FORM 10-QSB

                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

(Mark One)

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

For the quarterly period ended         September 30, 1998  
                               -----------------------------------

                                       OR

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

For the transition period from ____________ to _______________

Commission File No.     0-27916          

                            FFD FINANCIAL CORPORATION
        (Exact name of small business issuer as specified in its charter)

        Ohio                                                  34-1921148
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                         Identification Number)

321 North Wooster Avenue
Dover, Ohio                                                     44622       
(Address of principal                                        (Zip Code)
executive office)

Issuer's telephone number:  (330)  364-7777

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

Yes   X                                                      No      


As of November 10, 1998, the latest  practicable  date,  1,445,350 shares of the
registrant's common stock, without par value, were issued and outstanding.









                               Page 1 of 16 pages

<PAGE>



                                      INDEX

                                                                      Page

PART I  - FINANCIAL INFORMATION

           Consolidated Statements of Financial Condition               3

           Consolidated Statements of Earnings                          4

           Consolidated Statements of Comprehensive Income              5

           Consolidated Statements of Cash Flows                        6

           Notes to Consolidated Financial Statements                   8

           Management's Discussion and Analysis of
           Financial Condition and Results of
           Operations                                                  11


PART II - OTHER INFORMATION                                            15

SIGNATURES                                                             16






























                                        2



<PAGE>

<TABLE>

                            FFD Financial Corporation
<CAPTION>

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                        (In thousands, except share data)

                                                                                      September 30,            June 30,
         ASSETS                                                                                1998                1998
<S>                                                                                           <C>                   <C>
Cash and due from banks                                                                     $ 1,003             $ 1,026
Interest-bearing deposits in other financial institutions                                       870                 607
                                                                                             ------              ------
         Cash and cash equivalents                                                            1,873               1,633

Investment securities available for sale - at market                                          3,670               2,655
Investment securities - at amortized cost, approximate
  market value of $1,000 and $993 as of September 30,
  1998 and June 30, 1998                                                                        980                 977
Mortgage-backed securities available for sale - at market                                     9,956               5,935
Mortgage-backed  securities - at  amortized  cost,  approximate  market value of
  $5,806 and $6,073 as of September 30,
  1998 and June 30, 1998                                                                      5,615               5,960
Loans receivable - net                                                                       73,590              70,990
Loans held for sale                                                                             415                  - 
Office premises and equipment - at depreciated cost                                           1,417               1,383
Federal Home Loan Bank stock - at cost                                                          950                 933
Accrued interest receivable                                                                     231                 279
Prepaid expenses and other assets                                                               154                 221
Prepaid federal income taxes                                                                      5                  - 
                                                                                             ------              ------

         Total assets                                                                       $98,856             $90,966
                                                                                             ======              ======

         LIABILITIES AND SHAREHOLDER' EQUITY

Deposits                                                                                    $64,906             $61,956
Advances from the Federal Home Loan Bank                                                     17,019              12,519
Other borrowed money                                                                            150                  - 
Accrued interest payable                                                                        151                  94
Other liabilities                                                                               464                 258
Accrued federal income taxes                                                                     -                  197
Deferred federal income taxes                                                                   276                 117
                                                                                             ------              ------
         Total liabilities                                                                   82,966              75,141

Shareholders' equity
  Preferred stock - authorized 1,000,000 shares without par
    value; no shares issued                                                                      -                   - 
  Common shares - authorized 5,000,000 shares without par or
    stated value, 1,454,750 shares issued                                                        -                   - 
  Additional paid-in capital                                                                  7,705               7,705
  Retained earnings - restricted                                                              9,533               9,536
  Unrealized gains on securities designated as available for sale,
    net of related tax effects                                                                  208                 140
  Shares acquired by stock benefit plans                                                     (1,411)             (1,411)
  Less 9,400 shares of treasury stock - at cost                                                (145)               (145)
                                                                                             ------              ------
         Total shareholders' equity                                                          15,890              15,825
                                                                                             ------              ------

         Total liabilities and shareholders' equity                                         $98,856             $90,966
                                                                                             ======              ======
</TABLE>


                                        3


<PAGE>

<TABLE>

                            FFD Financial Corporation
<CAPTION>

                       CONSOLIDATED STATEMENTS OF EARNINGS

                    For the three months ended September 30,
                        (In thousands, except share data)


