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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

FORT THOMAS FINANCIAL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies: .......

(2) Aggregate number of securities to which transaction applies: ..........

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............

(4) Proposed maximum aggregate value of transaction: ......................

(5) Total fee paid: .......................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ...............................................

(2) Form, Schedule or Registration Statement No.: .........................

(3) Filing Party: .........................................................

(4) Date Filed: ...........................................................

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2

FORT THOMAS FINANCIAL CORPORATION
25 NORTH FORT THOMAS AVENUE
FORT THOMAS, KENTUCKY 41075
(606) 441-3302

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To
Be Held on January 26, 1998

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Fort Thomas Financial Corporation (the "Company") will be held at
the Comfort Inn Suites located at 420 Riverboat Row, Newport, Kentucky, on
Monday, January 26, 1998 at 9:00 a.m., Eastern Time, for the following purposes,
all of which are more completely set forth in the accompanying Proxy Statement:

(1) To elect five directors for terms of one year or until their
successors have been elected and qualified;

(2) To ratify the appointment of VonLehman & Company Inc. as the
Company's independent auditors for the fiscal year ending
September 30, 1998; and

(3) To transact such other business as may properly come before
the meeting or any adjournment thereof. Except with respect to
procedural matters incident to the conduct of the meeting,
management is not aware of any other such business.

Stockholders of record of the Company as of the close of business on
December 24, 1997 are entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof.

BY ORDER OF THE BOARD OF DIRECTORS

Larry N. Hatfield, President and
Chief Executive Officer

Fort Thomas, Kentucky
December 30, 1997

- --------------------------------------------------------------------------------

YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING
OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.

- --------------------------------------------------------------------------------

FORT THOMAS FINANCIAL CORPORATION

-----------

PROXY STATEMENT

-----------

ANNUAL MEETING OF STOCKHOLDERS

JANUARY 26, 1998

This Proxy Statement is furnished to holders of common stock, par value
$.01 per share ("Common Stock"), of Fort Thomas Financial Corporation (the
"Company"), which acquired all of the common stock of Fort Thomas Savings Bank,
FSB (the "Savings Bank") issued in connection with the conversion of the Savings
Bank from a federally chartered mutual savings and loan association to a
federally chartered stock savings bank in June 1995 (the "Conversion").

Proxies are being solicited on behalf of the Board of Directors of the
Company to be used at the Annual Meeting of Stockholders ("Annual Meeting") to
be held at the Comfort Inn Suites located at 420 Riverboat Row, Newport,
Kentucky, on Monday, January 26, 1998 at 9:00 a.m., Eastern Time, and at any
adjournment thereof for the purposes set forth in the Notice of Annual Meeting
of Stockholders. This Proxy Statement is first being mailed to stockholders on
or about December 30, 1997.

Each proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. IF NO CONTRARY INSTRUCTIONS ARE GIVEN, EACH
PROXY RECEIVED WILL BE VOTED FOR EACH OF THE MATTERS DESCRIBED HEREIN AND, UPON
THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING,
IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS APPOINTED AS PROXIES.

Any stockholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (J. Michael Lonnemann, Vice President and Secretary, Fort Thomas
Financial Corporation, 25 North Fort Thomas Avenue, Fort Thomas, Kentucky
41075); (ii) submitting a duly executed proxy bearing a later date; or (iii)
appearing at the Annual Meeting and giving the Secretary notice of his or her
intention to vote in person. Proxies solicited hereby may be exercised only at
the Annual Meeting and any adjournment thereof and will not be used for any
other meeting.

VOTING AND REQUIRED VOTES

Only stockholders of record at the close of business on December 24, 1997
("Voting Record Date") will be entitled to vote at the Annual Meeting. On the
Voting Record Date, there were 1,474,466 shares of Common Stock issued and
outstanding, and the Company had no other class of equity securities
outstanding. Each share of Common Stock outstanding is entitled to one vote at
the Annual Meeting on each matter properly presented at the Annual Meeting.

