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, 2001

                                       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: 000-23543

                             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, 2001 was 2,270,000.




<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                             4

             Consolidated Condensed Statement of Income                       5

             Consolidated Condensed Statement of Shareholders' Equity         6

             Consolidated Condensed Statement of Cash Flows                   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          11

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                   13
Item 2.  Changes in Securities                                               13
Item 3.  Defaults Upon Senior Securities                                     13
Item 4.  Submission of Matters to a Vote of Security Holders                 13
Item 5.  Other Information                                                   13
Item 6.  Exhibits and Reports on Form 8-K                                    13

SIGNATURES                                                                   14



<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,
                                                                                           2001                     2000
                                                                                  ------------------------ -------------------------
  Assets
<S>                                                                                   <C>                     <C>
       Cash                                                                           $      296,459          $      210,601
       Interest-bearing demand deposits                                                    2,660,136               4,544,085
                                                                                  ------------------------ -------------------------
           Cash and cash equivalents                                                       2,956,595               4,754,686
       Investment securities held to maturity                                              5,100,695               7,567,432
       Loans, net of allowance for loan losses of $509,554 and $479,554                  115,822,151             109,505,174
       Premises and equipment                                                                419,339                 373,986
       Federal Home Loan Bank stock                                                        1,180,700               1,043,700
       Investment in limited partnership                                                     876,609                 911,609
       Interest receivable                                                                   785,210                 958,450
       Other assets                                                                          213,235                 238,453
                                                                                  ------------------------ -------------------------

           Total assets                                                               $  127,354,534          $  125,383,490
                                                                                  ======================== =========================

  Liabilities
       Deposits
           Noninterest-bearing                                                        $    1,543,631          $    1,769,103
           Interest-bearing                                                               76,173,123              71,047,357
                                                                                  ------------------------ -------------------------
                Total deposits                                                            77,716,754              72,816,460
       Federal Home Loan Bank advances                                                    12,405,633              14,534,893
       Note payable                                                                          477,142                 654,542
       Interest payable                                                                      155,619                 196,223
       Dividends payable                                                                     317,683                 326,783
       Other liabilities                                                                     640,301                 666,655
                                                                                  ------------------------ -------------------------
           Total liabilities                                                              91,713,132              89,195,556

                                                                                  ------------------------ -------------------------
</TABLE>

  Commitments and Contingent Liabilities


<PAGE>



<TABLE>
<CAPTION>

  Shareholders' Equity
       Preferred stock, no par value
           Authorized and unissued - 2,000,000 shares
       Common stock, no-par value
           Authorized - 5,000,000 shares
<S>                                                                                   <C>                     <C>
           Issued and outstanding - 2,270,000 and 2,341,000 shares                        22,191,349              22,868,943
       Retained earnings                                                                  15,992,459              16,025,304
       Unearned employee stock ownership plan (ESOP) shares                               (1,470,951)             (1,521,125)
       Unearned recognition and retention plan (RRP) shares                               (1,071,455)             (1,185,188)
                                                                                  ------------------------ -------------------------
           Total shareholders' equity                                                     35,641,402              36,187,934
                                                                                  ------------------------ -------------------------

           Total liabilities and shareholders' equity                                 $  127,354,534          $  125,383,490
                                                                                  ======================== =========================
</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
                                                               ------------------ ---------------- ----------------- ---------------
                                                                      2001              2000             2001              2000
                                                               ------------------ ---------------- ----------------- ---------------
  Interest and Dividend Income
<S>                                                               <C>             <C>                <C>                <C>
       Loans                                                      $  2,221,355    $   2,108,416      $  4,393,124       $4,214,690
       Investment securities                                            93,114          133,735           212,310          265,226
       Dividends on Federal Home Loan Bank stock                        22,814           20,760             45,804          41,520
       Deposits with financial institutions                             42,410           13,659            120,287          36,955
                                                               ---------------- ----------------- ----------------- ---------------
           Total interest and dividend income                        2,379,693        2,276,570          4,771,525       4,558,431
                                                               ---------------- ----------------- ----------------- ---------------

