<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

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

                                  FORM 10-QSB

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

     For the Quarter Ended December 31, 1997

                          OR

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

     For the transition period from _____________  to ______________

                      Commission File Number 0-21687


                              IFB HOLDINGS, INC.
-------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)


           Delaware                                  43-1760023
--------------------------------                     ----------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                Identification Number)
 
522 Washington Street, Chillicothe, Missouri          64601
--------------------------------------------        ----------
 (Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code: (660) 646-3733
                                                    --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

    Yes (x)        No ( )

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

Class                           Outstanding at December 31, 1997
---------------------------     -------------------------------- 
Common stock, $01 par value                   592,523 
<PAGE>
 
                               IFB HOLDINGS, INC.
                                  FORM 10-QSB

                                     Index

PART I.    FINANCIAL INFORMATION
--------------------------------

<TABLE>
<CAPTION>
 
 
Item 1    Financial Statements                                                   Page
                                                                                ------
<S>                                                                             <C>
          Consolidated Statements of Financial Condition as of December 31,
          1997 (Unaudited) and June 30, 1997...................................     2
                                                                                  
          Consolidated Statements of Income for the Three Months and Six Months   
          ended December 31, 1997 and 1996 (Unaudited).........................     3
          
          Consolidated Statements of Changes in Stockholders' Equity
          for the Six Months ended December 31, 1997 (Unaudited)...............     4 
          
          Consolidated Statements of Cash Flows for the Six Months
          ended December 31, 1997 and 1996 (Unaudited).........................     5
          
          Notes to Unaudited Consolidated Financial Statements.................     7
          
Item 2    Management's Discussion and Analysis of Financial Condition
          and Results of Operations............................................    10
          
PART II.  OTHER INFORMATION
---------------------------
Item 1    Legal Proceedings....................................................    16
          
Item 2    Changes in Securities................................................    16
          
Item 3    Default 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
 
Signature Page.................................................................    18
 
</TABLE>
 
<PAGE>
 
                       IFB HOLDINGS, INC. AND SUBSIDIARY
                 Consolidated Statements of Financial Condition
                                        
<TABLE>
<CAPTION>
                                                               At           At    
                                                           December 31,   June 30, 
                                                              1997         1997   
                                                          -------------  -------- 
                                                           (Unaudited)            
                                                              (In Thousands)      
<S>                                                       <C>            <C>       
                   ASSETS
 
Cash on hand and noninterest-earning deposits                $   467     $   581
Interest-earning deposits in other institutions                1,504       2,422
Investment securities:                                                          
 Securities available-for-sale at fair value                   4,894       4,760
 Securities held-to-maturity at amortized cost                 1,215       2,209
Mortgage-backed and related securities                                          
 available-for-sale, at fair value                            22,452      18,501
Loans receivable, net                                         33,922      29,962
Accrued interest receivable                                      505         446
Investment required by law:                                                     
 FHLB and FRB stock, at cost                                   1,207         897
Premises and equipment                                           424         357
Other assets                                                      42          85
                                                             -------     -------
       Total assets                                          $66,632     $60,220
                                                             =======     ======= 
           LIABILITIES AND STOCKHOLDERS' EQUITY                        
Deposits                                                     $34,715     $34,980
Federal Home Loan Bank advances                               22,469      16,265
Advances from borrowers for taxes and insurance                   17          33
Income taxes payable                                             261         144
Accrued expenses and other liabilities                           201         157
                                                             -------     -------
       Total liabilities                                      57,663      51,579
                                                             -------     -------
Preferred stock, $.01 par value;                                       
 authorized 100,000 shares; none outstanding                       -           -
Common stock, $.01 par value; authorized 900,000                       
 shares, issued 592,523 shares at December 31, 1997                    
 and June 30, 1997                                                59          59
Additional paid-in capital                                     5,486       5,477
Retained earnings, substantially restricted                    3,741       3,559
Less:                                                                  
 Common stock acquired by the ESOP                              (397)       (421)
 Unrealized gain (loss) on securities available-for-sale,              
   net of applicable deferred income taxes                        80         (33)
                                                             -------     -------
       Total stockholders' equity                              8,969       8,641
                                                             -------     -------
       Total liabilities and stockholders' equity            $66,632     $60,220
                                                             =======     =======
</TABLE>

