UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-Q

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

For the quarterly period ended September 30, 1999   Commission File No.: 1-14274


                         CITIZENS FIRST FINANCIAL CORP.
             (Exact name of registrant as specified in its charter)

                 DELAWARE                               37-1351861
    (State or other jurisdiction of             (I.R.S. Employer I.D. No.)
     incorporation or organization)

            2101 NORTH VETERANS PARKWAY, BLOOMINGTON, ILLINOIS 61704
                    (Address of principal executive offices)

                  Registrant's telephone number: (309) 661-8700


         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 past 90 days.   (1)      Yes x No o
                                        (2)      Yes x No o


         The Registrant had 2,033,477 shares of Common Stock outstanding as of
October 31, 1999.

<PAGE>


                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                              PAGE

       ITEM 1. FINANCIAL STATEMENTS
               CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1999 AND
               DECEMBER 31, 1998                                              1

               CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS
               ENDED SEPTEMBER 30, 1999 AND 1998                              2

               CONSOLIDATED INCOME STATEMENT FOR THE THREE MONTHS
               ENDED SEPTEMBER 30, 1999 AND 1998                              3

               CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR
               THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998    4

               CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE
               MONTHS ENDED SEPTEMBER 30, 1999 AND 1998                       5

       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS                            8

       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     18

PART II - OTHER INFORMATION

       ITEM 1. LEGAL PROCEEDINGS                                              19
       ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                      19
       ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                19
       ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            19
       ITEM 5. OTHER INFORMATION                                              19
       ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                               19
       SIGNATURES                                                             20

Statements contained in this Form 10-Q which are not historical facts are
forward-looking statements, as that term is described in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risk and uncertainties which could cause actual results to differ materially
from those projected. Such risks and uncertainties include potential change in
interest rates, competitive factors in the financial services industry, general
economic conditions, the effect of new legislation and other risks detailed in
documents filed by the Company with the Securities and Exchange Commission from
time to time.


<PAGE>


PART I. -- FINANCIAL INFORMATION

                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                 AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        SEPTEMBER 30,       DECEMBER 31,
                                                                 1999               1998
                                                                 ----               ----
                                                           (UNAUDITED)
<S>                                                        <C>                <C>
ASSETS
  Cash and due from banks                                  $    5,990         $    5,758
  Interest-bearing demand deposits                              4,925             12,580
                                                           ----------         ----------
       Total cash and cash equivalents                         10,915             18,338
  Investment securities - available for sale                   16,937             18,033
  Mortgage loans held for sale                                  4,126              5,246
  Loans                                                       254,662            232,884
       Allowance for loan losses                               (1,560)            (1,256)
                                                           ----------         ----------
          Net loans                                           253,102            231,628
  Premises and equipment                                        8,938              8,124
  Federal Home Loan Bank of Chicago Stock                       2,533              1,971
  Foreclosed real estate                                          120                483
  Other assets                                                  6,580              3,451
                                                           ----------         ----------
               Total assets                                $  303,251         $  287,274
                                                           ==========         ==========
LIABILITIES AND EQUITY CAPITAL
Liabilities
  Deposits                                                 $  219,575         $  208,097
  Federal Home Loan Bank advances                              47,158             39,410
  Advances by borrowers for taxes and insurance                   425                601
  Other liabilities                                             1,861              3,146
                                                           ----------         ----------
               Total liabilities                              269,019            251,254
                                                           ----------         ----------
Equity Capital
  Preferred stock, $.01 par value
       Authorized and unissued - 1,000,000 shares                  --                 --
  Common stock, $.01 par value; 8,000,000 shares
       authorized 2,817,500 shares issued and
       outstanding                                                 28                 28
  Paid-in-capital                                              27,507             27,427
  Retained earnings                                            21,060             20,198
  Accumulated other comprehensive income                         (246)               (48)
  Less:
       Treasury shares, 779,623 and 583,083                   (12,436)            (9,404)
       Unearned incentive plan shares, 45,173 and
  64,709 shares                                                  (634)              (893)
       Unearned employee stock ownership plan
  shares,104,650 and 128,800 shares                            (1,047)            (1,288)
                                                           ----------         ----------
               Total equity capital                            34,232             36,020
                                                           ----------         ----------
               Total liabilities and equity capital        $  303,251         $  287,274
                                                           ==========         ==========
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                      -1-
<PAGE>


                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                          CONSOLIDATED INCOME STATEMENT

<TABLE>
<CAPTION>
                                                                     FOR THE NINE MONTHS
                                                                     ENDED SEPTEMBER 30,
                                                                 1999               1998
                                                                 ----               ----
                                                             (UNAUDITED AND IN THOUSANDS
                                                                  EXCEPT SHARE DATA)
<S>                                                       <C>                <C>
Interest income:
  Interest on loans                                       $    14,710        $    14,371
  Interest on investments                                       1,189              1,414
                                                          -----------        -----------
       Total interest income                                   15,899             15,785
Interest expense:
  Interest on savings deposits                                  6,869              7,205
  Interest on borrowings                                        1,878              1,565
                                                          -----------        -----------
       Total interest expense                                   8,747              8,770
                                                          -----------        -----------
           Net interest income                                  7,152              7,015
  Provision for loan losses                                       360                345
                                                          -----------        -----------
           Net interest income after provision for
                  loan losses                                   6,792              6,670
  Other income:
  Net realized gains on sales of available
      for sale securities                                           0                 17
  Net gains on loan sales                                         264                615
  Other operating income                                          833                638
                                                          -----------        -----------
       Total other income                                       1,097              1,270
                                                          -----------        -----------