  Interest Expense
       Deposits                                                      1,028,747          933,270         2,060,096        1,830,652
       Federal Home Loan Bank advances                                 161,444          173,614           380,466          344,794
                                                               ---------------- ----------------- ----------------- ---------------
           Total interest expense                                    1,190,191        1,106,884         2,440,562        2,175,446
                                                               ---------------- ----------------- ----------------- ---------------

  Net Interest Income                                                1,189,502        1,169,686         2,330,963        2,382,985
       Provision for loan losses                                        15,000           15,000            30,000           30,000
                                                               ---------------- ----------------- ----------------- ---------------
  Net Interest Income After Provision for Loan Losses                1,174,502        1,154,686         2,300,963        2,352,985
                                                               ---------------- ----------------- ----------------- ---------------

  Other Income (Losses)
       Equity in losses of limited partnerships                        (10,000)         (25,000)          (35,000)        (55,000)
       Net realized gains on sales of available for sale
  securities                                                                                                                 8,331
       Other income                                                     40,036           28,767            84,184           61,863
                                                               ---------------- ----------------- ----------------- ---------------
           Total other income (losses)                                  30,036            3,767            49,184           15,194
                                                               ---------------- ----------------- ----------------- ---------------

  Other Expenses
       Salaries and employee benefits                                  307,531          266,848           618,061          532,954
       Net occupancy expenses                                           18,340           15,614            29,878           26,506
       Deposit insurance expense                                         9,364            3,820            15,836            7,660
       Legal and professional fees                                      49,440           48,521            80,815           71,326
       Data processing fees                                             30,241           19,538            48,530           39,040
       Other expenses                                                  116,458           82,132           234,989          151,602
                                                               ---------------- ----------------- ----------------- ---------------
           Total other expenses                                        531,374          436,473         1,028,109          829,088
                                                               ---------------- ----------------- ----------------- ---------------

  Income Before Income Tax                                             673,164          721,980         1,322,038        1,539,091
       Income tax expense                                              223,430          227,584           436,458          509,473
                                                               ---------------- ----------------- ----------------- ---------------

  Net Income                                                      $    449,734    $     494,396      $    885,580       $1,029,618
                                                               ================ ================= ================= ===============

  Basic Earnings per Share                                              $  .22           $  .22            $  .43            $ .45
                                                               ================ ================= ================= ===============

  Diluted Earnings per Share                                            $  .22           $  .22            $  .43            $ .45
                                                               ================ ================= ================= ===============
</TABLE>
  See notes to consolidated condensed financial statements.




<PAGE>

                     UNION COMMUNITY BANCORP AND SUBSIDIARY
            Consolidated Condensed Statement of Shareholders' Equity
                     For the Six Months Ended June 30, 2001
                                   (Unaudited)

<TABLE>
<CAPTION>

                                              Common Stock                                Unearned
                                      ------------------------------
                                         Shares                           Retained          ESOP           Unearned
                                       Outstanding        Amount          Earnings         Shares         Compensation        Total
                                      -------------- ----------------- --------------- ---------------- ---------------- -----------

