UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


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

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


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

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

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

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


            Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for past 90 days.        (1)       Yes x No o
                                             (2)       Yes x No o



            The Registrant had 2,167,627 shares of Common Stock outstanding as
of July 31, 1999.







<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION                                                         PAGE
<S>                                                                                    <C>
            ITEM 1.     FINANCIAL STATEMENTS
                        CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999 AND
                        DECEMBER 31, 1998                                               1

                        CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS
                        ENDED JUNE 30, 1999 AND 1998                                    2

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

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

                        CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX
                        MONTHS ENDED JUNE 30, 1999 AND 1998                             5

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

            ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     18

PART II - OTHER INFORMATION

            ITEM 1.     LEGAL PROCEEDINGS                                              19
            ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS                      19
            ITEM 3.     DEFAULTS UPON SENIOR SECURITIES                                19
            ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS            19
            ITEM 5.     OTHER INFORMATION                                              19
            ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K                               19
            SIGNATURES                                                                 21



</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. Such forward-looking statements are subject to
risk and uncertainties which could cause actual results to differ materially
from those projected. Such risks and uncertainties include potential change in
interest rates, competitive factors in the financial services industry, general
economic conditions, the effect of new legislation and other risks detailed in
documents filed by the Company with the Securities and Exchange Commission from
time to time.


                                      -0-


<PAGE>


PART I. -- FINANCIAL INFORMATION

                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                    AS OF JUNE 30, 1999 AND DECEMBER 31, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                         JUNE 30,     DECEMBER 31,
                                                           1999          1998
                                                        ---------      ---------
                                                       (UNAUDITED)
<S>                                                     <C>            <C>
ASSETS
  Cash and due from banks                               $   5,485      $   5,758
  Interest-bearing demand deposits                            817         12,580
                                                        ---------      ---------
       Total cash and cash equivalents                      6,302         18,338
  Investment securities - available for sale               16,662         18,033
  Mortgage loans held for sale                              3,541          5,246
  Loans                                                   254,448        232,884
       Allowance for loan losses                           (1,444)        (1,256)
                                                        ---------      ---------
          Net loans                                       253,004        231,628
  Premises and equipment                                    8,457          8,124
  Federal Home Loan Bank of Chicago Stock                   2,262          1,971
  Foreclosed real estate                                      118            483
  Other assets                                              6,880          3,451
                                                        ---------      ---------
               Total assets                             $ 297,226      $ 287,274
                                                        =========      =========
LIABILITIES AND EQUITY CAPITAL
Liabilities
  Deposits                                              $ 213,867      $ 208,097
  Federal Home Loan Bank advances                          45,241         39,410
  Advances by borrowers for taxes and insurance               639            601
  Other liabilities                                         1,582          3,146
                                                        ---------      ---------
               Total liabilities                          261,329        251,254
                                                        ---------      ---------
Equity Capital
  Preferred stock, $.01 par value
       Authorized and unissued - 1,000,000 shares              --             --
  Common stock, $.01 par value; 8,000,000 shares
       authorized 2,817,500 shares issued and
       outstanding                                             28             28
  Paid-in-capital                                          27,480         27,427
  Retained earnings                                        20,851         20,198
  Accumulated other comprehensive income                     (199)           (48)
  Less:
       Treasury shares, 649,873 and 583,083               (10,426)        (9,404)
       Unearned incentive plan shares, 50,606
       and 64,709 shares                                     (710)          (893)

       Unearned employee stock ownership plan
       shares,112,700 and 128,800 shares                   (1,127)        (1,288)
                                                        ---------      ---------
               Total equity capital                        35,897         36,020
                                                        ---------      ---------
               Total liabilities and equity capital     $ 297,226      $ 287,274
                                                        =========      =========

</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.




