<PAGE>   1
                     SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC  20549
                --------------------------------------------
                                 FORM 10-QSB

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

         For the quarterly period ended December 31, 1997

                                     OR

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

        FOR THE TRANSITION PERIOD FROM ______________ to _______________

                       Commission File Number 0-24898

                             MSB FINANCIAL, INC.
           (Exact Name of registrant as specified in its charter)

          DELAWARE                                           38-3203510
------------------------------------             -------------------------------
(State or other jurisdiction of                  (I.R.S. Employer Identification
incorporation or organization                    Number)

PARK AND KALAMAZOO AVENUE, N.E., MARSHALL, MICHIGAN                   49068   
---------------------------------------------------              -------------
(Address of principal executive offices)                           (ZIP Code)

Registrant's telephone number, including area code:         (616) 781-5103

         Check 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 [ ]

As of  February 12, 1998, there were 1,231,610 shares of the Registrant's 
common stock issued and outstanding.

Transitional Small Business Disclosure Format (check one)
Yes [  ]       No [X]



<PAGE>   2

                             MSB FINANCIAL, INC.
                                    INDEX

<TABLE>


<S>                                                                          <C>
PART I.  FINANCIAL INFORMATION..............................................  1
                                                                            
Item 1.          Financial Statements (Unaudited)...........................  1
                                                                            
Consolidated Condensed Statements of Financial Condition....................  1
Consolidated Condensed Statements of Income.................................  2
Consolidated Condensed Statements of Cash Flows.............................  3-4
Notes to Consolidated Condensed Financial Statements........................  5
Item 2.          Management's Discussion and Analysis of Financial          
                 Condition and Results of Operations........................  6-8
                                                                            
PART II.         OTHER INFORMATION..........................................  9
                                                                            
                 SIGNATURES.................................................  10
                                                                            
                 EXHIBIT INDEX..............................................  11




</TABLE>




<PAGE>   3


           CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
                     December 31, 1997  and June 30, 1997


<TABLE>
<CAPTION>

                                                                              December 31,         June 30,
                                                                                 1997                1997
                                                                             --------------     ---------------
                                                                              (Unaudited)
<S>                                                                          <C>                <C>
ASSETS
    Cash and due from financial institutions                                 $    1,864,492     $     1,502,724
    Interest-bearing deposits                                                       906,266           1,577,888
                                                                             --------------     ---------------
         Total cash and cash equivalents                                          2,770,758           3,080,612

    Securities held to maturity (fair value of $9,763 at 
      December 31, 1997 and $11,455 at June 30, 1997)                                 9,763              11,455
    Loans held for sale                                                             255,010             150,000
    Loans receivable, net of allowance for loan losses of
      $331,634 at December 31, 1997 and $302,903 at June 30, 1997                71,572,018          68,739,556
    Federal Home Loan Bank stock                                                  1,063,100           1,043,700
    Accrued interest receivable                                                     434,205             420,921
    Premises and equipment, net                                                     625,326             577,058
    Mortgage servicing rights                                                        85,199              27,595
    Other assets                                                                    628,184             646,887
                                                                             --------------     ---------------

         Total Assets                                                        $   77,443,563     $    74,697,784
                                                                             ==============     ===============

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
    Deposits                                                                 $   42,358,441     $    41,706,732
    Federal Home Loan Bank Advance                                               21,162,967          19,373,600
    Advance payments by borrowers for taxes and insurance                           159,791             465,445
    Accrued interest payable                                                         91,721              79,114
    Accrued expenses and other liabilities                                          610,692             382,697
                                                                             --------------     ---------------
              Total Liabilities                                                  64,383,612          62,007,588

Shareholders' equity
    Preferred stock, $.01 par value:  2,000,000 shares
      authorized; none outstanding
    Common stock, par value $.01:  4,000,000 shares
      authorized; 1,483,014 shares issued and 1,236,510 shares
      outstanding at December 31, 1997 and 1,483,014 shares
       issued and 1,248,622 shares outstanding at June 30, 1997                      14,830              14,830
    Additional paid-in capital                                                    7,165,345           7,096,776
    Retained earnings, substantially restricted                                   8,809,248           8,372,493
    Unallocated Employee Stock Ownership Plan shares                               (350,606)           (383,006)
        Unearned Recognition and Retention Plan shares                             (177,406)           (208,084)
    Less cost of Common Stock in Treasury- 249,392 shares at
      December 31, 1997 and 234,392 shares at June 30, 1997                      (2,401,460)         (2,202,813)
                                                                             --------------     ---------------
              Total Shareholders' Equity                                         13,059,951          12,690,196
                                                                             --------------     ---------------
  
         Total Liabilities & Shareholders' Equity                            $   77,443,563     $    74,697,784
                                                                             ==============     ===============




</TABLE>

    See accompanying notes to consolidated financial statements.







