Edgar Filing: FIRST DEFIANCE FINANCIAL CORP

Filed by First Defiance Financial Corp. pursuant to Rule 425
under the Securities Act of 1933 and deemed filed pursuant
to Rule 14a-6 under the Securities Exchange Act of 1934

Subject Company: First Defiance Financial Corp.
Commission File No.: 333-119821

November 9, 2004

Dear ComBanc Shareholders:

As you are aware, on August 4, 2004, the Board of Directors of ComBanc,
Inc. signed a definitive agreement to merge ComBanc and The Commercial Bank with
and into First Defiance Financial Corp. We currently anticipate that the special
shareholder meeting to vote on the merger transaction will be scheduled and held
at some time during December of 2004 (the specific date will be announced very
soon). In order for you to make an informed decision, we are presenting the
second in our series of shareholder updates.

First Defiance Financial Corp., based in nearby Defiance, is the holding
company for First Federal Bank of the Midwest (First Federal Bank), which
operates 19 full-service banking offices and 25 ATM locations in 10 counties in
Northwest Ohio. First Defiance also operates First Insurance & Investments,
which offers property and casualty insurance, life and group health insurance
and financial planning. First Defiance is traded on the NASDAQ national market
under the trading symbol FDEF. We have enclosed more detailed information on
First Defiance:

1. The 2003 First Defiance Financial Corp. Annual Report, which was
released in April of this year. You will find that First Federal's
style of community banking and community involvement is very similar
to Commercial Bank's philosophy.

2. Biographies of William J. Small, Chairman, President and CEO of First
Defiance; and James L. Rohrs, President and COO of First Federal Bank.

3. A copy of the First Defiance Third Quarter Investor Fact Sheet.

We trust you will find this information helpful. ComBanc's Board of Directors
and executive management believe that our shareholders, employees and customers
will appreciate our combination with First Defiance Financial Corp. and First
Federal Bank.

In connection with the proposed merger of ComBanc into First Defiance, First
Defiance has filed with the U.S. Securities and Exchange Commission (SEC) a
registration statement on Form S-4 (SEC File Number: 333-119821) that included a
preliminary proxy statement of ComBanc and a prospectus for First Defiance.
Shareholders are urged to read the preliminary proxy statement/prospectus, which
is available now. The Board of Directors of ComBanc intends to mail the
definitive proxy statement/prospectus to all ComBanc shareholders to solicit

your vote in favor of the merger transaction. We urge all shareholders to read
the definitive proxy statement/prospectus when it becomes available because it
will contain important information about the proposed transaction. ComBanc is a
participant in the solicitation of your votes in favor of the merger
transaction.

Shareholders may obtain a free copy of the preliminary proxy
statement/prospectus and the definitive proxy statement/prospectus (when it is
available) as well as other documents filed with the SEC by First Defiance and
ComBanc, such as each company's annual report on Form 10-K, quarterly reports on
Form 10-Q, and current reports on Form 8-K, at the SEC's web site at
www.sec.gov. Information about First Defiance and its subsidiaries and filings
of First Defiance are available at www.fdef.com and www.first-fed.com. The
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definitive proxy statement/prospectus, when available, and other documents filed
by ComBanc may also be obtained at no charge from ComBanc by calling Rebecca L.
Minnig at ComBanc at (419) 695-1055.

Please feel free to call Paul Wreede at 419-695-1055 or Bill Small at
419-782-5015 if you have any questions. Thank you very much for your
consideration in this matter.

Very truly yours,

/s/ Paul G. Wreede

Paul G. Wreede
Chairman, President & CEO
ComBanc, Inc.

/s/ William J. Small

William J. Small
Chairman, President & CEO
First Defiance Financial Corp.

Corporate Profile

First Defiance Financial Corp. (NASDAQ:FDEF) is a banking and financial services
corporation headquartered in Defiance, Ohio. First Defiance is the holding
company for the Defiance-based First Federal Bank of the Midwest and First
Insurance & Investments.

First Federal Bank of the Midwest is a community financial institution serving
Northwest Ohio, where it currently operates 19 full-service banking offices and
25 ATMs. First Insurance & Investments is the largest insurance agency in the
Defiance, Ohio market, specializing in property and casualty insurance, life and
group health insurance, investment products and financial planning.

The company's strategy for continued profitability and growth is built on two
primary objectives:

o Growing the company's core banking operations by capitalizing on the strong
customer service and relations it enjoys as a community bank, maintaining a
diversified lending portfolio of commercial, consumer, and residential
mortgage offerings, expanding the branch network throughout the Northwest
Ohio market and enhancing customer service offerings.

o Growing its diversified financial services operations in areas such as
insurance, trust services and investment counsel.

Five Quarter Selected Financial Information
(In thousands, except for per share information and total assets)

---------------------------------------------------------------------------------------
At or for the
three months ended Sept. 30 Jun 30 Mar. 31 Dec. 31 Sept. 30
2004 2004 2004 2003 2003

Total Assets $1,102 $1,073 $1,037 $1,040 $1,033

Tax-Equivalent
Net Interest $8,791 $8,321 $8,182 $8,160 $8,239
Income

Provision for
Loan Losses $ 376 $ 490 $ 379 $ 534 $ 497

Non-Interest
Income $3,550 $3,838 $3,422 $3,179 $4,839

Non-interest
Expense $9,469* $7,134 $7,464 $6,885 $6,776

Net Income $1,680 $3,144 $2,493 $2,819 $3,681

Diluted EPS $ 0.26 $ 0.49 $ 0.39 $ 0.44 $ 0.58

Dividends
Per Share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.15

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Stock Information
(as of or for the three months ended September 30, 2004)

52 Week High $29.00
52 Week Low $22.01
Price on September 30, 2004 $26.01
Average Trading Volume 6,402
Market Capitalization $1.621 million
Avg. Diluted Shares Outstanding 6.340 million

*Includes a one-time contingent liability settlement charge of $1.9 million
related to the sale of a subsidiary in 2002.

