FORM 10-Q

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

(Mark One)
[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

         For the quarterly period ended:    MARCH 31, 1998
                                            --------------
                                       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  0-18832
                        -------
                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                 -----------------------------------------------
             (Exact Name of Registrant as specified in its charter)

                  KENTUCKY                               61-1168311
                  --------                               ----------
        (State or other jurisdiction          (IRS Employer Identification No.)
      of incorporation or organization)

                                 2323 Ring Road
                          ELIZABETHTOWN, KENTUCKY 42701
                          -----------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                  (502)765-2131
                                  -------------
              (Registrants'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  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

Yes    X     No
      ---      ---    APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.
            CLASS                      OUTSTANDING AS OF APRIL 30, 1998
         -----------                   ----------------------------------

         Common Stock                           4,129,612 shares

                     This document is comprised of 13 pages.


<PAGE>



                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY




                                      INDEX


PART I - Financial Information                                     Page Number

  Item 1 - Financial Statements

           Consolidated Statements of Financial Condition as
           of  March 31, 1998  (Unaudited) and June 30, 1997.            3

           Consolidated Statements of Income for the Three Months
           and Nine Months Ended March 31, 1998 and 1997
           (Unaudited).                                                  4

           Consolidated Statements of Cash Flows for the Nine
           Months Ended March 31, 1998 and 1997 (Unaudited).             5

           Notes to Consolidated Financial Statements.                   6


  Item 2 - Management's Discussion and Analysis of the Consolidated
           Statements of Financial Condition and Results of Operations.  7


PART II - Other Information                                              12

SIGNATURES                                                               13


<PAGE>
<TABLE>
<CAPTION>
                FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                                         March 31,      June 30,
          ASSETS                                           1998           1997
          ------                                        ----------      -------
                                                       (unaudited)
<S>                                                   <C>           <C>   
Cash                                                  $ 11,549,166  $  8,694,283
Interest bearing deposits                                4,463,842       481,430
Securities:
   Securities held-to-maturity                          21,415,695    17,484,427
   Securities available-for-sale                         2,080,709     5,192,323
     (Total securities fair value: $23,540,970 at
     March 31, 1998; $22,922,346 at June 30, 1997)
Loans receivable, net                                  349,773,379   327,791,495
Real estate owned:
   Acquired through foreclosure                            205,075       183,569
   Held for development                                    642,491       687,261
Investment in Federal Home Loan Bank stock               2,879,500     2,777,200
Premises and equipment                                  10,601,841    10,221,228
Other assets                                               890,944       842,656
Excess of cost over net assets of affiliate purchased    2,844,427     3,024,481
                                                       -----------    ----------

     TOTAL ASSETS                                     $407,347,069  $377,380,353         
                                                      ============  ============
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
LIABILITIES:
  Savings deposits                                    $305,894,750  $281,342,174
  Advances from Federal Home Loan Bank                  43,336,295    41,514,194
  Accrued interest payable                                 600,087       202,982
  Accounts payable and other liabilities                 1,593,951       655,272
  Deferred income taxes                                  2,112,358     1,949,361
                                                      ------------   -----------

     TOTAL LIABILITIES                                 353,537,441   325,715,603
                                                       -----------   -----------

STOCKHOLDERS' EQUITY:
  Serial preferred stock 5,000,000 shares authorized        
     and unissued                                           --            --
  Common stock, $1 par value per share; authorized
     10,000,000 shares; issued and outstanding  
     4,132,812 shares on March 31, 1998 and 4,170,003
     shares on June 30, 1997                            4,132,812      4,170,003
  Additional paid-in capital                            3,321,647      4,330,548
  Retained earnings - substantially restricted         45,158,409     42,193,609
  Net unrealized holding gain on securities
     available-for-sale, net of tax                     1,196,760        970,590
                                                      -----------    -----------
                                                          
         TOTAL STOCKHOLDERS' EQUITY                    53,809,628     51,664,750
                                                      -----------    -----------
         TOTAL LIABILITIES & STOCKHOLDERS' EQUITY    $407,347,069   $377,380,353
                                                     ============   ============
</TABLE>
          
   See notes to consolidated financial statements.
   