                                                                                               1998                1997
<S>                                                                                            <C>                  <C>
Interest income
  Loans                                                                                      $1,318              $1,090
  Mortgage-backed securities                                                                    238                 260
  Investment securities, interest-bearing
    deposits and other                                                                           69                 215
                                                                                              -----               -----
         Total interest income                                                                1,625               1,565

Interest expense
  Deposits                                                                                      752                 692
  Borrowings                                                                                    167                 121
                                                                                              -----               -----
         Total interest expense                                                                 919                 813
                                                                                              -----               -----

         Net interest income                                                                    706                 752

Other operating income                                                                           25                  12

General, administrative and other expense
  Employee compensation and benefits                                                            308                 206
  Occupancy and equipment                                                                        59                  36
  Federal deposit insurance premiums                                                              9                  12
  Franchise taxes                                                                                70                  40
  Other operating                                                                               124                 131
                                                                                              -----               -----
         Total general, administrative and other expense                                        570                 425
                                                                                              -----               -----

         Earnings before income taxes                                                           161                 339

Federal income taxes
  Current                                                                                       (69)                (13)
  Deferred                                                                                      124                 128
                                                                                              -----               -----
         Total federal income taxes                                                              55                 115
                                                                                              -----               -----

         NET EARNINGS                                                                        $  106              $  224
                                                                                              =====               =====

         EARNINGS PER SHARE
           Basic                                                                               $.08                $.17
                                                                                                ===                 ===

           Diluted                                                                             $.08                $.16
                                                                                                ===                 ===

</TABLE>



                                        4



<PAGE>

<TABLE>

                            FFD Financial Corporation
<CAPTION>

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                    For the three months ended September 30,
                                 (In thousands)


                                                                                               1998                1997
<S>                                                                                             <C>                 <C>
Net earnings                                                                                   $106                $224

Other comprehensive income, net of tax:
  Unrealized holding gains on securities during
    the period                                                                                   68                  32
                                                                                                ---                 ---

Comprehensive income                                                                           $174                $256
                                                                                                ===                 ===

</TABLE>



































                                        5



<PAGE>


<TABLE>
                            FFD Financial Corporation

<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    For the three months ended September 30,
                                 (In thousands)

                                                                                                 1998              1997
<S>                                                                                              <C>               <C>
Cash flows from operating activities:
  Net earnings for the period                                                                  $  106           $   224
  Adjustments to reconcile net earnings to net cash
  provided by (used in) operating activities:
    Amortization of discounts and premiums on loans,
      investments and mortgage-backed securities - net                                              9                 8
    Amortization of deferred loan origination fees                                                (25)              (21)
    Depreciation and amortization                                                                  32                19
    Gain on sale of mortgage loans                                                                 (1)               - 
    Loans originated for sale in the secondary market                                          (2,074)               - 
    Proceeds from sale of loans in the secondary market                                         1,660                - 
    Federal Home Loan Bank stock dividends                                                        (17)              (12)
    Increase (decrease) in cash due to changes in:
      Accrued interest receivable                                                                  48               (82)
      Prepaid expenses and other assets                                                            67               (41)
      Accrued interest payable                                                                     57                (7)
      Other liabilities                                                                           206               119
      Federal income taxes
        Current                                                                                  (202)             (118)
        Deferred                                                                                  124               128
                                                                                                -----            ------
         Net cash provided by (used in) operating activities                                      (10)              217

Cash flows provided by (used in) investing activities:
  Purchase of investment securities                                                            (1,500)          (11,175)
  Proceeds from maturities of investment securities                                               500            12,679
  Purchase of mortgage-backed securities                                                       (4,577)               - 
  Principal repayments on mortgage-backed securities                                              977               481
  Loan principal repayments                                                                     2,243             2,739
  Loan disbursements                                                                           (4,818)           (6,024)
  Purchase of office premises and equipment                                                       (66)             (191)
                                                                                                -----            ------
         Net cash used in investing activities                                                 (7,241)           (1,491)

Cash flows provided by (used in) financing activities:
  Net increase in deposit accounts                                                              2,950               190
  Proceeds from Federal Home Loan Bank advances                                                 4,500                - 
  Repayment of Federal Home Loan Bank advances                                                     -               (101)
  Proceeds from other borrowed money                                                              150                - 
  Dividends on common stock                                                                      (109)             (109)
  Purchase of treasury stock                                                                       -               (154)
                                                                                                -----            ------
         Net cash provided by (used in) financing activities                                    7,491              (174)
                                                                                                -----            ------

