<PAGE> 1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

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

                  For the quarterly period ended June 30, 1999

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

For the transition period from __________________ to _________________

                         Commission File Number 0-28162

                               LENOX BANCORP, INC.
        (Exact name of small business issuer as specified in its charter)

Ohio                                                                  31-1445959

(State or other jurisdiction of incorporation                   (I.R.S. Employer
or organization)                                             Identification No.)

5255 Beech Street, St. Bernard, Ohio                                       45217
(Address of principal executive offices)                              (Zip Code)

                                 (513) 242-6900
                           (Issuer's telephone number)


                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changes since last report)


      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
                                                     Yes     X        No
                                                           -----         -----

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

      State the number of shares  outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 268,001 shares of common stock,
par value $0.01 per share, were outstanding as of August 12, 1999.

Transitional Small Business Disclosure Format (check one):  Yes       No  X
                                                                ----     ----



                                        1

<PAGE> 2


                              LENOX BANCORP, INC.
                                  FORM 10-QSB

                      FOR THE QUARTER ENDED JUNE 30, 1999


                                     INDEX


                                                                          Page
                                                                          ----

PART I.     FINANCIAL INFORMATION............................................3

Item 1.  Financial Statements-Unaudited......................................3

            Consolidated Balance Sheets at
            June 30, 1999 (unaudited) and December 31, 1998..................3

            Consolidated Statements of Income - For the Three
            Months and Six Months Ended June 30, 1999 and 1998 (unaudited)...4

            Consolidated Statements of Cash Flows - For  the
             Six Months Ended June 30, 1999 and 1998 (unaudited).............6

            Notes to Unaudited Consolidated Financial Statements.............7


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


PART II:    OTHER INFORMATION...............................................16

Item 1.      Legal Proceedings..............................................16
Item 2.      Changes in Securities and Use of Proceeds......................16
Item 3.      Defaults Upon Senior Securities................................16
Item 4.      Submission of Matters to a Vote of Security Holders............16
Item 5.      Other Information..............................................16
Item 6.      Exhibits and Reports on Form 8-K...............................16

SIGNATURES..................................................................18




                                      2

<PAGE> 3

                         PART I. FINANCIAL INFORMATION
                              LENOX BANCORP, INC.
                                 JUNE 30, 1999

Item 1.     FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
                               LENOX BANCORP, INC.
                           CONSOLIDATED BALANCE SHEETS

                                                                          JUNE 30,     DECEMBER 31,
                                                                            1999          1998
                                                                          ---------    -----------
                                                                          (UNAUDITED)
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                                           <C>            <C>
ASSETS
Cash and due from banks.................................................      $   417        $ 2,350
Certificates of deposit.................................................          188            183
Investment securities - available for sale, at fair value (amortized
  cost of $2,702 and $3,303 at June 30, 1999 and December  31, 1998)....        2,643          3,301
Mortgage-back securities - available for sale, at fair value (amortized
  cost of $654 and $799 at June  30,  1999 and  December  31,  1998)....          653            805
Collateralized mortgage obligations - available for sale, at fair value
  (amortized cost of $1,035 and $2,167 at June 30, 1999 and
  December 31, 1998)....................................................        1,013          2,179
Collateralized mortgage obligations - held to maturity, (fair value of
  $4,630 and $5,992 at June 30, 1999 and December 31, 1998).............        4,558          5,925
Loans receivable, net...................................................       54,640         38,308
Loans held for sale - at lower of cost or market........................            -            220
Accrued interest receivable:
    Loans...............................................................          277            161
    Mortgage-backed securities..........................................            4              5
    Collateralized mortgage obligation..................................           28             40
    Investments and certificates of deposit.............................           50             63
Property and equipment, net.............................................          535            564
Federal Home Loan Bank stock - at cost..................................        1,221            822
Prepaid expenses and other assets.......................................          235            157
Prepaid federal income taxes............................................           40              6
                                                                              -------        -------
      Total assets......................................................      $66,502        $55,089
                                                                              =======        =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits:
    Savings, club and other accounts....................................      $ 5,372        $ 5,113
    Money market and NOW accounts.......................................        4,649          4,813
    Certificate accounts................................................       27,228         23,141
                                                                              -------        -------
      Total deposits....................................................       37,249         33,067
  Advances from Federal Home Loan Bank..................................       24,115         14,440
  Advance payments by borrowers for taxes and insurance.................          121            162
  Accrued expenses......................................................           82            161
  Deferred federal income taxes.........................................           79            112
                                                                              -------        -------
      Total liabilities.................................................      $61,646        $47,942
                                                                              =======        =======
Stockholders' Equity:
  Common stock - no par value: 2,000,000 authorized, 425,677 issued
and 277,525 outstanding at June 30, 1999 and 396,910 outstanding
    at December 31, 1998................................................      $    --        $    --
  Additional paid in capital............................................        3,743          3,743
  Retained earnings - substantially restricted..........................        4,197          4,216
  Unearned ESOP shares..................................................        (240)          (240)
  Share acquired for Stock Incentive Plan...............................         (99)          (112)
  Treasury stock 148,152 shares at June 30, 1999 and 28,767 shares at
    December 31, 1998...................................................      (2,691)          (471)
  Unrealized gain on available for sale securities net of tax of $28
   and $1 at June 30, 1999 and December 31, 1998........................         (54)             11
                                                                              -------        -------
      Total stockholders' equity........................................        4,856          7,147
                                                                              -------        -------
  Total liabilities and stockholders' equity............................      $66,502        $55,089
                                                                              =======        =======
</TABLE>

