<PAGE>

                                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 March 31, 2001    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
                                (2)    Yes x No

       The Registrant had 1,568,512 shares of Common Stock outstanding as of
April 30, 2001.
<PAGE>

                                 TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                             PAGE
<S>                                                                        <C>
       Item 1.  Financial Statements
                Condensed Consolidated Balance Sheet as of
                March 31, 2001 and December 31, 2000                          1

                Condensed Consolidated Income Statement for the Three
                Months Ended March 31, 2001 and 2000                          2


                Condensed Consolidated Statement of Comprehensive
                Income for the Three Months Ended March 31, 2001 and 2000     3


                Condensed Consolidated Statement of Cash Flows for
                the Three Months Ended March 31, 2001 and 2000                4

                Notes to Condensed Consolidated Financial Statements          6

       Item 2.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations                           7

       Item 3.  Quantitative and Qualitative Disclosures About Market Risk   12

PART II - OTHER INFORMATION

       Item 1.  Legal Proceedings                                            14
       Item 2.  Changes in Securities and Use of Proceeds                    14
       Item 3.  Defaults Upon Senior Securities                              14
       Item 4.  Submission of Matters to a Vote of Security Holders          14
       Item 5.  Other Information                                            14
       Item 6.  Exhibits and Reports on Form 8-K                             14
       Signatures                                                            15
</TABLE>

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. The forward-looking statements are generally
identifiable by the use of such words as "believes", "expects", "anticipates",
"estimates", "projects", "intends" or similar expressions.  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 and local 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
                     Condensed Consolidated Balance Sheet
                  As of March 31, 2001 and December 31, 2000
                                (in thousands)

<TABLE>
<CAPTION>
                                                                                     March 31,         December 31,
                                                                                        2001               2000
ASSETS                                                                              (Unaudited)
<S>                                                                                 <C>                   <C>
Cash and due from banks                                                              $  6,119              $  5,779
  Interest-bearing demand deposits                                                     12,633                 5,236
                                                                                     --------              --------
       Cash and cash equivalents                                                       18,752                11,015
  Investment securities - available for sale                                           15,366                15,054
  Mortgage loans held for sale                                                            990                 1,494
  Loans                                                                               280,592               285,315
       Allowance for loan losses                                                       (2,006)               (1,826)
                                                                                     --------              --------
          Net loans                                                                   278,586               283,489
  Land in real estate joint venture                                                     1,225                 1,220
  Premises and equipment                                                                7,985                 8,124
  Federal Home Loan Bank of Chicago stock                                               4,250                 4,166
  Other assets                                                                          5,692                 5,328
                                                                                     --------              --------
               Total assets                                                          $332,846              $329,890
                                                                                     ========              ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
  Deposits                                                                           $234,901              $228,115
  Long Term Debt                                                                       60,880                67,984
  Other liabilities                                                                     6,387                 3,894
                                                                                     --------              --------
               Total liabilities                                                      302,168               299,993
                                                                                     --------              --------
Minority interest in real estate joint venture                                            621                   591

Commitments and Contingent Liabilities

Stockholders' Equity
  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                                                                      27,574                27,559
  Retained earnings                                                                    23,149                22,634
  Accumulated other comprehensive gain (loss)                                              47                   (29)
  Less:
       Treasury shares, 1,248,988 and 1,249,220                                       (19,972)              (19,970)
       Unearned incentive plan shares, 15,075 and 19,916                                 (205)                 (272)
       Unearned employee stock ownership plan
               shares, 56,350 and 64,400 shares                                          (564)                 (644)
                                                                                     --------              --------
               Total stockholders' equity                                              30,057                29,306
                                                                                     --------              --------
               Total liabilities and stockholders' equity                            $332,846              $329,890
                                                                                     ========              ========
</TABLE>

See notes to condensed consolidated financial  statements.

