<PAGE>   1




                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934


                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934


     FOR THE TRANSITION PERIOD FROM __________________ TO __________________

                        COMMISSION FILE NUMBER: 001-15933

                              BLUE VALLEY BAN CORP
             (Exact name of registrant as specified in its charter)

Kansas                                                            48-1070996

  (State or other jurisdiction of                              (I.R.S. Employer
   incorporation or organization)                            Identification No.)

11935 Riley
                                                                  66225-6128
Overland Park, Kansas

(Address of principal executive offices)                          (Zip Code)


       Registrant's telephone number, including area code: (913) 338-1000



           Securities registered pursuant to Section 12(b) of the Act:

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------

Guarantee with respect to the         American Stock Exchange
Trust Preferred Securities,
$8.00 par value, of BVBC
Capital Trust 1


        Securities registered pursuant to Section 12(g) of the Act: None





<PAGE>   2




     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     As of March 1, 2001 the registrant had 2,158,876 shares of Common Stock
($1.00 par value) outstanding, of which 1,027,652 shares were held by
non-affiliates. The Common Stock of the registrant is not publicly traded;
therefore, the aggregate market value of the registrant's voting stock held by
non-affiliates is not ascertainable.





<PAGE>   3

                              BLUE VALLEY BAN CORP

                                 FORM 10-K INDEX

<TABLE>
<CAPTION>
                                                                                             Page No.
<S>                                                                                          <C>
PART I.

Item I.   Business                                                                                2

Item 2.   Properties                                                                             19

Item 3.   Legal Proceedings                                                                      20

Item 4.   Submission of Matters to a Vote of Security Holders                                    20

PART II.

Item 5.   Market for the Registrant's Common Equity and Related Stockholder Matters              21

Item 6.   Selected Financial Data                                                                22

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of
          Operations                                                                             24

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk                             49

Item 8.   Financial Statements and Supplementary Data                                            51

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial
          Disclosure                                                                             51

PART III.

Item 10.  Directors and Executive Officers of the Registrant                                     51

Item 11.  Executive Compensation                                                                 57

Item 12.  Security Ownership of Certain Beneficial Owners and Management                         62

Item 13.  Certain Relationships and Related Transactions                                         63

PART IV.

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K                      64
</TABLE>




                                       1

<PAGE>   4


                                     PART I

ITEM 1:  BUSINESS

THE COMPANY AND SUBSIDIARIES

         Blue Valley Ban Corp. ("Blue Valley", the "Company") is a bank holding
company organized in 1989. Subsequent to year-end December 31, 2000, Blue Valley
elected to become a financial holding company and such status was granted. The
Company's wholly-owned subsidiary, Bank of Blue Valley (the "Bank") was also
organized in 1989 to provide banking services to closely-held businesses, their
owners, professionals and individuals in Johnson County, Kansas, a high growth,
demographically attractive area within the Kansas City, Missouri - Kansas
Metropolitan Statistical Area (the "MSA"). The focus of Blue Valley has been to
take advantage of the current and anticipated growth in our market area as well
as to serve the needs of small and mid-sized commercial borrowers - customers
that we believe currently are underserved as a result of banking consolidation
in the industry generally and within our market specifically.

         We have experienced significant internal growth since our inception. In
addition, in 1994, we acquired the deposits of a branch of a failed savings and
loan institution to augment our internal growth and we expanded into an
additional market which management believed was attractive. In 1994, we also
completed the construction of our current headquarters in Overland Park, Kansas.
We currently have three banking locations in Johnson County, Kansas, including
our main office in Overland Park, a full-service office in Olathe, Kansas, and a
supermarket banking facility in Shawnee, Kansas. Also, subsequent to fiscal
year-end December 31, 2000, we opened another full-service office in Shawnee,
Kansas.

         Our lending strategy focuses on commercial lending, and, to a lesser
extent, residential and consumer lending. We strive to identify, develop and
maintain diversified lines of business which provide acceptable returns on a
risk adjusted basis. Our primary lines of business consist of commercial and
industrial lending, commercial real estate lending, construction lending,
indirect lending, leasing and residential mortgage lending.

         As a complement to our lending activities, we seek to develop lines of
business which diversify our revenue sources and increase our non-interest
income. In addition to fees generated in conjunction with our loan and lease
portfolios, we derive non-interest income by providing investment brokerage
services and trust services.

         In addition to the Bank, we have two direct wholly-owned subsidiaries,
Blue Valley Building Corp., which owns the building and property that comprises
our headquarters in Overland Park, Kansas, and BVBC Capital Trust I, which was
created to offer the trust preferred securities and to purchase our junior
subordinated debentures. The Bank has one wholly-owned subsidiary, Blue Valley
Investment Corp., which owns and services a portion of a commercial lease
portfolio that we purchased in 1999.



                                       2
<PAGE>   5

OUR MARKET AREA

         We operate as a community bank, serving the banking needs of small and
medium-sized companies and individuals in the Kansas City MSA generally, and in
suburban Johnson County, in particular. Our trade area generally consists of
Johnson County, Kansas. We believe that coupling our strategy of providing
exceptional customer service and local decision making with attractive market
demographics has led to a rate of growth which exceeds the natural growth rate
of the banking industry as well as the internal growth experienced locally by
our peers.

         The income levels and growth rate of Johnson County, Kansas compare
favorably to national averages. Johnson County's population growth rate ranks in
the top 2% of counties nationally, and its per capita income ranks in the top 1%
of counties nationally. Johnson County is also a significant banking market in
the State of Kansas and in the Kansas City MSA. According to available industry
data, as of June 30, 2000, total deposits in Johnson County, including those of
banks, thrifts and credit unions, were approximately $7.9 billion which
represented 20.45% of total deposits in the State of Kansas and 30.79% of total
deposits in the Kansas City MSA.

         As our founders anticipated, the trade area surrounding our main
banking facility in Overland Park has become one of the most developed retail
areas in the Kansas City MSA. Our Olathe, Kansas branch is located approximately
10 miles west of our main office. We opened our Olathe branch in 1994 when we
acquired the deposits of the Olathe branch of a failed savings and loan
association. We made this acquisition because it was located in a contiguous
market area and we believed that it represented a stable deposit base. The
Shawnee, Kansas banking facilities are approximately 20 miles northwest of our
headquarters location. We opened our Shawnee grocery branch for the convenience
of our existing customers in Shawnee, and to expand our market presence in
Shawnee. During the first quarter of 2001, construction of our free-standing
banking facility in Shawnee, Kansas was completed and operations commenced.

LENDING ACTIVITIES

         Overview. Our principal loan categories include commercial, commercial
real estate, construction, indirect, leasing and residential mortgages. We also
offer a variety of consumer loans. Our primary source of income is interest
earned on our loan portfolio. As of December 31, 2000, our loans represented
approximately 69.37% of our total assets. Our legal lending limit to any one
borrower was $8.5 million at December 31, 2000 and our largest single borrower
as of that date had outstanding loans of $8.3 million.

         We have been successful in expanding our loan portfolio because of the
commitment of our staff and the economic growth in our area of operation. Our
staff has significant experience in lending and has been successful in offering
our products to potential customers and existing customers. We believe that we
have been successful in maintaining our customers because of our staff's
attentiveness to the banking needs of


                                       3
<PAGE>   6


our customers and the development of personal relationships with them. We strive
to become a strategic business partner with our customers, not just a source of
funds.

         We conduct our lending activities pursuant to the loan policies adopted
by our board of directors. These policies currently require the approval of our
loan committee of all commercial credits in excess of $600,000 and all real
estate credits in excess of $1.0 million. Credits up to $600,000 on commercial
loans and $1.0 million on real estate loans can be approved by the President.
Commercial credits up to $500,000 and real estate credits up to $1.0 million can
also be approved by the joint signatures of our Senior Lending Officer, and
Senior Vice President - Mortgage Banking. Our management information systems and
loan review policies are designed to monitor lending sufficiently to ensure
adherence to our loan policies. The following table shows the composition of our
loan portfolio at December 31, 2000.

                                 LOAN PORTFOLIO

<TABLE>
<CAPTION>
                                                    AS OF DECEMBER 31, 2000
                                                 ----------------------------
                                                   AMOUNT           PERCENT
                                                    (DOLLARS IN THOUSANDS)
<S>                                              <C>                   <C>
Commercial real estate......................     $     42,267          14.69%
Residential real estate.....................           37,290          12.96
Commercial..................................           76,556          26.61
Personal....................................           35,864          12.47
Home equity.................................           10,657           3.70
Construction................................           59,733          20.76
Leases......................................           25,302           8.81
                                                 ------------    -----------
      Total loans and leases................          287,669         100.00%
Less allowance for loan losses..............            4,440
                                                 ------------
Loans receivable, net.......................     $    283,229
                                                 ------------
</TABLE>


         Commercial loans. As of December 31, 2000, approximately $76.6 million,
or 26.61%, of our loan portfolio represented commercial loans. The Bank has
developed a strong reputation in the servicing of small business and commercial
loans. We have expanded this portfolio through the addition of commercial
lending staff and as a result of our reputation. Commercial loans have
historically been a significant portion of our loan portfolio and we expect to
continue our emphasis on this loan category.

         The Bank's commercial lending activities historically have been
directed to small and medium-sized companies in the Kansas City MSA, focusing on
Johnson County, Kansas, with annual sales of between $100,000 and $20 million.
The Bank's commercial customers are primarily firms engaged in manufacturing,
service, retail, construction, distribution and sales with significant
operations in our market areas. The Bank's commercial loans are primarily
secured by real estate, accounts receivable, inventory and equipment, and the
Bank generally seeks to obtain personal guarantees for its commercial loans. As
of December 31, 2000, approximately 7.63% of the number of our commercial loans
had outstanding balances in excess of $300,000, and these loans accounted for
52.43% of the total carrying value of our commercial loan portfolio. The Bank
primarily underwrites its commercial loans on the basis of the borrowers' cash
flow and ability to


                                       4
<PAGE>   7



service the debt, as well as the value of any underlying collateral and the
financial strength of any guarantors.

         Approximately $3.7 million, or 4.89%, of our commercial loans are Small
Business Administration loans, of which $2.8 million is government guaranteed.
The SBA guarantees the repayment of a portion of the principal on these loans,
plus accrued interest on the guaranteed portion of the loan. Under the federal
Small Business Act, the SBA may guarantee up to 85% of qualified loans of
$150,000 or less and up to 75% of qualified loans in excess of $150,000, up to a
maximum guarantee of $1.0 million. We are an active SBA lender in our market
area and have been approved to participate in the SBA Certified Lender Program.

         Commercial lending is subject to risks specific to the business of each
borrower. In order to address these risks, we seek to understand the business of
each borrower, place appropriate value on any personal guarantee or collateral
pledged to secure the loan, and structure the loan amortization to maintain the
value of any collateral during the term of the loan.

         Commercial real estate loans. The Bank also makes loans to provide
permanent financing for retail and office buildings, multi-family buildings and
churches. As of December 31, 2000, approximately $42.3 million, or 14.69%, of
our loan portfolio represented commercial real estate mortgage loans. Our
commercial real estate mortgage loans are underwritten on the basis of the
appraised value of the property, the cash flow of the underlying property, and
the financial strength of any guarantors.

         Risks inherent in commercial real estate lending are related to the
market value of the property taken as collateral, the underlying cash flows and
documentation. Commercial real estate lending involves more risk than
residential lending because loan balances may be greater and repayment is
dependent on the borrower's operations. We attempt to mitigate these risks by
carefully assessing property values, investigating the source of cash flow
servicing the loan on the property and adhering to our loan documentation
policy.

         Construction loans. Our construction loans include loans to developers,
home building contractors and other companies and consumers for the construction
of single family homes, land development, and commercial buildings, such as
retail and office buildings and multi-family properties. As of December 31,
2000, approximately $59.7 million, or 20.76%, of our loan portfolio represented
real estate construction loans. The builder and developer loan portfolio has
been a consistent and profitable component of our loan portfolio over our
eleven-year history. We attribute this success to our availability and prompt
service. The Bank's experience and reputation in this area have enabled it to
focus on relationships with a smaller number of larger builders. The Bank's
focus on larger and more established builders has permitted it to increase the
total value of its real estate construction portfolio. Construction loans are
made to qualified builders to build houses to be sold following construction,
pre-sold houses and model houses. These loans are generally underwritten based
upon several factors, including the experience and current financial condition
of the borrowing entity, amount of the loan to



                                       5
<PAGE>   8


appraised value, and general conditions of the housing market. Construction
loans are also made to individuals for whom houses are being constructed by
builders with whom the Bank has an existing relationship. Those loans are made
on the basis of the individual's financial condition, the loan to value ratio,
the reputation of the builder, and whether the individual will be pre-qualified
for permanent financing.

         Risks related to construction lending include assessment of the market
for the finished product, reasonableness of the construction budget, ability of
the borrower to fund cost overruns, and the borrower's ability to liquidate and
repay the loan at a point when the loan-to-value ratio is the greatest. We seek
to manage these risks by, among other things, ensuring that the collateral value
of the property throughout the construction process does not fall below
acceptable levels, ensuring that funds disbursed are within parameters set by
the original construction budget, and properly documenting each construction
draw.

         Lease financing. Our lease portfolio includes capital leases that we
have originated and leases that we have acquired from brokers or third parties.
As of December 31, 2000, our lease portfolio totaled $25.3 million, or 8.81%, of
our total loan portfolio, consisting of $11.9 million principal amount of leases
originated by us and $13.4 million principal amount of leases that we purchased.
We provide lease financing for a variety of equipment and machinery, including
office equipment, heavy equipment, telephone systems, tractor trailers and
computers. Lease terms are generally from three to five years. In 1999, we
expanded our lease financing sales staff and administrative staff. As a result,
we have been able to acquire additional brokers and direct relationships.
Management believes this area is attractive because of its ability to provide a
source of both interest and fee income. Our leases are generally underwritten
based upon several factors, including the overall credit worthiness, experience
and current financial condition of the lessee, the amount of the financing to
collateral value, and general conditions of the market.

         Of our lease portfolio at December 31, 2000, $2.5 million, or 9.86%,
represented leases that Blue Valley Investment acquired on February 1, 1999 for
approximately $12.0 million from National Refuelers Leasing ("NRL"), a tanker
truck leasing company involved in bankruptcy proceedings. These leases represent
leases of tanker trucks used to transport fuel. Many of these tanker trucks are
used at airports and similar locations. Of the total number of leases acquired
by Blue Valley Investment, approximately $8.7 million in principal amount
represented leases that satisfied the Bank's underwriting criteria for leases,
and were purchased by the Bank from Blue Valley Investment. The remaining NRL
assets held by Blue Valley Investment totaling $3.3 million represented leases
that had defaults or delinquencies at the time of purchase. However, as of
December 31, 2000, the entire remaining portfolio of $2.5 million in leases was
supported by lease paper which was current. We expect our interest income from
the NRL leases to decline over the next year as the portfolio matures.

         The primary risks related to our lease portfolio are the value of the
underlying collateral and specific risks related to the business of each
borrower. To address these risks, we attempt to understand the business of each
borrower, value the underlying



                                       6
<PAGE>   9


collateral appropriately and structure the amortization to maximize the value of
the collateral during the term of the lease.

         Residential mortgage loans. Our residential mortgage loan portfolio
consists primarily of first and second mortgage loans on residential properties.
As of December 31, 2000, $37.3 million, or 12.96%, of our loan portfolio
represented residential mortgage loans. In 2000, we originated approximately
$82.0 million of residential mortgage loans, of which we sold approximately
$79.6 million, or 97.09%, in the secondary market. The terms of these loans are
for 15, 20 or 30 years, and accrue interest at a fixed or variable rate. Due to
interest rate risk considerations, we generally sell our fixed rate residential
mortgage loans in the secondary market. For our own portfolio, we typically
originate fixed-rate loans with a balloon payment in 2-5 years with 15 to 30
year amortizations. By offering these products, we can offer credit to
individuals who are self-employed or have significant income from partnerships
or investments, who are often unable to satisfy the underwriting criteria
permitting the sale of their mortgages into the secondary market.

         We originate conventional first mortgage loans primarily through
referrals from real estate brokers, builders, developers, prior customers and
media advertising. In addition, since 1999, we have offered customers the
ability to apply for mortgage loans and to pre-qualify for mortgage loans over
the Internet through our electronic banking service. To date, mortgage loans
originated over the Internet have not represented a material amount of our
mortgage loan originations. However, as a result of our recent expansion of our
Internet Mortgage personnel, we expect Internet mortgage loan originations to
increase over the next several years at a more rapid rate than our overall
mortgage loan originations. The origination of a mortgage loan from the date of
initial application through closing normally takes 15 to 60 days. We acquire
forward commitments to sell mortgage loans on those that we intend to sell into
the secondary market to reduce market risk on mortgage loans in the process of
origination and those held for sale.

         Our mortgage loan credit review process is consistent with the
standards set by traditional secondary market sources. We review appraised value
and debt service ratios, and we gather data during the underwriting process in
accordance with various laws and regulations governing real estate lending. We
require pre-approval from secondary market sources before we approve loans to be
sold into the secondary market.

         Loans originated by the Bank are sold with servicing released to
increase current income and reduce the costs associated with retaining servicing
rights. Commitments are obtained from the appropriate investor on a loan-by-loan
basis on a 30, 45 or 60 day delivery commitment. Interest rates are committed to
the borrower when a rate commitment is obtained from the investor. Loans are
funded by the Bank and purchased by the investor within 30 days following
closing pursuant to commitments obtained at the time of origination. We sell
conventional conforming loans and all loans that are non-conforming as to credit
quality to secondary market investors for cash on a non-recourse basis.
Consequently, foreclosure losses on all sold loans are generally the
responsibility of the investor and not that of the Bank.




                                       7
<PAGE>   10



         As with other loans to individuals, the risks related to residential
mortgage loans include primarily the value of the underlying property and the
financial strength and employment stability of the borrower. We attempt to
manage these risks by performing a pre-funding quality control review that
consists of the verification of employment and utilizes a detailed checklist of
loan qualification requirements, including the source and amount of down
payments, bank accounts, existing debt and overall credit.

         Consumer and other loans. As of December 31, 2000, our consumer and
other loans totaled $35.9 million, or 12.47%, of our total loan portfolio.
Substantially all of this amount consisted of installment loans to individuals
in our market area. Installment lending offered directly by the Bank in our
market area includes automobile loans, recreational vehicle loans, home
improvement loans and unsecured lines of credit and other loans, to
professionals, people in education, industry and government, as well as retired
individuals and others. A significant portion of our consumer loan portfolio
consists of indirect automobile loans offered through automobile dealerships
located primarily in our immediate market. As of December 31, 2000,
approximately $25.9 million, or 8.99%, of our loan portfolio represented
indirect installment loans. There are currently 11 dealerships participating in
this program. Our loans made through this program generally represent loans to
purchase new cars.

         Since 1999, we have offered customers the ability to apply for consumer
loans, personal lines of credit and overdraft protection lines of credit over
the Internet through our electronic banking services. To date, consumer loan
applications received over the Internet have not represented a material amount
of our consumer loan portfolio. Our consumer and other loans are underwritten
based on the borrower's income, current debt, past credit history, collateral,
and the reputation of the originating dealership with respect to indirect
automobile loans.

         Consumer loans are subject to the same risks as other loans to
individuals, including the financial strength and employment stability of the
borrower. In addition, many consumer loans are subject to the additional risk
that the loan is not secured by collateral. For some of the loans that are
secured, the underlying collateral may be rapidly depreciating and not provide
an adequate source of repayment if we are required to repossess the collateral.
We attempt to mitigate these risks by requiring a down payment and carefully
verifying and documenting the borrower's credit quality, employment stability,
monthly income, and with respect to indirect automobile loans, understanding and
documenting the value of the collateral and the reputation of the originating
dealership.

INVESTMENT ACTIVITIES

         The objectives of our investment policy are to:

         o    secure the safety of principal;

         o    provide adequate liquidity;



                                       8
<PAGE>   11



         o    provide securities for use in pledging for public funds or
              repurchase agreements; and

         o    maximize after-tax income consistent with servicing the Bank's
              customers' needs.

         We invest primarily in direct obligations of the United States,
obligations guaranteed as to principal and interest by the United States,
obligations of agencies of the United States and bank-qualified obligations of
state and local political subdivisions. In order to ensure the safety of
principal, we typically do not invest in mortgage-backed securities and other
higher-yielding instruments. We also may invest from time to time in corporate
debt or other securities as permitted by our investment policy. In addition, we
enter into federal funds transactions with our principal correspondent banks,
and primarily act as a net seller of these funds. The sale of federal funds are
effectively short-term loans from us to other banks.

         Our investment accounts also include minimal equity investments in the
Federal Home Loan Bank ("FHLB"). We invest in FHLB in order to be a member,
which qualifies us to use their services, including FHLB borrowings. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operation - Liquidity and Capital Resources."

DEPOSIT SERVICES

         The principal sources of funds for the Bank are core deposits from the
local market areas surrounding the Bank's offices, including demand deposits,
interest-bearing transaction accounts, money market accounts, savings deposits
and certificates of deposit of less than $100,000. Transaction accounts include
interest-bearing and non-interest-bearing accounts which provide the Bank with a
source of fee income and cross-marketing opportunities as well as a low-cost
source of funds. The Bank also offers two types of short-term investment
accounts. The Bank's money market account is a daily access account that has a
higher rate than a personal interest-bearing checking account and allows for
limited check-writing ability. A significant portion of our deposit growth
during 2000 and 1999 was attributable to a new money market deposit product, our
money management account, or "short-term parking account," introduced by the
Bank in the fourth quarter of 1998. The money management account provides a
hybrid of the features available from a traditional money market account and a
traditional time deposit. The account requires a minimum balance of $10,000 and
allows for daily deposits but limits withdrawals to the first day and the 15th
day of each month. This account pays a rate of interest which is higher than a
customer could receive on a traditional money market account but lower than the
rates generally available on certificates of deposit. We believe that the
trade-off to depositors between higher interest rates but more limited access to
withdrawals has proven to be an attractive product in our market areas and
provides us with a more attractive source of funds than other alternatives such
as Federal Home Loan Bank borrowings, due to our ability to cross-sell
additional services to these account holders. Time and savings accounts also
provide a relatively stable and low cost source of funding. In 1999, the Bank
changed its policy to allow for acceptance of



                                       9
<PAGE>   12



brokered deposits which can be utilized to support the growth of the Bank. As of
December 31, 2000, the Bank had $865,000 in brokered deposits, and the Bank does
not anticipate brokered deposits becoming a meaningful percentage of its deposit
base. In pricing deposit rates, management considers profitability, the matching
of term lengths with assets, the attractiveness to customers and rates offered
by our competitors.

INVESTMENT BROKERAGE SERVICES

         In 1999, the Bank began offering investment brokerage services through
an unrelated broker-dealer. These services are currently offered at our Overland
Park, Shawnee and Olathe locations. Two individuals responsible for providing
these services are joint employees of the Bank and the registered broker-dealer,
and the remaining individual is employed by the broker-dealer under contract to
the Bank. Investment brokerage services provide a source of fee income for the
Bank. In 2000, the amount of our fee income generated from investment brokerage
services was $250,000.

TRUST SERVICES

         We began offering trust services in 1996. Until 1999, the Bank's trust
services were offered exclusively through the employees of an unaffiliated trust
company. The Bank hired a full-time officer in 1999 to develop the Bank's trust
business. Trust customers are both existing Bank customers and new customers. We
believe that the ability to offer trust services as a part of our complement of
financial services to new customers of the Bank presents a significant
cross-marketing opportunity. The services currently offered by the Bank's trust
department include the administration of self-directed individual retirement
accounts, qualified retirement plans, custodial and directed trust accounts. The
Bank also offers investment advisory services with the assistance of the
unaffiliated trust company. As of December 31, 2000, the Bank's trust department
administered 112 accounts, with assets under management of approximately $35.3
million. Trust services provide the Bank with a source of fee income and
additional deposits. In 2000, the amount of our fee income from trust services
was $155,000.

COMPETITION

         We encounter competition primarily in seeking deposits and in obtaining
loan customers. The level of competition for deposits in our market area and
nationally is quite high. Our principal competitors for deposits are other
financial institutions within a few miles of our locations, including other
banks, savings institutions and credit unions. Competition among these
institutions is based primarily on interest rates offered, the quality of
service provided, and the convenience of banking facilities. Additional
competition for depositors' funds comes from U.S. government securities, private
issuers of debt obligations and suppliers of other investment alternatives for
depositors.

         We compete in our lending, investment brokerage and trust activities
with other financial institutions, such as banks and thrift institutions, credit
unions, automobile financing companies, mortgage companies, securities firms,
investment companies and other finance companies. Many of our competitors are
not subject to the same extensive



                                       10
<PAGE>   13




federal regulations that govern bank holding companies and federally insured
banks and state regulations governing state chartered banks. As a result, these
non-bank competitors have advantages over us in providing certain services. Many
of the financial institutions with which we compete are larger than us with
greater financial resources, name recognition and market presence.

EMPLOYEES

         As of December 31, 2000, the Bank had approximately 129 full-time
employees. Blue Valley, Blue Valley Building Corp., BVBC Capital Trust I and
Blue Valley Investment Corp. do not have any full-time employees. None of the
employees of the Bank is subject to a collective bargaining agreement. We
consider the Bank's relationship with its employees to be excellent.

                           REGULATION AND SUPERVISION

         Blue Valley and its subsidiaries are extensively regulated under both
federal and state laws. Laws and regulations to which Blue Valley and the Bank
are subject govern, among other things, the scope of business, investments,
reserve levels, capital levels relative to operations, the nature and amount of
collateral for loans, the establishment of branches, mergers and consolidations
and the payment of dividends. These laws and regulations are intended to protect
depositors, not stockholders. Any change in applicable laws or regulations may
have a material effect on Blue Valley's business and prospects, and legislative
and policy changes may affect Blue Valley's operations. Blue Valley cannot
predict the nature or the extent of the effects on its business and earnings
that fiscal or monetary policies, economic controls or new federal or state
legislation may have in the future.

         The following references to statutes and regulations affecting Blue
Valley and the Bank are brief summaries only and do not purport to be complete
and are qualified in their entirety by reference to the statutes and
regulations.

RECENT LEGISLATION

         The enactment of legislation described below has significantly affected
the banking industry generally and will have an on-going effect on Blue Valley
and its subsidiaries in the future.

         GRAMM-LEACH-BLILEY ACT. The President signed the Gramm-Leach-Bliley Act
into law on November 12, 1999. This major banking legislation expands the
permissible activities of bank holding companies such as Blue Valley by
permitting them to engage in activities, or affiliate with entities that engage
in activities, that are "financial in nature." Activities that the Act expressly
deems to be financial in nature include, among other things, securities and
insurance underwriting and agency, investment management and merchant banking.
The Federal Reserve and the Treasury Department, in cooperation with one
another, must determine what additional activities are "financial in nature."
With certain exceptions, the Gramm-Leach-Bliley Act similarly expands the
authorized



                                       11
<PAGE>   14


activities of subsidiaries of national banks. The provisions of the
Gramm-Leach-Bliley Act authorizing the expanded powers became effective March
11, 2000.

         Bank holding companies that intend to engage in the newly authorized
activities must elect to become "financial holding companies." Financial holding
company status is only available to a bank holding company if all of its
affiliated depository institutions are "well capitalized" and "well managed,"
based on applicable banking regulations, and have a Community Reinvestment Act
rating of at least "a satisfactory record of meeting community credit needs."
Financial holding companies and banks may continue to engage in activities that
are financial in nature only if they continue to satisfy the well capitalized
and well managed requirements. Bank holding companies that do not elect to be
financial holding companies or that do not qualify for financial holding company
status may engage only in non-banking activities deemed "closely related to
banking" prior to adoption of the Gramm-Leach-Bliley Act. Subsequent to fiscal
year-end 2000, Blue Valley elected to become a financial holding company.

