FFY FINANCIAL CORP, DEF 14A, 1997-09-16

FFY FINANCIAL CORP
DEF 14A, 1997-09-16
SAVINGS INSTITUTION, FEDERALLY CHARTERED

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[FFY FINANCIAL CORP. LETTERHEAD]

September 16, 1997

Dear Fellow Stockholder:

On behalf of the Board of Directors and management of FFY Financial
Corp., I cordially invite you to attend the Annual Meeting of Stockholders
of the Corporation. The Meeting will be held at 10:00 a.m., Youngstown,
Ohio time, on October 15, 1997, at The Butler Institute of American Art, 524
Wick Avenue, Youngstown, Ohio.

The Meeting is for the purpose of considering and acting upon the
election of three directors of the Corporation and the ratification of KPMG
Peat Marwick LLP as independent auditor. In addition, the Meeting will
include management's report on the Corporation's financial and operating
performance for the fiscal year ended June 30, 1997.

I encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This will save the
Corporation additional expense in soliciting proxies and will ensure that
your shares are represented at the Meeting.

Thank you for your attention to this important matter.

Very truly yours,

Jeffrey L. Francis
President and Chief Executive Officer

FFY FINANCIAL CORP.
724 Boardman-Poland Road
Youngstown, Ohio 44512

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 15, 1997

Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of FFY Financial Corp. (the "Corporation") will be held at 10:00
a.m., Youngstown, Ohio time, on October 15, 1997, at The Butler Institute of
American Art, 524 Wick Avenue, Youngstown, Ohio.

A proxy card and a Proxy Statement for the Meeting are enclosed. The
Meeting is for the purpose of considering and acting upon the election of
three directors of the Corporation, ratification of KPMG Peat Marwick LLP as
independent auditor and such other matters as may properly come before the
Meeting or any adjournments or postponements thereof. The Board of
Directors is not aware of any other business to come before the Meeting.

Any action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may
be adjourned or postponed. Stockholders of record at the close of business
on August 29, 1997 are the stockholders entitled to vote at the Meeting and
any adjournments or postponements thereof.

You are requested to complete, sign and date the enclosed proxy, which
is solicited on behalf of the Board of Directors, and to mail it promptly in
the enclosed postpaid return envelope. The proxy will not be used if you
attend and vote at the Meeting in person.

By Order of the Board of Directors,

SHIRLEY A. REIGHARD
Secretary

Youngstown, Ohio
September 16, 1997

- ------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE
EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
PRE-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
- ------------------------------------------------------------------------------

PROXY STATEMENT

FFY Financial Corp.
724 Boardman-Poland Road
Youngstown, Ohio 44512

ANNUAL MEETING OF STOCKHOLDERS
October 15, 1997

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of FFY Financial Corp. (the
"Corporation") to be used at the Annual Meeting of Stockholders of the
Corporation (the "Meeting"), to be held at The Butler Institute of American
Art, 524 Wick Avenue, Youngstown, Ohio, on October 15, 1997, at 10:00 a.m.,
Youngstown, Ohio time and at all adjournments or postponements of the
Meeting. The accompanying Notice of Meeting and form of proxy and this
Proxy Statement are first being mailed to stockholders on or about September
16, 1997. Certain of the information provided herein relates to First
Federal Savings Bank of Youngstown ("First Federal" or the "Bank"), a wholly
owned subsidiary and the predecessor of the Corporation.

At the Meeting, the stockholders of the Corporation are being asked to
consider and vote upon the election of three directors of the Corporation
and ratification of KPMG Peat Marwick LLP as independent auditor.

Voting Rights and Proxy Information

All shares of common stock, par value $.01 per share, of the
Corporation (the "Common Stock") represented at the Meeting by properly
executed proxies received prior to or at the Meeting, and not revoked, will
be voted at the Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be voted for
election of the nominees for director named herein and for the ratification
of the appointment of the independent auditor. The Corporation does not know
of any matters, other than as described in the Notice of Meeting, that are to
come before the Meeting. If any other matters are properly presented at the
Meeting for action, the persons named in the enclosed form of proxy will have
the discretion to vote on such matters in accordance with their best judgment.

A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the
Secretary of the Corporation at or before the Meeting a written notice of
revocation bearing a later date than the proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the
Secretary of the Corporation at or before the Meeting; or (iii) attending
the Meeting and voting in person (although attendance at the Meeting will
not in and of itself constitute revocation of a proxy). Any written notice
revoking a proxy should be delivered to Shirley A. Reighard, Secretary, FFY
Financial Corp., 724 Boardman-Poland Road, Youngstown, Ohio 44512.

Vote Required for Approval of Proposals

Directors shall be elected by a plurality of the votes cast at the
Meeting. Approval of the proposal to ratify KPMG Peat Marwick LLP as
independent auditor requires the affirmative vote of the holders of a
majority of the shares actually voted at the Meeting on the matter. Proxies
marked to abstain with respect to a proposal will have the same effect as a
vote against the proposal. Broker non-votes have no effect on the vote.
One-third of the shares of the Common Stock present in person or represented
by proxy shall constitute a quorum for purposes of the Meeting.

