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

                                -----------------

                                  FORM 10-QSB

(Mark One)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004
                               ------------------

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

                                                Commission file number 000-50820

                     FIRST FEDERAL FINANCIAL SERVICES, INC.
                     --------------------------------------
        (Exact name of small business issuer as specified in its charter)

                 Federal                                37-1413556
                 -------                                ----------
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
    incorporation or organization)

 300 St. Louis Street, Edwardsville, IL                    62025
 --------------------------------------                    -----
(Address of principal executive office)                  (Zip Code)

Registrant's telephone number, including area code (618) 656-6200
                                                   --------------

                                 Not applicable
                                 --------------
        (Former name, former address and former fiscal year, if changed
                               since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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 |_|.

Transitional Small Business Disclosure Format (Check one): Yes |_|. No |X|.

Indicate  the number of shares  outstanding  of the  issuer's  classes of common
stock, as of the latest practicable date.

                Class                           Outstanding October 29, 2004
--------------------------------------          ----------------------------
Common Stock, par value $.10 per share                    3,920,060 *

* As of October 29, 2004, 2,156,033 shares were owned by First Federal Financial
Services, MHC, the Company's mutual holding company parent.

<PAGE>

                     FIRST FEDERAL FINANCIAL SERVICES, INC.

                                   FORM 10-QSB

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2004

                                      INDEX

                                                                       PAGE NO.

PART I - Financial Information

    Consolidated Balance Sheets                                            3

    Consolidated Statements of Income                                      4

    Consolidated Statements of Comprehensive Income                        5

    Consolidated Statements of Cash Flows                                  6

    Notes to Consolidated Financial Statements                             8

    Management's Discussion and Analysis of
       Financial Condition and Results of Operations                      10

    Controls and Procedures                                               16

PART II - Other Information                                               17

Certifications                                                            18

<PAGE>

                     FIRST FEDERAL FINANCIAL SERVICES, INC.

                           Consolidated Balance Sheets
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    September 30,        December 31,
      Assets                                                            2004                 2003
                                                                    -------------       -------------
<S>                                                                 <C>                   <C>
Cash and due from banks                                             $   1,134,039           1,343,860
Federal funds sold                                                      1,200,000             800,000
                                                                    -------------       -------------
   Total cash and cash equivalents                                      2,334,039           2,143,860
Interest-bearing time deposits                                            500,000             500,000
Securities available for sale                                          16,190,565           9,856,218
Securities held to maturity, at amortized cost (fair value
   of $505,567 and $665,577, respectively)                                513,071             668,602
Federal Home Loan Bank stock                                            7,665,200           5,401,700
Loans, net of allowance for loan losses
   of $428,419 and $428,700, respectively                             105,944,482         101,144,595
Property and equipment                                                    872,711             873,029
Accrued interest receivable                                               417,923             299,587
Other assets                                                               64,962              83,216
                                                                    -------------       -------------
      Total assets                                                  $ 134,502,953         120,970,807
                                                                    =============       =============
      Liabilities and Stockholders' Equity
Deposits:
    Savings                                                         $  28,281,651          27,386,692
    Time                                                               68,540,057          70,544,640
                                                                    -------------       -------------
      Total deposits                                                   96,821,708          97,931,332
Advances from FHLB                                                      1,000,000           4,000,000
Accrued interest payable                                                    4,470              13,243
Other liabilities                                                         443,097             307,506
                                                                    -------------       -------------
      Total liabilities                                                98,269,275         102,252,081
                                                                    -------------       -------------
Commitments and contingencies
Stockholders' equity:
    Preferred stock, $.10 par value;  1,000,000 shares
      authorized; no shares issued                                             --                  --
   Common stock, $.10 par value; 10,000,000 shares authorized;
   3,920,060 and 100 shares issued and outstanding                        392,006                  10
Additional paid-in capital                                             16,513,181               4,990
Unearned employee stock ownership plan shares                            (859,960)                 --
Retained earnings - substantially restricted                           20,148,252          18,705,730
Accumulated other comprehensive income, net                                40,199               7,996
                                                                    -------------       -------------
      Total stockholders' equity                                       36,233,678          18,718,726
                                                                    -------------       -------------
      Total liabilities and stockholders' equity                    $ 134,502,953         120,970,807
                                                                    =============       =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                     FIRST FEDERAL FINANCIAL SERVICES, INC.

