<PAGE>


                                  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, 2001

                                       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


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     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 February 28, 2002 the registrant had 2,175,176 shares of Common Stock
($1.00 par value) outstanding, of which 1,296,267 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.




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                              BLUE VALLEY BAN CORP

                                 FORM 10-K INDEX
                                                                        Page No.
                                                                        --------
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                                                      48

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                                           58

Item 12.  Security Ownership of Certain Beneficial Owners
          and Management                                                   63

Item 13.  Certain Relationships and Related Transactions                   64

PART IV.

Item 14.  Exhibits, Financial Statement Schedules, and
          Reports on Form 8-K                                              65


                                       1

<PAGE>

                                     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. In 2001, 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 four banking locations in Johnson County, Kansas, including
our main office in Overland Park, full-service offices in Olathe and Shawnee,
Kansas, and a supermarket banking facility in Shawnee, Kansas.

     Our lending activities focus on commercial lending and residential mortgage
origination services, and, to a lesser extent, 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 and origination services.

     We also seek to develop lines of business which diversify our revenue
sources, increase our non-interest income and offer additional value-added
services to our customers. The growth experienced in 2001 in our residential
mortgage origination services provides an example of the benefits that we have
gained through diversification. In addition to fees generated in conjunction
with our lending activities, we derive non-interest income by providing mortgage
origination services, deposit and cash management services, 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 comprise 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.


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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.


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, 2001, total deposits in Johnson County, including those of
banks, thrifts and credit unions, were approximately $8.5 billion, which
represented 20.97% of total deposits in the State of Kansas and 32.08% 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. In 2001, the operations of
this branch were moved across the street into a more suitable location which the
Bank had acquired. 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, 2001, our loans represented approximately
67.90% of our total assets. Our legal lending limit to any one borrower was
$10.5 million at December 31, 2001 and our largest single borrower as of that
date had outstanding loans of $9.9 million.


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     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 financial needs of 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.
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,
2001.

                                 LOAN PORTFOLIO

<TABLE>
<CAPTION>
                                                        AS OF DECEMBER 31, 2001
                                                        -----------------------
                                                         AMOUNT         PERCENT
                                                        --------        -------
                                                        (DOLLARS IN THOUSANDS)
<S>                                                     <C>              <C>
Commercial real estate ..........................       $ 63,756          19.08%
Residential real estate .........................         24,460           7.32
Commercial ......................................         85,311          25.54
Personal ........................................         29,895           8.96
Home equity .....................................         12,776           3.82
Construction ....................................         93,656          28.03
Leases ..........................................         24,221           7.25
                                                        --------         ------
      Total loans and leases ....................        334,075         100.00%
Less allowance for loan losses ..................          5,267
                                                        --------
Loans receivable, net ...........................       $328,808
                                                        ========
</TABLE>


     Commercial loans. As of December 31, 2001, approximately $85.3 million, or
25.54%, 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, their business development efforts 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


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loans. As of December 31, 2001, approximately 7.04% of the number of our
commercial loans had outstanding balances in excess of $300,000, and these loans
accounted for 55.34% 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 service the debt, as well as the value
of any underlying collateral and the financial strength of any guarantors.

     Approximately $5.5 million, or 6.46%, of our commercial loans are Small
Business Administration loans, of which $4.2 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, 2001, approximately $63.8 million, or 19.08%, 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,
2001, approximately $93.7 million, or 28.03%, 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
twelve-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


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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 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, 2001, our lease portfolio totaled $24.2 million, or 7.25%, of our
total loan portfolio, consisting of $13.6 million principal amount of leases
originated by us and $10.6 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, 2001, $1.1 million, or 4.54%,
represented the remaining balances of 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, 2001, the entire remaining
portfolio of $1.1 million in leases was current. We expect our interest income
from the NRL leases to continue to decline over the next year as the portfolio
matures.


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     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 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, 2001, $24.5 million, or 7.32%, of our loan portfolio
represented residential mortgage loans. The terms of these loans typically
include 2-5 year balloon payments based on a 15 to 30 year amortization, 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. 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.

     In 2001, we originated approximately $641.3 million of residential mortgage
loans, of which we sold approximately $584.3 million, or 91.11%, in the
secondary market. We originate conventional first mortgage loans through our
internet website as well as through referrals from real estate brokers,
builders, developers, prior customers and media advertising. We have offered
customers the ability to apply for mortgage loans and to pre-qualify for
mortgage loans over the Internet since 1999. In 2001, we expanded our internet
mortgage application capacity with the acquisition of the internet domain name
InternetMortgage.com and created a separate Internet Mortgage Division. The
timing of this expansion allowed us to establish this division in a relatively
low-rate environment, and reap the benefits of an eruption of mortgage
originations and refinancing experienced in 2001. The origination of a mortgage
loan from the date of initial application through closing normally takes 15 to
60 days. We acquire forward commitments from investors on mortgage loans 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. 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.


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     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 underwrite 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, 2001, our consumer and other
loans totaled $29.9 million, or 8.96%, of our total loan portfolio. A
substantial part 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
employed 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, 2001, approximately $15.9
million, or 4.75%, of our loan portfolio represented indirect installment loans.
Our loans made through this program generally represent loans to purchase new
automobiles. There are currently 13 dealerships participating in this program.

     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;


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     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 depending
on our liquidity position, act as a net seller or purchaser of these funds. The
sale of federal funds is effectively short-term loans from us to other banks,
while conversely, the purchase of federal funds is effectively short-term loans
from other banks to us.

     Our investment accounts also include minimal equity investments in the
Federal Home Loan Bank ("FHLB") and the Federal Reserve Bank ("FRB"). Our FHLB
and FRB investments qualify us to use their services, and in the case of our
FHLB investment, provide us with an additional source of liquidity. 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. In 2001, the Bank realized a significant level of deposit
growth from commercial checking accounts. While these accounts do not earn
interest, many of them receive an earnings credit on their average balance to
offset the cost of other services provided by the Bank. The Bank also offers
two types of short-term investment accounts. The Bank's money market account is
a daily access account that bears 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


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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, as it provides us with the potential 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 brokered deposits which can be utilized to
support the growth of the Bank. As of December 31, 2001, the Bank had $2,246,000
in brokered deposits, and the Bank does not anticipate brokered deposits
becoming a meaningful percentage of its deposit base; however, we continue to
evaluate their potential role in the Bank's overall funding and liquidity
strategies. 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 2001, the amount of our fee income generated from investment brokerage
services was $190,000.


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, 2001, the Bank's trust department
administered 114 accounts, with assets under management of approximately $41.6
million. Trust services provide the Bank with a source of fee income and
additional deposits. In 2001, the amount of our fee income from trust services
was $201,000.


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


                                       10

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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 other providers of
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 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 and possess greater financial resources,
name recognition and market presence.


EMPLOYEES

     As of December 31, 2001, the Bank had approximately 217 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.


                                       11

<PAGE>

     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 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. In 2001, 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 became effective July 1, 2001.


                                       12

<PAGE>

     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 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


                                       13

<PAGE>

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.


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


                                       14

<PAGE>

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.

     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. and
BVBC Capital Trust I are Blue Valley's only direct subsidiaries that are not
banks.

     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.


                                       15

<PAGE>

     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 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 Federal Reserve Bank. The
Kansas Banking Department and the Federal Reserve Bank 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.


                                       16

<PAGE>

     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.

     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;


                                       17

<PAGE>

     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

     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, 2001, 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 dated February 10, 1999, 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.


                                       18

<PAGE>

     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.

     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 $41.3 million or
less plus 10% must be maintained against that portion of net transaction
accounts in excess of this amount (subject to adjustment by the Federal
Reserve). 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, 2001, the outstanding
principal amount of this indebtedness was $1.6 million.


                                       19

<PAGE>

     In 2001, the Bank's Olathe, Kansas location was moved to a more suitable
property occupying 0.41 acres of ground on the corner of Santa Fe and Ridgeview
Streets. The building consists of 2,580 square feet on the main floor, plus
basement storage.

     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 December
2004. The 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 2001, the Bank entered into two leases for approximately 7,345 square
feet of commercial office space located at 120th and Blue Valley Parkway for its
Internet Mortgage Division and mortgage secondary marketing department. The
terms of the leases expire in 2003.

     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. Additionally,
in 2001, the Bank entered into a contract for the purchase of undeveloped land
on the corner of 135th Street and Mission Road in Leawood, Kansas for the
purposes of constructing a full-service branch and office building. Our current
plans are for the construction of a two-story building with approximately 20,000
square feet of space at this location.


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>

                                     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. As of February 28, 2002,
there were approximately 155 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.









                                       21

<PAGE>

ITEM 6: SELECTED CONSOLIDATED FINANCIAL DATA

     The following table presents our consolidated financial data as of and for
the five years ended December 31, 2001, 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, 2001, have been derived from
our audited consolidated financial statements.

<TABLE>
<CAPTION>
                                                                             AS OF AND FOR THE
                                                                           YEAR ENDED DECEMBER 31,
                                                       --------------------------------------------------------------
                                                          2001         2000         1999         1998         1997
                                                       ----------   ----------   ----------   ----------   ----------
                                                           (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 ...........................   $   27,921   $   26,733   $   20,422   $   14,608   $   12,000
   Federal funds sold and interest-bearing deposits           679          777          431          396          276
   Securities ......................................        4,541        3,607        2,755        2,814        2,275
                                                       ----------   ----------   ----------   ----------   ----------
      Total interest income ........................       33,141       31,117       23,608       17,818       14,551
                                                       ----------   ----------   ----------   ----------   ----------
Interest expense:
   Interest-bearing demand deposits ................          815          872          644          348          296
   Savings and money market deposit accounts .......        4,846        5,726        3,156        1,637        1,353
   Other time deposits .............................        9,775        7,555        6,032        6,247        4,985
   Funds borrowed ..................................        2,958        2,543        1,372          973          624
                                                       ----------   ----------   ----------   ----------   ----------
      Total interest expense .......................       18,394       16,696       11,204        9,205        7,258
                                                       ----------   ----------   ----------   ----------   ----------
      Net interest income ..........................       14,747       14,421       12,404        8,613        7,293
Provision for loan losses ..........................        2,400        1,950        2,144        1,061          660
                                                       ----------   ----------   ----------   ----------   ----------
      Net interest income after provision for loan
         losses ....................................       12,347       12,471       10,260        7,552        6,633
                                                       ----------   ----------   ----------   ----------   ----------
Non-interest income:
   Loans held for sale fee income ..................        6,934        1,154        1,623        1,329          439
   NSF charges & service fees ......................          836          655          553          598          499
   Other service charges ...........................          793          963          659          157          107
   Realized gain on securities available-for-sale ..          500                         3          112            8
   Other income ....................................          203          284          186          450          401
                                                       ----------   ----------   ----------   ----------   ----------
      Total non-interest income ....................        9,266        3,056        3,024        2,646        1,454

Non-interest expense:
   Salaries and employee benefits ..................       10,063        5,856        4,578        3,312        2,304
   Occupancy .......................................        1,574        1,124          894          748          663
   FDIC and other insurance ........................          140          177          113          121           86
   General & administrative ........................        3,933        3,136        3,095        1,815        1,603
                                                       ----------   ----------   ----------   ----------   ----------
      Total non-interest expense ...................       15,710       10,293        8,680        5,996        4,656
                                                       ----------   ----------   ----------   ----------   ----------
   Income before income taxes ......................        5,903        5,234        4,604        4,202        3,431
      Income tax provision .........................        1,960        1,757        1,521        1,386        1,145
                                                       ----------   ----------   ----------   ----------   ----------
      Net income ...................................   $    3,943   $    3,477   $    3,083   $    2,816   $    2,286
                                                       ==========   ==========   ==========   ==========   ==========
PER SHARE DATA
   Basic earnings ..................................   $     1.82   $     1.62   $     1.45   $     1.36   $     1.24
   Diluted earnings ................................         1.77         1.59         1.42         1.35         1.22
   Dividends .......................................           --           --           --           --           --
   Book value basic (at end of period) .............        13.11        11.12         8.83         7.99         6.64
   Weighted average common shares outstanding:
      Basic ........................................    2,165,030    2,141,523    2,131,372    2,065,400    1,843,288
      Diluted ......................................    2,222,166    2,191,305    2,166,008    2,084,088    1,867,844
</TABLE>

                                       22

<PAGE>

<TABLE>
<CAPTION>
                                                                               AS OF AND FOR THE
                                                                            YEAR ENDED DECEMBER 31,
                                                    -----------------------------------------------------------------------
                                                        2001           2000           1999           1998           1997
                                                    -----------    -----------    -----------    -----------    -----------
                                                           (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 ................................   $    77,676    $    78,503    $    48,646    $    53,427    $    40,247
Total loans .....................................       334,075        287,669        250,410        161,444        127,308
Total assets ....................................       492,023        414,667        332,613        253,724        201,644
Total deposits ..................................       394,245        338,221        268,145        209,824        170,792
Funds borrowed ..................................        65,174         49,917         43,177         25,142         16,298
Total stockholders' equity ......................        28,525         23,815         18,869         17,016         13,464
Trust assets under administration ...............        41,571         35,268         19,436         13,099          8,241

SELECTED FINANCIAL RATIOS AND OTHER DATA :
Performance Ratios:
   Net interest margin (1) ......................          3.48%          4.31%          4.77%          4.30%          4.66%
   Non-interest income to average assets ........          2.02           0.84           1.06           1.20           0.83
   Non-interest expense to average assets .......          3.43           2.84           3.04           2.72           2.66
   Net overhead ratio (2) .......................          1.41           2.00           1.98           1.52           1.83
   Efficiency ratio (3) .........................         65.42          58.89          56.26          53.26          53.23
   Return on average assets (4) .................          0.86           0.96           1.08           1.28           1.30
   Return on average equity (5) .................         15.26          16.84          17.43          18.98          20.62

Asset Quality Ratios:
   Non-performing loans to total loans ..........          0.92%          0.86%          0.21%          0.84%          0.33%
   Allowance for possible loan losses to:
      Total loans ...............................          1.58           1.54           1.52           1.45           1.27
      Non-performing loans ......................        171.96         179.47         710.80         171.88         380.71
   Net charge-offs to average total loans .......          0.51           0.49           0.32           0.23           0.27
   Non-performing assets to total assets ........          0.63           0.68           0.22           0.55           0.61

Balance Sheet Ratios:
   Loans to deposits ............................         84.74%         85.05%         93.39%         76.94%         74.54%
   Average interest-earning assets to average
     interest-bearing liabilities ...............        114.50         113.30         116.11         116.57         114.55

Capital Ratios:
   Total equity to total assets .................          5.80%          5.74%          5.67%          6.71%          6.68%
   Total capital to risk-weighted assets ratio ..         10.69          11.95           8.07           9.62           9.87
   Tier 1 capital to risk-weighted assets ratio .          8.87           9.51           6.82           8.37           8.65
   Tier 1 capital to average assets ratio .......          7.17           7.47           5.80           6.13           6.28
</TABLE>
---------------
(1)  Net interest income, on a full tax-equivalent basis, 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>


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 2001 was $3.9 million, a $466,000, or 13.40% increase over
the $3.5 million earned in 2000. Diluted earnings per share increased 11.32% to
$1.77 at December 31, 2001 from $1.59 at December 31, 2000. The Company's
returns on average assets and average stockholders' equity at year-end 2001 were
0.86% and 15.26%, compared to 0.96% and 16.84%, respectively, for year-end 2000.
The principal contributor to our increase in net income during 2001 was an
increase in non-interest income.

