UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1999

Commission File Number 0-24118


                          OTTAWA FINANCIAL CORPORATION
                          ----------------------------
             (Exact name of registrant as specified in its charter)


          DELAWARE                                          38-3172166
          --------                                          ----------
(State or other jurisdiction of                           (IRS Employer
incorporation or organization)                         Identification No.)

                   245 CENTRAL AVENUE, HOLLAND, MICHIGAN 49423
                   -------------------------------------------
                    (Address of principal executive offices)

                                  616-393-7000
                                  ------------
              (Registrant's telephone number, including area code)


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  / /

Class:
Common stock, $.01 par value        As of August 4, 1999, there were 6,258,019
                                    shares outstanding.


<PAGE>


                          OTTAWA FINANCIAL CORPORATION

                                    FORM 10-Q
                           QUARTER ENDED JUNE 30, 1999

                         PART I - FINANCIAL INFORMATION


Interim Financial  Information required by Rule 10-01 of Regulation S-X and Item
303 of Regulation S-K is included in this Form 10-Q as referenced below:

                                                                            PAGE

ITEM 1 - FINANCIAL STATEMENTS

      Consolidated Statements of Financial Condition...........................3

      Consolidated Statements of Operations....................................4

      Consolidated Statements of Comprehensive Income..........................5

      Consolidated Statements of Cash Flows..................................6-7

      Notes to the Consolidated Financial Statements...........................8

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.........................................9-15

ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK................................................................16-18

                           Part II - Other Information

OTHER INFORMATION.............................................................19

SIGNATURES....................................................................20

EXHIBIT INDEX.................................................................21










                                        2

<PAGE>

<TABLE>
<CAPTION>
PART 1                    OTTAWA FINANCIAL CORPORATION
Item 1.          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (UNAUDITED)

                                                                              June 30, 1999  December 31, 1998
                                                                              -------------  -----------------
                                                                                     (Dollars in Thousands)
<S>                                                                             <C>             <C>
ASSETS
Cash and due from financial institutions                                        $  15,368       $  20,437
Interest-bearing demand deposits in other financial institutions                    1,403          21,788
                                                                                ---------       ---------
   Total cash and cash equivalents                                                 16,771          42,225
Securities available for sale                                                      80,121          71,646
Federal Home Loan Bank stock                                                       11,782          11,782
Loans held for sale                                                                 1,470           3,375
Loans receivable, net                                                             778,636         769,770
Premises and equipment, net                                                        15,572          15,200
Acquisition intangibles                                                            12,430          13,032
Other assets                                                                       12,074          11,000
                                                                                ---------       ---------
   Total Assets                                                                 $ 928,856       $ 938,030
                                                                                =========       =========

LIABILITIES
Deposits                                                                        $ 677,859       $ 693,632
Federal funds purchased                                                            10,600
Federal Home Loan Bank advances                                                   150,353         160,268
Accrued expenses and other liabilities                                             12,075          10,723
                                                                                ---------       ---------
   Total Liabilities                                                              850,887         864,623
                                                                                ---------       ---------

SHAREHOLDERS' EQUITY
Common Stock, $.01 par value;
  10,000,000 shares authorized; issued
  6,437,447 shares at June 30, 1999,
  6,770,757 shares at December 31, 1998                                                64              62
Additional Paid-in Capital                                                         76,825          73,177
Retained earnings, substantially restricted                                         6,732          15,363
Net unrealized gain or (loss) on securities available for sale, net of tax           (432)             23
Employee Stock Ownership Plan (Unallocated Shares)                                 (1,672)         (1,886)
Management Recognition and Retention Plan (Unearned Shares)                          (463)           (712)
Less Cost of Common Stock in
   Treasury - 174,428 shares at
   June 30, 1999, 777,780 shares at
   December 31, 1998                                                               (3,085)        (12,620)
                                                                                ---------       ---------

Total Shareholders' Equity                                                         77,969          73,407
                                                                                ---------       ---------

Total Liabilities and Shareholders' Equity                                      $ 928,856       $ 938,030
                                                                                =========       =========

</TABLE>

          See accompanying notes to consolidated financial statements.



                                        3


<PAGE>

<TABLE>
<CAPTION>

                          OTTAWA FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                 Three Months Ended            Six Months Ended
                                                       June 30                     June 30
                                                1999           1998            1999         1998
                                                ----           ----            ----         ----
                                                                (Dollars in Thousands,
                                                                except per share data)
<S>                                           <C>            <C>            <C>           <C>
Interest Income
    Loans                                     $ 15,293       $ 15,706       $ 30,540      $ 31,008
    Investment securities and
      equity investments                         1,147          1,006          2,120         1,971
    Other interest and dividend income             356            251            821           540
                                              --------       --------       --------      --------
                                                16,796         16,963         33,481        33,519
                                              --------       --------       --------      --------

Interest Expense
    Deposits                                     6,991          7,570         14,291        15,186
    Federal Home Loan Bank advances              2,250          2,371          4,548         4,622
    Other                                            9             22             12            31
                                              --------       --------       --------      --------
                                                 9,250          9,963         18,851        19,839
                                              --------       --------       --------      --------
NET INTEREST INCOME                              7,546          7,000         14,630        13,680

Provision for loan losses                          285            225            555           435
                                              --------       --------       --------      --------

NET INTEREST INCOME AFTER PROVISION
  FOR LOAN LOSSES                                7,261          6,775         14,075        13,245
                                              --------       --------       --------      --------

Noninterest income
    Service charges and other fees               1,143            998          2,180         2,058
    Mortgage servicing fees                         98             81            204           171
    Gain on sale of loans                          151            555            595           992
    Gain (loss) on sale of securities                                             (9)          (24)
    Other                                          253            305            500           349
                                              --------       --------       --------      --------
                                                 1,645          1,939          3,470         3,546
                                              --------       --------       --------      --------