Recent Highlights

o FDEF announced net income for the third quarter of 2004 was $1.7 million or
$0.26 per share compared to $3.7 million or $0.58 per share in the second
quarter of 2003. The 2004 third quarter includes a $1.9 million charge
($1.25 million or $0.20 per share after tax) to settle contingent liability
associated with the sale of former subsidiary. Excluding this item,
earnings for the quarter would have been $2.9 million, or $0.46 per share.

o Year-to-date net income of $7.3 million or $1.15 per share for first nine
months of 2004 compared to $9.3 million or $1.47 per share in the same
period of 2003. Excluding settlement of contingent liability, 2004
year-to-date net income would have been $8.6 million or $1.35 per share.
Net interest income increased to $8.6 million for the 2004 third quarter, a
9.6% increase over prior year third quarter.

FDEF announced two acquisitions during the third quarter. Combanc, Inc. and its
wholly owned subsidiary, The Commercial Bank, both headquartered in Delphos,
Ohio. With assets of $175 million in deposits, and $120 million in loans as of
June 30, 2004; and Genoa Savings and Loan Company, headquartered in Genoa, Ohio
with $84 million in deposits and $72 million in loans.

Financial Trends

Net Income From Operations

Net Income before Cumulative Effect 03 Q3 03Q4 04 Q1 04 Q2 04 Q3
----------------------------------- ----- ---- ----- ----- -----
Quarterly Net Income $3,681 $2,819 $2,493 $3,144 $1,680
One Time Contingent Liability charge after tax 1,250

Quarterly Efficiency Ratio
03 Q3 03 Q4 04 Q1 04 Q2 04 Q3*
----- ----- ----- ----- ------

Efficiency 51.81% 60.72% 64.87% 58.67% 78.65%

03 Q3 03 Q4 04 Q1 04 Q2 04 Q3
----- ----- ----- ----- -----

Total Assets $1,033 $1,040 $1,037 $1,050 $1,102

*Excluding the one time contingent liability settlement charge of $1.9 million,
the efficiency ratio would have been 62.6%

First Federal Bank Locations
(Map Omitted)

Safe Harbor Statement: Statements in this document that relate to other than
strictly historical facts, including statements about the Company's plans and
strategies, as well as management's expectations about new and existing products
and services, technologies and opportunities, market growth, demand for
acceptance of new and existing products and services are forward-looking
statements. The words "believe," "expect," "anticipate," "estimate," "project,"
and similar expressions identify forward-looking statements that speak only as
of the date thereof. Investors are cautioned that such statements involve risks
and uncertainties that could cause actual results to differ materially from
historical or anticipated results due to many factors. The Company undertakes no
obligations to publicly update or revise such statements. For more details,
please refer to the Company's Securities and Exchange Commission filings,
including its most recent Annual Report on Form 10-K and quarterly reports on
Form 10-Q.

Executive Profile
--------------------------------------------------------------------------------
First Defiance Financial Corp., 601 Clinton Street, Defiance, OH 43512

William J. Small, Chairman, President and CEO
First Defiance Financial Corp.

Mr. Small first became affiliated with the thrift business in 1978 when he
joined First Federal of Defiance as an assistant branch manager. He was promoted
to company vice president and transferred to the main office in 1979. He served
in this position until 1987 when he assumed the role of president and chief
executive officer of the Hicksville Building, Loan and Savings Company. In 1994,
he returned to First Federal of Defiance as senior vice president. He was
appointed president and chief operating officer in 1996 and chairman and chief
executive officer, First Federal Savings and Loan and president, chairman and
chief executive officer of First Defiance Financial Corp. in January, 1999.
Prior to 1978, Bill was affiliated with the Napoleon Products Company of
Napoleon, Ohio and Siena Heights College of Adrian, Michigan.

Mr. Small currently chairs the Federal Reserve Board's Thrift Advisory
Committee, is on the Board of America's Community Bankers and is past chairman
of The Ohio League of Financial Institutions and Ohio Bankers League. An active
citizen in his community, he is past president and board member of the Defiance
Area Chamber of Commerce and the Defiance City Schools Foundation and is a board
member of The Defiance College and the Defiance Area YMCA. He is a member of the
Defiance Rotary Club, Kettenring Country Club and St. Paul's United Methodist
Church. Bill has also been involved in several community oriented capital
campaigns including the Defiance YMCA and Defiance College campaigns.

Currently residing in Defiance, Bill attended the University of Notre Dame and
graduated with his bachelor's degree in sociology and business administration
from Siena Heights College in Adrian, Michigan in 1973.

# # #

[GRAPHIC OMITTED]

Executive Profile
--------------------------------------------------------------------------------
First Federal Bank, 601 Clinton Street, Defiance, OH 43512

James L. Rohrs, President and Chief Operating Officer
First Federal Bank, Defiance, Ohio

Mr. Rohrs was named President and Chief Operating Officer at First Federal Bank,
Defiance, Ohio on August 30, 1999. A Hamler, Ohio native, Rohrs began his
banking career with Huntington National Bank in Bowling Green, Ohio. He then
advanced to become a senior business development and credit officer responsible
for five banking offices in the Bowling Green area. Subsequently, he was
promoted to senior lending officer and then regional executive for Huntington's
Northwest Ohio Region.

In 1994, Rohrs was promoted to Business Banking Product Manager for Huntington's
entire small business market segment. In this capacity, he managed marketing,
product development, and the credit approval process for companies with annual
sales up to $10 million.

His community activities include serving as a board member of the Defiance Area
Chamber of Commerce, corporate campaign chairman for the United Way of Defiance
County, chairman of the American Heart Association Heart Walk and member of the
Defiance Rotary Club, Kettenring Country Club, and Emanuel Lutheran Church,
Hamler, Ohio.

Rohrs is a graduate of Bowling Green State University with a degree in
Finance/Credit Management, a Graduate of the University of Wisconsin School of
Banking , and a graduate of the Ohio School of Consumer and Commercial Credit.

# # #
[GRAPHIC OMITTED]

2003 ANNUAL REPORT TO SHAREHOLDERS

[GRAPHIC]

It's Personal

[LOGO]

FIRST DEFIANCE
FINANCIAL CORP.

