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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.

FORM 10-QSB

ý QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

OR

o TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT

For the transition period
from                            to

Commission File No. 0-28934

Empire Federal Bancorp, Inc.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation or organization)                   |  | 81-0512374(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------------------------- |  | ----------------------------------------------
|123 South Main Street, Livingston, Montana 59047(Address of principal executive offices)
|(406) 222-1981(Registrant's telephone number, including area code)                      

Check
whether the issuer (1) filed all reports required to be filed by Sections 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. YES ý NO o

State
the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date.

|Class: |  | Common Stock, par value $.01 per share
Outstanding at October 31, 2002: 1,507,643
|------ |  | ---------------------------------------------------------------------------------

Transitional
Small Business Disclosure Format (check
one): YES o NO ý

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EMPIRE FEDERAL BANCORP, INC.        INDEX TO FORM 10-QSB

|                                                                     |  |                                                                                                                   |  | Page
|-------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- |  | ----
|PART I                                                               |  | FINANCIAL INFORMATION                                                                                             |  |     
|Item 1.                                                              |  | Financial Statements                                                                                              |  |     
|                                                                     |  | Consolidated Balance Sheets at September 30, 2002 and December 31, 2001 (unaudited)                               |  | 1   
|                                                                     |  | Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2002 and 2001 (unaudited) |  | 2   
|                                                                     |  | Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001 (unaudited)           |  | 3   
|                                                                     |  | Notes to Unaudited Interim Consolidated Financial Statements                                                      |  | 4   
|Item 2.                                                              |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                             |  | 9   
|Item 3.                                                              |  | Controls and Procedures                                                                                           |  | 15  
|PART II                                                              |  | OTHER INFORMATION                                                                                                 |  |     
|Item 1.                                                              |  | Legal Proceedings                                                                                                 |  | 16  
|Item 2.                                                              |  | Changes in Securities                                                                                             |  | 16  
|Item 3.                                                              |  | Defaults upon Senior Securities                                                                                   |  | 16  
|Item 4.                                                              |  | Submission of Matters to a Vote of Security Holders                                                               |  | 16  
|Item 5.                                                              |  | Other Information                                                                                                 |  | 16  
|Item 6.                                                              |  | Exhibits and Reports on Form 8-K                                                                                  |  | 16  
|SIGNATURES                                                           |  | 17                                                                                                               
|CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER |  | 18                                                                                                               

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Part I, Item 1Financial Statements

EMPIRE FEDERAL BANCORP, INC. AND SUBSIDIARIES  Consolidated Balance Sheets  September 30, 2002 and December 31, 2001  (unaudited)

|                                                              |                                                                                                   | September 30,
2002                         |            | December 31,
2001 |            
|------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | ----------------- | -----------
|Assets                                                        |                                                                                                   |                                            |            |                   |            
|Cash and due from banks                                       |                                                                                                   | $                                          | 5,958,493  |                   | $          
|Interest-bearing deposits                                     |                                                                                                   |                                            | 47,597,580 |                   |            
|                                                              |                                                                                                   |                                            |            |                   |            
|                                                              | Cash and cash equivalents                                                                         |                                            |            | 53,556,073        |            
|Investments and mortgage-backed securities available-for-sale |                                                                                                   |                                            | 83,004,002 |                   |            
|Loans receivable, net                                         |                                                                                                   |                                            | 73,032,368 |                   |            
|Loans held for sale                                           |                                                                                                   |                                            | 2,417,011  |                   |            
|Stock in Federal Home Loan Bank of Seattle, at cost           |                                                                                                   |                                            | 1,746,600  |                   |            
|Accrued interest receivable                                   |                                                                                                   |                                            | 1,084,339  |                   |            
|Premises and equipment, net                                   |                                                                                                   |                                            | 4,869,348  |                   |            
|Prepaid expenses and other assets                             |                                                                                                   |                                            | 445,370    |                   |            
|                                                              |                                                                                                   |                                            |            |                   |            
|                                                              |                                                                                                   | Total assets                               |            | $                 | 220,155,111
|                                                              |                                                                                                   |                                            |            |                   |            
|Liabilities and Stockholders' Equity                          |                                                                                                   |                                            |            |                   |            
|Liabilities:                                                  |                                                                                                   |                                            |            |                   |            
|                                                              | Demand deposits                                                                                   |                                            |            | 4,664,438         |            
|                                                              | NOW accounts                                                                                      |                                            |            | 19,746,752        |            
|                                                              | Money market                                                                                      |                                            |            | 52,770,660        |            
|                                                              | Regular savings                                                                                   |                                            |            | 13,013,140        |            
|                                                              | Certificates of deposit                                                                           |                                            |            | 86,470,828        |            
|                                                              |                                                                                                   |                                            |            |                   |            
|                                                              |                                                                                                   | Total deposits                             |            |                   | 176,665,818
|                                                              | Advances from Federal Home Loan Bank and other borrowed funds                                     |                                            |            | 13,000,000        |            
|                                                              | Note payable                                                                                      |                                            |            |                  |            
|                                                              | Advances from borrowers for taxes and insurance                                                   |                                            |            | 266,954           |            
|                                                              | Accrued expenses and other liabilities                                                            |                                            |            | 1,553,886         |            
|                                                              |                                                                                                   |                                            |            |                   |            
|                                                              |                                                                                                   | Total liabilities                          |            |                   | 191,486,658
|Stockholders' equity:                                         |                                                                                                   |                                            |            |                   |            
|                                                              | Preferred stock, par value $.01 per share, 250,000 shares authorized, none issued and outstanding |                                            |            |                  |            
|                                                              | Common stock, par value $.01 per share, 4,000,000 shares authorized, 2,592,100 issued             |                                            |            | 25,921            |            
|                                                              | Additional paid-in capital                                                                        |                                            |            | 25,362,933        |            
|                                                              | Unearned ESOP and MRDP compensation                                                               |                                            |            | (1,367,915        | )          
|                                                              | MRDP shares acquired                                                                              |                                            |            | (258,864          | )          
|                                                              | Retained earnings, substantially restricted                                                       |                                            |            | 18,047,535        |            
|                                                              | Accumulated other comprehensive income, net                                                       |                                            |            | 1,750,776         |            
|                                                              | Treasury shares acquired, at cost, 1,084,457 shares at September 30, 2002 and December 31, 2001   |                                            |            | (14,891,933       | )          
|                                                              |                                                                                                   |                                            |            |                   |            
|                                                              |                                                                                                   | Total stockholders' equity                 |            |                   | 28,668,453 
|                                                              |                                                                                                   |                                            |            |                   |            
|                                                              |                                                                                                   | Total liabilities and stockholders' equity |            | $                 | 220,155,111
|                                                              |                                                                                                   |                                            |            |                   |            

See
accompanying notes to unaudited interim consolidated financial statements.