Net increase (decrease) in cash and cash equivalents                                              240            (1,448)

Cash and cash equivalents at beginning of period                                                1,633             4,080
                                                                                                -----            ------

Cash and cash equivalents at end of period                                                     $1,873           $ 2,632
                                                                                                =====            ======
</TABLE>


                                        6


<PAGE>

<TABLE>

                            FFD Financial Corporation
<CAPTION>

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                    For the three months ended September 30,
                                 (In thousands)

                                                                                                 1998              1997
<S>                                                                                              <C>                <C>
Supplemental  disclosure of cash flow  information:
  Cash paid during the period for:
    Federal income taxes                                                                         $133              $124
                                                                                                  ===               ===

    Interest on deposits and borrowings                                                          $862              $820
                                                                                                  ===               ===

Supplemental disclosure of noncash investing activities:
  Unrealized gains on securities designated as available for
    sale, net of related tax effects                                                             $ 68              $ 32
                                                                                                  ===               ===

</TABLE>


































                                        7



<PAGE>


                            FFD Financial Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

             For the three months ended September 30, 1998 and 1997


    1.   Basis of Presentation

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

    2.   Principles of Consolidation

    The accompanying  consolidated  financial statements include the accounts of
    the  Corporation  and First  Federal  Savings  Bank of Dover  (the  "Savings
    Bank"). All significant intercompany items have been eliminated.

    3.   Effects of Recent Accounting Pronouncements

    In June 1997, the Financial  Accounting  Standards Board (the "FASB") issued
    Statement of Financial  Accounting  Standards  ("SFAS") No. 130,  "Reporting
    Comprehensive  Income." SFAS No. 130 establishes standards for reporting and
    display of  comprehensive  income and its  components  (revenues,  expenses,
    gains and  losses) in a full set of  general-purpose  financial  statements.
    SFAS No. 130  requires  that all items that are  required  to be  recognized
    under accounting standards as components of comprehensive income be reported
    in a financial statement that is displayed with the same prominence as other
    financial  statements.  It does  not  require  a  specific  format  for that
    financial  statement  but  requires  that an  enterprise  display  an amount
    representing  total  comprehensive  income for the period in that  financial
    statement.

    SFAS  No.  130  requires  that an  enterprise  (a)  classify  items of other
    comprehensive  income  by their  nature  in a  financial  statement  and (b)
    display the accumulated  balance of other  comprehensive  income  separately
    from retained earnings and additional  paid-in capital in the equity section
    of a statement of financial  position.  SFAS No. 130 is effective for fiscal
    years  beginning  after  December  15, 1997.  Reclassification  of financial
    statements  for  earlier  periods  provided  for  comparative   purposes  is
    required.  Management  adopted  SFAS No.  130  effective  July 1,  1998,  as
    required, without material impact on the Corporation's financial statements.






                                        8



<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

             For the three months ended September 30, 1998 and 1997


    3.   Effects of Recent Accounting Pronouncements (continued)

    In June 1997, the FASB issued SFAS No. 131,  "Disclosures  about Segments of
    an Enterprise and Related  Information." SFAS No. 131 significantly  changes
    the way that public business  enterprises report information about operating
    segments in annual financial  statements and requires that those enterprises
    report selected  information about reportable  segments in interim financial
    reports issued to shareholders.  It also  establishes  standards for related
    disclosures  about  products  and  services,   geographic  areas  and  major
    customers.  SFAS No. 131 uses a "management  approach" to disclose financial
    and  descriptive  information  about the way that  management  organizes the
    segments within the enterprise for making operating  decisions and assessing
    performance.  For many  enterprises,  the  management  approach  will likely
    result in more segments being reported.  In addition,  SFAS No. 131 requires
    significantly  more information to be disclosed for each reportable  segment
    than is presently  being  reported in annual  financial  statements and also
    requires  that  selected   information  be  reported  in  interim  financial
    statements.  SFAS No. 131 is  effective  for fiscal  years  beginning  after
    December 15, 1997. SFAS No. 131 is not expected to have a material impact on
    the Corporation's financial statements.

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

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

    SFAS No. 133 is effective for fiscal years beginning after June 15, 1999. On
    adoption,   entities  are  permitted  to  transfer   held-to-maturity   debt
    securities to the  available-for-sale  or trading  category  without calling
    into question their intent to hold other debt  securities to maturity in the
    future.  SFAS No.  133 is not  expected  to have a  material  impact  on the
    Corporation's financial statements.









