<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 March 31, 1998

                                      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)

<TABLE>
<CAPTION>
 
 
<S>                                             <C>
          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)

</TABLE>
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 March 31, 1998
-----------------------------                      -----------------------------
Common stock, $01 par value                                    592,523
<PAGE>
 
                               IFB HOLDINGS, INC.
                                  FORM 10-QSB



                                     Index


Part I.    Financial Information
--------------------------------
 
 
Item 1                       Financial Statements                          Page
                                                                           -----
 
          Consolidated Statements of Financial Condition as of 
          March 31, 1998 (Unaudited) and June 30, 1997...................    2
 
          Consolidated Statements of Income for the Three Months 
          and Nine Months ended March 31, 1998 and 1997 (Unaudited)......    3

          Consolidated Statements of Changes in Stockholders' Equity
          for the Nine Months ended March 31, 1998 (Unaudited)...........    4
 
          Consolidated Statements of Cash Flows for the Nine Months
          ended March 31, 1998 and 1997 (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...........................................................   17
 

 
<PAGE>
 
                       IFB HOLDINGS, INC. AND SUBSIDIARY
                 Consolidated Statements of Financial Condition
                                        
<TABLE>
<CAPTION>
 
 
                                                       At          At
                                                    March 31,   June 30,
                                                      1998        1997
                                                   -----------  --------
                                                   (Unaudited)
                                                      (In Thousands)
<S>                                                <C>          <C>
                   ASSETS
 
Cash on hand and noninterest-earning deposits         $   552    $   581
Interest-earning deposits in other institutions         1,938      2,422
Investment securities:
 Securities available-for-sale at fair value            5,493      4,760
 Securities held-to-maturity at amortized cost            715      2,209
Mortgage-backed and related securities
 available-for-sale, at fair value                     26,391     18,501
Loans receivable, net                                  34,193     29,962
Accrued interest receivable                               573        446
Investment required by law:
 FHLB and FRB stock, at cost                            1,410        897
Premises and equipment                                    424        357
Other assets                                               68         85
                                                      -------    -------
       Total assets                                   $71,757    $60,220
                                                      =======    =======
 
</TABLE>
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
 
<S>                                                   <C>       <C>
Deposits                                              $35,593   $34,980
Federal Home Loan Bank advances                        26,504    16,265
Advances from borrowers for taxes and insurance            16        33
Income taxes payable                                      267       144
Accrued expenses and other liabilities                    191       157
                                                      -------   -------
       Total liabilities                               62,571    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 March 31, 1998
 and June 30, 1997                                         59        59
Additional paid-in capital                              5,493     5,477
Retained earnings, substantially restricted             3,911     3,559
Less:
 Common stock acquired by the ESOP                       (386)     (421)
 Unrealized gain (loss) on securities 
   available-for-sale, net of applicable
   deferred income taxes                                  109       (33)
                                                      -------   -------
       Total stockholders' equity                       9,186     8,641
                                                      -------   -------
       Total liabilities and stockholders' equity     $71,757   $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               Nine Months Ended
                                    March 31,                       March 31, 
                                  -----------                      ----------  
                                 1998       1997                 1998        1997
                                 ----       ----                 ----        ----
                                 (In thousands                   (In thousands
                               except share data)              except share data)            
<S>                            <C>         <C>               <C>        <C>
Interest income:
 Loans receivable            $    710   $    581             $  2,040    $  1,761
 Investment securities            114         74                  335         194
 Mortgage-backed and                                                  
  related securities              409        266                1,120         848
 Other interest-earning                                               
  assets                           18         40                   44          71
                             --------   --------             --------    --------
   Total interest income        1,251        961                3,539       2,874
                             --------   --------             --------    --------
                                                                      
Interest expense:                                                     
 Deposits                         400        393                1,200       1,217
 FHLB Advances                    359        163                  948         560
                             --------   --------             --------    --------
     Total interest expense       759        556                2,148       1,777
                             --------   --------             --------    --------
                                                                      
     Net interest income          492        405                1,391       1,097
                                                                      
Provision for loan losses           2          -                   66           -
                             --------   --------             --------    --------
     Net interest income                                              
      after provision for                                             
      loan losses                 490        405                1,325       1,097
                             --------   --------             --------    --------
                                                                      