                                       1


<PAGE>   4

                 CONSOLIDATED CONDENSED STATEMENTS OF INCOME
         Six months and three months ended December 31, 1997 and 1996
                                 (Unaudited)


<TABLE>
<CAPTION>

                                                      Six Months                        Three Months
                                                      ----------                        ------------
                                                1997              1996              1997              1996
                                                ----              ----              ----              ----
<S>                                        <C>               <C>              <C>                <C>
Interest and dividend income
    Loans, including fees                  $   3,120,736     $   2,526,789     $   1,581,029     $    1,321,525
    Securities available for sale                                   28,179                                9,158
    Securities held to maturity                      365             5,229               175                253
    Other interest and dividends                 102,977            58,892            55,389             27,645
                                           -------------     -------------     -------------     --------------
                                               3,224,078         2,619,089         1,636,593          1,358,581
Interest Expense
    Deposits                                     791,560           772,748           399,951            388,504
    Federal Home Loan Bank Advance               659,993           261,179           338,472            154,749
    Other interest expense                         4,764             2,755             2,563              1,236
                                           -------------     -------------     -------------     --------------
                                               1,456,317         1,036,682           740,986            544,489
                                           -------------     -------------     -------------     --------------

NET INTEREST INCOME                            1,767,761         1,582,407           895,607            814,092

Provision for loan losses                         40,000            18,000            15,000              9,000
                                           -------------     -------------     -------------     --------------

NET INTEREST INCOME AFTER PROVISION 
  FOR LOAN LOSSES                              1,727,761         1,564,407           880,607            805,092

Noninterest income
    Loan servicing fees                           38,771            43,555            17,665             21,404
    Gain on sales of loans                       111,300            15,735            68,711              8,922
    Service fees on deposit accounts              75,976            58,333            41,372             29,861
    Profit on sale of real estate owned           10,666                  
    Loss on sale of securities available 
     for sale                                                      (35,747)                              (3,507)
    Other                                         68,716            56,668            35,997             27,782
                                           -------------     -------------     -------------     --------------
                                                 305,429           138,544           163,745             84,462
Noninterest expense
    Salaries and employee benefits               499,310           411,950           254,087            208,341
    Buildings, occupancy and equipment            99,202            99,206            49,167             50,301
    Data processing                               91,360            77,831            47,746             38,536
    Federal deposit insurance premiums            25,954            53,006            13,012             23,470
    Director fees                                 62,044            61,494            31,572             31,422
    Correspondent bank charges                    28,703            28,177            14,304             14,512
    Michigan Single Business tax                  35,000            25,550            17,000             16,550
    Provision (recovery) to adjust loans held
     for sale to lower of cost or market                           (13,645)                              (9,699)
    SAIF special assessment                                        268,752                  
    Professional fees                             54,465            52,219            30,066             32,244
    Other                                        213,212           197,721           112,978            102,330
                                           -------------     -------------     -------------     --------------
                                               1,109,250         1,262,261           569,932            508,007
                                           -------------     -------------     -------------     --------------
INCOME BEFORE FEDERAL INCOME 
  TAX EXPENSE                                    923,940           440,690           474,420            381,547

Federal income tax expense                       325,000           149,500           166,000            131,000
                                           -------------     -------------     -------------     --------------

NET INCOME                                 $     598,940     $     291,190     $     308,420     $      250,547
                                           =============     =============     =============     ==============

Basic earnings per share                   $        0.48     $        0.22     $        0.25      $        0.19
                                           =============     =============     =============     ==============

Weighted average common 
  share outstanding                            1,238,768         1,304,962         1,234,783          1,301,832
                                           =============     =============     =============     ==============

Diluted earnings per share                 $        0.47     $        0.22     $        0.25     $         0.19
                                           =============     =============     =============     ==============

Weighted average common and diluted 
   potential common shares outstanding         1,262,637         1,310,921         1,248,092          1,305,404
                                           =============     =============     =============     ==============

</TABLE>






    See accompanying notes to consolidated condensed financial statements.


