SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (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

                                       OR

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

                        Commission file number: 333-35799

                             UNION COMMUNITY BANCORP
               (Exact name of registrant specified in its charter)

          Indiana                                           35-2025237
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)
Identification  Number)

                              221 East Main Street
                          Crawfordsville, Indiana 47933
                    (Address of principal executive offices,
                               including Zip Code)

                                 (765) 362-2400
              (Registrant's telephone number, including area code)


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

The  number of shares of the  Registrant's  common  stock,  without  par  value,
outstanding as of June 30, 1999 was 2,736,763.




<PAGE>



                             Union Community Bancorp
                                    Form 10-Q

                                      Index

                                                                        Page No.
FORWARD LOOKING STATEMENT                                                      3
PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements

                  Consolidated Condensed Balance
                  Sheet (Unaudited)                                            4

                  Consolidated Condensed Statement of Income
                  (Unaudited)                                                  5

                  Consolidated Condensed Statement of Shareholders'
                  Equity (Unaudited)                                           6

                  Consolidated Condensed Statement of Cash Flows
                  (Unaudited)                                                  7

                  Notes to Unaudited Consolidated Condensed
                  Financial Statements                                         8

Item 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations.                                       9

Item 3.       Quantitative and Qualitative Disclosures about Market Risk      12

PART II.      OTHER INFORMATION

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

SIGNATURES                                                                    15




<PAGE>




                            FORWARD LOOKING STATEMENT

This  Quarterly  Report on Form 10-Q ("Form  10-Q")  contains  statements  which
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-Q and include  statements  regarding the intent,  belief,
outlook, estimate or expectations of the Company (as defined in the notes to the
consolidated  condensed  financial  statements),  its  directors or its officers
primarily with respect to future events and the future financial  performance of
the  Company.  Readers  of this Form 10-Q are  cautioned  that any such  forward
looking  statements  are not  guarantees  of future  events or  performance  and
involve risks and  uncertainties,  and that actual results may differ materially
from those in the forward looking statements as a result of various factors. The
accompanying  information  contained  in this  Form  10-Q  identifies  important
factors that could cause such  differences.  These  factors  include  changes in
interest   rates;   loss  of  deposits  and  loan  demand  to  other   financial
institutions;  substantial changes in financial markets;  changes in real estate
values and the real estate market; or regulatory changes.



<PAGE>



PART I  FINANCIAL INFORMATION
Item 1.  Financial Statements

                     UNION COMMUNITY BANCORP AND SUBSIDIARY
                      Consolidated Condensed Balance Sheet
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                         June 30,               December 31,
                                                                                           1999                     1998
                                                                                  ------------------------ -------------------------
<S>                                                                                <C>                     <C>
    Assets
         Cash                                                                      $         144,533       $          32,153
         Interest-bearing demand deposits                                                  2,568,305               6,158,927
                                                                                  ------------------------ -------------------------
             Cash and cash equivalents                                                     2,712,838               6,191,080
         Investment securities
             Available for sale                                                              867,670
             Held to maturity                                                              7,988,957               8,026,162
                                                                                  ------------------------ -------------------------
                  Total investment securities                                              8,856,627               8,026,162
         Loans, net of allowance for loan losses of $392,258 and $362,258                 99,296,236              90,900,269
         Premises and equipment                                                              369,965                 355,194
         Federal Home Loan Bank stock                                                        848,700                 744,500
         Investment in limited partnership                                                 1,002,609               1,055,109
         Interest receivable                                                                 647,436                 714,691
         Other assets                                                                        113,416                 174,687
                                                                                  ------------------------ -------------------------

             Total assets                                                             $  113,847,827          $  108,161,692
                                                                                  ======================== =========================

    Liabilities
         Deposits
             Noninterest-bearing                                                    $      1,086,812       $         656,796
             Interest-bearing                                                             66,964,099              64,188,836
                                                                                  ------------------------ -------------------------
                  Total deposits                                                          68,050,911              64,845,632
         Federal Home Loan Bank advances                                                   4,658,526                 772,226
         Note payable                                                                        837,442               1,020,642
         Interest payable                                                                    108,883                 109,337
         Dividends payable                                                                   282,006                 270,567
         Other liabilities                                                                   593,634                 612,427
                                                                                  ------------------------ -------------------------
             Total liabilities                                                            74,531,402              67,630,831
                                                                                  ------------------------ -------------------------

    Commitments and Contingent Liabilities


<PAGE>




    Shareholders' Equity
         Preferred stock, no-par value
             Authorized and unissued - 2,000,000 shares
         Common stock, no-par value
             Authorized - 5,000,000 shares
             Issued and outstanding - 2,736,763 and 2,889,663 shares                      26,709,173              28,193,644
         Retained earnings                                                                15,757,398              15,708,073
         Accumulated other comprehensive income                                               53,832
         Unearned employee stock ownership plan ("ESOP") shares                           (1,677,591)             (1,730,736)
         Unearned recognition and retention plan ("RRP") shares                           (1,526,387)             (1,640,120)
                                                                                  ------------------------ -------------------------
             Total shareholders' equity                                                   39,316,425              40,530,861
                                                                                  ------------------------ -------------------------

             Total liabilities and shareholders' equity                               $  113,847,827           $ 108,161,692
                                                                                  ======================== =========================
</TABLE>


    See notes to consolidated condensed financial statements.




