FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                  For the Quarterly Period Ended March 31, 1998

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

       For the transition period from _________________to ________________

                             Commission File Number
                                     0-17915

                                   1ST BANCORP
         --------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Indiana                              35-1775411
--------------------------------------   ------------------------------------
  (State of other jurisdiction of          (I.R.S. Employer Identification
   Incorporation or organization)                       Number)

        101 N. Third Street
        Vincennes, Indiana                              47591
--------------------------------------    ------------------------------------
(Address of principal executive office)              (Zip Code)

        Registrant's telephone number, including are code: (812) 882-4528

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______________

As of April 21, 1998,  there were 1,089,840  Shares of the  Registrant's  Common
Stock issued and outstanding.


<PAGE>



                          1ST BANCORP AND SUBSIDIARIES

                                      INDEX


                                                                          Page
                                                                         Number

Forward-Looking Statements                                                  3

PART I.  FINANCIAL INFORMATION:

      Item 1.    Financial Statements

                     Consolidated Condensed Statements
                           of  Financial Condition,
                           March 31, 1998 (Unaudited) and
                           June 30, 1997                                    4

                     Consolidated Condensed Statements
                           of Earnings, Three and Nine Months Ended
                           March  31, 1998 and 1997 (Unaudited)             5

                     Consolidated Condensed Statements of
                          Cash Flows, Nine Months Ended
                          March 31, 1998 and 1997 (Unaudited)               6

                     Notes to Consolidated Condensed
                           Financial Statements (Unaudited)               7-8

      Item 2.    Management's Discussion and Analysis
                           of Financial Condition and Results
                           of Operations                                 9-14

      Item 3.    Quantitative and Qualitative Disclosures About
                           Market Risk                                     15

PART II.  OTHER INFORMATION

            Item 1.    Legal Proceedings                                   16

            Item 4.     Submission of Matters to Vote 
                            of Securities Holders                          16

            Item 6.     Exhibits and Reports on Form 8-K                   16

SIGNATURES                                                                 17


<PAGE>



Forward-Looking Statements

This  Quarterly  Report on Form 10-Q ("Form  10-Q")  contains  statements  which
constitute   forward-looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
places in this Form 10-Q and include  statements  regarding the intent,  belief,
outlook,  estimate or expectations  of the  Corporation (as defined below),  its
directors or its officers primarily with respect to future events and the future
financial  performance  of the  Corporation.  Readers  of  this  Form  10-Q  are
cautioned that any such forward- looking statements are not guarantees of future
events or  performance  and  involve  risks and  uncertainties,  and that actual
results may differ materially from those in the forward-looking  statements as a
result of various factors. The accompanying  information  contained in this Form
10-Q  identifies  important  factors  that could cause such  differences.  These
factors include  changes in interest rates;  loss of deposits and loan demand to
other  savings and  financial  institutions;  substantial  changes in  financial
markets;  changes in real estate values and the real estate  market;  regulatory
changes;  or the  deterioration in the financial  strength of the  Corporation's
loan customers.  In addition,  from time to time, the Corporation may make other
oral or written forward-looking statements with respect to future events and the
future financial performance of the Corporation. All these other forward-looking
statements are also subject to the factors  indicated above,  which such factors
could cause the  statements or  projections  contained  therein to be materially
inaccurate.
<PAGE>

                          1ST BANCORP AND SUBSIDIARIES
            CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
                 (Unaudited and in thousands except share data)

<TABLE>
<CAPTION>

                                                                     March 31,        June 30,
                                                                       1998             1997
                                                                    ---------        ---------
     ASSETS
Cash and cash
equivalents:
<S>                                                                 <C>              <C>      
    Interest bearing deposits                                       $  12,246        $  19,771
    Non-interest bearing deposits                                         322              523
                                                                    ---------        ---------
            Cash and cash equivalents                                  12,568           20,294
                                                                    ---------        ---------

Securities available for sale                                          18,973           11,588
Securities held to maturity (market value
    of $22,457 at March 31, 1998 and
    $43,556 at June 30, 1997)                                          22,559           44,065

Loans receivable, net                                                 172,620          146,840

Loans held for sale                                                    16,538           27,769
Accrued interest receivable:
    Securities                                                            475            1,081
    Loans                                                               1,170            1,099
Stock in FHLB of Indianapolis, at cost                                  5,519            4,941
Office premises and equipment                                           3,061            3,225
Real estate owned and repossessed assets                                  870              397
Prepaid expenses and other assets                                       5,209            9,191
                                                                    ---------        ---------

TOTAL ASSETS                                                        $ 259,562        $ 270,490
                                                                    =========        =========

     LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Deposits                                                        $ 122,711        $ 144,316
    Advances from FHLB and other borrowings                           110,381          100,296
    Advance payments by borrowers for taxes and insurance                 669              304
    Accrued interest payable on deposits                                  544            1,194
    Accrued expenses and other liabilities                              1,840            2,047
                                                                    ---------        ---------

                    Total Liabilities                               $ 236,145        $ 248,157
                                                                    ---------        ---------

Stockholders' Equity:
    Preferred stock, no par value; shares authorized
       of 2,000,000, none outstanding                                      --               --
    Common stock, $1 par value; shares authorized
       of 5,000,000; shares issued and outstanding
       of 1,089,840 at March 31,1998 and 1,099,188 
       at June 30,1997                                              $   1,090        $     698

    Paid-in capital                                                     2,047            2,642
    Retained earnings, substantially restricted                        20,328           19,102
    Unrealized depreciation on securities                                 (48)            (109)
                                                                    ---------        ---------

                   Total Stockholders' Equity                       $  23,417        $  22,333
                                                                    ---------        ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 259,562        $ 270,490
                                                                    =========        =========
</TABLE>


See Notes to Consolidated Condensed Financial Statements.



<PAGE>



                          1ST BANCORP AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
               (Unaudited and in thousands except per share data)

<TABLE>
<CAPTION>


                                                              Three months ended         Nine months ended
                                                                   March 31,                  March 31,
                                                             ---------------------      ---------------------
                                                               1998         1997          1998         1997
                                                             --------     --------      --------     --------
INTEREST INCOME:
<S>                                                          <C>          <C>           <C>          <C>     
   Loans                                                     $  3,927     $  3,897      $ 11,656     $ 11,243
   Investment securities
                                                                  728          970         2,433        2,826
   Trading account securities
                                                                    1           14             3           14
   Other short-term investments and
     interest bearing deposits
                                                                  153          149           528          464
                                                             --------     --------      --------     --------

  Total Interest Income                                         4,809        5,030        14,620       14,547
                                                             --------     --------      --------     --------

INTEREST EXPENSE:
   Deposits                                                     1,772        1,949         5,662        5,655
   Short-term borrowings                                           18           43
                                                                                               1            3
   FHLB advances and other borrowings                           1,395        1,369         4,149        4,189
                                                             --------     --------      --------     --------

  Total Interest Expense                                        3,168        3,336         9,814        9,887
                                                             --------     --------      --------     --------

NET INTEREST INCOME BEFORE
    PROVISION FOR LOAN LOSSES                                   1,641        1,694         4,806        4,660

Provision for loan losses                                         120           84           300          170
                                                             --------     --------      --------     --------

NET INTEREST INCOME AFTER
    PROVISION FOR LOAN LOSSES                                   1,521        1,610         4,506        4,490
                                                             --------     --------      --------     --------

NON-INTEREST INCOME:
   Fees and service charges
                                                                   82          101           251          273
   Net gain (loss) on sales of investment securities
      available for sale and trading account investments           10          (34)           32          (32)
   Net gain on sales of loans
                                                                  289          392           455        1,593
   Other                                                          228          172           637          478
                                                             --------     --------      --------     --------

  Total Non-Interest Income                                       609          631         1,375        2,312
                                                             --------     --------      --------     --------

NON-INTEREST EXPENSE:
   Compensation and employee benefits                             752        1,010         2,118        2,995
   Net occupancy                                                  150          185           405          545
   Federal insurance premiums                                      42           40           124        1,549
   Other                                                          394          472         1,226        1,616
                                                             --------     --------      --------     --------

  Total Non-Interest Expense                                    1,338        1,707         3,873        6,705
                                                             --------     --------      --------     --------

Earnings Before Income Taxes                                      792          534         2,008           97

Income Taxes                                                      233           (6)          557         (188)
                                                             --------     --------      --------     --------

NET EARNINGS                                                 $    559     $    540      $  1,451     $    285
                                                             ========     ========      ========     ========

BASIC EARNINGS PER SHARE:                                    $   0.51     $   0.49      $   1.32     $   0.26

DILUTED EARNINGS PER SHARE:                                  $   0.51     $   0.49      $   1.32     $   0.26

</TABLE>
See Notes to Consolidated Condensed Financial Statements



<PAGE>


                          1ST BANCORP AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                          (Unaudited and in thousands)

