|[X]   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|----- | ---------------------------------------------------------------------------------------
|      |                                                                                        
|      | For the quarterly period ended June 30, 2002                                           
|      |                                                                                        
|[   ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934     

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|Delaware(State or other jurisdiction ofincorporation or organization)      |  | 34-1870418(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                           |  |                                               
|55 North Main Street, Niles, Ohio
(Address of principal executive offices) |  | 44446(Zip Code)                               

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|**Item 1.** | **Financial Statements**
|----------- | ------------------------

|                                                                    |                                           |          |                            | June 30,2002 | December 31,2001
|------------------------------------------------------------------- | ----------------------------------------- | -------- | -------------------------- | ------------ | ----------------
|                                                                    |                                           |          |                            | (Unaudited)  |                 
|ASSETS                                                              |                                           |         
|                                                                    |                                           |          |                            |              |                 
|Cash and cash equivalents:                                          |                                           |         
|                                                                    | Noninterest bearing                       | $  2,086 | $  1,167                  
|                                                                    | Interest bearing                          | 7,811    | 5,080                     
|                                                                    |                                           |          | Total cash and equivalents | 9,897        | 6,247           
|                                                                    |                                           |          |                            |              |                 
|Securities available for sale - at market                           | 38,692                                    | 39,080  
|Securities to be held to maturity - at cost                         | 6,178                                     | 8,866   
|Loans receivable, net of allowance for loan losses of $738 and $676 | 40,118                                    | 39,508  
|Accrued interest receivable                                         | 717                                       | 735     
|Federal Home Loan Bank stock, at cost                               | 1,028                                     | 1,005   
|Real estate investment, limited partnership - at equity             | 172                                       | 208     
|Prepaid expenses and other assets                                   | 133                                       | 108     
|Prepaid federal income taxes                                        | -                                         | 2       
|Premises and equipment, at cost less accumulated depreciation       | 340                                       | 348     
|                                                                    |                                           |          |                            |              |                 
|                                                                    |                                           |          | TOTAL ASSETS               | $97,275      | $96,107         
|                                                                    |                                           |          |                            |              |                 
|LIABILITIES                                                         |                                           |         
|                                                                    |                                           |          |                            |              |                 
|Deposits                                                            | $57,786                                   | $57,061 
|Accrued interest payable                                            | 146                                       | 173     
|Accounts payable and other liabilities                              | 1,323                                     | 1,240   
|Federal Home Loan Bank advances                                     | 19,500                                    | 19,500  
|Federal income tax payable                                          | 13                                        | -       
|Deferred federal income tax liability                               | 306                                       | 167     
|                                                                    |                                           |          |                            |              |                 
|                                                                    |                                           |          | TOTAL LIABILITIES          | 79,074       | 78,141          
|                                                                    |                                           |          |                            |              |                 
|SHAREHOLDERS' EQUITY                                                |                                           |         
|                                                                    |                                           |          |                            |              |                 
|Preferred stock, $.01 par value, authorized                         |                                           |         
|                                                                    | 500,000 shares; none outstanding          | -        | -                         
|Common stock, $.01 par value, authorized                            |                                           |         
|                                                                    | 6,000,000 shares; 1,754,411 shares issued | 18       | 18                        
|Paid in capital                                                     | 6,810                                     | 6,797   
|Retained earnings                                                   | 13,560                                    | 13,506  
|Net unrealized gains on securities available for sale               | 1,649                                     | 1,337   
|Common stock purchased by the Employee Stock Ownership Plan         | (935)                                     | (935)   
|Treasury stock - 246,771 shares and 238,343 shares                  | (2,901)                                   | (2,757) 
|                                                                    |                                           |          |                            |              |                 
|                                                                    |                                           |          | TOTAL SHAREHOLDERS' EQUITY | 18,201       | 17,966          
|                                                                    |                                           |          |                            |              |                 
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          | $97,275                                   | $96,107 

