UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB

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

                For the quarterly period ended December 31, 1999

                                       OR

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

                           Commission File No. 0-20956

                            HFB FINANCIAL CORPORATION

 A Tennessee Corporation                                         I.R.S. Employer
                                                                  Identification
                                                                  No. 61-1228266

Address                                                         Telephone Number
-------                                                         ----------------

1602 Cumberland Avenue                                           (606) 248-1095
Middlesboro, Kentucky 40965


Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the  Securities  and  Exchange  Act of 1934 during the
preceding  twelve  months (or for such shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No .

The number of shares of the  registrant's $1 par value common stock  outstanding
at February 11, 2000 was 1,106,818.

There are a total of 14 pages filed in this document.
<PAGE>

                            HFB FINANCIAL CORPORATION

                                   I N D E X
                                   ---------

                                                                        PAGE NO
                                                                        -------

PART I - FINANCIAL INFORMATION

  Item  1.  Financial Statements

                 Consolidated Balance Sheet                                   3

                 Consolidated Statement of Income                             4

                 Consolidated Statement of Stockholders' Equity               5

                 Consolidated Statement of Cash Flows                         6

                 Notes to Consolidated Financial Statements                 7-8

  ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS                  9-12

PART II - OTHER INFORMATION                                                 13

SIGNATURES                                                                  14

                                       2
<PAGE>
                    HFB FINANCIAL CORPORATION AND SUBSIDIARY
                           Consolidated Balance Sheet
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,        JUNE 30,
                                                                     1999              1999
ASSETS
<S>                                                             <C>              <C>
     Cash and cash equivalents                                  $   7,457,465    $   3,573,139
     Trading securities                                               970,690        1,014,808
     Investment securities
        Available for sale                                         35,564,528       37,298,664
        Held to maturity                                           26,012,253       21,997,870
                                                                -------------    -------------
             Total investment securities                           61,576,781       59,296,534
     Loans                                                        122,089,487      121,953,392
        Allowance for loan losses                                    (614,574)      (1,211,594)
                                                                -------------    -------------
             Net loans                                            121,474,913      120,741,798
     Premises and equipment                                         3,157,654        2,432,475
     Real estate owned                                                136,641               --
     Federal Home Loan Bank stock                                   1,371,400        1,346,800
     Interest receivable                                            1,896,168        1,821,970
     Goodwill                                                         427,380               --
     Other Assets                                                     171,368          188,876
                                                                -------------    -------------
             Total assets                                         198,640,460      190,416,400
                                                                =============    =============

LIABILITIES
     Deposits
        Interest bearing                                        $ 163,982,916    $ 152,971,687
        Non-interest bearing                                        1,353,798        1,016,069
                                                                -------------    -------------
             Totals                                               165,336,714      153,987,756
     Short term borrowings                                          3,375,000        6,500,000
     Long term debt                                                10,563,472       10,597,501
     Interest payable                                                 710,465          733,041
     Other liabilities                                                533,289          847,055
                                                                -------------    -------------
             Total liabilities                                    180,518,940      172,665,353
                                                                -------------    -------------
STOCKHOLDERS' EQUITY
        Issued and outstanding - 1,308,864 shares                   1,308,864        1,303,031
     Additional paid-in capital                                     6,332,584        6,303,419
     Less: Common stock acquired by Rabbi trusts for deferred
                compensation plans                                   (611,329)        (639,767)
     Treasury stock, at cost, 202,046 shares                       (2,030,955)      (2,030,955)
     Retained earnings                                             14,209,550       13,501,715
     Accumulated other comprehensive income                        (1,087,194)        (686,396)
                                                                -------------    -------------
          Total stockholders' equity                               18,121,520       17,751,047
                                                                -------------    -------------
          Total liabilities and stockholders' equity            $ 198,640,460    $ 190,416,400
                                                                =============    =============
</TABLE>
See notes to consolidated financial statements.