                                        3

<PAGE>                                     
<TABLE>
<CAPTION>
                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                THREE MONTHS ENDED        NINE MONTHS ENDED
                                      MARCH 31,                MARCH 31,
                                  1998       1997          1998        1997
                                  ----       ----          ----        ----
<S>                           <C>         <C>           <C>          <C>  
INTEREST INCOME:
 Interest on loans            $7,451,143  $6,787,507    $21,811,011  $19,979,343
 Interest and dividends
  on investments and deposits    438,094     462,122      1,292,911    1,355,919
                               ---------   ---------     ----------   ----------                                       
    Total interest income      7,889,237   7,249,629     23,103,921   21,335,262
                               ---------   ---------     ----------   ----------
INTEREST EXPENSE:
 Savings deposits              3,434,597   2,981,606     10,071,475    8,945,270
 FHLB advances                   612,639     613,145      1,796,851    1,714,977
                               ---------   ---------     ----------    ---------
 Total interest expense        4,047,236   3,594,751     11,868,327   10,660,247
                               ---------   ---------     ----------   ----------
 Net interest income           3,842,001   3,654,878     11,235,595   10,675,015
 Provision for loan losses        30,000           0        120,000      200,000
                               ---------   ---------     ----------   ----------
   Net interest income after 
   provision for loan losses   3,812,001   3,654,878     11,115,595   10,475,015
                               ---------   ---------     ----------   ----------
OTHER INCOME:
 Customer service fees
  on deposit accounts            306,635     315,657        943,583      926,733
 Other income                    278,008     250,194        878,930      680,358
 Gain on sale of investment      125,622           0        242,567      316,927
                                 -------     -------        -------      -------
 Total other income              710,265     565,851      2,065,080    1,924,018
                                 -------     -------      ---------    ---------
OTHER EXPENSE:
 Employee compensation
  and benefits                   944,057     898,713      2,757,621    2,642,839
 Office occupancy and 
  equipment expense              226,179     241,089        696,237      683,374
 Federal insurance
  premiums (Note 2)               44,777      43,144        133,390    1,970,572
 Marketing and advertising        91,850      71,316        276,472      273,020
 Outside services and
  data processing                188,277     143,065        497,539      454,572
 State franchise tax              74,039      74,039        224,016      218,826
 Other expense                   462,936     401,239      1,424,900    1,270,622
                                 -------     -------      ---------    ---------
  Total other expense          2,032,155   1,872,605      6,010,175    7,513,825
                               ---------   ---------      ---------    ---------
Income before taxes            2,490,151   2,348,124      7,170,500    4,885,208
Income taxes                     840,645     819,261      2,464,827    1,684,379
                               ---------   ---------      ---------    ---------
NET INCOME                    $1,649,505  $1,528,863     $4,705,673   $3,200,829
                               =========   =========      =========    =========
                                                                  
Weighted average common
 shares outstanding            4,133,516   4,171,424      4,149,667    4,187,806
Net income per share
 of common stock (Note 3)          $0.40       $0.37          $1.13        $0.77  
Dividends per share                =====       =====          =====        =====
 of common stock                   $0.14       $0.13          $0.42        $0.37   
                                   =====       =====          =====        ===== 
</TABLE>
                                      
See notes to consolidated financial statements.  

                                        4

<PAGE>
<TABLE>
<CAPTION>
                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (UNAUDITED)

                                                            Nine Months Ended
                                                                MARCH 31,
                                                          1998            1997
                                                          ----            ----
<S>                                                  <C>            <C>    
OPERATING ACTIVITIES:
  Net income                                         $ 4,705,673    $ 3,200,829
  Adjustments to reconcile net income to
   net cash provided by operating activities
     Provision for loan losses and real estate owned     120,000        200,000
     Provision for depreciation                          446,565        406,238 
     Net change in deferred loan fees and costs          143,768        126,629
     Federal Home Loan Bank stock dividends             (153,700)      (138,000)
     Amortization of discounts on securities
       held-to-maturity                                  (81,968)      (115,812)
     Gain on sale of investments available-for-sale     (242,567)      (316,927)
     Increase in interest payable                        (48,288)       452,466
     Increase (Decrease) in accounts payable 
       and other liabilities                           1,101,676       (498,153)
                                                       ---------       --------