[LOGO]
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TABLE OF CONTENTS

Financial Highlights...................1

Letter from the Chairman...............2

Business Overview......................4

Community Advisory Boards..............8

Corporate and Shareholder
Information...Inside Back Cover
----------------------------------------

First Defiance Financial Corp.

First Defiance Financial Corp., headquartered in Defiance, OH, is the holding
company for First Federal Bank of the Midwest and First Insurance & Investments.
First Federal operates 19 full service branches and 25 ATM locations in
northwest Ohio. First Insurance & Investments is the largest property and
casualty insurance company in the Defiance, Ohio area, specializing in life and
group health insurance as well as financial planning. For more information,
visit the Company's Web site at www.fdef.com.

Statements contained in this Annual Report may not be based on historical facts
and are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21B of the Securities Act of
1934, as amended. Actual results could vary materially depending on risks and
uncertainties inherent in general and local banking and insurance conditions,
competitive factors specific to markets in which the Company and its
subsidiaries operate, future interest rate levels, legislative and regulatory
decisions or capital market conditions. The Company assumes no responsibility to
update this information. For more details, please refer to the Company's SEC
filings, including its most recent Annual Report on Form 10-K and quarterly
reports on Form 10-Q.

Front Cover: Pictured are some of the 2003 Customer Service Excellence Award
winners, 2003 Employee Anniversary Award winners and staff who were extensively
involved in volunteer activities in their communities and/or our organization.

Financial Highlights

YEARS ENDED DECEMBER 31
($ in thousands, except per share data)

2003 2002 2001

AT PERIOD END:
Assets $1,040,599 $ 884,245 $1,132,648
Assets of continuing operations 1,040,599 884,245 644,194
Loans, net 741,127 576,377 499,813
Deposits 728,996 599,573 615,238
Stockholders' equity 124,269 120,110 111,021

Book value per share $ 19.64 $ 18.73 $ 16.20
Tangible book value per share $ 16.39 $ 18.17 $ 15.65
Stockholders' equity to assets of
continuing operations 11.94% 13.58% 17.23%

AVERAGE BALANCES:
Assets $ 975,047 $ 946,497 $1,099,039
Assets of continuing operations 975,047 829,028 692,822
Loans, net 667,165 525,855 520,917
Deposits 680,539 580,622 490,954
Stockholders' equity 121,234 119,072 104,102

SUMMARY OF OPERATING
RESULTS:
Net interest income $ 29,081 $ 24,097 $ 20,943
Provision for loan losses 1,719 1,451 994
Securities gains (losses) 1,575 21 (137)
Non-interest income (excluding security gains) 17,213 12,900 10,357
Non-interest expense 28,378 26,161 22,948
Income from continuing operations 12,082 6,420 4,798
Net income 12,082 15,079 13,616

Basic earnings per share from continuing
operations $ 2.00 $ 1.01 $ 0.74
Diluted earnings per share from
continuing operations $ 1.91 $ 0.97 $ 0.72

Basic earnings per share $ 2.00 $ 2.37 $ 2.11
Diluted earnings per share $ 1.91 $ 2.28 $ 2.05

Return on average equity --
continuing operations 9.97% 5.39% 4.61%
Return on average assets --
continuing operations 1.24% 0.77% 0.69%

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Earnings Per Share

[BAR GRAPH OMITTED]

Year Ended December 31

Non-Interest Income
(Excluding Security Gains)

[BAR GRAPH OMITTED]

Year Ended December 31

Non-Residential Real Estate
and Commercial Loans

[BAR GRAPH OMITTED]

At December 31
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[LOGO]
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[PHOTO] William J. Small
Chairman, President, and
Chief Executive Officer
First Defiance Financial Corp.
----------------------------------------

Dear Shareholders:

The year 2003 was one of solid performance for First Defiance Financial Corp.
based on earnings and shareholder return. However, the bigger success, in terms
of future strength and viability, is the way we executed our business plan that
resulted in impressive growth, both organically and through an acquisition. We
said at the beginning of the year that our strategic focus would be on community
financial services featuring high-touch personalized service with
state-of-the-art products and a strong delivery system. We believed that by
following this blueprint we could grow our existing franchise and also look for
opportunities to grow through strategic acquisitions. Our performance in 2003
was a direct result of maintaining our focus on this plan and understanding that
when it comes to community banking, "it's personal."

The reputation of First Defiance Financial Corp. and its subsidiaries, First
Federal Bank of the Midwest and First Insurance & Investments, has been built on
personalized, relationship-based service. It is our mission to continue to
deliver this type of service as we grow and expand our market area.
Consolidation within banking will continue to give us opportunities to pick up
new client relationships as well as presenting the possibility for additional
acquisitions to continue our growth while maintaining our focus on personalized
service.

STRONG PERFORMANCE RESULTS

Our growth in 2003 came both from within our existing framework and through the
acquisition of three new branches located within our market. Organic loan growth
was achieved primarily from our continued emphasis on commercial lending.
Commercial loans and nonresidential real estate loans grew a healthy 23.5%
(excluding loans acquired through our branch acquisition) during a year when
many banks struggled to maintain their portfolio balances. The interest rate
climate, the improving economy, and our relatively new presence in some faster
growing markets all combined to give us opportunities to grow this segment of
our lending portfolio. I am again pleased to report that this rapid growth was
accomplished while maintaining outstanding credit quality ratios. Our
non-performing assets to total assets ratio at year-end was .28% compared to an
average of .78% for publicly traded Ohio banks.

As strong as the commercial growth was, the biggest story on the loan side in
2003 was the high volume of residential real estate lending that was experienced
here, and across the nation, due to the lowest mortgage rates in almost 50
years. Most of this production was sold on the secondary market, resulting in
increased revenue from the gain on the sale of these mortgages. We will not face
the risk of the low interest rates on our books over the life of the loan. The
challenge, however, will be replacing the income from the gain on sale now that
mortgage rates are beginning to rise and residential mortgage loan production
has slowed. Fortunately, the size of our servicing portfolio grew during this
period as we gained market share, and a portion of that revenue will be replaced
with ongoing servicing income. Additional loan growth and margin improvement
will also be critical to driving revenue in the coming year.

