Exhibit 13

A Message to Shareholders

Dear Fellow Shareholder:

In fiscal year 2010 FFD Financial Corporation recorded an increase in total assets of over $17 million representing a 9.2% growth. Net income for fiscal 2010 was $959,000, or diluted earnings per share of $0.95, compared to the $1.1 Million, or $1.02 per diluted earnings per share in fiscal year 2009. While profitability was modestly lower in 2010, when considering the problems many other banks experienced due to the difficult economic conditions of the past year, we are pleased with our results. We remained profitable with strong capital ratios at a time when over a fourth of the nation’s banks lost money during their most recent reporting periods.

There are a variety of factors that negatively impacted our financial performance in 2010. Historically low interest rates reduced the return we can earn on our loans and securities. The struggling economy has caused difficulties for some of our borrower’s which have resulted in increased provisions for loan losses. We have experienced significant increases in FDIC insurance premiums along with other rising regulatory costs. Finally, our decision to open our Berlin office has added to our operating costs.

We would like to highlight the following:

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In fiscal 2010, we recorded strong loan and deposit growth of 10.8% and 11.5% respectively. As we wrote to you last year, we opened a banking office in Berlin, Holmes County, Ohio in August 2009. This was part of our long term strategic plan to leverage our capital and business model to market areas that fit our community banking profile. We have been very pleased with our reception in Holmes County and the new market contributed significantly to our growth this past fiscal year.

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Net interest income was up 5.7% and our non-interest income increased 16.8%.

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Book value per share at the end of fiscal year 2010 was $18.10, an increase of 2.2% from fiscal year end 2009. We paid $0.68 of dividends per share in fiscal 2010, similar to 2009 ($0.675), while many in the banking industry have eliminated or reduced dividends.

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Credit quality continues to remain a primary focus of our organization. Continued high unemployment rates in our market area and the soft economic recovery have affected the overall quality of our loan portfolio by increasing our number of delinquent loans. Although this area remains a continued concern, we have continued to record credit quality ratios that are better than the industry. Our net charge-off ratio was 0.14% for fiscal 2010, equal to the 0.14% for the prior year and 2.64% industry average¹. Non-performing assets to total assets equaled 1.06% at year end, up from .57% last year, but well below the 3.31% industry average². We increased our allowance for loan losses and had a coverage ratio at June 30, 2010 of 1.10% of our total loans, up from 1.04% in fiscal 2009.

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¹

FDIC June 30, 2010 report on All Financial Institutions

²

BankRegData.com analysis of all Insured Institutions as of June 30, 2010

We successfully completed management’s compliance with Sarbanes-Oxley Section 404 (SOX 404) for certification of internal controls this fiscal year. Shortly after completing this project, a federal law was passed exempting smaller companies from the auditor attestation requirement of this law. However, we continue to be subject to our own attestation of the effectiveness of our internal controls.

At First Federal Community Bank, we view it as a privilege to be entrusted with savings accounts that fund our ability to be “Investing in our Community” with the money we lend to local consumers and businesses. We are also proud to support the many civic organizations throughout Tuscarawas and Holmes Counties financially as well as with our staff volunteer activities in these organizations. We encourage you to review the special section on page 52 of this Annual Report which details information about our civic involvement.

As we look forward to 2011, significant challenges remain on the horizon. The massive new Dodd-Frank banking bill has added additional compliance costs to banks and created other uncertainties. The economy remains weak, and unemployment remains high. However, we see growth opportunities as a result of our strong reputation in our market and believe that our community banking business model remains attractive to current and prospective customers. We remain encouraged by the opportunities our new Holmes County market area present. We will continue to focus on growing profitably which, in turn, will continue to improve the value of your investment in FFD Financial Corporation. We remain committed to our shareholders, our community, and our staff, and we appreciate your confidence and support.

Sincerely,

BUSINESS OF FFD FINANCIAL CORPORATION

FFD Financial Corporation (“FFD,” the “Corporation,” “we” or “us”) is the holding company for First Federal Community Bank (“First Federal” or the “Bank”), a federal savings bank. Since FFD’s formation in 1996, its activities have been limited primarily to holding all of First Federal’s outstanding common shares.

First Federal’s business involves attracting deposits from individual and business customers and using those deposits to originate loans in its market area, consisting of Tuscarawas, Holmes and contiguous counties in Ohio. The Bank provides a full array of deposit products including checking, savings, health savings, money market, individual retirement accounts, and certificates of deposit. First Federal originates residential and home equity loans, construction loans, commercial real estate loans, business loans and consumer loans. The Bank also invests in securities consisting primarily of United States government and government agency obligations and mortgage-backed securities.

