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:    DECEMBER 31, 1997
                                            -----------------
                                       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 JANUARY 31, 1998
          -----------                  ------------------------------------

          Common Stock                            4,128,759 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 December 31, 1997 (Unaudited) and June 30, 1997.            3

           Consolidated Statements of Income for the Three Months
           and Six Months Ended December 31, 1997 and 1996
           (Unaudited).                                                   4

           Consolidated Statements of Cash Flows for the Six
           Months Ended December 31, 1997 and 1996 (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

                                                      December 31,     June 30,
          ASSETS                                          1997           1997
          ------                                     -------------   -----------
                                                      (unaudited)
<S>                                                   <C>           <C>  
Cash                                                  $  6,007,803  $  8,694,283
Interest bearing deposits                                1,679,051       481,430
Securities:
   Securities held-to-maturity                          16,444,240    17,484,427
   Securities available-for-sale                         2,005,816     5,192,323
     (Total securities  fair  value: $18,559,135 at
     December 31, 1997; $22,992,346 at June 30, 1997)
Loans receivable, net                                  344,029,240   327,791,495
Real estate owned:
   Acquired through foreclosure                            260,438       183,569
   Held for development                                    687,261       687,261
Investment in Federal Home Loan Bank stock               2,879,500     2,777,200
Premises and equipment                                  10,671,415    10,221,228
Other assets                                               759,870       842,656
Excess of cost over net assets of affiliate purchased    2,904,445     3,024,481
                                                       -----------   -----------

     TOTAL ASSETS                                     $388,329,079  $377,380,353
                                                      ============  ============

LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
LIABILITIES:
 Savings deposits                                     $290,367,820  $281,342,174
 Advances from Federal Home Loan Bank                   41,462,955    41,514,194
 Accrued interest payable                                  198,642       202,982
 Accounts payable and other liabilities                  1,132,209       706,892
 Deferred income taxes                                   2,067,144     1,949,361
                                                      ------------  ------------
     TOTAL LIABILITIES                                 335,228,770   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 4,143,732
    shares on December 31, 1997 and 4,170,003 shares
    on June 30, 1997                                     4,143,732     4,170,003
 Additional paid-in capital                              3,731,550     4,330,548
 Retained earnings - substantially restricted           44,085,114    42,193,609
 Net unrealized holding gain on securities
    available-for-sale, net of tax                       1,139,913       970,590
                                                       -----------   -----------

        TOTAL STOCKHOLDERS' EQUITY                      53,100,309    51,664,750
                                                       -----------   -----------
        TOTAL LIABILITIES & STOCKHOLDERS' EQUITY      $388,329,079  $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         SIX MONTHS ENDED
                                    DECEMBER 31,              DECEMBER 31,
                                  1997       1996           1997       1996
<S>                           <C>         <C>           <C>          <C>    
Interest income:
 Interest on loans            $7,270,383  $6,683,488    $14,359,868  $13,191,837
 Interest and dividends
  on investments and deposits    422,576     449,395        854,817      893,716
                              ----------  ----------    -----------  -----------
    Total interest income      7,692,959   7,132,883     15,214,685   14,085,553
                              ----------   ---------     ----------   ----------
Interest expense:
 Savings deposits              3,389,315   2,990,636      6,636,878    5,963,664
 FHLB advances                   603,222     591,268      1,184,213    1,101,833
                               ---------   ---------      ---------    ---------
    Total interest expense     3,992,537   3,581,904      7,821,091    7,065,497
                               ---------   ---------      ---------    ---------
     
 Net interest income           3,700,422   3,550,979      7,393,594    7,020,056
 Provision for loan losses        30,000       --            90,000      200,000
                               ---------   ---------      ---------    ---------
    Net interest income after 
    provision for loan losses  3,670,422   3,550,979      7,303,594    6,820,056
                               ---------   ---------      ---------    ---------
Other income:
 Customer service fees
  on deposit accounts            323,703     290,171        636,948      611,076
 Other income                    290,987     207,097        600,922      430,165
 Gain on sale of investment         --        (6,000)       116,945      316,927
                               ---------     -------      ---------    ---------
    Total other income           614,690     491,268      1,354,815    1,358,168
                               ---------     -------      ---------    ---------
Other expense:
 Employee compensation
  and benefits                   925,429     857,613      1,813,564    1,744,126
 Office occupancy and
  equipment expense              232,525     211,725        470,058      442,285
 Federal insurance
  premiums (Note 2)               44,387     118,589         88,613    1,927,428
 Marketing and advertising        98,226     103,393        184,622      201,704
 Outside services and 
  data processing                151,899     148,049        295,413      302,949
 State franchise tax              75,939      73,994        149,978      144,788
 Other expense                   539,386     434,561        975,812      877,939
                               ---------     -------      ---------    ---------
    Total other expense        2,067,791   1,947,924      3,978,060    5,641,220
                               ---------   ---------      ---------    ---------

