UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q  (Mark One)  [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period endedDecember 31, 2009  OR  [   ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT  For the transition period from ____________ to _______________  Commission File Number:0-27916FFD FINANCIAL CORPORATION(Exact name of registrant as specified in its charter)Ohio34-1821148(State or other jurisdiction of(IRS Employer Identification No.)incorporation or organization)321 North Wooster Avenue, Dover, Ohio 44622(Address of principal executive offices) (Zip Code)(330) 364-7777(Registrants telephone number, including area code)(Former name, former address and former fiscal year, if changed since last report)  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X]          No [   ]  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [   ]          No [   ]  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.  Large accelerated filer [   ]Accelerated filer [   ]Non-accelerated filer [   ] (Do not check if a smaller reporting company)Smaller reporting company [X]  1  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [   ]          No [X]  APPLICABLE ONLY TO CORPORATE ISSUERS  Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: February 12, 2010  1,011,251 common shares, no par value   2  INDEX


|           |  |         |  |                                                             |  |     
|---------- |  | ------- |  | ----------------------------------------------------------- |  | ----
|           |  |         |  |                                                             |  | Page
|           |  |         |  |                                                             |  |     
|PART I     |  | Item 1  |  | FINANCIAL INFORMATION                                       |  |     
|           |  |         |  |                                                             |  |     
|           |  |         |  | Consolidated Statements of Financial Condition              |  | 4   
|           |  |         |  |                                                             |  |     
|           |  |         |  | Consolidated Statements of Earnings                         |  | 5   
|           |  |         |  |                                                             |  |     
|           |  |         |  | Consolidated Statements of Comprehensive Income             |  | 6   
|           |  |         |  |                                                             |  |     
|           |  |         |  | Condensed Consolidated Statements of Cash Flows             |  | 7   
|           |  |         |  |                                                             |  |     
|           |  |         |  | Notes to Consolidated Financial Statements                  |  | 8   
|           |  |         |  |                                                             |  |     
|           |  | Item 2  |  | Managements Discussion and Analysis of Financial Condition |  |     
|           |  |         |  | and Results of Operations                                   |  | 19  
|           |  |         |  |                                                             |  |     
|           |  | Item 3  |  | Qualitative and Quantitative Disclosures about Market Risk  |  | 27  
|           |  |         |  |                                                             |  |     
|           |  | Item 4T |  | Controls and Procedures                                     |  | 27  
|           |  |         |  |                                                             |  |     
|PART II    |  |         |  | OTHER INFORMATION                                           |  | 28  
|           |  |         |  |                                                             |  |     
|SIGNATURES |  |         |  | 29                                                         

3  FFD Financial Corporation  CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION  (In thousands, except share data)


|                                                                                  |             |          |      |   |         | 
|--------------------------------------------------------------------------------- | ----------- | -------- | ---- | - | ------- | 
|December 31,                                                                      |             | June 30,
|                                                                                  | 2009        |          | 2009
|ASSETS                                                                            | (Unaudited) |          |     
|                                                                                  |             |          |      |   |        
|Cash and due from financial institutions                                          | $           | 1,543    |      | $ | 2,381  
|Interest-bearing deposits in other financial institutions                         |             | 7,900    |      |   | 11,374 
|Cash and cash equivalents                                                         |             | 9,443    |      |   | 13,755 
|                                                                                  |             |          |      |   |        
|Investment securities available for sale                                          |             | 9,875    |      |   | 5,865  
|Mortgage-backed securities available for sale                                     |             | 222      |      |   | 231    
|Mortgage-backed securities held to maturity, fair value of $59 and $62 of         |             |          |      |   |        
|December 31, 2009 and June 30, 2009, respectively                                 |             | 59       |      |   | 62     
|Loans receivable  net of allowance of $1,801 and $1,694                          |             | 169,456  |      |   | 161,438
|Loans held for sale                                                               |             | 73       |      |   | 311    
|Real estate owned, net                                                            |             | 158      |      |   | 121    
|Premises and equipment, net                                                       |             | 3,825    |      |   | 3,383  
|Federal Home Loan Bank of Cincinnati: stock, at cost                              |             | 2,422    |      |   | 2,422  
|Loan servicing rights                                                             |             | 603      |      |   | 626    
|Accrued interest receivable                                                       |             | 601      |      |   | 515    
|Prepaid expenses and other assets                                                 |             | 917      |      |   | 285    
|                                                                                  |             |          |      |   |        
|Total assets                                                                      | $           | 197,654  |      | $ | 189,014
|                                                                                  |             |          |      |   |        
|LIABILITIES AND SHAREHOLDERS EQUITY                                              |             |          |      |   |        
|                                                                                  |             |          |      |   |        
|Deposits                                                                          |             |          |      |   |        
|Non-interest bearing                                                              | $           | 10,324   |      | $ | 9,828  
|Interest bearing                                                                  |             | 153,628  |      |   | 143,799
|Total deposits                                                                    |             | 163,952  |      |   | 153,627
|Federal Home Loan Bank advances                                                   |             | 13,553   |      |   | 13,869 
|Other borrowed funds                                                              |             | 430      |      |   | 800    
|Accrued interest payable                                                          |             | 155      |      |   | 172    
|Accrued and deferred federal income tax                                           |             | 146      |      |   | 219    
|Other liabilities                                                                 |             | 1,518    |      |   | 2,442  
|Total liabilities                                                                 |             | 179,754  |      |   | 171,129
|                                                                                  |             |          |      |   |        
|Commitments and contingent liabilities                                            |             |         |      |   |       
|                                                                                  |             |          |      |   |        
|Shareholders equity                                                              |             |          |      |   |        
|Preferred stock - authorized 1,000,000 shares without par value; no shares issued |             |         |      |   |       
|Common stock - authorized 5,000,000 shares without par or stated value;           |             |          |      |   |        
|1,454,750 shares issued                                                           |             |         |      |   |       
|Additional paid-in capital                                                        |             | 8,313    |      |   | 8,312  
|Retained earnings                                                                 |             | 15,746   |      |   | 15,751 
|Accumulated comprehensive loss, net                                               |             | (81)     |      |   | (89)   
|Treasury stock, at cost (443,499 and 444,844 treasury shares                      |             |          |      |   |        
|at December 31, 2009 and June 30, 2009, respectively)                             |             | (6,078)  |      |   | (6,089)
|Total shareholders equity                                                        |             | 17,900   |      |   | 17,885 
|                                                                                  |             |          |      |   |        
|Total liabilities and shareholders equity                                        | $           | 197,654  |      | $ | 189,014

The accompanying notes are an integral part of these statements.  4  FFD Financial Corporation  CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data)


|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|------------------------------------------------------- |  | --------------------------------------- | ----- | ------------------------------------- | - | ----- |  | - | ----- |  | - | -----
|                                                        |  | For the three months
ended December 31, |       | For the six months
ended December 31,
|                                                        |  |                                         | 2009  |                                       |   | 2008  |  |   | 2009  |  |   | 2008 
|                                                        |  | (Unaudited)                            
|Interest income                                         |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Loans, including fees                                   |  | $                                       | 2,426 |                                       | $ | 2,546 |  | $ | 4,884 |  | $ | 5,138
|Mortgage-backed securities                              |  |                                         | 2     |                                       |   | 4     |  |   | 5     |  |   | 9    
|Investment securities                                   |  |                                         | 73    |                                       |   | 71    |  |   | 122   |  |   | 142  
|Interest-bearing deposits and other                     |  |                                         | 28    |                                       |   | 33    |  |   | 59    |  |   | 89   
|                                                        |  |                                         | 2,529 |                                       |   | 2,654 |  |   | 5,070 |  |   | 5,378
|Interest expense                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Deposits                                                |  |                                         | 817   |                                       |   | 840   |  |   | 1,660 |  |   | 1,713
|Borrowings                                              |  |                                         | 155   |                                       |   | 200   |  |   | 315   |  |   | 403  
|                                                        |  |                                         | 972   |                                       |   | 1,040 |  |   | 1,975 |  |   | 2,116
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Net interest income                                     |  |                                         | 1,557 |                                       |   | 1,614 |  |   | 3,095 |  |   | 3,262
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Provision for losses on loans                           |  |                                         | 86    |                                       |   | 99    |  |   | 167   |  |   | 204  
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Net interest income after provision for losses on loans |  |                                         | 1,471 |                                       |   | 1,515 |  |   | 2,928 |  |   | 3,058
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Noninterest income                                      |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Net gain on sale of loans                               |  |                                         | 99    |                                       |   | 48    |  |   | 170   |  |   | 115  
|Mortgage servicing revenue (loss) net of amortization   |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|and impairment                                          |  |                                         | (38)  |                                       |   | 20    |  |   | (10)  |  |   | 36   
|Service charges on deposit accounts                     |  |                                         | 77    |                                       |   | 68    |  |   | 156   |  |   | 134  
|Impairment loss on securities                           |  |                                         |      |                                       |   |      |  |   |      |  |   | (9)  
|Other                                                   |  |                                         | 27    |                                       |   | 30    |  |   | 56    |  |   | 56   
|                                                        |  |                                         | 165   |                                       |   | 166   |  |   | 372   |  |   | 332  
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Noninterest expense                                     |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Employee and director compensation and benefits         |  |                                         | 625   |                                       |   | 529   |  |   | 1,227 |  |   | 1,081
|Occupancy and equipment                                 |  |                                         | 142   |                                       |   | 114   |  |   | 266   |  |   | 227  
|Franchise taxes                                         |  |                                         | 57    |                                       |   | 57    |  |   | 115   |  |   | 115  
|FDIC Insurance Premiums                                 |  |                                         | 51    |                                       |   | 33    |  |   | 119   |  |   | 57   
|Data processing                                         |  |                                         | 95    |                                       |   | 87    |  |   | 186   |  |   | 178  
|ATM processing                                          |  |                                         | 25    |                                       |   | 34    |  |   | 65    |  |   | 68   
|Professional and consulting fees                        |  |                                         | 68    |                                       |   | 38    |  |   | 135   |  |   | 109  
|Postage and stationery supplies                         |  |                                         | 47    |                                       |   | 27    |  |   | 101   |  |   | 69   
|Advertising                                             |  |                                         | 31    |                                       |   | 37    |  |   | 84    |  |   | 71   
|Checking account maintenance expense                    |  |                                         | 57    |                                       |   | 58    |  |   | 115   |  |   | 112  
|Loss on sale of real estate owned                       |  |                                         | 1     |                                       |   |      |  |   | 15    |  |   |     
|Other                                                   |  |                                         | 181   |                                       |   | 230   |  |   | 354   |  |   | 358  
|                                                        |  |                                         | 1,380 |                                       |   | 1,244 |  |   | 2,782 |  |   | 2,445
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Income before income taxes                              |  |                                         | 256   |                                       |   | 437   |  |   | 518   |  |   | 945  
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Income tax expense                                      |  |                                         | 89    |                                       |   | 155   |  |   | 179   |  |   | 332  
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Net Income                                              |  | $                                       | 167   |                                       | $ | 282   |  | $ | 339   |  | $ | 613  
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Earnings per share                                      |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Basic                                                   |  | $                                       | .17   |                                       | $ | .27   |  | $ | .34   |  | $ | .58  
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Diluted                                                 |  | $                                       | .16   |                                       | $ | .27   |  | $ | .33   |  | $ | .58  
|                                                        |  |                                         |       |                                       |   |       |  |   |       |  |   |      
|Dividends declared per share                            |  | $                                       | .17   |                                       | $ | .17   |  | $ | .34   |  | $ | .335 