                                        3

<PAGE> 4
<TABLE>
<CAPTION>

                               LENOX BANCORP, INC.
                        CONSOLIDATED STATEMENT OF INCOME
                                                             THREE MONTHS ENDED
                                                                  JUNE 30,
                                                          ------------------------
                                                            1999            1998
                                                          ---------       --------
                                                                (UNAUDITED)
                                                           (DOLLARS IN THOUSANDS
                                                           EXCEPT PER SHARE DATA)
<S>                                                         <C>            <C>
INTEREST INCOME AND DIVIDEND INCOME
  Loans............................................         $   890        $   727
  Mortgage-backed securities.......................              10             17
  Collateralized mortgage obligations..............              81            138
  Investments and interest bearing deposits........              46             75
  FHLB stock dividends.............................              16             14
                                                            -------        -------
    Total..........................................           1,043            971

INTEREST EXPENSE
  Deposits.........................................             420            385
  Borrowed money and capitalized leases............             237            216
                                                            -------        -------
    Total..........................................             657            601

  Net interest income before provision for loan losses          386            370

Provision for loan losses..........................               9              5
                                                                  -              -

  Net interest income after provision for loan losses           377            365

OTHER INCOME
  Service fee income...............................              27             37
  Gain on sale of loans............................              27             24
  Gain on sale of investments......................              22             --
                                                            -------        -------
    Total..........................................              76             61

GENERAL AND ADMINISTRATIVE EXPENSES
  Compensation and employee benefits...............             165            154
  Occupancy and equipment..........................              53             51
  Federal insurance premium........................               5              5
  Franchise taxes..................................              24             21
  Other expenses...................................             155            115
                                                            -------        -------
    Total..........................................             402            346

  Income before provision for income taxes.........              51             80

Provision for income taxes.........................              20             27
                                                            -------        -------

  Net income.......................................          $   31         $   53
                                                             ======         ======

  Basic earnings per share.........................           $0.09          $0.13
                                                              =====          =====

  Diluted earnings per share.......................           $0.09          $0.13
                                                              =====          =====
</TABLE>

                                       4


<PAGE> 5
<TABLE>
<CAPTION>

                               LENOX BANCORP, INC.
                        CONSOLIDATED STATEMENT OF INCOME

                                                          SIX MONTHS ENDED JUNE 30,
                                                          ------------------------
                                                            1999           1998
                                                          ---------      ---------
                                                                 (UNAUDITED)
                                                        (DOLLARS IN THOUSANDS, EXCEPT
                                                                PER SHARE DATA)
                                                        ------------------------------
<S>                                                       <C>              <C>
INTEREST INCOME AND DIVIDEND INCOME
  Loans............................................       $   1,625        $ 1,496
  Mortgage-backed securities.......................              21             36
  Collateralized mortgage obligations..............             166            222
  Investments and interest-bearing deposits........             115            158
  FHLB stock dividends.............................              30             27
                                                          -----------    -----------
       Total.......................................           1,957          1,939

INTEREST EXPENSE
  Deposits.........................................             818            752
  Borrowed money and capitalized leases............             438            417
                                                          -----------    -----------
       Total.......................................           1,256          1,169

  Net interest income before provision for loan losses          701            770

Provision for loan losses..........................              18              5
                                                          -----------    -----------

  Net interest income after provision for loan losses           683            765

OTHER INCOME
  Service fee income...............................              61             73
  Gain on sale of loans............................              47             51
  Gain on sale of investments......................              22             --
                                                          -----------    -----------
       Total.......................................             130            124

GENERAL AND ADMINISTRATIVE EXPENSES
  Compensation and employee benefits...............             327            316
  Occupancy and equipment..........................             108            104
  Federal insurance premiums.......................              10             10
  Franchise taxes..................................              45             40
  Other expenses...................................             285            241
                                                          -----------    -----------
       Total.......................................             775            711

  Income before provision for income taxes.........              38            178

Provision for income taxes.........................              17             60
                                                          -----------    -----------

  Net income.......................................       $      21        $   118
                                                          ===========    ===========

Basic earnings per share...........................       $     0.06       $    0.3
                                                          ===========    ===========

Diluted earnings per share.........................       $     0.06       $    0.3
                                                          ===========    ===========
</TABLE>

                                       5


<PAGE> 6
<TABLE>
<CAPTION>

                              LENOX BANCORP, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 JUNE 30, 1999


                                                                        FOR THE SIX MONTHS ENDED
                                                                                JUNE 30,
                                                                        -------------------------
                                                                          1999            1998
                                                                        ---------      ----------
                                                                               (UNAUDITED)
                                                                         (DOLLARS IN THOUSANDS)
<S>                                                                  <C>              <C>
Cash flows from operating activities:
  Net income......................................................   $        21      $      118
  Adjustments to reconcile net income to net cash provided (used)
    by operating activities:
    Depreciation and amortization.................................            72              31
    Provision (credit) for losses on loans........................            18               5
    Amortization of deferred loan fees............................           (11)            (25)
    Deferred loan origination fees (cost).........................           (54)             15
    FHLB stock dividends..........................................           (30)            (27)
    Gain on sale of investments...................................           (22)             --
    Gain on sale of loans.........................................           (47)            (51)
    Amortization of stock incentive plan award....................            13              34
    ESOP expense, net of tax benefit..............................            33              22
    Effect of change in operating assets and liabilities:
      Accrued interest receivable.................................           (90)             (9)
      Prepaid expenses............................................           (78)            (89)
      Advances by borrowers for taxes and insurance...............           (41)            (79)
      Accrued expenses............................................           (79)              31
      Accrued federal income taxes................................           (34)            (44)
      Deferred federal income taxes...............................           (33)             14
                                                                     ------------     -----------
      Net cash provided (used) by operating activities............          (362)            (54)

