SECURITIES AND EXCHANGE COMMISSION
                        Washington D. C.  20549

                               FORM 10-K
(Mark One)

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1996

                                 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 No. 000-20739

                         EAGLE BANCGROUP, INC
       (Exact Name of Registrant as Specified in its Charter)

            DELAWARE                              37-1353957
  (State or Other Jurisdiction        (IRS Employer Identification No.)
of Incorporation or Organization)

   301 FAIRWAY DRIVE, BLOOMINGTON, IL             61702-0429
(Address of Principal Executive Offices)          (Zip Code)

                           (309) 663-6345
          (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, $.01 Par Value
                          (Title of Class)

   Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  YES  XX    NO  __

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405) of this chapter) is not contained
herein, and will not be contained, to the best of the Registrant's knowledge,
in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.  XX

   As of March 21, 1997, the aggregate market value of the voting stock held
by non-affiliates of the Registrant was approximately $16,289,000 (1,026,055
shares at $15.875 per share).  The per share price of $15.875 is based on the
last sale price of the common stock at March 21, 1997, as reported by The
Nasdaq Stock Market.

   As of March 21, 1997, there were 1,277,705 shares of the Registrant's
Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

   Portions of the following documents are incorporated by reference:

   Annual Report to Stockholders for the Fiscal Year Ended December 31, 1996--
Part I and II.

   1997 Notice and Proxy Statement for the Annual Meeting of Stockholders to
be held on April 16, 1997--Part III

                         TABLE OF CONTENTS
                                                           PAGE
     PART I

Item 1.   Business                                            3
Item 2.   Properties                                         38
Item 3.   Legal Proceedings                                  38
Item 4.   Submission of Matters to a Vote of
            Security Holders                                 38

     PART II

Item 5.   Market for the Registrant's Common Stock and
            Related Security Matters                         39
Item 6.   Selected Financial Data                            39
Item 7.   Management's Discussion and Analysis of
            Financial Condition and Results of Operations    39
Item 8.   Financial Statements and Supplementary Data        39
Item 9.   Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure           39

     PART III

Item 10.  Directors and Executive Officers of Registrant     40
Item 11.  Executive Compensation                             40
Item 12.  Security Ownership of Certain Beneficial Owners
            and Managament                                   40
Item 13.  Certain Relationships and Related Transactions     40

     PART IV

Item 14.  Exhibits, Financial Statement Schedules and
            Reports on Form 8-K                              40
          Signatures                                         41
          Exhibit Index                                      42

                                  -Page 2-

                                     PART I

Item 1. BUSINESS

     Eagle BancGroup, Inc. ('Eagle'), a non-diversified unitary savings and
loan holding company as defined in the Home Owner's Loan Act, as amended, was
incorporated as a Delaware corporation on January 24, 1996.  Eagle owns all of
the common stock of First Federal Savings and Loan Association, Bloomington,
Illinois ('First Federal').  In June, 1996, First Federal converted from a
mutual savings association to a capital stock savings association at which
time Eagle acquired all of the common stock of First Federal.  Eagle conducted
a subscription stock offering simultaneous to the charter conversion which
resulted in the issuance of 1,302,705 shares of Eagle's common stock.  At
present, Eagle is engaged only in the business of managing its investments and
directing, planning and coordinating the business activities of First Federal.

     In the future, Eagle may expand its current operations or acquire or
organize other first-tier subsidiaries, including other financial
institutions.  At present, however, there are no agreements, plans or
understandings for such expansion.  For the foreseeable future, Eagle expects
that First Federal will continue to be the major source of Eagle's assets,
revenues and net income.  Eagle does not maintain separate offices from First
Federal and does not separately employ or compensate its officers.

     At December 31, 1996, Eagle had consolidated total assets of $172,666,000
and stockholders' equity of $22,141,000.  At December 31, 1996, Eagle was the
third largest financial institution holding company headquartered in McLean
county, Illinois, based on its consolidated assets as of that date.

First Federal

     First Federal is a federally-chartered capital stock savings association
regulated by the Office of Thrift Supervision (the 'OTS') and its deposits are
insured by the Federal Deposit Insurance Corporation (the 'FDIC') through the
Savings Association Insurance Fund (the 'SAIF').  First Federal was originally
chartered in 1919.  At December 31, 1996, First Federal had total assets of
$168,335,000, deposit accounts of $135,105,000 and stockholders' equity of
$16,005,000.

     First Federal conducts business from its main office in Bloomington,
Illinois and two full service branch offices located in Bloomington and LeRoy,
Illinois.  Bloomington and LeRoy, which is approximately 20 miles southeast of
Bloomington, are located in central Illinois in McLean County, the largest
county geographically in Illinois.  First Federal's primary market area is
McLean and DeWitt Counties.  DeWitt County is directly southeast of McLean
County.  Bloomington and its adjacent sister city, Normal, have a combined
population of approximately 100,000.  Of the five major metropolitan areas in
Illinois outside of Chicago, Bloomington-Normal's population is projected to
grow the fastest the remainder of this decade.  Outside of Bloomington-Normal,
McLean and Dewitt Counties are a mix of small towns and rural areas.  The
economy of the region is diversified in four major sectors- agriculture,
education, manufacturing and insurance.  Bloomington-Normal is home to two
large insurance companies, two four-year universities and numerous national
manufacturers.  McLean County annually ranks at or near the top nationally  in
corn and soybean production per county.  This diversification has resulted in
a strong, growing local economy that is expected to continue to grow in the
future.
                                 -Page 3-
     The principal business of First Federal has been and continues to be
attracting retail deposits in its primary market area from the general public
and investing those deposits, along with funds generated from operations and
borrowings, in one-to-four family residential mortgage loans, automobile
loans, mortgage-backed and other investment securities, and to a lesser
extent, in commercial real estate, commercial business and other consumer
loans.  Residential mortgage loans are originated for investment and for sale
in the secondary market, with servicing rights normally retained by First
Federal.  Revenues are derived principally from interest on residential
mortgage and consumer loans, interest and dividends on mortgage-backed and
other investment securities and, to a lesser extent, loan fees, loan servicing
income and gains on sale of loans.  Primary sources of funds are deposits,
principal and interest payments on loans, mortgage-backed and other investment
securities, FHLB advances and proceeds from the sale of residential mortgage
loans.

     First Federal competes with thirteen other savings institutions and banks
as well as numerous credit unions, finance companies and other financial
intermediaries in its primary market area.  Competition has been and will
continue to be intense with respect to attracting deposits and making loans.
Interest rates and customer service are the primary factors affecting
competition for deposits and loans.  First Federal's seventy-seven years as a
locally owned and managed savings institution and a tradition of customer
service are advantages current and future customers have at First Federal in
addition to locally competitive interest rates on deposits and loans.  First
Federal offers a variety of demand, savings and time deposit products.

     First Federal has one wholly-owned service corporation, FFS Investment
Services ('FFS'), which was incorporated in Illinois on March 25, 1994.  FFS
sells investment products, including annuities, offered by PrimeVest Financial
Services, Inc., a specialty brokerage firm.  Customers seeking alternatives to
the deposit products at First Federal have access to other financial products
through the FFS staff.

     Collectively, Eagle, First Federal and FFS are referred to herein as 'the
Company'.
                                   -Page 4
<TABLE>
Average Balance Sheets

     The following table sets forth information with respect to average
balances of assets and liabilities, dollar amounts of interest income or
expense from average interest-earning assets and interest-bearing liabilities,
respectively, resultant yields and costs, interest rate spreads, net interest
margins and the ratio of interest-earning assets to interest-bearing
liabilities for the periods indicated.  Average balances for each period have
been calculated using the average of month-end balances during such period,
the use of which management of the Company believes are not materially
different from averages calculated using the daily balances (amounts in
thousands):
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1996
                                             Average  Interest &   Yield/
                                             Balance   Dividends    Cost
<S>                                         <C>        <C>        <C>
Interest-earning assets <F1>:
  Mortgage loans <F2>                         65,224      4,862     7.45%
  Indirect auto loans                         22,962      1,985     8.64
  Other consumer loans                         8,346        754     9.03
  Other loans                                    848         80     9.43
    Total loans                               97,380      7,681     7.89
  Mortgage-backed securities:
    Collateralized mortgage obligations       19,583      1,153     5.89
    Other mortgage-backed securities          19,499      1,205     6.18
  Investment securities                       13,916        832     5.98
  Overnight and short-term investments         3,106        172     5.54
  Federal Home Loan Bank stock                   760         51     6.71
    Total interest-earning assets            154,244     11,094     7.19
Non-interest-earning assets:
  Office properties and equipment, net         2,997
  Real estate, net                               649
  Other non-interest-earning assets            1,506
    Total assets                             159,396

Interest-bearing liabilities:
  Passbook accounts                           15,462        577     3.73
  NOW accounts                                 5,338         96     1.80
  Money market accounts                        2,964         85     2.87
  Certificates of deposit                    111,859      6,673     5.97
    Total deposits                           135,623      7,431     5.48
  FHLB advances and other borrowed funds       4,386        272     6.20
    Total interest-bearing liabilities       140,009      7,703     5.50
Non-interest bearing liabilities:
  Non-interest bearing deposits                  549
  Other liabilities                            1,682
    Total liabilities                        142,240
Stockholders' equity                          17,156
    Total liabilities and
      stockholders' equity                   159,396

Net interest income                                       3,391
Interest rate spread                                                1.69
Net interest margin                                                 2.20%
Average interest-earning assets to
  average interest-bearing liabilities          1.10x
                                     -Page 5-
FOR THE YEAR ENDED DECEMBER 31, 1995
                                             Average  Interest &   Yield/
                                             Balance   Dividends    Cost
Interest-earning assets <F1>:
  Mortgage loans <F2>                         60,081      4,528     7.54%
  Indirect auto loans                         20,436      1,655     8.10
  Other consumer loans                         6,775        671     9.90
  Other loans                                    490         45     9.18
    Total loans                               87,782      6,899     7.86
  Mortgage-backed securities:
    Collateralized mortgage obligations       19,384      1,175     6.06
    Other mortgage-backed securities          17,347      1,055     6.08
  Investment securities                        9,713        552     5.68
  Overnight and short-term investments         3,335        207     6.21
  Federal Home Loan Bank stock                   683         45     6.59
    Total interest-earning assets            138,244      9,933     7.19
Non-interest-earning assets:
  Office properties and equipment, net         3,234
  Real estate, net                             5,392
  Other non-interest-earning assets            2,673
    Total assets                             149,543

Interest-bearing liabilities:
  Passbook accounts                           13,947        494     3.54
  NOW accounts                                 4,821         86     1.78
  Money market accounts                        3,611        103     2.85
  Certificates of deposit                    113,876      6,612     5.81
    Total deposits                           136,255      7,295     5.35
  FHLB advances and other borrowed funds       1,243         81     6.52
    Total interest-bearing liabilities       137,498      7,376     5.36
Non-interest bearing liabilities:
  Non-interest bearing deposits                  468
  Other liabilities                              802
    Total liabilities                        138,768
Stockholders' equity                          10,775
    Total liabilities and
      stockholders' equity                   149,543

Net interest income                                       2,557
Interest rate spread                                                1.83
Net interest margin                                                 1.85%
Average interest-earning assets to
  average interest-bearing liabilities          1.01x
                                     -Page 6-
FOR THE YEAR ENDED DECEMBER 31, 1994
                                             Average  Interest &   Yield/
                                             Balance   Dividends    Cost
Interest-earning assets <F1>:
  Mortgage loans <F2>                         54,351      4,176     7.68%
  Indirect auto loans                         14,730      1,081     7.34
  Other consumer loans                         5,741        504     8.78
  Other loans                                    526         48     9.13
    Total loans                               75,348      5,809     7.71
  Mortgage-backed securities:
    Collateralized mortgage obligations       20,359      1,184     5.82
    Other mortgage-backed securities          17,311        894     5.16
  Investment securities                       10,046        571     5.68
  Overnight and short-term investments         1,880         94     5.00
  Federal Home Loan Bank stock                   734         43     5.86
    Total interest-earning assets            125,678      8,595     6.84
Non-interest-earning assets:
  Office properties and equipment, net         2,628
  Real estate, net                             6,578
  Other non-interest-earning assets            2,347
    Total assets                             137,231

Interest-bearing liabilities:
  Passbook accounts                           14,991        474     3.16
  NOW accounts                                 4,041         84     2.08
  Money market accounts                        5,596        154     2.75
  Certificates of deposit                     97,950      4,542     4.64
    Total deposits                           122,578      5,254     4.29
  FHLB advances and other borrowed funds       2,762        142     5.10
    Total interest-bearing liabilities       125,340      5,396     4.30
Non-interest bearing liabilities:
  Non-interest bearing deposits                  418
  Other liabilities                            1,111
    Total liabilities                        126,869
Stockholders' equity                          10,362
    Total liabilities and
      stockholders' equity                   137,231