         The Act also calls for "functional regulation" of financial services
businesses in which functionally regulated subsidiaries of bank holding
companies will continue to be regulated by the regulator that ordinarily has
supervised their activities. As a result, state insurance regulators will
continue to oversee the activities of insurance companies and agencies, and the
Securities and Exchange Commission will continue to regulate the activities of
broker-dealers and investment advisers, even where the companies or agencies are
affiliated with a bank holding company. Federal Reserve authority to examine and
adopt rules regarding functionally regulated subsidiaries is limited. The Act
repeals some of the exemptions enjoyed by banks under federal securities laws
relating to securities offered by banks and licensing of broker-dealers and
investment advisers.

         The Gramm-Leach-Bliley Act imposes a new "affirmative and continuing"
obligation on all financial service providers (not just banks and their
affiliates) to safeguard consumer privacy and requires federal and state
regulators, including the Federal Reserve and the FDIC, to establish standards
to implement this privacy obligation. With certain exceptions, the Act prohibits
banks from disclosing to non-affiliated parties any non-public personal
information about customers unless the bank has provided the customer with
certain information and the customer has had the opportunity to prohibit the
bank from sharing the information with non-affiliates. The new privacy
obligations become effective July 1, 2001.

         Finally, the Act prevents companies engaged in commercial activities
from acquiring savings institutions, requires public disclosure of any
agreements between a depository institution and community groups regarding the
institution's Community Reinvestment Act record, adopts amendments designed to
modernize the Federal Home Loan Bank System and requires operators of automatic
teller machines to disclose any fees charged to non-customers that use the
machines.

         The Gramm-Leach-Bliley Act will be the subject of extensive rule making
by federal banking regulators and others. The effects of this legislation will
only begin to be


                                       12
<PAGE>   15



understood over the next several years and at this time cannot be predicted with
any certainty.

         ECONOMIC GROWTH AND REGULATORY PAPERWORK REDUCTION ACT OF 1996. The
Economic Growth and Regulatory Paperwork Reduction Act of 1996 became law on
September 30, 1996. This Act streamlined the non-banking activities application
process for well-capitalized and well-managed bank holding companies by
permitting qualified bank holding companies to commence an approved non-banking
activity without prior notice to the Federal Reserve, although written notice is
required within 10 days after commencing the activity. Also, the Act reduced the
prior notice period to 12 days in the event of any non-banking acquisition or
share purchase, assuming the size of the acquisition does not exceed 10% of
risk-weighted assets of the acquiring bank holding company and the consideration
does not exceed 15% of a bank holding company's Tier 1 capital. Among other
matters, the Economic Growth and Regulatory Paperwork Reduction Act also:

         o    Provided for the recapitalization of the Savings Association
              Insurance Fund of the FDIC (most of the members of which are, or
              were formerly, savings associations or savings banks) in order to
              bring it into parity with the FDIC's Bank Insurance Fund;

         o    Amended the Federal Fair Credit Reporting Act;

         o    Eliminated prior federal regulatory approval requirements for new
              officers and directors for recently organized banks and banks that
              have recently undergone a change of control;

         o    Amended the laws governing loans to bank insiders to permit them
              to participate in employee-wide programs offered by the bank; and

         o    Amended laws governing officer and director interlocks among
              unaffiliated depository institutions to permit such interlocks
              under a greater number of circumstances.

         RIEGLE-NEAL INTERSTATE BANKING AND BRANCHING EFFICIENCY ACT OF 1994.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
authorized bank holding companies to expand, by acquiring existing banks, into
all states, even those which had theretofore restricted entry. The legislation
also provides that a holding company may convert the banks it owns in different
states to branches of a single bank, unless a state has elected to prohibit
these interstate transactions. Statewide branching is permitted under Kansas
law, however, out of state banks may establish branches in Kansas only through
mergers with banks already located in Kansas. The federal legislation also
establishes limits on acquisitions by large banking organizations, providing
that no acquisition may be undertaken if it would result in the organization
having deposits exceeding either 10% of all bank deposits in the United States
or 30% of the bank deposits in the state in which the acquisition would occur.



                                       13
<PAGE>   16

BANK HOLDING COMPANY REGULATION

     Blue Valley is a bank holding company registered under the Bank Holding
Company Act of 1956. Under the Bank Holding Company Act, Blue Valley is subject
to periodic examination by the Federal Reserve and is required to file periodic
reports of its operations and such additional information as the Federal Reserve
may require.

     INVESTMENTS AND ACTIVITIES. A bank holding company must obtain approval
from the Federal Reserve before:

     o    Acquiring, directly or indirectly, ownership or control of any voting
          shares of another bank or bank holding company if, after the
          acquisition, it would own or control more than 5% of the shares of the
          bank or bank holding company (unless it already owns or controls the
          majority of the shares);

     o    Acquiring all or substantially all of the assets of another bank or
          bank holding company; or

     o    Merging or consolidating with another bank holding company.

         The Federal Reserve will not approve any acquisition, merger or
consolidation that would have a substantially anticompetitive result unless the
anticompetitive effects of the proposed transaction are clearly outweighed by a
greater public interest in meeting the convenience and needs of the community to
be served. The Federal Reserve also considers capital adequacy and other
financial and managerial factors in reviewing acquisitions or mergers.

     With certain exceptions, a bank holding company is also prohibited from:

          o    Acquiring or retaining direct or indirect ownership or control of
               more than 5% of the voting shares of any company that is not a
               bank or bank holding company; and

          o    Engaging, directly or indirectly, in any business other than that
               of banking, managing and controlling banks or furnishing services
               to banks and their subsidiaries.

     Bank holding companies may, however, engage in businesses found by the
Federal Reserve to be closely related to the business of banking or of managing
or controlling banks. These activities include making or servicing loans and
certain types of leases, engaging in certain insurance and discount brokerage
activities, performing certain data processing services, acting in certain
circumstances as a fiduciary or investment or financial advisor, owning savings
associations and making investments in corporations or projects designed to
promote community welfare. As a financial holding company, Blue Valley is
authorized to engage in the expanded activities permitted under the
Gramm-Leach-Bliley Act as long as it continues to qualify for financial holding
company status.


                                       14
<PAGE>   17

     Finally, subject to certain exceptions, the Bank Holding Company Act and
the Change in Bank Control Act, and the Federal Reserve's implementing
regulations, require Federal Reserve approval prior to any acquisition of
"control" of a bank holding company, such as Blue Valley. In general, a person
or company is presumed to have acquired control if it acquires 10% of the
outstanding shares of a bank or bank holding company and is conclusively
determined to have acquired control if it acquires 25% or more of the
outstanding shares of a bank or bank holding company.

     SOURCE OF STRENGTH. The Federal Reserve expects Blue Valley to act as a
source of financial strength and support for the Bank and to take measures to
preserve and protect the Bank in situations where additional investments in the
Bank may not otherwise be warranted. The Federal Reserve may require a bank
holding company to terminate any activity or relinquish control of a non-bank
subsidiary (other than a non-bank subsidiary of a bank) upon the Federal
Reserve's determination that the activity or control constitutes a serious risk
to the financial soundness or stability of any subsidiary depository institution
of the bank holding company. Further, federal bank regulatory authorities have
additional discretion to require a bank holding company to divest itself of any
bank or non-bank subsidiary if the agency determines that divestiture may aid
the depository institution's financial condition. Blue Valley Building Corp. is
Blue Valley's only direct subsidiary that is not a bank.

     CAPITAL REQUIREMENTS. The Federal Reserve uses capital adequacy guidelines
in its examination and regulation of bank holding companies and banks. If the
capital falls below minimum guideline levels, a bank holding company, among
other things, may be denied approval to acquire or establish additional banks or
non-bank businesses. The Federal Reserve's capital guidelines establish a
risk-based requirement expressed as a percentage of total risk-weighted assets
and a leverage requirement expressed as a percentage of total assets. The
risk-based requirement consists of a minimum ratio of total capital to total
risk-weighted assets of 8%, of which at least one-half must be Tier 1 capital
(which consists principally of stockholders' equity). The leverage requirement
consists of a minimum ratio of Tier 1 capital to total assets of 3%.

     The risk-based and leverage standards presently used by the Federal Reserve
are minimum requirements, and higher capital levels may be required if warranted
by the particular circumstances or risk profiles of individual banking
organizations. Further, any banking organization experiencing or anticipating
significant growth would be expected to maintain capital ratios, including
tangible capital positions, which is Tier 1 capital less all intangible assets,
well above the minimum levels.

     DIVIDENDS. The Federal Reserve has issued a policy statement concerning the
payment of cash dividends by bank holding companies. The policy statement
provides that a bank holding company experiencing earnings weaknesses should not
pay cash dividends exceeding its net income or which could only be funded in
ways that weakened the bank holding company's financial health, such as by
borrowing. Also, the Federal Reserve possesses enforcement powers over bank
holding companies and their non-bank subsidiaries to prevent or remedy actions
that represent unsafe or unsound practices or



                                       15
<PAGE>   18

violations of applicable statutes and regulations. Among these powers is the
ability to proscribe the payment of dividends by banks and bank holding
companies.

BANK REGULATIONS

     The Bank operates under a Kansas state bank charter and is subject to
regulation by the Kansas Banking Department and the FDIC. The Kansas Banking
Department and the FDIC regulate or monitor all areas of the Bank's operations,
including capital requirements, issuance of stock, declaration of dividends,
interest rates, deposits, record keeping, establishment of branches,
acquisitions, mergers, loans, investments, borrowing, security devices and
procedures and employee responsibility and conduct. The Kansas Banking
Department places limitations on activities of the Bank including the issuance
of capital notes or debentures and the holding of real estate and personal
property and requires the Bank to maintain a certain ratio of reserves against
deposits. The Kansas Banking Department requires the Bank to file a report
annually showing receipts and disbursements of the Bank, in addition to any
periodic report requested.

     DEPOSIT INSURANCE. The FDIC, through its Bank Insurance Fund, insures the
Bank's deposit accounts to a maximum of $100,000 for each insured depositor. The
FDIC, through its Savings Association Insurance Fund, insures certain deposit
accounts acquired by the Bank in 1994 from a branch of a failed savings
institution. These deposit accounts are insured to a maximum of $100,000 for
each insured depositor. The FDIC bases deposit insurance premiums on the
perceived risk each bank presents to its deposit insurance fund and currently
range from zero (for banks in the lowest risk-based premium category) to 27
cents for each $100 of insured deposits (for banks in the highest risk-based
premium category). In addition, all Bank Insurance Fund-insured and Savings
Association Insurance Fund-insured institutions currently pay an assessment of
1.96 cents for each $100 of insured deposits to service debt issued by the
Financing Corporation, a federal agency established to finance the
recapitalization of the former Federal Savings and Loan Insurance Corporation.
The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution has
engaged or is engaging in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations or has violated any applicable law,
regulation, order, or any condition imposed in writing by, or written agreement
with, the FDIC. The FDIC may also suspend deposit insurance temporarily during
the hearing process for a permanent termination of insurance if the institution
has no tangible capital. Management is not aware of any activity or condition
that could result in termination of the deposit insurance of the Bank.

     CAPITAL REQUIREMENTS. The FDIC has established the following minimum
capital standards for state-chartered, insured non-member banks, such as the
Bank: (1) a leverage requirement consisting of a minimum ratio of Tier 1 capital
to total assets of 3%; and (2) a risk-based capital requirement consisting of a
minimum ratio of total capital to total risk-weighted assets of 8%, at least
one-half of which must be Tier 1 capital. These capital requirements are minimum
requirements, and higher capital levels may be required if warranted by the
particular circumstances or risk profiles of individual institutions.


                                       16
<PAGE>   19

     The federal banking regulators also have broad power to take "prompt
corrective action" to resolve the problems of undercapitalized institutions. The
extent of the regulators' powers depends upon whether the institution in
question is "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized." Under the
prompt corrective action rules, an institution is:

     o    "Well-capitalized" if the institution has a total risk-based capital
          ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or
          greater, and a leverage ratio of 5% or greater, and the institution is
          not subject to an order, written agreement, capital directive, or
          prompt corrective action directive to meet and maintain a specific
          capital level for any capital measure;

     o    "Adequately capitalized" if the institution has a total risk-based
          capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of
          4% or greater, and a leverage ratio of 4% or greater;

     o    "Undercapitalized" if the institution has a total risk-based capital
          ratio that is less than 8%, a Tier 1 risk-based capital ratio that is
          less than 4%, or a leverage ratio that is less than 4%;

     o    "Significantly undercapitalized" if the institution has a total
          risk-based capital ratio that is less than 6%, a Tier 1 risk-based
          capital ratio that is less than 3%, or a leverage ratio that is less
          than 3%; and

     o    "Critically undercapitalized" if the institution has a ratio of
          tangible equity to total assets that is equal to or less than 2%.

     The federal banking regulators must take prompt corrective action with
respect to capital deficient institutions. Depending upon the capital category
to which an institution is assigned, the regulators' corrective powers include:

     o    Placing limits on asset growth and restrictions on activities,
          including the establishing of new branches;

     o    Requiring the institution to issue additional capital stock (including
          additional voting stock) or to be acquired;

     o    Restricting transactions with affiliates;

     o    Restricting the interest rate the institution may pay on deposits;

     o    Requiring that senior executive officers or directors be dismissed;

     o    Requiring the institution to divest subsidiaries;

     o    Prohibiting the payment of principal or interest on subordinated debt;
          and

                                       17
<PAGE>   20

     o    Appointing a receiver for the institution.

     Companies controlling an undercapitalized institution are also required to
guarantee the subsidiary institution's compliance with the capital restoration
plan subject to an aggregate limitation of the lesser of 5% of the institution's
assets at the time it received notice that it was undercapitalized or the amount
of the capital deficiency when the institution first failed to meet the plan.
The Federal Deposit Insurance Act generally requires the appointment of a
conservator or receiver within 90 days after an institution becomes critically
undercapitalized.

     As of December 31, 2000, the Bank had capital in excess of the requirements
for a "well-capitalized" institution.

     INSIDER TRANSACTIONS. The Bank is subject to restrictions on extensions of
credit to executive officers, directors, principal stockholders or any related
interest of these persons. Extensions of credit must be made on substantially
the same terms, including interest rates and collateral as the terms available
for third parties and must not involve more than the normal risk of repayment or
present other unfavorable features. The Bank is also subject to lending limits
and restrictions on overdrafts to these persons.

     COMMUNITY REINVESTMENT ACT REQUIREMENTS. The Community Reinvestment Act of
1977 requires that, in connection with examinations of financial institutions
within their jurisdiction, the federal banking regulators must evaluate the
record of the financial institutions in meeting the credit needs of their local
communities, including low and moderate income neighborhoods, consistent with
the safe and sound operation of those banks. These factors are also considered
in evaluating mergers, acquisitions and applications to open a branch or
facility. In its most recent examination, the Bank received a rating of
"outstanding record of meeting community credit needs." This is the highest
rating a bank may receive.

     STATE BANK ACTIVITIES. With limited exceptions, FDIC-insured state banks,
like the Bank, may not make or retain equity investments of a rate or in an
amount that are not permissible for national banks and also may not engage as a
principal in any activity that is not permitted for a national bank or its
subsidiary, respectively, unless the bank meets, and continues to meet, its
minimum regulatory capital requirements and the FDIC determines that the
activity would not pose a significant risk to the deposit insurance fund of
which the bank is a member.

     REGULATIONS GOVERNING EXTENSIONS OF CREDIT. The Bank is subject to
restrictions on extensions of credit to Blue Valley and on investments in Blue
Valley's securities and using those securities as collateral for loans. These
regulations and restrictions may limit Blue Valley's ability to obtain funds
from the Bank for its cash needs, including funds for acquisitions and for
payment of dividends, interest and operating expenses. Further, the Bank Holding
Company Act and Federal Reserve regulations prohibit a bank holding company and
its subsidiaries from engaging in various tie-in arrangements in connection with
extensions of credit, leases or sales of property or furnishing of services.

                                       18
<PAGE>   21

     RESERVE REQUIREMENTS. The Federal Reserve requires all depository
institutions to maintain reserves against their transaction accounts. Reserves
of 3% must be maintained against net transaction accounts of $42.8 million or
less (subject to adjustment by the Federal Reserve) and an initial reserve of
$1,284,000 plus 10% (subject to adjustment by the Federal Reserve to a level
between 8% and 14%) must be maintained against that portion of net transaction
accounts in excess of this amount. The balances maintained to meet the reserve
requirements imposed by the Federal Reserve may be used to satisfy liquidity
requirements.

OTHER REGULATIONS

     Interest and various other charges collected or contracted for by the Bank
are subject to state usury laws and other federal laws concerning interest
rates. The Bank's loan operations are also subject to federal laws applicable to
credit transactions. The federal Truth in Lending Act governs disclosures of
credit terms to consumer borrowers. The Home Mortgage Disclosure Act of 1975
requires financial institutions to provide information to enable the public and
public officials to determine whether a financial institution is fulfilling its
obligation to help meet the housing needs of the community it serves. The Equal
Credit Opportunity Act prohibits discrimination on the basis of race, creed or
other prohibited factors in extending credit. The Fair Credit Reporting Act of
1978 governs the use and provision of information to credit reporting agencies.
The Fair Debt Collection Act governs the manner in which consumer debts may be
collected by collection agencies. The various federal agencies charged with the
responsibility of implementing these federal laws have adopted various rules and
regulations. The deposit operations of the Bank are also subject to the Right to
Financial Privacy Act, which imposes a duty to maintain confidentiality of
consumer financial records and prescribes procedures for complying with
administrative subpoenas of financial records, and the Electronic Funds Transfer
Act, and Regulation E issued by the Federal Reserve to implement that Act, which
govern automatic deposits to and withdrawals from the use of ATMs and other
electronic banking services.

ITEM 2:  PROPERTIES

     The Bank's principal office occupies 2.40 acres of ground on the corner of
119th and Riley streets in Overland Park, Kansas. The construction of the
building was completed in 1994 and consists of 38,031 square feet. The building
and land are subject to third-party mortgage indebtedness in the original
principal amount of $2.5 million. As of December 31, 2000, the outstanding
principal amount of this indebtedness was $1.8 million.

     The Bank's Olathe, Kansas office occupies 0.93 acres of ground on the
corner of Santa Fe and Ridgeview Streets. The construction of the building was
completed in 1973, and consists of 4,116 square feet.

     The Bank's Shawnee, Kansas office currently occupies 425 square feet in a
grocery store located at Highway K-7 and 55th Street. The Bank leases this space
from Cosentino Food Marts under a lease with a primary term through January 18,
2002. The


                                       19
<PAGE>   22

Bank's free-standing facility in Shawnee, Kansas is also located at Highway K-7
and 55th Street and was completed during the first quarter of 2001. The building
consists of 4,000 square feet and occupies 0.85 acres of land.

     In 1998, the Bank purchased approximately 1.34 acres of undeveloped land on
the corners of K68 and US 69 Highway in Louisburg, Kansas, just south of Johnson
County for potential future development as a full-service branch.

ITEM 3:  LEGAL PROCEEDINGS

     We are involved from time to time in routine litigation incidental to our
business. We do not believe that we are a party to any material pending
litigation that in our opinion is likely to have a material adverse effect on
our consolidated financial condition, results of operations or cash flows.

ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security-holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.


                                       20
<PAGE>   23

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     MARKET FOR COMMON STOCK

     We are a reporting company under the Securities Exchange Act as a result of
a trust preferred securities offering we completed during July, 2000. No public
market currently exists for shares of our common stock, and none is expected to
develop for the foreseeable future. As of March 1, 2001, there were
approximately 137 record holders of our common stock.

     DIVIDENDS

     We have no history of paying dividends on shares of our common stock. Even
though in past years we have had earnings in an amount sufficient to pay
dividends on our common stock, we have elected to retain our earnings to fund
our growth.

     Because our consolidated net income consists largely of the net income of
the Bank, our ability to pay dividends on our common stock is subject to our
receipt of dividends from the Bank. The ability of the Bank to pay dividends to
us, and our ability to pay dividends to our stockholders, are regulated by
federal banking laws. In addition, if we elect to defer interest payments on our
outstanding junior subordinated debentures, we will be prohibited from paying
dividends on our common stock during such deferral.

     USE OF PROCEEDS

     On July 18, 2000, the Registration Statement on Form S-1 (File Nos.
333-34328 and 333-34328-01) filed by us and BVBC Capital Trust I was declared
effective by the SEC. The offering of the 1,437,500, 10.375% trust preferred
securities that was the subject of the Registration Statement commenced on July
21, 2000. The offering was made through an underwriting syndicate managed by
Stifel, Nicolaus & Company, Incorporated. The public offering price was $8.00
per trust preferred security, and we received aggregate net proceeds of
approximately $10.6 million, after deducting underwriting commissions and
estimated offering expenses of approximately $900,000. Of these net proceeds,
$7.1 million were used to retire outstanding indebtedness under our bank stock
loan and $2.0 million were contributed to the Bank in the form of additional
capital. We have retained the remainder of the proceeds for general corporate
purposes, including additional investments from time to time in the Bank in the
form of additional capital and possible future acquisitions.


                                       21
<PAGE>   24


ITEM 6:  SELECTED CONSOLIDATED FINANCIAL DATA

         The following table presents our consolidated financial data as of and
for the five years ended December 31, 2000, and should be read in conjunction
with the consolidated financial statements and notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," each
of which is included elsewhere in this Form 10-K. The selected statements of
condition and statements of income data, insofar as they relate to the five
years in the five-year period ended December 31, 2000, have been derived from
our audited consolidated financial statements.

<TABLE>
<CAPTION>
                                                                                   AS OF AND FOR THE
                                                                                YEAR ENDED DECEMBER 31,
                                                        ----------------------------------------------------------------------
                                                           2000           1999           1998           1997           1996
                                                        ----------     ----------     ----------     ----------     ----------
                                                        (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                                                     <C>            <C>            <C>            <C>            <C>
SELECTED STATEMENT OF INCOME DATA
Interest income:
   Loans, including fees ..........................     $   26,733     $   20,422     $   14,608     $   12,000     $    9,100
   Federal funds sold and interest-bearing deposits            777            431            396            276            315
   Securities .....................................          3,607          2,755          2,814          2,275          2,231
                                                        ----------     ----------     ----------     ----------     ----------
      Total interest income .......................         31,117         23,608         17,818         14,551         11,646
                                                        ----------     ----------     ----------     ----------     ----------

Interest expense:
   Interest-bearing demand deposits ...............            872            644            348            296            267
   Savings and money market deposit accounts ......          5,726          3,156          1,637          1,353          1,256
   Other time deposits ............................          7,555          6,032          6,247          4,985          3,668
   Funds borrowed .................................          2,543          1,372            973            624            605
                                                        ----------     ----------     ----------     ----------     ----------
      Total interest expense ......................         16,696         11,204          9,205          7,258          5,796
                                                        ----------     ----------     ----------     ----------     ----------
      Net interest income .........................         14,421         12,404          8,613          7,293          5,850
Provision for loan losses .........................          1,950          2,144          1,061            660            648
                                                        ----------     ----------     ----------     ----------     ----------
      Net interest income after provision for loan
        losses ....................................         12,471         10,260          7,552          6,633          5,202
                                                        ----------     ----------     ----------     ----------     ----------

Non-interest income:
   Loans held for sale fee income .................          1,154          1,623          1,329            439            232
   NSF charges & service fees .....................            655            553            598            499            402
   Other service charges ..........................            963            659            157            107             79
   Realized gain on securities available-for-sale .                             3            112              8             71
   Other income ...................................            284            186            450            401            424
                                                        ----------     ----------     ----------     ----------     ----------
      Total non-interest income ...................          3,056          3,024          2,646          1,454          1,208

Non-interest expense:
   Salaries and employee benefits .................          5,856          4,578          3,312          2,304          1,803
   Occupancy ......................................          1,124            894            748            663            581
     FDIC and other insurance .....................            177            113            121             86            290
   General & administrative .......................          3,136          3,095          1,815          1,603          1,196
                                                        ----------     ----------     ----------     ----------     ----------
      Total non-interest expense ..................         10,293          8,680          5,996          4,656          3,870
                                                        ----------     ----------     ----------     ----------     ----------
   Income before income taxes .....................          5,234          4,604          4,202          3,431          2,540
      Income tax provision ........................          1,757          1,521          1,386          1,145            918
                                                        ----------     ----------     ----------     ----------     ----------
      Net income ..................................     $    3,477     $    3,083     $    2,816     $    2,286     $    1,622
                                                        ==========     ==========     ==========     ==========     ==========

PER SHARE DATA
   Basic earnings .................................     $     1.62     $     1.45     $     1.36     $     1.24     $     0.88
   Diluted earnings ...............................           1.59           1.42           1.35           1.22           0.85
   Dividends ......................................           --             --             --             --             --
   Book value basic (at end of period) ............          11.12           8.83           7.99           6.64           5.49
   Weighted average common shares outstanding:
       Basic ......................................      2,141,523      2,131,372      2,065,400      1,843,288      1,836,796
       Diluted ....................................      2,191,305      2,166,008      2,084,088      1,867,844      1,912,876
</TABLE>




                                       22
<PAGE>   25

<TABLE>
<CAPTION>
                                                                                 AS OF AND FOR THE
                                                                               YEAR ENDED DECEMBER 31,
                                                       ---------------------------------------------------------------------
                                                          2000           1999           1998           1997           1996
                                                       ---------      ---------      ---------      ---------      ---------
                                                            (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S>                                                    <C>            <C>            <C>            <C>            <C>
SELECTED FINANCIAL CONDITION DATA
   (AT END OF PERIOD):
Total securities .................................     $  78,503      $  48,646      $  53,427      $  40,247      $  36,588
Total loans ......................................       287,669        250,410        161,444        127,308        101,323
Total assets .....................................       414,667        332,613        253,724        201,644        162,739
Total deposits ...................................       338,221        268,145        209,824        170,792        139,929
Funds borrowed ...................................        49,917         43,177         25,142         16,298         11,904
Total stockholders' equity .......................        23,815         18,869         17,016         13,464         10,100
Trust assets under administration ................        35,268         19,436         13,099          8,241          3,081

SELECTED FINANCIAL RATIOS AND OTHER DATA :
Performance Ratios:
      Net interest margin (1) ....................          4.31%          4.77%          4.30%          4.66%          4.57%
      Non-interest income to average assets ......          0.84           1.06           1.20           0.83           0.84
      Non-interest expense to average assets .....          2.84           3.04           2.72           2.66           2.69
      Net overhead ratio (2) .....................          2.00           1.98           1.52           1.83           1.85
      Efficiency ratio (3) .......................         58.89          56.26          53.26          53.23          54.83
      Return on average assets (4) ...............          0.96           1.08           1.28           1.30           1.13
      Return on average equity (5) ...............         16.84          17.43          18.98          20.62          17.79

Asset Quality Ratios:
      Non-performing loans to total loans ........          0.86%          0.21%          0.84%          0.33%          0.40%
      Allowance for possible loan losses to:
        Total loans ..............................          1.54           1.52           1.45           1.27           1.26
        Non-performing loans .....................        179.47         710.80         171.88         380.71         312.50
      Net charge-offs to average total loans .....          0.49           0.32           0.23           0.27           0.24
      Non-performing assets to total assets ......          0.68           0.22           0.55           0.61           0.28

Balance Sheet Ratios:
      Loans to deposits ..........................         85.05%         93.39%         76.94%         74.54%         72.41%
      Average interest-earning assets to average
        interest-bearing liabilities .............        113.30         116.11         116.57         114.55         114.76

Capital Ratios:
      Total equity to total assets ...............          5.74%          5.67%          6.71%          6.68%          6.21%
      Total capital to risk-weighted assets ratio          11.95           8.07           9.62           9.87           8.91
      Tier 1 capital to risk-weighted assets ratio          9.51           6.82           8.37           8.65           7.72
      Tier 1 capital to average assets ratio .....          7.47           5.80           6.13           6.28           5.57
</TABLE>

---------------
(1)  Net interest income divided by average interest-earning assets.
(2)  Non-interest expense less non-interest income divided by average total
     assets.
(3)  Non-interest expense divided by the sum of net interest income plus
     non-interest income.
(4)  Net income divided by average total assets.
(5)  Net income divided by average common equity.