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|                          |                                        |                                    |                            | Three Months EndedJune 30, | Six Months EndedJune 30,
|------------------------- | -------------------------------------- | ---------------------------------- | -------------------------- | -------------------------- | ------------------------
|                          |                                        |                                    |                            | 2002                       | 2001                    
|                          |                                        |                                    |                            |                            |                         
|Interest income:          |                                        |                                    |                            |                           
|                          | Loans receivable                       |                                    |                            |                            |                         
|                          |                                        | First mortgage loans               | $   670                    | $   665                    | $1,330                  
|                          |                                        | Consumer and other loans           | 38                         | 31                         | 74                      
|                          | Mortgage-backed and related securities | 139                                | 181                        | 296                        | 383                     
|                          | Investments                            | 576                                | 547                        | 1,130                      | 949                     
|                          | Interest-bearing deposits              | 28                                 | 54                         | 58                         | 124                     
|                          |                                        |                                    | TOTAL INTEREST INCOME      | 1,451                      | 1,478                   
|                          |                                        |                                    |                            |                            |                         
|Interest expense:         |                                        |                                    |                            |                           
|                          | Deposits                               | 436                                | 551                        | 904                        | 1,090                   
|                          | Borrowings                             | 222                                | 181                        | 443                        | 288                     
|                          |                                        |                                    | TOTAL INTEREST EXPENSE     | 658                        | 732                     
|                          |                                        |                                    |                            |                            |                         
|                          |                                        |                                    | NET INTEREST INCOME        | 793                        | 746                     
|                          |                                        |                                    |                            |                            |                         
|Provision for loan losses | 24                                     | 30                                 | 54                         | 60                        
|                          |                                        |                                    | NET INTEREST INCOME AFTER  |                            |                         
|                          |                                        |                                    | PROVISION FOR LOAN LOSSES  | 769                        | 716                     
|                          |                                        |                                    |                            |                            |                         
|Noninterest income:       |                                        |                                    |                            |                           
|                          | Gain on sale of securities             | 38                                 | 59                         | 37                         | 122                     
|                          | Service fees and other income          | 12                                 | 8                          | 25                         | 20                      
|                          |                                        |                                    | TOTAL NONINTEREST INCOME   | 50                         | 67                      
|                          |                                        |                                    |                            |                            |                         
|Noninterest expense:      |                                        |                                    |                            |                           
|                          | Equity in loss of limited partnership  | 14                                 | 9                          | 36                         | 18                      
|                          | General and administrative:            |                                    |                            |                            |                         
|                          |                                        | Compensation and benefits          | 275                        | 252                        | 558                     
|                          |                                        | Occupancy and equipment            | 20                         | 17                         | 43                      
|                          |                                        | Federal deposit insurance premiums | 2                          | 3                          | 5                       
|                          |                                        | Legal and audit                    | 52                         | 32                         | 96                      
|                          |                                        | Franchise taxes                    | 42                         | 59                         | 88                      
|                          |                                        | Other operating expense            | 80                         | 75                         | 147                     
|                          |                                        |                                    | TOTAL NONINTEREST EXPENSE  | 485                        | 447                     
|                          |                                        |                                    |                            |                            |                         
|                          |                                        |                                    | INCOME BEFORE INCOME TAXES | 334                        | 336                     
|                          |                                        |                                    |                            |                            |                         
|Federal income taxes      | 97                                     | 95                                 | 162                        | 100                       
|                          |                                        |                                    | NET INCOME                 | $ 237                      | $ 241                   
|                          |                                        |                                    |                            |                            |                         
|                          |                                        |                                    | EARNINGS PER SHARE         | $0.17                      | $0.17                   
|                          |                                        |                                    | DILUTED EARNINGS PER SHARE | $0.17                      | $0.17                   

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|                            |                                          |                                              |                      | Six Months Ended June 30,
|--------------------------- | ---------------------------------------- | -------------------------------------------- | -------------------- | -------------------------
|                            |                                          |                                              |                      | 2002                     
|                            |                                          |                                              |                      |                          
|Net income                  | $414                                     | $299                                        
|Other comprehensive income: |                                          |                                             
|                            | Unrealized gains (losses) on securities: |                                              |                     
|                            |                                          | Unrealized gains (losses) arising for period | 513                  | (291)                    
|                            |                                          | Related income tax                           | (174)                | 99                       
|                            |                                          |                                              |                      | 339                      
|                            | Reclassification adjustment:             |                                              |                     
|                            |                                          | Gain included in net income                  | (37)                 | (122)                    
|                            |                                          | Related income tax                           | 12                   | 41                       
|                            |                                          |                                              |                      | (25)                     
|Other comprehensive income  | 314                                      | (273)                                       
|                            |                                          |                                              | COMPREHENSIVE INCOME | $728                     

