EXHIBIT 13



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                                     [LOGO]

                          CRAZY WOMAN CREEK BANCORP
      


               ------------------------------------------------
                              1996 ANNUAL REPORT









<PAGE>




                    CRAZY WOMAN CREEK BANCORP INCORPORATED
                              1996 ANNUAL REPORT

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                               TABLE OF CONTENTS
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Letter to Stockholders...................................................    1

Corporate Profile and Stock Market Information............................   2

Financial Highlights.....................................................    3

Management's Discussion and Analysis of
  Financial Condition and Results of Operations..........................    4

Report of Independent Auditors ........................................     12

Consolidated Balance Sheets............................................     13

Consolidated Statements of Income......................................     14

Consolidated Statements of Change in Stockholders Equity...............     15

Consolidated Statements of Cash Flows..................................     16

Notes to Consolidated Financial Statements.............................     17

Office Locations and Other Corporate Information.......................     36









<PAGE>











                    [CRAZY WOMAN CREEK BANCORP LETTERHEAD]






To Our Stockholders:



We are proud to present to you our first annual  report since  becoming a public
company in March 1996. Crazy Woman Creek Bancorp Incorporated completed the year
profitably and in good financial condition despite a one-time special assessment
to recapitalize the Savings  Association  Insurance Fund.  Furthermore,  we were
pleased to see single-family mortgage and consumer loan originations continue to
increase over the previous year.

As we approach fiscal 1997, we retain our goal of providing  personal service to
our customers and  stockholders.  As a  community-based  financial  institution,
Buffalo  Federal  Savings Bank plays a special role in serving the lending needs
of the communities in our market area. At the same time, we will concentrate our
energies on achieving solid financial results and enhancing stockholder value.

Each member of your Board of Directors,  and our employees,  join me in thanking
you for your continued dedication, loyalty, and trust. Despite the ever-changing
economic challenges,  you have our commitment that we will utilize our very best
efforts to continue producing profitable results of operations.

Sincerely,



Deane D. Bjerke
President




<PAGE>



                    CRAZY WOMAN CREEK BANCORP INCORPORATED

Corporate Profile

Crazy Woman Creek Bancorp Incorporated (the "Company") is the parent company for
Buffalo Federal Savings Bank ("Buffalo Federal" or the "Bank").  The Company was
formed as a Wyoming corporation in December 1995 at the direction of the Bank to
acquire all of the capital stock that Buffalo Federal issued upon its conversion
from the mutual to stock  form of  ownership  in March 1996 (the  "Conversion"),
whereby the Company  sold  1,058,000  shares of common stock for net proceeds of
$9.49 million.  The Company is a savings and loan holding  company which,  under
existing  laws,  is not  restricted  in the types of  activities in which it can
engage.  At the  present  time,  since the  Company  does not conduct any active
business,  the Company does not intend to employ any persons other than officers
but utilizes the support staff and facilities of the Bank from time to time.

Buffalo Federal is a  federally-chartered  stock savings bank  headquartered  in
Buffalo, Wyoming, which was originally chartered in 1932 under the name "Buffalo
Building and Loan Association." Deposits are insured up to the maximum allowable
by the  Federal  Deposit  Insurance  Corporation  (the  "FDIC").  The  Bank is a
community oriented savings institution  offering a variety of financial services
to meet the needs of the communities  that it serves.  Buffalo Federal  conducts
its business from its office in Buffalo, Wyoming.

Buffalo  Federal  attracts  deposits  from the  general  public  and  uses  such
deposits,  together with borrowings and other funds,  primarily to originate and
fund loans  secured by first  mortgages on  owner-occupied,  one-to-four  family
residences  in its market  area.  The Bank also makes home equity  loans,  loans
secured  by  deposits,  automobile  loans  and  personal  loans and  invests  in
municipal obligations, mortgages-backed securities, and other investments.

Stock Market Information

Since its issuance in March 1996, the Company's  common stock has been traded on
the Nasdaq SmallCap Market under the symbol "CRZY." The following table reflects
the stock price as reported by Nasdaq.


                                            HIGH                   LOW
                                            ----                   --- 
July 1, 1996 - September 30, 1996          $11.50                $10.00
April 1, 1996 - June 30, 1996               11.00                 10.00


Quotations  reflect  inter-dealer  prices without retail  mark-up,  mark-down or
commission,   and  may  not  represent  actual   transactions.   The  number  of
shareholders   of  record  of  common  stock  as  of  December  19,  1996,   was
approximately  230.  This does not reflect the number of persons or entities who
held stock in nominee or "street"  name  through  various  brokerage  firms.  At
December 19, 1996, there were 1,058,000 shares outstanding. On July 16, 1996 and
on  October  16,  1996   dividends  of  $.05  and  $.10  per  share  were  paid,
respectively.

The Company's ability to pay dividends to stockholders is dependent in part upon
the dividends it receives from the Bank.  The Bank may not declare or pay a cash
dividend  on any of its stock if the  effect  thereof  would  cause  the  Bank's
regulatory  capital  to be  reduced  below  (1)  the  amount  required  for  the
liquidation  account  established in connection with the Bank's  conversion from
mutual to stock form, or (2) the regulatory capital  requirements imposed by the
Office of Thrift Supervision ("OTS").

