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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

(Mark One)

|/x/ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2000

or

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from  to

Commission File Number 1-13605

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EFC BANCORP, INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

36-4193304(I.R.S. Employer
Identification No.)1695 Larkin Avenue, Elgin, Illinois(Address of principal executive offices)

60123(Zip Code)


(847) 741-3900(Registrant's telephone number, including area code)

Not Applicable(Former name, former address and former fiscal year, if changes since last report)

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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 / /

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 4,880,169 shares of common stock, par value $0.01 per
share, were outstanding as of August 11, 2000.

EFC Bancorp, Inc.

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Form 10-Q       For the Quarter Ended June 30, 2000       INDEX

|           |  |                                                                                               |  | Page
|---------- |  | --------------------------------------------------------------------------------------------- |  | ----
|PART I:    |  | FINANCIAL INFORMATION                                                                         |  | 1   
|Item 1.    |  | Financial Statements (unaudited)                                                              |  |     
|           |  | Consolidated Balance Sheets at June 30, 2000 and December 31, 1999                            |  | 1   
|           |  | Consolidated Statements of Income - For the Three and Six Months Ended June 30, 2000 and 1999 |  | 2   
|           |  | Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2000 and 1999       |  | 3   
|           |  | Notes to Consolidated Financial Statements                                                    |  | 4   
|Item 2.    |  | Management's Discussion and Analysis of Financial Condition and Results of Operations         |  | 5   
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                    |  | 10  
|PART II:   |  | OTHER INFORMATION                                                                             |  | 10  
|Item 1.    |  | Legal Proceedings                                                                             |  | 10  
|Item 2.    |  | Changes in Securities and Use of Proceeds                                                     |  | 10  
|Item 3.    |  | Defaults Upon Senior Securities                                                               |  | 10  
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                           |  | 11  
|Item 5.    |  | Other Information                                                                             |  | 11  
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                              |  | 11  
|SIGNATURES |  | 12                                                                                           

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PART I.  FINANCIAL INFORMATION

EFC BANCORP, INC.
June 30, 2000

Item 1.  Financial Statements.

EFC BANCORP, INC.
AND SUBSIDIARIESConsolidated Balance Sheets (unaudited)
June 30, 2000 and December 31, 1999

|                                                             |                                                                                                                                | June 30,
2000 |             | December 31,
1999 |            
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------ | ------------- | ----------- | ----------------- | -----------
|Assets                                                       |                                                                                                                                |               |             |                   |            
|Cash and cash equivalents:                                   |                                                                                                                                |               |             |                   |            
|                                                             | On hand and in banks                                                                                                           |               | $           | 2,511,625         |            
|                                                             | Interest bearing deposits with financial institutions                                                                          |               |             | 13,171,129        |            
|Loans receivable, net                                        |                                                                                                                                |               | 434,370,330 |                   | 396,006,771
|Mortgage-backed securities available-for-sale, at fair value |                                                                                                                                |               | 10,610,254  |                   | 11,882,080 
|Investment securities available-for-sale, at fair value      |                                                                                                                                |               | 69,326,475  |                   | 61,079,696 
|Foreclosed real estate                                       |                                                                                                                                |               | 214,930     |                   | 168,145    
|Stock in Federal Home Loan Bank of Chicago, at cost          |                                                                                                                                |               | 6,410,000   |                   | 5,760,000  
|Accrued interest receivable                                  |                                                                                                                                |               | 3,440,242   |                   | 2,807,426  
|Office properties and equipment, net                         |                                                                                                                                |               | 9,012,471   |                   | 8,640,410  
|Other assets                                                 |                                                                                                                                |               | 2,748,387   |                   | 2,453,629  
|                                                             |                                                                                                                                |               |             |                   |            
|Total assets                                                 |                                                                                                                                | $             | 551,815,843 |                   | 510,971,752
|                                                             |                                                                                                                                |               |             |                   |            
|Liabilities and Stockholders' Equity                         |                                                                                                                                |               |             |                   |            
|Liabilities:                                                 |                                                                                                                                |               |             |                   |            
|                                                             | Deposits                                                                                                                       |               | $           | 350,537,885       |            
|                                                             | Borrowed money                                                                                                                 |               |             | 128,200,000       |            
|                                                             | Advance payments by borrowers for taxes and insurance                                                                          |               |             | 942,436           |            
|                                                             | Income taxes payable                                                                                                           |               |             | 661,877           |            
|                                                             | Accrued expenses and other liabilities                                                                                         |               |             | 6,605,317         |            
|                                                             |                                                                                                                                |               |             |                   |            
|Total liabilities                                            |                                                                                                                                |               | 486,947,515 |                   | 444,549,663
|                                                             |                                                                                                                                |               |             |                   |            
|Stockholders' Equity:                                        |                                                                                                                                |               |             |                   |            
|                                                             | Preferred stock, par value $.01 per share, authorized 2,000,000 shares; no shares issued                                       |               |             |                  |            
|                                                             | Common stock, par value $.01 per share, authorized 25,000,000 shares; issued 7,491,434 shares                                  |               |             | 74,914            |            
|                                                             | Additional paid-in capital                                                                                                     |               |             | 71,932,380        |            
|                                                             | Treasury stock, at cost, 2,611,265 and 2,331,184 shares at June 30, 2000 and at December 31, 1999, respectively                |               |             | (30,528,058       | )          
|                                                             | Unearned employee stock ownership plan (ESOP), 499,428 and 519,406 shares at June 30, 2000 and December 31, 1999, respectively |               |             | (7,467,745        | )          
|                                                             | Unearned stock award plan, 193,564 and 222,224 shares at June 30, 2000 and December 31, 1999, respectively                     |               |             | (2,153,400        | )          
|                                                             | Retained earnings, substantially restricted                                                                                    |               |             | 34,604,875        |            
|                                                             | Accumulated other comprehensive loss                                                                                           |               |             | (1,594,638        | )          
|                                                             |                                                                                                                                |               |             |                   |            
|Total stockholders' equity                                   |                                                                                                                                |               | 64,868,328  |                   | 66,422,089 
|                                                             |                                                                                                                                |               |             |                   |            
|Commitments and contingencies                                |                                                                                                                                |               |            |                   |           
|                                                             |                                                                                                                                |               |             |                   |            
|Total liabilities and stockholders' equity                   |                                                                                                                                | $             | 551,815,843 |                   | 510,971,752
|                                                             |                                                                                                                                |               |             |                   |            

