EXHIBIT B

             SEVERANCE AGREEMENT AND COMPLETE AND PERMANENT RELEASE

April 19, 2002

Mr. David A. Stearns
14611 Dogwood Lane
Woodstock IL 60098

1.   Your employment with Blackhawk State Bank ("the Company") will end on May
     1, 2002.  This date is considered your termination date for benefit
     purposes.  In accordance with the terms of the Company's plans, no
     contributions by the Company will be made on your behalf after May 1, 2002,
     and payouts will be made to you in accordance with the terms of the plans.

2.   The Company offers to do the following in consideration of your execution
     and return of this Severance Agreement and Complete and Permanent Release
     (the "Release):

     a.   Pay you twenty-six (26) weeks of severance pay at your current weekly
          salary $1,923.08.  The amounts paid to you pursuant to this sub-
          paragraph will not be taken into account as compensation under any
          welfare, pension, retirement or similar program that bases benefits in
          whole or in part on compensation received from the Company;

     b.   Pay seventy-percent (70%) of the premium for COBRA health insurance
          continuation coverage and 50% of the premium for COBRA dental
          insurance continuation coverage [the Company will pay $356.29 medical
          and $24.38 dental / month for employee + spouse coverage] through and
          including the month in which you receive your last severance check
          (hereafter referred to as the "severance period"), should you elect
          continuation of these insurances.  The Company will pay its portion
          directly to the COBRA administrator and will deduct your portion of
          the premiums from your severance checks.  After the severance period,
          you will be responsible for 100% of the cost of such continuation
          coverage for as long as you may remain eligible;

     c.   Not contest your claim for unemployment compensation benefits based on
          the circumstances of the termination of your employment with the
          Company, if you apply for unemployment compensation benefits after
          receipt of your last severance check.  For unemployment compensation
          purposes, the amounts paid under subparagraphs a and b shall be
          allocated at a gross amount of $1,923.08 per week commencing with the
          week in which you receive your first severance check; and,

     d.   Provide outplacement assistance through Furst Transitions in Rockford
          for up to twenty-six (26) weeks.  Outplacement assistance will include
          individual job search counseling, administrative assistance, use of
          private office, unlimited access to personal computer, Internet and
          resource materials, long distance calling, answering service, and
          various other job search support supplies. Outplacement assistance
          will end prior to the twenty-sixth (26th) week in the event you secure
          other employment prior to the end of this time period.

3.   You will start to receive your severance checks, less employment and income
     tax withholdings, and your portion of COBRA medical and dental continuation
     coverage, if elected, on the first normal pay date following your
     termination date which falls at least ten (10) business days after you
     execute and return this Release to the Company, directed to me.  This is
     because you have seven (7) calendar days from the date you sign this
     Release to revoke and void this Release by giving written notice of your
     intent to do so to the Company, directed to me.  This Release shall not
     become effective or enforceable until this seven-day period has expired.

4.   By signing below, you release the Company, its parent corporations, and its
     and their affiliates and subsidiaries and its and their past, current and
     future officers, directors, agents, employees, predecessors, successors and
     assigns (the "Releasees") from any and all claims that you might have
     relating to your employment and the termination thereof arising prior to
     the date you sign this Release, and by signing below you agree, to the
     fullest extent permitted by law, never to sue any of the Releasees
     regarding such matters.  Subject to the above, the claims and rights that
     you are releasing include, but are not limited to, claims for wrongful or
     constructive discharge, breach of contract, harassment, unlawful terms and
     conditions of employment, retaliation, defamation, invasion of privacy,
     discrimination (including, but not limited to, discrimination on the basis
     of age under the Age Discrimination in Employment Act and state and local
     law) and any and all other claims that might be brought under a federal,
     state or local law, order or regulation that regulates or relates to the
     employment relationship and/or employee benefits, whether such claims are
     known or unknown at the time your sign this Release.  We advise you to
     consult with an attorney before signing this Release.

5.   You have twenty-one (21) calendar days from the date you receive this
     Release in which to sign and return it to the Company, directed to me.

6.   By signing below, you acknowledge that the severance pay and other
     consideration provided for in this Release is greater than and in lieu of
     any other severance pay or similar obligations that the Releasees might
     otherwise have to pay you based on any written or oral agreement or promise
     or otherwise.  However, whether or not you sign this Release, you will
     receive pay for your fifteen (15) days of accrued but unused vacation, on
     the Company's next pay date (May 3, 2002).

7.   By signing below, you agree that you have not and will not disclose, reveal
     or characterize (directly or indirectly by innuendo or otherwise) the
     existence and terms of this Release, except as required by law, to anyone
     other than your immediate family, attorney and tax advisor and further
     agree that if you disclose information about this Release to your immediate
     family, attorney and/or tax advisor, they shall also comply with this
     confidentiality provision.

8.   By signing below, you agree not to make disparaging remarks about any of
     the Releasees, or their products or practices (including, but not limited
     to, personnel practices); provided, however, that you may give non-
     malicious and truthful testimony if properly subpoenaed to do so.