Noninterest expense
    Compensation and benefits                    2,921          2,909          5,768         5,756
    Occupancy                                      420            373            853           735
    Furniture, fixtures and equipment              324            300            655           585
    Advertising                                     75             75            150           150
    FDIC deposit insurance                         101            101            204           201
    State single business tax                      143            138            285           276
    Data processing                                336            241            614           469
    Professional services                           89            115            228           212
    Acquisition intangibles amortization           301            304            602           608
    Other                                          675            644          1,316         1,351
                                              --------       --------       --------      --------
                                                 5,385          5,200         10,675        10,343
                                              --------       --------       --------      --------
INCOME BEFORE FEDERAL
    INCOME TAX EXPENSE                           3,521          3,514          6,870         6,448

Federal income tax expense                       1,259          1,287          2,495         2,390
                                              --------       --------       --------      --------

NET INCOME                                    $  2,262       $  2,227       $  4,375      $  4,058
                                              ========       ========       ========      ========

Earnings per common share
     Basic                                    $    .38       $    .36       $    .73      $    .67
                                              ========       ========       ========      ========
     Diluted                                       .36            .33            .69           .60
                                              ========       ========       ========      ========

Dividends per common share                         .11            .08            .21           .16
                                              ========       ========       ========      ========

</TABLE>

          See accompanying notes to consolidated financial statements.


                                        4

<PAGE>


<TABLE>
<CAPTION>
                          OTTAWA FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)


                                                                       Six Months Ended
                                                                            June 30
                                                                      1999           1998
                                                                      ----           ----
                                                                    (Dollars in Thousands)
<S>                                                                  <C>           <C>
Net Income                                                           $ 4,375       $ 4,058

Other comprehensive income, net of tax:

     Unrealized gains (losses) arising during the period
          on securities available for sale                              (461)           12

     Less:  reclassification adjustment for accumulated (gains)
          losses included in net income                                    6            16
                                                                     -------       -------

     Unrealized gains (losses) on securities available for sale         (455)           28
                                                                     -------       -------

Comprehensive income                                                 $ 3,920       $ 4,086
                                                                     =======       =======

</TABLE>






















          See accompanying notes to consolidated financial statements.




                                        5

<PAGE>


<TABLE>
<CAPTION>
                          OTTAWA FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                                      Six Months Ended
                                                                           June 30
                                                                     1999           1998
                                                                     ----           ----
                                                                    (Dollars in Thousands)
<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                     $  4,375       $  4,058
   Adjustments to reconcile net income to net cash
      from operating activities
         Depreciation                                                  660            577
         Net amortization of security premiums and discounts           202            230
         Amortization of acquisition intangibles                       602            608
         Provision for loan losses                                     555            435
         Loss on limited partnership investments                        74             82
         ESOP expense                                                  576            731
         MRP expense                                                   249            270
         Origination of loans for sale                             (51,711)       (59,971)
         Proceeds from sale of loans originated for sale            53,653         59,018
         Gain on sale of loans                                        (595)          (992)
         (Gain) / Loss on sale of securities                             9             24
   Changes in:
         Other assets                                               (1,070)            40
         Other liabilities                                           1,550          2,371
                                                                  --------       --------
            Net cash from operating activities                       9,129          7,481
                                                                  --------       --------

CASH FLOWS FROM INVESTING ACTIVITIES
   Activity in available-for-sale securities:
     Purchases                                                     (23,032)       (19,094)
     Maturities, prepayments and calls                              12,808         14,056
     Sales                                                           1,005          3,976
  Purchases of FHLB stock                                                            (787)
  Purchases of loans                                                (9,910)
  Loan originations net of principal payments on loans               1,047        (25,844)
  Premises and equipment expenditures, net                          (1,032)        (1,128)
                                                                  --------       --------
     Net cash from investing activities                            (19,114)       (28,821)
                                                                  --------       --------
</TABLE>









                                        6

<PAGE>


<TABLE>
<CAPTION>
                          OTTAWA FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                    CONTINUED

                                                                     Six Months Ended
                                                                          June 30
                                                                1999                1998
                                                                ----                ----
                                                                 (Dollars in Thousands)
<S>                                                           <C>                  <C>
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase(decrease) in deposits                         (15,773)             16,379
   Net increase in Federal funds purchased                     10,600
   Proceeds from FHLB advances                                 16,000              63,500
   Repayment of FHLB advances                                 (25,915)            (47,315)
   Proceeds from exercise of stock options                        430                 397
   Proceeds from exercise of stock warrants                     1,072               1,470
       Cash paid for exchange of warrants for cash                (92)
   Cash dividends paid                                         (1,278)             (1,001)
   Purchase of treasury shares                                   (513)             (6,840)
                                                             --------            --------
      Net cash from financing activities                      (15,469)             26,590
                                                             --------            --------

Net change in cash and cash equivalents                       (25,454)              5,250
                                                             --------            --------
Cash and cash equivalents at beginning of year                 42,225              32,524
                                                             --------            --------

Cash and cash equivalents at end of year                     $ 16,771            $ 37,774
                                                             ========            ========

Supplemental disclosures of cash flow information
   Cash paid during the year for
      Interest                                               $ 19,402            $ 20,754
      Income taxes                                              2,450               1,710

</TABLE>















          See accompanying notes to consolidated financial statements.



                                        7

<PAGE>



                          OTTAWA FINANCIAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           QUARTER ENDED JUNE 30, 1999

                                   (UNAUDITED)


NOTE 1 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accompanying consolidated financial statements include the accounts of
Ottawa Financial  Corporation  ("Corporation")  and its wholly owned subsidiary,
AmeriBank ("Bank"). All significant  intercompany accounts and transactions have
been eliminated in consolidation.