                                      -1-
<PAGE>






                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                         CONSOLIDATED INCOME STATEMENTS

<TABLE>
<CAPTION>
                                                          FOR THE SIX MONTHS
                                                            ENDED JUNE 30,
                                                         1999            1998
                                                       ----------     ----------
                                                      (UNAUDITED AND IN THOUSANDS
                                                         EXCEPT SHARE DATA)
<S>                                                    <C>            <C>
Interest income:
  Interest on loans                                    $    9,791     $    9,535
  Interest on investments                                     864            936
                                                       ----------     ----------
       Total interest income                               10,655         10,471
Interest expense:
  Interest on savings deposits                              4,581          4,816
  Interest on borrowings                                    1,202          1,022
                                                       ----------     ----------
       Total interest expense                               5,783          5,838
                                                       ----------     ----------
           Net interest income                              4,872          4,633
  Provision for loan losses                                   240            225
                                                       ----------     ----------
           Net interest income after provision for
                  loan losses                               4,632          4,408
  Other  income:
  Net realized gains on sales of available
      for sale securities                                       0              2
  Net gains on loan sales                                     223            474
  Other operating income                                      528            424
                                                       ----------     ----------
       Total other income                                     751            900
                                                       ----------     ----------

Other expense:
  Salaries and employee benefits                            2,181          2,099
  Net occupancy and equipment expenses                        831            529
  Deposit insurance expense                                    93             98
  Data processing fees                                        301            243
  Other operating expense                                     909            795
                                                       ----------     ----------
     Total other expense                                    4,315          3,764
                                                       ----------     ----------
Income before income tax                                    1,068          1,544
  Income tax expense                                          415            599
                                                       ----------     ----------
Net income                                             $      653     $      945
                                                       ==========     ==========

Basic earnings per share                               $     0.33     $     0.41
  Weighted average shares outstanding                   2,009,159      2,304,304

Diluted earnings per share                             $     0.31     $     0.38
  Weighted average shares outstanding                   2,112,127      2,490,247
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



                                      -2-
<PAGE>

                  CITIZENS FIRST FINANCIAL CORP. AND SUBSIDIARY
                         CONSOLIDATED INCOME STATEMENTS

<TABLE>
<CAPTION>
                                                         FOR THE THREE MONTHS
                                                            ENDED JUNE 30,
                                                         1999          1998
                                                         ----          ----
                                                     (UNAUDITED AND IN THOUSANDS
                                                         EXCEPT SHARE DATA)

<S>                                                   <C>           <C>
Interest income:
  Interest on loans                                   $    5,034    $    4,724
  Interest on investments                                    362           557
                                                      ----------    ----------
       Total interest income                               5,396         5,281
Interest expense:
  Interest on savings deposits                             2,306         2,414
  Interest on borrowings                                     594           527
                                                      ----------    ----------
       Total interest expense                              2,900         2,941
                                                      ----------    ----------
           Net interest income                             2,496         2,340
  Provision for loan losses                                  120           120
                                                      ----------    ----------
           Net interest income after provision for
                  loan losses                              2,376         2,220
  Other  income:
  Net realized gains on sales of available
      for sale securities                                      0             8
  Net gains on loan sales                                     63           222
  Other operating income                                     256           237
                                                      ----------    ----------
       Total other income                                    319           467
                                                      ----------    ----------

Other expense:
  Salaries and employee benefits                           1,030         1,084
  Net occupancy and equipment expenses                       446           267
  Deposit insurance                                           31            49
  Data processing fees                                       149           116
  Other operating expense                                    529           460
                                                      ----------    ----------
     Total other expense                                   2,185         1,976
                                                      ----------    ----------
Income before income tax                                     510           711
  Income tax expense                                         198           276
                                                      ----------    ----------
Net income                                            $      312    $      435
                                                      ==========    ==========

Basic earnings per share                              $     0.16    $     0.19
  Weighted average shares outstanding                  2,003,225     2,307,747

Diluted earnings per share                            $     0.15    $     0.17
  Weighted average shares outstanding                  2,093,275     2,487,241
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.