                                      2


<PAGE>   5



               CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                 Six  months ended December 31, 1997 and 1996
                                 (Unaudited)


<TABLE>
<CAPTION>


                                                                                     1997             1996
                                                                                     ----             ----
<S>                                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                                  $     598,940   $      291,190
    Adjustments to reconcile net income
      to net cash from operating activities
         Provision for loan losses                                                     40,000           18,000
         Provision (recovery) to adjust loans held
          for sale to lower of cost or market                                                          (13,645)
         Depreciation                                                                  45,266           52,860
         Amortization of mortgage servicing rights                                      5,370
         Net amortization of premium                                                                       396
         Employee Stock Ownership Plan expense                                        104,760           61,344
         Recognition and Retention Plan expense                                        30,678           29,558
         Originations of loans held for sale                                       (6,402,472)      (1,274,269)
         Proceeds from sales of loans held for sale                                 6,345,916          988,416
         Net gains on sales of loans held for sale                                   (111,428)         (15,734)
         Net losses on sales of securities available for sale                                          (35,747)
         Change in assets and liabilities
             Accrued interest receivable                                              (13,284)           1,120
             Other assets                                                              18,703            8,435
             Accrued interest payable                                                  12,607           10,862
             Other expense and other liabilities                                      227,995         (249,520)
                                                                                -------------   --------------
                 Net cash from operating activities                                   903,051         (126,734)

CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from sale of securities available for sale                                              1,591,835
    Proceeds from maturities of securities held to maturity                                          1,000,000
    Principal paydowns on mortgage-backed  securities                                   1,692            1,884
    Purchase of Federal Home Loan Bank stock                                          (19,400)        (283,300)
    Net increase in loans                                                          (2,872,462)      (8,807,410)
    Net purchases of premises and equipment                                           (93,534)        (123,711)
                                                                                -------------   --------------
         Net cash used in investing activities                                     (2,983,704)      (6,620,702)


</TABLE>


                                 (Continued)

                                      3




<PAGE>   6




               CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                 Six months ended December 31, 1997 and 1996
                                 (Unaudited)





<TABLE>
<CAPTION>

                                                                                       1997             1996
                                                                                       ----             ----
<S>                                                                             <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES
    Net increase in deposits                                                    $     651,709   $      867,176
    Proceeds from Federal Home Bank advances                                       11,000,000        6,000,000
    Repayments on Federal Home Bank advances                                       (9,210,633)
    Decrease in advance payments
      by borrowers for taxes and insurance                                           (305,654)        (325,087)
    Payment of dividends on common stock                                             (162,185)        (151,556)
    Repurchase of common stock                                                       (225,000)        (153,257)
    Exercise of stock options                                                          22,562
                                                                                -------------   -------------- 
         Net cash from financing activities                                         1,770,799        6,237,276
                                                                                -------------   -------------- 

Net change in cash and cash equivalents                                              (309,854)        (510,160)

Cash and cash equivalents at beginning of period                                    3,080,612        2,180,060
                                                                                -------------   -------------- 

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $   2,770,758   $    1,669,900
                                                                                =============   ==============
Supplemental disclosures of cash flow information
    Cash paid during the period for:
         Interest                                                               $   1,438,946   $    1,023,066
         Income taxes                                                                 402,956          178,299
Supplemental disclosure of noncash investing activities
    Transfer from loans held for sale to loans held to maturity                                  $      47,486





</TABLE>


    See accompanying notes to consolidated condensed financial statements.

                                      4
<PAGE>   7

                             MSB FINANCIAL, INC.
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                      Six months ended December 31,1997
                                 (Unaudited)



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated condensed financial statements include the
accounts of MSB Financial, Inc. (the "Company") and its wholly-owned subsidiary,
Marshall Savings Bank, F.S.B. ("Bank") after the elimination of significant
intercompany transactions and accounts.  The initial capitalization of the
Company and its acquisition of the Bank took place on February 6, 1995.