                                       23
<PAGE>   26


ITEM 7:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following presents management's discussion and analysis of our
financial condition and results of operations as of the dates and for the
periods indicated. You should read this discussion in conjunction with our
"Selected Consolidated Financial Data," our consolidated financial statements
and the accompanying notes, and the other financial data contained elsewhere in
this report.

     This report contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. The Company
intends such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, and is including this statement for purposes of
those safe harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies and expectations of
the Company, can generally be identified by use of the words "believe,"
"expect," "intend," "anticipate," "estimate," "project," or similar expressions.
The Company is unable to predict the actual results of its future plans or
strategies with certainty. Factors which could have a material adverse effect on
the operations and future prospects of the Company include, but are not limited
to, fluctuations in market rates of interest and loan and deposit pricing; a
deterioration of general economic conditions or the demand for housing in the
Company's market areas; legislative or regulatory changes; adverse developments
in the Company's loan or investment portfolio; any inability to obtain funding
on favorable terms; the loss of key personnel; significant increases in
competition; and the possible dilutive effect of potential acquisitions or
expansions. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements.


OVERVIEW

     Net income for 2000 was $3.5 million, a $394,000, or 12.78% increase over
the $3.1 million earned in 1999. Diluted earnings per share increased 11.97% to
$1.59 at December 31, 2000 from $1.42 at December 31, 1999. The Company's return
on average assets and average stockholders' equity at year-end 2000 were 0.96%
and 16.84%, compared to 1.08% and 17.43%, respectively, for year-end 1999. The
principal contributor to our increase in net income during 2000 was an increase
of $2.0 million, or 16.26%, in net interest income.

     Non-interest income increased slightly by 1.06% to $3.1 million in 2000
from $3.0 million in 1999. Non-interest income to average assets decreased to
0.84% at December 31, 2000 from 1.06% at December 31, 1999. Increases in market
interest rates resulted in a lower number of residential mortgage loan
originations in 2000 compared to 1999. This resulted in significantly lower
origination fees during 2000 than during 1999.

     Total assets for the Company at December 31, 2000, were $414.7 million, an
increase of $82.1 million, or 24.67%, from $332.6 million at December 31, 1999.
Deposits and stockholders' equity at December 31, 2000 were $338.2 million and
$23.8 million, compared


                                       24
<PAGE>   27

with $268.1 million and $18.9 million at December 31, 1999, increases of $70.1
million, or 26.13%, and $4.9 million, or 26.21%, respectively.

     Loans at December 31, 2000 totaled $287.7 million, an increase of $37.3
million, or 14.88%, compared to December 31, 1999. The loan to deposit ratio at
December 31, 2000 was 85.05% compared to 93.39% at December 31, 1999. The
decrease in the loan to deposit ratio was due to deposit growth, which outpaced
loan growth by 1.9 times. Our funding philosophy has been to increase deposits
from retail and commercial deposit sources as necessary to fund loans within the
limits of the Bank's capital base.

     Our low level of non-performing assets reflects the Bank's conservative
underwriting policies and has resulted in low levels of nonaccrual loans. Over
the five years ended December 31, 2000, our non-performing loans to total loans
ratio has averaged 0.53%. As of December 31, 2000, non-performing loans equaled
0.86% of total loans. The non-performing ratio was above the historical average;
however, our non-performing credit relationships are being closely monitored and
our philosophy has been to value non-performing loans at their estimated
collectible value and to aggressively manage these situations. Generally, the
Bank maintains its allowance for loan losses in excess of its non-performing
loans. Over the five years ended December 31, 2000, our ratio of allowance for
loan losses to non-performing loans averaged 351.07%. As of December 31, 2000,
our ratio of allowance for loan losses to non-performing loans was 179.47%,
which was due to a higher level of our non-performing assets to total assets
than in previous years, as discussed above.

     The net charge-off ratio averages 0.31% for the five years ended December
31, 2000. Our net charge-off ratio for the year ended December 31, 2000 was
0.49%, slightly higher than our historical average due to defaults in the Bank's
portfolio of over-the-road truck and trailer leases. Rising fuel prices
contributed to these defaults and negatively impacted our net charge-off ratio.
In addition, we implemented a more aggressive charge-off policy during the first
quarter of 2000. Management intends to vigorously pursue collection of all
charged-off leases and loans.

NET INTEREST INCOME

     The primary component of our net income is our net interest income. Net
interest income is determined by the spread between the yields we earn on our
interest-earning assets and the rates we pay on our interest-bearing
liabilities, as well as the relative amounts of such assets and liabilities. Net
interest margin is determined by dividing net interest income by average
interest-earning assets.

     Years ended December 31, 2000 and 1999. Net interest income for 2000
increased to $14.4 million from $12.4 million in 1999, a $2.0 million, or
16.26%, increase.

     Interest income for 2000 was $31.1 million, an increase of $7.5 million, or
31.81%, from $23.6 million in 1999, primarily as a result of a $75.2 million, or
28.38%, growth in interest-earning assets. As a result of increases in market
interest rates during this period, the yield on interest-earning assets
increased to 9.22% in 2000, as compared to 8.99% in 1999, an increase of 23
basis points. Loan interest and fee income increased to $26.7 million from $20.4
million due


                                       25
<PAGE>   28

to greater volume of loans outstanding, which was primarily funded through
growth in core deposits. Interest income on investment securities increased by
$852,000 and the annualized tax-equivalent yield on our investment portfolio
increased 45 basis points in the current year period as compared to the prior
year period.

     Interest expense for 2000 was $16.7 million, up $5.5 million, or 49.02%,
from $11.2 million in 1999. We attribute the increase to a $56.3 million, or
28.13%, increase in our average interest-bearing deposits as well as a $15.7
million, or 56.03%, increase in other interest-bearing liabilities, including
FHLB borrowings and our junior subordinated debentures. Interest expense on
other interest-bearing liabilities increased to $2.5 million in 2000, up $1.1
million, or 85.35%, from $1.4 million in 1999. This increase is attributable
mainly to the issuance of our junior subordinated debentures in connection with
our trust preferred securities offering. Overall, rates paid on average
interest-bearing liabilities increased to 5.56% in the current year from 4.91%
in the prior year, an increase of 65 basis points.

     Years ended December 31, 1999 and 1998. Net interest income for 1999
increased to $12.4 million from $8.6 million in 1998, a $3.8 million, or 44.01%,
increase. This increase was primarily the result of a $59.7 million increase in
average interest-earning assets, which more than offset a $52.1 million increase
in average interest-bearing liabilities. Additionally, the decline in our cost
of funds was greater than the decline in the average rate we received on our
average interest-earning assets. Our net interest margin improved to 4.77%, from
4.30% during 1998. One of the major contributors to the improvement in our net
interest margin was interest of $2.0 million earned on a purchased lease
portfolio on average outstanding leases of $8.2 million, for a yield of 26.72%.
We expect our interest income from these purchased leases to decline over the
next two years as the portfolio matures. Without the interest income generated
from this portfolio, the net interest margin would have been 4.14%.

     Interest income for 1999 was $23.6 million, an increase of $5.8 million, or
32.50%, from $17.8 million in 1998, primarily as a result of a $59.7 million, or
29.05%, growth in interest-earning assets. Excluding the interest income
generated from the purchased lease portfolio discussed above, the yield on
average interest-earning assets declined from 8.78% in 1998 to 8.50%. However,
the increase in volume more than offset this 28 basis point decline in yield,
resulting in the $5.8 million increase in interest income from 1998 to 1999.
Interest income on available-for-sale securities decreased by $59,000, and the
tax-equivalent yield on our investment portfolio decreased 15 basis points in
1999 as compared to 1998. This resulted from our sale in 1998 of
higher-yielding, callable debt securities, which appeared to us likely to be
called due to the then-prevailing interest rate environment.

     Interest expense for 1999 was $11.2 million, up $2.0 million, or 21.72%,
from $9.2 million in 1998. We attribute the increase to a $42.4 million, or
26.88%, increase in our average balances of interest-bearing deposits as well as
a $9.7 million, or 52.57%, increase in other interest-bearing liabilities,
including FHLB borrowings and increased borrowings under our bank stock loan.
Overall, rates paid on average interest-bearing liabilities decreased to 4.91%
in 1999 from 5.22% in 1998, a decline of 31 basis points. The additional
deposits generated by the introduction of our short-term parking account were
used to fund a portion of our loan growth. The remaining funds were obtained
from other deposit products, as well as advances from the FHLB.

                                       26
<PAGE>   29

         Average Balance Sheets. The following table sets forth for the periods
and as of the dates indicated, information regarding our average balances of
assets and liabilities as well as the dollar amounts of interest income from
interest-earning assets and interest expense on interest-bearing liabilities and
the resultant yields or costs. Ratio, yield and rate information are based on
average daily balances where available; otherwise, average monthly balances have
been used. Nonaccrual loans are included in the calculation of average balances
for loans for the periods indicated.


                                       27
<PAGE>   30

                       AVERAGE BALANCES, YIELDS AND RATES


<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                           -----------------------------------------------------------------------------------------
                                                       2000                        1999                        1998
                                           ---------------------------   ---------------------------   -----------------------------
                                                               AVERAGE                       AVERAGE                         AVERAGE
                                            AVERAGE             YIELD/    AVERAGE             YIELD/    AVERAGE              YIELD/
                                            BALANCE   INTEREST   RATE     BALANCE  INTEREST    RATE     BALANCE  INTEREST     RATE
                                           ------------------  -------   --------  --------  -------   --------  --------    -------
                                                                         (DOLLARS IN THOUSANDS)
<S>                                        <C>         <C>        <C>    <C>        <C>        <C>     <C>        <C>         <C>
ASSETS
Federal funds sold......................   $  12,412   $   777    6.26%  $  9,482   $   431    4.55%   $  7,786   $   396     5.09%
Investment securities - taxable.........      42,539     2,894    6.80     33,422     2,087    6.24      33,836     2,191     6.48
Investment securities - non-taxable (1).      14,984       956    6.38     14,399       895    6.22      13,502       835     6.18
Mortgage loans held for sale............       2,072       165    7.96      1,413       112    7.93       2,026       138     6.81
Loans, net of unearned discount and fees     268,227    26,568    9.91    206,310    20,310    9.84     148,221    14,470     9.76
                                           ---------   -------           --------  --------            --------   -------
     Total earning assets...............     340,234    31,360    9.22    265,026    23,835    8.99     205,371    18,030     8.78
                                           ---------   -------           --------  --------            --------   -------
Cash and due from banks - non-interest
bearing.................................      12,063                        9,883                         7,689
Allowance for possible loan losses......      (4,102)                      (2,842)                       (2,069)
Premises and equipment, net.............       5,845                        5,505                         4,776
Other assets............................       8,246                        7,723                         4,491
                                           ----------                    --------                      --------
     Total assets.......................   $ 362,286                     $285,295                      $220,258
                                           ==========                    ========                      ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits-interest bearing:
   Interest-bearing demand accounts.....   $  24,920   $   872    3.50%  $ 19,260   $   644    3.34%   $ 12,620   $   348     2.76%
   Savings and money market deposits....     110,911     5,726    5.16     74,535     3,156    4.23       41,001    1,637     3.99
   Time deposits........................     120,632     7,555    6.26    106,366     6,032    5.67      104,141    6,247     6.00
                                           ---------   -------           --------  --------            --------   -------
     Total interest-bearing deposits....     256,463    14,153    5.52    200,161     9,832    4.91      157,762    8,232     5.22
                                           ---------   -------           --------  --------            --------   -------
Short -term borrowings..................      26,680     1,395    5.23     16,122       690    4.28       12,192      591     4.85
Long-term debt .........................      17,156     1,148    6.69     11,973       682    5.70        6,223      382     6.14
                                           ---------   -------           --------  --------            --------   -------
     Total interest-bearing liabilities      300,299    16,696    5.56    228,256    11,204    4.91      176,177    9,205     5.22
                                           ---------   -------           --------  --------            --------   -------
Non-interest bearing deposits...........      38,543                       37,314                         27,567
Other liabilities ......................       2,791                        2,034                          1,678
Stockholders' equity....................      20,653                       17,691                         14,836
                                           ---------                     --------                       --------
     Total liabilities and stockholders'
       equity...........................   $ 362,286                     $285,295                       $220,258
                                           =========                     ========                       ========
Net interest income/spread .............               $14,664    3.66%             $12,631    4.08%              $ 8,825     3.56%
                                                       =======   ======             =======   ======              =======    ======
Net interest margin.....................                          4.31%                        4.77%                          4.30%
                                                                 ======                       ======                         ======
</TABLE>

(1)  Presented on a full tax-equivalent basis assuming a tax rate of 34%.

                                       28
<PAGE>   31



     Analysis of Changes in Net Interest Income Due to Changes in Interest Rates
and Volumes. The following table presents the dollar amount of changes in
interest income and interest expense for major components of interest-earning
assets and interest-bearing liabilities. It distinguishes between the increase
or decrease related to changes in balances and changes in interest rates. For
each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to:

     o    changes in volume, reflecting changes in volume multiplied by the
          prior period rate; and

     o    changes in rate, reflecting changes in rate multiplied by the prior
          period volume.

     For purposes of this table, changes attributable to both rate and volume,
which cannot be segregated, have been allocated proportionately to the change
due to volume and the change due to rate.


                                       29
<PAGE>   32

                         CHANGES IN INTEREST INCOME AND
                        EXPENSE VOLUME AND RATE VARIANCES


<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                         ----------------------------------------------------------------------------
                                                       2000 COMPARED TO 1999           1999 COMPARED TO 1998
                                         -------------------------------------  -------------------------------------
                                               CHANGE       CHANGE                  CHANGE       CHANGE
                                               DUE TO       DUE TO      TOTAL       DUE TO       DUE TO       TOTAL
                                                RATE        VOLUME      CHANGE       RATE        VOLUME       CHANGE
                                              -------      -------     -------     -------      -------      -------
                                                                         (DOLLARS IN THOUSANDS)
<S>                                           <C>          <C>         <C>         <C>          <C>          <C>
Federal funds sold ......................     $   190      $   156     $   346     $   (33)     $    68      $    35
Investment securities - taxable .........         200          607         807         (78)         (26)        (104)
Investment securities - non-taxable (1) .          24           37          61           5           55           60
Mortgage loans held for sale ............           0           53          53          31          (57)         (26)
Loans, net of unearned discount .........         145        6,113       6,258         120        5,720        5,840
                                              -------      -------     -------     -------      -------      -------
      Total interest income .............         559        6,966       7,525          45        5,760        5,805
                                              -------      -------     -------     -------      -------      -------
Interest-bearing demand accounts ........          32          196         228          84          212          296
Savings and money market deposits .......         798        1,772       2,570         104        1,415        1,519
Time deposits ...........................         665          858       1,523        (352)         137         (215)
Short-term borrowings ...................         178          527         705         (56)         155           99
Long-term debt ..........................         133          333         466         (25)         325          300
                                              -------      -------     -------     -------      -------      -------
      Total interest expense ............       1,806        3,686       5,492        (245)       2,244        1,999
                                              -------      -------     -------     -------      -------      -------
Net interest income .....................     $(1,247)     $ 3,280     $ 2,033     $   290      $ 3,516      $ 3,806
                                              =======      =======     =======     =======      =======      =======
</TABLE>


(1) Presented on a fully tax-equivalent basis assuming a tax rate of 34%.




                                       30
<PAGE>   33

PROVISION FOR LOAN LOSSES

     We make provisions for loan losses in amounts management deems necessary to
maintain the allowance for loan losses at an appropriate level. During the year
ended December 31, 2000, we provided $2.0 million for loan losses, as compared
to $2.1 for the year ended December 31, 1999, a decrease of $194,000, or 9.05%.
During 2000, our allowance for loan losses increased as our provision exceeded
our net charge-offs. The loan portfolio increased to $287.7 million in 2000 from
$250.4 million in 1999, or 14.88%. The provision for loan losses increased to
$2.1 million in 1999 from $1.1 million in 1998, or 102.07%, while the loan
portfolio increased to $250.4 million in 1999 from $161.4 million in 1998, or
55.11%.

     The adequacy of the allowance is analyzed monthly based on internal loan
reviews and quality measurements of our loan portfolio. The Bank computes its
allowance by assigning specific reserves to impaired loans, and then applies a
general reserve based on a loss factor applied to the rest of the loan
portfolio. The loss factor is determined based on such items as management's
evaluation of risk in the portfolio, local economic conditions, and historical
loss experience. The Bank has for many years used several different calculations
to confirm the results of the allowance calculation, including an historical
loss ratio calculation, a comparison to peer group ratios, as well as regulatory
calculation formulas. To further assist in confirming the results of the
above-described allowance computation, during 1999, the Bank refined its risk
grading system by developing associated reserve factors for each risk grade.
Although a relatively new computation for the Bank, and currently used only to
confirm the allowance computation, management believes this methodology could
become the tool used to compute the allowance in the future.

     The allowance for loan losses as a percentage of loans increased to 1.54%
at December 31, 2000, as compared to 1.52% in 1999 and 1.45% in 1998. We
increased the allowance for loan losses in 2000, 1999 and 1998 based upon an
analysis of several factors, including changing loan mix and overall growth in
the loan portfolio. Our reserve on impaired loans increased 65.82%, to $1.4
million at December 31, 2000 from $825,000 at December 31, 1999 due in part to
an increase in nonperforming credit relationships, which are being closely
monitored. The general reserve factor, which is applied to all unimpaired loans,
decreased to 1.09% at December 31, 2000 compared to 1.22% at December 31, 1999.
The general reserve factor at December 31, 1998 was 1.02%. This slight decrease
was partially attributable to our personal loan portfolio. The personal loan
portfolio was $35.9 million at December 31, 2000 compared to $44.7 million at
December 31, 1999, an $8.9 million, or 19.85% decrease. The general reserve
applied to personal loans at December 31, 2000 was 1.04% compared to 1.54% at
December 31, 1999. The higher general reserve applied in 1999 was due to higher
risk factors and the significant growth in this portfolio of 126.56% from 1998
to 1999. During 2000, growth slowed as a result of tightened or stricter credit
terms and the outstanding portfolio began to decline in size as consumers
refinanced outside of the Bank.

     Due to the factors discussed above and the growth in our commercial real
estate and construction loan portfolios, the overall result was a slightly
higher allowance for loan losses at December 31, 2000 compared with December 31,
1999. The allowance for loan losses represents our best estimate of probable
losses that have been incurred as of the respective balance sheet dates.


                                       31

<PAGE>   34

NON-INTEREST INCOME

         The following table describes the items of our non-interest income for
the periods indicated:

                               NON-INTEREST INCOME

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31
                                                     ------------------------------
                                                      2000        1999        1998
                                                     ------      ------      ------
                                                            (IN THOUSANDS)
<S>                                                  <C>         <C>           <C>
Loans held for sale fee income.................      $1,154      $1,623      $1,329
NSF charges and service fees....................        655         553         598
Other service charges...........................        963         659         157
Realized gain on sales of investment securities.         --           3         112
Other income ...................................        284         186         450
                                                     ------      ------      ------
      Total non-interest income.................     $3,056      $3,024      $2,646
                                                     ======      ======      ======
</TABLE>

          Non-interest income increased to $3.1 million, or 1.06%, during 2000,
from $3.0 million during 1999. This increase is attributable to increases in NSF
charges and services fees of $102,000, other service charges of $304,000 and
other income of $98,000. Other service charge income includes lease referral
fees which generated an additional $126,000 over 1999 and investment brokerage
services which generated an additional $220,000 over 1999. The increases in NSF
charges and services, other service charges and other income during 2000 were
offset by a decrease in loans held for sale fee income of $469,000. This
decrease is primarily a result of a lower level of residential mortgage loans we
originated and sold in the secondary market in 2000 compared to 1999, due to the
rising interest rate environment and a slow down in the residential mortgage
industry.

          Non-interest income increased to $3.0 million in 1999 from $2.6
million in 1998, an increase of 14.29%. These increases were primarily
attributable to the increase in origination fees resulting from the higher level
of residential mortgage loans which we originated and sold in the secondary
market in 1999 and 1998. The increase in loans held for sale fee income is the
result of $82.4 million of residential mortgage loans that we originated and
sold in the secondary market in 1999, as compared to $75.6 million in 1998.
Although our practice has been to hold substantially all of our investment
securities to maturity, in 1998 we recognized a substantial increase in gain on
sales of investment securities when we sold a number of debt securities in our
portfolio that were subject to call. Due to the interest rate environment, it
appeared likely that these securities would be called. By selling the securities
and reinvesting the proceeds, we were able to maintain a comparable yield while
extending the maturity of the dollars invested. Other service charge income
increased by $502,000 in 1999. This increase is a result of the Bank developing
new products which are beginning to generate fee-based income. Our investment
brokerage, commercial mortgage brokerage and brokered lease services generated
an additional $208,000 in 1999 over 1998. In addition a rental fleet of tanker
equipment purchased as part of a portfolio of leases during 1999 generated
rental income of $127,000 before it was eventually liquidated. The remainder of
the increase is a result of the growth in the Bank, and increases in general
customer relationship/retail fee based products, such as ATM, check orders, and
various other retail products. Other income has declined over the past two years
because as we have


                                       32
<PAGE>   35

grown and expanded our number of employees, we have leased less of our corporate
headquarters to outside parties, which decreased our rental income by $133,000
in 1999 as compared to 1998.

NON-INTEREST EXPENSE

          The following table describes the items of our non-interest expense
for the periods indicated.

                              NON-INTEREST EXPENSE


<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31
                                                     ------------------------------
                                                      2000        1999        1998
                                                     ------      ------      ------
                                                            (IN THOUSANDS)
<S>                                                  <C>         <C>         <C>
 Salaries and employee benefits.................    $ 5,856      $4,578      $3,312
 Occupancy......................................      1,124         894         748
 FDIC and other insurance expense...............        177         113         121
 General and administrative.....................      3,136       3,095       1,815
                                                    -------      ------      ------
       Total non-interest expenses..............    $10,293      $8,680      $5,996
                                                    =======      ======      ======
</TABLE>

          Non-interest expense increased to $10.3 million, or 18.58%, during
2000, as compared to $8.7 million in the prior year. This increase is primarily
attributable to increases in salaries and employee benefits and occupancy
expenses. Our salaries and employee benefits expense increased to $5.9 million
in 2000, or 27.92%, from $4.6 million in 1999, as we hired additional staff to
facilitate our growth. We had 129 full-time employees at December 31, 2000 as
compared to 112 at December 31, 1999. The increase in employee benefits expense
was also due to a sizable increase in our health insurance costs of which the
Bank absorbed the majority. Occupancy expenses increased to $1.1 million, or
25.73% in 2000, from $894,000 in 1999, which was primarily attributable to a
$120,000 increase in depreciation, and a $61,000 increase in maintenance
agreements and repairs and maintenance expenses as a result of capital
expenditures needed to facilitate our growth. A lease portfolio was purchased
during 1999 with the assistance of a third party. A referral fee is due to the
third party based on the performance of the portfolio. The referral fee accrued
in 2000 was $177,000 and is included in general and administrative expenses.

          Non-interest expense increased to $8.7 million in 1999 from $6.0
million in 1998, an increase of 44.76%. This increase was primarily the result
of increases in salaries and employee benefits and general and administrative
expenses. Our salaries and employee benefits expenses increased to $4.6 million
in 1999 from $3.3 million in 1998, as we hired additional staff to facilitate
our growth. We had 112 and 83 full-time employees at the end of 1999 and 1998,
respectively. General and administrative expense increased to $3.1 million in
1999 from $1.8 million in 1998, which is a direct result of our growth, as well
as our increased advertising and marketing efforts. Advertising and marketing
expenditures increased to $476,000 in 1999 from $269,000 in 1998. A lease
portfolio was purchased during 1999 with the assistance of a third party. A
referral fee is due to a third party based on performance of the portfolio. The
referral fee accrued in 1999 was $305,000 and is included in general and
administrative expenses.


                                       33
<PAGE>   36

INCOME TAXES

          Our income tax expense during 2000 was $1.8 million, compared to $1.5
million during 1999, and $1.4 million during 1998. These increases reflect our
higher earnings for the current and previous fiscal years. Our consolidated
income tax rate varies from the statutory rate principally due to the effects of
state income taxes and interest income earned on our municipal securities
portfolio which is generally tax-exempt for federal income tax purposes.

FINANCIAL CONDITION

          Lending Activities. Our loan portfolio is our main source of income,
and has been the principal component of our revenue growth. Our loan portfolio
reflects an emphasis on commercial, residential real estate, construction, and
personal lending and leasing. We emphasize commercial lending to professionals,
businesses and their owners. Commercial loans and loans secured by commercial
real estate accounted for 41.30% of our total loans at December 31, 2000, 36.41%
of our total loans at December 31, 1999, and over 40% of our total loans at year
end 1998, 1997, and 1996. These loans increased at a 24.91% compound annual rate
during the four-year period ended December 31, 2000.

          Loans were $287.7 million at December 31, 2000, an increase of $37.3
million, or 14.88%, compared to December 31, 1999. Loans at December 31, 1999
were $250.4 million, an increase of $89.0 million, or 55.11%, compared to
December 31, 1998. Loan growth was limited during the first half of 2000 due to
funding constraints. The loan to deposit ratio fell to 85.05% at December 31,
2000 from 93.39% at December 31, 1999. The significant increase in deposits more
than adequately facilitated our growth during 2000.

          We experienced significant increases in our commercial real estate and
construction loan categories, and decreases in personal and lease loan
categories. Prior to 2000, we had expanded our personal lending lines of
business in an effort to more broadly diversify our risk across multiple lines
of business. A significant portion of the growth in our personal lending lines
was attributable to growth in our indirect automobile loan portfolio. As a
result of the significant growth through 1999 in our indirect automobile loan
portfolio and management's belief that our current level of investment in
indirect automobile loans as a percentage of our overall loan portfolio was
appropriate, we slowed further growth of the portfolio during 2000. We have also
encountered a considerable number of early pay-offs within the indirect
automobile loan portfolio due to customer refinancing. The growth of our
commercial real estate and construction loan portfolios is a result of the
natural economic growth and development of our market area, coupled with the
experience of our construction and development lenders.

          The following table sets forth the composition of our loan portfolio
by loan type as of the dates indicated. The amounts in the following table are
shown net of discounts and other deductions.