     Non-interest income increased 203.21% to $9.3 million in 2001 from $3.1
million in 2000. Non-interest income to average assets increased to 2.02% at
December 31, 2001 from 0.84% at December 31, 2000. The expansion of the
Company's internet mortgage capabilities coupled with declines in market
interest rates resulted in a significant increase in the number of residential
mortgage loan originations in 2001 compared to 2000. This resulted in
significantly higher origination fees during 2001 than during 2000.

     Total assets for the Company at December 31, 2001, were $492.0 million, an
increase of $77.4 million, or 18.65%, from $414.7 million at December 31, 2000.
Deposits and


                                       24

<PAGE>

stockholders' equity at December 31, 2001 were $394.2 million and $28.5 million,
compared with $338.2 million and $23.8 million at December 31, 2000, increases
of $56.0 million, or 16.56%, and $4.7 million, or 19.78%, respectively.

     Loans at December 31, 2001 totaled $334.1 million, an increase of $46.4
million, or 16.13%, compared to December 31, 2000. The loan to deposit ratio at
December 31, 2001 was 84.74% compared to 85.05% at December 31, 2000. The
decrease in the loan to deposit ratio was due to deposit growth, which, on a
relative basis, outpaced loan growth by 0.43%. 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, 2001, our non-performing loans to total loans
ratio has averaged 0.63%. As of December 31, 2001, our ratio of non-performing
loans to total loans was 0.92%. The non-performing ratio was above the
historical average; however, our non-performing credit relationships are
regularly reviewed and closely monitored. 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, 2001, our ratio of allowance for loan losses to non-performing loans has
exceeded 170.00%. As of December 31, 2001, our ratio of allowance for loan
losses to non-performing loans was 171.96%, compared to 179.47% at December 31,
2000.

     The net charge-off ratio has averaged 0.36% for the five years ended
December 31, 2001. Our net charge-off ratio for the year ended December 31, 2001
was 0.51%, which was slightly higher than our historical average as the Bank
continues to aggressively manage defaults in the loan portfolio in a softer
economic environment. 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 fully tax equivalent
(FTE) 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, 2001 and 2000. Net interest income for 2001
increased to $14.7 million from $14.4 million in 2000, a $0.3 million, or 2.26%,
increase.

     Interest income for 2001 was $33.1 million, an increase of $2.0 million, or
6.50%, from $31.1 million in 2000, primarily as a result of a $90.1 million, or
26.47%, growth in average interest-earning assets. As a result of sharp and
continued decreases in market interest rates during 2001, the yield on average
interest-earning assets fell to 7.76%, as compared to 9.22% in 2000, a decline
of 146 basis points. In spite of the steep decrease in yields, loan interest and
fee income increased slightly to $27.9 million from $26.7 million due to
increases in volumes of loans outstanding, which was primarily funded through
growth in core deposits. Interest income


                                       25

<PAGE>

on investment securities increased by $939,000 and the annualized tax-equivalent
yield on our investment portfolio decreased 30 basis points in the current year
period as compared to the prior year period.

     Interest expense for 2001 was $18.4 million, up $1.7 million, or 10.17%,
from $16.7 million in 2000. We attribute the increase to a $64.5 million, or
25.17%, increase in our average interest-bearing deposits as well as a $10.96
million, or 25.01%, increase in other interest-bearing liabilities, including
FHLB borrowings and the full-year's impact of the outstanding balance of our
junior subordinated debentures compared to a partial year in 2000. Interest
expense on other interest-bearing liabilities increased to $3.0 million in 2001,
up $415,000, or 16.32%, from $2.5 million in 2000. This increase is attributable
mainly to the increases in FHLB borrowings plus the full year's impact of our
junior subordinated debentures in connection with our trust preferred securities
offering. Overall, rates paid on average interest-bearing liabilities decreased
to 4.89% in the current year from 5.56% in the prior year, a decrease of 67
basis points.

     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 average interest-earning assets. As a result of increases in
market interest rates during this period, the yield on average 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 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.

     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.


                                       26

<PAGE>

                       AVERAGE BALANCES, YIELDS AND RATES

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                       ---------------------------------------------------------------------------------------------
                                                   2001                            2000                            1999
                                       -----------------------------   -----------------------------   -----------------------------
                                                             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 ..................  $ 15,269   $    679    4.45%    $ 12,412   $    777    6.26%    $  9,482   $    431    4.55%
Investment securities - taxable .....    59,010      3,812    6.46       42,539      2,894    6.80       33,422      2,087    6.24
Investment securities - non-
   taxable (1).......................    15,782        977    6.19       14,984        956    6.38       14,399        895    6.22
Mortgage loans held for sale ........    29,505      1,752    5.94        2,072        165    7.96        1,413        112    7.93
Loans, net of unearned discount
   and fees..........................   310,727     26,168    8.42      268,227     26,568    9.91      206,310     20,310    9.84
                                       --------   --------             --------   --------             --------   --------
      Total earning assets ..........   430,293     33,388    7.76      340,234     31,360    9.22      265,026     23,835    8.99
                                       --------   --------             --------   --------             --------   --------
Cash and due from banks -
   non-interest bearing..............    16,224                          12,063                           9,883
Allowance for possible loan losses...    (4,809)                         (4,102)                         (2,842)
Premises and equipment, net..........     7,435                           5,845                           5,505
Other assets.........................     9,133                           8,246                           7,723
                                       --------                        --------                        --------
      Total assets...................  $458,276                        $362,286                        $285,295
                                       ========                        ========                        ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits-interest bearing:
   Interest-bearing demand accounts..  $ 31,441   $    815    2.59%    $ 24,920   $    872    3.50%    $ 19,260   $    644    3.34%
   Savings and money market deposits.   131,492      4,846    3.69      110,911      5,726    5.16       74,535      3,156    4.23
   Time deposits.....................
      Total interest-bearing
         deposits....................   158,078      9,775    6.18      120,632      7,555    6.26      106,366      6,032    5.67
                                       --------   --------             --------   --------             --------   --------
Short -term borrowings...............   321,011     15,436    4.81      256,463     14,153    5.52      200,161      9,832    4.91
                                       --------   --------             --------   --------             --------   --------
Long-term debt ......................    21,862        667    3.05       26,680      1,395    5.23       16,122        690    4.28
      Total interest-bearing
         liabilities.................    32,937      2,291    6.96       17,156      1,148    6.69       11,973        682    5.70
                                       --------   --------             --------   --------             --------   --------
Non-interest bearing deposits........   375,810     18,394    4.89      300,299     16,696    5.56      228,256     11,204    4.91
                                       --------   --------             --------   --------             --------   --------
Other liabilities ...................    53,324                          38,543                          37,314
Stockholders' equity.................     3,295                           2,791                           2,034
      Total liabilities and
         stockholders' equity........    25,847                          20,653                          17,691
                                       --------                        --------                        --------
Net interest income/spread ..........  $458,276                        $362,286                        $285,295
                                       ========                        ========                        ========
Net interest margin..................             $ 14,994    2.87%               $ 14,664    3.66%              $ 12,631     4.08%
                                                  ========    ====                ========    ====               ========     ====
                                                              3.48%                           4.31%                           4.77%
                                                              ====                            ====                            ====
</TABLE>
---------------
(1)  Presented on a fully tax-equivalent basis assuming a tax rate of 34%.


                                       27

<PAGE>

     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
          current 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.









                                       28

<PAGE>

                         CHANGES IN INTEREST INCOME AND
                        EXPENSE VOLUME AND RATE VARIANCES

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                          -------------------------------------------------------------
                                              2001 COMPARED TO 2000            2000 COMPARED TO 1999
                                          -----------------------------    ----------------------------
                                          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 ....................   $  (226)   $   128    $   (98)   $   190    $   156   $   346
Investment securities - taxable .......      (144)     1,062        918        200        607       807
Investment securities - non-taxable (1)       (28)        49         21         24         37        61
Mortgage loans held for sale ..........       (42)     1,629      1,587                    53        53
Loans, net of unearned discount .......    (3,824)     3,424       (400)       145      6,113     6,258
                                          -------    -------    -------    -------    -------   -------
      Total interest income ...........    (4,264)     6,292      2,028        559      6,966     7,525
                                          -------    -------    -------    -------    -------   -------
Interest-bearing demand accounts ......      (223)       166        (57)        32        196       228
Savings and money market deposits .....    (1,647)       767       (880)       798      1,772     2,570
Time deposits .........................       (97)     2,317      2,220        665        858     1,523
Short-term borrowings .................      (581)      (147)      (728)       178        527       705
Long-term debt ........................        46      1,097      1,143        133        333       466
                                          -------    -------    -------    -------    -------   -------
      Total interest expense ..........    (2,502)     4,200      1,698      1,806      3,686     5,492
                                          -------    -------    -------    -------    -------   -------
Net interest income ...................   $(1,762)   $ 2,092    $   330    $(1,247)   $ 3,280   $ 2,033
                                          =======    =======    =======    =======    =======   =======
</TABLE>
---------------
(1)  Presented on a fully tax-equivalent basis assuming a tax rate of 34%.


                                       29

<PAGE>

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, 2001, we provided $2.4 million for loan losses, as compared
to $2.0 million for the year ended December 31, 2000, an increase of $450,000,
or 23.08%. During 2001, our allowance for loan losses increased as our provision
exceeded our net charge-offs. The loan portfolio increased to $334.1 million in
2001 from $287.7 million in 2000, or 16.13%. The provision for loan losses
decreased to $2.0 million in 2000 from $2.1 million in 1999, or 9.05%, while the
loan portfolio increased to $287.7 million in 2000 from $250.4 million in 1999,
or 14.88%.

     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, plus a general
reserve based on loss factors applied to the rest of the loan portfolio. The
specific reserve on impaired loans is computed as the amount of the loan in
excess of the present value of the estimated future cash flows discounted at the
loan's effective interest rate based on the loan's observable market value or
the fair value of the collateral if the loan is collateral dependent. The
general reserve loss factors are 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.

     The allowance for loan losses as a percentage of loans increased to 1.58%
at December 31, 2001, as compared to 1.54% in 2000 and 1.52% in 1999. We
increased the allowance for loan losses in 2001, 2000 and 1999 based upon an
analysis of several factors, including the impairment analysis referred to
above, changes in the loan mix and overall growth in the loan portfolio. Our
reserve on impaired loans remained relatively unchanged at $1.5 million at
December 31, 2001 compared to $1.4 million at December 31, 2000. The general
reserve factor, which is applied to all unimpaired loans, increased to 1.17% at
December 31, 2001 compared to 1.09% at December 31, 2000. The general reserve
factor at December 31, 1999 was 1.22%. The increase in the general reserve
factor in 2001 is attributable to economic factors and changes in the loan
portfolio mix. This slight decrease in 2000 was primarily 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 a 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.

     Due to the factors discussed above and the growth in our commercial real
estate and construction loan portfolios, the overall result was a higher
allowance for loan losses at December 31, 2001 compared with December 31, 2000.
The allowance for loan losses represents our best estimate of probable losses
that have been incurred as of the respective balance sheet dates.


                                       30

<PAGE>

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
                                                        ------------------------
                                                         2001     2000     1999
                                                        ------   ------   ------
                                                             (IN THOUSANDS)
<S>                                                     <C>      <C>      <C>
Loans held for sale fee income ......................   $6,934   $1,154   $1,623
NSF charges and service fees ........................      836      655      553
Other service charges ...............................      793      963      659
Net realized gains on sales of investment
   securities .......................................      500       --        3
Other income ........................................      203      284      186
                                                        ------   ------   ------
      Total non-interest income .....................   $9,266   $3,056   $3,024
                                                        ======   ======   ======
</TABLE>


     Non-interest income increased to $9.3 million, or 203.21%, during 2001,
from $3.1 million during 2000. This increase is attributable to increases in
loans held for sale fee income of $5.8 million, NSF charges and services fees of
$181,000 and net realized gains on sales of investment securities of $500,000.
We experienced significant growth in our loans held for sale income due to the
expansion of our internet mortgage capabilities concurrent with the mortgage
origination and refinancing boom. Mortgage origination's and refinancing
flourished due to the steep decline in market interest rates during 2001. Other
service charge income includes trust fees which generated an additional $43,000
over 2000 and bank services fee income which generated an additional $62,000
over 2000. These increases were offset by a combined decrease of $278,000 in
commercial mortgage and lease referral fee income and a decrease of $60,000 in
investment brokerage services. In 2001, we took advantage of opportunities to
mitigate the risk of long-term rate volatility in our available-for-sale
investment portfolio by selling some of our longer-term bonds. Due to the yield
environment when we sold the securities, we generated $500,000 of net gains on
the sales.