                                      -3-
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                           FOR THE SIX             FOR THE SIX
                                                                                           MONTHS ENDED            MONTHS ENDED
                                                                                           JUNE 30, 1999           JUNE 30, 1998
                                                                                           -------------           -------------
                                                                                                (Unaudited and in thousands)
                                                                                           -------------------------------------

<S>                                                                                            <C>                     <C>
Net Income                                                                                      $653                   $945

Other comprehensive income (loss), net of tax
  Unrealized gains (losses) on securities:
       Unrealized holding gains (losses) arising during the period                              (151)                    27
             Less: Reclassification adjustment for
             gains (losses) included in net income                                                 0                      2
                                                                                               -----                   ----

                                                                                                (151)                    25
                                                                                               -----                   ----
Comprehensive income                                                                            $502                   $970
                                                                                               =====                   ====
</TABLE>









<TABLE>
<CAPTION>
                                                                                           FOR THE THREE             FOR THE THREE
                                                                                           MONTHS ENDED              MONTHS ENDED
                                                                                           JUNE 30, 1999             JUNE 30, 1998
                                                                                           -------------             -------------
                                                                                                (Unaudited and in thousands)
                                                                                           ---------------------------------------


<S>                                                                                           <C>                       <C>
Net Income                                                                                     $312                     $435

Other comprehensive income (loss), net of tax
  Unrealized gains (losses) on securities:
       Unrealized holding gains (losses) arising during the period                             (128)                      32
             Less: Reclassification adjustment for
             gains (losses) included in net income                                                0                        6
                                                                                              -----                     ----

                                                                                               (128)                      26
                                                                                              -----                     ----
Comprehensive income                                                                           $184                     $461
                                                                                              =====                     ====
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.




                                      -4-
<PAGE>





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

<TABLE>
<CAPTION>
                                                                       FOR THE SIX MONTHS
                                                                         ENDED JUNE 30,
                                                                       1999           1998
                                                                       ----           ----
                                                                  (UNAUDITED AND IN THOUSANDS)
<S>                                                                    <C>          <C>
OPERATING ACTIVITIES
  Net income                                                           $    653     $    945
  Adjustments to reconcile net income to net
       cash (used) provided by operating activities:
  Provision for loan losses                                                 240          225
  Investment securities gains                                                 0           (2)
  ESOP compensation expense                                                 235          332
  Incentive plan compensation expense                                       163          139
  Investment securities amortization, net                                    31           31
  Net gains on sale of loan                                                (223)        (474)
  Net losses on sale of foreclosed property                                   8           35
  Depreciation                                                              571          299
  Loans originated for sale                                             (15,134)     (34,220)
  Proceeds from sale of loans                                            16,840       34,461
  Change in:
       Other liabilities                                                 (1,468)         475
       Prepaid expenses and other assets                                 (3,429)      (1,687)
                                                                       --------     --------
  Net cash (used) provided by operating activities                       (1,513)         559
INVESTING ACTIVITIES
  Purchase of securities available for sale                              (2,005)      (6,010)
  Proceeds from maturities and principal paydowns on
       securities available for sale                                      3,098        2,668
  Proceeds from sales of securities available for sale                        0        4,352
  Purchase of Federal Home Loan Bank stock                                 (291)           0
  Proceeds from redemption of Federal Home Loan Bank stock                    0          619
  Other net changes in loans                                            (21,404)       5,883
  Proceeds from sale of foreclosed property                                 367          393
  Purchase of premises and equipment                                       (904)        (155)
                                                                       --------     --------
       Net cash (used) provided by investing activities                 (21,139)       7,750
</TABLE>



                                      -5-
<PAGE>





<TABLE>
<S>                                                                  <C>          <C>
FINANCING ACTIVITIES
  Net change in deposits                                             5,770        4,124
  Proceeds from FHLB advances                                       13,000        6,000
  Repayment of FHLB advances                                        (7,169)      (4,367)
  Purchase of treasury stock shares                                 (1,069)        (193)
  Exercise of stock options                                             46            0
  Net changes in advances by borrowers for taxes and insurance          38          (10)
                                                                  --------     --------
  Net cash provided by financing activities                         10,616        5,554
  Net change in cash and cash equivalents                          (12,036)      13,863
  Cash and cash equivalents,beginning of period                     18,338        7,939
                                                                  --------     --------
  Cash and cash equivalents, end of period                        $  6,302     $ 21,802
                                                                  ========     ========
  Additional cashflows and supplementary information:
    Interest paid                                                 $  5,709     $  5,521
    Income tax paid                                                    874          582
    Loans transferred to foreclosed property                            10          400
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.