                                    - 2 -

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<TABLE>
<CAPTION>


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SELECTED FINANCIAL DATA
------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
------------------------------------------------------------------------------------------------------------
At or for the Year Ended September 30,               1996         1995         1994      1993        1992
------------------------------------------------------------------------------------------------------------
<S>                                               <C>           <C>         <C>        <C>        <C>     
Loans receivable, net .........................   $ 25,859      $ 23,006    $ 22,503   $ 19,642   $ 18,693
Mortgage-backed securities ....................      4,228         3,148       2,473      6,377      6,893
Investment securities .........................      6,075         6,806       5,385      3,519      2,729
Investment and mortgage-backed
  securities available for sale ...............     13,365(1)      2,230       2,276         --         --
Assets ........................................     51,517(1)     37,510      35,751     32,738     31,744
Deposits ......................................     29,371        28,209      28,980     26,322     26,868
FHLB advances .................................      6,113         3,183       1,095      1,257         --
Total stockholders' equity ....................     15,508(1)      5,857       5,449      4,997      4,510
Interest income ...............................      3,274(1)      2,722       2,505      2,482      2,609
Interest expense ..............................      1,702         1,455       1,143      1,256      1,606
Net interest income ...........................      1,572         1,267       1,362      1,226      1,003
Provision for loan losses (loan loss benefit)..          -            42         (10)       117         23
Net income ....................................   $    355(2)   $    352    $    502   $    488   $    170

</TABLE>


<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------
OTHER SELECTED DATA
------------------------------------------------------------------------------------------------------------
At or for Year Ended September 30,                 1996       1995        1994      1993      1992
------------------------------------------------------------------------------------------------------------
Return on average assets (net income
<S>                                             <C>         <C>         <C>       <C>       <C>  
  divided by average total assets)(2) ....         0.80%      0.96 %      1.48%     1.51%     0.53%
Return on average equity (net income
  divided by average equity)(1)(2) .......         3.07%      6.10 %      9.39%    10.13%     3.71%
Average interest-earning assets to average
  interest-bearing liabilities(1)  .......       133.47%    117.59 %    117.23%   115.35%   113.39%
Net interest income after provision for
  loan losses, to average assets .........         3.47%      3.35 %      4.04%     3.43%     3.03%
Net interest rate spread .................         2.26%      2.84 %      3.53%     3.30%     2.55%
Average equity to average assets ratio
  (average equity divided by average
  total assets)(1) .......................        25.50%     15.76 %     15.74%    14.89%    14.16%
Equity to assets at period end(1)  .......        30.10%     15.6  %     15.24%    15.26%    14.21%
Non-performing assets to total assets ....         0.06%      0.33 %      0.38%     3.28%     4.44%
Non-performing loans to net loans ........         0.12%      0.30 %      0.08%     4.72%     6.25%
Allowance for loan losses, REO and other
  repossessed assets to non-performing
  assets .................................       862.50%    223.58 %    151.09%    29.08%    15.54%
Allowance for loan losses to total
  loans, net .............................         1.06%      1.18 %      0.91%     1.56%     1.16%
Net charge-offs (recoveries) to loans
 receivable ..............................        (0.01)%    (0.11)%      0.41%     0.11%     0.45%
Earnings per share(3) ....................     $   0.36        n/a         n/a       n/a       n/a
Book value per share(3) ..................     $  14.66        n/a         n/a       n/a       n/a

</TABLE>

-------------------------      
(1)  The change in fiscal 1996 is primarily due to the conversion  from a mutual
     to a stock company in March 1996.
(2)  Includes a one time  assessment  in fiscal  year 1996 to  recapitalize  the
     SAIF.
(3)  There were no shares outstanding prior to the consummation of the Company's
     initial public offering on March 29, 1996.

                                    - 3 -

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                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

      The Company was formed in 1995 and acquired  control of the Bank through a
mutual-to-stock  conversion  that was  consummated  on March  29,  1996.  At the
present time, the Company's only assets are its investment in the Bank and loans
to the Bank's  Employee  Stock  Ownership Plan ("ESOP") and the Bank. The Bank's
net earnings are dependent  primarily on its net interest  income,  which is the
difference  between  interest income earned on its  interest-earning  assets and
interest  expense  paid on  interest-bearing  liabilities.  For the  year  ended
September  30,  1996,  the  Bank's  interest   income  was  $3.27  million,   or
approximately  96.5% of gross earnings (e.g.,  interest income and  non-interest
income). The Bank's interest rate spread is affected by regulatory, economic and
competitive  factors  that  influence  interest  rates,  loan demand and deposit
flows.  To a lesser  extent,  the Bank's net  earnings  also are affected by the
level of non-interest  income,  which primarily  consists of service charges and
other operating income.  In addition,  net earnings are affected by the level of
non-interest (general and administrative) expenses.

      The   operations  of  the  Bank  and  the  entire   thrift   industry  are
significantly  affected by prevailing economic  conditions,  competition and the
monetary  and  fiscal  policies  of  the  federal  government  and  governmental
agencies.  Lending  activities  are  influenced  by the demand for and supply of
housing,  competition  among  lenders,  the  level  of  interest  rates  and the
availability  of funds.  Deposit  flows and  costs of funds  are  influenced  by
prevailing market rates of interest, primarily on competing investments, account
maturities,  and the levels of personal  income and savings in the Bank's market
area.

