SECURITIES AND
EXCHANGE COMMISSION Washington, D.C.  20549 FORM 10-K |X|

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For
the Fiscal Year Ended December 31, 2003  OR |_|

TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For
the transition period from ______________ to ______________ .  Commission File Number
0-23063 FIRST SECURITYFED
FINANCIAL, INC.(Exact Name of Registrant as Specified in
its Charter) Delaware
     
     36-4177515(State or Other Jurisdiction of Incorporation or Organization)
     (I.R.S. Employer Identification Number)936 North Western Avenue, Chicago, Illinois
     60622(Address of Principal Executive Offices)
     Zip Code Registrants telephone number,
including area code: (773) 772-4500 Securities Registered Pursuant to
Section 12(b) of the Act:None Securities Registered Pursuant to
Section 12(g) of the Act: Common Stock,
par value $.01 per share(Title
of Class) Indicate by check mark whether the
Registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been subject
to such requirements for the past 90 days. YES |X|   NO  |_| Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K (ss.229.405 of this chapter)
is not contained herein, and will not be contained, to the best of 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. |_| Indicate by check mark whether the
registrant is an accelerated filer (as defined by Rule 12b-2 of the act). YES |_| NO |X| The aggregate market value of the
voting stock held by non-affiliates of the Registrant, computed by reference to the
closing price of such stock on June 30, 2003 was $58.8 million. (The exclusion from such
amount of the market value of the shares owned by any person shall not be deemed an
admission by the Registrant that such person is an affiliate of the Registrant.) As of March 23, 2004, the Registrant
had 4,043,565 shares of Common Stock issued and outstanding. DOCUMENTS INCORPORATED
BY REFERENCE PART II of Form 10-K - Annual Report
to Stockholders for the fiscal year ended December 31, 2003. PART III of Form 10-K -
Proxy Statement for 2004 Annual Meeting of Stockholders.       FORWARD-LOOKING STATEMENTS First
SecurityFed Financial, Inc. (First SecurityFed or the Company),
and its wholly owned subsidiary, First Security Federal First Savings Bank (First
Security or the Bank), may from time to time make written or oral
forward-looking statements, including statements contained in its filings with
the Securities and Exchange Commission (SEC).  These forward-looking
statements may be included in this Annual Report on Form 10-K and the exhibits attached to
it, in First SecurityFeds reports to shareholders and in other communications, which
are made in good faith by us pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements include statements about our beliefs, plans, objectives, goals,
expectations, anticipations, estimates and intentions, that are subject to significant
risks and uncertainties, and are subject to change based on various factors, some of which
are beyond our control.  The words may, could,
should, would, believe, anticipate,
estimate, expect, intend, plan and similar
expressions are intended to identify forward-looking statements. The following factors,
among others, could cause our financial performance to differ materially from the plans,
objectives, expectations, estimates and intentions expressed in the forward-looking
statements: the strength of the United States economy in general and the strength of the local economies in
which we conduct operations;

the effects of, and changes in, trade, monetary and fiscal policies and laws, including
interest rate policies of the Federal Reserve Board;

inflation, interest rate, market and monetary fluctuations;

the timely development of and acceptance of our new products and services and the
perceived overall value of these products and services by users, including the features,
pricing and quality compared to competitors products and services;

the willingness of users to substitute our products and services for products and services of
our competitors;

our success in gaining regulatory approval of our products and services, when required;

the impact of changes in financial services' laws and regulations (including laws concerning
taxes, banking, securities and insurance);

the impact of technological changes;

changes in consumer spending and saving habits; and

competition from other financial services companies;

prevailing real estate values in our market area

our success at managing the risks involved in the foregoing. The list of
important factors stated above is not exclusive.  We do not undertake to update any
forward-looking statement, whether written or oral, that may be made from time to time by
or on behalf of First SecurityFed or First Security. i  PART I Item 1.  Business General First
SecurityFed is a Delaware corporation that was formed in 1997 by the Bank for the purpose
of becoming a savings and loan holding company.  The Company owns all of the
outstanding capital stock of the Bank. As a
community-oriented financial institution, First Security seeks to serve the financial
needs of communities in its ethnically diverse market area.  We have achieved a
significant penetration in our market area by engaging in substantial community service
activities and targeting marketing initiatives focused on groups including ethnic
communities within our market area. Our business
involves attracting deposits from the general public and using such deposits, together
with other funds, to originate primarily one- to four-family residential mortgage loans
and, to a lesser extent, multi-family and commercial real estate, construction, consumer
and other loans in our market area. We also invest in mortgage-backed and other securities
and other permissible investments. The Bank
offers a variety of accounts having a range of interest rates and terms.  Our
deposits include passbook and NOW accounts, money market accounts and certificate accounts
with terms of three months to five years.  We solicit deposits only in our primary
market area and do not accept brokered deposits. Market Area Our main
office is located in Chicago, Illinois and our branch offices are located in Chicago,
Illinois, Philadelphia, Pennsylvania and Palatine, Illinois. Our Western
Avenue office is located on the near northwest side of Chicago in the Ukrainian
Village community, a middle-income community where the Bank has focused its
operations since 1964.  This community is located approximately two and one half
miles to the northwest of downtown Chicago and approximately three miles west of Lake
Michigan.  The majority of the communitys many businesses are small and local
companies.  Residences within the community consist primarily of two- to four-family
flats and single family homes although there are also mid-size apartment buildings. 
Real estate values within this community have risen sharply over the last ten years as
gentrification has occurred in much of this community due in part to its
proximity to downtown Chicago. Our Milwaukee
Avenue office was opened in 1993 and is located in the Norwood Park
neighborhood of Chicago.  This community is a stable middle income area which also
has many residents of Eastern European descent.  Residences within the community
consist primarily of single family homes as well as two and three flats and small
apartment buildings.  This area is located approximately eight miles northwest of
downtown Chicago. Our
Philadelphia branch was acquired in 1994 through a purchase from the Resolution Trust
Corporation.  The branch is located in a moderate income neighborhood of Philadelphia
known as Rhawnhurst.  The community is home to many persons of Eastern
European heritage, including new immigrants.  Residences within the community consist
primarily of single family row houses and, to a lesser extent, small apartment buildings. Our northwest
suburban Chicago branch was opened in 1977 in Rolling Meadows, Illinois, and in December
2002 relocated to a new facility in nearby Palatine, Illinois.  Over the last 20
years, the northwest suburban area of Chicago has experienced significant population and
commercial growth.  However, as a result of competition, the branchs deposit
and loan growth has been modest. In December 2002, the Bank completed the remodeling of a
building in Palatine, Illinois for its relocated northwest suburban office. The remodeled
office is located in very close proximity to the Banks Rolling Meadows branch, but
is a larger facility located on one acre of land enabling the Bank to offer drive-up
lanes, 24-hour ATM service and a night depository. The new branch was opened to service
the public in January 2003 and the Rolling Meadows facility was closed at that time. Lending Activities General.Our principal lending activity is originating for our
          portfolio fixed and, to a much lesser extent, adjustable rate (ARM)
          mortgage loans secured by one- to four-family residences located primarily in
          our market area.  First 1  Security also originates and has recently increased
          its emphasis on multi-family and commercial real estate, construction, home
          equity, consumer and other loans in its market area. At December 31, 2003, our
          net loans receivable totaled $304.0 million.  See - Originations
          of Loans. The following
table sets forth the composition of the Banks loan portfolio in dollar amounts and
in percentages as of the dates indicated. December 31,2003
     2002
     2001
     2000
     1999Amount
     Percent
     Amount
     Percent
     Amount
     Percent
     Amount
     Percent
     Amount
     Percent(Dollars in thousands)Real Estate Loans:One- to four-family
    
    
    $
    169,139
    
    
    51.63
    %
    $
    188,449
    
    
    59.46
    %
    $
    207,067
    
    
    68.60
    %
    $
    212,863
    
    
    75.32
    %
    $
    200,201
    
    
    80.58
    %Construction
    
    
    
    65,510
    
    
    20.00
    
    
    32,486
    
    
    10.25
    
    
    23,371
    
    
    7.74
    
    
    11,745
    
    
    4.16
    
    
    3,800
    
    
    1.53Multi-family
    
    
    
    24,156
    
    
    7.37
    
    
    33,464
    
    
    10.56
    
    
    28,659
    
    
    9.50
    
    
    19,272
    
    
    6.82
    
    
    13,389
    
    
    5.39Commercial
    
    
    
    46,397
    
    
    14.16
    
    
    40,745
    
    
    12.85
    
    
    24,546
    
    
    8.13
    
    
    20,845
    
    
    7.38
    
    
    15,304
    
    
    6.16Mixed use
      (1)
    
    
    
    9,020
    
    
    2.75
    
    
    11,463
    
    
    3.62
    
    
    7,931
    
    
    2.63
    
    
    8,972
    
    
    3.17
    
    
    9,084
    
    
    3.65Total real
      estate   loans
    
    
    
    314,222
    
    
    95.91
    
    
    306,607
    
    
    96.74
    
    
    291,574
    
    
    96.60
    
    
    273,697
    
    
    96.85
    
    
    241,778
    
    
    97.31Consumer loans:Share loans
    
    
    
    2,130
    
    
    0.65
    
    
    1,135
    
    
    0.36
    
    
    1,004
    
    
    0.33
    
    
    1,368
    
    
    0.48
    
    
    1,164
    
    
    0.47Automobile
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    0.01Home equity
    
    
    
    10,769
    
    
    3.29
    
    
    8,704
    
    
    2.75
    
    
    8,847
    
    
    2.93
    
    
    7,147
    
    
    2.53
    
    
    5,103
    
    
    2.05Other
    
    
    
    504
    
    
    0.15
    
    
    482
    
    
    0.15
    
    
    398
    
    
    0.14
    
    
    383
    
    
    0.14
    
    
    402
    
    
    0.16Total consumer   loans
    
    
    
    13,403
    
    
    4.09
    
    
    10,321
    
    
    3.26
    
    
    10,249
    
    
    3.40
    
    
    8,898
    
    
    3.15
    
    
    6,672
    
    
    2.69Total loans
    
    
    
    327,625
    
    
    100.00
    %
    
    316,928
    
    
    100.00
    %
    
    301,823
    
    
    100.0
    %
    
    282,595
    
    
    100.00
    %
    
    248,450
    
    
    100.00
    %Less:Construction loans   in
      process
    
    
    
    18,380
    
    
    
    
    
    10,227
    
    
    
    
    
    9,576
    
    
    
    
    
    2,777
    
    
    
    
    
    3,467Deferred
      fees and   discounts
    
    
    
    2,236
    
    
    
    
    
    2,122
    
    
    
    
    
    1,991
    
    
    
    
    
    1,803
    
    
    
    
    
    1,500Allowance for   losses
    
    
    
    3,032
    
    
    
    
    
    2,937
    
    
    
    
    
    2,806
    
    
    
    
    
    2,561
    
    
    
    
    
    2,315Total loans   receivable,
      net
    
    
    $
    303,977
    
    
    
    
    $
    301,642
    
    
    
    
    $
    287,450
    
    
    
    
    $
    275,454
    
    
    
    
    $
    241,168 _________________(1)    
          Mixed use refers to real estate on which the borrower both resides and conducts
          a business.  2  The following
table shows the composition of the Banks loan portfolio by fixed- and
adjustable-rate at the dates indicated. December 31,2003
     2002
     2001
     2000
     1999Amount
     Percent
     Amount
     Percent
     Amount
     Percent
     Amount
     Percent
     Amount
     Percent(Dollars in thousands)Fixed-Rate Loans:One- to     four-family
    
    
    $
    161,977
    
    
    49.44
    %
    $
    183,393
    
    
    57.86
    %
    $
    202,753
    
    
    67.18
    %
    $
    204,971
    
    
    72.53
    %
    $
    193,552
    
    
    77.90
    %Multi-family
    
    
    
    22,188
    
    
    6.77
    
    
    33,464
    
    
    10.56
    
    
    28,659
    
    
    9.50
    
    
    19,272
    
    
    6.82
    
    
    13,389
    
    
    5.39Commercial
    
    
    
    20,938
    
    
    6.39
    
    
    22,910
    
    
    7.23
    
    
    16,615
    
    
    5.50
    
    
    15,740
    
    
    5.57
    
    
    12,668
    
    
    5.10Mixed
      use(1)
    
    
    