1

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EMPIRE FEDERAL BANCORP, INC. AND SUBSIDIARIES        Consolidated Statements of Operations  Three and Nine Months Ended September 30, 2002 and 2001  (unaudited)

|                                  |                                                     | Three Months Ended
September 30   |           | Nine Months Ended
September 30
|--------------------------------- | --------------------------------------------------- | --------------------------------- | --------- | ------------------------------
|
|Interest income:                  |                                                     |                                   |           |                               
|                                  | Loans receivable                                    |                                   | $         | 1,408,921                     
|                                  | Mortgage-backed securities                          |                                   |           | 374,332                       
|                                  | Investment securities                               |                                   |           | 393,209                       
|                                  | Other                                               |                                   |           | 233,183                       
|                                  |                                                     |                                   |           |                               
|                                  |                                                     | Total interest income             |           |                               
|                                  |                                                     |                                   |           |                               
|Interest expense:                 |                                                     |                                   |           |                               
|                                  | Deposits                                            |                                   |           | 1,445,504                     
|                                  | FHLB advances and other borrowings                  |                                   |           | 162,892                       
|                                  |                                                     |                                   |           |                               
|                                  |                                                     | Total interest expense            |           |                               
|                                  |                                                     |                                   |           |                               
|                                  | Net interest income                                 |                                   |           | 801,249                       
|                                  |                                                     |                                   |           |                               
|Provision for loan losses         |                                                     |                                   | 30,000    |                               
|                                  |                                                     |                                   |           |                               
|                                  | Net interest income after provision for loan losses |                                   |           | 771,249                       
|Non-interest income:              |                                                     |                                   |           |                               
|                                  | Insurance commission income                         |                                   |           | 172,742                       
|                                  | Customer service charges                            |                                   |           | 69,952                        
|                                  | Gain on sale of investments, net                    |                                   |           | 61,406                        
|                                  | Gain on sale of loans                               |                                   |           | 116,447                       
|                                  | Other                                               |                                   |           | 2,445                         
|                                  |                                                     |                                   |           |                               
|                                  |                                                     | Total non-interest income         |           |                               
|Non-interest expense:             |                                                     |                                   |           |                               
|                                  | Compensation and benefits                           |                                   |           | 596,278                       
|                                  | Occupancy and equipment                             |                                   |           | 179,476                       
|                                  | Deposit insurance premiums                          |                                   |           | 24,750                        
|                                  | Merger and acquisition costs                        |                                   |           | 221,581                       
|                                  | Other                                               |                                   |           | 260,938                       
|                                  |                                                     |                                   |           |                               
|Total non-interest expense        |                                                     |                                   | 1,283,023 |                               
|                                  |                                                     |                                   |           |                               
|                                  |                                                     | Income (loss) before income taxes |           |                               
|Income tax expense (benefit)      |                                                     |                                   | (25,996   | )                             
|                                  |                                                     |                                   |           |                               
|                                  |                                                     | Net income (loss)                 |           | $                             
|                                  |                                                     |                                   |           |                               
|Basic earnings (loss) per share   |                                                     | $                                 | (0.05     | )                             
|                                  |                                                     |                                   |           |                               
|Diluted earnings (loss) per share |                                                     | $                                 | (0.05     | )                             
|                                  |                                                     |                                   |           |                               
|Dividends declared per share      |                                                     | $                                 | 0.115     |                               
|                                  |                                                     |                                   |           |                               

See
accompanying notes to unaudited interim consolidated financial statements.

2

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EMPIRE FEDERAL BANCORP, INC. AND SUBSIDIARIES  Consolidated Statements of Cash Flows  Nine Months Ended September 30, 2002 and 2001  (unaudited)

