U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the Year ended March 31, 2001
                                           --------------

                        Commission file number 000-24793
                                               ---------

                           CGB&L FINANCIAL GROUP, INC.
                     ---------------------------------------
                 (Name of small business issuer in its charter)

                     Delaware                          37-1374123
           -----------------------------           -------------------
           (State or other jurisdiction of           (IRS Employer
           incorporation or organization)          Identification No.)

        P.O. Box 680, 229 E. SOUTH ST., Cerro Gordo, Illinois 61818-0680
        ------------------------------------------------------ ----------
               (Address of principal executive offices) (Zip Code)

          Issuer's telephone number, including area code (217) 763-2911
                                                         --------------
                    Securities registered under Section 12(b)
                            of the Exchange Act: None
                                                 ----
                    Securities registered under Section 12(g)
                              of the Exchange Act:

                     Common Stock: par value $0.01 per share
                     ---------------------------------------
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]


Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation SB contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB.   [X]


                                        1
<PAGE>


            State issuer's revenues for its most recent fiscal year.
                                    $657,598
                                    --------
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, i.e., persons other than directors and executive officers of the
Registrant, at May 31, 2001 was $1,577,123. For purposes of this determina-tion
only, directors and executive officers of the Registrant have been presumed to
be affiliates. The above market value is based upon $23.00 per share, which
represents the approximate purchase price per share to be paid in connection
with the Corporation's recently announced proposed merger agreement with Golden
National Acquisition Corporation.

The Registrant had 97,063 shares of Common Stock outstanding, for ownership
purposes, at March 31, 2001.

Transitional Small Business Disclosure Format: Yes [ ] No [X]

The Exhibit Index is located at pages 63-64.


                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None


                                TABLE OF CONTENTS

PART I
                                                                    PAGE

Item 1.  Description of Business . . . . . . . . . . . . . . . . . .   3

Item 2.  Description of Property . . . . . . . . . . . . . . . . . .  30

Item 3.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .  30

Item 4.  Submission of Matters to a
          Vote of Security Holders . . . . . . . . . . . . . . . . .  30

PART II

Item 5.  Market for Common Equity and
          Related Stockholder Matters. . . . . . . . . . . . . . . .  30

Item 6.  Management's Discussion
          and Analysis or Plan of Operation. . . . . . . . . . . . .  32

Item 7.  Financial Statements. . . . . . . . . . . . . . . . . . . .  34

Item 8.  Changes In and Disagreements with Accountants
          on Accounting and Financial Disclosure . . . . . . . . . .  56


                                        2


<PAGE>


PART III

Item 9.  Directors, Executive Officers, Promoters and
          Control Persons; Compliance with Section
          16(a) of the Exchange Act. . . . . . . . . . . . . . . . .  55

Item 10. Executive Compensation. . . . . . . . . . . . . . . . . . .  56

Item 11. Security Ownership of Certain Beneficial
          Owners and Management. . . . . . . . . . . . . . . . . . .  60

Item 12. Certain Relationships and Related Transactions. . . . . . .  63

Item 13. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .  63

             SIGNATURES  . . . . . . . . . . . . . . . . . . . . . .  66

                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

GENERAL

   CGB&L Financial Group, Inc. ("CGB&L" or "the Company") was incorporated on
May 21, 1998 and on September 22, 1998 acquired all of the outstanding shares of
common stock of Cerro Gordo Building and Loan, s.b., Cerro Gordo, Illinois, (the
"Building & Loan") upon the Building & Loan's conversion from a state chartered
mutual savings bank to a state chartered stock savings bank (the "Conversion").
CGB&L purchased 100% of the outstanding capital stock of the Building & Loan
using 50% of the net proceeds from CGB&L's initial stock offering which was
completed on September 22, 1998. CGB&L sold 99,000 shares of common stock in the
initial offering at $10 per share, including 7,919 shares purchased by the
Building & Loan's Employee Stock Ownership Plan ("ESOP"). The Building & Loan
acquired the ESOP shares with proceeds from a CGB&L loan totaling $79,190. The
net proceeds of the offering totaled $699,293: $990,000 less $290,707 in
underwriting costs and other conversion expenses. CGB&L began trading on the
Over The Counter Bulletin Board on September 23, 1998 under the symbol "CGBL".

   The acquisition of the Building & Loan by CGB&L was accounted for as a
"pooling-of-interests" under generally accepted accounting principles. The
application of the pooling-of-interests method records the assets and
liabilities of the merged companies on a historical cost basis with no goodwill
or other intangible assets being recorded.

   CGB&L's assets at March 31, 2001 consist primarily of the investment in the
Building & Loan of $1,374,207, cash and cash equivalents of $109,098 and
interest bearing time deposits of $100,000. CGB&L does not transact any other
material business except through its subsidiary, the Building & Loan.

   On February 16, 2001, the Company's Board of Directors approved an agreement
and plan of merger with Golden National Acquisition Corporation ("Golden
National") and on May 30, 2001 the Company's shareholders approved the merger.
Under the terms of this agreement, each Company shareholder will receive
approximately $23 per share in exchange for each share of the


                                       3
<PAGE>


Company's common stock on the date of the merger. It had originally been
anticipated that this transaction would be completed during the second quarter
of 2001. However, it is subject to several other conditions including approval
by various regulatory authorities. It now appears the transaction will be
completed during the third quarter of 2001 due to continued regulatory review.

BUSINESS OF THE BUILDING & LOAN

   The Building & Loan was originally chartered as a state-chartered savings and
loan association in 1886 and converted to a state-chartered savings bank in
1992. Prior to changing its name to Cerro Gordo Building and Loan, s.b on
January 1, 1993 the institution operated as Cerro Gordo Building and Loan
Association.

   The Building & Loan's primary market area consists of a ten-mile radius of
Cerro Gordo, Illinois, which includes portions of the counties of Piatt, Macon,
and Moultrie. Cerro Gordo has a population of approximately 1,500. The primary
employers located in and around Cerro Gordo include the Cerro Gordo School
District, Bridgestone/Firestone, Inc., Caterpillar, Inc., Archer Daniels
Midland, and agricultural related businesses.

   The Building & Loan maintains one office in Cerro Gordo and provides savings
accounts, certificates of deposit and mortgage loans with an emphasis on one- to
four-family residential mortgage loans. At March 31, 2001, the Building & Loan
had total assets, liabilities, and stockholders' equity of $8,313,736,
$6,674,882, and $1,567,301 respectively.

   The Building & Loan's principal business consists of the acceptance of retail
deposits from the residents and small businesses surrounding its office and the
investment of those deposits, together with funds generated from operations,
primarily in one- to four-family residential mortgage loans.
The Building & Loan also invests, to a lesser extent, in multi-family mortgage
loans, commercial real estate loans, construction loans, and consumer (share)
loans.

   The Building & Loan's revenues are derived principally from interest on its
mortgage and share loans, and, to a lesser extent, interest and dividends on its
interest bearing deposits and securities. The Building & Loan's primary sources
of funds are deposits, principal and interest payments and principal prepayments
on loans, and proceeds from Federal Home Loan Bank ("FHLB") advances.


                                        4
<PAGE>


SELECTED FINANCIAL INFORMATION OF CGB&L

   The following table sets forth certain selected financial data for CGB&L on a
consolidated basis. This summary has been derived from, and should be read in
conjunction with, the financial statements of CGB&L and the related notes
thereto and management's discussion included elsewhere in this report.


FINANCIAL DATA:
                                                      At March 31
                                            ------------------------------
                                               2001                2000
                                            ----------          ----------
Total assets............................... $8,313,736          $7,981,684
Cash and cash equivalents..................    602,773             512,729
Interest-bearing time deposits.............    392,000             590,000
Investment securities available for sale...    241,693             163,317
Loans, net.................................  6,930,741           6,591,500
Federal Home Loan Bank stock...............     66,400              55,100
Deposits...................................  5,533,382           5,265,067
Long-term debt.............................  1,000,000           1,000,000
Total Stockholders' equity.................  1,567,301           1,586,663



OPERATING DATA:                          For the Fiscal Year Ended March 31,
                                         -----------------------------------
                                               2001               2000
                                            ----------         ----------
Total interest income...................... $  628,652         $  629,303
Total interest expense.....................    357,049            322,918
                                            ----------         ----------
Net interest income........................    271,603            306,385
Provision for loan losses..................         --                 --
                                            ----------         ----------
Net interest income after
 provision for loan loss...................    271,603            306,385
Other income...............................     28,946              4,177
Other expenses.............................    351,336            273,040
                                            ----------         ----------
Income (loss) before income tax............    (50,787)            37,522
Income tax expense.........................     11,886              7,414
                                            ----------         ----------
Net income (loss).......................... $  (62,673)            30,108
                                            ==========         ==========
OTHER DATA:
Number of real estate loans outstanding....        196                209
Number of deposit accounts.................        619                639


                                        5
<PAGE>


KEY OPERATING RATIOS:
The table below sets forth certain
 performance ratios of CGB&L.             For the Fiscal Year Ended March 31,
                                          -----------------------------------
                                                   2001                 2000
                                                   ----             --------
Return on assets (net income (loss) divided
  by average total assets).....................  (0.77%)               0.38%
Return on average equity (net income (loss)
  divided by average equity)...................  (3.99%)               1.84%
Average equity to average assets...............  19.36%               20.69%
Interest rate spread (difference
  between average yield on interest
  earning assets and average cost of
  interest bearing liabilities)................   2.23%                2.67%
Net interest margin (net interest
  income as a percentage of average
  interest earning assets).....................   3.39%                3.88%
Non-interest expense to average assets.........   4.31%                3.46%
Average interest-earning assets to
  interest bearing liabilities................. 125.96%              129.90%
Allowance for loan losses to
  total loans at end of period.................   0.47%                0.50%
Net charge offs to average outstanding
  loans during the period......................    N/A                  N/A
Ratio of nonperforming assets
  To total assets (1)..........................   0.14%                1.70%

--------------------------------
(1)      Nonperforming assets include non-accrual loans, accruing loans
         delinquent 90 days or more and real estate owned.


                                        6
<PAGE>


AVERAGE BALANCE SHEET

   The following table presents the average balance sheet for CGB&L for the
years ended March 31, 2001 and 2000, the interest on interest-earning assets and
interest-bearing liabilities and the related average yield or cost. The average
balances are derived from average monthly balances. The yields or costs are
calculated by dividing income or expense by the average balance of assets or
liabilities, respectively, for the periods shown except where noted otherwise.
The yields and costs include fees which are considered adjustments to yields.
<TABLE>
<CAPTION>
                                             AT MARCH 31,                          YEAR ENDED MARCH 31,
                                             -----------    -------------------------------------------------------------------
                                                 2001                     2001                               2000
                                               -------      ------------------------------     --------------------------------
                                                                                   AVERAGE                             AVERAGE
                                                            AVERAGE                 YIELD/     AVERAGE                  YIELD/
                                                 RATE       BAL.(5)       INT.       RATE      BAL.(5)       INT.        RATE
                                               -------      -------     -------    -------     -------     -------      -------
                                                                                  (DOLLARS IN THOUSANDS)
<S>                                               <C>       <C>         <C>           <C>      <C>         <C>            <C>
INTEREST-EARNING ASSETS:
 LOANS, NET (1)..............................     8.11%     $ 6,877     $   562       8.17%(4) $ 6,309     $   550        8.72%(4)
   INT-BEARING DEPOSITS WITH
    FINANCIAL INSTITUTIONS...................     5.59          924          57       6.17%      1,332          73        5.48%
  SECURITIES.................................     1.25          228          10       4.39%        192           6        3.13%
                                                            -------     -------                -------     -------
TOTAL INTEREST-EARNING ASSETS................     7.86        8,029         629       7.83%      7,833         629        8.03%
                                                                        -------                            -------
   NON-INTEREST-EARNING ASSETS...............                   119                                 54
                                                            -------                            -------
TOTAL ASSETS.................................               $ 8,148                            $ 7,887
                                                            =======                            =======
INTEREST-BEARING LIABILITIES:
  DEPOSITS:
    SAVINGS..................................     2.50      $   388          10       2.58     $   398          10        2.51
    CERTIFICATES.............................     6.14        4,986         283       5.68       4,815         264        5.48
                                                            -------     -------                -------     -------
    TOTAL DEPOSITS...........................     5.88        5,374         293       5.46       5,213         274        5.26
  FHLB ADVANCES..............................     6.29        1,000          64       6.40         817          49        6.00
                                                            -------     -------                -------     -------
TOTAL INTEREST-BEARING
  LIABILITIES................................     6.00        6,374         357       5.60       6,030         323        5.36
                                                            -------     -------                -------     -------


NON-INTEREST-BEARING LIABILITIES                                197                                225
                                                            -------                            -------
  TOTAL LIABILITIES..........................                 6,571                              6,255

  STOCKHOLDERS' EQUITY   ....................                 1,577                              1,632
                                                            -------                            -------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY.....               $88,148                            $ 7,887
                                                            =======                            =======
NET INTEREST INCOME;
  INTEREST RATE SPREAD (2)...................     1.86%                 $   272       2.23%                $   306        2.67%
                                               =======                  =======    =======                 =======     =======
NET INTEREST MARGIN (3)......................     2.99%                               3.39%                               3.88%
                                               =======                             =======                             =======
RATIO OF AVERAGE INT-EARNING
 ASSETS TO INT-BEARING LIABILITIES              126.03%                             125.96%                             129.90%
                                               =======                             =======                             =======
----------------------------------
</TABLE>
     (1)   Amount is net of deferred loan fees, loan discounts and premiums,
           loans in process, allowance for loan losses and nonperforming loans.
     (2)   Net interest rate spread represents the difference between the yield
           on average interest-earning assets and the cost of average
           interest-bearing liabilities.
     (3)   Net interest margin represents net interest income divided by average
           interest-earning assets.
     (4)   Loan fees included in interest income were $22,811 and $37,199 for
           2001 and 2000, respectively.
     (5)   Average balances are based on month-end balances.


                                        7
<PAGE>


    RATE/VOLUME ANALYSIS - The following table describes the extent to which
changes in interest rates and changes in the volume of interest-earning assets
and interest-bearing liabilities have affected CGB&L's interest income and
expense during the periods indicated. For each category of interest-earning
assets and interest-bearing liabilities, information is provided on changes
attributable to (i) changes in volume (change in volume multiplied by prior
rate), (ii) changes in rate (change in rate multiplied by prior volume); and
(iii) the total change in rate and volume. The combined effect of changes in
both rate and volume has been allocated proportionately to the change due to
volume and the change due to rate, based on the absolute value of each to the
total.
<TABLE>
<CAPTION>
                                                                     ------------------------               ------------------------
                                                                       Year Ended March 31,                   Year Ended March 31,
                                                                     ------------------------               ------------------------
                                                                        2001    vs.   2000                     2000    vs.    1999
                                                                     ------------------------               ------------------------
                                                                        Increase (Decrease)                   Increase (Decrease)
                                                                               Due to                                Due to
                                                                     ------------------------               ------------------------
                                                                     Volume      Rate     Net               Volume     Rate     Net
                                                                     ------      ----     ---               ------     ----     ---
                                                                            (In Thousands)                         (In Thousands)
<S>                                                                     <C>     <C>       <C>                  <C>     <C>      <C>
Interest-earning assets:

  Loans, net.........................................................   $48     ($36)     $12                  $61     ($18)    $43

  Interest-bearing deposits with
    financial institutions...........................................   (24)       8      (16)                  14       (3)     11

  Securities.........................................................     1        3        4                   --        1       1

  Total change in interest income....................................   $16     $(16)      $0                  $76     ($21)    $55

Interest-bearing liabilities:

  Deposits:

  Savings............................................................     0        0        0                   (2)      (2)     (4)

  Certificates.......................................................    10        9       19                    9       (7)      2

  FHLB advances......................................................    12        3       15                   13       (3)     10

  Total change in
    interest expense.................................................    19       15       34                   17       (9)      8

Net change in net interest income....................................   ($3)    ($31)    ($34)                 $60     ($13)    $47
</TABLE>

                                        8
<PAGE>


INVESTMENT ACTIVITIES

   Under applicable regulations of the Commissioner, the Building & Loan has the
authority to invest in various types of liquid assets, including United States
Treasury obligations, obligations of various Federal agencies and corporations
and of state and municipal governments, Federal Home Loan Bank of Chicago stock,
and certificates of deposit, demand or savings accounts or other insured
obligations of federally insured financial institutions. Subject to various
restrictions, the Building & Loan may also invest a portion of its assets in
investment grade commercial paper and debt securities.

   Investment decisions are made by the C.E.O. of CGB&L in accordance with an
investment policy adopted by the Board of Directors of CGB&L. Under the
investment policy in effect as of the date hereof, CGB&L is permitted to invest
in U.S. treasury bills, notes and bonds, securities backed by the full faith and
credit of the federal government or federal agencies, state, county and
municipal securities that meet specified credit standards and certificates of
deposit, demand or savings accounts or other insured obligations of federally
insured financial institutions. Under CGB&L's investment policy, CGB&L may
invest in certain other forms of bank-eligible securities if such investment is
approved by the Board of Directors.

   At March 31, 2001 CGB&L held $241,693 in investments securities, compared
with $163,317 at March 31, 2000.

   The following table sets forth CGB&L's investment securities portfolio at
carrying value at the dates indicated.


                                                    March 31,
                                  --------------------------------------------
                                           2001                   2000
                                  --------------------   ---------------------
                                   Book     Percent of    Book      Percent of
                                   Value    Portfolio     Value     Portfolio
                                  --------  ----------   --------   ----------
FHLMC common stock..............  $241,693      100%     $163,317       100%
                                  ========      ====     ========       ====


The FHLMC common stock had a book value and market value of $241,693 as of March
31, 2001 which was in excess of 10% of CGB&L's retained earnings at that date.

LENDING ACTIVITIES

   GENERAL. Historically, the principal lending activity of the Building & Loan
has been the origination of long-term fixed-rate mortgage loans for the purpose
of constructing, financing or refinancing one- to four-family residential
properties. The Building & Loan also originates, from time to time, multi-family
and commercial real estate loans, and consumer share loans, although such loans
presently constitute a relatively small percentage of the Building & Loan's
total loan portfolio.