                                       1
<PAGE>

                 Citizens First Financial Corp. and Subsidiary
                    Condensed Consolidated Income Statement

<TABLE>
<CAPTION>
                                                                             For the three       For the three
                                                                             months ended        months ended
                                                                            March 31, 2001      March 31, 2000
                                                                            --------------      --------------
                                                                                  (Unaudited and in thousands
                                                                                       except share data)
<S>                                                                         <C>                <C>
Interest income:
   Interest on loans                                                           $    6,034           $    5,534
   Interest on investments                                                            396                  352
                                                                               ----------           ----------
        Total interest income                                                       6,430                5,886
Interest expense:
   Interest on deposits                                                             2,921                2,398
   Interest on borrowings                                                             948                  804
                                                                               ----------           ----------
        Total interest expense                                                      3,869                3,202
                                                                               ----------           ----------
          Net interest income                                                       2,561                2,684
   Provision for loan losses                                                          180                  120
                                                                               ----------           ----------

          Net interest income after provision for
                 loan losses                                                        2,381                2,564
   Other income:
   Net gains on loan sales                                                            105                   59
   Other operating income                                                             285                  360
                                                                               ----------           ----------
        Total other income                                                            390                  419

Other expense:
   Salaries and employee benefits                                                   1,174                1,273
   Net occupancy and equipment expenses                                               308                  316
   Deposit insurance expense                                                           19                   22
   Data processing expense                                                             70                   88
   Other operating expense                                                            275                  453
                                                                               ----------           ----------
         Total other expense                                                        1,846                2,152
                                                                               ----------           ----------

Income before income tax                                                              925                  831
   Income tax expense                                                                 359                  322
                                                                               ----------           ----------
Net income                                                                     $      566           $      509
                                                                               ==========           ==========

Basic earnings per share                                                       $     0.38           $     0.27
   Weighted average shares outstanding                                          1,492,790            1,852,777

Diluted earnings per share                                                     $     0.37           $     0.26
   Weighted average shares outstanding                                          1,522,987            1,933,228
</TABLE>

See notes to condensed consolidated financial statements

                                       2
<PAGE>

                 Citizens First Financial Corp. and Subsidiary
            Condensed Consolidated Statement of Comprehensive Income


<TABLE>
<CAPTION>
                                                                              For the three    For the three
                                                                              months ended     months ended
                                                                             March 31, 2001   March 31, 2000
                                                                             --------------   --------------
                                                                                (Unaudited and in thousands)
<S>                                                                           <C>              <C>
Net income                                                                          $566                $509

Other comprehensive income (loss), net of tax:
   Unrealized gains (losses) on securities:
      Unrealized holding gains (losses) during the period                             76                 (37)
                                                                                    ----                ----

Comprehensive income                                                                $642                $472
                                                                                    ====                ====
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                 CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                 Condensed Consolidated Statement of Cash Flows

<TABLE>
<CAPTION>
                                                                                 For the three        For the three
                                                                                 months ended         months ended
                                                                                March 31, 2001       March 31, 2000
                                                                                --------------       --------------
                                                                                   (Unaudited and in thousands)
Operating activities

<S>                                                                              <C>                  <C>
Net income                                                                         $   566              $    509
  Adjustments to reconcile net income to net
    Cash provided by operating activities:
    Provision for loan losses                                                          180                   120
    ESOP compensation expense                                                          130                   100
    Incentive plan compensation expense                                                 60                    67
    Investment securities amortization, net                                              9                     8
    Net gains on sale of mortgage loans                                               (105)                  (59)
    Depreciation                                                                       188                   194
    Net gain on sale of foreclosed property                                             (1)
    Mortgage loans originated for sale                                              (6,047)               (1,494)
    Proceeds from sale of mortgage loans                                             6,656                 1,395
  Change in:
       Other liabilities                                                             2,219                   569
       Prepaid expenses and other assets                                              (294)                 (286)
                                                                                   -------               -------
    Net cash provided by operating activities                                        3,561                 1,123
Investing Activities
    Purchase of securities available for sale                                       (2,141)
    Proceeds from maturities and principal paydowns
       on securities available for sale                                              1,941                   330
    Purchase of Federal Home Loan Bank stock                                           (84)                 (171)
    Other net changes in loans                                                       4,537               (14,855)
    Proceeds from sale of foreclosed property                                           71
    Purchases of premises and equipment                                                (49)                  (88)
    Investment in land in real estate joint venture                                     (5)
    Proceeds from minority interest portion of real estate joint
          Venture                                                                       30
    Net cash used by investing activities                                            4,300               (14,784)
                                                                                   -------               -------
</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>
Financing Activities
   <S>                                                                                <C>            <C>
    Net change in deposits                                                            $  6,786       $  4,280
    Proceeds from long-term debt                                                        26,000         24,500
    Repayment of long-term debt                                                        (33,104)       (22,084)
    Purchase of treasury stock shares                                                       (2)        (1,045)
    Cash dividend paid on common stock                                                     (78)          (102)
    Net changes in advances by borrowers for taxes and insurance                           274            271
                                                                                      --------       --------
  Net cash provided (used) by financing activities                                        (124)         5,820
                                                                                      --------       --------
Net change in cash and cash equivalents                                                  7,737         (7,841)
Cash and cash equivalents, beginning of period                                          11,015         13,176
                                                                                      --------       --------
Cash and cash equivalents, end of period                                              $ 18,752       $  5,335
                                                                                      ========       ========
Additional cash flows information:
  Interest paid                                                                       $  3,914       $  3,159
  Income tax paid                                                                            0              0
  Loans transferred to foreclosed property                                                 186              0
</TABLE>