|                                               |                                                                                     | Nine Months Ended
September 30,                                                             |                                                 
|---------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------------------------------
|
|Cash flows from operating activities:          |                                                                                     |                                                                                             |                                                 
|                                               | Net (loss) income                                                                   |                                                                                             | $                                               
|                                               | Adjustments to reconcile net income to net cash provided by operating activities:   |                                                                                             |                                                 
|                                               |                                                                                     | Provision for loan losses                                                                   |                                                 
|                                               |                                                                                     | Depreciation                                                                                |                                                 
|                                               |                                                                                     | Loss on sale of premises and equipment                                                      |                                                 
|                                               |                                                                                     | ESOP shares committed to be released                                                        |                                                 
|                                               |                                                                                     | MRDP shares vested                                                                          |                                                 
|                                               |                                                                                     | Gain on sale of investments and mortgage-backed securities available for sale               |                                                 
|                                               |                                                                                     | Gain on sale of loans                                                                       |                                                 
|                                               |                                                                                     | Amortization of premium & discounts on mortgage-backed securities and investment securities |                                                 
|                                               |                                                                                     | Stock dividends reinvested in Federal Home Loan Bank                                        |                                                 
|                                               |                                                                                     | Proceeds from sales of loans                                                                |                                                 
|                                               |                                                                                     | Origination of loans held for sale                                                          |                                                 
|                                               |                                                                                     | Increase in accrued interest receivable                                                     |                                                 
|                                               |                                                                                     | (Increase) decrease in prepaid expenses and other assets                                    |                                                 
|                                               |                                                                                     | (Decrease) increase in accrued expenses and other liabilities                               |                                                 
|                                               |                                                                                     |                                                                                             |                                                 
|                                               |                                                                                     |                                                                                             | Net cash provided (used) by operating activities
|                                               |                                                                                     |                                                                                             |                                                 
|Cash flows from investing activities:          |                                                                                     |                                                                                             |                                                 
|                                               | Net change in loans receivable                                                      |                                                                                             |                                                 
|                                               | Proceeds from matured or called investment securities available for sale            |                                                                                             |                                                 
|                                               | Proceeds from sale of investments and mortgage-backed securities available-for-sale |                                                                                             |                                                 
|                                               | Principal payments on mortgage-backed securities available-for-sale                 |                                                                                             |                                                 
|                                               | Purchases of mortgage-backed securities available-for-sale                          |                                                                                             |                                                 
|                                               | Purchases of investment securities available-for-sale                               |                                                                                             |                                                 
|                                               | Purchases of premises and equipment                                                 |                                                                                             |                                                 
|                                               | Proceeds from sale of premises and equipment                                        |                                                                                             |                                                 
|                                               |                                                                                     |                                                                                             |                                                 
|                                               |                                                                                     |                                                                                             | Net cash (used) provided by investing activities
|                                               |                                                                                     |                                                                                             |                                                 
|Cash flows from financing activities:          |                                                                                     |                                                                                             |                                                 
|                                               | Net change in deposits                                                              |                                                                                             |                                                 
|                                               | Repayment of note payable                                                           |                                                                                             |                                                 
|                                               | Net change in advances from borrowers for taxes and insurance                       |                                                                                             |                                                 
|                                               | Dividends paid                                                                      |                                                                                             |                                                 
|                                               | Proceeds from advances from FHLB                                                    |                                                                                             |                                                 
|                                               | Repayment of advances from FHLB                                                     |                                                                                             |                                                 
|                                               |                                                                                     |                                                                                             |                                                 
|                                               |                                                                                     |                                                                                             | Net cash provided by financing activities       
|                                               |                                                                                     |                                                                                             |                                                 
|Net increase in cash and cash equivalents      |                                                                                     |                                                                                             | 7,019,970                                       
|Cash and cash equivalents, beginning of period |                                                                                     |                                                                                             | 46,536,103                                      
|                                               |                                                                                     |                                                                                             |                                                 
|Cash and cash equivalents, end of period       |                                                                                     | $                                                                                           | 53,556,073                                      
|                                               |                                                                                     |                                                                                             |                                                 
|Cash paid during the period for:               |                                                                                     |                                                                                             |                                                 
|                                               | Interest                                                                            |                                                                                             | $                                               
|                                               | Income taxes                                                                        |                                                                                             |                                                 
|                                               |                                                                                     |                                                                                             |                                                 

See
accompanying notes to unaudited interim consolidated financial statements

3

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EMPIRE FEDERAL BANCORP, INC. AND SUBSIDIARIES        Notes to Unaudited Interim Consolidated Financial Statements  September 30, 2002

Note 1Basis of Presentation

The
accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for
interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for audited
financial statements. They should be read in conjunction with the audited consolidated financial statements filed as part of the Annual Report on Form 10-KSB for the year ended
December 31, 2001.

The
accompanying consolidated financial statements include the accounts of Empire Federal Bancorp, Inc. (the Holding Company) and its wholly owned subsidiary, Empire Bank (Empire
or the Bank) and Dime Service Corporation (Dime), a wholly-owned subsidiary of Empire. The Holding Company, Empire and Dime are herein referred to collectively as "the Company." All significant
intercompany balances and transactions have been eliminated in consolidation.

In
the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentations have been included. The results of operations for the
three and nine months ended September 30, 2002, and 2001 are not necessarily indicative of the results, which may be expected for an entire year or any other period.

In
August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which supersedes both SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of
OperationsReporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for the disposal of a segment of a business. SFAS No. 144 retains the fundamental
provisions in SFAS No. 121 for recognizing and measuring impairment losses on long-lived assets held for use and long-lived assets to be disposed of by sale, while also resolving significant
implementation issues associated with SFAS No. 121. SFAS No. 144 retains the basic provisions of APB Opinion 30 on how to present discontinued operations in the income statement
but broadens that presentation to include a component of an entity rather than a segment of a business.

The
Company adopted the provisions of SFAS No. 144 as of January 1, 2002. The adoption of SFAS No. 144 for long-lived assets held for use did not have a material
impact on the Company's financial statements because the impairment assessment under SFAS No. 144 is largely unchanged from SFAS No. 121. The provisions of the statement for assets held
for sale or other disposal generally are required to be applied prospectively to newly initiated disposal activities.

Note 2Comprehensive Income

The
Company's only component of comprehensive income is the net unrealized gains or losses on securities available-for-sale. The following summarizes total
comprehensive income (loss) for the noted periods:

Three Months Ended September 30,

Nine Months Ended September 30,2002

2001

2002

2001$
256,189

$
325,198

$
(32,674
)
$
1,142,257


4

---

Note 3Earnings Per Share

Basic
earnings per share (EPS) excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the
period.
Additionally, ESOP shares, which are unallocated and not yet committed to be released (unallocated), and unvested MRDP shares issued are excluded from the weighted-average common shares outstanding
calculation. At September 30, 2002, included in the weighted average calculations were 59,144 allocated shares, 9,216 committed to be released ESOP shares and 76,368 vested MRDP shares.

Diluted
EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or resulted in the issuance of common stock that would
share in the earnings of the entity. Dilutive potential common shares are added to the weighted-average shares used to compute basic EPS. The following information provides a reconciliation of the
numerators and denominators of the basic and fully diluted EPS computation:

|                                                   |                                                                        | For the nine months ended September 30
|-------------------------------------------------- | ---------------------------------------------------------------------- | --------------------------------------
|
|
|Basic EPS                                          |                                                                        |                                       
|Net (loss) income available to common stockholders |                                                                        | $                                     
|                                                   |                                                                        |                                       
|Effect of Dilutive Securities                      |                                                                        |                                       
|                                                   | Stock Options                                                          |                                       
|                                                   | Unvested MRDP shares                                                   |                                       
|                                                   |                                                                        |                                       
|Diluted EPS                                        |                                                                        |                                       
|                                                   | (Loss) income available to common stockholders plus assumed conversion |                                       
|                                                   |                                                                        |                                       

|                                                   |                                                                        | For the three months ended September 30
|-------------------------------------------------- | ---------------------------------------------------------------------- | ---------------------------------------
|
|
|Basic EPS                                          |                                                                        |                                        
|Net (loss) income available to common stockholders |                                                                        | $                                      
|                                                   |                                                                        |                                        
|Effect of Dilutive Securities                      |                                                                        |                                        
|                                                   | Stock Options                                                          |                                        
|                                                   | Unvested MRDP shares                                                   |                                        
|                                                   |                                                                        |                                        
|Diluted EPS                                        |                                                                        |                                        
|                                                   | (Loss) income available to common stockholders plus assumed conversion |                                        
|                                                   |                                                                        |                                        

Note 4Cash Dividend Declared

On
July 23, 2002, the Board of Directors declared a quarterly cash dividend of $0.115 per common share to stockholders of record on August 16, 2002 payable on
August 30, 2002.