<S>                                     <C>            <C>             <C>             <C>                <C>           <C>
Balances, January 1, 2001               2,341,000      $22,868,943     $ 16,025,304    $(1,521,125)       $(1,185,188)  $36,187,934
  Net income for the period                                                 885,580                                         885,580
  Cash dividends ($.30 per share)                                          (635,367)                                       (635,367)
  Purchase of common  stock               (71,000)        (693,717)        (283,058)                                       (976,775)
  Amortization of unearned
compensation expense                                                                                           113,733      113,733
  ESOP shares earned                                        16,123                          50,174                           66,297
                                      -------------- --------------- ---------------- ---------------- ---------------- ------------
Balances, June 30, 2001                 2,270,000      $22,191,349       15,992,459    $(1,470,951)       $(1,071,455)  $ 5,641,402
                                      ============== =============== ================ ================ ================ ============
</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,
                                                                                              ---------------- ---------------
                                                                                                   2001             2000
                                                                                              ---------------- ---------------
  Operating Activities
<S>                                                                                            <C>             <C>
       Net income                                                                              $    885,580    $   1,029,618
       Adjustments to reconcile net income to net cash provided by operating activities
         Provision for loan losses                                                                   30,000           30,000
         Depreciation and amortization                                                               17,624           17,568
         Investment securities accretion, net                                                        (1,664)        (14,090)
         Gain on sale of investment securities available for sale                                                    (8,331)
         Equity in losses of limited partnerships                                                    35,000           55,000
         Amortization of unearned compensation expense                                              113,733          113,733
         ESOP shares earned                                                                          66,297           55,663
         Net change in:
           Interest receivable                                                                      173,240           82,123
           Interest payable                                                                         (40,604)          45,754
           Other assets                                                                              25,218           52,931
           Other liabilities                                                                        (48,627)          13,633
                                                                                              ---------------- ---------------
                Net cash provided by operating activities                                         1,255,797        1,473,622
                                                                                              ---------------- ---------------

  Investing Activities
       Purchase of securities held to maturity                                                                      (300,000)
       Purchase of  FHLB stock                                                                     (137,000)
       Proceeds from sales of investment securities available for sale                                                87,997
       Proceeds from maturities of securities held to maturity and paydowns of mortgage-
        backed securities                                                                         2,498,401          121,476
       Net changes in loans                                                                      (6,346,977)      (1,880,090)
       Purchases of property and equipment                                                          (62,977)         (15,116)
                                                                                              ---------------- ---------------
                Net cash used by investing activities                                            (4,048,553)      (1,985,733)
                                                                                              ---------------- ---------------

  Financing Activities
       Net change in
         Interest-bearing demand and savings deposits                                             3,232,372        1,076,981
         Certificates of deposit                                                                  1,667,922          652,776
       Proceeds from borrowings                                                                   4,000,000        9,000,000
       Repayment of borrowings                                                                   (6,306,660)      (9,306,533)
       Cash dividends                                                                              (644,467)        (652,473)
       Repurchase of common stock                                                                  (976,775)      (1,240,031)
       Net change in advances by borrowers for taxes and insurance                                   22,273            6,696
                                                                                              ---------------- ---------------
                Net cash provided (used) by financing activities                                    994,665         (462,584)
                                                                                              ---------------- ---------------

  Net Change in Cash and Cash Equivalents                                                        (1,798,091)        (974,695)

  Cash and Cash Equivalents, Beginning of Period                                                  4,754,686        3,117,025
                                                                                              ---------------- ---------------

  Cash and Cash Equivalents, End of Period                                                     $  2,956,595    $   2,142,330
                                                                                              ================ ===============

  Additional Cash Flows Information
       Interest paid                                                                           $  2,481,166    $   2,129,692
       Income tax paid                                                                              524,000          517,025
       Transfers from loans to foreclosed assets                                                                      85,320
</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  (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, 2000 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, 2001,  and for the
three and six months  ended  June 30,  2001 and 2000,  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 30, 2001                                 June 30, 2000
                                                 -------------                                 -------------
                                                   Weighted                                      Weighted
                                                    Average        Per Share                     Average      Per Share
                                      Income        Shares           Amount         Income        Shares        Amount
                                      ------        ------           ------         ------        ------        ------
Basic earnings per share
   Income available to common
<S>                                 <C>            <C>                <C>          <C>           <C>             <C>
    shareholders                    $449,734       2,031,714          $ .22        $494,396      2,260,870       $ .22
                                                                      =====                                      =====

Effect of dilutive RRP awards
and stock options
                                    ---------      ---------                       --------      ----------

Diluted earnings per share
   Income available to  common
    shareholders and assumed
    conversions                     $449,734       2,031,614          $ .22        $494,396      2,260,870       $ .22
                                    ========       =========          =====        ========      =========       =====
</TABLE>