                                        9
<PAGE>


     LOAN PORTFOLIO COMPOSITION. Virtually all of the loan portfolio is secured
by properties located in Piatt, Macon, and Moultrie counties in Central
Illinois. All loans are fixed rate loans with maximum maturities of 30 years or
less. The Building & Loan has historically not sold loans in the secondary
mortgage market, including transactions with FHLMC or mortgage brokers. The
following table sets forth the composition of the consolidated loan portfolio in
dollar amounts and in percentages of the respective portfolios at the dates
indicated:

                                                  Amount of Loans Outstanding at

                                                        March         March
                                                      31, 2001      31, 2000
                                                    -----------   -----------
Real estate
 One- to four-family residential                    $ 6,605,290   $ 6,361,223

 Multi-family residential                                58,173        68,777

 Commercial                                             239,768       255,131
                                                    -----------  -----------
  Total Real Estate Mortgage Loans                    6,903,231     6,685,131
 Consumer (Share loans)                                 134,402       124,841
                                                    -----------   -----------
                                                      7,037,633     6,809,972
Less:
 Undisbursed portion of loans (1)                       (19,812)     (122,500)

 Deferred loan fees                                     (54,380)      (63,272)
                                                    -----------   -----------
   Total loans, gross                                 6,963,441     6,624,200

 Allowance for loan losses                              (32,700)      (32,700)
                                                    -----------   -----------
   Total loans, net                                 $ 6,930,741   $ 6,591,500
                                                    ===========   ===========

(1)     The undisbursed portion of loans represents amounts included in gross
        loans that have been approved, but not disbursed to the borrower.

                                              Percentage of Loans Outstanding at

                                                     March         March
                                                   31, 2001      31, 2000
                                                   --------      --------
Real estate:
 One- to four-family                                   93.9%         93.4%
 Multi-family residential                                .8           1.0
 Commercial                                             3.4           3.8

Consumer (Share loans)                                  1.9           1.8
                                                   --------      --------
Total loans                                           100.0%        100.0%
                                                   ========      ========


                                       10
<PAGE>


   ONE- TO FOUR-FAMILY RESIDENTIAL LOANS. The primary lending activity of the
Building & Loan is the extension of fixed rate first mortgage residential loans
ranging in terms from 10 to 30 years to enable borrowers to purchase existing
one- to four-family homes or to construct new one- to four-family homes.
Management believes that its policy of focusing on one- to four-family
residential mortgage loans has been successful in contributing to interest
income while keeping delinquencies and losses to a minimum.

   The average outstanding balance of the loans included in the Building &
Loan's one- to four-family residential loan portfolio as of March 31, 2001 was
approximately $35,361. Management estimates that the average size of a new
single family residential first mortgage loan in its market area is
approximately $55,000.

   The loan-to-value ratio of most single family first mortgage loans made by
the Building & Loan is 80% or less. The maximum loan-to-value ratio is 90%. When
a loan is more than 80% loan-to-value, the interest rate increases to justify
the additional risk exposure. Under the Building & Loan's lending policies, the
maximum loan-to-value ratio on a loan for the construction of a new single
family residential home is 80%, and the maximum loan-to-value ratio on loans on
two- to four-family dwellings is 80%.

   The Building & Loan requires title insurance, or an attorney's opinion as to
title, and fire and casualty insurance coverage of the property securing any
mortgage loan originated by the Building & Loan. All of the Building & Loan's
real estate loans contain due-on-sale clauses which provide that if the
mortgagor sells, conveys or alienates the property underlying the mortgage note,
the Building & Loan has the right at its option to declare the note immediately
due and payable without notice. The Building & Loan's practice is to enforce
such due-on-sale clauses.

   MULTI-FAMILY RESIDENTIAL LENDING. Under the Building & Loan's current lending
policies, multi-family real estate loans are generally limited to 80% of the
appraised value of the property or the selling price, whichever is less. Loans
secured by multi-family real estate are generally larger and, like commercial
real estate loans, involve a greater degree of risk than one- to four-family
residential loans. The number of multi-family residential dwellings in the
Building & Loan's market area is limited, and mortgage loans on such dwellings
have historically represented a relatively small percentage of the Building &
Loan's loan portfolio. The Building & Loan does not anticipate that the
origination of such loans will constitute a significant part of its future
lending business.

   COMMERCIAL REAL ESTATE LOANS. The Building & Loan has historically made
commercial real estate loans on a limited basis as first mortgage loans. Such
loans are secured by office and retail buildings. Borrowers are always
established businesses with ties to the Cerro Gordo community. The loan-to-value
ratio of commercial real estate first mortgage loans made by the Building & Loan
is 80% or less.

   Loans secured by commercial real estate are generally larger and involve a
greater degree of risk than one- to four-family residential loans. Because
payments on loans secured by commercial real estate properties are often
dependent on the successful operation or management of the properties, repayment
of such loans may be subject to adverse conditions in the real


                                       11
<PAGE>


estate market or the economy. The Building & Loan's practice has been to
underwrite such loans based on its analysis of the amount of cash flow generated
by the business in which the real estate is used and the resulting ability of
the borrower to meet its payment obligations. Although such loans are secured by
a first mortgage on the underlying property, the Building & Loan also generally
seeks to obtain a personal guarantee of the loan by the owner of the business in
which the property is used. The Building & Loan does not anticipate that the
origination of such loans will constitute a significant part of its future
lending business.

   SHARE LOANS. Share Loans are loans to depositors of the Building & Loan which
are secured by the borrowers' deposits. Under the Building & Loan's current
lending policies, share loans are limited to 90% of the borrower's savings on
deposit with the Building & Loan. The borrower's deposit account is flagged by
the Building & Loan. These accounts are monitored to insure that the loan
principal and interest balance is not more than 90% of the borrower's passbook
account or certificate of deposit. The rate of interest charged on share loans
is the greater of (i) the 20 year residential mortgage rate (loan-to-value of
80% or less) or (ii) one and one-half percent over the interest rate paid on the
deposit account that is pledged as collateral.

   DELINQUENCIES. The Building & Loan's collection procedures with respect to
delinquent loans include written notice and telephone contact by Building & Loan
personnel. Most loan delinquencies are cured within 90 days and no legal action
is taken. With respect to mortgage loans, if the delinquency exceeds 90 days,
the Building & Loan institutes measures to enforce its remedies resulting from
the default, including the commencement of foreclosure action or the
repossession of collateral.

   NON-PERFORMING ASSETS. Non-performing assets include loans placed on
non-accrual status, loans that are 90 or more days past due, troubled debt
restructurings and foreclosed properties. The Building & Loan places loans that
are 90 days or more past due on non-accrual status unless such loans are
adequately collateralized and in the process of collection. Accrual of interest
on a non-accrual loan is resumed only when all contractually past due payments
are brought current and management believes that the outstanding loan principal
and contractually due interest are no longer doubtful of collection. As of March
31, 2001, no loans were on non-accrual status.

   Property acquired by the Building & Loan as a result of a foreclosure,
property upon which a judgement of foreclosure has been entered but for which no
foreclosure sale has yet taken place and property which is in substance
foreclosed are classified as foreclosed property or real estate owned.
Foreclosed properties are recorded at the lower of the unpaid principal balance
of the related loan or fair market value. The amount by which the recorded loan
balance exceeds the fair market value at the time the property is classified as
foreclosed property is charged against the allowance for loan losses. Any
subsequent reduction in the carrying value of a foreclosed property, along with
expenses to maintain or dispose of a foreclosed property, is charged against
current earnings. As of March 31, 2001, the Building & Loan had no foreclosed
properties or "real estate owned."

   The following table sets forth information with respect to the Building &
Loan's non-performing assets for the periods indicated. During the periods
shown, the Building & Loan had no troubled debt restructured loans within the
meaning of Statement of SFAS 15.


                                       12
<PAGE>


                                                        At March 31,
                                                  ------------------------
                                                     2001          2000
Loans accounted for on                            ----------    ----------
  a non-accrual basis:                            $       --    $       --
Accruing loans which are contractually
  Past due 90 days or more:
   Real estate -
    One- to four-family.......................        11,966       135,705
    Multi-family...............................           --            --
    Commercial.................................           --            --
   Share......................................            --            --
                                                  ----------    ----------
    TOTAL.....................................    $   11,966    $  135,705
                                                  ----------    ----------
Total of nonaccrual and 90 days past due loans    $   11,966    $  135,705

Real estate owned.............................            --            --
Other nonperforming assets....................    $       --            --
                                                  ----------    ----------
  Total nonperforming assets......................$   11,966    $  135,705
                                                  ==========    ==========

Total loans delinquent 90 days or more to net loans      .17%         2.06%
Total loans delinquent 90 days or more to total assets   .14%         1.70%
Total nonperforming assets to total assets               .14%         1.70%

   As of and during years ended March 31, 2001 and 2000 there were no impaired
loans. In applying the provisions of Statement of Financial Accounting Standards
(SFAS) No. 114, the Building and Loan considers its investments in one- to
four-family residential and share loans to be homogeneous and therefore excluded
from separate identification for valuation of impairment. As of March 31, 2001
the Building & Loan has no loans where known information about possible credit
problems of borrowers causes management to have serious doubts as to the ability
of such borrowers to comply with the present repayment terms.

   CLASSIFIED ASSETS. FDIC policies require that each insured depository
institution review and classify its assets on a regular basis. In addition, in
connection with examinations of insured institutions, regulatory examiners have
the authority to identify problem assets and, if appropriate, require them to be
classified. The Building & Loan reviews and classifies its assets at least
quarterly. There are three classifications for problem assets: substandard,
doubtful and loss. Substandard assets must have one or more defined weaknesses
and are characterized by the distinct possibility that the insured institution
will sustain some loss if the deficiencies are not corrected. Doubtful assets
have the weaknesses of substandard assets, with the additional characteristic
that the weaknesses make collection or liquidation in full on the basis of
currently existing facts, conditions and values, questionable, and there is a
high possibility of loss. An asset classified as loss is considered unable to
collect and of such little value that continued treatment of the asset as an
asset on the books of the institution is not warranted.


                                       13
<PAGE>


   An insured institution is required to establish prudent general allowances
for loan losses with respect to assets classified as substandard or doubtful.
The institution is required either to charge off assets classified as loss or to
establish a specific allowance for 100% of the portion of the asset classified
as loss.

   At March 31, 2001 and 2000 the aggregate amounts of the Building & Loan's
classified assets and the Building & Loan's general loss allowances for the
period then ended, were as follows:

                                               At March 31,
                                      -----------------------------
                                        2001                 2000
                                      --------             --------
Substandard assets................    $ 11,966             $135,705
General loss allowances...........    $ 32,700             $ 32,700

   The classified assets identified in the table above at March 31, 2001
relate to one residential mortgage loan and at March 31, 2000 relate to four
residential mortgage loans of which no loss was incurred.

   ALLOWANCE FOR LOAN LOSSES. The Building & Loan's management evaluates the
amount of its allowance for loan losses quarterly. Such evaluation includes a
review of all loans for which full ability to collect may not be reasonably
assured and considers among other matters, the estimated market value of the
underlying collateral of problem loans, prior loss experience, economic
conditions and overall portfolio quality. The Building & Loan's determination as
to its classification of assets and the amount of its specific and general
valuation allowances are subject to review by the Commissioner and the FDIC,
either of which can require the Building & Loan to establish additional general
or specific loan loss allowances. Provisions for losses are charged against
earnings in the year they are established and added to the allowance. Loan
losses are charged against the allowance.

   The Building & Loan established no provisions for loan losses for the years
ended March 31, 2001 or March 31, 2000. At March 31, 2001, the Building & Loan
had an allowance for loan losses of $32,700, or, .47%, of total loans, and 273%
of substandard assets.

   Management believes that the Building & Loan's loan loss reserves were
adequate at March 31, 2001. There can be no assurance, however, that the
allowance for loan losses will be adequate to cover losses which may in fact be
realized in the future and that additional provisions for loan losses will not
be required. Any material increase in reserves or material loss for which an
adequate reserve has not been established may adversely affect the Building &
Loan's financial condition and earnings.

   The following table sets forth an analysis of the Building & Loan's gross
allowance for possible loan losses for the periods indicated. Where specific
loan loss reserves have been established, any difference between the loss
reserve and the amount of loss realized has been charged or credited to current
income.


                                       14
<PAGE>


                                                       Period Ended March 31,
                                                       ---------------------
                                                         2001         2000
                                                       --------     --------
Allowance at beginning of period....................   $ 32,700     $ 32,700
Provision for loan losses...........................         --           --
  Total recoveries..................................         --           --

  Total charge offs.................................         --           --
                                                       --------     --------
  Balance at end of period..........................   $ 32,700     $ 32,700
                                                       ========     ========
Ratio of allowance to total loans
 outstanding at the end of the period                       .47%         .50%
Ratio of net charge offs to average
 loans outstanding during the period                        N/A          N/A

   The following table sets forth the breakdown of the allowance for loan losses
by loan category for the periods indicated.

                                               At March 31,
                                ---------------------------------------------
                                        2001                   2000
                                ---------------------   ---------------------
                                            As % of                 As % of
                                          Outstanding             Outstanding
                                             Loans                   Loans
                                Amount    in Category   Amount    in Category
                                -------     -------     -------     -------
Real estate - mortgage:
  One- to four- family........  $31,555        96.5%    $30,850          94%
  Multi-family................       --          --          --            -
  Commercial..................    1,145         3.5%      1,850           6%
Share.........................       --          --          --            -
Unallocated...................       --          --          --            -
Total allowance for             -------     -------     -------         ----
 loan losses..................  $32,700         100%    $32,700         100%
                                =======     =======     =======         ====

DEPOSIT ACTIVITIES AND OTHER SOURCES OF FUNDS

   GENERAL. The Building & Loan's primary sources of funds for use in lending
and investing and for other general purposes are deposits and proceeds from
principal and interest payments on loans, investment securities and interest
bearing time deposits. Contractual loan repayments are a relatively stable
source of funds, while deposit inflows and outflows and loan prepayments are
significantly influenced by general interest rates and money market conditions.
Borrowings may be used to compensate for reductions in the availability of funds
from other sources.

   DEPOSIT ACCOUNTS. The Building & Loan attracts deposits within its primary
market area by offering a variety of deposit accounts, including passbook
savings accounts and certificates of deposit. The flow of deposits is influenced
significantly by general economic conditions, changes in money market and
prevailing interest rates, and competition. Management generally reviews at
least on a monthly basis the interest rates set for its deposit


                                       15
<PAGE>


accounts. The Building & Loan has historically paid deposit rates at the higher
end of the range offered by its competitors, in order to retain existing and
attract new deposits, although there are no assurances that management will
continue the practice in the future. Such practice is also subject to regulation
by the FDIC. The Building & Loan also relies on customer service and
long-standing relationships with customers to attract and retain deposits.

   At March 31, 2001, the Building & Loan had $300,551 invested in certificate
accounts in the amount of $100,000 or more. These accounts included no deposits
with a remaining maturity of 3 months or less, $100,551 with a maturity of 3 to
6 months, $100,000 with a maturity of 6 months to 1 year and $100,000 with a
maturity of over 1 year.

  The following table shows the average amount of deposits and average rate of
interest paid thereon for the years indicated.

                                     March 31, 2001         March 31, 2000
                                   -----------------       ----------------
                                    Average  Average       Average  Average
                                     Amount     Rate        Amount     Rate
                                   ----------  -----       ---------  -----
Regular Savings Accounts           $  388,330  2.58%      $  398,330  2.51%

Fixed Rate Certificate of Deposit   4,986,478  5.68%       4,814,978  5.48%
                                   ----------  -----       ---------  -----
            Total Deposits         $5,374,808  5.46%      $5,213,308  5.26%
                                   ==========  =====      ==========  =====

RETURN ON EQUITY AND ASSETS                             2001            2000
                                                       ------          ------
Return on assets (net income (loss) divided by
  average total assets)                                (0.77%)          0.38%
Return on equity (net income (loss) divided by
  average total equity)                                (3.99%)          1.84%
Dividend payout ratio (dividends per
  share divided by net income per share)                N/A(1)          0.61%
Equity to assets ratio (average equity
  divided by average total assets)                      19.36%         20.69%

(1) Not applicable as the company recorded a net loss during that period.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES, LITIGATION REFORM ACT OF
1995

This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. CGB&L intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Reform Act of 1995, and is
including this statement for purposes of these safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies and expectations of CGB&L, are generally identifiable
by use of the words "believe," "expect," "intend," "anticipate," "estimate,"
"project" or similar expressions. CGB&L's ability to predict


                                       16
<PAGE>


results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on the operations
and future prospects of CGB&L and the subsidiaries include, but are not limited
to, changes in: interest rates, general economic conditions,
legislative/regulatory changes and/or approvals, monetary and fiscal policies of
the U.S. Government, including policies of the U.S. Treasury and the Federal
Reserve Board, the quality or composition of the loan or investment portfolios,
demand for loan products, deposit flows, competition, demand for financial
services in CGB&L's market area and accounting principles, policies and
guidelines. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. Such statements speak only of CGB&L's views as of the date this
statement was made, and they are not a guarantee of future performance. Certain
factors concerning CGB&L and its business, including additional factors that
could affect CGB&L's financial results, are listed below.

   The substantial increase in stockholder's equity due to the conversion may
result in a reduction of the Building & Loan's return on average equity (net
income divided by average equity) compared with historical levels, absent a
corresponding increase in net income. It is not expected that the Building and
Loan will be able to increase net income in future periods commensurate with the
increase in equity.

   The Building & Loan depends to a considerable degree on a limited number of
key management personnel, in particular, the C.E.O., Maralyn F. Heckman and
Board Secretary Michelle Shively. The loss of such personnel could adversely
effect the Building and Loan's operations. CGB&L and the Building & Loan have
each entered into an Employment Agreement with Mrs. Heckman. Management believes
that the future success of CGB&L will depend in large part upon its abilities to
attract and retain qualified personnel.

   The ESOP and MRP plans for employee incentive, increase employee
compensa-tion expense and could affect the future earnings of the Building &
Loan.

   Potential impact of changes in real estate property values could have a
material effect on the Building and Loan's operations. At March 31, 2001,
approximately 98.1% of the Building & Loan's net loan portfolio consisted of
loans secured by real estate properties located in central Illinois. There is no
assurance as to the future performance of the central Illinois real estate
markets.

   Potential changes in interest rates could effect the Building & Loan's future
earnings. The operations of the Building and Loan are substantially dependent on
its net interest income, which is the difference between the interest income
earned on its interest-earning assets and the interest expense paid on its
interest-bearing liabilities. "See Business of the Building & Loan."

   Significant competition both in attracting deposits and in originating loans
could be a factor to the Building & Loan's future earnings due to the low growth
primary market area. Reporting requirements related to being a public company
have increased expenses, affecting consolidated earnings.