Letter From The Chairman

Deposits grew at a good pace during 2003 as we continued to put emphasis on
growing the core deposits at the bank. Both commercial checking and retail
checking accounts showed substantial increases during the year and our Money
Market Access Account continued its strong growth. With the expectation of
interest rates starting to rise during the coming year, we will strategically
offer various certificate of deposit programs to attract some longer term funds,
however our primary focus will be to build balances in the demand deposit
accounts.

POSITIONED FOR GROWTH

Growth is an important component of our future profitability and we had strong
organic growth again in 2003. However, in light of our strong capital position,
we realized that to meet our long-term goals, we also had to pursue acquisition
opportunities. In February 2003, we announced that we reached an agreement to
purchase three branches of the RFC Banking Company. These branches presented an
opportunity for us to strengthen our position in the Hancock County market with
an additional office in Findlay and an office in McComb, and also gave us a
presence in Putnam County with a large office in Ottawa. This branch purchase
was completed on Friday, June 6, 2003. Thanks to the hard work of many dedicated
employees, we were able to convert the new offices to our systems over that
weekend and opened up on the following Monday morning in a very smooth
transition. These offices have integrated well into our operation, have a high
retention level of their existing business and have contributed new customer
relationships to First Federal Bank.

With that acquisition and the opening of a de novo branch on the east side of
Findlay, our third location in that city, in December 2003, we ended the year
with 18 full service banking centers in operation. A loan production office that
we opened in the Toledo market in the summer of 2002 continued to grow, leading
to the decision to establish a full service office in the Toledo suburb of
Maumee, Ohio that opened in February 2004. Our delivery system now consists of
the 19 full service offices, 25 ATMs and our Online Banking service.

In addition to our core banking operation, the insurance, investment, and trust
areas of our Company are continuing to play a larger role in contributing to
non-interest income. As the economy improves, we believe that this will create
additional opportunities in the investment and trust areas. The cross-selling we
emphasize, especially in our commercial area, has resulted in opportunities for
both additional insurance business and commercial relationships.

"IT'S PERSONAL"

The results that we have achieved at First Defiance Financial Corp. are
primarily due to our employees and their commitment to our personal service
strategy. We have been able to attract and retain a strong group of banking
professionals who firmly believe in community banking. They understand the
business and our strategy as well as the importance of their role in
contributing to the overall success of First Defiance. I want to thank them for
their hard work and dedication, and I look forward to continued success as we
move forward together.

As we look ahead, we will keep our focus on our community financial service
business plan. This is a model that has been very successful for us as we
continue to deliver personal, high quality financial service to our customers.
We have good growth potential throughout our markets, both in our newer markets
where our market share is small and the opportunities are many, and in the
communities we've served for years where our reputation for quality service,
responsiveness and integrity makes us the financial services provider of
choice for more people every year. In addition, we will actively seek
acquisition and de novo branching opportunities that add strategic value to
First Defiance and will contribute to increased shareholder value.

We appreciate your support and interest in First Defiance Financial Corp., and
we look forward to building the value of this company for our shareholders,
customers, and employees.

/s/ William J. Small

William J. Small
Chairman, President and Chief Executive Officer

[LOGO]
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[PHOTO]

Ashley Meraz, a Customer Service
Representative at the Wauseon community
banking office, provides friendly
service to a local customer.

THE STORY OF FIRST
DEFIANCE FINANCIAL CORP.

o First Federal Bank was established as
Northwest Savings and Loan Company in
the small city of Defiance, Ohio back
in the roaring 20's. As the city
grew, so did the savings and loan,
which was granted a federal charter
in 1935 and changed its name to First
Federal Savings and Loan of Defiance.
Assets reached the $1 million mark in
1941.

o The fledgling organization added its
first branch in Bryan, Ohio in 1953,
and hasn't stopped growing since.
Over the next 40 years, First Federal
opened six more branches in northwest
Ohio, changed its name to First
Federal Savings and Loan, and grew
its assets to over $336 million.

o In the early 90's, First Federal took
what turned out to be significant
steps in its ongoing success story.
In 1993, First Federal reorganized
from a Mutual Savings and Loan
Association to a Mutual Holding
Company and issued its first stock to
employees and the public. On
September 29, 1995, First Federal
converted from mutual holding company
ownership to a full stock company,
trading stock on the NASDAQ as FDEF.
This event also marked the formation
of First Defiance Financial Corp. as
the holding company for First
Federal.

(Continued on page 5 sidebar)
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It's Personal

[PHOTO]

Amy Daeger, Branch Manager at the Defiance North office, assists a
customer with a new account.

"We know we can trust what our loan officer says,
and we can rely on his advice."

"Moving our accounts to First Federal Bank was a great decision for us."

"The staff is involved in our community, and they know me by name."

While it may be unusual for some organizations to receive accolades like these,
we strive to make it the norm at First Defiance Financial Corp. Our customers
often tell us that our special brand of service delivery sets us apart from the
competition.

Whether we're providing retail banking services, commercial lending or insurance
and investment services, we stick to our mission to make our customers' lives
easier and help them reach their financial goals. The effort pays off in many
ways--with rewarding smiles on our customers' faces, impressive shareholder
returns, and exciting asset growth.

We look for ways to simplify our services, making them advantageous and
uncomplicated. We consult with and educate our customers, so they feel confident
making the financial decisions they need to make. And we aspire to humanize the
whole financial process, which can often seem intimidating. We don't want our
customers to ever feel they're treated like a number, lost in bureaucracy or
trapped in frustrating automated call center systems. Yes, we're now a $1
billion plus company. But we measure success the same way we always have--by the
number of customers who choose to put their trust in us every day and who are
delighted with their decision. To us--it's personal.

BUILDING ON OUR STRENGTHS

In 2003, our strategic initiatives included goals to continue expansion, improve
internal communications, focus on technology planning, work toward increased
efficiency and develop an enhanced employee incentive and reward system. We
fervently tackled each challenge and ended the year in an unprecedented position
of strength.