                        Consolidated Statements of Income
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          Three Months Ended              Nine Months Ended
                                                             September 30,                   September 30,
                                                      --------------------------      --------------------------
                                                         2004            2003            2004            2003
                                                      ----------      ----------      ----------      ----------
<S>                                                   <C>              <C>             <C>             <C>
Interest income:
Interest and fees on loans                            $1,567,562       1,521,615       4,707,234       4,585,632
Securities:
   Taxable interest income                               142,431         135,667         333,317         390,951
   Nontaxable income                                         682           1,312           2,047           7,729
   Dividends                                              82,707          97,831         263,636         231,204
Interest bearing deposits                                 23,354           6,721          51,466          34,751
                                                      ----------      ----------      ----------      ----------
      Total interest income                            1,816,736       1,763,146       5,357,700       5,250,267
                                                      ----------      ----------      ----------      ----------
Interest expense:
   Deposits                                              606,185         674,875       1,865,590       2,150,160
   Advances from Federal Home Loan Bank                    3,169           4,834          18,648           4,834
                                                      ----------      ----------      ----------      ----------
      Total interest expense                             609,354         679,709       1,884,238       2,154,994
                                                      ----------      ----------      ----------      ----------
      Net interest income                              1,207,382       1,083,437       3,473,462       3,095,273
Provision for loan losses                                     --          10,000              --          20,000
                                                      ----------      ----------      ----------      ----------
      Net interest income after
          provision for loan losses                    1,207,382       1,073,437       3,473,462       3,075,273
                                                      ----------      ----------      ----------      ----------
Noninterest income:
   Loss on sale of securities available for sale              --              --              --         (45,777)
   Other                                                   8,392          10,304          11,777          13,888
                                                      ----------      ----------      ----------      ----------
      Total noninterest income                             8,392          10,304          11,777         (31,889)
                                                      ----------      ----------      ----------      ----------
Noninterest expense:
   Compensation and employee benefits                    233,373         203,231         645,139         564,570
   Occupancy expense                                      28,211          28,630          78,047          76,963
   Data processing services                               16,810          14,654          48,668          45,397
   Advertising                                             9,467          11,465          21,427          29,712
   Director fees                                          33,050          31,200         117,900          94,850
   Professional services                                  45,571          11,300          95,737          33,913
   Loss on sale of foreclosed real estate                    316              --             316              --
   Other                                                  44,823          42,901         134,245         124,978
                                                      ----------      ----------      ----------      ----------
      Total noninterest expense                          411,621         343,381       1,141,479         970,383
                                                      ----------      ----------      ----------      ----------
      Income before income taxes                         804,153         740,360       2,343,760       2,073,001
Income taxes                                             310,413         282,717         901,238         814,617
                                                      ----------      ----------      ----------      ----------
      Net income                                      $  493,740         457,643       1,442,522       1,258,384
                                                      ==========      ==========      ==========      ==========
Basic and diluted income per share (see Note 2)       $     0.13               *            0.13               *
                                                      ==========      ==========      ==========      ==========
Dividends per share                                   $       --              --              --              --
                                                      ==========      ==========      ==========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.

* Not applicable since initial public offering completed on June 28, 2004.


                                       4
<PAGE>

                     FIRST FEDERAL FINANCIAL SERVICES, INC.

                 Consolidated Statements of Comprehensive Income
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended               Nine Months Ended
                                                       September 30,                    September 30,
                                                --------------------------       --------------------------
                                                   2004            2003             2004            2003
                                                ----------      ----------       ----------      ----------
<S>                                             <C>                <C>            <C>             <C>
Net income                                      $  493,740         457,643        1,442,522       1,258,384
Other comprehensive income:
   Reclassification adjustment for loss
        included in income, net of tax                  --              --               --          27,924
   Unrealized gains (losses) on securities
        arising during the period                  106,484         (86,782)          32,203         (71,753)
                                                ----------      ----------       ----------      ----------
Comprehensive income                            $  600,224         370,861        1,474,725       1,214,555
                                                ==========      ==========       ==========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                     FIRST FEDERAL FINANCIAL SERVICES, INC.

                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                                    September 30,
                                                                          -------------------------------
                                                                              2004               2003
                                                                          ------------       ------------
<S>                                                                       <C>                  <C>
Cash flows from operating activities:
   Net income                                                             $  1,442,522          1,258,384
   Adjustments to reconcile net income to net
      cash provided by operating activities:
      Amortization of:
         Deferred loan origination (fees) costs, net                           (17,272)           153,659
         Premiums and discounts on securities                                   12,926             35,825
      Provision for loan losses                                                     --             20,000
      Loss on sale of securities available for sale                                 --             45,777
      Loss on sale of foreclosed real estate                                       316                 --
      Depreciation and amortization                                             35,767             41,343
      FHLB stock dividends                                                    (263,500)          (289,700)
      ESOP expense                                                              28,252                 --
      Change in assets and liabilities:
        Decrease (increase) in accrued interest receivable                    (118,336)           (21,422)
        Decrease (increase) in other assets                                     23,310             74,174
        Increase (decrease) in accrued interest payable                         (8,773)            (1,387)
        Increase (decrease) in other liabilities                               110,086            (17,227)
                                                                          ------------       ------------
                   Net cash flows from operating activities                  1,245,298          1,299,426
                                                                          ------------       ------------
Cash flows from investing activities:
  Available for sale securities:
      Purchases                                                             (8,492,646)        (8,294,234)
      Proceeds from sale                                                            --          1,287,450
      Proceeds from call and maturities                                      2,200,000          5,400,000
  Held to maturity securities:
      Purchases                                                                     --           (770,218)
      Proceeds from paydowns                                                   153,556            157,969
   Purchase of Federal Home Loan Bank Stock                                 (2,000,000)        (1,000,000)
   Loan originations, net of principal collected                            (4,799,101)        (6,063,134)
   Purchase of property and equipment                                          (35,449)           (11,736)
   Proceeds from sale of foreclosed real estate                                 16,170                 --
                                                                          ------------       ------------
           Net cash flows from investing activities                       $(12,957,470)        (9,293,903)
                                                                          ------------       ------------
</TABLE>