    9,021
    
    
    2.75
    
    
    11,463
    
    
    3.62
    
    
    7,931
    
    
    2.63
    
    
    8,972
    
    
    3.17
    
    
    9,084
    
    
    3.66Consumer
    
    
    
    2,634
    
    
    0.80
    
    
    1,617
    
    
    0.51
    
    
    1,402
    
    
    0.46
    
    
    1,751
    
    
    0.62
    
    
    1,569
    
    
    0.63Total fixed-rate      loans
    
    
    
    216,758
    
    
    66.16
    
    
    252,847
    
    
    79.78
    
    
    257,360
    
    
    85.27
    
    
    250,706
    
    
    88.71
    
    
    230,262
    
    
    92.68Adjustable-Rate   LoansOne-to-four-family
    
    
    
    7,162
    
    
    2.19
    
    
    5,056
    
    
    1.60
    
    
    4,314
    
    
    1.43
    
    
    7,892
    
    
    2.79
    
    
    6,649
    
    
    2.68Multi-family
    
    
    
    1,968
    
    
    0.60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial
    
    
    
    25,458
    
    
    7.77
    
    
    17,835
    
    
    5.62
    
    
    7,931
    
    
    2.63
    
    
    5,105
    
    
    1.81
    
    
    2,636
    
    
    1.06Construction
    
    
    
    65,510
    
    
    20.00
    
    
    32,486
    
    
    10.25
    
    
    23,371
    
    
    7.74
    
    
    11,745
    
    
    4.16
    
    
    3,800
    
    
    1.53Home
      Equity
    
    
    
    10,769
    
    
    3.29
    
    
    8,704
    
    
    2.75
    
    
    8,847
    
    
    2.93
    
    
    7,147
    
    
    2.53
    
    
    5,103
    
    
    2.05Total adjustable-      rate
      loans
    
    
    
    110,867
    
    
    33.84
    
    
    64,081
    
    
    20.22
    
    
    44,463
    
    
    14.73
    
    
    31,889
    
    
    11.29
    
    
    18,188
    
    
    7.32Total
      loans
    
    
    
    327,625
    
    
    100.00
    %
    
    316,928
    
    
    100.00
    %
    
    301,823
    
    
    100.00
    %
    
    282,595
    
    
    100.00
    %
    
    248,450
    
    
    100.00
    %Less:Construction
      loans   in process
    
    
    
    18,380
    
    
    
    
    
    10,227
    
    
    
    
    
    9,576
    
    
    
    
    
    2,777
    
    
    
    
    
    3,467Deferred fees and   discounts
    
    
    
    2,236
    
    
    
    
    
    2,126
    
    
    
    
    
    1,991
    
    
    
    
    
    1,803
    
    
    
    
    
    1,500Allowance for   losses
    
    
    
    3,032
    
    
    
    
    
    2,932
    
    
    
    
    
    2,806
    
    
    
    
    
    2,561
    
    
    
    
    
    2,315Total loans   receivable,
      net
    
    
    $
    303,977
    
    
    
    
    $
    301,642
    
    
    
    
    $
    287,450
    
    
    
    
    $
    275,454
    
    
    
    
    $
    241,168 _______________(1)    
          Mixed use refers to real estate on which the borrower both resides and conducts
          a business. The following
schedule illustrates the interest rate sensitivity of the Banks loan portfolio at
December 31, 2003.  Mortgages that have adjustable or renegotiable interest rates are
shown as maturing in the period during which the final payment is due.  The schedule
does not reflect the effects of possible prepayments or enforcement of due-on-sale
clauses. One- to four-family
Residential
     Multi-family,
Construction and
Commercial Real
Estate
     Consumer
     TotalDue During
Years EndingDecember 31,
     Amount
     Weighted
Average
Rate
     Amount
     Weighted
Average
Rate
     Amount
     Weighted
Average
Rate
     Amount
     Weighted
Average
Rate(Dollars in thousands)2004
     
     
     $3,814
        
     7.89
        %
     $76,711
        
     6.25
        %
     $981
        
     4.29
        %
     $81,506
        
     6.28
        %2005 to 2006
     11,040
        
     6.33
        
     21,354
        
     8.07
        
     828
        
     4.69
        
     33,222
        
     7.262007 and 2008
     28,806
        
     5.90
        
     28,337
        
     7.31
        
     825
        
     4.88
        
     57,968
        
     6.632009 to 2013
     16,312
        
     6.61
        
     2,594
        
     8.25
        
     
        
     
        
     18,906
        
     6.832014 to 2023
     44,457
        
     6.19
        
     9,331
        
     7.20
        
     
        
     
        
     53,788
        
     6.262024 andfollowing
     64,710
        
     6.82
        
     17,525
        
     7.95
        
     
        
     
        
     82,235
        
     6.82Total
     $169,139
        
     6.50
        
     $155,852
        
     6.82
        
     $2,634
        
     4.61
        
     $327,625
        
     6.60 The total
amount of loans due after December 31, 2003 that have predetermined interest rates is
$257.3 million, while the total amount of loans due after such date that have floating or
adjustable interest rates is $16.5 million. Under federal
law, the aggregate amount of loans that we are permitted to make to any one borrower is
generally limited to 15% of unimpaired capital and surplus (25% if the security for such
loan has a readily ascertainable value or 30% for certain residential
development loans).  At December 31, 2003, based on the above, the Banks
regulatory loans-to-one borrower limit was approximately $10.3 million.  On the same
date, the Bank had no borrowers with outstanding balances in excess of this
amount.   As of December 31, 2003, the largest dollar amount 3  outstanding or
committed to be lent to one borrower, or group of related borrowers, was $3.5 million,
secured by two commercial buildings in the metropolitan Chicago area.  At December
31, 2003, this loan was performing in accordance with its terms.  As of the same
date, there were 47 other lending relationships with carrying values in excess of $1.0
million. All of the
Banks lending is subject to its written underwriting standards and to loan
origination procedures.  Decisions on loan applications are made on the basis of
detailed applications and property valuations (consistent with the Banks appraisal
policy). The loan applications are designed primarily to determine the borrowers
ability to repay, and the more significant items on the application are verified through
use of credit reports, financial statements, tax returns or confirmations. All mortgage loans currently originated by First Security are approved by the loan
committee, currently comprised of Directors Babyk, Gawryk and Nadzikewycz and Vice
President Korb, and ratified by the full Board of Directors. The Bank
requires title insurance or other evidence of title on its mortgage loans, as well as fire
and extended coverage casualty insurance in amounts at least equal to the principal amount
of the loan or the value of improvements on the property, depending on the type of
loan.  The Bank also requires flood insurance to protect the property securing its
interest when the property is located in a flood plain. One- to
Four-Family Residential Real Estate Lending.  The cornerstone of our
lending program is the origination of loans secured by mortgages on owner-occupied one- to
four-family residences. Historically, the Bank focused its residential lending activities
on fixed-rate loans with terms of up to 30 years.  In the 1980s, in order to reduce
the average term to repricing of its assets, the Bank began to offer 15-year and 10-year
fixed-rate loans as well as ARMs (although, as a result of customer preference, the ARM
loan volume has been limited).  Substantially all of our one- to four-family
residential mortgage originations are secured by properties located in our market
area.  All mortgage loans currently originated by the Bank are retained and serviced
by it. We currently
offer fixed-rate one-to-four family mortgage loans with maturities from 10 to 30
years.  We also offer fixed-rate balloon products with a 30-year amortization
schedule that are due in five years and which, under certain circumstances, may be
extended for an additional term of up to five years, as applicable.  As of December
31, 2003, we had $8.6 million of fixed rate loans with original terms of 10 years or less
(most of which were three- or five-year balloon loans), $68.9 million of fixed-rate loans
with original terms of 10-15 years and $105.9 million of fixed rate loans with original
terms of more than 15 years.  See  Originations of Loans. We also
originate fixed-rate home equity loans with terms of up to ten years. These loans are
written so that the total balance does not exceed the lesser of $50,000 or 80% of the
appraised value of the security property when combined with the balance of the first
mortgage lien.  At December 31, 2003, we had $2.0 million of home equity loans, all
of which are classified in the tabular data as one- to four-family residential loans. The
Banks ARM loans carry interest rates that adjust at a margin (generally 250 basis
points) over the yield on the One-Year and the Three-Year Average Monthly U.S. Treasury
Constant Maturity Indexes (CMT).   Such loans may carry terms to
maturity of up to 30 years. The ARM loans currently offered by the Bank provide for a cap
on annual interest rate changes of 200 basis points and a lifetime cap generally of 600
basis points over the initial rate.  Initial interest rates offered on our ARM loans
may be approximately 100-150 basis points below the fully indexed rate, although borrowers
are qualified at the fully indexed rate.   As a result, the risk of default on
these loans may increase as interest rates increase. At December 31, 2003, one- to
four-family ARMs totaled $5.1 million or 1.60% of the Banks total loan portfolio. We generally
lend up to 95% of the lesser of the sales price or appraised value of the security
property on owner occupied one- to four-family loans, provided, however, that private
mortgage insurance is obtained in an amount sufficient to reduce our exposure to not more
than 80% of the sales price or appraised value, as applicable.   The
loan-to-value ratio on non-owner occupied, one- to four-family loans is generally 80% of
the lesser of the sales price or appraised value of the security property.  
Non-owner occupied one- to four-family loans may pose a greater risk to the Bank than
traditional owner occupied one- to four-family loans.  In underwriting one- to
four-family residential real estate loans, we currently evaluate the borrowers
ability to make principal, interest and escrow payments, the borrowers credit
history, the value of the property that will secure the loan and debt to income ratios. Residential
loans do not currently include prepayment penalties, are non-assumable and do not produce
negative amortization.  Our underwriting practices do not comply in every way with
those required by most purchasers in the secondary market.  For instance, the Bank,
on occasion, will lend to borrowers that have income/debt service ratios 4  below that
required by many secondary market purchasers.  In such event, we require that the
borrower have other attributes that justify approving a loan, such as a favorable
repayment record with the Bank on previous lending relationships, favorable cash flow, a
low loan to value ratio or other assets that can be used as additional collateral. 
We have found that non-compliance with secondary market standards at the time of
origination does not in and of itself cause credit problems, since the Bank has engaged in
this type of lending for many years and our overall delinquency experience on these loans
has been satisfactory to date.  In addition, these loans, once seasoned, may be
saleable on the secondary market.  Furthermore, we have found that these policies and
procedures help us maintain and improve our customer relations and the Banks
reputation in the communities we serve. While we seek
to originate most of our one- to four-family residential loans in amounts that are less
than or equal to the applicable Federal Home Loan Mortgage Corporation maximum, we do make
one- to four-family residential loans in amounts in excess of such maximum.  Our
delinquency experience on such loans has been similar to our experience on our other
residential loans. Our
residential mortgage loans customarily include due-on-sale clauses giving us the right to
declare the loan immediately due and payable in the event that, among other things, the
borrower sells or otherwise disposes of the property subject to the mortgage and the loan
is not repaid. Multi-family
and Commercial Real Estate Lending.   In order to increase the
yield and interest rate sensitivity of our loan portfolio and complement residential
lending opportunities, we originate permanent multi-family and commercial real estate
loans secured by properties in our primary market area. As a result of the
strong economy in our Chicago market area, increased customer demand and an increased
emphasis on this lending on our part, we have been able to increase substantially our
holdings of these types of loans over the last several years.  At December 31, 2003,
we had multi-family loans totaling $24.2 million, or 7.37% of our total loan portfolio,
and $55.4 million in commercial and mixed use real estate loans, representing 16.91% of
the total loan portfolio. Our
multi-family loan portfolio consists primarily of loans secured by 44 or fewer
units.  Our commercial real estate loans are secured primarily by retail stores,
small office buildings, store/apartment complexes, taverns and store front offices. Our
multi-family real estate loans generally carry a maximum term of five years and have fixed
rates; most of these loans are five-year balloons with a 25-year or more amortization
schedule.  These loans are generally made in amounts of up to 80% of the lesser of
the appraised value or the purchase price of the property.  Most of our commercial
real estate loans are five-year balloon loans with fixed rates of interest. Included in
our commercial real estate loans are lines of credit with outstanding balances of $25.5
million secured by commercial real estate with floating interest rates tied to the prime
rate of interest.  Commercial real estate loans are generally made in amounts up to
75% of the lesser of the appraised value or the purchase price of the property. Appraisals on
properties securing multi-family and commercial real estate loans in excess of $250,000
are performed by an independent appraiser designated by us at the time the loan is
made.  All appraisals on multi-family and commercial real estate loans are reviewed
by the loan committee.  In addition, our underwriting procedures require verification
of the borrowers credit history, income and financial statements, banking
relationships, references and income history and projections for the property.  We
obtain personal guarantees on these loans. At December
31, 2003, our largest multi-family and commercial real estate loan outstanding totaled
$2.2 million and was secured by a 24 unit apartment building located in Chicago,
Illinois.  The loan was performing in accordance with its terms as of that date. Multi-family
and commercial real estate loans may present a higher level of risk than loans secured by
one- to four-family residences.  This greater risk is due to several factors,
including the concentration of principal in a limited number of loans and borrowers, the
effects of general economic conditions on income producing properties and the increased
difficulty of evaluating and monitoring these types of loans. Construction
Lending. We originate construction loans to builders, developers and
individuals to finance development of one- to four-family, multi-family and, to a lesser
extent, small commercial properties. These loans generally carry interest rates that float
with the prime rate of interest and have maturities of one year or less. As a result, they
can be valuable asset/liability management tools. 5  Because of
consumer demand in our Chicago market area and our increase emphasis on construction
lending, we have been able to increase significantly our construction loan activities over
the last several years. A small
portion of the Companys construction loans are made to individuals for the
constructions of their residences. Such loans may be structured to convert to permanent
loans at the end of the construction phase. Most of the Companys other construction
loans do not have prearranged takeout financing at the time of commitment and most of the
underlying projects do not have tenants or buyers at the time of commitment. This can
create a risk that the loan will not be promptly repaid at maturity. The Bank
requires independent appraisals on all construction loans. The maximum loan to value ratio
on construction loans is 80% (75% in the case of commercial properties) and disbursements
are made in increments as construction progresses and instructions warrant. The Bank
requires a personal guarantee from the borrower on its construction loans. The Bank also
makes a limited number of land loans. Such loans are generally limited to 60% of the
lesser appraised value or actual cost. At December
31, 2003, the Banks largest construction loan was $3,000,000 (including undisbursed
amounts.) On the same day, the Bank had 30 construction loans in excess of $750,000
(including undisbursed amounts.) Construction
lending generally affords us the opportunity to receive interest at rates higher than
those obtainable from residential lending and to receive higher origination and other loan
fees. In addition, such loans are generally made for relatively short terms. Nevertheless,
construction lending to persons other than owner-occupants is generally considered to
involve a higher level of credit risk than one- to four-family residential lending due to
the concentration of principal in a limited number of loans and borrowers and the effects
of general economic conditions on construction projects, real estate developers and
managers. In addition, the nature of these loans is such that they are more difficult to
evaluate and monitor. Our risk of loss on a construction loan is dependent largely upon
the accuracy of the initial estimate of the propertys value upon completion of the
project and the estimated cost (including interest) of the project. If the estimate of
value proves to be inaccurate, we may be confronted, at or prior to the maturity of the
loan, with a project with a value which is insufficient to assure full repayment and/or
the possibility of having to make substantial investments to complete and sell the
project. Because defaults in repayment may not occur during the construction period, it
may be difficult to identify problem loans at an early stage. When loan payments become
due, the cash flow from the property may not be adequate to service the debt. In such
cases, we may be required to modify the terms of the loan. As of
December 31, 2003, the Bank had committed $65.5 million to borrowers for construction
loans.  As of this same date, $47.1 million of the committed funds have been
disbursed. We intend to continue our emphasis on construction lending in the future. Consumer
Lending.  Management believes that offering consumer loan products
helps to expand the Banks customer base and to create stronger ties to its existing
customer base. In addition, because consumer loans generally have shorter terms to
maturity and carry higher rates of interest than do residential mortgage loans, they can
be valuable asset/liability management tools.  We originate a variety of different
types of consumer loans, including home equity lines of credit, and deposit account loans
for household and personal purposes.  Due to the tax advantages to the borrower of
home equity lines of credit, we have focused our recent consumer lending activities
primarily on home equity lines of credit.  At December 31, 2003, consumer loans
totaled $13.4 million or 4.09% of total loans outstanding. Consumer loan
terms vary according to the type and value of collateral, length of contract and
creditworthiness of the borrower.  Other than the home equity lines of credit, the
Banks consumer loans are made at fixed interest rates, with terms of up to five
years. Our home
equity lines of credit are written so that the total commitment amount, when combined with
the balance of the first mortgage lien, may not exceed 80% of the appraised value of the
property.  These loans are written with fixed terms of up to five years and carry
interest rates that float with the prime rate of interest.  At December 31, 2003, our
home equity lines of credit totaled $10.8 million outstanding, or 3.29% of our total loan
portfolio. The
underwriting standards we employ for consumer loans include a determination of the
applicants payment history on other debts and ability to meet existing obligations
and payments on the proposed loan.  Although 6  creditworthiness of the applicant is of
primary consideration, the underwriting process also includes a comparison of the value of
the security, if any, in relation to the proposed loan amount. Consumer
loans may entail greater credit risk than do residential mortgage loans, particularly in
the case of consumer loans which are unsecured.  In addition, consumer loan
collections are dependent on the borrowers continuing financial stability, and thus
are more likely to be affected by adverse personal circumstances.  Furthermore, the
application of various federal and state laws, including bankruptcy and insolvency laws,
may limit the amount which can be recovered on such loans. Originations of Loans Real estate
loans are originated by our staff through walk-ins and referrals from existing customers
or real estate agents. Our ability
to originate loans is dependent upon customer demand for loans in our market and to a
lesser extent, customer service and marketing efforts.  Demand is affected by both
the local economy and the interest rate environment.  As a result of the strong real
estate market in our primary market areas and our emphasis on customer service and
community outreach, the Bank has experienced loan growth in recent years.   See
Market Area.  However, as a result of consumer demand, most recent
originations other than construction loans have carried fixed rather than adjustable
interest rates.  Under current policy, all loans we originate are retained in our
portfolio. See One- to Four- Family Residential Lending and
Managements Discussion and Analysis of Financial Condition and Results of
Operations  Asset/Liability Management in the Annual Report attached as
Exhibit 13 hereto. As a
reflection of our emphasis on customer service, we have not sold loans in the
past, but may do so in the future to manage interest rate risk. Servicing of such
loans would be retained by us. The following
table shows the loan origination, purchase and repayment activities of the Bank for the
periods indicated. Year Ended December 31,2003
     2002
     2001(In Thousands)Originations by type:Adjustable rate:- one- to four-family
     $75,352
        