<TABLE>
<CAPTION>

                                                                Nine Months Ended
                                                                    March 31,
                                                              ----------------------
                                                                1998          1997
                                                              --------      --------
Net Cash Flows From Operating Activities:
<S>                                                           <C>           <C>     
   Net earnings                                               $  1,451      $    285
   Adjustments to reconcile net cash
    provided by operating activities:
      Depreciation and amortization                                329           241
      Amortization of mortgage servicing rights                    158            83
      Gain on sales of loans                                      (455)       (1,593)
      Net change in trading account securities                      --        (1,973)
      (Gain) loss on sales of securities                           (32)           32
      Net change in loans held for sale                         11,231        (2,722)
      Provision for loan losses                                    300           170
      Change in accrued interest receivable                        535           417
      Change in prepaid expenses and other assets                3,831          (464)
      Change in accrued expenses and other liabilities            (898)         (534)
      Loss on investment in limited partnership                     81            95
                                                              --------      --------

        NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES        16,531        (5,963)
                                                              --------      --------

Cash Flows From Investing Activities:
    Purchase of securities held to maturity                         --        (3,518)
    Proceeds from maturity of securities held to maturity       21,515            59
    Purchase of securities available for sale
     and trading account securities                            (40,747)      (20,982)
    Proceeds from maturities of securities
     available for sale                                          4,087           101
    Proceeds from sales of securities available for sale
      and trading account securites                             29,367        21,906
    Principal collected on loans, net of originations          (25,779)       (7,207)
    Purchases of equipment                                         (81)         (494)
    Purchases of stock of FHLB of Indianapolis                    (578)           --
    Other                                                         (458)         (184)
                                                              --------      --------

        NET CASH USED BY INVESTING ACTIVITIES                  (12,674)      (10,319)
                                                              --------      --------

Cash Flows From Financing Activities:
    Change in deposits                                         (21,605)        9,493
    Proceeds from FHLB advances and other borrowings            53,996        51,818
    Repayment of FHLB advances and other borrowings            (43,911)      (51,378)
    Proceeds from issuance of common stock                         102           116
    Purchase and retirement of common stock                       (305)         (207)
    Payment of dividends on common stock                          (225)         (203)
    Change in advance payments by borrowers
     for insurance and taxes                                       365           152
                                                              --------      --------

        NET CASH PROVIDED (USED)
        BY FINANCING ACTIVITIES                                (11,583)        9,791
                                                              --------      --------

NET DECREASE IN CASH AND CASH EQUIVALENTS                       (7,726)       (6,491)

Cash and Cash Equivalents at Beginning of Period                20,294        25,099
                                                              --------      --------

Cash and Cash Equivalents at End of Period                    $ 12,568      $ 18,608
                                                              ========      ========

</TABLE>
See Notes to Consolidated Financial Statements



<PAGE>



                          1ST BANCORP AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.  Basis of Presentation

In the opinion of management,  the accompanying unaudited consolidated condensed
financial statements contain all adjustments  necessary for a fair presentation.
The results of operations for the interim periods are not necessarily indicative
of the  results  which may be  expected  for an  entire  year.  These  financial
statements  are  condensed  and do  not  contain  all  disclosures  required  by
generally accepted  accounting  principles which would be included in a complete
set of financial statements.

Note 2.  Earnings Per Share

1ST BANCORP has  implemented  Statement of Financial  Accounting  Standards 128,
"Earnings  per Share" (EPS) which is effective for fiscal  periods  ending after
December 15, 1997. Accordingly, these amounts appear on the financial statements
in this  Quarterly  Report on Form 10-Q.  EPS have been computed on the basis of
the weighted average number of common shares outstanding and the dilutive effect
of stock options not exercised  during the periods  presented using the treasury
stock method.  The weighted average number of shares  outstanding for use in the
basic EPS computations was 1,089,395 and 1,090,962 for the three and nine months
ended March 31, 1998,  respectively.  The weighted  average number of shares for
use in the dilutive EPS  computations  was 1,096,912 and 1,098,479 for the three
and nine months ended March 31, 1998, respectively.  The weighted average number
of shares for use in the basic and dilutive EPS  computations  was 1,098,026 and
1,103,135 for the three and nine months ended March 31, 1997, respectively.

Note 3.  Stock Purchase Plans

The  Corporation  maintains an Employee Stock Purchase Plan (the "Plan") whereby
full-time  employees of First Federal Bank, A Federal Savings Bank (the "Bank"),
First Financial  Insurance  Agency,  Inc. ("First  Financial"),  and First Title
Insurance Company ("First Title") can purchase the Corporation's common stock at
a discount.  The purchase  price of the shares under the Plan is 85% of the fair
market  value of such  stock at the  beginning  or end of the  offering  period,
whichever  is lesser.  A total of 24,523  authorized  but  unissued  shares were
reserved  for  issuance  under the Plan. A total of 5,613 shares were issued and
purchased by  employees in the first  quarter of fiscal year 1998 for the fiscal
1997 plan year.