   The factors discussed above, among others, could cause our actual results to
differ. Though CGB&L has attempted to list the important factors above,


                                       17
<PAGE>


CGB&L cautions you that other factors may in the future prove to be important in
affecting CGB&L's results. New factors emerge from time to time, and it is not
possible for management to predict all of such factors, nor can it assess the
impact of each such factor on the business or the extent to which any factor or
combination of factors may cause actual results to differ materially from those
contained in any forward looking statement.

ASSET AND LIABILITY MANAGEMENT

   Asset and liability management is used to maintain an appropriate balance
between liquidity for the Building and Loan, on the one hand, and
interest-earning assets and interest-bearing liabilities, on the other, in order
to produce stable net income during changing market interest-rate cycles. The
operations of the Building and Loan are substantially dependent on its net
interest income, which is the difference between the interest income earned on
its interest-earning assets and the interest expense paid on its
interest-bearing liabilities.

   Like most savings institutions, the Building and Loan's earnings are affected
by changes in market interest rates and other economic factors beyond its
control. If an institution's interest-earning assets have longer effective
maturities than its interest-bearing liabilities, the yield on the institution's
interest-earning assets generally will adjust more slowly than the cost of its
interest-bearing liabilities. As a result, the institution's net interest income
generally would be adversely affected by material and prolonged increases in
interest rates and positively affected by comparable declines in interest rates.

   The Building and Loan's Board of Directors monitors its interest rate
sensitivity through the use of the net portfolio value model produced by the
Commissioner which generates estimates of the change in the Building and Loan's
net portfolio value ("NPV") over a range of interest rate scenarios. NPV is the
present value of expected cash flows from assets, liabilities, and off-balance
sheet contracts. The NPV ratio, under any interest rate scenario, is defined as
the NPV in that scenario divided by the market value of assets in the same
scenario. The Commissioner produces such estimates utilizing its own model,
based upon data submitted on the Building and Loan's Call Report on a quarterly
basis. The Commissioner's model assumes estimated loan prepayment rates,
reinvestment rates and deposit decay rates.

   The Building and Loan has sought to reduce the vulnerability of its
operations to changes in interest rates by managing the nature and composition
of its interest rate sensitive assets and liabilities. Management believes that
the assumptions used by the NPV model to evaluate the vulnerability of the
Building and Loan's operations to changes in interest rates approximate actual
experience and considers them reasonable. Management takes into account that the
interest rate sensitivity of the Building and Loan's assets and liabilities and
the estimated effects of changes in interest rates on the Building and Loan's
net income.

   The Building and Loan's deposits include a relatively high amount of
certificates of deposit ("certificates"), which are generally higher costing and
more interest-rate sensitive than "core" deposits. At March 31, 2001, $5.2
million of the Building and Loan's total deposits were comprised of


                                       18
<PAGE>


certificates of which $2.3 million, or 44.2%, were scheduled to mature within
one year. Certificates generally are a more costly and volatile source of funds
than savings accounts. In addition, certificates are more likely to be invested
in other instruments than are savings accounts. Notwithstanding the foregoing,
management believes that most of its certificates will remain at the Building
and Loan upon maturity. The Building and Loan does not accept brokered deposits.

   In addition to affecting interest income and expense, changes in interest
rates also would affect the value of the Building and Loan's interest-earning
assets, which are comprised of fixed instruments, and the ability to realize
gains from the sale of such assets if the loans were sold. The Building and Loan
historically has serviced all loans locally. As of March 31, 2001, $6.8 million
or 82.55% of the Building and Loan's interest-earning assets were fixed-rate
loans.

COMPETITION

   The Building & Loan faces strong competition both in attracting deposits and
making real estate loans. Its most direct competition for deposits has
historically come from other savings institutions, credit unions and commercial
banks located in its market area including many large financial institutions
that have greater financial and marketing resources available to them. As of
March 31, 2001, the Building & Loan's total deposits ranked ninth out of nine
commercial banks and savings associations operating in Piatt County, Illinois.
In addition, during times of high interest rates, the Building & Loan has faced
significant competition for investors' funds from short-term money market
securities, mutual funds and other corporate and government securities. The
ability of the Building & Loan to attract and retain savings deposits depends on
its ability to generally provide a rate of return, liquidity and risk comparable
to that offered by competing investment opportunities.

   The Building & Loan experiences strong competition for real estate loans
principally from other savings institutions, and commercial banks. The Building
& Loan competes for loans principally through the interest rates and loan fees
it charges, the efficiency and quality of services it provides borrowers and the
convenient location of its office. Competition may increase as a result of
internet lending and the continuing reduction of restrictions on the interstate
operations of financial institutions.

LIQUIDITY

   The Building and Loan's primary sources of funds are deposits, principal and
interest payments on loans and FHLB advances. While maturities and scheduled
amortizations of loans are predictable sources of funds, deposit flows and
mortgage prepayments are greatly influenced by general interest rates, economic
conditions, and competition. The Federal Deposit Insurance Corporation ("FDIC"),
the Building and Loan's primary regulator, requires the Building and Loan to
maintain minimum levels of liquid assets. Currently, the required ratio is 5%.
The Building and Loan's liquidity ratio was 18.25% at March 31, 2001, well above
the required minimum.

   As of March 31, 2001, the Building and Loan had outstanding commitments
(including undisbursed loan proceeds) of $101,312.  The Building and Loan


                                       19
<PAGE>


anticipates it will have sufficient funds available to meet its current loan
origination commitments. Certificates of deposit, scheduled to mature in one
year or less from March 31, 2001, total approximately $2.3 million. Based upon
the Building and Loan's experience, management believes that a signifi- cant
portion of such deposits will remain with the Building and Loan.

PERSONNEL

   As of March 31, 2001, the Building & Loan had a total of 4 full-time
employees. The Building & Loan's employees are not represented by a union or
collective bargaining group. The Building & Loan considers its relationship with
its employees to be satisfactory.

                         REGULATION AND SUPERVISION
GENERAL

   Financial institutions and their holding companies are extensively regulated
under federal and state law by various regulatory authorities including the
Federal Reserve Board, the Federal Deposit Insurance Corporation ("FDIC") and
the Illinois Office of Banks and Real Estate ("Commissioner"). The financial
performance of CGB&L and the Building & Loan may be affected by such regulation,
although the extent to which they may be affected cannot be predicted with a
high degree of certainty.

   Federal and state laws and regulations generally applicable to financial
institutions and their holding companies regulate, among other things, the scope
of business, investments, reserves against deposits, capital levels relative to
operations, the nature and amount of collateral for loans, the establishment of
branches, mergers, consolidations and dividends. The system of supervision and
regulation applicable to CGB&L and the Building & Loan establishes a
comprehensive framework for their operations and is intended primarily for the
protection of the FDIC's deposit insurance funds and the depositors of the
Building & Loan, rather than the stockholders of CGB&L.

   The following references to material statutes and regulations affecting CGB&L
and the Building & Loan are brief summaries thereof and are qualified in their
entirety by reference to such statutes and regulations. Any change in applicable
law or regulations may have a material effect on the business of CGB&L and the
Building & Loan.

THE BUILDING & LOAN

   GENERAL. The Building & Loan is an Illinois-chartered savings bank, with
deposit accounts which are insured by the Saving Association Insurance Fund
"SAIF" of the FDIC. The Building & Loan is subject to the examination,
supervision, reporting and enforcement requirements of the Commissioner, as the
chartering authority for Illinois savings banks, and the FDIC, as administrator
of the SAIF, and to the statutes and regulations administered by the
Commissioner and the FDIC governing such matters as capital standards, mergers,
establishment of branch offices, subsidiary investments and activities and
general investment authority. The Building & Loan is required to file reports
with the Commissioner and the FDIC concerning its activities and financial
condition and will be required to obtain regulatory approvals prior to entering
into certain transactions, including mergers with, or acquisitions of, other
financial institutions.


                                       20
<PAGE>


   The Commissioner and the FDIC have extensive enforcement authority over
Illinois-chartered saving banks, such as the Building & Loan. This enforcement
authority includes, among other things, the ability to issue cease-and-desist or
removal orders, to assess civil money penalties and to initiate injunctive
actions. In general, these enforcement actions may be initiated for violations
of laws and regulations and unsafe and unsound practices.

   The Commissioner has established a schedule for the assessment of
"supervisory fees" upon all Illinois savings banks to fund the operations of the
Commissioner. These supervisory fees are computed on the basis of each saving
bank's total assets (including consolidated subsidiaries) and are payable at the
end of each calendar quarter. A schedule of fees has also been established for
certain filings made by Illinois savings banks with the Commissioner. The
Commissioner also assesses fees for examinations conducted by the Commissioner's
staff, based upon the number of hours spent by the Commissioner's staff
performing the examination.

   CAPITAL REQUIREMENTS. Under the Illinois Savings Bank Act "ISBA" and the
regulations of the Commissioner, an Illinois savings bank must maintain a
minimum level of total capital equal to the higher of 3% of total assets or the
amount required to maintain insurance of deposits by the FDIC. The Commissioner
has the authority to require an Illinois savings bank to maintain a higher level
of capital if the Commissioner deems such higher level necessary based on the
savings bank's financial condition, history, management or earnings prospects.

   FDIC-insured institutions are required to follow certain capital adequacy
guidelines which prescribe minimum levels of capital and require that
institutions meet certain risk-based and leverage capital requirements.
FDIC-insured institutions in the strongest financial and managerial condition
(those not experiencing significant growth, with well-diversified risks,
excellent asset quality, gross earnings and a composite rating of "1" under the
Uniform Financial Institutions Rating System) are required to maintain "Tier 1
capital" to total assets of 3% (the "leverage capital requirement). For all
other FDIC-insured institutions, the minimum leverage limit requirement is a
ratio of tier 1 capital to total assets of 4%. Tier 1 capital is defined to
include the sum of common stockholders' equity, noncumulative perpetual stock
(including any related surplus), and minority interests in consolidated
subsidiaries, minus all intangible assets (other than qualifying servicing
rights, qualifying purchased credit-card relation- ships and qualifying
supervisory goodwill), certain identified losses (as defined in the FDIC's
regulations) and investments in certain subsidiaries.

   FDIC-insured institutions also are required to adhere to certain risk-based
capital guidelines which are designed to provide a measure of capital more
sensitive to the risk profiles of individual banks. Under the risk-based capital
guidelines, capital is divided into two tiers: core (Tier 1) capital, as defined
above, and supplementary (Tier 2) capital. (Tier 2) capital that may be
recognized for risk-based capital purposes is limited to 100% of core capital
and includes cumulative perpetual preferred stock, perpetual preferred stock for
which the dividend rate is reset periodically based on current credit standing,
regardless of whether dividends are cumulative or noncumulative, mandatory
convertible securities,


                                       21
<PAGE>


subordinated debt, intermediate preferred stock and the allowance for possible
loan and lease losses. The allowance for possible loan and lease losses
includable in Tier 2 capital is limited to a maximum of 1.25% of risk-weighted
assets.

   Total capital is the sum of Tier 1 and Tier 2 capital. The risk-based capital
framework assigns balance sheet assets to one of four broad risk categories
which are assigned risk weighs ranging from 0% to 100% based primarily on the
degree of credit risk associated with the obligor. Off-balance sheet items are
converted on an on-balance sheet "credit equivalent" amount utilizing certain
conversion factors. The sum of the four risk-weighted categories equals risk
weighted assets.

   FDIC insured institutions must maintain Tier 1 capital of not less than 4% of
risk-weighted assets and total capital of not less than 8% of risk-weighted
assets. At March 31, 2001, the Building and Loan was in compliance with
applicable regulatory capital requirements as follows:

          Tier 1 Capital to Average Assets                 15.23%
          Tier 1 Capital to Risk Weighted Assets           32.20%
          Risk Based Capital to Risk Weighted Assets       33.07%

   DIVIDENDS. Under the ISBA, dividends may only be declared when the total
capital of the Building & Loan is greater than that required by Illinois law.
Dividends may be paid by the Building & Loan out of its net profits (i.e.,
earnings from current operations, plus actual recoveries on loans, investments
and other assets, after deducting all current expenses, including dividends or
interest on deposits, additions to reserves as required by the Commissioner,
actual losses, accrued dividends on preferred stock, if any, and all state and
federal taxes). The written approval of the Commissioner must be obtained,
however, before a savings bank having total capital of less than 6% of total
assets may declare dividends in any calendar year in an amount in excess of 50%
of its net profits for that calendar year. A Building & Loan may not declare
dividends in excess of its net profits in any year without the approval of the
Commissioner. In addition, before declaring a dividend on its capital stock, the
Building & Loan must transfer no less than 10% of its net profits of the
preceding half year in the case of quarterly of semi-annual dividends, or not
less than 10% of the net profits for the preceding two half periods in the case
of annual dividends to its paid-in surplus until it shall have paid in surplus
equal to its capital stock. Finally, the Building & Loan will be unable to pay
dividends in an amount which would reduce its capital below the greater (i) the
amount required by the FDIC, (ii) the amount required by the Commissioner or
(iii) the amount required for the liquidation account established by the
Building & Loan in connection with the Conversion.

   STANDARDS FOR SAFETY AND SOUNDNESS. The federal banking agencies adopted
Interagency Guidelines Establishing Standards for Safety and Soundness (the
"Guidelines"). The Guidelines set forth the safety and soundness standards that
the federal banking agencies use to identify and address problems at insured
depository institutions before capital becomes impaired. The Guide-lines address
internal controls and information systems, internal audit systems, credit
underwriting, loan documentation, interest rate risk exposure, asset growth,
asset quality, earnings and compensation, fees and benefits. If FDIC determines
that an insured institution fails to meet any


                                       22
<PAGE>


standard prescribed by the Guidelines, the FDIC may require the institution to
submit an acceptable plan to achieve compliance with the standard.

   BROKERED DEPOSITS. FDIC regulations govern the acceptance of brokered
deposits by insured financial institutions. Well-capitalized insured financial
institutions that are not troubled are not subject to brokered deposit
limitations. Adequately-capitalized insured financial institutions are able to
accept, renew or roll over brokered deposits but only (i) with a waiver from the
FDIC and (ii) subject to the limitation that they do not pay an effective yield
on any such deposit that exceeds by more than 75 basis points (a) the effective
yield paid on deposits of comparable size and maturity in such association's
normal market area for deposits accepted in it normal market area or (b) the
national prime rate paid on deposits of comparable size and maturity for
deposits accepted outside the institution's normal market area. Undercapitalized
insured financial institutions are not permitted to accept brokered deposits and
may not solicit deposits by offering an effective yield that exceeds by more
than 75 basis points the prevailing effective yields on insured deposits of
comparable maturity in the institution's normal market area or the market area
in which such deposits are being solicited. The Building & Loan is not presently
soliciting brokered deposits.

   LENDING RESTRICTIONS. Under the ISBA, the Building & Loan is prohibited from
making secured or unsecured loans for business, corporate, commercial or
agricultural purposes representing in the aggregate an amount in excess of 15%
of its total assets, unless a greater amount is authorized in writing by the
Commissioner.

   The Building & Loan is also subject to a loans-to-one borrower limitation.
Under the ISBA, the total loans and extensions of credit, both direct and
indirect, by the Building & Loan to any person (other than the United States
or its agencies, the State of Illinois or its agencies, and any municipal
corporation for money borrowed) outstanding at one time must not exceed the
greater of $500,000 or 20% of the Building & Loan's total capital plus general
loan loss reserves. In addition, the Building & Loan may make loans in an amount
equal to an additional 10% of the Building & Loan's capital plus general loan
loss reserves if the loans are 100% secured by readily marketable collateral.

   The FDIC and the other federal banking agencies have adopted regulations that
prescribe standards for extensions of credit that (i) are secured by real estate
or (ii) are made for the purpose of financing the construction or improvements
on real estate. The FDIC regulations require each institution to establish and
maintain written internal real estate lending standards that are consistent with
safe and sound banking practices and appropriate to the size of the institution
and the nature and scope of its real estate lending activities. The standards
also must be consistent with FDIC guidelines, which include loan-to-value
limitations for the different types of real estate loans. Institutions are also
permitted to make a limited amount of loans that do not conform to the proposed
loan-to-value limitations so long as such exceptions are reviewed and justified
appropriately. The guidelines also list a number of lending situations in which
exceptions to the loan-to-value standard are justified.

   PROMPT CORRECTIVE REGULATORY ACTION.  Federal law requires, among other
things, that federal regulatory authorities take "prompt corrective action"


                                       23
<PAGE>


with respect to savings banks that do not meet minimum capital requirements. For
these purposes, the law establishes five capital categories: well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized, and
critically undercapitalized.

   The FDIC has adopted regulations to implement the prompt corrective action
legislation. Among other things, regulations define the relevant capital
measures for the five capital categories. An institution is deemed to be "well
capitalized" if it has a total risk-based capital ratio of 10% or greater, a
Tier I risk-based capital ratio of 6% or greater, and a leverage ratio of 5% or
greater, and is not subject to a regulatory order, agreement or directive to
meet and maintain a specific capital level for any capital measure. An
institution is deemed to be "adequately capitalized" if it has a total
risk-based capital ratio of 8% or greater, a Tier I risk-based capital ratio of
4% or greater, and generally a leverage ratio of 4% or greater. An institution
is deemed to be "undercapitalized" if it has a total risk-based capital ration
of less than 8%, a Tier I risk-based capital ratio of less than 4%, or generally
a leverage ratio of less than 4%. An institution is deemed to be "significantly
undercapitalized" if it has a total risk-based capital ratio of less than 6%, a
Tier I risk-based capital ratio of less than 3%, or a leverage ratio of less
than 3%. An institution is deemed to be "critically undercapitalized" if it has
a ratio of tangible equity (as defined in the regulations) to total assets that
is equal to or less than 2%.

   "Undercapitalized" institutions are subject to growth, capital distribution
(including dividend) and other limitations and are required to submit a capital
restoration plan. An institution's compliance with such plan is required to be
guaranteed by any company that controls the undercapitalized institutions in an
amount equal to the lesser of 5.0% of the institution's total assets when deemed
undercapitalized or the amount necessary to achieve the status of adequately
capitalized. If an "undercapitalized" institution fails to submit an acceptable
plan, it is treated as if it is "significantly undercapitalized." "Significantly
undercapitalized" institutions are subject to one or more of a number of
additional restrictions, including but not limited to an order by the FDIC to
sell sufficient voting stock to become adequately capitalized, requirements to
reduce total assets and cease receipt of deposits from correspondent banks or
dismiss directors or officers, and restrictions on interest rates paid on
deposits, compensation of executive officers and capital distributions by the
parent holding company. "Critically undercapitalized" institutions also may not,
beginning 60 days after becoming "critically undercapitalized," make any payment
of principal or interest on certain subordinated debt or extend credit for a
highly leveraged transaction or enter into any material transaction outside the
ordinary course of business. In addition, "critically undercapitalized"
institutions are subject to appointment of a receiver or conservator. Generally,
subject to a narrow exception, the appointment of a receiver or conservator is
required for a "critically undercapitalized" institution within 270 days after
it obtains such status.