Other expense:
  Salaries and employee benefits                                3,310              3,199
  Net occupancy and equipment expenses                          1,172                799
  Deposit insurance expense                                       123                146
  Data processing fees                                            424                364
  Other operating expense                                       1,276              1,090
                                                          -----------        -----------
     Total other expense                                        6,305              5,598
                                                          -----------        -----------
Income before income tax                                        1,584              2,342
  Income tax expense                                              614                909
                                                          -----------        -----------
Net income                                                $       970        $     1,433
                                                          ===========        ===========

Basic earnings per share                                  $      0.49        $      0.63
  Weighted average shares outstanding                       1,987,483          2,286,201

Diluted earnings per share                                $      0.47        $      0.58
  Weighted average shares outstanding                       2,079,260          2,454,009
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                      -2-
<PAGE>


                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                          CONSOLIDATED INCOME STATEMENT

<TABLE>
<CAPTION>
                                                                    FOR THE THREE MONTHS
                                                                     ENDED SEPTEMBER 30,
                                                                 1999               1998
                                                                 ----               ----
                                                             (UNAUDITED AND IN THOUSANDS
                                                                  EXCEPT SHARE DATA)
<S>                                                       <C>                <C>
Interest income:
  Interest on loans                                       $     4,919        $     4,836
  Interest on investments                                         325                478
                                                          -----------        -----------
       Total interest income                                    5,244              5,314
Interest expense:
  Interest on savings deposits                                  2,288              2,389
  Interest on borrowings                                          676                543
                                                          -----------        -----------
       Total interest expense                                   2,964              2,932
                                                          -----------        -----------
           Net interest income                                  2,280              2,382
  Provision for loan losses                                       120                120
                                                          -----------        -----------
           Net interest income after provision for
                  loan losses                                   2,160              2,262
  Other  income:
  Net realized gains on sales of available
      for sale securities                                           0                 15
  Net gains on loan sales                                          41                141
  Other operating income                                          305                214
                                                          -----------        -----------
       Total other income                                         346                370
                                                          -----------        -----------

Other expense:
  Salaries and employee benefits                                1,129              1,100
  Net occupancy and equipment expenses                            341                270
  Deposit insurance                                                30                 48
  Data processing fees                                            123                121
  Other operating expense                                         367                295
                                                          -----------        -----------
     Total other expense                                        1,990              1,834
                                                          -----------        -----------
Income before income tax                                          516                798
  Income tax expense                                              199                310
                                                          -----------        -----------
Net income                                                $       317        $       488
                                                          ===========        ===========

Basic earnings per share                                  $      0.16        $      0.22
  Weighted average shares outstanding                       1,930,132          2,253,397

Diluted earnings per share                                $      0.16        $      0.20
  Weighted average shares outstanding                       2,013,570          2,384,927
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                      -3-
<PAGE>


                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                           FOR THE NINE        FOR THE NINE
                                                           MONTHS ENDED        MONTHS ENDED
                                                        SEPTEMBER 30,1999   SEPTEMBER 30,1998
                                                        -----------------   -----------------
                                                             (Unaudited and in thousands)
                                                        -------------------------------------
<S>                                                                <C>                 <C>
Net Income                                                         $  970              $1,433

Other comprehensive income (loss), net of tax
  Unrealized gains (losses) on securities:
       Unrealized holding gains (losses) arising during the
  period                                                             (198)                 88
             Less: Reclassification adjustment for
             gains (losses) included in net income                      0                   0
                                                                   ------              ------

                                                                     (198)                 88
                                                                   ------              ------
Comprehensive income                                               $  772              $1,521
                                                                   ======              ======
</TABLE>


<TABLE>
<CAPTION>
                                                           FOR THE THREE       FOR THE THREE
                                                           MONTHS ENDED        MONTHS ENDED
                                                        SEPTEMBER 30,1999   SEPTEMBER 30,1998
                                                        -----------------   -----------------
                                                             (Unaudited and in thousands)
                                                        -------------------------------------
<S>                                                                <C>                 <C>
Net Income                                                         $  317              $  488

Other comprehensive income (loss), net of tax
  Unrealized gains (losses) on securities:
       Unrealized holding gains (losses) arising during the
  period                                                              (47)                 63
             Less: Reclassification adjustment for
             gains (losses) included in net income                      0                   0
                                                                       --                  --

                                                                      (47)                 63
                                                                   ------                  --
Comprehensive income                                               $  270              $  551
                                                                   ======              ======
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                      -4-
<PAGE>