We obtain funds for lending and investing activities primarily from deposits, which are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”), from Federal Home Loan Bank (“FHLB”) advances, loan sales and principal repayments on loans, investments and mortgage-backed securities. First Federal conducts business from its main office in Dover, Ohio, and branches in Dover, New Philadelphia, Sugarcreek and Berlin, Ohio, and provides access to its products and services via the Internet at www.onlinefirstfed.com.

We are subject to regulation, supervision and examination by the Office of Thrift Supervision of the United States Department of the Treasury (the “OTS”). First Federal is subject to regulation, supervision and examination by the OTS and the FDIC. First Federal is also a member of the FHLB of Cincinnati.

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MARKET PRICE OF FFD’S

COMMON SHARES AND RELATED SHAREHOLDER MATTERS

There were 1,010,596 of our common shares outstanding on September 1, 2010, held by 473 holders of record. Our common shares are listed on the NASDAQ Capital Market (“NASDAQ”) under the symbol “FFDF.”

The following table sets forth the high and low sales prices for our common shares on NASDAQ, and the dividends declared per share, for each quarter of fiscal years 2009 and 2010.

Our income consists primarily of dividends which may periodically be declared by First Federal’s Board of Directors on the shares held by us. In addition to certain federal income tax considerations, OTS regulations limit the payment of dividends and other capital distributions by savings associations. For example, First Federal is not permitted to pay a cash dividend on its common shares if its regulatory capital would, as a result of the payment of such dividend, be reduced below the amount required for the liquidation account established in connection with the conversion to stock form or applicable regulatory capital requirements prescribed by the OTS.

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SELECTED CONSOLIDATED

FINANCIAL INFORMATION AND OTHER DATA

The following table sets forth certain information concerning our consolidated financial condition, earnings and other data at the dates and for the periods indicated.

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⁽¹⁾

Includes loans held for sale.

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____________________

⁽¹⁾

Delinquent loans are loans as to which a scheduled payment has not been made within 30 days after the due date.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

Our principal business is owning all of First Federal’s outstanding stock. As a result, the discussion that follows focuses on First Federal’s financial condition and results of operations. The use of the terms “we,” “us” and “our” to refer to both FFD and First Federal together The following discussion and analysis of our financial condition and results of operations should be read in conjunction with, and with reference to, the consolidated financial statements, and the notes thereto, included in this Annual Report.

Forward-Looking Statements

Certain statements contained in this Annual Report that are not historical facts are forward looking statements that are subject to certain risks and uncertainties. When used herein, the terms “anticipates,” “plans,” “expects,” “believes,” “intends” and similar expressions as they relate to FFD, First Federal or their management are intended to identify such forward looking statements. Our actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general economic conditions, interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations, and rapidly changing technology affecting financial services.

Critical Accounting Policies

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to use judgments in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The following critical accounting policies are based upon judgments and assumptions by management that includes inherent risks and uncertainties.

The allowance for loan losses is an accounting estimate of probable, but unconfirmed, asset impairment that has occurred in our loan portfolio as of the date of the consolidated financial statements, but before losses have been confirmed via a recorded charge-off or write-down. It is our policy to provide valuation allowances for estimated losses on loans based upon past loss experience, adjusted for changes in trends and conditions of certain items, including:

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Local market areas and national economic developments;

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Levels of, and trends in, delinquencies and impaired loans;

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Levels of, and trends in, recoveries of prior charge-offs;

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Adverse situations that may affect specific borrowers’ ability to repay;

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Effects of any changes in lending policies and procedures;

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Credit concentrations;

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Volume and terms of loans; and

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Current collateral values, where appropriate.

When the collection of a loan becomes doubtful, or otherwise troubled, we record a loan loss provision equal to the difference between the fair value of the property securing the loan and the loan’s carrying value. We review major loans and major lending areas periodically in an effort to determine potential problems at an early date. The allowance for loan losses is increased by charges to earnings and decreased by charge-offs (net of recoveries).

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We account for our allowance for losses on loans in accordance with Accounting Standard Codification (“ASC”) No. 450, “Accounting for Contingencies,” and ASC No. 310, “Accounting by Creditors for Impairment of a Loan.” Both Statements require us to evaluate the collectability of both contractual interest and principal loan payments. ASC No. 450 requires the accrual of a loss when it is probable that a loan has been impaired and the amount of the loss can be reasonably estimated. ASC No. 310 requires that impaired loans be measured based upon the present value of expected future cash flows discounted at the loan’s effective interest rate or, as an alternative, at the loan’s observable market price or fair value of the collateral.