                                        9



<PAGE>


                            FFD Financial Corporation

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

             For the three months ended September 30, 1998 and 1997


    4.  Earnings Per Share

    Basic earnings per share is computed based upon the weighted-average  shares
    outstanding  during the period less shares in the FFD Financial  Corporation
    Employee  Stock  Ownership  Plan (the "ESOP") that are  unallocated  and not
    committed to be released. Weighted-average common shares deemed outstanding,
    which gives effect to 98,861 unallocated ESOP shares,  totaled 1,346,489 for
    the three month period ended  September  30, 1998.  Weighted-average  common
    shares deemed  outstanding,  which gives effect to 114,044  unallocated ESOP
    shares,  totaled  1,337,119  for the three month period ended  September 30,
    1997.

    Diluted  earnings  per share is computed  taking into  consideration  common
    shares  outstanding and dilutive  potential common shares to be issued under
    the Corporation's stock option plan.  Weighted-average  common shares deemed
    outstanding  for purposes of computing  diluted  earnings per share  totaled
    1,401,513 for the three month period ended September 30, 1998, and 1,370,106
    for the three month period ended September 30, 1997.































                                       10



<PAGE>


                            FFD Financial Corporation

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


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

The Corporation's total assets at September 30, 1998, amounted to $98.9 million,
a $7.9 million, or 8.7%, increase over the total at June 30, 1998. This increase
was funded primarily  through an increase in advances from the Federal Home Loan
Bank ("FHLB") of $4.5 million and growth in deposits of $3.0 million.

Investment securities totaled $4.7 million at September 30, 1998, an increase of
$1.0  million,  or  28.0%,  from the total at June 30,  1998,  as  purchases  of
securities totaling $1.5 million were partially offset by maturities of $500,000
during the period.

Mortgage-backed  securities  totaled $15.6 million at September 30, 1998, a $3.7
million,  or 30.9%,  increase  from the total at June 30,  1998.  This  increase
resulted  primarily from purchases of $4.6 million,  which were partially offset
by principal repayments totaling $1.0 million.

Loans  receivable and loans held for sale totaled $74.0 million at September 30,
1998, an increase of $3.0 million,  or 4.2%, over the June 30, 1998 total.  Loan
disbursements  during the period  totaled  $6.9  million,  which were  partially
offset by principal  repayments  of $2.2 million and loans sold in the secondary
market totaling $1.7 million.  Loan disbursements  during the three months ended
September 30, 1998, increased by $868,000, or 14.4%, compared to the origination
volume during the same period in 1997.

The allowance for loan losses  totaled  $270,000 at both  September 30, 1998 and
June 30,  1998,  which  represented  .4% of total loans and 275.5% and 329.3% of
nonperforming  loans at those respective dates.  Nonperforming loans amounted to
$98,000 and $82,000 at  September  30, 1998,  and June 30,  1998,  respectively.
Although management believes that its allowance for loan losses at September 30,
1998, is adequate based upon the available facts and circumstances, there can be
no assurance  that  additions to such  allowance will not be necessary in future
periods, which could adversely affect the Corporation's results of operations.

Deposits  totaled $64.9 million at September 30, 1998, a $3.0 million,  or 4.8%,
increase over June 30, 1998.  This increase  resulted  primarily  from growth in
deposits at the new branch office location, coupled with management's efforts to
obtain moderate growth through advertising and pricing strategies.

FHLB advances  totaled $17.0 million at September 30, 1998, an $4.5 million,  or
35.9%,  increase  over June 30, 1998.  Proceeds  from the increase in borrowings
were  primarily  used to partially  fund growth in the loan and  mortgage-backed
securities portfolios.

The Savings Bank is required to meet minimum  capital  standards  promulgated by
the Office of Thrift  Supervision  ("OTS").  At September 30, 1998,  the Savings
Bank's   regulatory   capital  was  well  in  excess  of  such  minimum  capital
requirements.





                                       11


<PAGE>


                            FFD Financial Corporation

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating Results for the Three Month Periods Ended September 30,
1998 and 1997

General

The  Corporation's  net  earnings  totaled  $106,000  for the three months ended
September 30, 1998, a decrease of $118,000,  or 52.7%,  from the net earnings of
$224,000 recorded in the comparable period in 1997. The decrease in net earnings
resulted  primarily  from a decrease  of $46,000 in net  interest  income and an
increase of $145,000 in general,  administrative and other expenses,  which were
partially  offset by an  increase  of $13,000 in other  income and a decrease of
$60,000 in the provision for federal income taxes.