Net interest income                                       3,199
Interest rate spread                                                2.54
Net interest margin                                                 2.55%
Average interest-earning assets to
  average interest-bearing liabilities          1.00x
<FN>
<F1>
 Does not include interest on loans 90 days or more past due.
<F2>
 Includes one-to-four family, construction, multi-family and commercial
real estate loans.
</FN>
</TABLE>
                                   -Page 7-
<TABLE>
     The following table sets forth the effects of changing interest rates and
volumes of interest-earning assets and interest-bearing liabilities on net
interest income.  Information is provided with respect to (i) effects on
interest income attributable to changes in rate (changes in rate multiplied by
prior volume), (ii) effects on interest income attributable to changes in
volume (changes in volume multiplied by prior rate) and (iii) changes in
rate/volume (change in rate multiplied by change in volume) (amounts in
thousands):
<CAPTION>
1996 COMPARED TO 1995
                                              Increase (Decrease) Due To
                                                             Rate/
                                            Rate    Volume   Volume    Net
<S>                                       <C>      <C>      <C>      <C>
Interest earning-assets <F1>:
  Mortgage loans <F2>                       (49)      387      (4)     334
  Indirect auto loans                       111       205      14      330
  Other consumer loans                      (59)      156     (14)      83
  Other loans                                 1        33       1       35
    Total loans                               4       781      (3)     782
  Mortgage-backed securities:
    Collateralized mortgage obligations     (34)       12       -      (22)
    Other mortgage-backed securities         17       131       2      150
  Investment securities                      29       239      12      280
  Overnight and short-term investments      (22)      (14)      1      (35)
  Federal Home Loan Bank Stock                1         5       -        6
    Total net change in income on
      interest-earning assets                (5)    1,154      12    1,161

Interest-bearing liabilities:
  Passbook accounts                          26        54       3       83
  NOW accounts                                1         9       -       10
  Money market accounts                       1       (19)      -      (18)
  Certificates of deposit                   181      (117)     (3)      61
    Total deposits                          209       (73)      -      136
  FHLB advances and other borrowed funds     (4)      205     (10)     191
    Total net change in expense on
      interest-bearing liabilities          205       132     (10)     327

Net change in net interest income          (210)    1,022      22      834
                                  -Page 8-
1995 COMPARED TO 1994
                                              Increase (Decrease) Due To
                                                             Rate/
                                            Rate    Volume   Volume    Net
Interest earning-assets (1):
  Mortgage loans (2)                        (79)      440      (8)     353
  Indirect auto loans                       112       419      43      574
  Other consumer loans                       65        90      12      167
  Other loans                                 -        (3)      -       (3)
    Total loans                              98       946      47    1,091
Mortgage-backed securities:
    Collateralized mortgage obligations      50       (57)     (2)      (9)
    Other mortgage-backed securities        159         2       -      161
  Investment securities                       -       (19)      -      (19)
  Overnight and short-term investment        23        73      17      113
  Federal Home Loan Bank Stock                5        (3)      -        2
    Total net change in income on
      interest-earning assets               335       942      62    1,339

Interest-bearing liabilities:
  Passbook accounts                          57       (33)     (4)      20
  NOW accounts                              (12)       16      (2)       2
  Money market accounts                       6       (55)     (2)     (51)
  Certificates of deposit                 1,145       739     186    2,070
    Total deposits                        1,196       667     178    2,041
  FHLB advances and other borrowed funds     39       (78)    (21)     (60)
    Total net change in expense on
      interest-bearing liabilities        1,235       589     157    1,981

Net change in net interest income          (900)      353     (95)    (642)
<FN>
<F1>
 Does not include interest on loans 90 days or more past due
<F2>
 Includes one-to-four family, construction, multi-family and commercial
real estate loans.
</FN>
</TABLE>
                                   -Page 9-
Lending Activities

     First Federal has historically focused primarily on the origination of
residential mortgage loans secured by one-to-four family homes.  In 1993,
First Federal began originating indirect automobile loans through a network of
local automobile dealerships.  At December 31, 1996, one-to-four family
residential mortgage loans totaled 62.7% and indirect automobile loans totaled
21.8% of gross loans.  The indirect automobile loans are generally higher
yielding and more interest rate sensitive than residential mortgage loans and
provide a degree of diversification to the loan portfolio.  First Federal has
not actively pursued origination of commercial real estate or business loans
in recent years but plans to increase activity in these loan types starting in
1997 to add more diversification to the loan portfolio.  Commercial real
estate and business loans totaled 4.6% of gross loans at December 31, 1996.
Home equity loans totaled 4.5% of gross loans at December 31, 1996.  First
Federal also originates multi-family mortgage loans, construction loans and
consumer loans (other than indirect automobile loans) although none of these
categories comprise more than 3% of gross loans at December 31, 1996.  The
following table sets forth the composition of the loan portfolio as of the
dates indicated:
<TABLE>
                                             December 31,
                                   1996            1995            1994
                              Amount   Pct    Amount   Pct    Amount   Pct
                                         (Amounts in thousands)
<S>                         <C>      <C>    <C>      <C>    <C>      <C>
Mortgage loans:
  One-to-four family <F1>     67,855  62.7%   53,294  59.2%   53,850  63.6%
  Construction                 1,183   1.1       716    .8        -     -
  Multi-family                 1,562   1.4     1,776   2.0     1,954   2.3
  Commercial real estate       3,827   3.5     4,484   5.0     4,902   5.8
    Total mortgage            74,427  68.7    60,270  67.0    60,706  71.7
Indirect auto loans           23,640  21.8    21,598  24.0    16,708  19.7
Other consumer loans:
  Direct auto                  2,136   2.0     1,515   1.7     1,120   1.3
  Home equity                  4,904   4.5     4,275   4.7     3,872   4.6
  Other consumer               1,479   1.4     1,332   1.5     1,328   1.6
    Total other consumer       8,519   7.9     7,122   7.9     6,320   7.5
Commercial business loans      1,145   1.1       541    .6       496    .6
Accrued interest
  receivable-all loans           563    .5       489    .5       432    .5
Gross loans                  108,294   100    90,020   100    84,662   100

Less:
  Due to borrowers on
    construction loans          (610)           (246)            (50)
  Unearned income               (120)            (81)            (50)
  Allowance for possible
    loan losses                 (923)           (907)           (973)

Net loans receivable         106,641          88,786          83,589
<FN>
<F1>
 Includes construction loans converted to permanent loans.
</FN>
</TABLE>
Other than the categories listed above, no other concentrations or categories
of loans exceeding 10% of total loans are known to exist.
                                  -Page 10-
    One-to-Four Family Residential Lending.  The primary lending activity of
First Federal has been the origination of first mortgage loans to enable
borrowers to purchase new or existing or to construct one-to-four family homes
located in First Federal's primary market area.  Such lending includes loans
secured by detached single-family residences or condominiums and individually
owned residences in attached housing containing not more than four separate
dwelling units.  Representing well over half of the loan portfolio,
residential mortgage loans have contributed significantly to interest income
and have low delinquency and loss rates.  To remain competitive, a variety of
mortgage products are offered including fixed or variable rate and term or
balloon loans.

     Fixed-rate, fixed-term residential mortgage loans are competitively
priced based on market conditions and the cost of funds.  Terms of 10, 15, 20
and 30 years are available.  First Federal maintains a policy of selling in
the secondary market all new fixed-rate, fixed-term residential mortgage loans
with terms of over 15 years and some such loans with terms of 15 years
depending on market conditions.  Loans are sold to either the Federal National
Mortgage Association ('FNMA'), a government sponsored agency, or to Fleet
Mortgage Company ('Fleet'), a private mortgage investor.  At December 31,
1996, fixed-rate, fixed-term loans represented about 40% of the one-to-four
family mortgage loans outstanding.

     Adjustable-rate ('ARM') residential mortgage loans having initial
adjustment periods of one, three, five or seven years, with annual adjustments
thereafter and maturities of up to 30 years, are offered by First Federal.  In
recent years, the three year ARM has been emphasized and generated the most
originations.  ARM loans are adjusted at the beginning of each adjustment
period based on a fixed spread above the average yield on US Treasury
securities as published by the Federal Reserve Board.  Generally, ARM loan
rate adjustments are limited to 2% per adjustment period and to 6% aggregate
over the life of the loan.  At December 31, 1996, ARM loans represented about
37% of the one-to-four family mortgage loans outstanding.

     Balloon loans are also offered by First Federal.  These loans have a
fixed-rate and fixed monthly payments (normally based on a thirty year
amortization schedule) but have a five or seven year term at which time the
entire unpaid principal balance is due.  Borrowers have the option of renewing
the loan at then current rates.  About 23% of the one-to-four family mortgage
loans outstanding at December 31, 1996 were balloon loans.

     Factors such as the general level of interest rates, competition, funds
availability and borrower preference all affect the amount and type of loans
originated.  Generally, borrowers prefer ARM loans in periods of higher
interest rates and fixed-rate loans in periods of lower interest rates.

     Because ARM loans allow for adjustment of the interest rate, such loans
are retained due to the lower level of interest rate risk compared to fixed-
rate, fixed-term loans.  Balloon loans also have lower interest rate risk than
fixed-rate, fixed-term loans but higher interest rate risk relative to ARM
loans since balloon loans usually are repriceable later than ARM loans but
sooner than fixed-term loans.  ARM loans do have higher credit risk compared
to fixed-rate loans due to the possibility of borrower default when interest
rates reset higher and monthly payment amounts increase.  ARM borrowers are
normally qualified at the highest possible rate to reduce credit risk.

     Generally, one-to-four family mortgage loans are underwritten to FNMA
guidelines to allow for sale in the secondary market.  If the loan to value
ratio exceeds 80%, private mortgage insurance is required to cover the excess
                                    -Page 11-
above 80%.  With private mortgage insurance, loan to value ratios cannot
exceed 95%.  Title insurance or attorney's opinion to title is required as is
hazard insurance for any property securing mortgage loans.

     Construction Loans.  First Federal originates construction loans at the
request of borrowers but does not actively solicit such loans.  Generally,
such loans are for construction of owner-occupied, single-family dwellings and
are usually converted to permanent mortgage financing upon completion.  The
loans usually have variable rates and have maturities of up to twelve months
in which time construction must be completed.  Loan amounts usually do not
exceed 80% of the estimated value of the completed property.   Credit risk
associated with construction loans is higher than permanent residential loans
due to uncertainty as to the final value of the property, possible
construction delays or underestimation of construction costs.  At December 31,
1996, construction loans totaled $1,183,000, or 1.1% of gross loans.

     Multi-Family Residential Lending.  First Federal offers multi-family
residential loans but has originated only one loan in the last two years.
Such loans usually carry adjustable rates with maturities up to 15 years.
Loan to value ratios usually do not exceed 80%.  At December 31, 1996, multi-
family residential loans totaled $1,562,000, or 1.4% of gross loans.

     Commercial Real Estate Lending.  In recent years, First Federal was not
active in commercial real estate lending but plans to increase activity in
1997.   Total commercial real estate loans were $3,827,000, or 3.5% of gross
loans, at December 31, 1996 and balances have decreased slightly each of the
last two years compared to the prior year.  Such loans usually have variable
rates and maturities up to 15 years.  Loans are underwritten based on analysis
of the cash flow generated by the business in which the real estate is used
and the ability of the borrower to meet payment obligations.  In addition to
securing the loan with a first mortgage on the real estate, personal
guarantees from the business owners are usually sought.  Loans are usually
limited to 75% of the value of the property.

     Commercial real estate loans have significantly more risk than one-to-
four family mortgage loans due to the usually higher loan amounts and the
credit risk, which arises from concentration of principal in a smaller number
of loans, the effects of general economic conditions on income producing
property and the difficulty of evaluating and monitoring the loans.  Events
that affect the operations and cash flow of the business which is on the
secured property must be monitored to ensure the borrower has the ability to
repay the loan.

     Indirect Auto Loans.  In 1993, First Federal began originating indirect
auto loans through a network that includes most local auto dealerships.  Loan
totals have increased each year since and equaled $23,640,000, or 21.8% of
gross loans outstanding, at December 31, 1996.  Current policy allows for
underwriting of loans on new or used automobiles with maturities between three
and five years.  All loans are secured by the new or used automobile.  Loan
amounts on new automobiles are limited to the manufacturer's suggested price
while used automobile loan amounts are limited to the retail price as listed
in the National Automobile Dealers Association used car guide.

     Following a credit review of the dealer, First Federal enters into a
contractual relationship with the dealer.  Short response times for credit
decisions, consistent application of underwriting standards and immediate
funding of indirect loans upon delivery of required documents have allowed
First Federal to successfully compete for these loans.  First Federal is
believed to have the highest volume of indirect loans among local financial
                                -Page 12-
institutions and third highest volume among all local indirect underwriters.
Management intends to maintain the same percentage of indirect auto loans to
total loans in the future.  The amount of indirect loan originations is
dependent on the volume of new and used automobile sales and the financing
choices of purchasers, factors over which First Federal has no control.  Loans
have been originated through 24 local dealerships with the highest amount
outstanding from any one dealer totalling 17% of the total indirect auto loans
outstanding at December 31, 1996.

     Underwriting standards are maintained to assess an applicant's ability to
repay amounts due and to verify the adequacy of the automobile financed as
collateral.  Even with the underwriting standards, the risks inherent in
indirect auto lending indicate that some loans will default.  Loans secured by
assets that depreciate rapidly, such as automobiles, are generally considered
to entail greater risks than residential mortgage loans.  Through the efforts
of a full-time collections officer, loan delinquencies have been kept at or
below industry averages.  At December 31, 1996, six loans (equaling $44,000 or
 .2% of total indirect loans) were delinquent 90 days or more.  No recourse is
available from dealerships on loan defaults.  The provision for loan losses
increased from $100,000 in 1995 to $183,000 in 1996 due in part to the
increase in indirect auto loans outstanding in 1996 and the increase in net
charge-offs on indirect auto loans to $134,000 in 1996 from $52,000 in 1995.