     $4,271
        
     $18,288- multi-family
     16,906
        
     
        
     5,001- commercial
     
        
     21,756
        
     1,250Total adjustable rate
     92,258
        
     26,027
        
     24,539Fixed rate:- one- to four-family
     56,130
        
     58,010
        
     72,718- multi-family
     7,877
        
     14,428
        
     13,460- commercial
     11,164
        
     17,468
        
     10,600- consumer
     2,012
        
     3,479
        
     5,721Total fixed-rate
     77,183
        
     93,385
        
     102,499Total loans originated
     169,441
        
     119,412
        
     127,038Principal repayments
     (166,897
        )
     (104,958
        )
     (114,615
        )Decrease in other items, net
     (209
        )
     (262
        )
     (427
        )Net increase
     $2,335
        
     $14,192
        
     $11,996  7   Delinquencies and
Non-Performing Assets Delinquency
Procedures.When a borrower fails to make a required payment on a loan, we
attempt to cure the delinquency by contacting the borrower.  Generally, our personnel
work with the delinquent borrower on a case by case basis to solve the delinquency. 
Generally, a late notice is sent on all delinquent loans followed by a phone call after
the thirtieth day of delinquency.  Additional written and verbal contacts may be made
with the borrower between 30 and 60 days after the due date.  If the loan is
contractually delinquent for 90 days, we may institute appropriate action to foreclose on
the property.  Generally, after 120 days, foreclosure procedures are initiated. 
If foreclosed, the property is sold at public sale and may be purchased by the Bank. Real estate
we acquire as a result of foreclosure or by deed in lieu of foreclosure is classified as
real estate owned until it is sold.  When property is acquired by foreclosure or deed
in lieu of foreclosure, it is recorded at the lower of cost or fair value less estimated
selling costs.  After acquisition, all costs incurred in maintaining the property are
expensed.  Costs relating to the development and improvement of the property,
however, are capitalized. The following
table sets forth the Banks loan delinquencies by type, by amount and by percentage
of type at December 31, 2003. Loans Delinquent For:
     Total Loans Delinquent60-89 Days
     90 Days and Over
     60 Days or MoreNumber
     Amount
     Percent
of
Loan
Category
     Number
     Amount
     Percent
of
Loan
Category
     Number
     Amount
     Percent of
Loan
Category(Dollars in Thousands)Real Estate:One- to   four-family
     9
        
     $840
        
     0.50
        %
     14
        
     $2,215
        
     1.31
        %
     23
        
     $3,055
        
     1.81
        %Multi-family
     1
        
     89
        
     0.37
        
     1
        
     231
        
     0.96
        
     2
        
     320
        
     1.33Commercial
     3
        
     637
        
     1.37
        
     1
        
     14
        
     0.03
        
     4
        
     651
        
     1.40Mixed Use
     
        
     
        
     
        
     2
        
     285
        
     3.16
        
     2
        
     285
        
     3.16Consumer
     
        
     
        
     
        
     4
        
     4
        
     0.03
        
     4
        
     4
        
     0.03Total
     13
        
     $1,566
        
     0.48
        %
     22
        
     $2,749
        
     0.84
        %
     35
        
     $4,315
        
     1.32
        % Classification
of Assets.  Federal regulations require that each savings institution
classify its own assets on a regular basis.  In addition, in connection with
examinations of savings institutions, Office of Thrift Supervision (OTS) and
Federal Deposit Insurance Corporation (FDIC) examiners have authority to
identify problem assets and, if appropriate, require them to be classified.  There
are three classifications for problem assets:  Substandard, Doubtful and Loss. 
Substandard assets have one or more defined weaknesses and are characterized by the
distinct possibility that we will sustain some loss if the deficiencies are not
corrected.  Doubtful assets have the weaknesses of Substandard assets, with the
additional characteristics that the weaknesses make collection or liquidation in full on
the basis of currently existing facts, conditions and values questionable, and there is a
high possibility of loss.  An asset classified Loss is considered uncollectible and
of such little value that continuance as an asset on the balance sheet of the institution
is not warranted.  Assets classified as Substandard or Doubtful require the
institution to establish prudent general allowances for loan losses.  If an asset or
portion thereof is classified as a Loss, the institution charges off such amount against
the loan loss allowance.  If an institution does not agree with an examiners
classification of an asset, it may appeal this determination to the District Director of
the OTS. On the basis
of managements review of its assets, at December 31, 2003, it had classified a total
of $2.7 million of its loan and other assets as follows: At
December 31, 2003(In Thousands)Substandard
     
     
     $2,616Doubtful
     133Loss
     Total
     2,749   8  Our
classified assets consist of the non-performing loans referred to below. Non-Performing
Assets.  The table below sets forth the amounts and categories of
non-performing assets in our loan portfolio.  Accrued interest on loans delinquent 90
days or more is credited to an interest reserve account which offsets the amount of
capitalized interest in loans receivable.  See Note 4 of the Notes to Consolidated
Financial Statements in the Annual Report attached as Exhibit 13 hereto. Foreclosed assets
include assets acquired in settlement of loans. December 31,2003
     2002
     2001
     2000
     1999(Dollars in Thousands)Non-accruing loans:One- to four-family
     $1,511
        
     $876
        
     $433
        
     $680
        
     $Commercial real estate
     14
        
     219
        
     206
        
     110
        
     Mixed Use
     209
        
     
        
     
        
     235
        
     Total
     1,734
        
     1,095
        
     639
        
     1,025
        
     Accruing loans delinquent 90 days ormore:One- to four-family
     704
        
     876
        
     845
        
     208
        
     934Multi-family
     231
        
     
        
     
        
     
        
     25Commercial real estate
     
        
     
        
     259
        
     237
        
     360Mixed Use
     76
        
     77
        
     81
        
     82
        
     Consumer
     4
        
     10
        
     7
        
     9
        
     8Total
     1,015
        
     963
        
     1,192
        
     536
        
     1,327Foreclosed assets:One- to four-family
     
        
     
        
     
        
     