<TABLE>
<CAPTION>

                                               Six Months Ended                              Six Months Ended
                                                June 30, 2001                                  June 30, 2000
                                                -------------                                  -------------
                                                   Weighted                                       Weighted
                                                    Average        Per Share                      Average      Per Share
                                      Income        Shares           Amount          Income        Shares        Amount
                                      ------        ------           ------          ------        ------        ------
Basic earnings per share
   Income available to common
<S>                                 <C>            <C>                <C>          <C>           <C>             <C>
    shareholders                    $  885,580     2,054,427          $ .43        $1,029,618    2,292,573       $ .45
                                                                      =====                                      ======

Effect of dilutive RRP awards
and stock options
                                    ----------     ---------                       ----------    ---------

Diluted earnings per share
   Income available to  common
    shareholders and assumed
    conversions                     $  885,580     2,054,427          $ .43        $1,029,618    2,292,573       $ .45
                                    ==========     =========          =====        ==========    =========       =====
</TABLE>

Note 3: Business Combinations

On July  23,  2001,  the  Company  signed  a  definitive  agreement  to  acquire
Montgomery Financial Corporation  ("Montgomery"),  Crawfordsville,  Indiana. The
acquisition will be accounted for under the purchase method of accounting. Under
the terms of the agreement,  shareholders of Montgomery  would have the right to
elect to receive either 1.1244 shares of the Company's common stock or $15.00 in
cash.  However,  fifty  percent of the aggregate  consideration  must be paid in
shares of common  stock and there may be pro rata  allocations  of cash or stock
made  to  shareholders  to  ensure  that  this  requirement  is  satisfied.  The
transaction is subject to approval by shareholders of the Company and Montgomery
and appropriate  regulatory agencies. As of March 31, 2001, Montgomery had total
assets  and   shareholders'   equity  of  $142.9   million  and  $16.9  million,
respectively.

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 the 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 opened its first branch
office in  Crawfordsville on April 2, 2001. 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 and consumer loans,  including
single-pay  loans,  loans secured by deposits,  installment loans and commercial
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 $2.0 million, or 1.6%, to $127.4 million at
June 30,  2001,  from $125.4  million at December  31,  2000.  The  increase was
primarily  due to loan growth of $6.3  million  offset by  decreases in cash and
cash equivalents and investment securities held to maturity. Net loans increased
by 5.8% to $115.8 million due to an increase in customer demand and an increased
focus by the Company in the areas of commercial and consumer  lending.  Cash and
cash  equivalents  decreased by $1.8 million from  December 31, 2000 to June 30,
2001.  Investment  securities held to maturity decreased $2.5 million during the
six  months  ended June 30,  2001  primarily  due to $2.3  million  received  on
investment securities that were called prior to their scheduled maturity dates.

Deposits  increased by $4.9 million to $77.7 million during the six months ended
June 30, 2001.  The increase in deposits was primarily used to fund loan growth.
Borrowed funds  decreased by $2.3 million,  or 15.2%,  from December 31, 2000 to
June 30, 2001.  The decrease in total borrowed funds resulted from a decrease in
FHLB  advances of $2.1  million and a decrease in the note  payable to a limited
partnership of $178,000.

Shareholders' equity decreased  approximately  $547,000 to $35.6 million at June
30, 2001.  The decrease was primarily due to stock  repurchases  of $977,000 and
cash  dividends of $636,000.  These  decreases were offset by net income for six
months ended June 30, 2001 of $886,000,  Employee  Stock  Ownership  Plan shares
earned of $66,000 and unearned compensation amortization of $114,000.

Comparison  of  Operating  Results for the Three  Months Ended June 31, 2001 and
2000

Net income  decreased  approximately  $44,000 from $494,000 for the three months
ended June 30, 2000 to $450,000 for the three  months  ended June 30, 2001.  The
return on average assets was 1.43% and 1.63% for the three months ended June 30,
2001 and 2000, respectively.