      These interim financial  statements are prepared without audit and reflect
all adjustments  which,  in the opinion of management,  are necessary to present
fairly the consolidated  financial position of the Corporation at June 30, 1999,
and its  results of  operations  and  statement  of cash  flows for the  periods
presented.  All such  adjustments  are  normal  and  recurring  in  nature.  The
accompanying consolidated financial statements do not purport to contain all the
necessary  financial  disclosures  required  by  generally  accepted  accounting
principles that might otherwise be necessary in the  circumstances and should be
read in conjunction with the consolidated financial statements and notes thereto
of Ottawa Financial Corporation for the year ended December 31, 1998.

      The  provision  for  income  taxes is based  upon the  effective  tax rate
expected to be applicable for the entire year.

      Amounts  reported as basic  earnings per common share reflect the earnings
available to common  shareholders for the period divided by the weighted average
number of common shares outstanding during the period. Common shares outstanding
includes issued shares less shares held in the treasury and  unallocated  shares
held by the employee stock  ownership  plan.  Diluted  earnings per common share
include the shares that would be outstanding assuming exercise of dilutive stock
options and warrants. All share and per share information has been retroactively
adjusted to reflect the 10% stock dividends paid on June 30, 1999 and August 31,
1998.

NOTE 2 - PENDING LITIGATION

      The claim against  AmeriBank for liquidated  damages and deconversion fees
made by On-Line  Financial  Services,  Inc.  and our claim for  damages  against
On-Line were settled in April 1999 with no damages to either party.

      A lawsuit  against  AmeriBank  was filed in December 1998 alleging that we
engaged in the unauthorized  practice of law due to charging a fee for preparing
loan documents. The complaint sought class action certification,  restitution of
all fees paid for the last six years,  interest,  attorney fees and other costs.
The class action certification was obtained in March 1999. We filed a motion for
summary  disposition based upon our belief that the complaint was wholly without
merit.  In July 1999 the court  granted  our motion and the case was  dismissed.
Since then,  the plaintiff has amended the complaint and is now alleging we have
violated certain banking regulations.  We again believe, after consultation with
legal  counsel,  that these  allegations  are wholly without merit and intend to
vigorously defend against this lawsuit.



                                       8
<PAGE>


Item 2
                          OTTAWA FINANCIAL CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL

      The  following  discussion  compares  the  financial  condition  of Ottawa
Financial  Corporation and its wholly owned subsidiary,  AmeriBank,  at June 30,
1999 to December 31, 1998,  and the results of operations  for the three and six
months  ended  June 30,  1999,  compared  to the  same  periods  in  1998.  This
discussion  should be read with the  interim  consolidated  condensed  financial
statements and footnotes attached.

      We  may  from  time  to  time  make   written  or  oral   "forward-looking
statements." These forward-looking statements may be contained in this quarterly
filing  with the  Securities  and  Exchange  Commission,  our  Annual  Report to
Shareholders,  other filings with the Securities and Exchange Commission, and in
other  communications  by us, which are made in good faith pursuant to the "safe
harbor" provisions of the Private Securities  Litigation Reform Act of 1995. The
words "may", "could", "should",  "would", "believe",  "anticipate",  "estimate",
"expect",  "intend",  "plan" and similar  expressions  are  intended to identify
forward-looking statements.

      Forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, estimates and intentions,
that are subject to significant risks and uncertainties.  The following factors,
many of which are subject to change based on various  other  factors  beyond our
control,  could cause our financial  performance to differ  materially  from the
plans,  objectives,  expectations,  estimates and  intentions  expressed in such
forward-looking  statements:

o the  strength  of the United  States  economy in
general and the strength of the local
         economies in which we conduct operations;

     o  the effects of, and changes in, trade,  monetary and fiscal policies and
        laws, including interest rate policies of the Federal Reserve Board;
     o  inflation, interest rate, market and monetary fluctuations;
     o  the timely  development  of and  acceptance of new products and services
        and the perceived overall value of these products and services by users,
        including the  features,  pricing and quality  compared to  competitors'
        products and services;
     o  the  willingness  of  users  to  substitute  competitors'  products  and
        services for our products and services;
     o  our success in gaining regulatory approval of our products and services,
        when required;
     o  the  impact of  changes  in  financial  services'  laws and  regulations
        (including laws concerning taxes, banking, securities and insurance);
     o  the impact of technological changes;
     o  acquisitions;
     o  changes in consumer spending and saving habits; and
     o  our success at managing the risks involved in our business.

      This list of important  factors is not  exclusive.  We do not undertake to
update any forward-looking statement,  whether written or oral, that may be made
from time to time by or on behalf of Ottawa or AmeriBank.

FINANCIAL CONDITION

      Total assets  decreased  to $928.86  million at June 30, 1999 from $938.03
million  at  December  31,  1998.  Most of this  decrease  was in cash  and cash
equivalents, resulting primarily from the decline in deposits.

      Net loans  receivable  increased to $778.64  million at June 30, 1999 from
$769.77  million at December 31, 1998.  Through our focus on the  development of

                                       9
<PAGE>



our commercial and business banking services and our consumer lending  products,
as well as  healthy  loan  demand in our market  area,  we were able to grow our
commercial  business and commercial real estate loan portfolio by $20.18 million
and our consumer loan  portfolio by $8.29 million during the first six months of
1999.  This  growth,  however,  was  partially  offset  by the  decrease  in the
residential  mortgage portfolio of $21.01 million during the same period. Due to
the low  interest  rate  environment  in the first  quarter,  a  portion  of our
adjustable-rate  mortgage loan  portfolio  refinanced to fixed rate loans during
the first  three  months of the year.  Since we sell almost all of our 15 and 30
year term fixed  rate  mortgage  loan  production  and retain for our  portfolio
adjustable  rate  mortgage  loan  production,  we saw a decrease  in our overall
mortgage loan portfolio.