These interim financial statements are prepared in accordance with the
Securities and Exchange Commission's rules for quarterly financial information
without audit and reflect all adjustments which, in the opinion of management,
are necessary to present fairly the financial position of the Company at
December 31, 1997 and the results of its operations and its cash flows for the
periods presented.  All such adjustments are normal and recurring in nature. 
The accompanying consolidated condensed financial statements do not purport to
contain all the necessary disclosures required by generally accepted accounting
principles that might otherwise be necessary in the circumstances and should be
read in conjunction with the consolidated financial statements and notes thereto
included in the annual report of MSB Financial, Inc. for the year ended June 30,
1997.  The results of the periods presented are not necessarily representative
of the results of operations and cash flows which may be expected for the entire
year.

The provision for income taxes is based upon the effective tax rate
expected to be applicable for the entire year.

Basic and diluted earnings per share for the periods presented in 1997
and 1996 are computed under a new accounting standard effective in the quarter
ended December 31, 1997.  All prior amounts have been restated to be
comparable.  Basic earnings per share is based on net income divided by the
weighted average number of common shares outstanding during the period. 
Diluted earnings per share shows the dilutive effect of additional common
shares issuable under stock option plans.  Net income was $598,940 and $308,420
for the six month and three month periods ended December 31, 1997.  The
weighted average number of common shares outstanding for the six and three
month periods ended December 31, 1997, were 1,238,768 and 1,234,783,
respectively.  The weighted average of number of common and diluted potential
common shares outstanding for the six and three months ended December 31, 1997,
were 1,262,637 and 1,248,092, respectively.   For the six month and three month
periods ended December 31, 1996, respectively, net income was $291,190 and
$250,547.  The weighted average number of common shares outstanding for the six
and three month periods ended December 31, 1996, were 1,304,962 and 1,301,832,
respectively.  The weighted average number of common and diluted potential
common shares outstanding for the six and three months ended December 31, 1996,
were 1,310,921 and 1,305,404, respectively.

NOTE 2 - REPURCHASES OF COMMON STOCK

On November 17, 1995 the Company received a "no objection" letter from
the Office of Thrift Supervision to repurchase up to 9% (129,962 shares) of its
common stock in the open market over a twelve month period.  As of March 31,
1996 the Company had completed the repurchase program with a total of 129,962
shares at an average price of $9.35 per share.  On April 22, 1996, the Company
received OTS approval to repurchase up to 5%  (67,780 shares) of its common
stock.  As of January 31, 1997, he Company had completed this repurchase program
with a total of 67,780 shares at an average price of $8.85 per share.  On
February 11, 1997, the Company received OTS approval to repurchase up to 5%
(64,264 shares) of its common stock.  As of December 31, 1997, 51,650 shares had
been repurchased at an average price of $11.87 per share.   Approval to
repurchase these shares expired on February 11, 1998, with a total of 56,550
shares repurchased at an avearge price of $12.31 per share.




                                      5

<PAGE>   8




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

         MSB Financial, Inc. (the "Company") was incorporated under the laws of
the State of Delaware for the purpose of becoming the savings and loan holding
company of Marshall Savings Bank, F.S.B. (the "Bank") in connection with the
Bank's conversion from a federally chartered mutual savings bank to a federally
chartered stock savings bank (the "Conversion").  On February 6, 1995 the
Conversion was completed and the Bank became a wholly-owned subsidiary of the
Company.  The following discussion compares the consolidated financial condition
of the Company and the Bank at December 31, 1997 to June 30, 1997 and the
results of operations for the three and six month periods ended December 31,
1997 with the same periods ended December 31, 1996.  This discussion should be
read in conjunction with the consolidated condensed financial statements and
footnotes included herein.

FORWARD-LOOKING STATEMENTS

       When used in this Quarterly Report of Form 10-QSB or future filings by
the Company with the Securities and Exchange Commission, in the Company's press
releases or other public or shareholder communications, or in oral statements
made with the approval of an authorized executive officer, the words or phrases
"will likely result", "are expected to", "will continue", "is anticipated",
"estimated", "project", "believe" or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.  The Company wishes to caution readers
not to place undue reliance on any such forward-looking statements, which speak
only as of the date made, and to advise readers that various factors including
regional and national economic conditions, changes in levels of market interest
rates, credit risks of lending activities, and competitive and regulatory
factors could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from those
anticipated or projected.