                                       3
<PAGE>
                    HFB FINANCIAL CORPORATION AND SUBSIDIARY
                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                THREE-MONTHS ENDED             SIX-MONTHS ENDED
                                                   DECEMBER 31,                  DECEMBER 31,
                                               1999           1998           1999           1998
INTEREST INCOME
<S>                                        <C>            <C>            <C>            <C>
   Loans receivable                        $ 2,510,638    $ 2,587,023    $ 5,058,302    $ 5,095,308
   Investment securities                     1,014,096        729,819      1,935,231      1,500,728
   Other dividend income                        32,218         28,425         66,985         56,047
   Deposits with financial institutions         39,086         50,961         41,496         70,582
                                           -----------    -----------    -----------    -----------
            Total interest income            3,596,038      3,396,228      7,102,014      6,722,665
                                           -----------    -----------    -----------    -----------
INTEREST EXPENSE
   Deposits                                  1,878,221      1,809,488      3,645,903      3,640,239
   Short term borrowings                        23,990         94,795        104,614        189,720
   Long term debt                              142,461         84,497        285,266        168,634
                                           -----------    -----------    -----------    -----------
            Total interest expense           2,044,672      1,988,780      4,035,783      3,998,593
                                           -----------    -----------    -----------    -----------

NET INTEREST INCOME                          1,551,366      1,407,448      3,066,231      2,724,072
   Provision for loan losses                        (2)        66,160       (474,488)       134,459
                                           -----------    -----------    -----------    -----------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES                  1,551,368      1,341,288      3,540,719      2,589,613
                                           -----------    -----------    -----------    -----------
OTHER INCOME
   Service charges for deposit accounts         98,009         86,535        192,040        179,841
   Other customer fees                          23,716         23,023         37,636         42,800
   Net gain (loss) on trading securities       (18,532)         2,830        (74,039)      (197,279)
   Net realized gain (loss) on sales of
    available for sale securities                   --          2,827             --          2,827
   Other income                                  2,185         (3,050)         8,802          3,292
                                           -----------    -----------    -----------    -----------
            Total other income                 105,378        112,165        164,439         31,481
                                           -----------    -----------    -----------    -----------
OTHER EXPENSES
   Salaries and employee benefits              530,138        395,854      1,021,659        835,326
   Net occupancy expenses                       74,085         51,138        128,514         97,919
   Equipment expenses                           63,839         49,809        114,775        102,676
   Data processing fees                         97,667         51,843        141,292        119,229
   Deposit insurance expense                    22,824         20,995         45,251         42,649
   Legal and professional fees                  43,467         47,513        104,264         99,658
   Advertising                                  69,226         35,171        123,741         61,333
   State franchise and deposit taxes            35,710         39,350         74,290         71,075
   Other expenses                              245,283        177,343        483,791        339,961
                                           -----------    -----------    -----------    -----------
            Total other expenses             1,182,239        869,016      2,237,577      1,769,826
                                           -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAX                       474,507        584,437      1,467,581        851,268
   Income tax expense                          119,858        192,005        528,435        294,492
                                           -----------    -----------    -----------    -----------

                                           ===========    ===========    ===========    ===========
NET INCOME                                 $   354,649    $   392,432    $   939,146    $   556,776
                                           ===========    ===========    ===========    ===========

BASIC EARNINGS PER SHARE                   $      0.32    $      0.36    $      0.85    $      0.51
DILUTED EARNINGS PER SHARE                        0.31           0.35           0.84           0.50
</TABLE>
See notes to consolidated financial statements.

                                       4
<PAGE>
                    HFB FINANCIAL CORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                       Six-months ended December 31, 1999
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                          ACCUMULATED
                                            ADDITIONAL                                                       OTHER        TOTAL
                                  COMMON     PAID-IN       RABBI    TREASURY    COMPREHENSIVE  RETAINED  COMPREHENSIVE STOCKHOLDERS'
                                  STOCK      CAPITAL      TRUSTS      STOCK         INCOME     EARNINGS      INCOME       EQUITY
                                ----------------------------------------------------------------------------------------------------
<S>                             <C>         <C>         <C>        <C>             <C>       <C>           <C>         <C>
BALANCES, JUNE 30, 1999         $1,303,031  $6,303,419  $(639,767) $(2,030,955)              $13,501,715   $(686,396)  $17,751,047

Net income                                                                         $939,146      939,146                   939,146

Other Comprehensive
 income - net change in
 unrealized loss on
 securities available for sale                                                     (400,798)                (400,798)     (400,798)
                                                                                   --------