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|                                                                                 |                                                           |                                        |                                 | Six Months Ended June 30,
|-------------------------------------------------------------------------------- | --------------------------------------------------------- | -------------------------------------- | ------------------------------- | -------------------------
|                                                                                 |                                                           |                                        |                                 | 2002                     
|                                                                                 |                                                           |                                        |                                 |                          
|CASH FLOWS FROM OPERATING ACTIVITIES                                             |                                                           |                                       
|                                                                                 |                                                           |                                        |                                 |                          
|Net income                                                                       | $   414                                                   | $   299                               
|Adjustments to reconcile net income to net cash provided by operating activities |                                                           |                                       
|                                                                                 | Deferred income taxes                                     | (21)                                   | (25)                           
|                                                                                 | Depreciation                                              | 16                                     | 14                             
|                                                                                 | Amortization of deferred loan fees and costs              | (4)                                    | (7)                            
|                                                                                 | Amortization of discounts and premiums on investments and |                                        |                                
|                                                                                 |                                                           | mortgage-backed and related securities | (8)                             | (12)                     
|                                                                                 | Recognition and Retention Plan shares                     | -                                      | 264                            
|                                                                                 | Gain on sale of securities                                | (38)                                   | (123)                          
|                                                                                 | ESOP shares allocated                                     | -                                      | (1)                            
|                                                                                 | Equity in loss of limited partnership                     | 36                                     | 19                             
|                                                                                 | Provision for loan losses                                 | 54                                     | 60                             
|                                                                                 | Federal Home Loan Bank stock dividends                    | (23)                                   | (22)                           
|                                                                                 |                                                           |                                        |                                 | 426                      
|                                                                                 |                                                           |                                        |                                 |                          
|Net increase in accrued interest receivable, prepaid expenses                    |                                                           |                                       
|                                                                                 | and other assets                                          | (6)                                    | (429)                          
|Net increase in accrued interest, accounts payable and                           |                                                           |                                       
|                                                                                 | other liabilities                                         | 73                                     | 112                            
|                                                                                 |                                                           |                                        | NET CASH PROVIDED BY            |                          
|                                                                                 |                                                           |                                        | OPERATING ACTIVITIES            | 493                      
|                                                                                 |                                                           |                                        |                                 |                          
|CASH FLOWS FROM INVESTING ACTIVITIES                                             |                                                           |                                       
|Proceeds from sale of securities available for sale                              | 2,065                                                     | 2,156                                 
|Purchase of FHLB stock                                                           | -                                                         | (526)                                 
|Purchase of securities available for sale                                        | (7,470)                                                   | (19,988)                              
|Proceeds from maturity of securities available for sale                          | 6,153                                                     | 2,000                                 
|Proceeds from principal payments on mortgage-backed                              |                                                           |                                       
|                                                                                 | and related securities                                    | 2,847                                  | 2,813                          
|Net (increase) decrease in interest-bearing deposits with banks                  | (2,731)                                                   | 194                                   
|Net increase in loans                                                            | (660)                                                     | (1,076)                               
|Additions to premises and equipment                                              | (8)                                                       | (11)                                  
|                                                                                 |                                                           |                                        | NET CASH PROVIDED BY (USED IN)  |                          
|                                                                                 |                                                           |                                        | INVESTING ACTIVITIES            | 196                      
|                                                                                 |                                                           |                                        |                                 |                          
|CASH FLOWS FROM FINANCING ACTIVITIES                                             |                                                           |                                       
|Net increase in savings accounts, MMDAs and NOW accounts                         | 1,760                                                     | 409                                   
|Net increase (decrease) in certificates of deposits                              | (1,035)                                                   | 1,506                                 
|Purchase of treasury shares                                                      | (245)                                                     | (520)                                 
|Cash dividends paid on common stock                                              | (360)                                                     | (319)                                 
|Proceeds from FHLB Advances                                                      | -                                                         | 13,000                                
|Common stock options exercised                                                   | 110                                                       | -                                     
|                                                                                 |                                                           |                                        | NET CASH PROVIDED BY            |                          
|                                                                                 |                                                           |                                        | FINANCING ACTIVITIES            | 230                      
|                                                                                 |                                                           |                                        | NET INCREASE (DECREASE) IN CASH | 919                      
|                                                                                 |                                                           |                                        |                                 |                          
|CASH AT BEGINNING OF PERIOD                                                      | 1,167                                                     | 969                                   
|                                                                                 |                                                           |                                        |                                 |                          
|                                                                                 |                                                           |                                        | CASH AT END OF PERIOD           | $2,086                   
|                                                                                 |                                                           |                                        |                                 |                          
|Cash paid during the period for:                                                 |                                                           |                                       
|                                                                                 | Interest                                                  | $1,373                                 | $1,405                         
|                                                                                 | Income taxes                                              | $165                                   | $125                           