The accompanying notes are an integral part of these statements.  5  FFD Financial Corporation  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  (In thousands)


|                                                                                                                                                        |  |                                         |  |                                       |  |      |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- |  | ------------------------------------- |  | ---- |  | ----
|                                                                                                                                                        |  | For the three months
ended December 31, |  | For the six months
ended December 31,
|                                                                                                                                                        |  | 2009                                    |  | 2008                                  |  | 2009 |  | 2008
|                                                                                                                                                        |  | (Unaudited)                            
|                                                                                                                                                        |  |                                         |  |                                       |  |      |  |     
|Net earnings                                                                                                                                            |  | $167                                    |  | $282                                  |  | $339 |  | $613
|                                                                                                                                                        |  |                                         |  |                                       |  |      |  |     
|Other comprehensive income, net of related tax effects:                                                                                                 |  |                                         |  |                                       |  |      |  |     
|Unrealized holding gains (losses) on securities during
  the period, net of taxes (benefits) of $(39), $61,
  $4 and $45, during the respective periods |  | (75)                                    |  | 119                                   |  | 8    |  | 87  
|                                                                                                                                                        |  |                                         |  |                                       |  |      |  |     
|Comprehensive income                                                                                                                                    |  | $  92                                   |  | $401                                  |  | $347 |  | $700

The accompanying notes are an integral part of these statements.  6  FFD Financial Corporation  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  For the six months ended December 31, 2009 and 2008 (In thousands) (Unaudited)  20092008Cash flows from operating activities:Net cash from operating activities$(837)$1,610Cash flows from investing activities:Purchase of investment securities designated as available for sale(4,000)(11)Proceeds from maturities/calls of investment securities designatedAs available for sale954Principal repayments on mortgage-backed securities1220Loan originations and payments, net(9,364)(2,633)Proceeds from participation loan sales to other financial institutions1,00013Additions to premises and equipment(562)(72)Proceeds from the sale of real estate owned132Net cash from investing activities(12,782)(1,729)Cash flows from financing activities:Net change in deposits10,3253,932Repayments of Federal Home Loan Bank advances(316)(2,943)Net change in other borrowed funds(370)800Proceeds from exercise of stock options1245Purchase of treasury stock(794)Cash dividends paid(344)(359)Net cash from financing activities9,307681Net change in cash and cash equivalents(4,312)562Beginning cash and cash equivalents13,75513,049Ending cash and cash equivalents$9,443$13,611Supplemental disclosure of cash flow information:Cash paid during the period for:Federal income taxes$255$265Interest paid$1,992$2,110Supplemental noncash disclosures:Transfer from loans to repossessed assets$179$  The accompanying notes are an integral part of these statements.  7  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  For the six- and three-month periods ended December 31, 2009 and 2008  1.    Basis of Presentation  The accompanying unaudited consolidated financial statements were prepared in accordance with the instructions for Form 10-Q and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with United States generally accepted accounting principles. Accordingly, these financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto of FFD Financial Corporation (the Corporation) included in the Corporations Annual Report on Form 10-K for the year ended June 30, 2009. However, in the opinion of management, all adjustments (consisting of only normal recurring accruals) which are necessary for a fair presentation of the financial statements have been included. The results of operations for the three- and six-month periods ended December 31, 2009, are not necessarily indicative of the results which may be expected for the entire fiscal year.  2.    Principles of Consolidation  The accompanying consolidated financial statements include the accounts of the Corporation, First Federal Community Bank (the Bank) and Dover Service Corporation, a wholly owned subsidiary of the Bank. All significant intercompany items have been eliminated.  3.    Earnings Per Share  Basic earnings per share is computed based upon the weighted-average common shares outstanding during the period. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under the Corporations stock option plans. Stock options for 3,500 shares of common stock were not considered in computing diluted earnings per share for the three and six months ended December 31, 2009 because they were antidilutive. Stock options for 10,000 shares of common stock were not considered in computing diluted earnings per share for the three and six months ended December 31, 2008 because they were antidilutive. The computations are as follows:


|                                                     |  |                                         |  |                                       |  |           |  |          
|---------------------------------------------------- |  | --------------------------------------- |  | ------------------------------------- |  | --------- |  | ---------
|                                                     |  | For the three months ended
December 31, |  | For the six months ended
December 31,
|                                                     |  | 2009                                    |  | 2008                                  |  | 2009      |  | 2008     
|                                                     |  |                                         |  |                                       |  |           |  |          
|Weighted-average common shares outstanding (basic)   |  | 1,010,951                               |  | 1,041,385                             |  | 1,010,426 |  | 1,056,231
|Dilutive effect of assumed exercise of stock options |  | 3,249                                   |  | 1,876                                 |  | 3,122     |  | 2,395    
|Weighted-average common shares outstanding (diluted) |  | 1,014,200                               |  | 1,043,261                             |  | 1,013,548 |  | 1,058,626

4.    Stock Option Plan  The FFD Financial Corporation 1996 Stock Option and Incentive Plan (the Plan) expired as to new awards in October of 2006. Options granted prior to expiration remain exercisable for ten years from the grant date, unless terminated in accordance with the Plan or the applicable award agreement. In addition, the Corporation has an option plan in which only one director participates. The director-only plan was adopted to permit an option issuance to a new director because the terms of the Plan at the time limited the aggregate number of options available for awards to directors.  8  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  4.    Stock Option Plan (continued)  A summary of the activity in the Plan for the six months ended December 31, 2009 follows:


|                                   |  |         |  |                                 |       |                                             |         |                           |   |       
|---------------------------------- |  | ------- |  | ------------------------------- | ----- | ------------------------------------------- | ------- | ------------------------- | - | ------
|                                   |  | Shares  |  | Weighted
average
exercise
price |       | Weighted
average
remaining
contractual
term |         | Aggregate
intrinsic
value
|                                   |  |         |  |                                 |       |                                             |         |                           |   |       
|Outstanding at beginning of period |  | 22,210  |  | $                               | 11.28 |                                             |         |                           |   |       
|Granted                            |  |        |  |                                 |      |                                             |         |                           |   |       
|Exercised                          |  | (1,345) |  |                                 | 9.18  |                                             |         |                           |   |       
|Forfeited or expired               |  |        |  |                                 |      |                                             |         |                           |   |       
|Outstanding at end of period       |  | 20,865  |  | $                               | 11.41 |                                             | 2.8 yrs |                           | $ | 49,720
|                                   |  |         |  |                                 |       |                                             |         |                           |   |       
|Exercisable at end of period       |  | 20,865  |  | $                               | 11.41 |                                             | 2.8 yrs |                           | $ | 49,720
|                                   |  |         |  |                                 |       |                                             |         |                           |   |       
|Options available for grant        |  |        |  |                                 |       |                                             |         |                           |   |       
|                                   |  |         |  |                                 |       |                                             |         |                           |   |       
|                                   |  |         |  |                                 |       |                                             |         |                           |   |       
|                                   |  |         |  |                                 |       |                                             |         |                           |   |       
|                                   |  |         |  |                                 |       |                                             |         |                           |   |       