Asset/Liability Management and Interest Rate Risk

      For the year ended September 30, 1996, the Bank's net interest rate spread
was 2.26%.  An asset or liability is interest rate  sensitive  within a specific
time period if it will mature or reprice within that time period.  If the Bank's
assets  mature  or  reprice  more  quickly  or  to a  greater  extent  than  its
liabilities,  the Bank's net portfolio  value and net interest income would tend
to increase  during periods of rising interest rates but decrease during periods
of falling interest rates. If the Bank's assets mature or reprice more slowly or
to a lesser extent than its liabilities,  the Bank's net portfolio value and net
interest  income would tend to decrease  during periods of rising interest rates
but increase  during periods of falling  interest  rates.  The Bank's policy has
been to mitigate  the  interest  rate risk  inherent in the  historical  savings
institution  business  of  originating  long-term  loans  funded  by  short-term
deposits by pursuing certain  strategies  designed to decrease the vulnerability
of its earnings to material and prolonged changes in interest rates.

      The Bank is subject to  significant  interest rate risk as a result of its
historical  emphasis on the  origination  for  portfolio of  fixed-rate  one- to
four-family  mortgage  loans.  In order to  improve  the  Bank's  interest  rate
sensitivity,  however, management has attempted to shorten the maturities of the
Bank's assets and lengthen the maturities of its liabilities,  while maintaining
asset  quality.  This  strategy  has been  implemented  by (i)  emphasizing  the
origination  for portfolio of 15-and 20-year  fixed-rate  mortgage  loans;  (ii)
originating  30-year fixed-rate mortgage loans for sale in the secondary market;
(iii) offering  adjustable rate home equity and shorter-term  installment loans;
(iv) emphasizing the solicitation and retention of core deposits and lengthening
the average  maturity of deposits by adopting a tiered  pricing  program for its
certificates of deposit (offering higher rates on longer term certificates); (v)
purchasing  for its own portfolio  adjustable-rate  mortgage-backed  securities,
(vi)  investing in short- and  intermediate-term  investment  securities,  (vii)
emphasizing the origination of adjustable-rate mortgage loans; (viii) managing

                                    - 4 -

<PAGE>



deposit  interest rates;  and (ix) utilizing FHLB advances to facilitate  growth
and lengthen liabilities.  These measures, while significant, may only partially
offset the Bank's  interest  rate risk.  Furthermore,  the Bank  believes it has
sufficient capital to accept a certain degree of interest rate risk.

      The Bank's Board of Directors is responsible for revising the Bank's asset
and liability  policies.  The Bank's management is responsible for administering
the policies and  determinations  of the Board of Directors  with respect to the
Bank's asset and liability goals and strategies.

Analysis of Net Interest Income

      Average  Balances,  Interest,  Yields and Rates.  The following table sets
forth  certain  information  relating to the Bank's  average  balance  sheet and
reflects  the average  yield on assets and average cost of  liabilities  for the
periods  indicated and the average yields earned and rates paid. Such yields and
costs are derived by dividing income or expense by the average balance of assets
or liabilities,  respectively,  for the periods presented.  Average balances are
derived from  month-end  balances.  Management  does not believe that the use of
month-end  balances  instead of daily  average  balances has caused any material
differences in the information  presented.  The table also presents  information
for the periods and at the date indicated with respect to the difference between
the average  yield  earned on  interest-earning  assets and average rate paid on
interest-bearing   liabilities,   or  "interest   rate  spread,"  which  savings
institutions have traditionally  used as an indicator of profitability.  Another
indicator of an institution's  net interest income is its "net interest margin,"
which  is  its  net  interest   income   divided  by  the  average   balance  of
interest-earning  assets.  When  interest-earning  assets  approximate or exceed
interest-bearing  liabilities,  any positive  interest rate spread will generate
net interest income.

                                    - 5 -

<PAGE>

<TABLE>
<CAPTION>



                               At September 30,                   Year Ended September 30,
                               --------------- --------------------------------------------------------------
                                     1996                  1996                          1995
                                  ----------   ------------------------------- ------------------------------
                                               Average               Average   Average              Average
                                  Yield/Cost   Balance   Interest   Yield/Cost Balance   Interest  Yield/Cost
                                  ----------   -------   --------   ---------- -------   --------  ----------
                                                       (Dollars in Thousands)
Interest-earning assets:
<S>                                  <C>      <C>         <C>       <C>       <C>        <C>         <C>  
 Loans receivable(1).....            7.90%    $24,675     $2,043       8.28%  $22,786    $1,917        8.41%
 Mortgage-backed securities           6.22      4,052        263       6.49     2,726       198        7.26
 Investment securities(2)             7.42      7,937        487       6.14     7,390       424        5.74
 Securities available for sale        3.38      7,183        452       6.29     2,361       160        6.78
 Other interest-earning assets        7.25        384         29       7.55       362        23        6.35
                                              -------     ------              -------    ------
  Total interest-earning assets       6.49    $44,231     $3,274       7.40   $35,625    $2,722        7.64
                                               ------      -----               ------     -----
                                                         