      Deposits  decreased  to  $677.86  million  at June 30,  1999 from  $693.63
million at December  31,  1998.  This  decrease  in  deposits  was a result of a
reduction in our certificates of deposit  portfolio.  Due to excess liquidity as
evidenced by the high balance of cash and cash equivalents at December 31, 1998,
we priced our  certificates  of deposit either at or below the market in certain
maturity categories to provide for some reduction in the certificates of deposit
portfolio. This portfolio decreased by $22.59 million in the first six months of
1999 while our  transaction and savings  accounts  increased by $6.82 million in
the same period.

      The  primary  components  of growth in  shareholder's  equity  for the six
months ended June 30, 1999 related to net income,  as well as proceeds  received
from the exercise of stock  options and warrants.  The increases  were offset by
cash  dividends  declared and additional  repurchases  of outstanding  shares of
common stock.  In  connection  with our warrant  exchange  offer that expired on
January 26,  1999,  we issued  180,599  shares of Ottawa  Financial  Corporation
common stock and paid $90,130 in cash. The remaining  warrants were exercised by
the date of the warrant  plan  expiration,  resulting in  additional  capital of
$900,000.













                                       10

<PAGE>



AVERAGE BALANCES, INTEREST RATES AND YIELDS

      This  table   presents   the  amount  of  interest   income  from  average
interest-earning  assets and the yields earned on those  assets,  as well as the
interest expense on average  interest-bearing  liabilities and the rates paid on
those liabilities. All average balances are daily average balances.

<TABLE>
<CAPTION>
                                                   Six Months Ended                        Six Months Ended
                                                     June 30, 1999                           June 30, 1998
                                          -----------------------------------    -----------------------------------
                                             Average      Interest                 Average
                                          Outstanding      Earned/     Yield/    Outstanding    Interest      Yield/
                                             Balance        Paid        Rate       Balance     Earned/Paid     Rate
                                          -----------------------------------    -----------------------------------
                                                   (Dollars in Thousands)
<S>                                         <C>           <C>           <C>        <C>           <C>           <C>
Interest-Earning Assets:
  Loans receivable (1) (2)                  $775,764      $ 30,557      7.91%      $769,089      $ 31,029      8.10%
  Securities (2)                              72,922         2,127      5.83         61,058         1,988      6.51
  Other interest-earning assets               25,808           821      6.42         14,727           540      7.33
                                            --------      --------      ----       --------      --------      ----
    Total interest-earning assets           $874,494      $ 33,505      7.69%      $844,874      $ 33,557      7.97%
                                            --------      --------      ----       --------      --------      ----
Interest-Bearing Liabilities:
  Demand and NOW deposits                   $202,696      $  3,408      3.39%      $161,526      $  3,052      3.81%
  Savings deposits                            54,020           463      1.73         62,316           624      2.02
  Certificate accounts                       386,580        10,420      5.44        403,311        11,510      5.76
  FHLB advances                              156,461         4,548      5.86        155,454         4,622      6.00
  Other interest-bearing liabilities             339            12      6.98          1,133            31      5.47
                                            --------      --------      ----       --------      --------      ----
    Total interest-bearing liabilities      $800,096      $ 18,851      4.75%      $783,740      $ 19,839      5.10%
                                                          --------      ----       --------      --------      ----

  Net interest income                                     $ 14,654                               $ 13,718
                                                          ========                               ========
  Net interest rate spread                                              2.94%                                  2.87%
                                                                        ====                                   ====
  Net earning assets                        $ 74,398                               $ 61,134
                                            ========                               ========
  Net yield on average
    interest-earning assets                                            3.36%                                   3.26%
                                                                       ====                                    ====
  Average interest-earning assets
    to average interest-bearing
    liabilities                                               1.09x                                  1.08x
</TABLE>


(1) Calculated net of deferred loan fees, loan discounts,  loans in process, and
    loan reserves.

(2) Tax exempt  interest on loans and securities has been converted to a fully -
    taxable equivalent basis.



                                       11
<PAGE>


RATE/VOLUME ANALYSIS

       This table  presents the dollar amount of changes in interest  income and
interest   expense  for  major   components  of   interest-earning   assets  and
interest-bearing  liabilities.  For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable to
(i) changes in volume (i.e.,  changes in volume multiplied by old rate) and (ii)
changes  in rate  (i.e.,  changes in rate  multiplied  by old  volume).  Changes
attributable  to both  rate and  volume  which  cannot be  segregated  have been
allocated  proportionately  to the  change  due to volume  and the change due to
rate.



                                                      Six Months Ended
                                                          June 30
                                                       1999 vs. 1998
                                            --------------------------------
                                                  Increase
                                                 (Decrease)
                                                   Due to
                                            -------------------
                                                                     Total
                                             Volume       Rate     Increase
                                                                  (Decrease)
                                            --------------------------------
                                                   (Dollars in Thousands)
Interest-earning assets:
   Loans receivable                         $   273     $  (745)    $  (472)
   Securities - Taxable                         300        (161)        139
   Other interest-earning assets                341         (60)        281
                                            -------     -------     -------
      Total interest-earning assets         $   914     $  (966)    $   (52)
                                            =======     =======     =======
Interest-bearing liabilities:
   Demand and NOW deposits                      627        (271)        356
   Savings deposits                             (77)        (84)       (161)
   Certificate accounts                        (466)       (624)     (1,090)
   Borrowings                                    30        (104)        (74)
   Other interest-bearing liabilities           (33)         14         (19)
                                            -------     -------     -------
      Total interest-bearing liabilities    $    81     $(1,069)    $  (988)
                                            =======     =======     =======
Net interest income                         $   833     $   103     $   936
                                            =======     =======     =======