                                       34
<PAGE>   37

                                 LOAN PORTFOLIO

<TABLE>
<CAPTION>
                                                              AS OF DECEMBER 31,
                            --------------------------------------------------------------------------------------------------------
                                2000                    1999                  1998                 1997                 1996
                            ------------------    ------------------     -----------------   ------------------   ------------------
                             AMOUNT    PERCENT     AMOUNT    PERCENT     AMOUNT    PERCENT    AMOUNT    PERCENT    AMOUNT    PERCENT
                            --------   -------    --------   -------     -------   -------   --------   -------   --------   -------
                                                                       (DOLLARS IN THOUSANDS)
<S>                         <C>        <C>         <C>        <C>         <C>       <C>      <C>        <C>       <C>        <C>
Commercial real estate...   $ 42,267    14.69%    $ 26,617     10.63%    $ 15,457     9.57%    7,878      6.19%   $ 7,300      7.20%
Residential real estate..     37,290    12.96       33,251     13.28       28,367    17.57    24,075     18.91     14,253     14.07
Commercial...............     76,556    26.61       64,552     25.78       52,310    32.41    45,969     36.11     41,514     40.97
Personal.................     35,864    12.47       44,747     17.87       19,751    12.23    14,590     11.46      9,507      9.38
Home equity..............     10,657     3.70        9,820      3.92        6,170     3.82     7,030      5.52      5,267      5.20
Construction.............     59,733    20.76       41,007     16.38       25,624    15.87    16,273     12.78     12,747     12.58
Leases...................     25,302     8.81       30,416     12.14       13,765     8.53    11,493      9.03     10,735     10.60
                            --------   ------     --------    ------     --------   ------  --------    ------   --------    ------
    Total loans and
      leases.............    287,669   100.00%     250,410    100.00%     161,444   100.00%  127,308    100.00%   101,323    100.00%
                                       ======                 ======                ======              ======               ======
Less allowance for loan
  losses...............        4,440                 3,817                  2,341              1,618                1,275
                            --------              --------               --------           --------             --------
Loans receivable, net....   $283,229              $246,593               $159,103           $125,690             $100,048
                            ========              ========               ========           ========             ========
</TABLE>


                                       35
<PAGE>   38

          Collateral and Concentration. At December 31, 2000, 1999 and 1998,
substantially all of our loans were collateralized with real estate, inventory,
accounts receivable and/or other assets or were guaranteed by the Small Business
Administration. Loans to individuals and businesses in the construction industry
totaled $74.4 million, or 25.85%, of total loans, as of December 31, 2000. The
Bank does not have any other concentrations of loans to individuals or
businesses involved in a single industry totaling 5% of total loans. The Bank's
lending limit under federal law to any one borrower was $8.5 million at December
31, 2000. The Bank's largest single borrower, net of participations, at December
31, 2000 had outstanding loans of $8.3 million.

          The following table presents the aggregate maturities of loans in each
major category of our loan portfolio as of December 31, 2000, excluding the
allowance for loan and valuation losses. Additionally, the table presents the
dollar amount of all loans due more than one year after December 31, 2000 which
have predetermined interest rates (fixed) or adjustable interest rates
(variable). Actual maturities may differ from the contractual maturities shown
below as a result of renewals and prepayments or the timing of loan sales.

                    MATURITIES AND SENSITIVITIES OF LOANS TO
                            CHANGES IN INTEREST RATES

<TABLE>
<CAPTION>
                                                          AS OF DECEMBER 31, 2000
                               -----------------------------------------------------------------------
                                                                               MORE THAN ONE YEAR
                                                                          ----------------------------
                                 LESS THAN     ONE TO        OVER FIVE
                                 ONE YEAR     FIVE YEARS      YEARS        TOTAL    FIXED    VARIABLE
                                ----------   -----------    ----------    -------  -------   ---------
                                                           (IN THOUSANDS)
<S>                              <C>           <C>           <C>        <C>       <C>        <C>
Commercial Real Estate           $ 3,436       $23,338       $15,493     $42,267   $11,533   $27,298
Commercial ...........            42,110        27,108         7,338      76,556    12,527    21,919
Construction .........            30,973        27,711         1,541      60,225     2,711    26,541
</TABLE>

NON-PERFORMING ASSETS

         Non-performing assets consist primarily of loans past due 90 days or
more and nonaccrual loans and foreclosed real estate. The following table sets
forth our non-performing assets as of the dates indicated:


                                       36
<PAGE>   39

                              NON-PERFORMING ASSETS

<TABLE>
<CAPTION>

                                                                        AS OF DECEMBER 31,
                                                    ------------------------------------------------------------
                                                       2000        1999         1998         1997        1996
                                                    ---------   ----------  -----------   ---------   ----------
                                                                       (DOLLARS IN THOUSANDS)
<S>                                                  <C>         <C>         <C>           <C>        <C>
  Real estate loans:
        Past due 90 days or more..................    $  206     $    --      $    --      $   --      $    --
        Nonaccrual................................       499          --           --          --           --
  Installment loans:
        Past due 90 days or more..................        --          --            7          --           --
        Nonaccrual................................        37          87           38          --           89
  Credit cards and related plans
        Past due 90 days or more..................        --          --           --          --           --
        Nonaccrual................................        --          --           --          --           --
  Commercial and all other loans:
        Past due 90 days or more..................        24          50          319          --          163
        Nonaccrual................................     1,326         375          650         367          156
  Lease financing receivables:
        Past due 90 days or more..................        --          --          121          --           --
        Nonaccrual................................       382          25          227          58           --
  Debt securities and other assets (excluding
    other real estate owned and other
    repossessed assets):

        Past due 90 days or more..................        --          --           --          --           --
        Nonaccrual................................        --          --           --          --           --
                                                      -------    --------     --------     -------     --------
         Total non-performing loans ..............     2,474         537        1,362         425          408
                                                      -------    --------     --------     -------     --------
  Foreclosed assets held for sale ................       334         186           46         795           40
                                                      -------    --------     --------     -------     --------
         Total non-performing assets .............    $2,808     $   723      $ 1,408      $1,220      $   448
                                                      =======    ========     ========     =======     ========
  Total non-performing loans to total loans.......      0.86%       0.21%        0.84%       0.33%        0.40%
  Total non-performing loans to total assets......      0.60        0.16         0.54        0.21         0.25
  Allowance for loan losses to non-performing loans   179.47      710.80       171.88      380.71       312.50
  Non-performing assets to loans and foreclosed
  assets held for sale ...........................      0.97        0.29         0.87        0.95         0.44
  </TABLE>

          Impaired Loans. A loan is considered impaired when it is probable that
we will not receive all amounts due according to the contractual terms of the
loan. This includes loans that are delinquent 90 days or more, nonaccrual loans,
and certain other loans identified by management. Accrual of interest is
discontinued, and interest accrued and unpaid is removed, at the time the loans
are delinquent 90 days. Interest is recognized for nonaccrual loans only upon
receipt, and only after all principal amounts are current according to the terms
of the contract.

          Impaired loans totaled $5.8 million at December 31, 2000, and $5.2
million at December 31, 1999 and 1998, with related allowances for loan losses
of $1.4 million, $825,000 and $747,000, respectively.

          Total interest income of $882,000, $713,000 and $600,000 was
recognized on average impaired loans of $6.2 million, $4.1 million and $3.5
million for 2000, 1999 and 1998, respectively. Included in this total is cash
basis interest income of $72,000, $140,000 and $85,000 recognized on impaired
loans on nonaccural during 2000, 1999 and 1998, respectively.

          Allowance For Loan Losses. The allowance for loan losses is increased
by provisions charged to expense and reduced by loans charged off, net of
recoveries. The allowance is management's best estimate of probable losses which
have been incurred as of the balance sheet date based on management's evaluation
of risk in the portfolio, local economic conditions and



                                       37
<PAGE>   40

historical loss experience. Management assesses the adequacy of the allowance
for loan losses based upon a number of factors including, among others:

         o    analytical reviews of loan loss experience in relationship to
              outstanding loans and commitments;

         o    unfunded loan commitments;

         o    problem and non-performing loans and other loans presenting credit
              concerns;

         o    trends in loan growth, portfolio composition and quality;

         o    appraisals of the value of collateral; and

         o    management's judgement with respect to current economic conditions
              and their impact on the existing loan portfolio.

          The adequacy of the allowance is analyzed monthly based on internal
loan reviews and quality measurements of our loan portfolio. The Bank computes
its allowance by assigning specific reserves to impaired loans, and then applies
a general reserve based on a loss factor applied to the rest of the loan
portfolio. The loss factor is determined based on such items as management's
evaluation of risk in the portfolio, local economic conditions, and historical
loss experience. Specific allowances are accrued on specific loans evaluated for
impairment for which the basis of each loan, including accrued interest, exceeds
the discounted amount of expected future collections of interest and principal
or, alternatively, the fair value of the loan collateral.

          The following table sets forth information regarding changes in our
allowance for loan and valuation losses for the periods indicated.


                                       38





<PAGE>   41

                         SUMMARY OF LOAN LOSS EXPERIENCE
                             AND RELATED INFORMATION

<TABLE>
<CAPTION>
                                                                    AS OF AND FOR THE
                                                               YEAR ENDED DECEMBER 31,
                                         ---------------------------------------------------------------------
                                            2000          1999           1998           1997          1996
                                         -----------   -----------   -------------   -----------   -----------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                      <C>           <C>            <C>            <C>           <C>
  Balance at beginning of period.....    $    3,817    $    2,341     $     1,618    $    1,275    $      836

  Loans charged-off:
     Commercial real estate..........             -             -               -             -             -
     Residential real estate.........             -             -               -             -             -
     Commercial .....................           343           567             310           357           216
     Personal .......................           153            47              49            19             7
     Home equity ....................             -             -               -             -             -
     Construction ...................             -             -               -             -             -
     Leases .........................         1,034           158              27            83            91
                                          ---------     ---------      ----------     ---------     ---------
        Total loans charged-off......         1,530           772             386           459           314
  Recoveries:
     Commercial real estate..........             -             -               -             -             -
     Residential real estate.........             -             -               -             -             -
     Commercial .....................           104            90              38            84            78
     Personal .......................            46             2               6             1            11
     Home equity ....................             -             -               -             -             -
     Construction ...................             -             -               -             -             -
     Leases .........................            53            12               4            57            16
                                          ---------     ---------      ----------     ---------     ---------
  Total recoveries...................           203           104              48           142           105
                                                                                                     ---------
                                          ---------     ---------      ----------     ---------
  Net loans charged-off..............         1,327           668             338           317           209
  Provision for loan losses..........
                                              1,950         2,144           1,061           660           648
                                          ---------     ---------      ----------     ---------     ---------

  Balance at end of period...........     $   4,440     $   3,817      $    2,341     $   1,618     $   1,275
                                          =========     =========      ==========     =========     =========
  Loans outstanding:
           Average...................     $ 268,227     $ 206,310      $  148,221     $ 115,939     $   87,501
           End of period.............       287,669       250,410         161,444       127,308        101,323
  Ratio of allowance for loan losses
  to loans outstanding:
           Average...................          1.66%         1.85%           1.58%         1.40%          1.46%
           End of period.............          1.54          1.52            1.45          1.27           1.26
  Ratio of net charge-offs to:
           Average loans ............          0.49          0.32            0.23          0.27           0.24
           End of period loans.......          0.46          0.27            0.21          0.25           0.21
</TABLE>

     The following table shows our allocation of the allowance for loan losses
by specific category at the end of each of the periods shown. Management
attempts to allocate specific portions of the allowance for loan losses based on
specifically identifiable problem loans. However, the allocation of the
allowance to each category is not necessarily indicative of future losses and
does not restrict the use of the allowance to absorb losses in any category.



                                       39


<PAGE>   42


                   ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES



<TABLE>
<CAPTION>
                                                                      AS OF DECEMBER 31,
                     ---------------------------------------------------------------------------------------------------------------
                              2000                    1999                  1998                 1997                  1996
                     ----------------------   ---------------------  --------------------  -------------------   -------------------
                                    % OF                    % OF                  % OF                 % OF                   % OF
                                    TOTAL                   TOTAL                 TOTAL                TOTAL                  TOTAL
                       AMOUNT     ALLOWANCE    AMOUNT     ALLOWANCE   AMOUNT    ALLOWANCE   AMOUNT   ALLOWANCE    AMOUNT   ALLOWANCE
                      -------     ---------    -------    ---------   -------   ---------   -----    ---------    -------  ---------
                                           (DOLLARS IN THOUSANDS)
<S>                   <C>           <C>       <C>            <C>     <C>           <C>         <C>       <C>     <C>          <C>
Commercial real
estate .............  $   485       10.92%    $   268        7.02%   $   155       6.62%       75        4.63%   $    72      5.65%
Residential real          399        8.99         364        9.53        340      14.52       298       18.42        231     18.12
estate..............
Commercial .........    1,687       38.00       1,206       31.60      1,013      43.27       648       40.05        564     44.23
Personal ...........      547       12.32         843       22.09        215       9.19       153        9.46         95      7.45
Home equity ........      124        2.79         123        3.22         69       2.95        83        5.13         60      4.71
Construction........      672       15.14         454       11.89        302      12.90       223       13.78        127      9.96
Leases .............      526       11.84         559       14.65        247      10.55       138        8.53        126      9.88
Unallocated.........        -           -           -           -          -          -         -           -          -         -
                      -------      ------     -------      ------    -------     ------     -----      ------    -------    ------
      Total.........  $ 4,440      100.00%    $ 3,817      100.00%   $ 2,341     100.00%    1,618      100.00%   $ 1,275    100.00%
                      =======      ======     =======      ======    =======     ======     =====      ======    =======    ======
</TABLE>




                                       40

<PAGE>   43


     Investment securities. The primary objectives of our investment portfolio
are to secure the adequacy of principal, to provide adequate liquidity and to
provide securities for use in pledging for public funds or repurchase
agreements. Income is a secondary consideration. As a result, we generally do
not invest in mortgage-backed securities and other higher yielding investments.
During 2000, the Bank purchased a security yielding 8% and maturing in 2015. Due
to the high yield and the extended maturity of this security, the Bank chose to
hold the security until maturity, and classified the security as such. The
security has a call date in September 2001. The remaining securities in our
investment portfolio are classified as available for sale in order to provide us
with an additional source of liquidity when necessary. The investment portfolio
increased by $29.9 million, or 61.38%, during 2000 as compared to 1999 year-end.
As rates have continued to increase, we were able to take advantage of some
attractive offers and add some higher yielding securities to our investment
portfolio during 2000. Approximately $10 million of these higher yielding
investments have been utilized for additional pledging requirements. The
remaining unpledged balance serves as an additional source of liquidity.
Subsequent to year-end December 31, 2000, the Bank utilized another $18 million
of the unpledged balance for the pledging requirements of a new municipal
customer.

     The balance of the investment portfolio at December 31, 1998 was higher
than the 1999 balance due to a 90-day, $5 million security we purchased in
December 1998 to cover a pledging requirement for one of the Bank's customers.

     The following table presents the composition of our investment portfolio by
major category at the dates indicated.

                   INVESTMENT SECURITIES PORTFOLIO COMPOSITION

<TABLE>
<CAPTION>
                                                                          AT DECEMBER 31,
                                                       ------------------------------------------------------
                                                            2000              1999               1998
                                                       ---------------- ---------------   -----------------
                                                                                     (IN THOUSANDS)
<S>                                                    <C>              <C>               <C>
U.S. government and agency securities...............   $         61,001 $        34,175   $          38,859
State and municipal obligations.....................             15,502          14,471              14,568
Mortgage-backed securities..........................                  -               -                   -
Other securities....................................                  -               -                   -
                                                       ---------------- ---------------   -----------------
      Total.........................................   $         76,503 $        48,646   $          53,427
                                                       ================ ===============   =================
Available for sale (fair value).....................   $         76,503 $        48,646   $          53,427
Held to maturity (amortized cost)...................              2,000               -                   -
                                                       ---------------- ---------------   -----------------
      Total.........................................   $         78,503 $        48,646   $          53,427
                                                       ================ ===============   =================
</TABLE>

     The following table sets forth the maturities, carrying value or fair value
(in the case of investment securities available for sale), and average yields
for our investment portfolio at December 31, 2000. Yields are presented on a tax
equivalent basis. Expected maturities will differ from contractual maturities
due to unscheduled repayments and because borrowers on the underlying mortgages
may have the right to call or prepay obligations with or without prepayment
penalties.

     Under our investment policy, not more than 10% of the Bank's capital may be
invested in the tax-exempt general obligation bonds of any single issuer.



                                       41

<PAGE>   44


                   MATURITY OF INVESTMENT SECURITIES PORTFOLIO
<TABLE>
<CAPTION>
                            ONE YEAR OR      ONE TO FIVE       FIVE TO TEN      MORE THAN TEN       TOTAL INVESTMENT
                               LESS             YEARS             YEARS             YEARS              SECURITIES
                          ---------------- ----------------- ----------------  ---------------- -------------------------
                          CARRYING AVERAGE CARRYING  AVERAGE CARRYING AVERAGE  CARRYING AVERAGE CARRYING  FAIR    AVERAGE
                           VALUE   YIELD    VALUE    YIELD    VALUE   YIELD     VALUE   YIELD    VALUE   VALUE    YIELD
                          -------  ------- --------  ------- -------  -------  -------  ------- -------- -------  -------
                                                                (DOLLARS IN THOUSANDS)
<S>                       <C>     <C>      <C>       <C>       <C>     <C>      <C>     <C>      <C>     <C>      <C>
HELD TO MATURITY
   U.S. government and
      agency securities   $    -       -%  $     -         -%  $     -      -%  $2,000     8.00% $ 2,000  $ 2,014    8.00%
   State and municipal
      Obligations.....         -       -         -         -         -      -        -        -        -        -       -
   Mortgage-backed
      securities......         -       -         -         -         -      -        -        -        -        -       -
   Other securities...         -       -         -         -         -      -        -        -        -        -       -
                          ------    ----   -------      ----   -------   ----   ------     ----  -------  -------    ----
      Total available
      for sale........    $    -       -%  $    -          -%  $     -      -%  $2,000     8.00% $ 2,000  $ 2,014    8.00%
                          ======    ====   =======      ====   =======   ====   ======     ====  =======  =======    ====
AVAILABLE FOR SALE

   U.S. government and
      agency securities   $3,004    5.66%  $25,869      6.62%  $32,128   6.69%  $    -        -% $61,001  $61,001    6.61%
   State and municipal
      obligations.....       276    4.55     5,008      4.73     9,962   4.74      256     4.87   15,502   15,502    4.74
   Mortgage-backed
      securities......         -       -         -         -         -      -        -        -        -        -       -
   Other securities...         -       -         -         -         -      -        -        -        -        -       -
                          ------    ----   -------      ----   -------   ----   ------     ----  -------  -------    ----
      Total available
        for sale......    $3,280    5.57%  $30,877      6.32%  $42,090   6.23%  $  256     4.87% $76,503  $76,503    6.23%
                          ======    ====   =======      ====   =======   ====   ======     ====  =======  =======    ====
      Total investment
        securities....    $3,280    5.57%  $30,877      6.32%  $42,090   6.23%  $2,256     7.65% $78,503  $78,517    6.28%
                          ======    ====   =======      ====   =======   ====   ======     ====  =======  =======    ====
</TABLE>


     Deposits. Deposits grew by $70.1 million, or 26.13%, for the year ended
December 31, 2000, as compared to 1999 year-end. A significant portion of our
deposit growth during fiscal year 2000 is attributable to a money market deposit
product, our money management account, or "short-term parking account,"
introduced by the Bank in the fourth quarter of 1998. The money management
account provides a hybrid of the features available from a traditional money
market account and a traditional time deposit. The account requires a minimum
balance of $10,000 and allows for daily deposits but limits withdrawals to the
first day and the 15th day of each month. This account pays a rate of interest
which is higher than a customer could receive on a traditional money market
account but lower than the rates generally available on certificates of deposit.
We believe that the trade-off to depositors between higher interest rates but
more limited access to withdrawals has proven to be an attractive product in our
market areas and provides us with a more attractive source of funds than other
alternatives such as Federal Home Loan Bank borrowings, due to our ability to
cross-sell additional services to these account holders.

         The following table sets forth the balances for each major category of
our deposit accounts and the weighted-average interest rates paid for
interest-bearing deposits for the periods indicated:


                                       42
<PAGE>   45

                                    DEPOSITS

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                          --------------------------------------------------------------------------------------------------------
                                         2000                              1999                               1998
                          ---------------------------------- ---------------------------------  ----------------------------------
                                                               (DOLLARS IN THOUSANDS)
                                        PERCENT     WEIGHTED               PERCENT    WEIGHTED               PERCENT     WEIGHTED
                                          OF         AVERAGE                  OF       AVERAGE                  OF        AVERAGE
                            BALANCE     DEPOSITS      RATE     BALANCE     DEPOSITS     RATE     BALANCE     DEPOSITS      RATE
                            -------     --------      ----     -------     --------     ----     -------     --------      ----
<S>                       <C>            <C>                 <C>            <C>                 <C>            <C>
Demand.................   $   44,354     13.11%        --%   $   36,950     13.78%       --%    $  33,752      16.09%        --%
Savings................        3,327      0.98       2.96         3,385      1.26      2.93         3,491       1.66       2.94
Interest-bearing demand       32,427      9.59       3.50        26,800      9.99      3.34        13,982       6.66       2.76
Money Market...........       27,923      8.26       3.46        35,764     13.34      3.51        35,911      17.11       4.00
Money Management.......       90,787     26.84       5.99        60,449     22.55      5.15         9,831       4.69       5.08
Time Deposits..........      139,403     41.22       6.26       104,797     39.08      5.67       112,857      53.79       6.00
                          ----------    ------               ----------    ------               ---------     ------
      Total deposits...   $  338,221    100.00%              $  268,145    100.00%              $ 209,824     100.00%
                          ==========    ======               ==========    ======               =========     ======
</TABLE>


                                       43





<PAGE>   46


     The following table sets forth the amount of our certificates of deposit
that are greater than $100,000 by time remaining until maturity as of December
31, 2000:

                            AMOUNTS AND MATURITIES OF
                        TIME DEPOSITS OF $100,000 OR MORE

<TABLE>
<CAPTION>
                                                                                         AS OF DECEMBER 31, 2000
                                                                                   -------------------------------------
                                                                                                      WEIGHTED AVERAGE
                                                                                       AMOUNT            RATE PAID
                                                                                   -----------------  ------------------
                                                                                         (DOLLARS IN THOUSANDS)
<S>                                                                                 <C>                     <C>
Three months or less.............................................................   $       10,580          6.33 %
Over three months through six months.............................................           13,079          6.88
Over six months through twelve months............................................           13,082          6.91
Over twelve months...............................................................           13,852          6.83
                                                                                    --------------          ----
      Total......................................................................   $       50,593          6.76 %
                                                                                    ==============          ====
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

     Liquidity. Liquidity is measured by a financial institution's ability to
raise funds through deposits, borrowed funds, capital, or the sale of marketable
assets, such as residential mortgage loans or a portfolio of SBA loans. Other
sources of liquidity, including cash flow from the repayment of loans, are also
considered in determining whether liquidity is satisfactory. Liquidity is also
achieved through growth of core deposits and liquid assets, and accessibility to
the money and capital markets. The funds are used to meet deposit withdrawals,
maintain reserve requirements, fund loans and operate the organization. Core
deposits, defined as demand deposits, interest-bearing transaction accounts,
savings deposits and certificates of deposit less than $100,000, were 69.36% of
our total assets at December 31, 2000, and 70.11% and 68.57% of total assets at
December 31, 1999 and 1998, respectively.

     We use various forms of short-term borrowings for cash management and
liquidity purposes on a limited basis. These forms of borrowings include federal
funds purchased, revolving lines of credit and Federal Home Loan Bank
borrowings.

     On July 21, 2000, BVBC Capital Trust I ("BVBC Trust"), a Delaware business
trust formed by Blue Valley, completed the sale of $11.5 million of its 10.375%
trust preferred securities. BVBC Trust also issued common securities to Blue
Valley and used the proceeds from the offering to purchase $11,855,672 in
principal amount of 10.375% junior subordinated debentures issued by Blue Valley
due September 30, 2030. The junior subordinated debentures are the sole assets
of BVBC Trust and are eliminated, along with the related income statement
effects, in the consolidated financial statements. Blue Valley received net
proceeds from the offering of its junior subordinated debentures of
approximately $10.6 million. Of these net proceeds, $7.1 million were used to
retire all of the outstanding indebtedness under Blue Valley's bank stock loan
agreement, and $2.0 million were contributed to the Bank in the form of
additional capital. The remainder of the proceeds have been retained by Blue
Valley for general corporate purposes, including additional investments from
time to time in the Bank in the form of additional capital and possible future
acquisitions. Total offering expenses of



                                       44

<PAGE>   47


approximately $900,000 are included in other assets and are being amortized on a
straight-line basis over the life of the junior subordinated debentures.

     The trust preferred securities accrue and pay distributions quarterly at an
annual rate of 10.375% of the stated liquidation amount of $8 per trust
preferred security. Blue Valley has fully and unconditionally guaranteed all of
the obligations of BVBC Trust under the trust preferred securities. The
guarantee covers the quarterly distributions and payments on liquidation or
redemption of the trust preferred securities, but only to the extent of funds
held by BVBC Trust.

     The trust preferred securities are mandatorily redeemable upon the maturity
of the junior subordinated debentures or upon earlier redemption as provided in
the indenture. We have the right to redeem the junior subordinated debentures,
in whole or in part, on or after September 30, 2005, at a redemption price
specified in the indenture plus any accrued but unpaid interest to the
redemption date. Under the indenture, we are prohibited from paying dividends on
our common stock if the scheduled payments on our junior subordinated debentures
and the trust preferred securities have not been made.

     The Bank is a member of the Federal Home Loan Bank System, which consists
of 12 regional Federal Home Loan Banks governed and regulated by the Federal
Housing Finance Board. The Federal Home Loan Banks provide a central credit
facility for member institutions. The Bank, as a member of the FHLB of Topeka,
is required to acquire and hold shares of capital stock in the FHLB of Topeka in
an amount at least equal to 0.30% of total assets or 1.00% of the aggregate
principal amount of its unpaid residential mortgage loans. The Bank is currently
in compliance with this requirement, with a $1.3 million investment in stock of
the FHLB of Topeka as of December 31, 2000. In 2000 and 1999, the Bank took
advantage of some special advances from the FHLB to supplement its funding base.
The Bank had $5.0 million in outstanding short-term advances from the FHLB of
Topeka at December 31, 2000.

     Internal guidelines have been established to measure liquid assets as well
as relevant ratios concerning asset levels and purchased funds. These indicators
are reported to the board of directors monthly, and at December 31, 2000, the
Bank was within the established guidelines.

     The following table sets forth a summary of our short-term borrowings
during and as of the end of each period indicated.