        
     66Total
     
        
     
        
     
        
     
        
     66Total non-performing assets
     $2,749
        
     $2,058
        
     $1,831
        
     $1,561
        
     $1,393Total as a percentage of total assets
     0.56
        %
     0.44
        %
     0.33
        %
     0.39
        %
     0.37
        % For the years
ended December 31, 2003 and December 31, 2002, the gross interest income (less additions
to the interest reserve) that would have been recorded had the non-accruing loans (and
accruing loans delinquent 90 days or more) been current in accordance with their original
terms amounted to $224,000 and $231,000, respectively.  No interest income was
recognized on non-accruing loans for the years ended December 31, 2003 and December 31,
2002, respectively. Other
Loans of Concern.  In addition to the non-performing assets set forth
in the table above, as of December 31, 2003, there were no other loans with respect
to which known information about the possible credit problems of the borrowers or the cash
flows of the security properties have caused management to have concerns as to the ability
of the borrowers to comply with present loan repayment terms and that may result in the
future inclusion of such items in the non-performing asset categories. Management
considers its non-performing and of concern assets in establishing its
allowance for loan losses. 9  The following
table sets forth an analysis of our allowance for loan losses. Year Ended December 31,2003
     2002
     2001
     2000
     1999(Dollars in Thousands)Balance at beginning of period
     
     
     $2,937
        
     $2,806
        
     $2,561
        
     $2,315
        
     $2,069Charge-offs:One- to four-family
     7
        
     
        
     
        
     
        
     Commercial real estate
     
        
     
        
     42
        
     
        
     Consumer
     24
        
     4
        
     
        
     
        
     31
        
     4
        
     42
        
     
        
     Recoveries:Construction or development
     
        
     
        
     143
        
     
        
     Consumer
     6
        
     8
        
     
        
     
        
     6
        
     8
        
     143
        
     
        
     Net (charge-offs) recoveries
     (25
        )
     4
        
     101
        
     
        
     Additions charged to operations
     120
        
     127
        
     144
        
     246
        
     246Balance at end of period
     $3,032
        
     $2,937
        
     $2,806
        
     $2,561
        
     $2,315Ratio of net charge-offs (recoveries) during theperiod to average loans outstanding during theperiod
     
    

    %
     
    
    %
     (0.04
        )%
     
    
    %
     
    
    %Ratio of net charge-offs (recoveries) during theperiod to average non-performing assets
     
    
    %
     (0.19
        )%
     (6.96
        )%
     
    
    %
     
    
    % The
distribution of our allowance for losses on loans at the dates indicated is summarized as
follows: December 31,2003
     2002
     2001
     2000
     1999Amount of
Loan
Loss
Allowance
     Loan
Amounts by
Category
     Percent
of Loans
in Each
Category
of Total
Loans
     Amount of
Loan
Loss
Allowance
     Loan
Amounts by
Category
     Percent
of Loans
in Each
Category
of Total
Loans
     Amount of
Loan
Loss
Allowance
     Loan
Amounts by
Category
     Percent
of Loans
in Each
Category
of Total
Loans
     Amount of
Loan
Loss
Allowance
     Loan
Amounts by
Category
     Percent
of Loans
in Each
Category
of Total
Loans
     Amount of
Loan
Loss
Allowance
     Loan
Amounts by
Category
     Percent
of Loans
in Each
Category
of Total
Loans(Dollars in Thousands)One-to four- family
     
     $   676
        
      $    169,139
      
     54.69
        %
     $   730
        
      $    188,449
      
     61.44
        %
     $   839
        
      $    207,067
      
     70.85
        %
     $   872
        
      $    212,863
      
     76.07
        %
     $   823
        
      $    200,201
      
     81.71
        %Multi-family
     260
        
     24,156
        
     7.81
        
     330
        
     33,464
        
     10.91
        
     172
        
     28,659
        
     9.81
        
     116
        
     19,272
        
     6.89
        
     80
        
     13,389
        
     5.47Commercialand mixed  use realestate
     605
        
     55,417
        
     17,92
        
     565
        
     52,208
        
     17.02
        
     490
        
     32,477
        
     11.11
        
     473
        
     29,817
        
     10.66
        
     607
        
     24,388
        
     9.95Construction
     1,000
        
     47,130
        
     15.24
        
     765
        
     22,259
        
     7.26
        
     710
        
     13,795
        
     4.72
        
     448
        
     8,968
        
     3.20
        
     33
        
     333
        
     0.14Consumer
     85
        
     13,403
        
     4.34
        
     80
        
     10,321
        
     3.37
        
     76
        
     10,249
        
     3.51
        
     35
        
     8,904
        
     3.18
        
     107
        
     6,680
        
     2.73Unallocated
     406
        
     
        
     
        
     467
        
     
        
     
        
     519
        
     
        
     
        
     617
        
     
        
     
        
     665
        
     
        
     Total
     $3,032
        
      $    309,245
      
     100.00
        %
     $2,937
        
      $    306,701
      
     100.00
        %
     $2,806
        
      $    292,247
      
     100
        %
     $2,561
        
     $    279,8
        24
     100.00
        %
     $2,315
        
      $    244,991
      
     100.00
        % The allowance
for loan losses is established through a provision for loan losses charged to earnings
based on managements evaluation of the risk inherent in its entire loan
portfolio.  This evaluation, which includes a review of all loans of which full
collectibility may not be reasonably assured, considers the market value of the underlying
collateral, growth and composition of the loan portfolio, delinquency trends, adverse
situations that may affect the borrowers ability to repay, prevailing economic
conditions and other factors that warrant recognition in providing for an adequate
allowance for loan losses.  In determining the general reserves under these policies,
historical charge-offs and recoveries, changes in the mix and levels of the various types
of loans, collateral values in the current loan portfolio and current economic conditions
are considered. While
management believes that it uses the best information available to determine the allowance
for loan losses, unforeseen economic and market conditions could result in adjustments to
the allowance for loan losses, and net earnings could be significantly affected, if
circumstances differ substantially from the assumptions used in making the final
determination. Securities Activities General.  Generally, the investment policy of the Company is to
          invest funds among categories of investments based upon our asset/liability
          management policies, investment quality, loan and deposit volume, national and
          local economic conditions, liquidity needs and performance objectives. In accordance with our asset/liability  10  management policy, we have recently
          focused a significant part of our investment activities on instruments with
          terms to repricing or maturity of five years or less and municipal securities
          that are exempt from federal taxes. Our
securities are classified into two categories: held-to-maturity and
available-for-sale.  Securities that we have the positive intent and ability to hold
to maturity are classified as held-to-maturity and reported at amortized cost.  All
other securities not classified as held-to-maturity are classified as
available-for-sale.  At December 31, 2003, we had $105.7 million of securities
classified as available-for-sale.  Available-for-sale securities are reported at fair
value with unrealized gains and losses included, on an after-tax basis, in a separate
component of shareholders equity. Mortgage-Backed
and Related Securities.  In order to supplement our lending activities and
achieve our asset/liability management goals, we invest in mortgage-backed and related
securities.  As of December 31, 2003, all of the mortgage-backed and related
securities we owned were issued, insured or guaranteed either directly or indirectly by a
federal agency or are rated AAA by a nationally recognized credit rating
agency.  It should be noted, however, that, while a (direct or indirect) federal
guarantee or a high credit rating may indicate a high degree of protection against
default, they do not indicate that the securities will be protected from declines in value
based on changes in interest rates or prepayment speeds. Consistent
with our asset/liability management strategy, at December 31, 2003, $34.5 million, or
87.22% of our mortgage-backed and related securities were classified
available-for-sale.  In addition, on the same date, $7.0 million or 17.73% of our
mortgage-backed and related securities carried adjustable rates. At December 31, 2003, all
of our mortgage-backed and related securities were pass through securities. For additional
information regarding our mortgage-backed securities portfolio, see Note 3 of the Notes to
Consolidated Financial Statements in the Annual Report attached as Exhibit 13 hereto. The following
table sets forth the composition of our mortgage-backed securities at the dates indicated. December 31,2003
     2002
     2001Carrying
Value
     %
of Total
     Carrying
Value
     %
of Total
     Carrying
Value
     %
of Total(Dollars in Thousands)Mortgage-backed securitiesheld-to-maturity:Government National Mortgage   Association
     $3,728
        
     9.43
        %
     $8,043
        
     32.62
        %
     $13,285
        
     55.64
        %Federal National Mortgage   Association
     317
        
     0.80
        
     1,001
        
     4.06
        
     1,716
        
     7.19Federal Home Loan Mortgage   Association
     1,010
        
     2.55
        
     2,836
        
     11.50
        
     2,708
        
     11.34Collateralized Mortgage   Obligations
     
        
     
        
     
        
     
        
     171
        
     0.725,055
        
     12.78
        
     11,880
        
     48.18
        
     17,880
        
     74.89Mortgage-backed securitiesavailable-for- sale:Government National Mortgage   Association
     13,625
        
     34.46
        
     856
        
     3.47
        
     794
        
     3.32Federal National Mortgage    Association
     17,530
        
     44.33
        
     9,004
        
     36.51
        
     2,264
        
     9.48Federal Home Loan Mortgage   Association
     3,332
        
     8.43
        
     2,920
        
     11.84
        
     2,938
        
     12.3134,487
        
     87.22
        
     12,780
        
     51.82
        
     5,996
        
     25.11Total mortgage-backed   securities
     $39,542
        
     100.00
        %
     $24,660
        
     100.00
        %
     $23,876
        
     100.00
        %  11  The following table
sets forth the contractual maturities of our mortgage-backed securities at December 31,
2003. Due in
     December 31, 20026 Months
or
Less
     6 Months
to
1 Year
     1 to 3
Years
     3 to 5
Years
     5 to 10
Years
     10 to 20
Years
     Over 20
Years
     Amortized
Cost
     Carrying
Value(In Thousands)Federal Home Loan   Mortgage  Corporation
     
     
     $
        
     $3
        
     $
        
     $45
        
     $
        
     $2,923
        
     $1,332
        
     $4,303
        
     $4,342Federal National   Mortgage   Association
     
        
     
        
     4
        
     
        
     10
        
     11,490
        
     6,161
        
     17,665
        
     17,847Government   National   Mortgage   Association
     
        
     
        
     47
        
     
        
     
        
     1,958
        
     15,242
        
     17,247
        
     17,353Total
     $
        
     $3
        
     $51
        
     $45
        
     $10
        
     $16,371
        
     $22,735
        
     $39,215
        
     $39,542 The market
values of a portion of our mortgage-backed securities held-to-maturity have been from time
to time lower than their carrying values. However, for financial reporting purposes, such
declines in value are considered to be temporary in nature, since they have been due to
changes in interest rates rather than credit concerns.  See Note 2 of the Notes
to Consolidated Financial Statements in the Annual Report attached as Exhibit 13 hereto. The following
table shows our mortgage-backed securities purchase, sale and repayment activities for the
periods indicated. Year Ended December 31,2003
     2002
     2001(In Thousands)Purchases:Adjustable-rate
     $1,533
        
     $
        
     $Fixed-rate
     33,191
        
     9,417
        
     15,879Total purchases
     34,724
        
     9,417
        
     15,879Principal repayments
     (21,132
        )
     (9,176
        )
     (5,675
        )Discount/premium net change
     912
        
     500
        
     462Fair value net change
     378
        
     43
        
     184Net increase (decrease)
     $14,882
        
     $784
        
     $10,850 Our holdings
of mortgage-backed securities are approximately 8.00% of our total assets.  Since
pass-through mortgage-backed securities generally carry a yield approximately 50 to 100
basis points below that of the corresponding type of residential loan (due to the implied
federal agency guarantee fee and the retention of a servicing spread by the loan
servicer), in the event that the proportion of our assets consisting of mortgage-backed
securities increases relative to our loans, our asset yields could be somewhat adversely
affected. We will evaluate mortgage-backed securities purchases in the future based on our
asset/liability objectives, market conditions and alternative investment opportunities. Other
Securities.  In order to complement our lending and mortgage-backed
securities activities, and to increase our holdings of short and intermediate term assets,
we invest in liquid investments and in high-quality investments, such as U.S. Treasury and
agency obligations.   At December 31, 2003 and December 31, 2002, our other
securities portfolio totaled $108.7 million and $87.1 million, respectively.  At
December 31, 2003, we did not own any other securities of a single issuer in an amount
exceeding 10% of our shareholders equity, other than federal agency obligations.  See
Note 3 of the Notes to Consolidated Financial Statements in the Annual Report attached as
Exhibit 13 hereto for additional information regarding our other securities portfolio. 12  The following
table sets forth the composition of our other securities and other earning assets at the
dates indicated. December 31,2003
     2002
     2001Carrying
Value
     %
of Total
     Carrying
Value
     %
of Total
     Carrying
Value
     %
of Total(Dollars in Thousands)Securities held-to-maturity:US government agencies
     $9,038
        