Cash flows from investing activities:
  Property and equipment additions................................            (6)            (25)
  Repayments of mortgage-backed securities........................           140              55
  Purchase of certificates of deposits............................            (5)             (5)
  Loan disbursements..............................................       (25,497)         (9,793)
  Loan principal repayments.......................................         6,902           7,142
  Proceeds from sale of investments...............................         1,154              --
  Proceeds from sale of mortgage loans............................         2,605           3,634
  Purchase of FHLB stock..........................................          (399)           (141)
  Purchase of investments - HTM...................................            --          (1,858)
  Purchase of investments - AFS...................................            --          (2,167)
       Maturity on investments - HTM..............................         1,337             651
       Maturity of investments - AFS..............................           600           1,950
                                                                     ------------     -----------
       Net cash used by investing activities......................       (13,169)           (557)

Cash flows from financing activities:
  Net increase (decrease) in deposits.............................         4,182           1,211
  Borrowings from FHLB............................................        20,775           4,050
  Repayments of FHLB advances.....................................       (11,100)         (2,159)
  Purchase Treasury Stock.........................................        (2,223)            (63)
  Reissue Treasury Stock..........................................             4              --
  Dividends paid..................................................           (40)            (39)
                                                                     ------------     -----------
    Net cash provided by financing activities.....................        11,598           3,000
                                                                     ------------     -----------
Increase (decrease) in cash and cash equivalents..................        (1,933)           2,389
Cash and cash equivalents at beginning of period..................         2,350              664
                                                                     ------------     -----------
Cash and cash equivalents at end of period........................   $       417      $     3,053
                                                                     ============     ===========
Supplemental disclosure:
  Cash paid for:
    Interest expense..............................................   $     1,254      $     1,156
    Income taxes..................................................            51              105
</TABLE>


                                        6

<PAGE> 7



                               LENOX BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THREE MONTHS ENDED JUNE 30, 1999 AND 1998


1.    Principles of Consolidation
      ---------------------------

      The consolidated  unaudited  financial  statements include the accounts of
Lenox Bancorp,  Inc. ("Lenox" or the "Company") and its wholly-owned  subsidiary
Lenox Savings Bank (the "Bank"). All significant intercompany  transactions have
been  eliminated  in  consolidation.  The  investment  in the  Bank  on  Lenox's
financial statements is carried at the parent company's equity in the underlying
net assets.

      The  consolidated   balance  sheet  as  of  June  30,  1999,  and  related
consolidated  statement  of income  and cash  flows for the three and six months
ending June 30, 1999, and 1998 are unaudited. In the opinion of management,  all
adjustments  necessary for a fair presentation of such financial statements have
been included.  Such adjustments  consisted of normal  recurring items.  Interim
results are not necessarily indicated of results for a full year.

      The  financial  statements  and notes are  presented  as permitted by Form
10-QSB and  Regulation  S-B. The interim  statements are unaudited and should be
read in conjunction with the financial statements and notes thereto contained in
the Bank's annual report for the year ended dated December 31, 1998.

2.    Earnings Per Share
      ------------------

      The net income for the three  months  ended  June 30,  1999,  was $.09 per
share or $31,000 on an average of 330,077 shares, compared to net income for the
quarter  ending  June 30,  1998,  of  $53,000 or $.13 per share on an average of
396,729 shares.  Earnings for the six months ending June 30, 1999 was $21,000 or
$.06 per share on an average of 347,386  shares  compared to $118,000 or $.30 on
an average of 397,582 shares for the six months ended June 30, 1998.


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

      The following  analysis  discusses changes in the financial  condition and
results of  operations  at and for the three and six months ended June 30, 1999,
and should be read in  conjunction  with the  Company's  Consolidated  Financial
Statements and the notes thereto, appearing in Part I, Item 1 of this document.




                                      7

<PAGE> 8



Forward-Looking Statements
--------------------------

      This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.   The  Company  intends  such
forward-looking  statements  to be covered  by the safe  harbor  provisions  for
forward-looking  statements  contained in the Private  Securities  Reform Act of
1995,  and is  including  this  statement  for  purposes  of these  safe  harbor
provisions.  Forward-looking statements,  which are based on certain assumptions
and describe  future plans,  strategies  and  expectations  of the Company,  are
generally  identified  by  use  of  the  words  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate,"  "project,"  or similar  expressions.  The  Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain.  Factors which could have a material adverse effect on the
operations of the Company and the Bank include,  but are not limited to, changes
in: interest rates, general economic conditions, legislative/regulatory changes,
monetary and fiscal policies of the U.S.  Government,  including policies of the
U.S.  Treasury and the Federal Reserve Board,  the quality or composition of the
loan  or  investment  portfolios,  demand  for  loan  products,  deposit  flows,
competition,  demand for  financial  services in the  Company's  market area and
accounting  principles and guidelines.  These risks and uncertainties  should be
considered in evaluating  forward-looking  statements and undue reliance  should
not be placed on such statements. Further information concerning the Company and
its business,  including  additional  factors that could  materially  affect the
Company's  financial  results,  is included in the  Company's  filings  with the
Securities and Exchange Commission.