See accompanying notes to consolidated financial statements.

1

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EFC BANCORP, INC.
AND SUBSIDIARIES

Consolidated
Statements of Income (unaudited) 
For the six months ended June 30, 2000 and 1999

|                                                     |                                                                                                    | Three months ended
June 30, |           | Six months ended
June 30,
|---------------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------- | --------- | -------------------------
|
|Interest income:                                     |                                                                                                    |                             |           |                          
|                                                     | Loans secured by real estate                                                                       |                             | $         | 7,444,478                
|                                                     | Other loans                                                                                        |                             |           | 663,839                  
|                                                     | Mortgage-backed securities available-for-sale                                                      |                             |           | 209,184                  
|                                                     | Investment securities available-for-sale and interest bearing deposits with financial institutions |                             |           | 1,419,239                
|                                                     |                                                                                                    |                             |           |                          
|Total interest income                                |                                                                                                    |                             | 9,736,740 |                          
|                                                     |                                                                                                    |                             |           |                          
|Interest expense:                                    |                                                                                                    |                             |           |                          
|                                                     | Deposits                                                                                           |                             |           | 3,787,304                
|                                                     | Borrowed money                                                                                     |                             |           | 1,790,589                
|                                                     |                                                                                                    |                             |           |                          
|Total interest expense                               |                                                                                                    |                             | 5,577,893 |                          
|                                                     |                                                                                                    |                             |           |                          
|Net interest income before provision for loan losses |                                                                                                    |                             | 4,158,847 |                          
|Provision for loan losses                            |                                                                                                    |                             | 95,742    |                          
|                                                     |                                                                                                    |                             |           |                          
|Net interest income after provision for loan losses  |                                                                                                    |                             | 4,063,105 |                          
|                                                     |                                                                                                    |                             |           |                          
|Noninterest income:                                  |                                                                                                    |                             |           |                          
|                                                     | Service fees                                                                                       |                             |           | 234,445                  
|                                                     | Insurance and brokerage commissions                                                                |                             |           | 43,113                   
|                                                     | Loss on sale of foreclosed real estate                                                             |                             |           | (7,413                   
|                                                     | Gain on sale of securities                                                                         |                             |           | 68,748                   
|                                                     | Other                                                                                              |                             |           | 20,406                   
|                                                     |                                                                                                    |                             |           |                          
|Total noninterest income                             |                                                                                                    |                             | 359,299   |                          
|                                                     |                                                                                                    |                             |           |                          
|Noninterest expense:                                 |                                                                                                    |                             |           |                          
|                                                     | Compensation and benefits                                                                          |                             |           | 1,590,118                
|                                                     | Office building, net                                                                               |                             |           | 77,806                   
|                                                     | Depreciation and repairs                                                                           |                             |           | 241,760                  
|                                                     | Data processing                                                                                    |                             |           | 92,237                   
|                                                     | Federal insurance premium                                                                          |                             |           | 16,778                   
|                                                     | NOW account operating expenses                                                                     |                             |           | 116,322                  
|                                                     | Other                                                                                              |                             |           | 701,783                  
|                                                     |                                                                                                    |                             |           |                          
|Total noninterest expense                            |                                                                                                    |                             | 2,836,804 |                          
|                                                     |                                                                                                    |                             |           |                          
|Income before income taxes                           |                                                                                                    |                             | 1,585,600 |                          
|Income tax expense                                   |                                                                                                    |                             | 586,192   |                          
|                                                     |                                                                                                    |                             |           |                          
|Net income                                           |                                                                                                    | $                           | 999,408   |                          
|                                                     |                                                                                                    |                             |           |                          
|Earnings per share (basic and diluted)               |                                                                                                    | $                           | 0.23      |                          
|                                                     |                                                                                                    |                             |           |                          