     Other Consumer Loans.  First Federal also originates a variety of other
consumer loans including direct auto loans and home equity loans and lines of
credit.  Direct auto loans are originated following the same underwriting
standards as indirect auto loans but are made directly with the borrower
rather than through a dealer.  Direct auto loans have the same amount and term
limits as indirect auto loans and also require as collateral the vehicle
purchased with the loan.  At December 31, 1996, direct auto loans outstanding
totaled $2,136,000 or 2.0% of gross loans outstanding.  Direct auto loans are
usually made to customers with previous borrowings and or deposit accounts
with First Federal.

     Home equity loans and lines of credit are secured by second liens on
residential real estate.  Home equity loans generally have fixed rates, fixed
monthly payments and maturities up to 15 years.  Home equity lines of credit
have adjustable rates and flexible payment plans depending on the amount
actually borrowed.  Loan amounts are made up to a maximum 80% loan to value
ratio taking into account all other liens on the property.  Underwriting
standards are virtually the same as for first mortgage loans and originations
are not limited to borrowers for whom First Federal holds the first mortgage.
At December 31, 1996, home equity loans and lines of credit totaled $4,904,000
or 4.5% of gross loans outstanding.  The amount of such loans increased 15% in
1996 from 1995 and First Federal intends to continue to actively solicit such
loans, especially home equity lines of credit, in the future.

     First Federal makes a variety of other consumer loans that totaled
$1,479,000, or 1.4% of gross loans outstanding as of December 31, 1996.
Included in this total are loans to purchase consumer goods, loans secured by
deposit accounts and unsecured personal loans.  Underwriting standards for
these loans vary based on the loan type but all consider the creditworthiness
of the borrower and the value of underlying collateral, with secured loans
limited to 90% of the value of the underlying collateral.  Interest rates and
maturities vary depending on the loan type as well.  As with direct auto loans
these types of loans are generally granted to customers with previous
borrowings and or existing deposit accounts with First Federal.
                                -Page 13-
     Commercial Business Lending.  As with commercial real estate loans, First
Federal has not actively solicited commercial business loans in recent years.
As of December 31, 1996, commercial business loans equaled $1,145,000, or 1.1%
of gross loans outstanding.  Commercial business loans are secured by accounts
receivable, inventory, capital stock or real estate of the business and are
usually personally guaranteed by the business owners.  Risks involved are
similar to commercial real estate loans with loan repayment often dependent
upon the business generating sufficient cash flow, but commercial business
loans carry even more credit risk than commercial real estate loans due to the
nature of the collateral underlying the loan.  Commercial business loans
usually have variable interest rates and maturities up to ten years.  First
Federal intends to more actively solicit commercial business loans in 1997.

     Loan Originations, Purchases and Sales.  First Federal's general policy
is to sell all fixed-rate, fixed-term residential mortgage loans with
maturities over 15 years at origination to either FNMA or Fleet.  Fixed-rate,
fixed-term residential mortgage loans with maturities of 15 years and certain
adjustable rate and balloon loans may be sold at origination depending on
market conditions but general policy is to retain all such loans in First
Federal's loan portfolio.  Servicing rights are retained on loans sold to FNMA
and are not retained on loans sold to Fleet.  All loans are sold without
recourse.  In 1996, $10,776,000 of residential mortgage loans were sold.
Sales to FNMA equaled about 84% of the total amount sold.

     In recent years, First Federal has not made a practice of purchasing
whole loans or participations in loans originated by other financial
institutions and has not sold participations in loans it originated.
Purchases of participations in loans originated by other financial
institutions will be considered in the future as one way to increase the
amount of commercial real estate and commercial business loans.
<TABLE>
     Contractual Principal Repayments.  The following table sets forth
information with respect to scheduled contractual maturity of loans receivable
at December 31, 1996 (in thousands):
<CAPTION>
                                          Due after
                               Due in      One Year     Due After
                              One Year      Through       Five
                              or Less     Five Years      Years      Total
<S>                          <C>           <C>         <C>        <C>
Mortgage Loans:
  One-to-four family            3,271        11,040       53,544    67,855
  Construction                  1,183            -            -      1,183
  Multi-family                    110           507          945     1,562
  Commercial real estate          522         1,415        1,890     3,827
    Total mortgage              5,086        12,962       56,379    74,427
Indirect auto loans             7,182        15,816          642    23,640
Other consumer loans
  Direct auto                     797         1,339           -      2,136
  Home equity                   1,653         2,814          437     4,904
  Other consumer                  591           888           -      1,479
    Total other consumer        3,041         5,041          437     8,519
Commercial business loans         137           629          379     1,145
Total loans                    15,446        34,448       57,837   107,731
</TABLE>
Demand loans, loans having no stated schedule of repayment and no stated
maturity and overdraft loans are reported as due in one year or less.
Scheduled repayments are reported in the maturity category in which the
payment is due.
                                -Page 14-
 The amount of loans due after one year having predetermined
interest rates and floating or adjustable interest rates is as follows (in
thousands):
<TABLE>
         <S>           <C>
          Fixed          61,996
          Adjustable     30,289
</TABLE>
     Loan Commitments.  At December 31, 1996, outstanding loan commitments
totaled $301,000.  Commitments are normally provided to prospective borrowers
following approval of a residential mortgage loan application and indicate
that at any time within a 30 day period from the date of approval, subject to
satisfaction of certain specified conditions, the approved loan will be
funded.  Unused lines of credit, primarily home equity lines of credit,
totaled $3,544,000 at December 31, 1996.  In management's opinion, these
commitments represent no more than normal lending risk and can be funded from
normal sources.

     Loan Origination, Servicing and Other Fees.  Origination fees are not
collected on most loans but when such fees are collected, the amount is offset
against certain direct loan origination costs, then deferred and recognized as
an adjustment to interest income over the expected life of the loan.  At
December 31, 1996, deferred loan fees equaled $80,000.  Certain costs paid by
First Federal necessary for loan processing and closing, such as the cost of
an independent appraisal, credit reports and title insurance, are reimbursed
by borrowers.  Loans totaling $35,278,000 were serviced for others as of
December 31, 1996.  Servicing income in 1996 totaled $146,000 which includes
$51,000 recognized as a net servicing asset in 1996 as a result of the
adoption of Statement of Financial Accounting Standards No. 122, 'Accounting
for Mortgage Servicing Rights.'  Fees may also be collected in connection with
loan modifications, late payments, prepayments and for other miscellaneous
loan related services all of which are recognized as non-interest income upon
receipt.

     Loans to One Borrower.  Under OTS regulations, First Federal is generally
subject to the same loans-to-one borrower limits that apply to national banks.
Generally, loans and extensions of credit at one time to one borrower (and
certain related entities of the borrower) may not exceed 15% of First
Federal's unimpaired capital and surplus, plus an additional 10% of unimpaired
capital and surplus for loans fully secured by certain readily marketable
collateral.  First Federal's lending limit for loans to one borrower as of
December 31, 1996 was approximately $2,400,000.  As of the same date, no
single borrower had loans exceeding $700,000.

     Delinquencies.  Borrowers with loans 30 days past due are initially
notified by letter and then contacted by telephone by the collections officer
or other loan personnel.  These reminders cure most delinquencies with no
legal action necessary.  With respect to residential mortgage loans and
consumer loans other than indirect auto loans, if the delinquency exceeds 90
days, measures to enforce remedies resulting from the default, including
mailing a 30 day notice of the commencement of a foreclosure action or the
repossession of collateral, are instituted.  With respect to indirect auto
loans, repossession of collateral is initiated if the loan is 60 days past
due.  Delinquencies on multi-family and commercial real estate and business
loans are addressed on a case by case basis.
                                   -Page 15-
 The following table sets forth
information with respect to loans past due 60-89 days and over 90 days at the
dates indicated (in thousands):
<TABLE>
                                             December 31,
                               1996             1995             1994
                           60-89  Over 90   60-89  Over 90   60-89  Over 90
                            Days    Days     Days    Days     Days    Days
<S>                        <C>     <C>      <C>     <C>      <C>     <C>
Mortgage loans:
  One-to-four family         288     310      165     305      344     149
  Construction                -       -        -       -        -       -
  Multi-family                -       -        -       -        19      -
  Commercial real estate      -      333       -      146       -      145
    Total mortgage           288     643      165     451      363     294
Indirect auto loans           49      44        4      51       53      11
Other consumer loans
  Direct auto                 22       7        8      -         -       9
  Home equity                 13      -         -      10        3      -
  Other consumer               6      11        5       1        4      55
    Total other consumer      41      18       13      11        7      64
Commercial business loans     81      -         -      -       100      29
  Total                      459     705      182     513      523     398

  Percent of Gross Loans    0.42%   0.65%    0.20%   0.57%    0.62%   0.47%
</TABLE>
     Non-Performing Assets.  All loans 90 days or more past due are placed on
non-accrual status unless such loans are adequately collateralized and in the
process of collection.  At December 31, 1996, 1995 and 1994, all loans 90 days
or more past due were on non-accrual status.  Interest income on such loans is
recognized only upon cash receipt and such loans are returned to accrual
status only after all contractually past due payments are brought current and
management believes collection of outstanding principal and interest is not in
doubt.  Additional interest income that would have been recognized on non-
accrual loans, had each been current, totaled $40,000, $28,000 and $24,000,
respectively, in 1996, 1995 and 1994.  In addition to non-accrual loans, other
assets classified as non-performing include troubled debt restructuring,
repossessed automobiles and certain real estate owned.  Real estate owned
includes property acquired through foreclosure, property upon which a judgment
of foreclosure has been entered but for which no foreclosure sale has yet
taken place, property which is in substance foreclosed and property acquired
for investment purposes.

     As of December 31, 1996 and 1995, real estate owned consisted entirely of
property acquired for investment purposes.  In late 1995, First Federal sold
for $5,900,000 a property acquired through foreclosure in 1993.  A loan for
$6,500,000 had been made to a manufacturer for construction of a warehouse
facility on the property.  The purchaser paid cash at the closing with no
unusual terms or conditions attached to the sale.  The significant decline in
real estate owned from December 31, 1994 to December 31, 1995 was the result
of this sale.  At December 31, 1996, the largest parcel of real estate owned
was 32 acres of industrial property valued at $600,000 acquired in 1992.  Sale
of this property is being actively pursued.
                                    -Page 16-
  The following table sets forth
information with respect to non-performing assets (in thousands):
<TABLE>
                                                  December 31,
                                          1996        1995        1994
<S>                                      <C>         <C>         <C>
Mortgage loans:
  One-to-four family                       310         305         149
  Construction                              -           -           -
  Multi-family                              -           -           -
  Commercial real estate                   333         146         145
    Total mortgage                         643         451         294
Indirect auto loans                         44          51          11
Other consumer loans
  Direct auto                                7          -            9
  Home equity                               -           11          -
  Other consumer                            11          -           55
    Total other consumer                    18          11          64
Commercial business loans                   -           -           29
  Total Non-Accrual Loans                  705         513         398

Real estate owned                          653         644       6,413
Troubled debt restructuring                 -           -           -
Repossessed automobiles                     76          46          41
  Total Non-Performing Assets            1,434       1,203       6,852

  Percent of Total Assets                 0.83%       0.80%       4.86%
</TABLE>
     Classified Assets.  OTS regulations and First Federal policy require the
review and classification of assets on a regular basis.  First Federal
performs such a review quarterly.  Regulatory examiners also have the
authority to review and, if appropriate, classify assets as part of their
regular examination procedures.  Problem assets can be classified as either
substandard, doubtful or loss.  Substandard assets have one or more defined
weaknesses and the distinct possibility exists that a loss will be sustained
if the weaknesses are not corrected.  Doubtful assets have the weaknesses of
substandard assets and, based on current information, the weaknesses make
collection or liquidation in full questionable resulting in the high
probability of loss.  Loss assets are considered uncollectible and of such
little value that continued treatment of the asset as an asset is not
warranted.  Insured institutions such as First Federal are required to
establish a prudent general allowance for loan losses with respect to assets
classified as substandard or doubtful.  Assets classified as loss are required
to either be charged-off or to be offset 100% with a specific allowance.  The
following table sets forth information with respect to the classification of
assets as of December 31, 1996 (in thousands):
<TABLE>
       <S>                                      <C>
          Substandard assets                       547
          Doubtful assets                           40
          Loss                                      68
            Total Classified Assets                655

            Percent of Total Assets               0.38%
</TABLE>
     Allowance for Loan Losses.  The allowance for loan losses was established
to recognize the risks inherent with lending activities and may consist of a
general allowance and a specific allowance.  A specific allowance reserves
against specific assets with respect to which a loss may be realized.  A
general allowance reserves against the entire loan portfolio.  Allowances for
loan loss are determined through analysis of factors such as past loan loss
                                 -Page 17-
experience, current loan volume, growth and composition of the loan portfolio,
local and national economic conditions and other factors deemed appropriate by
management.

     Evaluation of the allowance for loan losses is undertaken at least
quarterly.  This evaluation includes a review of all loans for which full
collectibility is not reasonably assured and includes an estimation of the
market value of collateral underlying problem loans, prior loss experience,
economic conditions, overall portfolio quality and other factors.  The
allowance for loan losses, including general and specific reserves, are
subject to review by the OTS, which can require First Federal to establish
additional general or specific reserves.  Provisions for loan losses are
charged against earnings in the year established.  Loan losses are charged
against the allowance and recoveries of loans previously charged against the
allowance are added back to the allowance.