                                      -6-
<PAGE>




                         CITIZENS FIRST FINANCIAL CORP.

Notes to Consolidated Financial Statements

1.          Background Information
            ----------------------

            Citizens First Financial Corp. (the "Company") was incorporated in
January, 1996 and on May 1, 1996 acquired all of the outstanding shares of
common stock of Citizens Savings Bank (the "Bank") upon the Bank's conversion
from a federally chartered mutual savings bank to a federally chartered stock
savings bank. The Company purchased 100% of the outstanding capital stock of the
Bank using 50% of the net proceeds from the Company's initial stock offering
which was completed on May 1, 1996. In April 1999, the Bank was converted from a
federally chartered savings bank to an Illinois state savings bank.
            The Company sold 2,817,500 shares of common stock in the initial
offering at $10.00 per share, including 225,400 shares purchased by the Bank's
Employee Stock Option Plan (the "ESOP"). The ESOP shares were acquired by the
Bank with proceeds from a Company loan totaling $2,254,000. The net proceeds of
the offering totaled $27,012,000; $28,175,000 less $1,163,000 in underwriting
commissions and other expenses. The Company's stock is traded on the American
Stock Exchange under the symbol "CBK".

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

            The accompanying unaudited consolidated financial statements have
been prepared in accordance with Form 10-Q instructions and Rule 10-01 of
Regulation S-X, and in the opinion of management reflects all adjustments
necessary to present a fair statement of the financial position as of June 30,
1999 and December 31, 1998, the results of operations for the six and three
months ended June 30, 1999 and 1998, comprehensive income for the six and three
months ended June 30, 1999 and 1998 and the cash flows for the six months ended
June 30, 1999 and 1998. All adjustments to the financial statements were of a
normal recurring nature. These results have been determined on the basis of
generally accepted accounting principles. The results of operations for the six
months ended June 30, 1999 are not necessarily indicative of the results to be
expected for the entire fiscal year.
            The consolidated financial statements are those of the Company and
the Bank. These consolidated financial statements should be read in conjunction
with the audited financial statements and notes thereto, dated January 22, 1999,
included in the Company's 1998 Annual Report to Shareholders.

3.          Earnings Per Share
            ------------------

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




                                      -7-
<PAGE>


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

GENERAL

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

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


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

Total assets increased from $287.3 million at December 31, 1998 to $297.2
million at June 30, 1999. The $9.9 million or 3.4% increase was due to the
increase in loans which was funded by decreased interest-bearing deposits and
increased deposits and borrowings from the Federal Home Loan Bank of Chicago
(the "FHLB").

Cash and cash equivalents decreased from $18.3 million at December 31, 1998 to
$6.3 million at June 30, 1999, a decrease of $12.0 million or 65.6%. This
decrease was due to these funds being used for the origination of loans.

Investment securities decreased from $18.0 million at December 31, 1998 to $16.7
million at June 30, 1999, a decrease of $1.3 million or 7.2%. The decrease was
due to maturities and repayments during the first half of 1999, which were
reinvested in loans.

Loans, net of allowance for loan losses and including loans held for sale,
increased from $236.9 million at December 31, 1998 to $256.5 million at June
30,1999, an increase of $19.6 million or 8.3%. The increase was funded by
decreased cash and cash equivalents and increased deposits and borrowings from
the FHLB. The growth in loans was primarily attributable to increases in
commercial loans, including agricultural loans, and nonresidential property and
land loans.