Net Interest Income

Total interest income increased by $60,000,  or 3.8%, to a total of $1.6 million
for the three  months  ended  September  30,  1998,  compared to the three month
period ended September 30, 1997. Interest income on loans increased by $228,000,
or  20.9%,  due  primarily  to a $15.3  million  increase  in the  average  loan
portfolio balance  outstanding.  Interest income on  mortgage-backed  securities
decreased by $22,000,  or 8.5%, due primarily to a $1.2 million  decrease in the
average balance outstanding, coupled with a decrease in the yield earned on such
securities.  Interest  income  on  investment  securities  and  interest-bearing
deposits  decreased by $146,000,  or 67.9%, due primarily to an approximate $8.5
million decrease in the related  investment  balance and a decrease in the yield
earned on such investments.

Interest expense on deposits increased by $60,000, or 8.7%, for the three months
ended September 30, 1998,  compared to the same period in 1997, due primarily to
a $6.3 million increase in the average deposit portfolio balance outstanding.

Interest expense on borrowings  increased by $46,000, or 38.0%, due primarily to
a $6.5 million increase in the average balance of advances outstanding.

As a result of the foregoing  changes in interest  income and interest  expense,
net interest  income  decreased by $46,000,  or 6.1%, for the three months ended
September  30,  1998,  compared to the same period in 1997.  The  interest  rate
spread amounted to approximately  2.32% for the three months ended September 30,
1998,  compared to 2.31% for the comparable 1997 period,  while the net interest
margin decreased to approximately 3.02% in 1998, compared to 3.49% in 1997.











                                       12



<PAGE>


                            FFD Financial Corporation

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (CONTINUED)


Comparison of Operating  Results for the Three Month Periods Ended September 30,
1998 and 1997 (continued)

Provision for Losses on Loans

A  provision  for  losses on loans is  charged  to  earnings  to bring the total
allowance for losses on loans to a level  considered  appropriate  by management
based on historical loss experience, the volume and type of lending conducted by
the  Savings  Bank,  the status of past due  principal  and  interest  payments,
general  economic  conditions,  particularly  as such  conditions  relate to the
Savings Bank's market area, and other factors related to the  collectibility  of
the Savings  Bank's loan  portfolio.  As a result of such  analysis,  management
concluded  that the allowance for loan losses was adequate and therefore did not
record a  provision  for losses on loans  during the three month  periods  ended
September  30,  1998 and  1997.  There  can be no  assurance  that the loan loss
allowance of the Savings Bank will be adequate to cover losses on  nonperforming
assets in the future.

Other Operating Income

Other operating  income totaled $25,000 for the three months ended September 30,
1998,  an  increase  of  $13,000  over the 1997  total.  Other  income  consists
primarily of fees generated from ATM transactions, late charges on loans, safety
deposit box rentals and negotiable order of withdrawal ("NOW") account fees.

General, Administrative and Other Expense

General,  administrative and other expense increased by $145,000,  or 34.1%, for
the three months ended September 30, 1998,  compared to the same period in 1997.
The increase in general,  administrative  and other expense  resulted  primarily
from an increase of $23,000,  or 63.9%, in occupancy and equipment  expense,  as
the Company  opened a new branch  office in New  Philadelphia,  Ohio in November
1997, an increase of $102,000,  or 49.5%, in compensation  expense as additional
personnel  were hired to staff the new branch  coupled with an increase in stock
benefit plan expense and an increase in Ohio franchise tax totaling $30,000,  or
75.2%, as the Company's equity has increased.

Federal Income Taxes

The Corporation  recorded a provision for federal income taxes totaling  $55,000
for the three months ended September 30, 1998, a decrease of $60,000,  or 52.2%,
from the same period in 1997. The decrease  resulted  primarily from a $178,000,
or 52.5%,  decrease in earnings before taxes. The effective tax rates were 34.2%
and 33.9% for the three months ended September 30, 1998 and 1997, respectively.






                                       13



<PAGE>


                            FFD Financial Corporation

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS (CONTINUED)


Year 2000 Compliance Matters

As with all providers of financial  services,  the Savings Bank's operations are
heavily  dependent  on  information  technology  systems.  The  Savings  Bank is
addressing  the potential  problems  associated  with the  possibility  that the
computers that control or operate the Bank's  information  technology system and
infrastructure  may not be  programmed to read  four-digit  date codes and, upon
arrival of the year 2000,  may  recognize  the  two-digit  code "00" as the year
1900, causing systems to fail to function or to generate erroneous data.