Directors are elected by a plurality of the votes cast with a quorum
present. A quorum consists of stockholders representing, either in person or by
proxy, a majority of the outstanding Common Stock entitled to vote at the
meeting. Abstentions are considered in determining the presence of a quorum and
will not affect the plurality vote required for the election of directors. The
affirmative vote of the holders of a majority of the total votes present in
person or by proxy is required to ratify the appointment of the independent
auditors. Under rules of the New York Stock Exchange, the proposal for
ratification of the auditors is considered a "discretionary" item upon which
brokerage firms may vote in their discretion on behalf of their clients if such
clients have not furnished voting instructions and for which there will not be
"broker non-votes."

INFORMATION WITH RESPECT TO NOMINEES FOR
DIRECTOR AND EXECUTIVE OFFICERS

ELECTION OF DIRECTORS

The Articles of Incorporation of the Company presently provide that the
Board of Directors shall consist of five members. As a result, all members shall
be elected for a one year term or until their successors are elected and
qualified. However, to the extent that the Board of Directors consists of six or
more members, the Articles of Incorporation of the Company provide that the
Board of Directors shall be divided into two or three classes as nearly equal in
number as possible provided no class shall consist of fewer than three members.
The members of each class would be elected for a term of two or three years,
respectively, or until their successors are elected and qualified with one class
of directors to be elected annually.

Stockholders of the Company are not permitted to cumulate their votes for
the election of directors. There are no arrangements or understandings between
the Company and any person pursuant to which such person has been elected a
director. No director or nominee for director is related to any other director,
nominee for director or executive officer of the Company by blood, marriage or
adoption except for Director Robert L. Grimm who is the uncle of Director J.
Steven McLane.

Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If any person named as a nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for any replacement nominee or nominees recommended by the Board of
Directors. At this time, the Board of Directors knows of no reason why any of
the nominees listed below may not be able to serve as a director if elected.
Ages are reflected as of December 24, 1997 and service as a director includes
service as a director of the Savings Bank.

Position with the Company and the
Savings Bank and Principal Occupation Director
Name Age During the Past Five Years Since
- ----------------------------- ---------- ---------------------------------------------------- --------------

Larry N. Hatfield 57 Director; President and Chief Executive Officer 1975
of Company and the Savings Bank since 1994.
Prior thereto, Managing Officer and Executive
Vice President of the Savings
Bank from 1973 to 1994.

Robert L. Grimm 78 Chairman of the Board of the Company and 1952
Savings Bank since 1994. Prior thereto,
President of the Savings Bank from 1982 to
1994.

Harold A. Luersen 73 Director of the Company and the Savings Bank 1971
and Vice President of the Savings Bank;
Managing Partner of the law firm of Luersen &
Luersen, Fort Thomas, Kentucky.

Don J. Beckmeyer 53 Director; President of Beckmeyer Insurance 1989
Agency, Inc., Newport, Kentucky.

J. Steven McLane 48 Director; President of Disney-McLane, Inc., 1989
Cincinnati, Ohio, a
manufacturing representative
in the commercial plumbing
supply business.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ELECTION OF THE ABOVE
NOMINEES FOR DIRECTOR.

- 2 -

STOCKHOLDER NOMINATIONS

Article X.D of the Company's Articles of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder who
has complied with the notice provisions in that section. In order for a
stockholder of the Company to make any such nominations, he or she shall give
notice thereof in writing, delivered or mailed by first class mail to the
Secretary of the Company not less than thirty days nor more than sixty days
prior to any such meeting; provided, however, that if less than forty days'
notice of the meeting is given to stockholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the Company not later
than the close of the tenth day following the day which notice of the meeting
was mailed to stockholders. Each such notice given by a stockholder with respect
to nominations for the election of directors shall set forth (i) the name, age,
business address and, if known, residence address of each nominee, and (iii) the
number of shares of stock of the Company which are beneficially owned by each
such nominee. In addition, the stockholder making such nomination shall promptly
provide any other information reasonably requested by the Company.

COMMITTEES AND MEETINGS OF THE BOARD OF THE SAVINGS BANK AND COMPANY

The Board of Directors of the Company has not yet established any
committees. The Board of Directors of the Savings Bank meets on a weekly basis
and may have additional special meetings from time-to-time as needed. During the
fiscal year ended September 30, 1997, the Board of Directors of the Savings Bank
met 52 times and the Board of Directors of the Company met 13 times. No director
attended fewer than 75% of the total number of meetings or committee meetings of
the Board of Directors on which he served that were held during this period. As
described below, the Board of Directors of the Savings Bank has established an
Audit Committee, Executive Committee, Compensation Committee and Nomination
Committee.