Vote Securities and Principal Holders Thereof

Stockholders of record as of the close of business on August 29, 1997
will be entitled to one vote for each share then held. As of that date, the
Corporation had 4,117,407 shares of Common Stock issued and outstanding.

The following table sets forth information as of June 30, 1997
regarding the share ownership of (i) those persons or entities known by
management to beneficially own more than five percent of the Corporation's
Common Stock, (ii) the executive officers named below, and (iii) all
directors and officers of the Corporation and the Bank as a group.

<TABLE>
<CAPTION>
Shares
Beneficially Percent
Name and Address of Beneficial Owner Owned of Class
- ----------------------------------------------------------------------------

<S> <C> <C>
FFY Financial Corp. Employee Stock Ownership 510,384 12.3%
and 401(k) Plan(1)
724 Boardman-Poland Road
Youngstown, Ohio 44512

Named Officers
- --------------

Jeffrey L. Francis 83,362 2.0
President and Chief Executive Officer of the
Corporation and First Federal

Randy L. Shaffer 107,364 2.6
Vice President of the Corporation and First Federal

Therese Ann Liutkus 22,497 0.5
Treasurer and Chief Financial Officer of the
Corporation and First Federal

All directors and officers of the Corporation and 514,868 11.8
the Bank as a group (14 persons)(2)

<FN>
- --------------------
<F1> Includes 6,569, 5,846, 4,608, and 30,135 shares beneficially owned by
Messrs. Francis, Shaffer, Ms. Liutkus and all directors and officers
as a group, respectively, which are held in the Employee Stock
Ownership and 401(k) Plan (KSOP). These shares are also included in
each individual's/group's respective shares.

<F2> This amount includes shares held by certain members of the named
individuals' families, or held by trusts of which the named individual
is a trustee or substantial beneficiary. This amount also includes
46,715, 43,790, 12,260 and 207,136 shares subject to options granted
under the Corporation's Stock Option and Incentive Plan (the "Stock
Option Plan") to Messrs. Francis, Shaffer, Ms. Liutkus and all
directors and officers as a group, respectively.
</FN>
</TABLE>

I. ELECTION OF DIRECTORS

General

The Board of Directors of the Corporation (the "Board" or the "Board
of Directors") is comprised of ten directors and is divided into three
classes, each of which contains approximately one-third of the Board.
Approximately one-third of the directors are elected annually. Directors of
the Corporation are generally elected to serve for a three-year period or
until their respective successors are elected and qualified.

The following table sets forth certain information, as of June 30,
1997, regarding the composition of the Board, including their terms of
office. The Board of Directors acting as the nominating committee has
recommended and approved the nominees identified in the following table. It
is intended that the proxies solicited on behalf of the Board of Directors
(other than proxies in which the vote is withheld as to a nominee) will be
voted at the meeting FOR the election of the nominees identified below. If
a nominee is unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitute nominee as the Board of
Directors may recommend. At this time, the Board of Directors knows of no
reason why any nominee may be unable to serve, if elected. Except as
disclosed herein, there are no arrangements or understandings between the
nominee and any other person pursuant to which the nominee was selected.

<TABLE>
<CAPTION>
Shares of
Common
Stock
Position(s) Held in Director Term to Beneficially Percent
Name Age(1) the Corporation Since(2) Expire Owned(3) of Class(3)
- ---------------------------------------------------------------------------------------------------

<S> <C> <S> <C> <C> <C> <C>
NOMINEES
Marie Izzo Cartwright 44 Director 1991 2000 27,118 0.7%
Henry P. Nemenz 58 Director 1991 2000 41,198 1.0
W. Terry Patrick 47 Director 1992 2000 21,249 0.5

DIRECTORS CONTINUING IN OFFICE

Randy L. Shaffer 46 Vice President and 1996 1998 107,364 2.6
Director
Daniel J. Mirto 70 Director 1980 1998 11,081 0.3
A. Gary Bitonte, MD 49 Director 1990 1998 59,286 1.4
Jack R. Brownlee 69 Director 1980 1998 40,518 1.0
Jeffrey L. Francis 46 President, Chief 1992 1999 83,362 2.0
Executive Officer
and Director
Myron S. Roh 70 Chairman of the 1978 1999 41,818 1.0
Board
Ronald P. Volpe, Ph.D. 54 Director 1996 1999 4,315 0.1

<FN>
- --------------------
<F1> At June 30, 1997.

<F2> Includes service as a director of the Bank.