<PAGE>



                     UNION COMMUNITY BANCORP AND SUBSIDIARY
                   Consolidated Condensed Statement of Income
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      Three Months Ended                  Six Months Ended
                                                                            June 30                          June 30
                                                               ---------------- ----------------- ---------------- ----------------
                                                                     1999            1998              1999              1998
                                                               ---------------- ----------------- ---------------- ----------------
<S>                                                               <C>            <C>                <C>              <C>
    Interest and Dividend Income
         Loans                                                    $  1,903,945   $  1,716,660       $   3,720,294    $ 3,348,026
         Investment securities                                         142,018         72,549             283,550        179,389
         Dividends on Federal Home Loan Bank stock                      16,882         14,825              31,568         28,785
         Deposits with financial institutions                           24,012        208,734              73,057        470,287
                                                               ---------------- ----------------- ---------------- ----------------
             Total interest and dividend income                      2,086,857      2,012,768           4,108,469      4,026,487
                                                               ---------------- ----------------- ---------------- ----------------

    Interest Expense
         Deposits                                                      865,493        823,252           1,724,718      1,627,775
         Federal Home Loan Bank advances                                46,626         11,271              58,040         28,035
                                                               ---------------- ----------------- ---------------- ----------------
             Total interest expense                                    912,119        834,523           1,782,758      1,655,810
                                                               ---------------- ----------------- ---------------- ----------------

    Net Interest Income                                              1,174,738      1,178,245           2,325,711      2,370,677
         Provision for loan losses                                      15,000         98,000              30,000         98,000
                                                               ---------------- ----------------- ---------------- ----------------
    Net Interest Income After Provision for Loan Losses              1,159,738      1,080,245           2,295,711      2,272,677
                                                               ---------------- ----------------- ---------------- ----------------

    Other Income (Losses)
         Equity in losses of limited partnerships                      (27,500)       (36,000)            (52,500)       (61,000)
         Other income                                                   38,434         18,996              52,213         33,512
                                                               ---------------- ----------------- ---------------- ----------------
             Total other income (losses)                                10,934        (17,004)               (287)       (27,488)
                                                               ---------------- ----------------- ---------------- ----------------

    Other Expenses
         Salaries and employee benefits                                248,376        162,230             515,245        380,414
         Net occupancy and equipment expenses                           21,496         16,449              36,546         28,812
         Deposit insurance expense                                      10,774         11,466              21,995         21,177
         Legal and professional fees                                    48,113         53,601              82,662         73,491
         Other expenses                                                115,352         88,865             246,554        168,359
                                                               ---------------- ----------------- ---------------- ----------------
             Total other expenses                                      444,111        332,611             903,002        672,253
                                                               ---------------- ----------------- ---------------- ----------------

    Income Before Income Tax                                           726,561        730,630           1,392,422      1,572,936
         Income tax expense                                            256,150        259,721             486,886        565,103
                                                               ---------------- ----------------- ---------------- ----------------

    Net Income                                                    $    470,411    $   470,909      $      905,536    $ 1,007,833
                                                               ================ ================= ================ ================

    Basic Earnings per Share                                         $  .19           $  .16          $    .36           $  .35
                                                               ================ ================= ================ ================

    Diluted Earnings per Share                                       $  .19           $  .16          $    .36           $  .35
                                                               ================ ================= ================ ================
</TABLE>





    See notes to consolidated condensed financial statements.



<PAGE>





                     UNION COMMUNITY BANCORP AND SUBSIDIARY
            Consolidated Condensed Statement of Shareholders' Equity
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                               Accumulated
                                 Common Stock                                     Other      Unearned
                            -----------------------
                              Shares                Comprehensive  Retained   Comprehensive     ESOP       Unearned
                           Outstanding     Amount       Income     Earnings       Income       Shares     Compensation    Total
                           -------------- --------- ------------- ----------- -------------- ----------- ------------- -----------

<S>                          <C>          <C>                      <C>                       <C>          <C>         <C>
Balances, January 1, 1999    2,889,663    $28,193,644              $ 15,708,073              $(1,730,736) (1,640,120) $ 40,530,861

  Comprehensive income
    Net income for the                               $   905,536       905,536                                              905,536
     period
    Other comprehensive
     income, net of  tax
      Unrealized gains on
       securities                                    $    53,832                $ 53,832                                $    53,832
                                                    =============
  Comprehensive income                               $   959,368
                                                    =============
  Cash dividends
      ($.215 per share)                                               (555,698)                                            (555,698)
  Purchase of common  stock   (152,900)   (1,492,097)                 (300,513)                                          (1,792,610)
  Amortization of unearned
     compensation expense                                                                                     113,733       113,733
  ESOP shares earned                           7,626                                                                         60,771
                                                                                                 53,145
                            -----------  -----------               ----------- -------------- ----------- ------------- -----------
Balances, June 30, 1999      2,736,763    26,709,173                15,757,398                1,677,591)   (1,526,387) $ 39,316,425
                            ===========  ===========               =========== ============== =========== ============= ===========

</TABLE>





See notes to consolidated condensed financial statements.