Non-interest-earning assets                     1,072                             968
                                              -------                         -------   
  Total assets...........                     $45,303                         $36,593
                                               ======                          ======
                                                         
Interest-bearing liabilities:                            
  Interest checking......             3.61      5,675        215       3.79     5,736       227        3.96
  Time Deposits/Passbook.             5.29     22,627      1,224       5.41    22,499     1,129        5.02
                                              -------     ------              -------   -------
  Total deposit accounts.             4.94     28,302      1,439       5.08    28,235     1,356        4.80
 FHLB advances...........             4.30      4,837        263       5.44     2,062        99        4.80
                                              -------     ------              -------   -------
  Total interest-bearing
    liabilities..........             4.83    $33,139     $1,702       5.14   $30,297   $ 1,455        4.80                   
                                              -------     ------              -------   -------
                                                         
Non-interest-bearing liabilities                  613                             530
                                                  ---                          ------
 Total liabilities.......                     $33,752                         $30,827
                                               ------                          ------
 Total equity............                      11,551                           5,766
                                               ------                          ------
 Total liabilities and equity                 $45,303                         $36,593
                                               ======                          ======
Net interest income......                                 $1,572                         $1,267
                                                           =====                          =====
Interest rate spread.....                                             2.26%                           2.84%
                                                                   =======                         =======
                                                         
Net interest margin......                                             3.55%                           3.56%
                                                                   =======                         =======
                                                         
Ratio of average interest-                               
 earning assets to average                               
 interest-bearing liabilities                                       133.47%                         117.59%
                                                                    ======                          ======
                                                       
</TABLE>

---------------------------------
(1)  Average balances include non-accrual loans, and are net of reserve for loan
     losses and deferred loan fees.
(2)  Includes interest-bearing deposits in other financial institutions.



                                    - 6 -

<PAGE>




      Rate/Volume  Analysis.  The table  below  sets forth  certain  information
regarding  changes in interest  income and interest  expense of the Bank for 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 (changes in average volume  multiplied by old rate);  (ii)
changes in rates  (changes  in rate  multiplied  by old average  volume);  (iii)
changes in  rate-volume  (changes  in rate  multiplied  by the change in average
volume).


                                     Year Ended September 30,
                                 ---------------------------------
                                          1996 vs. 1995
                                 ---------------------------------
                                        Increase (Decrease)
                                              Due to
                                 ---------------------------------
                                                       Rate/
                                  Volume      Rate    Volume   Net
                                 --------    ------  -------- ----
                                           (In Thousands)
Interest income:
 Loans receivable ..............   $ 158    $ (30)   $  (2)   $ 126
 Mortgage-backed securities ....      96      (21)     (10)      65
 Investment securities .........      31       30        2       63
 Securities available for sale..     327      (11)     (23)     293
 Other interest-earning assets..       1        4        0        5
                                   -----    -----    -----    -----
  Total interest-earning assets.   $ 613    $ (28)   $ (33)   $ 552
                                   =====    =====    =====    =====

Interest expense:
 Deposit accounts ..............   $   4    $  79    $   0    $  83
 FHLB advances .................     133       13       18      164
                                   -----    -----    -----    -----
   Total interest-bearing
    liabilities ................   $ 137    $  92    $  18    $ 247
                                   =====    =====    =====    =====

Net change in net interest
income .........................   $ 476    $(120)   $ (51)   $ 305
                                   =====    =====    =====    =====


Financial Condition

      The Bank's  total assets  increased  by $14.0  million or 37.3% from $37.5
million at  September  30, 1995 to $51.5  million at  September  30,  1996.  The
increase  in assets  was  primarily  attributed  to an  increase  in  investment
securities and net loans receivable. The increase in assets was primarily funded
through  the $9.49  million in net  proceeds  received  from the  initial  stock
offering and from a $2.9 million increase in advances from the FHLB of Seattle.

      The Bank's net investment in investment securities  available-for-sale and
held-to-maturity  significantly  increased during 1996. Such assets increased by
$11.5  million  from $12.2  million at  September  30, 1995 to $23.7  million at
September  30, 1996.  An increase in  investment  securities  available-for-sale
accounted  for most of the  increase.  From  September 30, 1995 to September 30,
1996  investment  securities  available-for-sale  increased from $2.2 million to
$13.4 million, respectively.  Meanwhile,  investment securities held-to-maturity
only increased by approximately $300,000 during the period.

      Net loans  increased  by $2.8  million  or 12.4%  from  $23.0  million  at
September  30,  1995 to $25.9  million  at  September  30,  1996 as a result  of
increased loan originations. The majority of this growth occurred in residential
real estate loans and in consumer loans.

                                    - 7 -

<PAGE>




      Deposits  increased by $1.2 million or 4.1% to $29.4  million at September
30, 1996 from $28.2  million at September  30, 1995.  Interest-bearing  checking
accounts  (NOW and money  market)  increased  by  approximately  $483,000  while
passbook and time deposits increased by $733,000.  Meanwhile,  business checking
showed a slight decline of $54,000 for the period.