      The  Company  does  not  undertake  --  and  specifically   disclaims  any
obligation -- to publicly  release the result of any revisions which may be made
to any  forward-looking  statements to reflect events or circumstances after the
date  of  such  statements  or to  reflect  the  occurrence  of  anticipated  or
unanticipated events.

Management Strategy
-------------------

      The  Bank's   current   strategic   plan  is  to  enhance  its   long-term
profitability,  reduce the level of interest rate risk and improve market share.
Management is committed to achieving a substantial increase in the Bank's return
on equity within the next three years.  Improving  earnings and reducing capital
levels are the two important steps toward meeting this objective. Capital levels
have been reduced through the Company's  repurchase  program,  which resulted in
approximately  120,000 shares being  repurchased this quarter.  Asset growth has
increased  over 40% since the  Bank's  conversion  from  mutual to stock form in
1996. Asset growth is expected to continue due to special loan programs designed
for the Bank's niche market with Procter & Gamble employees,  expanding the loan
portfolio to include  multi-family  lending and attracting new customers through
the Bank's new branch opened in October  1997.  The Bank also intends to enhance
profitability  by  continuing to seek means of  increasing  non-interest  income
through the generation of transaction fees, commissions and selling loans in the
secondary market.  Finally, the Bank intends to continue to seek to reduce cost.
Management's  committed  to its  goal of  enhancing  shareholder  value  through
improving profitability, reducing interest rate risk and increasing market share
and believes that the actions it has taken to date and its future strategic plan
will enhance the long-term profitability of the Company.


                                        8

<PAGE> 9



Comparison of Financial Condition at June 30, 1999 and December 31, 1998
------------------------------------------------------------------------

      ASSETS.  Total  assets  increased  by $11.4  million,  or 20.7%,  to $66.5
      ------
million at June 30, 1999 from $55.1 million at December 31, 1998.  This increase
was due to a $16.3 million,  or 42.6%,  increase in loans  receivable from $38.3
million at December 31, 1998, to $54.6 million at June 30, 1999. This was due to
an increase of $10.9 million,  or 32.8%, in one- to four-family loans from $33.3
million  at  December  31,  1998,  to $ 44.2  million at June 30,  1999,  and an
increase of $3.8 million,  or 382.9%, in multi-family loans from $1.0 million to
$4.8 million. The increase in loans resulted from management's  decision to grow
the balance sheet to enhance future profits. Federal Home Loan Bank (the "FHLB")
stock  increased  $399,000,  or 48.5%,  increasing from $822,000 at December 31,
1998,  to $1.2  million at June 30,  1999,  resulting  from an  increase in FHLB
advances.  The  increase in assets due to  increased  loans was offset by a $1.9
million  decrease in cash and due from banks,  from $2.3 million at December 31,
1998,  to $417,000 at June 30,  1999,  as the cash was used to finance the loans
made.  The  increase  in  assets  was also  offset  by a  $805,000  decrease  in
investments  and  mortgage-backed  securities  to $3.5 million at June 30, 1999,
from $4.3 million at December 31, 1998,  due to principal  payments and $600,000
in investment  securities  being called.  Collateralized  Mortgage  Obligations,
("CMOs") decreased $2.5 million, or 31.3%, to $5.6 million at June 30, 1999 from
$8.1 million at December  31,  1998,  from the sale of $1.2 million in CMOs held
available for sale and principal  repayments on both available for sale and held
to maturity CMOs.

      LIABILITIES.  Total liabilities increased by $13.7 million, or 28.6%, from
      -----------
$47.9 million at December 31, 1998 to $61.6 million at June 30, 1999,  primarily
due to an increase in advances  from the FHLB of $9.7  million,  or 67.0%,  from
$14.4  million at  December  31,  1998 to $24.1  million at June 30,  1999.  The
advances were borrowed on a short term basis to fund asset growth while lowering
the cost of funds.  Deposits increased $4.1 million or 12.6% to $37.2 million at
June 30, 1999 from $33.1 million at December 31, 1998. This increase in deposits
was  primarily  due to a $4.1 million  increase in  certificates  of deposits to
$27.2 million at June 30, 1999 from $23.1 million at December 31, 1998 resulting
from an aggressive approach by management to attract deposits for loan demand by
increasing rates on current products.  Savings and other accounts also increased
$259,000 to $5.4  million at June 30,  1999,  from $5.1  million at December 31,
1998. These increases were offset by a reduction of $164,000 in Money Market and
NOW accounts  from $4.8 million at December 31, 1998 to $4.6 million at June 30,
1999.

      TERMINATION  OF  LEASEHOLD  IMPROVEMENTS.  In July 1999 Procter and Gamble
      ----------------------------------------
("P&G")  advised the Company that it will not renew the Company's  lease for its
main office in St.  Bernard,  Ohio,  when the lease  becomes due on December 31,
1999. Management is currently seeking alternative office space in and around the
St. Bernard,  Ohio area and is confident that a new location will be found at or
below the cost of the  Company's  current  lease with P&G prior to December  31,
1999;  however,  no assurance can be given that acceptable  office space will be
found or that the Company's  non-interest  expense will not increase as a result
of the change in office  location.  As of July 31, 1999 the  remaining  net book
value  on  the  leasehold  improvements  totaled  $165,000.  As  per  the  lease
agreement, P&G will reimburse the Company an estimated $22,000 for the leasehold
improvements  at the lease  termination  date.  The Company  anticipates it will
record, in the third quarter of 1999, an after-tax charge to earnings of $91,000
to record the impairment of leasehold improvements.