NET CASH PROVIDED BY OPERATING ACTIVITIES              6,568,318      3,961,925
                                                       ---------      ---------
INVESTING ACTIVITIES:
   Sale of securities available-for-sale               3,615,708        335,111                         
   Purchases of securities available-for-sale            (36,082)      (151,567)
   Purchases of securities held-to-maturity          (10,000,000)    (6,000,000)
   Principal collections on securities
      held-to-maturity                                 6,150,699        377,681
   Net increase in loans to customers                (22,858,245)   (20,267,731)
   Purchases of premises and equipment                  (827,178)      (718,707)
   Sales of real estate acquired in settlement of loans  593,448        483,063
   Increase in real estate held for development             --         (182,000)
   Sales of real estate held for development              44,770            --
                                                      ----------     -----------                                           
   
NET CASH USED IN INVESTING ACTIVITIES                (23,316,880)   (17,571,858)
                                                      ----------     -----------
                                           
FINANCING ACTIVITIES:
   Advances from Federal Home Loan Bank                1,822,101      6,719,389
   Net increase in customer savings deposits          24,552,576     12,249,201
   Dividends paid                                     (1,742,689)    (1,547,234)
   Proceeds from stock options exercised                   --            60,543
   Common stock repurchased                           (1,046,131)    (1,042,645)
   Advance to ESOP                                         --           (14,658)
                                                      ----------     -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES             23,585,857     16,424,569
                                                      ----------     ----------

Increase (Decrease) in cash and cash equivalents       6,837,295     (5,737,656)
Cash and cash equivalents, beginning of year           9,175,713     16,160,272
                                                      ----------     ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD             $16,013,008    $10,422,616        
                                                      ==========     ==========
</TABLE>

See notes to consolidated financial statements.


                                        5

<PAGE>



                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       INTERIM FINANCIAL STATEMENTS

         First Federal Financial Corporation of Kentucky  ("Corporation") is the
         parent to its wholly owned  subsidiary,  First Federal  Savings Bank of
         Elizabethtown  ("Bank").  The Corporation has no material income, other
         than that generated by the Bank.

         In the opinion of management,  these unaudited  consolidated  financial
         statements include all adjustments necessary for a fair presentation of
         its  financial  position  as of March 31,  1998 and the  results of its
         operations  and its cash  flows  for the  three  month  and nine  month
         periods then ended.  All such  adjustments  were of a normal  recurring
         nature.

         The results of  operations  for the three month and nine month  periods
         ended March 31,  1998 and 1997 are not  necessarily  indicative  of the
         results for the full years.

         It is suggested that these financial  statements be read in conjunction
         with the financial statements,  accounting policies and financial notes
         thereto  included in the Appendix to the Company's 1997 Proxy Statement
         which has been previously filed with the Commission.

2.       Federal Deposit  Insurance  Corporation  (FDIC)  legislation was signed
         into law on September 30, 1996, to recapitalize the Savings Association
         Insurance  Fund (SAIF).  All  SAIF-insured  savings  institutions  were
         required to pay a one-time  special  assessment of $.657 for every $100
         of  customer  deposits.  This has  resulted  in a charge to earnings of
         $1,658,000  ($1,094,000,  net of tax) during the Bank's  first  quarter
         ended September 30, 1996.