AUDIT COMMITTEE. The Audit Committee, which consists of the entire Board
of Directors, reviews the records and affairs of the Savings Bank, engages the
Savings Bank's external auditors and reviews their reports. The Audit Committee
met once during fiscal 1997.

EXECUTIVE COMMITTEE. The Executive Committee is authorized to exercise
all the authority of the Board of Directors in the management of the Savings
Bank between Board of Directors meetings except as otherwise provided in the
Savings Bank's Bylaws. The Executive Committee, which consists of Messrs.
Luersen, Grimm and Beckmeyer, met once in fiscal 1997.

COMPENSATION COMMITTEE. The Compensation Committee, which consist of
Messrs. Luersen, Grimm and Beckmeyer, reviews the compensation and benefits
received by employees of the Savings Bank and met twice during fiscal 1997.

NOMINATION COMMITTEE. The Nomination Committee, which consists of the
entire Board of Directors, nominates the directors and officers of the Savings
Bank. The Nomination Committee met once during fiscal 1997.

- 3 -

EXECUTIVE OFFICER WHO IS NOT A DIRECTOR

The following table sets forth certain information with respect to the
only executive officer of the Company who is not a director. There are no
arrangements or understandings between the Company and such person pursuant to
which such person was elected an executive officer of the Company, and such
officer is not related to any director or officer of the Company by blood,
marriage or adoption.

Name Age(1) Principal Occupation During the Past Five Years
- ------------------------------ ------------ ---------------------------------------------------------------

J. Michael Lonnemann 39 Vice President of the Savings Bank and the Company since
1988 and 1994, respectively; Secretary of the Savings Bank
since 1990 and 1994, respectively.

- -----------------------------

<FN>
(1) As of December 24, 1997.

BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table includes, as of the Voting Record Date, certain
information as to the Common Stock beneficially owned by (i) the only person or
entity, including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended ("1934 Act"), who or which was known
to the Company to be the beneficial owner of more than 5% of the issued and
outstanding Common Stock, (ii) the directors of the Company, and (iii) all
directors and executive officers of the Company and the Savings Bank as a group.

Common Stock
Beneficially Owned as of
December 24, 1997(1)
---------------------------------------
Name of Beneficial Owner Amount %
- -------------------------------------------------------------------- ---------------------- --------------

Fort Thomas Financial Corporation 74,387(2) 5.0%
Employee Stock Ownership Plan Trust
25 North Fort Thomas Avenue
Fort Thomas, Kentucky 41075

Directors:
Larry N. Hatfield 41,219(3) 2.8%
Robert L. Grimm 13,555(4) *
Harold A. Luersen 23,555(5) 1.6%
Don J. Beckmeyer 13,111(6) *
J. Steven McLane 15,050(7) *

All directors and executive officers of the Company 143,751(2) 9.5%
and the Savings Bank as a group (6 persons)

(Footnotes on following page)

- 4 -

- -----------------

* Represents less than 1% of the outstanding Common Stock.

(1) For purposes of this table, pursuant to rules promulgated under the 1934
Act, an individual is considered to beneficially own shares of Common
Stock if he or she directly or indirectly has or shares (i) voting power,
which includes the power to vote or to direct the voting of the shares;
or (ii) investment power, which includes the power to dispose or direct
the disposition of the shares. Unless otherwise indicated, an individual
has sole voting power and sole investment power with respect to the
indicated shares. Shares which may be acquired by the exercise of stock
options which are exercisable within 60 days of the Voting Record Date
are deemed to be beneficially owned by the holder and are outstanding for
the purpose of computing the percentages of Common Stock beneficially
owned by the respective individual and group. The shares reflected as
beneficially owned by Messrs. Hatfield, Grimm, Luersen, Beckmeyer and
McLane include 15,738, 2,989, 2,989, 2,989 and 2,989 shares which are
exercisable within 60 days of the Voting Record Date pursuant to the
Company's stock option plans.