<F3> Includes shares held directly and shares which are held in retirement
accounts, or held by certain members of the named individuals'
families, or held by trusts of which the named individual is a trustee
or substantial beneficiary, with respect to which shares the
respective directors may be deemed to have sole or shared voting
and/or investment power. The amount also includes 4,945, 9,945,
9,945, 43,790, 9,945, 9,945, 9,945, 46,715, 6,630 and 3,315 shares
subject to options currently exercisable which were granted under the
Stock Option Plan to Directors Cartwright, Nemenz, Patrick, Shaffer,
Mirto, Bitonte, Brownlee, Francis, Roh and Volpe, respectively.
</FN>
</TABLE>

The business experience of each director of the Corporation is set
forth below. All directors have held their present position for at least
five years, unless otherwise indicated.

Marie Izzo Cartwright - Ms. Cartwright has served as vice president of
corporate communications and marketing for Glimcher Properties Limited
Partnership since October, 1996. Ms. Cartwright formerly served as vice
president of corporate communications for DeBartolo Properties Management,
Inc. ("DeBartolo"). Ms. Cartwright, who joined DeBartolo in 1985 as
director of public relations, was promoted to assistant vice president in
1989 and elevated to vice president in June 1994. An honors graduate of
Kent State University with a BA degree in journalism, Ms. Cartwright has
over 20 years experience in both corporate and agency public relations,
marketing and advertising.

Henry P. Nemenz - Mr. Nemenz has been President of H.P. Nemenz Food
Stores since 1976, which owns and operates retail grocery stores in the
Youngstown, Ohio area. Since 1995, Mr. Nemenz has also been the President
of Food Store Management which operates 14 Sav-A-Lot retail grocery stores
in Mahoning, Columbiana, Jefferson, Trumbull and Ashtabula counties in
northeastern Ohio.

W. Terry Patrick - Mr. Patrick has been a partner in the law firm of
Friedman & Rummell, L.P.A. of Youngstown, Ohio since 1980.

Randy L. Shaffer - Mr. Shaffer is Vice President of the Corporation
and the Bank, responsible for coordinating the activities of the lending
departments and development of lending policies and procedures. Mr. Shaffer
has served in various capacities since joining the Bank in 1973 and has
served in his current position since 1986. He earned a BA degree in
economics from Hiram College, served as a Director of the Youngstown Board
of Realtors, and is a member of the Home Builders Association of Mahoning
Valley and the Mortgage Bankers of Northeastern Ohio.

Daniel J. Mirto - Mr. Mirto currently serves as Chairman of the Board
and CEO of The Rhiel Supply Company, a distributor of janitor supplies,
paper products, swimming pools and swimming pool supplies. He has been
associated with The Rhiel Supply Company for the past 41 years. For the
past 13 years, Mr. Mirto has also been President of the American Cleaning
Equipment Company, Cleveland, Ohio, a distributor of janitor supplies and
paper products. He is also a Director of the Serex Corporation, Youngstown,
Ohio, which provides retail food vending services.

A. Gary Bitonte, MD - Dr. Bitonte is a urologic surgeon and has been
in private practice for the past 19 years. Dr. Bitonte received his BS and
MD degrees from Ohio State University. He is an assistant professor of
urology at the Northeastern Ohio Universities College of Medicine and
associate professor of urology at the Ohio University College of Osteopathic
Medicine. Dr. Bitonte is the Director of the Urologic and Impotence Center
located in Youngstown, Ohio.

Jack R. Brownlee - Mr. Brownlee is the former owner of Brownlee
Pontiac, Inc., a Youngstown-based automobile dealership. Mr. Brownlee owned
and operated Brownlee Pontiac for 28 years, and has served in various
capacities for national, state and local trade associations as well as
various community service organizations.

Jeffrey L. Francis - Mr. Francis is President and Chief Executive
Officer of the Corporation and the Bank. He began his career with the Bank
in 1973 and has served in his current capacity since March 1996. Mr.
Francis was named Executive Vice President and Treasurer of the Corporation
and Executive Vice President and Chief Operating Officer of the Bank in
October 1995. Prior to his most recent positions, he was Vice President and
Treasurer of the Corporation and the Bank in which capacities he was
responsible for managing the Bank's securities portfolio and supervising its
data processing, accounting and savings departments. Mr. Francis received a
BBA degree from Kent State University and an MBA from Youngstown State
University.

Myron S. Roh - Mr. Roh has been President and Treasurer of The Scholl-
Choffin Co., a management, private investment consulting firm, since 1985.
Formerly, Mr. Roh was Secretary-Treasurer for 22 years of Scholl-Choffin
Co., a mechanical contracting firm and The Scholl-Choffin Sprinkler Corp.

Ronald P. Volpe, Ph.D. - Dr. Volpe has been a professor of finance at
the Williamson College of Business Administration at Youngstown State
University since 1975. Dr. Volpe received his BSBA degree from Youngstown
State University, MBA from Central Michigan University and Ph.D. from the
University of Pittsburgh. Prior to his career in higher education, he was
employed as a member of the accounting and finance staff of The Ford Motor
Company in Dearborn, Michigan.