See accompanying notes to consolidated financial statements.

2

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EFC BANCORP, INC. 
AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited) 
For the six months ended June 30, 2000 and 1999

|                                                 |                                                                                  | 2000                                                                                     |             | 1999        |            
|------------------------------------------------ | -------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ----------- | ----------- | -----------
|Cash flows from operating activities:            |                                                                                  |                                                                                          |             |             |            
|                                                 | Net income                                                                       |                                                                                          | $           | 1,962,285   |            
|                                                 | Adjustment to reconcile net income to net cash provided by
operating activities: |                                                                                          |             |             |            
|                                                 |                                                                                  | Amortization of premiums and discounts, net                                              |             |             | 18,307     
|                                                 |                                                                                  | Provision for loan losses                                                                |             |             | 155,742    
|                                                 |                                                                                  | Stock award plan shares allocated                                                        |             |             | 318,842    
|                                                 |                                                                                  | ESOP shares committed to be released                                                     |             |             | 298,714    
|                                                 |                                                                                  | Change in fair value of ESOP shares                                                      |             |             | (107,217   
|                                                 |                                                                                  | Gain on sale of securities                                                               |             |             | (68,748    
|                                                 |                                                                                  | Loss on sale of foreclosed real estate                                                   |             |             | 7,413      
|                                                 |                                                                                  | Depreciation of office properties and equipment                                          |             |             | 331,985    
|                                                 |                                                                                  | Decrease in accrued interest receivable and other assets, net                            |             |             | (708,142   
|                                                 |                                                                                  | Increase (Decrease) in income taxes payable, accrued expenses and other liabilities, net |             |             | 2,783,935  
|                                                 |                                                                                  |                                                                                          |             |             |            
|Net cash provided by operating activities        |                                                                                  |                                                                                          | 4,993,116   |             | 2,746,206  
|                                                 |                                                                                  |                                                                                          |             |             |            
|Cash flows from investing activities:            |                                                                                  |                                                                                          |             |             |            
|                                                 | Net increase in loans receivable                                                 |                                                                                          |             | (19,584,361 | )          
|                                                 | Purchases of loans receivable                                                    |                                                                                          |             | (19,149,436 | )          
|                                                 | Principal payments on mortgage-backed securities available-for-sale              |                                                                                          |             | 1,244,417   |            
|                                                 | Maturities of investment securities available-for-sale                           |                                                                                          |             | 57,500      |            
|                                                 | Proceeds from sale of investment securities available for sale                   |                                                                                          |             | 3,467,642   |            
|                                                 | Purchases of investment securities available-for-sale                            |                                                                                          |             | (12,256,720 | )          
|                                                 | Purchases of office properties and equipment                                     |                                                                                          |             | (704,046    | )          
|                                                 | Purchases of stock in the Federal Home Loan Bank of Chicago                      |                                                                                          |             | (650,000    | )          
|                                                 | Proceeds from the sale of foreclosed real estate                                 |                                                                                          |             | 160,298     |            
|                                                 |                                                                                  |                                                                                          |             |             |            
|Net cash used in investing activities            |                                                                                  |                                                                                          | (47,414,706 | )           | (35,404,122
|                                                 |                                                                                  |                                                                                          |             |             |            
|Cash flows from financing activities:            |                                                                                  |                                                                                          |             |             |            
|                                                 | Cash dividends paid                                                              |                                                                                          |             | (871,509    | )          
|                                                 | Purchase of treasury stock                                                       |                                                                                          |             | (2,856,334  | )          
|                                                 | Net increase in deposits                                                         |                                                                                          |             | 26,658,592  |            
|                                                 | Proceeds from borrowed money                                                     |                                                                                          |             | 68,000,000  |            
|                                                 | Repayments on borrowed money                                                     |                                                                                          |             | (55,000,000 | )          
|                                                 |                                                                                  |                                                                                          |             |             |            
|Net cash provided by financing activities        |                                                                                  |                                                                                          | 35,930,749  |             | 23,261,844 
|                                                 |                                                                                  |                                                                                          |             |             |            
|Net decrease in cash and cash equivalents        |                                                                                  |                                                                                          | (6,490,841  | )           | (9,396,072 
|Cash and cash equivalents at beginning of period |                                                                                  |                                                                                          | 22,173,595  |             | 23,279,906 
|                                                 |                                                                                  |                                                                                          |             |             |            
|Cash and cash equivalents at end of period       |                                                                                  | $                                                                                        | 15,682,754  |             | 13,883,834 
|                                                 |                                                                                  |                                                                                          |             |             |            