The allowance for losses increased from $1,256,000 at December 31, 1998 to
$1,444,000 at June 30, 1999, an increase of $188,000 or 15.0%. The ratio of the
Company's allowance for loan losses to total loans was 0.57% at June 30, 1999
and 0.54% at December 31, 1998. The ratios of the Company's allowance for loan
losses to total nonperforming loans were 532.8% and 331.5% at June 30, 1999 and
December 31, 1998, respectively. Company management performs ongoing reviews of
the loan portfolio in order to identify nonperforming loans and potential
problem loans and to evaluate the adequacy of the allowance for loan losses. In
performing its review, management classifies nonperforming and potential problem
loans as either SUBSTANDARD,



                                      -8-
<PAGE>

DOUBTFUL, LOSS or SPECIAL MENTION loans. A loan is considered SUBSTANDARD if it
is inadequately protected by the current net worth and paying capacity of the
borrower or of the collateral pledged, if any. SUBSTANDARD loans include those
characterized by the distinct possibility that the Company will sustain some
loss if the deficiencies are not corrected. Loans classified as DOUBTFUL have
all of the weaknesses inherent in those classified as substandard with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts and conditions, highly
questionable and improbable. Loans classified as LOSS are those are those
considered uncollectible and of such little value that their continuance as
loans without the establishment of a specific loss reserve is not warranted.
Loans which do not currently expose the Company to sufficient risk to warrant
classification in any one of the categories described above but possesses
weaknesses are classified as SPECIAL MENTION. The total of internally classified
loans was $264,000 and $305,000 at June 30, 1999 and December 31, 1998,
respectively.

Other assets increased from $3.5 million at December 31, 1998 to $6.9 million at
June 30, 1999, an increase of $3.4 million or 97.1%. The increase was primarily
due to a $2 million investment in a real estate venture by the Bank's service
corporation.

Deposits increased from $208.1 million at December 31, 1998 to $213.9 million at
June 30, 1999, an increase of $5.8 million or 2.8%. Checking accounts, savings
accounts and certificates of deposit increased by $2.6 million, $1.2 million and
$2.0 million, respectively.

Borrowings from the FHLB increased from $39.4 million at December 31, 1998 to
$45.2 million at June 30, 1999, an increase of $5.8 million or 14.7%. Proceeds
from the borrowings were used to fund the origination of loans.

Other liabilities decreased from $3.1 million at December 31, 1998 to $1.6
million at June 30, 1999, a decrease of $1.5 million or 48.4% primarily because
of decreases in the accrued principal and interest payments payable to owners of
serviced loans and reduced income tax liability.

Total stockholders' equity capital decreased by $123,000 or 0.3%, from
$36,020,000 at December 31, 1998 to $35,897,000 at June 30, 1999. The decrease
was caused by the repurchase of 70,546 shares of the Company's stock, offset by
earnings of the Company during the six months ended June 30, 1999 and the
allocation of shares in the Company's stock-based compensation plans.


COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1999 and JUNE
30, 1998

GENERAL
Net income for the six months ended June 30, 1999 decreased by $292,000 from
$945,000 for the six months ended June 30, 1998 to $653,000 for the six months
ended June 30, 1999. The decrease was primarily due to lower net gains on loan
sales and increased net occupancy and equipment expenses due to the accelerated
depreciation of computer equipment that will be replaced as part of a computer
conversion in the third quarter of 1999.




                                      -9-
<PAGE>

INTEREST INCOME
Interest on loans increased by $256,000 or 2.7%, from $9,535,000 for the six
months ended June 30, 1998 to $9,791,000 for the six ended June 30, 1999.
Interest on loans increased because of a higher average balance of loans
outstanding.

Interest on investments decreased from $936,000 for the six months ended June
30, 1998 to $864,000 for the six months ended June 30, 1999, a decrease of
$72,000 or 7.7%. The decrease was due to a lower average balances of
interest-bearing demand deposits in 1999.

INTEREST EXPENSE
Interest on savings deposits decreased by $235,000 or 4.9%, from $4,816,000 for
the six months ended June 30, 1998 to $4,581,000 for the six months ended June
30, 1999. The decrease was primarily caused by a 47.3 basis point decrease in
the average interest rate paid on deposits, partially offset by an increase in
average balance of deposits.