Note 4.  Stock Option Plan

The  Corporation  has a stock  option plan under which  260,466  authorized  but
unissued  shares of common stock were  reserved.  As of March 31,  1998,  26,775
incentive  stock  options  were  outstanding  with  certain  key  officers.   An
additional 2,961 shares remain reserved for future grant. All other options have
been exercised or have expired.


Note 5.  Stock Repurchase Plan

In  August  1996,  the  Board  authorized  the  repurchase  of up  to 5% of  the
outstanding shares of common stock subject to market conditions, over a two year
period  which  expires in August  1998.  During the nine months  ended March 31,
1998, 15,750 shares of common stock were repurchased.


<PAGE>

Note 6.  Stock Split and Stock Dividend

On October 23, 1997, the Corporation  declared a three-for-two  stock split. The
additional shares were issued on November 30, 1997, to shareholders of record as
of November 15, 1997. All share and per share data have been adjusted to reflect
the three-for-two stock split.

On  December  18,  1997,  the Board of  Directors  approved  a 5%  common  stock
dividend. The dividend was paid January 23, 1998 to shareholders of record as of
January 9, 1998.  All share and per share data have been adjusted to reflect the
5% stock dividend.

Note 7.  Savings Association Insurance Fund ("SAIF") Recapitalization

On  September  30,  1996,  the federal  government  mandated  an  industry  wide
assessment  to  recapitalize  the SAIF,  which is a part of the Federal  Deposit
Insurance  Corporation  ("FDIC").  The special assessment was charged to savings
associations with insured deposits by the SAIF. The assessment was calculated at
0.657% of insured  deposits  as of March 31,  1995.  The  Bank's  portion of the
assessment was $1,330,000 and is included in  non-interest  expense for the nine
months ended March 31, 1997.

Note 8.  Reclassifications

Certain  amounts  in the  fiscal  year  1997  consolidated  condensed  financial
statements   have  been   reclassified  to  conform  to  the  fiscal  year  1998
presentation.


<PAGE>



                          1ST BANCORP AND SUBSIDIARIES
           Management's Discussion and Analysis of Financial Condition
                            and Results of Operations

(a)  Financial Condition:

The  Corporation's  goal is to  increase  net  interest  income and become  less
reliant on non-interest  items to provide  profitability.  To achieve this goal,
the Corporation has targeted lower levels of cash and cash equivalents,  smaller
securities   portfolios,   and  increased   levels  of  loans  as  part  of  its
asset/liability  strategy to enhance the net interest margin. As a result, total
assets have  declined  modestly  during this time of  restructuring  the balance
sheet. Total assets aggregated $259,562,000 at March 31, 1998, compared to total
assets of $270,490,000 at June 30, 1997, a decrease of 4.04%.

Cash and cash equivalents  aggregated $12,568,000 at March 31, 1998, compared to
$20,294,000  at June 30,  1997.  While this  level is  somewhat  above  targeted
levels,  it still however,  represents a 38.07% reduction and is consistent with
the  Bank's  asset/liability  strategies.  Securities  held to  maturity,  which
primarily consist of U.S. Agency securities,  totaled $22,559,000,  at March 31,
1998, compared to $44,065,000 at June 30, 1997, a 48.81% decline. The decline in
the level of held to maturity  securities resulted from the exercise of the call
feature by the issuer of the securities. The cash generated from the call of the
securities was used to primarily  fund  expansion of the loan  portfolios and to
allow brokered deposits to mature without renewal.

Investment  securities  available for sale increased to $18,973,000 at March 31,
1998,  from  $11,588,000  at June  30,  1997.  The  increase  in the  securities
available for sale  portfolio  resulted from  purchases of GNMA mortgage  backed
securities.  The Bank's  primary focus  continues to be on expansion of the loan
portfolio;  however,  the interest rate  environment over the past few months of
the fiscal year has  precipitated  increased loan  prepayments and a significant
level of the Bank's securities portfolio to be called by the issuer.  Therefore,
the levels of cash and cash equivalents  during the quarter ended March 31, 1998
were  increasing  more  quickly  than the funds could be invested  through  loan
originations.  The GNMA mortgage backed  securities  typically  provide a higher
yield  alternative  than  overnight  deposits,  can be used  to meet  regulatory
liquidity  requirements,  have no credit risk,  and are perceived to have slower
prepayment  rates than other Agency  mortgage backed  securities.  There were no
trading account securities at March 31, 1998 or June 30, 1997.

Net loans  receivable  (including loans held for sale) increased by $14,549,000,
or 8.33%, to $189,158,000 at March 31, 1998, from $174,609,000 at June 30, 1997.
The increase in net loans  receivable is  attributable  to residential  mortgage
loan production,  an emphasis on the Bank's indirect auto lending program, and a
lower level of mortgage loan sales.  Growth  occurred in the  nonconforming  and
conforming residential mortgage loan portfolios and in the auto loan portfolio.