     8.31
        %
     $28,474
        
     32.69
        %
     $46,223
        
     51.31
        %Municipal bonds
     28,525
        
     26.23
        
     28,772
        
     33.04
        
     28,113
        
     31.2137,563
        
     34.54
        
     57,246
        
     65.73
        
     74,336
        
     82.52Securities available-for sale:US Treasury
     346
        
     0.32
        %
     361
        
     0.42
        %
     348
        
     0.39
        %US government agencies
     48,118
        
     44.25
        
     14,982
        
     17.20
        
     3,078
        
     3.41Mutual funds
     4,014
        
     3.69
        
     3,294
        
     3.78
        
     3,182
        
     3.53Municipal bonds
     18,499
        
     17.01
        
     11,064
        
     12.70
        
     8,737
        
     9.70Corporate notes
     
        
     
        
     
        
     
        
     260
        
     0.29Other equity
     208
        
     0.19
        
     147
        
     0.17
        
     140
        
     0.1671,185
        
     65.46
        
     29,848
        
     34.27
        
     15,745
        
     17.48Total securities
     $108,748
        
     100.00
        %
     $87,094
        
     100.00
        %
     90,081
        
     100.00
        %Other earning assets:Interest-earning deposits withbanks
     $3,909
        
     14.84
        %
     $5,631
        
     21.62
        %
     1,423
        
     9.81
        %FHLB stock
     20,139
        
     76.43
        
     14,788
        
     56.77
        
     12,162
        
     83.80Federal funds sold
     2,300
        
     8.73
        
     5,629
        
     21.61
        
     928
        
     6.39Total
     $26,348
        
     100.00
        %
     $26,048
        
     100.00
        %
     14,513
        
     100.00
        % The
composition and remaining maturities of our other securities portfolio, excluding mutual
funds, other equity securities and Federal Home Loan Bank (FHLB) stock, is
indicated in the following table. December 31, 2003Less Than 1
Year
     1 to 5
Years
     5 to 10
Years
     Over 10
years
     Total SecuritiesAmortized
Cost
     Amortized
Cost
     Amortized
Cost
     Amortized
Cost
     Amortized
Cost
     Fair
Value(Dollars in Thousands)US Treasury
     
     
     $
        
     $
        
     $257
        
     $
        
     $257
        
     $346Federal agency obligations
     1,000
        
     1,000
        
     23,638
        
     31,462
        
     57,100
        
     57,362Municipal bonds
     299
        
     1,700
        
     9,503
        
     34,845
        
     46,347
        
     49,215Total securities
     $1,299
        
     $2,700
        
     $33,398
        
     $66,307
        
     $103,704
        (1)
     $106,924Weighted average yield
     
5.79
     %
        3.66
     %
        5.04
     %
        5.08
     %
        5.03% ________________(1)  Includes $102.9 million of
callable securities. See
Note 3 of Notes to the Consolidated Financial Statements in the Annual Report
attached as Exhibit 13 hereto for a discussion of our securities portfolio. Sources of Funds General.  The Banks primary sources of funds are deposits,
          payments (including prepayments) of loan principal, interest earned on loans and
          securities, repayments of securities, borrowings and funds provided from
          operations. Deposits.  We offer deposit accounts having a wide range of interest
          rates and terms.  The Banks deposits consist of passbook savings,
          NOW, money market and various certificate accounts.  We rely primarily on
          competitive  13   pricing, customer service and community outreach to attract and
          retain these deposits.  The Banks customers may access their accounts
          through any of our five offices and six automated teller machines
          (ATMs).    In addition, our customers may access
          their accounts through several nationwide ATM networks.  The Bank only
          solicits deposits in its market area and does not currently use brokers to
          obtain deposits. We manage the
pricing of our deposits in keeping with our asset/liability management, profitability and
growth objectives.   The variety of deposit accounts offered by the Bank has
allowed us to be competitive in obtaining funds and to respond with flexibility to changes
in consumer demand.  As some customers have become more interest rate conscious, the
Bank has become more susceptible to short-term fluctuations in its certificate of deposit
flows. Management
believes that the core portion of its regular passbook savings, NOW and money
market accounts, which amounted to $139.7 million or 45.08% of total deposits at December
31, 2003, can have a lower cost and be more resistant to interest rate changes (and
competing non-depository financial products) than certificate accounts.  We utilize
customer service, community outreach and marketing initiatives in an effort to build and
maintain the volume of such deposits.  However, there can be no assurance as to
whether we will be able to maintain or increase our core deposits in the future. The table
below sets forth the Banks deposit flows for the periods indicated. Year Ended December 31,2003
     2002
     2001(Dollars In Thousands)Opening balance
     
     
     $290,612
        
     $268,857
        
     $252,662Deposits
     474,596
        
     457,133
        
     439,561Withdrawals
     (461,547
        )
     (443,392
        )
     (434,362
        )Interest credited
     6,181
        
     8,014
        
     10,996Ending balance
     
     
     $309,842
        
     $290,612
        
     $268,857Net increase (decrease)
     19,230
        
     21,755
        
     16,195Percent increase (decrease)
     6.62
        %
     8.09
        %
     6.41
        % The following
table sets forth the dollar amount of savings deposits in the Bank as of the dates
indicated. December 31,2003
     2002
     2001Amount
     Percent of
Total
     Amount
     Percent of
Total
     Amount
     Percent of
Total(Dollars in Thousands)Passbook Accounts 1.10%
     
     
     $103,531
        
     33.4
        %
     $100,371
        
     34.5
        %
     $83,963
        
     31.2
        %NOW Accounts 0.40%
     30,088
        
     9.7
        
     25,233
        
     8.7
        
     23,946
        
     8.9Money Market Accounts 1.00%
     6,073
        
     2.0
        
     5,978
        
     2.1
        
     4,720
        
     1.8Total Non-Certificates
     139,692
        
     45.1
        
     131,582
        
     45.3
        
     112,629
        
     41.9Certificates:0.00 - 3.99%
     141,231
        
     45.6
        
     127,023
        
     43.7
        
     73,044
        
     27.24.00 - 5.99%
     20,342
        
     6.6
        
     22,570
        
     7.8
        
     70,067
        
     26.06.00 - 7.99%
     8,533
        
     2.7
        
     9,395
        
     3.2
        
     13,075
        
     4.98.00 - 9.00%
     44
        
     
        
     42
        
     
        
     42
        
     Total Certificates
     170,150
        
     54.9
        
     159,030
        
     54.7
        
     156,228
        
     58.1Total Deposits
     $309,842
        
     100.0
        %
     290,612
        
     100.0
        %
     268,857
        
     100.0
        %  14   The following
table shows rate and maturity information for our certificates of deposit as of
December 31, 2003. Less Than
1 Year
     1 to 2
Years
     2 to 3
Years
     3 to 4
Years
     4 to 5
Years
     Total(In Thousands)1.00 - 1.99%
     
     
     $84,888
        
     $1,462
        
     $
        
     $
        
     $
        
     $86,3502.00 - 2.99%
     31,221
        
     3,571
        
     1,121
        
     29
        
     
        
     35,9423.00 - 3.99%
     3,102
        
     691
        
     137
        
     10
        
     14,999
        
     18,9394.00 - 4.99%
     570
        
     130
        
     935
        
     8,268
        
     3,903
        
     13,8065.00 - 5.99%
     455
        
     600
        
     448
        
     5,033
        
     
        
     6,5366.00 - 6.99%
     3,788
        
     4,716
        
     29
        
     
        
     
        
     8,5337.00 - 7.99%
     
        
     
        
     
        
     
        
     
        
     8.00 - 8.99%
     44
        
     
        
     
        
     
        
     
        
     44$124,068
        
     $11,170
        
     $2,670
        
     $13,340
        
     $18,902
        
     $170,150 The following
table indicates the amount of our certificates of deposit and other deposits by time
remaining until maturity as of December 31, 2003. Maturity3 Months
or Less
     Over
3 to 6
Months
     Over
6 to 12
Months
     Over
12
Months
     Total(In Thousands)Certificates of deposit less than $100,000
     
     
     $24,904
        
     $29,469
        
     $31,652
        
     $31,066
        
     $117,091Certificates of deposit $100,000 or more
     13,257
        
     12,930
        
     11,856
        
     15,016
        
     53,059Total certificates of deposit
     $38,161
        
     $42,399
        
     $43,508
        
     $46,082
        
     $170,150 For
additional information regarding the composition of our deposits, see Note 7 of the
Notes to the Consolidated Financial Statements in the Annual Report attached as Exhibit 13
hereto. Borrowings.  Our other available sources of funds include advances from
          the FHLB of Chicago and other borrowings.  Our FHLB advances to date have
          primarily consisted of subsidized borrowings to fund special housing programs.
          As a member of the FHLB of Chicago, the Bank is required to own capital stock in
          the FHLB of Chicago and is authorized to apply for advances from the FHLB of
          Chicago.  Each FHLB credit program has its own interest rate, which may be
          fixed or variable, and range of maturities.  The FHLB of Chicago may
          prescribe the acceptable uses for these advances, as well as limitations on the
          size of the advances and repayment provisions.   At December 31, 2003,
          the weighted average term to maturity of our FHLB advances was 40 months. 
          See Note 8 of the Notes to Consolidated Financial Statements in the Annual
          Report attached as Exhibit 13 hereto. The following
table sets forth the maximum month-end balance and average balance of FHLB advances for
the periods indicated. Year Ended December 31,2003
     2002
     2001
     2000
     1999(Dollars In Thousands)Maximum Balance:FHLB Advances
     $93,951
        