                                                                     (Continued)


                                       6
<PAGE>

                     FIRST FEDERAL FINANCIAL SERVICES, INC.

                      Consolidated Statements of Cash Flows
                                   (Unaudited)

(Continued)

<TABLE>
<CAPTION>
                                                                                      Nine Months Ended
                                                                                        September 30,
                                                                              -------------------------------
                                                                                  2004               2003
                                                                              ------------       ------------
<S>                                                                           <C>                   <C>
Cash flows from financing activities:
   Net increase (decrease) in savings accounts                                $    894,959          1,474,250
   Net increase (decrease) in time accounts                                     (2,004,583)           610,382
   Proceeds from advances from FHLB                                                     --          3,000,000
   Repayment of advances from FHLB                                              (3,000,000)                --
   Proceeds from issuance of common stock                                       16,011,975                 --
                                                                              ------------       ------------
         Cash flows from financing activities                                   11,902,351          5,084,632
                                                                              ------------       ------------
Net increase (decrease) in cash and cash equivalents                               190,179         (2,909,845)
Cash and cash equivalents at beginning of period                                 2,143,860          4,269,844
                                                                              ------------       ------------
Cash and cash equivalents at end of period                                    $  2,334,039          1,359,999
                                                                              ============       ============

Supplemental schedule of noncash investing and financing activities:
Real estate acquired in settlement of loan                                    $     16,486                 --

Supplemental  disclosures of cash flow information:
Cash paid (received) during the period for:
   Interest                                                                   $  1,893,011          2,156,381
   Income taxes, net of refunds                                               $    790,165            783,919
</TABLE>

See accompanying notes to consolidated financial statements.


                                       7
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                   Notes to Consolidated Financial Statements

(1)   The  information  contained  in the  accompanying  consolidated  financial
      statements is unaudited.  In the opinion of management,  the  consolidated
      financial  statements  contain all  adjustments  (none of which were other
      than normal  recurring  entries)  necessary  for a fair  statement  of the
      results of operations for the interim  periods.  The results of operations
      for the interim  periods  are not  necessarily  indicative  of the results
      which may be  expected  for the entire  fiscal  year.  These  consolidated
      financial  statements  should be read in conjunction with the consolidated
      financial  statements of the Company for the year ended  December 31, 2003
      contained in the Prospectus used in the Company's  initial public offering
      (described below).

      On  January  2,  2001,   First  Federal  Savings  &  Loan  Association  of
      Edwardsville  (Association)  reorganized  into the two-tier mutual holding
      company structure. As part of the reorganization, the Association became a
      capital stock savings and loan  association and a wholly-owned  subsidiary
      of First Federal  Financial  Services,  Inc.  (Company),  which became the
      wholly-owned  subsidiary of First Federal Financial Services,  MHC (Mutual
      Holding  Company).  On November 20, 2003, the Board of Directors adopted a
      plan to complete  an initial  public  offering of the common  stock of the
      Company.  In connection  with the offering the Company  offered its common
      stock to the depositors of the Association as of specified dates and to an
      employee stock ownership plan. The initial public offering was consummated
      on June 28, 2004 through the sale and issuance by the Company of 1,764,027
      shares of common stock at $10 per share.  In addition,  the Company issued
      2,156,033 shares to the Mutual Holding Company. The Mutual Holding Company
      has a 55% ownership  percentage in the Company. Net proceeds from the sale
      of common stock were  $16,011,975  after deduction of conversion  costs of
      $746,285, and unearned compensation related to shares issued to the ESOP.

      The Association operates as a  federally-chartered  stock savings and loan
      association,  originally  chartered by the State of Illinois in 1921.  The
      Association's  deposit accounts are insured up to a maximum of $100,000 by
      the Savings  Association  Insurance Fund (SAIF),  which is administered by
      the Federal Deposit Insurance Corporation (FDIC).