Comprehensive Income                                                               $538,348
                                                                                   ========
Stock issued upon exercise of
  stock options                      5,833      29,165                                                                      34,998

Dividends declared                                                                              (231,311)                 (231,311)

Net change in fair value of
  rabbi trust shares                                       28,438                                                           28,438
                                -----------------------------------------------              ---------------------------------------
BALANCES, DECEMBER 31, 1999     $1,308,864  $6,332,584  $(611,329) $(2,030,955)              $14,209,550 $(1,087,194)  $18,121,520
                                ===============================================              =======================================
</TABLE>
                                       5
<PAGE>
                    HFB FINANCIAL CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                   SIX-MONTHS ENDED
                                                                     DECEMBER 31,
                                                                  1999            1998
OPERATING ACTIVITIES
<S>                                                           <C>            <C>
    Net cash provided by operating activities                 $   810,825    $   479,027
                                                              -----------    -----------
INVESTING ACTIVITIES
  Purchases of securities available for sale                   (6,332,482)    (5,045,830)
  Proceeds from maturities of securities available for sale     7,451,963      3,531,208
  Purchases of securities held to maturity                     (7,874,038)    (3,503,625)
  Proceeds from sales of securities available for sale                           520,648
  Proceeds from maturities of securities held to maturity       3,862,471      2,950,085
  Net change in loans                                            (733,115)    (5,597,051)
  Purchases of premises and equipment                            (835,491)      (179,310)
  Proceeds from sale of fixed assets                                   --         13,000
  Acquisition of deposits (net of cash acquired)                 (459,423)            --
                                                              -----------    -----------
    Net cash used by investing activities                      (4,920,115)    (7,310,875)
                                                              -----------    -----------
FINANCING ACTIVITIES
  Net change in
    Non interest-bearing, interest-bearing and
      savings deposits                                          3,291,172      1,771,182
    Certificates of deposit                                     8,057,786      3,247,511
    Short term borrowings                                      (3,125,000)     1,000,000
    Repayment of long-term debt                                   (34,029)       (31,406)
  Cash dividends                                                 (231,311)      (239,723)
  Proceeds from exercise of options on common stock                34,998         59,130
  Common stock acquired by Rabbi trusts                                --          8,352
                                                              -----------    -----------
    Net cash used by financing activities                       7,993,616      5,815,046
                                                              -----------    -----------

NET CHANGE IN CASH AND CASH EQUIVALENTS                         3,884,326     (1,016,802)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                  3,573,139      6,947,148
                                                              -----------    -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                      $ 7,457,465    $ 5,930,346
                                                              ===========    ===========
ADDITIONAL CASH FLOWS INFORMATION
  Interest paid                                               $ 3,668,567    $ 3,589,906
  Income tax paid                                                 600,505         95,864
</TABLE>

See notes to consolidated financial statements.

                                       6
<PAGE>
                            HFB FINANCIAL CORPORATION

             Notes to Consolidated Financial Statements (Unaudited)

1.   BASIS OF PRESENTATION

         The  unaudited  consolidated  financial  information  for the three and
         six-month periods ended December 31, 1999 and 1998 includes the results
         of operations of HFB Financial  Corporation (the "Corporation") and its
         wholly owned subsidiary Home Federal Bank,  Federal Savings Bank ("Home
         Federal"  or  the  "Bank").   The  accompanying   unaudited   financial
         statements  have been prepared in accordance  with  generally  accepted
         accounting  principles  for interim  financial  statements and with the
         instructions  to Form 10-Q. It is suggested  that these  statements and
         notes be read in  conjunction  with the financial  statements and notes
         thereto  included in the Bank's  annual  report for the year ended June
         30,  1999  on  Form  10-K  filed  with  the   Securities  and  Exchange
         Commission.

         In the opinion of management,  the financial  information  reflects all
         adjustments  (consisting only of normal recurring  adjustments),  which
         are necessary for a fair  presentation of the results of operations for
         such periods but should not be  considered as indicative of results for
         a full year.

