                                             -------        -------
         Net cash provided by financing activities               568            395
                                                             -------        -------

Net increase in cash and cash equivalents                        807            659

Cash and cash equivalents at beginning of period               2,643          2,844
                                                             -------        -------

Cash and cash equivalents at end of period                   $ 3,450        $ 3,503
                                                             =======        =======

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
    Federal income taxes                                     $    23        $    20
                                                             =======        =======

    Interest on deposits and borrowings                      $   356        $   394
                                                             =======        =======

</TABLE>

                                      -5-
<PAGE>



                          London Financial Corporation


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          For the three month periods ended December 31, 1996 and 1995


In October 1995, the Board of Directors of The Citizens Loan and Savings Company
("Citizens")  adopted  a Plan  of  Conversion  (the  "Plan")  providing  for the
conversion of Citizens to the stock form of organization (the "Conversion").  In
connection  with the  Conversion,  Citizens  formed a  holding  company,  London
Financial  Corporation  ("LFC").  On March  29,  1996,  Citizens  completed  the
conversion to the stock form of organization,  in connection with which Citizens
issued all of its outstanding shares to LFC and LFC issued 529,000 common shares
in a  subscription  offering  and a community  offering at a price of $10.00 per
share which,  after  consideration of offering expenses totaling  $380,000,  and
shares  purchased by employee benefit plans totaling  $423,000,  resulted in net
cash proceeds of $4.5 million. The financial statements for the periods prior to
March 1996 are those of Citizens prior to the Conversion.

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 LFC included in the Annual Report on Form 10-KSB
for the year ended  September 30, 1996.  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 three month  periods  ended
December 31, 1996 and 1995, 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 Citizens. All significant intercompany items have been eliminated.

3.  EARNINGS PER SHARE

Earnings  per share for the three month  period  ended  December  31,  1996,  is
computed based upon 486,680  weighted-average  shares  outstanding,  which gives
effect to a  reduction  for the  42,320  unallocated  shares  held by the London
Financial  Corporation  Employee Stock Ownership Plan (the "ESOP") in accordance
with Statement of Position 93-6.

Earnings per share for the three month period  ended  December 31, 1995,  is not
applicable  as LFC  completed  its  conversion to the stock form of ownership in
March 1996.



                                      -6-
<PAGE>



                          London Financial Corporation


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

          For the three month periods ended December 31, 1996 and 1995


4.  EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS

In October 1995, the Financial  Accounting  Standards  Board (the "FASB") issued
Statement of Financial  Accounting  Standards ("SFAS") No. 123,  "Accounting for
Stock-Based  Compensation",  establishing  financial  accounting  and  reporting
standards for stock-based  employee  compensation plans. SFAS No. 123 encourages
all entities to adopt a new method of accounting to measure compensation cost of
all employee stock  compensation  plans based on the estimated fair value of the
award at the date it is granted.  Companies are, however, allowed to continue to
measure compensation cost for those plans using the intrinsic value based method
of  accounting,   which  generally  does  not  result  in  compensation  expense
recognition  for most plans.  Companies  that elect to remain with the  existing
accounting  are required to disclose in a footnote to the  financial  statements
pro forma net earnings and, if presented, earnings per share, as if SFAS No. 123
had been adopted. The accounting  requirements of SFAS No. 123 are effective for
transactions  entered  into during  fiscal  years that begin after  December 15,
1995; however, companies are required to disclose information for awards granted
in their first fiscal year  beginning  after  December 15, 1994.  Management has
determined  that LFC will  continue  to  account  for  stock-based  compensation
pursuant to  Accounting  Principles  Board  Opinion No. 25 and,  therefore,  the
provisions  of SFAS No.  123 will have no effect on its  consolidated  financial
condition or results of operations.

In June 1996,  the FASB  issued  SFAS No.  125,  "Accounting  for  Transfers  of
Financial Assets,  Servicing Rights,  and  Extinguishment of Liabilities",  that
provides  accounting  guidance on transfers of  financial  assets,  servicing of
financial assets, and extinguishment of liabilities.  SFAS No. 125 introduces an
approach to accounting  for transfers of financial  assets that provides a means
of dealing with more complex transactions in which the seller disposes of only a
partial  interest in the assets,  retains  rights or  obligations,  makes use of
special  purpose  entities  in the  transaction,  or  otherwise  has  continuing
involvement  with  the  transferred  assets.  The  new  accounting  method,  the
financial  components  approach,  provides  that  the  carrying  amount  of  the
financial assets transferred be allocated to components of the transaction based
on their relative fair values.  SFAS No. 125 provides  criteria for  determining
whether control of assets has been relinquished and whether a sale has occurred.
If the transfer  does not qualify as a sale,  it is  accounted  for as a secured
borrowing. Transactions subject to the provisions of SFAS No. 125 include, among
others, transfers involving repurchase agreements,  securitizations of financial
assets,  loan   participations,   factoring   arrangements,   and  transfers  of
receivables with recourse.