3.       The Bank has  elected  to adopt  SFAS No.  128  "Earnings  Per  Share,"
         effective  for both  interim and annual  fiscal  periods  ending  after
         December  15,  1997.   The   reconciliation   of  the   numerators  and
         denominators of the basic and diluted EPS computations is as follows:
<TABLE>
<CAPTION>

                                             Three Months Ended      Nine Months Ended
                                                  MARCH 31,              MARCH 31,
                                             ------------------      -----------------
                                              1998        1997       1998        1997
                                              ----        ----       ----        ----

                                                       (Dollars in Thousands)
         <S>                               <C>        <C>        <C>        <C>    
         Net Income available                                          
          to common shareholders              $1,650     $1,529     $4,706     $3,201
                                              ======     ======     ======     ======
                                                  
         Basic EPS:
          Weighted average common shares   4,133,516  4,171,424  4,149,667  4,187,806              
                                           =========  =========  =========  =========                                
                                                                                                                      
         Diluted EPS:
          Weighted average common shares   4,133,516  4,171,424  4,149,667  4,187,806
          Dilutive effect of stock options    28,433     42,887     29,055     47,502
          Weighted average common and      ---------   --------  ---------  ---------
            incremental shares             4,161,949  4,214,311  4,178,722  4,235,308                 
                                           =========  =========  =========  =========
         Earnings Per Share:
                 Basic                         $0.40      $0.37      $1.13      $0.77           
                                               =====      =====      =====      =====
                 Diluted                       $0.40      $0.36      $1.13      $0.76
                                               =====      =====      =====      =====                
 </TABLE>
                                                                       



                                        6

<PAGE>



            MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


First Federal Financial Corporation of Kentucky ("Corporation") is the parent to
its  wholly  owned  subsidiary,  First  Federal  Savings  Bank of  Elizabethtown
("Bank").  The  Bank has  operations  in the  central  Kentucky  communities  of
Elizabethtown,  Radcliff,  Bardstown,  Munfordville,   Shepherdsville,  and  Mt.
Washington.

The  following  discussion  and  analysis  covers  any  material  changes in the
financial  condition since June 30, 1997 and any material changes in the results
of operations for the three month and nine month periods ending, March 31, 1998.
This  discussion and analysis  should be read in conjunction  with  "Managements
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations"
included in the 1997 Annual Report to Shareholders.

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The  information set forth in this report  includes  forward-looking  statements
within the meaning of the Private Securities  Litigation Reform Act of 1995. For
this purpose,  the words  "believes,"  "anticipates,"  "plans,"  "expects,"  and
similar  expressions  are  intended  to  identify  forward-looking   statements.
Although the Corporation believes that the forward-looking  statements are based
upon  reasonable  assumptions,  the  statements are subject to certain risks and
uncertainties  that  could  cause the  Corporation's  actual  results  to differ
materially from those indicated by the forward-looking statements. Among the key
factors that may have a direct bearing on the  Corporation's  operating  results
are  fluctuations  in the economy;  the relative  strengths  and weakness in the
consumer  and  commercial  credit  sectors  and in the real estate  market;  the
actions  taken by the Federal  Reserve for the purpose of managing  the economy;
the Corporation's  success in assimilating acquired branches and operations into
the Bank's existing operations;  the Bank's success in converting its systems to
integrate  new  hardware  and  software   without   material   disruption;   the
Corporation's  ability to offer competitive  banking products and services;  the
continued  growth of the markets in which the  Corporation  operates  consistent
with  recent  historical  experience;   the  enactment  of  federal  legislation
affecting the operations of the Corporation;  and the  Corporation's  ability to
expand into new markets  and to maintain  profit  margins in the face of pricing
pressure.

RESULTS OF OPERATIONS
THREE MONTH PERIOD ENDED MARCH 31, 1998 VS. 1997 - Net income was  $1,649,505 or
$0.40 per share for the three month period ended March 31, 1998,  as compared to
$1,528,863  or $0.37 per share for the same  period in 1997.  In addition to the
higher net income, the 8% increase in net income per share was also attributable
to the  Corporation's  stock  repurchase  plans which have  reduced the weighted
average  number of shares  outstanding  from  4,171,424  for the 1997  period to
4,133,516 for the 1998 period.  The following  discussion  outlines the material
differences  in income and  expenses  for the three month period ended March 31,
1998, as compared to 1997.