HIGHLIGHTS FROM 2003 INCLUDE:

o Ended the year with earnings of $12.1 million and $1.91 in earnings
per share (a 96.9% increase over 2002 earnings per share from
continuing operations)

o Acquired three banking offices in Findlay, McComb and Ottawa, Ohio

o Surpassed the $1 billion in assets mark in June

o Achieved an efficiency ratio of 60.31%

o Opened a third office on the east side of Findlay, Ohio

o Broke ground for a new office in Maumee, Ohio, a suburb of Toledo

o Generated record mortgage volume

o Exceeded goals in commercial loan growth

o Succeeded in keeping net commercial loan charge-offs for the year at
a low 0.06% of average loans

o Donated over $310,000 to community improvement projects, surpassing
previous levels

o Developed and implemented a quarterly bonus program tying employee
efforts directly to profitability and customer satisfaction

MOMENTUM FOR 2004

The success we experienced in 2003 gives us the critical momentum to meet our
goals in 2004. Our year will be marked by

o The organization's continued planned growth

o The development of new products

o The opening of a full-service office in the Toledo market

o Enhanced customer satisfaction measures

o Increased product marketing and sales for both First Federal Bank
and First Insurance & Investments

o Customer and product profitability studies and

o Operational enhancements designed to improve customer processes
without losing the personal touch we provide.

We are confident that we have the team in place to meet these objectives in
typical First Defiance Financial Corp. fashion.

Throughout the year, our Board will remain actively engaged in the oversight
process and facilitate steady progress without sacrificing credit quality or
taking harmful risks. We are proud of our solid reputation, and we'll be working
harder than ever to become the premier financial services provider in each of
our markets.

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(Continued from page 4 sidebar)

o In 1998, two more branches were added
to the First Federal Bank system--one
in Paulding and one in Hicksville,
Ohio. A community focus and a desire
to provide more comprehensive
services prompted the name change to
First Federal Bank of the Midwest in
1999. A "Customer First" philosophy
was introduced, along with the
tagline "Bank with the people you
know and trust" as an indication of
our commitment to providing local,
personalized service. Before the year
was out, an office was opened in the
Findlay, Ohio market and First
Insurance & Investments was added to
the growing list of financial
services.

o In 2000, First Federal Bank continued
its expansion in northwest Ohio by
adding a 13th branch location in
Fostoria, Ohio. In 2002, a 14th
branch opened for customers in
Bowling Green, Ohio and a loan
production office opened in Toledo.
The Leader Mortgage Company, based in
Cleveland and owned by First Federal
for several years, was sold in 2002,
freeing up capital for further
expansion of our community banking
franchise.

o In June of 2003, a portion of that
capital was utilized to acquire three
offices in Ottawa, Findlay and
McComb, Ohio. In December of 2003, a
grand opening was held for a third
office on Findlay's east side,
bringing the total number of branches
to 18. Our 19th office opened in
Maumee, a suburb of Toledo, in
February of 2004.

o Today, First Federal Bank enjoys
formidable market share and a
reputation of strength and stability
in northwest Ohio. With a continued
emphasis on local decision-making,
community banking, quality staff and
a customer-centered service culture,
First Federal Bank and First Defiance
Financial Corp. are well positioned
for the future.
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[LOGO]
There's No Place Like Home
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Northwest Ohio is an ideal place to work
and live. We have the benefit of wide
open spaces, meandering rivers,
historical sites, big cities, small
towns and great opportunities.
Characterized by a strong midwestern
work ethic, the citizens of the region
truly enjoy an enviable quality of life.

We take pride in the fact that First
Defiance Financial Corp.'s headquarters
is located in Defiance, not more than 90
minutes away from any of our branches.
These offices are confidently run by
leaders empowered to make the best
local decisions for their customers, who
often double as friends and neighbors.
We will continue to strengthen our
presence in our existing market
footprint and in our contiguous
geographic areas.

We know our markets, and we believe in
our strategy. The old saying rings true
with us: there's no place like home.

[PHOTO]

Maumee office, opened in February 2004
----------------------------------------

OFFICE LOCATIONS:

DEFIANCE

601 Clinton Street

825 North Clinton Street

Inside Super Kmart
190 Stadium Drive

BOWLING GREEN

1226 West Wooster Street

BRYAN

204 East High Street

926 East High Street

FINDLAY

3900 North Main Street

301 South Main Street

7591 Patriot Drive

FOSTORIA

1694 North Countyline Road

HICKSVILLE

201 East High Street

MAUMEE (TOLEDO)

417 West Dussel

McCOMB

124 East Main Street

MONTPELIER

1050 East Main Street

NAPOLEON

625 Scott Street

1333 Woodlawn Avenue

OTTAWA

405 East Main Street

PAULDING

905 North Williams Street

WAUSEON

211 South Fulton Street

[MAP]

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New Offices in 2003

[PHOTO]

Findlay Downtown office

[PHOTO]

Ottawa office

[PHOTO]

McComb office

[PHOTO]

Findlay East office
----------------------------------------

[LOGO]
Community Banking
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FAST FACTS

FIRST FEDERAL BANK
CONSUMER PRODUCTS

Retail customers who bank with the
people they "know and trust" at First
Federal Bank enjoy a wide variety of
financial options including:

DEPOSIT PRODUCTS

o A variety of Checking Accounts

o Savings Accounts for every situation

o Money Market and Money Market Access
Accounts

o Certificates of Deposit--available in
short and long terms

LOANS

o Mortgage Loans--with no-money-down
and bi-weekly payment options
available

o Home Equity Loans--several ways for
homeowners to take advantage of their
homes' value.

o Consumer Loans--for autos, RV's,
boats and other major purchases

CONVENIENT ACCESS

o OnLine Banking and Bill Pay services

o Automated Teller Machines (ATM's)
throughout our market area

o Telephone Banking service

o Automated Deductions from checking
and savings accounts

FINANCIAL PLANNING

o Investment Planning

o Retirement Planning

o Trust Services

o 401(k) Employee Benefit Plans

o IRA Accounts
----------------------------------------

[PHOTO]

Surrounded by the personal touches she added to the kitchen of her
first home, Rebecca Pilger reviews her final paperwork with mortgage
loan officer Kathy Hoover.