Income before taxes            2,217,321    2,094,323     4,680,349    2,537,004
Income taxes                     764,921      707,668     1,624,181      865,118
                               ---------    ---------     ---------    ---------
Net Income                    $1,452,400   $1,386,655    $3,056,168   $1,671,886
                               =========    ==========    =========    =========

Weighted average common
 shares outstanding            4,148,785    4,186,608     4,158,049    4,196,340
Net income per share
 of common stock (Note 3)         $ 0.35       $ 0.33        $ 0.74       $ 0.40
Dividends per share               ======       ======        ======       ======
 of common stock                  $ 0.14       $ 0.12        $ 0.28       $ 0.24
                                  ======       ======        ======       ======                               
</TABLE>
See notes to consolidated financial statements.


                                        4

     
 
    

    

    
<PAGE>
<TABLE>
<CAPTION>

                 FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (UNAUDITED)

                                                            Six Months Ended
                                                              DECEMBER 31,
                                                           -----------------
                                                            1997       1996
<S>                                                   <C>          <C>                                                          
OPERATING ACTIVITIES:
  Net income                                           $3,056,168   $1,671,886
  Adjustments to reconcile net income to
  net cash provided by operating activities:
    Provision for loan losses and real estate owned        90,000      200,000
    Provision for depreciation                            292,290      257,431
    Net change in deferred loan fees and cost              94,043       83,830
    Federal Home Loan Bank stock dividends               (102,300)     (91,800)
    Amortization of discounts on securities
      held-to-maturity                                    (61,806)     (71,091)
    Amortization of acquired intangible assets            120,036      120,036
    Gain on sale of investments available-for-sale       (116,945)    (316,927)
    Increase (Decrease) in interest payable                (4,340)      92,024
    Decrease in other assets                               82,786      255,019
    Increase in accounts payable and other liabilities    543,100    1,471,680
                                                        ---------    ---------

NET CASH PROVIDED BY OPERATING ACTIVITIES               3,993,032    3,672,088
                                                        ---------    ---------

INVESTING ACTIVITIES:
   Sale of securities available-for-sale                3,479,138      335,111
   Purchases of securities available-for-sale             (36,082)    (100,215)
   Purchases of securities held-to-maturity            (5,000,000)  (6,000,000)
   Principal collections on securities
     held-to-maturity                                   6,101,993      274,811
   Net increase in loans to customers                 (16,866,565) (16,573,888)
   Purchases of premises and equipment                   (742,477)    (588,250)
   Sales of real estate acquired in settlement
     of loans                                             382,948      399,839
   Increase in real estate held for development             --        (182,000)
                                                       ----------   ----------

NET CASH USED IN INVESTING ACTIVITIES                 (12,681,045) (22,404,592)
                                                       ----------   ----------

FINANCING ACTIVITIES:
   Advances from, repayments to,
     Federal Home Loan Bank                               (51,239)  10,745,865
   Net increase in customer savings deposits            9,025,646    2,046,163
   Dividends paid                                      (1,164,663)  (1,005,430)
   Proceeds from stock options exercised                    --          60,543
   Common stock repurchased                              (625,275)    (730,411)
   Collection on advance to ESOP                           14,685         --
                                                        ---------    ---------

Net cash provided by financing activities               7,199,154   11,116,730
                                                        ---------   ----------

Increase (Decrease) in cash and cash equivalents       (1,488,859)  (7,615,774)
Cash and cash equivalents, beginning of year            9,175,713   16,160,272
                                                        ---------   ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD               $7,686,854   $8,544,498
                                                        =========    =========
</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 December 31, 1997 and the results of its
         operations and its cash flows for the three month and six month periods
         then ended. All such adjustments were of a normal recurring nature.

         The results of  operations  for the three  month and six month  periods
         ended December 31, 1997 and 1996 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
         $1,658,151  ($1,094,380,  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 reconcilation of the numerators and denominators
         of the basic and diluted EPS computations is as follows:
<TABLE>
<CAPTION>

                                            Three Months Ended    Six Months Ended
                                                DECEMBER 31,        DECEMBER 31,
                                            -------------------   ----------------
                                              1997        1996      1997      1996
                                              ----        ----      ----      ----

                                                     (Dollars in thousands)
         <S>                               <C>       <C>       <C>       <C>
         Net income available
          to common shareholders              $1,452    $1,387    $3,056    $1,672
                                              ======    ======    ======    ======

         Basic EPS:
          Weighted average common shares   4,148,785 4,186,608 4,158,049 4,196,340   
                                           ========= ========= ========= =========
         Diluted EPS:
          Weighted average common shares   4,148,785 4,186,608 4,158,049 4,196,340
          Dilutive effect of stock options    30,237    43,271    28,739    47,800
          Weighted average common and      --------- --------- --------- ---------
            incremental shares             4,179,022 4,229,879 4,186,788 4,244,140
                                           ========= ========= ========= =========
         Earnings per share:

           Basic                              $0.35      $0.33     $0.74     $0.40
                                              =====      =====     =====     =====
           Diluted                            $0.35      $0.33     $0.73     $0.39
                                              =====      =====     =====     =====
           
</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 six month periods  ending,  December 31,
1997.  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.