     See accompanying Notes to Unaudited Consolidated Financial Statements

                                       2
<PAGE>
 
                       IFB HOLDINGS, INC. AND SUBSIDIARY
                       Consolidated Statements of Income
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                               Three Months Ended     Six Months Ended   
                                                                  December 31,          December 31,     
                                                               -------------------   ------------------  
                                                                 1997       1996       1997      1996    
                                                               --------   --------   --------  --------  
                                                                  (In thousands        (In thousands     
                                                               except share data)    except share data)   
<S>                                                           <C>         <C>        <C>       <C>
Interest income:                                             
 Loans receivable                                              $    685   $    595   $  1,330  $  1,181
 Investment securities                                              112         57        221       119
 Mortgage-backed and related securities                             370        272        711       582
 Other interest-earning assets                                       14         22         26        31
                                                               --------   --------   --------  --------
    Total interest income                                         1,181        946      2,288     1,913
                                                               --------   --------   --------  --------
Interest expense:                                                         
 Deposits                                                           402        414        800       824
 FHLB Advances                                                      321        188        589       398
                                                               --------   --------   --------  --------
     Total interest expense                                         723        602      1,389     1,222
                                                               --------   --------   --------  --------
      Net interest income                                           458        344        899       691
                                                                          
Provision for loan losses                                            64          -         64         -
                                                               --------   --------   --------  --------
     Net interest income after provision for loan losses            394        344        835       691
                                                               --------   --------   --------  --------
Noninterest income:                                                       
 Fees and service charges                                            54         57        109       110
 Gain on sales of mortgage-backed securities                         35          9         43         9
 Other                                                                7         10         16        22
                                                               --------   --------   --------  --------
      Total noninterest income                                       96         76        168       141
                                                               --------   --------   --------  --------
Noninterest expense:                                                      
 Compensation and benefits                                          167        191        337       327
 Occupancy and equipment                                             26         34         52        53
 SAIF deposit insurance premiums                                      5         25         10       275
 Other                                                              105         52        160       105
                                                               --------   --------   --------  --------
      Total noninterest expense                                     303        302        559       760
                                                               --------   --------   --------  --------
Income (loss) before income taxes                                   187        118        444        72
                                                                          
Income tax expense                                                   72         51        180        29
                                                               --------   --------   --------  --------
Net income (loss)                                              $    115   $     67   $    264  $     43
                                                               ========   ========   ========  ========
Earnings per share:                                                       
     Basic                                                         $.21       $.12       $.48      $.08
                                                               ========   ========   ========  ========
Weighted average number of                                                
 shares outstanding:                                                      
      Basic                                                     549,703    547,333    549,110   547,333
 
</TABLE>

     See accompanying Notes to Unaudited Consolidated Financial Statements

                                       3
<PAGE>
 
                       IFB HOLDINGS, INC. AND SUBSIDIARY
           Consolidated Statements of Changes in Stockholders' Equity
                                  ( Unaudited)

<TABLE> 
<CAPTION> 
                                                                                Unrealized                                     
                                                                                Gain (Loss)     
                                                                                Securities      
                                                                                Available-      
                                                                                 For-Sale,      
                                                                                  Net of        
                                                                      Common    Applicable      
                                             additional               Stock     Deferred             
                                     Common   Paid-In     Retained   Acquired    Income                       
                                     Stock    Capital     Earnings    by ESOP     Taxes      Total               
                                     ------  ----------   --------   ---------  -----------  -----
                                                                (In thousands)
<S>                                  <C>     <C>          <C>        <C>        <C>          <C> 
Six Months Ended
----------------
 December 31, 1997
------------------
Balance at June 30, 1997             $59      $5,477      $3,559      $(421)       $(33)     $8,641
                                                                                         
Additions (deductions) for                                                               
  the six months ended                                                                   
   December 31, 1997                                                                     
  Net income                           -           -         264          -           -         264
  Dividends declared                                         (82)                               (82)
  Allocation of ESOP                                                                     
    shares                             -           9           -         24           -          33
  Unrealized gain (loss) on                                                              
    securities available-for-                                                            
    sale, net of deferred                                                                
    Income tax of $56,000              -           -           -          -         113         113
                                     ---      ------      ------      -----        ----      ------  
Balance, December 31, 1997           $59      $5,486      $3,741      $(397)       $ 80      $8,969
                                     ===      ======      ======      =====        ====      ====== 
</TABLE>

     See accompanying Notes to Unaudited Consolidated Financial Statements

                                       4
<PAGE>
 
                       IFB HOLDINGS, INC. AND SUBSIDIARY
                     Consolidated Statements of Cash Flows
                                  (Unaudited)
<TABLE>
<CAPTION>
 