A loan is impaired under ASC No. 310 when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. In applying the provisions of ASC No. 310, we consider our investment in one- to four-family residential loans and consumer loans to be homogeneous and therefore excluded from separate identification for evaluation of impairment. These homogeneous loan groups are evaluated for impairment in accordance with ASC No. 450.

Our policy is to charge off unsecured credits that are more than 90 days delinquent. Similarly, once a collateral dependent loan becomes more than 90 days delinquent, we consider it to constitute more than a minimum delay in repayment and is evaluated for impairment under ASC No. 310 at that time.

CHANGES IN FINANCIAL CONDITION FROM JUNE 30, 2009 TO JUNE 30, 2010

Our assets at June 30, 2010, totaled $206.5 million, a $17.5 million, or 9.2%, increase from the June 30, 2009 total. The increases were comprised primarily of increases of $17.4 million in loans receivable, $2.2 million in investment securities available for sale, $1.1 million in loans held for sale, $1.0 million in prepaid expenses and other assets, $572,000 in premises and equipment, $41,000 in accrued interest receivable, and $29,000 in mortgage servicing rights, which were partially offset by decreases of $4.7 million in cash and cash equivalents, $121,000 in real estate owned, and $20,000 in mortgage-backed securities available for sale and held to maturity.

Our cash and interest-bearing deposits totaled $9.0 million at June 30, 2010, a decrease of $4.7 million, or 34.3%, from June 30, 2009. Investment securities available for sale totaled $8.0 million at June 30, 2010, an increase of $2.2 million, or 37.1% from June 30, 2009. Called investment securities totaled $4.0 million and $6.0 million of investment securities were purchased during the fiscal year ended June 30, 2010.

Our mortgage-backed securities totaled $273,000 at June 30, 2010, a $20,000, or 6.8%, decrease from the total at June 30, 2009, due to principal repayments.

Our loans receivable, including loans held for sale, totaled $180.2 million at June 30, 2010, an increase of $18.5 million, or 11.4%, from the June 30, 2009 total. The portfolio of loans secured by one- to four-family residential real estate increased by $5.2 million to $68.2 million at June 30, 2010 largely due to increases in non-owner occupied residential real estate loans included in the one-to four-family portfolio. Loans secured by nonresidential real estate and land totaled $80.1 million at June 30, 2010, compared to $72.2 million at June 30, 2009, an increase of $7.9 million, or 11.0%. Commercial loans totaled $20.2 million at June 30, 2010, compared to $17.7 million at June 30, 2009, an increase of $2.5 million, or 14.0%. Net loan originations increased by $13.3 million, or 228.9%, compared to fiscal 2009. The increases in our loans receivable and originations are due primary to lending activity in our Berlin office that opened in August 2009.

The allowance for loan losses totaled $2.0 million and $1.7 million at June 30, 2010 and 2009, respectively, which represented 1.10% and 1.04% of total loans and 49.7% and 87.4% of nonperforming and impaired loans at those respective dates. Nonperforming and impaired loans totaled $4.0 million and $1.9 million at June 30, 2010 and 2009, respectively. We believe that our nonperforming and impaired loans at June 30,

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2010, are either adequately collateralized or have sufficient specific reserves for any probable loss on such loans. Although we believe that the allowance for loan losses at June 30, 2010, was adequate based upon the available facts and circumstances, there can be no assurance that additions to the allowance will not be necessary in future periods, which could adversely affect our net earnings.

Our deposits totaled $171.3 million at June 30, 2010, a $17.7 million, or 11.5%, increase over total deposits at June 30, 2009. This increase resulted primarily from new deposits at our new Berlin branch, our continued efforts to generate deposit growth through advertising and relationship banking strategies, as well as consumers moving funds into insured deposit accounts from uninsured investment vehicles, such as stocks and mutual funds.

FHLB advances totaled $13.7 million at June 30, 2010, a $170,000, or 1.2%, decrease from June 30, 2009. Other borrowed money totaled $630,000 at June 30, 2010, a $170,000, or 21.3%, decrease from June 30, 2009.

Shareholders’ equity totaled $18.3 million at June 30, 2010, an increase of $410,000 from June 30, 2009 levels. This increase was due primarily to $959,000 of net earnings, $118,000 in unrealized gains from the mark to market of securities available for sale and $45,000 from activity related to stock based compensation plan, which were partially offset by dividends paid of $688,000, and the purchase of treasury shares totaling $24,000.