As part of the awareness and assessment phases of its action plan related to the
Year 2000 problem, management identified the operating systems that it considers
critical to the on-going  operations  of the Savings  Bank.  The Savings Bank is
working with companies that supply or service its information technology systems
to remedy any year 2000 problems.

Of the systems that the Savings Bank  identified as  mission-critical,  the most
significant is the on-line core account processing system that is performed by a
third party service provider,  Intrieve, Inc. The service provider is converting
its hardware to a new Year 2000 compliant system.  The Savings Bank's conversion
to this new system will be completed during the fourth calendar quarter of 1998.
The service provider successfully performed Year 2000 proxy testing with several
of its larger users during early October 1998.  The Savings Bank is scheduled to
perform final  customer  testing,  which is designed to test the Savings  Bank's
unique equipment  configuration and communications  link to the service provider
before December 31, 1998.

The Savings Bank has developed a contingency  plan in case the  mission-critical
systems are not  successfully  renovated in a timely  manner or if they actually
fail at Year 2000 critical dates.  The contingency  plan states that the Savings
Bank  deems the  likelihood  of  failure of the  service  provider's  efforts to
renovate Year 2000 changes to the on-line core account  processing  system to be
remote;  however,  a more likely scenario is that the service  provider's system
will be down for  several  days or weeks upon  arrival  of Year 2000.  The plan,
therefore, primarily addresses action to deal with the latter possibility rather
than with a catastrophic  event. The Savings Bank does not consider  contingency
planning to be a static process;  therefore, the plan will be amended to address
a catastrophic event if testing results indicate greater concern.

Management  of the Savings Bank has  developed an estimate of expenses  that are
reasonably  likely to be incurred by the Savings  Bank in  connection  with this
issue; however, the Savings Bank does not expect to incur significant expense to
implement the necessary corrective measures. No assurance can be given, however,
that  significant  expense will not be incurred in future periods.  In the event
that the Savings Bank is ultimately  required to purchase  replacement  computer
systems,  programs  and  equipment,  or incur  substantial  expense  to make the
Savings Bank's current systems,  programs and equipment Year 2000 compliant, the
Savings Bank's net earnings and financial condition could be adversely affected.

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

                                       14



<PAGE>


                            FFD Financial Corporation

                                     PART II


ITEM 1.  Legal Proceedings

         Not applicable


ITEM 2.  Changes in Securities and Use of Proceeds

         Not applicable


ITEM 3.  Defaults Upon Senior Securities

         Not applicable


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

          On  October  13,  1998,  the  Annual  Meeting  of  the   Corporation's
          Shareholders  was  held.  Each of the four  directors  nominated  were
          elected to terms expiring in 1998 by the following votes:

          Stephen G. Clinton         For:  1,204,767         Withheld:  7,400
          Robert R. Gerber           For:  1,208,967         Withheld:  3,200
          Richard J. Herzig          For:  1,207,667         Withheld:  4,500
          Enos L. Loader             For:  1,198,394         Withheld:  3,270

          One other  matter was  submitted  to the  shareholders,  for which the
          following votes were cast:

          Ratification  of the  appointment of Grant Thornton LLP as independent
          auditors of the Corporation for the fiscal year ended June 30, 1999.

            For: 1,198,394                    Against: 10,648  
            Abstain: 3,125                    Broker Non-votes: none


ITEM 5.  Other Information

         None

ITEM 6.  Exhibits and Reports on Form 8-K

         Reports on Form 8-K:           None.

         Exhibits:
             27.1:                      Financial data schedule for the three
                                        months ended September 30, 1998.

             27.2:                      Restated Financial data schedule for the
                                        three months ended  September 30, 1997.


                                       15


<PAGE>


                            FFD Financial Corporation

                                   SIGNATURES


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





Date:    November 12, 1998               By:  /s/Robert R. Gerber            
     ------------------------                 -------------------------------
                                                Robert R. Gerber
                                                President and
                                                Principal Financial Officer




Date:    November 12, 1998               By:  /s/Charles A. Bradley          
     ------------------------                 -------------------------------
                                                Charles A. Bradley
                                                Treasurer






























                                       16