                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       FOR THE NINE MONTHS
                                                                       ENDED SEPTEMBER 30,
                                                                    1999              1998
                                                                    ----              ----
                                                              (UNAUDITED AND IN THOUSANDS)
<S>                                                            <C>               <C>
OPERATING ACTIVITIES
  Net income                                                   $     970         $   1,433
  Adjustments to reconcile net income to net
       cash (used) provided by operating activities:
  Provision for loan losses                                          360               345
  Investment securities gains                                          0               (17)
  ESOP compensation expense                                          351               452
  Incentive plan compensation expense                                230               206
  Investment securities amortization, net                             45                44
  Net gains on sale of loan                                         (264)             (615)
  Net losses on sale of foreclosed property                            8                43
  Depreciation                                                       800               449
  Loans originated for sale                                      (20,722)          (43,088)
  Proceeds from sale of loans                                     22,112            42,842
  Change in:
       Other liabilities                                          (1,159)            2,636
       Prepaid expenses and other assets                          (3,141)           (1,163)
                                                               ---------         ---------
  Net cash (used) provided by operating activities                  (410)            3,567
                                                               ---------         ---------
INVESTING ACTIVITIES
  Purchase of securities available for sale                       (3,005)           (8,121)
  Proceeds from maturities and principal paydowns on
       securities available for sale                               3,733             4,360
  Proceeds from sales of securities available for sale                 0             5,367
  Purchase of Federal Home Loan Bank stock                          (562)                0

  Proceeds from redemption of Federal Home Loan Bank
 stock                                                                 0               619
  Other net changes in loans                                     (21,840)           (1,567)
  Proceeds from sale of foreclosed property                          367               723
  Purchase of premises and equipment                              (1,614)             (204)
                                                               ---------         ---------
       Net cash (used) provided by investing activities          (22,921)            1,177
                                                               ---------         ---------
</TABLE>


                                      -5-
<PAGE>


<TABLE>
<S>                                                               <C>                <C>
FINANCING ACTIVITIES
  Net change in deposits                                          11,478             5,325
  Proceeds from FHLB advances                                     15,000             9,000
  Repayment of FHLB advances                                      (7,252)           (4,450)
  Purchase of treasury stock shares                               (3,202)           (2,383)
  Exercise of stock options                                          169                 0
  Cash dividend paid on common stock                                (109)                0

  Net changes in advances by borrowers for taxes and
 insurance                                                          (176)             (458)
                                                               ---------         ---------
  Net cash provided by financing activities                       15,908             7,034
                                                               ---------         ---------
Net change in cash and cash equivalents                           (7,423)           11,778
Cash and cash equivalents,beginning of period                     18,338             7,939
                                                               ---------         ---------
Cash and cash equivalents, end of period                         $10,915           $19,717
                                                               =========         =========
Additional cashflows and supplementary information:
  Interest paid                                                   $8,569            $7,587
  Income tax paid                                                  1,239               776
  Loans transferred to foreclosed property                            50               915
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                      -6-
<PAGE>


                         CITIZENS FIRST FINANCIAL CORP.

Notes to Consolidated Financial Statements

1.       Background Information

         Citizens First Financial Corp. (the "Company") was incorporated in
January, 1996 and on May 1, 1996 acquired all of the outstanding shares of
common stock of Citizens Savings Bank (the "Bank") upon the Bank's conversion
from a federally chartered mutual savings bank to a federally chartered stock
savings bank. The Company purchased 100% of the outstanding capital stock of the
Bank using 50% of the net proceeds from the Company's initial stock offering
which was completed on May 1, 1996. In April 1999, the Bank was converted from a
federally chartered savings bank to an Illinois state savings bank.

         The Company sold 2,817,500 shares of common stock in the initial
offering at $10.00 per share, including 225,400 shares purchased by the Bank's
Employee Stock Option Plan (the "ESOP"). The ESOP shares were acquired by the
Bank with proceeds from a Company loan totaling $2,254,000. The net proceeds of
the offering totaled $27,012,000; $28,175,000 less $1,163,000 in underwriting
commissions and other expenses. The Company's stock is traded on the American
Stock Exchange under the symbol "CBK".

2.       Statement of Information Furnished

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and Rule 10-01 of Regulation
S-X, and in the opinion of management reflects all adjustments necessary to
present a fair statement of the financial position as of September 30, 1999 and
December 31, 1998, the results of operations for the nine and three months ended
September 30, 1999 and 1998, comprehensive income for the nine and three months
ended September 30, 1999 and 1998 and the cash flows for the nine months ended
September 30, 1999 and 1998. All adjustments to the financial statements were of
a normal recurring nature. These results have been determined on the basis of
generally accepted accounting principles. The results of operations for the nine
months ended September 30, 1999 are not necessarily indicative of the results to
be expected for the entire fiscal year.

         The consolidated financial statements are those of the Company and the
Bank. These consolidated financial statements should be read in conjunction with
the audited financial statements and notes thereto, dated January 22, 1999,
included in the Company's 1998 Annual Report to Shareholders.

3.       Earnings Per Share

         Basic earnings per share have been computed based upon the weighted
average common shares outstanding for the nine and three months ended September
30, 1999 and 1998. Diluted earnings per share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company.