     $94,682
        
     $83,600
        
     $65,850
        
     $46,300Average Balance:FHLB Advances
     $93,084
        
     $86,904
        
     $68,003
        
     $56,597
        
     $34,607Weighted average interest rate of FHLB advances   during the year
     5.00
        %
     5.33
        %
     5.47
        %
     6.03
        %
     5.41
        % Subsidiary Activities As a
federally chartered savings bank, First Security is permitted by OTS regulations to invest
up to 2% of its assets in the stock of, or loans to, service corporation subsidiaries, and
may invest an additional 1% of its assets in service corporations where such additional
funds are used for inner-city or community development purposes.  In addition to
investments in service corporations, federal institutions are permitted to invest an
unlimited amount in operating subsidiaries engaged solely in activities which a federal
savings association may engage in directly.  15   At December
31, 2003, First Security had one wholly owned service corporation, Western Security
Service Corporation (Western or the Subsidiary). Western, an
Illinois corporation, was incorporated in November 1977 for the purpose of offering
customers and members of the general public credit, life, mortgage and disability
insurance.  First Securitys investment in Western was $118,580 as of December
31, 2003.  Western recognized net income of $38,171 during the year ended December
31, 2003 and $26,913 during the year ended December 31, 2002. Competition We face
strong competition both in originating real estate loans and in attracting deposits. 
Competition in originating loans comes primarily from credit unions, mortgage bankers,
commercial banks and other savings institutions, which also make loans secured by real
estate located in our market area.  First Security competes for loans principally on
the basis of the interest rates and loan fees it charges, the types of loans it
originates, community outreach and the quality of services it provides to borrowers. Competition
for deposits is principally from credit unions, commercial banks, mutual funds, securities
firms and other savings institutions located in the same communities.  The ability of
the Bank to attract and retain deposits depends on its ability to provide an investment
opportunity that satisfies the requirements of investors as to rate of return, liquidity,
risk, convenient locations and other factors.  We compete for these deposits by
offering competitive rates, convenient business hours, community outreach and a customer
oriented staff. We also
experience competition from online financial service providers. Regulations 
General First
Security is a federally chartered savings bank, the deposits of which are federally
insured and backed by the full faith and credit of the United States Government. 
Accordingly, First Security is subject to broad federal regulation and oversight extending
to all its operations.  First Security is a member of the FHLB of Chicago and is
subject to certain limited regulation by the Board of Governors of the Federal Reserve
System (Federal Reserve Board).  As the savings and loan holding company
of First Security, the Company also is subject to federal regulation and oversight. 
The purpose of the regulation of the Company and other holding companies is to protect
subsidiary savings associations.  First Security is a member of the Savings
Association Insurance Fund (SAIF) and the deposits of First Security are
insured by the Federal Deposit Insurance Corporation (FDIC).  As a
result, the FDIC has certain regulatory and examination authority over First Security. Certain of
these regulatory requirements and restrictions are discussed below or elsewhere in this
document. Federal Regulation of
Savings Associations The OTS has
extensive authority over the operations of savings associations.  As part of this
authority, First Security is required to file periodic reports with the OTS and is subject
to periodic examinations by the OTS and the FDIC.   When these examinations are
conducted by the OTS and the FDIC, the examiners may require First Security to provide for
higher general or specific loan loss reserves.  All savings associations are subject
to a semi-annual assessment, based upon the savings associations total assets, to
fund the operations of the OTS. The OTS also
has extensive enforcement authority over all savings institutions and their holding
companies, including First Security and the Company.  This enforcement authority
includes, among other things, the ability to assess civil money penalties, to issue
cease-and-desist or removal orders and to initiate injunctive actions.  In general,
these enforcement actions may be initiated for violations of laws and regulations and
unsafe or unsound practices.  Other actions or inactions may provide the basis for
enforcement action, including misleading or untimely reports filed with the OTS. 
Except under certain circumstances, public disclosure of final enforcement actions by the
OTS is required. In addition,
the investment, lending and branching authority of First Security is prescribed by federal
laws and it is prohibited from engaging in any activities not permitted by such
laws.  For instance, no savings institution may invest in non-investment grade
corporate debt securities.  In addition, the permissible level of investment by
federal associations in loans secured by non-residential real property may not exceed 400%
of total capital, except with approval of the OTS.  Federal savings associations are
also generally authorized to branch nationwide.  First Security is in compliance with
the noted restrictions. 16   First
Securitys general permissible lending limit for loans-to-one-borrower is equal to
the greater of $500,000 or 15% of unimpaired capital and surplus (except for loans fully
secured by certain readily marketable collateral, in which case this limit is increased to
25% of unimpaired capital and surplus).  At December 31, 2003, First Securitys
lending limit under this restriction was approximately $10.3 million. First Security is in
compliance with the loans-to-one-borrower limitation. The OTS, as
well as the other federal banking agencies, has adopted guidelines establishing safety and
soundness standards on such matters as loan underwriting and documentation, asset quality,
internal controls and audit systems, interest rate risk exposure and compensation and
other employee benefits.  Any institution that fails to comply with these standards
must submit a compliance plan. Insurance of Accounts
and Regulation by the FDIC First
Security is a member of the SAIF, which is administered by the FDIC.  Deposits are
insured up to applicable limits by the FDIC and such insurance is backed by the full faith
and credit of the United States Government.  As the insurer, the FDIC imposes deposit
insurance premiums and is authorized to conduct examinations of and to require reporting
by FDIC-insured institutions.  It also may prohibit any FDIC-insured institution from
engaging in any activity the FDIC determines by regulation or order to pose a serious risk
to the FDIC.  The FDIC also has the authority to initiate enforcement actions against
savings associations, after giving the OTS an opportunity to take such action, and may
terminate the deposit insurance if it determines that the institution has engaged in
unsafe or unsound practices or is in an unsafe or unsound condition. The
FDICs deposit insurance premiums are assessed through a risk-based system under
which all insured depository institutions are placed into one of nine categories and
assessed insurance premiums based upon their level of capital and supervisory
evaluation.  Under the system, institutions classified as well capitalized
(i.e., a core capital ratio of at least 5%, a ratio of Tier 1 or core capital
to risk-weighted assets (Tier 1 risk-based capital) of at least 6% and a
risk-based capital ratio of at least 10%) and considered healthy pay the lowest premium
while institutions that are less than adequately capitalized (i.e., core or
Tier 1 risk-based capital ratios of less than 4% or a risk-based capital ratio of
less than 8%) and considered of substantial supervisory concern pay the highest
premium.  Risk classification of all insured institutions will be made by the FDIC
for each semi-annual assessment period. Based on the Banks most recent semi-annual
assessment, as of December 31, 2003, the Bank is classified as well capitalized. The FDIC is
authorized to increase assessment rates, on a semiannual basis, if it determines that the
reserve ratio of the SAIF will be less than the designated reserve ratio of 1.25% of
SAIF-insured deposits.  In setting these increased assessments, the FDIC must seek to
restore the reserve ratio to that designated reserve level, or such higher reserve ratio
as established by the FDIC.  The FDIC may also impose special assessments on SAIF
members to repay amounts borrowed from the United States Treasury or for any other reason
deemed necessary by the FDIC. Effective
January 1, 1997, the premium schedule for Bank Insurance Fund (BIF) and SAIF
insured institutions ranged from 0 to 27 basis points.  In addition, all BIF and SAIF
insured institutions are required to pay a financing corporation assessment in order to
fund the interest on bonds issued to resolve the thrift failures in the 1980s.  
Prior to January 1, 2000, SAIF members paid approximately 6 basis points for each $100 of
domestic deposits.  The assessment was reduced to 2.12 basis points as of
January 1, 2000, when BIF insured institutions began to fully participate in the
assessment.  As of January 1, 2004, the assessment stood at 1.52 basis points. 
These assessments, which may be revised based upon the level of BIF and SAIF deposits,
will continue until the bonds mature in the year 2017. Regulatory Capital
Requirements Federally
insured savings associations, such as First Security, are required to maintain a minimum
level of regulatory capital. The OTS has established capital standards that require the
Bank to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted
assets and of Tier I capital to qualifying total assets (leverage ratio). These capital
requirements must be generally as stringent as the comparable capital requirements for
national banks. The OTS is also authorized to impose capital requirements in excess of
these standards on individual associations on a case-by-case basis. 17   The capital
regulations require a leverage ratio of 4% of adjusted total assets (as defined by
regulation). Tier I capital, used to calculate the leverage ratio, generally includes
common stockholders equity and retained income and certain noncumulative perpetual
preferred stock and related income. In addition, all intangible assets, other than a
limited amount of purchased mortgage servicing rights, must be deducted from Tier I
capital for calculating compliance with the requirement. At December 31, 2003, First
Security had $61,192 of intangible assets recorded as assets on its financial statements,
as a result of its acquisition of assets and assumption of liabilities from the Resolution
Trust Corporation in 1994. The OTS
regulations establish special capitalization requirements for savings associations that
own subsidiaries. In determining compliance with the capital requirements, all
subsidiaries engaged solely in activities permissible for national banks or engaged in
certain other activities solely as agent for its customers are includable
subsidiaries that are consolidated for capital purposes in proportion to the
associations level of ownership. For excludable subsidiaries the debt and equity
investments in such subsidiaries are deducted from assets and capital.   At
December 31, 2003, First SecurityFed had no deductions for non-includable subsidiaries. At December
31, 2003, First Security had Tier I capital of $68.6 million or 14.1% of adjusted total
assets, which is approximately $49.1 million above the minimum requirement of 4% of
adjusted total assets in effect on the date. The capital
standards also require Tier I capital equal to at least 4% of risk-weighted assets. At December 31,
2003, First Security had Tier I capital equal to $68.6 million or 25.7% of risk-weighted
assets, which is $37.9 million above the minimum Tier I risk-based capital ratio of 4% in
effect on that date. The OTS
risk-based requirement requires savings associations to have total capital of at least 8%
of risk-weighted assets.  Total capital consists of core capital, as defined above,
and supplementary capital.  Supplementary capital consists of certain permanent and
maturing capital instruments that do not qualify as core capital and general valuation
loan and lease loss allowances up to a maximum of 1.25% of risk-weighted assets. 
Supplementary capital may be used to satisfy the risk-based requirement only to the extent
of core capital.  The OTS is also authorized to require a savings association to
maintain an additional amount of total capital to account for concentration of credit risk
and the risk of non-traditional activities.  At December 31, 2003, First Security had
$3.0 million of general loss reserves all, of which qualifies as supplementary capital,
which was less than 1.25% of risk-weighted assets. Certain
exclusions from capital and assets are required to be made for the purpose of calculating
total capital.  Such exclusions consist of equity investments (as defined by
regulation) and that portion of land loans and nonresidential construction loans in excess
of an 80% loan-to-value ratio and reciprocal holdings of qualifying capital
instruments.  First Security had no such exclusions from capital and assets at
December 31, 2003. In
determining the amount of risk-weighted assets, all assets, including certain off-balance
sheet items, will be multiplied by a risk weight, ranging from 0% to 100%, based on the
risk inherent in the type of asset.  For example, the OTS has assigned a risk weight
of 50% for prudently underwritten permanent one- to four-family first lien mortgage loans
not more than 90 days delinquent and having a loan to value ratio of not more than 80% at
origination unless insured to such ratio by an insurer approved by the FNMA or FHLMC. On December
31, 2003, First Security had total risk-based capital of approximately $71.6 million
(including $68.6 million in core capital and $3.0 million in qualifying supplementary
capital) and risk-weighted assets of $266.9 million; or total capital equal to 26.8% of
risk-weighted assets.  This amount was $50.2 million above the 8% requirement in
effect on that date. The OTS and
the FDIC are authorized and, under certain circumstances, required to take certain actions
against savings associations that fail to meet their capital requirements.  The OTS
is generally required to take action to restrict the activities of an
undercapitalized association (generally defined to be one with less than
either a 4% core capital ratio, a 4% Tier 1 risked-based capital ratio or an 8%
risk-based capital ratio).  Any such association must submit a capital restoration
plan and, until such plan is approved by the OTS, may not increase its assets, acquire
another institution, establish a branch or engage in any new activities, and generally may
not make capital distributions.  The OTS is authorized to impose the additional
restrictions that are applicable to significantly undercapitalized associations. 18   As a
condition to the approval of the capital restoration plan, any company controlling an
undercapitalized association must agree that it will enter into a limited capital
maintenance guarantee with respect to the institutions achievement of its capital
requirements. Any savings
association that fails to comply with its capital plan or is significantly
undercapitalized (i.e., Tier 1 risk-based or core capital ratios of less
than 3% or a risk-based capital ratio of less than 6%) must be made subject to one or more
of additional specified actions and operating restrictions that may cover all aspects of
its operations and include a forced merger or acquisition of the association.  An
association that becomes critically undercapitalized (i.e., a tangible
capital ratio of 2% or less) is subject to further mandatory restrictions on its
activities in addition to those applicable to significantly undercapitalized
associations.  In addition, the OTS must appoint a receiver (or conservator with the
concurrence of the FDIC) for a savings association, with certain limited exceptions,
within 90 days after it becomes critically undercapitalized.  Any undercapitalized
association is also subject to the general enforcement authority of the OTS and the FDIC,
including the appointment of a conservator or a receiver. The OTS is
also generally authorized to reclassify an association into a lower capital category and
impose the restrictions applicable to such category if the institution is engaged in
unsafe or unsound practices or is in an unsafe or unsound condition. The
imposition by the OTS or the FDIC of any of these measures on the association may have
substantial adverse effects on its operations and profitability. Limitations on Dividends
and Other Capital Distributions OTS
regulations impose various restrictions on savings associations with respect to their
ability to make distributions of capital, which include dividends, stock redemptions or
repurchases, cash-out mergers and other transactions charged to the capital account. 
OTS regulations also prohibit a savings association from declaring or paying any dividends
or from repurchasing any of its stock if, as a result, the regulatory capital of the
association would be reduced below the amount required to be maintained for the
liquidation account established in connection with its mutual to stock conversion. Generally,
savings associations, such as First Security, that before and after the proposed
distribution remain well-capitalized, may make capital distributions during any calendar
year equal to 100% of net income for the year-to-date plus retained net income for the two
preceding years.  However, an association deemed to be in need of more than normal
supervision by the OTS may have its dividend authority restricted by the OTS.  First
Security may pay dividends in accordance with this general authority. Savings
associations proposing to make any capital distribution need not submit written notice to
the OTS prior to such distribution unless they are not a subsidiary of a holding company
or would not remain well capitalized following the distribution 30 days prior to such
distribution.  Savings associations that do not, or would not meet their current
minimum capital requirements following a proposed capital distribution, however, must