     The provision for loan losses in 1996 was $183,000.  This provision was
deemed appropriate due to the growth of the loan portfolio and an increase in
net charge-offs to $167,000 in 1996 from $66,000 in 1995.  The 1996 provision
relates primarily to consumer loans the outstanding total of which increased
12% in 1996 from 1995.  As total consumer loans outstanding have increased in
recent years, net charge-offs related to consumer loans have also increased.
Management will continue to monitor actual experience with the consumer loan
portfolio as part of the determination of future provisions.  Management
believes that the allowance for loan losses at December 31, 1996 is adequate
though there can be no assurance as to the adequacy of the allowance or the
need for additional provisions for loan losses that may adversely impact
earnings of the Company.
                                  -Page 18-
 The following table sets forth information with
respect to activity in the allowance for loan losses for the years indicated
(in thousands):
<TABLE>
                                         For the Year Ended December 31,
                                          1996        1995        1994
<S>                                      <C>         <C>         <C>
Allowance for loan loss at
  beginning of period                      907         873         946

Provision for loan losses                  183         100         (32)

Charge-offs:
  Mortgage loans:
    One to four family                       1          -           -
    Construction                            -           -           -
    Multi-family                            -           -           -
    Commercial real estate                  -           -           -
      Total mortgage                         1          -           -
  Indirect auto loans                      145          54          30
  Other consumer loans
    Direct auto                             21           9          -
    Home equity                             -           -           -
    Other consumer                          11           5          13
      Total other consumer                  32          14          13
  Commercial business loans                 -           -           -
    Total charge-offs                      178          68          43

Recoveries:
  Mortgage loans:
    One to four family                      -           -            2
    Construction                            -           -           -
    Multi-family                            -           -           -
    Commercial real estate                  -           -           -
      Total mortgage                        -           -            2
  Indirect auto loans                       11           2          -
  Other consumer loans
    Direct auto                             -           -           -
    Home equity                             -           -           -
    Other consumer                          -           -           -
      Total other consumer                  -           -           -
  Commercial business loans                 -           -           -
    Total recoveries                        11           2           2

Net charge-offs                           (167)        (66)        (41)

Allowance for loan loss at
  end of period                            923         907         873

Allowance for loan losses to total
  loans outstanding at end of period      0.85%       1.01%       1.03%

Net charge-offs to average loans
  outstanding during the period           0.17%       0.08%       0.05%
</TABLE>
                                     -Page 19-
<TABLE>
     The following table sets forth information with respect to the breakdown
of the allowance for loan losses by loan category at the dates indicated
(amounts in thousands):
                                             December 31,
                                 1996            1995            1994
                              Loan  Percent   Loan  Percent   Loan  Percent
                              Loss    of      Loss    of      Loss    of
                             Amount  Loans   Amount  Loans   Amount  Loans
<S>                         <C>     <C>     <C>     <C>     <C>     <C>
Mortgage loans:
  One to four family           352   0.52%     250   0.47%     278   0.52%
  Construction                   6   0.51       -      -        -      -
  Multi-family                  16   1.02       18   1.01       20   1.02
  Commercial real estate       127   3.32      334   7.45      327   6.67
    Total mortgage             501   0.67      602   1.00      625   1.03
Indirect auto loans            244   1.03      221   1.02      170   1.02
Other consumer loans
  Direct auto                   23   1.08       15   0.99       12   1.07
  Home equity                   36   0.73       57   1.33       40   1.03
  Other consumer                15   1.01        1   0.08        1   0.08
    Total other consumer        74   0.87       73   1.02       53   0.84
Commercial business loans        6   0.52       11   0.60        2   0.40
Unallocated                     98     -        -      -        23     -
Total Allowance for Loan Loss  923   0.85      907   1.01      873   1.03
</TABLE>
Loan Loss Amount represents the portion of the allowance for loan loss
allocated to each loan category.  Percent of Loans represents the ratio of the
allowance for loan loss for each category to the total amount of loans in the
same category.

Investment Activities

     General.  The Company is permitted under federal law to make investments
in securities issued by the U.S. government, various federal agencies and
state and municipal governments, in deposits at the Federal Home Loan Bank, in
certificates of deposit and federal funds at federally insured institutions
and in other earning assets within certain limitations.  The Board of
Directors has established and periodically reviews the investment policy, the
objectives of which include holding investments that provide and maintain
liquidity and generate a favorable return without incurring undue interest
rate risk.  At present, the investment securities portfolio includes mortgage-
backed and related securities and securities issued or guaranteed by the U.S.
government and various federal agencies.  In recent years, no investment
products designed to hedge interest rate risk, such as futures, options, swaps
or other derivative securities, have been purchased or held.  All investment
securities are designated as 'available-for-sale' and are reported at fair
value as of December 31, 1996.  Investment securities can also be designated
as 'trading securities' or 'held-to-maturity' according to Generally Accepted
Accounting Principals and regulatory guidelines but no securities have been so
designated in recent years.

     Mortgage-Backed and Related Securities.  Mortgage-backed securities
represent a participation interest in a pool of mortgages, the principal and
interest payments of which are passed through intermediaries, who pooled and
repackaged the participation interest as securities, to investors.
Intermediaries include quasi-governmental agencies such as Federal Home Loan
Mortgage Corp. ('FHLMC'), Federal National Mortgage Association ('FNMA') and
Government National Mortgage Association ('GNMA'), each of whom guarantees or
insures payment of principal and interest to investors.  By virtue of the
                               -Page 20-
guarantees, mortgage-backed securities generally increase the quality of the
Company's assets.  In addition, mortgage-backed securities can be used to
collateralize borrowings or other obligations of the Company and are generally
more liquid than mortgage loans.  Mortgage loans with similar interest rates
and maturities are normally pooled so that the characteristics of the
mortgage-backed security, which will mirror the underlying mortgage loans, can
be reasonably defined.  Mortgage-backed securities can have fixed or
adjustable interest rates.

     Mortgage-backed security holders assume the interest rate risk
characteristics of the underlying pool of mortgage loans.  Prepayments made by
the mortgage loan holders are passed on to the security holders which can
adversely affect the yield to maturity and market value of the mortgage-backed
security.  Prepayment assumptions, based on historical performance, are used
to determine anticipated maturity dates, which are then used to amortize
premium or discount on a level yield basis.  When actual prepayments on a
mortgage-backed security differ from previous assumptions, adjustments to
anticipated maturity dates may be necessary.  At December 31, 1996, mortgage-
backed securities with a book value of $19,685,000 and a market value of
$19,612,000 were held.

     Mortgage related securities were created to reduce the prepayment risk
associated with mortgage-backed securities.  Collateralized mortgage
obligations ('CMOs') and real estate mortgage investment conduits ('REMICs'),
issued in a variety of legal forms by both quasi-government agencies and
private entities, are aggregate pools of mortgage-backed securities or
mortgage loans.  Once combined, separate classes or tranches of individual
securities are created each having designated priority to future cash flows.
As principal and interest payments are received on the underlying pools or
mortgage loans, the class or tranche with highest priority is first to receive
such payments.  Once a class or tranche is fully paid out, the cash flows are
directed to the class or tranche with the next highest priority.  Security
purchasers can buy certain classes or tranches with reasonable expectation as
to when principal will be repaid.  Prepayment risk is reduced with CMOs and
REMICs compared to mortgage-backed securities but is not eliminated since
changes in the general level of interest rates can affect prepayment rates.
The market value of CMOs and REMICs, most of which have fixed interest rates,
can also be more affected by the general level of interest rates than
adjustable rate mortgage-backed securities.  At December 31, 1996, CMOs with a
book value of $18,125,000 and a market value of $17,833,000 were held.

     Regulatory policy requires at least an annual 'stress' test of mortgage
related securities to determine if price volatility under a 200 basis point
interest rate shock for each security exceeds a benchmark 30 year mortgage-
backed security.  Securities that fail the stress test are considered high
risk and may only be purchased to reduce interest rate risk.  Regulators can
require institutions to dispose of such high risk securities.  At December 31,
1996, First Federal held two mortgage-related securities, with a book value of
$1,720,000 and a market value of $1,690,000, that were considered high risk by
virtue of failing the stress test.  To date, the OTS has not required the
disposal of the securities.  No new mortgage-related securities were purchased
in 1996.

     Other Investment Securities.  First Federal also owns U.S. government,
federal agency and state and municipal securities in addition to stock in the
Federal Home Loan Bank of Chicago.  At December 31, 1996, the book value of
other investment securities held was $16,583,000 and the market value was
$16,438,000.
                                   -Page 21-
  The table below sets forth information with respect to the
carrying value of investment securities at the dates indicated (in thousands):
<TABLE>
                                                    December 31,
                                           1996         1995        1994
<S>                                     <C>          <C>         <C>
Mortgage-backed securities:
  Collateralized mortgage obligations     18,125       21,305      19,974
  Other mortgage-backed                   19,685       20,286      15,151
U.S. government and agencies              15,181       10,664       9,684
Other securities                             447          482         521
FHLB stock                                   955          694         650
  Total investments, at carrying value    54,393       53,431      45,980
</TABLE>
<TABLE>
     The following table sets forth information with respect to the carrying
value, weighted average yields and scheduled maturities of investment
securities at December 31, 1996 (amounts in thousands):

                                              Over One        Over Five
                       One Year or Less    to Five Years    to Ten Years
                                Weighted          Weighted          Weighted
                       Carrying Average  Carrying Average  Carrying Average
                         Value   Yield     Value   Yield     Value   Yield
<S>                    <C>     <C>      <C>      <C>       <C>     <C>
Mortgage-backed securities:
  Collateralized mortgage
    obligations             82   5.66%     1,940   5.76%     1,656   5.79%
  Other mortgage-backed    745   7.07        208   5.01        911   5.89
U.S. government and
  agencies                 215   6.07     13,467   5.91      1,499   6.99
Other securities            26   7.60        212   8.47        138   7.60
FHLB stock
  Total Investments      1,068   6.77%    15,827   5.91%     4,204   6.30%
</TABLE>
<TABLE>
                                Over Ten Years        Total
                                        Weighted          Weighted
                               Carrying Average  Carrying Average   Market
                                 Value   Yield     Value   Yield     Value
<S>                           <C>      <C>      <C>      <C>      <C>
Mortgage-backed securities:
  Collateralized mortgage
    obligations                 14,447   5.63%    18,125   5.66%    17,833
  Other mortgage-backed         17,821   6.70     19,685   6.68     19,612
U.S. government and
  agencies                                        15,181   6.02     15,036
Other securities                    71   7.60        447   8.01        447
FHLB stock                         955   6.75        955   6.75        955
  Total Investments             33,294   6.25%    54,393   6.17%    53,883
</TABLE>

     With the exception of the U.S. government and federal agencies, as of
December 31, 1996, the Company did not hold securities of any one issuer the
aggregate total of which exceeded 10% of stockholder's equity.

Deposit Activities and Other Sources of Funds

     General.  Primary sources of funds for use in lending, investing and
other general purposes are deposits and proceeds from principal and interest
payments on loans, mortgage-backed and other securities and FHLB advances.
Contractual loan repayments are a relatively stable source of funds while loan
and mortgage-backed security prepayments and deposit inflows and outflows are
significantly influenced by general interest rate levels and money market
                                 -Page 22-
conditions.  Borrowings can be used to increase liquidity on a short-term
basis and on a long-term basis for general operational purposes.

     Deposit Accounts.  A variety of deposit products are offered to customers
in the primary market area.  Non-interest bearing checking accounts,
negotiable order of withdrawal ('NOW') accounts, money market accounts and
passbook savings accounts, with several variations of each available, are the
types of demand accounts offered.  Demand account terms vary based on minimum
balance requirements, withdrawal restrictions and interest rates.  In 1996,
Visa check cards were added to the features available on certain demand
accounts.  Time certificate of deposit accounts, with maturities of up to six
years, are also offered.  Interest rates offered on all accounts are reviewed
by management and subject to change as deemed necessary.  The flow of deposits
is greatly influenced by general economic conditions, changes in money market
and local interest rates and competition.  Brokered deposits are not solicited
or accepted.