RESULTS OF OPERATIONS

      Net income for the quarter  ended June 30, 1999 was $2.26  million or $.36
per share assuming  dilution compared to net income of $2.23 million or $.33 per
share  assuming  dilution  for the same  period in 1998.  Net income for the six
months ended June 30, 1999 was $4.38 million or $.69 per share assuming dilution
compared to net income of $4.06 million or $.60 per share assuming  dilution for
the same period in 1998.  The  improvement  in earnings over the same periods in
the prior year was due  primarily  to the growth in net  interest  income.  This
improvement was partially  offset by a decrease in gains on sales of loans.  All
per share information has been  retroactively  adjusted to reflect the 10% stock
dividends paid on June 30, 1999 and August 31, 1998.

      To supplement the EPS information  typically  disclosed,  we are providing
"cash"  or  "tangible"  EPS  as  an  alternative   measure  for  evaluating  the
Corporation's  ability  to  grow  tangible  capital.  The  calculations  of cash
earnings per share were specifically  formulated by us and may not be comparable
to similarly titled measures  reported by other  companies.  This measure is not
intended to reflect cash flow per share.  The "cash" or  "tangible"  EPS for the
second  quarter  of 1999 was  $.44,  which was $.08 per  share  higher  than the
standard EPS, compared to a cash EPS of $.42 for the second quarter of 1998. The


                                       12
<PAGE>



cash or tangible EPS for the six months ended June 30, 1999 was $.87,  which was
$.18 per share higher than the standard EPS,  compared to a cash EPS of $.78 for
the  same  period  in  1998.  This  measure  and  the  factors  influencing  its
calculation are described more fully in the 1998 Annual Report to shareholders.

      Net interest income  increased  $936,000 on a tax equivalent basis for the
six months ended June 30, 1999 compared to the same period in 1998. The increase
in  net  interest   income  was   attributable   to  the   positive   impact  of
interest-earning  asset volume increases  caused by internal growth  experienced
during the latter half of 1998 as well as the  positive  impact of  decreases in
the cost of  interest-bearing  liabilities.  The  improvement in interest income
resulting from the increase in the volume of interest-earning  assets was offset
by the 28 basis point drop in the yield on interest-earning assets caused by the
decline  in  general  market  interest  rates.  There was also a 35 basis  point
decrease in the cost of interest-bearing liabilities, resulting in a seven basis
point improvement in net interest spread. While there was an overall increase in
the volume of  interest-bearing  liabilities,  the shift in the mix from  higher
costing  certificates  of deposit to lower costing demand deposits for the first
six months of 1999 compared to the same period of the prior year  contributed to
the lower interest  expense.  Net interest margin  increased to 3.36% from 3.26%
for the six months ended June 30, 1999  compared to the same period in the prior
year. The improvement in net interest  margin was due to the spread  improvement
discussed above and the growth in  noninterest-bearing  deposits during the past
year.

      The  provision  for loan  losses  is a  result  of  management's  periodic
analysis of the  adequacy of the  allowance  for loan  losses.  Although  actual
losses on loans have not increased compared to the first six months of the prior
year,  the provision of $555,000 for the six months ended June 30, 1999 compared
to $435,000  for the same period in the prior year was in response to the growth
achieved in the consumer and commercial loan portfolios, which generally involve
a greater degree of credit risk than one-to-four family mortgage lending.

      The allowance is maintained by management at a level  considered  adequate
to cover possible loan losses that are currently  anticipated based on past loss
experience,  general economic  conditions,  information  about specific borrower
situations,  including their financial position and collateral values, and other
factors and estimates, which are subject to change over time. Although the level
of  non-performing  assets is considered in establishing  the allowance for loan
losses  balance,  variations in  non-performing  loans have not been  meaningful
based upon our past loss  experience  and, as such,  have not had a  significant
impact on the overall level of the allowance for loan losses.  Delinquent  loans
more  than 90 days are put on  non-accrual  status  unless  they are  adequately
collateralized   and  in  the  process  of   collection   (see   discussion   on
Non-Performing Assets and Allowance for Loan Losses below).

      Noninterest  income  decreased  for both the three  and six month  periods
ended June 30, 1999 compared to the same periods in 1998.  The decrease  related
primarily to lower gains on sales of mortgage  loans.  The rising  interest rate
environment  in 1999  not  only  caused  a  reduction  in the  volume  of  loans
originated  for  sale  but  also  caused  a  tightening  of the  profit  margins
experienced on the sale of those loans.  Noninterest  income in most other areas
improved in 1999.

       Noninterest  expense showed a moderate increase to $10.68 million for the
six months ended June 30, 1999 from $10.34  million for the same period in 1998.
While noninterest expense showed an increase,  our efficiency ratio,  defined as
noninterest  expense  divided by the sum of net interest  income and noninterest
income,  decreased  from 61.08% for the six months ended June 30, 1998 to 59.08%
for the same period in 1999.  This ratio  demonstrates  that while the  absolute
dollars of noninterest  expense increased for the period presented,  our ability
to generate revenues on those dollars improved.


NON-PERFORMING ASSETS AND ALLOWANCE FOR LOAN LOSSES

      Non-performing  assets  decreased  to $2.46  million at June 30, 1999 from
$4.03 million at December 31, 1998  primarily  due to decreases in  non-accruing
loans. The percentage of non-performing  assets to total assets was .27% at June
30, 1999 compared to .43% at December 31, 1998. Our allowance for loan losses as
a percentage of  non-performing  loans at June 30, 1999 was 240.12%  compared to
129.37% at December 31, 1998.