"BANK WITH THE PEOPLE YOU KNOW AND TRUST"

It's an advantage to be a community bank. Our operating style allows us to get
to know our customers and make a difference in their lives. We have the
resources to help them buy or build their first home, pay for a child's college
education and plan for retirement. First Federal Bank is large enough to offer
the services they need, yet small enough to make those services personal and
convenient. We keep the "community" in community banking.

ACHIEVING DREAMS

Kathy Hoover enjoys her job as a mortgage lender for First Federal Bank. For the
past eight years, she has helped hundreds of customers achieve their goal of
becoming homeowners. One such customer is Rebecca Pilger, a determined woman
with a young son and a big dream: to own her own home. "I came to First Federal
Bank because Kathy made me feel comfortable," Rebecca states. "She explained
everything so well." Kathy set to work researching ways to help Rebecca purchase
the perfect spot in the town of Hamler, Ohio, right next door to the home where
Rebecca was raised. With the help of the Federal Home Loan Bank's Welcome Home
Funds, Kathy found a way to make it all possible. Rebecca was thrilled with the
result: "I didn't think it would happen. I never imagined I would send a thank
you note to a bank employee, but I just had to send one to Kathy."

SERVING THE NEEDS OF THREE GENERATIONS

More than 50 years ago, Dan Dhaenens stepped into the brand new First Federal
Bank office in downtown Bryan and started a tradition that has lasted for three
generations. "I opened my first account in 1953," Dan recalls with a smile.
"They were giving away pen and pencil sets in honor of the grand opening." His
boys became customers of First Federal Bank while they were still young. "Mom
brought us up to the bank in 1968 to open our first savings

[PHOTO]

Curt Dhaenens (left) helps his son Caleb, 11, fill out a deposit
slip, while Dan Dhaenens consults with Bryan office Branch Manager
and VP Cindy Castor on a new CD option.

accounts," son Curt comments. He continued the tradition by starting accounts
for his own children soon after they were born. "The people at First Federal
Bank helped me finance my first house," he explains. "And we now have our
checking, savings, CD's, .....everything there. The people know me, and the
service they offer keeps me there."

COMMITTED TO MAKING A DIFFERENCE

No one knows the issues and challenges of a community better than the involved
citizens who live there. At First Defiance Financial Corp., we traditionally
hire the best and brightest from the area and encourage them to take part in the
development efforts going on in their communities. From mentoring in the
elementary schools, to chairing a Chamber of Commerce committee, to delivering
chicken BBQ dinners for a local United Way fundraiser, our employees regularly
donate their time and effort to help make a difference.

COMMUNITY ADVISORY BOARDS

DEFIANCE, OHIO

Rick Weaver
Poggemeyer Design
Craig Hoffman
Mast-Mock-Hoffman Funeral Home
Mike Koester
Koester Corporation
Doug Daoust
Daoust Drugs
Sam Strausbaugh
Defiance Metal Products

FINDLAY, OHIO

M. Michael Roberts
dmh Toyota-Lift
Dr. Alan Tong
Cascade Women's Health
James Koehler
Country Club Acres, Inc.
John Bookmyer
Blanchard Valley Hospital
Paul Kramer
Kramer Enterprises, Inc.

FOSTORIA, OHIO

Steve Dandurand
Corporate One Benefit Agency, Inc.
Tom Reineke
Reineke Ford
Peggy Frankart
Fostoria Community Hospital
Frank Kinn
Business/Financial Consultant

WAUSEON, OHIO

Kerry Ackerman
J and B Feed Company
Leon Mann
Trailite Sales, Inc.
Steven McElrath
BMW Services
Bill Fortier
Aquatek Water Conditioning

HICKSVILLE, OHIO

Michael Headley
H & W Automotive Parts Inc.
Larry Haver
Haver Construction & Lumber
Dr. Robert Ramus
Dentist

MONTPELIER, OHIO

Eric Harter
Herbson Manufacturing
Thomas Houck
Do It Best Hardware
Dr. Walter Bumb
Dentist
Pete Yeager
Yeager's Market

NAPOLEON, OHIO

Mike Snyder
Napoleon/Defiance Wash-N-Fill
Susan Witt
Engineer, Gerken Paving
Jeffrey Spangler
Holgate Metal Fab, Inc.
Kay Wesche
Henry County Development Services
Bradley Westhoven
Midwest Trim, Inc.

PAULDING, OHIO

Jeff Clark
JA Clark Home Improvements
Joseph Burkard
Paulding County Prosecutor
William Shugars
Paulding Schools Administration

BRYAN, OHIO

Steve Smith
L.E. Smith Co.
Richard Hallett
Ohio Gas Company
Renee Isaac
Bryan Middle School
LeRoy Feather
Community Hospitals of
Williams County
Stacey Bock
C.P.A.

OTTAWA, OHIO

Mike Ruhe
Ret. Supt, O-G Schools
Kevin Ellerbrock
Kevin Ellerbrock Construction
Dr. Dean Walther
Optometrist
Kenneth Konst
Agri-Business

-----------------sidebar----------------

FAST FACTS

COMMUNITY
INVOLVEMENT

In 2003, First Federal Bank and First
Insurance & Investments donated over
$310,000 to local charities and service
organizations to help improve our
communities. Among the monetary donation
recipients were:

Nine United Way Chapters in northwest
Ohio

Chambers of Commerce fundraisers

The Defiance Area YMCA Capital
Campaign

The American Cancer Society Relay For
Life events throughout the region

The American Heart Association

Area 4-H and DECA Clubs

High School Sports Programs, Academic
Boosters and Music Groups

Habitat for Humanity projects

NAACP events

Police and Sheriff Department
fundraisers

Senior Center events

The Volunteer Connection

March of Dimes

Big Brothers/Big Sisters...

.....and dozens more.
----------------------------------------

[LOGO]
-----------------sidebar----------------

"The bank keeps our money working for us
all the time."

FAST FACTS

COMMERCIAL SERVICES:

o Commercial Loans

o Owner-occupied and non-owner-occupied
Real Estate Loans

o Lines of Credit

o Equipment Purchase Loans

o Agriculture Loans

o Cash Management Internet Banking
Services

o Free Small Business Checking Accounts

o Sweep Accounts

o Merchant Services

o First AM Fax program for account
management
----------------------------------------

Commercial Banking

[PHOTO]

Gene Westhoven, CEO of Midwest Trim, Inc., Steve Bischoff, VP and
Commercial Loan Officer at First Federal Bank, and Brad Westhoven,
President of Midwest Trim, Inc., review a load of hardwood trim about
to be shipped.