     First Federal attracts and maintains deposit accounts, in part, because
of its tradition of customer service and seventy-seven years as a locally
owned and managed savings association.  Locally competitive interest rates,
convenient locations with hours of service designed to meet customer needs and
membership in a nationwide ATM network are used by First Federal to attract
customers.  From December, 1994 through July, 1995, First Federal offered to
match competitor's terms on certain fixed-rate, fixed-term certificates of
deposit.  From December 31, 1994 to December 31, 1995, total certificates
increased 15% to $114,999,000.  Since the program was discontinued,
certificate balances have gradually decreased slightly to $109,072,000 at
December 31, 1996.  The following table sets forth information with respect to
the average amount outstanding and the weighted average rate paid on the
categories of deposit accounts listed for the years indicated (amounts in
thousands):
<TABLE>
                                  For the Year Ended December 31,
                              1996             1995              1994
                                Average          Average           Average
                        Average  Rate    Average   Rate    Average   Rate
                        Balance  Paid    Balance   Paid    Balance   Paid
<S>                    <C>     <C>      <C>      <C>      <C>      <C>
Demand Accounts:
  Non-interest bearing      549  0.00%       468   0.00%       418   0.00%
  NOW                     5,338  1.80      4,821   1.78      4,041   2.08
  Money market            2,964  2.87      3,611   2.85      5,596   2.75
  Passbook               15,462  3.73     13,947   3.54     14,991   3.16
    Total Demand         24,313  3.13     22,847   2.99     25,046   2.84

Certificate of Deposit Accounts:
  6 months or less        9,335  4.95     11,863   5.24     14,816   3.46
  7 to 12 months         27,011  5.71     27,608   5.57     24,886   3.77
  13 to 24 months        18,390  6.17     18,733   5.54     16,001   4.46
  25 to 36 months        27,509  5.94     26,050   5.64     19,396   5.02
  37 to 60 months        12,077  6.30     12,187   6.65     11,096   6.88
  Over 60 months         10,117  6.61      9,643   6.59      6,083   5.85
  Jumbo                   7,420  6.31      7,792   6.46      5,672   5.02
    Total Certificates  111,859  5.97    113,876   5.81     97,950   4.64

    Total Deposits      136,172  5.48%   136,723   5.35%   122,996   4.29%
</TABLE>
                                     -Page 23-
<TABLE>
   The following table sets forth information with respect to the maturity of
jumbo time certificates of deposit as of December 31, 1996.  Jumbo time
certificates of deposit require minimum deposits of $100,000.  No other time
deposits of $100,000 or more are outstanding (in thousands):

                                                 Amount
<S>                                             <C>
Due in three months or less                       2,042
Due in over three through six months                900
Due in over six through twelve months             1,675
Due in over twelve months                         3,441
</TABLE>
     Borrowings.  Prior to 1996, First Federal had relied on advances from the
FHLB of Chicago only in the event of a reduction in available funds from other
sources.  In the last six months of 1996, FHLB advances were used to fund loan
originations rather than more traditional sources of funds due to the lower
cost of the advances.  In 1997, First Federal plans to continue to use FHLB
advances as a source of funds.  Advances are available with a variety of terms
including fixed or variable rate and open line or fixed maturity.  Most fixed
maturity advances allow prepayments under certain conditions.  At December 31,
1996, FHLB advances totaled $15,300,000.  Of this amount, $7,300,000 had
variable rates.  All advances had fixed maturity dates.  All advances are
secured by stock in the FHLB and a blanket floating lien on First Federal's
one-to-four family residential mortgage loans.  The FHLB determines the
creditworthiness of and sets a credit limit for each institution.  The
following table sets forth information with respect to FHLB advances at the
end of and during the periods indicated (amounts in thousands):
<TABLE>
                                 At and For the Year Ended December 31,
                                        1996              1995
<S>                                  <C>                <C>
Balance on December 31                 15,300                -
Highest month-end balance              19,100             5,000
Average balance during the year         4,342             1,075
Average rate during the year             6.20%             6.49%
Average rate at year-end                 5.73%               -
</TABLE>
     During 1996 and 1995, First Federal entered into repurchase agreements
under which funds were borrowed in exchange for investment securities pledged
to and held by counterparties.  No such agreements were in effect at any month
end in 1996 or 1995, including December.  The average amount of repurchase
agreements outstanding was $44,000 and $171,000 and the average rate paid on
the repurchase agreements were 5.25% and 6.78% in 1996 and 1995, respectively.
Repurchase agreements are usually used as a source of funds for short periods
of time.  In certain circumstances, repurchase agreements may be used as a
source of funds in the future but there are no plans to make frequent use of
this source of funds.

     At December 31, 1996, the Company had 42 full-time and 16 part-time
employees none of whom were represented by a union or collective bargaining
group.  The Company considers its relations with employees to be satisfactory.

	REGULATION AND SUPERVISION

General

First Federal is chartered under federal law by the OTS.  It is a
member of the FHLB System, and its deposit accounts are insured up to legal
limits by the FDIC under the SAIF.  The OTS is charged with overseeing and
regulating First Federal's activities and monitoring its financial condition.
                               -Page 24-
This regulatory framework sets parameters for First Federal's activities and
operations and grants the OTS extensive discretion with regard to its
supervisory and enforcement powers and examination policies.  First Federal
files periodic reports with the OTS concerning its activities and financial
condition, must obtain OTS approval prior to entering into certain
transactions or initiating new activities, and is subject to periodic
examination by the OTS to evaluate the First Federal's compliance with various
regulatory requirements.

Eagle is a savings and loan holding company and, like First
Federal, is subject to regulation by the OTS.   As part of this regulation,
Eagle is required to file certain reports with, and is subject to periodic
examination by, the OTS.

Recent Legislative and Regulatory Developments

During calender year 1996, several new laws and regulations were
adopted that affect savings associations like First Federal.

Deposit Insurance Reform Legislation.  The SAIF and the Bank
Insurance Fund (the 'BIF') were required by law  to achieve and maintain a
ratio of insurance reserves to total insured deposits equal to 1.25 percent.
The BIF reached this required reserve ratio during 1995, while some
predictions indicated the SAIF would not reach this target until the year
2002.  The SAIF had not grown as quickly as the BIF for many reasons, but in
large part because almost half of SAIF premiums had to be used to retire bonds
issued by the Financing Corporation ('FICO Bonds') in the late 1980's  to
recapitalize the Federal Savings and Loan Insurance Corporation.

Until 1995, the SAIF and BIF deposit insurance premium rate
schedules had been identical.  But in-mid 1995, the FDIC issued final rules
modifying its assessment rate schedules for SAIF and BIF member institutions.
Under the revised schedule, SAIF members continued to pay assessments ranging
from $0.23 to $0.31 per $100 of deposits, while BIF members paid assessments
ranging from zero to $0.27 per $100 of deposits.  But the majority of BIF
members paid only the $2,000 minimum annual premium.  Thrift industry
representatives argued that this significant premium differential caused
savings associations to operate at a competitive disadvantage to their BIF-
insured bank counterparts.

On September 30, 1996, President Clinton signed the Deposit
Insurance Funds Act of 1996 ('DIFA') that was part of the omnibus spending
bill enacted by Congress at the end of its 1996 session.  DIFA mandated that
the FDIC impose a special assessment on the SAIF-assessable deposits of each
insured depository institution at a rate applicable to all such  institutions
that the FDIC determined would cause the SAIF to achieve its designated
reserve ratio of 1.25 percent as of October 1, 1996.  The assessment was based
on the amount of SAIF-insured deposits owned by each institution as of March
31, 1995, the record date established in the original drafts of the
legislation.  DIFA allowed  the FDIC to exempt any insured institution that it
determined to be weak from paying the special assessment if the FDIC
determined that the exemption would reduce the risk to the SAIF.

DIFA provides that the FDIC may not set semiannual assessments
with respect to SAIF or BIF in excess of the amount needed to maintain the
1.25 percent designated reserve ratio or, if the reserve ratio is less than
the designated reserve ratio, to increase the reserve ratio to the designated
reserve ratio.
                                  -Page 25-
'Oakar' banks (i.e., BIF-member banks holding SAIF deposits) are
eligible for a 20 percent discount from the special assessment with respect to
the SAIF-insured deposits they own, provided the ratio of SAIF-insured
deposits to total deposits they owned as of June 30, 1995  was 50 percent or,
in some cases, 75 percent.  Some 'Sasser' banks (i.e., SAIF-member banks that
converted to state savings banks or commercial banks) are also eligible for
this reduced assessment rate.

On October 10, 1996, the FDIC adopted a final rule governing the
payment of the SAIF special assessment.  The FDIC imposed a special assessment
in the amount of 65.7 basis points, which is less than the 85-95 basis points
estimated during the early stages of the law's enactment in 1995.  The SAIF
special assessment was due by November 27, 1996.  First Federal's portion of
this special assessment amounted to $875,000 on a pre-tax basis.  First
Federal paid this amount to the FDIC during its fiscal third quarter ended
September 30, 1996, as mandated by the Financial Accounting Standards Board
that ruled that the SAIF special assessment should be recorded as an ordinary
non-interest expense for the quarter ended September 30, 1996 for calender
year reporting institutions.  DIFA also confirmed that the special assessment
is tax deductible.

In response to the recapitalization of the SAIF, the FDIC
announced on December 11, 1996 that deposit insurance rates for most savings
associations insured under the SAIF would be lowered to zero effective January
1, 1997.  BIF-insured institutions would also no longer have to pay the $2,000
minimum for deposit insurance, thereby equalizing deposit premiums for savings
associations and banks.

Merger of SAIF and BIF.  DIFA mandates the merger of the SAIF and
BIF, effective January 1, 1999, but only if no insured depository institution
is a savings association on that date.  The combined deposit insurance fund
will be called the 'Deposit Insurance Fund', or 'DIF'.

FICO Bond Payments.  Before DIFA, federal regulators and thrift
industry trade groups were predicting that a default would occur on the FICO
Bonds as early as 1998, as SAIF-assessable deposits continued to decline.
DIFA amends The Federal Home Loan Bank Act to impose the FICO assessment
against both SAIF and BIF deposits beginning after December 31, 1996.  But the
assessment imposed on insured depository institutions with respect to any BIF-
assessable deposit will be assessed at a rate equal to one-fifth of the rate
(approximately 1.3 basis points) of the assessments imposed on insured
depository institutions with respect to any SAIF-assessable deposit
(approximately 6.7 basis points).   The FICO assessment for 1996 was paid
entirely by SAIF-insured institutions.  BIF-insured banks will pay the same
FICO assessment as SAIF-insured institutions beginning as of the earlier of
December 31, 1999 or the date as of which the last savings association ceases
to exist.

Deposit Shifting.  DIFA provides that until the earlier of
December 31, 1999 or the date as of which the last savings association ceases
to exist, the Office of the Comptroller of the Currency (the 'OCC'), the FDIC,
the Board of Governors of the Federal Reserve System, and the OTS will take
appropriate actions, including enforcement actions and denial of applications,
to prevent insured depository institutions from facilitating or encouraging
the shifting of deposits from SAIF-assessable deposits to BIF-assessable
deposits for the purpose of evading the assessments imposed on insured
depository institutions with respect to SAIF-assessable deposits.
                              -Page 26-
Bad Debt Recapture.  The Small Business Job Protection Act of
1996, signed by President Clinton on August 20, 1996, removed a significant
tax obstacle for savings associations that desire to become commercial banks.
It also eliminated a potential impediment to business combinations between
banks and thrifts and the creation of a new depository institution charter.

Before this new law, savings associations that converted to
commercial banks had to change their method of accounting for bad debt
reserves, which forced a recapture of the savings association's untaxed bad
debt reserves into taxable income.  Under prior law, savings associations were
allowed to use the reserve method for establishing bad debt reserves.  This
meant in recent years they could deduct up to 8 percent of their taxable
income each year as a charge for bad debts, regardless of their actual loan
loss experience.  Since the 1950's, this deduction has steadily declined from
its initial rate of 100 percent.  These annual deductions resulted in
significant tax savings for savings associations and an accumulation by
savings associations of untaxed  income.

Under the new law, a savings association's base-year reserves
established before 1988 will not be taxed should it convert to a commercial
bank. But reserves created after 1987 would be recaptured into taxable income
ratably over six years (beginning with the first tax year after December 31,
1995) whether or not a savings association converts to a commercial bank.
Recapture of post-1987 reserves may be deferred until after January 1, 1998 if
the savings association maintains a high level of residential loan
originations.  In the future, all savings associations must account for bad
debts under tax rules applicable to commercial banks.

Relaxation of the Qualified Thrift Lender Test.  In September
1996, the Economic Growth and Regulatory Paperwork Reduction Act of 1996
became law (the 'Economic Growth Act of 1996').  In the past, savings
associations were required to satisfy a qualified thrift lender test ('QTL'
test) by maintaining 65 percent of their portfolio assets (defined as all
assets minus intangible assets, property used by the association in conducting
its business and liquid assets equal to 20% of total assets) in certain
'qualified thrift investments' (primarily residential mortgages and related
investments, including certain mortgage-backed securities) on a monthly basis
in nine out of every twelve months.

The Economic Growth Act of 1996 liberalized the QTL test for
savings associations by permitting them to satisfy a similar-but-different 60
percent asset test under the Internal Revenue Code.  Alternatively, savings
associations may meet  the QTL test by satisfying a more liberal 65 percent
asset test that allows an institution to include small business, credit card
and education loans as qualified investments for purposes of the test.
Furthermore, consumer loans now count as qualified thrift investments up to 20
percent of portfolio assets.  On November 27, 1996, OTS issued an interim
final rule that implements provisions of the Economic Growth Act of 1996,
including the amended QTL test.

Increased Commercial and Consumer Lending Authority.  Before the
Economic Growth Act of 1996, federal savings associations were able to lend up
to 10 percent of their assets in commercial business loans (i.e., secured or
unsecured loans for commercial, corporate, business, or agricultural purposes)
and, subject to OTS approval for a higher amount, up to 400 percent of their
capital in commercial real estate loans.  In addition, federal savings
associations were permitted to make consumer loans (i.e., loans for personal,
family or household purposes) in an amount not to exceed 35 percent of their
                                  - Page 27-
assets.