Information related to the Plan during the six months ended December 31, 2009 follows:


|                                     |  |          |  |  |  |  |  |  |  | 
|------------------------------------ |  | -------- |  |  |  |  |  |  |  | 
|Intrinsic value of options exercised |  | $  5,000 |  |  |  |  |  |  |  | 
|Cash received from options exercised |  | 12,000   |  |  |  |  |  |  |  | 
|Tax benefit from options exercised   |  |         |  |  |  |  |  |  |  | 

A summary of the activity in the Plan for the year ended June 30, 2009 follows:


|                                 |  |         |  |                                 |       |                                             |         |                           |   |       
|-------------------------------- |  | ------- |  | ------------------------------- | ----- | ------------------------------------------- | ------- | ------------------------- | - | ------
|                                 |  | Shares  |  | Weighted
average
exercise
price |       | Weighted
average
remaining
contractual
term |         | Aggregate
intrinsic
value
|                                 |  |         |  |                                 |       |                                             |         |                           |   |       
|Outstanding at beginning of year |  | 27,780  |  | $                               | 10.85 |                                             |         |                           |   |       
|Granted                          |  |        |  |                                 |      |                                             |         |                           |   |       
|Exercised                        |  | (5,445) |  |                                 | 9.09  |                                             |         |                           |   |       
|Forfeited or expired             |  | (125)   |  |                                 | 12.48 |                                             |         |                           |   |       
|Outstanding at end of year       |  | 22,210  |  | $                               | 11.28 |                                             | 3.2 yrs |                           | $ | 58,906
|                                 |  |         |  |                                 |       |                                             |         |                           |   |       
|Exercisable at end of year       |  | 22,210  |  | $                               | 11.28 |                                             | 3.2 yrs |                           | $ | 58,906
|                                 |  |         |  |                                 |       |                                             |         |                           |   |       
|Options available for grant      |  |        |  |                                 |       |                                             |         |                           |   |       

Information related to the Plan for the year ended June 30, 2009 follows:


|                                     |  |         |  |  |  |  |  |  |  | 
|------------------------------------ |  | ------- |  |  |  |  |  |  |  | 
|Intrinsic value of options exercised |  | $12,000 |  |  |  |  |  |  |  | 
|Cash received from options exercised |  | 49,000  |  |  |  |  |  |  |  | 
|Tax benefit from options exercised   |  |        |  |  |  |  |  |  |  | 

9  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008 5.    Loans  Loans at period end and year end were as follows:


|                                        |  |                   |         |               |   |        
|--------------------------------------- |  | ----------------- | ------- | ------------- | - | -------
|                                        |  | December 31,
2009 |         | June 30,
2009
|                                        |  | (in thousands)   
|Residential real estate                 |  |                   |         |               |   |        
|One- to four-family                     |  | $                 | 65,320  |               | $ | 62,940 
|Multi-family                            |  |                   | 7,870   |               |   | 8,136  
|Nonresidential real estate and land     |  |                   | 75,582  |               |   | 72,157 
|Commercial loans  secured              |  |                   | 18,693  |               |   | 17,533 
|Commercial loans  unsecured            |  |                   | 165     |               |   | 145    
|Consumer and other loans                |  |                   | 6,242   |               |   | 6,328  
|                                        |  |                   | 173,872 |               |   | 167,239
|                                        |  |                   |         |               |   |        
|Net deferred loan origination costs     |  |                   | 201     |               |   | 221    
|Undisbursed portion of loans in process |  |                   | (2,816) |               |   | (4,328)
|Allowance for loan losses               |  |                   | (1,801) |               |   | (1,694)
|                                        |  |                   |         |               |   |        
|Loans, net                              |  | $                 | 169,456 |               | $ | 161,438

Activity in the allowance for loan losses was as follows:


|                          |  |                                 |  |                               |  |        |  |       
|------------------------- |  | ------------------------------- |  | ----------------------------- |  | ------ |  | ------
|                          |  | Three months ended
December 31, |  | Six months ended
December 31,
|                          |  | 2009                            |  | 2008                          |  | 2009   |  | 2008  
|                          |  | (in thousands)                  |  | (in thousands)               
|                          |  |                                 |  |                               |  |        |  |       
|Beginning balance         |  | $1,724                          |  | $1,529                        |  | $1,694 |  | $1,482
|Provision for loan losses |  | 86                              |  | 99                            |  | 167    |  | 204   
|Loans charged-off         |  | (11)                            |  | (23)                          |  | (64)   |  | (83)  
|Recoveries                |  | 2                               |  | 4                             |  | 4      |  | 6     
|Ending balance            |  | $1,801                          |  | $1,609                        |  | $1,801 |  | $1,609

Individually impaired loans were as follows:


|                                                                      |  |                   |       |              |   |      
|--------------------------------------------------------------------- |  | ----------------- | ----- | ------------ | - | -----
|                                                                      |  | December 31,
2009 |       | June 30
2009
|                                                                      |  | (in thousands)   
|                                                                      |  |                   |       |              |   |      
|                                                                      |  |                   |       |              |   |      
|Period-end impaired loans with no allocated allowance for loan losses |  | $                 |      |              | $ |     
|Period-end impaired loans with allocated allowance for loan losses    |  |                   | 2,507 |              |   | 1,823
|                                                                      |  |                   |       |              |   |      
|Total                                                                 |  | $                 | 2,507 |              | $ | 1,823
|                                                                      |  |                   |       |              |   |      
|Amount of the allowance for loan losses allocated                     |  | $                 | 484   |              | $ | 413  
|                                                                      |  |                   |       |              |   |      
|Period -end impaired loans on nonaccural                              |  | $                 | 1,696 |              | $ | 834  
|Period-end impaired loans accruing                                    |  |                   | 811   |              |   | 989  
|                                                                      |  | $                 | 2,507 |              | $ | 1,823

10  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  5. Loans (continued)  Nonaccrual loans and loans past due 90 days still on accrual were as follows:


|                                             |  |                   |       |               |   |    
|-------------------------------------------- |  | ----------------- | ----- | ------------- | - | ---
|                                             |  | December 31,
2009 |       | June 30,
2009
|                                             |  | (in thousands)   
|                                             |  |                   |       |               |   |    
|Loans past due over 90 days still on accrual |  | $                 |      |               | $ |   
|                                             |  |                   |       |               |   |    
|                                             |  | December 31,
2009 |       | June 30,
2009
|Nonaccrual loans                             |  | (in thousands)   
|                                             |  |                   |       |               |   |    
|Residential real estate                      |  |                   |       |               |   |    
|One- to four-family                          |  | $                 | 539   |               | $ | 128
|Multi-family                                 |  |                   |      |               |   |   
|Nonresidential real estate and land          |  |                   | 1,995 |               |   | 821
|Commercial loans  secured                   |  |                   | 30    |               |   |   
|Commercial loans  unsecured                 |  |                   |      |               |   |   
|Consumer and other loans                     |  |                   | 10    |               |   |   
|                                             |  | $                 | 2,574 |               | $ | 949

Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.  6.    Securities  The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:


|                                                                      |                   |        |                        |   |                         |  |            |       |  |   |       
|--------------------------------------------------------------------- | ----------------- | ------ | ---------------------- | - | ----------------------- |  | ---------- | ----- |  | - | ------
|                                                                      | December 31, 2009
|                                                                      | Amortized
Cost    |        | Gross
Unrealized
Gains |   | Gross
Unrealized
Losses |  | Fair
Value
|                                                                      | (In thousands)   
|U.S. Government agency obligations                                    | $                 | 9,998  |                        | $ |                        |  | $          | (125) |  | $ | 9,873 
|Equity securities                                                     |                   | 2      |                        |   |                        |  |            |      |  |   | 2     
|                                                                      |                   |        |                        |   |                         |  |            |       |  |   |       
|Total                                                                 |                   | 10,000 |                        |   |                        |  |            | (125) |  |   | 9,875 
|                                                                      |                   |        |                        |   |                         |  |            |       |  |   |       
|Mortgage Backed Securities:                                           |                   |        |                        |   |                         |  |            |       |  |   |       
|Federal National Mortgage
  Association participation certificates    |                   | 173    |                        |   | 2                       |  |            |      |  |   | 175   
|Government National Mortgage
  Association participation certificates |                   | 47     |                        |   |                        |  |            |      |  |   | 47    
|Total mortgage-backed securities
  available for sale                 |                   | 220    |                        |   | 2                       |  |            |      |  |   | 222   
|                                                                      |                   |        |                        |   |                         |  |            |       |  |   |       
|Total                                                                 | $                 | 10,220 |                        | $ | 2                       |  | $          | (125) |  | $ | 10,097