THERE'S BUSINESS AS USUAL, AND THERE'S BUSINESS
THE FIRST FEDERAL BANK WAY

When we decided to increase our emphasis on commercial banking services in 1998,
we set aggressive goals for commercial loan and deposit growth. A mere six years
later,our commercial services are an impressive part of our success story.
Although we are competitive, it's not solely our interest rate pricing that
generates our growth. Once again, it's our people who make the difference.

Our commercial loan officers display a passion for excellence and an intrinsic
desire to help others succeed. They get out from behind their desks and spend
the time necessary to listen to and learn from business owners, zeroing in on
their aspirations and devising ways to help them meet their goals. Their
collaborative approach turns our customers into our greatest referral sources.
In addition to our customer relationships, we are also proud of the credit
quality of our loan portfolio. Unlike many of our peer banks, our charge-off
rates are negligible--only 0.06% of average loans in 2003.

PARTNERS IN PROGRESS

Gene and Brad Westhoven know their business. For over twenty years, the
father-son duo have skillfully provided hardwood mouldings and trimwork for
homes and businesses across the country. They also know their banking needs.
When Midwest Wood Trim, Inc.

[PHOTO]

A team approach helps Maumee Valley Vending Company succeed. Working
with Controller Scott Plassman (right) on 401(k) Plans for his
employees is Carol Whetstone, Assistant Vice President and Trust
Officer with First Federal Bank. Providing commercial insurance
consultation is Ken Keller, EVP of First Insurance & Investments.

was growing rapidly and searching for a new financial partner in 2000, they
turned to First Federal Bank. "The feeling we got from First Federal was one of
cooperation," comments Brad, the company President. "They did their homework on
us, and they wanted to develop more of a banking relationship, which we needed
at the time." According to Gene, the company's CEO, working with First Federal
Bank has been easy: "They have been extremely helpful." "And their products are
advantageous," adds Brad. "The bank keeps our money working for us all the
time." The company also connected with First Insurance & Investments several
years ago, citing service as a key factor in their decision.

FIRST INSURANCE & INVESTMENTS:
SOLUTIONS FOR TODAY AND TOMORROW

The First Insurance & Investments story began in the late 1800's when insurance
coverage was a novel idea. Over the next 100 years, the company grew and
changed, always providing the latest in insurance products and services. In
1998, the company became part of First Defiance Financial Corp. and is now the
largest property and casualty insurance agency in the Defiance market.

Professional agents and financial planners work together to find solutions for
their customers' insurance challenges and investment goals. With representation
in all branches of First Federal Bank, First Insurance & Investments has built a
reputation for quick responses and customized offerings.

QUALITY SERVICE

Established in 1946, Maumee Valley Vending Company has grown to be one of Ohio's
largest independent vending companies, boasting over 30 trucks, 87 employees and
hundreds of customers. Scott Plassman, the company's controller, has been
working with First Insurance & Investments since 1989 and turns to First Federal
Bank's Trust department for management of the company's 401(k) plan. "The First
Insurance & Investments products are extremely competitive," he comments, "but
it's their service that makes us want to stay with them." Scott counts the local
connection as a major advantage. "We could conduct business with some insurance
company over the phone, of course," he states, "but to have knowledgeable
insurance and trust people close by is a definite plus."

-----------------sidebar----------------
[PHOTO]

Pat Briskey, Financial Advisor with
First Insurance & Investments, assists a
customer with her investment planning
needs.

FAST FACTS

FIRST INSURANCE &
INVESTMENTS SERVICES:

Risk Management

Commercial Insurance

Employee Benefits

Medical Professional Liability
Insurance

Auto, Home, Life and Property
Insurance

Financial Planning and Investments

First Insurance & Investments Officers
(l to r): Steven P. Grosenbacher,
President Timothy S. Whetstone,
Executive Vice President Lawrence H.
Woods, Executive Vice President Kenneth
G. Keller, Executive Vice President

[PHOTO]
----------------------------------------

[LOGO]
-----------------sidebar----------------

[PHOTO] FIRST DEFIANCE FINANCIAL CORP.
BOARD OF DIRECTORS

Seated (l to r): William J. Small, Don C. Van Brackel
Standing (l to r): Gerald W. Monnin, Stephen L. Boomer,
James L. Rohrs, John U. Fauster, Peter A. Diehl,
Thomas A. Voigt, Douglas A. Burgei

FIRST DEFIANCE FINANCIAL CORP. [PHOTO]
CORPORATE OFFICERS

Seated (l to r): John C. Wahl, Rachel L. Ulrich,
James L. Rohrs.
Standing (l to r): William J. Small,
Don C. Van Brackel, John W. Boesling

[PHOTO] FIRST FEDERAL BANK
EXECUTIVE VICE PRESIDENTS

Seated (l to r): Gregory R. Allen, John C. Wahl,
Standing (l to r): Mark D. Gazarek,
Jeffrey D. Vereecke, Dennis E. Rose

[LOGO]
-----------------sidebar----------------

FIRST DEFIANCE FINANCIAL CORP. BOARD OF DIRECTORS

William J. Small - 1, 3, 7, 8
Chairman, President, and
Chief Executive Officer,
First Defiance Financial Corp.
Age 53, Joined Company 1994,
Director Since 1998

Don C. Van Brackel - 3, 4, 5, 7
Vice Chairman, First Defiance
Financial Corp.
Age 65, Officer Since 1992,
Director Since 1979

Stephen L. Boomer - 2, 6, 7, 8
President, Arps Dairy,
Defiance, Ohio
Age 53, Director Since 1994

Douglas A. Burgei,
D.V.M. - 3, 5, 6
Veterinarian, Napoleon, Ohio
Age 49, Director Since 1995

Peter A. Diehl - 2, 4, 5, 8
President, Diehl, Inc.,
Defiance, Ohio
Age, 53 Director Since 1998