Meetings and Committees of the Board of Directors

Meetings and Committees of the Corporation. The Board of Directors
meets quarterly and may have additional special meetings upon the written
request of the President or at least three directors. The Board of
Directors met 11 times during the year ended June 30, 1997. During fiscal
year 1997, no incumbent director of the Corporation attended fewer than 75%
of the aggregate total number of meetings of the Board and committees on
which he or she served. The Board of Directors of the Corporation has
standing Stock Option, Audit and Executive Committees.

During fiscal year 1997, the members of the Corporation's Stock Option
Committee were Directors Mirto (chairman), Brownlee and Nemenz. The Stock
Option Committee is responsible for administering the Corporation's Stock
Option Plan. The Stock Option Committee met one time during fiscal year
1997.

The Audit Committee is responsible for selecting the Corporation's
independent auditors and meeting with the independent auditors to outline
the scope and review the results of the annual audit. The Audit Committee
also meets with the Corporation's internal audit staff on a periodic basis.
During fiscal year 1997, the members of this committee were Directors Roh
(Chairman), Cartwright, Nemenz and Volpe. The Audit Committee met four
times during fiscal year 1997.

During fiscal year 1997, the members of the Executive Committee were
Directors Francis (Chairman), Brownlee, Mirto, Roh, Shaffer and Patrick. To
the extent authorized by the Board of Directors and by the Bylaws, this
committee exercises all of the authority of the Board of Directors between
Board meetings. The Executive Committee did not meet during fiscal 1997.

The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. While the Board of Directors
of the Corporation will consider nominees recommended by stockholders, the
Board has not actively solicited such nominations. Pursuant to the
Corporation's Bylaws, nominations by stockholders generally must be
delivered in writing to the Secretary of the Corporation at least 30 days
prior to the date of the Meeting. The Board of Directors met one time
during fiscal 1997 in its capacity as a nominating committee.

Meetings and Committees of the Bank. The Bank's Board of Directors
meets monthly and may hold additional special meetings upon the written
request of the President or at least three directors. The Board of
Directors met 13 times during the year ended June 30, 1997. During fiscal
year 1997, no incumbent director of the Bank attended fewer than 75% of the
aggregate total number of meetings of the Board and committees on which he
or she served. The Bank has standing Executive, Audit and Compensation
Committees. The Bank also has other committees which meet as needed to
review various other functions of the Bank.

The Bank's Executive Committee exercises the powers of the full Board
of Directors between Board Meetings, except that this committee does not
have the authority of the Board to amend the charter or bylaws, adopt a plan
of merger, consolidation, dissolution, or provide for the disposition of all
or substantially all of the property and assets of the Bank. During fiscal
year 1997, the Executive Committee was composed of Directors Francis
(Chairman), Brownlee, Mirto, Roh, Patrick and Shaffer. The Executive
Committee met 15 times during the fiscal year ended June 30, 1997.

The Audit Committee is responsible for selecting the Bank's
independent auditors and meeting with the independent auditors to outline
the scope and review the results of the annual audit. The Audit Committee
also meets with the Bank's internal audit staff on a periodic basis. During
fiscal year 1997, the members of this committee were Directors Roh
(Chairman), Cartwright, Nemenz and Volpe. This Committee held five
meetings during fiscal year 1997.

The Bank's Compensation Committee recommends employee compensation,
benefits and personnel policies to the Board of Directors, as well as
salaries and bonuses concerning executive officers. The members of this
committee during fiscal year 1997 were Directors Patrick (Chairman),
Bitonte, Brownlee, Mirto and Roh. The Compensation Committee held four
meetings during the fiscal year ended June 30, 1997.

Director Compensation. Each director of the Corporation is paid a fee
of $50 per Board meeting attended. Each director of the Bank is paid a fee
of $1,250 per quarter plus $350 per Board meeting attended. Each non-
employee member of a committee of the Bank's Board of Directors is paid $150
per committee meeting attended, and the Chairman of each committee of the
Bank's Board of Directors receives $250 per committee meeting attended.
Bank directors who are employed by the Bank receive no fees for attending
committee meetings.

During fiscal 1997, Director Volpe was granted an option to purchase
9,945 shares of Common Stock at an exercise price of $24.00 per share. One-
third, or 3,315 of these shares vested April 16, 1997, another 3,315 shares
will vest on April 16, 1998 and the remaining 3,315 shares will become
vested on April 16, 1999.

Executive Compensation

The following table sets forth information concerning the compensation
for services in all capacities to the Corporation for the years ended June
30, 1997, 1996 and 1995 of those persons who were (i) the Corporation's
Chief Executive Officer at or any time during the year ended June 30, 1997
and (ii) the other executive officers of the Corporation and the Bank at
June 30, 1997 who earned in excess of $100,000 (the "named executives").