All mortgage backed securities held by the Corporation have underlying collateral of residential real estate.  11  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  6.    Securities (continued)


|                                                                      |                |       |                        |   |                         |  |            |       |  |   |      
|--------------------------------------------------------------------- | -------------- | ----- | ---------------------- | - | ----------------------- |  | ---------- | ----- |  | - | -----
|                                                                      | June 30, 2009 
|                                                                      | Amortized
Cost |       | Gross
Unrealized
Gains |   | Gross
Unrealized
Losses |  | Fair
Value
|                                                                      | (In thousands)
|U.S. Government agency obligations                                    | $              | 6,000 |                        | $ |                        |  | $          | (137) |  | $ | 5,863
|Equity securities                                                     |                | 2     |                        |   |                        |  |            |      |  |   | 2    
|                                                                      |                |       |                        |   |                         |  |            |       |  |   |      
|Total                                                                 |                | 6,002 |                        |   |                        |  |            | (137) |  |   | 5,865
|                                                                      |                |       |                        |   |                         |  |            |       |  |   |      
|Mortgage Backed Securities:                                           |                |       |                        |   |                         |  |            |       |  |   |      
|Federal National Mortgage
  Association participation certificates    |                | 179   |                        |   | 2                       |  |            |      |  |   | 181  
|Government National Mortgage
  Association participation certificates |                | 50    |                        |   |                        |  |            |      |  |   | 50   
|Total mortgage-backed securities
  available for sale                 |                | 229   |                        |   | 2                       |  |            |      |  |   | 231  
|                                                                      |                |       |                        |   |                         |  |            |       |  |   |      
|Total                                                                 | $              | 6,231 |                        | $ | 2                       |  | $          | (137) |  | $ | 6,096

All mortgage backed securities held by the Corporation have underlying collateral of residential real estate.  The carrying amount, unrecognized gains and losses, and fair value of securities held to maturity were as follows:


|                                                    |  |                |                   |  |                          |  |                           |  |            |  |       |  |  |       | 
|--------------------------------------------------- |  | -------------- | ----------------- |  | ------------------------ |  | ------------------------- |  | ---------- |  | ----- |  |  | ----- | 
|                                                    |  |                | December 31, 2009
|                                                    |  |                | Carrying
Amount   |  | Gross
Unrecognized
Gains |  | Gross
Unrecognized
Losses |  | Fair
Value
|                                                    |  | (In thousands)
|Federal Home Loan Mortgage (FHLMC)                  |  |                |                   |  |                          |  |                           |  |            |  |       |  |  |      
|Corporation participation certificates              |  |                | $59               |  |                          |  | $                        |  |            |  | $    |  |  | $  59
|Total mortgage-backed securities
  held to maturity |  |                | $59               |  |                          |  | $                        |  |            |  | $    |  |  | $  59




|                                                    |  |                |                 |  |                          |  |                           |  |            |  |       |  |  |       | 
|--------------------------------------------------- |  | -------------- | --------------- |  | ------------------------ |  | ------------------------- |  | ---------- |  | ----- |  |  | ----- | 
|                                                    |  |                | June 30, 2009  
|                                                    |  |                | Carrying
Amount |  | Gross
Unrecognized
Gains |  | Gross
Unrecognized
Losses |  | Fair
Value
|                                                    |  | (In thousands)
|Federal Home Loan Mortgage (FHLMC)                  |  |                |                 |  |                          |  |                           |  |            |  |       |  |  |      
|Corporation participation certificates              |  |                | $62             |  |                          |  | $                        |  |            |  | $    |  |  | $  62
|Total mortgage-backed securities
  held to maturity |  |                | $62             |  |                          |  | $                        |  |            |  | $    |  |  | $  62

No securities were sold during the three and six months ended December 31, 2009 and December 31, 2008.  12  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  6.    Securities (continued)  The fair value of debt securities and the carrying amount, if different, at December 31, 2009, by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. Equity securities were excluded.


|                           |  |                  |     |                    |     |                |  |            |  |         |  | 
|-------------------------- |  | ---------------- | --- | ------------------ | --- | -------------- |  | ---------- |  | ------- |  | 
|                           |  | Held to maturity |     | Available for sale
|                           |  | Carrying
amount  |     | Fair
value         |     | Amortized
cost |  | Fair
value
|                           |  | (in thousands)  
|Due in one year or less    |  |                  | $  |                    | $  |                |  | $         |  | $     
|Due from one to five years |  |                  |    |                    |    |                |  | 2,000      |  | 1,995  
|Due from five to ten years |  |                  |    |                    |    |                |  | 5,998      |  | 5,919  
|Due after ten years        |  |                  |    |                    |    |                |  | 2,000      |  | 1,959  
|Mortgage-backed            |  |                  | 59  |                    | 59  |                |  | 220        |  | 222    
|Total                      |  |                  | $59 |                    | $59 |                |  | $10,218    |  | $10,095

Securities pledged to secure public deposits at December 31, 2009 and June 30, 2009 had carrying amounts of $4.3 million and $4.2 million, respectively  At December 31, 2009 and June 30, 2009, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders equity.  Securities with unrealized losses at December 31, 2009 and June 30, 2009, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:  December 31, 2009Less than 12 months12 months or moreTotalDescription of
securitiesFair
valueUnrealized
lossesFair
valueUnrealized
lossesFair
valueUnrealized
losses(In thousands)U.S. Government
  agency obligations$9,873$(125)$  $  $9,873$(125)  June 30, 2009Less than 12 months12 months or moreTotalDescription of
securitiesFair
valueUnrealized
lossesFair
valueUnrealized
lossesFair
valueUnrealized
losses(In thousands)U.S. Government
  agency obligations$5,863$(137)$  $  $5,863$(137)  13  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  7.    Recent Accounting Developments  In June 2009, the Financial Accounting Standards Board (FASB) established the FASB Accounting Standards Codification (ASC) as the source of authoritative accounting principles for financial statements of non-governmental entities that are presented in conformity with generally accepted accounting principles in the United States. This pronouncement was effective for financial statements issued for interim and annual periods ending after September 15, 2009. We do not expect the adoption of this standard to have an impact on our financial position or results of operation although the adoption has had an impact on the accounting literature references in this report.  ASC 855-10, Subsequent Events, establishes general standards of accounting for, and disclosure of, subsequent events. Subsequent events are events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The statement is effective for interim or annual periods ending after June 15, 2009. The impact of this new statement was not material to the Corporation's consolidated financial statements. Management has evaluated events occurring subsequent to the balance sheet date through the financial statement issuance date of February 16, 2010 determining no events require adjustment to, or additional disclosure in the financial statements.  8. Effect of Newly Issued But Not Yet Effective Accounting Standards  In June 2009, the FASB issued a pronouncement that removes the concept of qualifying special-purpose entity from ASC 860-10, modifies the financial-components approach and limits circumstances in which a transferor derecognizes a portion or component of a financial asset when the transferor has a continuing involvement with the financial asset. It clarifies the principle of whether a transferor and all the entities included in the transferors financial statements being presented have surrendered control over transferred financial assets. This pronouncement is effective for the first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. The adoption of this pronouncement is not expected to have a material effect on the Companys consolidated financial statements.  In June 2009, the FASB issued ASC 810-10, Amendments to FASB Interpretation No. 46(R), which amended guidance for consolidation of variable interest entities by replacing the quantitative-based risks and rewards calculation for determining which enterprise, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entitys economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. This Statement also requires additional disclosures about an enterprises involvement in variable interest entities. This Statement will be effective as of the beginning of each reporting entitys first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Early adoption is prohibited. The adoption of this pronouncement is not expected to have a material effect on the Companys consolidated financial statements.  14  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  9.    Fair Value Measurement  ACS 820-10 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:  Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.  Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.  Level 3: Significant unobservable inputs that reflect the entitys own assumptions about the assumptions that market participants would use in pricing an asset or liability.  The Corporation determines fair values of securities available for sale by (i) obtaining quoted prices on nationally recognized securities exchanges, which are Level 1 inputs, or (ii) matrix pricing, which are Level 2 inputs. Matrix pricing is a mathematical technique widely used to in the industry to value debt securities by relying on the securities relationship to other benchmark quoted securities.  The fair value of loan servicing rights is based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. The Corporation is able to compare the valuation model inputs and results to widely available published industry data for reasonableness (Level 2 inputs).  The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available and result in a Level 3 classification for determining fair value.  15  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  9.    Fair Value Measurement (continued)  Assets Measured on a Recurring Basis  Assets and liabilities measured at fair value on a recurring basis are summarized below:


|                                                                      |  |                 |  |                                                                |                |                                               |  |                                           |  |  |      |  |  | 
|--------------------------------------------------------------------- |  | --------------- |  | -------------------------------------------------------------- | -------------- | --------------------------------------------- |  | ----------------------------------------- |  |  | ---- |  |  | 
|                                                                      |  |                 |  | Fair Value Measurements
at December 31, 2009 Using            
|                                                                      |  | Carrying
Amount |  | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |                | Significant
Other
Observable
Inputs
(Level 2) |  | Significant
Unobservable
Inputs
(Level 3)
|                                                                      |  |                 |  |                                                                | (in thousands) |                                              
|Assets:                                                               |  |                 |  |                                                                |                |                                              
|Available for sale securities                                         |  |                 |  |                                                                |                |                                              
|U. S. government agency obligations                                   |  | $  9,873        |  |                                                                | $             |                                               |  | $9,873                                    |  |  | $   | 
|Equity securities                                                     |  | 2               |  |                                                                | 2              |                                               |  |                                          |  |  |     | 
|Federal National Mortgage Association
  Participation Certificates    |  | 175             |  |                                                                |               |                                               |  | 175                                       |  |  |     | 
|Government National Mortgage
  Association Participation Certificates |  | 47              |  |                                                                |               |                                               |  | 47                                        |  |  |     | 
|Total Securities available for sale                                   |  | $10,097         |  |                                                                | $    2         |                                               |  | $10,095                                   |  |  | $   | 