(2) The Fort Thomas Financial Corporation Employee Stock Ownership Plan Trust
("Trust") was established pursuant to the Fort Thomas Financial
Corporation Employee Stock Ownership Plan ("ESOP") by an agreement
between the Company and Messrs. Beckmeyer, Grimm and Luersen, who act as
trustees of the plan ("Trustees"). As of the Voting Record Date, the
Trust had allocated 51,515 shares to the accounts of participating
employees. Under the terms of the ESOP, the Trustees must vote all
allocated shares held in the ESOP in accordance with the instructions of
the participating employees, and allocated shares for which employees do
not give instructions will be voted in the same ratio on any matter as to
those shares for which instructions are given. Unallocated shares held in
the ESOP will be voted by the ESOP Trustees in accordance with their
fiduciary duties as trustees. The amount of Common Stock beneficially
owned by each individual trustee or all directors and executive officers
as a group does not include the shares held by the Trust.

(3) Includes 10,000 shares held jointly with Mr. Hatfield's spouse, with whom
voting and dispositive power is shared, 11,984 shares allocated to Mr.
Hatfield pursuant to the Company's ESOP and 350 shares held by his
spouse, which Mr. Hatfield may be deemed to beneficially own.

(4) Includes 5,000 shares held by Mr. Grimm's spouse, which Mr. Grimm may be
deemed to beneficially own. Excludes the shares held by the ESOP, of
which Mr. Grimm is one of three trustees.

(5) Includes 10,000 shares held jointly with Mr. Luersen's spouse, with whom
voting and dispositive power is shared, and 10,000 shares held by his
spouse, which Mr. Luersen may be deemed to beneficially own. Excludes the
shares held by the ESOP, of which Mr. Luersen is one of three trustees.

(6) Includes 5,250 shares held jointly with Mr. Beckmeyer's spouse, with whom
voting and dispositive power is shared, 1,153 shares held by his spouse's
IRA, and 2,000 shares held by a corporation as to which Mr. Beckmeyer
owns 100% of the outstanding stock. Excludes the shares held by the ESOP,
of which Mr.
Beckmeyer is one of three trustees.

(7) Includes 5,407 shares held by Mr. McLane's spouse, which Mr. McLane may
be deemed to beneficially own and 1,500 shares held in trust for Mr.
McLane's children for which he acts as trustee.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Act requires the Company's directors, officers
and any persons holding more than 10% of the Common Stock to report their
ownership of the Common Stock and any changes in that ownership

- 5 -

to the Securities and Exchange Commission ("Commission") and the National
Association of Securities Dealers, Inc. ("NASD") by specific dates. Officers,
directors and greater than 10% stockholders are required by regulation to
furnish the Company with copies of all Section 16(a) forms they file. The
Company knows of no person who owns 10% or more of the Common Stock. Based on
representations of its directors and officers and copies of the reports that
they have filed with the Commission and the NASD, the Company believes that all
of these filing requirements were satisfied by the Company's directors and
officers in the fiscal year ended September 30, 1997.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The Company has not yet paid separate compensation directly to its
officers. The following table sets forth a summary of certain information
concerning the compensation paid by the Savings Bank for services rendered in
all capacities during the indicated periods to the two executive officers of the
Company and the Savings Bank.

Annual Compensation Long-Term Compensation
---------------------------------------- --------------------------
Name and Fiscal Other Annual Stock Number of All Other
Principal Position Year Salary(1) Bonus Compensation(2) Grants(3) Options(4) Compensation(5)
- -------------------------- --------- ----------- -------- ---------------- ---------- ----------- -----------------

Larry N. Hatfield 1997 $144,738 $31,395 $4,178 $ -- -- $ 31,697
President and Chief 1996 133,500 26,130 4,010 194,207 39,344 133,980
Executive Officer 1995 128,711 28,080 6,046 -- -- --

J. Michael Lonnemann 1997 90,093 20,930 2,681 -- -- 22,142
Vice President and 1996 84,200 17,420 2,564 194,207 39,344 93,632
Secretary 1995 80,865 18,720 4,126 -- -- --

- ------------------------------

<FN>
(1) Includes directors' fees for Mr. Hatfield during each of the respective
fiscal years shown.