- -------------------------------------------------------------------------------
Summary Compensation Table
- --------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
Annual Compensation Awards
- ------------------------------------------------------------------------------------------------------------
Other Annual Restricted Stock Options/ All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($)(1) Awards ($) SARs(#) Compensation($)(2)
- --------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
Jeffrey L. Francis 1997 $114,746 $44,391 $--- $--- $--- $55,621
President and Chief 1996 93,100 46,743 --- --- --- 37,929
Executive Officer 1995 89,000 32,817 --- --- --- 30,903
- --------------------------------------------------------------------------------------------------------------------------------
Randy L. Shaffer 1997 $ 94,955 $22,688 $--- $--- $--- $46,101
Vice President 1996 79,925 29,682 --- --- --- 34,913
1995 75,800 31,729 --- --- --- 28,443
- --------------------------------------------------------------------------------------------------------------------------------
Therese Ann Liutkus 1997 $ 88,681 $17,271 $--- $--- $--- $33,225
Treasurer and Chief Financial 1996 79,839 17,405 --- --- --- 26,315
Officer 1995 71,574 6,525 --- --- --- 20,111
- --------------------------------------------------------------------------------------------------------------------------------

<FN>
- --------------------
<F1> Does not include perquisites which did not exceed the lesser of $50,000
or 10% of the named individuals' salary and bonus.

<F2> The 1997 amounts represent contributions from the Corporation's KSOP,
the present value payout from the termination of the Supplemental
Executive Retirement Plan ("SERP") and term life insurance premiums.
These amounts respectively include $47,445, $7,313 and $863 paid to
Mr. Francis; $38,488, $7,009 and $604 paid to Mr. Shaffer; and
$33,225, $-0- and $-0- paid to Ms. Liutkus. The 1996 and 1995 amounts
represent contributions made from the Corporation's Employee Stock
Ownership Plan.
</FN>
</TABLE>

The table below provides information as to options exercised by each
of the named executives for the fiscal year ended June 30, 1997 and the
value of the options held by such executives at year-end measured in terms
of the $26.00 closing price of the Corporation's Common Stock on June 30,
1997.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES

- --------------------------------------------------------------------------------------------------------------------
Value of Unexercised In-the-
Number of Unexercised Money Options/SARs at
Options/SARs at June 30, 1997 June 30, 1997(1)
- --------------------------------------------------------------------------------------------------------------------
Shares
Acquired on Value Exercisable Unexercisable Exercisable Unexercisable
Name Exercise (#) Realized ($) (#) (#) ($) ($)
- --------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Jeffrey L. Francis 3,825 $59,288 46,715 --- $747,440 ---
Randy L. Shaffer 4,750 73,625 43,790 --- 700,640 ---
Therese Ann Liutkus 1,000 15,219 12,260 --- 196,160 ---
- --------------------------------------------------------------------------------------------------------------------

<FN>
- --------------------
<F1> The difference between the aggregate option exercise price and the fair
market value of the underlying shares at June 30, 1997.
</FN>
</TABLE>

All options for the three executives named above were granted as of
the date of the Bank's conversion to stock form (June 28, 1993) and expire
10 years from the date of grant. The exercise price for options was set at
the market price on the date of grant ($10.00).

Employment Agreements. The Bank has existing employment agreements
with Messrs. Francis and Shaffer. The employment agreements are designed to
assist the Bank in maintaining a stable and competent management team. The
continued success of the Bank depends to a significant degree on the skills
and competence of its officers. These agreements were filed with, and
approved by, the Office of Thrift Supervision (the OTS) as part of the
application of the Corporation for approval to become a savings and loan
holding company. The employment agreements provide for annual base salary
and an initial term of three years. The agreements provide for extensions
of one year, in addition to the then-remaining term under the agreement, on
each anniversary of the effective date of the agreements (June 28, 1993)
subject to a formal performance evaluation performed by disinterested
members of the Board of Directors of the Bank. The agreements were extended
for one year terms effective August 19, 1997. The agreements provide for
termination upon the employee's death, for cause or upon certain events
specified by OTS regulations. The employment agreements are also terminable
by the employee upon 90 days notice to the Bank.

The employment agreements provide for payment to the employee of his
salary for the remainder of the term of the agreement, plus up to 299% of
the employee's base compensation, in the event there is a "change in
control" of the Bank where employment terminates involuntarily in connection
with such change in control or within twelve months thereafter. This
termination payment is subject to reduction by the amount of all other
compensation to the employee deemed for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"), to be contingent on a "change in
control," and may not exceed three times the employee's average annual
compensation over the most recent five year period or be non-deductible by
the Bank for federal income tax purposes. For the purposes of the
employment agreements, a "change in control" is defined as any event which
would require the filing of an application for acquisition of control or
notice of change in control pursuant to 12 C.F.R. Sections 574.3 or 574.4.
Such events would generally be triggered prior to the acquisition or control
of 10% of the Common Stock. The agreements also provide for participation
in an equitable manner in employee benefits applicable to executive
personnel.

Based on their current salaries, if Messrs. Francis and Shaffer's
employment had been terminated as of June 30, 1997, under circumstances
entitling them to severance pay as described above, they would have been
entitled to receive lump sum cash payments of approximately $415,000 and
$339,000, respectively.