                                       45

<PAGE>   48


                              SHORT-TERM BORROWINGS

<TABLE>
<CAPTION>
                                                                                         WEIGHTED
                                                             AVERAGE                     AVERAGE         WEIGHTED
                                               AMOUNT        AMOUNT         MAXIMUM      INTEREST        AVERAGE
                                             OUTSTANDING   OUTSTANDING    OUTSTANDING      RATE          INTEREST
                                                 AT        DURING THE       AT ANY      DURING THE         RATE
                                             PERIOD END    PERIOD (1)      MONTH END      PERIOD       AT PERIOD END
                                            ------------  -----------     ----------    ----------     -------------
                                                                     (DOLLARS IN THOUSANDS)
<S>                                           <C>           <C>            <C>                 <C>          <C>
At or for the year ended December 31, 2000:
   Federal Home Loan Bank borrowings.         $    5,000    $    7,408     $   10,000          7.01%        7.17%
   Bank Stock Loan...................                  -         3,999          7,262          8.17            -
   Federal Funds purchased...........                  -           590          4,000          7.72            -
   Revolving lines of credit.........                  -             -              -             -            -
   Repurchase agreements.............             15,299        13,245         16,650          3.09         3.34
                                              ----------    ----------     ----------          ----         ----
      Total..........................             20,299        25,242         37,912          5.15         6.05
At or for the year ended December 31, 1999:
   Federal Home Loan Bank borrowings.         $   10,000    $      461     $   10,000          4.50%        5.98%
   Bank Stock Loan...................              7,450         4,763          7,450          7.03         7.50
   Federal Funds purchased...........                  -           163              -          5.10            -
   Revolving lines of credit.........                  -             -              -             -            -
   Repurchase agreements.............             11,260         9,500         13,056          3.00         3.00
                                              ----------    ----------     ----------          ----         ----
      Total..........................             28,710        14,887         30,506          4.36         5.21
At or for the year ended December 31, 1998:
   Federal Home Loan Bank borrowings.         $        -    $        -     $        -             -%          -
   Bank Stock Loan...................              3,575         3,800          4,038          7.97         7.25
   Federal Funds purchased...........                  -           261          1,500          6.35            -
   Revolving lines of credit.........                  -             -              -             -            -
   Repurchase agreements.............              8,817         7,040          8,886          3.00         3.00
                                              ----------    ----------     ----------          ----         ----
      Total..........................             12,392        11,101         14,424          4.78         4.23
</TABLE>

----------
(1)  Calculations are based on daily averages where available and monthly
     averages otherwise.

     Capital Resources. At December 31, 2000, our total stockholders' equity was
$23.8 million, and our equity to asset ratio was 5.74%. At December 31, 1999,
our total stockholders' equity was $18.9 million. At year-end 1999, our equity
to asset ratio was 5.67% as compared to 6.71% at year-end 1998.

     The Federal Reserve Board's risk-based guidelines establish a risk-adjusted
ratio, relating capital to different categories of assets and off-balance sheet
exposures, such as loan commitments and standby letters of credit. These
guidelines place a strong emphasis on tangible stockholder's equity as the core
element of the capital base, with appropriate recognition of other components of
capital. At December 31, 2000, our Tier 1 capital ratio was 9.51%, while our
total risk-based capital ratio was 11.95%, both of which exceed the capital
minimums established in the risk-based capital requirements.



                                       46

<PAGE>   49


     Our risk-based capital ratios at December 31, 2000, 1999 and 1998 are
presented below.

                               RISK-BASED CAPITAL

<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                  ---------------------------------------------------
                                                        2000             1999              1998
                                                  --------------- ----------------  -----------------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                               <C>             <C>               <C>
     Tier 1 capital
     Stockholder's equity.....................    $        23,815 $         18,869  $          17,016
     Intangible assets........................            (1,295)          (1,448)            (1,600)
     Unrealized appreciation on available-
       For-sale securities....................              (461)              957              (352)
     Guaranteed preferred beneficial interest
       in Company's subordinated debt (1).....              7,785                -                  -
     Other....................................                  -                -                  -
                                                  --------------- ----------------  -----------------
       Total Tier 1 capital...................             29,844           18,378             15,064
                                                  --------------- ----------------  -----------------

     Tier 2 capital
     Qualifying allowance for loan losses.....              3,929            3,371              2,255
     Guaranteed preferred beneficial interest.
       in Company's subordinated debt (1).....              3,715
                                                  --------------- ----------------  -----------------
       Total Tier 2 capital...................              7,644            3,371              2,255
                                                  --------------- ----------------  -----------------
       Total risk-based capital...............    $        37,488 $         21,749  $          17,319
                                                  =============== ================  =================
     Risk weighted assets....................     $       313,841 $        269,660  $         180,077
                                                  =============== ================  =================
     Ratios at end of period
     Total capital to risk-weighted assets              11.95 %            8.07 %             9.62 %
     ratio....................................
     Tier 1 capital to average assets ratio
        (leverage ratio)......................           7.47 %            5.80 %             6.13 %
     Tier 1 capital to risk-weighted assets
       Ratio..................................           9.51 %            6.82 %             8.37 %
     Minimum guidelines
     Total capital to risk-weighted assets               8.00 %            8.00 %             8.00 %
     ratio....................................
     Tier 1 capital to average assets ratio
       (leverage ratio).......................           4.00 %            4.00 %             4.00 %
     Tier 1 capital to risk-weighted assets
       Ratio..................................           4.00 %            4.00 %             4.00 %
</TABLE>

(1)  Federal Reserve guidelines for calculation of Tier 1 capital limits the
     amount of cumulative trust preferred securities which can be included in
     Tier 1 capital to 25% of total Tier 1 capital (Tier 1 capital before
     reduction of intangibles). At December 31, 2000, approximately $7.8 million
     of the trust preferred securities have been included as Tier 1 capital for
     Blue Valley. The balance of the trust preferred securities have been
     included as Tier 2 capital for Blue Valley.



                                       47

<PAGE>   50


INFLATION

     The consolidated financial statements and related data presented in this
report have been prepared in accordance with generally accepted accounting
principles, which require the measurement of financial position and operating
results in terms of historical dollars without considering changes in the
relative purchasing power of money over time due to inflation. Unlike most
industrial companies, substantially all of our assets and liabilities are
monetary in nature. As a result, interest rates have a more significant impact
on our performance than the effects of general levels of inflation. Interest
rates do not necessarily move in the same direction or in the same magnitude as
prices of goods and services. We disclose the estimated fair market value of our
financial instruments in accordance with Statement of Financial Accounting
Standards No. 107. See Note 17 to the consolidated financial statements included
in this report.

FUTURE ACCOUNTING REQUIREMENTS

     The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133")." This statement, as amended by SFAS No.
137, requires all derivatives to be recorded on the balance sheet at fair value
and establishes standard accounting methodologies for hedging activities. The
standard will result in the recognition of offsetting changes in value or cash
flows of both the hedge and the hedged item in earnings or comprehensive income
in the same period. The statement is effective for Blue Valley's fiscal year
ending December 31, 2001. Because Blue Valley generally does not hold derivative
instruments, the adoption of this statement is not expected to have a material
impact on the financial statements.

     FASB also has issued Statement of Financial Accounting Standards No. 134,
"Accounting for Mortgage-Backed Securities retained after the Securitization of
Mortgage Loans Held for Sale by a Mortgage Banking Entity ("SFAS 134")." This
statement amends SFAS No. 65 allowing mortgage-backed securities or other
retained interests arising from the securitization of mortgage loans to be
classified based on the mortgage banking entities' ability and intent to sell or
hold those securities. Previously, these securities had to be held within a
trading account. This statement was effective for Blue Valley's fiscal year
ending December 31, 1999. The adoption of this standard did not have a material
impact on the financial statements.


                                       48

<PAGE>   51


ITEM 7A: QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

     As a continuing part of our financial strategy, we attempt to manage the
impact of fluctuations in market interest rates on our net interest income. This
effort entails providing a reasonable balance between interest rate risk, credit
risk, liquidity risk and maintenance of yield. Our funds management policy is
established by our Board of Directors and monitored by our Risk Management
Committee. Our funds management policy sets standards within which we are
expected to operate. These standards include guidelines for exposure to interest
rate fluctuations, liquidity, loan limits as a percentage of funding sources,
exposure to correspondent banks and brokers, and reliance on non-core deposits.
Our funds management policy also establishes the reporting requirements to our
Board of Directors. Our investment policy complements our funds management
policy by establishing criteria by which we may purchase securities. These
criteria include approved types of securities, brokerage sources, terms of
investment, quality standards, and diversification.

     We use an asset/liability modeling service to analyze the Company's current
sensitivity to instantaneous and permanent changes in interest rates. The system
simulates the Company's asset and liability base and projects future net
interest income results under several interest rate assumptions. This allows
management to view how changes in interest rates will affect the spread between
the yield received on assets and the cost of deposits and borrowed funds.

     The asset/liability modeling service is also used to analyze the net
economic value of equity at risk under instantaneous shifts in interest rates.
The "net economic value of equity at risk" is defined as the market value of
assets less the market value of liabilities plus/minus the market value of any
off-balance sheet positions. By effectively looking at the present value of all
future cash flows on or off the balance sheet, the net economic value of equity
modeling takes a longer term view of interest rate risk.

     We strive to maintain a position that changes in interest rates will not
affect net interest income or the economic value of equity by more than 10%, per
100 basis points. The following table sets forth the estimated percentage change
in our net interest income over the next twelve month period and our economic
value of equity at risk at December 31, 2000 based on the indicated
instantaneous and permanent changes in interest rates.

<TABLE>
<CAPTION>
                                               NET INTEREST    NET ECONOMIC
                                                  INCOME         VALUE OF
       CHANGES IN INTEREST RATES             (NEXT 12 MONTHS) EQUITY AT RISK
       -------------------------             ---------------- --------------
       <S>                                       <C>             <C>
       300 basis point rise                       11.04%           (6.10%)
       200 basis point rise                        7.72%           (3.00%)
       100 basis point rise                        4.24%           (0.23%)
       Base Rate Scenario                             -                -
       100 basis point decline                    (6.53%)          (2.10%)
       200 basis point decline                   (10.20%)          (5.43%)
       300 basis point decline                   (16.97%)          (8.41%)
</TABLE>

     The above table indicates that, at December 31, 2000, in the event of a
sudden and sustained increase in prevailing market rates, our net interest
income would be expected


                                       49


<PAGE>   52


to increase as our assets would be expected to reprice quicker than our
liabilities, while a decrease in rates would indicate just the opposite.
Generally, in the decreasing rate scenarios, not only would adjustable rate
assets (loans) reprice to lower rates faster than our liabilities, but our
liabilities - long-term Federal Home Loan Bank of Topeka (FHLB) advances and
existing certificates of deposits - would not decrease in rate as much as market
rates. In addition, fixed rate loans might increase in prepayments, further
decreasing yields on earning assets and causing net interest income to decrease.

     The above table also indicates that, at December 31, 2000, in the event of
a sudden increase or decrease in prevailing market rates, the economic value of
our equity would decrease. Given our current asset/liability position, a 100,
200 or 300 basis point decline in interest rates will result in a lower economic
value of our equity as the change in estimated loss on liabilities exceeds the
change in estimated gain on assets in these interest rate scenarios. Currently,
under a falling rate environment, the Company's estimated market value of loans
could increase as a result of fixed rate loans, net of possible prepayments. The
estimated market value of investment securities could also rise as our portfolio
contains higher yielding securities with extended call dates. However, the
estimated market value increase in fixed rate loans and investment securities is
offset by certificates of deposit unable to reprice to lower rates immediately
and fixed-rate callable advances from FHLB. The likelihood of advances being
called in a decreasing rate environment is diminished resulting in the advances
existing until final maturity, which has the effect of lowering the economic
value of equity.

     Subsequent to fiscal year-end 2000, our prime lending rate declined by 100
basis points. Assumptions utilized for the base rate scenario above included a
decline of 50 basis points from our prime lending rate as of December 31, 2000.
As discussed above, this decrease in the prime lending rate could result in a
decrease in our net interest income margin as our interest-rate sensitive assets
exceeded our interest-rate sensitive liabilities at December 31, 2000.

     The table on page 51 summarizes the anticipated maturities or repricing of
our interest-earning assets and interest-bearing liabilities as of December 31,
2000, based on the information and assumptions set forth below.




                                       50

<PAGE>   53
                       INTEREST-RATE SENSITIVITY ANALYSIS


<TABLE>
<CAPTION>
                                                                        Expected Maturity Date
                             -----------------------------------------------------------------------------------------------------
                                                              Fiscal Year Ending December 31,
                             -----------------------------------------------------------------------
                               0-90      91-365                                                                            Fair
                               Days       Days      2001       2002      2003      2004       2005   Thereafter   Total    Value
                             ---------  --------  --------  --------  ---------  ---------  -------- ---------- --------  --------
<S>                          <C>        <C>       <C>       <C>       <C>        <C>        <C>      <C>        <C>       <C>
INTEREST-EARNING ASSETS:
Fixed Rate Loans ........... $  32,344  $ 29,250  $ 61,594  $ 24,368  $  17,797  $   9,832  $  7,590  $  3,206  $124,387  $124,634
  Average Interest Rate ....      9.83%     9.47%     9.66%     9.62%      9.56%      9.27%     9.26%     8.51%     9.55%
Variable Rate Loans ........   140,786     7,209   147,995     3,196      7,109      3,587     1,182       213   163,282   163,282
  Average Interest Rate ....      9.99%     9.34%     9.96%     8.55%      9.36%      9.00%     9.64%     8.32      9.88%
Fixed Rate Investments .....     1,999     1,281     3,280     4,804      7,980      5,291    12,802    44,346    78,503    78,517
  Average Interest Rate ....      5.44%     6.18%     5.73%     6.26%      6.02%     6.04%      6.74%     6.43%     6.37%
Variable Rate Investments ..        --        --        --        --         --         --        --        --        --        --
  Average Interest Rate ....        --        --        --        --         --         --        --        --        --
Federal Funds Sold .........    22,200        --    22,200        --         --         --        --        --    22,200    22,200
  Average Interest Rate ....      6.26%       --      6.26%       --         --         --        --        --      6.26%
                             ---------  --------  --------  --------  ---------  ---------  --------  --------  --------  --------
     Total interest-
     earning assets......... $ 197,329  $ 37,740  $235,069  $ 32,368  $  32,886  $  18,710  $ 21,574  $ 47,765  $388,372  $388,633
                             =========  ========  ========  ========  =========  =========  ========  ========  ========  ========

INTEREST-BEARING
LIABILITIES:
Interest-bearing demand .... $  32,427  $     --  $ 32,427  $     --  $      --  $      --  $     --  $     --  $ 32,427  $ 30,883
  Average Interest Rate ....      3.81%       --      3.81%       --         --         --        --        --%     3.81%
Savings and money market ...   122,037        --   122,037        --         --         --        --        --   122,037   121,111
  Average Interest Rate ....      5.40%       --      5.40%       --         --         --        --        --      5.40%
Time deposits ..............    23,141    57,224    80,365    40,800     11,674      1,521     3,784     1,259   139,403   140,345
  Average Interest Rate ....      6.20%     6.72%     6.57%     6.80%      6.39%      6.56%     6.79%     6.38%     6.63%
Funds borrowed .............    16,649    10,000    26,649        --     10,000         --        --    13,268    49,917    50,456
  Average Interest Rate ....      3.56%     5.99%     4.47%       --       5.13%        --        --      9.99%     6.07%
                             ---------  --------  --------  --------  ---------  ---------  --------  --------  --------  --------
     Total interest-bearing
     liabilities ........... $ 194,254  $ 67,224  $261,478  $ 40,800  $  21,674  $   1,521  $  3,784  $ 14,527  $343,784  $342,795
                             =========  ========  ========  ========  =========  =========  ========  ========  ========  ========

CUMULATIVE:
 Rate sensitive assets
   (RSA).................... $ 197,329  $235,069  $235,069  $267,437  $ 300,323  $ 319,033  $340,607  $388,372  $388,372
 Rate sensitive liabilities
   (RSL)....................   194,254   261,478   261,478   302,278    323,952    325,473   329,257   343,784   343,784
GAP (GAP = RSA - RSL) ......     3,075   (26,409)  (26,409)  (34,841)   (23,629)    (6,440)   11,350    44,588    44,588
RSA/RSL ....................    101.58%    89.90%    89.90%    88.47%     92.71%     98.02%   103.45%   112.97%
RSA/Total assets ...........      0.48      0.57      0.57      0.64       0.72       0.77      0.82      0.94
RSL/Total assets ...........      0.47      0.63      0.63      0.73       0.78       0.78      0.79      0.83
GAP/Total assets ...........      0.74%    -6.37%    -6.37%    -8.40%     -5.70%     -1.55%     2.74%    10.75%
GAP/RSA ....................      0.02     (0.11)    (0.11)    (0.13)     (0.08)     (0.02)     0.03      0.11
</TABLE>


     Certain assumptions are contained in the above table which affect the
presentation. Although certain assets and liabilities may have similar
maturities or periods to repricing, they may react in different degrees to
changes in market interest rates. The interest rates on certain types of assets
and liabilities may fluctuate in advance of changes in market interest rates,
while interest rates on other types of assets and liabilities lag behind changes
in market interest rates.

     Disclosures about fair values of financial instruments, which reflect
changes in market prices and rates, can be found in note 17 to the consolidated
financial statements included in this report.

ITEM 8: CONSOLIDATED FINANCIAL STATEMENTS OF BLUE VALLEY BAN CORP

     See index to Blue Valley Ban Corp financial statements on page F-1.

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     No items are reportable.

                                    PART III

ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The Blue Valley board of directors is divided into three classes as nearly
equal in number as the total number of directors constituting the entire board
of directors permits. In order to implement this staggered board, at the 2000
annual meeting, the directors of class 1 were elected to hold office for a term
of one year, the directors of class 2 were elected to hold office for a term of
two years, and the directors of class 3 were elected to hold office for a term
of three years. Thereafter, at each succeeding annual meeting, the directors of
each class that are elected will serve a three-year term, and will continue to
hold office until their successors are elected and qualified. All of our
directors are also directors of the Bank, except Messrs. Henry and McDonnell.
Ms. Dotson and Messrs. Bodker, Stein, and Hunter are directors of the Bank, but
not of Blue Valley. Each of our directors has been elected for a term to expire
at the next annual meeting. None of our executive officers have employment
contracts assuring continued employment.

     For each of our directors, the additional directors of the Bank and our
executive officers, we have set forth below their ages as of December 31, 2000,
and their principal positions with Blue Valley.

                                       51


<PAGE>   54

<TABLE>
<CAPTION>
Name                                              Age               Positions
----                                              ---               ---------
<S>                                               <C>        <C>
Directors

Robert D. Regnier .............................   52         President, Chief Executive Officer and
                                                             Chairman of the Board of Directors of Blue
                                                             Valley; President, Chief Executive Officer and
                                                             Director of the Bank

Donald H. Alexander............................   62         Director of Blue Valley and the Bank

Wayne A. Henry, Jr.............................   48         Director of Blue Valley

C. Ted McCarter................................   64         Director of Blue Valley and Chairman of the
                                                             Board of Directors of the Bank

Thomas A. McDonnell............................   55         Director of Blue Valley

Additional Directors of the Bank

Harvey S. Bodker...............................   65         Director of the Bank

Suzanne E. Dotson..............................   54         Director of the Bank

Charles H. Hunter..............................   58         Director of the Bank

Stewart M. Stein...............................   50         Director of the Bank

Executive Officers who are not Directors

John K. Doull..................................   39         Executive Vice President and Chief Lending
                                                             Officer of the Bank (1)

Mark A. Fortino................................   34         Senior Vice President and Chief Financial
                                                             Officer of the Bank; Treasurer of Blue Valley

Nancy A. Taylor................................   56         Senior Vice President - Mortgage Banking of
                                                             the Bank

Gregory J. Motley..............................   44         Senior Vice President - Retail Division
                                                             Manager of the Bank

Penny T. Hershman..............................   56         Senior Vice President - Retail Banking and
                                                             Director of Marketing of the Bank
</TABLE>

(1)  Mr. Doull resigned from the Bank of Blue Valley subsequent to the period
     covered by this report.


                                       52

<PAGE>   55


     Below we have provided information regarding the principal occupations and
business experience of each director and executive officer of Blue Valley and
the additional directors of the Bank named above. Unless otherwise indicated,
each person has held the indicated positions for at least the past five years.
Except as otherwise indicated below, there are no reportable family
relationships among our directors and executive officers.

     ROBERT D. REGNIER has been a director and the President and Chief Executive
Officer of Blue Valley and the Bank since their formation in 1989. He has also
been the sole director and President and Chief Executive Officer of Blue Valley
Investment Corp. since its formation in 1995, and of Blue Valley Building Corp.
since its formation in 1994. Prior to joining Blue Valley, Mr. Regnier held
various managerial positions with Boatmen's Bank and Trust and Boatmen's First
National Bank of Kansas City. Mr. Regnier has nearly 30 years of experience in a
number of banking areas, including lending, investments, personnel,
administration, trust, operations, new business development and mergers.

     DONALD H. ALEXANDER has been a director of Blue Valley and member of its
Audit Committee since 1992. Mr. Alexander has also been a director of the Bank
since its formation in 1989. Mr. Alexander is a private investor with a
background in commercial banking. In addition to his positions with Blue Valley
and the Bank, Mr. Alexander has also been Chairman of Ventaire Corporation in
Tulsa, Oklahoma, a metal fabrication company, since 1989; Chairman of Tulsa
Power, LLC in Tulsa, Oklahoma, a machinery fabrication company, since 1988;
Chairman of Huebert Fiberboard Corp. in Boonville, Missouri, a manufacturing
company, since 1996; a director of BHA Group, Inc. in Raytown, Missouri, an air
pollution control equipment manufacturer, since 1986; and President and director
of Alexander & Associates, Inc. in Kansas City, Missouri, a private investment
company, since 1987.

     WAYNE A. HENRY, JR. has been a director of Blue Valley since 1992. Mr.
Henry has also been the President and Treasurer and a director of Personal
Financial Designs, Inc. in Holden Missouri, a registered investment advisory
firm providing portfolio management and financial planning services, since 1986.
Mr. Henry is a licensed financial planning practitioner and has served on the
board of directors of the Kansas City Chapter of the International Association
of Financial Planning and as President and Chairman of the Heart of America
Society of the Institute of Certified Financial Planners.

     C. TED MCCARTER has been a director of Blue Valley since 1992. Mr. Carter
has also been the Chairman of the board of directors of the Bank and a member of
the Loan Committee, Trust Committee and Audit Committee of the Bank since 1990.
He has served as the Chairman of Agency Premium Resource in Lenexa, Kansas, an
insurance premium finance company, since 1990; the Chairman and President of
Valley Investment Co. in Mission Woods, Kansas, a consulting company, since
1990; a director and co-owner of Huebert Fiberboard Co. in Boonville, Missouri,
a manufacturing company, since 1990; and a director and co-owner of Emco
Specialty Products, Inc. in Kansas City, Kansas, a manufacturing company, since
1990. Mr. McCarter has a background in commercial banking having served as
President, Chief Executive Officer, and director of


                                       53


<PAGE>   56


Boatmen's Bank in Kansas City from 1974 to 1990. He has also served as a
director of Century Acceptance Corporation of Kansas City and Boatmen's
Bancshares of St. Louis.

     THOMAS A. MCDONNELL has been a director of Blue Valley since 1996. Mr.
McDonnell has also served as Chief Executive Officer of DST Systems, Inc. in
Kansas City, Missouri, a transfer agent for mutual funds, stocks and bonds,
since 1984, and as a director of DST since 1971. From August 1983 to November
1995, Mr. McDonnell was Executive Vice President and a director of Kansas City
Southern Industries, Inc. in Kansas City, Missouri, a holding company and the
former parent of DST. Mr. McDonnell has also been a director of Informix Corp.
in Menlo Park, California, a developer, manufacturer and marketer of relational
database management systems, connectivity interfaces and gateways, since 1988; a
director of BHA Group, Inc. in Kansas City, Missouri, a manufacturer of
pollution control devices, since 1993; a director of Computer Sciences
Corporation in El Segundo, California, an information technology company, since
1997; a director of Euronet Services, Inc. in Budapest, Hungary, an operator of
automatic teller machines, since 1997; a director of Janus Capital Corporation
in Denver, Colorado, a registered investment advisor, since 1985.

     HARVEY S. BODKER has been a director of the Bank since its formation in
1989. Mr. Bodker has been the President of Bodker Realty, Inc. in Prairie
Village, Kansas, a commercial real estate brokerage, management and development
company, since 1971. He has also been the managing partner of Rosewood
Development Co. in Prairie Village, Kansas, a developer of small office
buildings since 1978. Mr. Bodker is very active in the community having served
on several boards including the Heart of America Boy Scout Board for over 25
years, the Menorah Medical Center Board of Trustees, Cosmopolitan Club of
Johnson County, and Chairman of the Overland Park Civil Service Commission. Mr.
Bodker has also served on the Kansas Real Estate Commission under two governors,
the Overland Park Planning Commission, the Leawood Board of Zoning Appeals, the
Sunflower State Private Industry Council, and on the Overland Park Chamber of
Commerce.

     SUZANNE E. DOTSON has been a director of the Bank since 1993. Ms. Dotson is
a community volunteer with a background in community banking. She has also been
a director of the Brain Injury Association of Kansas and Greater Kansas City in
Kansas City, Missouri, a non-profit association dedicated to brain injury
prevention, research, education and advocacy, since 1992; and a director of
Wayside Waifs in Kansas City, Missouri, an animal shelter and humane society
dedicated to humane education and providing temporary housing for lost,
abandoned, abused and unwanted animals, since 1998. Prior to joining the Bank in
1993, Ms. Dotson served as senior vice president of commercial lending at
Boatmen's First National Bank of Kansas City and executive vice president of
lending at First Continental Bank and Trust in the Kansas City area.

     CHARLES H. HUNTER became a director of the Bank during 2000. Mr. Hunter is
a principal in Kessinger/Hunter & Company; a Kansas City based real estate
brokerage and management company, and has been with Kessinger/Hunter & Company
since 1966. Mr. Hunter has a background in commercial banking having served as a
director of Boatmen's Bank in Kansas City from 1978 to 1996. He is also a Board
member of the Negro Leagues Baseball Museum and serves as an Ambassador to
Children's Mercy Hospital.




                                       54


<PAGE>   57


     STEWART M. STEIN has been a director of the Bank since its formation in
1989. Mr. Stein is a real estate, corporate and commercial litigation attorney.
He has been a partner with the law firm of Morrison & Hecker LLP, serving as
Partner-in-Charge of their Overland Park, Kansas office, since 1997. Mr. Stein
was managing partner of the law firm of Buck, Bohm & Stein, P.C. in Overland
Park, Kansas, from 1981 to 1997. He serves on several community boards including
The Leawood Foundation, Johnson County Arts and Humanities Organization and as a
trustee to the Beth Shalom Foundation.

     JOHN K. DOULL is currently the Executive Vice President and Chief Lending
Officer of the Bank, and a member of the Bank's Discount Committee, Trust
Committee, Audit Committee, Risk Management Committee and Compliance Committee.
As such, he is primarily responsible for overseeing the lending function of the
Bank. He is also responsible for strategic planning, risk management, funds
management and developing future plans for the Bank. Mr. Doull has over 15 years
experience in banking. Prior to joining Blue Valley, he was a commercial loan
officer at Boatmen's First National Bank of Kansas City. Mr. Doull is also
currently the Board President and a member of the Administrative Team at Indian
Creek Community Church in Olathe, Kansas. He is also the past treasurer of the
Johnson County Housing Coalition. Mr. Doull resigned from the Bank of Blue
Valley subsequent to the period covered in this report.

     MARK A. FORTINO has been Treasurer of Blue Valley, Blue Valley Investment
and Blue Valley Building, and Senior Vice President and Chief Financial Officer
of the Bank since May, 1998. As such, he is responsible for oversight of all
financial reporting and analysis for Blue Valley, as well as oversight of human
resources, technology and administrative functions. Mr. Fortino also serves on
the Technology Committee and Communications/Moral Committee of the Bank. Mr.
Fortino is a certified public accountant, and for ten years prior to joining
Blue Valley, served in various positions, including Audit Manager, at Baird,
Kurtz & Dobson, a public accounting firm in Kansas City, Missouri. His prior
experience includes bank consulting and auditing, bank mergers and acquisitions,
public securities offerings and periodic SEC reporting. Mr. Fortino is a member
of the Missouri Society of CPAs and the American Institute of CPAs. Mr. Fortino
is also a Board member and Chairman of the Finance Committee of the Girl Scouts
of Midcontinent Council and a member of the Associate Advisory Committee to the
University of Kansas Accounting and Information Systems Board.