      The Bank  increased  its level of borrowing  from the FHLB of Seattle from
$3.2 million at September  30, 1995 to $6.1 million at September  30, 1996.  The
increase in FHLB  advances  was used to fund loan  originations  and to purchase
investment  securities.  The Bank utilizes FHLB advances to manage interest rate
risk and to take advantage of investment  opportunities with the goal of earning
income  on the  interest  rate  differential  between  the  yield  earned on the
investments and the rate paid on the FHLB advances.

      The Company's  stockholders' equity significantly increased as a result of
the mutual to stock conversion. Stockholders' equity increased from $5.9 million
at September 30, 1995 to $15.5 million at September  30, 1996,  representing  an
increase of 164.8%.

Non-performing Assets

      The following table sets forth information regarding non-performing assets
at September 30, 1996 and 1995, respectively.

                                                    At September 30,
                                               -------------------------
                                                   1996          1995
                                               ----------       --------
                                                 (Dollars in Thousands)
Total non-performing loans.................    $       32      $     68
                                                   ======        ======
Real estate owned..........................    $       --      $     55
                                                   ------        ------
Total non-performing assets................    $       32      $    123
                                                   ======        ======
Total non-performing loans to net loans....          0.12%         0.30%
                                                   ======        ======
Total non-performing loans to total assets.          0.06%         0.18%
                                                   ======        ======
Total non-performing assets to total assets          0.06%         0.33%
                                                   ======        ======


Comparison of Results of Operations  for the Years Ended  September 30, 1996 and
1995

      Net Income. Net income increased slightly from $352,000 for the year ended
September 30, 1995 to $355,000 for the year ended September 30, 1996. Net income
for  1996  was  negatively   affected  by  a  one-time  special   assessment  to
recapitalize  the  Savings  Association  Insurance  Fund  (SAIF).  This  special
assessment  was $187,000 and the after tax effect was  $123,000.  Net income for
1996  was  also  reduced  by (i) an  increase  in the  cost of  interest-bearing
liabilities,  (ii) costs  associated with a change in the Bank's data processor,
(iii) a decline in the gain on the sale of real estate  owned,  (iv) an increase
in  compensation  related  costs,  and  (v)  increased  costs  due  to  expenses
associated with being a public company.  Net income for the year ended September
30,  1995  included  a one-time  gain of  $90,000  on the sale of a  repossessed
commercial property.

      Net Interest Income.  Net interest income increased by $347,000 from $1.23
million  for the year ended  September  30,  1995 to $1.57  million for the year
ended  September  30, 1996.  The  increase in net  interest  income is primarily
attributed to an increase in the volume of average  interest-earning  assets and
to the fact that no  provisions  for loan  losses were made in fiscal year 1996.
The primary cause for the increase in average volume of interest-earning  assets
was attributed to the net proceeds of $9.49 million

                                    - 8 -

<PAGE>



received from the initial stock offering that was consummated on March 29, 1996.
In fiscal year 1995, a $42,000 loan loss provision was recorded.

      Interest Income. Total interest income increased by $552,000 or 20.3% from
1995 to 1996. In 1996,  interest income totaled $3.27 million  compared to $2.72
million in 1995. The increase in interest income is primarily due to an increase
in the average volume of interest-bearing assets from 1995 to 1996. Such average
assets increased from $35.63 million for the twelve-month period ended September
30, 1995 to $44.23 million for the twelve-month period ended September 30, 1996.
This increase in volume caused interest income to increase by $613,000.

      A decline in the yield on  interest-earning  assets from 7.64% for 1995 to
7.40% for 1996 reduced net income by approximately  $28,000.  The decline in the
yield  on  interest-earning   assets  is  due,  in  part,  to  the  purchase  of
adjustable-rate  mortgage-backed  securities. Such securities tend to have lower
coupon  rates than  fixed rate  securities  at the time of  purchase,  but their
interest  rates can increase with market  interest  rates thereby  providing the
Bank with a hedge against rising interest rates.

      Interest  income on loans increased by $126,000 or 6.6% from 1995 to 1996.
An increase in the volume of mortgage  loans helped augment  interest  income on
mortgage  loans.  From 1995 to 1996, the average volume of net loans  receivable
increased from $22.79 million to $24.68 million, respectively.

      Interest Expense. From 1995 to 1996, interest expense increase by $247,000
due to an increase in the average volume of interest-bearing  liabilities and to
an increase in the interest rate paid on such  liabilities.  The increase in the
volume of average  interest-bearing  liabilities  was  attributed  to additional
advances from the FHLB of Seattle.  The average of such advances  increased from
$2.06  million for the  twelve-month  period ended  September  30, 1995 to $4.84
million for the  twelve-month  period ended  September 30, 1996. The increase in
advances  caused  interest  expense to increase by $164,000.  FHLB advances were
utilized to fund loan  originations and to purchase  investment  securities with
the goal of increasing net interest income.  The increase in interest rates paid
on interest-bearing  liabilities from 4.80% in 1995 to 5.14% in 1996 also caused
interest expense to increase.