See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                        Citizens First Financial Corp.

Notes to Condensed 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 Ownership 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 NASDAQ
National Market under the symbol "CFSB".

2.   Statement of Information Furnished
     ----------------------------------

The accompanying unaudited condensed 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 March 31, 2001 and
December 31, 2000, the results of operations and comprehensive income for the
three months ended March 31, 2001 and 2000 and the cash flows for the three
months ended March 31, 2001 and 2000. 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 three months ended March 31, 2001 are not necessarily
indicative of the results to be expected for the entire fiscal year.

The condensed consolidated financial statements are those of the Company and the
Bank. These condensed consolidated financial statements should be read in
conjunction with the audited financial statements and notes thereto, dated
January 19, 2001, included in the Company's 2000 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 three months ended March 31, 2001 and 2000.
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.

                                       6
<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 MARCH 31, 2001 and DECEMBER 31, 2000

Total assets increased from $329.9 million at December 31, 2000 to $332.8
million at March 31, 2001. The $2.9 million or 0.9% increase was primarily due
to the increase in interest-bearing demand deposits, which is included in cash
and cash equivalents.

Cash and cash equivalents increased from $11.0 million at December 31, 2000 to
$18.8 million at March 31, 2001 an increase of $7.8 million or 70.9%. This
increase resulted from primarily from increased deposits offset by a decrease in
loans.

Investment securities increased from $15.1 million at December 31, 2000 to $15.4
million at March 31, 2001, an increase of $300,000 or 2.0%. The increase was
primarily due to the purchase of investment securities during the first quarter
of 2001.

Loans, net of allowance for loan losses and including loans held for sale,
decreased from $285.0 million at December 31, 2000 to $278.6 million at March
31, 2001, a decrease of $5.4 million or 1.9%. The decrease resulted from the
repayment of loans during the first quarter of 2001.

The Company maintains an allowance for loan losses to absorb losses inherent in
the loan portfolio. The allowance for losses increased from $1,826,000 at
December 31, 2000 to $2,006,000 at March 31, 2001, an increase of $180,000 or
9.9%. The allowance is based on ongoing assessments of the probable estimated
losses inherent in the loan portfolio. The methodology for assessing the
appropriateness of the allowance consists of several key elements, which include
a formula allowance, a specific allowance for identified problem loans and an
unallocated allowance.

The formula allowance is calculated by applying loss factors to outstanding
loans based on the internal risk grade of such loans. Changes in risk grades of
both performing and non-performing

                                       7
<PAGE>

loans affect the amount of the formula allowance. Loss factors are based on
historical loss experience and may be adjusted for significant factors that, in
management's judgment, affect the collectibility of the portfolio as of the
evaluation date. Loss factors are based on (1) historical loss experience over a
five-year period, which management believes approximates a business cycle; (2)
individual evaluations of residential, commercial real estate, construction,
agricultural, commercial and consumer loans and (3) expected charge-offs by loan
classification for one-year.

A specific allowance is established in cases where management has identified
significant conditions or circumstances related to a loan that management
believes indicate the probability that a loss has been incurred.