     NANCY A. TAYLOR has been Senior Vice President - Mortgage Banking of the
Bank since 1989. As such, Ms. Taylor is responsible for mortgage loan
origination (both conforming and non-conforming), mortgage loan operations, the
sale of mortgage loans in the secondary market and consumer construction loans
for the Bank. Ms. Taylor has over 24 years of banking experience.

     GREGORY J. MOTLEY has been with the Bank since 1999 and is currently Senior
Vice President - Retail Division Manager. As such, he is responsible for retail
sales at all Bank locations. Mr. Motley has over 20 years of banking experience
and during 1999, served as Senior Vice President, Branch Manager of Security
Savings Bank, FSB of Olathe, Kansas. Mr. Motley served as President, East
Region, of First National Bank,



                                       55

<PAGE>   58


Medicine Lodge, in Overland Park, Kansas, from 1996 to 1998, Senior Vice
President of Bank of America, in Kansas City, Missouri, from 1984 to 1996, and
Vice President of Security State Bank, Weatherford, Oklahoma, from 1982 to 1984.
Mr. Motley began his career with the Federal Reserve Bank of Kansas City,
Missouri, as an Assistant Bank Examiner from 1979 to 1982. Mr. Motley is also a
co-founder and owner of Integrity Management, Inc., in Leawood, Kansas, a
business consulting firm specializing in structural issues and business ethics.

     PENNY T. HERSHMAN has been the Senior Vice President of Retail Banking and
Director of Marketing of the Bank since 1997. As such, she directs the retail
functions for the Bank, including branching and marketing. Ms. Hershman has over
30 years of banking experience. From 1995 to 1997, Ms. Hershman served as
principal of at Tapco Consulting in Novato, California, a consulting firm, where
she specialized in banking, management and marketing. From 1984 to 1995, Ms.
Hershman served in various positions at Novato National Bank in Novato,
California, including President and Chief Executive Officer. Ms. Hershman began
her career at Metcalf Bank in Overland Park, Kansas, where she advanced from
teller to director and Senior Vice President and Cashier.

COMMITTEES OF THE BOARD OF DIRECTORS

     The Blue Valley board of directors has a standing Audit Committee, which
reports to the full board of directors in discharging its responsibilities
relating to our accounting, reporting and financial control practices. The Audit
Committee has general responsibility for oversight of financial controls, as
well as our accounting, regulatory and audit activities, and annually reviews
the qualifications of our independent auditors. The current members of the Audit
Committee are Messrs. Alexander, McCarter, Henry and Stein.

     The Blue Valley board of directors does not currently have a standing
Nominating Committee or Compensation Committee. The full Blue Valley board of
directors nominates persons to serve as directors of Blue Valley. The
compensation of the executive officers and employees of the Bank is determined
jointly by the full boards of directors of Blue Valley and the Bank.



                                       56

<PAGE>   59


ITEM 11: EXECUTIVE COMPENSATION

     The Summary Compensation Table below provides summary information
concerning compensation that we paid or accrued during 2000, 1999 and 1998 to or
on behalf of our Chief Executive Officer and the three other highest paid
executive officers whose salary and bonus for 2000 was in excess of $100,000:

<TABLE>
<CAPTION>
                                                                          ANNUAL COMPENSATION (1)
                                                         ----------------------------------------------------------
                                                                                               LONG-TERM
                                                                                              COMPENSATION
                                                                                                 AWARDS
                                                                                    OTHER      SECURITIES    ALL
                                                                                   ANNUAL      UNDERLYING   OTHER
       NAME AND PRINCIPAL POSITIONS               YEAR      SALARY      BONUS      COMP.(2)     OPTIONS    COMP.(3)
       ----------------------------               ----      ------      -----      --------     -------    --------
<S>                                               <C>    <C>          <C>         <C>            <C>      <C>
Robert D. Regnier.........................        2000   $  200,000   $  85,000   $  22,188      10,000   $      -
    President, Chief Executive Officer and        1999      185,000      85,000      17,322      14,000          -
    Chairman of the Board of Directors of         1998      170,000      80,000      16,285      15,160      7,519
    Blue Valley; Chief Executive Officer and
    Director of the Bank
John K. Doull.............................        2000   $  125,000   $  80,000   $  22,188       7,500   $      -
    Executive Vice President and Chief            1999      115,000      80,000      17,322      10,000          -
    Lending Officer of the Bank (4)               1998      105,000      55,000      16,285      11,156          -
Mark A. Fortino...........................        2000   $   90,000   $  35,000   $  15,191       3,000   $      -
    Treasurer of Blue Valley; Senior Vice         1999       82,500      25,000       7,172       4,000          -
    President and Chief Financial Officer of      1998       50,000      12,000           -       6,800          -
    the Bank
Gregory J. Motley.........................        2000   $   85,000   $  20,000   $       -       3,000   $      -
    Senior Vice President - Retail Division       1999       10,625       5,000           -       1,000          -
    Manager of the Bank                           1998            -           -           -           -          -
Nancy A. Taylor...........................        2000   $   70,000   $  35,000   $  12,077       3,000   $      -
    Senior Vice President - Mortgage              1999       65,000      40,000      11,367       3,000          -
    Banking of the Bank                           1998       60,000      35,000       9,948       2,800      2,077
</TABLE>

----------
(1)  Annual compensation does not include the cost to us of benefits executive
     officers receive in addition to salary and cash bonuses. The aggregate
     amounts of these personal benefits, however, did not exceed the lesser of
     either $50,000 or 10% of the total annual compensation of each named
     executive officer.

(2)  Includes the amount of our contributions to our Profit Sharing Plan
     allocated to the accounts of each of the named executive officers.

(3)  Includes amounts paid for unused vacation.

(4)  Mr. Doull resigned from the Bank of Blue Valley subsequent to the period
     covered by this report.



                                       57

<PAGE>   60


GRANTS OF STOCK OPTIONS

     The following table sets forth information with respect to the executive
officers identified in the prior table concerning the grants of options during
2000.

                            AGGREGATED OPTION GRANTS
                                     IN 2000

<TABLE>
<CAPTION>
                                                                                           POTENTIAL REALIZABLE
                                                                                             VALUE AT ASSUMED
                                                                                          ANNUAL RATES OF STOCK
                                                                                            PRICE APPRECIATION
                                   INDIVIDUAL GRANTS                                         FOR OPTION TERM (3)
----------------------------------------------------------------------------------------  ------------------------
              (A)                          (B)            (C)          (D)       (E)          (F)          (G)
                                         NUMBER OF     % OF TOTAL
                                        SECURITIES       OPTIONS    EXERCISE
                                        UNDERLYING     GRANTED TO    OR BASE
                                          OPTIONS     EMPLOYEES IN   PRICE    EXPIRATION
              NAME                      GRANTED (#)    FISCAL YEAR   ($/SH)      DATE         5% ($)      10% ($)
              ----                      -----------    -----------   ------   ----------      ------      -------
<S>                                       <C>            <C>         <C>      <C>   <C>     <C>         <C>
Robert D. Regnier (1)...........          10,000         13.99%      $16.50   12/20/2010    $103,768    $262,968
John K. Doull (1) (2)...........           7,500         10.49%      $16.50   12/20/2010     $77,826    $197,226
Mark A. Fortino (1).............           3,000          4.20%      $16.50   12/20/2010     $31,130     $78,890
Gregory J. Motley (1)...........           3,000          4.20%      $16.50   12/20/2010     $31,130     $78,890
Nancy A. Taylor (1).............           3,000          4.20%      $16.50   12/20/2010     $31,130     $78,890
</TABLE>

(1)  Options were granted under the Company's 1998 Equity Incentive Plan. The
     exercise price of each option represents fair market value of the common
     stock on the date of grant. Options vest two years from the date of grant
     and have a 10 year term, unless they are exercised or expire earlier upon
     the occurrence of certain events described in the plan.

(2)  Mr. Doull resigned from the Bank of Blue Valley subsequent to the period
     covered by this report. Upon his resignation, the 7,500 options granted to
     Mr. Doull in 2000 were forfeited.


(3)  These amounts represent certain assumed rates of appreciation only. Actual
     gains, if any, on stock option exercises are dependent upon a number of
     factors, including the development of an active trading market for the
     Company's common stock, the performance of the Company's common stock,
     overall market conditions and the executive's continued employment with the
     Company. The amounts represented in this table may not be achieved.



                                       58
<PAGE>   61



EXERCISES OF STOCK OPTIONS

     The following table sets forth information with respect to the executive
officers identified in the prior table concerning the exercise of options during
2000, and unexercised options held as of December 31, 2000.

                     AGGREGATED OPTION EXERCISES IN 2000 AND
                           2000 YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                                                                         VALUE OF
                                                                                                        UNEXERCISED
                                                                                Number of              IN-THE-MONEY
                                        NUMBER OF                          Unexercised options            OPTIONS
                                          SHARES                               at year-end:            AT YEAR-END:
                                       ACQUIRED ON                             Exercisable/            EXERCISABLE/
               NAME                      EXERCISE       VALUE REALIZED        Unexercisable          UNEXERCISABLE(1)
               ----                    ----------       --------------        -------------          ----------------
<S>                                       <C>               <C>             <C>                      <C>
Robert D. Regnier..................         -                 -                  39,160/ -               $109,340/ $-
John K. Doull (2)..................         -                 -              11,156/17,500            $58,569/$21,250
Mark A. Fortino....................         -                 -                2,800/7,000            $14,700/$ 8,500
Gregory J. Motley..................         -                 -                   - /4,000                $  /$ 2,125
Nancy A. Taylor....................         -                 -                6,800/6,000            $50,700/$ 6,375
</TABLE>

----------
(1) No established public trading market exists for shares of our common
    stock. The estimated fair value of our common stock at December 31, 2000 was
    $16.50.

(2) Mr. Doull resigned from the Bank of Blue Valley subsequent to the period
    covered by this report. Upon his resignation, 17,500 options granted to Mr.
    Doull were unexercisable and were forfeited.

                                       59
<PAGE>   62
1998 EQUITY INCENTIVE PLAN

         In April, 1998, our board of directors and stockholders approved the
Blue Valley Ban Corp 1998 Equity Incentive Plan (the "Plan"), which superceded
our 1994 Stock Option Plan. The Plan is administered by our full board of
directors. The Plan authorizes our board of directors to grant equity awards to
substantially all of our employees and directors. The total number of shares of
our common stock reserved for awards under the Plan is 143,784. Awards granted
under the Plan may consist of any of the following:

         o    incentive stock options and nonqualified stock options, which
              entitle the holder to purchase a stated number of shares of our
              common stock;

         o    restricted shares of our common stock, which are subject to
              forfeiture; and

         o    deferred share units, which entitle the holder to receive a future
              cash payment equal to the increase in the value of shares of our
              common stock.

         The period of any award granted under the Plan may not exceed ten
years, and awards vest based on the determination by our board of directors. The
exercise price of any incentive stock option granted under the Plan may not be
less than the fair market value of a share of our common stock on the date of
grant. The exercise price of any nonqualified stock option may be less than,
greater than or equal to the fair market value of a share of our common stock on
the grant date. The consideration to be received by Blue Valley in exchange for
any award of restricted shares may not be less than the minimum amount for which
our shares of common stock can be issued under Kansas law. The initial value of
a deferred share unit generally will equal the fair market value of a share of
our common stock on the grant date. The Plan provides for increases in the
number of shares and to the exercise price, if applicable, in the event of a
declaration of a stock dividend or any recapitalization resulting in a stock
split-up, combination or exchange of shares of our common stock.

         The Plan further provides that in most instances unvested restricted
share or deferred share unit awards and any unexercised options are forfeited
upon the termination of the recipient's employment with Blue Valley for cause.
If employment is terminated due to an award recipient's death or disability,
unvested awards generally vest, and in the case of options, may be exercised
within 12 months thereafter. If employment is terminated for any other reason,
unvested options, restricted shares and deferred share units are generally
forfeited, and vested options may be exercised within three months after the
termination of employment.

DIRECTOR COMPENSATION

         We pay each of our nonemployee directors a fee of $1,500 for each
meeting of our board of directors, and a fee of $350 for each committee meeting,
that he attends in person. Directors are also eligible to receive stock options,
restricted stock and deferred share unit grants under our 1998 Equity Incentive
Plan. In 2000, each nonemployee


                                       60
<PAGE>   63



director of Blue Valley received options to purchase 3,000 shares of our common
stock. Mr. Regnier received options to purchase 10,000 shares of our common
stock.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     All of our executive officers and employees are employed by the Bank and do
not receive separate compensation for positions held with Blue Valley, Blue
Valley Investment Corp. or Blue Valley Building Corp. Executive compensation is
determined jointly by the full boards of directors of Blue Valley and the Bank.
During 2000, Robert D. Regnier, who is a director of Blue Valley and the Bank,
and President and Chief Executive Officer of Blue Valley and the Bank, Mark A.
Fortino, who is Senior Vice President and Chief Financial Officer of the Bank
and Treasurer of Blue Valley, and John K. Doull who, prior to his resignation in
February, 2001, was Executive Vice President - Lending of the Bank,
participated in the deliberations of the boards of directors of Blue Valley and
the Bank concerning executive compensation. There are no other reportable
compensation committee interlocks or insider participation matters.






                                       61
<PAGE>   64



ITEM   12:        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table shows the common stock owned by directors and
executive officers of Blue Valley and persons known by Blue Valley to
beneficially own more than 5% of our outstanding common stock as of March 1,
2001. The address of each person listed below is 11935 Riley, Overland Park,
Kansas 66225-6128. This information has been prepared based upon the SEC's
"beneficial ownership" rules. Under these rules a person is deemed to be a
beneficial owner of a security if that person has or shares voting power, which
includes the power to vote or to direct the voting of a security, or investment
power, which includes the power to dispose or to direct the disposition of a
security. Unless otherwise indicated, each of the following persons has sole
voting and investment power with respect to the shares beneficially owned.

<TABLE>
<CAPTION>
               Beneficial Owner                       Shares         Percentage
------------------------------------------        -------------      ----------
<S>                                               <C>                 <C>
Robert D. Regnier.........................          493,732 (1)        21.54%
Donald H. Alexander.......................          144,032 (1)         6.28
Wayne A. Henry, Jr........................          116,880 (1)         5.10
C. Ted McCarter...........................           75,584 (1)         3.30
Thomas A. McDonnell.......................          136,952 (1)         5.98
John K. Doull (2).........................           66,536             2.90
Mark A. Fortino...........................            6,800 (1)         0.30
Gregory J. Motley.........................              --               --
Nancy A. Taylor...........................           35,620 (1)         1.55
All directors and executive officers,
    11 in number, as a group..............        1,082,936 (1)        47.25
</TABLE>

-------------
(1)      Includes options that are currently exercisable, or become exercisable
         within 60 days of March 1, 2001, to purchase from us the number of
         shares of common stock indicated for the following persons: Robert D.
         Regnier, 39,160; Donald H. Alexander, 3,000; Wayne A. Henry, Jr.,
         8,500; C. Ted McCarter, 7,000; Thomas A. McDonnell, 3,000; Mark A.
         Fortino, 2,800; Nancy A. Taylor, 6,800; and Penny T. Hershman, 6,800.
(2)      Mr. Doull resigned from the Bank of Blue Valley subsequent to the
         period covered by this report. Upon his resignation, 17,500 options
         were forfeited.





                                       62
<PAGE>   65



ITEM     13:   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Bank periodically makes loans to our executive officers and
directors, the members of their immediate families and companies that they are
affiliated with. As of January 31, 2001, the Bank had aggregate loans
outstanding to such persons of approximately $2.0 million, which represented
8.16% of our stockholders' equity of $24.1 million on that date. These loans:

         o    were made in the ordinary course of business;

         o    were made on substantially the same terms, including interest
              rates and collateral, as those prevailing at the time for
              comparable transactions with other persons; and

         o    did not involve more than the normal risk of collectibility or
              present other unfavorable features.





                                       63
<PAGE>   66



                                     PART IV

ITEM  14:    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      1 and 2. Financial Statements and any Financial Statement Schedules

         The financial statements and financial statement schedules listed in
the accompanying index to consolidated financial statements and financial
statement schedules are filed as part of this annual report.

(b)      Reports on Form 8-K

         Registrant did not file any reports on Form 8-K during the fourth
quarter of fiscal year 2000.

(c)      Exhibits

         The following exhibits were previously filed with the Commission on
July 18, 2000 as an Exhibit to Blue Valley's Registration Statement on Form S-1,
Amendment No. 5, File No. 333-34328. The same is incorporated herein by
reference.

         3.1  Amended and Restated Articles of Incorporation of Blue Valley Ban
              Corp.

         3.2  Bylaws, as amended, of Blue Valley Ban Corp.

         4.1  1998 Equity Incentive Plan.

         4.2  1994 Stock Option Plan.

         4.3  Form of Indenture of Blue Valley Ban Corp.

         4.4  Form of Junior Subordinated Debentures, due September 30, 2030.

         4.5  Certificate of Trust of BVBC Capital Trust I.

         4.6  Form of Amended and Restated Trust Agreement of BVBC Capital Trust
              I.

         4.7  Form of Cumulative Preferred Security Certificate for BVBC Capital
              Trust I.

         4.8  Form of Trust preferred securities Guarantee Agreement of Blue
              Valley Ban Corp relating to the Cumulative Trust preferred
              securities.

         4.9  Form of Agreement as to Expenses and Liabilities.



                                       64
<PAGE>   67



         10.1 Security Agreement of Blue Valley Ban Corp in favor of Boatmen's
              First National Bank of Kansas City, dated as of June 7, 1994.

         10.2 Agreement between Blue Valley Ban Corp, Bank of Blue Valley and
              Boatmen's First National Bank of Kansas City, dated as of January
              2, 1997.

         10.3 Amendment of Loan Documents between Blue Valley Ban Corp, Bank of
              Blue Valley and NationsBank, N.A. (successor to Boatmen's First
              National Bank of Kansas City), dated as of December 26, 1997.

         10.4 Second Amendment of Loan Documents between Blue Valley Ban Corp,
              Bank of Blue Valley and NationsBank, N.A., dated as of January 31,
              1999.

         10.5 Third Amendment of Loan Documents between Blue Valley Ban Corp,
              Bank of Blue Valley and NationsBank, N.A., dated as of June 21,
              1999.

         10.6 Fourth Amendment of Loan Documents between Blue Valley Ban Corp,
              Bank of Blue Valley and NationsBank, N.A., dated as of December
              30, 1999.

         10.7 Amended and Restated Promissory Note of Blue Valley Ban Corp,
              dated December 30, 1999.

         10.8 Promissory Note of Blue Valley Building, dated July 15, 1994.

         10.9 Mortgage, Assignment of Leases and Rents and Security Agreement
              between Blue Valley Building and Businessmen's Assurance Company
              of America, dated July 15, 1994.

         10.10 Assignment of Leases and Rents between Blue Valley Building and
              Businessmen's Assurance Company of America, dated July 15, 1994.

         10.11 Lease Agreement between Bank of Blue Valley and CMI, Inc., dated
              January 18, 1999.

The following exhibits are filed as part of this annual report.

         11.1 Statement re computation of per share earnings. Please see p.
              F-12.

         21.1 Subsidiaries of Blue Valley Ban Corp.

         23.3 Consent of Baird, Kurtz and Dobson.






                                       65
<PAGE>   68



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

         Date:  March 21, 2001         By: /s/ Robert D. Regnier
                                           -------------------------------------
                                           Robert D. Regnier, President,
                                           Chief Executive Officer and  Director

         Date:  March 21, 2001         By: /s/ Mark A. Fortino
                                           -------------------------------------
                                           Mark A. Fortino, Treasurer and
                                           Principal Finance and Accounting
                                           Officer






                                       66
<PAGE>   69



         Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

         Date:  March 21, 2001         By: /s/ Robert D. Regnier
                                           -------------------------------------
                                           Robert D. Regnier, President,
                                           Chief Executive Officer and Director

         Date:  March 21, 2001        By: /s/ Donald H. Alexander
                                          --------------------------------------
                                          Donald H. Alexander, Director

         Date:  March 21, 2001        By: /s/ Wayne A. Henry, Jr.
                                          --------------------------------------
                                          Wayne A. Henry, Jr., Director

         Date:  March __, 2001        By:
                                          C. Ted McCarter, Director

         Date:  March 21, 2001        By: /s/ Thomas A. McDonnell
                                          --------------------------------------
                                          Thomas A. McDonnell, Director






                                       67
<PAGE>   70







                              BLUE VALLEY BAN CORP

                        DECEMBER 31, 2000, 1999 AND 1998


                                    CONTENTS



                                                                      Page
                                                                      ----

INDEPENDENT ACCOUNTANTS' REPORT...................................     F-2


CONSOLIDATED FINANCIAL STATEMENTS

     Balance Sheets...............................................     F-3
     Statements of Income.........................................     F-5
     Statements of Changes in Stockholders' Equity................     F-6
     Statements of Cash Flows.....................................     F-7
     Notes to Financial Statements................................     F-8








                                      F-1
<PAGE>   71








                         INDEPENDENT ACCOUNTANTS' REPORT




Board of Directors and Stockholders
Blue Valley Ban Corp
Overland Park, Kansas


     We have audited the accompanying consolidated balance sheets of BLUE VALLEY
BAN CORP as of December 31, 2000 and 1999, and the related consolidated
statements of income, changes in stockholders' equity and cash flows for each of
the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of BLUE VALLEY
BAN CORP as of December 31, 2000 and 1999, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 2000
in conformity with generally accepted accounting principles.





                                                       /s/ BAIRD, KURTZ & DOBSON


Kansas City, Missouri
February 9, 2001



                                      F-2
<PAGE>   72





                              BLUE VALLEY BAN CORP

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999
                   (dollars in thousands, except share data)


                                     ASSETS


<TABLE>
<CAPTION>
                                                                   2000                  1999
                                                               -----------            ----------

<S>                                                            <C>                    <C>
Cash and due from banks                                        $    13,720            $    15,460
Federal funds sold                                                  22,200                  8,000
                                                               -----------            -----------
              Cash and cash equivalents                             35,920                 23,460

Available-for-sale securities                                       76,503                 48,646
Held-to-maturity securities                                          2,000

Mortgage loans held for sale                                         1,207                    952

Loans                                                              287,669                250,410
   Less allowance for loan losses                                    4,440                  3,817
                                                               -----------            -----------
              Net loans                                            283,229                246,593

Premises and equipment                                               6,591                  5,574
Foreclosed assets held for sale, net                                   334                    186
Interest receivable                                                  3,058                  2,039
Deferred income taxes                                                  939                  1,841
Prepaid expenses and other assets                                    2,041                    840
Federal Home Loan Bank stock and other securities                    1,550                  1,034
Excess of cost over fair value of net assets acquired,
   at amortized cost                                                 1,295                  1,448
                                                               -----------            -----------


              Total Assets                                     $   414,667            $   332,613
                                                               ===========            ===========
</TABLE>




See Notes to Consolidated Financial Statements



                                      F-3
<PAGE>   73




                              BLUE VALLEY BAN CORP

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999
                    (dollars in thousands, except share data)


                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                            2000                  1999
                                                                        -----------             ---------
<S>                                                                     <C>                     <C>
LIABILITIES
   Demand deposits                                                      $    44,354             $    36,950
   Savings, NOW and money market deposits                                   154,464                 126,398
   Time deposits                                                            139,403                 104,797
                                                                        -----------             -----------
                  Total Deposits                                            338,221                 268,145

   Securities sold under agreements to repurchase                            15,299                  11,260
   Short-term debt                                                            5,000                  17,450
   Long-term debt                                                            16,768                  11,908
   Guaranteed preferred beneficial interest in Company's
     subordinated debt                                                       11,500
   Advances from borrowers for taxes and insurance                            1,350                   2,559
   Accrued interest and other liabilities                                     2,714                   2,422
                                                                        -----------             -----------
                  Total Liabilities                                         390,852                 313,744
                                                                        ===========             ===========

STOCKHOLDERS' EQUITY
   Capital stock
     Common stock, par value $1 per share;
         Authorized 15,000,000 shares; issued and outstanding
         2000 - 2,141,720 shares; 1999 - 2,137,720 shares                     2,142                   2,138
   Additional paid-in capital                                                 5,277                   5,230
   Retained earnings                                                         15,935                  12,458
   Accumulated other comprehensive income
     Unrealized appreciation (depreciation) on available-for-
         sale securities, net of income taxes of $307 in
         2000 and $(638) in 1999                                                461                    (957)
                                                                        -----------             -----------
                  Total Stockholders' Equity                                 23,815                  18,869
                                                                        -----------             -----------

                  Total Liabilities and Stockholders' Equity            $   414,667             $   332,613
                                                                        ===========             ===========
</TABLE>

   See Notes to Consolidated Financial Statements




                                      F-4
<PAGE>   74




                              BLUE VALLEY BAN CORP

                        CONSOLIDATED STATEMENTS OF INCOME

                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                  (dollars in thousands, except per share data)


<TABLE>
<CAPTION>
                                                        2000            1999            1998
                                                       -------         -------         -------
<S>                                                    <C>             <C>             <C>
INTEREST INCOME
   Interest and fees on loans                          $26,733         $20,422         $14,608
   Federal funds sold                                      777             431             396
   Available-for-sale securities                         3,566           2,755           2,814
   Held-to-maturity securities                              41
                                                       -------         -------         -------
              Total Interest Income                     31,117          23,608          17,818
                                                       -------         -------         -------

INTEREST EXPENSE
   Interest-bearing demand deposits                        872             644             348
   Savings and money market deposit accounts             5,726           3,156           1,637
   Other time deposits                                   7,555           6,032           6,247
   Securities sold under repurchase agreements             417             287             438
   Long-term debt and advances                           2,126           1,085             535
                                                       -------         -------         -------
              Total Interest Expense                    16,696          11,204           9,205
                                                       -------         -------         -------

NET INTEREST INCOME                                     14,421          12,404           8,613

PROVISION FOR LOAN LOSSES                                1,950           2,144           1,061
                                                       -------         -------         -------

NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                            12,471          10,260           7,552
                                                       -------         -------         -------

NONINTEREST INCOME
   Service fees                                          2,772           2,835           2,084
   Other income                                            284             189             562
                                                       -------         -------         -------
              Total Noninterest Income                   3,056           3,024           2,646
                                                       -------         -------         -------

NONINTEREST EXPENSE
   Salaries and employee benefits                        5,856           4,578           3,312
   Net occupancy expense                                 1,124             894             748
   Other operating expense                               3,313           3,208           1,936
                                                       -------         -------         -------
              Total Noninterest Expense                 10,293           8,680           5,996
                                                       -------         -------         -------

INCOME BEFORE INCOME TAXES                               5,234           4,604           4,202

PROVISION FOR INCOME TAXES                               1,757           1,521           1,386
                                                       -------         -------         -------

NET INCOME                                             $ 3,477         $ 3,083         $ 2,816
                                                       =======         =======         =======

BASIC EARNINGS PER SHARE                               $  1.62         $  1.45         $  1.36
                                                       =======         =======         =======

DILUTED EARNINGS PER SHARE                             $  1.59         $  1.42         $  1.35
                                                       =======         =======         =======
</TABLE>