5

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Note 5 Capital Compliance

The
following table presents Empire's compliance with its regulatory capital requirements as of September 30, 2002 (dollars in thousands):

Amount

Percentage
of AssetsGAAP capital(1)

$
28,333

12.88
%Tangible capital

$
26,101

12.04
%Tangible capital requirement


3,251

1.50
%Excess

$
22,850

10.54
%Core capital

$
26,101

12.04
%Core capital requirement


8,670

4.00
%Excess

$
17,431

8.04
%Total risk-based capital(2)

$
27,168

29.03
%Total risk-based capital requirement(2)


7,487

8.00
%Excess

$
19,681

21.03
%


---

Note 6Operating Segment Information

The
Company evaluates segment performance internally based on its two primary lines of business, commercial banking and insurance, and thus the operating segments are so defined. The
operating segment defined as "other" includes the Holding Company and elimination of transactions between segments.

The
accounting policies of the individual operating segments are the same as those of the Company. Transactions between operating segments are primarily conducted at fair value,
resulting in profits that are eliminated for reporting consolidated results of operations.

6

---

The
following is a summary of selected operating segment information as of and for the nine months ended September 30, 2002 and 2001.

|2002:                        |                                   | Empire |             | Dime      |   | Other   |         | Consolidated |         
|---------------------------- | --------------------------------- | ------ | ----------- | --------- | - | ------- | ------- | ------------ | --------
|Net interest income          |                                   | $      | 2,222,652   |           | $ | 5,809   |         | $            |        
|Non-interest income(loss)    |                                   |        | 1,051,045   |           |   | 431,189 |         |              | (740    
|                             |                                   |        |             |           |   |         |         |              |         
|                             | Total income(loss)                |        |             | 3,273,697 |   |         | 436,998 |              |         
|Provision for loan losses    |                                   |        | 750,000     |           |   |        |         |              |        
|Other non-interest expense   |                                   |        | 2,483,658   |           |   | 435,380 |         |              | 545,977 
|                             |                                   |        |             |           |   |         |         |              |         
|                             | Income (loss) before income taxes |        |             | 40,039    |   |         | 1,618   |              |         
|Income tax expense (benefit) |                                   |        | 15,396      |           |   | 873     |         |              | (187,181
|                             |                                   |        |             |           |   |         |         |              |         
|                             | Net income (loss)                 |        | $           | 24,643    |   | $       | 745     |              | $       
|                             |                                   |        |             |           |   |         |         |              |         
|Assets                       |                                   | $      | 220,105,692 |           |   | 523,388 |         |              | (473,969
|Net loans                    |                                   |        | 75,449,379  |           |   |        |         |              |        
|Deposits                     |                                   |        | 176,994,992 |           |   |        |         |              | (329,174
|Stockholders' equity         |                                   |        | 28,332,721  |           |   | 480,527 |         |              | (144,795
|                             |                                   |        |             |           |   |         |         |              |         

|2001:                        |                                   | Empire |             | Dime      |   | Other   |         | Consolidated
|---------------------------- | --------------------------------- | ------ | ----------- | --------- | - | ------- | ------- | ------------
|Net interest income          |                                   | $      | 3,552,058   |           | $ | 9,310   |         | $           
|Non-interest income(loss)    |                                   |        | 621,834     |           |   | 439,348 |         |             
|                             |                                   |        |             |           |   |         |         |             
|                             | Total income(loss)                |        |             | 4,173,892 |   |         | 448,658 |             
|Provision for loan losses    |                                   |        | 75,006      |           |   |        |         |             
|Other non-interest expense   |                                   |        | 2,344,341   |           |   | 417,490 |         |             
|                             |                                   |        |             |           |   |         |         |             
|                             | Income (loss) before income taxes |        |             | 1,754,545 |   |         | 31,168  |             
|Income tax expense (benefit) |                                   |        | 716,042     |           |   | 3,151   |         |             
|                             |                                   |        |             |           |   |         |         |             
|                             | Net income (loss)                 |        | $           | 1,038,503 |   |         | 28,017  |             
|                             |                                   |        |             |           |   |         |         |             
|Assets                       |                                   | $      | 148,674,974 |           |   | 544,547 |         |             
|Net loans                    |                                   |        | 89,918,302  |           |   |        |         |             
|Deposits                     |                                   |        | 100,218,733 |           |   |        |         |             
|Stockholders' equity         |                                   |        | 28,934,715  |           |   | 470,341 |         |             
|                             |                                   |        |             |           |   |         |         |             

7

---

The
following is a summary of selected operating segment information for the three months ended September 30, 2002 and 2001.

|2002:                        |                                   | Empire |         | Dime      |   | Other   |         | Consolidated |         
|---------------------------- | --------------------------------- | ------ | ------- | --------- | - | ------- | ------- | ------------ | --------
|Net interest income          |                                   | $      | 799,291 |           | $ | 1,958   |         |             |         
|Non-interest income (loss)   |                                   |        | 276,322 |           |   | 173,281 |         | (26,611      | )       
|                             |                                   |        |         |           |   |         |         |              |         
|                             | Total income (loss)               |        |         | 1,075,613 |   |         | 175,239 |              | (26,611 
|Provision for loan losses    |                                   |        | 30,000  |           |   |        |         |             |         
|Other non-interest expense   |                                   |        | 838,275 |           |   | 147,755 |         | 296,993      |         
|                             |                                   |        |         |           |   |         |         |              |         
|                             | Income (loss) before income taxes |        |         | 207,338   |   |         | 27,484  |              | (323,604
|Income tax expense (benefit) |                                   |        | 79,731  |           |   | 873     |         | (106,600     | )       
|                             |                                   |        |         |           |   |         |         |              |         
|                             | Net income (loss)                 |        | $       | 127,607   |   |         | 26,611  |              | (217,004
|                             |                                   |        |         |           |   |         |         |              |         