Report on Executive Compensation

The Committee. The responsibility of compensation matters for the
Corporation rests with the Compensation Committee of the Board of Directors
(the "Compensation Committee"). The members of the Compensation Committee
are independent directors of the Corporation and the Bank. Mr. Francis
attends committee meetings to present recommendations and to provide
information. However, he does not participate in any deliberations
regarding his own compensation. The Compensation Committee met four times
during the year ended June 30, 1997. The most significant issues addressed
each year by the Compensation Committee are: 1) approval of salary
adjustments for officers of the Corporation and Bank and recommendation to
the full Board of a total wage and salary budget prior to each calendar
year; 2) approval of payments under the Bank's bonus plans; and 3)
completion of evaluations of the performance of executive officers in
accordance with the provisions of employment contracts.

Salary Adjustments. Mr. Francis was named President and Chief
Executive Officer of the Corporation and the Bank on March 7, 1996.
Effective January 1, 1996 his base salary was increased from $7,000 per
month to $7,400 per month, with another increase in salary effective
September 1, 1996 to $8,450 per month. Effective January 1, 1997 the
quarterly bonus plan was terminated (see Bonus below) and the salaries of
all full-time employees, including that of Mr. Francis, were increased by
13.5%. This adjustment brought Mr. Francis' salary to $9,950 per month,
where it remained until the end of the fiscal year. Discussions of annual
salary adjustments for other executives were held in December 1996 for
calendar year 1997. With respect to determining Mr. Francis's compensation,
the Compensation Committee considered the following: (i) salary information
for the chief executive officers of comparable institutions gathered from
local, regional and national salary surveys; (ii) information from proxy
statements of publicly traded banks and thrifts; (iii) the financial
performance of the Bank during the preceding year as measured by return on
assets, loan losses, total general and administrative expenses and net
income, with regard to both the absolute level of such measures and as
compared to peer institutions, including similar publicly traded thrift
holding companies; (iv) regional and national statistics, as well as any
regulatory examination comments received during the preceding year; and (v)
the Bank's progress toward completing a number of long-term initiatives, as
monitored by the Board of Directors. The Bank's senior executives were also
reviewed based on the same criteria. Excluding the adjustment in base
salary to reflect the termination of the Bank's quarterly bonus plan, the
percentage increase in base salary for the Bank's five highest paid
executives (except for Mr. Francis who had been previously considered) at
January 1, 1997 ranged from 0% to 5.94%.

Bonus. The Bank has a long history of paying annual bonuses based on
annual net income. The Compensation Committee believes that these payments
more closely tie employee compensation to the Corporation's annual
performance and act as an incentive to management to work toward consistent
and increasing net income. Each of the Corporation's executives, as well as
the employees of the Bank, were eligible to participate in the Bank's
quarterly bonus plan prior to the termination of that plan effective January
1, 1997. All full-time employees received a salary increase of 13.5% upon
termination of the plan. The plan was terminated because bonus funds were
distributed to all full-time employees on the basis of salary, a formula
which did not adequately reward individual performance. A discretionary
bonus, distributed annually following the completion of each fiscal year, is
awarded to those individuals who, in the opinion of the Compensation
Committee and the Board of Directors, most contributed to the success of the
Bank during the year. For the year ended June 30, 1997, select executives
of the Corporation (among others) received payments under the Bank's
discretionary bonus plan. Mr. Francis' payments under both bonus plans
totaled $44,391, a decrease of $2,352 compared to fiscal 1996. This
decrease was attributable to the mid-year termination of the Bank's
quarterly bonus plan. The Compensation Committee continues to evaluate the
Corporation's compensation arrangements to consider return on equity,
earnings per share growth and individual performance.

Performance Evaluations. As noted above, during each year the
Compensation Committee completes performance evaluations of the executive
officers of the Corporation. Each executive officer was evaluated based on
experience, knowledge and his or her vision of the Corporation's future.
The evaluation process included individual interviews with the Compensation
Committee and consultation with other outside directors. Among other items,
the Compensation Committee considered Corporation performance statistics as
objective measures of performance, as well as discussion of progress toward
subjective goals established the previous year. The committee prepared and
presented a written report of each evaluation, which was reviewed by the
entire Board of Directors in August, 1997.

Stock Options/Restricted Stock. During 1993, the stockholders of the
Corporation ratified the Corporation's Stock Option and Recognition and
Retention Plans. The Compensation Committee believes that such equity-based
compensation arrangements provide a strong incentive to focus on the long
term appreciation of the Corporation's stock price, thereby matching the
interests of the company executives with those of stockholders. Awards
granted in fiscal 1993 to executive officers were based on an analysis of
awards granted in other similar mutual to stock conversions. During the
fiscal year ended June 30, 1997 no grants were made to executive officers
under the Company's Stock Option Plan or Recognition and Retention Plan.