                                      -7-
<PAGE>


ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATION

GENERAL

Citizens First Financial Corp. (the "Company") is the holding company for
Citizens Savings Bank (the "Bank"). The Company completed its initial offering
of 2,817,500 shares of common stock on May 1, 1996 in connection with the
conversion of the Bank from the mutual to stock form of ownership. Prior to the
Company's acquisition of the Bank on May 1, 1996, the Company had no material
assets or operations.

The Bank was originally chartered in 1888 by the State of Illinois and in 1989
became a federally chartered savings bank. In April 1999, the Bank was converted
from a federally chartered savings bank to an Illinois state savings bank. The
Bank's principal business consists of the acceptance of retail deposits from the
general public in the area surrounding its main and branch offices and the
investment of these deposits, together with funds generated from operations and
borrowings, primarily in one-to-four family residential mortgages. The Bank also
originates commercial, multi-family, construction and land, commercial real
estate, agricultural, consumer and other loans.


COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 1999 and DECEMBER 31, 1998

Total assets increased from $287.3 million at December 31, 1998 to $303.3
million at September 30, 1999. The $16.0 million or 5.6% increase was due to the
increase in loans which was funded by decreased interest-bearing deposits and
increased deposits and borrowings from the Federal Home Loan Bank of Chicago
(the "FHLB").

Cash and cash equivalents decreased from $18.3 million at December 31, 1998 to
$10.9 million at September 30, 1999, a decrease of $7.4 million or 40.4%. This
decrease was due to these funds being used for the origination of loans.

Investment securities decreased from $18.0 million at December 31, 1998 to $16.9
million at September 30, 1999, a decrease of $1.1 million or 6.1%. The decrease
was due to maturities and repayments during the first half of 1999, which were
reinvested in loans.

Loans, net of allowance for loan losses and including loans held for sale,
increased from $236.9 million at December 31, 1998 to $257.2 million at
September 30,1999, an increase of $20.3 million or 8.6%. The increase was funded
by decreased cash and cash equivalents and increased deposits and borrowings
from the FHLB. The growth in loans was primarily attributable to increases in
commercial loans, including agricultural loans, and nonresidential property and
land loans.

The allowance for losses increased from $1,256,000 at December 31, 1998 to
$1,560,000 at September 30, 1999, an increase of $304,000 or 24.2%. The ratio of
the Company's allowance for loan losses to total loans was 0.60% at September
30, 1999 and 0.53% at December 31, 1998. The ratios of the Company's allowance
for loan losses to total nonperforming loans were 183.1% and 331.5% at September
30, 1999 and December 31, 1998, respectively. Company management performs
ongoing reviews of the loan portfolio in order to identify nonperforming


                                      -8-
<PAGE>


loans and potential problem loans and to evaluate the adequacy of the allowance
for loan losses. In performing its review, management classifies nonperforming
and potential problem loans as either SUBSTANDARD, doubtful, LOSS or SPECIAL
MENTION loans. A loan is considered SUBSTANDARD if it is inadequately protected
by the current net worth and paying capacity of the borrower or of the
collateral pledged, if any. SUBSTANDARD loans include those characterized by the
distinct possibility that the Company will sustain some loss if the deficiencies
are not corrected. Loans classified as DOUBTFUL have all of the weaknesses
inherent in those classified as substandard with the added characteristic that
the weaknesses present make collection or liquidation in full, on the basis of
currently existing facts and conditions, highly questionable and improbable.
Loans classified as LOSS are those are those considered uncollectible and of
such little value that their continuance as loans without the establishment of a
specific loss reserve is not warranted. Loans which do not currently expose the
Company to sufficient risk to warrant classification in any one of the
categories described above but possesses weaknesses are classified as SPECIAL
MENTION. The total of internally classified loans was $657,000 and $305,000 at
September 30, 1999 and December 31, 1998, respectively.

Other assets increased from $3.5 million at December 31, 1998 to $6.6 million at
September 30, 1999, an increase of $ 3.1 million or 90.7%. The increase was due
primarily to a $2 million investment in a real estate venture by the Bank's
service corporation.

Deposits increased from $208.1 million at December 31, 1998 to $219.6 million at
September 30, 1999, an increase of $11.5 million or 5.5%. Checking accounts,
savings accounts and certificates of deposit increased by $4.4 million, $0.4
million and $6.7 million, respectively.

Borrowings from the FHLB increased from $39.4 million at December 31, 1998 to
$47.2 million at September 30, 1999, an increase of $7.8 million or 19.7%.
Proceeds from the borrowings were used to fund the origination of loans.

Other liabilities decreased from $3.1 million at December 31, 1998 to $1.9
million at September 30, 1999, a decrease of $1.2 million or 40.8% primarily
because of decreases in the accrued principal and interest payments payable to
owners of serviced loans and reduced income tax liability.

Total stockholders' equity capital decreased by $1,788,000 or 5.0%, from
$36,020,000 at December 31, 1998 to $34,232,000 at September 30, 1999. The
decrease was caused by the repurchase of 70,546 shares of the Company's stock
and the payment of a cash dividend of $109,000, offset by earnings of the
Company during the nine months ended September 30, 1999 and the allocation of
shares in the Company's stock-based compensation plans.


COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 and
SEPTEMBER 30, 1998

GENERAL
Net income for the nine months ended September 30, 1999 decreased by $463,000
from $1,433,000 for the nine months ended September 30, 1998 to $970,000 for the
nine months ended September 30, 1999. The decrease was primarily due to lower
net gains on loan sales and increased net occupancy and equipment expenses due
to the accelerated depreciation of


                                      -9-
<PAGE>


computer equipment that were replaced as part of a computer conversion in the
third quarter of 1999.


INTEREST INCOME
Interest on loans increased by $339,000 or 2.4%, from $14,371,000 for the nine
months ended September 30, 1998 to $14,710,000 for the nine months ended
September 30, 1999. Interest on loans increased because of a higher average
balance of loans outstanding.

Interest on investments decreased from $1,414,000 for the nine months ended
September 30, 1998 to $1,189,000 for the nine months ended September 30, 1999, a
decrease of $225,000 or 15.9%. The decrease was due to a lower average balances
of interest-bearing demand deposits in 1999.

INTEREST EXPENSE
Interest on savings deposits decreased by $336,000 or 4.7%, from $7,205,000 for
the nine months ended September 30, 1998 to $6,869,000 for the nine months ended
September 30, 1999. The decrease was primarily caused by a 40.9 % basis point
decrease in the average interest rate paid on deposits, partially offset by an
increase in average balance of deposits.

The interest on borrowings increased by $313,000 or 20.0%, from $1,565,000 for
the nine months ended September 30, 1998 to $1,878,000 for the nine months ended
September 30, 1999 as a result of increased average borrowings from the FHLB.

PROVISION FOR LOAN LOSSES
The provision for loan losses increased from $345,000 for the nine months ended
September 30, 1998 to $360,000 for the nine months ended September 30, 1999 an
increase of $15,000 or 4.3%. The provision for both periods reflects
management's analysis of the Company's loan portfolio based on information which
is currently available to it at such time. In particular, management considers
the level of non-performing loans and potential problem loans. While management
believes that the allowance for loan losses is sufficient based on information
currently available, no assurances can be made that future events or conditions
or regulatory directives will not result in increased provisions for loan losses
or additions to the Bank's allowance for losses which may adversely affect net
income.

OTHER INCOME
Total other income decreased by $173,000 or 13.6%, from $1,270,000 for the nine
months ended September 30, 1998 to $1,097,000 for the nine months ended
September 30, 1999. Net gains on loan sales decreased by $351,000 or 57.1%, from
$615,000 for the nine months ended September 30, 1998 to $264,000 for the nine
months ended September 30, 1999, because of a decrease in loan sales in the nine
months ended September 30, 1999. Loan fees, checking account fees and branch and
ATM service fees increased by $37,000, $76,000 and $34,000, respectively, for
the nine months ended September 30,1999 when compared to the nine months ended
September 30, 1998.

OTHER EXPENSES
Total other expenses increased by $707,000 or 12.6%, from $5,598,000 for the
nine months ended September 30, 1998 to $6,305,000 for the nine months ended
September 30, 1999.


                                      -10-
<PAGE>


Salaries and benefits increased by $111,000 or 3.5%, from $3,199,000 for the
nine months ended September 30, 1998 to $3,310,000 for the nine months ended
September 30, 1999. The majority of the increase was due to a lower standard
cost allocation of loan fees against salaries and benefits in 1999 as a result
of reduced loan originations. Net occupancy expenses increased by $373,000 or
46.7%, from $799,000 for the nine months ended September 30, 1998 to $1,172,000
for the nine months ended September 30, 1999, because of accelerated
depreciation of computer equipment that was replaced in a computer conversion in
the third quarter of 1999.

INCOME TAX EXPENSE
Total income tax expense was $614,000 for the nine months ended September 30,
1999, compared to $909,000 for the nine months ended September 30, 1998. The
decrease is attributable to lower taxable income for the nine months ended
September 30, 1999. The effective tax rates for the nine months ended September
30, 1999 and 1998 were 38.8% and 38.8%, respectively.


COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999
and SEPTEMBER 30, 1998

GENERAL
Net income for the three months ended September 30, 1999 decreased by $171,000
from $488,000 for the three months ended September 30, 1998 to $317,000 for the
three months ended September 30, 1999. The decrease was primarily due to lower
net gains on loan sales and increased net occupancy and equipment expenses due
to the accelerated depreciation of computer equipment that was replaced as part
of a computer conversion in the third quarter of 1999.

INTEREST INCOME
Interest on loans increased by $83,000 or 1.7%, from $4,836,000 for the three
months ended September 30, 1998 to $4,919,000 for the three ended September 30,
1999.

Interest on investments decreased from $478,000 for the three months ended
September 30, 1998 to $325,000 for the three months ended September 30, 1999, a
decrease of $153,000 or 32.0%. The decrease was due to a lower average balances
of interest-bearing demand deposits in 1999.