                                                                 Six Months Ended
                                                                   December 31,
                                                              --------------------
                                                                 1997      1996
                                                              --------   ---------
                                                                (In thousands)
<S>                                                          <C>         <C>     
Cash flow from operating activities:
 Net income (loss)                                            $   264    $     43
 Adjustments to reconcile net earnings to                              
 net cash provided by operating activities:                            
   Net loss (gain) on sale of investments                         (43)         (9)
   Depreciation                                                    24          30
       Provision for loan loss                                     64           -
   Amortization of premiums and discounts and loan fees             6          24
   ESOP expense                                                    33          28
   Changes in:                                                         
   Decrease (increase) in interest receivable                     (59)         78
   Decrease (increase) in other assets                             43          31
   Increase (decrease) in income tax payable                      117         (36)
   Increase (decrease) in other liabilities                        44          40 
                                                              -------    -------- 
        Net cash provided by operating activities                 493         229
                                                              -------    -------- 
Cash flow from investing activities:                                   
 Loans purchased                                               (3,649)      ( 626)
 (Increase) decrease in loans, net                               (390)        342
 Proceeds from sales of available-for-sale mortgage-backed             
  and related securities                                        2,275       1,857
 Proceeds from sales of available-for-sale investment                  
  securities                                                      491           -
 Proceeds from maturities of investment securities              1,999           -
 Purchase of available-for-sale investment securities          (1,562)       (138)
 Purchase of available-for-sale mortgage-backed                        
  and related securities                                       (8,169)     (1,485)
 Principal collected on repayments and maturities of                   
  available-for-sale mortgage-backed and related securities     2,039       1,418
 Purchase of FHLB and FRB stock                                  (310)        (50)
 Purchase of equipment                                            (91)         (4)
                                                              -------    --------
      Net cash provided (used) by investing activities         (7,367)      1,314
                                                              -------    --------
Cash flows from financing activities:                                  
 Dividends paid                                                   (82)          -
 Net proceeds from issuance of common stock                         -       5,048
 Net increase (decrease) in deposits                             (265)     (1,073)
 Net increase (decrease) in advances from                              
    borrowers for taxes and insurance                             (16)        (27)
 Proceeds from FHLB advances                                   14,450       9,450
 Principal payments on FHLB advances                           (8,245)    (11,727)
                                                              -------    --------
     Net cash provided (used) by financing activities           5,842       1,671
                                                              -------    --------
      Increase (decrease) in cash and cash equivalents         (1,032)      3,214
                                                                       
Cash and cash equivalents at beginning of period                3,003       2,080
                                                              -------    --------
Cash and cash equivalents at end of period                    $ 1,971    $  5,294
                                                              =======    ========
</TABLE>

                                       5
<PAGE>
 
                       IFB HOLDINGS, INC. AND SUBSIDIARY
                     Consolidated Statements of Cash Flows
                                  (Unaudited)

                                                            
                                                            
                                                            
                                                            
                                                            
<TABLE>
<CAPTION>

                                            Six Months Ended  
                                              December 31,        
                                           1997        1996  
                                           ----        ----  
                                            (In thousands)       
<S>                                        <C>         <C>  
Supplemental cash flow disclosures:                         
 Cash paid for:                                             
   Interest                                $ 734       $ 681
                                           =====       =====
                                                            
   Income Taxes                            $ 127       $  72
                                           =====       =====
                                                            
Noncash activity:                                           
 Loans transferred to real estate owned    $   -       $    
                                           =====       ===== 
 
</TABLE>


     See accompanying Notes to Unaudited Consolidated Financial Statements
                                        

                                       6
<PAGE>
 
                       IFB HOLDINGS, INC. AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


(1)       BASIS OF PRESENTATION

          The accompanying unaudited consolidated financial statements have been
          prepared in accordance with Generally Accepted Accounting Principles
          (GAAP) for interim financial information and with the instructions to
          Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not
          include all of the information and footnotes required by GAAP for
          complete financial statements.  In the opinion of management, all
          adjustments (consisting of only normal recurring accruals) necessary
          for a fair presentation have been included.  The results of operations
          and other data for the three and six month periods ended December 31,
          1997  are not necessarily indicative of results that may be expected
          for the entire fiscal year ending June 30, 1998.

          The unaudited consolidated financial statements include the amounts of
          IFB Holdings, Inc.  (the "Holding Company") and its wholly-owned
          subsidiary, Investors Federal Bank, National Association, (the
          "Bank"), and the Bank's wholly-owned subsidiary, Investors Federal
          Service Corporation for the six months ended December 31, 1997.  The
          consolidated financial statements for the prior periods include
          accounts of the Bank and its subsidiaries.  Material intercompany
          accounts and transactions have been eliminated in consolidation.