The Economic Growth Act of 1996 amended the commercial-lending-
asset limit by increasing the ceiling from 10 percent to 20 percent, but
provides that amounts in excess of 10 percent may be used only for small
business loans.  Moreover, the new law exempts credit card and educational
loans from any percentage of asset limitations applicable to consumer loans.
The interim final rule issued by the OTS on November 27, 1996, defines a
'small business loan' as one which meets the Small Business Administration
size eligibility standards.  This definition also applies for purposes of the
new QTL test.

Effective October 30, 1996, the OTS (as part of its regulatory
streamlining project) amended its lending regulations for federal savings
associations to remove the requirement that commercial loans made at the
service corporation level be aggregated with the 10 percent of assets limit on
commercial lending.

Charter Overhaul.  Proposals to eliminate the savings association
charter have been considered by the U.S. Congress several times in recent
years.  DIFA mandates that the Secretary of the Treasury  conduct a study of
all issues which the Secretary considers to be relevant with respect to the
development of a common charter for all insured depository institutions and
the abolition of separate and distinct charters between banks and savings
associations.

The Secretary of the Treasury must submit a report to the Congress
on or before March 31, 1997, containing the findings and conclusions of the
Secretary in connection with this study.  The report must include a detailed
analysis of each issue the Secretary considers relevant to the subject of the
study, recommendations of the Secretary with regard to the establishment of a
common charter for insured depository institutions and such recommendations
for legislative and administrative action as the Secretary determines to be
appropriate to implement the recommendations of the Secretary.

Regulatory Relief for Thrifts and Banks.  The Economic Growth Act
of 1996 included dozens of changes to financial institution laws granting
regulatory relief to financial institutions (including savings associations)
and simplifying and streamlining the regulatory application process with
respect to certain transactions.  Many existing laws were affected by the new
legislation, including the Truth in Lending Act (the 'TILA'), the Real Estate
Settlement Procedures Act, the Truth in Savings Act, the Fair Credit Reporting
Act, the Home Mortgage Disclosure Act and Fair Lending, among others.  In
particular, the new law expands the definition of a small depository
institution that qualifies for an extended examination cycle (18 rather than
12 months) to include institutions with assets of $250 million (as opposed to
the former $175 million asset threshold).

Environmental Liability Reform.  On September 30, 1996, President
Clinton signed into law amendments to the Comprehensive Environmental Response
Compensation and Liability Act ('CERCLA').  These amendments provide relief
for lenders in connection with their liability for environmental contamination
in making and administering loans.

Overhaul of Thrift Conflict of Interest, Corporate Opportunity and
Corporate Governance Rules.  For several years the OTS has been engaged in an
extensive review of its regulations to identify regulations that are obsolete
and areas where regulatory streamlining is appropriate.  This review has
                                    -Page 28-
culminated in several substantial revisions to OTS regulations.  In 1996, the
OTS issued final regulations streamlining its regulations in the areas of
lending and investment authority, corporate governance, subsidiaries and
equity investments and conflicts of interest, among others.  As a result of
this project, many OTS regulations have been removed to the OTS Thrift
Activities Handbook.

New Thrift Subsidiary and Equity Investment Rules.  On December
18, 1996, the OTS issued a final rule updating and streamlining its
regulations governing subsidiary and equity investments.  The regulation
recasts operating subsidiaries and service corporations as 'subordinate
organizations,' revises the list of permissible activities for service
corporations, confirms federal preemption of state law regarding the
activities of operating subsidiaries and clarifies the application process for
establishing subordinate organizations.  The new  rule also codifies the
authority of a federal savings association to invest in certain pass-through
investments, such as limited partnerships and mutual funds.

Federal-Savings-Association Regulation

Business Activities.  The activities of savings associations are
governed by the Home Owners' Loan Act, as amended (the "HOLA"), and, in
certain respects, the Federal Deposit Insurance Act (the "FDI Act").  The HOLA
and the FDI Act were amended by the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA") and the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA").  FIRREA was enacted for the
purpose of resolving problem savings associations, establishing a new thrift
insurance fund, reorganizing the regulatory structure applicable to savings
associations, and imposing bank-like standards on savings associations.
FDICIA, among other things, requires that federal banking regulators intervene
promptly when a depository institution experiences financial difficulties,
mandates the establishment of a risk-based deposit insurance assessment system
and requires imposition of numerous additional safety and soundness
operational standards and restrictions.  FIRREA and FDICIA both contain
provisions affecting numerous aspects of the operations and regulations of
federally-insured savings associations and empowers the OTS and the FDIC,
among other agencies, to promulgate regulations implementing its provisions.

Branching.  A federally-chartered savings association, like First
Federal, can establish branches in any state or states in the United States
and its territories, subject to a few exceptions.  The exercise by the OTS of
its authority to permit interstate branching by federal savings associations
is preemptive of any state law purporting to address the subject of branching
by a federal savings association.

Loans to One Borrower.  Under HOLA, savings associations are
generally subject to the national bank limits regarding loans to one borrower.
Generally, savings associations may not make a loan or extend credit to a
single or related group of borrowers in excess of 15 percent of the
association's unimpaired capital and surplus, where the borrowing is not fully
secured by readily-marketable collateral.  An additional amount may be lent,
equal to 10 percent of the association's unimpaired capital and surplus, if
such additional borrowing is secured by readily-marketable collateral at least
equal to the amount of such additional funds.  At December 31, 1996, First
Federal had no outstanding loans or commitments that exceeded the loans to one
borrower limit at the time made or committed.
                                -Page 29-
Brokered Deposits.   Well-capitalized savings associations that
are not troubled are not subject to brokered deposit limitations.
Adequately-capitalized associations are able to accept, renew or roll over
brokered deposits but only (i) with a waiver from the FDIC and (ii) subject to
the limitation that they do not pay an effective yield on any such deposit
that exceeds by more than (a) 75 basis points the effective yield paid on
deposits of comparable size and maturity in such association's normal market
area for deposits accepted in its normal market area or (b) 120 basis points
of the current yield on similar maturity U.S. Treasury obligations or, in the
case of any deposit at least half of which is uninsured, 130 percent of such
Treasury yield.  Undercapitalized associations are not permitted to accept
brokered deposits and may not solicit deposits by offering an effective yield
that exceeds by more than 75 basis points the prevailing effective yields on
insured deposits of comparable maturity in the association's normal market
area or in the market area in which such deposits are being solicited.  First
Federal is not presently soliciting brokered deposits.

Enforcement.  Under the FDI Act, the OTS has primary enforcement
responsibility over savings associations and has the authority to bring
enforcement action against all "institution-related parties," including
stockholders, and any attorneys, appraisers and accountants who knowingly or
recklessly participate in wrongful action likely to have an adverse effect on
an insured association.  Civil penalties cover a wide range of violations and
actions.  Criminal penalties for most financial association crimes include
fines and imprisonment.  In addition, regulators have substantial discretion
to impose enforcement action on an association that fails to comply with its
regulatory requirements, particularly with respect to amounts of capital.
Possible enforcement action ranges from requiring the preparation of a capital
plan or imposition of a capital directive to receivership, conservatorship or
the termination of deposit insurance.  Under the FDI Act, the FDIC has the
authority to recommend to the Director of OTS enforcement action be taken with
respect to a particular savings association.  If action is not taken by the
Director, the FDIC has authority to take enforcement action under certain
circumstances.

Assessments.  Savings associations are required by OTS regulation
to pay assessments to the OTS to fund the operations of the OTS.  The general
assessment paid on a semi-annual basis is computed based upon the savings
association's total assets, including consolidated subsidiaries, as reported
in the association's latest quarterly thrift financial report.

Federal Home Loan Bank System.  First Federal is a member of the
FHLB System, which consists of 12 regional FHLB's. The FHLB provides a central
credit facility primarily for member associations.  First Federal, as a member
of the FHLB-Chicago, is required to acquire and hold shares of capital stock
in that FHLB in an amount at least equal to 1 percent of the aggregate
principal amount of its unpaid residential mortgage loans and similar
obligations at the beginning of each year, or 1/20 of its advances
(borrowings) from the FHLB-Chicago, whichever is greater.  First Federal is in
compliance with this requirement, with an investment in FHLB-Chicago stock at
December 31, 1996, of $955,000.  FHLB advances must be secured by specified
types of collateral and may be obtained only for the purpose of purchasing or
funding new residential housing finance assets.

OTS Capital Requirements.  The OTS capital regulations require
savings associations to meet three capital standards: a 1.5 percent tangible
capital standard, a 3 percent leverage ratio (or core capital ratio) and an 8
percent risk-based capital standard.
                                  -Page 30-
Tangible capital is defined as common stockholders' equity
(including retained earnings), noncumulative perpetual preferred stock and
related earnings, certain nonwithdrawable accounts and pledged deposits of
mutual savings associations, and minority interests in equity accounts of
fully consolidated subsidiaries, less intangible assets (other than certain
mortgage servicing rights) and certain equity and debt investments in
nonqualifying subsidiaries (as hereinafter defined).

Core capital is defined as common stockholders' equity (including
retained earnings), certain noncumulative perpetual preferred stock and
related surplus, minority interests in equity accounts of consolidated
subsidiaries, certain nonwithdrawable accounts and pledged deposits of mutual
savings associations, certain amounts of goodwill resulting from prior
regulatory accounting practices, less intangible assets (other than certain
mortgage servicing rights) and certain equity and debt investments in
nonqualifying subsidiaries.

The OTS capital regulation requires that in meeting the leverage
ratio, tangible and risk-based capital standards, savings associations must
deduct investments in and loans to subsidiaries engaged in activities not
permissible for a national bank (a "nonqualifying subsidiary").  At December
31, 1996, First Federal did not own a nonqualifying subsidiary.

In April 1991, the OTS issued a proposal to amend its regulatory
capital regulation to establish a 3 percent leverage ratio (defined as the
ratio of core capital to adjusted total assets) for associations in the
strongest financial and managerial condition, with a 1 CAMEL Rating (the
highest rating of the OTS for savings associations).  For all other
associations, the minimum core capital leverage ratio would be 3 percent plus
at least an additional 100 to 200 basis points.  In determining the amount of
additional capital under the proposal, the OTS would assess both the quality
of risk management systems and the level of overall risk in each individual
association through the supervisory process on a case-by-case basis.
Associations that failed the new leverage ratio would be required to file with
the OTS a capital plan that details the steps they would take to reach
compliance. If enacted in final form as proposed, management does not believe
that the proposed regulation would have a material effect on First Federal.

Although the OTS has not adopted this regulation in final form,
generally a savings association that has a leverage capital ratio of less than
4 percent will be deemed to be "undercapitalized" under the OTS prompt
corrective action regulations and consequently can be subject to various
limitations on activities.

The OTS' risk-based capital standard requires that savings
associations maintain a ratio of total capital (which is defined as core
capital and supplementary capital) to risk-weighted assets of 8 percent.  In
calculating total capital, a savings association must deduct reciprocal
holdings of depository institution capital instruments, all equity investments
and that portion of land loans and nonresidential construction loans in excess
of 80 percent loan-to-value ratio and its interest rate risk component (as
discussed below), in addition to the assets that must be deducted in
calculating core capital.  In determining the amount of risk-weighted assets,
all assets, including certain off-balance sheet assets, are multiplied by a
risk-weight of 0 percent to 100 percent, as assigned by the OTS capital
regulation based on the risks OTS believes are inherent in the type of asset.

The components of core capital are equivalent to those discussed
above under the 3 percent leverage standard.  The components of supplementary
                                      -Page 31-
capital include cumulative preferred stock, long-term perpetual preferred
stock, mutual capital certificates, certain nonwithdrawable accounts and
pledged deposits, certain net worth certificates, income capital certificates,
certain perpetual subordinated debt, mandatory convertible subordinated debt,
certain intermediate-term preferred stock, certain mandatorily redeemable
preferred stock and allowance for loan and lease losses (up to 1.25 percent of
risk-weighted assets).  Allowance for loan and lease losses includable in
supplementary capital is limited to a maximum of 1.25 percent.  Overall, the
amount of capital counted toward supplementary capital cannot exceed 100
percent of core capital.  At December 31, 1996, First Federal met each of its
capital requirements.

FDICIA required that the OTS (and other federal banking agencies)
revise risk-based capital standards, with appropriate transition rules, to
ensure that they take account of interest rate risk, concentration of risk and
the risks of nontraditional activities.

The OTS' interest rate risk component became effective on January
1, 1994.  Under the  rule, savings associations with "above normal" interest
rate risk exposure would be subject to a deduction from total capital for
purposes of calculating their risk-based capital requirements.  A savings
association's interest rate risk is measured by the decline in the net
portfolio value of its assets (i.e., the difference between incoming and
outgoing discounted cash flows from assets, liabilities and off-balance sheet
contracts) that would result from a hypothetical 200-basis point increase or
decrease in market interest rates (except when the three-month Treasury bond
equivalent yield falls below 4%, then the decrease would be equal to one-half
of that Treasury rate) divided by the estimated economic value of the
association's assets, as  calculated in accordance with guidelines set forth
by the OTS.  A savings association whose measured interest rate risk exposure
exceeds 2% must deduct an interest rate component in calculating its total
capital under the risk-based capital rule.  The interest rate risk component
is an amount equal to one-half of the difference between the association's
measured interest rate risk and 2%, multiplied by the estimated economic value
of the association's assets.  That dollar amount is deducted from an
association's total capital in calculating compliance with its risk-based
capital requirement.  Savings associations with assets of less than $300
million and risk-based capital ratios in excess of 12% are not subject to the
interest rate risk component.  The rule also provides that the Director of the
OTS may waive or defer an association's interest rate risk component.  The OTS
has postponed the date that the risk component will first be deducted from an
institution's total capital to allow, among other things, the OTS to evaluate
the interest rate risk proposals issued by the other banking agencies.