(2)   Basic and  diluted  income  per share was $.13 for both the three and nine
      months ended September 30, 2004. The  weighted-average  shares outstanding
      for basic and diluted income per share for the three and nine months ended
      September 30, 2004 were 3,832,962.  Basic and diluted income per share for
      the  nine   months   ended   September   30,   2004  is  based   upon  the
      weighted-average  shares  outstanding  during the period  June 28, 2004 to
      September 30, 2004. ESOP shares, which have been committed to be released,
      are considered  outstanding.  Net income for the six months ended June 30,
      2004, is not included in the  calculation  of basic and diluted income per
      share for the nine months ended  September 30, 2004.  Income per share for
      the three and nine months ended September 30, 2003 is not applicable since
      the initial public offering was completed on June 28, 2004.


                                       8
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                   Notes to Consolidated Financial Statements

3)    Unrealized  losses and fair value,  aggregated by investment  category and
      length  of time  that  individual  securities  have  been in a  continuous
      unrealized  loss  position,  as of September 30, 2004,  are  summarized as
      follows:

<TABLE>
<CAPTION>
                                              Less than 12 Months         12 Months or More               Total
                                             Fair       Unrealized       Fair       Unrealized       Fair      Unrealized
                                             Value         loss          Value          loss         Value         loss
                                          ----------    ----------    ----------    ----------    ----------   ----------
<S>                                       <C>                  <C>     <C>              <C>        <C>             <C>
      Securities available for sale:
        U.S. government agency
            obligations                   $1,005,625           737     1,464,870        34,505     2,470,495       35,242
        Corporate                                 --            --     1,537,869        59,131     1,537,869       59,131
                                          ----------    ----------    ----------    ----------    ----------   ----------
                                          $1,005,625           737     3,002,739        93,636     4,008,364       94,373
                                          ==========    ==========    ==========    ==========    ==========   ==========

      Securities held to maturity:
        Mortgage-backed securities        $       --            --       505,567         7,504       505,567        7,504
                                          ==========    ==========    ==========    ==========    ==========   ==========
</TABLE>

      For all of the above  investment  securities,  the  unrealized  losses are
      generally due to changes in interest rates and, as such, are considered to
      be temporary, by the Company.

4)    Subsequent  to September  30, 2004 the Board of Directors  declared a $.07
      per share cash  dividend  payable  November  18, 2004 to  stockholders  of
      record,  excluding First Federal Financial  Services,  MHC, on November 4,
      2004. The Company expects that, subject to regulatory capital requirements
      of the Association,  financial condition and results of operations for the
      Company and Association,  quarterly  dividends will continue to be paid in
      the future.  No assurances can be given that dividends will be paid in the
      future.


                                       9
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Forward-Looking Statements
--------------------------

When used in this Form 10-QSB,  the words or phrases "will likely  result," "are
expected  to," "will  continue,"  "is  anticipated,"  "estimate,"  "project"  or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private  Securities  Litigation Act of 1995.  Such statements
are subject to certain  risks and  uncertainties  including  changes in economic
conditions  in our market  area,  changes in  policies by  regulatory  agencies,
fluctuations  in  interest  rates,  demand  for loans in our  market  area,  and
competition that could cause actual results to differ materially from historical
earnings and those  presently  anticipated  or projected.  The Company wishes to
caution you not to place undue reliance on any such forward-looking  statements,
which only speak as of the date made.  The Company wishes to advise you that the
factors listed above could affect the Company's financial  performance and could
cause the Company's actual results for future periods to differ  materially from
any  opinions or  statements  expressed  with  respect to future  periods in any
current statements.

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  events or  circumstances  after the date of such
statements or to reflect the occurrence of anticipated or unanticipated events.

Overview
--------

The Company  completed an initial  public  offering on June 28, 2004 through the
sale and issuance by the Company of 1,764,027  shares of common stock at $10 per
share.  Basic and diluted  income per share was $.13 for both the three and nine
months ended September 30, 2004.

Qualitative Disclosures of Market Risk
--------------------------------------

The   Company's   principal   financial   objective  is  to  achieve   long-term
profitability  while reducing its exposure to fluctuating  interest  rates.  The
Company has an exposure to interest rate risk. The Company has employed  various
strategies  intended to minimize  the  adverse  effect of interest  rate risk on
future  operations  by  providing  a better  match  between  the  interest  rate
sensitivity  of  its  assets  and  liabilities.  In  particular,  the  Company's
strategies  are intended to stabilize  net interest  income for the long-term by
protecting its interest rate spread against  increases in interest  rates.  Such
strategies  include the  origination for portfolio of  adjustable-rate  mortgage
loans (AMLs) secured by one- to four- family,  multi-family,  and nonresidential
real estate and the origination of other types of adjustable-rate and short-term
loans with  greater  interest  rate  sensitivities  than  long-term,  fixed-rate
residential mortgage loans.