COMPARISON OF OPERATING RESULTS

FOR THE YEARS ENDED JUNE 30, 2009 AND 2010

Our consolidated net earnings depend primarily on our level of net interest income, which is the difference between interest earned on our interest-earning assets and the interest paid on interest-bearing liabilities. Net interest income is substantially affected by our interest rate spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, as well as by the average balance of interest-earning assets compared to interest-bearing liabilities.

General. Our net earnings totaled $959,000 for the fiscal year ended June 30, 2010, a decrease of $98,000, or 9.3%, compared to fiscal 2009. This decrease in net earnings resulted from increases of $533,000, or 10.8%, in noninterest expense and $104,000, or 23.4%, in the provision for losses on loans, which were partially offset by increases of $357,000, or 5.7%, in net interest income and $125,000, or 16.9%, in noninterest income and a decrease of $57,000, or 10.1%, in income tax expense.

Net Interest Income. Our total interest income decreased by $162,000, or 1.6%, to a total of $10.3 million for the year ended June 30, 2010. Interest income on loans decreased by $148,000, or 1.5%, due primarily to a 52 basis point decrease in the average yield, which was partially offset by a $11.6 million increase in the average balance outstanding. Interest income on mortgage-backed securities decreased by $8,000, or 47.1%, due primarily to a $23,000, or 7.5%, decrease in the average balance outstanding and a 238 basis point decrease in the average yield earned on such securities, to 3.19% in fiscal 2010. Interest income on investment securities increased by $25,000 due primarily to a $2.0 million, or 35.5%, increase in the average balance outstanding, which was partially offset by a 79 basis point decrease in the average yield earned on such securities, to 3.44%. Interest income on interest-bearing deposits decreased by $31,000, or 21.1% due primarily to decreases in the average balance outstanding of $1.2 million, or 12.4%, and in the average yield of 15 basis points to 1.35%. The decreases in the average yields on our interest-earning assets were due primarily to the overall decrease in interest rates in the economy.

Interest expense on deposits decreased by $390,000, or 11.3%, for the year ended June 30, 2010, compared to fiscal 2009, due primarily to a decrease of 49 basis points in the average cost of deposits to 1.88%, which was

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partially offset by an increase in the average deposit portfolio balance outstanding year to year of $16.8 million, or 11.5%. Interest expense on borrowings decreased by $129,000, or 17.3%, due primarily to a decrease of $3.9 million, or 21.3%, in the average balance of advances outstanding, which was partially offset by a 21 basis point increase in the average cost of such borrowings to 4.29%. The sustained low rate environment has reduced our interest expense significantly, particularly on deposits; however, if rates increase we may be required to increase the interest rates we offer on our deposits to compete with market rates, resulting in our interest expense increasing.

As a result of the foregoing changes in interest income and interest expense, our net interest income increased by $357,000, or 5.7%, for the fiscal year ended June 30, 2010, compared to fiscal 2009. The interest rate spread was 3.44% for the fiscal years ended June 30, 2010 and 2009, while the net interest margin was 3.55% in fiscal 2010, compared to 3.60% in fiscal 2009. The prevailing low interest rates environment in the 2010 fiscal year increased our net interest income, largely because our liabilities repriced to lower rates faster than our assets. When rates increase this scenario could have the opposite effect. It is difficult to predict the effect of future rate increases or decreases because of the timing differences in the repricing of assets and liabilities and interest rate floors on some of our assets.

Provision for Loan Losses. We charge a provision for losses on loans to earnings to bring the total allowance for loan losses to a level considered appropriate by our management based on historical loss experience, the volume and type of lending conducted by us, the status of past due principal and interest payments, general economic conditions, particularly as such conditions relate to our market area, and other factors related to the collectability of our loan portfolio. The provision for losses on loans totaled $548,000 for the year ended June 30, 2010, an increase of $104,000 compared to fiscal 2009. The increase in the provision for losses on loans was due to increases in specific allocations on impaired loans, increases in impaired and nonperforming loans as well as our assessment of our loan portfolio, delinquency rates, net charge-offs, and current economic conditions. Over the twelve-month period, the allowance for loan losses increased by 17.7% from a balance of $1.7 million to $2.0 million. The coverage ratio as a percentage of net loans increased from 1.04% as of June 30, 2009 to 1.10% as of June 30, 2010. Net charge-offs for the twelve-month period totaled $249,000, or .15%, of average loans in fiscal 2010 compared to charge-offs of $232,000, which was also .15% of average loans in fiscal 2009. Non-performing loans were $2.2 million, or 1.21%, of total loans at June 30, 2009, compared to $949,000, or .58%, at June 30, 2009. There can be no assurance that our loan loss allowance will be adequate to cover losses on nonperforming assets in the future, and if additions to the allowance are required, it may adversely affect our net earnings.