(2)       CONVERSION TO STOCK OWNERSHIP AND NATIONAL BANK

          The Board of Directors of the Bank, on September 23, 1996,
          unanimously adopted a Plan of Conversion pursuant to which the Bank
          converted from a federally chartered mutual savings bank to a
          federally chartered stock savings bank, with the concurrent formation
          of the Holding Company.  The Holding Company, on December 30, 1996,
          sold 592,523 shares of common stock at $10.00 per share  during the
          subscription offering.  The proceeds from the conversion, after
          recognizing conversion expenses and underwriting costs of
          approximately $403,000, were $5,522,000 and are recorded as common
          stock and additional paid in capital on the accompanying unaudited
          consolidated statement of financial condition.  The Holding Company
          utilized approximately $2,762,000 of the net proceeds to purchase all
          of the capital stock of the Bank.

          On January 30, 1997, the Bank changed its charter from a federally
          chartered savings   bank to a national bank.

          The Bank has established for eligible employees an Employee Stock
          Ownership Plan ("ESOP") in connection with the conversion.  The ESOP
          borrowed $474,010 from the Holding Company and purchased 47,401 common
          shares issued in the conversion.  The Bank is making the scheduled
          discretionary cash contributions to the ESOP sufficient to service the
          amount borrowed.   To date, the Bank has made payments of $112,448
          ($76,300 principal) to the Holding Company.   The $397,710 ESOP
          obligation ($474,010 in stock issued by the Holding Company on
          December 30, 1996 less the principal payments made by the Bank) is
          reflected in the accompanying consolidated financial statements as a
          charge to unearned compensation and a credit to common stock and paid-
          in capital.  The unamortized balance of unearned compensation is shown
          as a deduction of stockholders' equity.  The unpaid balance of the
          ESOP loan is eliminated in consolidation.

                                       7
<PAGE>
 
(3)       EARNINGS PER SHARE

          Earnings per share (EPS) computations follow SFAS No. 128 which is
          effective for financial statements issued for periods ending after
          December 15, 1997.  Basic EPS have been determined by dividing net
          income for the period (numerator) by the weighted-average number of
          common shares outstanding during the period (denominator).  Weighted-
          average common shares include allocated ESOP shares. Unallocated ESOP
          shares are not used in basic EPS calculations.


(4)       COMMITMENTS AND CONTINGENCIES

          Commitments to originate and purchase mortgage loans of $1,599,000  at
          December 31, 1997, represent amounts which the Bank plans to fund
          within the normal commitment period of sixty to ninety days.  As of
          December 31, 1997, the Bank had no commitments to purchase mortgage-
          backed securities, CMOs or investment securities.  The Bank had no
          commitments outstanding to sell mortgage loans, mortgage-backed
          securities, CMOs or investment securities at December 31,  1997.


(5)       RECENT ACCOUNTING DEVELOPMENTS

          The Financial Accounting Standards Board (the "FASB") recently adopted
          or issued proposals and guidelines which may have a significant impact
          on the accounting practices of commercial enterprises in general and
          financial institutions in particular.

          SFAS No. 123, Accounting for Stock-Based Compensation, is effective
          for fiscal years beginning after December 15, 1995. This statement
          established financial accounting and reporting standards for stock-
          based employee compensation plans, including stock option plans. These
          plans include all arrangements by which employees receive shares of
          stock or other equity investments of the employer or where an employer
          incurs liabilities to employees in amounts based on the price of the
          employer's stock. This statement also applies to transactions in which
          an entity issues its equity instruments to acquire goods and services
          from nonemployees.

          SFAS No. 130, "Reporting Comprehensive Income," will be adopted July
          1, 1998. This statement provides accounting and reporting standards to
          report a measure of all changes in equity of an enterprise that
          results from recognized transactions and economic events of the
          period. The major component of comprehensive income for the Company
          will be unrealized gains and losses on certain investments in debt and
          equity securities.

          Management has not determined the effect on the financial position or
          the results of operations that adoption of SFAS 123 and 130 will have.


(6)       DIRECTOR AND EMPLOYEE PLANS

          The Company's Board of Directors has approved a stock option and
          incentive plan and a recognition and retention plan (RRP) which were
          approved by the Company's shareholders at the Annual meeting in
          November, 1997.

          Stock Option and Incentive Plan
          -------------------------------

          The plan will be implemented for the benefit of directors, officers
          and employees of the 

                                       8
<PAGE>
 
          Company and its affiliates. The maximum number of shares to be issued
          from authorized but not currently outstanding shares under the plan is
          59,252 or 10% of the total shares issued in the conversion. The
          exercise price of the options shall not be less than the common stock
          market value at the date the options are granted.