Quantitative Disclosures of Market Risk
---------------------------------------

The  Company  does  not  purchase  derivative  financial  instruments  or  other
financial instruments for trading purposes.  Further, the Company is not subject
to any foreign currency exchange rate risk, commodity price risk or equity price
risk. The Company is subject to interest rate risk.

The OTS provides a net market  value  methodology  to measure the interest  rate
risk  exposure  of  thrift  institutions.  This  exposure  is a  measure  of the
potential decline in the net portfolio value (NPV) of the institution based upon
the effect of an assumed 100 basis point increase or decrease in interest rates.
NPV is the present  value of the expected net cash flows from the  institution's
financial  instruments  (assets,  liabilities and off-balance  sheet contracts).
Loans,  deposits,  advances and investments are valued taking into consideration
similar   maturities,   related   discount  rates  and   applicable   prepayment
assumptions.


                                       10
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Liquidity and Capital Resources
-------------------------------

The Company's  principal sources of funds are cash receipts from deposits,  loan
repayments by borrowers,  proceeds from maturing  securities,  advances from the
Federal Home Loan Bank (FHLB) and net income.  The  Association has an agreement
with the FHLB of Chicago to obtain cash advances,  should the  Association  need
additional funds for loan originations or other purposes.

Commitments to originate  mortgage loans are legally binding  agreements to lend
to the Company's  customers.  Commitments,  which generally expire in 90 days or
less, at September 30, 2004 to originate  adjustable  and  fixed-rate  loans for
portfolio   were   approximately   $1,661,000  and   $1,427,000,   respectively.
Commitments  on behalf of borrowers for unused lines of credit for  construction
adjustable  and fixed-rate  loans were  approximately  $698,000 and  $1,744,000,
respectively.  Interest rates on these fixed-rate  commitments  generally ranged
from 5.875% to 6.375%.

Financial Condition
-------------------

Total  assets  increased  from  $121.0  million at  December  31, 2003 to $134.5
million at  September  30,  2004.  Proceeds  from sale of common  stock of $16.0
million were invested $8.5 million in federal agency  obligations  and corporate
debt securities,  $2.0 million in FHLB stock and the remaining $5.5 million were
used to fund loans and deposit  withdrawals.  As a result,  securities available
for sale  increased  from $9.9 million at December 31, 2003 to $16.2  million at
September  30,  2004.  Federal  Home Loan Bank stock  rose from $5.4  million at
December 31, 2003 to $7.7 million at September  30, 2004.  Loans,  net increased
from $101.1 million at December 31, 2003 to $105.9 million at September 30, 2004
as a result of new loan  originations,  partially  offset  by loan  collections.
Accrued  interest  receivable  increased  from  $300,000 at December 31, 2003 to
$418,000 at September 30, 2004 due to a higher securities  portfolio balance and
timing of interest  receipts on loans and  securities.  Deposits  declined  from
$97.9  million at December  31, 2003 to $96.8  million at  September  30,  2004.
Advances  from FHLB  decreased  from $4.0  million at December  31, 2003 to $1.0
million at September  30, 2004,  as certain  advances  from FHLB of Chicago were
repaid.  Other  liabilities  increased  from  $308,000 at  December  31, 2003 to
$443,000 at  September  30, 2004 as a result of the timing of payment of Federal
income taxes and certain accrued expenses.  Stockholders'  equity increased from
$18.8  million at December  31, 2003 to $36.2  million at  September  30,  2004,
primarily  as a result of the net  proceeds  from sale of common  stock of $16.0
million  and net income for the nine  months  ended  September  30, 2004 of $1.4
million.

Subsequent  to  September  30, 2004 the Board of  Directors  declared a $.07 per
share  cash  dividend  payable  November  18,  2004 to  stockholders  of record,
excluding First Federal Financial Services, MHC, on November 4, 2004.

The Association is required to maintain  certain  minimum  capital  requirements
under OTS regulations.  Failure by a savings institution to meet minimum capital
requirements can result in certain mandatory and possible  discretionary actions
by regulators,  which, if undertaken, could have a direct material effect on the
Association's  financial  statements.  Under the capital adequacy guidelines and
regulatory  framework for prompt  corrective  action,  the Association must meet
specific  capital   guidelines  that  involve   quantitative   measures  of  the
Association's  assets,  liabilities,  and  certain  off-balance  sheet  items as
calculated  under  regulatory  accounting  practices.  The  capital  amounts and
classifications   are  also  subject  to  judgments  by  the  regulators   about
components, risk-weightings and other factors.


