"First Defiance was interested in this program from the time it wasannounced in October," said William J. Small, Chairman, President and CEO ofFirst Defiance Financial Corp. "After thorough analysis of the program and itsbenefits, our board decided to submit an application. The additional capitalgives us opportunities beyond our already well-capitalized position, and willhelp to increase First Federal Bank's lending opportunities throughout ourfootprint and continue implementing our long-term growth strategy despiteuncertain economic conditions."

The Preferred Stock, Series A will pay cumulative dividends at a rate of5% per year for the first five years and 9% per year thereafter. FirstDefiance cannot redeem the preferred securities during the first three yearsafter issuance except with the proceeds from a "qualified equity offering."First Defiance is restricted for a period of three years from the closing dateor the date the preferred shares are redeemed, whichever is the earlier, inthe buyback of company stock and in increasing the quarterly dividend inexcess of the current level.

"This program was designed to increase lending in order to stimulate theeconomy," said Small. "First Defiance, through the solid lending practices atFirst Federal Bank, plans to do its share to help improve economiccircumstances in our area. In addition, we are developing a foreclosureforbearance program to assist certain First Federal Bank mortgage loancustomers who are struggling with their mortgage payments."

About First Defiance Financial Corp.

First Defiance Financial Corp., headquartered in Defiance, Ohio, is theholding company for First Federal Bank of the Midwest and First Insurance &Investments. First Federal operates 36 full service branches and 45 ATMlocations in northwest Ohio, southeastern Michigan and Ft. Wayne, Indiana.First Insurance & Investments specializes in property and casualty and grouplife and health insurance, with offices in Defiance and Bowling Green, Ohio.

For more information, visit the company's Web site at www.fdef.com .

Safe Harbor Statement

This news release may contain certain forward-looking statements withinthe meaning of Section 27A of the Securities Act of 1933, as amended, andSection 21 B of the Securities Act of 1934, as amended, which are intended tobe safe harbors created thereby. Those statements may include, but are notlimited to, all statements regarding intent, beliefs, expectations,projections, forecasts and plans of First Defiance Financial Corp. and itsmanagement, and specifically include statements regarding: future movements ofinterest rates, the production levels of mortgage loan generation, the abilityto continue to grow loans and deposits, the ability to benefit from a changinginterest rate environment, the ability to sustain credit quality ratios atcurrent or improved levels, the ability to sell OREO properties, continuedstrength in the market area for First Federal Bank of the Midwest, and theability of the Company to grow in existing and adjacent markets. Theseforward-looking statements involve numerous risks and uncertainties, includingthose inherent in general and local banking, insurance and mortgageconditions, competitive factors specific to markets in which the Company andits subsidiaries operate, future interest rate levels, legislative andregulatory decisions or capital market conditions and other risks anduncertainties detailed from time to time in the Company's Securities andExchange Commission (SEC) filings, including the Company's Annual Report onForm 10-K for the year ended December 31, 2007. One or more of these factorshave affected or could in the future affect the Company's business andfinancial results in future periods and could cause actual results to differmaterially from plans and projections. Therefore, there can be no assurancesthat the forward-looking statements included in this news release will proveto be accurate. In light of the significant uncertainties in theforward-looking statements included herein, the inclusion of such informationshould not be regarded as a representation by the Company or any otherpersons, that the objectives and plans of the Company will be achieved. Allforward-looking statements made in this news release are based on informationpresently available to the management of the Company. The Company assumes noobligation to update any forward-looking statements.

SOURCE First Defiance Financial Corp.