   TRANSACTIONS WITH AFFILIATES. Under current federal law, transactions between
depository institutions and their affiliates are governed by Sections 23A and
23B of the Federal Reserve Act. An affiliate of a savings bank is any company or
entity that controls, is controlled by, or is under common control with the
savings bank, other than a subsidiary. In a holding company context, at a
minimum, the parent holding company of a savings bank and any


                                       24
<PAGE>


companies which are controlled by such parent holding company are affiliates
of the savings bank. Generally, Section 23A limits the extent to which the
Building & Loan or its subsidiaries may engage in "covered transactions" with
any one affiliate to an amount equal to 10% of the Building and Loan's capital
stock and surplus, and contains an aggregate limit on all such transactions with
all affiliates to an amount equal to 20% of such capital stock and surplus. The
term "covered transactions" includes the making of loans or other extensions of
credit to an affiliate; the purchase of assets from an affiliate; the purchase
of, or an investment in, the securities of an affiliate; the acceptance of
securities of an affiliate as collateral for a loan or extension of credit to
any person; or issuance of a guarantee, acceptance, or letter of credit on
behalf of an affiliate. Section 23A also establishes specific collateral
requirements for loans or extensions of credit to, or guarantees, acceptances on
letters of credit issued on behalf of an affiliate. Section 23B requires that
covered transactions and a broad list of other specified transactions with
affiliates be on terms substantially the same, or no less favorable, to the
savings bank or its subsidiary as similar transactions with non-affiliates. In
the absence of similar transactions, the terms must be those which, in good
faith, would be offered to those who are not affiliates.

   Further, Section 22(h) of the Federal Reserve Act restricts a savings bank
with respect to loans to directors, executive officers, and principal
stockholders. Under Section 22(h), loans to directors, executive officers and
stockholders who control, directly or indirectly, 10% or more of voting
securities of a savings bank, and certain related interests of any of the
foregoing, may not exceed, together with all other outstanding loans to such
persons and affiliated entities, the savings bank's total capital and surplus.
Section 22(h) also prohibits loans above amounts prescribed by the appropriate
federal banking agency to directors, executive officers, and shareholders who
control 10% of more of voting securities of a stock savings bank, and their
respective related interests, unless such loan is approved in advance by a
majority of the board of directors of the savings bank. Any "interested"
director may not participate in the voting. The loan amount (which includes all
other outstanding loans to such person and their related interests) as to which
such prior board of director approval is required, is the greater of $25,000 or
5% of capital and surplus or any loans over $500,000. Further, pursuant to
Section 22(h), loans to directors, executive officers and principal shareholders
must be made on terms substantially the same as offered in comparable
transactions to other persons, except that such insiders may receive
preferential loans made pursuant to a benefit or compensation program that is
widely available to the institution's employees and does not give preference to
the insider over other employees. Section 22(g) of the Federal Reserve Act
places additional limitations on loans to executive officers.

   INSURANCE OF DEPOSIT ACCOUNTS. Deposits of the Building and Loan are
presently insured by the SAIF. The amount each insured depository institution
pays for FDIC deposit insurance coverage is determined in accordance with a
risk-based assessment system under which all insured depository institutions are
placed into one of nine categories and assessed insurance premiums based upon
their level of capital and supervisory evaluation. SAIF member institutions
classified as well-capitalized and considered healthy pay the lowest premium
(currently 0% of deposits) while SAIF member institutions that are
undercapitalized and of substantial supervisory concern pay the highest premium
(currently up to .27% of deposits).


                                       25
<PAGE>


   FICO BOND PAYMENTS. The Building and Loan also pays assessments for the
payment of bonds issued by the Financing Corporation in the late 1980s to
recapitalize the Federal Savings and Loan Insurance Corporation.

   FEDERAL RESERVE SYSTEM. The Federal Reserve Board regulations require
depository institutions to maintain non-interest-earning reserves against their
transaction accounts (primarily NOW and regular checking accounts). The Federal
Reserve Board regulations currently require that reserves be maintained against
aggregate transaction accounts as follows: for that portion of net transaction
accounts aggregating $42.8 million or less (subject to adjustment by the Federal
Reserve Board) the reserve requirement is 3%; and for net transaction accounts
greater than $42.8 million, the reserve requirement is $1.284 million plus 10%
(subject to adjustment by the Federal Reserve Board between 8% and 14%) against
that portion of total transaction accounts in excess of $42.8 million. The first
$5.5 million of otherwise reservable balances (subject to adjustments by the
Federal Reserve Board) are exempted from the reserve requirements. Because
required reserves must be maintained in the form of either vault cash, a
non-interest-bearing account at a Federal Reserve Bank or a pass-through account
as defined by the Federal Reserve Board, the effect of this reserve requirement
is to reduce the Building and Loan's interest-earning assets. Federal Home Loan
Bank ("FHLB") System members are also authorized to borrow from the Federal
Reserve "discount window," but Federal Reserve Board regulations require
institutions to exhaust all FHLB sources before borrowing from a Federal Reserve
Bank.

   COMMUNITY REINVESTMENT ACT. Under the Community Reinvestment Act, as amended
("CRA"), as implemented by FDIC regulations, a savings bank has a continuing and
affirmative obligation consistent with its safe and sound operation to help meet
the credit needs of its entire community, including low and moderate income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community, consistent with the CRA. The CRA
requires the FDIC, in connection with its examination of a savings institution,
to assess the institution's record of meeting the credit needs of its community
and to take such record into account in its evaluation of certain applications
by such institution. The FDIC is required to provide a written evaluation of an
institution's CRA performance utilizing a four-tiered descriptive rating system
and an institution's rating is subject to public disclosure. The Building &
Loan's latest CRA rating received from the FDIC was "Satisfactory."

   FEDERAL HOME LOAN BANK SYSTEM. The Building & Loan is a member of the FHLB
System, which consists of 12 regional FHLBs. The FHLB provides a central credit
facility primarily for member institutions. The Building & Loan, as a member of
the FHLB of Chicago, is required to acquire and hold shares of capital stock in
that FHLB in an amount at least equal to 1% of the aggregate principal amount of
its unpaid residential mortgage loans and similar obligations at the beginning
of each year, or 1/20 of its advances (borrowings) from the FHLB of Chicago,
whichever is greater. The Building & Loan was in compliance with this
requirement with an investment in FHLB of Chicago stock at March 31, 2001, of
$66,400. FHLB advances must be secured by specified types of collateral and all
long-term advances may be obtained only for the purpose of providing funds for
residential housing financing. At March 31, 2001, the Building & Loan had $1
million in FHLB advances.


                                       26
<PAGE>


CGB&L

   GENERAL. CGB&L is a bank holding company and is the sole stockholder of the
Building & Loan. As a bank holding company, the CGB&L is required to register
with, and is subject to regulation by, the Federal Reserve Board under the Bank
Holding Company Act ("BHCA"). In accordance with Federal Reserve Board policy,
CGB&L is expected to act as a source of financial strength to the Building &
Loan and to commit resources to support the Building & Loan in circumstances
where CGB&L might not do so absent such policy. Under the BHCA, CGB&L is subject
to periodic examination by the Federal Reserve Board and is required to file
periodic reports of its operations and such additional information as the
Federal Reserve Board may require. Because the Building & Loan is chartered
under Illinois law, CGB&L is also subject to registration with, and regulation
by, the Commissioner under the ISBA.

   Under the Bank Holding Company Act and regulations promulgated by the Federal
Reserve Board, a bank holding company must seek and obtain approval of the
Federal Reserve Board before taking any of several actions. For example, subject
to certain specific exceptions, a bank holding company may not acquire direct or
indirect ownership or control of more than five percent of the voting shares or
substantially all assets of a bank without prior approval of the Federal Reserve
Board. Also (and again subject to certain exceptions), a bank holding company
may not merge with or consolidate into another bank holding company without such
prior approval.

   Until the passage of the Gramm-Leach-Bliley Act in November, 1999, the Bank
Holding Company Act and applicable regulations generally prohibited bank holding
companies from acquiring direct or indirect ownership or control of voting
shares of any company which was not either a bank or bank holding company. In
addition, Federal Reserve Board regulations generally prohibited bank holding
companies from engaging directly or indirectly in any activity other than (i)
banking, or managing or controlling banks and other sub-sidiaries authorized
under the Bank Holding Company Act and (ii) activities so closely related to
banking, or managing or controlling banks as to be a proper incident thereto.

   Under the Gramm-Leach-Bliley Act, a bank holding company that elects to
become a "financial holding company" may engage in any activity that the Federal
Reserve Board, in consultation with the Secretary of the Treasury, determines is
(i) financial in nature or incidental thereto, or (ii) comple-mentary to any
such financial-in-nature activity, provided that such complementary activity
does not pose a substantial risk to the safety and soundness of depository
institutions or the financial system generally. A bank holding company may elect
to become a financial holding company only if each of its depository institution
subsidiaries is well-capitalized, well-managed, and has a Community Reinvestment
Act rating of "satisfactory" or better at its most recent examination.

   This new law specifies many activities that are financial in nature,
including lending, exchanging, transferring, investing for others, or
safeguarding money or securities; underwriting and selling insurance; providing
financial, investment, or economic advisory services; underwriting, dealing in,
or making a market in securities; and those activities currently permitted for
bank holding companies that are so closely related to banking, or managing or
controlling banks, as to be a proper incident thereto.


                                       27
<PAGE>


   A bank holding company is a legal entity separate and distinct from its
subsidiary bank or banks. Normally, the major source of a holding company's
revenue is dividends a holding company receives from its subsidiary banks. The
right of a bank holding company to participate as a stockholder in any
distribution of assets of its subsidiary banks upon their liquidation or
reorganization or otherwise is subject to the prior claims of creditors of such
subsidiary banks. The subsidiary banks are subject to claims by creditors for
long- and short-term debt obligations, including substantial obligations for
federal funds purchased and securities sold under repurchase agreements, as well
as deposit liabilities. Under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, in the event of a loss suffered by the FDIC in
connection with a banking subsidiary of a bank holding company (whether due to a
default or the provision of FDIC assistance), other banking subsidiaries of the
holding company could be assessed for such loss.

   Federal laws limit the transfer of funds by a subsidiary bank to its holding
company in the form of loans or extensions of credit, investments or purchase of
assets. "See The Building & Loan - Transactions with Affiliates".

   The Federal Reserve Board has adopted risk-based capital standards to assist
in evaluating bank holding company capital adequacy. For purposes of risk-based
capital standards, capital is broken into "core capital elements" (Tier 1
capital) and supplementary capital elements" (Tier 2 capital).

   A bank holding company's Tier 1 capital generally consists of common
stockholder's equity, noncumulative perpetual preferred stock (including any
related surplus); and minority interest in the common equity accounts of
consolidated subsidiaries offset by goodwill and certain other intangible
assets. A bank holding company's Tier 2 capital generally consists of the
allowance for loan and lease losses (subject to certain limitations), perpetual
preferred stock and related surplus (subject to certain conditions) hybrid
capital instruments, perpetual debt and mandatory convertible debt securities,
term subordinated debt, and intermediate-term preferred stock.

   The Federal Reserve Board's capital standards require a minimum ratio of
qualifying total capital (i.e., Tier 1 plus Tier 2 capital) to weighted risk
assets of 8%, of which at least half should be in the form of Tier 1 capital. In
addition, the maximum amount of supplementary (i.e., Tier 2) capital that can be
counted toward the 8% standard is limited to 100% of a holding company's Tier 1
capital.

   The Federal Reserve Board has adopted a minimum ratio of Tier 1 capital to
total assets of 3% (the "Tier 1 Leverage Ratio") for strong bank holding
companies (those rated "1" under the BOPEC rating system for bank holding
companies) and for holding companies that have implemented risk-based capital
measures for market risk. For all other bank holding companies, the minimum Tier
1 Leverage Ratio is 4%. The Federal Reserve Board expects bank holding companies
with supervisory, financial, operational, or managerial weakness and those
anticipating or experiencing significant growth to maintain capital ratios well
above the minimum level.


                                       28
<PAGE>


INTERSTATE BANKING AND BRANCHING

   Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Riegle-Neal Act"), the Federal Reserve Board is permitted, under specified
circumstances to approve the acquisition by a bank holding company located in
one state of a bank or a bank holding company located in another state, without
regard to any prohibition contained in state law.

   The Riegle-Neal Act permits states to require that a target bank have been in
operation for a minimum period, up to five years, and to impose non-
discriminatory limits on the percentage of the total amount of deposits with
insured depository institutions in the state which may be controlled by a single
bank or bank holding company. In addition, the Riegle-Neal Act imposed federal
deposit concentration limits (10% of nationwide total deposits, and 30% of total
deposits in the host state on applications subsequent to the applicant's initial
entry to the host state).

   The Riegle-Neal Act also authorized, effective June 1, 1997, the responsible
federal banking agency to approve applications for mergers of banks across state
lines without regard to whether such activity is contrary to state law. Each
state is permitted to retain a minimum age requirement of up to five years, a
non-discriminatory deposit cap, and non-discriminatory notice or filing
requirements. The responsible federal agency will apply the same federal
concentration limits and capital management adequacy requirements noted above
with respect to BHCA applications.

   Illinois law, unlike the laws of some states and as permitted by federal law,
does not authorize the establishment of de novo branches or the purchase by an
out-of-state bank of one or more branches of a bank with its main office in
Illinois. Since the laws of the various states which do authorize de novo
branches or branch purchases normally have reciprocity provisions, Illinois
state-chartered banks generally are not able to establish or acquire branches in
other states except through the merger with a bank in another state.

   Branches acquired in a host state by both out-of-state state-chartered and
national banks will be subject to community reinvestment, consumer protection,
fair lending and interstate branching laws of the host state to the same extent
as branches of a national bank having its main office in the host state. Among
other things, the Riegle-Neal Act also preserves state taxation authority,
prohibits the operation by out-of-state banks of interstate branches as deposit
production offices, imposes additional notice requirements upon interstate banks
proposing to close branch offices in a low or moderate-income area, and creates
new Community Reinvestment Act evaluation requirements for interstate depository
institutions.

IMPACT OF NEW ACCOUNTING STANDARDS

   During 1998, the Financial Accounting Standards Board ("FASB") issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities." This Statement requires companies to record derivatives on the
balance sheet at their fair value. Statement No. 137 amended the effective date
of Statement No. 133 to fiscal years beginning after June 15, 2000. The new
Statement applies to all entities. This Statement may not be applied
retroactively to financial statements of prior periods. The adoption of the


                                       29
<PAGE>


Statement will have no material impact on the Company's financial condition or
result of operations.

During 2000, the FASB issued Statement of Financial Accounting Standards No.
140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities". This Statement replaces Statement of Financial
Accounting Standards No. 125. This Statement is effective for fiscal years
ending after December 15, 2000. The adoption of this Statement had no impact on
the Company's financial condition or results of operation.

ITEM 2.   DESCRIPTION OF PROPERTY.

    The Building & Loan conducts its business through its sole office at 229 E.
South Street, Cerro Gordo, Illinois 61818. The institution moved to this office
in 1963. It consists of the first floor of a two-story, brick building. At March
31, 2001, the net book value of the Building & Loan's premises and equipment was
$30,741. The Building & Loan believes that its facilities are adequate for its
current needs and those of the foreseeable future. The property is not subject
to any encumbrances and is adequately covered by insurance.

ITEM 3.   LEGAL PROCEEDINGS.

   CGB&L and the Building & Loan are, from time to time, a party to legal
proceedings arising in the ordinary course of its business, including legal
proceedings to enforce its rights against borrowers. CGB&L and the Building &
Loan are not currently a party to any legal proceedings which could reasonably
be expected to have a material adverse effect on the financial condition or
operations of CGB&L and the Building & Loan.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

   During the quarter ended March 31, 2001, no matters were submitted to a vote
of security holders through a solicitation of proxies or otherwise.

                                   PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

   The following table shows, for the indicated periods, the range of prices
per share of CGB&L's common stock in the over-the-counter market of which CGB&L
is aware. This information was obtained from Trident Securities, Inc.

   As to the bids of 10.5 and 10, this information is based on private
transactions between CGB&L and two individual shareholders.

   As to the high bid of 23 this quarter, this represents the terms of the
merger agreement the Company signed February 16, 2001 with Golden National
Acquisition Corporation, a company controlled by David Bijan Movtady. The terms
of the merger call for CGB&L stockholders to receive approximately $23.00 in
cash for each share of CGB&L they own.

  As to the low bid of 12.50 this quarter, this represents the lowest proposal
of six offers received for the purchase of the Company's common stock.


                                       30
<PAGE>


   Except for the 10.5, 10, 12.50 and 23 bids, which were not over the counter,
these quotations represent inter-dealer prices without retail mark-ups,
mark-downs or commissions and do not necessarily represent actual stock
transactions. For the periods after June 30, 1999, there were no high or low
bids over the counter. At this time, there is no active trading market in the
stock. CGB&L's common stock was first issued on September 28, 1998 at a price to
the public of $10 per share.

                                Bid price
                            High         Low            Dividend paid
                            ----         ----           --------------
09/28/1998 - 12/31/1998     11           10                  --
01/01/1999 - 03/31/1999     11           11                  --
04/01/1999 - 06/30/1999     11            9                 .10
07/01/1999 - 09/30/1999     --           --                  --
10/31/1999 - 12/31/1999     10.50        10.50              .10
01/01/2000 - 03/31/2000     --           --                  --
04/01/2000 - 06/30/2000     --           --                 .10
07/01/2000 - 09/30/2000     10           10                  --
10/31/2000 - 12/31/2000     --           --                 .10
01/01/2001 - 03/31/2001     23           12.50               --

   At March 31, 2001, there were approximately 90 holders of record of CGB&L's
common stock.