                                        9

<PAGE> 10


      STOCKHOLDERS' EQUITY. Stockholders' equity decreased $2.2 million or 32.1%
      --------------------
from $7.1 million at December 31,  1998,  to $4.9 million at June 30, 1999.  The
decrease was  primarily  due to the stock  repurchase  of 119,640  shares of the
Company's  outstanding  common stock which totaled $2.2  million,  a decrease in
market  value on  securities  of  $65,000,  net of taxes,  and the  payment of a
quarterly  dividend.  The repurchase of the Company's  outstanding common stock,
completed in June 1999, was an important step in increasing the return on equity
over the next three years.

      LIQUIDITY AND CAPITAL  RESOURCES.  The Company's  primary sources of funds
      --------------------------------
are deposits,  FHLB advances,  principal and interest payments on loans and loan
sales in the secondary  market.  While maturities and scheduled  amortization of
loans are predictable  sources of funds,  deposit flow and mortgage  prepayments
are  strongly  influenced  by  changes  in  general  interest  rates,   economic
conditions and competition.

      The primary  investment  activity of the Company for the six months  ended
June 30, 1999, was the  origination of mortgage and consumer loans in the amount
of $25.5 million. The most significant source of funds for the six months ending
June 30, 1999, was the borrowing of FHLB advances totaling $20.8 million.  Also,
the  repayment  of loans  totaled $6.9 million for the six months ended June 30,
1999.

      The Bank is required to maintain a minimum  level of liquidity  (net cash,
short term and  marketable  assets  divided by total  withdrawable  deposits and
short term liabilities), as defined by the Federal Deposit Insurance Corporation
("FDIC").  The Bank's  liquidity  at June 30,  1999,  was 9.6%.  The Bank's most
liquid  assets are cash,  federal funds sold,  and  marketable  securities.  The
levels of the Bank's  liquid  assets  are  dependent  on the  Bank's  operation,
financing, lending and investing activities during any given period. At June 30,
1999, assets qualifying for short term liquidity,  including cash and short term
investment,  totaled  $4.9  million.  To increase  the Bank's  liquidity  level,
management  converted  the CMOs  classified as held to maturity to available for
sale as of July 1, 1999, as permitted under FASB, with SFAS No. 133,  amended by
SFAS No. 137.

      At June 30, 1999, the Bank's capital exceeded all the capital requirements
of the FDIC,  which are 4% for tier I capital and Tier II of 8%. The Bank's tier
1 leverage  and total  capital to  risk-weighted  capital  ratios  were 7.7% and
13.8%, respectively.

      Comprehensive  income (loss) for the six months ending June 30, 1999,  and
1998 was ($11,000) and $146,000, respectively. The difference between net income
and  comprehensive  income  consists solely of the effect of unrealized gain and
losses, net of taxes, on available for sale securities.


                                       10

<PAGE> 11



COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTH ENDED JUNE 30,
----------------------------------------------------------------------
1999 AND 1998.
--------------

      GENERAL.  The Company  reported net income of $31,000 for the three months
      -------
ending June 30, 1999,  which  represents a $22,000  decrease from $53,000 of net
income  reported for the three months  ended June 30,  1998.  This  decrease was
attributable to a decrease in the Bank's net interest margin due to refinancings
due to a lower  interest rate  environment,  whereas the yields on deposits have
only decreased  slightly.  Additionally,  the Bank's general and  administrative
expenses  increased  from  $346,000  for the three months ended June 30, 1998 to
$402,000 for the same period ended June 30, 1999.  This  increase in general and
administrative  expenses was  primarily  attributable  to  additional  legal and
professional expenses related to the Company's annual meeting.

      INTEREST INCOME AND DIVIDEND  INCOME.  Interest income and dividend income
      ------------------------------------
for the three months  ended June 30, 1999 was $1.0 million  compared to $971,000
for the three months ended June 30,  1998,  an increase of $72,000 or 7.4%.  The
increase was  primarily  due to the increase in loan  production,  primarily the
origination of adjustable  rate loans,  increasing  the average  balance for the
three  months ended June 30, 1999 to $44.9  million  from $33.3  million for the
same period ended June 30, 1998, a $11.6 million or a 34.8%  increase.  However,
such  increase  was  offset by a  decrease  in the  average  yield from 7.26% on
interest  earning  assets for the three months ended June 30, 1998 to a yield of
6.86% for the three  months  ended June 30,  1999 due to a lower  interest  rate
environment.  This  increase in loan interest was offset by a decrease of income
from the CMO portfolio.

      INTEREST  EXPENSE.  Interest  expense for the three  months ended June 30,
      -----------------
1999,  was  $657,000  compared to $601,000  for the three  months ended June 30,
1998,  an increase  of $56,000,  or 9.3%,  due to the  increase in deposits  and
borrowings from the FHLB to fund the increase in loan demand.  Deposits interest
increased  $35,000,  or 9.1%,  from $385,000 for the three months ended June 30,
1998 to $420,000 for the three  months ended June 30, 1999.  The increase in the
interest  earned on deposits was offset by a decrease in the average  yield from
4.58% for the three months ended June 30, 1998 to a yield of 4.45% for the three
months ended June 30,  1999.  The interest  expense on borrowed  fund  increased
$21,000  from  $216,000 for the three months ended June 30, 1998 to $237,000 for
the three months ended June 30, 1999.