<PAGE>



                     UNION COMMUNITY BANCORP AND SUBSIDIARY
                 Consolidated Condensed Statement of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                   Six Months Ended
                                                                                                       June 30,
                                                                                              ---------------- ---------------
                                                                                                   1999             1998
                                                                                              ---------------- ---------------
<S>                                                                                             <C>              <C>
    Operating Activities
         Net income                                                                             $   905,536      $ 1,007,833
         Adjustments to reconcile net income to net cash
             provided (used) by  operating activities
           Provision for loan losses                                                                 30,000           98,000
           Depreciation and amortization                                                             17,177           16,257
           Investment securities accretion, net                                                      (4,206)          (4,691)
           Gain on sale of foreclosed assets                                                           (284)
           Equity in losses of limited partnerships                                                  52,500           61,000
           Amortization of unearned compensation expense                                            113,733
           ESOP shares earned                                                                        60,771           80,855
           Net change in:
             Interest receivable                                                                     67,255          (40,491)
             Interest payable                                                                          (454)         (24,054)
             Other assets                                                                            25,962           29,440
             Other liabilities                                                                      (13,336)          14,195
                                                                                              ---------------- ---------------
                  Net cash provided by operating activities                                       1,254,654        1,238,344
                                                                                              ---------------- ---------------

    Investing Activities
         Investment securities
             Purchase of securities available for sale                                             (778,529)
             Purchase of securities held to maturity                                               (815,000)      (5,903,586)
             Proceeds from maturities of securities
                 held to maturity and paydowns of
                 mortgage-backed securities                                                         856,411        1,865,959
         Net changes in loans                                                                    (8,523,313)      (9,446,696)
         Purchase of  FHLB of Indianapolis stock                                                   (104,200)         (36,800)
         Purchases of property and equipment                                                        (31,948)          (1,946)
         Proceeds on sale of foreclosed assets                                                      100,356
         Other investing activities                                                                  (2,726)
                                                                                              ---------------- ---------------
                  Net cash used by investing activities                                          (9,298,949)     (13,523,069)
                                                                                              ---------------- ---------------

    Financing Activities
         Net change in
           Interest-bearing demand and savings deposits                                           4,587,743         (793,169)
           Certificates of deposit                                                               (1,382,464)         413,348
           Stock subscription escrow accounts                                                                    (22,687,104)
         Proceeds from borrowings                                                                 4,000,000
         Repayment of borrowings                                                                   (296,900)      (1,780,225)
         Cash dividends                                                                            (544,258)        (214,332)
         Repurchase of common stock                                                              (1,792,610)
         Net change in advances by borrowers for taxes and insurance                                 (5,458)          30,352
                                                                                              ---------------- ---------------
                  Net cash provided (used) by financing activities                                4,566,053      (25,031,130)
                                                                                              ---------------- ---------------

    Net Change in Cash and Cash Equivalents                                                      (3,478,242)     (37,315,855)

    Cash and Cash Equivalents, Beginning of Period                                                6,191,080       44,780,827
                                                                                              ---------------- ---------------

    Cash and Cash Equivalents, End of Period                                                  $   2,712,838    $   7,464,972
                                                                                              ================ ===============

    Additional Cash Flows Information
         Interest paid                                                                        $   1,783,212    $   1,679,864
         Income tax paid                                                                            551,860          424,650
</TABLE>



    See notes to consolidated condensed financial statements.


<PAGE>



                     UNION COMMUNITY BANCORP AND SUBSIDIARY
         Notes to Unaudited Consolidated Condensed Financial Statements

Note 1: Basis of Presentation

The consolidated  financial  statements  include the accounts of Union Community
Bancorp (the "Company") and its wholly owned  subsidiary,  Union Federal Savings
and Loan Association, a federally chartered savings and loan association ("Union
Federal").  A summary of significant  accounting policies is set forth in Note 1
of Notes to Financial Statements included in the December 31, 1998 Annual Report
to Shareholders.  All significant  intercompany  accounts and transactions  have
been eliminated in consolidation.

The interim  consolidated  financial statements have been prepared in accordance
with instructions to Form 10-Q, and therefore do not include all information and
footnotes  necessary for a fair presentation of financial  position,  results of
operations  and cash flows in  conformity  with  generally  accepted  accounting
principles.

The interim consolidated  financial statements at June 30, 1999, and for the six
and  three  months  ended  June 30,  1999 and  1998,  have not been  audited  by
independent  accountants,  but  reflect,  in  the  opinion  of  management,  all
adjustments  (which  include  only normal  recurring  adjustments)  necessary to
present fairly the financial position,  results of operations and cash flows for
such periods.