See
accompanying notes to consolidated financial statements.

3

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Note 1:  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the accounts of EFC Bancorp, Inc. (the Company) and its wholly-owned subsidiary, Elgin
Financial Savings Bank (the Bank) and its wholly-owned subsidiary, Fox Valley Service Corp. Certain amounts for the prior year have been reclassified to conform to the current year presentation.

In
the opinion of the management of the Company, the accompanying consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the
financial position and results of operations for the periods presented. All significant intercompany transactions have been eliminated in consolidation. These interim financial statements have been
prepared according to the rules and regulations of the Securities and Exchange Commission and therefore certain information and footnote disclosures normally included in financial statements presented
in accordance with generally accepted accounting principles have been condensed or omitted. The results of operations for the interim periods are not necessarily indicative of the results to be
expected for the full year. It is suggested that the accompanying unaudited consolidated financial statements be read in conjunction with the Company's 1999 Annual Report on Form 10-K.
Currently, other than investing in various securities, the Company does not directly transact any material business other than through the Bank. Accordingly, the discussion herein addresses the
operations of the Company as they are conducted through the Bank.

Note 2:  COMPREHENSIVE INCOME

The Company's comprehensive income for the three and six month periods ended June 30, 2000 and 1999 are as follows:

|                                                                |                                                                   | Three months ended
June 30, |         | Six months ended
June 30, |          
|--------------------------------------------------------------- | ----------------------------------------------------------------- | --------------------------- | ------- | ------------------------- | ---------
|
|Net income                                                      |                                                                   | $                           | 999,408 |                           | 1,077,583
|Other comprehensive loss, net of tax:                           |                                                                   |                             |         |                           |          
|                                                                | Unrealized holding losses on securities arising during the period |                             |         | (285,870                  | )        
|Reclassification adjustment for net gain realized in net income |                                                                   |                             | (43,311 | )                         |         
|                                                                |                                                                   |                             |         |                           |          
|                                                                | Comprehensive income                                              |                             | $       | 670,227                   |          
|                                                                |                                                                   |                             |         |                           |          

There
were no sales of investment securities during the six months ended June 30, 1999. During the second quarter of 2000 the sale of securities resulted in a gain of $68,748
($43,311 net of tax effect).

4

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Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following analysis discusses changes in the financial condition at June 30, 2000 and results of operations for the three and six months ended
June 30, 2000, and should be read in conjunction with the Company's Unaudited Consolidated Financial Statements and the notes thereto, appearing in Part I, Item 1 of this
document.

Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain
assumptions and describe future plans, strategies and expectations of the Company, are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or
similar expressions. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the
operations of the Company and the subsidiaries include, but are not limited to, changes in: interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of
the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows,
competition, demand for financial services in the Company's market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including additional factors that could materially affect the
Company's financial results, is included in the Company's filings with the SEC, including its 1999 Annual Report on Form 10-K.