See Notes to Consolidated Financial Statements



                                      F-5
<PAGE>   75

                              BLUE VALLEY BAN CORP

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                    (dollars in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                    Accumulated
                                                                                                       Other
                                                                                                   Comprehensive
                                                                                                       Income
                                                                                                   ----------------
                                                                                                     Unrealized
                                                                                                    Appreciation
                                                                                                   (Depreciation)
                                                                         Additional                     on
                                            Comprehensive     Common       Paid-In    Retained    Available-for-Sale
                                               Income         Stock        Capital    Earnings     Securities, Net     Total
                                            -------------     ------     ----------   --------    ------------------   -----

<S>                                           <C>             <C>         <C>         <C>             <C>            <C>
BALANCE, DECEMBER 31, 1997                                     $2,028      $ 4,617     $ 6,559         $  260         $13,464

   Issuance of 102,336 shares of
     common stock                                                 102          542                                        644

   Net income                                  $ 2,816                                   2,816                          2,816

   Change in unrealized appreciation
     (depreciation) on available-for-sale
     securities, net of income taxes of $61         92                                                     92              92
                                               -------         ------      -------     -------         ------         -------
                                               $ 2,908
                                               =======
BALANCE, DECEMBER 31, 1998                                      2,130        5,159       9,375            352          17,016

   Issuance of 7,324 shares of
     common stock                                                   8           71                                         79

   Net income                                  $ 3,083                                   3,083                          3,083

   Change in unrealized appreciation
     (depreciation) on available-for-sale
     securities, net of income taxes of
     $(872)                                     (1,309)                                                (1,309)         (1,309)
                                               -------         ------      -------     -------         ------         -------
                                               $ 1,774
BALANCE, DECEMBER 31, 1999                     =======          2,138        5,230      12,458           (957)         18,869

   Issuance of 4,000 shares of
     common stock                                                   4           47                                         51

   Net income                                  $ 3,477                                   3,477                          3,477

   Change in unrealized appreciation
     (depreciation) on available-for-sale
     securities, net of income taxes of $945     1,418                                                  1,418           1,418
                                               -------         ------      -------     -------         ------         -------
                                               $ 4,895
BALANCE, DECEMBER 31, 2000                     =======         $2,142      $ 5,277     $15,935         $  461         $23,815
                                                               ======      =======     =======         ======         =======

</TABLE>

<TABLE>
<CAPTION>
                                                                                        2000           1999             1998
                                                                                       -------       --------          -------
<S>                                                                                   <C>           <C>               <C>
RECLASSIFICATION DISCLOSURE:

   Unrealized appreciation (depreciation) on available-for-sale securities, net
     of income taxes of $945, $(871) and $106 for 2000, 1999 and 1998, respectively    $ 1,418       $ (1,307)          $  159

   Less: reclassification adjustments for appreciation (depreciation) included in
     net income, net of income taxes of $1 and $45 for 1999 and 1998,
     respectively                                                                                          (2)             (67)
                                                                                       -------       --------          -------

   Change in unrealized appreciation (depreciation) on available-for-sale
     securities, net of income taxes of $945, $(872) and $61 for 2000, 1999 and
     1998, respectively                                                                $ 1,418       $ (1,309)         $    92
                                                                                       =======       ========          =======

</TABLE>

   See Notes to Consolidated Financial Statements

                                      F-6
<PAGE>   76


                             BLUE VALLEY BAN CORP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                             (dollars in thousands)


<TABLE>
<CAPTION>
                                                                             2000                1999               1998
                                                                          ----------          ----------         ----------
<S>                                                                       <C>                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                           $    3,477          $    3,083         $    2,816
     Items not requiring (providing) cash:
         Depreciation and amortization                                           653                 533                445
         Amortization of premiums and discounts
              on securities                                                       74                  50
         Provision for loan losses                                             1,950               2,144              1,061
         Deferred income taxes                                                   (43)               (497)              (298)
         Gain on sales of available-for-sale securities                                               (3)              (112)
         (Gain) loss on sale of foreclosed assets                                                                       (78)
     Changes in:
         Accrued interest receivable                                          (1,019)               (538)              (141)
         Mortgage loans held for sale                                           (255)              1,002             (1,063)
         Prepaid expenses and other assets                                      (291)               (259)                38
         Accrued interest payable and other liabilities                          292                 680                730
                                                                          ----------          ----------         ----------
                  Net cash provided by operating activities                    4,838               6,195              3,398
                                                                          ----------          ----------         ----------

CASH FLOWS FROM INVESTING ACTIVITIES
     Net originations of loans                                               (41,375)            (92,460)           (38,869)
     Proceeds from sales of loan participations                                1,617               2,231              4,394
     Purchase of premises and equipment                                       (1,514)               (530)            (1,203)
     Proceeds from the sale of foreclosed assets                               1,024                 455                827
     Purchases of held-to-maturity securities                                 (2,000)
     Proceeds from sales of available-for-sale securities                                          2,003             11,115
     Proceeds from maturities of available-for-sale securities                 3,355              10,105              7,270
     Purchases of available-for-sale securities                              (28,923)             (9,556)           (31,299)
     Purchases of Federal Home Loan Bank stock and other securities             (516)               (417)              (134)
                                                                          ----------          ----------         ----------
                  Net cash used in investing activities                      (68,332)            (88,169)           (47,899)
                                                                          ----------           ---------          ---------

CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in demand deposits, money market,
         NOW and savings accounts                                             35,470              66,381             18,861
     Net increase (decrease) in certificates of deposit                       34,606              (8,060)            20,171
     Repayments of long-term debt                                               (140)               (130)              (120)
     Proceeds from long-term debt                                              5,000                                 10,000
     Net proceeds from guaranteed preferred beneficial interest in
         Company's subordinated debt                                          10,587
     Net proceeds (payments) on short-term debt                              (12,450)             13,875               (463)
     Proceeds from sale of common stock                                           51                  79                644
     Net increase in other borrowings                                          4,039               2,443                704
     Net increase (decrease) in advances from borrowers
         for  taxes and insurance                                             (1,209)              1,847             (1,277)
                                                                          ----------          ----------         ----------
                  Net cash provided by financing activities                   75,954              76,435             48,520
                                                                          ----------          ----------         ----------
                                                                              12,460              (5,539)             4,019
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR                                                        23,460              28,999             24,980
                                                                          ----------          ----------         ----------

CASH AND CASH EQUIVALENTS,
     END OF YEAR                                                          $   35,920          $   23,460         $   28,999
                                                                          ==========          ==========         ==========
</TABLE>

See Notes to Consolidated Financial Statements


                                      F-7
<PAGE>   77


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 1:   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


NATURE OF OPERATIONS

     The Company is a holding company for Bank of Blue Valley (the Bank), Blue
Valley Building Corporation and BVBC Capital Trust I through 100% ownership of
each.

     The Bank is primarily engaged in providing a full range of banking and
mortgage services to individual and corporate customers in southern Johnson
County. The Bank is subject to competition from other financial institutions.
The Bank also is subject to the regulation of certain federal and state agencies
and undergoes periodic examinations by those regulatory authorities.

     The Blue Valley Building Corporation is primarily engaged in leasing real
property at its only facility in Overland Park, Kansas.

     BVBC Capital Trust I is a newly created Delaware business trust that was
created in 2000 to offer trust preferred securities and to purchase the
Company's prior subordinated debentures. The Trust has a term of 35 years, but
may dissolve earlier as provided in its trust agreement.


OPERATING SEGMENT

     The Company provides community banking services through its subsidiary
bank, including such products and services as loans; time deposits, checking and
savings accounts; trust services; and investment services. These activities are
reported as one operating segment.


USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

     Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for loan losses and the valuation
of real estate acquired in connection with foreclosures or in satisfaction of
loans. In connection with the determination of the allowance for loan losses and
the valuation of foreclosed assets held for sale, management obtains independent
appraisals for significant properties.

     Management believes that the allowances for loan losses and the valuation
of foreclosed assets held for sale are adequate. While management uses available
information to recognize losses on loans and foreclosed assets held for sale,
changes in economic conditions may necessitate revision of these estimates in
future years. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Company's allowances for loan
losses and valuation of foreclosed assets held for sale. Such agencies may
require the


                                      F-8

<PAGE>   78


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 1:   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

Company to recognize additional losses based on their judgements of information
available to them at the time of their examination.


PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of Blue Valley
Ban Corp and its 100% owned subsidiaries, Bank of Blue Valley, Blue Valley
Building Corporation and BVBC Capital Trust I. Significant intercompany accounts
and transactions have been eliminated in consolidation.


CASH EQUIVALENTS

     The Company considers all liquid investments with original maturities of
three months or less to be cash equivalents. At December 31, 2000 and 1999, cash
equivalents consisted of federal funds sold.


INVESTMENT IN DEBT SECURITIES

     Available-for-sale securities, which include any security for which the
Company has no immediate plan to sell, but which may be sold in the future, are
carried at fair value. Realized gains and losses, based on amortized cost of the
specific security, are included in other income. Unrealized gains and losses are
recorded, net of related income tax effects, in stockholders' equity. Premiums
and discounts are amortized and accreted, respectively, to interest income using
a method which approximates the level-yield method over the period to maturity.

     Held-to-maturity securities, which include any security for which the
Company has the positive intent and ability to hold until maturity, are carried
at historical cost adjusted for amortization of premiums and accretion of
discounts. Premiums and discounts are amortized and accreted, respectively, to
interest income using a method which approximates the level-yield method over
the period to maturity.

     Interest on investments in debt securities is included in income when
earned.


OTHER INVESTMENTS

        The Company, as a member of the Federal Home Loan Bank (FHLB) system, is
required to maintain an investment in capital stock of the FHLB. No ready market
exists for the FHLB stock, and it has no quoted market value. Such stock is
recorded at cost and reported as other investments in the accompanying
consolidated balance sheets.


                                      F-9

<PAGE>   79


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 1:   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)


MORTGAGE LOANS HELD FOR SALE

     Mortgage loans held for sale are carried at the lower of cost or fair
value, determined using an aggregate basis. Write-downs to fair value are
recognized as a charge to earnings at the time the decline in value occurs.
Forward commitments to sell mortgage loans are acquired to reduce market risk on
mortgage loans in the process of origination and mortgage loans held for sale.
Amounts paid to investors to obtain forward commitments are deferred until such
time as the related loans are sold. The fair values of the forward commitments
are not recognized in the financial statements. Gains and losses resulting from
sales of mortgage loans are recognized when the respective loans are sold to
investors. Gains and losses are determined by the difference between the selling
price and the carrying amount of the loans sold, net of discounts collected or
paid, commitment fees paid and considering a normal servicing rate. Fees
received from borrowers to guarantee the funding of mortgage loans held for sale
are recognized as income or expense when the loans are sold or when it becomes
evident that the commitment will not be used.


LOANS

     Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or pay-offs are reported at their
outstanding principal adjusted for any charge-offs, the allowance for loan
losses, and any deferred fees or costs on originated loans and unamortized
premiums or discounts on purchased loans.


ALLOWANCE FOR LOAN LOSSES

     The allowance for loan losses is increased by provisions charged to expense
and reduced by loans charged off, net of recoveries. The allowance is
management's best estimate of probable losses which have been incurred as of the
balance sheet date based on management's evaluation of risk in the portfolio,
local economic conditions and historical loss experience.

     The adequacy of the allowance is analyzed monthly based on internal loan
reviews and quality measurements of the loan portfolio. The Bank computes its
allowance by assigning specific reserves to impaired loans, and then applies a
general reserve based on a loss factor applied to the rest of the loan
portfolio. The loss factor is determined based on such items as management's
evaluation of risk in the portfolio, local economic conditions and historical
loss experience. Specific allowances are accrued on specific loans evaluated for
impairment for which the basis of each loan, including accrued interest, exceeds
the discounted amount of expected future collections of interest and principal
or, alternatively, the fair value of loan collateral.


                                      F-10

<PAGE>   80


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)

     A loan is considered impaired when it is probable that the Company will not
receive all amounts due according to the contractual terms of the loan. This
includes loans that are delinquent 90 days or more (nonaccrual loans) and
certain other loans identified by management. Accrual of interest is
discontinued, and interest accrued and unpaid is removed, at the time such
amounts are delinquent 90 days. Interest is recognized for nonaccrual loans only
upon receipt, and only after all principal amounts are current according to the
terms of the contract.


PREMISES AND EQUIPMENT

     Depreciable assets are stated at cost less accumulated depreciation.
Depreciation is charged to expense using the straight-line method over the
estimated useful lives of the assets.


FORECLOSED ASSETS HELD FOR SALE

     Assets acquired by foreclosure or in settlement of debt and held for sale
are valued at estimated fair value as of the date of foreclosure, and a related
valuation allowance is provided for estimated costs to sell the assets.
Management evaluates the value of foreclosed assets held for sale periodically
and increases the valuation allowance for any subsequent declines in fair value.
Increases in the valuation allowance and gains/losses on sales of foreclosed
assets are included in non-interest expenses, net.


EXCESS OF COST OVER FAIR VALUE OF NET ASSETS ACQUIRED

     Unamortized costs in excess of the fair value of underlying net tangible
assets acquired aggregated $1,295,000 and $1,448,000 (originally $2,286,000) at
December 31, 2000 and 1999, respectively, and are being amortized over a 15-year
period using the straight-line method. Amortization expense related to purchased
subsidiaries and acquired deposits was $152,000 for each of the years 2000, 1999
and 1998.


FEE INCOME

     Loan origination fees, net of direct origination costs, are recognized as
income using the level-yield method over the term of the loans.


RECLASSIFICATION

     Certain reclassifications have been made to the 1999 financial statements
to conform to the 2000 financial statement presentation. These reclassifications
had no effect on net income.


                                      F-11


<PAGE>   81

                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)


INCOME TAXES

     Deferred tax liabilities and assets are recognized for the tax effect of
differences between the financial statement and tax bases of assets and
liabilities. A valuation allowance is established to reduce deferred tax assets
if it is more likely than not that a deferred tax asset will not be realized.


EARNINGS PER SHARE

     Basic earnings per share is computed based on the weighted average number
of shares outstanding during each year. Diluted earnings per share is computed
using the weighted average common shares and all potential dilutive common
shares outstanding during the period.

     The computation of per share earnings is as follows:

<TABLE>
<CAPTION>
                                                    2000         1999         1998
                                                 ----------   ----------   ----------
                                                    (IN THOUSANDS, EXCEPT SHARE AND
                                                             PER SHARE DATA)
<S>                                              <C>          <C>          <C>
Net income ...................................   $    3,477   $    3,083   $    2,816
                                                 ----------   ----------   ----------

Average common shares outstanding ............    2,141,523    2,131,372    2,065,400
Average common share stock options outstanding       49,782       34,636       18,688
                                                 ----------   ----------   ----------
Average diluted common shares ................    2,191,305    2,166,008    2,084,088
                                                 ----------   ----------   ----------

     Basic earnings per share .............      $     1.62   $     1.45   $     1.36
                                                  =========    =========    =========

     Diluted earnings per share ...........      $     1.59   $     1.42   $     1.35
                                                  =========    =========    =========
</TABLE>

                                      F-12

<PAGE>   82


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 2:   INVESTMENT IN DEBT SECURITIES

     The amortized cost and approximate fair value of available-for-sale
securities are as follows:

<TABLE>
<CAPTION>
                                                     December 31, 2000
                                   ----------------------------------------------------
                                                   Gross         Gross
                                   Amortized    Unrealized    Unrealized    Approximate
                                      Cost         Gains        Losses       Fair Value
                                   ---------    ----------    ----------    -----------
                                                  (dollars in thousands)
<S>                                 <C>          <C>           <C>            <C>
U.S. Treasury ..................    $  8,000     $    106      $     (2)      $  8,104
U.S. Government agencies .......      52,488          606          (197)        52,897
State and political subdivisions      15,247          258            (3)        15,502
                                    --------     --------      --------       --------
                                    $ 75,735     $    970      $   (202)      $ 76,503
                                    ========     ========      ========       ========
</TABLE>

<TABLE>
<CAPTION>
                                                     December 31, 1999
                                   ----------------------------------------------------
                                                   Gross         Gross
                                   Amortized    Unrealized    Unrealized    Approximate
                                      Cost         Gains        Losses       Fair Value
                                   ---------    ----------    ----------    -----------
                                                  (dollars in thousands)
<S>                                 <C>          <C>           <C>            <C>
U.S. Treasury ..................    $ 10,012     $     20      $    (83)      $  9,949
U.S. Government agencies .......      25,591                     (1,365)        24,226
State and political subdivisions      14,638           33          (200)        14,471
                                    --------     --------      --------       --------
                                    $ 50,241     $     53      $ (1,648)      $ 48,646
                                    ========     ========      ========       ========
</TABLE>


     Maturities of available-for-sale debt instruments at December 31, 2000:
<TABLE>
<CAPTION>
                                                      Amortized      Approximate
                                                         Cost        Fair Value
                                                      ---------      -----------
                                                        (dollars in thousands)
<S>                                                    <C>             <C>
In one year or less ............................       $ 3,275         $ 3,280
After one through five years ...................        30,460          30,877
After five through ten years ...................        41,747          42,090
After ten years ................................           253             256
                                                       -------         -------
                                                       $75,735         $76,503
                                                       =======         =======
</TABLE>

                                      F-13


<PAGE>   83

                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 2:   INVESTMENT IN DEBT SECURITIES (CONTINUED)

     The amortized cost and approximate fair value of held-to-maturity
securities are as follows:

<TABLE>
<CAPTION>
                                                     December 31, 2000
                                   ----------------------------------------------------
                                                   Gross         Gross
                                   Amortized    Unrealized    Unrealized    Approximate
                                      Cost         Gains        Losses       Fair Value
                                   ---------    ----------    ----------    -----------
                                                  (dollars in thousands)
<S>                                 <C>          <C>           <C>            <C>
U.S. Government agencies........    $  2,000     $     14                     $  2,014
                                    ========     ========                     ========
</TABLE>



     Maturities of held-to-maturity debt instruments at December 31, 2000:

<TABLE>
<CAPTION>
                                                              Amortized     Approximate
                                                                 Cost        Fair Value
                                                              ---------     -----------
                                                                (dollars in thousands)
<S>                                                            <C>            <C>
In one year or less............
After one through five years...
After five through ten years...
After ten years ...............                                $  2,000       $  2,014
                                                               --------       --------
                                                               $  2,000       $  2,014
                                                               ========       ========
</TABLE>


     The book value of securities pledged as collateral to secure public
deposits amounted to $25,145,000 at December 31, 2000 and $22,177,000 at
December 31, 1999. The approximate fair value of pledged securities amounted to
$25,380,000 at December 31, 2000 and $21,597,000 at December 31, 1999.

     The Company entered into sales of securities under agreements to
repurchase. The amounts deposited under these agreements represent short-term
borrowings and are reflected as a liability in the consolidated balance sheets.
The securities underlying the agreements are book-entry securities. During the
period, securities held in safekeeping were pledged to the depositors under a
written custodial agreement that explicitly recognizes the depositors' interest
in the securities. At December 31, 2000, or at any month end during the period,
no material amount of agreements to repurchase securities sold was outstanding
with any individual dealer. Securities sold under agreements to repurchase
averaged $13,245,000 and $9,500,000 during 2000 and 1999, and the maximum
amounts outstanding at any month-end were $16,650,000 and $13,056,000,
respectively. The book value of securities pledged to secure agreements to
repurchase amounted to $21,031,000 and $15,110,000 at December 31, 2000 and
1999, respectively. The approximate fair value of these securities was
$21,155,000 at December 31, 2000 and $14,235,000 at December 31, 1999
respectively.

     Gross gains of $3,000 and $112,000 were realized at December 31, 1999 and
1998, respectively, resulting from sales of available-for-sale securities.


                                      F-14

<PAGE>   84


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 3:  LOANS AND ALLOWANCE FOR LOAN LOSSES

     Categories of loans at December 31, 2000 and 1999 include the following:

<TABLE>
<CAPTION>
                                                            2000         1999
                                                          --------     --------
                                                          (dollars in thousands)
<S>                                                       <C>          <C>
Commercial .............................................. $ 76,556     $ 64,552
Commercial real estate ..................................   42,267       26,617
Construction ............................................   60,225       41,336
Residential real estate .................................   37,290       33,251
Leases ..................................................   25,143       30,174
Personal ................................................   35,864       44,747
Home equity .............................................   10,657        9,820
                                                          --------     --------
Total loans .............................................  288,002      250,497
    Less: Unearned discount and fees ...................       333           87
           Allowance for loan losses ....................    4,440        3,817
                                                          --------     --------
     Net loans .......................................... $283,229     $246,593
                                                          ========     ========
</TABLE>


     Activity in the allowance for loan losses was as follows:

<TABLE>
<CAPTION>
                                                   2000       1999       1998
                                                  -------    -------    -------
                                                      (dollars in thousands)
<S>                                               <C>        <C>        <C>
Balance, beginning of year ....................   $ 3,817    $ 2,341    $ 1,618
     Provision charged to expense .............     1,950      2,144      1,061
     Losses charged off, net of recoveries
        of $203,000, $104,000 and $48,000
        for 2000, 1999 and 1998, respectively..    (1,327)      (668)      (338)
                                                  -------    -------    -------
Balance, end of year ..........................   $ 4,440    $ 3,817    $ 2,341
                                                  =======    =======    =======
</TABLE>



     Impaired loans totaled $5,762,000 and $5,153,000 at December 31, 2000 and
1999, respectively, with related allowances for loan losses of $1,368,000 and
$825,000, respectively.

     Total interest income of $882,000 and $713,000 was recognized on average
impaired loans of $6,186,000 and $4,092,000 for 2000 and 1999, respectively.
Included in this total is cash basis interest income of $72,000 and $140,000
recognized on impaired loans on nonaccrual during 2000 and 1999, respectively.


                                      F-15



<PAGE>   85


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 4:   PREMISES AND EQUIPMENT

     Major classifications of these assets are as follows:

<TABLE>
<CAPTION>
                                                           2000            1999
                                                          ------          ------
                                                          (dollars in thousands)

<S>                                                       <C>             <C>
Land ...........................................          $1,477          $1,477
Building and improvements ......................           4,494           3,567
Furniture and equipment ........................           2,238           1,651
Land improvements, net .........................             230             230
                                                          ------          ------
                                                           8,439           6,925
Less accumulated depreciation ..................           1,848           1,351
                                                          ------          ------
Total premises and equipment ...................          $6,591          $5,574
                                                          ======          ======
</TABLE>



NOTE 5:   INTEREST-BEARING DEPOSITS

     Interest-bearing deposits in denominations of $100,000 or more were
$50,593,000 on December 31, 2000 and $34,957,000 on December 31, 1999.

     At December 31, 2000, the scheduled maturities of certificates of deposit
are as follows:

<TABLE>
<CAPTION>
                                                          (dollars in thousands)
<S>                                                              <C>
2001....................................................         $ 80,365
2002....................................................           40,800
2003....................................................           11,674
2004....................................................            1,521
2005 and thereafter.....................................            5,043
                                                                 --------
                                                                 $139,403
                                                                 ========
</TABLE>

                                      F-16

<PAGE>   86


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 6:   OPERATING LEASES

     Blue Valley Building Corp. leases office space to others under
noncancellable operating leases expiring in various years through 2004. Minimum
future rentals receivable under noncancellable operating leases at December 31,
2000 are as follows:

<TABLE>
<CAPTION>
                                                          (dollars in thousands)
<S>                                                              <C>
2001...................................................          $    132
2002...................................................               133
2003...................................................               138
2004...................................................               143
                                                                 --------
Future minimum lease receivable........................          $    546
                                                                 ========
</TABLE>



NOTE 7:  INCOME TAXES

     The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                            2000           1999           1998
                                          -------        -------        -------
                                                  (dollars in thousands)
<S>                                       <C>            <C>            <C>
Taxes currently payable ...........       $ 1,800        $ 2,018        $ 1,684
Deferred income taxes .............           (43)          (497)          (298)
                                          -------        -------        -------
                                          $ 1,757        $ 1,521        $ 1,386
                                          =======        =======        =======
</TABLE>



     A reconciliation of income tax expense at the statutory rate to the
Company's actual income tax expense is shown below:

<TABLE>
<CAPTION>
                                            2000           1999           1998
                                          -------        -------        -------
                                                  (dollars in thousands)
<S>                                       <C>            <C>            <C>
Computed at the statutory
     rate (34%) .......................   $ 1,780        $ 1,565        $ 1,428
Increase (decrease) resulting from:
     Tax-exempt interest ..............      (242)          (190)          (213)
     Stock options ....................        (2)           (22)            (6)

     State income taxes ...............       128            138            139
     Other ............................        93             30             38
                                          -------        -------        -------

Actual tax provision ..................   $ 1,757        $ 1,521        $ 1,386
                                          =======        =======        =======
</TABLE>


                                      F-17

<PAGE>   87


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 7:   INCOME TAXES (CONTINUED)

     The tax effects of temporary differences related to deferred taxes shown on
the December 31, 2000 and 1999 consolidated balance sheets are as follows:

<TABLE>
<CAPTION>
                                                            2000          1999
                                                          --------      --------
                                                          (dollars in thousands)
<S>                                                        <C>          <C>
Deferred tax assets:
     Allowance for loan losses .......................     $ 1,349      $ 1,239
     Accrued compensated absences ....................          64           50
     Accumulated depreciation on available-for-
        sale securities ..............................                      638
                                                           -------      -------
                                                             1,413        1,927
                                                           -------      -------
Deferred tax liabilities:
     Accumulated depreciation ........................         (26)         (41)
     Accumulated appreciation on available-for-
sale securities ......................................        (307)
     Other ...........................................        (141)         (45)
                                                           -------      -------
                                                              (474)         (86)
                                                           -------      -------
          Net deferred tax asset .....................     $   939      $ 1,841
                                                           =======      =======
</TABLE>


                                      F-18

<PAGE>   88


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 8:   SHORT-TERM DEBT

     Short-term debt at December 31, 2000 and 1999 consisted of the following
components:

<TABLE>
<CAPTION>
                                                            2000           1999
                                                          -------        -------
                                                          (dollars in thousands)
<S>                                                       <C>            <C>
Note payable to bank (A) .........................                       $ 7,450
Line of credit (B) ...............................                        10,000
Federal Home Loan Bank advance (C) ...............        $ 5,000
                                                          -------        -------
Total short-term debt ............................        $ 5,000        $17,450
                                                          =======        =======
</TABLE>


     (A)  Due on demand, but no later than July 2000; payable in quarterly
          installments of $187,500 plus interest at prime less 1.0%;
          collateralized by 258,000 shares of the Bank's capital stock.

     (B)  Line of credit with the Federal Home Loan Bank. Amount outstanding is
          a two-week advance with principal and interest payable at maturity.
          The line is collateralized by various assets including mortgage-backed
          loans and securities, and U.S. Treasury and Agency securities. The
          interest rate is adjusted daily and is tied to the Federal Funds rate.
          Availability is determined quarterly and at year-end an additional
          $9,016,000 was available per the September 30, 2000 Qualifying
          Collateral Determination (QCD) Form.

     (C)  Due in June 2001; collateralized by various assets including
          mortgage-backed loans and securities, and U.S. Treasury and Agency
          securities. The interest rate on the advance is 7.170%.


                                      F-19

<PAGE>   89


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 9:   LONG TERM DEBT

     Long-term debt at December 31, 2000 and 1999 consisted of the following
components:

<TABLE>
<CAPTION>
                                                            2000           1999
                                                          -------        -------
                                                          (dollars in thousands)
<S>                                                       <C>            <C>
Note payable - other (A) .........................        $ 1,768        $ 1,908
Federal Home Loan Bank advances (B) ..............         15,000         10,000
                                                          -------        -------
Total long-term debt .............................        $16,768        $11,908
                                                          =======        =======
</TABLE>



     (A)  Due in August 2009; payable in monthly installments of $23,175
          including interest at 7.5%; collateralized by land, building and
          assignment of future rents.