The interest on borrowings increased by $180,000 or 17.6%, from $1,022,000 for
the six months ended June 30, 1998 to $1,202,000 for the six months ended June
30, 1999 as a result of increased average borrowings from the FHLB.

PROVISION FOR LOAN LOSSES
The provision for loan losses increased from $225,000 for the six months ended
June 30, 1998 to $240,000 for the six months ended June 30, 1999 an increase of
$15,000 or 6.7%. The provision for both periods reflects management's analysis
of the Company's loan portfolio based on information which is currently
available to it at such time. In particular, management considers the level of
non-performing loans and potential problem loans. While management believes that
the allowance for loan losses is sufficient based on information currently
available, no assurances can be made that future events or conditions or
regulatory directives will not result in increased provisions for loan losses or
additions to the Bank's allowance for losses which may adversely affect net
income.

OTHER INCOME
Total other income decreased by $149,000 or 16.6%, from $900,000 for the six
months ended June 30, 1998 to $751,000 for the six months ended June 30, 1999.
Net gains on loan sales decreased by $251,000 or 53.0%, from $474,000 for the
six months ended June 30, 1998 to $223,000 for the six months ended June 30,
1999, because of a decrease in loan sales in the six months ended June 30, 1999.
Checking account fees and branch and ATM service fees increased by $62,000 and
$24,000, respectively, for the six months ended June 30,1999 when compared to
the six months ended June 30, 1998.

OTHER EXPENSES
Total other expenses increased by $551,000 or 14.6%, from $3,764,000 for the six
months ended June 30, 1998 to $4,315,000 for the six months ended June 30, 1999.
Salaries and benefits increased by $82,000 or 3.9%, from $2,099,000 for the six
months ended June 30, 1998 to $2,181,000 for the six months ended June 30, 1999.
The majority of the increase was due to a lower standard cost allocation of loan
fees against salaries and benefits in 1999 as a result of reduced loan
originations. Net occupancy expenses increased by $302,000 or 57.1%, from
$529,000 for the six months ended June 30, 1998 to $831,000 for the six months
ended June 30, 1999, because of accelerated depreciation of computer equipment
that will be replaced in a computer conversion in the third quarter of 1999.




                                      -10-
<PAGE>

INCOME TAX EXPENSE
Total income tax expense was $415,000 for the six months ended June 30, 1999,
compared to $599,000 for the six months ended June 30, 1998. The decrease is
attributable to lower taxable income for the six months ended June 30, 1999. The
effective tax rates for the six months ended June 30, 1999 and 1998 were 38.9%
and 38.8%, respectively.


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

GENERAL
Net income for the three months ended June 30, 1999 decreased by $123,000 from
$435,000 for the three months ended June 30, 1998 to $312,000 for the three
months ended June 30, 1999. The decrease was primarily due to lower net gains on
loan sales and increased net occupancy and equipment expenses due to the
accelerated depreciation of computer equipment that will be replaced as part of
a computer conversion in the third quarter of 1999.


INTEREST INCOME
Interest on loans increased by $310,000 or 6.6%, from $4,724,000 for the three
months ended June 30, 1998 to $5,034,000 for the three ended June 30, 1999.
Interest on loans increased because of a higher average balance of outstanding
loans.

Interest on investments decreased from $557,000 for the three months ended June
30, 1998 to $362,000 for the three months ended June 30, 1999, a decrease of
$195,000 or 35.0%. The decrease was due to a lower average balances of
interest-bearing demand deposits in 1999.

INTEREST EXPENSE
Interest on savings deposits decreased by $108,000 or 4.5%, from $2,414,000 for
the three months ended June 30, 1998 to $2,306,000 for the three months ended
June 30, 1999. The decrease was primarily caused by a decrease in the average
interest rate paid on deposits, partially offset by an increase in average
balance of deposits.