Noninterest income:                                                   
 Fees and service charges          49         49                  158         159
 Gain on sales of                                                     
  mortgage-backed                                                     
  securities                        -          5                   43          14
 Other                             12          9                   28          31
                             --------   --------             --------    --------
     Total noninterest                                               
       income                      61         63                  229         204
                             --------   --------             --------    --------
                                                                      
Noninterest expense:                                                  
 Compensation and benefits        178        167                  515         493
 Occupancy and equipment           31         26                   83          79
 SAIF deposit insurance                                               
  premiums                          5          1                   16         277
 Other                             69         62                  228         167
                             --------   --------             --------    --------
     Total noninterest                                               
       expense                    283        256                  842       1,016
                             --------   --------             --------    --------
                                                                      
Income (loss) before                                                  
 income taxes                     268        212                  712         285
                                                                      
Income tax expense                105         82                  285         112
                             --------   --------             --------    --------
Net income (loss)            $    163   $    130             $    427    $    173
                             ========   ========             ========    ========
                                                                      
Earnings per share:                                                   
    Basic                        $.29       $.24                 $.77        $.32
                             ========   ========             ========    ========
                                                                      
Weighted average number of                                            
 shares outstanding:                                                  
      Basic                   552,665    547,333              551,480     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)
 
Nine Months Ended
-----------------
 March 31, 1998
---------------
<S>                                  <C>         <C>         <C>        <C>        <C>     <C> 
Balance at June 30, 1997             $   59      $5,477      $3,559     $(421)     $(33)   $8,641
                                                                                         
Additions (deductions) for                                                               
  the nine months ended                                                                  
   March 31, 1998                                                                        
  Net income                              -           -         427         -         -       427
  Dividends declared                                            (75)                          (75)
  Allocation of ESOP                                                                     
    shares                                -          16           -        35         -        51
  Unrealized gain on                                                                     
    securities available-for-                                                            
    sale, net of deferred                                                                
    Income tax of $48,000                 -           -           -         -       142       142
                                 ----------    --------    --------   -------     -----  --------
                                                                                         
Balance, March 31, 1998              $   59      $5,493      $3,911     $(386)     $109    $9,186
                                     ======      ======     =======     ======    =====   =======
 
</TABLE>



     See accompanying Notes to Unaudited Consolidated Financial Statements

                                       4
<PAGE>


                       IFB HOLDINGS, INC. AND SUBSIDIARY
                     Consolidated Statements of Cash Flows
                                  (Unaudited)

<TABLE> 
<CAPTION> 


                                                                                    Nine Months Ended          
                                                                                         March 31,             
                                                                                         ---------             
                                                                                   1998             1997       
                                                                                   ----             ----       
                                                                                      (In thousands)           
<S>                                                                              <C>               <C>         
Cash flow from operating activities:                                                                           
 Net income (loss)                                                               $   427           $   43      
 Adjustments to reconcile net earnings to                                                                      
 net cash provided by operating activities:                                                                    
   Net loss (gain) on sale of investments                                           (43)              (9)      
   Depreciation                                                                       39               30      
   Provision for loan loss                                                            66                -      
   Amortization of premiums and discounts and loan fees                                4               24      
   ESOP expense                                                                       51               28      
   Changes in:                                                                                                 
   Decrease (increase) in interest receivable                                      (127)               78      
   Decrease (increase) in other assets                                                17               31      
   Increase (decrease) in income tax payable                                         123             (36)      
   Increase (decrease) in other liabilities                                           32               40      
                                                                                 -------           ------      
                Net cash provided by operating activities                            589              229      
                                                                                 -------           ------      
                                                                                                               
Cash flow from investing activities:                                                                           
 Loans purchased                                                                 (3,956)           ( 626)      
 (Increase) decrease in loans, net                                                 (298)              342      
 Proceeds from sales of available-for-sale mortgage-backed                                                     
   and related securities                                                          2,311            1,857      
 Proceeds from sales of available-for-sale investment                                                          
   securities                                                                        499                -      
 Proceeds from maturities of investment securities                                 2,999                -      
 Purchase of available-for-sale investment securities                            (2,601)            (138)      
 Purchase of available-for-sale mortgage-backed                                                                
  and related securities                                                        (13,523)          (1,485)      
 Principal collected on repayments and maturities of                                                           
  available-for-sale mortgage-backed and related securities                        3,326            1,418      
 Purchase of FHLB and FRB stock                                                    (513)             (50)      
 Purchase of equipment                                                             (106)              (4)      
                                                                                 -------           ------      
        Net cash provided (used) by investing activities                        (11,862)            1,314      
                                                                                 -------           ------      
                                                                                                               