<PAGE>

During the nine months  ended March 31, 1998,  the Bank funded $74.8  million of
loans  compared to $93.2 million of loans during the nine months ended March 31,
1997.   The  decrease  in  overall  loan   production  was  the  result  of  the
restructuring of the Bank's nonconforming loan origination network in the latter
part of fiscal year 1997.  All loan  origination  offices were closed except the
Evansville,  Indiana loan origination  office and all  administrative  functions
were  transferred  to  the  Bank's   operations  in  Vincennes,   Indiana.   The
restructuring was undertaken primarily as a cost reduction measure. The "Results
of  Operations"  section of this  Quarterly  Report on Form 10-Q  discusses  the
effectiveness of the cost reduction plan in additional detail.

During the nine months ended March 31, 1998, nonconforming  residential mortgage
lending  constituted  $23.2 million,  or 31.0%, of total loans funded during the
period  compared with $57.6 million,  or 61.8%, of total loans funded during the
nine months ended March 31, 1997.  Nonconforming  residential  loans,  including
those held for sale,  increased to $80.4 million at March 31, 1998,  compared to
$66.5 million at June 30, 1997.

During the fourth quarter of fiscal year 1997, the Bank  implemented an indirect
auto lending program in its Vincennes,  Indiana market area.  Indirect auto loan
fundings  during the nine months ended March 31, 1998 totaled $7.4 million.  The
indirect auto loan portfolio totaled $6.7 million at March 31, 1998.

At March 31, 1998,  nonaccrual loans, real estate owned ("REO"), and repossessed
assets totaled $3,837,000, or 1.48% of total assets. This compares to $2,727,000
of nonaccrual  loans,  REO, and repossessed  assets or 1.01% of total assets, at
June 30, 1997. The upward trend in loan  delinquencies is related to residential
one-to-four  family  mortgage loans.  Delinquencies  have trended upward in both
conforming and  nonconforming  mortgage loans.  Loan quality  continues to be of
major  importance  to the Bank and strong  efforts are being made to ensure loan
quality.  In an effort to mitigate  potential  losses and reduce  non-performing
assets,  additional  loan collection  personnel have been hired,  more stringent
collection  practices  have been  implemented,  and certain  higher risk lending
programs have been  discontinued.  In addition,  loan loss  allowances have been
increased to prepare for potential future losses in the portfolio.

The  table  below  sets  forth  the  amounts  and  categories  of 1ST  BANCORP's
nonaccrual  loans,  REO,  and  repossessed  assets for the  balance  sheet dates
presented.  Loans are reviewed  regularly and are generally placed on nonaccrual
status when they become contractually past due more than 90 days.

                                                    March 31,      June 30,
                                                      1998            1997
                                                   --------------------------
Nonaccrual loans, REO, and repossessed assets:
     Nonaccrual loans                              $2,967,000      $2,330,000
     REO and repossessed assets (1)                   870,000         397,000
     Restructured loans                                    --              --
                                                   --------------------------
Total nonaccrual loans, REO,
     and repossessed assets                        $3,837,000      $2,727,000
Nonaccrual loans, REO and repossessed
     assets to total assets                              1.48%           1.01%

-------------
(1)  Certain assets acquired  through  repossession,  foreclosures,  or deeds in
     lieu of  foreclosure,  which are  included  in the  Consolidated  Condensed
     Statements  of Financial  Condition  as real estate  owned and  repossessed
     assets.


<PAGE>

During the nine  months  ended March 31,  1998,  the Bank  established,  through
operations,  provisions for loan losses totaling  $300,000  compared to $170,000
during the same nine months of the prior  year.  The Bank's  allowance  for loan
loss increased to $1,181,000 at March 31, 1998 from $1,158,000 at June 30, 1997.

Prepaid expenses and other assets decreased by $3,982,000 to $5,209,000 at March
31, 1998 from $9,191,000 at June 30, 1997. The decrease was primarily the result
of the completion of a $4.1 million loan sale.

Deposits  aggregated  $122,711,000 at March 31, 1998 compared to $144,316,000 at
June 30,  1997.  The level of retail  deposits has  remained  stable  throughout
fiscal  year  1998.  The  $21,605,000,  or  14.97%  decline,  resulted  from the
decreased use of brokered funds during the nine months ended March 31, 1998. The
lower level of brokered  deposits were partially offset by an increased level of
Federal Home Loan Bank ("FHLB") advances. Advances have been a lower cost source
of funds than brokered  deposits during the fiscal year. FHLB advances and other
borrowings  increased by  $10,085,000,  or 10.06%,  to $110,381,000 at March 31,
1998  compared  to  $100,296,000  at June 30,  1997.  The overall  reduction  of
borrowed funds and brokered  deposits during the period  correlated to the lower
levels of cash and securities,  and was a part of the Corporation's  strategy of
expanding the net interest margin and improving profitability.