The unallocated allowance is based upon management's evaluation of various
conditions, the effects of which are not directly measured in the determination
of the formula and specific allowances. The evaluation of the inherent loss with
respect to these conditions is subject to a higher degree of uncertainty because
they are not identified with specific loans. The conditions evaluated in
connection with the unallocated allowance include (1) general economic and
business conditions affecting the Company's lending areas; (2) collateral
values; (3) loan volumes and concentrations; (4) seasoning of the loan
portfolio; (5) specific industry conditions and (6) recent loss experience in
particular segments of the portfolio.

The allowance for loan losses is based upon estimates of probable losses
inherent in the loan portfolio. The amount of actual losses can vary
significantly from the estimated amounts. The methodology includes several
features that are intended to reduce the differences between estimated and
actual losses. The Company closely monitors any difference of actual and
estimated losses and adjusts the methodology accordingly.

There were no changes in estimation methods or assumptions that affected our
methodology for assessing the appropriateness of the allowance for loan losses
from December 31, 2000 to March 31, 2001. The increased allowance in 2001 was
related to the increase in delinquent and other problem loans.

Non-performing loans are loans which are past due 90 days or more, and non-
accruing loans. The ratio of the Company's allowance for loan losses to total
non-performing loans was 27.5% and 34.7% at March 31, 2001 and December 31,
2000, respectively. The ratio decreased due to an increase in delinquent loans
and other matters related to a small group of borrowers. Management believes
that the problems with these borrowers are isolated and not indicative of the
loan portfolio in total.

The Bank's internally classified loans, which include non-performing loans, in
addition to potential problem loans, increased from $8,277,000 at December 31,
2000 to $10,324,000 at March 31, 2001. The increase of $2,047,000 was
attributable to a $1,874,000 increase in loans contractually delinquent 90 days
or more and a $173,000 increase in non-accrual loans relating to loans to a
residential real estate developer, PAK Builders.

Loans delinquent greater than 90 days increased from $3,767,000 at December 31,
2000 to $5,641,000 at March 31, 2001, an increase of $1,874,000. The total loans
delinquent greater than 90 days at March 31, 2001 includes $4.1 million of
residential construction loans to three borrowers and a $1.1 million loan
secured by lots in a retail development. The Company expects that the properties
supporting the residential construction loans will be completed and sold in

                                       8
<PAGE>

2001. A specific reserve of $150,000 has been established for these loans. The
loan for the retail development property is to the same borrowers that are
discussed regarding potential problem loans. The Company believes that this
reserve adequately covers any possible losses relating to these loans.

Non-accruing loans increased from $1,493,000 at December 31, 2000 to $1,666,000
at March 31, 2001, an increase of $173,000. The non-accruing loans pertain to
loans made to a residential real estate developer. The developer, PAK Builders,
an Illinois general partnership, had $4.2 million in loans with the Bank for the
development of 27 residential properties. On August 3, 2000 they filed for
bankruptcy protection. A bankruptcy trustee is handling the disposition of PAK
Builders' assets. During 2000, the Company charged off $2.8 million of the loans
outstanding to PAK Builders. Based on the cash and real estate currently held by
the trustee and the Bank's expected portion of these assets, management believes
that there will be no additional losses relative to PAK Builders. It is expected
that the trustee will complete the distribution of the proceeds to creditors by
the third quarter of 2001. The increase in the first quarter of 2001 relates to
disbursements to other lien holders of PAK Builders, which improved the
Company's position.

The $3,017,000 balance of potential problem loans did not change from December
31, 2000 to March 31, 2001. The balance relates to a commercial mortgage in a
retail development. Subsequent to year-end, the borrowers requested and were
granted a loan modification of the interest rate and maturity for their loan on
a building in this development. The loan was delinquent less than 30 days at
December 31, 2000. As of March 2001 this loan is contractually current. The
modifications were requested because of the borrowers' difficulties meeting
their combined obligations to other lenders. The collateral for the Company's
loan for this development is a commercial building and property in a large
shopping center. The building that serves as the Bank's collateral is leased
and, in addition, the borrowers have personally guaranteed the loan. Management
believes there will be no loss related to this loan.