     (B)  Due in 2008 and 2010; collateralized by various assets including
          mortgage-backed loans and securities, and U.S. Treasury and Agency
          securities. The interest rates on the advances range from 4.63% to
          5.682%.

     Aggregate annual maturities of long-term debt at December 31, 2000 are as
follows:

<TABLE>
<CAPTION>
                                                          (dollars in thousands)
<S>                                                             <C>
2001..................................................          $   151
2002..................................................              162
2003..................................................              175
2004..................................................              188
2005..................................................              203
Thereafter............................................           15,889
                                                                -------
                                                                $16,768
                                                                =======
</TABLE>



NOTE 10:  TRUST PREFERRED SECURITIES

     On July 21, 2000, BVBC Capital Trust I (the "Trust"), a Delaware business
trust formed by the Company, completed the sale of $11,500,000 of 10.375% trust
preferred securities. The Trust also issued $355,672 of common securities to the
Company and used the net proceeds of $10,578,000 from the offering to purchase
$11,855,672 in principal amount of 10.375% junior subordinated debentures of the
Company due September 30, 2030. The junior subordinated debentures are the sole
assets of the Trust and are eliminated, along with the related income statement
effects, in the Company's future consolidated financial statements. The Trust
preferred securities are mandatorily redeemable upon the maturity of the junior
subordinated debentures or upon earlier redemption as provided in the indenture.
The Company has the right to redeem the junior subordinated debentures, in whole
or in part, on or after September 30, 2005, at a redemption price specified in
the indenture plus any accrued but unpaid interest to the redemption date. The
trust preferred securities meet the criteria to be considered regulatory
capital.


                                      F-20
<PAGE>   90
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 11:  REGULATORY MATTERS

     The Company and the Bank are subject to various regulatory capital
requirements administered by federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the Company's financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Company and the Bank must meet specific capital guidelines that involve
quantitative measures of assets, liabilities and certain off-balance sheet items
as calculated under regulatory accounting practices. The capital amounts and
classification are also subject to qualitative judgements by the regulators
about components, risk weightings and other factors.

     Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum amounts and ratios (set
forth in the table below) of total and Tier 1 capital (as defined in the
regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as
defined) to average assets (as defined). Management believes, as of December 31,
2000, that the Company and the Bank meet all capital adequacy requirements to
which they are subject.

     As of December 31, 2000, the most recent notification from the FDIC
categorized the Bank as well capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, the Bank must
maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios
as set forth in the table. There are no conditions or events since that
notification that management believes have changed the Bank's category.

     The Company and the Bank's actual capital amounts and ratios are also
presented in the table.

<TABLE>
<CAPTION>
                                                                                            To Be Well
                                                                                           Capitalized
                                                                                           Under Prompt
                                                                   For Capital              Corrective
                                             Actual              Adequacy Purposes       Action Provisions
                                       --------------------     ------------------       -----------------
                                        Amount       Ratio       Amount      Ratio        Amount     Ratio
                                       -------       ------     -------      -----       -------    ------
                                                              (dollars in thousands)
     <S>                               <C>           <C>        <C>          <C>         <C>        <C>
     AS OF DECEMBER 31, 2000:

     Total Capital
     (to Risk Weighted Assets)
              Consolidated             $37,488       11.95%     $25,107      8.00%        N/A
                                       =======       ======     =======      =====
              Bank Only                $33,453       10.84%     $24,693      8.00%       $30,866    10.00%
                                       =======       ======     =======      =====       =======    ======

     Tier 1 Capital
     (to Risk Weighted Assets)
              Consolidated             $29,844        9.51%     $12,554      4.00%        N/A
                                       =======        =====     =======      =====
              Bank Only                $29,588        9.59%     $12,346      4.00%       $18,520     6.00%
                                       =======        =====     =======      =====       =======    ======

     Tier 1 Capital
     (to Average Assets)
              Consolidated             $29,844        7.47%     $15,980      4.00%        N/A
                                       =======        =====     =======      =====
              Bank Only                $29,588        7.50%     $15,777      4.00%       $19,721      5.00%
                                       =======        =====     =======      =====       =======     ======
</TABLE>


                                      F-21
<PAGE>   91
                              BLUE VALLEY BAN CORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 11:  REGULATORY MATTERS (CONTINUED)

<TABLE>
<CAPTION>
                                                                                            To Be Well
                                                                                           Capitalized
                                                                                           Under Prompt
                                                                   For Capital              Corrective
                                             Actual              Adequacy Purposes       Action Provisions
                                       --------------------     ------------------       -----------------
                                        Amount       Ratio       Amount      Ratio        Amount     Ratio
                                       -------       ------     -------      -----       -------    ------
                                                               (dollars in thousands)
     <S>                               <C>           <C>        <C>          <C>         <C>        <C>
     AS OF DECEMBER 31, 1999:

     Total Capital
     (to Risk Weighted Assets)
              Consolidated             $21,749        8.07%     $21,573      8.00%        N/A
                                       =======       ======     =======      =====
              Bank Only                $27,396       10.31%     $21,256      8.00%       $26,570    10.00%
                                       =======       ======     =======      =====       =======    ======

     Tier 1 Capital
     (to Risk Weighted Assets)
              Consolidated             $18,378        6.82%     $10,786      4.00%        N/A
                                       =======        =====     =======      =====
              Bank Only                $24,074        9.06%     $10,628      4.00%       $15,942     6.00%
                                       =======        =====     =======      =====       =======    ======

     Tier 1 Capital
     (to Average Assets)
              Consolidated             $18,378        5.80%     $12,678      4.00%        N/A
                                       =======        =====     =======      =====
              Bank Only                $24,074        7.69%     $12,525      4.00%       $15,656      5.00%
                                       =======        =====     =======      =====       =======    =======
</TABLE>


     The Bank is subject to certain restrictions on the amounts of dividends
that it may declare without prior regulatory approval. At December 31, 2000,
approximately $8,760,000 of retained earnings were available for dividend
declaration without prior regulatory approval.


NOTE 12:  TRANSACTIONS WITH RELATED PARTIES

     At December 31, 2000 and 1999, the Company had loans outstanding to
executive officers, directors and to companies in which the Bank's executive
officers or directors were principal owners, in the amounts of $2,128,000 and
$1,384,000, respectively. Related party transactions for 2000 and 1999 were as
follows:

<TABLE>
<CAPTION>
                                         2000            1999
                                       -------         -------
                                        (dollars in thousands)
     <S>                               <C>             <C>
     Balance, beginning of year        $ 1,384         $ 1,713
     New loans                           1,389             202
     Repayments                           (645)           (531)
                                       -------         -------
     Balance, end of year              $ 2,128         $ 1,384
                                       =======         =======
</TABLE>

     In management's opinion, such loans and other extensions of credit and
deposits were made in the ordinary course of business and were made on
substantially the same terms (including interest rates and collateral) as those
prevailing at the time for comparable transactions with other persons. Further,
in management's opinion, these loans did not involve more than the normal risk
of collectibility or present other unfavorable features.

                                      F-22


<PAGE>   92
                              BLUE VALLEY BAN CORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 13:  PROFIT SHARING PLAN

     The Company's profit sharing plan covers substantially all employees.
Contributions to the plan are determined annually by the Board of Directors, and
participant interests are vested over a period from two to six years of service.
Employer contributions charged to expense for 2000, 1999 and 1998 were $271,000,
$216,000 and $152,000, respectively.


NOTE 14:  STOCK OPTIONS

     The Company has a fixed option plan under which the Company may grant
options that vest two years from the date of grant to its employees for shares
of common stock. At December 31, 2000, the Company had 143,784 options available
to be granted (options granted prior to 1998 were subject to an earlier plan
with similar terms). The exercise price of each option is intended to equal the
fair value of the Company's stock on the date of grant, and maximum terms are 10
years.

     A summary of the status of the plan at December 31, 2000, 1999 and 1998,
and changes during the years then ended, is presented below:

<TABLE>
<CAPTION>
                                                    2000                          1999                         1998
                                         -----------------------        ----------------------     --------------------------
                                                        Weighted                      Weighted                       Weighted
                                                         Average                       Average                       Average
                                                        Exercise                      Exercise                       Exercise
                                         Shares           Price         Shares          Price       Shares             Price
                                         -------        --------        -------       --------     --------          --------

<S>                                      <C>             <C>            <C>             <C>         <C>               <C>
Outstanding, beginning of year           157,216         $ 11.21        101,340         $ 9.18      138,160           $  6.17
Granted                                   71,500           16.50         64,000          14.38       65,516             11.02
Exercised                                 (4,000)          12.81         (7,324)         10.75     (102,336)             6.30
Forfeited                                                                  (800)
                                         -------         -------        -------        -------     --------           -------

Outstanding, end of year                 224,716         $ 12.86        157,216         $11.21      101,340           $  9.18
                                         =======         =======        =======        =======     ========           =======

Options exercisable, end of year         150,216         $ 11.57         88,860         $ 9.91       68,984            $ 8.20
                                         =======         =======        =======        =======     ========           =======
</TABLE>


     The weighted-average remaining contractual life at December 31, 2000 was
8.53 years. Exercise prices ranged from $3.75 to $16.50.


                                      F-23

<PAGE>   93
                              BLUE VALLEY BAN CORP
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998



NOTE 14:  STOCK OPTIONS (CONTINUED)

     The fair value of options granted is estimated on the date of the grant
using the minimum value method with the following weighted-average assumptions:

<TABLE>
<CAPTION>
                                                     2000       1999       1998
                                                   -------    -------    -------
                                                       (dollars in thousands)
<S>                                                 <C>        <C>        <C>
Dividend per Share                                  $--        $--        $--
Risk-Free Interest Rate                                6%         6%         6%
Expected Life of Options                           2 years    2 years    2 years
Weighted-average fair value of options granted
     during the year                                $130       $101       $ 79
                                                    ====       ====       ====
</TABLE>

     The expected life of options outstanding is based on the historical
experience of the Company.

     The Company applies APB Opinion 25 and related Interpretations in
accounting for the plan and no compensation cost has been recognized. Had
compensation cost for the Company's plan been determined based on the fair value
at the grant dates using the minimum value method under Statement of Financial
Accounting Standards No. 123, the Company's net income and earnings per share
would have been reduced to the pro forma amounts indicated below:





<TABLE>
<CAPTION>
                                                            2000          1999           1998
                                                           ------        ------         ------
                                                                 (dollars in thousands)
  <S>                                  <C>                 <C>           <C>            <C>
  Net income                           As reported         $3,477        $3,083         $2,816
                                       Pro forma           $3,401        $3,023         $2,790

  Basic earnings per share             As reported         $ 1.62        $ 1.45         $ 1.36
                                       Pro forma           $ 1.59        $ 1.42         $ 1.35

  Diluted earnings per share           As reported         $ 1.59        $ 1.42         $ 1.35
                                       Pro forma           $ 1.55        $ 1.40         $ 1.34
</TABLE>



                                      F-24

<PAGE>   94
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 15:  ADDITIONAL CASH FLOWS INFORMATION

<TABLE>
<CAPTION>
                                                         2000             1999            1998
                                                       -------          -------          -------
                                                                 (dollars in thousands)
<S>                                                    <C>              <C>              <C>
NONCASH INVESTING AND FINANCING ACTIVITIES

       Loans transferred to foreclosed assets
         held for sale                                 $ 1,172          $   595          $    82

ADDITIONAL CASH PAYMENT INFORMATION

       Interest paid                                    16,077           11,411            8,995
       Income taxes paid                                 1,900            1,655            1,551
</TABLE>


NOTE 16:  OTHER INCOME/EXPENSE

     Other operating expenses consist of the following:

<TABLE>
<CAPTION>
                                                         2000             1999            1998
                                                       -------          -------          -------
                                                                 (dollars in thousands)
       <S>                                                    <C>              <C>              <C>
       Advertising                                      $  514          $  475          $  269
       Data processing                                     397             352             266
       Professional fees                                   289             259             154
       Other expense                                     2,113           2,122           1,247
                                                        ------          ------          ------
         Total                                          $3,313          $3,208          $1,936
                                                        ======          ======          ======
</TABLE>

     Other income consists of the following:

<TABLE>
<CAPTION>
                                                         2000            1999            1998
                                                       -------          ------          ------
                                                                (dollars in thousands)
       <S>                                             <C>              <C>              <C>
       Rental income                                   $   170          $  143          $  273
       Other income                                        114              46             289
                                                       -------          ------          ------
          Total                                        $   284          $  189          $  562
                                                       =======          ======          ======
</TABLE>



                                      F-25
<PAGE>   95
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 17:  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

CASH AND CASH EQUIVALENTS

     For these short-term instruments, the carrying amount approximates fair
value.

AVAILABLE-FOR-SALE SECURITIES

     Fair values for available-for-sale securities, which also are the amounts
recognized in the consolidated balance sheets, equal quoted market prices, if
available. If quoted market prices are not available, fair values are estimated
based on quoted market prices of similar securities.

MORTGAGE LOANS HELD FOR SALE

     For homogeneous categories of loans, such as mortgage loans held for sale,
fair value is estimated using the quoted market prices for securities backed by
similar loans, adjusted for differences in loan characteristics.

LOANS

     The fair value of loans is estimated by discounting the future cash flows
using the current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities. Loans with similar
characteristics were aggregated for purposes of the calculations. The carrying
amount of accrued interest approximates its fair value.

DEPOSITS

     The fair value of demand deposits, savings accounts, NOW accounts and
certain money market deposits is the amount payable on demand at the reporting
date (i.e., their carrying amount). The fair value of fixed maturity time
deposits is estimated using a discounted cash flow calculation that applies the
rates currently offered for deposits of similar remaining maturities. The
carrying amount of accrued interest payable approximates its fair value.

ADVANCES FROM BORROWERS FOR TAXES AND INSURANCE

     The fair value of advances from borrowers for taxes and insurance is the
amount payable at the reporting date (i.e., their carrying amount).

SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE AND OTHER LIABILITIES

     For these short-term instruments, the carrying amount is a reasonable
estimate of fair value.


                                      F-26
<PAGE>   96
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 17:  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

NOTES PAYABLE AND LONG-TERM DEBT

     Rates currently available to the Company for debt with similar terms and
remaining maturities are used to estimate fair value of existing debt.

COMMITMENTS TO EXTEND CREDIT, LETTERS OF CREDIT AND LINES OF CREDIT

     The fair value of commitments is estimated using the fees currently charged
to enter into similar agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparties. For fixed
rate loan commitments, fair value also considers the difference between current
levels of interest rates and the committed rates. The fair value of letters of
credit and lines of credit is based on fees currently charged for similar
agreements or on the estimated cost to terminate or otherwise settle the
obligations with the counterparties at the reporting date.

     The following table presents estimated fair values of the Company's
financial instruments. The fair values of certain of these instruments were
calculated by discounting expected cash flows, which method involves significant
judgements by management and uncertainties. Fair value is the estimated amount
at which financial assets or liabilities could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
Because no market exists for certain of these financial instruments, and because
management does not intend to sell these financial instruments, the Company does
not know whether the fair values shown below represent values at which the
respective financial instruments could be sold individually or in the aggregate.


                                      F-27
<PAGE>   97
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 17:  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

<TABLE>
<CAPTION>
                                                                        2000                        1999
                                                               ----------------------      ----------------------
                                                               Carrying       Fair         Carrying        Fair
                                                                Amount        Value         Amount        Value
                                                               --------     ---------      --------      --------
                                                                              (dollars in thousands)
<S>                                                            <C>           <C>           <C>           <C>
Financial assets:
  Cash and cash equivalents                                    $ 35,920      $ 35,920      $ 23,460      $ 23,460
  Available-for-sale securities                                  76,503        76,503        48,646        48,646
  Held-to-maturity securities                                     2,000         2,014
  Mortgage loans held for sale                                    1,207         1,207           952           952
  Interest receivable                                             3,058         3,058         2,039         2,039
  Loans, net of allowance for loan losses                       283,229       283,476       246,593       246,090

Financial liabilities:
  Deposits                                                      338,221       334,186       268,145       262,913
  Advances from borrowers for taxes
      and insurance                                               1,350         1,350         2,559         2,559
  Securities sold under agreements to repurchase                 15,299        15,302        11,260        11,260
  Short-term debt                                                 5,000         5,036        17,450        17,450
  Long-term debt                                                 16,768        16,707        11,908        11,348
  Guaranteed preferred beneficial interest in
        Company's subordinated debt                              11,500        12,061
  Interest payable                                                1,163         1,163           870           870

Unrecognized financial instruments (net of amortization):
      Commitments to extend credit                                    0             0             0             0
      Letters of credit                                               0             0             0             0
      Lines of credit                                                 0             0             0             0
      Forward commitments                                             0             0             0             0
</TABLE>


NOTE 18:  COMMITMENTS AND CREDIT RISKS

     The Company extends credit for commercial real estate mortgages,
residential mortgages, working capital financing and consumer loans to
businesses and residents principally in southern Johnson County. The Bank also
purchases indirect leases from various leasing companies throughout Kansas and
Missouri.

     Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require a payment of a fee. Since a portion of the commitments may
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. Each customer's creditworthiness is
evaluated on a case-by-case basis. The amount of collateral obtained, if deemed
necessary, is based on management's credit evaluation of the counterparty.
Collateral held varies, but may include accounts receivable, inventory,
property, plant and equipment, commercial real estate and residential real
estate.


                                      F-28
<PAGE>   98
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 18:  COMMITMENTS AND CREDIT RISKS (CONTINUED)

     At December 31, 2000 and 1999, the Company had outstanding commitments to
originate loans aggregating approximately $40,692,000 and $36,826,000,
respectively. The commitments extended over varying periods of time with the
majority being disbursed within a one-year period. Loan commitments at fixed
rates of interest amounted to $6,836,000 and $2,116,000 at December 31, 2000 and
1999, respectively, with the remainder at floating market rates.

     Mortgage loans in the process of origination represent amounts that the
Company plans to fund within a normal period of 60 to 90 days and which are
intended for sale to investors in the secondary market. Forward commitments to
sell mortgage loans are obligations to deliver loans at a specified price on or
before a specified future date. The Bank acquires such commitments to reduce
market risk on mortgage loans in the process of origination and mortgage loans
held for sale.

     Total mortgage loans in the process of origination amounted to $8,609,000
and $9,204,000 and mortgage loans held for sale amounted to $1,207,000 and
$952,000 at December 31, 2000 and 1999, respectively. Related forward
commitments to sell mortgage loans amounted to approximately $9,816,000 and
$10,156,000 at December 31, 2000 and 1999, respectively. Mortgage loans in the
process of origination represent commitments to originate loans at fixed rates.

     Letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support public and private borrowing arrangements, including
commercial paper, bond financing and similar transactions. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loans to customers.

     The Company had total outstanding letters of credit amounting to $3,439,000
and $4,267,000 at December 31, 2000 and 1999, respectively.

     Lines of credit are agreements to lend to a customer as long as there is no
violation of any condition established in the contract. Lines of credit
generally have fixed expiration dates. Since a portion of the line may expire
without being drawn upon, the total unused lines do not necessarily represent
future cash requirements. Each customer's creditworthiness is evaluated on a
case-by-case basis. The amount of collateral obtained, if deemed necessary, is
based on management's credit evaluation of the counterparty. Collateral held
varies, but may include accounts receivable, inventory, property, plant and
equipment, commercial real estate and residential real estate. Management uses
the same credit policies in granting lines of credit as it does for on-balance
sheet instruments.

     At December 31, 2000 and 1999, unused lines of credit borrowings aggregated
approximately $80,051,000 and $75,112,000, respectively.


                                      F-29
<PAGE>   99
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 18:  COMMITMENTS AND CREDIT RISKS (CONTINUED)

     Additionally, the Company periodically has excess funds, which are loaned
to other banks as federal funds sold. At December 31, 2000 and 1999, federal
funds sold totaling $22,200,000 and $8,000,000, respectively, were loaned to
various banks, as approved by the Board of Directors, with the largest balance
at any one bank being $13,800,000 and $5,000,000 (Federal Home Loan Bank) at
December 31, 2000 and 1999, respectively.


NOTE 19:  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

     The following table presents the unaudited results of operations for the
past two years by quarter. See discussion on earnings per share in "Note 1:
Nature of Operations and Summary of Significant Accounting Policies" in the
Company's Consolidated Financial Statements.

<TABLE>
<CAPTION>
                                                          2000                                        1999
                                        -----------------------------------------   -----------------------------------------
                                         FOURTH     THIRD     SECOND      FIRST      FOURTH     THIRD      SECOND      FIRST
                                        QUARTER    QUARTER    QUARTER    QUARTER     QUARTER    QUARTER    QUARTER    QUARTER
                                        --------   --------   --------   --------   --------   --------   --------   --------
                                                         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                     <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Operations
  Net interest income after provision
    for loan losses                     $  3,260   $  2,997   $  3,070   $  3,144   $  2,906   $  2,666   $  2,619   $  2,069
  Noninterest income                         785        817        779        675        900        735        674        715
  Noninterest expense                      2,711      2,589      2,395      2,598      2,624      2,106      2,142      1,808
                                        --------   --------   --------   --------   --------   --------   --------   --------
Income before income taxes                 1,334      1,225      1,454      1,221      1,182      1,295      1,151        976

Income taxes                                 450        411        508        388        393        433        374        321
                                        --------   --------   --------   --------   --------   --------   --------   --------
      Net income                        $    884   $    814   $    946   $    833   $    789   $    862   $    777   $    655
                                        ========   ========   ========   ========   ========   ========   ========   ========
Net Income per Share Data
      Basic                             $   0.41   $   0.38   $   0.44   $   0.39   $   0.37   $   0.40   $   0.36   $   0.31
                                        ========   ========   ========   ========   ========   ========   ========   ========
      Diluted                           $   0.40   $   0.37   $   0.43   $   0.38   $   0.36   $   0.40   $   0.36   $   0.30
                                        ========   ========   ========   ========   ========   ========   ========   ========
Balance Sheet
      Total assets                      $414,667   $397,644   $353,880   $333,662   $332,613   $291,931   $281,074   $261,351
      Total loans, net                   283,229    278,994    263,491    250,330    246,593    219,174    203,962    183,486
      Shareholders' equity                23,815     21,975     20,620     19,627     18,869     18,423     17,500     17,476
</TABLE>

     The above unaudited financial information reflects all adjustments that
are, in the opinion of management, necessary to present a fair statement of the
results of operations for the interim periods presented.


NOTE 20:  SIGNIFICANT ESTIMATES AND CONCENTRATIONS

     Generally accepted accounting principles require disclosure of certain
significant estimates and current vulnerabilities due to certain concentrations.
Estimates related to the allowance for loan losses are reflected in the footnote
regarding loans. Current vulnerabilities due to certain concentrations of credit
risk are discussed in the footnote on commitments and credit risk.


                                      F-30
<PAGE>   100
                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 21:  FUTURE CHANGES IN ACCOUNTING PRINCIPLE

     The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("SFAS 133"). This statement, as amended by SFAS No. 137,
requires all derivatives to be recorded on the balance sheet at fair value and
establishes standard accounting methodologies for hedging activities. The
standard will result in the recognition of offsetting changes in value or cash
flows of both the hedge and the hedged item in earnings or comprehensive income
in the same period. The statement is effective for Blue Valley's fiscal year
ending December 31, 2001. Because Blue Valley generally does not hold derivative
instruments, the adoption of this statement is not expected to have a material
impact on the financial statements.


NOTE 22:  CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

                            CONDENSED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                                      2000          1999
                                                                                    --------      --------
                                                                                             (In thousands)
<S>                                                                                 <C>           <C>
ASSETS
     Cash and cash equivalents                                                      $  1,291      $    136
     Investments in subsidiaries:
         Bank of Blue Valley                                                          31,344        24,565
         Blue Valley Building Corp.                                                    1,516         1,425
     Loans                                                                               300           300
     Other assets                                                                      1,545           334
                                                                                    --------      --------
              Total Assets                                                          $ 35,996      $ 26,760
                                                                                    ========      ========

LIABILITIES
     Long-term debt                                                                               $  7,450
     Guaranteed preferred beneficial interest in
            Company's subordinated debt                                             $ 11,500
     Other liabilities                                                                   681           441
                                                                                    --------      --------
              Total Liabilities                                                       12,181         7,891
                                                                                    --------      --------
STOCKHOLDERS' EQUITY
     Common stock                                                                      2,142         2,138
     Additional paid-in capital                                                        5,277         5,230
     Undivided profits                                                                15,935        12,458
     Unrealized appreciation (depreciation) on available-for-sale securities,
         net of income taxes of $307 and $(638) at 2000 and 1999, respectively           461          (957)
                                                                                    --------      --------
              Total Stockholders' Equity                                              23,815        18,869
                                                                                    --------      --------
              Total Liabilities and Stockholders' Equity                            $ 35,996      $ 26,760
                                                                                    ========      ========
</TABLE>


                                      F-31
<PAGE>   101
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 22:  CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) (CONTINUED)

                         CONDENSED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                               2000         1999          1998
                                                             -------       -------       -------
                                                                       (In thousands)
<S>                                                          <C>           <C>           <C>
Income
     Dividends from subsidiaries                             $   600       $   695       $   100
     Other income                                                 46             5             7
                                                             -------       -------       -------
                                                                 646           700           107

Expenses                                                         918           379           350
                                                             -------       -------       -------
Income (loss) before income taxes and equity in
     undistributed net income of subsidiaries                   (272)          321          (243)
Credit for income taxes                                         (297)         (128)         (118)
                                                             -------       -------       -------

Income (loss) before equity in undistributed net income
     of subsidiaries                                              25           449          (125)
Equity in undistributed net income of subsidiaries             3,452         2,634         2,941
                                                             -------       -------       -------
Net income                                                   $ 3,477       $ 3,083       $ 2,816
                                                             =======       =======       =======
</TABLE>



                                      F-32


<PAGE>   102
                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


NOTE 22:  CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) (CONTINUED)

                       CONDENSED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                2000          1999           1998
                                                             --------       --------       --------
                                                                         (In thousands)
<S>                                                          <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                              $  3,477       $  3,083       $  2,816
     Items not requiring (providing) cash:
         Deferred income taxes                                   (297)          (128)          (198)
         Equity in undistributed income of subsidiaries        (3,452)        (2,634)        (2,941)
     Changes in:
         Other assets                                              (1)            (3)
         Other liabilities                                        240            146            257
                                                             --------       --------       --------
              Net cash provided by (used in)
                  operating activities                            (33)           464            (66)
                                                             --------       --------       --------
CASH FLOW FROM INVESTING ACTIVITIES
     Capital contributed to subsidiary                         (2,000)        (4,500)
     Net originations of loans                                                  (100)
                                                             --------       --------
              Net cash used in investing activities            (2,000)        (4,600)
                                                             --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES
     Repayments of long-term debt                              (7,450)          (625)          (463)
     Proceeds from long-term debt                                              4,500
     Net proceeds from guaranteed preferred beneficial
          interest in Company's subordinated debt              10,587
     Proceeds from sale of common stock                            51             79            644
                                                             --------       --------       --------
              Net cash provided by financing activities         3,188          3,954            181
                                                             --------       --------       --------
INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                           1,155           (182)           115

CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR                                            136            318            203
                                                             --------       --------       --------
CASH AND CASH EQUIVALENTS,
     END OF YEAR                                             $  1,291       $    136       $    318
                                                             ========       ========       ========
</TABLE>


                                      F-33