                                       11
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

The  Association's  actual and required  capital amounts and ratios at September
30, 2004 were as follows:

<TABLE>
<CAPTION>
                                                                                     Minimum Required
                                                                       -------------------------------------------
                                                                            for Capital            to be "Well
                                                Actual                        Adequacy             Capitalized"
                                             -------------------       -------------------     -------------------
                                               Amount      Ratio         Amount      Ratio       Amount      Ratio
                                             ----------    -----       ---------     -----     ---------     -----
                                                                      (Dollars in Thousands)
<S>                                          <C>            <C>        <C>             <C>     <C>           <C>
Stockholders' equity                         $   27,421
Unrealized loss on securities AFS, net                2
                                             ----------
Tangible capital                             $   27,423     21.5%      $   1,911       1.5%         N/A
General valuation allowance                         428
                                             ----------

Total capital to risk-weighted assets        $   27,851     42.0%      $   5,300       8.0%    $   6,626     10.0%
                                             ==========

Tier 1 capital to risk-weighted assets       $   27,423     41.4%      $     N/A               $   3,975      6.0%

Tier 1 capital to total assets               $   27,423     21.5%      $   5,096       4.0%    $   6,370      5.0%
</TABLE>

Critical Accounting Estimates
-----------------------------

The  Company  considers  the  allowance  for  loan  losses  to be  its  critical
accounting  estimate,  due to the higher degree of judgment and complexity  than
its other  significant  accounting  estimates.  The allowance for loan losses is
evaluated  quarterly by management and is based upon management's  consideration
of current  economic  conditions,  the Company's loan portfolio  composition and
historical loss experience used to estimate probable losses as well as the level
of  nonperforming   assets  and  classified  assets.   Management  also  reviews
individual loans for which full  collectibility  may not be reasonably  assured.
This  evaluation is  inherently  subjective  as it requires  estimates  that are
susceptible to significant revision as more information becomes available.

The analysis has two  components:  specific  and general  allocations.  Specific
allocations are made for loans that are determined to be impaired. Impairment is
measured by determining  the present value of expected future cash flows or, for
collateral-dependent loans, the fair value of the collateral adjusted for market
conditions  and  selling  expenses.  The general  allocation  is  determined  by
segregating  the remaining loans by type of loan, risk weighting (if applicable)
and payment  history.  Management  also  analyzes  historical  loss  experience,
delinquency  trends,  general  economic  conditions  and geographic and industry
concentrations.  This analysis  establishes factors that are applied to the loan
groups to determine the amount of the general allowance for loan losses.  Actual
loan losses may be  significantly  more than the  allowances  established  which
could have a material negative effect on the Company's financial results.


                                       12
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

Asset Quality
-------------

The  following  table  sets forth  information  with  respect  to the  Company's
nonperforming loans at the dates indicated.

<TABLE>
<CAPTION>
                                                           September 30,      December 31,
                                                               2004               2003
                                                           -------------      ------------
<S>                                                        <C>                     <C>
Nonaccrual loans                                           $     158,791           140,453
Accruing loans past due 90 days or more                               --                --
                                                           -------------      ------------
  Total nonperforming loans                                $     158,791           140,453
                                                           =============      ============

Allowance for losses on nonperforming loans                $      15,879            14,045
                                                           =============      ============

Nonperforming loans with no allowance for loan losses      $          --                --
                                                           =============      ============
</TABLE>

At  September  30,  2004,  the  Company  had no loans  which were not  currently
classified  as  nonaccrual,  90 days past due or  restructured  but where  known
information  about possible  credit problems of borrowers  caused  management to
have serious  concerns as to the ability of the borrowers to comply with present
loan repayment  terms and which may result in disclosure as nonaccrual,  90 days
past due or restructured.

Under the Company's  internal  review  policy,  loans  classified as substandard
decreased  from $181,500 at December 31, 2003 to $158,791 at September 30, 2004.
Loans  classified as doubtful  amounted to $280 at December 31, 2003 compared to
none at September 30, 2004.

Following is a summary of activity in the allowance for loan losses:

Balance at December 31, 2003                                $  428,700
   Charge-offs                                                    (281)
   Recoveries                                                       --
   Provision charged to expense                                     --
                                                            ----------
Balance at September 30, 2004                               $  428,419
                                                            ==========

Results of Operations
---------------------

Net income increased from $458,000 for the three months ended September 30, 2003
to $494,000 for the three months ended September 30, 2004. Net income  increased
from  $1,258,000 for the nine months ended  September 30, 2003 to $1,443,000 for
the nine months ended  September 30, 2004. The increases in net income  resulted
from  higher net  interest  income,  which more than offset  higher  noninterest
expense and income taxes.