Note 2: Earnings Per Share

Earnings per share have been  computed  based upon the weighted  average  common
shares  outstanding.  Unearned  Employee  Stock  Ownership Plan shares have been
excluded from the computation of average common shares outstanding.
<TABLE>
<CAPTION>


                                             Three Months Ended                         Three Months Ended June
                                                June 30, 1999                                   30, 1998
                                                -------------                                   --------
                                                  Weighted                                      Weighted
                                                   Average        Per Share                     Average      Per Share
                                     Income        Shares           Amount         Income        Shares        Amount
<S>                                  <C>           <C>            <C>             <C>          <C>           <C>
Basic earnings per share
  Income available to common
  shareholders                       $  470,411    2,488,607      $     .19       $  470,909   2,861,847     $       .16
                                                                 ===========                                =============

Effect of dilutive RRP awards
and stock options
                                  -------------- ---------------                ------------- -------------
Diluted earnings per share
Income available to  common
shareholders and assumed
conversions                          $  470,411    2,488,607      $     .19       $  470,909     2,861,847   $       .16
                                  ============== =============== ===========    ============= ============= =============



                                              Six Months Ended                              Six Months Ended
                                                June 30, 1999                                June 30, 1998
                                                -------------                                -------------
                                                  Weighted                                      Weighted
                                                   Average        Per Share                     Average      Per Share
                                     Income        Shares           Amount         Income        Shares        Amount
Basic earnings per share
  Income available to common
  shareholders                       $  905,536    2,541,514      $     .36     $  1,007,833   2,860,482     $       .35
                                                                 ===========                                =============

Effect of dilutive RRP awards
and stock options
                                  -------------- ---------------                ------------- -------------
Diluted earnings per share
Income available to  common
shareholders and assumed
conversions                          $  905,536    2,541,514       $    .36      $ 1,007,833     2,860,482   $       .35
                                  ============== =============== ===========    ============= ============= =============

</TABLE>
<PAGE>


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

General

Union Community Bancorp, an Indiana  corporation (the "Company"),  was organized
in September,  1997.  On December 29, 1997,  it acquired all of the  outstanding
common stock of Union Federal  Savings and Loan  Association  ("Union  Federal")
upon the  conversion  of Union  Federal from a federal  mutual  savings and loan
association to a federal stock savings and loan association.

Union Federal was organized as a state-chartered savings and loan association in
1913. Since then, Union Federal has conducted its business from its full-service
office located in Crawfordsville,  Indiana.  Union Federal's  principal business
consists  of  attracting  deposits  from  the  general  public  and  originating
fixed-rate and  adjustable-rate  loans secured primarily by first mortgage liens
on one- to four-family residential real estate. Union Federal's deposit accounts
are insured up to applicable  limits by the Savings  Association  Insurance Fund
("SAIF") of the Federal Deposit Insurance  Corporation  ("FDIC").  Union Federal
offers a number of financial  services,  including:  (i) residential real estate
loans;  (ii)  multi-family  loans;  (iii)  commercial  real estate  loans;  (iv)
construction  loans;  (v) home  improvement  loans;  (vi)  money  market  demand
accounts ("MMDAs");  (vii) passbook savings accounts; and (viii) certificates of
deposit.

Union Federal currently owns one subsidiary,  UFS Service Corp.  ("UFS"),  whose
sole asset is its investment in Pedcor Investments  1993-XVI,  L.P.  ("Pedcor"),
which is an Indiana limited partnership that was established to organize, build,
own, operate and lease a 48-unit  apartment complex in  Crawfordsville,  Indiana
known as Shady Knoll II  Apartments  (the  "Project").  Union  Federal  owns the
limited partner  interest in Pedcor.  The general partner is Pedcor  Investments
LLC. The Project,  operated as a multi-family,  low- and moderate-income housing
project,  is  completed  and is  performing  as  planned.  Because  UFS  engages
exclusively  in  activities  that  are  permissible  for a  national  bank,  OTS
regulations  permit  Union  Federal  to  include  its  investment  in UFS in its
calculation of regulatory capital.

Union  Federal's  results of operations  depend  primarily upon the level of net
interest income,  which is the difference  between the interest income earned on
interest-earning assets, such as loans and investments,  and costs incurred with
respect to  interest-bearing  liabilities,  primarily  deposits and  borrowings.
Results of operations also depend upon the level of Union Federal's non-interest
income,  including  fee  income  and  service  charges,  and  the  level  of its
non-interest expenses, including general and administrative expenses.

Financial Condition

Total assets increased approximately $5.6 million, or 5.2%, to $113.8 million at
June 30,  1999,  from $108.2  million at December  31,  1998.  The  increase was
primarily  due to loan growth of $8.4  million  offset by a decrease in cash and
cash  equivalents of $3.5 million.  Net loans increased by 9.2% to $99.3 million
due to an increase in customer  demand and an increased  focus by the Company in
the areas of commercial and consumer lending.  Investment  securities  available
for sale and held to maturity  also  increased by $831,000,  or 10.4% during the
six months ended June 30, 1999.

Deposits  increased by $3.2 million to $68.1 million during the six months ended
June 30, 1999.  Demand and savings  deposits  increased $4.6 million,  or 28.6%,
from  December 31, 1998 to June 30, 1999  primarily  due to an increase in money
market savings of $4.1 million.  Certificates of deposit decreased $1.4 million,
or 2.8%, during this period.

Borrowed funds increase by $3.7 million from December 31, 1998 to June 30, 1999.
The increase in total  borrowed funds resulted from an increase in FHLB advances
of $3.9 million and a decrease in the note payable to a limited  partnership  of
$184,000. The increases in borrowings were primarily used to fund loan growth.