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

FINANCIAL CONDITION

       Total assets increased $2.7 million to $77.4 million from June 30, 1997
to December 31, 1997.  Net loans, including loans held for sale, increased by
$2.9 million, or 4.3% for the period, due primarily to the strong demand for
mortgage loans, especially residential 1-4 family construction loans, in the
Company's market area.  This increase was primarily funded by an increase of
$1.8 million in Federal Home Loan Bank advances and a $652,000 increase in
deposits.

       Total liabilities increased $2.4 million to $64.4 million from June 30,
1997 to December 31, 1997. In addition to the increase in the Federal Home Loan
Bank advances and deposits discussed above, were increases in accrued expenses
and other liabilities of $228,000 and accrued interest payable of $13,000. 
Offsetting the above increases in liabilities for the period was a decrease of
$306,000 in advance payments by borrowers for taxes and insurance.

       The repurchase of the Company's common stock, payment of dividends
declared on common stock, and net income resulted in a net increase in
shareholders' equity of $370,000. 

RESULTS OF OPERATIONS

GENERAL.  The Company's results of operations depend primarily upon the
level of net interest income, which is the difference ("spread") between the
average yield earned on loans and securities, interest-bearing deposits, and
other interest-earning assets, and the average rate paid on deposits and
borrowed funds, as well as competitive factors that influence interest rates,
loan demand, and deposit flows.  Results of operations are also dependent upon
the level of the Company's noninterest income, including fee income and service
charges, and the level of its noninterest expense, including general and
administrative expenses.  The Company, like other financial institutions, is
subject to interest rate risk to the degree that its interest-bearing
liabilities mature or reprice at different times, or on a different basis, than
its interest-earning assets.



                                      6


<PAGE>   9




NET INCOME.  Net income for the three months ended December 31, 1997 was
$308,000, 23.1% higher than net income of $251,000 for same period ended
December 31, 1996.  Net income for the six month period ended December 31, 1997
was $599,000, compared to  net income of $291,000 for the same period in 1996. 
Net income for the six month period ended December 31, 1996 was reduced by
$170,000, net of taxes, due to a non-recurring special assessment to
recapitalize the Savings Assocation Insurance Fund (SAIF).  Net income, without
the SAIF assessment, for the six months ended December 31, 1996 was $461,000 as
compared to $599,000 for the same six month period in 1997, resulting in an
increase of $138,000, or 29.9%.

NET INTEREST INCOME.  Net interest income increased $82,000, or 10.0%,
to $896,000 for the three month period ended December 31, 1997.  For the six
month period ended December 31, 1997 net interest income increased $185,000, or
11.7%, to $1.8 million.  The increases in net interest income for the three
month and six month periods ended December 31, 1997 compared to the same periods
in 1996 were primarily a result of an increase in interest income.  Interest
income increased primarily due to the increase in the average outstanding
balance of  net loans, as discussed above.  The weighted average yield on the
loan portfolio for the three month period ended December 31, 1997 increased 18
basis points to 8.83% from 8.65% for the same period ended December 31, 1996. 
For the six month period ended December 31, 1997 the weighted average yield on
the loan portfolio was 8.77%, compared to 8.63% for the same period ended
December 31, 1996, an increase of 14 basis points.  Interest expense increased
$196,000 for three month period ended December 31, 1997 and increased $420,000
for the six month period ended December 31, 1997, as compared to the same
periods in 1996.  These increases are attributable to an increase in interest
paid on Federal Home Loan Bank advances for the three month and six month
periods ended December 31, 1997 of $184,000 and $399,000, respectively, when
compared to the same periods ended December 31, 1996.

PROVISION FOR LOAN LOSSES.  The provision for loan losses is a result of
management's periodic analysis of the adequacy of the allowance for loan
losses.  The provision for loan losses increased by $6,000 to $15,000 for the
three month period ended December 31, 1997 as compared to the three month period
ended December 31, 1996, due to management's continuing reassessment of losses
inherent in the loan portfolio.  At December 31, 1997 the Company's allowance
for loan losses totaled $332,000 or  0.46% of net loans receivable and 51.31% of
total non-performing loans.  At June 30, 1997, the Company's allowance for loan
losses totaled $303,000, or 0.44% of net loans receivable and 65.16% of total
non-performing loans.  