Net  interest  income  increased  from $1.08  million for the three months ended
September  30, 2003 to $1.21  million for the three months ended  September  30,
2004.  Net  interest  income  increased  for the nine month  periods  from $3.10
million in 2003 to $3.47 million in 2004.  The  increases  were due to growth of
the Company's  assets primarily as a result of the initial public offering and a
slightly higher interest rate spread.


                                       13
<PAGE>


                      FIRST FEDERAL FINANCIAL SERVICES INC.

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

The ratio of interest-earning  assets to interest-bearing  liabilities rose from
116.36% for the nine  months  ended  September  30, 2003 to 123.25% for the same
period in 2004.  The  interest  rate spread was 3.18% for the nine months  ended
September 30, 2003 and 3.22% for the nine months ended  September 30, 2004.  The
average rate on interest-earning  assets decreased by 39 basis points, while the
average rate on interest-bearing  liabilities  decreased by 43 basis points. The
improvement  in the interest  rate spread was  attributable  to the repricing of
deposit rates, which more than offset the effect of lower rates earned on loans.

Interest income on loans increased from $1.52 million for the three months ended
September  30, 2003 to $1.57  million for the three months ended  September  30,
2004.  Interest income on loans increased from $4.59 million for the nine months
ended  September 30, 2003 to $4.71  million for the nine months ended  September
30, 2004.  Interest  income on loans  increased as a result of a higher  average
balance,  partially  offset by a lower average yield. The average yield on loans
decreased  from 6.51% for the nine months ended  September 30, 2003 to 6.03% for
the nine months ended September 30, 2004. The average balance of loans was $93.9
million  and $104.0  million for the nine months  ended  September  30, 2003 and
2004,  respectively.  The higher average balance for loans reflected an increase
in loan  originations,  due to the  relatively  low interest  rate  environment.
Interest income on securities  decreased as a result of a lower average balance,
partially  offset by a higher average yield.  The average  balance of securities
for the nine months  ended  September  30,  2003 and 2004 was $18.7  million and
$16.6 million, respectively. The average yield on securities for the nine months
ended September 30, 2003 and 2004 was 4.50% and 4.81%, respectively.

Interest  expense on deposits  declined from $675,000 for the three months ended
September  30,  2003 to $606,000  for the  comparable  period in 2004.  Interest
expense on deposits  decreased  from $2.15  million  for the nine  months  ended
September 30, 2003 to $1.87 million for the comparable period in 2004.  Interest
expense on deposits  decreased as a result of a lower  average  rate,  partially
offset by a higher average balance.  The average rate on deposits decreased from
2.92% for the nine months ended  September 30, 2003 to 2.49% for the  comparable
period in 2004.  The  average  balance of deposits  was $98.3  million and $99.8
million for the nine months  ended  September  30, 2003 and 2004,  respectively.
Interest  expense on advances from the FHLB for the nine months ended  September
30, 2004 increased  from the  comparable  period in 2003 due to a higher average
balance.  Interest  expense on advances from the FHLB for the three months ended
September 30, 2004 decreased  from the comparable  period in 2003 due to a lower
average balance.

The provision for loan losses  decreased  from $10,000 and $20,000 for the three
and nine months ended  September 30, 2003 to none for the comparable  periods in
2004. The provision for loan losses is based upon management's  consideration of
current  economic  conditions,  the Company's  loan  portfolio  composition  and
historical loss experience used to estimate probable losses as well as the level
of  nonperforming   assets  and  classified  assets.   Management  also  reviews
individual loans for which full collectibility may not be reasonably assured and
considers,  among other  matters,  the  estimated  fair value of the  underlying
collateral.  This  evaluation  is  ongoing  and  results  in  variations  in the
Company's  provision  for loan  losses.  The  Company  is  subject  to  periodic
examination  by the Office of Thrift  Supervision  (OTS),  which may require the
Company to record  increases  in the  allowances  based on their  evaluation  of
available  information.  There can be no assurance that the OTS will not require
further increases to the allowances.

Noninterest  income  decreased from $10,000 for the three months ended September
30,  2003 to  $8,000  for the  comparable  period  in 2004.  Noninterest  income
increased from a loss of $32,000 for the nine months ended September 30, 2003 to
income of $12,000 for the comparable period in 2004. The nine month period


                                       14
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

in 2003 included  losses on sales of  securities  available for sale of $46,000.
Other noninterest income consists of rental income, net of expenses.