Accrued expenses and other liabilities  declined modestly to $1,840,000 at March
31, 1998, compared to $2,047,000 at June 30, 1997. Advance payments by borrowers
for taxes and  insurance  increased  to $669,000  at March 31, 1998  compared to
$304,000 at June 30, 1997.  The  fluctuation  in this category was due to timing
differences  that  occurred in the normal course of business.  Accrued  interest
payable on deposits  decreased to $544,000 at March 31, 1998, from $1,194,000 at
June 30, 1997. The fluctuation in this category  resulted from the reduced level
of brokered deposits.

The  Corporation  acquired  the  assets  of an  existing  independent  title and
abstract  company  during the quarter  ended March 31,  1998.  The assets of the
acquired  company were merged into the  previously  inactive  subsidiary,  First
Title  Insurance  Company.  First Title  underwrites for Chicago Title Insurance
Company,  Ticor Title Insurance Company, and Stewart Title Guaranty Company. The
limited  operations  by First Title during the quarter  ended March 31, 1998 did
not have a material  impact of the financial  statements of the  Corporation for
the  three or nine  months  ended  March  31,  1998,  however,  First  Title was
profitable in its initial month of active operation.

(b)  Results of Operations:

During the three  months  ended  March 31,  1998,  1ST  BANCORP's  net  earnings
increased to $559,000,  or $0.51 per share,  compared to net income of $540,000,
or $0.49 per share,  for the three months ended March 31, 1997.  During the nine
months ended March 31, 1998,  1ST BANCORP net earnings  totaled  $1,451,000,  or
$1.32 per share,  compared to $285,000,  or $0.26 per share, for the nine months
ended March 31, 1997. Net earnings for the nine months ended March 31, 1997 were
negatively affected by the special one-time assessment for the  recapitalization
of the SAIF.


<PAGE>

The  increased  earnings  for the three and nine months  ended March 31, 1998 as
compared to the three and nine months ended March 31, 1997, were a reflection of
the  Corporation's  shift to more  emphasis on the net interest  margin and less
reliance on non-interest income. Also significantly contributing to the improved
earnings was a substantial  decline in  non-interest  expenses.  This decline is
largely  attributable  to the  restructuring  of the Bank's  nonconforming  loan
operations during the latter part of fiscal year 1997.

Net  interest  income  before  provision  for loan  losses  remained  relatively
constant at $1,641,000 during the three months ended March 31, 1998, as compared
to  $1,694,000  during the three months ended March 31, 1997.  However,  the net
interest margin  increased to 2.76% for the three months ended March 31, 1998 as
compared to 2.64% for the three months  ended March 31,  1997.  The net interest
margin  increased  primarily as a result of an increased yield on earning assets
and a stable cost of funds  compared  with the same  period of the prior  fiscal
year.  The  modest  decline in the net  interest  income was a result of a lower
level of interest  earning assets.  The Bank's  asset/liability  strategy during
fiscal year 1998 of retaining  more  mortgage  loan  production in portfolio and
targeting  lower levels of cash and  securities  has resulted in a lower average
level of interest earning assets and interest bearing liabilities.

Net interest income before provision for loan losses increased to $4,806,000 for
the nine months ended March 31,  1998,  compared to  $4,660,000  during the nine
months ended March 31, 1997. The net interest margin  increased to 2.63% for the
nine months  ended March 31, 1998 as compared to 2.45% for the nine months ended
March 31, 1997. The increased level of net interest income was the result of the
expanded net interest margin.

To achieve  the  increased  net  interest  margin,  high-quality,  high-yielding
nonconforming  mortgage loans were placed in portfolio and the Bank  implemented
an  indirect  auto  loan  program  in its local  market  to  provide a source of
consumer credit. The Bank's asset/liability  strategy during fiscal year 1998 of
retaining more mortgage loan  production in portfolio and targeting lower levels
of cash and securities has resulted in a lower average level of interest earning
assets.  Despite  the lower  average  interest  earning  assets,  the efforts to
increase the net interest margin have been successful in increasing net interest
income.

As previously  stated,  the Bank has placed into  portfolio  "A+",  "A" and "B+"
rated nonconforming  residential mortgage loans and implemented an indirect auto
loan program.  To recognize the risk associated with such loans,  provisions for
loan losses have been  increased.  During the three and nine month periods ended
March  31,  1998,  provisions  for loan  losses  have  aggregated  $120,000  and
$300,000,  respectively,  as  compared  to loan loss  provisions  of $84,000 and
$170,000, respectively, during the same periods of the previous fiscal year.