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|                                                | Three Months Ended June 30, | Six Months Ended June 30,
|----------------------------------------------- | --------------------------- | -------------------------
|                                                | 2002                        | 2001                     
|                                                |                             |                          
|Net income                                      | $237                        | $241                     
|Earnings applicable to basic earnings per share | 237                         | 241                      
|Average common shares                           | 1,512,568                   | 1,581,967                
|Less average unallocated ESOP shares            | 122,752                     | 142,504                  
|Average common shares outstanding - basic       | 1,389,816                   | 1,439,464                
|Average common shares outstanding - diluted     | 1,411,107                   | 1,439,464                
|Earnings per share                              | - basic                     |                          
|                                                | - diluted                   |                          

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|**Item 2.** | **Management's Discussion and Analysis of Financial Condition
and Results of Operations**
|----------- | -----------------------------------------------------------------------------------------

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> the strength of the United States economy in general and the strength of the local
> economies in which we conduct operations;
> 
> the effects of, and changes in, trade, monetary and fiscal policies and laws, including
> interest rate policies of the Federal Reserve Board;
> 
> inflation, interest rate, market and monetary fluctuations;
> 
> the timely development of and acceptance of our new products and services and the
> perceived overall value of these products and services by users, including the features,
> pricing and quality compared to competitors' products and services;
> 
> the willingness of users to substitute competitors' products and services for our products
> and services;
> 
> our success in gaining regulatory approval of our products and services, when required;
> 
> the impact of changes in financial services' laws and regulations (including laws
> concerning taxes, banking, securities and insurance);
> 
> the impact of technological changes;
> 
> acquisitions;
> 
> changes in consumer spending and saving habits; and
> 
> our success at managing the risks involved in the foregoing.

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|Item 1. | Legal Proceedings:                                                                                                                                                                                                                                                                                                                                                                           
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | There are no matters required to be reported under this item.                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|Item 2. | Changes in Securities:                                                                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | There are no matters required to be reported under this item.                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|Item 3. | Defaults Upon Senior Securities:                                                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | There are no matters required to be reported under this item.                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|Item 4. | Submission of Matters to a Vote of Security Holders:                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | The annual meeting of shareholders of First Niles was held on April 17, 2002 at our
office in Niles, Ohio.  At that meeting the shareholders were asked to vote upon (i) the
election of Director William S. Eddy, and (ii) the appointment of Anness, Gerlach &
Williams as independent accountants for the fiscal year ending December 31, 2002.
The voting on such matters was as follows:
|        | Director Election:                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | Director Eddy                                                                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | Directors not subject to election at the annual meeting and continuing in office are
William L. Stephens, George J. Swift, Paul J. Kramer and Ralph J. Zuzolo, Sr.                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | Independent Auditor Ratification:                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | Anness,Gerlach &
Williams                                                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|Item 5. | Other Information:                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | There are no matters required to be reported under this item.                                                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|Item 6. | Exhibits and Reports on Form 8-K:                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | (a)                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                              
|        | (b)                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                              

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|      |                 |     | **FIRST NILES FINANCIAL, INC.**Registrant                                                                        
|----- | --------------- | --- | -----------------------------------------------------------------------------------------------------------------
|      |                 |     |                                                                                                                  
|Date: | August 12, 2002 | By: | /s/ William L. StephensWilliam L. StephensPresident and Chief Executive Officer*(Duly Authorized Representative)*
|      |                 |     |                                                                                                                  
|Date: | August 12, 2002 | By: | /s/ Thomas G. MaleyThomas G. MaleyController*(Principal Accounting Officer)*                                     



Each of the undersigned hereby certifies in his capacity as an officer of First Niles Financial, Inc. (the
"Company") that the Quarterly Report of the Company on Form 10-QSB for the period ended June 30,
2002 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and
that the information contained in such report fairly presents, in all material respects, the financial
condition of the Company at the end of such period and the results of operations of the Company for such
period.

|Dated: | August 12, 2002 |  | /s/ William L. StevensWilliam L. StevensChief Executive Officer                                            
|------ | --------------- |  | -----------------------------------------------------------------------------------------------------------
|       |                 |  |                                                                                                            
|Dated: | August 12, 2002 |  | /s/ George J. SwiftGeorge J. SwiftVice President and Secretary*(Principal Financial and Operating Officer*)

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