Other assets increased from $5.3 million at December 31, 2000 to $5.7 million at
March 31, 2001, an increase of $400,000 or 7.5%, due primarily to increases in
accrued interest of $131,000 and in foreclosed real estate of $116,000.

Deposits increased from $228.1 million at December 31, 2000 to $234.9 million at
March 31, 2001, an increase of $6.8 million or 3.0%. The increase was due
primarily to a $7.3 million increase in time deposits.

Long-term debt decreased from $68.0 million at December 31, 2000 to $60.9
million at March 31, 2001, a decrease of $7.1 million or 10.4%. Debt repaid
during the first quarter was due to normal maturities and scheduled repayments.
Proceeds from the repayment of loans were used to reduce long-term debt during
the first quarter of 2001.

Other liabilities increased from $3.9 million at December 31, 2000 to $6.4
million at March 31, 2001 an increase of $2.5 million or 64.1%. The increase was
primarily due to a $1.8 million increase in accrued principal and interest
payments payable to owners of serviced loans, a $320,000 increase in accrued
income taxes payable and a $220,000 increase in advance payments by borrowers
for taxes and insurance.

Total stockholders' equity capital increased by $750,000 or 2.7%, from $29.3
million at December 31, 2000 to $30.1 million at March 31, 2001. The increase
resulted from the earnings of the Company of $566,000 for the three months ended
March 31, 2001, offset by the payment of

                                       9
<PAGE>

$78,000 in dividends to shareholders, a $75,000 increase in accumulated other
comprehensive income and recognition of earned incentive plan and ESOP shares of
$190,000.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2001 and
MARCH 31, 2000

GENERAL
Net income for the three months ended March 31, 2001 increased by $57,000 from
$509,000 for the three months ended March 31, 2000 to $566,000 for the three
months ended March 31, 2001. The increase was due primarily to lower other
operating expenses and salaries and employee benefit expenses, an increased net
gains on loan sales, offset by decreased net interest income and an increase in
the provision for loan losses.

INTEREST INCOME
Interest on loans increased by $500,000 or 9.0%, from $5,534,000 for the three
months ended March 31, 2000 to $6,034,000 for the three months ended March 31,
2000. Interest on loans increased due to an increase in the average balance of
loans outstanding of $14.0 million and an increase in the average yield on loans
outstanding of 9 basis points.

Interest on investments increased from $352,000 for the three months ended March
31, 2000 to $396,000 for the three months ended March 31, 2001, an increase of
$44,000 or 12.5%. The increase was due to a $1.3 million increase in the average
balances of interest-bearing demand deposits, FHLB stock and investment
securities in 2001 and a 76 basis point increase in the average yield on
investments and interest-bearing deposits.

INTEREST EXPENSE
Interest on savings deposits increased by $523,000 or 21.8%, from $2,398,000 for
the three months ended March 31, 2000 to $2,921,000 for the three months ended
March 31, 2001. The increase was due to a $8.8 million increase in the average
balance of deposits and a 73 basis point increase in the average cost of
deposits.

The interest on borrowings increased by $144,000 or 17.9%, from $804,000 for the
three months ended March 31, 2000 to $948,000 for the three months ended March
31, 2001 as a result of a $8.4 million increase in average borrowings and a 10
basis point increase in the average cost of borrowings.

PROVISION FOR LOAN LOSSES
The provision for loan losses was $180,000 for the three months ended March 31,
2001 and $120,000 for the three months ended March 31, 2000. The increase was
due to the increase in internally classified loans. 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.

                                       10
<PAGE>

OTHER INCOME

Total other income decreased by $29,000 or 6.9%, from $419,000 for the three
months ended March 31, 2000 to $390,000 for the three months ended March 31,
2000. Net gains on loan sales increased from $59,000 for the three months ended
March 31, 2000 to $105,000 for the three months ended March 31, 2001, an
increase of $46,000 or 78.0%. The increase resulted from the increase in loan
sales in the three months ended March 31, 2001. Other operating income decreased
from $360,000 for the three months ended March 31, 2000 to $285,000 for the
three months ended March 31, 2001, a decrease of $75,000 or 20.8%. The decrease
resulted primarily from decreased ATM fees of $21,000, loan fees of $29,000 and
lower office rental income of $10,000.