Noninterest expense increased from $343,000 for the three months ended September
30, 2003 to $412,000 for the three months ended September 30, 2004.  Noninterest
expense  increased from $970,000 for the nine months ended September 30, 2003 to
$1.14  million for the  comparable  period in 2004.  Compensation  and  employee
benefits  increased from $203,000 for the three months ended  September 30, 2003
to  $233,000  for the  comparable  period  in 2004.  Compensation  and  employee
benefits increased from $565,000 for the nine months ended September 30, 2003 to
$645,000 for the comparable  period in 2004.  Compensation and employee benefits
increased due to salary  increases,  higher  benefit costs  associated  with the
retirement  plan  and  employee  bonus  plan,   which   distributes  5%  of  the
Association's  pre-tax income to its employees based upon each employee's  years
of service and salary level and expenses related to the Employee Stock Ownership
Plan approved as part of the stock conversion. Pursuant to Statement of Position
93-6,  "Employers'  Accounting for Employee Stock Ownership  Plans," the Company
recognizes  compensation  expense  equal to the  fair  market  value  of  shares
committed to be released during the period.  ESOP expense for the three and nine
months  ended  September  30, 2004 was $28,000.  Director  fees  increased  from
$31,000  for the three  months  ended  September  30,  2003 to  $33,000  for the
comparable  period in 2004.  Director fees  increased  from $95,000 for the nine
months ended  September 30, 2003 to $118,000 for the comparable  period in 2004.
Director fees increased as a result of additional  director meetings held due to
the initial  public  offering  and the  addition of one  director.  Professional
services increased from $11,000 for the three months ended September 30, 2003 to
$45,000 for the comparable period in 2004.  Professional services increased from
$34,000  for the  nine  months  ended  September  30,  2003 to  $96,000  for the
comparable period in 2004. Professional services increased as a result of higher
audit fees incurred and costs related to the Company's  securities filings.  The
Company also expects other noninterest  expense to increase in the future due to
the additional costs of operating as a public entity.

Income taxes  increased  from $283,000 for the three months ended  September 30,
2003 to $310,000 for the comparable  period in 2004. Income taxes increased from
$815,000  for the nine months  ended  September  30,  2003 to  $901,000  for the
comparable  period in 2004.  Income taxes increased due to higher pretax income.
The effective  tax rate was 38.2% for the three months ended  September 30, 2003
versus 38.6% for the comparable period in 2004. The effective tax rate was 39.3%
for the nine months ended  September  30, 2003 versus  38.5% for the  comparable
period in 2004.


                                       15
<PAGE>

                      FIRST FEDERAL FINANCIAL SERVICES INC.

                             Controls and Procedures

As of the end of the period covered by this report,  the Company  carried out an
evaluation,  under the supervision and with the  participation  of the Company's
principal   executive   officer  and  principal   financial   officer,   of  the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures.  Based on this  evaluation,  the Company's  principal  executive
officer and principal financial officer concluded that the Company's  disclosure
controls  and  procedures  are  effective  in timely  alerting  them to material
information  required to be included in the Company's  periodic SEC reports.  It
should be noted that the design of any system of  controls is based in part upon
certain  assumptions about the likelihood of future events,  and there can be no
assurance  that any design will succeed in achieving  its stated goals under all
potential future conditions, regardless of how remote.

In addition,  there have been no changes in the Company's  internal control over
financial  reporting  during the most recent fiscal  quarter that has materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.


                                       16
<PAGE>

                     FIRST FEDERAL FINANCIAL SERVICES, INC.

                           PART II - Other Information

Item 1 - Legal Proceedings.

      There are no material legal proceedings to which the Company is a party or
      of which any of their property is subject.  From time to time, the Company
      is a party to various legal proceedings incident to its business.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds.

      No equity securities were sold during the quarter that were not registered
      under the  Securities  Exchange  Act.  No  repurchases  of stock were made
      during the quarter.

      Proceeds  from sale of common stock of $16.0  million were  invested  $8.5
      million in federal agency obligations and corporate debt securities,  $2.0
      million in FHLB stock,  and the  remaining  $5.5 million were used to fund
      loans and deposit withdrawals during the quarter ended September 30, 2004.

Item 3 - Defaults upon Senior Securities.

      Not applicable.

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

      None

Item 5 - Other Information.

      None

Item 6 - Exhibits.

      (a)   Exhibits.

            31.1: Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

            31.2: Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

            32:   Certification pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

            99:   On June 28, 2004 the Company issued a press release  reporting
                  that it had completed its initial stock offering.*

            *     Incorporated  herein  by  reference  into this  document  from
                  Exhibit 99 to the Form 8-K/A filed with the Commission on July
                  1, 2004. (File 000-50820)

                                   SIGNATURES
                                   ----------

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

                                      FIRST FEDERAL FINANCIAL SERVICES, INC.
                                      --------------------------------------
                                              (Small Business Issuer)


DATE: November 12, 2004               BY: Larry W. Mosby
      -----------------                   --------------
                                          Larry Mosby, President and
                                          Chief Executive Officer


                                      BY: Donald Engelke
                                          --------------
                                          Donald Engelke, Vice President and
                                          Chief Financial Officer


                                       17