(2) Such amounts consist of a portion of the discretionary contributions
made by the Savings Bank to the Savings Bank's 401(k) Plan which were
allocated to the respective accounts of Messrs. Hatfield and Lonnemann
and matching contributions on behalf of Messrs. Hatfield and Lonnemann
pursuant to the Savings Bank's deferred compensation plan. Other annual
compensation does not include amounts attributable to other
miscellaneous benefits received by Messrs. Hatfield and Lonnemann,
including automobile expenses and the payment of civic club dues. The
costs to the Company of providing such benefits did not exceed 10% of
the total salary and bonus paid to or accrued for the benefit of such
individual executive officer in any of the fiscal years shown.

(3) Represents the grant of 15,738 shares of restricted Common Stock to
each of Messrs. Hatfield and Lonnemann pursuant to the Company's 1996
Management Recognition Plan for Officers during the year ended
September 30, 1997. The fair market value of such awarded shares was
$206,561 at September 30, 1996. Awarded shares become vested and
distributable over a five-year period at the rate of 20% per year,
commencing January 29, 1997, the first annual anniversary of the award
date. Award recipients are entitled to voting and other stockholder
rights (including dividends) as awarded shares become vested.

(4) Consists of awards granted pursuant to the Company's 1996 Key Employee
Stock Compensation Program which options vest and are exercisable over
a five year period at the rate of 20% per year commencing January 29,
1997, the first annual anniversary of the date of grant.

(5) Consists of amounts allocated during the year ended September 30, 1997
pursuant to the ESOP based on a price of $13.125 per share on the date
of allocation.

- 6 -

STOCK OPTIONS

The following table discloses the options exercised for the year ended
September 30, 1997, and held at year-end, by Messrs. Hatfield and Lonnemann.

Shares Acquired Value Number of Options at Value of Options at
Name On Exercise Realized September 30, 1997 September 30, 1997(1)
- --------------------- ----------------- ----------- ---------------------------- --------------------------

Exercisable Unexercisable Exercisable Unexercisable
------------ -------------- ----------- -------------

Larry N. Hatfield --- --- 7,869 31,475 $37,653 $150,608
J. Michael Lonnemann --- --- 7,869 31,475 37,653 150,608

- --------------------

<FN>
(1) Based on a per share market price of $13.125 at September 30, 1997.

No options were granted to either Mr. Hatfield or Mr. Lonnemann during
the year ended September 30, 1997.

DIRECTOR COMPENSATION

During the year ended September 30, 1997, each member of the Board of
Directors of the Savings Bank received an annual fee of $14,000. During fiscal
1997, each director of the Company received a fee of $1,800.

EMPLOYMENT AGREEMENTS

The Savings Bank and the Company (collectively the "Employers") entered
into employment agreements with Messrs. Hatfield and Lonnemann on June 27, 1995.
The Employers have agreed to employ Messrs. Hatfield and Lonnemann for a term of
three years in their current respective positions. The term of each employment
agreement shall be extended each year for a successive additional one-year
period upon approval of the Employers' Board of Directors, unless the officer
elects, not less than 30 days prior to the annual anniversary date, not to
extend the employment term.

- 7 -

The employment agreements are terminable with or without cause by the
Employers. The officer shall have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary termination
or termination by the Employers for cause, disability, retirement or death,
provided, however, that (i) in the event that the officer terminates his
employment because of failure of the Employers to comply with any material
provision of the employment agreement or the Employers change the officers'
title or duties or (ii) the employment agreement is terminated by the Employers
other than for cause, disability, retirement or death or by the officer as a
result of certain adverse actions which are taken with respect to the officer's
employment following a Change in Control of the Employers, as defined, Messrs.
Hatfield and Lonnemann would be entitled to a cash severance amount equal to
2.99 times their base salaries, and to continuation of benefits similar to those
they are receiving at the time of such termination for the remaining term of the
agreement or until the officers obtain full-time employment with another
employer.

A Change in Control is generally defined in the employment agreement to
include any change in control required to be reported under the federal
securities laws, as well as (i) the acquisition by any person of 25% or more of
the Company's outstanding voting securities and (ii) a change in a majority of
the directors of the Company during any two-year period without the approval of
at least two-thirds of the persons who were directors of the Company at the
beginning of such period.