                                       13
<PAGE>



      The table below sets forth the amounts and  categories  of  non-performing
assets at June 30, 1999 and December 31, 1998.

                                                      June 30      December 31
                                                       1999           1998
                                                       ----           ----
                                                       (Dollars in Thousands)

      Non-accruing loans
         One to four family                             $175           $696
         Multi-family and commercial real estate                        879
         Construction or development                   1,057            609
         Commercial business                             394            504
         Consumer                                        173            446
                                                       -----          -----
           Total                                       1,799          3,134
      Accruing loans delinquent more than 90 days:
         One- to four-family                             ---             32
         Commercial and multi-family real estate         ---            ---
         Construction or development                     ---             21
         Consumer                                        ---             11
                                                       -----          -----
           Total                                                         64
      Foreclosed assets:
         One- to four-family                             431            656
         Consumer                                        231            174
                                                       -----          -----
           Total                                         662            830
                                                       -----          -----
      Total non-performing assets                     $2,461         $4,028
                                                       =====          =====
      Total as a percentage of total assets              .27%           .43%
                                                         ===            ===



LIQUIDITY

      We anticipate we will have sufficient funds available to meet current loan
commitments through sales, calls and maturities of securities, loan payments and
payoffs,  and the  growth of  deposits.  If  necessary,  significant  sources of
liquidity are available from Federal Home Loan Bank advances and unused lines of
credit with  correspondent  banks.  At June 30, 1999, we had commitments to make
loans of  $23.38  million,  unused  lines  of  credit  of  $62.93  million,  and
construction loans in process of $52.86 million.

CAPITAL RESOURCES

      AmeriBank  is subject to capital  requirements  in  accordance  with state
banking  regulations.  There has been no significant  change in the level of the
AmeriBank's  regulatory  capital relative to the requirements since December 31,
1998.  AmeriBank remains "well  capitalized"  under the prompt corrective action
regulations.

YEAR 2000 ISSUE

       The year 2000 ("Y2K") issue relates to the inability of computer  systems
to recognize  the year 2000.  Processing  problems  could  result from  existing
computer  programs and systems  misinterpreting  the year 2000 as the year 1900.
The financial  institutions industry could be significantly  impacted by the Y2K
issue due to our  dependence  on  technology  and  date-sensitive  data.  If not
adequately  addressed,  the Y2K issue could have a significant adverse impact on
our business and, in turn, our financial condition and results of operations.

                                       14
<PAGE>



       Our Y2K  assessment  began in late 1997 when an action plan was developed
and  approved by our Board of  Directors.  We created a "Y2K Task Force" to work
with  associates  corporate-wide  to prepare for Y2K.  Our  Computer and Network
Department,  as well as our Technology Committee,  have been testing these areas
to assess Y2K  compliance.  If an area is not validated as Y2K  compliant,  then
updates are made to become Y2K compliant.

       Our Y2K plan consists of several phases including awareness,  assessment,
renovation,  validation  and  implementation.  Within the  awareness  phase,  we
defined the Y2K problem and identified the resources to perform compliance work.
Within the  assessment  phase,  we evaluated the complexity of the Y2K issue and
detailed  the effort  necessary  to address the  issues.  The  renovation  phase
included code enhancements, hardware and software upgrades, system replacements,
vendor certifications and other similar changes. Within the validation phase, we
tested the incremental changes to hardware and software components identified in
the renovation  phase. All of the above stages were completed prior to March 31,
1999.

       At the end of the  implementation  phase  we were  able  to  certify  our
mission-critical  systems as Y2K compliant. In addition, this phase ensured that
any new systems or  subsequent  changes to verified  systems are Y2K  compliant.
This phase was completed by June 30, 1999.

       We are expensing all costs  associated  with required  system  changes as
they occur.  These  costs are being  funded  through  operating  cash flows.  We
estimate the total cost of our Y2K conversion  project will be $300,000,  net of
income taxes.  Approximately  two thirds of this  estimated  cost has been spent
through  June  30,1999.  We do not expect  significant  increases in future data
processing costs relating to Y2K compliance.

       The  software   program  that  processes  and  tracks  customer   account
information  is the most  significant  component  of our computer  system.  This
software is the ITI Premier Financial  Information  System that is used by 3,500
banks  across the  country  and has been  certified  as Y2K  compliant.  This is
relatively  new  software  that was written to include  four digits for the year
calculations,  and therefore  does not require its language to be rewritten.  An
outside  service bureau runs this software for us which also is certified as Y2K
compliant.  We have  completed  the  compliance  testing of this  system and our
interfacing with the service bureau in the implementation  phase discussed above
and have concluded that it is Y2K compliant.

      In  addition  to  reviewing  our  own  computer   operating   systems  and
applications,  we initiated formal  communications  with our significant vendors
(operating  risk) and large  customers  (credit risk) to determine the extent to
which  AmeriBank is vulnerable to those third parties'  failure to resolve their
own Y2K issues.  There is no assurance that the systems of other  companies with
which we have a relationship will be timely converted. If such modifications and
conversions are not made, or are not completed in a timely manner, the Y2K issue
could have an adverse impact on our operations.  Our  communications  with these
third parties have taken place over the various  stages of our Y2K plan. We have
assessed the readiness status of our significant  vendors and borrowers and have
updated  these  assessments  on an  ongoing  basis.  If any of these  vendors or
borrowers displayed a high risk of not being ready for Y2K, the relationship was
severed.  Underwriting  standards for our significant  borrowing  customers have
incorporated  Y2K  assessments  since  late  1997.  At that  time  all  existing
significant   borrowing   customer   relationships   were   evaluated   and  new
relationships have been evaluated in the underwriting  process. Y2K readiness is
monitored on an ongoing basis by the individual loan officers  assigned to these
borrowing customers.