Cash flows from financing activities:                                                                          
 Dividends paid                                                                     (75)                -      
 Net proceeds from issuance of common stock                                            -            5,048      
 Net increase (decrease) in deposits                                                 613          (1,073)      
 Net increase (decrease) in advances from                                                                      
    borrowers for taxes and insurance                                               (17)             (27)      
 Proceeds from FHLB advances                                                      27,675            9,450      
 Principal payments on FHLB advances                                            (17,436)         (11,727)      
                                                                                 -------           ------      
       Net cash provided (used) by financing activities                           10,760            1,671      
                                                                                 -------           ------      
                                                                                                               
       Increase (decrease) in cash and cash equivalents                            (513)            3,214      
                                                                                                               
Cash and cash equivalents at beginning of period                                   3,003            2,080      
                                                                                 -------           ------      
                                                                                                               
Cash and cash equivalents at end of period                                        $2,490           $5,294      
                                                                                 =======           ======       
</TABLE> 

                                       5

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

<TABLE>
<CAPTION>

                                                              Nine Months Ended
                                                                  March 31,
                                                           1998              1997
                                                           ----              ----
                                                              (In thousands)
<S>                                                       <C>              <C>  
Supplemental cash flow disclosures:
 Cash paid for:
   Interest                                               $1,177             $681
                                                          ======            =====
 
   Income Taxes                                           $  246             $ 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 nine month periods ended March 31,
          1998  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 accounts
          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 nine months ended March 31, 1998.  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 $132,750
          ($88,150 principal) to the Holding Company.   The $385,860 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 $900,000  at
          March 31, 1998, represent amounts which the Bank plans to fund within
          the normal commitment period of thirty to ninety days.  As of March
          31, 1998, 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 March 31, 1998.


(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 result
          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 was 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.

          As of March 31, 1998, no stock options or RRP award shares had been
          granted.


 
                                       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.

Capability of the Bank's Data Processing Hardware to Accommodate the Year 2000

          Like many financial institutions, the Bank relies upon computers for
the daily conduct of its business and for data processing generally.  There is
concern among industry experts that on January 1, 2000 computers will be unable
to "read" the new year and there may be widespread computer malfunctions.  The
Bank has formed a Year 2000 Committee to initiate and implement the Year 2000
project, policies, document readiness of the Bank to accommodate Year 2000
processing and to track and test progress towards full compliance.   The Bank is
in the process of ensuring that external vendors and servicers are adequately
addressing the system and software issues related to the Year 2000 by obtaining
written system certifications that the systems are fully Year 2000 compliant or
that the vendor has a plan to become fully compliant in the near future.
Beginning in the third quarter of 1998, the Bank will coordinate end-to-end
tests with primary vendors, which will allow the 

                                       10
<PAGE>
 
Bank to simulate daily processing on sensitive century dates. In the evaluation,
the Bank will ensure that critical operations will continue if vendors are
unable to achieve the Year 2000 requirements. The Bank does not expect costs to
make their computer system Year 2000 compliant to materially affect operations.


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 March 31, 1998 and June 30, 1997, cash and cash equivalents
totalled $2.5 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 March 31, 1998, the Bank had outstanding loan commitments of
$900,000.  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 March 31, 1998 were $14.0 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 March 31, 1998, the Bank exceeded
both of the  capital requirements.  The Bank's capital ratios were:  9.09%
leverage capital and 22.09% risk-based capital.  The Bank had "Tier 1 capital"
of $6.2 million at March 31, 1998 and risk-based capital of $6.5 million.