          Recognition and Retention Plan
          ------------------------------

          The RRP would award shares authorized but not currently outstanding to
          directors and to employees in key management positions in order to
          provide them with a proprietary interest in the Company in a manner
          designed to encourage such employees to remain with the Company. The
          maximum number of shares authorized under the plan is 23,700 or 4% of
          the total shares issued in the conversion.

          Under the terms of the stock option and incentive plan, the effective
          date of the plan would be January 1, 1998. The term of the plan would
          be ten years. The future impact of the plan would be to increase (1)
          the number of outstanding shares of common stock, and (2) compensation
          expense, and decrease (1) net income per share, and (2) book value per
          share. It is not possible to quantify the effect on the financial
          position or results of operations from implementing the plan at this
          time.

                                       9
<PAGE>
 
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

          IFB Holdings, Inc. was organized, as a Delaware corporation, in
October 1996 at the direction of the Bank's Board of Directors to acquire all of
the capital stock that the Bank issued upon its conversion from mutual to stock
form of ownership.  The business of the Holding Company consists primarily of
the business of the Bank.  There are no current arrangements, understandings or
agreements to expand its business activities or make any business acquisitions.

          Investors Federal Bank, National Association was originally founded in
1934 as a federally chartered savings and loan association located in
Chillicothe, Missouri under the name Chillicothe Federal Savings and Loan
Association.  In 1974, the Bank changed its name to Investors Federal Savings
and Loan Association, and in 1988 the Bank changed its name to Investors Federal
Bank and Savings Association. On December 30, 1996, the Bank completed a
conversion from mutual to stock ownership.  On January 30, 1997, the Bank
changed its charter to a national bank charter and its name to Investors Federal
Bank, National Association.  Its deposits are insured up to the maximum
allowable amount by the Federal Deposit Insurance Corporation (the "FDIC").  The
Bank serves Livingston, Caldwell, and Daviess Counties, Missouri.  The Bank
conducts business through its main office and two branches located in Hamilton
and Gallatin, Missouri.

          The Bank's business strategy is to operate as a well-capitalized,
profitable and independent community financial institution dedicated to home-
mortgage lending and to providing quality service to its customers.  The Bank
intends to implement this strategy by (i) closely monitoring the needs of its
customers and providing quality service; (ii) maintaining asset quality; (iii)
utilizing investments in mortgage-backed securities and other investment
securities to invest excess funds and to increase net interest income; (iv)
maintaining capital in excess of the regulatory requirements; (v) attempting to
increase the Bank's earnings; and  (vi) managing interest rate risk by
attempting to match asset and liability maturities and rates.

          The earnings of the Bank  depend primarily on its net interest income,
which is the difference between interest earned on its loans and investments and
the interest paid on its interest-bearing liabilities, consisting of deposits
and FHLB advances.  The Bank, like other financial institutions, is subject to
interest-rate risk to the degree that its interest-earning assets mature or
reprice at different times, or on different bases, than its interest-bearing
liabilities.  The Bank's operating results are also affected by the amount of
its noninterest income, including gain on the sales of investments, service
charges, and other income.  Non-interest expense consists  primarily of employee
compensation, occupancy expenses, FDIC insurance premiums and other general and
administrative expenses.   The Bank's operating results are significantly
affected by general economic and competitive conditions, in particular, the
changes in market interest rates, government policies and actions by regulatory
authorities.

YEAR 2000

          The Company does not expect costs to make their computer systems Year
2000 compliant to materially affect operations.  Based on results of an internal
study, the Company believes that all systems will be made to function
sufficiently prior to the Year 2000.


LIQUIDITY AND CAPITAL RESOURCES

          The Company's most liquid assets are cash and cash equivalents, which
includes short-term investments.   The levels of these assets are dependent on
the Bank's lending, investing, operating, and deposit activities during any
given period.  At December 31, 1997 and June 30, 1997,

                                       10
<PAGE>
 
cash and cash equivalents totalled $2 million and $3 million, respectively.

          The Bank's primary sources of funds are deposits, FHLB advances,
repayments on loans, the maturity of investment securities and income from
operations.  While maturity and scheduled amortization of loans and investment
securities are predictable sources of funds, deposit inflows and mortgage
prepayments are greatly influenced by local conditions, general interest rates
and regulatory changes.

         The primary investment activity of the Bank is the origination and
purchase of mortgage loans. Another investment activity of the Bank is the
investment of funds in U.S. agency bonds, mortgage-backed securities,
collateralized mortgage obligations and FHLB overnight funds.  During periods
when the Bank's loan demand is limited, the Bank may purchase short-term
investment securities to obtain a higher yield than otherwise available.

          At  December 31, 1997, the Bank had outstanding loan commitments of
$1,599,000. The Bank anticipates it will have sufficient funds available to meet
its commitments.  Certificates of deposit that were scheduled to mature in one
year or less at December 31, 1997 were $13.2  million. Management believes that
a significant portion of such deposits will remain with the Bank.