     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 EXPENSE

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


                                       31

<PAGE>

                              NON-INTEREST EXPENSE

<TABLE>
<CAPTION>
                                                      YEAR ENDED DECEMBER 31
                                                 -------------------------------
                                                   2001        2000        1999
                                                 -------     -------     -------
                                                         (IN THOUSANDS)
<S>                                              <C>         <C>         <C>
Salaries and employee benefits ...............   $10,063     $ 5,856     $ 4,578
Occupancy ....................................     1,574       1,124         894
FDIC and other insurance expense .............       140         177         113
General and administrative ...................     3,933       3,136       3,095
                                                 -------     -------     -------
      Total non-interest expenses ............   $15,710     $10,293     $ 8,680
                                                 =======     =======     =======
</TABLE>


     Non-interest expense increased to $15.7 million, or 52.63%, during 2001, as
compared to $10.3 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 $10.1 million
in 2001, or 71.84%, from $5.9 million in 2000, as we hired additional staff to
facilitate our growth. We had 217 full-time equivalent employees at December 31,
2001 as compared to 129 at December 31, 2000. Many areas of the Company added
employees to manage growth, the addition of the Internet Mortgage Division
represented a significant opportunity for the Company and necessitated the
addition of 61 full-time equivalent employees. Occupancy expenses increased to
$1.6 million, or 40.04% in 2001, from $1.1 million in 2000, which was primarily
attributable to a $143,000 increase in depreciation, a $90,000 increase in
maintenance agreements and repairs and maintenance expenses and a $52,000
increase in rent expense as the Company expanded its infrastructure to
facilitate growth. Included in general and administrative expenses is a lease
portfolio that 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 2001 was $25,000 compared to $177,000 in
the prior year.

     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.


INCOME TAXES

     Our income tax expense during 2001 was $2.0 million, compared to $1.8
million during 2000, and $1.5 million during 1999. 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.


                                       32
<PAGE>
FINANCIAL CONDITION

         Lending Activities. Our loan portfolio is our main source of income,
and since our inception, 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 44.62% of our total loans at
December 31, 2001, 41.30% of our total loans at December 31, 2000, and over 36%
of our total loans at year end 1999, 1998, and 1997. These loans increased at a
28.99% compound annual rate during the four-year period ended December 31, 2001.

         Loans were $334.1 million at December 31, 2001, an increase of $46.4
million, or 16.13%, compared to December 31, 2000. Loans at December 31, 2000
were $287.7 million, an increase of $37.3 million, or 14.88%, compared to
December 31, 1999. The increase in deposits sufficiently facilitated our growth
during both 2001 and 2000. The loan to deposit ratio remained fairly constant in
2001 at 84.74%, compared to 85.05% at December 31, 2000, which had declined from
93.39% at December 31, 1999.

         We experienced significant increases in our commercial, commercial real
estate and construction loan categories, and decreases in residential real
estate, personal loan and lease categories in 2001. The growth of our
commercial, commercial real estate and construction loan portfolios is a result
of the economic growth and development of our market area, coupled with the
efforts and experience of our construction and development lenders. 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. In 2001, our indirect loan portfolio
declined by approximately $10 million as we encountered significant competitive
factors from national finance companies offering below market rate financing
incentives. We have also encountered a considerable number of early pay-offs
within the indirect automobile loan portfolio due to customer refinancing.

         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.


                                       33
<PAGE>



                                 LOAN PORTFOLIO


<TABLE>
<CAPTION>
                                                                      AS OF DECEMBER 31,
                             -----------------------------------------------------------------------------------------------------
                                     2001                2000                 1999                1998                1997
                             ------------------   ------------------   ------------------   -----------------   ------------------
                              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 ...   $ 63,756    19.08%   $ 42,267    14.69%   $ 26,617    10.63%   $ 15,457     9.57%  $  7,878     6.19%
Residential real estate ..     24,460     7.32      37,290    12.96      33,251    13.28      28,367    17.57     24,075    18.91
Commercial ...............     85,311    25.54      76,556    26.61      64,552    25.78      52,310    32.41     45,969    36.11
Personal .................     29,895     8.96      35,864    12.47      44,747    17.87      19,751    12.23     14,590    11.46
Home equity ..............     12,776     3.82      10,657     3.70       9,820     3.92       6,170     3.82      7,030     5.52
Construction .............     93,656    28.03      59,733    20.76      41,007    16.38      25,624    15.87     16,273    12.78
Leases ...................     24,221     7.25      25,302     8.81      30,416    12.14      13,765     8.53     11,493     9.03
                             --------   ------    --------   ------    --------   ------    --------   ------   --------   ------
    Total loans and leases    334,075   100.00%    287,669   100.00%    250,410   100.00%    161,444   100.00%   127,308   100.00%
                                        ======               ======               ======               ======              ======
Less allowance for loan
    losses................      5,267                4,440                3,817                2,341               1,618
                             --------             --------             --------             --------            --------
Loans receivable, net.....   $328,808             $283,229             $246,593             $159,103            $125,690
                             ========             ========             ========             ========            ========
</TABLE>


                                       34
<PAGE>

         Collateral and Concentration. At December 31, 2001, 2000 and 1999,
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 $93.7 million, or 28.03%, of total loans, as of December 31, 2001. 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 $10.5 million at
December 31, 2001. The Bank's largest single borrower, net of participations, at
December 31, 2001 had outstanding loans of $9.9 million.

         The following table presents the aggregate maturities of loans in each
major category of our loan portfolio as of December 31, 2001, 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, 2001 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, 2001
                           --------------------------------------------------------------------------
                                                                                 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      $ 6,808      $40,345      $16,603      $63,756      $18,059      $38,889
Commercial ...........       45,868       34,360        5,083       85,311        7,100       32,343
Construction .........       54,463       38,107        1,588       94,158        4,703       34,992
</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:

                                       35
<PAGE>

                              NON-PERFORMING ASSETS

<TABLE>
<CAPTION>
                                                                         AS OF DECEMBER 31,
                                                      ------------------------------------------------------
                                                       2001        2000        1999        1998        1997
                                                      ------      ------      ------      ------      ------
                                                                       (DOLLARS IN THOUSANDS)
<S>                                                   <C>         <C>         <C>         <C>         <C>
Real estate loans:
      Past due 90 days or more ..................     $   --      $  206      $   --      $   --      $   --
      Nonaccrual ................................        824         499          --          --          --
Installment loans:
      Past due 90 days or more ..................         33          --          --           7          --
      Nonaccrual ................................         13          37          87          38          --
Credit cards and related plans:
      Past due 90 days or more ..................         --          --          --          --          --
      Nonaccrual ................................         --          --          --          --          --
Commercial and all other loans:
      Past due 90 days or more ..................         76          24          50         319          --
      Nonaccrual ................................        752       1,326         375         650         367
Lease financing receivables:
      Past due 90 days or more ..................         --          --          --         121          --
      Nonaccrual ................................      1,365         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 ...............      3,063       2,474         537       1,362         425
                                                      ------      ------      ------      ------      ------
Foreclosed assets held for sale .................         49         334         186          46         795
                                                      ------      ------      ------      ------      ------
       Total non-performing assets ..............     $3,112      $2,808      $  723      $1,408      $1,220
                                                      ======      ======      ======      ======      ======
Total non-performing loans to total loans .......       0.92%       0.86%       0.21%       0.84%       0.33%
Total non-performing loans to total assets ......       0.62        0.60        0.16        0.54        0.21
Allowance for loan losses to non-performing loans     171.96      179.47      710.80      171.88      380.71
Non-performing assets to loans and foreclosed
  assets held for sale ..........................       0.93        0.97        0.29        0.87        0.95
</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 $8.4 million at December 31, 2001, $5.8 million
at December 31, 2000, and $5.2 million at December 31, 1999, with related
allowances for loan losses of $1.5 million, $1.4 million, and $825,000
respectively.

         Total interest income of $923,000, $882,000 and $713,000 was recognized
on average impaired loans of $6.6 million, $6.2 million and $4.1 million for
2001, 2000 and 1999, respectively. Included in this total is cash basis interest
income of $202,000, $72,000 and $140,000 recognized on impaired loans on
nonaccural during 2001, 2000 and 1999, 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 historical loss
experience. Management assesses the adequacy of the allowance for loan losses
based upon a number of factors including, among others:

                                       36
<PAGE>

     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.

                                       37
<PAGE>

                         SUMMARY OF LOAN LOSS EXPERIENCE
                             AND RELATED INFORMATION


<TABLE>
<CAPTION>
                                                              AS OF AND FOR THE
                                                           YEAR ENDED DECEMBER 31,
                                       ---------------------------------------------------------------
                                          2001        2000          1999          1998          1997
                                       --------     --------      --------      --------      --------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                    <C>          <C>           <C>           <C>           <C>
Balance at beginning of period ...     $  4,440     $  3,817      $  2,341      $  1,618      $  1,275

Loans charged-off:
   Commercial real estate ........           --           --            --            --            --
   Residential real estate .......            5           --            --            --            --
   Commercial ....................        1,015          343           567           310           357
   Personal ......................           80          153            47            49            19
   Home equity ...................           --           --            --            --            --
   Construction ..................           --           --            --            --            --
   Leases ........................          836        1,034           158            27            83
                                       --------     --------      --------      --------      --------
      Total loans charged-off ....        1,936        1,530           772           386           459
Recoveries:
   Commercial real estate ........           --           --            --            --            --
   Residential real estate .......            5           --            --            --            --
   Commercial ....................          119          104            90            38            84
   Personal ......................           41           46             2             6             1
   Home equity ...................           --           --            --            --            --
   Construction ..................           --           --            --            --            --
   Leases ........................          198           53            12             4            57
                                       --------     --------      --------      --------      --------
Total recoveries .................          363          203           104            48           142
                                       --------     --------      --------      --------      --------
Net loans charged-off ............        1,573        1,327           668           338           317
Provision for loan losses.........        2,400        1,950         2,144         1,061           660
                                       --------     --------      --------      --------      --------
Balance at end of period .........     $  5,267     $  4,440      $  3,817      $  2,341      $  1,618
                                       ========     ========      ========      ========      ========

Loans outstanding:
         Average .................     $310,727     $268,227      $206,310      $148,221      $115,939
         End of period ...........      334,075      287,669       250,410       161,444       127,308
Ratio of allowance for loan losses
  to loans outstanding:
         Average .................         1.70%        1.66%         1.85%         1.58%         1.40%
         End of period ...........         1.58         1.54          1.52          1.45          1.27
Ratio of net charge-offs to:
         Average loans ...........         0.51         0.49          0.32          0.23          0.27
         End of period loans .....         0.47         0.46          0.27          0.21          0.25
</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.


                                       38
<PAGE>


                   ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                                               AS OF DECEMBER 31,
                          ---------------------------------------------------------------------------------------------
                                 2001               2000               1999              1998               1997
                          -----------------  -----------------  -----------------  -----------------  -----------------
                                    % 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    $  888    16.86%   $  485    10.92%   $  268     7.02%   $  155     6.62%   $   75     4.63%
Residential real estate      400     7.59       399     8.99       364     9.53       340    14.52       298    18.42
Commercial ............    1,181    22.42     1,687    38.00     1,206    31.60     1,013    43.27       648    40.05
Personal ..............      210     3.99       547    12.32       843    22.09       215     9.19       153     9.46
Home equity ...........       78     1.48       124     2.79       123     3.22        69     2.95        83     5.13
Construction ..........    1,070    20.32       672    15.14       454    11.89       302    12.90       223    13.78
Leases ................    1,440    27.34       526    11.84       559    14.65       247    10.55       138     8.53
Unallocated ...........       --       --        --       --        --       --        --       --        --       --
                          ------   ------    ------   ------    ------   ------    ------   ------    ------   ------
      Total ...........   $5,267   100.00%   $4,440   100.00%   $3,817   100.00%   $2,341   100.00%   $1,618   100.00%
                          ======   ======    ======   ======    ======   ======    ======   ======    ======   ======
</TABLE>

                                       39
<PAGE>

         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.
Substantial declines in market rates prompted the issuers of many of the
securities in our portfolio to call those securities in 2001. In spite of this
situation, the December 31, 2001 composition and balance of the investment
portfolio was relatively unchanged as compared to 2000 year-end. Additionally,
we took advantage of opportunities in 2001 to mitigate the risk of long-term
rate volatility in our available-for-sale investment portfolio by selling some
of our longer-term bonds. Due to the yield environment when we sold the
securities, we generated $500,000 of net gains on the sales. As of December 31,
2001, all of the securities in our investment portfolio were 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. In 2000, we were able to take advantage of
some attractive offers and add some higher yielding securities to our investment
portfolio. These higher yielding investments were utilized to satisfy additional
pledging as well as serve as an additional source of liquidity.

          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,
                                            ----------------------------------
                                              2001         2000         1999
                                            --------     --------     --------
                                                      (IN THOUSANDS)
<S>                                         <C>          <C>          <C>
U.S. government and agency securities       $ 62,050     $ 61,001     $ 34,175
State and municipal obligations .....         15,626       15,502       14,471
Mortgage-backed securities ..........                          --           --
Other securities ....................                          --           --
                                            --------     --------     --------
      Total .........................       $ 77,676     $ 76,503     $ 48,646
                                            ========     ========     ========
Available for sale (fair value) .....       $ 77,676     $ 76,503     $ 48,646
Held to maturity (amortized cost) ...             --        2,000           --
                                            --------     --------     --------
      Total .........................       $ 77,676     $ 78,503     $ 48,646
                                            ========     ========     ========
</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, 2001. 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.