      Provision for Loan Losses. No provisions for loan losses were made in 1996
compared to $42,000 for 1995.  Loan  charge-offs  for 1996 totaled $11,000 while
recoveries  totaled  $12,000.  In  1995,   recoveries  were  also  greater  than
charge-offs  resulting in a net increase to loan loss  reserves of $26,000.  The
1995  increase in loan loss reserves was due in part to  management's  desire to
increase  loan  loss  reserves  based  on  management's  assessment  of its loan
portfolio (increase in total mortgage loans outstanding) and the general economy
(continued  slow  economic  growth).  Management's  periodic  evaluation  of the
adequacy of the  allowance is based on factors such as the Bank's past loan loss
experience,  known and inherent risks in the portfolio,  adverse situations that
may affect the borrower's  ability to repay,  estimated  value of any underlying
collateral,   current  and  prospective  economic  conditions,  and  independent
appraisals.  Any  increase or decrease  in the  provision  for loan losses has a
corresponding  negative or positive effect on net income. At September 30, 1996,
the  allowance  represented  1.06% of loans  receivable  as compared to 1.18% of
loans receivable at September 30, 1995.

      Assessment of the adequacy of the  allowance  for credit  losses  involves
subjective  judgments  regarding  future  events,  and  thus,  there  can  be no
assurance that  additional  provisions for credit losses will not be required in
future periods.

      Non-Interest Income. Non-interest income declined by $40,000 from $157,000
in 1995 to $117,000 in 1996. The decrease is primarily due to a reduction in the
amount of gain from the sale of real estate  owned  properties  from $90,000 for
the year ended September 30, 1995 to $14,000 for the year

                                    - 9 -

<PAGE>



ended  September  30,  1996.  Future  gains from the sale of real  estate  owned
properties is not likely  because all such  properties  have been sold,  and the
Bank does not anticipate, at this time, any material foreclosures.

      A $30,000  gain from the sale of certain  mortgage-backed  securities  and
REMICs in 1996 somewhat offset the reduction in non-interest income. An increase
in customer  service charges from $33,000 in 1995 to $41,000 in 1996 also helped
offset the reduction in non-interest income.

      Non-Interest  Expense.  Non-interest  expense  significantly  increased in
fiscal  1996 as a  result  of  several  one-time  charges.  From  1995 to  1996,
non-interest  expense increased from $859,000 to $1.18 million,  representing an
increase of 37.7%. The increase is due to (i) a one-time  special  assessment of
$187,000 to  recapitalize  the SAIF, (ii) a $34,000 charge from the Bank's prior
data  processor  to de- convert  the Bank's  data,  (iii) a $21,000  loss on the
abandonment/disposition  of equipment and software  utilized with the prior data
processing  system,  (iv)  $8,000  in  other  costs  associated  with  the  data
processing  conversation  such as travel and  documentation  set-up fees,  (v) a
$30,000 increase in compensation  expenses, and (vi) a $36,000 increase in other
operating  expense such as legal fees and costs  associated  with being a public
company.  The increase in compensation  expense was due in part to the hiring of
an additional employee in May 1996. Other non-interest items remained relatively
stable.

      Recent legislation  required all qualifying members of the SAIF (including
the Bank) to recapitalize the SAIF by paying a one-time special assessment equal
to .65% of the Bank's deposits as of March 31, 1995. This  assessment,  expensed
during the fourth quarter of fiscal 1996, cost the Bank  approximately  $187,000
prior to any tax benefit. Due to the special assessment,  it is anticipated that
future SAIF  premiums  will be lowered  from levels paid during  fiscal 1996 and
1995.

     Income  Taxes.  The  effective  tax rates for 1996 and 1995 were 29.84% and
32.70%, respectively. There is no state income tax imposed on the Company.

Liquidity and Capital Resources

      The Bank is  required  to  maintain  minimum  levels of  liquid  assets as
defined by OTS  regulations.  This  requirement,  which varies from time to time
depending upon economic conditions and deposit flows, is based upon a percentage
of deposits and short term borrowings. The required liquidity ratio currently is
5.0% and the Bank's  liquidity  ratio  average was 18.88% at September  30, 1996
compared to 17.30% at September 30, 1995.

      The  Bank's  primary  sources  of  funds  are  deposits,   prepayment  and
amortization of loans and mortgage-backed  securities,  maturities of investment
securities,  earnings  from  operations,  and advances from the FHLB of Seattle.
While scheduled principal  repayments are greatly influenced by general interest
rates, economic conditions,  competition and other factors, the Bank manages the
pricing of its  deposits to maintain  desired  levels and invests in  short-term
interest-earning   assets,   which   provide   liquidity  to  meet  its  lending
requirements.

      During the years ended  September 30, 1995 and 1994, the Bank had positive
net cash flows of $444,000 and $289,000  from  operating  activities  and $13.55
million and $1.32 million from  financing  activities,  respectively.  The Bank,
however,  experienced  negative  net cash  flows of  $13.81  million  and  $2.55
million, respectively, from investing activities.

      The  primary  investing  activity  of  the  Bank  is  the  origination  of
fixed-rate  mortgages with maturities of less than 20 years.  During fiscal 1996
and 1995, the Bank originated mortgage loans in the

                                    - 10 -

<PAGE>



amounts of $8.91 million and $5.70 million,  respectively. The sharp increase in
cash flows in 1996 from financing activities and the decrease in cash flows from
investing  activities  were  primarily  attributed  to receipt  and use of funds
received from the stock offering that was  consummated on March 29, 1996.  These
proceeds along with additional  borrowings from the FHLB of Seattle were used to
fund such investment  activities as the origination of loans and the purchase of
investment securities available for sale.