          Under federal law, the Bank is required to meet certain leverage and
risk-based capital requirements.  The leverage ratio requires a minimum ratio of
"Tier 1 capital" to adjusted total assets. At December 31, 1997, the Bank
exceeded both of the  capital requirements.  The Bank's capital ratios were:
9.39% leverage capital and 22.63% risk-based capital.  The Bank had "Tier 1
capital"  of   $6 million at December 31, 1997 and risk-based capital of $6.3
million.

FINANCIAL CONDITION

          Total assets increased $6.4 million, or 10.6%, to $66.6 million at
December 31, 1997 from $60.2 million at June 30, 1997.  Mortgage-backed and
related securities increased  $4 million, or 21.4%, from $18.5 million at June
30, 1997, to $22.5 million at December 31, 1997.  Loans receivable increased  $4
million, or 13.2%, from $30 million at June 30, 1997, to $34 million at December
31, 1997.  FHLB and FRB stock increased  $310,000, or 34.6%, from $897,000 at
June 30, 1997, to $1.2 million at December 31, 1997.  The increases were funded
primarily from an increase in FHLB advances of $6.2 million which reflected
management's asset/liability strategy of seeking to earn the spread between the
yield earned on adjustable-rate earning assets and the rates paid on the FHLB
advances.  In addition, investment securities decreased $860,000, from $7
million at June 30, 1997, to $6.1 million at December 31, 1997.  Interest-
earning deposits in other institutions decreased $919,000, or 37.9%, from $2.4
million to $1.5 million at December 31, 1997.

          Total liabilities increased $6 million, or 11.8%, from $51.6 million
at June 30, 1997, to $57.7 million at December 31, 1997.  The increase was a
result of the increases in FHLB advances and a decrease in deposits of
$265,000, or .8% from $35 million at June 30, 1997, to $34.7 million at December
31, 1997.

          Total equity increased $328,000, or 3.8%, from $8.6 million at June
30, 1997 to $9 million at December 31, 1997.  The increase was due primarily to
net income for the six months ended December 31, 1997, of $264,000 and a
decrease in unrealized loss on securities available-for-sale, net of deferred
income tax of $113,000.

ASSET QUALITY

          The Bank regularly reviews interest earning assets to determine proper
valuation. Management's monitoring of the asset portfolio includes reviews of
historical loss experience, known and inherent risks in the portfolio, the value
of any underlying collateral, prospective economic conditions and the regulatory
environment.  The Bank's non-accrual mortgage loans decreased from

                                       11
<PAGE>
 
$203,000 at June 30, 1997 to $164,000 at December 31, 1997.

          The table on the following page sets forth information regarding the
Bank's non-accrual loans and foreclosed real estate at the dates indicated.  The
Bank discontinues accruing interest on delinquent loans no later than ninety
days past due.  At December 31, 1997, the Bank had no restructured loans within
the meaning of Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 15.

                                       12
<PAGE>

                               IFB HOLDINGS, INC.
                                 Asset Quality
<TABLE>
<CAPTION>
 
                                 December 31,   June 30,
                                     1997         1997
                                 -------------  ---------
                                      (In thousands)
<S>                              <C>            <C>
Non-accrual mortgage loans
 delinquent more than 90 days     $   164        $   203
Non-accrual other loans                       
 delinquent more than 90 days         134             21
                                  -------        -------
Total non-performing loans        $   298        $   224
                                              
 Real estate owned and in-                    
  substance foreclosed loans,                 
  net of allowance                      0              0
                                              
  Total non-performing assets     $   298        $   224
                                  =======        =======
                                              
Non-performing loans to                       
 total loans                         0.88%          0.75%
                                  =======        =======
Non-performing assets to                      
 total assets                        0.45%          0.37%
                                  =======        =======
Allowance for loan losses                     
 to non-performing loans           102.75%        127.23%
                                  =======        =======
</TABLE>

                                       13

<PAGE>
 
RESULTS OF OPERATIONS

          Comparisons of quarterly results in this section are between the three
month periods ended December 31, 1997, and December 31, 1996 and between the six
month periods then ended.

GENERAL

          Net income for the second quarter ended December 31, 1997 was
$115,000, an increase of $48,000 from the $67,000 net income for the second
quarter ended December 31, 1996. Net income for the six months ended December
31, 1997, was $264,000, an increase of $221,000, or 513.9% from the $43,000 net
income for the comparable period ended December 31, 1996.