      NET INTEREST  INCOME AFTER PROVISION FOR LOAN LOSSES.  Net interest income
      ----------------------------------------------------
after provision for loan losses increased $12,000, or 3.3%, for the three months
ended June 30, 1999 to $377,000  from  $365,000  for the three months ended June
30, 1998. This increase takes into accounts an increase of $4,000  provision for
loan losses for the three  months  ending June 30, 1999,  to $9,000  compared to
$5,000 for the three months ended June 30, 1998,  due to an increase in the loan
portfolio.  The  increase in loan loss  reserve is  relative to the  increase in
lending.

      OTHER INCOME.  Other income  increased  $15,000,  or 24.6%,  for the three
      ------------
months  ended June 30, 1999 to $76,000  from  $61,000 for the three months ended
June  30,  1998.  This  increase  was  primarily  due to the gain on the sale of
investments  of $22,000 for the three months  ended June 30,  1999,  where there
were no sales for the same period  ended June 30, 1998.  The  proceeds  from the
sale of  investments  was used to fund the loan demand.  The gain on the sale of
loans for the three

                                       11

<PAGE> 12



months ending June 30, 1999, was $27,000 compared to $24,000 or a 12.5% increase
from the sale of loans for the same period ending June 30, 1998. These increases
were offset by a reduction  in service fee income of $10,000 or 27% from $37,000
for the three  months  ended June 30,  1998,  compared  to $27,000 for the three
months  ended June 30,  1999.  The  reduction  in service  fee income is largely
related to a reduction  in loan  commitment  fees and a reduction  in debit card
income.

      GENERAL AND ADMINISTRATIVE  EXPENSES.  General and administrative expenses
      ------------------------------------
for the three months ended June 30, 1999, were $402,000 compared to $346,000 for
the three  months  ended June 30,  1998,  an increase  of $56,000 or 16.2%.  The
increase was primarily due to other  expenses which  increased  $40,000 or 34.8%
from $115,000 for the three months ended June 30, 1998 to $155,000 for the three
months  ended June 30,  1999,  primarily  attributable  to  additional  expenses
related to the Company's  annual  meeting.  Other  expenses  include legal fees,
other  professional  fees,  ATM  expense,  now account  servicing,  payroll tax,
postage and telephone expense.  The compensation and employee benefits increased
$11,000, or 7.1% due normal increases and the timing of the salary expenses.

      INCOME  TAXES.  Income  taxes for the three  months  ended June 30,  1999,
      -------------
decreased  $7,000 to  $20,000  for the three  months  ended  June 30,  1999 from
$27,000 for the three  months  ending June 30,  1998,  because of a reduction in
pre-tax earnings. Net income before taxes was $80,000 for the three months ended
June 30, 1998  compared to $51,000  for the same  period  ending June 30,  1999.
Taxes are calculated  based on net income less the employee stock ownership plan
expenses as required by Statement of Position ("SOP") 93-6.

COMPARISON OF RESULTS OF  OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND
--------------------------------------------------------------------------------
1998.
-----

      GENERAL.  The  Company  reported  net income of $21,000 for the six months
      -------
ended June 30, 1999,  which  represents a $97,000  decrease from $118,000 of net
income  reported  for the six months  ended June 30,  1998.  This  decrease  was
attributable to a decrease in the Bank's net interest margin due to refinancings
due to a lower  interest rate  environment,  whereas the yields on deposits have
only  decreased  slightly.  Net income also  decreased due to the  prepayment of
mortgages  underlying a portion of the Company's CMO portfolio,  resulted in the
Company having to amortize premiums. The Company anticipates,  during the second
half of fiscal 1999,  accreting  discounts on  additional  CMOs in the portfolio
that will offset the premium  amortization  it  experienced.  Additionally,  the
Bank's  general and  administrative  expenses  increased to $775,000 for the six
months  ended June 30,  1999,  from  $711,000 for the same period ended June 30,
1998.  This  increase  in general  and  administrative  expenses  was  primarily
attributable to additional expenses related to the Company's annual meeting.

      INTEREST INCOME AND DIVIDEND  INCOME.  Interest income and dividend income
      ------------------------------------
for the six months  ended June 30, 1999,  increased  $18,000,  or 0.9%,  to $2.0
million from $1.9  million for the six months  ended June 30,  1998,  due to the
increase in the average earning  assets,  which increased from $52.6 million for
the six months ended June 30,  1998,  to $ 57.6 million for the six months ended
June  30,  1999  due  to  increased   lending,   primarily  the  origination  of
adjustable-rate  loans.  This  increase  was offset by a decrease in the average
yield from 7.38% for the six months ended June


                                       12

<PAGE> 13



30, 1998 to 6.79% for the six months ended June 30,  1999. The decrease in yield
on earning assets was primarily a result of loan customers  refinancing due to a
lower  interest  rate  environment  and the  amortization  of the  premiums on a
portion of the Bank's CMO portfolio were accelerated due to increased prepayment
speeds.  The Bank does anticipate  that discounts  associated with CMO portfolio
will also accelerate in the second half of this fiscal year.

      INTEREST EXPENSE. Interest expense for the six months ended June 30, 1999,
      ----------------
was $1.3  million  compared to $1.2  million  for the six months  ended June 30,
1998,  an increase  of $87,000,  or 7.4%,  due to the  increase in deposits  and
borrowings  from the FHLB to fund  the  increase  in loan  demand.  Interest  on
deposits increased  $66,000,  or 8.8%, to $818,000 for the six months ended June
30, 1999 from $752,000 for the six months ended June 30, 1998. This increase was
due to a $4.3  million  increase in the average  balance of deposits  from $32.6
million  for the six months  ended June 30,  1998 to $36.3  million  for the six
months ended June 30, 1999. Such increase was offset by a 9 basis point decrease
in the average  yield from 4.66% for the six months ended June 30, 1998 to 4.57%
for the six months ended June 30, 1999.  The interest  expense on borrowed funds
increased  $21,000,  or 5.0%, to $438,000 for the six months ended June 30, 1999
from $417,000 for the six months ended June 30, 1998.