                                       40
<PAGE>

                   MATURITY OF INVESTMENT SECURITIES PORTFOLIO

<TABLE>
<CAPTION>
                                                                                         MORE THAN
                             ONE YEAR OR LESS  ONE TO FIVE YEARS   FIVE TO TEN YEARS     TEN YEARS       TOTAL INVESTMENT 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   $    --      --%   $    --      --%    $    --      --%    $ --       --%    $    --    $    --      --%
  State and municipal
    obligations .........        --      --         --      --          --      --       --       --          --         --      --
  Mortgage-backed
    securities ..........        --      --         --      --          --      --       --       --          --         --      --
  Other securities ......        --      --         --      --          --      --       --       --          --         --      --
                            -------    ----    -------    ----     -------    ----     ----     ----     -------    -------    ----
    Total held to
      maturity ..........   $    --      --%   $    --      --%    $    --      --%    $ --       --%    $    --    $    --      --%
                            =======    ====    =======    ====     =======    ====     ====     ====     =======    =======    ====

AVAILABLE FOR SALE
  U.S. government and
    agency securities ...   $ 3,066    6.46%   $46,680    5.52%    $12,304    5.86%    $ --       --%    $62,050    $62,050    5.63%
  State and municipal
    obligations .........       767    4.72      6,584    4.86       7,976    4.96      299     4.68      15,626     15,626    4.90
  Mortgage-backed
    securities ..........        --      --         --      --          --      --       --       --          --         --      --
  Other securities ......        --      --         --      --          --      --       --       --          --         --      --
                            -------    ----    -------    ----     -------    ----     ----     ----     -------    -------    ----
    Total available
      for sale ..........   $ 3,833    6.11%   $53,264    5.44%    $20,280    5.51%    $299     4.68%    $77,676    $77,676    5.49%
                            =======    ====    =======    ====     =======    ====     ====     ====     =======    =======    ====
    Total investment
      securities ........   $ 3,833    6.11%   $53,264    5.44%    $20,280    5.51%    $299     4.68%    $77,676    $77,676    5.49%
                            =======    ====    =======    ====     =======    ====     ====     ====     =======    =======    ====
</TABLE>

         Deposits. Deposits grew by $56.0 million, or 16.56%, for the year ended
December 31, 2001, as compared to 2000 year-end. Approximately $27.0 million of
our deposit growth during fiscal year 2001 was attributable to growth in
business checking accounts and reflects the continued efforts of our business
development officers. These commercial deposit accounts do not earn interest;
however, many of them receive an earnings credit on the balance to offset the
cost of other services provided by the Bank. Another significant source of
deposit growth in 2001 was in time deposit balances, which increased by over
$23.0 million in 2001. We have traditionally offered market-competitive rates on
our time deposit products and believe they provide 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:

                                       41
<PAGE>


                                    DEPOSITS

<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                   --------------------------------------------------------------------------------------------
                                                2001                          2000                            1999
                                   --------------------------    ----------------------------    ------------------------------
                                                                     (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>     <C>           <C>         <C>
Demand............................ $ 74,229    18.83%      --%    $ 44,354     13.11%      --%    $ 36,950      13.78%       --%
Savings...........................    5,050     1.28     2.54        3,327      0.98     2.96        3,385       1.26      2.93
Interest-bearing demand...........   28,397     7.20     2.59       32,427      9.59     3.50       26,800       9.99      3.34
Money Market......................   30,427     7.72     2.67       27,923      8.26     3.46       35,764      13.34      3.51
Money Management..................   93,462    23.71     4.04       90,787     26.84     5.99       60,449      22.55      5.15
Time Deposits.....................  162,680    41.26     4.81      139,403     41.22     6.26      104,797      39.08      5.67
                                   --------  -------              --------    ------              --------     ------
      Total deposits.............. $394,245   100.00%             $338,221    100.00%             $268,145     100.00%
                                   ========  =======              ========    ======              ========     ======
</TABLE>

                                       42
<PAGE>

         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, 2001:

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

<TABLE>
<CAPTION>
                                                AS OF DECEMBER 31, 2001
                                              --------------------------
                                                        WEIGHTED AVERAGE
                                               AMOUNT      RATE PAID
                                              -------   ----------------
                                                (DOLLARS IN THOUSANDS)
<S>                                           <C>             <C>
Three months or less ................         $20,760         5.59%
Over three months through six months           16,484         5.03
Over six months through twelve months          11,596         4.60
Over twelve months ..................           7,408         4.90
                                              -------         ----
      Total .........................         $56,248         5.13%
                                              =======         ====
</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 68.70% of our total assets at December 31, 2001, and 69.36% and
70.11% of total assets at December 31, 2000 and 1999, 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 were retained by Blue Valley
for general corporate purposes, including additional investments from time to
time in the Bank in the form of additional capital. Total offering expenses of
approximately $900,000 are included in other assets and are


                                       43
<PAGE>

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. Blue Valley 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. Under the indenture, Blue Valley is prohibited
from paying dividends on common stock if the scheduled payments on the 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 1.00% of the aggregate principal amount of
its unpaid residential mortgage loans or 5.00% of our total outstanding FHLB
advances. The Bank is currently in compliance with this requirement, with a $2.2
million investment in stock of the FHLB of Topeka as of December 31, 2001. In
2001 and 2000, the Bank took advantage of some special advances from the FHLB to
supplement its funding base. The Bank had $32.5 million in outstanding long-term
advances from the FHLB of Topeka at December 31, 2001 and $5.0 million in
outstanding short-term advances 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,
2001, 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.

                                       44
<PAGE>

                                               SHORT-TERM BORROWINGS

<TABLE>
<CAPTION>
                                                                                         WEIGHTED    WEIGHTED
                                                             AVERAGE                     AVERAGE     AVERAGE
                                                 AMOUNT       AMOUNT       MAXIMUM       INTEREST   INTEREST
                                              OUTSTANDING   OUTSTANDING  OUTSTANDING       RATE       RATE
                                                   AT       DURING THE     AT ANY       DURING THE  AT PERIOD
                                               PERIOD END   PERIOD (1)    MONTH END       PERIOD       END
                                              -----------   -----------  -----------    ----------  ----------
                                                     (DOLLARS IN THOUSANDS)
<S>                                             <C>           <C>           <C>            <C>         <C>
At or for the year ended December 31, 2001:
   Federal Home Loan Bank borrowings ......     $    --       $ 2,985       $ 5,000        6.37%         --%
   Bank Stock Loan ........................          --            --            --          --          --
   Federal Funds purchased ................          --            --            --          --          --
   Note Payable - other ...................          --           231         1,000        6.00          --
   Repurchase agreements ..................      17,173        17,246        20,862        2.37        1.07
                                                -------       -------                      ----        ----
      Total ...............................      17,173        20,462                      2.43        1.07
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          --
   Note Payable - other ...................          --            --            --          --          --
   Repurchase agreements ..................      15,299        13,245        16,650        3.09        3.34
                                                -------       -------                      ----        ----
      Total ...............................      20,299        25,242                      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          --
   Note Payable - other ...................          --            --            --          --          --
   Repurchase agreements ..................      11,260         9,500        13,056        3.00        3.00
                                                -------       -------                      ----        ----
      Total ...............................      28,710        14,887                      4.36        5.21
</TABLE>

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

         Capital Resources. At December 31, 2001, our total stockholders' equity
was $28.5 million, and our equity to asset ratio was 5.80%. At December 31,
2000, our total stockholders' equity was $23.8 million. At year-end 2000, our
equity to asset ratio was 5.74% as compared to 5.67% at year-end 1999.

         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, 2001, our Tier 1 capital ratio was
8.87%, while our total risk-based capital ratio was 10.69%, both of which exceed
the capital minimums established in the risk-based capital requirements.

                                       45
<PAGE>

         Our risk-based capital ratios at December 31, 2001, 2000 and 1999 are
presented below.

                               RISK-BASED CAPITAL


<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                              ---------------------------------------
                                                 2001           2000           1999
                                              ---------      ---------      ---------
                                                       (DOLLARS IN THOUSANDS)
<S>                                           <C>            <C>            <C>
Tier 1 capital
Stockholder's equity ....................     $  28,525      $  23,815      $  18,869
Intangible assets .......................        (1,433)        (1,295)        (1,448)
Unrealized (appreciation) depreciation
  on available-for-sale securities ......          (831)          (461)           957
Guaranteed preferred beneficial interest
  in Company's subordinated debt (1) ....         9,231          7,785             --
Other ...................................            --             --             --
                                              ---------      ---------      ---------
  Total Tier 1 capital ..................        35,492         29,844         18,378
                                              ---------      ---------      ---------


Tier 2 capital
Qualifying allowance for loan losses ....         5,002          3,929          3,371
Guaranteed preferred beneficial interest
  in Company's subordinated debt (1) ....         2,269          3,715             --
                                              ---------      ---------      ---------
  Total Tier 2 capital ..................         7,271          7,644          3,371
                                              ---------      ---------      ---------
  Total risk-based capital ..............     $  42,763      $  37,488      $  21,749
                                              =========      =========      =========

Risk weighted assets ....................     $ 399,923      $ 313,841      $ 269,660
                                              =========      =========      =========

Ratios at end of period
Total capital to risk-weighted assets
  ratio .................................       10.69 %        11.95 %         8.07 %
Tier 1 capital to average assets ratio
   (leverage ratio) .....................        7.17 %         7.47 %         5.80 %
Tier 1 capital to risk-weighted assets
  ratio .................................        8.87 %         9.51 %         6.82 %

Minimum guidelines
Total capital to risk-weighted assets
  ratio .................................        8.00 %         8.00 %         8.00 %
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, 2001, approximately $9.2 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.

                                       46
<PAGE>

INFLATION

         The consolidated financial statements and related data presented in
this report have been prepared in accordance with accounting principles
generally accepted in the United States of America, 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 16 to the
consolidated financial statements included in this report.

FUTURE ACCOUNTING REQUIREMENTS

         The Company adopted SFAS No. 142, "Goodwill and Other Intangible
Assets," on January 1, 2002. This Statement addresses the accounting and
reporting for acquired goodwill and other intangible assets. Goodwill shall not
be amortized after December 31, 2001. It shall be tested for impairment at a
reporting unit level, under certain circumstances. Intangible assets with
definite useful lives shall be amortized over their respective estimated useful
lives to the estimated residual values, and reviewed for impairment. In
connection with the transitional goodwill impairment evaluation, SFAS 142
requires the Company to assess whether there is an indication that goodwill is
impaired as of the date of adoption. If the carrying amount of reporting unit
goodwill exceeds the implied fair value of that goodwill, an impairment loss
shall be recognized in an amount equal to that excess. As of the date of
adoption, the Company had identifiable core deposit intangible assets of
approximately $1,433,000 that is subject to the transition provisions of SFAS
142. Amortization expense related to intangible assets was $152,000 for the
years ended December 31, 2001 and 2000. The initial adoption of this Standard
has not had a material impact on the financial statements of the Company.

                                       47
<PAGE>

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 5%,
per 50 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, 2001 based on the indicated
instantaneous and permanent changes in interest rates.

                                             NET INTEREST    NET ECONOMIC
                                                INCOME         VALUE OF
     CHANGES IN INTEREST RATES             (NEXT 12 MONTHS) EQUITY AT RISK
     -------------------------             ---------------- --------------
     300 basis point rise                       12.78%          (2.23%)
     200 basis point rise                        9.04%          (1.87%)
     100 basis point rise                        4.49%          (0.56%)
     Base Rate Scenario                            --              --
     50 basis point decline                     (3.81%)         (0.06%)
     100 basis point decline                    (6.47%)         (1.13%)
     150 basis point decline                   (10.13%)         (2.49%)

         The above table indicates that, at December 31, 2001, in the event of a
sudden and sustained increase in prevailing market rates, our net interest
income would be expected


                                       48
<PAGE>

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, 2001, 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 50,
100 or 150 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.

         The table on page 50 summarizes the anticipated maturities or repricing
of our interest-earning assets and interest-bearing liabilities as of December
31, 2001, based on the information and assumptions set forth below.