INTEREST INCOME

          Interest income for the second quarter ended December 31, 1997,  was
$1.2 million an increase of  $235,000, or 24.8%, compared to  $946,000 for the
second quarter ended December 31, 1996.  Interest income for the six months
ended December 31, 1997, was $2.3 million, an increase of $375,000, or 19.6% as
compared to the six months ended December 31, 1996.  Interest on loans
receivable increased $90,000, or 15.1%, from $595,000 for the second quarter
ended December 31, 1996, to $685,000 for the same period ended December 31,
1997.  Interest on loans receivable increased $149,000, or 12.6%, from $1.2
million for the six months ended December 31, 1996, to $1.3 million for the six
months ended December 31, 1997.  Interest on investment securities increased
$55,000, or 96.5%, from $57,000 for the three months ended December 31, 1996, to
$112,000 for the three months ended December 31, 1997.  Interest on investment
securities increased $102,000 or 85.7%, from $119,000 for the six months ended
December 31, 1996, to $221,000 for the six months ended December 31, 1997.
Interest on mortgage-backed and related securities increased $98,000, or 36%,
from $272,000 for the quarter ended December 31, 1996, to $370,000 for the
quarter ended December 31, 1997.  Interest on mortgage-backed and related
securities increased $129,000, or 22.2%, from $582,000 for the six months ended
December 31, 1996, to $711,000 for the six months ended December 31, 1997.  The
increases are primarily the  result of the increases in the amount of investment
securities, mortgage-backed and related securities, and loans receivable
outstanding at December 31, 1997, as compared to December 31, 1996.

INTEREST EXPENSE

          Interest expense for the second quarter ended December 31, 1997 was
$723,000 as compared to $602,000 for the quarter ended December 31, 1996, an
increase of $121,000, or 20.1%. Interest expense for the six months ended
December 31, 1997, was $1.4 million as compared to $1.2 million for the six
months ended December 31, 1996, an increase of $167,000 or 13.7%. Interest on
advances from FHLB was $321,000 for the three months ended December 31, 1997, as
compared to $188,000 for the same period ended December 31, 1996, an increase of
$133,000 or 70.7%. Interest on advances increased $191,000, or 48%, from
$398,000 for the six months ended December 31, 1996 to $589,000 for the six
months ended December 31, 1997. The increase was due to an increase in the
amount of advances outstanding during the three month and six month periods
ended December 31, 1997, as compared to the three and six month periods ended
December 31, 1996. Interest on deposits decreased $12,000 from $414,000 for the
quarter ended December 31, 1996 to $402,000 for the quarter ended December 31,
1997. Interest on deposits decreased $24,000, or 2.9%, for the six months ended
December 31, 1997, from $824,000 for the six months ended December 31, 1996 to
$800,000, as a result of a decrease in the interest rate paid on the deposits
during that period.

                                       14
<PAGE>
 
NET INTEREST INCOME

          Net interest income before provisions for loan losses was $458,000 for
the second quarter ended December 31, 1997, as compared to $344,000 for the
second quarter ended December 31, 1996, an increase of $114,000 or 33.1%.  Net
interest income before provisions for loan losses was $899,000 or the six months
ended December 31, 1997, an increase of $208,000, or 30.1%, as compared to the
six months ended December 31, 1996.


NONINTEREST INCOME

          Noninterest income was $96,000 for the quarter ended December 31, 1997
as compared to $76,000 for the quarter ended December 31, 1996, an increase of
$20,000 or 26.3%. Noninterest income was $168,000 for the six months ended
December 31, 1997, as compared to $141,000 for the six months ended December 31,
1996, an increase of $27,000, or 19.1%.  The increases are primarily due to an
increase in gain on the sales of mortgage-backed  securities of $26,000 for the
quarter ended December 31, 1997, as compared to the quarter ended December 31,
1996.   Gain on sales of mortgage-backed  securities increased $34,000, or
377.8%, from $9,000 for the six months ended December 31, 1996, to $43,000 for
the six months ended December 31, 1997.


NONINTEREST EXPENSE

          Noninterest expense was $303,000 for the second quarter ended December
31, 1997 and $302,000 for the second quarter ended December 31, 1996.  For the
six months ended December 31, 1997, noninterest expense was $560,000 as compared
to $760,000 for the six months ended December 31, 1996, a decrease of $200,000,
or 26.3%.  The decrease was largely due to a decrease of $264,000, or 96%, in
the amount of SAIF deposit insurance premiums incurred in the six months ended
December 31, 1997 as compared to the six months ended December 31, 1996.  0n
September 30, 1996, the Bank incurred  a one time SAIF assessment of
approximately $226,000.  In addition, other noninterest expense  increased
$53,000, or 101.9% from $52,000 for the second quarter ended December 31, 1996,
to $105,000 for the second quarter ended December 31, 1997.  Other noninterest
expense increased $55,000, or 52.4%, from $105,000 for the six months ended
December 31, 1996, to $160,000 for the six months ended December 31, 1997.  The
increase in other expenses was primarily due expenses associated with the
Company operating as a publicly owned stock institution. In addition, during the
second quarter ended December 31, 1997, the Bank purchased an ATM  and incurred
operational expenses that it did not have in the second quarter ended December
31, 1996.
                 .
PROVISION FOR LOAN LOSSES