INTEREST EXPENSE
Interest on savings deposits decreased by $101,000 or 4.2%, from $2,389,000 for
the three months ended September 30, 1998 to $2,288,000 for the three months
ended September 30, 1999. The decrease was primarily caused by a decrease in the
average interest rate paid on deposits, partially offset by an increase in
average balance of deposits.

The interest on borrowings increased by $133,000 or 24.5%, from $543,000 for the
three months ended September 30, 1998 to $676,000 for the three months ended
September 30, 1999 as a result of increased average borrowings from the FHLB.


                                      -11-
<PAGE>


PROVISION FOR LOAN LOSSES
There was no change in the provision for loan losses, which was $120,000 for the
three months ended September 30, 1999 and 1998. The provision for both periods
reflects management's analysis of the Company's loan portfolio based on
information which is currently available to it at such time. In particular,
management considers the level of non-performing loans and potential problem
loans. While management believes that the allowance for loan losses is
sufficient based on information currently available, no assurances can be made
that future events or conditions or regulatory directives will not result in
increased provisions for loan losses or additions to the Bank's allowance for
losses which may adversely affect net income.

OTHER INCOME
Total other income decreased by $24,000 or 6.5%, from $370,000 for the three
months ended September 30, 1998 to $346,000 for the three months ended September
30, 1999. Net gains on loan sales decreased by $100,000 or 70.9%, from $141,000
for the three months ended September 30, 1998 to $41,000 for the three months
ended September 30, 1999, because of a decrease in loan sales in the three
months ended September 30, 1999.

OTHER EXPENSES
Total other expenses increased by $156,000 or 8.5%, from $1,834,000 for the
three months ended September 30, 1998 to $1,990,000 for the three months ended
September 30, 1999. Salaries and benefits increased by $29,000 or 2.6%, from
$1,100,000 for the three months ended September 30, 1998 to $1,129,000 for the
three months ended September 30, 1999. Net occupancy expenses increased by
$71,000 or 26.3%, from $270,000 for the three months ended September 30, 1998 to
$341,000 for the three months ended September 30, 1999, because of accelerated
depreciation of computer equipment that was replaced in a computer conversion in
the third quarter of 1999.

INCOME TAX EXPENSE
Total income tax expense was $199,000 for the three months ended September 30,
1999, compared to $310,000 for the three months ended September 30, 1998. The
decrease is attributable to lower taxable income in the third quarter of 1999.
The effective tax rate was 38.6% and 38.8% for the three months ended September
30, 1999 and 1998, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's primary sources of funds are deposits, principal and
interest payments on loans and securities, sales of loans and securities and
FHLB advances. While maturing and scheduled amortization of loans are
predictable sources of funds, deposit outflows and mortgage prepayments are
greatly influenced by general interest rates, economic conditions and
competition. The Bank's liquidity requirement, which may be varied at the
direction of the Bank's regulators depending on economic conditions and deposit
flows, is based upon a percentage of the Bank's deposits and short-term
borrowings. Management maintains its liquid assets in accordance with regulatory
requirements.

         At September 30, 1999, the Bank exceeded all of its regulatory capital
requirements with Tier 1 core capital of $28.7 million, or 9.6% of adjusted
assets, which is above the required level of $12.0 million or 4.0%; and
risk-based capital of $30.0 million or 15.8% of risk-weighted assets, which is
above the required level of $15.2 million or 8.0%.


                                      -12-
<PAGE>


         The Company's most liquid assets are cash and interest-bearing demand
accounts. The level of these accounts is dependent on the operating, financing,
lending and investing activities during any given period. At September 30, 1999
cash and interest-bearing deposits totaled $7.4 million.

         The Company has other sources of liquidity if a need for additional
funds arises, including FHLB advances. At September 30, 1999, the Bank had
outstanding advances with the FHLB of $47.2 million. The FHLB maintains two
limitations on the availability based on FHLB stock ownership and total assets.
The Bank currently meets the stock limitation; however, this limit may be raised
by the purchase of additional FHLB stock. Based on the total assets limitations,
the Bank may increase its borrowings with the FHLB by $57.1 million. Depending
upon market conditions and the pricing of deposit products and FHLB borrowings,
the Bank may utilize FHLB advances to fund loan originations.

         At September 30, 1999 the Bank had commitments to originate loans and
unused lines of credit totaling $17.2 million. Certificate accounts which are
scheduled to mature in one year or less from September 30, 1999 totaled $93.0
million. The Bank anticipates that it will have sufficient funds to meet its
current loan commitments and maturing deposits.


                                      -13-
<PAGE>


YEAR 2000

The Year 2000 compliance issue exists because many computer systems and
applications currently use two-digit fields to designate a year. As the century
date change occurs, data-sensitive systems may either fail or not operate
properly unless the underlying programs are modified or replaced.

The Company's lending and deposit activities, like those of most financial
institutions, depend significantly upon computer systems to process and record
transactions. The Company is aware of the potential Year 2000 problems that may
affect the operating systems that control our computers as well as those of our
third-party data service providers that maintain many of our records and those
of our customers. In 1997, the Company began the process of identifying Year
2000 related problems that may affect the Company's systems. A task force of
Company officers and employees was established to address the issues related to
these problems. Outside consultants have and will be utilized when required to
complete this project.