      Cash flows from  operating  activities  during  fiscal  1996 and 1995 were
primarily  related to net income  adjusted  by gains on the sale of real  estate
owned and  securities,  dividends  from the FHLB of  Seattle,  accrued  interest
receivable,  the special  assessment  due to the FDIC, and federal income taxes,
all of which are non-cash or non-operating  adjustments to operating cash flows.
Furthermore,  cash flows during  fiscal 1995 also were affected by the provision
for loan  losses.  As a  result,  net  income,  adjusted  for the  non-cash  and
non-operating  items,  was the  primary  source  of cash  flows  from  operation
activities.

      During fiscal 1996 and 1995,  investing activities used $13.81 million and
$2.55 million, respectively,  primarily to purchase investment securities and to
fund  the  origination  of  loans.  This  use of cash  was  offset  somewhat  by
maturities and calls of investment  securities and the repayment of principal on
loans.

      Changes in cash flows from financing  activities during these periods have
primarily  been  related to changes in  deposits  and  borrowings.  The  primary
financing activity of the Bank is the attraction of deposits. During fiscal year
1996,  deposits increased $1.16 million,  or 4.1%. The Bank also supplements its
deposits with  advances  from the FHLB of Seattle to manage  interest rate risks
and to take  advantage  of  investment  opportunities  with the goal of  earning
income  on the  interest  rate  differential  between  the  yield  earned on the
investments  and the rate paid on the advances.  During  fiscal year 1996,  FHLB
advances  increased by $2.93  million.  Additional  FHLB  advances  were used to
purchase  investment  securities and to fund loan originations.  Generally,  the
cost of advances is greater than the cost of deposits .

      The Bank  anticipates that it will have sufficient funds available to meet
its current  commitments.  At September 30, 1996,  the Bank had  commitments  to
originate  loans of  $708,000.  Certificates  of  deposit  and State of  Wyoming
deposits  which are  scheduled to mature in less than one year at September  30,
1996 totalled $14.2 million. Based on historical experience, management believes
that a significant portion of such deposits will remain with the Bank.

Impact of Inflation and Changing Prices

      The  financial  statements  of  the  Bank  and  notes  thereto,  presented
elsewhere  herein,  have been prepared in  accordance  with  generally  accepted
accounting  principles,  which require the measurement of financial position and
operating results in terms of historical dollars without  considering the change
in the relative  purchasing  power of money over time and due to inflation.  The
impact of inflation is reflected in the increased cost of the Bank's operations.
Unlike most industrial  companies,  nearly all the assets and liabilities of the
Bank are monetary.

      As  a  result,  interest  rates  have  a  greater  impact  on  the  Bank's
performance  than do the effects of general levels of inflation.  Interest rates
do not necessarily move in the same direction or to the same extent as the price
of goods and services.



                                    - 11 -

<PAGE>


[KPMG Peat Marwick LLP Letterhead]

     1000 First Interstate Center 
     401 N. 31st Street
     P.O. Box 7108
     Billings, MT 59103

                          Independent Auditors' Report
                          ----------------------------



The Board of Directors and Stockholders
Crazy Woman Creek Bancorp Incorporated:

We have  audited the  accompanying  consolidated  balance  sheets of Crazy Woman
Creek Bancorp Incorporated and subsidiary as of September 30, 1996 and 1995, and
the related consolidated  statements of income,  stockholders'  equity, and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these 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 financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Crazy Woman Creek  Bancorp
Incorporated  and  subsidiary as of September 30, 1996 and 1995, and the results
of their operations and their cash flows for the years then ended, in conformity
with generally accepted accounting principles.


/s/ KPMG Peat Marwick LLP

November 1, 1996



                                      -12-




<PAGE>


<TABLE>
<CAPTION>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                           Consolidated Balance Sheets

                           September 30, 1996 and 1995


                    Assets                                             1996           1995
                    ------                                             ----           ----

<S>                                                                <C>             <C>    
Cash and cash equivalents                                              451,445        267,896
Interest bearing deposits                                               99,000        693,000
Investment and mortgage-backed securities available-for-
   sale                                                             13,364,698      2,229,579
Investment and mortgage-backed securities held-to-maturity
   (estimated market value of $10,180,716 in 1996 and
   $9,975,072 in 1995)                                              10,302,645      9,954,383
Stock in Federal Home Loan Bank of Seattle, at cost                    399,900        371,000
Loans receivable, net                                               25,858,760     23,005,940
Accrued interest receivable                                            495,750        357,316
Premises and equipment, net                                            502,055        542,757
Other real estate owned, net                                                 -         55,111
Other assets                                                            42,664         33,442
                                                                    ----------     ----------

                                                                   $51,516,917     37,510,424
                                                                   ===========     ==========
</TABLE>

     Liabilities and Stockholders' Equity
     ------------------------------------

<TABLE>
<CAPTION>


Liabilities:
<S>                                                                <C>            <C>       
   Deposits                                                        $29,370,985    28,208,532
   Advances from Federal Home Loan Bank                              6,113,438      3,182,658
   Advances from borrowers for taxes and insurance                      53,427         47,059
   Federal income taxes payable                                         14,953         58,312
   Deferred tax liability                                               80,925         65,818
   Dividends payable                                                   105,800              -
   Accrued expenses and other liabilities                              269,381         90,644
                                                                    ----------     ----------
         Total liabilities                                          36,008,909     31,653,023