An entity that undertakes an obligation to service  financial assets  recognizes
either a servicing asset or liability for the servicing contract (unless related
to a securitization of assets,  and all the securitized  assets are retained and
classified  as  held-to-maturity).  A  servicing  asset  or  liability  that  is
purchased or assumed is initially recognized at its fair value. Servicing assets
and  liabilities are amortized in proportion to and over the period of estimated
net  servicing  income  or net  servicing  loss and are  subject  to  subsequent
assessments for impairment based on fair value.

SFAS No. 125 provides that a liability is removed from the balance sheet only if
the debtor  either pays the creditor and is relieved of its  obligation  for the
liability or is legally released from being the primary obligor.

SFAS No. 125 is effective for  transfers  and servicing of financial  assets and
extinguishment  of liabilities  occurring  after December 31, 1997, and is to be
applied  prospectively.  Earlier or  retroactive  application  is not permitted.
Management  does not believe that  adoption of SFAS No. 125 will have a material
adverse  effect  on  LFC's   consolidated   financial  position  or  results  of
operations.

                                                                               7

                                      -7-
<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 of allowance for losses on
loans and the effect of certain accounting pronouncements.


DISCUSSION OF FINANCIAL CONDITION CHANGES FROM SEPTEMBER 30, 1996 TO
DECEMBER 31, 1996

At December 31,  1996,  LFC had total  assets of $37.3  million,  an increase of
$496,000,  or 1.3%,  over  September 30, 1996. The increase in assets was funded
primarily from an increase in deposits of approximately $600,000.

Investment securities and mortgage-backed  securities decreased by $1.0 million,
to a total of $5.2  million at December  31,  1996,  reflecting  the maturity of
investment   securities  totaling   approximately  $1.0  million  and  principal
repayments on mortgage-backed securities of $80,000.

Loans  receivable  increased  $828,000,  or 3.1%, as loan  disbursements of $2.2
million exceeded principal repayments of $1.4 million.

At December 31, 1996,  Citizens'  allowance  for loan losses  totaled  $187,000,
which equaled the level  maintained at September 30, 1996.  Nonperforming  loans
totaled  $299,000,  or 1.0% of the total loan  portfolio at December 31 1996, as
compared to nonperforming loans of $261,000,  or .9% of the total loan portfolio
at September 30, 1996. At December 31, 1996, 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 December 31, 1996,  based on
the  available  facts and  circumstances,  there can be no  assurances  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 $28.8 million at December 31, 1996, an increase of $600,000, or
2.1%, from the $28.2 million of deposits outstanding at September 30, 1996. Such
increase  resulted  primarily  from  management's  efforts to increase  deposits
through marketing strategies.

As required by the Financial Institutions Reform,  Recovery, and Enforcement Act
of  1989  and  regulations  promulgated  thereunder  by  the  Office  of  Thrift
Supervision,  Citizens is required to maintain  minimum  levels of capital under
three separate  standards.  Citizens is required to maintain  regulatory capital
sufficient to meet  tangible,  core and  risk-based  capital ratios of 1.50% and
3.00% of adjusted total assets, and 8.00% of risk-weighted assets, respectively.


                                      -8-
<PAGE>

                          London Financial Corporation


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


DISCUSSION OF FINANCIAL CONDITION CHANGES FROM SEPTEMBER 30, 1996 TO
DECEMBER 31, 1996 (continued)

As of December  31,  1996,  Citizens'  regulatory  capital  exceeded all minimum
capital requirements as shown in the following table:

<TABLE>
                                                                  Regulatory capital
                              Tangible                       Core                     Risk-based
                               Capital      Percent         Capital       Percent       Capital        Percent
                              --------      -------         -------       -------     ----------       -------
                                                                      (In thousands)
<S>                            <C>              <C>         <C>              <C>         <C>              <C>  
Capital under generally
  accepted accounting
  principles                   $5,527                       $5,527                     $  5,527
Additional capital items
  General valuation
  allowances                     --                            --                           187
                               -------                      ------                     --------
Regulatory capital
  computed                      5,527           15.7         5,527           15.7         5,714           29.8
Capital requirement               529            1.5         1,058            3.0         1,533            8.0
                               ------       --------        ------       --------        ------       --------

Regulatory
  capital - excess             $4,998           14.2%       $4,469           12.7%       $4,181           21.8%
                               ======       ========        ======       ========        ======       ========

</TABLE>


COMPARISON OF OPERATING RESULTS FOR THE THREE MONTH PERIODS ENDED
DECEMBER 31, 1996 AND 1995

GENERAL

Net  earnings  for the three month  period  ended  December  31,  1996,  totaled
$95,000, an increase of $52,000, or 120.9%, over the comparable 1995 period. The
increase in earnings resulted  primarily from a $70,000 increase in net interest
income and a $5,000 decrease in general, administrative and other expense, which
were partially offset by a $23,000 increase in the federal income tax provision.