2.   HARLAN BRANCH ACQUISITION

         On October 15,  1999,  the Bank  acquired  the deposits of the National
         City  Bank  of  Kentucky's  Harlan,  Kentucky  branch  office.  In  the
         acquisition,  the Bank purchased  $17.1 million in deposits and $12,000
         in fixed assets.  The purchase  premium was $459,000 and was calculated
         on 3% of core  deposits.  This premium will be amortized over 84 months
         on a declining balance method.  The Bank is currently in the process of
         purchasing the office building and real estate of this branch bank from
         National City and expects to complete the transfer of title by June 30,
         2000. In the interim period, the bank has placed $438,000 in escrow for
         the purchase of this branch and rents the building  from  National City
         for $3,600 per month.  The Bank has opted to  continue  operating  this
         branch as a separate  office and has retained the 7 persons  previously
         employed by National City.

3.       NON-PERFORMING LOANS AND PROBLEM ASSETS

         The following sets forth the activity in the Bank's  allowance for loan
         losses for the six-months ended December 31, 1999 and 1998:

                                                          (Dollars in thousands)

                                                               1999       1998
                                                               ----       ----

           Balance July 1                                    $1,212       $973
           Charge offs                                         (125)       (16)
           Recoveries                                             2          -
           Provision for loan losses                           (474)       134
                                                              -----      -----
           Balance December 31                                 $615     $1,091

           Ratio of net charge offs during
             the period to average
             loans outstanding during the period                .10%       .00%
                                                           =========  =========

                                       7
<PAGE>
           Information on impaired loans is summarized below

           AT DECEMBER 31                                                1999
                                                                         ----

           Impaired loans with an allowance                              $275

           Allowance for impaired loans (included in the Company's
               allowance for loan losses)                                 $99

           SIX-MONTHS ENDED DECEMBER 31                                  1999
                                                                         ----

           Average balance of impaired loans                             $749
           Interest income recognized on impaired loans                    86
           Cash-basis interest received                                    83


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

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain   matters   discussed  in  this  Quarterly   Report  on  Form  10-Q  are
"forward-looking  statements"  intended  to qualify  for the safe  harbors  from
liability  established by the Private Securities  Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the  statement  will  include  words such as the Company  "believes",
"anticipates",  "expects",  "estimates" or words of similar  import.  Similarly,
statements  that  describe the Company's  future plans,  objectives or goals are
also forward-looking  statements. Such forward-looking statements are subject to
certain risks and uncertainties, which are described in, close proximity to such
statements and which could cause actual results to differ  materially from those
anticipated as of the date of this report. Shareholders, potential investors and
other  readers  are  urged  to  consider   these   factors  in  evaluating   the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking  statements.  The forward-looking statements included herein are
only made as of the date of this report and the Company undertakes no obligation
to publicly update such forward-looking  statements to reflect subsequent events
or circumstances.

GENERAL:

HFB Financial Corporation, a Tennessee Corporation, was formed in September 1992
at the direction of Home Federal Bank,  Federal  Savings Bank for the purpose of
becoming a holding company for the Bank as part of its conversion from mutual to
stock form. The Corporation's  primary operation is its investment in the common
stock of the Bank.

The Bank is principally  engaged in the business of accepting  deposits from the
general public and originating permanent loans, which are secured by one-to-four
family  residential  properties  located  in its  market  area.  The  Bank  also
originates  consumer  loans and  commercial  real estate loans,  and maintains a
substantial   investment  portfolio  of  mortgage-backed  and  other  investment
securities.

The  operations  of  Home  Federal,  and  savings  institutions  generally,  are
significantly  influenced by general  economic  conditions  and the monetary and
fiscal policies of government  regulatory  agencies.  Deposit flows and costs of
funds are influenced by interest rates on competing  investments  and prevailing
market  rates of  interest.  Lending  activities  are affected by the demand for
financing real estate and other types of loans,  which in turn are influenced by
the  interest  rates at which such  financing  may be offered and other  factors
related  to loan  demand  and the  availability  of  funds.  Just as  regulatory
authorities  influence the Bank's  operations,  so are its liquidity  levels and
capital  resources.  As of December  31,  1999,  management  is not aware of any
current  recommendations  by the regulatory  authorities,  which if implemented,
would have a material effect on the Bank's  operations,  liquidity or resources.

                                       8
<PAGE>
FINANCIAL CONDITION

The  Corporation's  assets  increased by 4.32% to $198.6 million at December 31,
1999 compared to $190.4  million at June 30, 1999. The majority of this increase
is reflected in increases in cash and cash equivalents,  investment  securities,
loans and fixed assets.  These increases are financed primarily by the net of an
increase in deposits and a decrease in short-term borrowings.