   The Board of Directors has the authority to declare dividends, subject to
statutory and regulatory requirements. The Board of Directors paid semi-annual
cash dividends of $.10 per share on May 11, 1999 to stockholders of record as of
April 27, 1999, again on November 10, 1999 to stockholders of record as of
October 26, 1999, again on May 11, 2000 to stockholders of record as of April
27, 2000, and again on November 10, 2000 to stockholders of record as of October
26, 2000. Declarations of dividends and the amount of any declared dividends are
subject to the discretion of the Board of Directors, and depend upon a number of
factors, including, without limitation, investment opportunities available to
CGB&L, strategic plans, capital requirements, regulatory limitations, CGB&L's
financial condition and results of operations. When dividends are declared,
CGB&L probably will be largely dependent upon dividends from the Building & Loan
for funds to pay common stock dividends.

   The Federal Reserve Board has issued a policy statement on the payment of
cash dividends by Building & Loan holding companies. In the policy state-ment,
the Federal Reserve Board expressed its view 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. The Federal Reserve Board
additionally 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. In addition to the restrictions on dividends
imposed by the Federal Reserve Board, the Delaware General
  Corporation Law would allow CGB&L to pay dividends only out of its surplus,


                                       31
<PAGE>


or if CGB&L has no such surplus, out of its net profits for the fiscal year in
which the dividend is declared and/or the preceding fiscal year. Under the ISBA
and the regulations of the Commissioner, dividends may be paid by CGB&L out of
its net profits (i.e., earnings from current operations, investments and other
assets plus actual recoveries on loan, net or current expenses including
dividends or interest on deposits, additions to reserves as required by the
Commissioner, actual losses, accrued dividends on preferred stock, if any and
all state and federal taxes). The written approval of the Commissioner must be
obtained, however, before CGB&L may declare dividends in any calendar year in an
amount in excess of 50% of its net profits for that calendar year. Additionally,
CGB&L will be unable to pay dividends in an amount which would reduce its
capital below the greater of the amount required (i) by the FDIC or (ii) for the
liquidation account established by the CGB&L in connection with its conversion
to the stock form of organization. The Commissioner and the FDIC also have the
authority to prohibit dividend payment by CGB&L if either body determines that
the distribution would constitute an unsafe or unsound practice.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2001 AND MARCH 31, 2000.

   Total assets increased $332,052 from $7,981,684 at March 31, 2000 to
$8,313,736 at March 31, 2001 or 4.2% compared to a 8.1% increase in the year
ending March 31, 2000. This increase was attributable primarily to the $339,241
increase in the loan portfolio from $6,591,500 at March 31, 2000 to $6,930,741
at March 31, 2001, a $90,044 increase in cash and cash equivalents from $512,729
at March 31, 2000 to $602,773 at March 31, 2001, a $78,376 increase in
investment securities, a $14,215 increase in premises and equipment, a $11,300
increase in FHLB stock offset by a $198,000 decrease in interest-bearing time
deposits from $590,000 to $392,000 for the same period and a $3,124 decrease in
other assets.

   The $78,376 increase in investment securities from March 31, 2000 to March
31, 2001 was the result of an increase in the market value of the Federal Home
Loan Mortgage Corporation ("FHLMC") stock. The FHLMC stock value at March 31,
2000 was $163,317 compared to $241,693 at March 31, 2001. The FHLMC stock is the
sole investment security held by the Building & Loan.

   The $339,241 increase in net loans from March 31, 2000 to March 31, 2001 was
the result primarily of one- to four-family loan originations. This 5.1%
increase in loans was primarily due to aggressively pursuing this category of
loan by publishing mortgage rates weekly. For owner occupied residential fixed
rate mortgages, the Building and Loan offers a maximum maturity of 30 years and
a maximum loan-to-value of 90%. Loan fee points are no longer collected on
residential mortgage loans.

   Interest bearing deposits decreased $198,000 or 33.6% from $590,000 at March
31, 2000 to $392,000 at March 31, 2001 and cash and cash equivalents increased
by $90,044 for the same period. The $14,315 increase in premises and equipment
was the result of exterior property improvements necessitated by the demolition
of an adjoining building.

   Customers' interest-bearing deposits increased $268,315 or 5.1% from
$5,265,067 at March 31, 2000 to $5,533,382 at March 31, 2001. The funds


                                       32
<PAGE>


generated from new deposits and proceeds from maturing time deposits were used
primarily to fund the mortgage loan portfolio.

   Equity received from contributions to the Employee Stock Ownership Plan
(ESOP) was $71,553 at March 31, 2001 compared to $20,278 at March 31, 2000. This
$51,275 increase represents the $23 share value set by the purchase agreement
for shares released during four quarters in fiscal year 2001 as compared to the
lower fair market value in fiscal year 2000.

   Total stockholders' equity decreased $19,362 from March 31, 2000 to March 31,
2001; the decrease summarized as follows:

   Stockholders' equity, March 31, 2000...........................   $1,586,663
   Net loss.......................................................      (62,673)
   Increase in unrealized gain on securities available for sale...       50,407
   Cash Dividends.................................................      (18,622)
   Incentive plan shares earned   ................................        7,434
   Purchase of treasury stock.....................................       (3,220)
   Exercise of stock options......................................        7,312
                                                                     ----------
 Total Stockholder's equity, March 31, 2001.......................   $1,567,301
                                                                     ==========

COMPARISON OF OPERATING RESULTS FOR THE FISCAL YEARS ENDED MARCH 31, 2001 AND
MARCH 31, 2000.

   CGB&L's net loss was $62,673 for fiscal year ended March 31, 2001
compared to net income of $30,108 for the comparative period ending March 31,
2000. The decrease in earnings of $92,781 is primarily attributable to an
increase in added expenses related to the proposed merger agreement with Golden
National Acquisition Corporation, an increase in salaries and employee benefit
expense related to employee stock ownership and incentive plans and lower net
interest income.

   Net interest income decreased to $271,603 in fiscal year ended March 31, 2001
compared to $306,385 for the same period in 2000. Total interest income of
$628,652 for 2001 approximated the $629,303 for the same period in 2000.
The increase of $19,195 in interest expense on deposits from $274,101 to
$293,296 was due to an increase in interest bearing deposits and an increase in
average rates paid on certificates of deposit during the fiscal year ending
March 31, 2001. Interest expense on Federal Home Loan Bank borrowings increased
from $48,817 to $63,753, a total of $14,936 due to the higher average balance
and average interest rate of Federal Home Loan Bank borrowings during the fiscal
year ended March 31, 2001.

   The provision for loan loss expense was $0 for the 2001 and 2000 fiscal
years. Building & Loan management believes the allowance for loan loss is
sufficient based on information currently available. No assurances can be made
that future events, conditions or regulatory directives will not result in
increased provisions for loan losses or additions to the Building & Loan's
allowance for loan losses which may adversely affect net income. Non-performing
assets at fiscal year ended March 31, 2001 decreased to $11,966 (one loan)from
$135,705 (four loans) at March 31, 2000. Each of these loans


                                       33
<PAGE>


were three payments delinquent when classified, all have sufficient collateral
and the Building and Loan anticipates no collection problems.

   Total other expenses increased from $273,040 to $351,336 for a total of
$78,296 or 28.7% for fiscal year ending March 31, 2001 compared to the same
period of 2000. This change is due to increased professional expenses and
employee compensation expenses related to the increased stock price due to the
proposed merger agreement with Golden National Acquisition Corporation. Employee
compensation expense increased due to ESOP expense of $51,275 for the fiscal
year ending March 31, 2001 compared to $11,903 during the same period of 2000.
The increase was due to the increase in the value assigned to the company stock
of $23 per share. The ESOP shares are recorded at the fair market value of the
Company's stock as of the balance sheet date. The increase in fair market value
is recognized as compensation expense. The $53,258 increase in professional fees
from 2000 to 2001 was due to expenses incurred in relation to the proposed
merger agreement with Golden National Acquisition Corporation.

   Total income tax expense was $11,886 for the year ended March 31, 2001
compared to $7,414 for the same period in 2000, despite the decrease in earnings
due to non-deductible professional fees and the effect of allocating ESOP
shares.

ITEM 7.   FINANCIAL STATEMENTS

                   CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2001 AND 2000

Independent Auditor's Report................................................  35

Consolidated Balance Sheet..................................................  36

Consolidated Statement of Income............................................  37

Consolidated Statement of Stockholder's Equity..............................  38

Consolidated Statement of Cash Flows........................................  39

Notes to Consolidated Financial Statements..................................  40


                                       34
<PAGE>


[LOGO]
OLIVE

                          INDEPENDENT AUDITOR'S REPORT


To the Stockholders and
Board of Directors
CGB&L Financial Group, Inc. and Subsidiary
Cerro Gordo, Illinois


We have audited the accompanying consolidated balance sheet of CGB&L Financial
Group, Inc. and subsidiary as of March 31, 2001 and 2000, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements described above present
fairly, in all material respects, the consolidated financial position of CGB&L
Financial Group, Inc. and subsidiary as of March 31, 2001 and 2000, and the
results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

/s/ Olive LLP


Decatur, Illinois
April 6, 2001


                                       35
<PAGE>


                   CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31                                                                            2001            2000
-----------------------------------------------------------------------------------------------------------
<S>                                                                             <C>             <C>
ASSETS
   Cash and due from banks                                                      $    27,890     $    25,068
   Interest-bearing demand deposits                                                 574,883         487,661
                                                                                ---------------------------
         Cash and cash equivalents                                                  602,773         512,729
   Interest-bearing deposits                                                        392,000         590,000
   Investment securities available for sale                                         241,693         163,317
   Loans, net of allowance for loan losses of $32,700                             6,930,741       6,591,500
   Premises and equipment                                                            30,741          16,526
   Federal Home Loan Bank stock                                                      66,400          55,100
   Other assets                                                                      49,388          52,512
                                                                                ---------------------------
         Total assets                                                           $ 8,313,736     $ 7,981,684
                                                                                ===========================

LIABILITIES
   Interest-bearing deposits                                                    $ 5,533,382     $ 5,265,067
   Long-term debt                                                                 1,000,000       1,000,000
   Other liabilities                                                                141,500         109,676
                                                                                ---------------------------
         Total liabilities                                                        6,674,882       6,374,743
                                                                                ---------------------------
COMMITMENTS AND CONTINGENT LIABILITIES

EQUITY RECEIVED FROM CONTRIBUTIONS TO THE ESOP                                       71,553          20,278
                                                                                ---------------------------

STOCKHOLDERS' EQUITY
   Preferred stock, $.01 par value
     Authorized and unissued-- 100,000
   Common stock, $.01 par value
     Authorized -- 900,000 shares
     Issued-- 99,000 shares, less unallocated ESOP shares of 4,808 and 5,939            911             911
   Additional paid-in capital                                                       617,764         618,747
   Retained earnings                                                                840,485         921,780
   Accumulated other comprehensive income                                           155,808         105,401
                                                                                ---------------------------
                                                                                  1,614,968       1,646,839

   Less:
   Unearned incentive plan shares-- 2,618 and 3,366 shares                          (27,489)        (35,343)
   Treasury stock, at cost-- 1,937 and 2,365 shares                                 (20,178)        (24,833)
                                                                                ---------------------------
         Total stockholders' equity                                               1,567,301       1,586,663
                                                                                ---------------------------

         Total liabilities and stockholders' equity                             $ 8,313,736     $ 7,981,684
                                                                                ===========================

See notes to consolidated financial statements.
</TABLE>

                                       36
<PAGE>


                   CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENT OF INCOME


YEAR ENDED MARCH 31                                      2001          2000
------------------------------------------------------------------------------

INTEREST INCOME
   Loans receivable                                    $ 561,620     $ 550,033
   Investment securities                                   9,546         6,088
   Interest bearing deposits                              57,486        73,182
                                                       -----------------------
         Total interest income                           628,652       629,303

INTEREST EXPENSE
   Deposits                                              293,296       274,101
   FHLB borrowings                                        63,753        48,817
                                                       -----------------------

         Total interest expense                          357,049       322,918
                                                       -----------------------

NET INTEREST INCOME                                      271,603       306,385
   Provision for loan losses                           -----------------------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES      271,603       306,385
                                                       -----------------------

OTHER INCOME                                              28,946         4,177
                                                       -----------------------

OTHER EXPENSE
   Salaries and employee benefits                        198,832       174,126
   Net occupancy and equipment expenses                    8,599         8,730
   Deposit insurance expense                               1,073         2,519
   Insurance expense                                       5,052         5,052
   Professional fees                                      97,670        44,412
   Other expenses                                         40,110        38,201
                                                       -----------------------
         Total other expense                             351,336       273,040
                                                       -----------------------

INCOME (LOSS) BEFORE INCOME TAX                          (50,787)       37,522
   Income tax expense                                     11,886         7,414
                                                       -----------------------

NET INCOME (LOSS)                                      $ (62,673)    $  30,108
                                                       =======================

BASIC EARNINGS PER SHARE                               $    (.71)    $    0.33
                                                       =======================

DILUTED EARNINGS PER SHARE                             $    (.71)    $    0.33
                                                       =======================

See notes to consolidated financial statements.


                                       37
<PAGE>


                   CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                              ADDITIONAL
                                                COMMON         PAID-IN       COMPREHENSIVE
                                                STOCK          CAPITAL       INCOME (LOSS)
---------------------------------------------------------------------------------------------
<S>                                          <C>             <C>             <C>
BALANCES, APRIL 1, 1999                      $       911     $   619,193
   Comprehensive loss
     Net income                                                              $    30,108
     Other comprehensive income, net of
       tax
       Unrealized losses on securities                                           (32,017)
                                                                             -----------
   Comprehensive loss                                                        $    (1,909)
                                                                             ===========
   Cash dividends ($.20 per share)
   Incentive plan shares acquired
   Incentive plan shares earned                                     (446)
   Purchase of treasury stock, 2,365
     shares
                                             ---------------------------
BALANCES, MARCH 31, 2000                             911         618,747
   Comprehensive loss
     Net loss                                                                $   (62,673)
     Other comprehensive income, net of
       tax
       Unrealized gains on securities                                             50,407
                                                                             -----------
   Comprehensive loss                                                        $   (12,266)
                                                                             ===========
   Cash dividends ($.20 per share)
   Incentive plan shares earned                                     (420)
   Exercise of stock options, 750 shares                            (563)
   Purchase of treasury stock, 322 shares
                                             ---------------------------

BALANCES, MARCH 31, 2001                     $       911     $   617,764
                                             ===========================
</TABLE>

[WIDE TABLE CONTINUED]
<TABLE>
<CAPTION>
                                                             ACCUMULATED
                                                                OTHER         UNEARNED
                                               RETAINED      COMPREHENSIVE    INCENTIVE        TREASURY
                                               EARNINGS         INCOME       PLAN SHARES         STOCK           TOTAL
                                             ---------------------------------------------------------------------------
<S>                                          <C>             <C>             <C>             <C>             <C>
BALANCES, APRIL 1, 1999                      $   910,056     $   137,418                                     $ 1,667,578
   Comprehensive loss
     Net income                                   30,108                                                          30,108
     Other comprehensive income, net of
       tax
       Unrealized losses on securities                           (32,017)                                        (32,017)

   Comprehensive loss

   Cash dividends ($.20 per share)               (18,384)                                                        (18,384)
   Incentive plan shares acquired                                            $   (41,580)                        (41,580)
   Incentive plan shares earned                                                    6,237                           5,791
   Purchase of treasury stock, 2,365
     shares                                                                                  $   (24,833)        (24,833)
                                             ---------------------------------------------------------------------------
BALANCES, MARCH 31, 2000                         921,780         105,401         (35,343)        (24,833)      1,586,663
   Comprehensive loss
     Net loss                                    (62,673)                                                        (62,673)
     Other comprehensive income, net of
       tax
       Unrealized gains on securities                             50,407                                          50,407

   Comprehensive loss

   Cash dividends ($.20 per share)               (18,622)                                                        (18,622)
   Incentive plan shares earned                                                    7,854                           7,434
   Exercise of stock options, 750 shares                                                           7,875           7,312
   Purchase of treasury stock, 322 shares                                                         (3,220)         (3,220)
                                             ---------------------------------------------------------------------------

BALANCES, MARCH 31, 2001                     $   840,485     $   155,808     $   (27,489)    $   (20,178)    $ 1,567,301
                                             ===========================================================================
</TABLE>

See notes to consolidated financial statements


                                       38
<PAGE>


                   CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31                                                                          2001           2000
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>             <C>
OPERATING ACTIVITIES
   Net income (loss)                                                                     $   (62,673)    $    30,108
   Adjustments to reconcile net income (loss) to net cash
     provided by operating activities
     Depreciation                                                                              1,608           1,344
     Deferred income tax expense                                                               4,961           2,829
     Compensation expense related to employee stock ownership plan and incentive plan         58,709          17,694
     Federal Home Loan Bank stock dividends                                                   (4,500)
     Federal Home Loan Mortgage stock dividends                                               (2,002)
     Change in
       Other liabilities                                                                         896          11,855
       Other assets                                                                            3,124          (9,487)
                                                                                         ---------------------------
         Net cash provided by operating activities                                               123          54,343
                                                                                         ---------------------------

INVESTING ACTIVITIES
   Net change in interest-bearing deposits                                                   198,000         301,000
   Net change in loans                                                                      (339,241)     (1,201,227)
   Purchases of securities held to maturity                                                 (100,000)
   Proceeds from maturities of securities held to maturity                                   100,000
   Purchase of premises and equipment                                                        (15,823)         (1,677)
   Purchase of Federal Home Loan Bank stock                                                   (6,800)
                                                                                         ---------------------------
         Net cash used by investing activities                                              (163,864)       (901,904)
                                                                                         ---------------------------

FINANCING ACTIVITIES
   Net change in
     Savings deposits                                                                        (39,536)        (48,165)
     Certificates of deposit                                                                 307,851         317,938
   Proceeds from long-term debt                                                              400,000
   Cash dividends                                                                            (18,622)        (18,384)
   Purchase of stock for incentive plan                                                      (41,580)
   Purchase of treasury stock                                                                 (3,220)        (24,833)
   Proceeds from exercise of stock options                                                     7,312
                                                                                         ---------------------------
         Net cash provided by financing activities                                           253,785         584,976
                                                                                         ---------------------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                                       90,044        (262,585)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                 512,729         775,314
                                                                                         ---------------------------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                   $   602,773     $   512,729
                                                                                         ===========================

ADDITIONAL CASH FLOWS INFORMATION
   Interest paid                                                                         $   353,375     $   316,458
   Income tax paid                                                                             1,663          10,264
</TABLE>

See notes to consolidated financial statements.