NET INTEREST INCOME

Interest income on loans for the three months ended December 31, 1996, decreased
by $15,000,  or 2.5%,  as compared to the three months ended  December 31, 1995.
The decrease was  primarily  due to a decline in yield,  coupled with a $400,000
decrease in the weighted average portfolio balance year to year. Interest income
on mortgage-backed  securities increased by $29,000, or 107.4%, due primarily to
a $2.0 million increase in the weighted average  portfolio balance year to year.
Interest  income on  investment  securities  and other  interest-earning  assets
increased by $18,000,  or 41.9%,  due primarily to an increase of  approximately
$725,000 in the weighted-average balance outstanding year to year. The increases
in interest  income on investment  and  mortgage-backed  securities  reflect the
earnings on securities  purchased  from net proceeds of LFC's offering of common
shares.


                                      -9-
<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
DECEMBER 31, 1996 AND 1995 (continued)

NET INTEREST INCOME (continued)

Interest  expense on deposits  decreased by $38,000,  or 9.8%,  during the three
months ended  December 31, 1996.  This decrease  resulted  primarily from a $2.3
million decline in the weighted average balance of deposits outstanding, coupled
with a decrease in the cost of deposits.

As a result of the foregoing  changes in interest  income and interest  expense,
net  interest  income  increased by $70,000,  or 26.2%,  during the three months
ended  December  31, 1996,  as compared to the three  months ended  December 31,
1995. The interest rate spread totaled  approximately 2.86% for the three months
ended  December 31, 1996,  compared to 2.89% for the same period in 1995,  while
the net interest margin increased to approximately 3.80% in the 1996 period from
3.22% in the 1995 period.

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,  general  economic
conditions, particularly as such conditions relate to Citizens' market area, and
other factors related to the  collectibility  of Citizen's loan portfolio.  As a
result of such analysis, management concluded that the allowance for loan losses
was adequate and, as a result, a provision for losses on loans was not necessary
during the three month periods ended December 31, 1996 and 1995. There can be no
assurance  that the loan loss  allowance  of Citizens  will be adequate to cover
losses on nonperforming assets in the future.

OTHER INCOME

Other income totaled  $15,000 during each of the three months ended December 31,
1996 and 1995.  Other 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 decreased by approximately $5,000, or
2.3%, during the three months ended December 31, 1996, as compared to 1995. This
decrease  was  primarily  the result of a $7,000,  or 28.0%,  decline in federal
deposit insurance  premiums,  which resulted from lower premium rates during the
quarter.

FEDERAL INCOME TAXES

The provision for federal income taxes increased $23,000,  or 88.5%,  during the
three months ended  December 31, 1996,  due primarily to an increase in earnings
before income taxes of $75,000, or 108.7%. LFC's effective tax rates amounted to
34.0% and 37.7%  during  the three  months  ended  December  31,  1996 and 1995,
respectively.


                                      -10-
<PAGE>


                          London Financial Corporation


                                     PART II


ITEM 1.   LEGAL PROCEEDINGS

                  Not applicable


ITEM 2.   CHANGES IN SECURITIES

          Not applicable


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          Not applicable


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          At the 1997 Annual Meeting of Shareholders of the Corporation, held on
          January 23, 1997,  each of Donald E.  Forrest,  Edward D. Goodyear and
          Kennison A. Sims was elected to serve as a director of the Corporation
          for a term expiring in 1999 by the following vote:

                      For:  418,390                              Withheld:  0

          Three other matters were submitted to the shareholders,  for which the
          following votes were cast:

          1)   Adoption of the London  Financial  Corporation  1997 Stock Option
               and Incentive Plan.

                      For:  305,872       Against:  11,815       Abstain:  565

          2)   Adoption  of The  Citizens  Loan and Savings  Company  Management
               Recognition Plan and Trust.

                      For:  326,309       Against:  8,915        Abstain: 14,165

          3)   Ratification   of  the  appointment  of  Grant  Thornton  LLP  as
               independent auditors of the Corporation for the fiscal year ended
               September 30, 1997.

                      For:  417,075       Against:  1,000        Abstain:  315

ITEM 5.   OTHER INFORMATION

                  None


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          Reports on Form 8-K:            None.

          Exhibits:                       Financial Data Schedule for the three
                                          months ended December 31, 1996.


                                      -11-
<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:  February 12, 1997                By:  John J. Bodle
                                             President and
                                             Chief Executive Officer





Date:  February 12, 1997                By:  Joyce E. Bauerle
                                             Treasurer


                                      -12-