Cash and cash equivalents  increased by $3.9 million to $7.5 million at December
31, 1999 from $3.6 million at June 30, 1999.  This  increase was  primarily  the
result of anticipated  cash needs related to general  concerns  about  potential
operational problems in the banking industry as a result of the year 2000.

The Company  maintains  a  portfolio  of trading  account  securities,  which is
comprised of common stock of other  financial  institutions.  The  portfolio was
$971,000 at December 31, 1999 compared to $1.015 million at June 30, 1999.  Most
of this decrease was  attributable to a decrease in the fair market value of the
portfolio.

The loan portfolio  increased by $800,000 to $121.5 million at December 31, 1999
from $120.7  million at June 30, 1999.  During the past 2 quarters,  the rate of
loan  production  has  decreased  due to higher  interest  rates and  increasing
competition  in  the  overall  marketplace.   A  substantial  portion  of  loans
originated  during the last six-month  period were  adjustable-rate  residential
mortgages.

At December  31,  1999,  the  allowance  for loan losses was $615,000 or .50% of
loans  receivable  compared to $1.2 million or .99% of loans  receivable at June
30, 1999. During the six-months ended December 31, 1999,  management reduced the
allowance,   due  to  the  repayment  of  $904,000  on  impaired  loans.   Total
non-performing  assets were $893,000 or .73% of total loans at December 31, 1999
as  compared  to $1.9  million  or 1.56% of total  loans at June 30,  1999.  The
decrease in non-performing  loans was primarily due to the repayment of $874,000
on several  problem real estate loans to one borrower that totaled $1.4 million.
Over the past year,  management  has  aggressively  worked to help this borrower
find new financing with another lender.  This  refinancing was the source of the
$874,000  reduction and reduced the borrowers  outstanding debt to $455,000.  At
December  31,  1999,  $99,000 was  included in the  allowance  for loan  losses,
specifically as a reserve for the remaining loans to this borrower.

The Bank  augments  its lending  activities  and  increases  its asset yields by
investing in mortgage-backed  securities and U.S. Government securities.  During
the six-months  ended December 31, 1999,  management  purchased $14.2 million in
investment and mortgage-backed securities. These purchases were primarily funded
by proceeds  from the  acquisition  of the  deposits in the Harlan  transaction,
called   and   maturing   investment   securities,    principal   collected   on
mortgage-backed securities and investments, and the sale of securities available
for sale.  At December  31,  1999,  the Bank held $35.6  million in  securities,
available for sale with a net unrealized  loss of $1.1 million and $26.0 million
in securities held to maturity with a fair market value of $24.9 million.

Premises and  equipment  increased by $725,000 $3.2 million at December 31, 1999
from $2.4 million at June 30, 1999 primarily as the result of progress  payments
made on the Bank's new operations center which is presently under  construction.
The final cost is estimated at approximately $1.0 million,  including  furniture
and fixtures.

The unamortized core deposit  intangible  resulting from the Harlan  transaction
was $427,000 at December 31, 1999, with 81 months of amortization remaining.

Total deposits increased by $11.3 million to $165.3 million at December 31, 1999
from $154.0 million at June 30, 1999.  During the six-months  ended December 31,
1999,  certificates of deposit increased $8.1 million.  NOW accounts and savings
deposits  increased  $3.2  million,  primarily  due  to the  acquisition  of the
deposits in Harlan on October 15, 1999.  Excluding the $17.1 million in deposits
acquired in the Harlan  transaction,  NOW accounts and savings decreased by $1.0
million and  certificates of deposit  decreased by $4.9 million.  The decline in
these deposits was primarily  attributable to aggressive competition in the form
of premium rates offered by other institutions in our market area.

                                       9
<PAGE>
At  December  31,  1999,  the  Bank  met all  regulatory  capital  requirements.
Tangible,  core  and  risk-based  capital  ratios  were  8.8%,  8.8%  and  20.6%
respectively  at December  31, 1999 as compared to 9.0%,  9.0% and 21.4% at June
30, 1999.