Each employment agreement provides that in the event that any of the
payments to be made thereunder or otherwise upon termination of employment are
deemed to constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), then such
payments and benefits received thereunder shall be reduced, in the manner
determined by the employee, by the amount, if any, which is the minimum
necessary to result in no portion of the payments and benefits being
non-deductible by the Company for federal income tax purposes. Excess parachute
payments generally are payments in excess of three times the base amount, which
is defined to mean the recipient's average annual compensation from the employer
includable in the recipient's gross income during the most recent five taxable
years ending before the date on which a change in control of the employer
occurred. Recipients of excess parachute payments are subject to a 20% excise
tax on the amount by which such payments exceed the base amount, in addition to
regular income taxes, and payments in excess of the base amount are not
deductible by the employer as compensation expense for federal income tax
purposes.

Although the above-described employment agreements could increase the
cost of any acquisition of control of the Company, management of the Company
does not believe that the terms thereof would have a significant anti-takeover
effect.

EMPLOYEE STOCK OWNERSHIP PLAN

The Company has established the ESOP for employees of the Company and the
Savings Bank who have been credited with at least 1,000 hours of service during
a twelve month period and who have attained age 18 are eligible to participate
in the ESOP.

As part of the Conversion, the ESOP borrowed funds from the Company to
purchase 125,902 shares of Common Stock issued in the Conversion. The loan to
ESOP will be repaid principally from the Company's and the Savings Bank's
contributions to the ESOP over a period of 15 years, and the collateral for the
loan will be the Common Stock purchased by the ESOP. The interest rate for the
ESOP loan bears a fixed rate of 9.0%. The Company may, in any plan year, make
additional discretionary contributions for the benefit of plan participants in
either cash or shares of Common Stock, which may be acquired through the
purchase of outstanding shares in the market or from individual stockholders,
upon the original issuance of additional shares by the Company or upon the sale
of treasury shares by the Company. Such purchases, if made, would be funded
through additional borrowings by the ESOP or additional contributions from the
Company. The timing, amount and manner of future contributions to the ESOP will
be affected by various factors, including prevailing regulatory policies, the
requirements of applicable laws and regulations and market conditions.

- 8 -

Shares purchased by the ESOP with the proceeds of the loan will be held
in a suspense account and released on a pro rata basis as debt service payments
are made. Discretionary contributions to the ESOP and shares released from the
suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be reallocated among remaining participating
employees and may reduce any amount the Company might otherwise have contributed
to the ESOP. Participants will vest in their right to receive their account
balances within the ESOP at the rate of 20% per year starting with the
completion of three years of service and will be 100% vested upon the completion
of five years of service. Credit is given for years of service with the Savings
Bank prior to adoption of the ESOP. Benefits may be payable upon retirement or
separation from service. The Company's contributions to the ESOP are not fixed,
so benefits payable under the ESOP cannot be estimated.

Messrs. Beckmeyer, Grimm and Luersen serve as trustees of the ESOP. Under
the ESOP, the trustees must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees, and allocated
shares for which employees do not give instructions will be voted in the same
ratio on any matter as those shares for which instructions are given. Initially,
to the extent that there are only unallocated shares, such shares will be voted
by the ESOP Trustees in accordance with their fiduciary duties as trustees.

TRANSACTIONS WITH CERTAIN RELATED PERSONS

The Savings Bank's loan policy to its directors and officers provides
that all loans made by the Savings Bank to its directors and officers are made
in the ordinary course of business, are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features. As of
September 30, 1997 no director or executive officer had aggregate loan balances
in excess of $60,000. At such date, all loans to directors and officers of the
Savings Bank amounted to approximately $35,300.

Director Luersen serves as the managing partner at the law firm of
Luersen & Luersen, Fort Thomas, Kentucky. During fiscal 1997, Luersen & Luersen
performed loan closing and foreclosure legal services for the Savings Bank which
amounted to approximately $167,000 or more than 5% of the law firm's gross
revenues. It is currently anticipated that the Savings Bank will continue to
retain Luersen & Luersen to perform such services in the future.

RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors of the Company has appointed VonLehman & Company
Inc., independent certified public accountants, to perform the audit of the
Company's consolidated financial statements for the year ending September 30,
1998, and further directed that the selection of auditors be submitted for
ratification by the stockholders at the Annual Meeting.

The Company has been advised by VonLehman & Company Inc. that neither
that firm nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. VonLehman & Company Inc. will have one
or more representatives at the Annual Meeting who will have an opportunity to
make a statement, if they so desire, and who will be available to respond to
appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF VONLEHMAN & COMPANY INC. AS INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING SEPTEMBER 30, 1998.