                                       49
<PAGE>

                                        INTEREST-RATE SENSITIVITY ANALYSIS

<TABLE>
<CAPTION>
                                                                   Expected Maturity Date
                             -----------------------------------------------------------------------------------------------------
                                                         Fiscal Year Ending December 31,
                               0-90     91-365   -------------------------------------------------                          Fair
                               Days      Days      2002      2003      2004      2005       2006   Thereafter    Total      Value
                             --------  --------  --------  --------  --------  --------   -------- ----------  --------   --------
<S>                          <C>       <C>       <C>       <C>       <C>       <C>         <C>      <C>        <C>        <C>
INTEREST-EARNING ASSETS:
Fixed Rate Loans..........   $ 34,347  $ 27,993  $ 62,340  $ 17,911  $ 11,868  $  4,641    $ 3,243  $  2,443   $102,446   $118,796
  Average Interest Rate...       6.51%     9.05%     7.66%     9.80%     9.66%     9.47%      8.59%     8.17%      8.39%
Variable Rate Loans.......    192,722     8,863   201,585     9,298     6,224     5,905      7,292     1,325    231,629    222,013
  Average Interest Rate...       5.28%     7.90%     5.40%     8.99%     8.53%     9.21%      7.74%     7.45%      5.81%
Fixed Rate Investments....      1,114     2,719     3,833     5,073    11,387    19,353     17,451    20,579     77,676     77,676
  Average Interest Rate...       6.43%     5.91%     6.06%     5.87%     5.50%     5.56%      5.16%     5.73%      5.55%
Variable Rate Investments          --        --        --        --        --        --         --        --         --         --
  Average Interest Rate...         --        --        --        --        --        --         --        --         --
Federal Funds Sold........      5,000        --     5,000        --        --        --         --        --      5,000      5,000
  Average Interest Rate...       1.76%       --      1.76%       --        --        --         --        --       1.76%
                             --------  --------  --------  --------  --------  --------   --------  --------   --------   --------
    Total interest-earning
      assets..............   $233,183  $ 39,575  $272,758  $ 32,282  $ 29,479  $ 29,899   $ 27,986  $ 24,347   $416,751   $423,485
                             ========  ========  ========  ========  ========  ========   ========  ========   ========   ========
INTEREST-BEARING
LIABILITIES:
Interest-bearing demand...    $28,397    $   --  $ 28,397  $     --  $     --  $     --   $     --  $     --   $ 28,397   $ 28,083
  Average Interest Rate...       1.38%       --      1.38%       --        --        --         --        --       1.38%
Savings and money market..    128,939        --   128,939        --        --        --         --        --    128,939    129,150
  Average Interest Rate...       2.41%       --      2.41%       --        --        --         --        --       2.41%
Time deposits.............     57,779    55,691   113,470    22,549     6,114     5,428     13,322     1,797    162,680    164,555
  Average Interest Rate...       6.15%     4.93%     5.55%     5.48%      5.23%    6.23%      4.99%     5.86%      5.51%
Funds borrowed............     17,555     5,000    22,555    12,000        --        --     12,500    18,119     65,174     66,384
  Average Interest Rate...       1.08%     4.80%     1.91%     4.85%       --        --       4.74%     8.36%      4.79%
                             --------  --------  --------  --------  --------  --------   --------  --------   --------   --------
    Total interest-bearing
      liabilities.........   $232,670  $ 60,691  $293,361  $ 34,549  $  6,114  $  5,428   $ 25,822  $ 19,916   $385,190   $388,172
                             ========  ========  ========  ========  ========  ========   ========  ========   ========   ========
CUMULATIVE:
  Rate sensitive
    assets (RSA)..........   $233,183  $272,758  $272,758  $305,040  $334,519  $364,418  $392,404   $416,751   $416,751
  Rate sensitive
    liabilities (RSL) ....    232,670   293,361   293,361   327,910   334,024   339,452   365,274    385,190    385,190
GAP (GAP = RSA - RSL) ....        513   (20,603)  (20,603)  (22,870)      495   24,966     27,130     31,561     31,561
RSA/RSL...................     100.22%    92.98%    92.98%    93.03%   100.15%  107.35%    107.43%    108.19%
RSA/Total assets..........      47.39%    55.44%    55.44%    62.00%    67.99%   74.07%     79.75%     84.70%
RSL/Total assets..........      47.29%    59.62%    59.62%    66.65%    67.89%   68.99%     74.24%     78.29%
GAP/Total assets..........       0.10%   (4.19)%   (4.19)%   (4.65)%     0.10%    5.07%      5.51%      6.41%
GAP/RSA...................       0.22%   (7.55)%   (7.55)%   (7.50)%     0.15%    6.85%      6.91%      7.57%
</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 16 to the consolidated
financial statements included in this report.

                                       50

<PAGE>

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 respective 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, 2001,
and their principal positions with Blue Valley.

                                       51
<PAGE>

Name                                        Age   Positions
----                                        ---   ---------

Directors

Robert D. Regnier .......................    53   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......................    63   Director of Blue Valley and
                                                  the Bank

Wayne A. Henry, Jr.......................    49   Director of Blue Valley

C. Ted McCarter..........................    65   Director of Blue Valley and
                                                  Chairman of the Board of
                                                  Directors of the Bank

Thomas A. McDonnell......................    56   Director of Blue Valley

Additional Directors of the Bank

Harvey S. Bodker.........................    66   Director of the Bank

Suzanne E. Dotson........................    55   Director of the Bank

Charles H. Hunter........................    59   Director of the Bank

Stewart M. Stein.........................    51   Director of the Bank

Executive Officers who are not Directors

Mark A. Fortino .........................    35   Senior Vice President and
                                                  Chief Financial Officer of the
                                                  Bank; Treasurer of Blue Valley

Gregory J. Motley .......................    45   Senior Vice President -
                                                  Commercial Business
                                                  Development for the Bank

Sheila Stokes ...........................    40   Senior Vice President - Retail
                                                  Division of the Bank

Edward A. Herman ........................    57   Senior Vice President and
                                                  Chief Lending Officer of the
                                                  Bank

John Markert ............................    56   Senior Vice President -
                                                  Internet Mortgage Division of
                                                  the Bank

                                       52
<PAGE>

Name                                        Age   Positions
----                                        ---   ---------

Penny T. Hershman .......................    57   Senior Vice President -
                                                  Marketing & Signature
                                                  Financial Services of the Bank


         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 1998;
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.
McCarter 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


                                       53
<PAGE>

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 1996; and a director and co-owner of Emco
Specialty Products, Inc. in Kansas City, Kansas, a manufacturing company, since
1996. Mr. McCarter has a background in commercial banking having served as
President, Chief Executive Officer, and director of 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 provider of information processing and software
services to the financial services industry, 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


                                       54
<PAGE>

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 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.

         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.

         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 operations, human resources, mortgage secondary marketing,
compliance, audit, information technology and administration. Mr. Fortino also
serves on the Technology, Risk Management, Compliance and Communications/Moral
Committees 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 (now BKD, LLP), 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 treasurer and serves on
the Finance Committee of the Girl Scouts of Midcontinent Council and a member of
the University of Kansas Accounting and Information Systems Advisory Board.

         GREGORY J. MOTLEY has been with the Bank since 1999 and is currently
Senior Vice President - Commercial Business Development. As such, he is
responsible for commercial credit sales efforts 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, 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.

                                       55
<PAGE>

         SHEILA STOKES joined the Bank in 2001 as Senior Vice President heading
the Bank's Retail Division. Ms. Stokes is responsible for all Retail sales and
activities, Private Banking, Call Center, Consumer Lending and the Retail
Mortgage Loan Department. Ms. Stokes has been employed in banking for twenty
years with experience as a Personal Banker, Banking Center Manager and Regional
Sales Manager. Most recently, she was Vice President, Regional Sales Manager at
Bank of America, Kansas City from 1997 to 2001. Previously, she had served as
Assistant Vice President, Banking Center Manager, Bank of America, Kansas City
from 1991 to 1996, Assistant Cashier, Assistant Banking Center Manager, Bank of
America from 1985 to 1990 and Part-time Personal Banker, Goppert Bank & Trust
Company, Kansas City from 1981 to 1984.


         EDWARD A. HERMAN has been with the Bank since 1997 and currently serves
as Senior Vice President, Senior Lender. He is responsible for the credit
quality of the Bank and oversight of the loan operations and loan review
functions. Mr. Herman began his banking career in 1971 at Raytown Federal and
was promoted to Loan Department Manager and Senior Vice President. From 1983 to
1988, Mr. Herman worked for Blue Valley Federal as Installment Loan Manager for
12 branches, Branch Coordinator for six branches, and as Senior Vice President.
1988 to 1989, he worked for First Federal-K.C. as Chief Operating Officer. From
1989 to 1997, he worked for Boatman's First National Bank and held the position
of Vice President Real Estate Banking Group. At Boatman's, Mr. Herman also
served on due diligence teams for the acquisitions of Merchants/Metro North,
First Continental Bank & Trust, and Bank IV. Previous to his banking career, Mr.
Herman served in the United States Air Force as a Staff Sergeant and in Security
Services as a Communications Analyst. He holds a Masters of Business
Administration from Rockhurst College.

         JOHN MARKERT has been with the Bank since January 2001 and is Senior
Vice President and division-head for Internetmortgage.com, the Bank's Internet
Mortgage Division. Internetmortgage.com is an Internet mortgage-lending site
geared to fulfilling mortgage needs outside of the Bank's local Retail Mortgage
Division. John has 31 years of real estate and mortgage experience including six
years of Internet mortgage lending. During his real estate and mortgage career,
John has held various management and ownership positions. John attended Kansas
University. He became a Real Estate Broker in Kansas in 1977 and in Missouri in
1979. In 1990, he started his own mortgage company and in 1996, started
Internetmortgage.com, expressly to make residential loans over the Internet.

         PENNY T. HERSHMAN has been with the Bank since 1997 and is currently
Senior Vice President of Marketing and Signature Financial Services. As such,
she directs the Bank's marketing, the Trust Department and INVEST Financial
Services. Ms. Hershman has over 30 years of banking experience. From 1995 to
1997, Ms. Hershman served as principal of Tapco Consulting in Novato,
California, a consulting firm, where she specialized in banking, management and
marketing. As a founding executive officer of Novato National Bank in Novato,
California, Ms. Hershman served in various positions at the Bank including
President and Chief Executive Officer from 1984 to 1995. Ms.


                                       56
<PAGE>

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, Bodker, 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.

                                       57

<PAGE>


ITEM 11: EXECUTIVE COMPENSATION

         The Summary Compensation Table below provides summary information
concerning compensation that we paid or accrued during 2001, 2000 and 1999 to or
on behalf of our Chief Executive Officer and the three other highest paid
executive officers whose salary and bonus for 2001 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...........................    2001   $215,000    $100,000   $20,492        10,000     $  --
  President, Chief Executive Officer and        2000    200,000      85,000    22,188        10,000        --
  Chairman of the Board of Directors of         1999    185,000      85,000    17,322        14,000        --
  Blue Valley; Chief Executive Officer and
  Director of the Bank

Mark A. Fortino.............................    2001   $100,000    $ 50,000   $ 9,609         3,000     $  --
  Treasurer of Blue Valley; Senior Vice         2000     90,000      35,000    15,191         3,000        --
  President and Chief Financial Officer of      1999     82,500      25,000     7,172         4,000        --
  the Bank

Gregory J. Motley...........................    2001    $95,000    $ 35,000   $ 8,890         3,000     $  --
  Senior Vice President - Commercial            2000     85,000      20,000        --         3,000        --
  Development of the Bank                       1999     10,625       5,000        --         1,000        --

John Markert ...............................    2001   $143,750    $     --    $4,082         2,000     $  --
   Senior Vice President - Internet Mortgage    2000         --          --        --            --        --
   Division of the Bank                         1999         --          --        --            --        --
</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, if any

                                       58

<PAGE>


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 2001.

                            AGGREGATED OPTION GRANTS
                                     IN 2001

<TABLE>
<CAPTION>
                                                                                           POTENTIAL REALIZABLE
                                                                                             VALUE AT ASSUMED
                                                                                          ANNUAL RATES OF STOCK
                                                                                            PRICE APPRECIATION
                                   INDIVIDUAL GRANTS                                       FOR OPTION TERM (2)
----------------------------------------------------------------------------------------  -----------------------
              (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>
Robert D. Regnier (1)...........      10,000         13.70%         $19.50    12/20/2011    $122,634    $310,780

Mark A. Fortino (1).............       3,000          4.10%         $19.50    12/20/2011     $36,790     $92,234

Gregory J. Motley (1)...........       3,000          4.10%         $19.50    12/20/2011     $36,790     $92,234

John Markert (1)................       2,000          2.70%         $19.50    12/20/2011     $24,527     $62,156
</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)  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.

                                       59

<PAGE>



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 2001, and unexercised options held as of December 31, 2001.

                     AGGREGATED OPTION EXERCISES IN 2001 AND
                           2001 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..................        --                --                 49,160/ -            $226,750/ $ -

Mark A. Fortino....................        --                --                6,800/6,000            $43,580/$ 9,000

Gregory J. Motley..................        --                --                1,000/6,000             $5,120/$ 9,000

John Markert.......................        --                --                   - /2,000               $ - /$ -
</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, 2001 was
     $19.50.

                                       60
<PAGE>




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 100,284. 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 or she 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 2001, each nonemployee director of Blue Valley received
options to purchase 3,000 shares of our



                                       61
<PAGE>


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 2001, 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, 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.







                                       62
<PAGE>



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......................      555,171 (1)      23.66 %
        Donald H. Alexander....................      147,032 (1)       6.27
        Wayne A. Henry, Jr.....................      119,880 (1)       5.11
        C. Ted McCarter........................       82,584 (1)       3.52
        Thomas A. McDonnell....................      139,952           5.96
        Mark A. Fortino........................       11,800 (1)       0.50
        Gregory J. Motley......................        1,000 (1)       0.04
        All directors and executive officers,
            9 in number, as a group............    1,070,019 (1)      45.59
</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, 49,160; Donald H. Alexander, 6,000; Wayne A. Henry, Jr.,
         11,500; C. Ted McCarter, 10,000; Mark A. Fortino, 6,800; Gregory J.
         Motley, 1,000; Ed Herman, 1,800; and Penny T. Hershman, 8,800.





                                       63
<PAGE>


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 December 31, 2001, the Bank had aggregate loans
outstanding to such persons of approximately $10.1 million, which represented
35.52% of our stockholders' equity of $28.5 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.






                                       64
<PAGE>


                                     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 Form 10K.

(b)      Reports on Form 8-K

         Registrant did not file any reports on Form 8-K during the fourth
         quarter of fiscal year 2001.

(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.



                                       65
<PAGE>


         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 BKD, LLP.



                                       66
<PAGE>





                                   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 25, 2002         By:  /s/ Robert D. Regnier
                                            ---------------------------
                                            Robert D. Regnier, President,
                                            Chief Executive Officer and Director

         Date:  March 25, 2002         By:  /s/ Mark A. Fortino
                                            ---------------------------
                                            Mark A. Fortino, Treasurer and
                                            Principal Finance and Accounting
                                            Officer




                                       67
<PAGE>




         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 25, 2002         By:  /s/ Robert D. Regnier
                                            ---------------------------
                                            Robert D. Regnier, President,
                                            Chief Executive Officer and Director

         Date:  March 26, 2002         By:  /s/ Donald H. Alexander
                                            ---------------------------
                                            Donald H. Alexander, Director

         Date:  March 27, 2002         By:  /s/ Wayne A. Henry, Jr.
                                            ---------------------------
                                            Wayne A. Henry, Jr., Director

         Date:  March 26, 2002         By:  /s/ C. Ted McCarter
                                            ---------------------------
                                            C. Ted McCarter, Director

         Date:  March 27, 2002         By:  /s/ Thomas A. McDonnell
                                            ---------------------------
                                            Thomas A. McDonnell, Director









                                       68
<PAGE>





                              BLUE VALLEY BAN CORP

                        DECEMBER 31, 2001, 2000 AND 1999


                                    CONTENTS



                                                                           Page
                                                                           ----

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


CONSOLIDATED FINANCIAL STATEMENTS

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









                                       F-1

<PAGE>







                         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, 2001 and 2000, and the related consolidated
statements of income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 2001. 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 auditing standards generally
accepted in the United States of America. 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, 2001 and 2000, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 2001
in conformity with accounting principles generally accepted in the United States
of America.