Shareholders'  equity  decreased $1.2 million to $39.3 million at June 30, 1999.
The decrease was  primarily  due to stock  repurchases  of $1.8 million and cash
dividends of $556,000.  These decreases were offset by net income for six months
ended June 30, 1999 of $906,000,  Employee Stock Ownership Plan shares earned of
$61,000 and unearned compensation amortization of $114,000.

Comparison  of  Operating  Results for the Three  Months Ended June 30, 1999 and
1998

Net income  decreased  approximately  $1,000 from  $471,000 for the three months
ended June 30, 1998 to $470,000 for the three  months  ended June 30, 1999.  The
return on average  assets was 1.67% and 1.74 % for the three  months  ended June
30, 1999 and 1998, respectively.

Interest  income was  $2,087,000  for the three  months  ended June 30,  1999 as
compared to  $2,013,000  for the  comparable  period in 1998.  Interest  expense
increased  approximately  $77,000,  or 9.2%,  from $834,000 for the three months
ended June 30, 1998 to $912,000  for the same period in 1999.  As a result,  net
interest income for the three months ended June 30, 1999 amounted to $1,175,000,
approximately a $4,000 decrease from the three months ended June 30, 1998.

The  provision for loan losses made for the three months ended June 30, 1999 was
$15,000 as compared to $98,000 for the same period in 1998.  The 1999  provision
and the  allowance  for loan losses  were  considered  adequate,  based on size,
condition and components of the loan portfolio.  While management estimates loan
losses using the best  available  information,  no  assurance  can be given that
future  addition  to the  allowance  will not be  necessary  based on changes in
economic  and  real  estate  market  conditions,  further  information  obtained
regarding problem loans,  identification  of additional  problem loans and other
factors, both within and outside of management's control.

Other  income  (losses)  was  $11,000 for the three  months  ended June 30, 1999
compared to losses of $17,000 for the same period in 1998. Other income (losses)
includes  the  equity  in  losses  of  the  Company's  investment  in a  limited
partnership,  Pedcor.  In  addition  to  recording  the  equity in the losses of
Pedcor,  a benefit of low  income  housing  income tax  credits in the amount of
$45,000 was  recorded  for the three  months  ended June 30, 1999 and 1998.  The
increase  in other  income was due to nominal  increases  in a variety of income
categories.

Salaries and employee benefits were $248,000 for the three months ended June 30,
1999 compared to $162,000 for the 1998 period, an increase of $86,000, or 53.1%.
This  increase  was  primarily  due  to  compensation  expense  related  to  the
management  recognition  and  retention  plan that became  effective on June 30,
1998. Other expenses, consisting primarily of expenses related to service center
fees, advertising,  directors' fees, supervisory examination fees, supplies, and
postage  increased  approximately  $26,000 for three  months ended June 30, 1999
compared  to the same  period  in 1998.  The  increase  in  other  expenses  was
primarily due to nominal increases in a variety of expense categories.

Income tax expense  decreased  $4,000,  or 1.4%, for the three months ended June
30, 1999 compared to the same period in 1998. The decrease was directly  related
to the decrease in taxable income for the period.

Comparison of Operating Results for the Six Months Ended June 30, 1999 and 1998

Net income  decreased  $102,000,  or 10.1%,  from  $1,008,000 for the six months
ended June 30,  1998 to $906,000  for the six months  ended June 30,  1999.  The
decrease was primarily  attributable  to a decline in the Company's net interest
income and increases in non-interest  expenses. The return on average assets was
1.63% and 1.87 % for the six months ended June 30, 1999 and 1998, respectively.

Interest  income  was  $4,108,000  for the six  months  ended  June 30,  1999 as
compared to $4,026,000 for the six months ended June 30, 1998.  Interest expense
increased  $127,000,  or 7.7%, from $1,656,000 for the six months ended June 30,
1998 to $1,783,000 for the same period in 1999. As a result, net interest income
for the six months ended June 30, 1999 amounted to  $2,326,000,  a 1.9% decrease
from six months ended June 30, 1998. The Company's net interest margin decreased
from 4.5% for the six  months  ended  June 30,  1998 to 4.3% for the  comparable
period in 1999.

The  provision  for loan losses made for the six months  ended June 30, 1999 was
$30,000 as compared to $98,000 for the same period in 1998.  The 1999  provision
and the  allowance  for loan losses  were  considered  adequate,  based on size,
condition and components of the loan portfolio.  While management estimates loan
losses using the best  available  information,  no  assurance  can be given that
future  addition  to the  allowance  will not be  necessary  based on changes in
economic  and  real  estate  market  conditions,  further  information  obtained
regarding problem loans,  identification  of additional  problem loans and other
factors, both within and outside of management's control.

Other losses  decreased  $27,000 for the six months ended June 30, 1999 compared
to the same period in 1998. Other income (losses)  includes the equity in losses
of the Company's  investment in a limited  partnership,  Pedcor.  In addition to
recording  the equity in the losses of Pedcor,  a benefit of low income  housing
income tax  credits in the amount of  $45,000  was  recorded  for the six months
ended June 30, 1999 and 1998.  The  increase in other  income was due to nominal
increases in a variety of income categories.