The
Company does not undertake  and specifically disclaims any obligation  to publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Comparison of Financial Condition at June 30, 2000 and December 31, 1999

Total assets at June 30, 2000 were $551.8 million, which represented an increase of $40.8 million, or 8.0%, compared to
$511.0 million at December 31, 1999. The increase in total assets was primarily as a result of an increase in loans receivable of $38.4 million, or 9.7%, to $434.4 million
at June 30, 2000 from $396.0 million at December 31, 1999. Of the $38.4 million increase, $17.5 million was due to loans purchased. The increase in loans receivable
was primarily attributable to strong loan demand during the period. The growth in total assets was funded by increases in borrowed money and savings deposits. Borrowed money, representing FHLB
advances, increased by $13.0 million to $128.2 million at June 30, 2000 from $115.2 million at December 31, 1999. Savings deposits increased $26.6 million to
$350.5 million
at June 30, 2000 from $323.9 million at December 31, 1999. Stockholders' equity decreased by $1.5 million to $64.9 million at June 30, 2000 from $66.4 million
at December 31, 1999. The decrease in stockholders' equity was primarily the result of the Company completing its third and fourth stock repurchases since becoming a public company in April,
1998. A 5.0% repurchase announced on October 1, 1999 was completed January 13, 2000. The total shares repurchased were 270,370 and the average price was $10.38 per share. Subsequently,
on March 22, 2000, the Company announced the completion of an additional stock repurchase. Total shares repurchased were 256,851, or 5.0%, of the outstanding shares of common stock and the
average price was $10.20. After these transactions, there were 4,880,169 shares of common stock issued and outstanding. In addition to the stock repurchases, dividends totaling $0.12 per share were
declared during both the first and second quarters of 2000.

5

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Comparison of Operating Results For the Three Months Ended June 30, 2000 and 1999

General.The Company's net income decreased $78,000, to $999,000 for the three months ended June 30, 2000, from
$1.1 million for the three months ended June 30, 1999.

Interest Income.Interest income increased $2.1 million, or 26.8%, to $9.7 million for the
three months ended June 30, 2000, compared with $7.7 million for the same period in 1999. The increase in interest income was primarily due to an increase in average interest-earning
assets, which increased by $92.6 million, or 21.3%, to $526.6 million for the three months ended June 30, 2000 from $434.0 million for the comparable period in 1999, and an
increase in the average yield on interest-earning assets by 33 basis points to 7.40% for the three months ended June 30, 2000 from 7.07% for the three months ended June 30, 1999.

Mortgage
loan interest income increased by $1.5 million for the three months ended June 30, 2000 compared with the same period in 1999. The average balance of mortgage
loans increased $74.4 million, while the loan yield increased by 7 basis points from 7.44% to 7.51%. Interest income from investment securities, mortgage backed securities and short term
deposits increased by $265,000 for the three months ended June 30, 2000, compared with the same period in 1999. This increase resulted from a combination of an increase in average balance of
$4.3 million and a 81 basis point increase in yield.

Interest Expense.Interest expense increased by $1.8 million, or 48.9%, to
$5.6 million for the three months ended June 30, 2000 from $3.8 million for the three months ended June 30, 1999. This increase resulted from the combination of an increase
in the average balance of interest-bearing liabilities, and an overall
increase in the average rate paid on those interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $110.2 million, or 32.0%, to $454.0 million at
June 30, 2000 from $343.8 million at June 30, 1999. This change reflects a $60.8 million increase in the deposit accounts, with the remaining $49.4 million increase
attributable to advances from the FHLB-Chicago. The average rate paid on combined deposits and borrowed money increased by 55 basis points to 4.91% for the three months ended June 30,
2000 from 4.36% for the three months ended June 30, 1999.

Net Interest Income Before Provision for Loan Losses.Net interest income before provision for
loan losses increased $229,000, or 5.8%, to $4.2 million for the three months ended June 30, 2000 from $3.9 million for the comparable period in 1999. The net interest margin as a
percent of interest-earning assets decreased by 46 basis points to 3.16% for the three months ended June 30, 2000 from 3.62% for the comparable period in 1999.