Net interest  income  increased by $187,123 in 1998 as compared to 1997 in spite
of the  declining  net interest  margin which was 4.11% for the 1998 period,  as
compared to 4.23% for the 1997 period. The Corporation's cost of funds increased
by 18 basis  points  in 1998  compared  to 1997,  due to  higher  rates  paid on
short-term customer deposits and FHLB advances.

Average  interest-earning  assets increased by $28 million from $348 million for
the 1997 period to $376  million  for the 1998  period.  Average  loans were $27
million higher and averaged $347 million during 1998, while the average yield on
loans increased by 10 basis points to 8.70%.

Average  interest-bearing  liabilities  increased  by $26  million to an average
balance of $342 million for the 1998 period.  Customer  deposits  averaged  $299
million during 1998, an increase of $26 million compared to the 1997 quarter.

Total other income was  $710,265  for the three months ended March 31, 1998,  as
compared to $565,851 for the 1997 period, an increase of $144,414.  The increase
is attributable  to a $125,622 gain recorded on sales of investments  during the
March 31,  1998  period.  Other  sources of income,  such as loan fees and other
customer transaction fees increased by $18,792 in 1998 versus 1997 due to growth
in deposit relationships with existing customers.


                                        7

<PAGE>


Total other  expense was  $2,032,115  for the three month period ended March 31,
1998,  as compared to $1,872,605  for the 1997 period,  an increase of $159,510.
Expenses directly related to loans and customer checking accounts  increased due
to a higher volume of accounts.  Expenses  directly  related to data  processing
costs, marketing,  and supplies increased due to asset growth, expanded services
and products offered to customers, and general inflation.
                                  
NINE MONTH PERIOD ENDED MARCH 31, 1998 VS. 1997 - Net income was  $4,705,673  or
$1.13 per share for the nine month period  ended March 31, 1998,  as compared to
$4,295,209  or $1.03 per share for the same  period in 1997.  During the quarter
ended  September  30,  1996,  net income  was  affected  by a  one-time  special
assessment of $1,658,151 ($1,094,380,  net of tax) paid to the FDIC. Due to this
payment,  actual net income was  $3,200,829  or $0.77 per share  during the 1997
period. See further discussion under "Regulatory Matters."

In  addition  to the higher net income the 10%  increase in net income per share
was also  attributable to the  Corporation's  stock  repurchase plans which have
reduced the weighted average number of shares outstanding from 4,187,806 for the
1997 period to 4,149,667 for 1998.

Net interest  income  increased by $560,580 in 1998 as compared to 1997 in spite
of the  declining  net  interest  margin  which was 4.06% for the 1998 period as
compared to 4.12% for the 1997 period. Average interest-earning assets increased
by $24 million  during the nine months ended March 31, 1998 compared to the 1997
period  as  average  loans  grew  by  $25  million.   Average   interest-bearing
liabilities  increased by $23 million to an average  balance of $332 million for
the 1998 period,  while the average  cost of funds  increased by 18 basis points
during the comparative  periods due to higher rates paid on short-term  customer
deposits.

Total other income was  $2,065,080  for the nine months ended March 31, 1998, as
compared to $1,924,018  for the 1997 period,  an increase of $141,062.  Customer
service  fees  increased  by $16,850  during the 1998  period due to a growth in
customer  checking  accounts.  Gains from investment sales were $242,567 for the
nine months ended March 31, 1998,  as compared to $316,927  reported in the 1997
period.  Other sources of non-interest  income,  such as brokerage  commissions,
loan fees, checking account fees, and other customer transaction fees, increased
by $198,572, or 29% in 1998 versus 1997.

Total other expense was  $6,010,175 for the nine months ended March 31, 1998, as
compared  to  $7,513,825  for the 1997  period,  a decrease of  $1,503,650.  The
decrease  is a result  of the SAIF  special  assessment  recorded  in the  first
quarter of 1996. Federal insurance premium expense decreased $153,815 during the
1998 period,  reflecting lower assessment  rates.  Expenses  directly related to
customer checking accounts  increased by $19,604 during the 1998 period due to a
higher volume of accounts.  Expenses  directly related to data processing costs,
postage and  supplies  increased  due to asset  growth,  expanded  services  and
products offered to customers.