Salaries and employee  benefits  were $515,000 for the six months ended June 30,
1999  compared to $380,000  for the 1998  period,  an increase of  $135,000,  or
35.5%.  This increase was primarily due to  compensation  expense related to the
management recognition and retention plan that began effective on June 30, 1998.
Other expenses, consisting primarily of expenses related to service center fees,
advertising,  directors'  fees,  supervisory  examination  fees,  supplies,  and
postage  increased  approximately  $78,000  for six months  ended June 30,  1999
compared  to the same  period  in 1998.  The  increase  in  other  expenses  was
primarily due to approximately $45,000 of non-recurring  expenses related to the
Company's data processing conversion during the first quarter of 1999.

Income tax expense  decreased  $78,000,  or 13.8%, for the six months ended June
30, 1999 compared to the same period in 1998.  The decease was directly  related
to the decrease in taxable income for the period.

Asset Quality

Union  Federal  currently  classifies  loans as  special  mention,  substandard,
doubtful  and loss to  assist  management  in  addressing  collection  risks and
pursuant to regulatory  requirements  which are not necessarily  consistent with
generally  accepted  accounting  principles.  Special  mention  loans  represent
credits  that  have  potential   weaknesses  that  deserve   management's  close
attention.  If left  uncorrected,  these  potential  weaknesses  may  result  in
deterioration  of the repayment  prospects or Union Federal's credit position at
some future date.  Substandard  loans  represent  credits  characterized  by the
distinct  possibility  that some loss will be sustained if deficiencies  are not
corrected.  Doubtful loans possess the characteristics of substandard loans, but
collection  or  liquidation  in full is  doubtful  based  upon  existing  facts,
conditions and values. A loan classified as a loss is considered  uncollectible.
Union  Federal had no loans  classified  as special  mention as of June 30, 1999
while there were $1.2 million of special  mention loans at December 31, 1998. In
addition,  Union  Federal  had  $826,000  and  $840,000 of loans  classified  as
substandard  at June 30, 1999 and December 31, 1998,  respectively.  At June 30,
1999 and December 31, 1998,  no loans were  classified  as doubtful or loss.  At
June 30, 1999, and December 31, 1998, respectively, $337,000 and $349,000 of the
substandard  loans were  non-accrual  loans.  The  allowance for loan losses was
$392,000  or .4% of loans at June 30,  1999 as  compared  to  $362,000 or .4% of
loans at December 31, 1998.


Liquidity and Capital Resources

The standard measure of liquidity for savings  associations is the ratio of cash
and eligible  investments to a certain  percentage of net  withdrawable  savings
accounts  and  borrowings  due within one year.  The minimum  required  ratio is
currently set by the Office of Thrift  Supervision  regulation at 4%. As of June
30 , 1999, Union Federal had liquid assets of $5.4 million and a liquidity ratio
of 7.3%.

Other

The  Securities  and  Exchange  Commission  maintains  a Web site that  contains
reports,   proxy  information   statements,   and  other  information  regarding
registrants that file electronically with the Commission, including the Company.
The address is (http://www.sec.gov).

Year 2000 Compliance

The  Company's  lending and  deposit  activities,  like those of most  financial
institutions,  depend  significantly  upon  computer  systems.  The  Company  is
addressing  the potential  problems  associated  with the  possibility  that the
computers  that  it  uses to  control  its  operating  systems,  facilities  and
infrastructure  may not be programmed to read four-digit date codes.  This could
cause some computer  applications  to be unable to recognize the change from the
year 1999 to the year 2000,  which  could  cause  computer  systems to  generate
erroneous data or to fail.

The Company is  actively  monitoring  its  compliance  with making its  computer
equipment and other  information  systems Year 2000 compliant.  During the first
week of March 1999, the Company  switched its electronic  data service  provider
from  On-Line  Financial  Services,  Inc.  in Oak Brook,  Illinois  to  Intrieve
Incorporated ("Intrieve"), located in Cincinnati, Ohio. The Company changed data
service providers in order to improve the quality of its computer and networking
technology.  Testing  conducted  during the second week of March 1999  indicates
that the data  that the  Company  maintains  on  Intrieve's  system is Year 2000
compliant.  The Company incurred expenses of approximately $45,000 in converting
its  data  processing  to  Intrieve's  system.  It is  not  expected  that  data
processing  expense incurred by the Company in the future will differ materially
from prior  periods.  Bankers'  Systems,  which  maintains  the  Company's  loan
documentation  system,  conducted tests during December 1998 that indicated that
its systems are Year 2000 compliant.  The Company will continue to conduct tests
during the remainder of 1999 to ensure that its data  processing and information
systems are Year 2000 compliant.

The Company  contacted  the 49  companies  that  supply or service its  material
operations  requesting  that they  certify by  December  31, 1998 that they have
plans  to make  their  respective  systems  Year  2000  compliant  and  received
responses  from all of these  companies  confirming  that their systems are Year
2000  compliant.  Notwithstanding  these  efforts that the Company has made,  no
assurances can be given that the systems of its service providers will be timely
renovated to address the Year 2000 issue.