The interest on borrowings increased by $67,000 or 12.7%, from $527,000 for the
three months ended June 30, 1998 to $594,000 for the three months ended June 30,
1999 as a result of increased average borrowings from the FHLB.

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



                                      -11-
<PAGE>

OTHER INCOME
Total other income decreased by $148,000 or 31.7%, from $467,000 for the three
months ended June 30, 1998 to $319,000 for the three months ended June 30, 1999.
Net gains on loan sales decreased by $159,000 or 71.6%, from $222,000 for the
three months ended June 30, 1998 to $63,000 for the three months ended June 30,
1999, because of a decrease in loan sales in the three months ended June 30,
1999.

OTHER EXPENSES
Total other expenses increased by $209,000 or 10.6%, from $1,976,000 for the
three months ended June 30, 1998 to $2,185,000 for the three months ended June
30, 1999. Salaries and benefits decreased by $54,000 or 5.0%, from $1,084,000
for the three months ended June 30, 1998 to $1,030,000 for the three months
ended June 30, 1999. The decrease was due to lower expenses related to stock and
cash incentive programs for officers and employees. Net occupancy expenses
increased by $179,000 or 67.0%, from $267,000 for the three months ended June
30, 1998 to $446,000 for the three months ended June 30, 1999, because of
accelerated depreciation of computer equipment that will be replaced in a
computer conversion in the third quarter of 1999.


INCOME TAX EXPENSE
Total income tax expense was $198,000 for the three months ended June 30, 1999,
compared to $276,000 for the three months ended June 30, 1998. The decrease is
attributable to lower taxable income in the second quarter of 1999. The
effective tax rate was 38.8% for both the three months ended June 30, 1999 and
1998.

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 June 30, 1999 and 1998, the Bank's liquidity ratio was 9.6% and
14.6%, respectively. Management maintains its liquid assets in accordance with
regulatory requirements.

            At June 30, 1999, the Bank exceeded all of its regulatory capital
requirements with Tier 1 core capital of $28.2 million, or 9.77% of adjusted
assets, which is above the required level of $11.6 million or 4.0%; and
risk-based capital of $29.5 million or 15.1% of risk-weighted assets, which is
above the required level of $15.7 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 June 30,
1999 cash and interest-bearing deposits totaled $6.3 million.

            The Company has other sources of liquidity if a need for additional
funds arises, including FHLB advances. At June 30, 1999, the Bank had
outstanding advances with the FHLB of $45.2



                                      -12-
<PAGE>

million. The FHLB maintains two limitations on the availability based on FHLB
stock ownership and total assets. The Bank currently meets the stock limitation;
however, this limit may be raised by the purchase of additional FHLB stock.
Based on the total assets limitations, the Bank may increase its borrowings with
the FHLB by $58.8 million. Depending upon market conditions and the pricing of
deposit products and FHLB borrowings, the Bank may utilize FHLB advances to fund
loan originations.

            At June 30, 1999 the Bank had commitments to originate loans and
unused lines of credit totaling $28.1 million. Certificate accounts which are
scheduled to mature in one year or less from June 30, 1999 totaled $97.1
million. The Bank anticipates that it will have sufficient funds to meet its
current loan commitments and maturing deposits.




                                      -13-
<PAGE>


YEAR 2000

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

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

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

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

Inventory and testing of the Company's computer equipment was conducted during
the fourth quarter of 1998. New equipment will be obtained to replace equipment
that is not found to be Year 2000 compliant.

The Company's primary lending and savings systems have been maintained by an
independent data center. These systems have been identified as being mission
critical to the Company. The data center currently used by the Company has
completed the revision of a majority of their programs. Testing of these
programs began in the third quarter of 1998 by representatives of the data
center and their client advisory group utilizing tests that we developed by the
group. The Company participated in the development of this test plan. No
material deficiencies were noted as a result of this testing. On January 28,
1999, the Company entered into a contract with a new provider for the Company's
primary lending and savings systems. The Company's decision to convert was not
based on Year 2000 concerns it had with its current provider, but rather, on the
overall benefits of the new provider's products, service and pricing.