                                       15
<PAGE>


       While our Y2K  readiness  process is  proceeding  according to plan, as a
precaution,  we developed a contingency  plan in the event of physical  disaster
including  power outage and/or  telecommunication  system  outages.  We assigned
responsibilities   regarding  final  preparation  to  individuals   within  each
department.  In addition,  we  identified a  centralized  location to accomplish
communications and data processing under various disaster conditions.

      The  costs of the  project,  the date on which we  believe  the Year  2000
modifications  will be  completed,  and the related risk  exposures are based on
management's best estimates. There can be no guarantee that these estimates will
be achieved and actual results could differ from those anticipated. Furthermore,
no assurance can be given that our contingency  plans, if needed,  will function
as anticipated, or that our results of operations will not be adversely affected
by  difficulties  or delays in third  parties Y2K  readiness  efforts.  Specific
factors  that might  cause  differences  include,  but are not  limited  to, the
ability of other  companies on which our systems rely to modify or convert their
systems to be Y2K  compliant,  the ability to locate and  correct  all  relevant
computer codes, and similar uncertainties.


Item 3
                          OTTAWA FINANCIAL CORPORATION
                    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK

      The balance sheet  consists of  investments  in  interest-earning  assets,
primarily  loans  and  investment  securities,  which  are  primarily  funded by
interest-bearing   liabilities,   deposits  and   borrowings.   These  financial
instruments  have varying levels of  sensitivity  to changes in market  interest
rates,  resulting in market risk.  Other than loans that are originated and held
for sale, all of our financial  instruments are for other than trading purposes.
We are  subject to interest  rate risk to the extent  that our  interest-bearing
liabilities with short and intermediate-term maturities reprice more rapidly, or
on a different basis, than our interest-earning assets.

      Our senior management and Board of Directors review  AmeriBank's  exposure
to interest  rate risk on a quarterly  basis.  We measure  interest rate risk by
computing  estimated  changes in net interest income and the net portfolio value
of cash flows from  assets,  liabilities  and  off-balance  sheet items within a
range of assumed changes in market  interest rates. If estimated  changes to net
portfolio value and net interest income are not within the limits established by
the  Board,  the Board may direct  management  to adjust  AmeriBank's  asset and
liability mix to bring interest rate risk within Board approved limits.

      Net portfolio value represents the market value of portfolio equity and is
equal to the market value of assets minus the market value of liabilities,  with
adjustments made for off-balance sheet items. This analysis assesses the risk of
loss in market risk  sensitive  instruments in the event of sudden and sustained
1% to 3% increases  and  decreases in market  interest  rates.  The tables below
present the change in AmeriBank's net portfolio value and net interest income at
June 30, 1999 and December 31, 1998, based on internal  assumptions,  that would
occur upon an immediate  change in interest  rates,  with no effect given to any
steps that management might take to counteract that change.




                                       16
<PAGE>



 JUNE 30, 1999:         Net Portfolio Value             Net Interest Income
                      -----------------------       ------------------------
  Change in
Interest Rate           $ Amount   % Change           $ Amount    % Change
(Basis Points)           in NPV     in NPV             in NII      in NII
--------------------------------------------------------------------------------
    +300              $ 41,486       -46 %          $ 21,870         -25 %
    +200                53,690       -30              24,351         -16
    +100                65,115       -15              26,748          -8
       0                76,320       ---              29,117         ---
    -100                84,864        11              31,329           8
    -200                88,029        15              32,774          13
    -300                96,512        26              33,996          17

 DECEMBER 31, 1998:     Net Portfolio Value             Net Interest Income
                      -----------------------       ------------------------
  Change in
Interest Rate           $ Amount   % Change           $ Amount    % Change
(Basis Points)           in NPV     in NPV             in NII      in NII
--------------------------------------------------------------------------------
    +300              $ 38,798       -48 %          $ 20,275         -27 %
    +200                52,011       -30              23,040         -18
    +100                63,218       -15              25,532          -9
       0                74,187       ---              27,965         ---
    -100                84,511        14              30,309           8
    -200                89,599        21              31,886          14
    -300                99,922        35              33,440          20

      As  illustrated  in the table,  net portfolio  value is more  sensitive to
rising rates than declining rates.  This occurs  principally  because,  as rates
rise,  the  market  value  of  fixed-rate  loans  declines  due to both the rate
increase and slowing  prepayments.  When rates  decline,  we do not experience a
significant  rise in market value for these loans  because  borrowers  prepay at
relatively  high rates.  The value of our  deposits  and  borrowings  changes in
approximately the same proportion in rising or falling rate scenarios.

      The  results for the 300 basis point  interest  rate shocks are  monitored
primarily to assist in identifying trends in our interest rate risk profile.  We
feel that a sudden and sustained change in interest rates of 300 basis points is
not a realistic event. Therefore we focus on managing, to acceptable levels, the
change in net  portfolio  value for the 100 and 200 basis  point  interest  rate
shocks both up and down.


                                       17

<PAGE>



      The tables  above show that from  December 31, 1998 to June 30, 1999 there
has been a slight  decrease in  sensitivity to a rise in interest  rates.  At an
increase in interest rates of 300 basis points, net portfolio value decreases by
46% as of June 30, 1999 compared to a 48% decrease as of December 31, 1998. Most
of the  decrease  in  sensitivity  relates to the  increase  in our equity  from
December 31, 1998 to June 30, 1999. As equity  increases,  the percent change in
net portfolio value decreases for the same dollar amount change in net portfolio
value.  A deposit  portfolio  mix change  also  contributed  to the  decrease in
sensitivity. During the six months ended June 30, 1999, many of our shorter-term
certificates  of deposit  matured and rolled over into our 30-month  certificate
program.  The effect of this shift was to lengthen  the average  maturity of our
certificate of deposit  portfolio  which  decreases our sensitivity to a rise in
interest rates.