|2001:                             |                     | Empire |           | Dime      |         | Other   |          | Consolidated
|--------------------------------- | ------------------- | ------ | --------- | --------- | ------- | ------- | -------- | ------------
|Net interest income               |                     | $      | 1,109,579 |           | 2,793   |         |         |             
|Non-interest income (loss)        |                     |        | 246,132   |           | 168,160 |         | (34,242  | )           
|                                  |                     |        |           |           |         |         |          |             
|                                  | Total income (loss) |        |           | 1,355,711 |         | 170,953 |          | (34,242     
|Provision for loan losses         |                     |        | 25,002    |           |        |         |         |             
|Other non-interest expense        |                     |        | 723,423   |           | 133,528 |         | 81,407   |             
|                                  |                     |        |           |           |         |         |          |             
|Income (loss) before income taxes |                     |        | 607,286   |           | 37,425  |         | (115,649 | )           
|Income tax expense (benefit)      |                     |        | 254,801   |           | 3,151   |         | (23,719  | )           
|                                  |                     |        |           |           |         |         |          |             
|                                  | Net income (loss)   |        | $         | 352,485   |         | 34,274  |          | (91,930     
|                                  |                     |        |           |           |         |         |          |             

Note 7Definitive Agreement with Sterling Financial Corporation

On
September 19, 2002, Empire Federal Bancorp entered into an Agreement and Plan of Merger with Sterling Financial Corporation, a Washington corporation. Empire will be merged
with and into Sterling, with Sterling being the surviving corporation in the merger.

Under
the terms of the merger, each share of Empire's outstanding common stock will be converted into the right to receive $19.25 per share in the form of Sterling common stock, provided
the average closing price thereof within the ten-day period preceding the fifth trading day prior to the closing date is between $17.01 and $22.68. The merger exchange ratio provides that, regardless
of the closing price of Sterling common stock, Sterling will issue no less than 0.849 and no more than 1.132 of a share of Sterling common stock for each share of Empire's common stock outstanding.
The merger will be structured as a tax-free reorganization and is expected to be completed in the first quarter of 2003.

8

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Part I, Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

General

Management's discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results
of operations of the Company.

Special Note Regarding Forward-Looking Statements

Certain matters in the quarterly report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements relate to, among others, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market,
potential future credit experience, and statements regarding the Company's business strategy. Specifically, the Company has changed its role as a traditional mortgage lender to that of a commercial
bank by increasing its commercial and business lending during fiscal 2001. This reflects the Company's new growth-oriented expansion strategy, which is to pursue internal and external growth
opportunities when management deems it appropriate. This new strategy may subject the Company to a greater degree of risk. Risks associated with this new business strategy include increased risk of
losses on loans, provision for loan losses which exceed historical levels, difficulties in integrating or managing new branches or acquired institutions and problems related to the management of
growth. There can be no assurance that the Company will be successful in implementing this new business strategy or in managing growth.

These
forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Company's actual results, performance, or
achievements may differ materially from those suggested, expressed, or implied by forward-looking statements due to a wide range of factors including, but not limited to, the general business
environment, the direction of future interest rates, the local real estate market, competitive conditions between banks and non-bank financial services providers, regulatory changes, labor
market competitiveness, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission.

Critical Accounting Policies

Companies may apply certain critical accounting policies requiring management to make subjective or complex judgments, often as a result of the need to estimate
the effect of matters that are inherently uncertain. The Company considers its only critical accounting policy to be the allowance for loan losses. The allowance for loan losses is established through
a provision for loan losses charged against earnings. The balance of allowance for loan losses is maintained at the amount management believes will be adequate to absorb known and inherent losses in
the loan portfolio. The appropriate balance of allowance for loan losses is determined by applying estimated loss factors to the credit exposure from outstanding loans. Estimated loss factors are
based on subjective measurements including management's assessment of the internal risk classifications, changes in the nature of the loan portfolio, industry concentrations and the impact of current
local, regional and national economic factors on the quality of the loan portfolio. Changes in these estimates and assumptions are reasonably possible and may have a material impact on the Company's
consolidated financial statements, results of operation or liquidity.

Operating Strategy

The Bank is a community oriented financial institution which has traditionally offered a variety of savings products to its retail customers while concentrating
its lending activities on the origination of loans secured by one-to-four family residential dwellings. In the past, the Bank considered Gallatin, Park and Sweet Grass counties
in south central Montana as its primary market area. During 1999, the Bank received regulatory approval to open a de novo branch in Billings, Montana, and management

9

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opened the new branch in April 2001. In addition, the Bank opened a loan production office in Missoula, Montana during the third quarter of 2000, which was converted to a full service branch
that opened during March 2002. Lending activities also have included the origination of multi-family, commercial, business, commercial real estate and home equity loans. The Bank's primary
business has been that of a traditional financial institution, originating loans in its primary market area for its portfolio. In addition, the Bank has maintained a significant portion of its assets
in investment and mortgage-backed securities. Similar to its lending activities, the Bank's investment portfolio has been weighted toward U.S. Government, U.S. Government agency and U.S. Government
agency mortgage-backed securities secured by one-to-four family residential properties. The Bank plans to continue to fund its assets primarily with deposits, although FHLB
advances are used as a supplemental source of funds.

The
Bank relies to a significant extent on borrowings from the FHLB of Seattle to finance its short-term and, to a certain extent, its longer term financing needs. The FHLB
of Seattle functions as the central reserve bank providing credit for savings institutions and certain other member financial institutions.

The
Bank's profitability depends primarily on its net interest income, which is the difference between the income it receives on its loan and investment portfolio and its cost of funds,
which consists of interest paid on deposits and FHLB advances. Net interest income is also affected by the relative amounts of interest-earning assets and interest-bearing liabilities. When
interest-earning assets equal or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income. The level of other income and expenses also affects the
Bank's profitability. Other income consists of service charges on checking and NOW accounts and other fees, insurance commissions and net gains or losses on the sale of investments and loans. Other
expenses include compensation and employee benefits, occupancy expenses, deposit insurance premiums, equipment and data servicing expenses, professional fees and other operating costs. The Bank's
results of operations are also significantly affected by general economic and competitive conditions, particularly changes in market interest rates, government legislation and policies concerning
monetary and fiscal affairs, housing and financial institutions and the attendant actions of the regulatory authorities.