RESULTS OF OPERATIONS
THREE MONTH PERIOD ENDED  DECEMBER 31, 1997 VS. 1996 - Net income was $1,452,400
or $0.35 per share for the three  month  period  ended  December  31,  1997,  as
compared  to  $1,386,655  or $0.33  per share  for the same  period in 1996.  In
addition to the higher net  income,  the 6% 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 4,186,608 for the 1996
period to 4,148,785 for the 1997 period. The following  discussion  outlines the
material  differences  in income and  expenses  for the three month period ended
December 31, 1997, as compared to 1996.

Net interest  income  increased by $149,443 in 1997 as compared to 1996 in spite
of the  declining  net interest  margin which was 3.97% for the 1997 period,  as
compared to 4.08% for the 1996 period. The Corporation's cost of funds increased
by 21 basis  points  in 1997  compared  to 1996,  due to  higher  rates  paid on
short-term customer deposits and FHLB advances.

Average  interest-earning  assets increased by $24 million from $342 million for
the 1996 period to $366  million  for the 1997  period.  Average  loans were $26
million higher and averaged $342 million during 1997, while the average yield on
loans decreased by 5 basis points to 8.44%.

Average  interest-bearing  liabilities  increased  by $20  million to an average
balance of $330 million for the 1997 period.  Customer  deposits  averaged  $289
million during 1997, an increase of $22 million compared to the 1996 quarter.

Total other income was $614,690 for the three months ended December 31, 1997, as
compared to $491,268  for the 1996  period,  a increase  of  $123,422.  Customer
service fees charged on deposit  accounts  increased by $ 34,000 during 1997 due
to a growth in customer  checking  accounts.  Other  sources of income,  such as
brokerage commissions,  loan fees, safety deposit box rental, and other customer
transaction fees increased by $83,422, or 17% in 1997 versus 1996.

Total other expense was $2,067,791 for the three month period ended December 31,
1997,  as compared to  $1,947,924  for the 1996  period.  This 6.2%  increase of
$119,867 was primarily  due to the Bank's  opening of a new branch office in the
Bardstown  community which became operational in November 1997, and inflationary
increases  in  other  occupancy  and  equipment   related   expenses.   Employee
compensation  and benefits  increased by 7.9% in 1997 as compared to 1996 due to
new employees  added to service the normal customer growth of the bank. The rest
of the increase was  attributable to expanded  services and products  offered to
customers. FDIC premiums were $74,202 lower this quarter versus the 1996 quarter
due to the  SAIF  special  assessment  reducing  the  normal  prepaid  quarterly
premium.



                                        7

<PAGE>



SIX MONTH PERIOD ENDED DECEMBER 31, 1997 VS. 1996 - Net income was $3,056,168 or
$0.74 per share for the six month period ended December 31, 1997, as compared to
$2,766,266  or $0.66 per share for the same  period in 1996.  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  $1,671,886  or $0.40 per share  during the 1996
period. See further discussion under "Regulatory Matters."

In  addition  to the higher net income the 12%  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 4,196,340 for the
1996 period to 4,158,049 for 1997.

Net interest  income  increased by $373,538 in 1997 as compared to 1996 in spite
of the  declining  net  interest  margin  which was 4.04% for the 1997 period as
compared to 4.07% for the 1996 period. Average interest-earning assets increased
by $22 million  during the six months ended  December 31, 1997,  compared to the
1996  period as average  loans  grew by $25  million.  Average  interest-bearing
liabilities  increased by $20 million to an average  balance of $326 million for
the 1997 period,  while the average  cost of funds  increased by 17 basis points
during the comparative  periods due to higher rates paid on short-term  customer
deposits.

Total other income was $1,354,815 for the six months ended December 31, 1997, as
compared to $1,358,168 for the 1996 period,  a decrease of $3,353.  The decrease
in income is due to reduced sales of available-for-sale securities. For the 1997
period, the Bank reported gains from investment sales of $116,945 as compared to
$316,927 for 1996, a decrease of $199,982. Other sources of non-interest income,
such as brokerage  commissions,  loan fees,  checking  account  fees,  and other
customer transaction fees, increased by $196,629, or 19% in 1997 versus 1996.

Total other expense was  $3,978,060  for the six months ended December 31, 1997,
as compared to $5,641,220  for the 1996 period,  a decrease of  $1,663,160.  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
1997 period,  reflecting lower  assessment  rates while other expenses  remained
relatively constant.