Noninterest Income. Noninterest income totaled $867,000 for the fiscal year ended June 30, 2010, an increase of $125,000, or 16.9%, from fiscal 2009. The $125,000 increase in noninterest income resulted primarily from a $193,000 increase in mortgage servicing revenue net of amortization and impairment charges related to mortgage servicing rights, a $41,000 increase in service charges on deposit accounts, a $9,000 impairment loss on securities which was recognized in fiscal 2009 and a $11,000 increase in other noninterest income, which were partially offset by a $129,000 decrease in gain on sale of mortgage loans from a softening in the residential mortgage market. The recovery of a portion of the valuation allowance against the carrying value of the Corporation’s loan servicing rights is a function of interest rates, prepayment speed assumptions, and refinancing of mortgage loans.

Noninterest Expense. Noninterest expenses totaled $5.5 million for the fiscal year ended June 30, 2010, an increase of $533,000, or 10.8%, compared to fiscal 2009. The increase resulted from increases of $255,000, or 11.7%, in employee and director compensation, $83,000, or 18.0%, in occupancy and equipment, $71,000, or 11.6%, in other expenses, $33,000, or 28.0%, in advertising, $29,000, or 8.2%, in data processing, $29,000 in loss on sale of real estate owned, $14,000, or 8.8%, in postage and stationary supplies, $8,000, or 3.6%, in checking account maintenance expense, $5,000, or 3.9% in ATM processing, $4,000, or 1.6%, in professional and consulting fees, $3,000, or 1.3% in FDIC insurance premiums, which were partially offset by a decrease of $1,000, or .4%, in franchise taxes.

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The increase in employee and director compensation and benefits included increases of $297,000 in wages, and related benefit expenses, which were partially offset by decreases of $13,000 in 401(k) benefits, and a $29,000 increase in deferred loan origination costs. The increase in wages and related expenses was due to increases in the size of staff, salaries, and incentive compensation, in large part due to staffing additions in connection with our new Berlin office which opened in August 2009. Our new Berlin office also contributed significantly to the increases in occupancy and equipment, advertising, postage and stationary, and checking account processing and maintenance.

Federal Income Taxes. The provision for federal income taxes totaled $505,000 for the fiscal year ended June 30, 2010, a decrease of $57,000, or 10.1%, compared to fiscal 2009. The decrease resulted primarily from a $155,000, or 9.6%, decrease in earnings before taxes. Our effective tax rates were 34.5% and 34.7% for the fiscal years ended June 30, 2010 and 2009, respectively.

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AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA

The following table sets forth certain information relating to our average balance sheet and reflects the average yield on our interest-earning assets and the average cost of our interest-bearing liabilities for the periods indicated. These yields and costs are derived by dividing income or expense by the average monthly balance of interest-earning assets or interest-bearing liabilities, respectively, for the periods shown. Average balances are derived from month-end balances, which include nonaccruing loans in the loan portfolio, net of the allowance for loan losses.

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The table below describes the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities have affected our interest income and expense during the years indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in volume (change in volume multiplied by prior year rate), (ii) changes in rate (change in rate multiplied by prior year volume) and (iii) total changes in rate and volume. The combined effects of changes in both volume and rate, which cannot be separately identified, have been allocated proportionately to the change due to volume and the change due to rate.

ASSET AND LIABILITY MANAGEMENT

First Federal, like other financial institutions, is subject to interest rate risk to the extent that our interest-earning assets reprice differently than its interest-bearing liabilities. As part of our effort to monitor and manage interest rate risk, we use the “net interest income” (“NII”) and “net portfolio value” (“NPV”) methodologies. Generally, NPV is the discounted present value of the difference between incoming cash flows on interest-earning and other assets and outgoing cash flows on interest-bearing and other liabilities. NII is interest income minus interest expense. Interest rate risk is estimated as the percent and dollar changes in NII and NPV projected to occur should the yield curve instantaneously shift up or down in a parallel fashion from its beginning or base position. The base case rate scenario is defined by the prevailing rate environment and is held constant throughout the simulation. Rate shock scenarios are derived by adding to or subtracting from base case rates.