obtain OTS approval prior to making such distribution.  The OTS may object to the
distribution during that 30-day period based on safety and soundness concerns.  See
- Regulatory Capital Requirements. Liquidity Prior to the
passage of the Financial Regulatory Relief and Economic Efficiency Act of 2000, all
savings associations, including First Security, were required to maintain an average daily
balance of liquid assets equal to a certain percentage of the average daily balance of its
liquidity base during the preceding calendar quarter or a percentage of the amount of its
liquidity base at the end of the preceding quarter.  For a discussion of what First
Security includes in liquid assets, see Managements Discussion and Analysis of
Financial Condition and Results of Operations  Liquidity and Capital Resources
in the Annual Report attached as Exhibit 13 hereto. This liquid asset ratio requirement
would vary from time to time (between 4% and 10%) depending upon economic conditions and
savings flows of all savings associations.  At the time the rule was in effect, the
minimum liquid asset ratio was 4%. Qualified Thrift Lender
Test All savings
associations, including First Security, are required to meet a qualified thrift lender
(QTL) test to avoid certain restrictions on their operations.  This test
requires a savings association to have at least 65% of its portfolio 19   assets (as defined by
regulation) in qualified thrift investments on a monthly average for nine out of every 12
months on a rolling basis.  As an alternative, the savings association may maintain
60% of its assets in those assets specified in Section 7701(a)(19) of the Internal Revenue
Code.  Under either test, such assets primarily consist of residential housing
related loans and investments.  At December 31, 2003, First Security met the test and
has always met the test since its effectiveness. Any savings
association that fails to meet the QTL test must convert to a national bank charter,
unless it requalifies as a QTL and thereafter remains a QTL.  If such an association
has not yet requalified or converted to a national bank, its new investments and
activities are limited to those permissible for both a savings association and a national
bank, and it is limited to national bank branching rights in its home state.  In
addition, the association is immediately ineligible to receive any new FHLB borrowings and
is subject to national bank limits for payment of dividends.  If such association has
not requalified or converted to a national bank within three years after the failure, it
must divest of all investments and cease all activities not permissible for a national
bank.  If any association that fails the QTL test is controlled by a holding company,
then within one year after the failure, the holding company must register as a bank
holding company and become subject to all restrictions on bank holding companies.
 See - Holding Company Regulation. Community Reinvestment
Act Under the
Community Reinvestment Act (CRA), every FDIC insured institution has a
continuing and affirmative obligation consistent with safe and sound banking practices to
help meet the credit needs of its entire community, including low and moderate income
neighborhoods.  The CRA does not establish specific lending requirements or programs
for financial institutions nor does it limit an institutions discretion to develop
the types of products and services that it believes are best suited to its particular
community, consistent with the CRA.  The CRA requires the OTS, in connection with the
examination of First Security, to assess the institutions record of meeting the
credit needs of its community and to take such record into account in its evaluation of
certain applications, such as a merger or the establishment of a branch, by First
Security.  An unsatisfactory rating may be used as the basis for the denial of an
application by the OTS. The federal
banking agencies, including the OTS, have recently revised the CRA regulations and the
methodology for determining an institutions compliance with the CRA.  Due to
the heightened attention being given to the CRA in the past few years, First Security may
be required to devote additional funds for investment and lending in its local
community.  First Security was examined for CRA compliance in June 2003 and received
a rating of satisfactory. Transactions with
Affiliates Generally,
transactions between a savings bank or its subsidiaries and its affiliates are required to
be on terms as favorable to the bank as transactions with non-affiliates.  In
addition, certain of these transactions, such as loans to an affiliate, are restricted to
a percentage of the banks capital.  Affiliates of First Security include the
Company and any company that is under common control with First Security.  In
addition, a savings bank may not lend to any affiliate engaged in activities not
permissible for a bank holding company or acquire the securities of most affiliates. 
The OTS has the discretion to treat subsidiaries of savings banks as affiliates on a case
by case basis. Certain
transactions with directors, officers or controlling persons are also subject to conflict
of interest regulations enforced by the OTS.  These conflict of interest regulations
and other statutes also impose restrictions on loans to such persons and their related
interests.  Among other things, such loans must be made on terms substantially the
same as for loans to unaffiliated individuals. Holding Company
Regulation The Company
is a unitary savings and loan holding company subject to regulatory oversight by the
OTS.  As such, the Company is required to register and file reports with the OTS and
is subject to regulation and examination by the OTS.  In addition, the OTS has
enforcement authority over the Company and its non-savings association subsidiaries, such
as Western. This authority permits the OTS to restrict or prohibit activities that are
determined to be a serious risk to the subsidiary savings association. As a unitary
savings and loan holding company, the Company generally is not subject to activity
restrictions.  If the Company acquires control of another savings association as a
separate subsidiary, it would become a multiple 20   savings and loan holding company, and the
activities of the Company and any of its subsidiaries (other than First Security or any
other SAIF-insured savings association) would become subject to such restrictions unless
such other associations each qualify as a QTL and were acquired in a supervisory
acquisition. If First
Security fails the QTL test, the Company must obtain the approval of the OTS prior to
continuing after such failure, directly or through its other subsidiaries, any business
activity other than those approved for multiple savings and loan holding companies or
their subsidiaries.  In addition, within one year of such failure the Company must
register as, and will become subject to, the restrictions applicable to bank holding
companies.  The activities authorized for a bank holding company are more limited
than are the activities authorized for a unitary or multiple savings and loan holding
company.  See - Qualified Thrift Lender Test. The Company
must obtain approval from the OTS before acquiring control of any other SAIF-insured
association.  Such acquisitions are generally prohibited if they result in a multiple
savings and loan holding company controlling savings associations in more than one
state.  However, such interstate acquisitions are permitted based on specific state
authorization or in a supervisory acquisition of a failing savings association. USA Patriot Act The USA
Patriot Act was signed into law on October 26, 2001. The USA Patriot Act gives the federal
government new powers to address terrorist threats through enhanced domestic security
measures, expanded surveillance powers, increased information sharing and broadened
anti-money laundering requirements. The USA Patriot Act also requires the federal banking
agencies to take into consideration the effectiveness of controls designed to combat money
laundering activities in determining whether to approve a merger or other acquisition
application of a member institution. Accordingly, if we engage in a merger or other
acquisition, our controls designed to combat money laundering would be considered as part
of the application process. The Company has established policies, procedures and systems
designed to comply with these regulations. Federal Securities Law The common
stock of the Company is registered with the SEC under the Securities Exchange Act of 1934,
as amended (the Exchange Act).  The Company is subject to the
information, proxy solicitation, insider trading restrictions and other requirements of
the SEC under the Exchange Act. First
SecurityFed common stock held by persons who are deemed to be affiliates (generally
officers, directors and principal stockholders) of the Company pursuant to the SECs
rules and regulations may not be resold without registration or unless sold in accordance
with certain resale restrictions.  If the Company meets specified current public
information requirements, each affiliate of the Company is able to sell in the public
market, without registration, a limited number of shares in any three-month period,
subject to restrictions on the manner of sale and a reporting requirement. Sarbanes-Oxley Act of
2002 On July 30,
2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which contains
important new requirements for public companies in the area of financial disclosure and
corporate governance. Among the requirements of the Sarbanes-Oxley Act of 2002 are written
certifications by our Chief Executive Officer and Chief Financial Officer of our quarterly
and annual reports filed with the SEC, as well as disclosures regarding our internal
controls and procedures. In response to the Sarbanes-Oxley Act of 2002 and the related
regulations, the Company has reviewed its practices, policies and procedures to ensure our
ability to comply with the requirements of the Act. Federal Reserve System The Federal
Reserve Board requires all depository institutions to maintain non-interest bearing
reserves at specified levels against their transaction accounts (primarily checking, NOW
and Super NOW checking accounts).  At December 31, 2003, First Security was in
compliance with these reserve requirements.  The balances maintained to meet the
reserve requirements imposed by the Federal Reserve Board may be used to satisfy liquidity
requirements that may be imposed by the OTS.  See -Liquidity. 21   Savings
associations are authorized to borrow from the Federal Reserve Bank discount
window, but Federal Reserve Board regulations require associations to exhaust other
reasonable alternative sources of funds, including FHLB borrowings, before borrowing from
the Federal Reserve Bank. Federal Home Loan Bank
System First
Security is a member of the FHLB of Chicago, which is one of 12 regional FHLBs, that
administers the home financing credit function of savings associations.  Each FHLB
serves as a reserve or central bank for its members within its assigned region.  It
is funded primarily from proceeds derived from the sale of consolidated obligations of the
FHLB System.  It makes loans to members (i.e., advances) in accordance with
policies and procedures, established by the board of directors of the FHLB, that are
subject to the oversight of the Federal Housing Finance Board.  All advances from the
FHLB are required to be fully secured by sufficient collateral as determined by the
FHLB.  In addition, all long-term advances are required to provide funds for
residential home financing. As a member,
First Security is required to purchase and maintain stock in the FHLB of Chicago.  At
December 31, 2003, First Security had $20.1 million in FHLB stock, which was in
compliance with this requirement.  In past years, First Security has received
substantial dividends on its FHLB stock. Over the past five calendar years such dividends
have averaged 6.50% and were 6.11% for calendar year 2003.  As a result of its
holdings, the Bank could borrow up to $402 million from the FHLB. For the year
ended December 31, 2003, dividends paid by the FHLB of Chicago to First Security
totaled $1,128,000, which constitutes a $423,000 increase from the amount of dividends
received in calendar year 2002. Federal and State
Taxation Savings
associations such as First Security that meet certain conditions prescribed by the
Internal Revenue Code of 1986, as amended (the Code), were previously
permitted to establish reserves for bad debts and to make annual additions thereto that
may, within specified formula limits, be taken as a deduction in computing taxable income
for federal income tax purposes.  The amount of the bad debt reserve deduction is
computed under the experience method.  Under the experience method, the bad debt
reserve deduction is an amount determined under a formula based generally upon the bad
debts actually sustained by the savings association over a period of years. In addition
to the regular income tax, corporations, including savings associations such as First
Security, generally are subject to a minimum tax.  An alternative minimum tax is
imposed at a minimum tax rate of 20% on alternative minimum taxable income, which is the
sum of a corporations regular taxable income (with certain adjustments) and tax
preference items, less any available exemption.  The alternative minimum tax is
imposed to the extent it exceeds the corporations regular income tax and net
operating losses can offset no more than 90% of alternative minimum taxable income. A portion of
the Banks reserves for losses on loans may not, without adverse tax consequences, be
utilized for the payment of cash dividends or other distributions to a shareholder
(including distributions on redemption, dissolution or liquidation) or for any other
purpose (except to absorb bad debt losses).  As of December 31, 2003, First
Securitys excess for tax purposes totaled approximately $2.0 million. First
Security files its federal, state and local income tax returns on a calendar year basis
using the accrual method of accounting. First
Security has not been audited by the IRS with respect to consolidated federal income tax
returns in the past five years. With respect to years examined by the IRS, either all
deficiencies have been satisfied or sufficient reserves have been established to satisfy
asserted deficiencies.   In the opinion of management, any examination of still
open returns (including returns of subsidiary and predecessors of, or entities merged
into, First Security) would not result in a deficiency that could have a material adverse
effect on the financial condition of First Security and its consolidated subsidiary. Illinois
Taxation.  For Illinois income tax purposes, the Bank is taxed at an
effective rate equal to 7.18% of Illinois taxable income.   For these purposes,
Illinois Taxable Income generally means federal taxable income, subject to
certain adjustments (including the addition of interest income on state and municipal
obligations and the exclusion of interest income on United States Treasury obligations). 22   Delaware
Taxation.  As a Delaware holding company, the Company is exempted from
Delaware corporate income tax but is required to file an annual report with and pay an
annual fee to the State of Delaware.  The Company is also subject to an annual
franchise tax imposed by the State of Delaware. Employees At December
31, 2003, the Company, including its subsidiaries, had a total of 96 employees, including
23 part-time employees.  Our employees are not represented by any collective
bargaining group.   Management considers its employee relations to be good. Executive and Other
Officers of the Company Who Are Not Directors The business
experience of each officer who is not also a director is set forth below. Each of the
following officers serves until his or her successor is duly elected. Executive Officers Harry
Kucewicz.  Mr. Kucewicz, age 47, is currently serving as the Treasurer and Chief
Financial Officer of both the Company and the Bank.  He began working at the Bank in
1978 as the Controller.  He was elected Treasurer and Chief Financial Officer in
1990.  Mr. Kucewicz is responsible for all of the Companys and Banks
financial and accounting functions. Paul T.
Bandriwsky.  Mr. Bandriwsky, age 48, is currently Vice President and Chief Operating
Officer of both the Company and the Bank.   He began working at the Bank in 2000
and was appointed to his present capacity at that time.  Mr. Bandriwsky has over 20
years of experience in banking management, lending and real estate.  He is
responsible for the day-to-day operations of the Banks retail banking branches,
human resources and marketing/advertising. Other Officers Mary H.
Korb.  Ms. Korb, age 56, is currently Vice President of the Company and Vice
President  Lending of the Bank.  Ms. Korb supervises all aspects of the
Banks lending operations, including lending compliance.  Ms. Korb has been with
the Bank since 1970, and has served in her present capacity since March 1991. Irene S.
Subota.  Ms. Subota, age 57, currently serves as Vice President of the Company and as
Vice President  Savings of the Bank.  Ms. Subota is in charge of all aspects of
the Banks savings function, including compliance.  Ms. Subota has been employed
by the Bank since 1973, and has served in her current position since 1992. Adrian
Hawryliw.  Mr. Hawryliw, age 67, has served as Philadelphia Branch Manager of the
Bank since 1994 when the Philadelphia, Pennsylvania branch was acquired from the
Resolution Trust Corporation, and is currently a Vice President of the Bank and of the
Company.  Mr. Hawryliw is responsible for supervising operations of the Philadelphia,
Pennsylvania branch, including business development, retail deposits, real estate lending,
accounting and marketing.  He has over 34 years of banking experience in the
Philadelphia area, holding various positions including Chief Financial Officer and Vice
President/Investments for other area institutions. Peter
Ilnyckyj. Mr. Ilnyckyj, age 35 is currently serving as the Vice President of Investor
Relations of both the Company and the Bank. Mr. Ilnyckyj began working at the Bank in 1987
and was elected Vice President in 2002. Mr. Ilnyckyj has also functioned as the Accounting
Department Manager since 1994 and oversees the daily accounting duties and OTS Regulatory
Reporting. 23   Item 2. Properties The following
table sets forth information concerning the main office and each branch office of the Bank
at December 31, 2003.  At December 31, 2003, the Banks premises had an
aggregate net book value of approximately $3.8 million. Location
    Year
      Acquired/
      Established
    