                                        8

<PAGE>



NON-PERFORMING ASSETS
Management  periodically evaluates the adequacy of the allowance for loan losses
based on the Bank's past loan loss  experience,  known and inherent risks in the
portfolio,  adverse  situations that may effect the borrower's  ability to repay
and other factors. During the nine month period ended March 31, 1998, management
chose to add  $120,000  to the  reserve  for loan loss.  Although  current  loan
charge-offs and  delinquencies  are consistent with previous years,  the reserve
was increased to compensate  for the Bank's  continued  strong loan growth.  The
Bank  experienced  an  insignificant  amount of  uncollectible  loans during the
periods  indicated  in  the  table  below.   Approximately  56%  of  the  Bank's
non-performing assets are secured by one-to-four-family  residences at March 31,
1998.
<TABLE>
<CAPTION>
                                         Three Months Ended        Nine Months Ended
                                              MARCH 31,                MARCH 31,
                                         ------------------        -----------------
                                          1998         1997         1998        1997
                                          ----         ----         ----        ----

                                                    (Dollars in thousands)
<S>                                     <C>           <C>          <C>         <C>
Allowance for loan losses:
   Balance, beginning of period         $1,795        $1,772       $1,715      $1,613
   Provision for loan losses                30           --           120         200
   Charge-offs                              (7)          (43)         (32)        (86)
   Recoveries                                3             1           18           3
                                        ------        ------       ------      ------
   Balance, end of period               $1,821        $1,730       $1,821      $1,730           
                                        ======        ======       ======      ======                           
                                                    
Net loans outstanding at quarter end                             $349,773    $321,835
Non-performing loans at quarter end:
   Collateralized by one-to-four family homes                      $1,038        $878
   Other non-performing loans                                        $606        $294

Ratios:
   Non-performing loans to total loans                               .47%        .36%
   Allowance for loan losses to non-performing
      loans                                                          111%        148%
   Allowance for loan losses to net loans                            .52%        .54%
   Non-performing assets to total assets                             .45%        .43%
</TABLE>



LIQUIDITY & CAPITAL RESOURCES
Loan demand  continued to be strong during the nine months ended March 31, 1998,
as net loans grew by $22 million to $350  million,  a 9% annualized  growth.  In
spite of strong competition from new financial  institutions,  mutual funds, and
the  stock  market,  customer  deposits  increased  by  $24.6  million,  or  12%
annualized,  during the nine month period,  primarily in customer  accounts with
maturity terms under two years.  The Bank's loan growth was funded by additional
borrowings of $1.8 million from the Federal Home Loan Bank.

Current regulations require the Corporation's subsidiary,  First Federal Savings
Bank, to maintain  minimum  specific levels of liquid assets,  (currently 4%) of
cash and eligible investments to the savings deposits and short-term borrowings.
At March 31, 1998,  the Bank's liquid  assets were 9.98% of its liquidity  base.
The Bank intends to continue to fund loan growth  (outstanding  loan commitments
were $8.1  million at March 31,  1998) and any  declines  in  customer  deposits
through  additional  advances from the FHLB. At March 31, 1998,  the Bank has an
unused approved line of credit in the amount of $12.3 million, and the potential
to

                                        9

<PAGE>



significantly increase its indebtedness with the FHLB, if necessary,  due to the
Bank's strong financial condition.

The Office of Thrift Supervision's  capital regulations require the Bank to meet
three capital standards. As indicated below, the Bank substantially exceeded the
regulatory requirements for each category at March 31, 1998.

                                    (Dollars in thousands)


                            TANGIBLE        CORE         RISK-WEIGHTED

Actual capital              $48,608        $48,608          $50,423

Regulatory requirement        6,078         16,226           20,902
                            -------        -------          -------

Excess                      $42,530        $32,382          $29,521 
                            =======        =======          =======   


REGULATORY MATTERS
The Bank  insures  its  customers'  deposits  through  the  Savings  Association
Insurance  Fund  ("SAIF").  On September  30, 1996,  Federal  Deposit  Insurance
Corporation  ("FDIC")  legislation was signed into law to recapitalize the SAIF.
As was anticipated, all SAIF-insured savings institutions were required to pay a
one-time special assessment of $.657 for every $100 of customer  deposits.  This
has  resulted  in a charge to  earnings of  $1,095,000,  net of tax,  during the
quarter  ended  September  30, 1996.  On January 1, 1997,  the Bank began paying
insurance  premiums  of $.064 per $100 of  deposits  as  compared  to a previous
premium of $.23 per $100 of deposits.