Non-interest  income for the three months ended March 31, 1998 totaled  $609,000
compared to $631,000 for the three  months  ended March 31,  1997.  Non-interest
income for the nine months ended March 31, 1998 totaled  $1,375,000  compared to
$2,312,000  for the nine  months  ended  March  31,  1997.  The  lower  level of
non-interest  income  resulted  primarily from a lower level of loan sales and a
corresponding decreased gain on sales of loans.

The reduction in loan sales is a part of the Bank's  asset/liability  management
strategy to enhance the net interest margin by retaining a larger portion of its
mortgage  loan  production  in  portfolio.  The gain on sales of mortgage  loans
totaled  $289,000 and $455,000  during the three and nine months ended March 31,
1998,  compared to $392,000 and $1,593,000  during the same periods of the prior
year.  The  decline in the gain on sales of loans for the three and nine  months
ended  March 31, 1998  resulted  from a lower  volume of loan sales.  Loan sales
totaled $15.0 million and $28.1 million  during the three and nine month periods
ended March 31, 1998,  compared to $16.5  million and $57.5 million for the same
periods of the prior fiscal year.

Other  non-interest  income increased to $228,000 and $637,000 for the three and
nine months ended March 31, 1998 compared with $172,000 and $478,000  during the
three and nine months ended March 31,  1997.  The  increase is  attributable  to
additional  income from the insurance  operations of First  Financial  Insurance
Agency, Inc. The additional  insurance income was due in part to the purchase of
the book of  business of an existing  independent  insurance  agency in December
1996.  The book of business was merged with the existing  customer base of First
Financial.  As a result of the  acquisition,  First  Financial  operates  a full
service  insurance  office in  Princeton,  Indiana in  addition to its office in
Vincennes, Indiana.

Non-interest  expense  totaled  $1,338,000  for the three months ended March 31,
1998,  compared to  $1,707,000  for the three months  ended March 31, 1997.  The
restructuring of the Bank's nonconforming loan operations near the end of fiscal
year 1997  resulted in the lower level of  non-interest  expenses  for the three
months ended March 31, 1998 as compared to the prior year.  Non-interest expense
totaled  $3,873,000  for the nine  months  ended  March 31,  1998,  compared  to
$6,705,000  for the nine months ended March 31,  1997.  The  nonconforming  loan
operation  restructuring combined with the one-time SAIF assessment in the first
quarter of fiscal year 1997 resulted in the lower level of non-interest expenses
for the nine months  ended March 31, 1998  compared  with the same period of the
prior year.

On  September  30,  1996,  the federal  government  mandated  an  industry  wide
assessment to  recapitalize  the SAIF,  which is a part of the FDIC. The special
assessment  was charged to savings  associations  with  insured  deposits by the
SAIF. The  assessment  was calculated at 0.657% of insured  deposits as of March
31, 1995.  The Bank's  portion of the assessment was $1,330,000 and was included
in non-interest  expense for the first quarter of fiscal 1997. Federal insurance
premiums and special  assessments totaled $42,000 and $124,000 for the three and
nine months ended March 31, 1998,  compared with $40,000 and  $1,549,000 for the
three and nine months ended March 31, 1997.

During  the fourth  quarter  of fiscal  year  1997,  the Bank  restructured  its
nonconforming  loan  operation.  The  restructuring  included  closing  all loan
offices except the Evansville,  Indiana loan  origination  office and moving all
administrative  functions to the Bank's home office in Vincennes,  Indiana.  The
restructuring  was  undertaken  to reduce  non-interest  operating  expenses and
improve profitability of the Bank.

Compensation  and employee  benefits expense declined to $752,000 and $2,118,000
for the three and nine months ended March 31, 1998  compared to  $1,010,000  and
$2,995,000 for three and nine months ended March 31, 1997. Net occupancy expense
declined to $150,000  and $405,000 for the three and nine months ended March 31,
1998 compared to $185,000 and $545,000 for the three and nine months ended March
31,  1997.  Finally,   other  non-interest  expense  declined  to  $394,000  and
$1,226,000  for the three and nine  months  ended  March 31,  1998  compared  to
$472,000  and  $1,616,000  for the three and nine months  ended March 31,  1997.
These  declines  in  operating  expenses  resulted  from  a  reduced  number  of
employees,  fewer office facilities, and generally lower administrative expenses
which  are  attributable  to  the  restructuring  of  the   nonconforming   loan
operations.