RESULTS OF OPERATIONS FOR THE THREE-MONTHS ENDED DECEMBER 31, 1999 AND 1998

Net income  decreased  by $38,000 to $354,000 for the  three-month  period ended
December 31, 1999 from $392,000 for the  three-month  period ended  December 31,
1998.  The  primary  reasons  for the  decrease  were a  decrease  of  $7,000 in
non-interest income and an increase of $313,000 in non-interest  expense.  These
items  were  offset by a  $144,000  increase  in net  interest  income a $66,000
decrease in the provision  for loan losses and a $72,000  decrease in income tax
expense.

Net  interest  income  increased by $144,000  for the  three-month  period ended
December 31, 1999 as compared to the three-month period ended December 31, 1998,
primarily as the result of higher volume.

Interest on loans  decreased  by $76,000 to $2.511  million for the  three-month
period ended December 31, 1999 as compared to $2.587 million for the three-month
period ended December 31, 1998. This decrease is mainly  attributable to a lower
yield on the weighted-average balance of loans receivable outstanding.

Interest on investment  securities  increased by $284,000 to $1.014  million for
the three-month period ended December 31, 1999 from $730,000 for the three-month
period ended December 31, 1998.  This increase is primarily the result of higher
weighted-average balances during the period.

Interest on deposits  increased by $69,000 to $1.878 million for the three-month
period ended  December 31, 1999 from $1.809 million for the  three-month  period
ended December 31, 1998 as a result of higher volume.

Interest on short-term  borrowings  and long-term  debt  decreased by $13,000 to
$166,000 for the  three-month  period ended  December 31, 1999 from $179,000 for
the three-month period ended December 31, 1998 due to lower levels of short-term
borrowing.

The provision for loan losses decreased $66,000 for the three-month period ended
December 31, 1999 as compared to the same period in 1998.  The provision was the
result of  management's  evaluation  of the adequacy of the  allowance  for loan
losses including  consideration  of recoveries of loans previously  charged off,
the  perceived  risk  exposure  among  loan  types,   actual  loss   experience,
delinquency  rates,  and current economic  conditions.  The Bank's allowance for
loan losses as a percent of total loans at December 31, 1999 was .50%.

Non-interest  income decreased by $7,000 to $105,000 for the three-month  period
ended December 31, 1999 as compared to $112,000 for the same period in 1998. The
decrease was  attributable  to a net decrease in realized and  unrealized  gains
(losses) on trading account  securities and realized gains on available for sale
securities  of $24,000  offset by an increase  of $11,000 in service  charges on
deposits and an increase of $6,000 in other income.

Non-interest expense increased by $313,000 to $1.182 million for the three-month
period  ended  December  31, 1999 as compared to $869,000 for the same period in
1998.  Compensation  and  benefits  increased  by $134,000  to $530,000  for the
three-month  period ended December 31, 1999 as compared to $396,000 for the same
period in 1998. This increase is primarily attributable to a decrease of $35,000
in salaries and wages that are being deferred as loan  origination  costs and an
increase of $35,000,  which was attributable to the addition of 7 employees from
the Harlan transaction.

Data processing fees increased by $46,000 to $98,000 for the three-month  period
ended December 31, 1999 from $52,000 for the  three-month  period ended December
31, 1998 primarily due to one time costs  associated with the acquisition of the
branch office in Harlan.

                                       10
<PAGE>
Advertising  expense  increased  by  $34,000 to $69,000  for the  quarter  ended
December 31, 1999  compared to $35,000 for the quarter  ended  December 31, 1998
primarily due to a higher level of advertising activity in the current period.

Other expenses increased by $68,000 to $245,000 for the three-month period ended
December 31, 1999 from $177,000 for the  three-month  period ended  December 31,
1998,  primarily  due to the  addition  of  $32,000 in core  deposit  intangible
amortization expense related to the Harlan transaction.

Income tax expense  decreased by $72,000 to $120,000 for the three-month  period
ended December 31, 1999 compared to $192,000 for the three-months ended December
31, 1998 due a lower level of income.

RESULTS OF OPERATIONS FOR THE SIX -MONTHS ENDED DECEMBER 31, 1999 AND 1998

Net income  increased  by $382,000 to $939,000  for the  six-month  period ended
December 31, 1999 from  $557,000  for the  six-month  period ended  December 31,
1998.  The primary  reasons  for the  increase  were a $342,000  increase in net
interest  income,  a $609,000  decrease in provision for loan losses, a $133,000
increase  non-interest  income  offset by a $468,000  increase  in  non-interest
expense and a $234,000 increase in income tax expense.