The foregoing report on executive compensation was furnished by the
Compensation Committee of the Board of Directors:

W. Terry Patrick, Chairman A. Gary Bitonte Jack R. Brownlee
Daniel J. Mirto Myron S. Roh

Pension Plan. The Corporation, through the Bank, maintained a
qualified defined benefit pension plan (the "Pension Plan") for all
employees that were 20.5 years of age or older and had completed at least
six months of eligible service. On November 15, 1996, the Board of
Directors approved the termination of the Pension Plan due to significantly
high retirement costs. Upon termination, all participants in the Pension
Plan became fully vested. The plan assets were not distributed as of June
30, 1997 because the Corporation was still awaiting Internal Revenue Service
(IRS) approval of the termination. The Corporation subsequently received a
favorable determination letter from the IRS dated July 25, 1997. Management
anticipates that Pension Plan assets will be distributed to participants
within three months of the date of the determination letter. All plan
assets through the date of distribution will be allocated to the
participants and none will be retained by the Corporation.

Benefit payment options for distribution available to participants are
(i) monthly, based on normal retirement age or early retirement age,
dependent upon certain qualifications; (ii) a single lump sum, including
direct rollovers to an IRA or qualified pension plan; or (iii) certain types
of annuities. As of June 30, 1997, the estimated monthly benefits at normal
retirement age available to Messrs. Francis and Shaffer and Ms. Liutkus were
$1,580, $1,376 and $363, respectively, whereas the single lump sums were
$81,482, $70,500 and $11,736, respectively. These estimates may change
depending upon final plan asset values at the date of distribution.

Supplemental Executive Retirement Plan. Effective July 1992, the Bank
adopted a supplemental executive retirement plan ("SERP" or "Plan") for the
benefit of key employees, including Messrs. Francis and Shaffer, as a
supplement to the Pension Plan. On September 10, 1996, the Board of
Directors terminated the SERP and on November 15, 1996, a lump sum
distribution was made to former participants of the SERP. See the Summary
Compensation Table above for the amounts distributed to Messrs. Francis and
Shaffer.

Stockholder Return Performance Presentation

The line graph below compares the cumulative total stockholder return
on the Corporation's common stock to the cumulative total return of the
NASDAQ Stock Market Index and the NASDAQ Banking Index for the period June
30, 1993 through June 30, 1997. The graph assumes that $100 was invested on
June 30, 1993 and that all dividends were reinvested. The Corporation
became a publicly traded company on June 28, 1993.

<TABLE>
<CAPTION>
FFYF NASDAQ (US) NASDAQ BANK
---- ----------- -----------

Certain Transactions. The Bank, like many financial institutions, has
followed a policy of granting various types of loans to officers, directors
and employees. All loans by the Bank to its directors and executive
officers are subject to OTS regulations restricting loans and other
transactions with affiliated persons of the Bank. Since August 9, 1989,
federal law has required that all such loans be made on terms and conditions
comparable to those for similar transactions with non-affiliates (including
interest rates and loan fees).

All transactions between the Corporation or the Bank and its officers,
directors, holders of 10% or more of the shares of any class of its common
stock and affiliates thereof, other than those originated prior to August 9,
1989 or at a time when the borrower was not an executive officer or
director, were made in the ordinary course of business with substantially
the same terms, including interest rates and collateral as those prevailing
at the time for comparable transactions with other persons, do not involve
more than the normal risk of collectibility or present other unfavorable
features and are approved by a majority of disinterested directors of the
Corporation, if any.

The following table sets forth certain information as to loans made by
the Bank to any of its directors or executive officers on terms more
favorable than for similar loans to public borrowers and whose aggregate
indebtedness to First Federal exceeded $60,000 at any time since June 30,
1996. Each of these loans is a residential first mortgage loan secured by
the borrower's principal place of residence.

<TABLE>
<CAPTION>
Largest
Amount Interest
Outstanding Balance as Rate as of
Since June 30, of June 30, June 30,
Name and Position Date of Loan Type of Loan 1996 1997 1997
- ----------------- ------------ -------------- -------------- ----------- ---------

<S> <C> <C> <C> <C> <C>
Mark S. Makoski 11/27/92 Residential(1) $ 62,535 $ 57,317 6.25%
Vice President

David S. Hinkle 11/25/94 Residential(2) 131,714 130,015 6.95%
Vice President

<FN>
- --------------------
<F1> This loan was made to Mr. Makoski when he was a non-executive officer
of the Bank entitled to receive a 1.0% reduction on the interest rate
as well as reduced closing costs consistent with the Bank's policy and
Federal law.

<F2> This loan was made to an immediate family member of Mr. Hinkle who was
also a non-executive officer employee of the Bank entitled to receive
a 1.0% reduction on the interest rate as well as reduced closing costs
consistent with the Bank's policy and Federal law.
</FN>
</TABLE>

II. RATIFICATION OF THE APPOINTMENT OF AUDITORS

The Board of Directors has appointed KPMG Peat Marwick LLP as the
Corporation's auditors for the 1998 fiscal year, subject to the ratification
of such appointment by the Corporation's stockholders at the Meeting. KPMG
Peat Marwick LLP has been the Corporation's auditors since February, 1996.
Representatives of KPMG Peat Marwick LLP are expected to attend the Meeting
to respond to appropriate questions and to make a statement if they so
desire.