- 9 -

STOCKHOLDER PROPOSALS

Any proposal which a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders of
the Company, which is scheduled to be held in January 1999 must be received at
the principal executive offices of the Company, 25 North Fort Thomas Avenue,
Fort Thomas, Kentucky 41075, Attention: J. Michael Lonnemann, Vice President and
Secretary, no later than September 4, 1998. If such proposal is in compliance
with all of the requirements of Rule 14a-8 under the 1934 Act, it will be
included in the proxy statement and set forth on the form of proxy issued for
such annual meeting of stockholders. It is urged that any such proposals be sent
by certified mail, return receipt requested.

ANNUAL REPORTS

A copy of the Company's Annual Report to Stockholders for the year ended
September 30, 1997 accompanies this Proxy Statement. Such annual report is not
part of the proxy solicitation materials.

UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED SEPTEMBER 30, 1997 AND A LIST OF THE EXHIBITS THERETO
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE 1934
ACT. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO J. MICHAEL LONNEMANN, VICE
PRESIDENT AND SECRETARY, FORT THOMAS FINANCIAL CORPORATION, 25 FORT THOMAS
AVENUE, FORT THOMAS, KENTUCKY 41075. THE FORM 10-K IS NOT PART OF THE PROXY
SOLICITATION MATERIALS.

OTHER MATTERS

Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the election
of any person as a director if the nominee is unable to serve or for good cause
will not serve, matters incident to the conduct of the meeting, and upon such
other matters as may properly come before the Annual Meeting. Management is not
aware of any business that may properly come before the Annual Meeting other
than those matters described above in this Proxy Statement. However, if any
other matters should properly come before the Annual Meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.

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

YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY
CARD AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.

- 10 -

FORT THOMAS
SAVINGS BANK,
F.S.B.

[LOGO]

FORT THOMAS FINANCIAL CORPORATION REVOCABLE PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FORT THOMAS
FINANCIAL CORPORATION FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON JANUARY 26, 1998 AND AT ANY ADJOURNMENT THEREOF.

The undersigned hereby appoints the Board of Directors of the company, or
any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Comfort Inn Suites located at 420 Riverboat Row,
Newport, Kentucky on Monday, January 26, 1998, at 9:00 a.m., Eastern Time, or at
any adjournment thereof, with all powers that the undersigned would possess if
personally present, as follows:

1. Election of Directors

[ ] FOR all nominees listed below (except [ ] WITHHOLD authority
as marked to the contrary below) to vote for all
nominees listed below
Nominees for one-year term: Larry N. Hatfield, Robert L. Grimm, Harold A.
Luersen, Don J. Beckmeyer and J. Steven McLane

To withhold authority to vote for any individual nominee, write the name of
the nominee in the space provided below:

- ------------------------------------------------------------------------------

2. Proposal to ratify the appointment of VonLehman & Company, Inc. as the
Company's independent auditors for the fiscal year ending September 30, 1998.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

In their discretion, the proxies are authorized to vote with respect to the
election of any person as a director if the nominee is unable to serve or for
good cause will not serve, matters incident to the conduct of the meeting, and
upon such other matters as may properly come before the meeting.

FORT THOMAS FINANCIAL CORPORATION
c/o CORPORATE TRUST SERVICES
MAIL DROP 1090F5--4129
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OH 45263

fold and detach here

- ------------------------------------------------------------------------------

The Board of Directors recommends that you vote FOR the Board of Directors'
nominees listed above and FOR Proposal 2. Shares of common stock of the Company
will be voted as specified. If no specification is made, shares will be voted
for the election of the Board of Directors' nominees to the Board of Directors,
for Proposal 2 and otherwise at the discretion of the proxies. This proxy may
not be voted for any person who is not a nominee of the Board of Directors of
the Company. This proxy may be revoked at any time before it is exercised.

The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders of Fort Thomas Financial Corporation called for January 26, 1998,
a Proxy Statement for the Annual Meeting and the 1997 Annual Report to
Stockholders.

PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE ENCLOSED
ENVELOPE.

Dated: , 199
----------------

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Signature(s)
Please sign exactly as your
name(s) appear on this Proxy.
Only one signature is required
in the case of a joint account.
When signing in a representative
capacity, please give title.