       Management establishes an allowance for loan losses based on an analysis
of risk factors in the loan portfolio.  This analysis includes the evaluation of
concentrations of credit, past loss experience, current economic conditions,
amount and composition of the loan portfolio, estimated fair value of underlying
collateral, loan commitments outstanding, delinquencies, and other factors. 
Because the Company has had extremely low loan losses during its history,
management also considers loss experience of similar portfolios in comparable
lending markets.  Accordingly, the calculation of the adequacy of the allowance
for loan losses was not based directly on the level of non-performing assets.

       As of December 31, 1997, the Company's non-performing assets, consisting
of nonaccrual loans and accruing loans 90 days or more delinquent, totaled
$647,000, or 0.90% of total loans, compared to $465,000, or 0.67% of total loans
as of June 30, 1997, an increase of $182,000.  Loans greater than 90 days past
due, and other designated loans of concern, are placed on non-accrual status,
unless it is determined that the loans are well collateralized and in the
process of collection.  There was no real estate owned at December 31, 1997.

       Management will continue to monitor the allowance for loan losses and
make future additions to the allowance through the provision for loan losses as
economic conditions dictate.  Although the Company maintains its allowance for
loan losses at a level which it considers to be adequate to provide for losses,
there can be no assurance that future losses will not exceed estimated amounts
or that additional provisions for loan losses will not be required in future
periods.  In addition, management's determination as to the amount of the
allowance for loan losses is subject to review by the Office of Thrift
Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC), as part
of their examination process, which may result in the establishment of an
additional allowance based upon their judgment of the information available to
them at the time of their examination.

NONINTEREST INCOME.  Noninterest income consists primarily of gains on
the sale of loans, gains or losses on sale of securities available for sale,
loan servicing fees, service fees on deposit accounts and other fees. 
Noninterest income increased $79,000 during the three month period ended
December 31, 1997 compared to the three month period ended December 31, 1996.
For the six month period ended December 31, 1997 noninterest income increased
$167,000 compared the six month period ended December  31, 1996.  The increase
for the six month





                                      7

<PAGE>   10



period ended December 31, 1997, was due to increases in gains on sales of loans
of $96,000, due to increased sales of  loans, an increase of $18,000 in service
charges on deposit accounts and a $11,000 profit on the sale of real estate
owned.  Also, net realized losses of $36,000 on the sale of securities
available for sale during the six month period ended December 31, 1996 resulted
in lower noninterest income for the 1996 period.  There were no other
significant changes in the components of noninterest income.  
        
NONINTEREST EXPENSE.  Noninterest expense was $570,000 for the three
month period ended December 31, 1997 compared to $508,000 reported for the same
prior year period, an increase of $62,000 or 12.2%.  For the six month period 
ended December 31, 1996 noninterest expense was $1.3 million including the
non-recurring SAIF assessment of $269,000.  Noninterest expense without the SAIF
assessment was $994,000 for the six month period ended December 31, 1996,
compared to $1.1 million for the same six month period in 1997, an increase of
$116,000 or 11.6%.   Salaries and employee benefits, the largest component of
noninterest expense, increased $46,000 and $87,000 for the three month and six
month periods ended December 31, 1997, respectively, compared to the same
periods during 1996.  Significant factors causing the increase in salaries and
employee benefits was the addition of a full-time employee during the 1997
period and increases in expenses associated with the Company's stock-based
benefit plans, as a result of the Company's stock price.  Also contributing to
the increase in noninterest expense was a recovery of $14,000 during the six
month period ended December 31, 1996, to adjust loans held for sale to the
lower of cost value or market value.

       INCOME TAX EXPENSE.  Income tax expense increased $35,000 and $176,000
for the three and six month periods ended December 31, 1997 compared to the same
periods in 1996 due to the increase in net income.  The Company's effective tax
rate remains at approximately 34%. 