The
Bank's strategy is to operate as a conservative, well-capitalized, profitable institution dedicated to offering a full line of community banking services and to providing
quality service to all customers. The Bank believes that it has successfully implemented its strategy by (i) maintaining strong capital levels, (ii) maintaining effective control over
operating expenses to attempt to achieve profitability under differing interest rate scenarios, (iii) emphasizing local loan originations, and (iv) emphasizing high-quality
customer service with a competitive fee structure.

As
evidenced by the new branches in Billings and Missoula coupled with an increase in commercial and business loans, the Bank's strategy is changing from its historical role as a
mortgage lender to a growth-oriented expansion strategy by pursuing internal and external growth opportunities, when appropriate. Further, during 2001 and the first two quarters of 2002, the Bank had
undertaken an aggressive solicitation of deposits by paying higher than the usual interest rates in its markets. During the third quarter of 2002, interest rates were lowered by the Bank to be more
competitive with interest rates in the Bank's market areas. Retention of these new depositors will require an increased emphasis on personal service, more products and expanded locations. The
reinvestment of these deposits into loans and investments that will provide acceptable interest margins will be a critical element of this strategy. This strategy has subjected the Company to a
greater degree of risk. This strategy presents increased risk of losses on loans, provision on loan losses which exceed historical levels, difficulties in integrating or managing new branches or
acquired institutions and problems related to the investment of deposit growth.

10

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On
September 19, 2002, the Company entered into an Agreement and Plan of Merger with Sterling Financial Corporation, a Washington corporation. Empire will be merged with and into
Sterling, with Sterling being the surviving corporation in the merger.

Under
the terms of the merger, each share of the Company's outstanding common stock will be converted into the right to receive $19.25 per share in the form of Sterling common stock,
provided the
average closing price thereof within the ten-day period preceding the fifth trading day prior to the closing date is between $17.01 and $22.68. The merger exchange ratio provides that, regardless of
the closing price of Sterling common stock, Sterling will issue no less than 0.849 and no more than 1.132 of a share of Sterling common stock for each share of Company's common stock outstanding. The
merger will be structured as a tax-free reorganization and is expected to be completed in the first quarter of 2003. See note 7 of "Notes to Unaudited Interim Consolidated Financial
Statements."

Financial Condition

Consolidated assets increased by approximately $45.3 million, or 25.9%, from $174.9 million at December 31, 2001 to $220.2 million at
September 30, 2002.

Short
term interest bearing deposits, primarily with the FHLB, increased from $42.4 million at December 31, 2001 to $47.6 million at September 30, 2002, an
increase of $5.2 million, or 12.4%.

Investment
and mortgage-backed securities available-for-sale increased $47.1 million, or 130.9%, from $35.9 million at December 31, 2001 to
$83.0 million at September 30, 2002 as the result of purchases totaling $58.5 million offset by maturities, sales and payments of $11.9 million and an increase in market
value of $494,000.

Net
loans decreased $9.8 million, or 11.5%, from $85.2 million at December 31, 2001 to $75.4 million at September 30, 2002.

Deposits
increased $49.7 million or 39.2% from $126.9 million at December 31, 2001 to $176.7 million at September 30, 2002. This increase is the result
of a program to attract depositors in all of the Bank's market. The majority of this increase in deposits was in one to two-year certificates and money market accounts. The increase in
deposits has been invested primarily in short-term interest bearing deposits and investments.

Premises
and equipment increased by $273,000 from $4.6 million at December 31, 2001 to $4.9 million at September 30, 2002 primarily as the result of costs of
$515,000 related to the construction of a new branch in Missoula. Depreciation of $289,000 partially offset this increase.

Stockholders'
equity decreased from $28.9 million at December 31, 2001, to $28.7 million at September 30, 2002. The change is the result of net loss of
$334,000, the release of ESOP shares in the amount of $151,000 and an increase of $301,000 (net of taxes) related to the market value of securities available-for-sale. In
addition, 9,334 shares of MRDP vested and unearned MRDP compensation was reduced by $148,000. Stockholders' equity was also decreased by the payment of $471,000 in dividends.
There were 1,084,457 shares held in treasury at September 30, 2002 with an average price of $13.73. Book value per share at September 30, 2002 was $19.02. Stockholders' equity as a
percentage of total assets amounted to 13.0% at September 30, 2002.

Asset Quality

At September 30, 2002, the Bank had eight non-accrual loans amounting to $2.5 million compared to two loans amounting to $747,000 on
December 31, 2001. At September 30, 2002, the Bank had nineteen loans delinquent over 30 days amounting to $2.5 million of which six loans amounting to $1.7 million
were delinquent over 90 days. On December 31, 2001 the Bank had twenty-five loans delinquent over 30 days amounting to $4.5 million. The Bank had no real estate
acquired through foreclosure at September 30, 2002.

11

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Results of Operations

The operating results of the Bank depend primarily on its net interest income. The Bank's net interest income is determined by its interest rate spread, which is
the difference between the yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities and the degree of mismatch in the maturity and re-pricing
characteristics of its interest-earning assets and interest-bearing liabilities. The Bank's net earnings are also affected by the establishment of provisions for loan losses and the level of its other
non-interest income, including insurance commission income and deposit service charges, as well as its other expenses and income tax provisions.

Comparison of Results of Operations for the Nine Months Ended September 30, 2002 and 2001

Net Income.Net income decreased by $1,187,000 from $853,000 for the nine months ended September 30, 2001 to a loss of
$334,000 for the nine months ended September 30, 2002. The major cause of this decrease in net income is the result of the provision for loan losses of $750,000 primarily related to the
deterioration of one multi-family construction loan. This loan was placed on non-accrual and all accrued interest was charged off as of March 31, 2002. Also $861,000 of the loan
principal was charged off against the reserve in the third quarter of 2002. The Bank is in the process of foreclosure on this loan. The Company has incurred $263,000 in merger and acquisition related
expense during 2002. $108,000 of this expense is related to failed mergers and acquisitions. The remaining $155,000 is related to the anticipated merger with Sterling. Further the Bank experienced a
significant growth in interest bearing deposits over the past several quarters including a $49.7 million increase during the nine
months ended September 30, 2002. Most of the deposit growth has been invested in short-term interest bearing deposits or investment securities. The effect of this deposit activity
on the Bank's net interest income, interest rate spread and other factors are discussed in the following narrative.