                                        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 six  month  period  ended  December  31,  1997,
management  chose to add $90,000 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 58% of the Bank's delinquent
loans are secured by one-to-four-family residences at December 31, 1997.

                                         Three Months Ended     Six Months Ended
                                            DECEMBER 31,          DECEMBER 31,
                                         ------------------     ----------------
                                          1997        1996       1997      1996
                                          ----        ----       ----      ----

                                                  (Dollars in thousands)

Allowance for loan losses:
   Balance, beginning of period         $1,766      $1,785     $1,715    $1,613
   Provision for loan losses                30        --           90       200
   Charge-offs                             (10)        (33)       (25)      (60)
   Recoveries                                9          20         15        19
                                       -------      ------     -------   ------
   Balance, end of period               $1,795      $1,772     $1,795    $1,772
                                        ======      ======     ======    ======

Net loans outstanding at quarter end                         $344,029  $318,284
Non-performing loans at quarter end:
   Collateralized by one-to-four family homes                  $1,066      $971
   Other non-performing loans                                    $526      $343

Ratios:
   Non-performing loans to total loans                            .46%      .41%
   Allowance for loan losses to non-performing
      loans                                                       113%      135%
   Allowance for loan losses to net loans                         .52%      .57%
   Non-performing assets to total assets                          .48%      .46%

LIQUIDITY & CAPITAL RESOURCES
Loan demand  continued  to be strong  during the six months  ended  December 31,
1997,  as net loans grew by $16.2  million  to $344  million,  a 10%  annualized
growth rate. In spite of strong  competition  from new  financial  institutions,
mutual funds, and the stock market, customer deposits increased by $9.0 million,
or 6.4% annualized,  during the six month period, primarily in customer accounts
with  maturity  terms  under two  years.  The Bank's  loan  growth was funded by
additional borrowings of $5 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 December 31, 1997, the Bank's liquid assets were 6.62% of its liquidity base.
The Bank intends to continue to fund loan growth  (outstanding  loan commitments
were $5.9 million at December  31,  1997) and any declines in customer  deposits
through additional advances from the FHLB. At December 31, 1997, the Bank has an
unused approved line of credit in the amount of $11.4 million, and the potential
to significantly  increase its indebtedness with the FHLB, if necessary,  due to
the Bank's strong financial condition.



                                        9

<PAGE>



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 December 31, 1997.

                                    (Dollars in thousands)


                             TANGIBLE        CORE        RISK-WEIGHTED

Actual capital               $47,005       $47,005          $48,800

Regulatory requirement         5,753        14,923           20,040
                             -------       -------          -------


Excess                       $41,252       $32,082          $28,760
                             =======       =======          =======


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 No. 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 No. 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.

YEAR 2000
The Bank is currently in the process of  addressing a potential  problem that is
facing all users of automated  information systems. This problem arises from the
fact  that  many  computer  systems  process  transactions  based on two  digits
representing  the year of the  transaction  (e.g.,  "97" to  represent  "1997"),
rather  than the full  four  digits.  These  computer  systems  may not  operate
properly when the last two digits become "00", as will occur on January 1, 2000.
In some  cases a date after  December  31,  1999 will  cause a computer  to stop
operating,  while in other cases  incorrect  output may result.  This  potential
problem  could affect a wide variety of  automated  information  systems such as
mainframe  applications,  personal computers,  communications  systems and other
information systems utilized in all industries.

The Bank  recognizes  the need to ensure its  operations  will not be  adversely
impacted by Year 2000 software  failures.  To accomplish  this,  the Bank has an
ongoing program  designed to ensure that its  operational and financial  systems
will be Year 2000  compliant.  While the Bank  believes  it is taking all of the
appropriate steps to assure Year 2000 compliance, it is to some extent dependent
upon vendor cooperation. The Bank is requiring its computer systems and software
vendors to represent  that the services and products  provided  are, or will be,
Year 2000 compliant.  Due to the Bank's current contract  expiring in March 1999
with its core

                                       10

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operating  system vendor,  it is evaluating the  alternative of staying with the
current third-party vendor or possibly switching to another.

Based on currently  available  information,  management does not anticipate that
the cost to address the Year 2000 issue will have a material  adverse  impact on
the Bank's financial condition, results of operations, or liquidity. However, it
is recognized that any Year 2000 compliance  failures could result in additional
expense to the Bank.


                                       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:  February 11, 1998         BY:  (S) B. KEITH JOHNSON
                                       ----------------------
                                          B. Keith Johnson
                                          President and Chief Executive Officer


DATE:  February 11, 1998         BY:  (S) RICHARD L. MUSE
                                       ---------------------
                                          Richard L. Muse
                                          Vice President and Comptroller




                                       13

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