The task force analyzed the Company's operations and both identified those
functions that would be affected by the Year 2000 issues and determined which of
these functions were "mission critical" (i.e., vital to the day-to-day
operations of the Company). A timetable was established for completion of the
various sections of the project.

The Company has worked with the companies that supply or service the Company's
computer systems to identify and remedy any Year 2000 related systems. The
Company's Board of Directors is monitoring the Company's progress in addressing
Year 2000 issues.

The Company converted to a new computer system in the third quarter of 1999 that
supports the primary lending and savings operations of the Company. Upon
conversion, the Company tested the new systems to ensure that they were Year
2000 compliant.

The Company's direct expenses to date (other than the salary of Company
employees involved in the project) have been less than $10,000 and the Company
does not currently anticipate that its Year 2000 costs will exceed $100,000.

Although the Company believes it is taking the necessary steps to address the
Year 2000 compliance issue, no assurances can be given that some problems will
not occur or that we will not incur significant additional expenses in future
periods. In the event that the Company is ultimately required to purchase
replacement computer systems, programs and equipment, or to incur substantial
expenses to make the Company's current systems, programs and equipment Year 2000
compliant, the Company's net income and financial condition could be adversely
affected.

Because the Company's loan portfolio to individual borrowers is diversified and
its market area does not depend significantly on one employer or industry, it
does not expect any Year 2000 related difficulties that may affect the Company's
depositors and borrowers to significantly affect the Company's net earnings or
cash flow.

The Company has developed a contingency plan to deal with the Year 2000 related
issues. This program provides for dealing with situations that might occur that
are both related to the Company's operation ( e.g., computer system or
equipment, liquidity) and those that are beyond the Company's control (e.g.
power failure, phone/communication line failure). The plan includes


                                      -14-
<PAGE>


methods to deal with these situations, while continuing to service the Company's
customers despite Year 2000 problems arising.

CERTAIN STATEMENTS CONTAINED IN THIS SECTION "YEAR 2000 " CONSTITUTE "FORWARD
LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF
1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. SUCH FORWARD
LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED
OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS. SUCH FACTORS MAY INCLUDE, BUT ARE
NOT LIMITED TO, THE SEVERITY OF PROBLEMS DISCOVERED WITH THE COMPANY'S OWN
SYSTEMS AS YEAR 2000 TESTING CONTINUES, THE COST OF REMEDYING SUCH PROBLEMS, THE
SEVERITY OF YEAR 2000 PROBLEMS ENCOUNTERED BY THIRD PARTY SERVICE PROVIDERS AND
THE COMPANY'S BORROWERS, ADDITIONAL INITIATIVES BY THE COMPANY'S REGULATORS, AND
THE COSTS OF YEAR 2000 PROFESSIONALS GENERALLY IN THE EVENT PROBLEMS ARE
ENCOUNTERED.


                                      -15-
<PAGE>



CURRENT ACCOUNTING ISSUES

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
         During 1998, the Financial Accounting Standards Board ("FASB") issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This Statement requires companies to record derivatives on the
balance sheet at their fair value. Statement No. 133 also acknowledges that the
method of recording a gain or loss depends on the use of the derivative.

         The new Statement applies to all entities. If hedge accounting is
elected by the entity, the method of assessing the effectiveness of the hedging
derivative and measurement approach of determining the hedge's ineffectiveness
must be established at the inception of the hedge.

         Statement No. 133 amends Statement No. 52 and supercedes No. 80, 105
and 119. Statement No. 107 is amended to include the disclosure provisions about
the concentrations of credit risk from Statement 105. Several Emerging Issues
Task Force consensuses also are changed or modified by the provisions of
Statement 133.

         Statement No. 137 deferred the effective date of Statement No. 133 to
all fiscal years beginning after June 15, 2000. Statement No. 133 may not be
applied retroactively to financial statement of prior periods. The adoption of
the Statement would have no material impact on the Company's financial condition
or results of operation.

ACCOUNTING FOR MORTGAGE BACKED SECURITIES RETAINED AFTER THE SECURITIZATION OF
MORTGAGE LOANS HELD FOR SALE BY A MORTGAGE BANKING ENTERPRISE

         Also in 1998, the FASB issued Statement No. 134, "Accounting for
Mortgage-Backed Securities Retained After the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise". It establishes accounting
standards for certain activities of mortgage banking enterprises and for other
enterprises with similar mortgage operations. This Statement amends No. 65.

         Statement No. 65, as previously amended by Statements No. 115 and 125,
required a mortgage banking enterprise to classify a mortgage-backed security as
a trading security following the securitization of the mortgage loans held for
sale. This Statement further amends Statement No. 65 to require that after the
securitization of mortgage loans held for sale, an entity engaged in mortgage
banking activities must classify the resulting mortgage-backed security or other
retained interests based on the entity's ability to sell or hold those
investments.

         The determination of the appropriate classification for securities
retained after the securitization of mortgage loans by a mortgage banking
enterprise now conforms to Statement No. 115. The only new requirement is that
if an entity has a sales commitment in place, the security must be classified
into trading.