Provision for Loan Losses.The provision for loan losses increased by $51,000, to $96,000 for
the three months ended June 30, 2000 from $45,000 in 1999. At June 30, 2000, December 31, 1999 and June 30, 1999, non-performing loans totaled $911,000, $1.3 million
and $761,000, respectively. At June 30, 2000, the ratio of the allowance for loan losses to non-performing loans was 186.4% compared to 121.7% at December 31, 1999 and 192.0% at
June 30, 1999. The ratio of the allowance to total loans was 0.39%, 0.39% and 0.43%, at June 30, 2000, December 31, 1999 and June 30, 1999, respectively. Charge-offs for
the three months ended June 30, 2000 amounted to $3,000. There were no charge-offs for the three months ended June 30, 1999. Management periodically calculates an allowance sufficiency
analysis based upon the portfolio composition, asset classifications, loan-to-value ratios, potential impairments in the loan portfolio, and other factors.

Noninterest Income.Noninterest income totaled $359,000 and $280,000 for the three months ended
June 30, 2000 and 1999, respectively. The increase in noninterest income is primarily attributable to a gain on sale of securities totaling $69,000 and an increase in insurance and brokerage
commission income of $18,000.

Noninterest Expense.Noninterest expense increased $357,000, to $2.8 million for the
three months ended June 30, 2000 from $2.5 million for the comparable period in 1999. Compensation and benefits

6

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increased by $203,000. This increase was primarily due to a combination of annual salary increases, the addition of staff and increases in employee health insurance costs. All other operating
expenses, including advertising, marketing, postage, communications, data processing and other office expense increased by a combined $154,000, or 14.1%, to $1.3 million for the three months
ended June 30, 2000 from
$1.1 million for the three months ended June 30, 1999. Of this increase, $46,000 is related to media advertising and marketing and $48,000 in NOW account operating expenses, primarily
representing increases in data processing and imaging expenses. Management continues to emphasize the importance of expense management and control while continuing to provide expanded banking services
to a growing market base.

Income Tax Expense.Income tax expense totaled $586,000 for the three months ended
June 30, 2000 compared to $607,000 for the comparable period in 1999. The decrease in the provision for income taxes was primarily the result of a decrease of $99,000 in income before income
tax expense for the three months ended June 30, 2000 compared to the three months ended June 30, 1999.

Comparison of Operating Results For the Six Months Ended June 30, 2000 and 1999

General.The Company's net income decreased $150,000, to $2.0 million for the six months ended June 30,
2000, from $2.1 million for the six months ended June 30, 1999.

Interest Income.Interest income increased $3.8 million, or 25.0%, to $18.9 million for
the six months ended June 30, 2000, compared with $15.1 million for the same period in 1999. The increase in interest income was primarily due to an increase in average interest-earning
assets, which increased by $89.0 million, or 21.0%, to $513.7 million for the six months ended June 30, 2000 from $424.7 for the comparable period in 1999, and an increase in the
average yield on interest-earning assets by 24 basis points to 7.37% for the six months ended June 30, 2000 from 7.13% for the six months ended June 30, 1999.

Mortgage
loan interest income increased by $2.8 million for the six months ended June 30, 2000. The average balance of mortgage loans increased $77.2 million,
while the loan yield decreased 8 basis points from 7.54% to 7.46%. Interest income from investment securities, mortgage-backed securities and short term deposits increased $415,000 for the six months
ended June 30, 2000, compared with the same period in 1999. This increase resulted from a combination of a decrease in the average balance of $624,000 and a 90 basis point increase in yield.

Interest Expense.Interest expense increased by $3.4 million, or 46.9%, to
$10.7 million for the six months ended June 30, 2000 from $7.3 million for the six months ended June 30, 1999. This increase resulted from the combination of an increase in
the average balance of interest-bearing liabilities, and an overall increase in the average rate paid on those interest-bearing liabilities. The average balance of interest-
bearing liabilities increased by $110.0 million, or 33.1%, to $442.2 million for the six months ended June 30, 2000 from $332.2 million for the six months ended June 30,
1999. This change reflects a $61.1 million increase in deposit accounts, with the remaining $48.9 million increase attributed to advances from the FHLB-Chicago. The average rate paid on
combined deposits and borrowed money increased by 45 basis points to 4.83% for the six months ended June 30, 2000 from 4.38% for the six months ended June 30, 1999.