      NET INTEREST  INCOME AFTER PROVISION FOR LOAN LOSSES.  Net interest income
      -----------------------------------------------------
after provision for loan losses decreased $82,000,  or 10.7%, for the six months
ended June 30, 1999 to $683,000  from $765,000 for the six months ended June 30,
1998.  This decrease  takes into  accounts an increase of $13,000  provision for
loan  losses for the six months  ended June 30,  1999,  to $18,000  compared  to
$5,000 for the six months  ended June 30,  1998,  due to an increase in the loan
portfolio  and the  additional  risks  associated  with  increased  multi-family
lending.  The Bank has maintained the same  percentage of reserves to loans from
0.15% as of June 30, 1998 as compared to 0.15% as of June 30, 1999,  as past due
loans more than 90 days  dropped  from  $126,000  at June 30, 1998 to $69,000 at
June 30, 1999.

      OTHER  INCOME.  Other income  increased  $6,000 or 4.8% for the six months
      -------------
ended June 30, 1999, to $130,000 from $124,000 for the six months ended June 30,
1998.  This increase was primarily due to the gain on the sale of investments of
$22,000 for the six months  ended June 30,  1999,  where there were no sales for
the same  period  ended June 30,  1998.  These  same  investments  funded  loans
resulting in a higher yield.  This increase was reduced by the reduction in gain
on the sale of loans for the six months ending June 30, 1999 of $4,000, or 7.8%,
to $47,000 from $51,000 for the same period ending June 30, 1998. Loan sales for
the six months ended June 30, 1998 was $3.6 million compared to $2.6 million for
the six months  ended June 30,  1999.  Other  income was further  reduced by the
reduction in service fee income of $12,000,  or 15.4%,  from $73,000 for the six
months ended June 30, 1998 compared to $61,000 for the six months ended June 30,
1999.  The reduction in service fee income is largely  related to a reduction in
loan commitment fees and a reduction in debit card income.

      GENERAL AND ADMINISTRATIVE  EXPENSES.  General and administrative expenses
      ------------------------------------
for the six months ended June 30, 1999,  were $775,000  compared to $711,000 for
the six months ended June 30, 1998, an increase of $64,000 or 9.0%. The increase
was  primarily  due to an  increase  of  $44,000,  or 18.3%,  increase  in other
expenses  from  $241,000 for the six months ended June 30, 1998, to


                                       13

<PAGE> 14



$285,000  for the six months  ended June 30, 1999,  due to  additional  expenses
related  to the  Company's  annual  meeting.  In  addition  to  other  expenses,
compensation and employee  benefits  increased $11,000 or 3.5% from $316,000 for
the six months  ended June 30,  1998,  to $327,000 for the six months ended June
30, 1999, due to normal salary adjustments.

      INCOME  TAXES.  Income  taxes  for the six  months  ended  June 30,  1999,
      -------------
decreased  $43,000 to  $17,000  for the six months  ended  June 30,  1999,  from
$60,000 for the six months  ending  June 30,  1998,  because of a  reduction  in
pre-tax earnings.  Net income before taxes was $178,000 for the six months ended
June 30,  1998,  compared to $38,000 for the same period  ending June 30,  1999.
Taxes are  calculated  based on net income less employee  stock  ownership  plan
expenses as required by SOP 93-6.

      RECENT ACCOUNTING PRONOUNCEMENTS.
      --------------------------------

      In June 1997, the FASB issued SFAS No. 131,  'Disclosure about Segments of
an Enterprise and Related Information," which significantly changed the way that
public business  enterprises  report  information  about  operating  segments in
annual and interim  financial  statements  issued to shareholders.  SFAS No. 131
uses a 'management  approach' to disclose financial and descriptive  information
about  an  enterprise's   reportable   operating  segments  which  is  based  on
management's method for making operating  decisions and assessing  performances.
SFAS No. 131 is effective for financial  statements for periods  beginning after
December 15, 1997. There was no effect from the adoption of this pronouncement.

      In June 1998,  the FASB issued SFAS No. 133,  "Accounting  for  Derivative
Instruments   and  Hedging   Activities,"   which   establishes  for  derivative
instruments,  including derivative instruments imbedded in other contracts,  and
for hedging activities.  It requires that an entire recognize all derivatives as
either assets or liabilities in the statement of financial  position and measure
those  instruments  at fair value.  SFAS No. 133, as amended by SFAS No. 137, is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.

      YEAR 2000 COMPLIANCE.
      --------------------

      Many existing  computer programs use only two digits to identify a year in
the date field.  These programs were designed without  considering the impact of
the upcoming change in the century. If not corrected, many computer applications
and systems could fail or create erroneous results by or at the 'Year 2000.' The
Bank  primarily  utilizes a third  party  vendor and such  vendor's  proprietary
software to process its electronic  data. The third party data processor  vender
has  modified,  upgraded or replaced  its  computer  software  applications  and
systems as necessary to accommodate  the Year 2000 dating  changes  necessary to
permit correct  recording of year dates for 2000 or later years. The third party
vendors also have engaged various consultants to review its Year 2000 issues and
has implemented a Year 2000 compliance program,  and deemed to be in compliance.
The Bank has representation  from its primary third party data processing vendor
that it has  completed all of the Year 2000 problems in its software and is Year
2000 compliant.  The Bank has also implemented its Year 2000 plan and tested its
internal system for compliance status.