Liquidity.  First Federal is required to maintain an average daily
balance of liquid assets (e.g., cash, accrued interest on liquid assets,
certain time deposits, savings accounts, bankers' acceptances, specified
United States Government, state or federal agency obligations, shares of
certain mutual funds and certain corporate debt securities and commercial
paper) equal to not less than a specified percentage of the average daily
balance of its net withdrawal deposit accounts plus short-term borrowings.
This liquidity requirement may be changed from time to time by the OTS to any
amount within the range of 4 percent to 10 percent depending upon economic
conditions and the savings flows of member associations; this requirement is
currently 5 percent.  OTS regulations also require each member savings
association to maintain an average daily balance of short-term liquid assets
at a specified percentage (currently 1 percent) of the average daily balance
of its net withdrawable deposit accounts and borrowings.  The OTS may initiate
                               -Page 32-
enforcement actions for failure to meet these liquidity requirements. First
Federal has never been subject to monetary penalties for failure to meet its
liquidity requirements.

Insurance of Deposit Accounts.  FDICIA required the FDIC to
establish a risk-based assessment system for insured depository associations
that takes into account the risks attributable to different categories and
concentrations of assets and liabilities.  Under the rule, the FDIC assigns an
association to one of three capital categories consisting of (i) well
capitalized, (ii) adequately capitalized or (iii) undercapitalized, and one of
three supervisory subcategories.  The supervisory subgroup to which an
association is assigned is based on a supervisory evaluation provided to the
FDIC by the association's primary federal regulator and information which the
FDIC determines to be relevant to the association's financial condition and
the risk posed to the deposit insurance funds (which may include, if
applicable, information provided by the association's state supervisor).  An
association's assessment rate depends on the capital category and supervisory
category to which it is assigned.  There are nine assessment risk
classifications (i.e., combinations of capital groups and supervisory
subgroups) to which different assessment rates are applied.  Assessment rates
range from 23 basis points for an association in the highest category (i.e.,
well-capitalized and healthy) to 31 basis points for an association in the
lowest category (i.e., undercapitalized and of substantial supervisory
concern).

Limitation on Capital Distributions.  The OTS regulations impose
limitations upon all capital distributions by savings associations, such as
cash dividends, payments to repurchase or otherwise acquire its shares,
payments to shareholders of another association in a cash-out merger and other
distributions charged against capital.  The regulations establish three tiers
of associations.  An association that exceeds all fully phased-in capital
requirements before and after the proposed capital distribution ("Tier 1
Association") and has not been advised by the OTS that it is in need of more
than normal supervision, could, after prior notice but without the approval of
the OTS, make capital distributions during a calendar year up to the higher of
(a) 100 percent of its net income to date during the calendar year plus the
amount that would reduce by one-half its "surplus capital ratio" (the excess
capital over its fully phased-in capital requirements) at the beginning of the
calendar year or (b) 75 percent of its net reserve over the most recent four-
quarter period.  Any additional capital distributions would require prior
regulatory approval.  In computing the association's permissible percentage of
capital distributions, previous distributions made during the prior four
quarter period must be included.  As of December 31, 1996, First Federal met
the requirements of a Tier 1 Association.  In the event First Federal's
capital fell below its fully phased-in requirement or the OTS notified it that
it was in need of more than normal supervision, the Savings Bank's ability to
make capital distributions could be restricted.  In addition, the OTS could
prohibit a proposed capital distribution by any association, which would
otherwise be permitted by regulation, if the OTS determines that such
distribution would constitute an unsafe or unsound practice.  Moreover, under
the OTS prompt corrective action regulations, First Federal would be
prohibited from making any capital distribution if, after the distribution,
First Federal would have, (i) total risk-based capital ratio of less than 8
percent, (ii) Tier 1 risk-based capital ratio of less than 4 percent, or (iii)
a leverage ratio of less than 4 percent or has a leverage ratio that is less
than 3 percent if the association is rated composite 1 under the CAMEL rating
system in the most recent examination of the association and is not
experiencing or anticipating significant growth.
                                   -Page 33-
Community Reinvestment.  The OTS, the FDIC, the Federal Reserve
Board and the OCC have jointly issued a final rule (the "Final Rule") under
the Community Reinvestment Act (the "CRA").  The Final Rule eliminates the
existing CRA regulation's twelve assessment factors and substitutes a
performance based evaluation system.  The Final Rule will be phased in over a
period of time and become fully effective by July 1, 1997.  Under the Final
Rule, an institution's performance in meeting the credit needs of its entire
community, including low- and moderate-income areas, as required by the CRA,
will generally be evaluated under three tests:  the "lending test," the
"investment test," and the "service test."

The lending test analyzes lending performance using five criteria:
(i) the number and amount of loans in the institution's assessment area, (ii)
the geographic distribution of lending, including the proportion of lending in
the assessment area, the dispersion of lending in the assessment area, and the
number and amount of loans in low-, moderate-, middle-, and upper-income areas
in the assessment area, (iii) borrower characteristics, such as the income
level of individual borrowers and the size of businesses or farms, (iv) the
number and amount, as well as the complexity and innovativeness of an
institution's community development lending and (v) the use of innovative or
flexible lending practices in a safe and sound manner to address the credit
needs of low- or moderate-income individuals or areas.  The investment test
analyzes investment performance using four criteria: (i) the dollar amount of
qualified investments, (ii) the innovativeness or complexity of qualified
investments, (iii) the responsiveness of qualified investments to credit and
community development needs, and (iv) the degree to which the qualified
investments made by the institution are not routinely provided by private
investors.  The service test analyzes service performance using six criteria:
(i) the institution's branch distribution among low-, moderate-, middle-, and
upper-income areas, (ii) its record of opening and closing branches,
particularly in low- and moderate-income areas, (iii) the availability and
effectiveness of alternative systems for delivering retail banking services,
(iv) the range of services provided in low-, moderate-, middle- and upper-
income areas and extent to which those services are tailored to meet the needs
of those areas, (v) the extent to which the institution provides community
development services, and (vi) the innovativeness and responsiveness of
community development services provided.

An independent financial institution with assets of less than $250
million, or a financial institution with assets of less than $250 million that
is a subsidiary of a holding company with assets of less than $1 billion, will
be evaluated under a streamlined assessment method based primarily on its
lending record.  The streamlined test considers an institution's loan-to-
deposit ratio adjusted for seasonal variation and special lending activities,
its percentage of loans and other lending related activities in the assessment
area, its record of lending to borrowers of different income levels and
businesses and farms of different sizes, the geographic distribution of its
loans, and its record of taking action, if warranted, in response to written
complaints.  In lieu of being evaluated under the three assessment tests or
the streamlined test, a financial institution can adopt a "strategic plan" and
elect to be evaluated on the basis of achieving the goals and benchmarks
outlined in the strategic plan.

Transactions with Related Parties.  First Federal's authority to
engage in transactions with related parties or "affiliates," (i.e., any
company that controls or is under common control with an association)
including the Corporation and its non-savings-association subsidiaries or to
make loans to certain insiders, is limited by Sections 23A and 23B of the
                               -Page 34-
Federal Reserve Act ("FRA").  Subsidiaries of a savings association are
generally exempted from the definition of "affiliate."  Section 23A limits the
aggregate amount of transactions with any individual affiliate to 10 percent
of the capital and surplus of the savings association and also limits the
aggregate amount of transactions with all affiliates to 20 percent of the
savings association's capital and surplus.  Certain transactions with
affiliates are required to be secured by collateral in an amount and of a type
described in the FRA and the purchase of low quality assets from affiliates is
generally prohibited.  Section 23B provides that certain transactions with
affiliates, including loans and asset purchases, must be on terms and under
circumstances, including credit standards, that are substantially the same or
at least as favorable to the association as those prevailing at the time for
comparable transactions with non-affiliated companies.  In the absence of
comparable transactions, such transactions may only occur under terms and
circumstances, including credit standards, that in good faith would be offered
to or would apply to non-affiliated companies.  Notwithstanding Sections 23A
and 23B, FIRREA prohibits any savings association from lending to any
affiliate that is engaged in activities that are not permissible for bank
holding companies under Section 4(c) of the Bank Holding Company Act ("BHC
Act").  Further, no savings association may purchase the securities of any
affiliate other than a subsidiary.

First Federal's authority to extend credit to executive officers,
directors and 10 percent shareholders, as well as such entities such persons
control are currently governed by Section 22(g) and 22(h) of the FRA and
Regulation O promulgated by the Federal Reserve Board.  Among other things,
these regulations require such loans to be made on terms substantially similar
to those offered to unaffiliated individuals, place limits on the amount of
loans the Savings Bank may make to such persons based, in part, on the Savings
Bank's capital position, and require certain approval procedures to be
followed.  OTS regulations, with the exception of minor variations, apply
Regulation O to savings associations.

Prompt Corrective Regulatory Action.  FDICIA establishes a system
of prompt corrective action to resolve the problems of undercapitalized
associations.  Under this system, the OTS is required to take certain
supervisory actions against undercapitalized associations, the severity of
which depends upon the association's degree of undercapitalization.
Generally, subject to a narrow exception, FDICIA requires the OTS to appoint a
receiver or conservator for an association that is critically
undercapitalized.  FDICIA authorizes the OTS to specify the ratio of tangible
equity to assets at which an association becomes critically undercapitalized
and requires that ratio be no less than 2 percent of assets.

Under OTS regulations,  a savings association is considered to be
undercapitalized if it has risk-based capital of less than 8 percent or has a
Tier 1 risk-based capital ratio that is less than 4 percent or has a leverage
ratio that is less than 4 percent or has a leverage ratio less than 3 percent
if the savings association is rated composite 1 under the CAMEL rating system
in the most recent examination of the association.  A savings association that
has risk-based capital less than 6 percent or a Tier 1 risk-based capital
ratio that is less than 3 percent or a leverage ratio that is less than 3
percent would be considered to be "significantly undercapitalized."  A savings
association that has a tangible equity to total assets ratio equal to or less
than 2 percent would be deemed to be "critically undercapitalized."
Generally, a capital restoration plan must be filed with the OTS within 45
days of the date an association receives notice that it is undercapitalized,
significantly undercapitalized or critically undercapitalized.  In addition,
                                  -Page 35-
numerous mandatory supervisory actions become immediately applicable to the
association, including, but not limited to, restrictions on growth, investment
activities, capital distributions, and affiliate transactions.  In addition,
the OTS could issue a capital directive to the savings association that
includes additional discretionary restrictions on the savings association.

Real Estate Lending Standards.  The OTS and the other federal
banking agencies have uniform regulations prescribing real estate lending
standards.  The OTS regulation requires each savings association to establish
and maintain written internal real estate lending standards consistent with
safe and sound banking practices and appropriate to the size of the
institution and the nature and scope of its real estate lending activities.
The policy must also be consistent with accompanying OTS guidelines, which
include maximum loan-to-value ratios for the following types of real estate
loans: raw land (65 percent), land development (75 percent), nonresidential
construction (80 percent), improved property (85 percent) and one- to four-
family residential construction (85 percent).  Owner-occupied one- to four-
family mortgage loans and home equity loans do not have maximum loan-to-value
ratio limits, but those with a loan-to-value ratio at origination of 90
percent or greater are to be backed by private mortgage insurance or readily
marketable collateral.  Institutions are also permitted to make a limited
amount of loans that do not conform to the proposed loan-to-value limitations
so long as such exceptions are appropriately reviewed and justified.  The
guidelines also list a number of lending situations in which exceptions to the
loan-to-value standard are justified.

Standards for Safety and Soundness.  As required by FDICIA and
subsequently amended by the Riegle Community Development and Regulatory
Improvement Act of 1994, the federal banking regulators adopted interagency
guidelines establishing standards for safety and soundness for depository
institutions on matters such as internal controls, loan documentation, credit
underwriting, interest-rate risk exposure, asset growth, compensation and
other benefits and asset quality and earnings (the "Guidelines").  The
agencies expect to request a compliance plan from an institution whose failure
to meet one or more of the standards is of such severity that it could
threaten the safe and sound operation of the institution.  FDIC regulations
enacted under FDICIA also require all depository institutions to be examined
annually by the banking regulators (but see, 'Regulatory Relief for Thrifts
and Banks') and depository institutions having $500 million or more in total
assets to have an annual independent audit, an audit committee comprised
solely of outside directors, and to hire outside auditors to evaluate the
institution's internal control structure and procedures and compliance with
laws and regulations relating to safety and soundness.  The FDIC, in adopting
the regulations, reiterated its belief that every depository institution,
regardless of size, should have an annual independent audit and an independent
audit committee.

Financial Management Requirements.  FDICIA imposes new financial
reporting requirements on all depository institutions with assets of more than
$500 million, their management, and their independent auditors.  It also
establishes new rules for the composition, duties and authority of such
institutions' audit committees and boards of directors.  Among other things,
all such depository institutions will be required to prepare and make
available to the public annual reports on their financial condition and
management (including statements of managements' responsibility for the
financial statements, internal controls and compliance with certain federal
banking laws and regulations relating to safety and soundness, and an
assessment by management of the effectiveness of the institution's internal
                                 -Page 36-
controls and procedures and the institution's compliance with such laws and
regulations).  The institution's independent public accountants are required
to attest to these management assessments. Each such institution is also
required to have an audit committee composed of independent directors.