All mortgage backed securities held by the Corporation have underlying collateral of residential real estate


|                                                                      |  |                 |  |                                                                |                |                                               |  |                                           |  |  |      |  |  | 
|--------------------------------------------------------------------- |  | --------------- |  | -------------------------------------------------------------- | -------------- | --------------------------------------------- |  | ----------------------------------------- |  |  | ---- |  |  | 
|                                                                      |  |                 |  | Fair Value Measurements
at June 30, 2009 Using                
|                                                                      |  | Carrying
Amount |  | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |                | Significant
Other
Observable
Inputs
(Level 2) |  | Significant
Unobservable
Inputs
(Level 3)
|                                                                      |  |                 |  |                                                                | (in thousands) |                                              
|Assets:                                                               |  |                 |  |                                                                |                |                                              
|Available for sale securities                                         |  |                 |  |                                                                |                |                                              
|U. S. government agency obligations                                   |  | $5,863          |  |                                                                | $             |                                               |  | $5,863                                    |  |  | $   | 
|Equity securities                                                     |  | 2               |  |                                                                | 2              |                                               |  |                                          |  |  |     | 
|Federal National Mortgage Association
  Participation Certificates    |  | 181             |  |                                                                |               |                                               |  | 181                                       |  |  |     | 
|Government National Mortgage
  Association Participation Certificates |  | 50              |  |                                                                |               |                                               |  | 50                                        |  |  |     | 
|Total Securities available for sale                                   |  | $6,096          |  |                                                                | $    2         |                                               |  | $6,094                                    |  |  | $   | 

All mortgage backed securities held by the Corporation have underlying collateral of residential real estate  16  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  9.    Fair Value Measurement (continued)  Assets Measured on a Non-Recurring Basis  Assets measured at fair value on a non-recurring basis are summarized below:


|                                 |  |                                                                |   |                                               |                |                                           |  |  |        |  |  | 
|-------------------------------- |  | -------------------------------------------------------------- | - | --------------------------------------------- | -------------- | ----------------------------------------- |  |  | ------ |  |  | 
|                                 |  | Fair Value Measurements
at December 31, 2009 Using            
|                                 |  | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |   | Significant
Other
Observable
Inputs
(Level 2) |                | Significant
Unobservable
Inputs
(Level 3)
|                                 |  |                                                                |   |                                               | (in thousands) |                                           |  | 
|Assets:                          |  |                                                                |   |                                               |                |                                           |  |  |        | 
|Loan servicing rights            |  |                                                                |  |                                               |                | $598                                      |  |  |       | 
|Impaired loans, net of allowance |  |                                                                |  |                                               |                |                                          |  |  | $2,169 | 

The following represent impairment charges recognized during the period:  Loan servicing rights, which are carried at lower of cost or fair value based on stratifying rights into groupings, were written down to fair value of $603,000, resulting in a valuation allowance of $161,000. A net charge of $26,000 was taken against earnings for the three months ended December 31, 2009 and a net recovery of $11,000 was included in earnings for the six months ended December 31, 2009. Servicing rights totaling $5,000 were carried at cost.  Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a principal balance of $2.5 million, with a valuation allowance of $484,000, resulting in an additional provision for loan losses of $54,000 for the three months ended December 31, 2009 and $85,000 for the six months ended December 31, 2009.


|                                 |  |                                                                |   |                                               |                |                                           |  |  |        |  |  | 
|-------------------------------- |  | -------------------------------------------------------------- | - | --------------------------------------------- | -------------- | ----------------------------------------- |  |  | ------ |  |  | 
|                                 |  | Fair Value Measurements
at June 30, 2009 Using                
|                                 |  | Quoted Prices in
Active Markets
for Identical
Assets
(Level 1) |   | Significant
Other
Observable
Inputs
(Level 2) |                | Significant
Unobservable
Inputs
(Level 3)
|                                 |  |                                                                |   |                                               | (in thousands) |                                           |  | 
|Assets:                          |  |                                                                |   |                                               |                |                                           |  |  |        | 
|Loan servicing rights            |  |                                                                |  |                                               |                | $517                                      |  |  |       | 
|Impaired loans, net of allowance |  |                                                                |  |                                               |                |                                          |  |  | $1,140 | 

The following represent impairment charges recognized during the period:  Servicing rights, which are carried at lower of cost or fair value based on stratifying rights into groupings, were written down to fair value of $517,000, resulting in a valuation allowance of $172,000. A net charge of $133,000 was included in earnings for the year ended June 30, 2009. Servicing rights totaling $109,000 were carried at cost.  Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $1,823,000, with a valuation allowance of $413,000, resulting in an additional provision for loan losses of $2,000 for the year ended June 30, 2009.  17  FFD Financial Corporation  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  For the six- and three-month periods ended December 31, 2009 and 2008  9.    Fair Value Measurement (continued)  Carrying amount and estimated fair values of financial instruments at year end were as follows:


|                                          |  |                   |  |               |  |                 |  |           
|----------------------------------------- |  | ----------------- |  | ------------- |  | --------------- |  | ----------
|                                          |  | December 31, 2009 |  | June 30, 2009
|                                          |  | Carrying
Amount   |  | Fair
Value    |  | Carrying
Amount |  | Fair
Value
|                                          |  | (in thousands)   
|Financial assets                          |  |                   |  |               |  |                 |  |           
|Cash and cash equivalents                 |  | $     9,443       |  | $     9,443   |  | $   13,755      |  | $   13,755
|Investment Securities                     |  | 9,875             |  | 9,875         |  | 5,865           |  | 5,865     
|Mortgage-backed securities                |  | 281               |  | 281           |  | 293             |  | 293       
|Loans, net, including loans held for sale |  | 169,529           |  | 175,095       |  | 161,749         |  | 166,562   
|Federal Home Loan Bank stock              |  | 2,422             |  | n/a           |  | 2,422           |  | n/a       
|Accrued interest receivable               |  | 601               |  | 601           |  | 515             |  | 515       
|                                          |  |                   |  |               |  |                 |  |           
|Financial liabilities                     |  |                   |  |               |  |                 |  |           
|Deposits                                  |  | $(163,952)        |  | $(162,487)    |  | $(153,627)      |  | $(152,083)
|Federal Home Loan Bank advances           |  | (13,553)          |  | (14,250)      |  | (13,869)        |  | (14,525)  
|Other borrowed funds                      |  | (430)             |  | (430)         |  | (800)           |  | (800)     
|Accrued interest payable                  |  | (155)             |  | (155)         |  | (172)           |  | (172)     