                                      14

<PAGE> 15




      The Bank's  operations may also be affected by the Year 2000 compliance of
its  significant  suppliers  and other  vendors,  including  those  vendors that
provide  non-informational  and technology systems. In the event that the Bank's
significant suppliers or other vendors prove not to be Year 2000 compliant,  the
Bank  has  prepared  a  contingency  plan in the  event  there  are  any  system
interruptions.  There  can be no  assurance,  however,  that  such  plan  or the
performances  by any of the Bank's  suppliers  will be  effective  to remedy all
potential problems. In the worst case scenario,  there could be an excess amount
of withdrawal requests created by depositor concerns over Year 2000 failures and
the Bank could lose communication with the data processing center.  However, the
Bank's contingency plan covers both scenarios.

      The Company has upgraded its technology system in addition to implementing
its Year 2000  policy.  The Bank has held that the cost  arising  from Year 2000
issues will not  materially  impact the  institution,  and as June 30, 1999, the
Bank has incurred cost of  approximately  $17,000.  The current  budget for Year
2000  issues is $20,000 but is not limited to that  amount.  The Bank's  systems
have been tested and appear to be Year 2000  compliant,  but additional cost may
be incurred in the  education  of the Bank's  customers.  Lenox has  developed a
customer  awareness  plan for all  customers  which  begins in  August  and will
continue  throughout  the year.  After  evaluating the customer base and because
substantially all of the Bank's borrowers are individuals rather than commercial
enterprises,  management  believes  that Year 2000  issues  will not  materially
impair the ability of the Bank's borrowers to repay their debts.



                                       15

<PAGE> 16



                           PART II. OTHER INFORMATION


Item 1.     Legal Proceedings.
            -----------------

            The Company is not involved in any pending legal  proceedings  other
            than routine legal  proceedings  occurring in the ordinary course of
            business.  Such routine legal  proceedings,  in the  aggregate,  are
            believed by management  to be immaterial to the Company's  financial
            condition or results of operation.

Item 2.     Changes in Securities and Use of Proceeds.
            -----------------------------------------

            The Company entered into a Stockholder  Protection Rights Agreement,
            dated as of May 5, 1999, between with The Fifth Third Bank, as Right
            Agent (the  "Rights  Agreement").  Under the Rights  Agreement  each
            stockholder  of record as of May 27, 1999 will receive a dividend of
            one right ("Right") for each  outstanding  share of common stock, no
            par value of the Company (the "Common  Stock") they own.  Each Right
            entitles the registrant holder to purchase from the Company one-half
            of one share of the  Common  Stock at an  exercise  price of $55.00,
            subject to adjustment.  The  description and terms of the Rights are
            set  forth in the  Rights  Agreement,  a copy of  which is  included
            herein as Exhibit 10.1.

Item 3.     Defaults Upon Senior Securities.
            -------------------------------

            None.

Item 4.     Other Information.
            -----------------

            None.

Item 6.     Exhibits and Reports on Form 8-K (Section 249.308 of this Chapter).
            ------------------------------------------------------------------
            (a)   Exhibits
                  3.1   Amended Articles of Incorporation of Lenox Bancorp,
                        Inc.*
                  3.2   Amended and Restated Code of Regulations of Lenox
                        Bancorp, Inc.*
                  10.1  Stockholder Protection Rights Agreement, dated as of May
                        5, 1999, between Lenox Bancorp, Inc. and The Fifth Third
                        Bank, as Rights Agent**
                  11.0  Statement re: Computation of Per Share Earnings
                  27.0  Financial Data Schedule




                                      16

<PAGE> 17



            (b)   Reports on Form 8-K

                  On June 1, 1999,  the Company filed an 8-K to announce that on
                  May 27, 1999,  the Company filed a  registration  statement on
                  Form  8-A  with  the   Securities   and  Exchange   Commission
                  registering its Stockholder Protection Rights Agreement, dated
                  as of May 5, 1999  between  the  Company  and The Fifth  Third
                  Bank, as Right Agent (the "Rights Agreement"). A copy of the
                  Rights Agreement was filed by exhibit.

----------------------
*     Incorporated herein by reference to the Company's Form 10-KSB, filed on
      March 25, 1998.
**    Incorporated herein by reference to the Company's Form 8-K, filed on June
      1, 1999.


                                       17

<PAGE> 18



                                   SIGNATURES


      In accordance  with the  requirements  of the Exchange Act, the registrant
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                                          LENOX BANCORP, INC.


Dated: August 16, 1999                 By: /s/ Virginia M. Deisch
                                           ----------------------
                                           Virginia M. Deisch
                                           President and Chief Executive Officer
                                           (principal executive officer)

Dated: August 16, 1999                 By: /s/ Michael P. Cooper
                                           ---------------------
                                           Michael P. Cooper
                                           Chief Financial Officer and Treasurer
                                           (principal financial and accounting
                                            officer)



                                       18

<PAGE> 19



                                 EXHIBIT INDEX


                                                                         PAGES
                                                                         -----

      11.0  Statement re: Computation of Per Share Earnings.................20

      27.0  Financial  Data Schedule  (submitted  only with  electronic
            filing).........................................................--








                                       19