Financial Condition

          Total assets increased $11.5 million, or 19.2%, to $71.7 million at
March 31, 1998 from $60.2 million at June 30, 1997.  Mortgage-backed and related
securities increased  $7.9 million, or 42.6%, from $18.5 million at June 30,
1997, to $26.4 million at March 31, 1998.  Loans receivable increased $4.2
million, or 14.1%, from $30 million at June 30, 1997, to $34.2 million at March
31, 1998.  FHLB and FRB stock increased  $513,000, or 57.2%, from $897,000 at
June 30, 1997, to $1.4 million at March 31, 1998.  The increases were funded
primarily from an increase in FHLB advances of $10.2 million, or 63%, from $16.3
million at June 30, 1997, to $26.5 million at March 31, 1998, 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 $761,000, from $7.0
million at June 30, 1997, to $6.2 million at March 31, 1998.  Interest-earning
deposits in other institutions decreased $484,000, or 20%, from $2.4 million to
$1.9 million at March 31, 1998.

          Total liabilities increased $10.9 million, or 21.3%, from $51.6
million at June 30, 1997, to $62.6 million at March 31, 1998.  The increase was
primarily the result of the increases in FHLB advances and an increase in
deposits of  $613,000, or 1.8% from $35 million at June 30, 1997, to $35.6
million at March 31, 1998.

                                       11
<PAGE>
 
          Total equity increased $545,000, or 6.3%, from $8.6 million at June
30, 1997 to $9.2 million at March 31, 1998.  The increase was due primarily to
net income for the nine months ended March 31, 1998, of $427,000 and a decrease
in unrealized loss on securities available-for-sale, net of deferred income tax
of $142,000.

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 loans increased from $224,000 at June 30,
1997 to $248,000 at March 31, 1998.

          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 March 31, 1998, 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
 
 
                                  March 31,   June 30,
                                    1998        1997
                                    ----        ----
                                     (In thousands)
Non-accrual mortgage loans
 delinquent more than 90 days      $   141    $   203
Non-accrual other loans
 delinquent more than 90 days          107         21
                                   -------    -------
Total non-performing loans         $   248    $   224
 
 Real estate owned and in-
  substance foreclosed loans,
  net of allowance                       0          0
                                   -------    -------
 
  Total non-performing assets      $   248    $   224
                                   =======    =======
 
Non-performing loans to
 total loans                          0.72%      0.75%
                                      ====       ====
Non-performing assets to
 total assets                         0.35%      0.37%
                                      ====       ====
Allowance for loan losses
 to non-performing loans            124.19%    127.23%
                                    ======     ======
 

                                       13
<PAGE>
 
Results of Operations

          Comparisons of quarterly results in this section are between the three
month periods ended March 31, 1998, and March 31, 1997 and between the nine
month periods then ended.

General

          Net income for the third quarter ended March 31, 1998 was $163,000, an
increase of $33,000 from the $130,000 net income for the third quarter ended
March 31, 1997.
Net income for the nine months ended March 31, 1998, was $427,000, an increase
of $254,000, or 146.8% from the $173,000 net income for the comparable period
ended March 31, 1997.

Interest Income

          Interest income for the third quarter ended March 31, 1998, was $1.3
million, an increase of $290,000, or 30.2%, compared to $961,000 for the
third quarter ended March 31, 1997. Interest income for the nine months ended
March 31, 1998, was $3.5 million, an increase of $665,000, or 23.1% as compared
to the nine months ended March 31, 1997.  Interest on loans receivable increased
$129,000, or 22.2%, from $581,000 for the third quarter ended March 31, 1997, to
$710,000 for the same period ended March 31, 1998.  Interest on loans receivable
increased $279,000, or 15.8%, from $1.8 million for the nine months ended March
31, 1997, to $2 million for the nine months ended March 31, 1998.  Interest on
investment securities increased $40,000, or 54.1%, from $74,000 for the three
months ended March 31, 1997, to $114,000 for the three months ended March 31,
1998.  Interest on investment securities increased $141,000 or 72.7%, from
$194,000 for the nine months ended March 31, 1997, to $335,000 for the nine
months ended March 31, 1998.  Interest on mortgage-backed and related securities
increased $143,000, or 53.8%, from $266,000 for the quarter ended March 31,
1997, to $409,000 for the quarter ended March 31, 1998. Interest on mortgage-
backed and related securities increased $272,000, or 32.1%, from $848,000 for
the nine months ended March 31, 1997, to $1.1 million for the nine months ended
March 31, 1998. The increases are primarily the result of the increases in the
average balances  of investment securities, mortgage-backed and related
securities, and loans receivable outstanding during the three and nine months
ended March 31, 1998, as compared to the three and nine months ended March 31,
1997.