The methods and assumptions used to estimate fair value are described as follows:  Carrying amount is the estimated fair value for cash and cash equivalents, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of debt is based on current rates for similar financing. It was not practicable to determine the fair value of Federal Home Loan Bank (FHLB) stock due to restrictions placed on its transferability. The fair value of off-balance-sheet items is not considered material.  18  FFD Financial Corporation  Item 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  Forward-Looking Statements  Certain statements contained in this report that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties. When used herein, the terms anticipates, plans, expects, believes, intends and similar expressions as they relate to the Corporation or its management are intended to identify such forward looking statements. The Corporations actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general and local economic conditions, changes in the interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations, and rapidly changing technology affecting financial services.  Business Overview  The Corporation is a unitary savings and loan holding company incorporated in Ohio in 1996. Our primary business is the operation of the Bank, our principal subsidiary. The Bank is a federally chartered savings association established in 1898.  The Bank is a community-oriented financial institution offering a variety of financial services to meet the needs of the communities we serve. Its business model emphasizes personalized service, clients access to decision makers, solution-driven lending and quick execution, efficient use of technology and the convenience of remote deposit, telephone banking, and online internet banking. It attracts deposits from the general public and uses the deposits, together with borrowings and other funds, primarily to originate commercial and commercial real estate loans, single-family and multi-family residential mortgage loans, vehicle loans, boat loans and home equity lines of credit. The majority of its customers are consumers and small businesses.  General  The Corporations net income is dependent primarily on net interest income, which is the difference between the interest income earned on loans and securities and the cost of funds, consisting of interest paid on deposits and borrowed funds. Net interest income is affected by regulatory, economic and competitive factors that influence interest rates, loan demand and deposit flows. Net income is also affected by, among other things, loan fee income, provisions for loan losses, service charges, gains on loan sales, operating expenses, and franchise and income taxes. Operating expenses principally consist of employee compensation and benefits, occupancy, and other general and administrative expenses. In general, results of operations are significantly affected by general economic and competitive conditions, particularly changes in market interest rates, government policies, and actions of regulatory authorities. Future changes in applicable laws, regulations or government policies may also materially impact our performance.  As a result of the current economic situation, which has included failures of financial institutions, investments in banks and other companies by the U.S. government, and government-sponsored economic stimulus packages, one area of public and political focus is how, and the extent to which, financial institutions are or should be regulated by the government. The current economic environment may result in new or revised regulations that could have a material effect on our operations and performance.  19  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  The capital, credit and financial markets have experienced significant volatility and disruption for more than a year. These conditions have had significant adverse effects on our national and local economies, including declining real estate values; a widespread tightening in the availability of credit; illiquidity in certain securities markets; increasing loan delinquencies, foreclosures, personal and business bankruptcies, increasing unemployment rates; declining consumer confidence and spending; significant write-downs of asset values by financial institutions and government-sponsored agencies; and a reduction of manufacturing and service business activity and international trade. These conditions have also had significant impacts on the stock market generally, and have contributed to significant declines in the trading prices of financial institution stocks. Management does not expect these difficult market conditions to improve in the short term, and a continuation or worsening of these conditions could increase their adverse effects. Adverse effects of these conditions on the Corporation could include increases in loan delinquencies and charge-offs; increases in loan loss reserves based on general economic factors; increases to specific loan loss reserves due to the impact of these conditions on specific borrowers or on the collateral for their loans; declines in the value of the securities portfolio; increases in the cost of funds due to aggressive deposit pricing by local and national competitors with liquidity needs; attrition of the core deposits due to this aggressive deposit pricing or consumer concerns about the safety of their deposits; increases in regulatory and compliance costs; and declines in the trading price of the Corporations shares.  In October 2008, the U.S. Congress enacted the Emergency Economic Stabilization Act of 2008 in response to the impact of the volatility and disruption in the credit and capital markets on the financial sector. Additionally, in February 2009, the U.S. Congress enacted the American Recovery and Reinvestment Act of 2009 in an effort to save and create jobs, stimulate the U.S. economy and promote long-term growth and stability. There can be no assurance that these acts or the programs that are implemented under them will achieve their intended purposes. If they fail to achieve some or all of their purposes, economic and market conditions could continue to worsen, which could adversely affect the Corporations performance and/or the trading price of the Corporations shares.  Other than discussed above and noted in the following narrative, management is not aware of any market or institutional trends, other events, or uncertainties that are expected to have a material effect on liquidity, capital resources or operations. Management is not aware of any current recommendations by regulators which would have a material effect on the Corporation if implemented, except as described above.  Managements Discussion and Analysis represents a review of the Corporations consolidated financial condition and results of operations. This review should be read in conjunction with the Corporations Consolidated Financial Statements and related notes.  Critical Accounting Policies  The Corporations financial condition and results or operations presented in the Consolidated Financial Statements, accompanying notes to the Consolidated Financial Statements and Management's Discussion and Analysis are, to a large degree, dependent upon the Corporation's accounting policies. The selection and application of these accounting policies involve judgments, estimates and uncertainties that are susceptible to change.  Critical accounting policies are those policies that require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Corporation has identified the appropriateness of the allowance for loan losses and the valuation of securities as critical accounting policies and an understanding of these policies is necessary to understand the financial statements. Footnote 2 (Securities), footnote 3 (Loans), and Managements Discussion and Analysis in the Form 10-K for the year ended June 30, 2009 provide detail regarding the Corporation's accounting for the allowance for loan losses and valuation of securities. There have been no significant changes in the application of accounting policies since June 30, 2009.  20  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  Liquidity  The objective of liquidity management is to ensure adequate cash flows to accommodate the demands of customers and provide adequate flexibility for the Corporation to take advantage of market opportunities under both normal operating conditions and under unpredictable circumstances of industry or market stress. Cash is used to fund loan purchases, the maturity of liabilities and, at times, deposit outflows and operating activities. The Corporation's principal sources of funds are deposits; amortization and prepayments of loans; maturities, sales and principal received from securities: borrowings; and operations. Management considers the Corporation's asset position to be sufficiently liquid to meet normal operating needs and conditions. The Corporation's earning assets are mainly comprised of loans and investment securities. Management continually strives to obtain the best mix of loans and investments to both maximize yield and insure the soundness of the portfolio, as well as to provide funding for loan demand.  Capital Resources  The Bank is subject to various regulatory capital requirements. Capital adequacy guidelines and prompt corrective-action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Failure to meet various capital requirements can result in regulatory action that could have a direct material effect on the Corporation's financial statements. The Bank exceeded the regulatory requirements to be well capitalized at December 31, 2009. Management is not aware of any matters occurring subsequent to December 31, 2009, that would cause the Bank's capital category to change.  The Banks actual and required capital amounts (in thousands) and ratios are presented below at December 31, 2009.  ActualRequired
For Capital
Adequacy PurposesTo Be Well
Capitalized Under
Prompt Corrective
Action RegulationsAmountRatioAmountRatioAmountRatioTotal capital to risk
  weighted assets$19,08412.2%$12,4838.0%$15,60410.0%Tier 1 (core) capital to risk
  weighted assets17,78111.4%6,2414.0%9,3626.0%Tier 1 (core) capital to
  Adjusted assets17,7819.0%7,9074.0%9,8845.0%Tangible capital (to adjusted
  total assets)17,7819.0%2,9651.5%N/AN/A  21  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  Discussion of Financial Condition Changes from June 30, 2009 to December 31, 2009  The Corporations total assets at December 31, 2009, were $197.7 million, a $8.6 million, or 4.6%, increase from the total at June 30, 2009.  Cash and cash equivalents totaled $9.4 million at December 31, 2009, a decrease of $4.3 million, or 31.3%, from the total at June 30, 2009. Investment securities totaled $9.9 million at December 31, 2009, a $4.0 million, or 68.4%, increase from the total at June 30, 2009, resulting from the purchase of four investment securities. The investments were purchased to reduce the cash and cash equivalent balances in an effort to improve net interest income. As a result of principal repayments, mortgage-backed securities totaled $281,000 at December 31, 2009, a $12,000, or 4.1%, decrease compared to the total at June 30, 2009.  Loans receivable totaled $169.5 million at December 31, 2009, an increase of $8.0 million, or 5.0%, from the June 30, 2009 total. The portfolio of loans secured by one- to four-family residential real estate increased by $2.4 million, or 3.8%, to $65.3 million at December 31, 2009. Loans secured by nonresidential real estate and land totaled $72.2 million at June 30, 2009, compared to $75.6 million at December 31, 2009, an increase of $3.4 million, or 4.7%. Commercial loans totaled $17.7 million at June 30, 2009, compared to $18.9 million at December 31, 2009, an increase of $1.2 million, or 6.7%. Loan originations during the period totaling $47.2 million were partially offset by principal repayments of $38.1 million and adjustments to the allowance for loan losses and net unamortized fees and costs. During the six-month period ended December 31, 2009, loan originations were comprised of $26.6 million of one- to four-family residential real estate loans, $16.3 million of nonresidential real estate loans, $1.7 million of consumer loans, $1.7 million of commercial loans, and $900,000 of multifamily real estate loans. Nonresidential real estate and commercial lending generally involve a higher degree of risk than one- to four-family residential real estate lending due to the relatively larger loan amounts and the effects of general economic conditions on the successful operation of income-producing properties and businesses. The Corporation endeavors to reduce this risk by evaluating the credit history and past performance of the borrower, the location of the real estate, the quality of the management operating the property or business, the debt service ratio, the quality and characteristics of the income stream generated by the property or business and appraisals supporting the real estate or collateral valuation.  The allowance for loan losses totaled $1.8 million at December 31, 2009, an increase of $107,000, or 6.3%, from June 30, 2009, and represented 1.05% of total loans on December 31, 2009 and 1.04% of total loans on June 30, 2009. The increase resulted from a provision of $167,000 and recoveries of $4,000, which were partially offset by charge-offs of $64,000. Nonaccrual loans were $2.6 million at December 31, 2009 and $949,000 at June 30, 2009, which represented 1.50% and .58% of loans receivable at those respective dates. Non-accruing non-residential mortgage loans increased by $1.2 million, one- to four-family properties secured by first liens increased by $411,000 and commercial and consumer loans increased by $40,000. Of the $2.6 million nonaccrual loans at December 31, 2009, $876,000 of the balances were guaranteed by a government agency. Of the $949,000 million nonaccrual loans at June 30, 2009, $533,000 of the balances were guaranteed by a government agency. Adjusting for the guaranteed portion, nonaccrual loans were $1.7 million at December 31, 2009 and $416,000 at June 30, 2009, which represented .99% and .26% of loans receivable at those respective dates. Delinquent loans to total loans were 3.64% on December 31, 2009 and 1.69% on June 30, 2009, due to an increase in non-residential properties delinquent 30-89 days and one- to four-family properties secured by first liens and nonresidential mortgage loans on nonaccrual. There were no loans past due over 90 days and still on accrual. Although the Company experienced increases in nonaccrual and delinquent loans from June 30, 2009 to December 31, 2009, management does not believe a further increases in the allowance and related provision are necessary. Management has reviewed these loans for loss exposure and determined them to be adequately collateralized in the event of liquidation. The composition of the loan portfolio remained relatively the same from June 30, 2009 to December 31, 2009. Real estate loans consisting of residential real estate, one- to four-family and multifamily and nonresidential real estate and land make up most of the portfolio. Impaired loan balances were $2.5 million with an allowance of $484,000 and $1.8 million with an allowance of $413,000 at December 31, 2009 and June 30, 2009, respectively. Although management believes that the allowance for loan losses at December 31, 2009, is adequate based upon the available facts and circumstances, there can be no assurance that additions to the allowance will not be necessary in future periods, which could adversely affect the Corporations results of operations.  22  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  Discussion of Financial Condition Changes from June 30, 2009 to December 31, 2009 (continued)  Deposits totaled $164.0 million at December 31, 2009, a $10.3 million, or 6.7%, increase from total deposits at June 30, 2009. The increase resulted from managements efforts to generate deposit growth through advertising, relationship banking strategies, consumers moving into insured deposits accounts from uninsured investment products and the opening of the new office in Berlin, Ohio. FHLB advances decreased 2.3% from $13.9 million at June 30, 2009 to $13.6 million at December 31, 2009. No new advances were taken during the six month period ended December 31, 2009. Other borrowed money, consisting of a line of credit with another financial institution decreased to $430,000 at December 31, 2009 from a June 30, 2009 balance of $800,000.  Other liabilities totaled $1.5 million at December 31, 2009, a $924,000, or 37.8%, decrease from June 30, 2009. The decrease was primarily due to a $778,000 decrease in deposits in process accounts and a $133,000 decrease in accrued FDIC expense.  