                                                 /s/ BKD, LLP


Kansas City, Missouri
February 1, 2002





                                      F-2
<PAGE>





                              BLUE VALLEY BAN CORP

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2001 AND 2000
                    (dollars in thousands, except share data)


                                     ASSETS

<TABLE>
<CAPTION>
                                                                   2001            2000
                                                                 --------        --------

<S>                                                              <C>             <C>
Cash and due from banks                                          $ 20,159        $ 13,720
Federal funds sold                                                  5,000          22,200
                                                                 --------        --------
              Cash and cash equivalents                            25,159          35,920

Available-for-sale securities                                      77,676          76,503
Held-to-maturity securities                                          --             2,000

Mortgage loans held for sale                                       41,853           1,207

Loans                                                             334,075         287,669
   Less allowance for loan losses                                   5,267           4,440
                                                                 --------        --------
              Net loans                                           328,808         283,229

Premises and equipment                                              8,079           6,591
Foreclosed assets held for sale, net                                   49             334
Interest receivable                                                 2,513           3,058
Deferred income taxes                                                 904             939
Prepaid expenses and other assets                                   2,072           2,041
Federal Home Loan Bank stock, Federal Reserve Bank stock,
   and other securities                                             3,477           1,550
Core deposit intangible asset, at amortized cost                    1,433           1,295
                                                                 --------        --------


              Total Assets                                       $492,023        $414,667
                                                                 ========        ========
</TABLE>





See Notes to Consolidated Financial Statements




                                      F-3
<PAGE>


                              BLUE VALLEY BAN CORP

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2001 AND 2000
                    (dollars in thousands, except share data)


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                        2001            2000
                                                                      --------        --------
<S>                                                                   <C>             <C>
LIABILITIES
   Demand deposits                                                    $ 74,229        $ 44,354
   Savings, NOW and money market deposits                              157,336         154,464
   Time deposits                                                       162,680         139,403
                                                                      --------        --------
                  Total Deposits                                       394,245         338,221

   Securities sold under agreements to repurchase                       17,173          15,299
   Short-term debt                                                        --             5,000
   Long-term debt                                                       36,118          16,768
   Guaranteed preferred beneficial interest in Company's
     subordinated debt                                                  11,500          11,500
   Advances from borrowers for taxes and insurance                         383           1,350
   Accrued interest and other liabilities                                4,079           2,714
                                                                      --------        --------
                  Total Liabilities                                    463,498         390,852
                                                                      --------        --------

STOCKHOLDERS' EQUITY
   Capital stock
     Common stock, par value $1 per share;
         Authorized 15,000,000 shares; issued and outstanding
         2001 - 2,175,176 shares; 2000 - 2,141,720 shares                2,175           2,142
   Additional paid-in capital                                            5,641           5,277
   Retained earnings                                                    19,878          15,935
   Accumulated other comprehensive income
     Unrealized appreciation on available-for-sale securities,
         net of income taxes of $553 in 2001 and $307
         in 2000                                                           831             461
                                                                      --------        --------
                  Total Stockholders' Equity                            28,525          23,815
                                                                      --------        --------

                  Total Liabilities and Stockholders' Equity          $492,023        $414,667
                                                                      ========        ========
</TABLE>






See Notes to Consolidated Financial Statements



                                      F-4
<PAGE>




                              BLUE VALLEY BAN CORP

                        CONSOLIDATED STATEMENTS OF INCOME

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                  (dollars in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                      2001            2000             1999
                                                                    --------        --------         --------
<S>                                                                 <C>             <C>              <C>
INTEREST INCOME

   Interest and fees on loans                                       $ 27,921        $ 26,733         $ 20,422
   Federal funds sold                                                    679             777              431
   Available-for-sale securities                                       4,422           3,566            2,755
   Held-to-maturity securities                                           119              41
                                                                    --------        --------         --------
              Total Interest Income                                   33,141          31,117           23,608
                                                                    --------        --------         --------

INTEREST EXPENSE

   Interest-bearing demand deposits                                      815             872              644
   Savings and money market deposit accounts                           4,846           5,726            3,156
   Other time deposits                                                 9,775           7,555            6,032
   Securities sold under repurchase agreements                           409             417              287
   Long-term debt and advances                                         2,549           2,126            1,085
                                                                    --------        --------         --------
              Total Interest Expense                                  18,394          16,696           11,204
                                                                    --------        --------         --------

NET INTEREST INCOME                                                   14,747          14,421           12,404

PROVISION FOR LOAN LOSSES                                              2,400           1,950            2,144
                                                                    --------        --------         --------

NET INTEREST INCOME AFTER
   PROVISION FOR LOAN LOSSES                                          12,347          12,471           10,260
                                                                    --------        --------         --------

NONINTEREST INCOME

   Service fees                                                        8,563           2,772            2,835
   Realized gains on sales of securities                                 500               0                3
   Other income                                                          203             284              186
                                                                    --------        --------         --------
              Total Noninterest Income                                 9,266           3,056            3,024
                                                                    --------        --------         --------

NONINTEREST EXPENSE

   Salaries and employee benefits                                     10,063           5,856            4,578
   Net occupancy expense                                               1,574           1,124              894
   Other operating expense                                             4,073           3,313            3,208
                                                                    --------        --------         --------
              Total Noninterest Expense                               15,710          10,293            8,680
                                                                    --------        --------         --------

INCOME BEFORE INCOME TAXES                                             5,903           5,234            4,604

PROVISION FOR INCOME TAXES                                             1,960           1,757            1,521
                                                                    --------        --------         --------

NET INCOME                                                             3,943           3,477            3,083
                                                                    --------        --------         --------

OTHER COMPREHENSIVE INCOME

   Unrealized appreciation (depreciation) on
     available-for-sale securities, net of income taxes
     (credit) of $246, $945 and $(871), respectively                     670           1,418           (1,307)

   Less: reclassification adjustment for realized gains
     (losses) included in net income, net of income taxes of
     $(200) and $1, for 2001 and 1999, respectively                      300                               (2)
                                                                    --------        --------         --------
COMPREHENSIVE INCOME                                                $  4,313        $  4,895         $  1,774
                                                                    ========        ========         ========

BASIC EARNINGS PER SHARE                                            $   1.82        $   1.62         $   1.45
                                                                    ========        ========         ========

DILUTED EARNINGS PER SHARE                                          $   1.77        $   1.59         $   1.42
                                                                    ========        ========         ========
</TABLE>


See Notes to Consolidated Financial Statements




                                      F-5
<PAGE>
                              BLUE VALLEY BAN CORP

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                    (dollars in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                         Accumulated
                                                             Additional                     Other
                                               Common         Paid-In        Retained   Comprehensive
                                                Stock         Capital        Earnings       Income          Total
                                               --------      ----------      --------   -------------     --------

<S>                                            <C>            <C>            <C>           <C>            <C>
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

   Change in unrealized appreciation
     (depreciation) on available-for-sale
     securities, net of income taxes
     of $(872)                                                                               (1,309)        (1,309)
                                               --------       --------       --------      --------       --------


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

   Change in unrealized appreciation
     (depreciation) on available-for-sale
     securities, net of income taxes of $945                                                  1,418          1,418
                                               --------       --------       --------      --------       --------

BALANCE, DECEMBER 31, 2000                     $  2,142       $  5,277       $ 15,935      $    461       $ 23,815
                                               ========       ========       ========      ========       ========

   Issuance of 33,456 shares of
     common stock                                    33            364                                         397

   Net income                                                                   3,943                        3,943

   Change in unrealized appreciation
     (depreciation) on available-for-sale
     securities, net of income taxes of $246                                                    370            370
                                               --------       --------       --------      --------       --------

BALANCE, DECEMBER 31, 2001                     $  2,175       $  5,641       $ 19,878      $    831       $ 28,525
                                               ========       ========       ========      ========       ========
</TABLE>





See Notes to Consolidated Financial Statements




                                      F-6
<PAGE>
                              BLUE VALLEY BAN CORP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                            2001             2000             1999
                                                                          --------         --------         --------
<S>                                                                       <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                           $  3,943         $  3,477         $  3,083
     Items not requiring (providing) cash:
         Depreciation and amortization                                         848              653              533
         Amortization of premiums and discounts
              on securities                                                     24               74               50
         Provision for loan losses                                           2,400            1,950            2,144
         Deferred income taxes                                                (212)             (43)            (497)
         Gain on sales of available-for-sale securities                       (500)            --                 (3)
         Gain on sale of premises and equipment                                 (5)            --               --
     Changes in:
         Accrued interest receivable                                           546           (1,019)            (538)
         Mortgage loans held for sale                                      (40,646)            (255)           1,002
         Prepaid expenses and other assets                                     (87)            (291)            (259)
         Accrued interest payable and other liabilities                      1,365              292              680
                                                                          --------         --------         --------
                  Net cash provided by (used in) operating activities      (32,324)           4,838            6,195
                                                                          --------         --------         --------

CASH FLOWS FROM INVESTING ACTIVITIES
     Net originations of loans                                             (53,295)         (41,375)         (92,460)
     Proceeds from sales of loan participations                              4,946            1,617            2,231
     Purchase of premises and equipment                                     (1,445)          (1,514)            (530)
     Proceeds from sale of premises and equipment                               11             --               --
     Proceeds from the sale of foreclosed assets                               655            1,024              455
     Purchases of held-to-maturity securities                                 --             (2,000)            --
     Proceeds from maturities of held-to-maturity securities                 2,000             --               --
     Proceeds from sales of available-for-sale securities                   16,400             --              2,003
     Proceeds from maturities of available-for-sale securities              33,875            3,355           10,105
     Purchases of available-for-sale securities                            (50,357)         (28,923)          (9,556)
     Purchases of Federal Home Loan Bank stock, Federal Reserve
         Bank stock, and other securities                                   (1,926)            (516)            (417)
     Net cash acquired in branch acquisition                                 1,604             --               --
                                                                          --------         --------         --------
                  Net cash used in investing activities                    (47,532)         (68,332)         (88,169)
                                                                          --------         --------         --------

CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in demand deposits, money market,
         NOW and savings accounts                                           31,279           35,470           66,381
     Net increase (decrease) in certificates of deposit                     22,162           34,606           (8,060)
     Repayments of long-term debt                                             (150)            (140)            (130)
     Proceeds from long-term debt                                           19,500            5,000             --
     Net proceeds from guaranteed preferred beneficial interest in
             Company's subordinated debt                                      --             10,587             --
     Net proceeds (payments) on short-term debt                             (5,000)         (12,450)          13,875
     Proceeds from sale of common stock                                        397               51               79
     Net increase in other borrowings                                        1,874            4,039            2,443
     Net increase (decrease) in advances from borrowers
         for taxes and insurance                                              (967)          (1,209)           1,847
                                                                          --------         --------         --------
                  Net cash provided by financing activities                 69,095           75,954           76,435
                                                                          --------         --------         --------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           (10,761)          12,460           (5,539)

CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR                                                      35,920           23,460           28,999
                                                                          --------         --------         --------

CASH AND CASH EQUIVALENTS,
     END OF YEAR                                                          $ 25,159         $ 35,920         $ 23,460
                                                                          ========         ========         ========

SUPPLEMENTAL CASH FLOWS INFORMATION
     Loans transferred to foreclosed assets held for sale                 $    370         $  1,172         $    595
     Interest paid                                                        $ 18,443         $ 16,077         $ 11,411
     Income taxes paid (net of refunds)                                   $  2,693         $  1,900         $  1,655
</TABLE>



See Notes to Consolidated Financial Statements




                                      F-7
<PAGE>




                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999



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 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 accounting
principles generally accepted in the United States of America 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>



                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


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, 2001 and 2000, 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) and
Federal Reserve Bank (FRB) systems, is required to maintain an investment in
capital stock of both the FHLB and FRB. No ready market exists for the either
stock, and the stocks have no quoted market value. Such stock is recorded at
cost and reported as other investments in the accompanying consolidated balance
sheets.




                                      F-9
<PAGE>


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


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>


                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


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, when in the opinion of
management, collection of interest or principal payments becomes doubtful.
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 their 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.

CORE DEPOSIT INTANGIBLE ASSETS

     Unamortized core deposit intangible assets aggregated $1,433,000 and
$1,295,000 (originally $2,286,000) at December 31, 2001 and 2000, respectively,
and have been amortized over a 15-year period using the straight-line method.
Amortization expense related to core deposit intangible assets was $152,000 for
each of the years 2001, 2000 and 1999.

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 2000 financial statements
to conform to the 2001 financial statement presentation. These reclassifications
had no effect on net income.