The  Company's  Board of  Directors  reviews on a monthly  basis its progress in
addressing  Year 2000  issues and has  appointed  three  executive  officers  to
address  all aspects of Year 2000  compliance.  The  Company  believes  that its
expenses  related to upgrading its systems and software for Year 2000 compliance
will not exceed $10,000.  At June 30, 1999, the Company had spent  approximately
$7,000 in connection with Year 2000 compliance. Although the Company believes it
is taking the  necessary  steps to address the Year 2000  compliance  issue,  no
assurances  can be given that some  problems  will not occur or that it will not
incur significant  additional  expenses in future periods. In the event that the
Company  is  ultimately  required  to  purchase  replacement  computer  systems,
programs and  equipment,  or to incur  substantial  expenses to make its current
systems,  programs  and  equipment  Year  2000  compliant,  its net  income  and
financial condition could be adversely affected.

In addition to possible  expenses related to the Company's own systems and those
of its service  providers,  the Company could incur losses if Year 2000 problems
affect any of its depositors or borrowers.  Such problems could include  delayed
loan  payments  due to  Year  2000  problems  affecting  any of its  significant
borrowers  or  impairing  the payroll  systems of large  employers in its market
area. The Company has contacted the  approximately 18 commercial  borrowers with
outstanding  loans in excess of $500,000 for  confirmation  that their  computer
systems are, or soon will be, Year 2000  compliant.  As of June 30, 1999, all 18
confirmations had been received and no items of concern were noted. In addition,
the  Company  requires  that  borrowers  under  new  commercial  loans  that  it
originates  certify that they are aware of the Year 2000 issue and will give all
necessary  attention to insure that their  information  technology  will be Year
2000 compliant.  Because the Company's loan portfolio to individual borrowers is
diversified and its market area does not depend  significantly upon one employer
or industry, the Company does not expect any such Year 2000 related difficulties
that may affect its  depositors  and borrowers to  significantly  affect its net
earnings or cash flow.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

An important  component of Union  Federal's  asset/liability  management  policy
includes  examining the interest rate  sensitivity of its assets and liabilities
and  monitoring  the  expected  effects  of  interest  rate  changes  on its net
portfolio value.

An asset or liability is interest rate  sensitive  within a specific time period
if it will mature or reprice within that time period.  If Union Federal's assets
mature or reprice  more  quickly or to a greater  extent  than its  liabilities,
Union  Federal's  net  portfolio  value and net  interest  income  would tend to
increase  during periods of rising interest rates but decrease during periods of
falling interest rates. Conversely,  if Union Federal's assets mature or reprice
more slowly or to a lesser extent than its liabilities,  its net portfolio value
and net interest income would tend to decrease during periods of rising interest
rates but increase during periods of falling interest rates.

Management  believes it is critical to manage the relationship  between interest
rates and the  effect on Union  Federal's  net  portfolio  value  ("NPV").  This
approach  calculates the  difference  between the present value of expected cash
flows from assets and the present value of expected cash flows from liabilities,
as well as cash flows from off-balance  sheet  contracts.  Union Federal manages
assets  and  liabilities  within  the  context  of the  marketplace,  regulatory
limitations  and within  limits  established  by its Board of  Directors  on the
amount of change in NPV which is acceptable given certain interest rate changes.

The OTS  issued a  regulation,  which  uses a net market  value  methodology  to
measure the interest rate risk exposure of savings associations.  Under this OTS
regulation,  an institution's  "normal" level of interest rate risk in the event
of an assumed change in interest rates is a decrease in the institution's NPV in
an  amount  not  exceeding  2% of  the  present  value  of its  assets.  Savings
associations  with over  $300  million  in assets or less than a 12%  risk-based
capital  ratio are required to file OTS Schedule  CMR. Data from Schedule CMR is
used by the OTS to calculate  changes in NPV (and the related  "normal" level of
interest rate risk) based upon certain interest rate changes  (discussed below).
Associations  which  do not  meet  either  of the  filing  requirements  are not
required to file OTS Schedule CMR, but may do so  voluntarily.  As Union Federal
does not meet either of these  requirements,  it is not required  file  Schedule
CMR, although it does so voluntarily.  Under the regulation,  associations which
must file are  required  to take a deduction  (the  interest  rate risk  capital
component)  from their total  capital  available to  calculate  their risk based
capital  requirement  if their  interest rate exposure is greater than "normal."
The amount of that  deduction  is  one-half  of the  difference  between (a) the
institution's  actual  calculated  exposure to a 200 basis point  interest  rate
increase or  decrease  (whichever  results in the greater pro forma  decrease in
NPV) and (b) its "normal"  level of exposure which is 2% of the present value of
its assets.