OTHER EXPENSES
Total other expenses decreased by $306,000 or 14.2%, from $2,152,000 for the
three months ended March 31, 2000 to $1,846,000 for the three months ended March
31, 2001. Salaries and benefits decreased by $99,000 or 7.8%, from $1,273,000
for the three months ended March 31, 2000 to $1,174,000 for the three months
ended March 31, 2001. The decrease was primarily due to the efficiencies
achieved from the sale of a branch facility in 2000 and other staffing changes.
Other operating expense decreased from $453,000 for the three months ended March
31, 2000 to $275,000 for the three months ended March 31, 2001, a decrease of
$178,000 or 39.3%, primarily because of lower legal and professional fees
associated with the 2000 Annual Meeting of Shareholders, and operational savings
resulting from the sale of the branch facility in 2000.

INCOME TAX EXPENSE
Total income tax expense was $359,000 for the three months ended March 31, 2001,
compared to $322,000 for the three months ended March 31, 2000. The increase is
attributable to higher taxable income for the three months ended March 31, 2001.
The effective tax rates for the three months ended March 31, 2001 and 2000 were
38.8% and 38.7%, 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.

At March 31, 2001, the Bank exceeded all of its regulatory capital requirements
with Tier 1 core capital of $28.9 million, or 9.0% of adjusted assets, which is
above the required level of $12.9 million or 4.0%; and risk-based capital of
$30.9 million or 13.5% of risk-weighted assets, which is above the required
level of $18.2 million or 8.0%.

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 March 31, 2001 cash and
interest-bearing deposits totaled $18.8 million.

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<PAGE>

The Company has other sources of liquidity if a need for additional funds
arises, including FHLB advances, loan sales, brokered deposits and Fed funds. At
March 31, 2001, the Bank had outstanding advances with the FHLB of $55.6
million. The FHLB maintains two limitations on borowing availability based on
(1) FHLB stock ownership and (2) 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 $59.0 million. The ability to borrow
this amount would require meeting regulatory mandated loan and collateral
limits. Depending upon market conditions and the pricing of deposit products and
FHLB borrowings, the Bank may utilize FHLB advances to fund loan originations.

At March 31, 2001 the Bank had commitments to originate loans and unused lines
of credit totaling $8.5 million. Certificate accounts which are scheduled to
mature in one year or less from March 31, 2001 totaled $141.0 million. The Bank
anticipates that it will have sufficient funds to meet its current commitments
and maturing deposits.


Current Accounting Issues
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. This new Statement applies to all entities. Statement No. 137
amended the effective date of Statement No. 133 to fiscal years beginning after
June 15, 2000. This Statement may not be applied retroactively to financial
statements of prior periods. The adoption of this Statement had no material
impact on the Company's financial position or results of operation.

During 2000, the FASB issued Statement of Financial Accounting Standards No.
140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities". This Statement replaces Statement of Financial
Accounting Standards No. 125. This Statement is also effective for fiscal years
ending after December 15, 2000. The adoption of this Statement had no impact on
the Company's financial condition or results of operation.

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 three months ended March 31, 2001 and 2000.

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 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

                                       12
<PAGE>

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 yields 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, 2000. Please refer to the Company's 2000 Form
10-K for further discussion of the Company's market and interest rate risk.

                                       13
<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
                  None

          Item 5. Other Information

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

                  b.  Reports on Form 8-K
                          Citizens First Financial Corp. filed the following
                          Form 8-K during the quarter ended March 31, 2001:

                                a. Form 8-K filed February 5, 2001 attaching as
                                an exhibit a press release dated February 2,
                                2001 announcing the its unaudited results of
                                operation for the year ended December 31, 2000,
                                the declaration of a dividend, and that it had
                                scheduled its Annual Meeting of Stockholders.

                                 Exhibit Index
                                 -------------

11.0      Statement re:  Computation of Per Share Earnings        16

                                       14
<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:   May 14, 2001                         /s/ C. William Landefeld
     -------------------------------        ------------------------------------
                                                   C. William Landefeld
                                                   President


Date:   May 14, 2001                         /s/ Dallas G.Smiley
     -------------------------------        ------------------------------------
                                                   Dallas G. Smiley
                                                   Chief Financial Officer

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