9.   By signing below, you acknowledge your obligation to continue complying
     with the Pledge of Confidentiality between you and the Company, dated March
     15, 2001 (hereafter referred to as the Confidentiality Agreement).

10.  By signing below, you acknowledge that as part of your employment, you were
     exposed to confidential information relating to the Company's policies,
     procedures and operations and information about the Company's customers
     which the Company has an obligation to keep confidential ("Confidential
     Information").  Therefore, as an essential ingredient of and in
     consideration of this Agreement and the payment of the amounts described in
     Paragraph 2, you hereby agree that, except with the express prior written
     consent of the Company, for a period of one (1) year after the termination
     of your employment with the Company (the "Restrictive Period") you (a) will
     not, directly or indirectly, on your own behalf or on behalf of any other
     person or legal entity which owns or operates a bank, savings and loan
     association, credit union, savings bank or similar financial institution
     ("Financial Institution"), solicit, accept or provide (or assist others in
     doing so), from or to any Customer or any representative of any Customer,
     any products or services of the type provided by the Company; and (b) will
     not, directly or indirectly, encourage, advise or solicit (or assist
     others, including any Financial Institution, in doing so) any other Company
     employee to leave employment with the Company.  For purposes of this
     Agreement, "Customer" shall mean any person or entity that is receiving
     products or services from the Company at the time of the termination of
     your employment (a) with whom or with which you had business contact during
     the two (2) years preceding the termination of your employment; or (b)
     about whose account you are knowledgeable by virtue of having managed or
     supervised, during the two (2) years preceding the termination of your
     employment, the person or persons with responsibility for the Customer.  If
     you violate the Restrictive Covenant and the Company brings legal action
     for injunctive or other relief, the Company shall not, as a result of the
     time involved in obtaining such relief, be deprived of the benefit of the
     full period of the Restrictive Covenant.  Accordingly, the Restrictive
     Covenant shall be deemed to have the duration specified in this Paragraph
     10 computed from the date the relief is granted but reduced by the time
     between the period when the Restrictive Period began and the date of the
     first violation of the Restrictive Covenant.  The foregoing Restrictive
     Covenant shall not prohibit you from directly or indirectly owning more
     than five percent (5%) of the outstanding capital stock or similar
     securities of any Financial Institution that is publicly traded.

11.  By signing below, you agree that in the event that you breach any of the
     provisions in paragraphs 4, 7, 8, 9, or 10 the Company shall have no
     obligation to make any of the severance payments provided for in sub-
     paragraphs 2 (a) - (b).  Further, you agree that, if you breach paragraph
     10, in addition to all relief which may be awarded by a Court, you will be
     required to return all amounts paid pursuant to subparagraphs 2 (a) -(b)
     during any periods in which you were in breach of paragraph 10.

12.  By signing below, you agree that, to the extent permitted by law, if the
     Company and/or any other Releasee successfully brings an action for your
     failure to comply with the terms of this Release or successfully defends an
     action brought by you in violation of this Release, the Company and the
     Releasee shall be entitled to recover its and their attorneys' fees and
     costs as part of such action, as well as any and all other relief deemed
     appropriate by a court.  The Company agrees that, to the extent permitted
     by law, if you successfully bring an action against it for its failure to
     comply with the terms of this Release, you shall be entitled to recover
     your attorneys' fees and costs as part of such action, as well as any and
     all other relief deemed appropriate by a court.

13.  By signing below, you and the Company agree that any lawsuit to enforce or
     interpret (in any way) paragraph 10 of this Release can be brought and
     maintained only in a circuit court in Wisconsin and you and the Company
     expressly waive any rights that you and it otherwise may have to remove any
     such lawsuit to a federal court or to have a jury trial.  You further agree
     to submit to personal jurisdiction in the circuit courts of Wisconsin for
     such purposes.

14.  This Agreement will be interpreted, governed and enforced according to the
     law of the State of Wisconsin.

15.  The provisions of this Agreement are severable, and if any provision should
     be found invalid or unenforceable, such invalidity or unenforceability
     shall not affect the remaining provisions hereof and they shall remain in
     full force and effect as if such invalid or unenforceable provisions were
     omitted.

16.  This Release supersedes any prior written or oral agreements between you
     and the Company except for the Confidentiality Agreement.  This Release
     constitutes the complete understanding between you and the Company
     concerning your separation from employment.  No other promises or
     agreements shall be binding unless signed by you and the Company.

17.  The Company's rights under this Release shall be fully assignable and shall
     inure to the benefit of any successor or assignor of the Company.

18.  The sending of any notice or document to the Company under this Release
     shall be done via certified United States mail (return receipt requested)
     to Blackhawk State Bank, P.O. Box 719, Beloit, WI  53512, and directed to
     my attention.

BLACKHAWK STATE BANK

By:  /s/ R. Richard Bastian III
     ---------------------------------------------
     R. Richard Bastian III
     President and Chief Executive Officer

AGREED TO AND ACCEPTED THIS 22nd DAY OF APRIL, 2002

/s/ David A. Stearns
--------------------------
David Stearns (Signature)