Federal Reserve System

The Federal Reserve Board regulations require savings institutions
to maintain non-interest-earning reserves against their transaction accounts
(primarily NOW and regular checking accounts), non-personal time deposits
(those which are transferable or held by a person other than a natural person)
with an original maturity of less than one and one-half years and certain
money market accounts.  The Federal Reserve Board regulations generally
require that reserves of 3% must be maintained against aggregate transaction
accounts of $52 million or less (subject to adjustment by the Federal Reserve
Board) and an initial reserve of $1.6 million plus 10 percent (subject to
adjustment by the Federal Reserve Board between 8 percent and 14 percent)
against that portion of total transaction accounts in excess of $52 million.
The first $4.3 million of otherwise reservable balances (subject to
adjustments by the Federal Reserve Board) are exempted from the reserve
requirements. First Federal is in compliance with the foregoing requirements.

The balances maintained to meet the reserve requirements imposed
by the Federal Reserve Board may be used to satisfy liquidity requirements by
the OTS.  Because required reserves must be maintained in the form of either
vault cash, a non-interest-bearing account at a Federal Reserve Bank or a
pass-through account as defined by the Federal Reserve Board, the effect of
this reserve requirement is to reduce the Savings Bank's interest-earning
assets.

FHLB System members are also authorized to borrow from the Federal
Reserve "discount window," but Federal Reserve Board regulations require
institutions to exhaust all FHLB sources before borrowing from a Federal
Reserve Bank.

Holding Company Regulation

Eagle is considered a non-diversified, savings and loan holding
company within the meaning of the HOLA, has registered as a savings and loan
holding company with the OTS and is subject to OTS regulations, examinations,
supervision and reporting requirements.  In addition, the OTS has enforcement
authority over the Corporation and its non-savings association subsidiaries.
Among other things, this authority permits the OTS to restrict or prohibit
activities that are determined to be a serious risk to the subsidiary savings
association.

The HOLA prohibits a savings and loan holding company, directly or
indirectly, or through one or more subsidiaries, from (i) acquiring control
of, or acquiring by merger or purchase of assets, another savings association
or holding company thereof, without prior written approval of the OTS; (ii)
acquiring or retaining, with certain exceptions, more than 5 percent of a non-
subsidiary savings association, a non-subsidiary holding company, or a non-
subsidiary company engaged in activities other than those permitted by the
HOLA; or (iii) acquiring or retaining control of an institution that is not
federally insured.  In evaluating applications by holding companies to acquire
savings associations, the OTS must consider the financial and managerial
resources and future prospects of the company and institution involved, the
effect of the acquisition on the risk to the insurance funds, the convenience
                                  -Page 37-
and needs of the community and competitive factors.

As a unitary savings and loan holding company, Eagle generally is
not restricted under existing laws as to the types of business activities in
which it may engage, provided that its savings association subsidiary
continues to satisfy the QTL test. Upon any acquisition by Eagle of another
SAIF-insured institution (other than the Corporation), a federal savings bank
insured by the BIF, or a state-chartered BIF-insured savings bank meeting the
QTL test that is deemed to be a savings institution by OTS, except for a
supervisory acquisition, Eagle would become a multiple savings and loan
holding company (if the acquired institution is held as a separate subsidiary)
and would be subject to extensive limitations on the types of business
activities in which it could engage.  The HOLA, as amended by the FIRREA,
limits the activities of a multiple savings and loan holding company and its
non-insured institution subsidiaries primarily to activities permissible for
bank holding companies under Section 4(c)(8) of the BHC Act, subject to the
prior approval of the OTS, and activities in which multiple savings and loan
holding companies were authorized by regulation to engage in on March 5, 1987.
Such activities include mortgage banking, consumer finance, operation of a
trust company, and certain types of securities brokerage.  The services and
activities in which multiple holding companies were authorized to engage in on
March 5, 1987 generally correspond to the activities which are permitted for
service corporations of federally-chartered savings institutions.

Item 2.  PROPERTIES

     The Company conducts its business through three full-service offices.
The main office is located at 301 Fairway Drive, Bloomington, Illinois.  All
offices are owned in fee and are unencumbered.  The Company believes that its
current facilities are adequate to meet its present and foreseeable needs.
<TABLE>
                                              Date         Net Book Value
Office                                      Acquired      December 31, 1996
                                                           (in thousands)
<S>                                         <C>              <C>
Main Office
  301 Fairway Drive
  Bloomington, Illinois 61701                 1981             1,183
Veterans Parkway Branch
  1111 South Veterans Parkway
  Bloomington, Illinois  61701                1994             1,404
LeRoy Branch
  207 South East Street
  LeRoy, Illinois 61752                       1983               249
</TABLE>
Item 3.  LEGAL PROCEEDINGS

     The Company is, from time to time, party to legal proceedings arising in
the normal course of its business, including legal proceedings to enforce its
rights against borrowers.  The Company is not currently party to any legal
proceedings which could reasonably be expected to have a material adverse
effect on the financial condition or operations of the Company.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders through a
solicitation of proxies or otherwise in the quarter ended December 31, 1996.
                                   -Page 38-
                                     PART II

Item 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

     The information called for by this item is incorporated by reference to
'Common Stock - Market Information' on page 29 of the Corporation's
Annual Report to Stockholders for the year ended December 31, 1996.

Item 6.  SELECTED FINANCIAL DATA

     The information called for by this item is incorporated by reference to
'Selected Financial Highlights' on page 1 of the Corporation's Annual Report
to Stockholders for the year ended December 31, 1996.

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     The information called for by this item is incorporated by reference to
'Managament's Discussion and Analysis' on pages 2 through 7 of the
Corporation's Annual Report to Stockholders for the year ended December 31,
1996.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following financial statements of the Corporation and its
subsidiaries included in the Corporations's Annual Report to Stockholders for
the year ended December 31, 1996 are incorporated herein by reference.

                                                             1996 Annual
                                                            Report Page(s)

Report of Independent Auditors                                    8

Consolidated Statements of Condition as of
     December 31, 1996 and 1995                                   9

Consolidated Statements of Income for the Years
     Ended December 31, 1996, 1995 and 1994                      10

Consolidated Statements of Cash Flows for the Years
     Ended December 31, 1996, 1995 and 1994                      11

Consolidated Statements of Changes in Stockholders' Equity
     For the Years Ended December 31, 1996, 1995 and 1994        12

Notes to Consolidated Financial Statements                      12-28

Note 12 of Notes to Consolidated Financial Statements titled 'Quarterly
Financial Information' on pages 25 and 26 of the Corporation's 1996 Annual
Report to Stockholders for the year ended December 31, 1996 is incorporated
herein by reference.

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.
                                -Page 39-
                                   PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

     Listed below is the executive officer of Eagle, who was appointed on
January 24, 1996 when Eagle was incorporated.  Commencing with the annual
meeting on April 16, 1997, executive officer(s) will be elected annually.
There are no arrangements or understandings between the person so named and
any other person pursuant to which such person was appointed an executive
officer.

  Donald L. Fernandes, age 39, President, Chief Executive Officer and Director
of Eagle.  President, Chief Executive officer and Director of First Federal
since August, 1995.  Senior Vice President and Chief Financial Officer of
First Federal, prior thereto.

     The information called for by this item with respect to directors and
director nominees for election to the Board of Directors is presented in
Eagle's Notice and Proxy Statement dated March 27, 1997 on pages 3 and 4 under
the caption 'Proposal 1 - Election of Directors' and is incorporated herein by
reference.

Item 11.  EXECUTIVE COMPENSATION

     The information called for by this item is presented in Eagle's Notice
and Proxy Statement dated March 27, 1997 on pages 5 through 9 under the
caption 'Executive Compensation' and is incorporated herein by reference.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information called for by this item is presented in Eagle's Notice
and Proxy Statement dated March 27, 1997 on pages 1 through 3 under the
caption 'Voting Securities and Principal Holders Therof' and is incorporated
herein by reference.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None.

                                PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a) The following documents are filed as part of this report:

          1. Financial Statements - The financial statements required by this
     item are included under Item 8. of Part II of this document.

          2. Financial Statement Schedules - The financial statement schedules
     required by this item are either not applicable or are included in the
     financial statements.

          3. Exhibits - The exhibits listed on the Exhibit Index beginning on
     page 42 of this Form 10-K are filed herewith or are incorporated herein
     by reference to other Filings.

     (b) Reports on Form 8-K:

          No reports on Form 8-K were filed during the quarter ended December
     31, 1996.
                                  -Page 40-
                                   SIGNATURES

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

                                             EAGLE BANCGROUP, INC


               Date:  March 27, 1997         By: /s/ Donald L. Fernandes
                                             ---------------------------
                                             DONALD L. FERNANDES,
                                             President and Chief
                                             Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature                     Title                         Date

                              President, Chief Executive
/s/ Donald L. Fernandes       Officer and Director          March 27, 1997
-------------------------
  DONALD L. FERNANDES
                              Chief Financial Officer and
/s/ Larry C. McClellan        Principal Accounting Officer  March 27, 1997
-------------------------
  LARRY C. MCCLELLAN

/s/ Gerald A. Bradley         Chairman of the Board         March 27, 1997
---------------------
  GERALD A. BRADLEY

/s/ Robert P. Dole            Director                      March 27, 1997
---------------------
  ROBERT P. DOLE

/s/ William J. Hanfland       Director                      March 27, 1997
-----------------------
  WILLIAM J. HANFLAND

/s/ Louis F. Ulbrich          Director                      March 27, 1997
--------------------
  LOUIS F. ULBRICH

/s/ Steven J. Wannamacher     Director                      March 27, 1997
-------------------------
  STEVEN J. WANNEMACHER

<TABLE>
                              EXHIBIT INDEX

Item                      Exhibit                                      Page
<S>                      <C>                                          <C>
2. Plan of acquisition,   2.1  Amended Plan of Conversion of First
reorganization,                Federal Savings and Loan Association
arrangement,                   of Bloomington  <F1>
liquidation or
succession

3. Articles of            3.1  Certificate on Incorporation of
Incorporation and              Registrant as filed in Delaware on
Bylaws                         January 24, 1996 <F1>

                          3.2  Bylaws of Registrant as adopted by the
                               Board of Directors of Registrant on
                               January 25, 1996 <F1>

4. Instruments defining   4.1  Specimen Stock Certificate of
the rights of holders,         Registrant <F1>
including indentures
                          4.2  Articles IV, V, VI, VII, XI, XII, XIII,
                               XIV, XVI, and XVII of the Registrant's
                               Certificate of Incorporation (See
                               Exhibit 3.1)

                          4.3  Articles II, III, IV, VIII and XI of
                               the Registrant's Bylaws (See
                               Exhibit 3.2)

10. Material contracts   10.1  First Federal Savings and Loan
                               Association of Bloomington Employee
                               Stock Ownership Plan <F1>

                         10.2  Credit Agreement between Registrant
                               and First Federal Savings and Loan
                               Association of Bloomington Employee
                               Stock Ownership Plan <F1>

                         10.3  Eagle BancGroup, Inc. 1996 Stock
                               Option and Incentive Plan <F2>

                         10.4  Eagle BancGroup, Inc. Management
                               Development and Recognition Plan
                               and Trust Agreement <F2>

                         10.5  Deferred Compensation Agreement,
                               dated as of September 22, 1992,
                               between First Federal Savings and
                               Loan Association of Bloomington
                               and Donald L. Fernandes <F1>

                         10.6  Release and Settlement Agreement,
                               dated as of July 18, 1995, between
                               First Federal Savings and Loan
                               Association of Bloomington and
                               Jon C. Thetard <F1>

                         10.7  Employment Agreement, dated as of
                               June 29, 1996, among Eagle
                               BancGroup, Inc., First Federal Savings
                               and Loan Association of Bloomington
                               and Donald L. Fernandes                    44

                         10.8  Employment Security Agreement, dated
                               as of July 1, 1996, between the
                               Registrant and Larry C. McClellan          53

                         10.9  Employment Security Agreement, dated
                               as of July 5, 1996, between the
                               Registrant and Laurel B. Donovan           57

                        10.10  Employment Security Agreement, dated
                               as of July 8, 1996, between the
                               Registrant and Gary L. Richardson          62

13. Annual report to     13.1  1996 Annual Report to
security holders               Stockholders                               67

21. Subsidiaries of      21.1  List of subsidiaries of the
the registrant                 Registrant                                100

23. Consent of experts   23.1  Consent of Ernst & Young LLP              101
and counsel

27. Fiancial data        27.1  Financial data schedule
schedule

99. Additional exhibits  99.1  Notice and Proxy Statement dated
                               March 27, 1997 <F3>
<FN>
<F1>
 Incorporated by reference to Exhibits filed with the Registration
Statement on Form S-1, Registration No. 333-2474

<F2>
 Incorporated by reference to Notice and Proxy Statement for Special
Meeting of Stockholders dated January 10, 1997, filed January 9, 1997

<F3>
 Incorporated by reference to Notice and Proxy Statement dated March 27,
1997, filed March 27, 1997
</FN>
</TABLE>
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