          For the three months ended December 31, 1997 , the provision for loan
losses was increased $64,000.  For the comparable period ended December 31,
1996, the provision for loan losses was not increased.

INCOME TAX

          The provision for income taxes  increased $21,000, from  $51,000 for
the quarter ended December 31, 1996, to $72,000 for the quarter ended December
31, 1997.  The provision for income taxes increased $151,000, or 520.7%, from
$29,000 for the six months ended December 31, 1996, to $180,000 for the six
months ended December 31, 1997.  The increases were due to increases in income
for the periods.

                                       15
<PAGE>
 
                              IFB HOLDINGS, INC.
                        PART II  --  OTHER INFORMATION

ITEM 1    LEGAL PROCEEDINGS

          The Holding Company and the Bank are not involved in any pending legal
proceedings other than legal proceedings incident to the business of the Holding
Company and the Bank, which involve amounts in the aggregate which management
believes are immaterial to the financial condition and results of operations of
the Holding Company and the Bank.

ITEM 2    CHANGES IN SECURITIES
          Not applicable.

ITEM 3    DEFAULT UPON SENIOR SECURITIES
          Not applicable.
 
ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 
 
         (A) On November 18, 1997, the Company held its Annual Meeting of
         Stockholders.

         (B) Election of Directors

<TABLE> 
<CAPTION> 
                                                                                 Broker   
          Nominee                     For          Against       Withheld       Non-Votes 
          -------                     ---          -------       --------       --------- 
          <S>                       <C>            <C>           <C>            <C> 
          Earle S. Teegarden, Jr    460,762          -0-           -0-             -0-    
          Armand J. Peterson        460,762          -0-           -0-             -0-     
 
</TABLE> 

          The terms of office of Directors Edward P. Milbank, Robert T.
          Fairweather, J. Michael Palmer, Larry R. Johnson continued after the
          Annual Meeting.
 
          (C) Other Matters voted on at the Annual Meeting
 
          1. The appointment of Lockridge, Constant & Conrad, LLC, as auditors
             of the Company for the fiscal year ending June 30, 1998.
 
             For:  460,762   Against:  -0-
                   --------           -----
             Abstained:   -0-  Broker Non-Votes:  -0-
                        ------                   ---- 
          2. The approval of the Company's 1997 Stock Option and Incentive Plan.
  
             For:  350,393   Against:  13,650 
                  --------            --------
             Abstained: 1,000  Broker Non-Votes: 95,719
                        ------                   ------

          3. The approval of the Company's Recognition and Retention Plan.

             For:  331,843  Against: 25,950
                   -------           ------
             Abstained: 3,250  Broker Non-Votes: 99,719
                        ------                  -------

          The Boards nominees and each of the other proposals were approved.

ITEM 5    OTHER INFORMATION

          The Company's Board of Directors authorized a stock repurchase program
          in January 1998. Twenty percent or 188,504 shares were authorized to
          be purchased. The price to be paid will depend upon the availability
          of shares, the prevailing market prices and

                                       16
<PAGE>
 
          any other considerations which may, in the opinion of the board of
          directors or management, affect the advisability of purchasing IFBH
          shares.


ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K
 
          (A) Exhibits;  Statement re: Computation of Per Share Earnings-Exhibit
11
                   Financial Data Schedule--Exhibit 27

          (B) Reports on Form 8-K; No reports on Form 8-K have been filed during
          the quarter  for  which this report is filed.

                                       17
<PAGE>
 
                               IFB HOLDINGS, INC.
                                   SIGNATURES


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



                                                IFB Holdings, Inc.
                                                --------------------------
                                                (Registrant)


Dated February 6, 1998                          /s/ Earle S. Teegarden, Jr. 
                                                ---------------------------
                                                Earle S. Teegarden, Jr.
                                                President and Chief
                                                  Executive Officer
                                                (Duly Authorized Officer) 




Dated February 6, 1998                          /s/ Sherri Williams 
                                                ----------------------------
                                                Sherri Williams
                                                Chief Accounting Officer
                                                (Principal Financial Officer)
 

                                      18