                                       39
<PAGE>


                   CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

The accounting and reporting policies of CGB&L Financial Group, Inc. (Company)
and its wholly owned subsidiary Cerro Gordo Building and Loan, s.b. (Bank)
conform to generally accepted accounting principles and reporting practices
followed by the thrift industry. The more significant of the policies are
described below.

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

The Company is a thrift holding company whose principal activity is the
ownership and management of the Bank. The Bank operates under a state thrift
charter and provides full banking services. As a state-chartered thrift, the
Bank is subject to regulation by the Illinois Office of Banks and Real Estate
and the Federal Deposit Insurance Corporation.

The Bank generates mortgage and share loans and receives deposits from customers
located primarily in Piatt County. The Bank's loans are generally secured by
specific items of collateral including real property and consumer assets.
Although the Bank has a diversified loan portfolio, a substantial portion of its
debtors' ability to honor their contracts is dependent upon economic conditions
in Piatt County and the surrounding communities.

CONSOLIDATION -- The consolidated financial statements include the accounts of
the Company and Bank after the elimination of all material intercompany
transactions.

INVESTMENT SECURITIES -- Debt securities are classified as held to maturity when
the company has the positive intent and ability to hold the securities to
maturity. Securities held to maturity are carried at amortized cost. Debt
securities not classified as held to maturity and marketable equity securities
are classified as available for sale. Securities available for sale are carried
at fair value with unrealized gains and losses reported separately as
accumulated other comprehensive income in equity capital, net of tax.

Amortization of premiums and accretion of discounts are recorded as interest
income from securities. Realized gains and losses are recorded as net security
gains (losses). Gains and losses on sales of securities are determined on the
specific-identification method.

LOANS are carried at the principal amount outstanding. Interest income is
accrued on the principal balances of loans. The accrual of interest on impaired
loans is discontinued when, in management's opinion, the borrower may be unable
to meet payments as they become due. When interest accrual is discontinued, all
unpaid accrued interest is reversed when considered uncollectible. Interest
income is subsequently recognized only to the extent cash payments are received.
In applying the provisions of Statement of Financial Accounting Standards (SFAS)
No. 114, the Company considers its investments in one-to-four family residential
and share loans to be homogeneous and therefore excluded from separate
identification for valuation of impairment. Certain loan fees and direct costs
are being deferred and amortized as an adjustment of yield on the loans.


                                       40
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


ALLOWANCE FOR LOAN LOSSES is maintained to absorb loan losses based on
management's continuing review and evaluation of the loan portfolio and its
judgment as to the impact of economic conditions on the portfolio. The
evaluation by management includes consideration of past loss experience, changes
in the composition of the portfolio, the current condition and amount of loans
outstanding, and the probability of collecting all amounts due. Impaired loans
are measured by the present value of expected future cash flows, or the fair
value of the collateral of the loan, if collateral dependent.

The determination of the adequacy of the allowance for loan losses is based on
estimates that are particularly susceptible to significant changes in the
economic environment and market conditions. Management believes that as of March
31, 2001, the allowance for loan losses is adequate based on information
currently available. A worsening or protracted economic decline in the area
within which the Bank operates would increase the likelihood of additional
losses due to credit and market risks and could create the need for additional
loss reserves.

PREMISES AND EQUIPMENT are carried at cost net of accumulated depreciation.
Depreciation is computed using the straight-line method based on the estimated
useful lives of the assets. Maintenance and repairs are expensed as incurred
while major additions and improvements are capitalized. Gains and losses on
dispositions are included in current operations.

FEDERAL HOME LOAN BANK STOCK is a required investment for institutions that are
members of the Federal Home Loan Bank (FHLB) system. The required investment in
the common stock is based on a predetermined formula.

TREASURY STOCK is stated at cost. Cost is determined by the first-in, first-out
method.

INCOME TAX in the consolidated statement of income includes deferred income tax
provisions or benefits for all significant temporary differences in recognizing
income and expenses for financial reporting and income tax purposes. The Company
files consolidated income tax returns with its subsidiary.

INCENTIVE PLAN -- The Company accounts for its stock award program or incentive
plan in accordance with Accounting Principals Board Opinion (APB) No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. The aggregate purchase price of all
shares owned by the incentive plan is reflected as a reduction of stockholders'
equity. Compensation expense is based on the market price of the Company's stock
on the date the shares are granted and is recorded over the vesting period. The
differences between the aggregate purchase price and the fair value on the date
granted of the shares is recorded as an adjustment to paid-in capital.

EMPLOYEE STOCK OWNERSHIP PLAN -- The Company accounts for its employee stock
ownership plan (ESOP) in accordance with American Institute of Certified Public
Accountants (AICPA) Statement of Position 93-6. Compensation expense is recorded
based on the fair value of the shares as they are committed to be released for
allocation to participant accounts. The allocated shares are included in the
mezzanine as equity received from contributions to the ESOP and are adjusted
based on the changes in market value.

EARNINGS PER SHARE -- Basic earnings per share have been computed based upon the
weighted average common shares outstanding during each year. Diluted earnings
per share reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock or resulted in the issuance of common stock that then shared in the
earnings of the Company.


                                       41
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2 -- MERGER AGREEMENT

On February 16, 2001, the Company's Board of Directors approved an agreement and
plan of merger with Golden National Acquisition Corporation (Golden National).
Under the terms of this agreement, each Company shareholder will receive
approximately $23 per share in exchange for each share of the Company's common
stock on the date of the merger. It is anticipated that this transaction will be
completed during the first quarter of fiscal year ending March 31, 2002.
However, it is subject to several conditions including approval of the Company's
shareholders and various regulatory authorities. The Company has incurred
approximately $38,000 in professional fees related to the merger which were
expensed during 2001.


NOTE 3 -- INVESTMENT SECURITIES AVAILABLE FOR SALE

                                                       2001
                                ------------------------------------------------
                                             GROSS            GROSS
                                           UNREALIZED       UNREALIZED    FAIR
MARCH 31                         COST        GAINS            LOSSES      VALUE
--------------------------------------------------------------------------------
Federal Home Loan Mortgage
   Corporation common stock     $  5,621   $236,072             $0     $ 241,693
                                ================================================


                                                       2000
                                ------------------------------------------------
                                             GROSS            GROSS
                                           UNREALIZED       UNREALIZED    FAIR
MARCH 31                         COST        GAINS            LOSSES      VALUE
--------------------------------------------------------------------------------
Federal Home Loan Mortgage
   Corporation common stock     $  3,619   $159,698             $0     $ 163,317
                                ================================================


There were no pledged securities at March 31, 2001 or 2000.

There were no sales of securities held to maturity or available for sale during
2001 or 2000.

The Company's investment in the Federal Home Loan Mortgage Corporation Common
Stock exceeded 10% of stockholders' equity at March 31, 2001. The Company did
not hold any other securities of a single issuer, payable from and secured by
the same source of revenue of taxing authority, the book value of which exceeded
10% of stockholders' equity at March 31, 2001.


                                       42
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 -- LOANS AND ALLOWANCE

MARCH 31                                         2001              2000
--------------------------------------------------------------------------------
Real estate mortgage loans
   One-to-four family                         $6,605,290        $6,361,223
   Multi-family                                   58,173            68,777
   Commercial                                    239,768           255,131
Share loans                                      134,402           124,841
                                              ----------------------------
                                               7,037,633         6,809,972
Less
   Undisbursed portion of loans                  (19,812)         (122,500)
   Deferred loan fees                            (54,380)          (63,272)
   Allowance for loan losses                     (32,700)          (32,700)
                                              ----------------------------

         Total loans                          $6,930,741        $6,591,500
                                              ============================


There was no activity in the allowance for loan losses for 2001 or 2000.

The amount of impaired loans as of or during the periods ending March 31, 2001
and 2000 was immaterial.


NOTE 5 -- PREMISES AND EQUIPMENT

MARCH 31                                          2001              2000
--------------------------------------------------------------------------------

Land                                          $      500        $      500
Buildings and land improvements                   37,205            21,382
Furniture and equipment                           55,947            55,947
                                              ----------------------------
         Total cost                               93,652            77,829

Accumulated depreciation                         (62,911)          (61,303)
                                              ----------------------------

         Net                                  $   30,741        $   16,526
                                              ============================


                                       43
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 -- OTHER ASSETS AND OTHER LIABILITIES

MARCH 31                                              2001              2000
--------------------------------------------------------------------------------

Other assets
   Interest receivable
     Investment securities                         $    3,785        $    3,598
     Loans                                             17,455            16,376
   Prepaid expenses and other                          28,148            32,538
                                                   ----------------------------

         Total                                     $   49,388        $   52,512
                                                   ============================

Other liabilities
   Interest payable
     Deposits                                      $   57,047        $   53,373
     Long-term debt                                     5,415             5,415
   Accrued expenses payable                            14,162            16,940
   Deferred tax liability                              64,876            33,948
                                                   ----------------------------

         Total                                     $  141,500        $  109,676
                                                   ============================


NOTE 7 -- DEPOSITS

MARCH 31                                              2001              2000
-------------------------------------------------------------------------------

Savings deposits                                      292,493       $   332,029
Certificates of deposit of $100,000 or more           300,551           100,000
Other certificates of deposits                      4,940,338         4,833,038
                                                  -----------------------------

         Total deposits                           $ 5,533,382       $ 5,265,067
                                                  =============================


CERTIFICATES MATURING IN YEARS ENDING MARCH 31,
-------------------------------------------------------------------------------

2002                                                                $ 2,302,255
2003                                                                  1,272,738
2004                                                                    388,572
2005                                                                    197,867
2006                                                                    583,993
Thereafter                                                              495,464
                                                                    -----------

                                                                    $ 5,240,889
                                                                    ===========


                                       44
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 -- LONG-TERM DEBT

MARCH 31                                              2001               2000
--------------------------------------------------------------------------------

Federal Home Loan Bank advances                   $ 1,000,000        $ 1,000,000
                                                  ==============================

The Federal Home Loan Bank (FHLB) advances are secured by all stock in the FHLB
and first mortgage loans.

The FHLB advances consist of two advances, a $400,000 advance due February, 2005
at 6.18% and a $600,000 advance due December, 2007 at 6.36%.


NOTE 9 -- INCOME TAX

YEAR ENDED MARCH 31                                           2001       2000
-------------------------------------------------------------------------------

Income tax expense
   Currently payable
     Federal                                                $  4,082   $  2,951
     State                                                     2,843      1,634

   Deferred
     Federal                                                   4,961      2,829
                                                            -------------------

         Total income tax expense                           $ 11,886   $  7,414
                                                            ===================

Reconciliation of federal statutory to actual tax expense
   Federal statutory income tax at 34%                      $(17,268)   $12,758
   Non-deductible professional fees                           18,105
   Effect of allocating ESOP shares                           12,914
   Graduated tax rates                                        (6,499)    (7,129)
   Effect of state income taxes                                1,876      1,078
   Other                                                       2,758        707
                                                            -------------------

         Actual tax expense                                 $ 11,886   $  7,414
                                                            ===================


                                       45
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


A cumulative net deferred tax liability is included in other liabilities. The
components of the liability are as follows:

MARCH 31                                                    2001        2000
-------------------------------------------------------------------------------

ASSETS
   Loan fees                                              $  15,770   $  18,349
   Allowance for loan losses                                  8,569       7,655
                                                          ---------------------

         Total assets                                        24,339      26,004
                                                          ---------------------

LIABILITIES
   Accrual to cash adjustment                                (3,455)     (3,749)
   Depreciation                                              (2,886)       (601)
   Net unrealized gains on securities available for sale    (80,264)    (54,297)
   FHLB stock dividends                                      (2,610)     (1,305)
                                                          ---------------------

         Total liabilities                                  (89,215)    (59,952)
                                                          ---------------------

                                                          $ (64,876)   $(33,948)
                                                          =====================


Retained earnings include approximately $125,000 for which no deferred income
tax liability has been recognized. This amount represents an allocation of
income to bad debt deductions as of April 30, 1988, for tax purposes only.
Reduction of amounts so allocated for purposes other than tax bad debt losses or
adjustments arising from carryback of net operating losses would create income
for tax purposes only, which income would be subject to the then-current
corporate income tax rate. The unrecorded deferred income tax liability on the
above amount was approximately $43,000.


NOTE 10 --         OTHER COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
                                                                               2001
                                                         --------------------------------------
                                                         BEFORE-TAX      TAX         NET-OF-TAX
YEAR ENDED MARCH 31                                        AMOUNT      EXPENSE         AMOUNT
-----------------------------------------------------------------------------------------------
<S>                                                      <C>          <C>            <C>
Unrealized gains on securities:
   Unrealized holding gains arising during the year      $  76,374    $ (25,967)     $  50,407
                                                         ======================================

                                                                               2000
                                                         --------------------------------------
                                                         BEFORE-TAX        TAX       NET-OF-TAX
YEAR ENDED MARCH 31                                         AMOUNT      BENEFIT        AMOUNT
-----------------------------------------------------------------------------------------------

Unrealized gains on securities:
   Unrealized holding losses arising during the year     $ (48,510)   $  16,493      $ (32,017)
                                                         ======================================
</TABLE>

                                       46
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11 -- COMMITMENTS AND CONTINGENT LIABILITIES

In the normal course of business there are outstanding commitments and
contingent liabilities, such as commitments to extend credit, which are not
included in the accompanying financial statements. The Bank's exposure to credit
loss in the event of nonperformance by the other party to the financial
instruments for commitments to extend credit is represented by the contractual
or notional amount of those instruments. The Bank uses the same credit policies
in making such commitments as it does for instruments that are included in the
consolidated balance sheet.

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 payment of a fee. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Bank evaluates each customer's credit
worthiness on a case-by-case basis. The amount of collateral obtained, if deemed
necessary by the Bank upon extension of credit, is based on management's credit
evaluation. Collateral held varies but may include residential real estate,
income-producing commercial properties, or other assets of the borrower. The
Bank had loan commitments at fixed rates of $81,500 and $78,000 as of March 31,
2001 and 2000. The interest rates on the loan commitments ranged from 6.50% to
7.75% at March 31, 2001.

The Company and subsidiary are subject to claims and lawsuits which arise
primarily in the ordinary course of business. It is the opinion of management
that the disposition or ultimate resolution of such claims and lawsuits will not
have a material adverse effect on the financial position of the Company.


NOTE 12 -- DIVIDEND AND CAPITAL RESTRICTIONS

Without prior approval, the Bank is restricted by Illinois law and regulations
of the Illinois Office of Banks and Real Estate and the Federal Deposit
Insurance Corporation as to the maximum amount of dividends it can pay to the
Company. The Bank is permitted to pay dividends to the Company in an amount
equal to its net profits in any fiscal year. As a practical matter, the Bank
restricts dividends to a lessor amount because of the need to maintain an
adequate capital structure.

At the time of conversion, a liquidation account was established in an amount
equal to the Bank's net worth as reflected in the latest statement of condition
used in its final conversion offering circular. The liquidation account is
maintained for the benefit of eligible deposit account holders who maintain
their deposit account in the Bank after conversion. In the event of a complete
liquidation, and only in such event, each eligible deposit account holder will
be entitled to receive a liquidation distribution from the liquidation account
in the amount of the then current adjusted subaccount balance for deposit
accounts then held, before any liquidation distribution may be made to
stockholders. Except for the repurchase of stock and payment of dividends, the
existence of the liquidation account will not restrict the use or application of
net worth. The initial balance of the liquidation account was $898,939.


                                       47
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13 -- REGULATORY CAPITAL

The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies and is assigned to a capital category. The assigned
capital category is largely determined by three ratios that are calculated
according to the regulations: total risk adjusted capital, Tier 1 capital, and
Tier 1 leverage ratios. The ratios are intended to measure capital relative to
assets and credit risk associated with those assets and off-balance sheet
exposures of the entity. The capital category assigned to an entity can also be
affected by qualitative judgments made by regulatory agencies about the risk
inherent in the entity's activities that are not part of the calculated ratios.

There are five capital categories defined in the regulations, ranging from well
capitalized to critically undercapitalized. Classification of a bank in any of
the undercapitalized categories can result in actions by regulators that could
have a material effect on a bank's operations. At March 31, 2001 and 2000, the
Bank is categorized as well capitalized and met all subject capital adequacy
requirements. There are no conditions or events since March 31, 2001 that
management believes have changed the Bank's classification.

The Bank's actual and required capital amounts and ratios are as follows:
<TABLE>
<CAPTION>
                                                                                    2001
                                                  --------------------------------------------------------------------------
                                                                            REQUIRED FOR ADEQUATE         TO BE WELL
                                                           ACTUAL                 CAPITAL(1)            CAPITALIZED(1)
                                                  --------------------------------------------------------------------------
MARCH 31                                              AMOUNT       RATIO      AMOUNT       RATIO       AMOUNT       RATIO
----------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>        <C>            <C>       <C>            <C>        <C>
Total risk-based capital(1)(to risk-weighted
   assets)                                             $1,251,000  33.07%        $303,000   8.0%          $378,000   10.0%

Core capital(1)(to adjusted tangible assets)            1,218,000  32.20%         151,000   4.0%           227,000    6.0

Core capital(1)(to adjusted total assets)               1,218,000  15.23          320,000   4.0%           400,000    5.0

                                                                                    2000
                                                  --------------------------------------------------------------------------
                                                                            REQUIRED FOR ADEQUATE         TO BE WELL
                                                           ACTUAL                 CAPITAL(1)            CAPITALIZED(1)
                                                  --------------------------------------------------------------------------
MARCH 31                                              AMOUNT       RATIO      AMOUNT       RATIO       AMOUNT       RATIO
----------------------------------------------------------------------------------------------------------------------------

Total risk-based capital(1)(to risk-weighted
   assets)                                             $1,199,000  32.75%        $293,000   8.0%          $366,000   10.0%

Core capital(1)(to adjusted tangible assets)            1,166,000  31.85          146,000   4.0%           220,000    6.0

Core capital(1)(to adjusted total assets)               1,166,000  14.61          320,000   4.0%           399,000    5.0


(1)  As defined by regulatory agencies
</TABLE>

                                       48
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 -- EMPLOYEE BENEFITS

The Company maintained a Simplified Employee Pension Plan for the benefit of
eligible employees during 2000. Contributions to the Plan were based on 15% of
the eligible participant's salary and were $4,466 during 2000. There were no
contributions to the Plan during 2001.

In connection with the conversion, the Company established an employee stock
ownership plan (ESOP) covering substantially all of its employees. The ESOP
borrowed $79,190 from the Company and used those funds to acquire 7,919 shares
of the Company's common stock at $10 per share. The ESOP covers employees who
perform at least 1,000 hours of service. A participant is 100% vested after
seven years of credited service.