On February 13, 1996, Hill, Barth & King, Inc. was dismissed and KPMG
Peat Marwick LLP was engaged as the Corporation's independent accountants.
Hill, Barth & King, Inc.'s accountant's report on the financial statements
for each of the years ended June 30, 1994 and June 30, 1995 was unqualified
and did not contain an adverse opinion or a disclaimer opinion, or
qualification or modification as to uncertainty, audit scope or accounting
principles. The decision to dismiss Hill, Barth & King, Inc. was approved
by the Board of Directors upon recommendation by the Audit Committee of the
Board of Directors. During the fiscal years ended June 30, 1994 and June
30, 1995 and the subsequent interim period from July 1, 1995 through
February 13, 1996, there were no disagreements with Hill, Barth & King, Inc.
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope of procedure which, if not resolved to the
satisfaction of Hill, Barth & King, Inc., would have caused it to make
reference to the subject matter of the disagreements in connection with its
report. Additionally, there were no disagreements with Hill, Barth & King,
Inc. regarding any of these matters, either those resolved to their
satisfaction or those not resolved to their satisfaction. None of the
events listed in Item 304(a)(1)(v)(A) through (D) of Regulation S-K of the
Securities and Exchange Commission ("Regulation S-K") occurred during the
fiscal years ended June 30, 1994 or June 30, 1995 or the subsequent interim
period from July 1, 1995 through February 13, 1996. During the fiscal years
ended June 30, 1994 and June 30, 1995 and the subsequent interim period from
July 1, 1995 through February 13, 1996, there was no consultation with KPMG
Peat Marwick LLP regarding: (1) application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on FFY Financial Corp.'s financial
statements; or (2) any matter that was the subject of a disagreement (as
defined in paragraph 304(a)(1)(iv) of Regulation S-K) or a reportable event
(as defined in paragraph 304(a)(1)(v) of Regulation S-K).

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
CORPORATION'S AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 1998.

SHAREHOLDER PROPOSALS

In order to be eligible for inclusion in the Corporation's proxy
materials for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the
Corporation's executive offices, 724 Boardman-Poland Road, Youngstown, Ohio,
no later than May 19, 1998. Any such proposals shall be subject to the
requirements of the proxy rules adopted under the Securities Exchange Act of
1934.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more
than 10% of a registered class of the Corporation's equity securities, to
file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Corporation. Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish the Corporation
with copies of all Section 16(a) forms they file.

Based solely upon a review of the copies of such reports furnished to
the Corporation, or written representations that no other reports were
required, the Corporations believes that all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with during the fiscal year ended June 30,
1997, except for the inadvertent omission of the acquisition of shares
through the dividend reinvestment plan by Directors Bitonte, Patrick and
Shaffer, which omissions have been subsequently corrected.

OTHER MATTERS

The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.

The cost of solicitation of proxies will be borne by the Corporation.
The Corporation will reimburse brokerage firms and other custodians,
nominees and fiduciaries for reasonable expenses incurred by them in sending
proxy materials to the beneficial owners of Corporation Common Stock. In
addition to solicitation by mail, directors and officers of the Corporation
and regular employees of the Bank may solicit proxies personally or by
telegraph or telephone, without additional compensation.

By Order of the Board of Directors,

Shirley A. Reighard
Secretary

Youngstown, Ohio
September 16, 1997

REVOCABLE PROXY
FFY FINANCIAL CORP.
----------------------------------
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 15, 1997
----------------------------------

The undersigned hereby appoints the Board of Directors of FFY
Financial Corp. (the "Company"), and its survivor, with full power of
substitution, to act as attorneys and proxies for the undersigned to vote
all shares of common stock of the Company which the undersigned is entitled
to vote at the Annual Meeting of Stockholders (the "Meeting"), to be held on
Wednesday, October 15, 1997 at The Butler Institute of American Art, located
at 524 Wick Avenue, Youngstown, Ohio, at 10:00 a.m., Youngstown, Ohio time,
and at any and all adjournments thereof, as follows:

I. The election as directors of all nominees listed below:
FOR WITHHELD
[ ] [ ]

INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:

Marie Izzo Cartwright Henry P. Nemenz W. Terry Patrick

II. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for the fiscal year ending
June 30, 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]

In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment
thereof.

The Board of Directors recommends a vote "FOR" the listed proposals.

- -----------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- -----------------------------------------------------------------------------

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Should the undersigned be present and elect to vote at the Meeting or
at any adjournment thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this
Proxy, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect.

The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of a Notice of the Meeting, a Proxy Statement and
the Company's Annual Report to Stockholders for the fiscal year ended
June 30, 1997.

_________________________________________________ , 1997

________________________________________________________
Print Name of Stockholder Print Name of Stockholder

________________________________________________________
Signature of Stockholder Signature of Stockholder

Please sign exactly as your name appears above on this
card. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.

PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.