Interest  income  increased  $103,000,  or 4.5%,  from  $2,277,000 for the three
months  ended June 30, 2000 to  $2,380,000  for the  comparable  period in 2001.
Interest expense increased  approximately  $83,000, or 7.5%, from $1,107,000 for
the three months ended June 30, 2000 to $1,190,000  for the same period in 2001.
As a result,  net  interest  income for the three  months  ended  June 30,  2001
amounted to $1,190,000, a $20,000 increase from the second quarter of 2000.

The provisions for loan losses made for the three months ended June 30, 2001 and
2000 were  $15,000.  The 2001  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  $30,000 for the three  months  ended June 30, 2001
compared to $4,000 for the same period in 2000.  Other income (losses)  includes
the  equity in  losses of the  Company's  investment  in a limited  partnership,
Pedcor.  The Company recorded $10,000 in equity losses during the 2nd quarter of
2001 as  compared  to $25,000  during the same  period in 2000.  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,  2001 and 2000.  Other  income  also  increased  during the three
months ended June 30, 2001 as compared to the same period in 2000 due to nominal
increases in a variety of income categories.

Other  expenses  increased  approximately  $95,000  from  $437,000 for the three
months ended June 30, 2000 to $532,000 for the  comparable  period in 2001.  The
increase was primarily due to the opening of the Association's  branch office in
Crawfordsville, Indiana on April 2, 2001.

Income tax expense  decreased  $5,000,  or 2.2%, for the three months ended June
30, 2001  compared to the same period in 2000.  The  effective tax rates for the
three  months  ended  June 30,  2001 and 2000  were  approximately  33% and 32%,
respectively.

Comparison of Operating Results for the Six Months Ended June 31, 2001 and 2000

Net income  decreased  $144,000,  or 14.0%,  from  $1,030,000 for the six months
ended June 30,  2000 to $886,000  for the six months  ended June 30,  2001.  The
return on average  assets was 1.40% and 1.70 % for the six months ended June 30,
2001 and 2000, respectively.

Interest income increased $214,000,  or 4.7%, from $4,558,000 for the six months
ended June 30, 2000 as compared to $4,772,000  for the six months ended June 30,
2001. Interest expense increased $266,000, or 12.2%, from $2,175,000 for the six
months  ended June 30,  2000 to  $2,441,000  for the same  period in 2001.  As a
result,  net interest  income for the six months ended June 30, 2001 amounted to
$2,331,000, a 2.2% decrease from six months ended June 30, 2000.

The  provisions  for loan losses made for the six months ended June 30, 2001 and
2000 were  $30,000.  The 2001  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)  were  $49,000  for the six months  ended June 30,  2001
compared to $15,000 for the same period in 2000. Other income (losses)  includes
the  equity in  losses of the  Company's  investment  in a limited  partnership,
Pedcor.  The Company  recorded  $35,000 in equity  losses  during the six months
ended 2001 as compared to $55,000 during the same period in 2001. In addition to
recording the equity in the losses of Pedcor,  a benefit of  low-income  housing
income tax  credits in the amount of  $89,000  was  recorded  for the six months
ended June 30, 2001 and 2000.  Other income also increased during the six months
ended  June 30,  2001 as  compared  to the same  period  in 2000 due to  nominal
increases in a variety of income categories.

Other  expenses  increased  $199,000 from $829,000 for the six months ended June
30, 2000 to  $1,028,000  for the  comparable  period in 2001.  The  increase was
primarily  due to the opening of the  Association's  branch  office as mentioned
above.

Income tax expense decreased approximately $73,000, or 14.3%, for the six months
ended June 30, 2001 compared to the same period in 2000.  The effective tax rate
was 33% for both six-month periods ended June 30, 2001 and 2000.

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 $455,000 and $461,000 of loans  classified as special  mention
as of June 30, 2001 and  December  31, 2000  respectively.  In  addition,  Union
Federal had $1.3 million and $1.4 million of loans  classified as substandard at
June 30, 2001 and December 31, 2000, respectively. At June 30, 2001 and December
31, 2000, no loans were  classified  as doubtful or loss. At June 30, 2001,  and
December 31, 2000, respectively,  $326,000 and $406,000 of the substandard loans
were  non-accrual  loans.  The allowance for loan losses was $510,000 or .44% of
loans at June 30, 2001 as compared to $480,000 or .44% of loans at December  31,
2000.