Shareholders equity totaled $17.9 million at December 31, 2009, an increase of $15,000, or .1%, from June 30, 2009. The increase was due to a decrease in treasury stock of $11,000 and a decrease unrealized losses on securities designated as available for sale of $8,000 and an increase of $1,000 in additional paid in capital from the exercise of stock options. Period net earnings of $339,000 were more than offset by dividends paid of $344,000.  Comparison of Operating Results for the Six-Month Periods Ended December 31, 2009 and 2008  General  The Corporations net earnings totaled $339,000 for the six months ended December 31, 2009, a decrease of $274,000, or 44.7%, from the net earnings of $613,000 recorded in the comparable period in 2008. The decrease in net earnings resulted from an increase of $337,000, or 13.8%, in noninterest expense, and a decrease of $167,000, or 5.1% in net interest income, which were partially offset by an increase of $40,000, or 12.1%, in noninterest income, and decreases of $37,000 in the provision for losses on loans and $153,000 in federal income tax expense.  Net Interest Income  Total interest income decreased $308,000, or 5.7%, to $5.1 million for the six months ended December 31, 2009, compared to the same period in 2008. The decrease was due primarily to decreases on yields across all categories of interest earning assets, despite general increases in average balances outstanding. Interest income on loans decreased by $254,000, or 4.9%, due to a 61 basis point decrease in yield, which more than offset an increase of $7.8 million, or 4.9%, in the average loan portfolio balance outstanding. Interest income on investment securities decreased by $20,000, or 14.1%, to $122,000 due to a 219 basis point decrease in yield, which was partially offset by a $2.6 million, or 47.3%, increase in the average balance outstanding. Interest income on interest bearing deposits, decreased $30,000, or 33.7%, to a total of $59,000 for the six months ended December 31, 2009, due to a 122 basis point decrease in yield, which was partially offset by a $2.8 million, or 37.4%, increase in the average balance outstanding. Interest income on mortgage-backed securities decreased by $4,000, or 44.4%, due to a decrease of $46,000, or 14.6%, in the average balance outstanding and a 200 basis point decrease in yield.  Total interest expense decreased by $141,000, or 6.7%, to $2.0 million for the six months ended December 31, 2009, compared to the six months ended December 31, 2008. Interest expense on deposits decreased by $53,000, or 3.1%, due to a 36 basis point decrease in the average cost of deposits, to 2.08% for the 2009 six months, which was partially offset by a $19.4 million, or 13.9%, increase in the average balance outstanding. Interest expense on borrowings decreased by $88,000, or 21.8%, due to a $5.7 million, or 28.8%, decrease in the average balance outstanding, which was partially offset by a 38 basis point increase in the average cost.  23  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  Comparison of Operating Results for the Six-Month Periods Ended December 31, 2009 and 2008 (continued)  While the Federal Reserve discount rate and Federal Funds rate have remained constant from December of 2008 to present, the Corporations interest earning assets and interest paying liabilities have been impacted by a decrease in market interest rates. This decline coupled with the positive gap position, when a greater amount of interest earning assets reprice differently than interest-bearing liabilities, caused yields on interest earning assets to decline at a faster rate than costs of new and repricing deposits, decreasing net interest income.  As a result of the foregoing, net interest income decreased by $167,000, or 5.1%, for the six months ended December 31, 2009, compared to the same period in 2008. The interest rate spreads were 3.21% and 3.62%, and the net interest margins were 3.35% and 3.80%, for the six-month periods ended December 31, 2009 and 2008, respectively. The decrease in the interest rate spread and net interest margin has stabilized. Interest-bearing cash deposits have been reduced. The funds were used to invest in higher yielding loans and investment securities offering a greater yield. Deposits continue to re-price downward and balances have grown at lower cost to fund loan growth and provide an incremental increase in net interest income.  Provision for Losses on Loans  The Corporation recorded a $167,000 provision for losses on loans during the six months ended December 31, 2009, and a $204,000 provision for the comparable six months in 2008. The decrease in the provision for losses on loans was due to managements assessment of the loan portfolio, delinquency rates, net charge-offs, and current economic conditions. Net charge-offs were $73,000 for the six months ended December 31, 2009 and $77,000 for the comparable six months in 2008. The allowance for losses on loans as a percentage of loans receivable increased to 1.05% for December 31, 2009 compared to 1.04% at June 30, 2009. There can be no assurance that the loan loss allowance will be adequate to cover losses on nonperforming assets in the future, which could result in additions to the allowance and could adversely affect the Corporations results of operations.  Noninterest Income  Noninterest income totaled $372,000 for the six months ended December 31, 2009, an increase of $40,000, or 12.1%, from the 2008 total. Net gain on sale of loans increased by $55,000, or 47.8%, to $170,000 for the six months ended December 31, 2009, compared to $115,000 for the six months ended December 31, 2008. The increase in gain on sale of loans was due to increased activity in residential mortgage refinancing and purchases. Service charges on deposit accounts increased by $22,000, or 16.4%, to $156,000 for the six months ended December 31, 2009 compared to $134,000 in 2008. The prior year six-month period also had a $9,000 security impairment charge that did not re-occur in the 2009 period. The mortgage servicing revenue loss net of amortization and impairment of $10,000 for the six months ended December 31, 2009, resulted from $58,000 of additional expense from increased amortization of the mortgage servicing rights asset as loans serviced payed off from loan refinances, which were partially offset by a $11,000 reversal of the valuation allowance for mortgage servicing rights due to changes in mortgage interest rates and prepayment speeds.  24  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  Comparison of Operating Results for the Six-Month Periods Ended December 31, 2009 and 2008 (continued)  Noninterest Expense  General, administrative and other expense totaled $2.8 million for the six months ended December 31, 2009, an increase of $337,000, or 13.8%, compared to the same period in 2008. The increase in noninterest expense includes increases of $146,000, or 13.5%, in employee compensation and benefits, $62,000, or 108.8%, in FDIC insurance expense, $39,000, or 17.2%, in occupancy and equipment expense, $32,000, or 46.4%, in postage and stationary supplies, $26,000, or 23.9%, in professional and consulting fees, $15,000 in loss on sale of real estate owned, $13,000, or 18.3%, in advertising expense, $8,000, or 4.5%, in data processing and$3,000, or 2.7%, in checking account maintenance expense,which were slightly offset by decreases of$4,000 in other operating expense and $3,000 in ATM processing. The increase in employee compensation was due to additional staffing in connection with the opening of the new Berlin, Ohio office. Portions of the increase in noninterest expense in advertising, postage and stationary supplies, occupancy and equipment expense and data processing were also the result of opening and marketing the new Berlin office.  The increase in FDIC insurance expense comparing the six month periods ended December 31, 2008 with December 31, 2009 was the result of the average balance of deposit liabilities used to calculate the expense increasing by approximately 14.3% from $139,4 million to $159.3 million coupled with an increase in the average assessment rate of approximately 124.9%.  Federal Income Taxes  The Corporation recorded a provision for federal income taxes totaling $179,000 for the six months ended December 31, 2009, a decrease of $153,000, or 46.1%, over the same period in 2008. The decrease resulted from a $427,000, or 45.2%, decrease in earnings before taxes. The Corporations effective tax rates were 34.4% and 35.1%, for the six-month periods ended December 31, 2009 and 2008, respectively.  Comparison of Operating Results for the Three-Month Periods Ended December 31, 2009 and 2008  General  The Corporations net earnings totaled $167,000 for the three months ended December 31, 2009, a decrease of $115,000, or 40.8%, from the net earnings of $282,000 recorded in the comparable period in 2008. The decrease in net earnings resulted from an increase of $136,000, or 10.9%, in noninterest expense, and decreases of $57,000, or 3.5%, in net interest income and $1,000, or .6%, in noninterest income, which were partially offset by decreases of $13,000 in the provision for losses on loans and $66,000, or 42.6%, in federal income tax expense.  Net Interest Income  Total interest income decreased by $125,000, or 4.7%, to $2.5 million for the three months ended December 31, 2009, compared to the same period in 2008. The decrease was due primarily to decreases in yields across all categories of interest earning assets, despite general increases in average balances outstanding. Interest income on loans decreased by $120,000, or 4.7%, due to a 62 basis point decrease in yield, which more than offset an increase of $8.7 million, or 5.5%, in the average loan portfolio balance outstanding. Interest income on investment securities, increased by $2,000, or 2.8%, to a total of $73,000, due to a $3.8 million, or 71.1%, increase in the average balance outstanding, which was substantially offset by a 216 basis point decrease in yield. Interest income on interest bearing deposits decreased by $5,000, or 15.2%, to a total of $28,000 for the three months ended December 31, 2009, due to a 71 basis point decrease in yield, which was partially offset by a $3.1 million, or 41.5%, increase in the average balance outstanding. Interest income on mortgage-backed securities decreased by $2,000, or 50.0%, due to a decrease of $26,000, or 8.4%, in the average balance outstanding and a 212 basis point decrease in yield.  25  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  Comparison of Operating Results for the Three-Month Periods Ended December 31, 2009 and 2008 (continued)  Total interest expense decreased by $68,000, or 6.5%, to $1.0 million for the three months ended December 31, 2009, compared to the three months ended December 31, 2008. Interest expense on deposits decreased by $23,000, or 2.7%, due to a 39 basis point decrease in the average cost of deposits, to 2.01% for the 2009 quarter, which was partially offset by a $22.6 million, or 16.2%, increase in the average balance of deposits outstanding period to period. Interest expense on borrowings decreased by $45,000, or 22.5%, due to a $5.5 million, or 28.5%, decrease in the average borrowings outstanding, which was partially offset by a 32 basis point increase in the average cost.  As a result of the foregoing, net interest income decreased by $57,000, or 3.5%, for the three months ended December 31, 2009, compared to the same period in 2008. The interest rate spreads were 3.12% and 3.56%, and the net interest margins were 3.32% and 3.75%, for the three-month periods ended December 31, 2009 and 2008, respectively. The decrease in the interest rate spread and net interest margin has stabilized. Interest-bearing cash deposits have been reduced. The funds were used to invest in higher yielding loans and investment securities offering a greater yield. Deposits continue to re-price downward and balances have grown at lower cost to fund loan growth and provide an incremental increase in net interest income.  Provision for Losses on Loans  The Corporation recorded a $86,000 provision for losses on loans during the three months ended December 31, 2009, and a $99,000 provision for the comparable quarter in 2008. The decrease in the provision for losses on loans was due to managements assessment of the loan portfolio, delinquency rates, net charge-offs, and current economic conditions. Net charge-offs were $9,000 for the quarter ended December 31, 2009 and $21,000 for the comparable quarter in 2008. The allowance for losses on loans as a percentage of loans receivable increased to 1.05% for December 31, 2009, compared to 1.04% at June 30, 2009. There can be no assurance that the loan loss allowance will be adequate to cover losses on nonperforming assets in the future, which could result in additions to the allowance and could adversely affect the Corporations results of operations.  Noninterest Income  Noninterest income totaled $165,000 for the three months ended December 31, 2009, a decrease of $1,000, or .6%, from the 2008 total. Net gain on sale of loans increased by $51,000, or 106.3%, to $99,000 for the three months ended December 31, 2009, compared to $48,000 for the three months ended December 31, 2008. The increase in gain on sale resulted primarily from increased mortgage refinancings due to lower interest rates. Service charges on deposit accounts increased by $9,000, or 13.2%, to $77,000 for the three months ended December 31, 2009, compared to $68,000 for the same period ended December 31, 2008. The mortgage servicing revenue loss net of amortization and impairment of $38,000 for the three months ended December 31, 2009 resulted from $31,000 of additional expense due to loan prepayments and a $26,000 impairment expense due to changes in mortgage interest rates and prepayment speeds.  26  FFD Financial Corporation  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)  Comparison of Operating Results for the Three-Month Periods Ended December 31, 2009 and 2008 (continued)  Noninterest Expense  General, administrative and other expense totaled $1.4 million for the three months ended December 31, 2009, an increase of $136,000, or 10.9%, compared to the same period in 2008. The increase in noninterest expense includes increases of $96,000, or 18.2%, in employee compensation and benefits, $30,000, or 79.0%, in professional and consulting fees, $28,000, or 24.6%, in occupancy and equipment expense, $20,000, or 74.1%, in postage and stationary supplies, $18,000, or 54.6%, in FDIC insurance expense, $8,000, or 9.2%, in data processing, and$1,000, in loss on sale of real estate owned,which were slightly offset by decreases of$49,000, or 21.3%, in other operating expense, $9,000, or 26.5%, in ATM processing, $6,000, or 16.2%, in advertising expense, and $1,000, or 1.7%, in checking account maintenance expense. The increase in employee compensation was due to additional staffing in connection with the opening of the new Berlin, Ohio office. Portions of the increase in noninterest expense in postage and stationary supplies, occupancy and equipment expense and data processing were also the result of opening and marketing the new Berlin office.  The increase in FDIC insurance expense comparing the three month period ended December 31, 2008 with December 31, 2009 was the result of the balance of deposit liabilities used to calculate the expense increasing by approximately 12.2% from $142.9 million to $160.3 million, coupled with an increase in the assessment rate of approximately 113.0%.  Federal Income Taxes  The Corporation recorded a provision for federal income taxes totaling $89,000 for the three months ended December 31, 2009, a decrease of $66,000, or 42.6%, over the same period in 2008. The decrease resulted from a $181,000, or 41.4%, decrease in earnings before taxes. The Corporations effective tax rates were 34.8% and 35.5%, for the three-month periods ended December 31, 2009 and 2008, respectively.  ITEM 3:    Quantitative and Qualitative Disclosures About Market Risk  Not required.  ITEM 4T:    Controls and Procedures  The Corporations Chief Executive Officer and Chief Financial Officer have evaluated the Corporations disclosure controls and procedures (as defined under Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Corporations disclosure controls and procedures are effective. There were no changes in the Corporations internal controls which materially affected, or are reasonably likely to materially effect, the Corporations internal controls over financial reporting.  27  FFD Financial Corporation  PART II