Net Interest Income Before Provision for Loan Losses.Net interest income before provision for
loan losses increased $370,000, or 4.7%, to $8.2 million for the six months ended June 30, 2000 from $7.9 million for the comparable period in 1999. The net interest margin as a
percent of interest-earning assets decreased 50 basis points to 3.21% for the six months ended June 30, 2000 from 3.71% for the comparable period in 1999.

Provision for Loan Losses.The provision for loan losses increased by $66,000, to $156,000 for
the six months ended June 30, 2000 from $90,000 in 1999. At June 30, 2000, December 31, 1999 and June 30, 1999, non-performing loans totaled $911,000, $1.3 million
and $761,000, respectively. At June 30, 2000, the ratio of the allowance for loan losses to non-performing loans was 186.4% compared to 121.7% at

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December 31, 1999 and 192.0% at June 30, 1999. The ratio of the allowance to total loans was 0.39%, 0.39% and 0.43% at June 30, 2000, December 31, 1999 and June 30,
1999, respectively. Charge-offs for the six months ended June 30, 2000 and 1999 amounted to $3,000 and $2,000, respectively. Management periodically calculates an allowance sufficiency analysis
based upon the portfolio composition, asset classifications, loan-to-value ratios, potential impairments in the loan portfolio, and other factors.

Noninterest Income.Noninterest income totaled $625,000 and $517,000 for the six months ended
June 30, 2000 and 1999, respectively. The increase in noninterest income is primarily attributed to a gain on sale of securities totaling $69,000 and an increase in insurance and brokerage
commissions of $45,000.

Noninterest Expense.Noninterest expense increased $647,000, to $5.7 million for the six
months ended June 30, 2000 from $5.0 million for the comparable period in 1999. Compensation and benefits increased by $274,000. This increase is primarily due to a combination of annual
salary increases, the addition of staff and increases in employee health insurance costs. All other operating expenses, including advertising, marketing, postage, communication, data processing and
other office expense increase by a combined $373,000, or 17.3%, to $2.5 million for the six months ended June 30, 2000 from $2.2 million for the six months ended June 30,
1999. Of this increase $102,000 is related to media advertising and marketing and $97,000 increase in NOW account operating expenses, primarily representing increases
in data processing and imaging expenses. Management continues to emphasize the importance of expense management and control while continuing to provide expanded banking services to a growing market
base.

Income Tax Expense.Income tax expense totaled $1.1 million for the six months ended
June 30, 2000 compared to $1.2 million for the comparable period in 1999. The decrease in the provision for income taxes was primarily the result of a decrease of $234,000 in income
before income tax expense for the six months ended June 30, 2000 compared to the six months ended June 30, 1999.

Liquidity and Capital Resources

The Bank's primary sources of funds are savings deposits, proceeds from the principal and interest payments on loans and proceeds from the maturation of
securities and borrowings from the FHLB-Chicago. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit outflows and mortgage prepayments are
greatly influenced by general interest rates, economic conditions and competition.

The
primary investing activities of the Bank are the origination of residential one-to-four-family loans and, to a lesser extent multi-family and commercial real estate, construction
and land, commercial and consumer loans and the purchase of mortgage-backed and mortgage-related securities. In addition, the Bank purchases loans, consisting of multi-family and commercial real
estate. Deposit flows are affected by the level of interest rates, the interest rates and products offered by the local competitors, the Bank and other factors.

The
Bank's most liquid assets are cash and interest-bearing demand accounts. The levels of these assets are dependent on the Bank's operating, financing, lending and investing
activities during any given period. At June 30, 2000, cash and interest-bearing demand accounts totaled $15.7 million, or 2.8% of total assets.

See
the "Consolidated Statement of Cash Flows" in the Unaudited Consolidated Financial Statements included in this Form 10-Q for the sources and uses of cash flows for
operating, investing and financing activities for the six months ended June 30, 2000 and 1999.

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At June 30, 2000, the Bank exceeded all of its regulatory capital requirements. The following is a summary of the Bank's regulatory capital ratios at June 30, 2000:

Total Capital to Total Assets

10.77
%Total Capital to Risk-Weighted Assets

16.39
%Tier I Leverage Ratio

11.12
%Tier I to Risk-Weighted Assets

16.81
%


At
June 30, 2000, the Company had a Total Capital to Total Assets ratio of 11.76%.

On
June 14, 2000, the Company announced its second quarter dividend of $0.12 per share. The effective date of the dividend was June 30, 2000. Payment of the cash
dividend was made on July 11, 2000.