         This Statement is effective for the first fiscal quarter beginning
after December 15, 1998. On the date the Statement is initially applied, an
entity may reclassify mortgage-backed securities and other beneficial interest
retained after the securitization of mortgage loans held for sale from the
trading category, except for those with sales commitments in place. Those
securities and other interests shall be classified based on the entity's present
ability and intent to hold the


                                      -16-
<PAGE>


investments. The adoption of this Statement would have no material impact on the
Company's financial condition and results of operations.

REPORTING THE COSTS OF START-UP ACTIVITIES

         During 1998, the Accounting Standards Executive Committee, ("AcSec")
issued Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities". Statement of Position 98-5 will affect all non-government entities,
including not-for-profits, reporting start-up costs in their financial
statements.

         Some existing industry practices result in the capitalization and
amortization of start-up costs. This Statement of Position requires that
start-up costs be expensed when incurred. The Statement of Position applies to
start-up activities and organizational costs associated with both development
stage and established operating entities.

         According to Statement of Position 98-5, start-up activities are "those
one-time activities related to opening a new facility, introducing a new product
or service, conducting business in a new territory, conducting business with a
new class of customer or beneficiary, initiating a new process in an existing
facility, or commencing some new operation. Start-up activities include
activities related to organizing a new entity commonly referred to as
organizational costs". The adoption of this Statement would have no material
impact on the Company's financial condition and results of operation.


                                      -17-
<PAGE>


ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Sources of market risk include interest rate risk, foreign currency exchange
rate risk, commodity price risk and equity price risk. The Company is only
subject to interest rate risk. The Company purchased no financial instruments
for trading purposes during the nine months ended September 30, 1999 or 1998.

The principal objective of the Company's interest rate risk management function
is to evaluate the interest rate risk included in balance sheet accounts,
determine the level of risk appropriate given the Company's business strategy,
operating environment, capital and liquidity requirements and performance
objectives, and manage the risk consistent with Board of Director's approved
guidelines. Through such management, the Company seeks to reduce the
vulnerability of its operations to changes in interest rates. The Company
monitors its interest rate risk as such risk relates to its operating
strategies. The Company's Board of Directors reviews the Company's interest rate
risk position on a quarterly basis. The Company's Asset/Liability Committee is
comprised of the Company's senior management under the direction of the Board of
Directors, with the Committee responsible for reviewing with the Board of
Directors its activities and strategies, the effect of those strategies on the
Company's net interest margin, the market value of the portfolio and the effect
that changes in the interest rates will have on the Company's portfolio and its
exposure limits. The extent of the movement of interest rates is an uncertainty
that could have a negative impact on the earnings of the Company.

In recent years, the Company has utilized the following strategies to manage
interest rate risk: (1) originating for investment adjustable-rate residential
mortgage and fixed-rate one-to-four family loans with maturities of 10 years or
less; (2) generally selling fixed-rate one-to-four family loans with maturities
exceeding 10 years in the secondary market without recourse and on a servicing
retained basis; (3) increasing its origination of shorter term and/or adjustable
rate commercial loans; and (4) investing in shorter term investment securities
which may generally bear lower yield as compared to longer term investments, but
which may better position the Company for increases in market interest rates.

The Company's interest rate and market risk profile has not materially changed
from the year ended December 31, 1998. Please refer to the Company's 1998 Form
10-K for further discussion of the Company's market and interest rate risk.


                                      -18-
<PAGE>


PART II. -- OTHER INFORMATION

         Item 1. Legal Proceedings

         The Company is not involved in any legal proceedings of a material
nature at this time other than those occurring in the ordinary course of
business which in the aggregate involves amounts which are believed by
management to be immaterial to the financial condition of the Company.

         Item 2. Changes in Securities and Use of Proceeds
                 Not applicable.

         Item 3. Defaults Upon Senior Securities
                 Not applicable.

         Item 4. Submission of Matters to a Vote of Security Holders
                 Not applicable

         Item 5. Other Information
                 Not applicable

         Item 6. Exhibits and Reports on Form 8-K
                 a.  Exhibits
                          11.0   Statement re: Computation of Per Share Earnings
                                 (filed herewith)
                          27.0   Financial Data Schedule*

                 b.  Reports on Form 8-K

                          On September 2, 1999, the Company filed a report on
                          Form 8-K, announcing the completion of a stock
                          repurchase program of 5% of its outstanding shares of
                          common stock.

                          * Submitted only in electronic format.


                                  EXHIBIT INDEX



11.0    Statement re: Computation of Per Share Earnings                      22

27.0    Financial Data Schedule (submitted only in electronic format)


                                       19
<PAGE>


                                   SIGNATURES

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

                                       Citizens First Financial Corp.



Date:    November 12, 1999             /s/ C. William Landefeld
      ----------------------------     --------------------------------------
                                       C. William Landefeld
                                       President


Date:    November 12, 1999             /s/ Dallas G. Smiley
      ----------------------------     --------------------------------------
                                       Dallas G. Smiley
                                       Chief Financial Officer


                                       20