The ESOP shares are held in trust and allocated to the ESOP participants based
on the interest and principal payments made by the ESOP on the loan from the
Company. The loan is secured by shares purchased with the loan proceeds and is
being repaid by the ESOP with funds from the Company's discretionary
contributions to the ESOP and earnings on ESOP assets. Dividends on unallocated
ESOP shares will be applied to reduce the loan. Principal payments are scheduled
to occur in even annual amounts over a seven year period. However, in the event
Company's contributions exceed the minimum debt service requirements, additional
principal payments will be made. The ESOP provides the participants with a put
option which permits the participants to sell such company stock to the Company
at the fair market value of the company stock.

Below are the transactions affecting the ESOP equity accounts:
<TABLE>
<CAPTION>
                                                ADDITIONAL
                                     COMMON        PAID-IN      UNALLOCATED
                                      STOCK        CAPITAL      ESOP SHARES          TOTAL
------------------------------------------------------------------------------------------
<S>                                     <C>      <C>               <C>           <C>
Balances, April 1, 1999                 $79      $  79,566         $(71,270)     $   8,375
   Market value increase in
     Employee stock ownership
     plan shares released                               26                              26
   Loan repayments                                                   11,877         11,877
                                     -----------------------------------------------------

Balances, March 31, 2000                 79         79,592          (59,393)        20,278
   Market value increase in
     Employee stock ownership
     plan shares released                           39,952                          39,952
   Loan repayments                                                   11,323         11,323
                                    ------------------------------------------------------

Balances, March 31, 2001                $79       $119,544         $(48,070)       $71,553
                                    ======================================================
</TABLE>

                                       49
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


During the year ended March 31, 2001 and 2000, 1,131 and 1,188 shares of stock
were committed to be released. The compensation expense, which is based on the
market value of allocated shares, was $51,275 and $11,903, respectively, during
the years ended March 31, 2001 and 2000. The following table reflects the shares
held by the plan:

MARCH 31                                            2001              2000
----------------------------------------------------------------------------

Allocated shares                                     3,111             1,980
Unallocated shares                                   4,808             5,939
                                                 ---------------------------
         Total ESOP shares
                                                     7,919             7,919
                                                 ===========================

Fair value of unallocated shares at March 31      $110,584          $ 57,905
                                                 ===========================


During fiscal year 2000, the Company adopted a stock-based compensation program
which included a stock award program or incentive plan. The incentive plan
covers key employees and directors and was authorized to acquire and grant 3,960
shares of the Company's common stock. All 3,960 shares authorized under the plan
were granted during October 1999. The shares were purchased in fiscal year 2000.
Participants in the incentive plan vest over five years. During fiscal year
2000, 220 shares were vested due to accelerated vesting as allowed by the plan.

As of March 31, 2001 and 2000, 594 and 0 shares were distributed, respectively.
None of these shares were forfeited during 2001 or 2000. For the years ended
March 31, 2001 and 2000, $7,434 and $5,791 was recorded as compensation expense
under the plan.


NOTE 15 -- STOCK OPTION PLAN

Under the Company's incentive stock option plan, which is accounted for in
accordance with Accounting Principles Board Opinion (APB) No. 25, ACCOUNTING FOR
STOCK ISSUED TO EMPLOYEES, and related interpretations, the Company grants
selected executives and other key employees stock option awards which vest pro
rata over a five year period and become fully exercisable at the end of five
years of continued employment. The plan includes a provision for accelerated
vesting based on certain conditions. During October 1999, the Company authorized
and granted 9,900 options of the Company's common stock. The exercise price of
each option, which has a 10-year life, was equal to the market price of the
Company's stock on the date of grant; therefore, no compensation expense was
recognized.


                                       50
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Although the Company has elected to follow APB No. 25, SFAS No. 123 requires pro
forma disclosures of net income and earnings per share as if the Company had
accounted for its employee stock options under that Statement. The fair value of
each option grant was estimated on the grant date using an option-pricing model
with the following assumptions:

                                                                2000
                                                              --------

Risk-free interest rates                                         6.50%
Dividend yields                                                  4.10%
Volatility factors of expected market price of common stock     18.00%

Weighted-average expected life of the options                 10 years

Under SFAS No. 123, compensation cost is recognized in the amount of the
estimated fair value of the options and amortized to expense over the options'
vesting period. The pro forma effect on net income and earnings per share of
this statement are as follows:

                                                    2001             2000
                                                 --------------------------

Net income                     As reported       $(62,673)          $30,108
                               Pro forma          (65,605)           28,486

Basic earnings per share       As reported           (.71)              .33
                               Pro forma             (.74)              .32

Diluted earnings per share     As reported           (.71)              .33
                               Pro forma             (.74)              .31


The following is a summary of the status of the Company's stock option plan and
changes in that plan as of and for the year ended March 31, 2001.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31                                                2001                             2000
-----------------------------------------------------------------------------------------------------------------------
                                                                         WEIGHTED-                         WEIGHTED-
                                                                          AVERAGE                           AVERAGE
                        OPTIONS                            SHARES      EXERCISE PRICE        SHARES      EXERCISE PRICE
-----------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>            <C>                <C>            <C>
Outstanding, beginning of year                              9,900          $9.75              9,900          $9.75
Granted
Exercised                                                    (750)         $9.75
Forfeited/expired
                                                         --------                          --------

Outstanding, end of year                                    9,150          $9.75              9,900          $9.75
                                                         ========                          ========

Options exercisable at year end                             1,830          $9.75                750          $9.75
Weighted-average fair value of options granted
   during the year                                                                                           $2.08
</TABLE>

                                       51
<PAGE>

CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


As of March 31, 2001, the 9,150 options outstanding have an exercise price of
$9.75 and a weighted-average remaining contractual life of 8.5 years.


NOTE 16 -- RELATED PARTY TRANSACTIONS

The Bank has entered into transactions with certain directors, executive
officers, significant stockholders and their affiliates or associates (related
parties). Such transactions were made in the ordinary course of business on
substantially the same terms and conditions, including interest rates and
collateral, as those prevailing at the same time for comparable transactions
with other customers, and did not, in the opinion of management, involve more
than normal credit risk or present other unfavorable features. The aggregate
amount of loans to such related parties at March 31, 2001 and 2000 was $339,189
and $231,536.

Deposits from related parties held by the Bank at March 31, 2001 and 2000
totaled $198,661 and $162,890.

The aggregate amount of loans, as defined, to such related parties were as
follows:

                                                                     2001
---------------------------------------------------------------------------
Balances, April 1, 2000                                            $231,536
New loans, including renewals                                       127,681
Payments, etc., including renewals                                  (20,028)
                                                                  ---------

Balances, March 31, 2001                                           $339,189
                                                                  =========


NOTE 17 -- EARNINGS PER SHARE

Earnings per share (EPS) were computed as follows:
<TABLE>
<CAPTION>
                                                                     YEAR ENDED MARCH 31, 2001
                                                            ----------------------------------------
                                                                            Weighted       Per-Share
                                                               Income    Average Shares      Amount
                                                            ---------------------------------------
<S>                                                         <C>              <C>            <C>
BASIC EARNINGS PER SHARE
   Income available to common stockholders and assumed
       conversions                                          $ (62,673)       88,256         $(0.71)
                                                            =======================================
</TABLE>

Unearned incentive plan shares and stock options were excluded in the year ended
March 31, 2001 earnings per share calculation as they were anti-dilutive due to
the loss.


                                       52
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                                       YEAR ENDED MARCH 31, 2000
                                                               ----------------------------------------
                                                                               Weighted       Per-Share
                                                                Income      Average Shares     Amount
                                                               ----------------------------------------
<S>                                                            <C>                <C>             <C>
BASIC EARNINGS PER SHARE
   Income available to common stockholders                     $ 30,108           90,431          $0.33

EFFECT OF DILUTIVE SECURITIES
   Unearned incentive plan shares                                                  1,194

DILUTED EARNINGS PER SHARE
                                                               ----------------------------------------
   Income available to common stockholders and assumed
     conversions                                               $ 30,108           91,625          $0.33
                                                               ========================================
</TABLE>
The stock options were not dilutive as of March 31, 2001.


NOTE 18 -- FAIR VALUES OF FINANCIAL INSTRUMENTS

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

CASH AND CASH EQUIVALENTS -- The fair value of cash and cash equivalents
approximates carrying value.

INTEREST-BEARING DEPOSITS -- The fair value of interest-bearing deposits
approximates carrying value.

SECURITIES -- Fair values are based on quoted market prices.

LOANS -- For short-term loans that reprice frequently and with no significant
change in credit risk, fair values are based on carrying values. The fair values
for mortgage loans, including one-to-four family residential, are based on
quoted market prices of similar loans sold in conjunction with securitization
transactions, adjusted for differences in loan characteristics.

INTEREST RECEIVABLE/PAYABLE -- The fair values of interest receivable/payable
approximate carrying values.

FHLB STOCK -- Fair value of FHLB stock is based on the price at which it may be
resold to the FHLB.

DEPOSITS -- The fair values of interest-bearing savings accounts are equal to
the amount payable on demand at the balance sheet date. The carrying amounts for
variable rate, fixed-term certificates of deposit approximate their fair values
at the balance sheet date. Fair values for fixed-rate certificates of deposit
are estimated using a discounted cash flow calculation that applies interest
rates currently being offered on certificates to a schedule of aggregated
expected monthly maturities on such time deposits.

LONG-TERM DEBT -- The fair value of these borrowings are estimated using a
discounted cash flow calculation, based on current rates for similar debt.


                                       53
<PAGE>


CGB&L FINANCIAL GROUP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


OFF-BALANCE SHEET COMMITMENTS -- Commitments include commitments to originate
mortgage loans, and are generally of a short-term nature. The fair value of such
commitments are based on fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreements and the
counterparties' credit standing.

The estimated fair values of the Company's financial instruments are as follows:
<TABLE>
<CAPTION>
                                                             2001                               2000
                                               ----------------------------------------------------------------------
                                                      CARRYING           FAIR            Carrying           Fair
MARCH 31                                               AMOUNT            VALUE            Amount            Value
---------------------------------------------------------------------------------------------------------------------
<S>                                                <C>               <C>               <C>               <C>
ASSETS
   Cash and cash equivalents                       $   602,773       $   602,773       $  512,729        $  512,729
   Interest-bearing deposits                           392,000           392,000          590,000           590,000
   Investment securities available for sale            241,693           241,693          163,317           163,317
   Loans, net                                        6,930,741         7,377,642        6,591,500         6,406,095
   Interest receivable                                  21,240            21,240           19,974            19,974
   Stock in FHLB                                        66,400            66,400           55,100            55,100

LIABILITIES
   Deposits                                          5,533,382         5,546,097        5,265,067         5,289,986
   Long-term debt                                    1,000,000         1,000,880        1,000,000           970,982
   Interest payable                                     62,462            62,462           58,788            58,788

OFF-BALANCE SHEET ASSETS (LIABILITIES)
   Commitments to extend credit                              0                 0                0                 0
</TABLE>

                                       54
<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

          None

                                 PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.

         The following is a list of the current directors and executive officers
of CGB&L, including their ages, periods of service, term expirations, and
principal occupations.
<TABLE>
<CAPTION>
                                          DIRECTOR         TERM
            NAME                 AGE       SINCE *        EXPIRES            PRINCIPAL OCCUPATION
            ----                 ---      --------        -------            --------------------
<S>                              <C>         <C>            <C>        <C>
Noel R. Buckley                  66          1995           2003       Retired Floor Supervisor, Firestone
                                                                       Tire and Rubber Company

Lester W. Crandall               43          1998           2002       Meat Manager, Wal-Mart (Decatur)

James E. Flaugher                42          2000           2001       President, Jim Flaugher Farms, Inc.
                                                                       and Jim Flaugher Trucking, Inc.

Larry D. Gaitros                 40          1997           2003       Millwright, Archer Daniel Midland
                                                                       (Decatur)

Maralyn F. Heckman               60          1976           2001       President and Chief Executive
                                                                       Officer, CGB&L Financial Group, Inc.
                                                                       and Cerro Gordo Building and Loan,
                                                                       s.b.

C. Russell York                  60          1983           2002       Service Technician, Phil Flaugher
                                                                       Electric Corporation (Decatur)

John A. Sochor, DDS              54          1981           2003       Dentist (Cerro Gordo)
</TABLE>

* Includes periods of service as director for Cerro Gordo Building and Loan.

         Noel R. Buckley. Mr. Buckley became a director of Cerro Gordo Building
and Loan, s.b. in 1995. He retired from his position as floor supervisor with
Firestone Tire and Rubber Company in 1994.
         Lester W. Crandall. Mr. Crandall is the meat manager at Wal-Mart in
Decatur, and prior to June 1, 1999 he was the meat manager of Eagle Food Center
in Decatur, Illinois for the past five years. Mr. Crandall also became a
director of Cerro Gordo Building and Loan, s.b. in 1998.


                                       55
<PAGE>


         Larry D. Gaitros. Mr. Gaitros became a director of Cerro Gordo Building
and Loan, s.b. in 1997. He is, and has been for more than the past five years, a
millwright for Archer Daniels Midland in Decatur, Illinois.
         James E. Flaugher. Mr. Flaugher became a director in 2000. Mr. Flaugher
became a director of the Corporation on April 12, 2000 to fill the vacancy left
when Dale C. Born passed away. Mr. Flaugher is self-employed, as the President
of Jim Flaugher Farms, Inc. and Jim Flaugher Trucking, Inc., and has held these
positions for more than the past five years.
         Maralyn F. Heckman. Mrs. Heckman has held various positions with Cerro
Gordo Building and Loan, s.b. since 1976. She became Chief Executive Officer of
Cerro Gordo Building and Loan, s.b. in 1977. She is, and has been since the
creation of the Corporation, the Chief Executive Officer and the Chief Financial
Officer of the Corporation.
         John A. Sochor, DDS. Dr. Sochor is the Chairman of the Bank Board and
has been a director of Cerro Gordo Building and Loan, s.b. since 1981. He is,
and has been for more than the past five years, a licensed, self-employed
dentist in Cerro Gordo, Illinois.
         C. Russell York. Mr. York has had a long association with Cerro Gordo
Building and Loan, s.b., first becoming a director of Cerro Gordo Building and
Loan, s.b. in 1983. He holds the title of Vice Chairman of the Bank Board. Since
October of 1994, he has held the position of service technician for Phil
Flaugher Electric Corporation in Decatur, Illinois. Prior to that, Mr. York was
employed with the A. E. Staley Manufacturing Company in Decatur, Illinois for
thirty-five years.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and certain officers, and persons who own more than ten
percent (10%) of the Company's Common Stock to file with the SEC initial reports
of beneficial ownership and reports of changes of beneficial ownership of Common
Stock. These officers, directors and greater than ten-percent (10%) shareholders
are required by SEC regulation to furnish the Company with copies of these
reports.

         Based solely on the Company's review of such reports the Company
believes that all its executive officers, directors and persons owning more than
ten percent (10%) of the Company's Common Stock complied with all filing
requirements applicable to them with respect to transactions during the fiscal
year ending March 31, 2001.

ITEM 10. EXECUTIVE COMPENSATION.

         The rules of the Securities Exchange Act of 1934 require the Company to
disclose to you in connection with any solicitation of proxies for an annual
meeting, the compensation paid to the chief executive officer of the Company and
the next four highly compensated officers if such officers received salary and
bonus in excess of $100,000. No officers of the Company and its subsidiaries
have received a salary and bonus in excess of $100,000. As a result, the Company
is only disclosing the compensation of its Chief Executive Officer, Maralyn
Heckman.


                                       56
<PAGE>


SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                 ANNUAL COMPENSATION                            LONG-TERM COMPENSATION AWARDS
                                 -------------------                            -----------------------------
  NAME & PRINCIPAL     FISCAL                             OTHER ANNUAL      RESTRICTED         SECURITIES          ALL OTHER
    POSITION (*)        YEAR                            COMPENSATION($)    STOCK AWARDS        UNDERLYING        COMPENSATION
                       ENDING     SALARY       BONUS                         ($)(a)            OPTIONS (#)           ($)(b)
                                    ($)         ($)
<S>                     <C>       <C>          <C>             <C>            <C>                <C>                 <C>
Maralyn Heckman         2001      43,940       1,500           -0-              -0-               -0-                 995
President and Chief     2000      42,665       1,500           -0-            $40,480            4,650                663
Executive Officer       1999      40,040       1,300           -0-              -0-               -0-                6,516
</TABLE>
--------------------------------------------------------------------------------

(a)      This amount was calculated assuming the fair market value of Company
Common Stock to be $23.00, which represents the approximate purchase price per
share to be paid in connection with the Company's recently announced proposed
merger agreement with Golden National Acquisition Corporation. The shares vest
at the rate of 20% each year and will accelerate upon the change of control.
Dividends will not be paid on this stock.

(b)      The amounts in this column represent premiums for disability insurance
in the amount of $994.50 for 2001, $663 for 2000, and $510 for 1999. The
remaining amount represents contributions under the Simplified Employee Pension
Plan in the amounts of $0 for 2001, $0 for 2000 and $6,006 for 1999.

         No stock options were granted during the fiscal year ended March 31,
2001. The following table indicates for each of the named executive officers
information concerning stock options exercised during the last fiscal year, and
the number and value of exercisable and unexercisable in-the-money options as of
March 31, 2001.

                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
                                                                         NUMBER OF            VALUE OF UNEXERCISED
                                                                    UNEXERCISED OPTIONS       IN-THE-MONEY OPTIONS
                                                                       AT 3/31/01(#)            AT 3/31/01($)(1)
                            SHARES ACQUIRED          VALUE             EXERCISABLE/               EXERCISABLE/
          NAME               ON EXERCISE(#)       REALIZED($)          UNEXERCISABLE              UNEXERCISABLE
          ----              ---------------       ------------         -------------              -------------
<S>                                <C>                 <C>             <C>                       <C>
Maralyn Heckman                    0                   0               930/3,720                 $12,322/$49,290
</TABLE>
(1)     The value of the unexercisable in-the-money options was determined by
using the amount of $23.00 as the fair market value, per share to be paid in
connection with the Company's recently announced proposed merger agreement with
Golden National Acquisition Corporation, less the exercise price per share of
$9.75. Unexercisable stock options will be accelerated upon the
change-in-control.


                                       57
<PAGE>


         SIMPLIFIED EMPLOYEE PENSION PLAN. Cerro Gordo Building and Loan, s.b.
no longer maintains a simplified employee pension plan (the "SEP") to provide
retirement benefits for employees eligible to participate therein.