John U. Fauster, III, D.D.S. - 2, 3, 5
Dentist, Defiance, Ohio
Age 66, Director Since 1975

Gerald W. Monnin - 2, 4, 6
Chairman of the Board,
Northwest Controls,
Defiance, Ohio
Age 65, Director Since 1997

James L. Rohrs - 1, 3, 8
President and Chief
Operating Officer,
First Federal Bank, Executive Vice
President, First Defiance
Age 56, Joined Company 1999,
Director Since 2002

Thomas A. Voigt - 4, 5, 6
Vice President, General Manager,
Bryan Publishing Company,
Bryan, Ohio
Age 61, Director Since 1995

----------
1. Permanent Member of Executive Committee

2. Audit Committee Financial Corp.

3. Investment Committee

4. Compensation Committee

5. Long Range Planning Committee

6. Corporate Governance Committee

7. Trust Committee

8. First Insurance & Investments Board of Directors

--------------------------------------------------------------------------------
FIRST DEFIANCE FINANCIAL CORP. CORPORATE OFFICERS

William J. Small
Chairman, President, and
Chief Executive Officer
Joined Company 1994

Don C. Van Brackel
Vice Chairman
Officer Since 1992

John C. Wahl
Executive Vice President,
Chief Financial Officer,
and Corporate Treasurer
Age 43, Joined Company 1994

James L. Rohrs
Executive Vice President,
Joined Company 1999

John W. Boesling
Senior Vice President,
Corporate Secretary
Age 56, Joined Company 1971

Rachel L. Ulrich
Senior Vice President
Age 38, Joined Company 1996

--------------------------------------------------------------------------------
FIRST FEDERAL BANK OF THE MIDWEST

William J. Small
Chairman and
Chief Executive Officer

Don C. Van Brackel
Vice Chairman

James L. Rohrs
President, Chief Operating Officer

Gregory R. Allen
Executive Vice President,
Chief Lending Officer

Mark D. Gazarek
Executive Vice President,
Trust Services

Dennis E. Rose, Jr.
Executive Vice President,
Operations

Jeffrey D. Vereecke
Executive Vice President,
Retail Banking

John C. Wahl
Executive Vice President, Finance
Chief Financial Officer

John W. Boesling
Senior Vice President, Secretary

Patricia A. Cooper
Senior Vice President, Operations

Eric A. Morman
Senior Vice President,
Commercial Lending

Patrick S. Rothgery
Senior Vice President,Residential Lending

Rachel L. Ulrich
Senior Vice President,Human Resources

FIRST INSURANCE & INVESTMENTS, INC.

Steven P. Grosenbacher
President

Kenneth G. Keller
Executive Vice President,
Group Health & Life

Timothy S. Whetstone
Executive Vice President,
Secretary

Lawrence H. Woods
Executive Vice President,
Property & Casualty

--------------------------------------------------------------------------------
SHAREHOLDER INFORMATION

ANNUAL MEETING

The Annual Meeting of Shareholders of First Defiance Financial Corp. will be
held on Tuesday, April 20, 2004 at 1:00 p.m. at the office of First Federal
Bank, 601 Clinton Street, Defiance, Ohio 43512.

INVESTOR INFORMATION

Shareholders, investors and analysts interested in additional information about
First Defiance Financial Corp. may contact Jack Wahl, Chief Financial Officer,
at the corporate office, (419)782-5015.

FIRST DEFIANCE ON THE WEB

First Defiance Financial Corp. is located on the Internet at www.fdef.com

STOCK TRANSFER AGENT

Shareholders with questions concerning the transfer of shares, lost
certificates, dividend payments, dividend reinvestment, receipt of multiple
dividend checks, duplicate mailings or changes of address should contact:

Registrar and Transfer Company
First Defiance Financial Corp. Transfer Agent
10 Commerce Drive
Cranford, NJ 07016-3572
Telephone: 800-368-5948

SECURITIES LISTING

First Defiance Financial Corp. common stock trades on the National Market System
of the NASDAQ Stock Market under the symbol FDEF.

As of March 5, 2004, there were approximately 1,600 stockholders of record and
6.4 million shares outstanding.

PRICE RANGE

Year Ended December 31, 2003

High Low
First Quarter $20.67 $18.21
Second Quarter $20.70 $18.50
Third Quarter $26.80 $19.28
Fourth Quarter $30.65 $24.00

Year Ended December 31, 2002

High Low
First Quarter $17.25 $15.01
Second Quarter $21.45 $16.95
Third Quarter $21.14 $15.70
Fourth Quarter $19.70 $15.00

DIVIDENDS POLICY

Cash dividends on the common stock are declared quarterly and have been paid
since First Defiance and its predecessor, First Federal Savings and Loan, went
public in 1993. The company's Board of Directors has increased the quarterly
rate six times since 1997. The current annual dividend rate is $.80 per share.

DIVIDEND REINVESTMENT PLAN

Shareholders may automatically reinvest dividends in additional First Defiance
Financial Corp. common stock through the Dividend Reinvestment Plan, which also
provides for purchase by voluntary cash contributions. For additional
information, please contact the Registrar and Transfer Company at 800-368-5948.

AUDITORS

Ernst and Young LLP
1300 Huntington Building
Cleveland, OH 44115

GENERAL COUNSEL

Vorys, Sater, Seymour and Pease LLP
Suite 2100 Atrium Two
221 East Fourth Street
Cincinnati, Ohio 45201

[LOGO]
FIRST DEFIANCE FINANCIAL CORP.
First Defiance Financial Headquarters
601 Clinton Street
Defiance, Ohio 43512
www.fdef.com
419-782-5015

[LOGO]
FIRST FEDERAL BANK
First Federal Bank of the Midwest
601 Clinton Street
Defiance, Ohio 43512
www.first-fed.com
419-782-5015

[LOGO]
FIRST INSURANCE & INVESTMENTS
First Insurance & Investments, Inc.
419 Fifth Street, Suite 1200
Defiance, Ohio 43512
www.firstii.com
419-784-5431

For investor relations information,
please visit www.fdef.com

[LOGO] FDEF
NASDAQ
LISTED