Net Interest Income.Net interest income decreased $1.3 million, or 37.5%, from $3.6 million for the nine
months ended September 30, 2001 to $2.2 million for the same period in 2002. The interest rate spread decreased from 2.72% for the nine months ended September 30, 2001 to 1.05%
for the comparable period in 2002.

Interest Income.Total interest income decreased by $100,000, or 1.7% from $7.2 million for the nine months ended
September 30, 2001 to $7.1 million for the same period in 2002. The change was primarily attributable to a decrease in the yield on interest earning assets from 7.6% for the nine months
ended September 30, 2001 to 4.8% for the comparable period in 2002. Average interest earning assets increased $69.1 million, or 54.9% from $125.9 million for the nine months ended
September 30, 2001 to $194.9 million for the same period in 2002. The major component of this increase was from average other interest earning assets, primarily short-term
interest bearing deposits of $44.7 million.

Interest Expense.Total interest expense was $4.8 million for the nine months ended September 30, 2002, as
compared to $3.6 million for the same period in 2001. Interest on deposits increased by $1.5 million, or 53.6%, from $2.8 million for the nine months ended September 30,
2001 to $4.3 million for the comparable period in 2002. Interest on notes payable and other debt decreased $293,000, or 36.5% from the nine months ended September 30, 2001 as compared to
the same period in 2002.

Average
deposits for the nine months ended September 30, 2002 amounted to $156.7 million as compared to $79.4 million for the same period in 2001, an increase of
$77.4 million or 97.5%. Included in the average deposits for the nine months ended September 30, 2002 was $88.5 million in certificates of deposit as compared to
$46.2 million for the comparable period in 2001, an increase of $42.2 million or 91.3%. Offsetting the increase in average deposits, the cost of deposits decreased from 4.7% for the nine
months ended September 30, 2001 to 3.7% for the same period in 2002. This increase in deposits is the result of a strategic emphasis by management to attract new depositors and borrowers.
During the third quarter of 2002, deposit rates were lowered by the Bank to be more competitive with prevailing interest rates in the Bank's market areas. Due to the increased volume of deposits
during the

12

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last four quarters, the Bank will continue to experience increased cost of deposits through the end of 2002.

Provision for Loan Losses.The provision for loan losses was $750,000 for nine months ended September 30, 2002 as
compared to $75,000 for the same period in 2001. The significant increase is the result of deterioration in a multi-family construction loan. At the end of both periods, the level of reserves was
deemed to be adequate by management. Loan loss reserves were $434,000 and $411,000 at September 30, 2002 and 2001, respectively. Loan loss reserves as a percentage of loans were .59% at
September 30, 2002, and .48% at September 30, 2001. Management's periodic evaluation of the adequacy
of the allowance is based on factors such as the Bank's past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay,
estimated value of any underlying collateral, current and prospective economic conditions, peer group comparisons, and independent appraisals. In addition, various regulatory agencies, as an integral
part of their examination process, periodically review the Bank's allowance for loan losses. Such agencies may require the Bank to provide additions to the allowance based upon judgments different
from management. Assessment of the adequacy of the allowance for credit losses involves subjective judgments regarding future events, and thus, there can be no assurance that additional provisions for
credit losses will not be required in future periods. Although management uses the best information available, future adjustments to the allowance may be necessary due to economic, operating,
regulatory and other conditions that may be beyond the Bank's control. Any increase or decrease in the provision for loan losses has a corresponding negative or positive effect on net income.

Non-Interest Income.Non-interest income for the nine months ended September 30, 2002 amounted
to $1.5 million as compared to $941,000 for the comparable period in 2001. The largest component of non-interest income was a gain of $508,000 on the sale of investments as compared
to no sales of investments for the comparable period in 2001. Other significant components include the gain on sale of loans of $326,000 for the nine months ended September 30, 2002 as compared
to $279,000 for the comparable period in 2001. This gain is the result of the Bank's activity in underwriting mortgage loans for sale in the secondary market on a servicing released basis. Insurance
commissions received by Dime were $431,000 and $433,000 for the nine months ended September 30, 2002 and 2001, respectively.

Non-Interest Expense.Total non-interest expense amounted to $3.5 million for the nine months
ended September 30, 2002 as compared to $2.9 million for the same period in 2001, an increase of $526,000. The opening of the full service branch in Missoula in early 2002 contributed to
this increase. Also included in this increase is $263,000 related to acquisition and merger expense. There was no acquisition or merger expense for the comparable period in 2001.

Income Taxes.Income taxes decreased $808,000 to a $171,000 (benefit) for the nine months ended September 30, 2002,
compared to $637,000 for the same period in 2001 as a result of the loss before income taxes in 2002. The effective combined federal and state tax rate was 42.7% and 33.8% (benefit) for the nine
months ended September 30, 2001 and 2002, respectively. The primary difference between the expected and actual tax calculation relates to state taxes and mark-to-market
adjustments on ESOP shares committed to be released and MRDP shares awarded during the period.

Comparison of Results of Operations for the Three Months Ended September 30, 2002 and 2001

Net Income.Net income decreased by $358,000 from $295,000 for the three months ended September 30, 2001 to a $63,000
loss for the three months ended September 30, 2002. The following narrative discusses the various components of the change:

Net Interest Income.Net interest income decreased $311,000, or 28.0%, from $1.1 million for the three months ended
September 30, 2001 to $.8 million for the same period in 2002. The interest rate

13

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spread decreased from 2.3% for the three months ended September 30, 2001 to 1.1% for the comparable period in 2002.