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|ITEM 1.  |  | Legal Proceedings                                                                                                                                                                                                                                                                                        
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|ITEM 1A: |  | Risk Factors                                                                                                                                                                                                                                                                                             
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|         |  | Not applicable                                                                                                                                                                                                                                                                                           
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|ITEM 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                                                                                                              
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|         |  | (a)
During the six months ended December 31, 2009, the Corporation issued a total of 1,345 unregistered shares upon the exercise of stock options for an aggregate purchase price of $12,400. The sales were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.
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|         |  | (b)   None                                                                                                                                                                                                                                                                                               
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|         |  | (c)   None                                                                                                                                                                                                                                                                                               
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|ITEM 3.  |  | Defaults Upon Senior Securities                                                                                                                                                                                                                                                                          
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|         |  | Not applicable                                                                                                                                                                                                                                                                                           
|         |  |                                                                                                                                                                                                                                                                                                          
|ITEM 4.  |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                      
|         |  |                                                                                                                                                                                                                                                                                                          
|         |  | On October 20, 2009, the Corporation held its 2009 Annual Meeting of Shareholders. All of the directors nominated were reelected to terms expiring in 2011 by the following votes:                                                                                                                       
|         |  |                                                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                           |                                                   | For     |  | Withheld | 
|         |  |                                                                                                                                                                                                                                                                                                           |                                                   |         |  |          | 
|         |  | Richard A. Brinkman, Jr.                                                                                                                                                                                                                                                                                  |                                                   | 719,990 |  | 101,168  | 
|         |  | Stephen G. Clinton                                                                                                                                                                                                                                                                                        |                                                   | 786,166 |  | 34,992   | 
|         |  | Leonard L. Gundy                                                                                                                                                                                                                                                                                          |                                                   | 788,216 |  | 32,942   | 
|         |  |                                                                                                                                                                                                                                                                                                           |                                                   |         |  |          | 
|         |  | David W. Kaufman, Enos L. Loader and Robert D. Sensel each continued to serve as a director of the Corporation for terms expiring in 2010.                                                                                                                                                               
|         |  |                                                                                                                                                                                                                                                                                                          
|ITEM 5.  |  | Other Information                                                                                                                                                                                                                                                                                        
|         |  |                                                                                                                                                                                                                                                                                                          
|         |  | None                                                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                                          
|ITEM 6.  |  | Exhibits                                                                                                                                                                                                                                                                                                 
|         |  |                                                                                                                                                                                                                                                                                                          
|         |  | 31.1                                                                                                                                                                                                                                                                                                      | Section 302 Chief Executive Officer certification
|         |  | 31.2                                                                                                                                                                                                                                                                                                      | Section 302 Chief Financial Officer certification
|         |  | 32.1                                                                                                                                                                                                                                                                                                      | Section 906 Chief Executive Officer certification
|         |  | 32.2                                                                                                                                                                                                                                                                                                      | Section 906 Chief Financial Officer certification

28  FFD Financial Corporation  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.


|      |                   |  |                           |                                      
|----- | ----------------- |  | ------------------------- | -------------------------------------
|      |                   |  | FFD FINANCIAL CORPORATION
|      |                   |  |                           |                                      
|Date: | February 16, 2010 |  | By:                       | /s/  Trent B. Troyer                 
|      |                   |  |                           | Trent B. Troyer                      
|      |                   |  |                           | President and Chief Executive Officer
|      |                   |  |                           |                                      
|Date: | February 16, 2010 |  | By:                       | /s/Robert R. Gerber                  
|      |                   |  |                           | Robert R. Gerber                     
|      |                   |  |                           | Senior Vice President, Treasurer and 
|      |                   |  |                           | Chief Financial Officer              

29