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Presented below, as of June 30, 2010 and 2009, is an analysis of our interest rate risk as measured by changes in NII and NPV for instantaneous and sustained parallel shifts of +100, +200 and +300 and -100, -200 and -300 basis points in market interest rates.

As the above table shows, in the event of a sudden increase in interest rates, our net interest income would increase but our overall net portfolio value would decrease, and a sudden decrease in rates would have the opposite effect. However, as with any method of measuring interest rate risk, certain shortcomings are inherent in the NII and NPV approaches. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Further, in the event of a change in interest rates, expected rates of prepayment on loans and mortgage-backed securities and early withdrawal levels from certificates of deposit would likely deviate significantly from those assumed in making the risk calculations.

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LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of funds are deposits, proceeds from loan sales, principal repayments on loans and mortgage-backed securities, maturities of investment securities and other funds provided by operations. We also have the ability to borrow from the FHLB of Cincinnati. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows, loan sales and principal prepayments are more influenced by interest rates, general economic conditions and competition. We maintain investments in liquid assets based upon our assessment of (i) the need for funds, (ii) expected deposit flows, (iii) the yields available on short-term liquid assets and (iv) the objectives of the asset/liability management program. At June 30, 2010, we had commitments to originate loans, including unused lines of credit, totaling $42.0 million. Our management anticipates that these loan commitments will be funded from normal cash flows from operations and existing excess liquidity.

Cash and cash equivalents, which is a component of liquidity, is a result of the funds used in or provided by our operating, investing and financing activities. These activities are summarized below for the years ended June 30, 2010 and 2009:

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The following table sets forth information regarding our obligations and commitments, including undisbursed loans in process, to make future payments under contract as of June 30, 2010:

First Federal is required by applicable law and regulation to meet certain minimum capital standards, which include a tangible capital requirement, a core capital requirement or leverage ratio, and a risk-based capital requirement.

The tangible capital requirement requires a savings institution to maintain “tangible capital” of not less than 1.5% of the institution’s adjusted total assets. Tangible capital is defined in OTS regulations as core capital minus any intangible assets.

“Core capital” is comprised of common shareholders’ equity (including retained earnings), noncumulative preferred stock and related surplus, minority interests in consolidated subsidiaries and certain nonwithdrawable accounts. OTS regulations generally require savings institutions to maintain core capital of at least 4% of the institution’s total assets, except for those institutions with the highest examination rating and acceptable levels of risk.

OTS regulations require that savings institutions maintain “risk-based capital” in an amount not less than 8% of risk-weighted assets. Risk-based capital is defined as core capital plus certain additional items of capital, which for First Federal includes a general loan loss allowance of $1.4 million at June 30, 2010.

First Federal exceeded all of its capital requirements and was “well-capitalized” under OTS regulations at June 30, 2010. Note 13 - Regulatory Capital summarizes First Federal’s regulatory capital requirements and regulatory capital at June 30, 2010 and 2009.

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REPORT OF MANAGEMENT ON THE COMPANY’S

INTERNAL CONTROL OVER FINANCIAL REPORTING

September 15, 2010

Management of FFD Financial Corporation is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management of FFD Financial Corporation including the Chief Executive Officer and the Chief Financial Officer, has assessed the Company’s internal control over financial reporting as of June 30, 2010, based on criteria for effective internal control over financial reporting described in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that the Company’s internal control over financial reporting was effective as of June 30, 2010, based on specified criteria.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting because management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

FFD Financial Corporation

Dover, Ohio

We have audited the accompanying consolidated statements of financial condition of FFD Financial Corporation as of June 30, 2010 and 2009, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of FFD Financial Corporation as of June 30, 2010 and 2009, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

Cleveland, Ohio

September 20, 2010

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FFD FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

June 30, 2010 and 2009

(In thousands, except share data)

The accompanying notes are an integral part of these statements.

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FFD FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

Years ended June 30, 2010 and 2009

(In thousands, except per share data)

The accompanying notes are an integral part of these statements.

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FFD FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended June 30, 2010 and 2009

(In thousands)

The accompanying notes are an integral part of these statements.

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FFD FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Years ended June 30, 2010 and 2009

(In thousands, except share and per share data)

The accompanying notes are an integral part of these statements.

20

FFD FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended June 30, 2010 and 2009

(In thousands)

Continued

21

FFD FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

Years ended June 30, 2010 and 2009

(In thousands)