                                      F-11
<PAGE>



                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


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>
                                                         2001              2000              1999
                                                      ----------        ----------        ----------
                                                     (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<S>                                                   <C>               <C>               <C>
Net income                                            $    3,943        $    3,477        $    3,083
                                                      ----------        ----------        ----------

Average common shares outstanding                      2,165,030         2,141,523         2,131,372
Average common share stock options outstanding            57,136            49,782            34,636
                                                      ----------        ----------        ----------
Average diluted common shares                          2,222,166         2,191,305         2,166,008
                                                      ----------        ----------        ----------

        Basic earnings per share                      $     1.82        $     1.62        $     1.45
                                                      ==========        ==========        ==========


        Diluted earnings per share                    $     1.77        $     1.59        $     1.42
                                                      ==========        ==========        ==========
</TABLE>



                                      F-12
<PAGE>



                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999



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, 2001
                                            -------------------------------------------------------------
                                                              Gross            Gross
                                            Amortized       Unrealized       Unrealized       Approximate
                                              Cost            Gains            Losses         Fair Value
                                            ---------       ----------       -----------      -----------
                                                               (dollars in thousands)
<S>                                          <C>             <C>              <C>              <C>
     U.S. Treasury                           $  2,000        $     36         $   --           $  2,036
     U.S. Government agencies                  59,024           1,119             (129)          60,014
     State and political subdivisions          15,268             368              (10)          15,626
                                             --------        --------         --------         --------

                                             $ 76,292        $  1,523         $   (139)        $ 77,676
                                             ========        ========         ========         ========
</TABLE>


<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>

     Maturities of available-for-sale debt instruments at December 31, 2001:

<TABLE>
<CAPTION>
                                        Amortized     Approximate
                                           Cost       Fair Value
                                        ---------     -----------
                                         (dollars in thousands)
<S>                                      <C>            <C>
     In one year or less                 $ 3,755        $ 3,833
     After one through five years         52,392         53,264
     After five through ten years         19,846         20,280
     After ten years                         299            299
                                         -------        -------

                                         $76,292        $77,676
                                         =======        =======
</TABLE>




                                      F-13
<PAGE>




                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999




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>

     The Company held no held-to-maturity securities as of December 31, 2001.

     The book value and approximate fair value of securities pledged as
collateral to secure public deposits amounted to $35,298,000 at December 31,
2001 and $25,380,000 at December 31, 2000.

     The Company enters 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, 2001, 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
$17,246,000 and $13,245,000 during 2001 and 2000, and the maximum amounts
outstanding at any month-end were $20,862,000 and $16,650,000, respectively. The
book value and approximate fair value of securities pledged to secure agreements
to repurchase amounted to $27,413,000 and $21,155,000 at December 31, 2001 and
2000, respectively.

     Gross gains of $514,000 and $3,000 were realized in 2001 and 1999,
respectively, and gross losses of $14,000 were realized in 2001 resulting from
sales of available-for-sale securities.




                                      F-14
<PAGE>




                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 3:  LOANS AND ALLOWANCE FOR LOAN LOSSES

     Categories of loans at December 31, 2001 and 2000 include the following:

<TABLE>
<CAPTION>
                                                         2001            2000
                                                       --------        --------
                                                        (dollars in thousands)

<S>                                                    <C>             <C>
      Commercial                                       $ 85,311        $ 76,556
      Commercial real estate                             63,756          42,267
      Construction                                       94,158          60,225
      Residential real estate                            24,460          37,290
      Leases                                             24,079          25,143
      Personal                                           29,895          35,864
      Home equity                                        12,776          10,657
                                                       --------        --------

      Total loans                                       334,435         288,002
               Less: Unearned discount and fees             360             333
                     Allowance for loan losses            5,267           4,440
                                                       --------        --------

               Net loans                               $328,808        $283,229
                                                       ========        ========
</TABLE>

     Activity in the allowance for loan losses was as follows:

<TABLE>
<CAPTION>
                                                             2001            2000            1999
                                                            -------         -------         -------
                                                                    (dollars in thousands)

<S>                                                         <C>             <C>             <C>
        Balance, beginning of year                          $ 4,440         $ 3,817         $ 2,341
             Provision charged to expense                     2,400           1,950           2,144
             Losses charged off, net of recoveries
               of $363,000 $203,000 and $104,000
               for 2001, 2000 and 1999, respectively         (1,573)         (1,327)           (668)
                                                            -------         -------         -------

        Balance, end of year                                $ 5,267         $ 4,440         $ 3,817
                                                            =======         =======         =======
</TABLE>

     Impaired loans totaled $8,431,000 and $5,762,000 at December 31, 2001 and
2000, respectively, with related allowances for loan losses of $1,470,000 and
$1,368,000, respectively.

     Total interest income of $923,000 and $882,000 was recognized on average
impaired loans of $6,630,000 and $6,186,000 for 2001 and 2000, respectively.
Included in this total is cash-basis interest income of $202,000 and $72,000
recognized on impaired loans on nonaccrual during 2001 and 2000, respectively.




                                      F-15
<PAGE>




                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 4:  PREMISES AND EQUIPMENT

     Major classifications of these assets are as follows:

<TABLE>
<CAPTION>
                                              2001           2000
                                             -------        -------
                                             (dollars in thousands)

<S>                                          <C>            <C>
        Land                                 $ 1,577        $ 1,477
        Building and improvements              5,370          4,494
        Furniture and equipment                3,368          2,238
        Land improvements, net                   230            230
                                             -------        -------
                                              10,545          8,439
        Less accumulated depreciation          2,466          1,848
                                             -------        -------

        Total premises and equipment         $ 8,079        $ 6,591
                                             =======        =======
</TABLE>


NOTE 5:  INTEREST-BEARING DEPOSITS

     Interest-bearing time deposits in denominations of $100,000 or more were
$56,248,000 on December 31, 2001 and $50,593,000 on December 31, 2000.

     At December 31, 2001, the scheduled maturities of certificates of deposit
are as follows:

<TABLE>
<CAPTION>
                                        (dollars in thousands)
       <S>                                    <C>
        2002                                   $ 113,470
        2003                                      22,549
        2004                                       6,114
        2005                                       5,428
        2006 and thereafter                       15,119
                                               ---------

                                               $ 162,680
                                               =========
</TABLE>


                                      F-16
<PAGE>




                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999



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,
2001 are as follows:

<TABLE>
<CAPTION>
                                                    (dollars in thousands)
        <S>                                               <C>
        2002                                               $ 133
        2003                                                 138
        2004                                                 143
                                                           -----

        Future minimum lease receivable                    $ 414
                                                           =====
</TABLE>

     The Company leases space from others under noncancellable operating leases
expiring in various years through 2004. Consolidated rental and operating lease
expenses were $82,000 in 2001, $30,000 in 2000 and $24,200 in 1999. Minimum
rental commitments payable under noncancellable operating leases at December 31,
2001 are as follows:

<TABLE>
<CAPTION>
                                                   (dollars in thousands)
       <S>                                                <C>
        2002                                               $  95
        2003                                                  70
        2004                                                  32
                                                           -----

        Future minimum lease payable                       $ 197
                                                           =====
</TABLE>

NOTE 7:  INCOME TAXES

     The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
                                        2001            2000            1999
                                       -------         -------         -------
                                               (dollars in thousands)
        <S>                            <C>             <C>             <C>
        Taxes currently payable        $ 2,172         $ 1,800         $ 2,018
        Deferred income taxes             (212)            (43)           (497)
                                       -------         -------         -------

                                       $ 1,960         $ 1,757         $ 1,521
                                       =======         =======         =======
</TABLE>



                                      F-17
<PAGE>




                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 7:  INCOME TAXES (CONTINUED)

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

<TABLE>
<CAPTION>
                                                    2001            2000            1999
                                                   -------         -------         -------
                                                           (dollars in thousands)
        <S>                                        <C>             <C>             <C>
        Computed at the statutory
             rate (34%)                            $ 2,007         $ 1,780         $ 1,565
        Increase (decrease) resulting from:
             Tax-exempt interest                      (248)           (242)           (190)
             Stock options                             (59)             (2)            (22)

             State income taxes                        194             128             138
             Other                                      66              93              30
                                                   -------         -------         -------

        Actual tax provision                       $ 1,960         $ 1,757         $ 1,521
                                                   =======         =======         =======
</TABLE>

     The tax effects of temporary differences related to deferred taxes shown on
the December 31, 2001 and 2000 consolidated balance sheets are as follows:

<TABLE>
<CAPTION>
                                                                2001            2000
                                                               -------         -------
                                                               (dollars in thousands)

       <S>                                                    <C>             <C>
        Deferred tax assets:
             Allowance for loan losses                         $ 1,528         $ 1,349
             Accrued compensated absences                           47              64
             Accumulated depreciation on available-for-
                 sale securities
                                                               -------         -------
                                                                 1,575           1,413
                                                               -------         -------

        Deferred tax liabilities:
             Accumulated depreciation                              (52)            (26)
             Accumulated appreciation on available-for-
                 sale securities                                  (553)           (307)
             Other                                                 (66)           (141)
                                                               -------         -------
                                                                  (671)           (474)
                                                               -------         -------

                     Net deferred tax asset                    $   904         $   939
                                                               =======         =======
</TABLE>




                                      F-18
<PAGE>



                              BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 8:  SHORT-TERM DEBT

     Short-term debt at December 31, 2001 and 2000 consisted of the following
components:

<TABLE>
<CAPTION>
                                                    2001            2000
                                                  --------         ------
                                                   (dollars in thousands)
        <S>                                       <C>              <C>
        Federal Home Loan Bank advance (A)        $   --           $5,000
                                                  --------         ------

        Total short-term debt                     $   --           $5,000
                                                  ========         ======
</TABLE>

           (A)      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 was
                    7.170%.


NOTE 9:  LONG TERM DEBT

     Long-term debt at December 31, 2001 and 2000 consisted of the following
components:

<TABLE>
<CAPTION>
                                                     2001           2000
                                                   --------       --------
                                                   (dollars in thousands)
        <S>                                        <C>            <C>
        Note payable - other (A)                   $  1,618       $  1,768
        Note payable - bank (B)                       2,000          --
        Federal Home Loan Bank advances (C)          32,500         15,000
                                                   --------       --------

        Total long-term debt                       $ 36,118       $ 16,768
                                                   ========       ========
</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)      Borrowing under $10 million revolving line of credit;
                    interest only at the fed funds rate + 1.68% due quarterly
                    until 2003, when the outstanding principal balance is due;
                    collateralized by common stock of the Company's subsidiary
                    bank.

           (C)      Due in 2008, 2010 and 2011; 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 4.00% to 5.682%.


                                      F-19
<PAGE>






                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 9:  LONG TERM DEBT (CONTINUED)

     Aggregate annual maturities of long-term debt at December 31, 2001 are as
follows:

<TABLE>
<CAPTION>
                                (dollars in thousands)
        <S>                           <C>
        2002                          $    162
        2003                             2,175
        2004                               188
        2005                               203
        2006                               219
        Thereafter                      33,171
                                      --------

                                      $ 36,118
                                      ========
</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 is a 100% owned finance subsidiary of the
Company. The Trust also issued $355,672 of common securities to the Company and
used the total proceeds of $11,855,672 from the offering to purchase $11,855,672
in principal amount of 10.375% junior subordinated debentures of the Company due
September 30, 2030. Payments to the Company on the common securities are
subordinated to the trust preferred securities in the event of a default on the
junior subordinated debentures. The Company paid all underwriting discounts and
other operating expenses related to the offering and received net proceeds of
$10,578,000. 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 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 Company has fully
and unconditionally guaranteed the Trust's obligations under the trust preferred
securities on a subordinated basis to the extent that the funds are held by the
Trust. The trust preferred securities meet the criteria to be considered
regulatory capital.



                                      F-20
<PAGE>





                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


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,
2001, that the Company and the Bank meet all capital adequacy requirements to
which they are subject.

     As of December 31, 2001, 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
                                                                For Capital        Under Prompt Corrective
                                           Actual            Adequacy Purposes        Action Provisions
                                    ------------------       ------------------      -------------------
                                     Amount      Ratio        Amount      Ratio       Amount      Ratio
                                    --------     -----       --------     -----      ---------   -------
     AS OF DECEMBER 31, 2001:                                    (dollars in thousands)
<S>                                 <C>          <C>        <C>          <C>        <C>           <C>

     Total Capital
     (to Risk Weighted Assets)
              Consolidated          $ 42,763     10.69%      $ 31,994     8.00%         N/A
                                    ========     =====       ========     ====
              Bank Only             $ 41,609     10.54%      $ 31,586     8.00%      $  39,483     10.00%
                                    ========     =====       ========     ====       =========     =====

     Tier 1 Capital
     (to Risk Weighted Assets)
              Consolidated          $ 35,492      8.87%      $ 15,997     4.00%         N/A
                                    ========     =====       ========     ====
              Bank Only             $ 36,669      9.29%      $ 15,793     4.00%      $  23,690      6.00%
                                    ========     =====       ========     ====       =========     =====

     Tier 1 Capital
     (to Average Assets)
              Consolidated          $ 35,492      7.17%      $ 19,812     4.00%         N/A
                                    ========     =====       ========     ====
              Bank Only             $ 36,669      7.48%      $ 19,612     4.00%      $  24,515      5.00%
                                    ========     =====       ========     ====       =========     =====
</TABLE>




                                      F-21
<PAGE>





                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 11:  REGULATORY MATTERS (CONTINUED)

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

     <S>                            <C>          <C>         <C>          <C>        <C>          <C>
     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>


     The Bank is subject to certain restrictions on the amounts of dividends
that it may declare without prior regulatory approval. At December 31, 2001,
approximately $10,023,000 of retained earnings were available for dividend
declaration without prior regulatory approval.