         EMPLOYEE STOCK OWNERSHIP PLAN. The Company and Cerro Gordo Building and
Loan, s.b. have adopted the ESOP. Employees age 21 and over who have completed
at least 1,000 hours of service in the 12-month period of employment with Cerro
Gordo Building and Loan, s.b. are eligible to participate in the ESOP.
Participants' benefits vested at a rate of 20% for each year of service and are
100% vested at the end of five years of service. Vesting will be accelerated
upon early or normal retirement, death, disability, or upon termination of the
ESOP, provided the participant is employed at such time. A change of control
will also accelerate vesting. Contributions and forfeitures will be allocated
pro rata, based on the ratio each participant's compensation bears to the
compensation of all participants entitled to share in such allocation.

         In addition to being eligible to receive benefits under the above
plans, Mrs. Heckman has entered into two employment agreements, one with the
Company and one with Cerro Gordo Building and Loan, s.b.

         The Employment Agreements provide for three-year terms for Mrs.
Heckman's employment. The term of the Employment Agreements are automatically
extended on a daily basis unless written notice of non-renewal is given by the
Board of Directors or Mrs. Heckman. Therefore, on any day that Mrs. Heckman is
employed by Cerro Gordo Building and Loan, s.b. and the Company, and assuming
that neither the Board of Directors nor Mrs. Heckman have provided prior notice
of non-renewal, the remaining term in Mrs. Heckman's employment agreements is
three years. The Employment Agreements provide that Mrs. Heckman's base salary
will be reviewed annually. The base salary which will be effective for such
Employment Agreements for Mrs. Heckman will be her current salary at the time
such agreement is triggered. In addition to the base salary, the Employment
Agreements provide for, among other things, participation in stock benefits
plans and other fringe benefits applicable to the executive personnel. The
Employment Agreements provide for termination by Cerro Gordo Building and Loan,
s.b. or the Company for cause, as defined in the Employment Agreements, at any
time. In the event Cerro Gordo Building and Loan, s.b. or the Company chooses to
terminate Mrs. Heckman's employment for reasons other than for cause, or in the
event of Mrs. Heckman's resignation from Cerro Gordo Building and Loan, s.b. and
the Company upon: (1) failure to re-elect Mrs. Heckman to her current offices;
(ii) a material change in Mrs. Heckman's functions, duties or responsibilities;
(iii) a relocation of Mrs. Heckman's principal place of employment by more than
25 miles; (iv) a reduction in the benefits and perquisites being provided to
Mrs. Heckman in the Employment Agreements; (v) liquidation or dissolution of
Cerro Gordo Building and Loan, s.b. or the Company; or (vi) a breach of the
Employment Agreement by Cerro Gordo Building and Loan, s.b. or the Company, Mrs.
Heckman or, in the event of death, her beneficiary would be entitled to receive
an amount equal to the remaining base salary payments due to Mrs. Heckman for
the remaining term of the Employment Agreement and the contributions that would
have been made on Mrs. Heckman's behalf to any employee benefits plans of Cerro
Gordo Building and Loan, s.b. and the Company during the remaining term of the
Employment


                                       58
<PAGE>


Agreements. Cerro Gordo Building and Loan, s.b. and the Company would also
continue to pay for Mrs. Heckman's life and disability coverage for the
remaining term of the Employment Agreements. Upon termination of Mrs. Heckman's
employment, except upon a change in control, Mrs. Heckman is subject to a
one-year non-competition clause.

         Under the Employment Agreements, if voluntary or involuntary
termination follows a change in control of Cerro Gordo Building and Loan, s.b.
or the Company, Mrs. Heckman or, in the event of Mrs. Heckman's death, her
beneficiary would be entitled to a severance payment equal to the greater of:
(i) the payments due for the remaining terms of the Employment Agreements; or
(ii) three times the average of the five preceding taxable years' annual
compensation. Cerro Gordo Building and Loan, s.b. and the Company would also
continue Mrs. Heckman's life, health and disability coverage for thirty-six
months. Notwithstanding that both Employment Agreements provide for a severance
payment in the event of a change in control, Mrs. Heckman would only be entitled
to receive a severance payment under one agreement.

         Payments to Mrs. Heckman under Cerro Gordo Building and Loan, s.b.'s
Employment Agreement will be guaranteed by the Corporation in the event that
payments or benefits are not paid by Cerro Gordo Building and Loan, s.b..
Payments under the Corporation's Employment Agreement would be made by the
Corporation but would be reduced to the extent Mrs. Heckman receives payment
under Cerro Gordo Building and Loan, s.b.'s Employment Agreement. All reasonable
costs and legal fees paid or incurred by Mrs. Heckman pursuant to any dispute or
question of interpretation relating to the Employment Agreements shall be paid
by Cerro Gordo Building and Loan, s.b. or the Company, respectively, if Mrs.
Heckman is successful on the merits pursuant to a legal judgment, arbitration or
settlement. The Employment Agreements also provide that Cerro Gordo Building and
Loan, s.b. and the Company shall indemnify Mrs. Heckman to the fullest extent
allowable under Illinois and Delaware law, respectively. In the event of a
change in control of Cerro Gordo Building and Loan, s.b. or the Company, the
total amount of payments due under the Employment Agreements, based solely on
current base salary for such Employment Agreements and excluding any benefits
under any employee benefit plan which may be payable, would be approximately
$51,500.00.

         Notwithstanding the above discussion, in connection with closing of the
proposed Agreement and Plan of Merger, Mrs. Heckman will enter into a new
employment agreement with Cerro Gordo Building and Loan, s.b. The employment
agreement is for a 36 month term and provides for a base salary of $50,000,
participation in Cerro Gordo Building and Loan's fringe benefit plans and
discretionary cash bonuses. The employment agreement requires that Mrs. Heckman
devote substantially all of her business time, attention and efforts to the
interests and business of Cerro Gordo Building and Loan. The employment
agreement also includes change of control provisions similar to those described
above. If Mrs. Heckman's employment is terminated or she resigns as a result of
demotion or loss of responsibility after a change in control (as those terms are
defined in the employment agreement), she will receive an amount equal to the
sum of her base salary that would have been paid through the remaining term of
her employment agreement plus an amount


                                       59
<PAGE>


equal to the annual contributions made to any employee retirement plan for the
year preceding multiplied by the number of calendar years remaining through the
term of her employment agreement. In the event of termination without cause, she
will also receive an amount equal to the sum of her base salary that would have
been paid through the remaining term of her employment agreement plus an amount
equal to the annual contributions made to any employee retirement plan for the
year preceding multiplied by the number of calendar years remaining through the
term of her employment agreement.

DIRECTOR COMPENSATION

         Directors received no fees for their services on the Company's Board
during this past fiscal year. Directors did receive $125 for each Bank Board
meeting attended and for attending the meeting of the Compensation Committee.
The highest fee paid to any one director was $1,750 and the lowest of directors
who were directors for the full year was $1,625.

         In addition, each of the directors serve as appraisers of real property
constituting security for loans. Three directors act as appraisers for any one
loan application. The borrower pays a fee of $120 for such appraisal which is
split by the three directors. During the fiscal year ending March 31, 2001, no
director earned more than $960 with regard to this appraisal function.

         The Stock Option Plan permits the Company to grant options to directors
for their services to the Company and Cerro Gordo Building and Loan, s.b.. The
Company may so grant such options to reward directors for the considerable
amount of time and skill each has given to the Company and Cerro Gordo Building
and Loan, s.b.. Pursuant to the Stock Option Plan, on October 13, 1999, the
Company granted to each director, other than Maralyn Heckman, options to
purchase 750 shares of the Company's Common Stock, at the exercise price of
$9.75. Mrs. Heckman received options to purchase 4,650 shares at $9.75, as a
result of her employment with the Company.

         Under the Company's Management Development and Recognition Plan, the
Company also has the option to award shares of the Company's Common Stock to the
directors. On October 13, 1999, the Company awarded to all directors, other than
Maralyn Heckman, 220 shares of the Company's Common Stock. Mrs. Heckman received
1,760 shares, as a result of her employment with the Company.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         As of June 27, 2001, we had 97,063 shares of common stock issued and
outstanding. The following table sets forth information regarding the share
ownership of:

         *        each stockholder who beneficially owns 5% or more of our
                  common stock;

         *        each of our directors and executive officers, and

         *        all of our directors and executive officers as a group.


                                       60

<PAGE>
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER                      SHARES BENEFICIALLY OWNED (1)        PERCENT OF CLASS
------------------------                      -----------------------------        ----------------
<S>                                                       <C>                              <C>
5% OR GREATER STOCKHOLDERS:

Noel R. Buckley                                            6,519(2)                        6.72%
702 South Madison
PO Box 464
Cerro Gordo, Illinois 61818-0464

Cerro Gordo Building and Loan, s.b.                        7,919                           8.16%
as Trustee for the Corporation ESOP

Philip R. Flaugher                                         5,825                           6.00%
540 East Eldorado
Decatur, Illinois 62523-1041

Gregory A. Heckman                                         7,525                           7.75%
3333 North 140th Street
Omaha, Nebraska 68164

Maralyn F. Heckman                                         8,780.44(3)                     9.05%
201 East 600 North Road
PO Box 463
Cerro Gordo, Illinois 61818-0463

Tracy A. Norcross                                          6,325                           6.52%
786 North State, Highway 32
Cerro Gordo, Illinois 61818-4321

Julie & Robert Werking                                     6,325                           6.52%
3931 East Garrett Court
Highlands Ranch,  Colorado 80126

Beverly & Dave White                                       5,000                           5.15%
R.R. #2 Box 161
Sullivan, Illinois 61951-9449

C. Russell York                                            6,519(4)                        6.72%
435 West Abraham
PO Box 134
Cerro Gordo, Illinois 61818-0124
</TABLE>

                                       61
<PAGE>


DIRECTORS AND EXECUTIVE OFFICERS:

Noel R. Buckley                                   6,519(2)           6.72%
Lester W. Crandall                                  694(5)           *
James E. Flaugher                                 1,100              1.13
Larry D. Gaitros                                    694(6)           *
Maralyn F. Heckman                                8,780.44(3)        9.05
John A. Sochor, D.D.S.                            1,194(7)           1.23
C. Russell York                                   6,519(4)           6.72

All directors and executive officers of          25,500.44          26.27%
CGB&L as a group (7 persons)
------------------------------------------------
*Amount beneficially owned is less than 1% of the common stock issued and
outstanding.

(1)      Based upon filings made pursuant to the Securities Exchange Act of
1934, as amended, and information furnished by the respective individuals. Under
regulations promulgated pursuant to the Exchange Act, shares of common stock are
deemed to be beneficially owned by a person if he or she directly or indirectly
has or shares (a) voting power, which includes the power to vote or to direct
the voting of the shares, or (b) investment power, which includes the power to
dispose or to direct the disposition of the shares. Unless otherwise indicated,
the named beneficial owner has sole (or shares with spouse or other immediate
family members) voting and dispositive power with respect to the shares.

(2)      Includes 3,000 shares owned by his wife.  Mr. Buckley has disclaimed
beneficial ownership of those 3,000 shares.  Also includes 150 exercisable stock
options and 44 vested shares of restricted stock, but excludes 600 unvested
stock options and 176 unvested restricted shares.

(3)      Includes 400 shares owned by her husband. Mrs. Heckman has disclaimed
beneficial ownership of those 400 shares. The fractional share is due to the
allocation in the ESOP, and reflects her beneficial interest. Also includes 930
exercisable stock options and 352 vested shares of restricted stock, but
excludes 3,720 unvested stock options and 1,408 unvested restricted shares.

(4)      Includes 150 exercisable stock options and 44 vested shares of
restricted stock, but excludes 600 unvested stock options and 176 unvested
restricted shares.

(5)      Includes 150 exercisable stock options and 44 vested shares of
restricted stock, but excludes 600 unvested stock options and 176 unvested
restricted shares.

(6)      Includes 150 exercisable stock options and 44 vested shares of
restricted stock, but excludes 600 unvested stock options and 176 unvested
restricted shares.

(7)      Includes 150 exercisable stock options and 44 vested shares of
restricted stock, but excludes 600 unvested stock options and 176 unvested
restricted shares.


                                       62
<PAGE>


CHANGES IN CONTROL OF REGISTRANT

         CGB&L entered into an Agreement and Plan of Merger with Golden National
Acquisition Corporation, a company controlled by David Bijan Movtady on February
16, 2001. Details of the proposed merger were contained in the Company's Proxy
Statement which was filed with the Securities and Exchange Commission on April
26, 2001 and which is incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Cerro Gordo Building and Loan, s.b. makes loans to executive officers
and directors of the Corporation and its affiliates in the ordinary course of
business. Such loans are made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time the transaction
is originated for comparable transaction not with affiliates. In the opinion of
Cerro Gordo Building and Loan, s.b.'s management, such loans to executive
officers and directors do not involve more than the normal risk of
collectibility or present any other unfavorable features.

         As of March 31, 2001, approximately $339,189 of loans were outstanding
from Cerro Gordo Building and Loan, s.b. to executive officers and directors,
which equals approximately 21.7% of the Company's equity on March 31, 2001 and
approximately 40% of its retained earnings. Of the total loans outstanding from
Cerro Gordo Building and Loan, s.b. to officers and directors, only Dr. Sochor,
Larry Gaitros, and Mr. Flaugher have loans outstanding in excess of $60,000. The
amounts of such loans were $90,877 to Dr. Sochor, $119,544 to Mr. Flaugher, and
$63,799 to Mr. Gaitros. Under our Certificate of Incorporation, the Company also
indemnifies directors and officers to the fullest extent permitted by the law of
the State of Delaware.

         In July 2000, the Company purchased from Bement Bancshares Inc., 322
shares of the Company's Common Stock for $10.00 a share. After this purchase,
Bement Bancshares did not own more than 5% of the Corporation's Common Stock.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

   (a)    The following documents are filed as a part of this report:

(1)      FINANCIAL STATEMENTS

             Consolidated Financial Statements of CGB&L and its Index are
             located at Item 7, page 35-55 of this report.

(2)      SCHEDULES

          All schedules are omitted because they are not required or applicable,
          or the required information is shown in the consolidated financial
          statements or the notes thereto.


                                       63
<PAGE>


         (3)      EXHIBITS

         The following exhibits are filed as part of this report:

         2.1      Agreement and Plan of Merger between CGB&L and Golden National
                  Acquisition Corporation dated February 16, 2001, including the
                  Voting Agreement attached thereto (incorporated by reference
                  to Appendix A of CGB&L's proxy statement filed on April 26,
                  2001 in connection with the Special Meeting of Stockholders).

         3.1      Certificate of Incorporation of CGB&L Financial Group, Inc.*

         3.2      Bylaws of CGB&L Financial Group, Inc. (incorporated by
                  reference to Exhibit 3.2 of the Company's Form 10-KSB for the
                  fiscal year ended March 31, 1999, filed on June 29, 1999).

         4.0      Stock Certificate of CGB&L Financial Group, Inc.*

        10.2      Employment Agreement between Cerro Gordo Building and Loan,
                  s.b. and Maralyn Heckman (incorporated by reference to Exhibit
                  10.2 of the Company's Form 10-KSB for fiscal year March 31,
                  1999 filed on June 29, 1999).**

        10.3      Employment Agreement between CGB&L Financial Group, Inc. and
                  Maralyn Heckman (This Employment Agreement is not being filed
                  as it is virtually identical to the Employment Agreement filed
                  as Exhibit 10.2 except that CGB&L Financial Group, Inc. is the
                  party acting as the employer instead of Cerro Gordo Building
                  and Loan, s.b.).**

        10.4      CGB&L Financial Group 1999 Stock Option and Incentive Plan
                  (incorporated by reference to Appendix of Proxy Statement for
                  1999 annual meeting filed June 29, 1999.**

        10.5      CGB&L Financial Group, Inc. Management Development and
                  Recognition Plan and Trust Agreement (incorporated by
                  reference to Appendix of Proxy Statement for 1999 annual
                  meeting filed June 29, 1999).**

        21.0      Subsidiary information is incorporated herein by reference to
                  "Part I - General".

        23.0      Consent of BKD LLP, formerly know as Olive LLP to publish
                  their Consolidated Financial Statements dated March 31, 2001
                  and 2000.

        *Incorporated herein by reference to the Exhibits to Form SB-2
         Registration Statement, filed on June 3, 1998 and any amendments
         thereto, Registration No. 333-55953.

       **Management Compensation Plans

b)     REPORTS ON FORM 8-K

       The following current reports on Form 8-K were filed by Registrant during
       the quarter ended March 31, 2001:

   (1)      Report filed January 16, 2001 announcing Letter of Intent entered
            into with Golden National Acquisition Corporation.

   (2)      Report filed February 22, 2001 announcing the signing of a
            Definitive Agreement and Plan of Merger between CGB&L and Golden
            National Acquisition Corporation.


                                       64
<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.

                                      CGB&L FINANCIAL GROUP, INC.
Date:  June 29, 2001                  By:  /s/ Maralyn F. Heckman
     -----------------------          -------------------------------
                                      Maralyn F. Heckman
                                      President, Chief Executive Officer,
                                      Chief Financial Officer and Director


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

Date:  June 29, 2001                  By:  /s/ Maralyn F. Heckman
     -----------------------          ---------------------------------------
                                      Maralyn F. Heckman
                                      President, Chief Executive Officer,
                                      C.F.O., C.A.O. and Director
                                      (principal executive officer, principal
                                      financial officer, principal accounting
                                      officer and director)

Date:  June 29, 2001                  By:  /s/ John A. Sochor, DDS
     -----------------------          ---------------------------------------
                                      John A. Sochor, DDS
                                      Chairman of the Board of Directors

Date:  June 29, 2001                  By:  /s/ C. Russell York
     -----------------------          ---------------------------------------
                                      C. Russell York
                                      Vice-Chairman of the Board of Directors

Date:  June 29, 2001                  By:  /s/ Noel R. Buckley
     -----------------------          ---------------------------------------
                                      Noel R. Buckley, Director


Date:  June 29, 2001                  By:  /s/ Lester W. Crandall
     -----------------------          ---------------------------------------
                                      Lester W. Crandall, Director


Date:  June 29, 2001                  By:  /s/ James E. Flaugher
     -----------------------          ---------------------------------------
                                      James E. Flaugher, Director


Date:  June 29, 2001                  By:   /s/ Larry D. Gaitros
     -----------------------          ---------------------------------------
                                      Larry D. Gaitros, Director


                                       65