Liquidity and Capital Resources

       The Company's principal sources of funds are deposits, principal and
interest repayments on loans, sales of loans, interest-bearing deposits and
securities available for sale.  While scheduled loan repayments and maturing
investments are relatively predictable, deposit flows and early loan prepayments
are more influenced by interest rates, general economic conditions and
competition.

       Federal regulations have required the Bank to maintain minimum levels of
liquid assets.  The required percentage has varied from time to time based upon
economic conditions and savings flows and is currently 4% of net withdrawable
savings deposits and borrowings payable on demand or in one year or less during
the preceding calendar month.  Liquid assets for purposes of this ratio include
cash, certain time deposits, U.S. Government, government agency and other
securities and obligations generally having remaining maturities of less than
five years.  The Bank has maintained its liquidity ratio at levels in excess of
those required.  At December 31, 1997, the Bank's liquidity ratio was 6.90%.

       The Company uses its liquidity resources principally to meet ongoing
commitments, to fund maturing certificates of deposit and deposit withdrawals
and to meet operating expenses.  The Company anticipates that it will have
sufficient funds available to meet current loan commitments.  At December 31,
1997, the Company had outstanding commitments to extend credit which amounted to
$5.0 million (including $3.2 million in available home equity lines of credit). 
At December 31, 1997, the Company had $21.1 million in advances from the Federal
Home Loan Bank of Indianapolis outstanding.  Management believes that loan
repayments and other sources of funds, including Federal Home Loan Bank
borrowings, will be adequate to meet the Company's foreseeable liquidity needs.

       At December 31, 1997, the Bank had tangible capital of $9.7 million, or
12.5% of adjusted total assets which was $8.5 million above the minimum capital
requirement of $1.2, or 1.5% of adjusted total assets.

       The Bank had, at December 31, 1997, core capital of $9.7 million, or
12.5% of adjusted total assets which was $7.4 million above the minimum capital
requirement of $2.3 million, or 3.0% of adjusted total assets.

       At December 31, 1997, the Bank had total risk based capital of $10.0
million and risk weighted assets of $47.5 million or total risk based capital of
21.2% of risk weighted assets.  This amount was $6.2 million above the minimum
regulatory requirement of $3.8 million, or 8.0% of risk weighted assets.





                                      8

<PAGE>   11




                         PART II.  OTHER INFORMATION

Item 1.          Legal Proceedings

                 None.

Item 2.          Changes in Securities

                 None.

Item 3.          Defaults Upon Senior Securities

                 None.

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

                 The Annual Shareholders' Meeting of MSB Financial, Inc.
                 was held on October 28, 1997 in Marshall, Michigan.  At that
                 meeting the shareholders elected the following persons to three
                 year terms to the Board of Directors. Richard L. Dobbins by a
                 vote of 909,301 for and 84,582 against.  Martin L. Mitchel by a
                 vote of 910,801 for and 83,082 against.  Shareholders ratified
                 the 1997 Stock Option and Incentive Plan by a vote of 871,539
                 for, 113,292 against, 8,650 abstentions & 402 non-votes.  Also
                 approved was the appointment of Crowe, Chizek and Company,
                 L.L.P., as independent auditors for the Company for the fiscal
                 year ending June 30, 1998, with a vote of  905,841 for, 84,592
                 against & 3,450 abstentions.

Item 5.          Other Information

                 None.

Item 6.          Exhibits and Reports on Form 8-K

                 (a) Exhibits
 
                          Exhibit 27 - Financial Data Schedule

                 (b) Reports on Form 8-K

                          None





                                      9

<PAGE>   12



                                                                         
       Pursuant to the requirement 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. 

                                  SIGNATURES

                                           MSB FINANCIAL, INC.
                                           Registrant


Date: February 12, 1998                    \s\Charles B. Cook 
                                           ---------------------------
                                           Charles B. Cook,  President and Chief
                                           Executive Officer  (Duly Authorized
                                           Officer)

Date: February 12, 1998                    \s\Elaine R. Carbary
                                           ---------------------------
                                           Elaine R. Carbary, Chief Financial 
                                           Officer (Principal Financial Officer)





                                      10

<PAGE>   13



                             MSB FINANCIAL, INC.

                                EXHIBIT INDEX

Exhibit No.               Description                                Page No.

    27                    Financial Data Schedule                       12









                                      11