Year 2000

The Bank did not experience any material disruptions of the systems or software applications due to the start of the Year 2000 nor has the Bank experienced any
problems with third party vendors, suppliers or service providers. The Bank developed contingency plans, which were validated by a third party and will be updated periodically during 2000. These plans
continue to be maintained and can be implemented, in the unlikely event that any mission critical systems fail. In addition, the Bank did not incur Year 2000 related expenses for the six months ended
June 30, 2000.

Recent Accounting Pronouncements

The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," in June 1998. SFAS No. 133 standardizes the accounting for derivative instruments, including certain derivative instruments embedded in other contracts.
Under the standard, entities are required to carry all derivative instruments in the statement of financial position at fair value. The accounting for changes in the fair value
(i.e.,gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so,
on the reason for holding it. If certain conditions are met, entities may elect to designate a derivative instrument as a hedge of exposures to changes in fair values, cash flows, or foreign
currencies. If the hedged exposure is a fair value exposure, the gain or loss on the derivative instrument is recognized in earnings in the period of change together with the offsetting loss or gain
on the hedged item attributable to the risk being hedged. If the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported initially
as a component of other comprehensive income (outside earnings) and subsequently reclassified into earnings when the forecasted transaction affects earnings. Any amounts excluded from the assessment
of hedge effectiveness as well as the ineffective portion of the gain or loss is reported in earnings immediately. SFAS No. 133 is effective for all quarters of fiscal years beginning after
June 15, 1999. Earlier application is encouraged, but is permitted only as of the beginning of any fiscal quarter that begins after the issuance of the statement. This statement should not be
applied retroactively to financial statements of prior periods. During June, 1999, the FASB issued the Statement of Financial Accounting Standards No. 137, "Accounting for Derivative
Instruments and Hedging ActivitiesDeferral of the Effective Date of FASB Statement No. 133  an amendment of FASB Statement No. 133," ("SFAS 137")
that delays SFAS 133 until fiscal years beginning after June 15, 2000. The FASB issued Statement No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities  an amendment of FASB Statement No. 133" in June 2000, which statement addresses various implementation issues relating to SFAS No. 133. The Company anticipates
that the adoption of SFAS No. 133 will not have a material impact in the Company's results of operations.

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## 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

The
Bank's interest rate sensitivity is monitored by management through the use of a Net Portfolio Value Model which generates estimates of the change in the Bank's net portfolio
value ("NPV") over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts. The NPV ratio, under any interest rate
scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The model assumes estimated prepayment rates, reinvestment rates and deposit decay rates.
The Sensitivity Measure is the decline in the NPV ratio, in basis points, caused by a 2% increase or decrease in rates, whichever produces a larger decline. The higher the institution's Sensitivity
Ratio, the greater its exposure to interest rate risk is considered to be. The following NPV Table sets forth the Bank's NPV as of June 30, 2000.

|       |  |   |        | (In Thousands) |   |         |   |        |   
|------ |  | - | ------ | -------------- | - | ------- | - | ------ | --
|
|
|
|+300   |  | $ | 32,687 |                | $ | (24,318 | ) | (42.66 | )%
|+200   |  |   | 39,989 |                |   | (17,016 | ) | (29.85 | ) 
|+100   |  |   | 48,622 |                |   | (8,383  | ) | (14.71 | ) 
|Static |  |   | 57,005 |                |   |        |   |       |   
|(100)  |  |   | 65,312 |                |   | 8,307   |   | 14.57  |   
|(200)  |  |   | 70,910 |                |   | 13,905  |   | 24.39  |   
|(300)  |  |   | 71,425 |                |   | 14,420  |   | 25.30  |   

Certain
shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV require the making of certain assumptions which may or
may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the NPV Table presented assumes that the composition of the Bank's interest
sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected
uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV Table provides an indication of the Bank's
interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on the Bank's
net interest income and will differ from actual results.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine
legal proceedings, in the aggregate, are believed by management to be immaterial to the Company's financial condition, results of operations or cash flows.

Item 2.  Changes in Securities and Use of Proceeds.



Item 3.  Defaults Upon Senior Securities.



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



Item 5.  Other Information.



Item 6.  Exhibits and Reports on Form 8-K (§249.308 of this Chapter).



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## 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.

|                       |  | EFC BANCORP, INC.
|---------------------- |  | -----------------
|Dated: August 11, 2000 |  | By:              
|Dated: August 11, 2000 |  | By:              

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