Interest Expense

          Interest expense for the third quarter ended March 31, 1998 was
$759,000 as compared to $556,000 for the quarter ended March 31, 1997, an
increase of $203,000, or 36.5%. Interest expense for the nine months ended March
31, 1998, was $2.1 million as compared to $1.8 million for the nine months ended
March 31, 1997, an increase of $371,000 or 20.9%.   Interest on advances from
FHLB was $359,000 for the three months ended March 31, 1998, as compared to
$163,000 for the same period ended March 31, 1997, an increase of $196,000 or
120.2%.  Interest on advances increased $388,000, or 69.3%, from $560,000 for
the nine months ended March 31, 1997 to $948,000 for the nine months ended March
31, 1998.    The increase was due to an increase in the amount of advances
outstanding during the three month and nine month periods ended March 31, 1998,
as compared to the three and nine month periods ended March 31, 1997.
Interest on deposits remained fairly stable for the three and nine month periods
ended March 31, 1998, as compared to March 31, 1997.

Net Interest Income

          Net interest income before provisions for loan losses was $492,000 for
the third quarter ended March 31, 1998, as compared to $405,000 for the third
quarter ended March 31, 1997, an increase of $87,000 or 21.5%.  Net interest
income before provisions for loan losses was $1.4 million for the nine months
ended March 31, 1998, an increase of $294,000, or 26.8%, as compared to the $1.1
million for the nine months ended March 31, 1997.

                                       14
<PAGE>
 
Provision for Loan Losses

          The provision for loan losses increased $2,000 for the three months
ended March 31, 1998, as compared to the three months ended March 31, 1997.  The
provision for loan losses increased $66,000 for the nine months ended March 31,
1998, compared to the nine months ended March 31, 1997.


Noninterest Income

          There was little change in noninterest income for the quarter ended
March 31, 1998, compared to the quarter ended March 31, 1997.  Noninterest
income was $229,000 for the nine months ended March 31, 1998, an increase of
$25,000, or 12.3%,  compared to $204,000 for the nine months ended March 31,
1997.  The increase was primarily due to an increase in gain on the sales of
mortgage-backed  securities of $29,000, or 207% for the nine months ended March
31, 1998, as compared to the same period ended March 31, 1997.


Noninterest Expense

          Noninterest expense was $283,000 for the third quarter ended March 31,
1998, an increase of $27,000, or 10.5%, compared to $256,000 for the third
quarter ended March 31, 1997. For the nine months ended March 31, 1998,
noninterest expense was $842,000 as compared to $1 million  for the nine months
ended March 31, 1997, a decrease of $174,000, or 17.1%.  The decrease was
largely due to a decrease of $261,000, or 94.2%, in the amount of SAIF deposit
insurance premiums incurred in the nine months ended March 31, 1998 as compared
to the nine months ended March 31, 1997.  0n September 30, 1996, the Bank
incurred  a one time SAIF assessment of approximately $226,000.  In addition,
other noninterest expense  increased $61,000, or 36.5% from $167,000 for the
nine months ended March 31, 1997, to $228,000 for the nine months ended March
31, 1998.   The increase in other expenses was primarily due to expenses
associated with the Company operating as a publicly owned stock institution.  In
addition, during the second quarter,   the Bank purchased an ATM  and incurred
operational expenses that it did not have during the nine months ended March 31,
1997.

Income Tax

          The provision for income taxes  increased $23,000, from  $82,000 for
the quarter ended March 31, 1997, to $105,000 for the quarter ended March 31,
1998.  The provision for income taxes increased $173,000, or 154.5%, from
$112,000 for the nine months ended March 31, 1997, to $285,000 for the nine
months ended March 31, 1998.  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
          None.
 
Item 5    Other Information
          None.

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.

                                       16
<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 April 29, 1998                            /s/ Earle S. Teegarden, Jr.
                                                -------------------------------
                                                Earle S. Teegarden, Jr.
                                                President and Chief Executive 
                                                Officer 
                                                (Duly Authorized Officer)



Dated April 29, 1998                            /s/ Sherri Williams
                                                -------------------------------
                                                Sherri Williams
                                                Chief Accounting Officer
                                                (Principal Financial Officer)

                                       17