NOTE 12:  TRANSACTIONS WITH RELATED PARTIES

     At December 31, 2001 and 2000, 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 $10,133,000 and
$2,128,000, respectively. Related party transactions for 2001 and 2000 were as
follows:

<TABLE>
<CAPTION>
                                             2001              2000
                                           --------          --------
                                            (dollars in thousands)
        <S>                                <C>               <C>
        Balance, beginning of year         $  2,128          $  1,384
        New loans                             8,301             1,389
        Repayments                             (296)             (645)
                                           --------          --------

        Balance, end of year               $ 10,133          $  2,128
                                           ========          ========
</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>


                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


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 2001, 2000 and 1999 were $292,000,
$271,000 and $216,000, 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, 2001, the Company had 100,284 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, 2001, 2000 and 1999,
and changes during the years then ended, is presented below:

<TABLE>
<CAPTION>
                                                  2001                            2000                            1999
                                        -------------------------       -------------------------       -------------------------
                                                         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           224,716         $ 12.86         157,216         $ 11.21         101,340         $  9.18
Granted                                   73,500           19.50          71,500           16.50          64,000           14.38
Exercised                                (32,456)          11.70          (4,000)          12.81          (7,324)          10.75
Forfeited                                (30,000)          15.37               0                            (800)
                                        --------         -------        --------         -------        --------         -------

Outstanding, end of year                 235,760         $ 14.77         224,716         $ 12.86         157,216         $ 11.21
                                        ========         =======        ========         =======        ========         =======

Options exercisable, end of year         171,760         $ 13.44         150,216         $ 11.57          88,860         $  9.91
                                        ========         =======        ========         =======        ========         =======
</TABLE>

     The weighted-average remaining contractual life at December 31, 2001 was
8.93 years. Exercise prices ranged from $3.75 to $19.50.




                                      F-23
<PAGE>


                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


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>
                                                       2001          2000          1999
                                                      ------        ------        ------
                                                           (dollars in thousands)
<S>                                                   <C>           <C>           <C>
Dividend per Share                                    $ --          $ --          $ --
Risk-Free Interest Rate                                  4%           6%           6%
Expected Life of Options                              2 years       2 years       2 years
Weighted-average fair value of options granted
     during the year                                  $ 108         $ 130         $ 101
                                                      =====         =====         ====
</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>
                                                        2001           2000           1999
                                                       -------        -------        -------
                                                              (dollars in thousands)
<S>                                <C>                 <C>            <C>            <C>
Net income                         As reported         $ 3,943        $ 3,477        $ 3,083
                                   Pro forma           $ 3,864        $ 3,401        $ 3,023

Basic earnings per share           As reported         $  1.82        $  1.62        $  1.45
                                   Pro forma           $  1.78        $  1.59        $  1.42

Diluted earnings per share         As reported         $  1.77        $  1.59        $  1.42
                                   Pro forma           $  1.74        $  1.55        $  1.40

</TABLE>



                                      F-24
<PAGE>




                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 15:  OTHER INCOME/EXPENSE

     Other operating expenses consist of the following:

<TABLE>
<CAPTION>
                                    2001            2000            1999
                                   -------         -------         -------
                                            (dollars in thousands)
        <S>                        <C>             <C>             <C>
        Advertising                $   732         $   514         $   475
        Data processing                441             397             352
        Professional fees              379             289             259
        Other expense                2,521           2,113           2,122
                                   -------         -------         -------

             Total                 $ 4,073         $ 3,313         $ 3,208
                                   =======         =======         =======
</TABLE>

     Other income consists of the following:

<TABLE>
<CAPTION>
                               2001          2000          1999
                               -----         -----         -----
                                    (dollars in thousands)
        <S>                    <C>           <C>           <C>
        Rental income          $ 140         $ 170         $ 143
        Other income              63           114            43
                               -----         -----         -----

             Total             $ 203         $ 284         $ 186
                               =====         =====         =====
</TABLE>



                                      F-25
<PAGE>




                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 16:  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>



                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 16:  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>





                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999

NOTE 16:  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)


<TABLE>
<CAPTION>
                                                                             2001                           2000
                                                                  -------------------------       -------------------------
                                                                  Carrying          Fair          Carrying          Fair
                                                                   Amount           Value           Amount          Value
                                                                  ---------       ---------       ---------       ---------
     Financial assets:                                                              (dollars in thousands)
<S>                                                               <C>             <C>             <C>             <C>
               Cash and cash equivalents                          $  25,159       $  25,159       $  35,920       $  35,920
               Available-for-sale securities                         77,676          77,676          76,503          76,503
               Held-to-maturity securities                                0               0           2,000           2,014
               Mortgage loans held for sale                          41,853          41,862           1,207           1,207
               Interest receivable                                    2,513           2,513           3,058           3,058
               Loans, net of allowance for loan losses              328,808         335,539         283,229         283,476

     Financial liabilities:
               Deposits                                             394,245         394,740         338,221         334,186
               Advances from borrowers for taxes
                   and insurance                                        383             383           1,350           1,350
               Securities sold under agreements to                   17,173          17,173          15,299          15,302
             repurchase
               Short-term debt                                            0               0           5,000           5,036
               Long-term debt                                        36,118          36,094          16,768          16,707
               Guaranteed preferred beneficial interest in
                     Company's subordinated debt                     11,500          12,734          11,500          12,061
               Interest payable                                       1,484           1,484           1,533           1,533

     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 17:  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>




                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 17:  COMMITMENTS AND CREDIT RISKS (CONTINUED)

     At December 31, 2001 and 2000, the Company had outstanding commitments to
originate loans aggregating approximately $46,467,000 and $40,692,000,
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 $1,110,000 and $6,836,000 at December 31, 2001 and
2000, 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 $84,280,000
and $8,609,000 and mortgage loans held for sale amounted to $41,853,000 and
$1,207,000 at December 31, 2001 and 2000, respectively. Related forward
commitments to sell mortgage loans amounted to approximately $126,133,000 and
$9,816,000 at December 31, 2001 and 2000, 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 $3,232,000
and $3,439,000 at December 31, 2001 and 2000, 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, 2001 and 2000, unused lines of credit borrowings aggregated
approximately $112,428,000 and $80,051,000, respectively.



                                      F-29
<PAGE>




                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999

NOTE 17:  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, 2001 and 2000, federal
funds sold totaling $5,000,000 and $22,200,000, respectively, were loaned to
various banks, as approved by the Board of Directors, with the largest balance
at any one bank being $5,000,000 and $13,800,000 at December 31, 2001 and 2000,
respectively.


NOTE 18:  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>
                                                          2001                                            2000
                                       -------------------------------------------     -------------------------------------------
                                       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    $  3,063    $  3,184    $  3,051    $  3,049    $  3,260    $  2,997    $  3,070    $  3,144
      Noninterest income                  4,197       2,586       1,585         898         785         817         779         675
      Noninterest expense                 4,829       4,184       3,517       3,180       2,711       2,589       2,395       2,598
                                       --------    --------    --------    --------    --------    --------    --------    --------
Income before income taxes                2,431       1,586       1,119         767       1,334       1,225       1,454       1,221
Income taxes                                805         544         356         255         450         411         508         388
                                       --------    --------    --------    --------    --------    --------    --------    --------
      Net income                       $  1,626    $  1,042    $    763    $    512    $    884    $    814    $    946    $    833
                                       ========    ========    ========    ========    ========    ========    ========    ========

Net Income per Share Data
      Basic                            $   0.75    $   0.48    $   0.35    $   0.24    $   0.41    $   0.38    $   0.44    $   0.39
                                       ========    ========    ========    ========    ========    ========    ========    ========
      Diluted                          $   0.72    $   0.47    $   0.35    $   0.23    $   0.40    $   0.37    $   0.43    $   0.38
                                       ========    ========    ========    ========    ========    ========    ========    ========

Balance Sheet
      Total assets                     $492,023    $479,062    $451,065    $440,779    $414,667    $397,644    $353,880    $333,662
      Total loans, net                  328,808     315,480     309,906     294,306     283,229     278,994     263,491     250,330
      Shareholders' equity               28,525      27,340      25,791      24,874      23,815      21,975      20,620      19,627
</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 19:  SIGNIFICANT ESTIMATES AND CONCENTRATIONS

     Accounting principles generally accepted in the United States of America
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>



                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 20:  FUTURE CHANGES IN ACCOUNTING PRINCIPLE

     The Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets,"
on January 1, 2002. This Statement establishes new financial accounting and
reporting standards for acquired goodwill and other intangible assets. Goodwill
shall not be amortized after December 31, 2001. It shall be tested for
impairment at a reporting unit level, under certain circumstances. Intangible
assets with definite useful lives shall be amortized over their respective
estimated useful lives to the estimated residual values, and reviewed for
impairment. In connection with the transitional goodwill impairment evaluation,
SFAS 142 requires the Company to assess whether there is an indication that
goodwill is impaired as of the date of adoption. If the carrying amount of
reporting unit goodwill exceeds the implied fair value of that goodwill, an
impairment loss shall be recognized in an amount equal to that excess. As of the
date of adoption, the Company had identifiable core deposit intangible assets of
approximately $1,433,000 that is subject to the transition provisions of SFAS
142. Amortization expense related to intangible assets was $152,000 for the
years ended December 31, 2001 and 2000. The initial adoption of this Standard
has not had a material impact on the financial statements of the Company.

     The FASB recently adopted SFAS 143, "Accounting for Asset Retirement
Obligations." This Statement requires an entity to record a liability for an
obligation associated with the retirement of an asset at the time the liability
is incurred by capitalizing the cost as part of the carrying value of the
related asset and depreciating it over the remaining useful life of that asset.
SFAS 143 is effective for Blue Valley's fiscal year ending December 31, 2002.
The adoption of SFAS 143 is not expected to have a material impact on the
financial statements.

     The FASB recently adopted SFAS 144, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This Statement
addresses how and when to measure impairment on long-lived assets and how to
account for long-lived assets that an entity plans to dispose of either through
sale, abandonment, exchange or distribution to owners. The Statement also
requires expected future operating losses from discontinued operations to be
recorded in the period in which the losses are incurred rather than the
measurement date. SFAS is effective for Blue Valley's fiscal year ending
December 31, 2002. The adoption of this statement is not expected to have a
material impact on the financial statements.



                                      F-31
<PAGE>


                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 21:  CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

                            CONDENSED BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000
<TABLE>
<CAPTION>

                                                                                     2001          2000
                                                                                   --------      --------
                                                                                      (In thousands)
<S>                                                                                <C>           <C>
ASSETS
     Cash and cash equivalents                                                     $    301      $  1,291
     Investments in subsidiaries:
         Bank of Blue Valley                                                         38,933        31,344
         Blue Valley Building Corp.                                                   1,978         1,516
         BVBC Capital Trust I                                                           356           356
     Loans                                                                                0           300
     Other assets                                                                     1,444         1,545
                                                                                   --------      --------

              Total Assets                                                         $ 43,012      $ 36,352
                                                                                   ========      ========

LIABILITIES
     Long-term debt                                                                $  2,000
     Guaranteed preferred beneficial interest in
            Company's subordinated debt                                              11,856      $ 11,856
     Other liabilities                                                                  631           681
                                                                                   --------      --------
              Total Liabilities                                                      14,487        12,537
                                                                                   --------      --------

STOCKHOLDERS' EQUITY
     Common stock                                                                     2,175         2,142
     Additional paid-in capital                                                       5,641         5,277
     Undivided profits                                                               19,878        15,935
     Unrealized appreciation  on available-for-sale securities,
         net of income taxes of $553 and $307 at 2001 and 2000, respectively            831           461
                                                                                   --------      --------
              Total Stockholders' Equity                                             28,525        23,815
                                                                                   --------      --------

              Total Liabilities and Stockholders' Equity                           $ 43,012      $ 36,352
                                                                                   ========      ========
</TABLE>



                                      F-32
<PAGE>





                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999

NOTE 21:  CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) (CONTINUED)

                         CONDENSED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                2001           2000           1999
                                                              --------       --------       --------
                                                                          (In thousands)
<S>                                                           <C>            <C>            <C>
Income
     Dividends from subsidiaries                              $     37       $    616       $    695
     Other income                                                   29             30              5
                                                              --------       --------       --------
                                                                    66            646            700

Expenses                                                         1,375            918            379
                                                              --------       --------       --------

Income (loss) before income taxes and equity in
     undistributed net income of subsidiaries                   (1,309)          (272)           321
Credit for income taxes                                           (446)          (297)          (128)
                                                              --------       --------       --------

Income (loss) before equity in undistributed net income
     of subsidiaries                                              (863)            25            449
Equity in undistributed net income of subsidiaries               4,806          3,452          2,634
                                                              --------       --------       --------

Net income                                                    $  3,943       $  3,477       $  3,083
                                                              ========       ========       ========
</TABLE>


                                      F-33
<PAGE>

                             BLUE VALLEY BAN CORP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999


NOTE 21:  CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) (CONTINUED)

                       CONDENSED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                2001            2000            1999
                                                              ---------       ---------       ---------
                                                                            (In thousands)

<S>                                                           <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                               $   3,943       $   3,477       $   3,083
     Items not requiring (providing) cash:
         Deferred income taxes                                      181            (297)           (128)
         Equity in undistributed income of subsidiaries          (4,806)         (3,452)         (2,634)
     Changes in:
         Other assets                                               (80)             (1)             (3)
         Other liabilities                                          (50)            240             146
                                                              ---------       ---------       ---------
              Net cash provided by (used in)
                  operating activities                             (812)            (33)            464
                                                              ---------       ---------       ---------

CASH FLOW FROM INVESTING ACTIVITIES
     Capital contributed to subsidiary                           (2,875)         (2,000)         (4,500)
     Net collections (originations) of loans                        300                            (100)
                                                              ---------       ---------       ---------
              Net cash used in investing activities              (2,575)         (2,000)         (4,600)
                                                              ---------       ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES
     Repayments of long-term debt                                                (7,450)           (625)
     Proceeds from long-term debt                                 2,000                           4,500
     Net proceeds from guaranteed preferred beneficial
          interest in Company's subordinated debt                                10,587
     Proceeds from sale of common stock                             397              51              79
                                                              ---------       ---------       ---------
              Net cash provided by financing activities           2,397           3,188           3,954
                                                              ---------       ---------       ---------

INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                              (990)          1,155            (182)

CASH AND CASH EQUIVALENTS,
     BEGINNING OF YEAR                                            1,291             136             318
                                                              ---------       ---------       ---------

CASH AND CASH EQUIVALENTS,
     END OF YEAR                                              $     301       $   1,291       $     136
                                                              =========       =========       =========
</TABLE>




                                      F-34