    Owned or
      Leased
    
    Net Book Value
      at
      December 31, 2003
    
    Deposits(In Thousands)Main
      Office:936 North
      Western Avenue
      Chicago, Illinois 60622-4695
    
    
    
    1964
    
    
    Owned
    
    $
    888
    
    $
    171,711Branch
      Offices:820 N. Western
      Avenue
      Chicago, Illinois 60622
    
    
    
    1983
    
    
    Owned
    
    
    158
    
    
    3,3805670 N.
      Milwaukee Avenue
      Chicago, Illinois 60646
    
    
    
    1993
    
    
    Owned
    
    
    840
    
    
    32,7767918 Bustleton
      Avenue
      Philadelphia, Pennsylvania 19152
    
    
    
    1994
    
    
    Owned
    
    
    477
    
    
    81,1882251 Plum
      Grove Road
      Palatine, Illinois 60067
    
    
    
    2002
    
    
    Owned
    
    
    1,466
    
    
    20,787 We believe
that our current facilities are adequate to meet our present and foreseeable future
needs. The
Banks depositor and borrower customer files are maintained by an independent data
processing company.  The net book value of the data processing and computer equipment
utilized by the Bank at December 31, 2003 was approximately $150,400. Item 3. Legal
Proceedings From time to
time, First Security is involved as plaintiff or defendant in various legal proceedings
arising in the normal course of its business.  While the ultimate outcome of these
various legal proceedings cannot be predicted with certainty, it is the opinion of
management that the resolution of these legal actions should not have a material effect on
the Companys and the Banks financial position or results of operations. Item 4. Submission of
Matters to a Vote of Security Holders No matter was
submitted to a vote of security holders, through the solicitation of proxies or otherwise,
during the quarter ended December 31, 2003. PART II Item 5. Market for
Registrants Common Equity and Related Stockholder Matters The
information set forth under the caption Shareholders Information in the
attached 2003 Annual Report to Stockholders is incorporated herein by reference. Item 6. Selected
Financial Data The
information set forth under the caption Selected Consolidated Financial
Information in the attached 2003 Annual Report to Stockholders is incorporated
herein by reference. Item 7.
Managements Discussion and Analysis of Financial Condition and Results of
Operations The
information set forth under the caption Managements Discussion and
Analysis in the attached 2003 Annual Report to Stockholders is incorporated herein
by reference.  24   Item 7A. Quantitative
and Qualitative Disclosures About Market Risk The
information set forth under the caption Quantitative and Qualitative Disclosures
About Market Risk in the attached 2003 Annual Report to Stockholders is incorporated
herein by reference. Item 8. Financial
Statements and Supplementary Data The
information set forth under the caption Consolidated Financial Statements in
the attached 2003 Annual Report to Stockholders is incorporated herein by reference. Item 9. Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure There has
been no Current Report on Form 8-K filed within 24 months prior to the date of the most
recent financial statements reporting a change of accountants and/or reporting
disagreements on any matter of accounting principle or financial statement disclosure. Item 9A. Controls and
Procedures The Company
has adopted interim disclosure controls and procedures designed to facilitate the
Companys financial reporting. The interim disclosure controls currently consist of
communications among the Chief Executive Officer, the Chief Financial Officer and each
department head to identify any transactions, events, trends, risks or contingencies which
may be material to the Companys operations. The Companys disclosure controls
also contain certain elements of its internal controls adopted in connection with
applicable accounting and regulatory guidelines. Finally, the Chief Executive Officer, the
Chief Financial Officer, the Audit Committee and the Companys independent auditors
also meet on a quarterly basis and discuss the Companys material accounting
policies. The Companys Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of these interim disclosure controls as of the end of the
period covered by this report and found them to be adequate. The Company
maintains internal control over financial reporting. There have not been any significant
changes in such internal control over the financial reporting in the last quarter that
have materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting. PART III Item 10. Directors and
Executive Officers of the Registrant Directors The
information concerning Directors of the Corporation is incorporated herein by reference
from the definitive Proxy Statement for the Annual Meeting of Stockholders to be held in
May 2004. Executive Officers Information
regarding the business experience of the executive officers of the Corporation and the
Bank who are not also directors contained in Part I of this Form 10-K is incorporated
herein by reference. Section 16(a) Beneficial
Ownership Reporting Compliance The
information set forth under the caption Section 16(a) Beneficial Ownership Reporting
Compliance in our definitive Proxy Statement for the Annual Meeting of Stockholders
to be held in May 2004 is incorporated herein by reference. Item 11. Executive
Compensation Information
concerning executive compensation is incorporated herein by reference from the definitive
Proxy Statement for the Annual Meeting of Stockholders to be held in May 2004.  25  Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information
concerning security ownership of certain beneficial owners and management and information
concerning equity compensation plans is incorporated herein by reference from the
definitive Proxy Statement for the Annual Meeting of Stockholders to be held in May 2004. Item 13. Certain
Relationships and Related Transactions Information
concerning certain relationships and related transactions is incorporated herein by
reference from the definitive Proxy Statement for the Annual Meeting of Stockholders to be
held in May 2004 a copy of which will be filed not later than 120 days after the close of
the fiscal year. Item 14. Principal
Accountant Fees and Services Information
concerning principal accountant fees and services is incorporated herein by reference from
the definitive Proxy Statement for the Annual Meeting of Stockholders to he held in May
2004 a copy of which will be filed not later than 120 days after the close of the fiscal
year. PART IV Item 15. Exhibits, Financial
Statement Schedules and Reports on Form 8-K (a)(1) Financial Statements: The following financial statements
are included in this Form 10-K: 1.

Five-Year
Summary of Selected Consolidated Financial Data.  2.

Report
of Independent Auditors.  3.

Consolidated
Balance Sheets at December 31, 2003 and 2002.  4.

Consolidated
Statements of Income for the fiscal years ended December 31, 2003, 2002 and 2001.  5.

Consolidated
Statements of Comprehensive Income for the fiscal years ended December 31, 2003, 2002 and
2001.  6.

Consolidated
Statements of Shareholders' Equity for the fiscal years ended December 31, 2003, 2002 and
2001.  7.

Consolidated
Statements of Cash Flows for the fiscal years ended December 31, 2003, 2002 and 2001.  8.

Notes
to Consolidated Financial Statements.  (a)(2) Financial Statement Schedules: All financial statement schedules
have been omitted as the required information is inapplicable or has been included in the
Notes to Consolidated Financial Statements. (a)(3) Exhibits: See Exhibit Index. (b) Reports on Form 8-K: There were no current reports on
Form 8-K filed by the Corporation during the quarter ended December 31, 2003. 26  SIGNATURES Pursuant to the requirements of
Section 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.


FIRST SECURITYFED FINANCIAL, INC.
By: /s/ Julian E. Kulas  Its:  President and Chief Executive officer
Date: March 30, 2003


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. /s/ Julian E. Kulas
     
     /s/ Steve BabykJulian E. Kulas
     Steve BabykPresident, Chief Executive Officer and Director
     Director(Principal Executive Officer)Date: March 30, 2004
     Date: March 30, 2004/s/ Lila Maria Bodnar
     /s/ Myron DobrowolskyLila Maria Bodnar
     Myron DobrowolskyRecording Secretary and Director
     DirectorDate: March 30, 2004
     Date: March 30, 2004/s/ Terry Gawryk
     /s/ George KawkaTerry Gawryk
     George KawkaSecretary and Director
     DirectorDate: March 30, 2004
     Date: March 30, 2004/s/ Paul Nadzikewycz
     /s/ Jaroslav H. SydorenkoPaul Nadzikewycz
     Jaroslav H. SydorenkoChairman of the Board
     DirectorDate: March 30, 2004
     Date: March 30, 2004/s/ Chrysta Wereszczak
     /s/ Harry KucewiczChrysta Wereszczak
     Harry KucewiczDirector
     Principal Financial and Accounting OfficerDate: March 30, 2004
     Date: March 30, 2004  27  EXHIBIT INDEX Regulation
S-K
Exhibit
Number
      Document
      Reference to
Prior Filing
or Exhibit
Number
Attached
Hereto3(a)
Certificate of Incorporation
*3(b)
By-Laws
**4
Instruments defining the right of security holders, including debentures
*10
Executive Compensation Plans and Arrangements(a) Employment Agreement between Julian E. Kulas and the Bank.
***(b) Change-In-Control Severance Agreement between Harry I. Kucewicz and the Bank
***(c) Change-In-Control Severance Agreement between Paul Bandriwsky and the Bank
***(d) 1998 Stock Option and Incentive Plan
****(e) 1998 Recognition and Retention Plan
****13
Annual Report to Security Holders
1314
Code of Ethics
1421
Subsidiaries of Registrant
2123
Consent of Independent Auditor
2331.1
Certification of Chief Executive Officer pursuant to Section 302 of theSarbanes-Oxley Act of 2002
31.131.2
Certification of Chief Financial Officer pursuant to Section 302 of theSarbanes-Oxley Act of 2002
31.232
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32 _____________*    Filed as an Exhibit to the
Company's Form S-1 Registration Statement filed on July 21, 1997 (File No. 333-31739)
pursuant to Section 5 of the Securities Act of 1933.  All of such previously filed
documents are hereby incorporated herein by reference in accordance with Item 601 of
Regulation S-K. **   Filed as an Exhibit to the
Company's Form 10-Q Quarterly report filed on November 15,1999 (File No. 000-23063)
pursuant to Section 12 of the Securities Exchange Act of 1934. All of such previously
filed documents are hereby incorporated by reference in accordance with Item 601 of
Regulation S-K. ***  Filed as an Exhibit to the
Company's Annual Report on Form 10-K filed on March 31, 2003 (File no. 000-23063)
pursuant to Section 12 of the Securities Exchange Act of 1934. All of such previously
filed documents are hereby incorporated by reference in accordance with Item 601 of
Regulation S-K. **** Filed as an Exhibit
to the Company's Definitive Proxy Statement on Schedule 14A on March 24, 1998 (File No.
0-23063).  All of such previously filed documents are hereby incorporated herein by
reference in accordance with Item 601 of Regulation S-K.  28