The Company is converting to the new system in the third quarter of 1999.
Immediately upon conversion, the Company will begin testing the new systems to
ensure that they are Year 2000 compliant.

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



                                      -14-
<PAGE>

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

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

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

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



                                      -15-
<PAGE>



CURRENT ACCOUNTING ISSUES

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

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

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

            Statement No. 133 will be effective for all fiscal years beginning
after June 15, 1999. The Statement may not be applied retroactively to financial
statement of prior periods. The adoption of the Statement would have no material
impact on the Company's financial condition or results of operation.

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

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

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

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

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




                                      -16-
<PAGE>

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

REPORTING THE COSTS OF START-UP ACTIVITIES

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

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


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



                                      -17-
<PAGE>



ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Sources of market risk include interest rate risk, foreign currency exchange
rate risk, commodity price risk and equity price risk. The Company is only
subject to interest rate risk. The Company purchased no financial instruments
for trading purposes during the three months ended March 31, 1999 or 1998.

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

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

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











                                      -18-
<PAGE>


25

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
                    a.   The Company's Annual Meeting of Shareholders was held
                         on April 26, 1999.
                    b.   See Item 4-c below.
                    c.   At such meeting, the shareholders approved the
                         following matters:

                            1.  The election of the following individuals as
                                Directors:

                                            Votes For   Votes Withheld   Term
                                            ---------   --------------   ----
                    C. William Landefeld    1,977,117   49,314           3 years
                    Jeffrey M. Solberg      1,966,167   60,234           3 years

                    Additionally, the following individuals are the other
                    Directors whose terms of office as a Director continued
                    after the meeting:

                                Dean J. Broquard
                                Paul J. Hoffman
                                Ronald C. Wells

                            2.  The ratification of Olive LLP as independent
                                auditors for the Company for the fiscal year
                                ending December 31, 1999, as reflected by
                                1,969,354 votes for, 26,012 votes against,
                                31,065 abstentions and no broker non-votes.

                            3.  Proposal to approve the eliminations of
                                restrictions and authorize committee action
                                concerning vesting and awards under the Stock
                                Incentive Plan, as reflected by 1,115,110 votes
                                for, 374,545 votes against, 43,716 abstentions
                                and 493,060 votes withheld.

                            4.  Proposal to approve an increase in the number of
                                shares reserved for issuance of stock or stock
                                options under the Company's Stock Incentive
                                Plan, as reflected by 1,105,821 votes for,
                                410,424 votes against, 17,216 abstentions and
                                493,060 votes withheld.

            Item 5. Other Information
                        Not applicable.

            Item 6. Exhibits and Reports on Form 8-K
                        a.  Exhibits



                                      -19-
<PAGE>

                                    11.0        Statement re: Computation of Per
                                                Share Earnings
                                                (filed herewith)
                                    27.0        Financial Data Schedule*

                        b.  Reports on Form 8-K
                                    On April 28, 1999, the Company filed a
                                    report on Form 8-K, announcing the
                                    completion of a stock repurchase program of
                                    5% of its outstanding shares of common stock
                                    and the results of operations for the first
                                    quarter of 1999.

                                    On May 20, 1999, the Company filed a report
                                    on Form 8-K, announcing the start of a stock
                                    repurchase program of 5% of its outstanding
                                    shares of common stock.

                                    * Submitted only in electronic format.


                                  EXHIBIT INDEX
                                  -------------

--------------------------------------------------------------------------------
11.0        Statement re:  Computation of Per Share Earnings           22

27.0        Financial Data Schedule (submitted only in electronic format)


                                      -20-
<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:   August 13, 1999                      /s/ C. William Landefeld
        ---------------                      -----------------------------------
                                              C. William Landefeld
                                              President


Date:   August 13, 1999                      /s/ Dallas G. Smiley
        ---------------                      -----------------------------------
                                              Dallas G. Smiley
                                              Chief Financial Officer










                                      -21-