      To decrease  our exposure to interest  rate risk,  we are trying to reduce
the duration and average life of our  interest-earning  assets.  To achieve this
goal, we are emphasizing adjustable-rate mortgage loans and growing our consumer
and  commercial  loan  portfolios  which are  shorter-term  in  nature  than the
mortgage loan portfolio.  In addition, we are underwriting all long-term,  fixed
rate  residential  mortgages in  accordance  with Freddie Mac  guidelines  which
allows us the flexibility of selling these assets into the secondary  market. We
are currently selling 30- and 15-year fixed-rate  residential  mortgage loans as
they are originated.  With our funding sources,  we are attempting to reduce the
impact of interest rate changes by emphasizing non-interest bearing products and
using longer-term fixed-rate advances from the Federal Home Loan Bank.

      As with any  method of  measuring  interest  rate  risk,  the above  table
inherently  has   shortcomings.   For  example,   although  certain  assets  and
liabilities may have similar maturities or periods to repricing,  they may react
in different  degrees to changes in market interest rates. The interest rates on
certain types of assets and  liabilities  may fluctuate in advance of changes in
market  interest  rates,  while  interest  rates on other  types may lag  behind
changes in market rates.  Additionally,  certain assets, such as adjustable-rate
mortgage  loans,  have  features that  restrict  changes in interest  rates on a
short-term  basis  and over the life of the  asset.  When  there is a change  in
interest rates,  expected rates of prepayments on loans, decay rates of deposits
and early withdrawals from  certificates  could likely differ from those assumed
in the table.  Finally,  the ability of many borrowers to service their debt may
decrease in the event of a significant interest rate increase.

      In  addition,  the above  table may not  properly  reflect  the  impact of
general interest rate movements on our net interest income because the repricing
of certain  categories of assets and  liabilities  are influenced by competitive
and other pressures beyond our control.



                                       18

<PAGE>


                          OTTAWA FINANCIAL CORPORATION

                                    FORM 10-Q
                           QUARTER ENDED JUNE 30, 1999

                           PART II - OTHER INFORMATION

Item 1   Legal Proceedings:
            There are no matters  required to be reported  under this item,  but
            see Note 2 of the Notes to Consolidated Financial Statements.

Item 2   Changes in Securities:
            There are no matters required to be reported under this item.

Item 3   Defaults Upon Senior Securities:
            There are no matters required to be reported under this item.

Item 4   Submission of Matters to a Vote of Security Holders:
            On April 27,  1999,  Ottawa  Financial  Corporation  held its Annual
            Meeting of Shareholders ("Meeting").

            Shareholders  of the Corporation  voted on the following  matters at
            the Meeting:

Election of Directors                        Votes For  Votes Withheld
---------------------                        ---------  --------------
Ronald J. Bieke                              4,503,118      120,928
Ronald L. Haan                               4,518,498      105,548
Douglas J. Iverson                           4,506,614      117,432
Brian W. Koop                                4,520,275      103,771

Ratification of an amendment to Ottawa       Votes For   Votes Against   Abstain
Financial's 1995 Stock Option and            ---------   -------------   -------
Incentive Plan to increase the number of
shares available thereunder by 283,860       3,975,697      599,218       49,131

Ratification of an amendment to Ottawa
Financial's 1995 Stock Option and
Incentive Plan to remove Office of Thrift
Supervision restrictions on the granting
and vesting of awards under the Plan         3,983,481      527,655      112,910

Ratification of the appointment
of Crowe, Chizek and Company as
independent auditors of the Bank             4,559,849       32,001       32,196

Item 5   Other Information:
            There are no matters required to be reported under this item.

Item 6   Exhibits and Reports on Form 8-K:

            (a)    Exhibit 11 Statement - Re: Computation of per Share Earnings

            (b)    Exhibit 27 - Financial Data Schedule (electronic filing only)

            (c)    Reports on Form 8-K

                   1. The  Corporation  filed a Current Report on Form 8-K dated
                      May 26, 1999 with the SEC,  containing two press releases.
                      The first press  release  reported the  retirement of G.W.
                      Haworth  as  a  Director  of  Ottawa   Financial  and  its
                      wholly-owned subsidiary, AmeriBank, effective June 1, 1999
                      and the  appointment  of Richard  T. Walsh to succeed  the
                      Director position vacated by Mr. Haworth effective June 1,
                      1999.  The  second  press  release  reported  the Board of
                      Director's  declaration of a 10% stock dividend and a cash
                      dividend  of $0.11 per share  payable on June 30,  1999 to
                      shareholders of record on June 14, 1999.


                                       19

<PAGE>



                                   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.

                                     OTTAWA FINANCIAL CORPORATION

Date:  August 10, 1999               /s/ Douglas J. Iverson
       ------------------            -------------------------------------------
                                     Douglas J. Iverson
                                      Vice Chairman and Chief Executive Officer
                                      (Duly Authorized Officer)

Date:  August 10, 1999               /s/ Jon W. Swets
      -------------------            -------------------------------------------
                                     Jon W. Swets
                                      Chief Financial Officer
                                      (Principal Financial Officer)














                                       20

<PAGE>


                                  EXHIBIT INDEX



EXHIBIT
NUMBER                               DESCRIPTION


 11                Statement - Re:  Computation of per share earnings.

 27                Financial Data Schedule (electronic filing only)