(c) Capital Resources and Liquidity:

The  Corporation is subject to regulation as a savings and loan holding  company
by the Office of Thrift  Supervision  ("OTS").  First  Federal  Bank,  A Federal
Savings Bank, as a subsidiary of a savings and loan holding company,  is subject
to certain  restrictions in its dealings with the Corporation.  The Bank is also
subject to the regulatory requirements applicable to a federal savings bank.

Current  capital  regulations  require  savings  institutions  to  have  minimum
tangible  capital equal to 1.5% of total assets and a minimum core capital ratio
of 3  percent.  Additionally,  savings  institutions  are  required  to  meet  a
risk-based  capital ratio equal to 8.0% of  risk-weighted  assets.  At March 31,
1998, the Bank met all current capital requirements.

The  following  is a  summary  of the  Bank's  regulatory  capital  and  capital
requirements at March 31, 1998:

                                 Tangible          Core            Risk-Based
                                  Capital         Capital           Capital
                                ----------------------------------------------
Regulatory Capital              $22,041,000      $22,041,000      $22,741,000
Minimum Capital Requirement       3,892,000        7,784,000       11,963,000
                                ----------------------------------------------
Excess Capital                  $18,149,000      $14,257,000      $10,778,000

Regulatory Capital Ratio               8.50%            8.50%           15.21%
Required Capital Ratio                 1.50%            3.00%            8.00%

During the quarter ended March 31, 1998, 1ST BANCORP paid a $0.067 cash dividend
per share. This is the twenty second consecutive  quarterly dividend 1ST BANCORP
has paid to shareholders.

Liquidity  measures the Bank's ability to meet savings  withdrawals  and lending
commitments.  Management  believes  that  liquidity  is adequate to meet current
requirements,  including  the funding of  $20,583,000  in loan  commitments  and
$1,924,000 of loans in process  outstanding  at March 31, 1998.  The majority of
these commitments are expected to be funded within the three month period ending
June 30,  1998.  At  March  31,  1998,  the Bank  had  $241,000  in  outstanding
commitments to sell mortgage loans. The Bank maintains  liquidity of at least 4%
of net withdrawable  assets as required by current  liquidity  regulations.  The
average regulatory liquidity ratio for the month ended March 31, 1998 was 5.80%.

A Year 2000 Committee (the  "Committee") has been established by the Corporation
consisting of directors,  officers,  and employees of the Corporation to address
problems  which  could  arise  from the  forthcoming  Year  2000  rollover.  The
Committee is charged with  providing  regular  reports to the Board of Directors
detailing  progress in this area. Based on progress by the Committee to date, it
is not anticipated that the Year 2000 rollover will present  material  financial
or operational burdens for the Corporation.

There are no other known trends,  events,  or  uncertainties,  including current
recommendations  by  regulatory  authorities,  that  should  have,  or that  are
reasonably  likely  to  have,  a  material  effect  on  the  liquidity,  capital
resources, or operations of 1ST BANCORP.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There have been no  material  changes in market risk  exposures  that affect the
quantitative  or qualitative  disclosures  presented as of the preceding  fiscal
year end in the Corporation's Annual Report on Form 10-K.


<PAGE>




PART II.  OTHER INFORMATION

Item 1. Legal Proceedings.

Neither 1ST  BANCORP nor its  subsidiaries  is  involved in any  material  legal
proceedings,  other than routine proceedings occurring in the ordinary course of
its business.

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

There were no matters submitted to a vote of security holders during the quarter
ended March 31, 1998.

Item 6. Exhibits and Reports on Form 8-K

a)   The following exhibits are filed herewith:

        Exhibit 3a    Certificate   of    Incorporation    of   Registrant
                      (incorporated  by reference to exhibit 3.1 to Registrant's
                      Registration  Statement  on  Form  S-4,  Registration  No.
                      33-24587, filed September 28, 1988)
                     
        Exhibit 3b    Restated  Code of By-Laws of Registrant  (incorporated  by
                      reference to Exhibit 3b to Registrant's  Form 10-K for the
                      year ended June 30, 1994)
                     
        Exhibit 27    Financial Data Schedule
                  
b)   Reports on Form 8-K -- There  were no reports on Form 8-K filed  during the
     three months ended March 31, 1998.



<PAGE>




                                   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 thereunto duly authorized.

                                               1ST BANCORP


Date: May 13, 1998                             By:  /s/   C. James McCormick
                                               -----------------------------
                                               C. James McCormick, Chairman
                                               and Chief Executive Officer


Date: May 13, 1998                             By:  /s/   Frank D. Baracani
                                               ----------------------------
                                               Frank D. Baracani, President


Date: May 13, 1998                             By:  /s/   Mary Lynn Stenftenagel
                                               ---------------------------------
                                               Mary Lynn Stenftenagel,
                                               Secretary-Treasurer and
                                               Chief Accounting Officer