NEW ACCOUNTING PRONOUNCEMENT
Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Comprehensive
Income,"  was  issued in June 1997 and  becomes  effective  for  fiscal  periods
beginning after December 15, 1997. SFAS 130 requires reclassification of earlier
financial statements for comparative purposes. SFAS 130 requires that changes in
the amounts of certain items, including foreign currency translation adjustments
and gains and losses on certain securities be shown in the financial statements.
SFAS 130 does not require a specific format for the financial statement in which
comprehensive  income is reported,  but does require that an amount representing
total  comprehensive  income  be  reported  in that  statement.  Management  has
determined  that the adoption of SFAS 130 will not have a material effect on the
consolidated financial statements.

PENDING ACQUISITION
In March 1998,  the Bank entered into an agreement to acquire  three  offices of
Bank One Corporation located in Meade County,  Kentucky,  a community located 40
miles  from  the  Bank's  main  office.   The  three  offices   currently   have
approximately $72 million in customer deposits resulting in a 24% growth for the
Bank. This  acquisition  will expand the Bank's market share to 53% of the total
deposits in Meade County.  In addition,  approximately  $7 million of commercial
loans are included in the acquisition.

It is currently  anticipated that the acquisition will be completed late in July
1998.  During the quarter ended  September 30, 1998, it is anticipated  the Bank
will charge against operations  approximately  $150,000 after tax in acquisition
costs.  Management  estimates that the operations of the acquired branches could
dilute earnings by approximately $200,000 after tax during the fiscal year ended
June 30,  1999.  However,  management  anticipates  the three  offices to have a
positive contribution to earnings beginning July 1, 1999.

                                    10


<PAGE>


YEAR 2000
Recognizing the need to ensure its operations will not be adversely  impacted by
Y2K failures,  the Bank has developed a proactive  plan for  minimizing its risk
and  updating a majority of its computer  hardware  and software  systems in the
process. The Bank has entered into agreements with hardware and software vendors
to systematically  replace all non-Y2K compliant  hardware and software by March
1999. An equally important  objective of the complete overhaul of the systems is
to enhance the Bank's  technological  capabilities.  The anticipated benefits of
the new systems  include faster  customer  service,  the  flexibility to offer a
wider range of new products and services and the capability to offer  electronic
banking  services in the future.  Communication  systems  will be converted to a
fully  integrated  wide area network,  thereby  connecting  all banking  centers
electronically to one another. Although the Bank anticipates a $400,00 after tax
charge against  operations  during the quarter ended September 30, 1998,  future
technology  costs are expected not to differ  materially  from those incurred in
prior periods.






                                       11

<PAGE>



                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY



Part II.          Other Information

                  Item 1.        Legal Proceedings
                                 Not Applicable

                  Item 2.        Changes in Securities
                                 Not Applicable

                  Item 3.        Defaults Upon Senior Securities
                                 Not Applicable

                  Item 4.        Submission of Matters to a Vote of
                                 Security Holders
                                 Not Applicable

                  Item 5.        Other Information
                                 Not applicable

                  Item 6.        Exhibits: Not Applicable
                                 Reports on Form 8-K:
                                 Not Applicable

                                       12

<PAGE>



                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY



Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.





DATE:  May 13, 1998              BY:  (S) B. KEITH JOHNSON
                                      --------------------
                                          B. Keith Johnson
                                          President and Chief Executive Officer


DATE:  May 13, 1998              BY:  (S) RICHARD L. MUSE
                                       ------------------
                                          Richard L. Muse
                                          Vice President and Comptroller




                                       13


<PAGE>