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, 2001,  Union Federal had liquid assets of $8.1 million and a liquidity ratio
of 9.8%.

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Presented  below, as of June 30, 2001 and 2000, is an analysis  performed by the
OTS of Union  Federal's  interest  rate risk as  measured  by  changes  in Union
Federal's net portfolio value ("NPV") for instantaneous  and sustained  parallel
shifts in the yield curve, in 100 basis point increments,  up and down 300 basis
points.



<PAGE>

<TABLE>
<CAPTION>


                                           June 30, 2001
                                           -------------
                          Net Portfolio Value                             NPV as % of PV of Assets
   Changes
   In Rates        $ Amount         $ Change          % Change            NPV Ratio          Change
   --------        --------         ---------         --------            ---------          ------
<S> <C>              <C>               <C>               <C>               <C>               <C>
   +300 bp           27,880           -8,003            -22%               23.09%           -417 bp
   +200 bp           30,519           -5,364            -15%               24.56%           -271 bp
   +100 bp           33,289           -2,594             -7%               26.00%           -126 bp
      0 bp           35,883                                                27.26%
   -100 bp           37,739            1,856              5%               28.05%            +79 bp
   -200 bp           38,881            2,998              8%               28.41%           +115 bp
   -300 bp           39,972            4,089             11%               28.73%           +147 bp


</TABLE>

<TABLE>
<CAPTION>

                                           June 30, 2000
                                           -------------
                           Net Portfolio Value                            NPV as % of PV of Assets
   Changes
   In Rates        $ Amount         $ Change          % Change            NPV Ratio          Change
   --------        --------         ---------         --------            ---------          ------
<S> <C>              <C>               <C>               <C>               <C>               <C>
   +300 bp           24,872           -8,852            -26%               22.57%           -545 bp
   +200 bp           27,789           -5,935            -18%               24.47%           -354 bp
   +100 bp           30,765           -2,959             -9%               26.30%           -172 bp
      0 bp           33,724                                                28.01%
   -100 bp           36,386            2,663              8%               29.46%           +145 bp
   -200 bp           38,297            4,573             14%               30.43%           +242 bp
   -300 bp           40,081            6,358             19%               31.30%           +329 bp

</TABLE>



The analysis at June 30, 2001 indicates that there have been no material changes
in market interest rates or in the Company's interest rate sensitive instruments
which would cause a material  change in the market risk  exposures  which affect
the quantitative and qualitative risk disclosures as presented in Item 7A of the
Company's Annual Report on Form 10-K for the period ended December 31, 2000.



<PAGE>

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 18, 2001, Union Community Bancorp held its Annual Meeting
              of Shareholders. Two directors were elected to terms expiring in
              2004 by the following votes:

                  Philip L. Boots       For:   2,054,398     Withheld:   109,460
                  John M. Horner        For:   2,050,717     Withheld:   113,141

              The terms of office of the following directors of Union Community
              Bancorp continued after the Annual Shareholder Meeting:

                           Name                               Term Expires In
                           ----                               ---------------
                           Marvin L. Burkett                       2002
                           Phillip E. Grush                        2002
                           Joseph E. Timmons                       2002
                           Samuel H. Hildebrand                    2003
                           Harry A. Siamas                         2003

Item 5.       Other Information.

              None.

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

                   (a)  On July 24, 2001, the Company filed a current report on
                        Form 8-K disclosing the merger between Union Community
                        Bancorp and Montgomery Financial Corporation the
                        Agreement and Plan of Reorganization attached to which
                        is an exhibit thereto.


<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, 2001                     By: /s/ Joseph E. Timmons
              ---------------                         -------------------------
                                                     Joseph E. Timmons
                                                     President and
                                                     Chief Executive Officer

Date:         August 13, 2001                     By: /s/ Denise E. Swearingen
              ---------------                         --------------------------
                                                      Denise E. Swearingen
                                                      Treasurer