Interest Income.Total interest income increased by $13,000, or .6% from $2.4 million for the three months ended
September 30, 2001 to $2.4 million for the same period in 2002. Average interest earning assets increased $72.7 million or 54.2% from $134.1 million for the three months
ended September 30, 2001 to $206.8 million for the same period in 2002. Offsetting this increase the yield on interest earning assets decreased from 7.1% for the three months ended
September 30, 2001 to 4.7% for the same period in 2002.

Interest Expense.Total interest expense was $1.6 million for the three months ended September 30, 2002, as
compared to $1.3 million for the same period in 2001. Interest on deposits increased by $410,000, or 39.5%, from $1.0 million for the three months ended September 30, 2001 to
$1.4 million for the comparable period in 2002. Interest on notes payable and other debt decreased $85,000, or 34.3% from the three months ended September 30, 2001 as compared to the
same period in 2002.

Average
deposits for the three months ended September 30, 2001 amounted to $88.0 million as compared to $168.7 million for the same period in 2002, an increase of
$80.8 million or 91.9%. Included in the average deposits for the three months ended September 30, 2002 was $88.7 million in certificates of deposit as compared to
$53.8 million for the comparable period in 2001, an increase of $35.0 million or 65.0%. Offsetting the increase in average deposits, the cost of deposits decreased from 4.7% for the
three months ended September 30, 2001 to 3.4% for the same period in 2002.

Provision for Loan Losses.The provision for loan losses was $30,000 for three months ended September 30, 2002 as
compared to $25,000 for the same period in 2001. At the end of both periods, the level of reserves was deemed to be adequate by management. Loan loss reserves as a percentage of loans were .59% at
September 30, 2002 and .48% at September 30, 2001. Loan loss reserves were $434,000 and $411,000 at September 30, 2002 and 2001, respectively.

Non-Interest Income.Non-interest income increased $43,000 for the three months ended
September 30, 2002, as compared to the same period in 2001. During the three months ended September 30, 2002, the Bank recorded $61,000 in gains on sale of securities as compared to no
sales of securities for the comparable period in 2001. Gain on sale of loans decreased slightly from $135,000 for the three months ended September 30, 2001 to $116,000 for the same period in
2002.

Insurance
commissions received by Dime are a large component of non-interest income. Insurance commissions of $173,000 and $168,000 were received for the three months ended
September 30, 2002 and 2001, respectively.

Non-Interest Expense.Total non-interest expense increased $345,000 for the three months ended
September 30, 2002 as compared to the same period in 2001. The opening of the full service branch in Missoula contributed to this increase. Included in this increase is $222,000 related to
merger and acquisition expense. $66,000 of this expense is related to failed mergers and acquisitions. The remaining $155,000 is related to the anticipated merger with Sterling. There was no
acquisition or merger expense for the comparable period in 2001. Also included in this expense is $596,000 in compensation and benefits for the three months ended September 30, 2002 as compared
to $541,000 for the same period in 2001, an increase of $55,000.

Income Taxes.Income taxes decreased $260,000 to a $26,000 (benefit) for the three months ended September 30, 2002,
compared to $234,000 for the same period in 2001, as a result of the loss in income before income taxes. The effective combined federal and state tax rate was 29.3% (benefit) and 44.3% for the three
months ended September 30, 2002 and 2001, respectively. The primary difference

14

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between the expected and actual tax calculation relates to state taxes and mark-to-market adjustments on ESOP shares committed to be released and MRDP shares awarded during
the period.

Part 1Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company's Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as
defined in Exchange Act Rules 240.13a-14(c) and 15d-14(c) as of a date within 90 days before the filing date of this quarterly report. Based on that evaluation,
the Chief Executive Officer and Chief Financial Officer have concluded that the Company's current disclosure controls and procedures are effective and timely, providing them with material information
relating to the Company required to be disclosed in the reports we file or submit under the Exchange act.

Changes in Internal Controls

There have not been any significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of
their evaluation. We are not aware of any significant deficiencies or material weaknesses, therefore no corrective actions were taken.

15

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Part IIOther Information

Item 1. Legal Proceedings

There are no pending material legal proceedings to which the registrant or its subsidiaries are a party.

Item 2. Changes in Securities

None.

Item 3. Defaults on Senior Securities

Not applicable.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K



|2.1   |  | Agreement and Plan of Merger by and between Sterling Financial Corporation and Empire Federal Bancorp, Inc. dated as of September 19, 2002
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|3.1   |  | Certificate of Incorporation of Empire Federal Bancorp, Inc(1)                                                                            
|3.2   |  | Bylaws of Empire Federal Bancorp, Inc(1)                                                                                                  
|10.1  |  | Employment Agreement with Kenneth P. Cochran(4)                                                                                           
|10..2 |  | Employment Agreement with William H. Ruegamer(3)                                                                                          
|10..3 |  | Employee Stock Ownership Plan(1)                                                                                                          
|10..5 |  | Stock Option Plan(2)                                                                                                                      
|10.6  |  | Financial Institution's Thrift Plan 401(k)(3)                                                                                             
|21    |  | Subsidiaries of the Registrant(3)                                                                                                         
|99    |  | Certification of Chief Executive Officer and Chief Financial Officer                                                                      

---

16

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SIGNATURES

Pursuant to the requirements 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.

Empire
Federal Bancorp, Inc.

|By |  | s/sWILLIAM H. RUEGAMERWilliam H. Ruegamer President & Chief Executive Officer
(Principal Executive Officer) |  | November 14, 2002Date |  | 
|-- |  | ----------------------------------------------------------------------------------------------------------- |  | --------------------- |  | 
|   |  |                                                                                                             |  |                       |  | 
|By |  | s/sLINDA M. ALKIRELinda M. Alkire Treasurer & Chief Financial Officer                                       |  | November 14, 2002Date |  | 

17

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EMPIRE FEDERAL BANCORP, INC. AND SUBSIDIARIES

I,
William H. Ruegamer, certify that:





November 14, 2002

| |  | /s/WILLIAM H. RUEGAMERWilliam H. Ruegamer President and
CEO
| |  | -----------------------------------------------------------

18

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EMPIRE FEDERAL BANCORP, INC. AND SUBSIDIARIES

I,
Linda M. Alkire, certify that:





November 14, 2002

| |  | /s/LINDA M. ALKIRELinda M. Alkire CFO and Treasurer
| |  | ---------------------------------------------------

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