Presented  below,  as of June 30,  1999 and  December  31,  1998,  are  analyses
performed  by the OTS of Union  Federal's  interest  rate  risk as  measured  by
changes in NPV for  instantaneous  and  sustained  parallel  shifts in the yield
curve, in 100 basis points increments, up and down 300 basis points. At June 30,
1999, 2% of the present value of Union Federal's assets was  approximately  $2.3
million.  Because the interest rate risk of a 200 basis point increase in market
rates  (which  was  greater  than the  interest  rate risk of a 200 basis  point
decrease)  was $5.6  million at June 30,  1999.  Union  Federal  would have been
required to deduct $1.6  million from its total  capital  available to calculate
its risk based capital  requirement if it had been subject to the OTS' reporting
requirements  under this  methodology.  This  amount  represents  an increase of
$200,000 over the $1.4 million  calculated at December 31, 1998. Union Federal's
exposure  to  interest  rate risk  results  from a  concentration  of fixed rate
mortgage loans in its portfolio.

<TABLE>
<CAPTION>
                                June 30, 1999

                             Net Portfolio Value                       NPV as % of PV of Assets
   Changes
  In Rates      $ Amount         $ Change          % Change           NPV Ratio           Change
  --------      --------         ---------         --------           ---------           ------
<S>            <C>               <C>                  <C>               <C>              <C>
+300 bp        $  24,379         $ -8,455            -26%               23.30%          -547 bp
+200 bp           27,261           -5,573            -17               25.27            -350 bp
+100 bp           30,147           -2,687             -8               27.13            -163 bp
   0 bp           32,834                                               28.76
-100 bp           35,074            2,240              7               30.04             126 bp
-200 bp           36,965            4,131             13               31.06             230 bp
-300 bp           38,920            6,086             19               32.08             331 bp


                              December 31, 1998

                             Net Portfolio Value                       NPV as % of PV of Assets
   Changes
  In Rates      $ Amount         $ Change          % Change           NPV Ratio           Change
  --------      --------         ---------         --------           ---------           ------
+300 bp         $ 25,730         $ -7,687             -23%              25.18%           -498 bp
+200 bp           28,509            -4,907            -15               27.08            -308 bp
+100 bp           31,161            -2,256             -7               28.79            -137 bp
   0 bp           33,417                                                30.16
-100 bp           35,042             1,625             +5               31.08             +92 bp
-200 bp           36,542             3,125             +9               31.90            +175 bp
-300 bp           38,272             4,855            +15               32.84            +268 bp
</TABLE>



The chart at June 30, 1999 illustrates,  for example, that a 200 basis point (or
2%) increase in interest  rates would result in a $5.6 million,  or 17% decrease
in the net portfolio value of Union Federal's assets compared to a $4.9 million,
or 15% decrease,  at December 31, 1998. This  hypothetical  increase in interest
rates at June 30, 1999 would also result in a 350 basis point, or 3.49% decrease
in the ratio of the net portfolio  value to the present value of Union Federal's
assets compared to a 308 basis point, or 3.08% decrease at December 31, 1998.

As with any method of measuring  interest rate risk,  certain  shortcomings  are
inherent in the methods of  analysis  presented  above.  For  example,  although
certain  assets  and  liabilities  may have  similar  maturities  or  periods to
repricing,  they may react in  different  degrees to changes in market  interest
rates.  Also the interest rates on certain types of assets and  liabilities  may
fluctuate in advance of changes in market interest  rates,  while interest rates
on other types may lag behind  changes in market  rates.  Additionally,  certain
assets,  such as adjustable-rate  loans, have features which restrict changes in
interest rates on a short-term basis and over the life of the asset. Further, in
the event of a change in interest rates,  expected rates of prepayments on loans
and early withdrawals from certificates could likely deviate  significantly from
those assumed in calculating the table.


PART II.   OTHER INFORMATION

Item 1.       Legal Proceedings

              None.

Item 2.       Changes in Securities and Use of Proceeds

              None.

Item 3.       Defaults Upon Senior Securities.

              None.

Item 4.       Submission of Matters to Vote of Security Holders.

              On April  21,  1999,  the  Company  held  its  annual  meeting  of
              shareholders.  A total of  2,427,742  shares were  represented  in
              person or by proxy at the  meeting.  Marvin L. Burkett was elected
              to the Board of Directors for a three-year  term expiring in 2002.
              2,340,137  shares  were  voted  in favor  of the  election  of the
              nominee and there were 87,605 votes withheld. Phillip E. Grush was
              elected to the Board of Directors  for a three-year  term expiring
              in 2002.  2,343,617  shares were voted in favor of the election of
              the  nominee  and there  were  84,125  votes  withheld.  Joseph E.
              Timmons was  elected to the Board of  Directors  for a  three-year
              term expiring in 2002. 2,344,569 shares were voted in favor of the
              election of the nominee and there were 83,173 votes withheld

Item 5.       Other Information.

              None.

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

                    (a) Exhibits 27.  Financial Data Schedule

                    (b) No  reports on Form 8-K were  filed  during the  quarter
                        ended June 30, 1999.




<PAGE>



                                   Signatures

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

                                                UNION COMMUNITY BANCORP

Date:         August 13, 1999                   By: /s/ Joseph E. Timmons
              ---------------                   -------------------------

                                                  Joseph E. Timmons
                                                  President and
                                                  Chief Executive Officer

Date:         August 13, 1999                   By: /s/ Denise E. Swearingen
              ---------------                   ----------------------------

                                                  Denise E. Swearingen
                                                  Treasurer