Net  interest  income  increased  by $342,000  for the  six-month  period  ended
December 31, 1999 as compared to the six-month  period ended  December 31, 1998,
primarily  as the result of a higher  volumes  and the  recognition  of interest
income on several non-accrual loans, which were paid off.

Interest  on loans  decreased  by $37,000 to $5.058  million  for the  six-month
period ended  December 31, 1999 as compared to $5.095  million for the six-month
period ended December 31, 1998.  This decrease is mainly  attributable  to lower
yields on the weighted-average balance of loans receivable outstanding.

Interest on investment  securities  increased by $434,000 to $1.935  million for
the  six-month  period  ended  December  31,  1999 from  $1.501  million for the
six-month  period ended December 31, 1998. This increase is primarily the result
of higher weighted-average balances during the period.

Interest on deposits with other financial  institutions  decreased by $30,000 to
$41,000 for the  six-month  period ended  December 31, 1999 from $71,000 for the
six-month  period  ended  December  31, 1998  primarily  due to a lower level of
interest-bearing cash balances.

Interest on short term  borrowings  and long term debt  increased  by $32,000 to
$390,000 for the six-month  period ended December 31, 1999 from $358,000 for the
six-month  period  ended  December  31, 1998 due to higher  levels of  long-term
borrowing and higher interest rates on short-term borrowings.

The provision for loan losses decreased  $609,000 for the six-month period ended
December  31, 1999 as  compared  to the same period in 1998.  During the quarter
ended  September 30, 1999, a total of $904,000 of impaired  loans were paid off.
The amount  charged  off for those  loans was  significantly  less than what was
specifically  reserved for these loans and  resulted in a $474,000  reduction in
the overall allowance.  The provision was the result of management's  evaluation
of the adequacy of the  allowance  for loan losses  including  consideration  of
recoveries of loans  previously  charged off, the perceived  risk exposure among
loan types,  actual loss  experience,  delinquency  rates,  and current economic
conditions.  The Bank's  allowance  for loan losses as a percent of total loans,
net at December 31, 1999 was .50%.

The Bank's  non-interest  income  increased  by  $133,000  to  $164,000  for the
six-month  period  ended  December  31, 1999 as compared to $31,000 for the same
period in 1998. The increase was  attributable to a net decrease in realized and
unrealized  losses on trading  account  securities  of  $123,000,  a decrease in
realized gains on available for sale securities of $3,000,  a $7,000 increase in
customer fees and service charges and an increase of $6,000 in other income. The
decrease in realized and  unrealized  losses on trading  account  securities was
primarily  the result of an  decrease in the market  value of equity  securities
included in the trading  account  portfolio.  The trading  account  portfolio is
comprised of common stocks of other financial institutions.

                                       11
<PAGE>
Non-interest  expense  increased by $468,000 to $2.238 million for the six-month
period ended December 31, 1999 as compared to $1.770 million for the same period
in 1998.  Compensation and benefits  increased by $187,000 to $1.022 million for
the  six-month  period  ended  December 31, 1999 as compared to $835,000 for the
same period in 1998.  This increase is primarily  attributable  to a decrease of
$84,000 in salaries and wages that are being deferred as loan origination  costs
and an increase of $17,000 in employee  benefits.  The  decrease in salaries and
wages  deferred as loan  origination  costs  decreased due to a decrease in loan
production.  The  remainder of increases in wages and benefits  were a result of
annual wage increases and, a $35,000  increase  attributable  to the addition of
seven employees from the Harlan transaction.

Occupancy  expense  increased  by $31,000 to $129,000 for the  six-month  period
ended  December 31, 1999  compared to $98,000 for the same period in 1998.  This
increase  was  primarily  due to $9,000 in rent  expense for the newly  acquired
branch in Harlan, an increase of $10,000 in repairs and maintenance  expense and
an increase of $5,000 in depreciation expense.

Data processing  fees increased by $22,000 to $141,000 for the six-month  period
ended  December 31, 1999 from $119,000 for the six-month  period ended  December
31, 1998 primarily due to one time conversion  expenses  incurred for the Harlan
branch acquisition.

Advertising  expense  increased by $63,000 to $124,000 for the six-month  period
ended  December  31, 1999  compared to $61,000 for the  six-month  period  ended
December 31, 1998 primarily due to a new  advertising  campaign  launched in the
quarter ended December 31, 1999.

Other expenses  increased by $144,000 to $484,000 for the six-month period ended
December 31, 1999 from $340,000 for the six-month period ended December 31, 1998
primarily as the result of $32,000 in core deposit  intangible  amortization for
the Harlan transaction, a $14,000 increase in printing and stationary expense, a
$41,000  increase in other real estate  expense,  a $15,000  increase in ATM and
other processing fees and a $9,000 increase in telephone expense.

Income tax expense  increased by $234,000 to $528,000 for the  six-month  period
ended December 31, 1999 compared to $294,000 for the  six-months  ended December
31, 1998 due to a higher level of taxable income.

ASSET/LIABILITY MANAGEMENT

Key components of a successful  asset/liability  strategy are the monitoring and
managing of interest rate  sensitivity  of both the  interest-earning  asset and
interest-bearing  liability  portfolios.   Home  Federal  has  employed  various
strategies  intended to minimize  the  adverse  affect of interest  rate risk on
future  operations  by  providing  a better  match  between  the  interest  rate
sensitivity of its assets and liabilities.  In particular, the Bank's strategies
are intended to stabilize  net interest  income for the  long-term by protecting
its interest rate spread against  increases in interest  rates.  Such strategies
include the origination of adjustable-rate mortgage loans secured by one-to-four
family  residential  real estate and the origination of consumer and other loans
with greater interest rate sensitivities than long-term,  fixed-rate residential
mortgage loans. Although customers typically prefer fixed-rate mortgage loans in
a low interest rate environment, Home Federal has been successful in originating
adjustable-rate  loans in recent  years.  In addition,  the Bank has used excess
funds to invest in  various  short-term  investments  including  mortgage-backed
securities  with terms of seven  years or less,  U.S.  Government  Treasury  and
Agency  securities  with  terms  of ten  years  or  less  and  other  short-term
investments.

Asset/liability  management in the form of structuring cash instruments provides
greater flexibility to adjust exposure to interest rates. During periods of high
interest rates,  management believes it is prudent to offer competitive rates on
short-term deposits and less competitive rates for long-term  liabilities.  This
posture  allows the Bank to benefit  quickly  from  declines in interest  rates.
Likewise,  offering more competitive rates on long-term  deposits during the low
interest rate periods allows the Bank to extend the repricing and/or maturity of
its liabilities thus reducing its exposure to rising interest rates.

                                       12
<PAGE>
                            HFB FINANCIAL CORPORATION

                                     PART II

                                OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

             None

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

             None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

             None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE
             OF SECURITY HOLDERS

          a.   The  Corporation  held its  annual  meeting  of  Stockholders  on
               October 19, 1999

          b.   Not Applicable

          c.   At  the  Annual  Meeting,  shareholders  voted  on the  following
               matters:

                 (1)  The election of the following persons to three-year  terms
                      as directors of the Corporation:

                            Nominee                    For           Withheld
                            -------                    ---           --------
                      Frank W. Lee                   913,130           3,000
                      Charles A. Harris              913,130           3,000
                      Frances Coffey Rasnic          910,175           5,811

               As a result, all were elected as directors of the Corporation for
               terms to expire in 2002.

          d.   Not Applicable

ITEM 5.   OTHER INFORMATION

             None

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

           a.  Exhibits

               The following exhibit  is  filed  as part of  this  Form  10-QSB
                  Exhibit 27 - Financial Data Schedule

           b.  Reports on Form 8-K

                 None

                                       13
<PAGE>
                            HFB FINANCIAL CORPORATION

                                   Signatures

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

                                       HFB FINANCIAL CORPORATION


                                       By:  /s/ David B. Cook
                                            ------------------------------
                                            David B. Cook
                                            President and
                                            Chief Executive Officer


                                       By: /s/ Stanley Alexander, Jr.
                                           ------------------------------
                                           Stanley Alexander, Jr.
                                           Chief Financial Officer

Dated: February 14, 2000

                                       14