Stockholders' equity:
   Preferred stock, par value $.10 per share, 2,000,000
      shares authorized; none issued and outstanding                         -              -
   Common stock, par value $.10 per share, 5,000,000
      shares authorized; 1,058,000 issued in 1996                      105,800              -
   Additional paid-in capital                                       10,027,393              -
   Unearned ESOP compensation                                         (617,143)             -
   Retained earnings                                                 6,057,879      5,852,134
   Unrealized gain (loss) on securities available-for-sale, net        (65,921)         5,267
                                                                    ----------     ----------
         Total stockholders' equity                                 15,508,008      5,857,401
                                                                    ----------     ----------

                                                                   $51,516,917     37,510,424
                                                                   ===========     ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -13-


<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                        Consolidated Statements of Income

                     Years ended September 30, 1996 and 1995


                                                          1996           1995
                                                          ----           ----
Interest income:
   Loans receivable                                   $2,043,167     1,916,893
   Mortgage-backed securities                            485,571       324,824
   Investment securities                                 627,593       395,495
   Interest bearing deposits                              26,452        38,718
   Other                                                  90,975        45,741
                                                       ---------     ---------
         Total interest income                         3,273,758     2,721,671

Interest expense:
   Deposits                                            1,438,562     1,355,476
   Advances from Federal Home Loan Bank                  263,155        99,171
                                                       ---------     ---------
         Total interest expense                        1,701,717     1,454,647
                                                       ---------     ---------

         Net interest income                           1,572,041     1,267,024
Provision for loan losses                                      -        42,000
                                                       ---------     ---------
         Net interest income after provision 
         for loan losses                               1,572,041     1,225,024
                                                       ---------     ---------

Non-interest income:
   Customer service charges                               41,213        32,813
   Other operating income                                 31,605        33,996
   Gain on sale of securities                             30,198             -
   Gain on sale of other real estate owned                13,599        90,022
                                                       ---------     ---------
        Total non-interest income                       116,615       156,831
                                                       ---------     ---------

Non-interest expense:
   Compensation and benefits                             440,771       410,662
   Occupancy and equipment                               107,820        95,625
   FDIC/SAIF deposit insurance premiums                   66,684        64,900
   Special assessment by the SAIF                        186,569             -
   Advertising                                            37,349        42,282
   Data processing services                              150,162       109,208
   Loss on sale of equipment                              21,097             -
   Other                                                 171,939       136,345
                                                       ---------     ---------
         Total non-interest expense                    1,182,391       859,022
                                                       ---------     ---------

         Income before income taxes                      506,265       522,833
Income tax expense                                       151,420       170,585
                                                       ---------     ---------

         Net income                                   $  354,845       352,248
                                                       =========     =========
Net income per share                                  $      .36             -
                                                       =========     =========

Average common and common equivalent shares              995,143             -
                                                       =========     =========


See accompanying notes to consolidated financial statements.

                                      -14-



<PAGE>


               CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                  Consolidated Statements of Stockholders' Equity

                      Years ended September 30, 1996 and 1995

<TABLE>
<CAPTION>


                                              Additional   Unearned                     securities     stock-
                                  Common       paid-in       ESOP           Retained      gain        holders'
                                   stock       capital    compensation      earnings    (loss), net    equity
                                  --------    ----------  ------------      --------   ------------   --------
<S>                               <C>         <C>          <C>             <C>          <C>          <C>      
Balances at September 30, 1994    $      -            -           -        5,499,886    (50,820)     5,449,066

Net income                               -            -           -          352,248          -        352,248

Change in unrealized gain (loss)
on securities available-for-
sale                                     -            -           -                -     56,087         56,087
                                  --------   ----------    --------        ---------    -------     ----------

Balances at September 30, 1995           -            -           -        5,852,134      5,267      5,857,401

Net proceeds from issuance of
common stock                        99,400    9,392,409           -                -          -      9,491,809

Common stock acquired by
ESOP                                 6,400      633,600    (640,000)               -          -              -

ESOP shares committed to be
released                                 -        1,384      22,857                -          -         24,241

Change in net unrealized gain
(loss) on securities
available-for-sale                       -            -           -                -    (71,188)       (71,188)

Net income                               -            -           -          354,845          -        354,845
cash dividends declared ($.15
per share)                               -            -           -         (149,100)         -       (149,100)
                                  --------   ----------    --------        ---------    -------     ----------

Balances at September 30, 1996    $105,800   10,027,393    (617,143)       6,057,879    (65,921)    15,508,008
                                  ========   ==========    ========        =========    =======     ==========
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -15-

<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                      Consolidated Statements of Cash Flows

                     Years ended September 30, 1996 and 1995

<TABLE>
<CAPTION>

                                                                             1996          1995
                                                                             ----          ----
Cash flows from operating activities:
<S>                                                                     <C>             <C>    
   Net income                                                           $   354,845        352,248
   Adjustments to reconcile net income to net cash provided by
     operating activities:
      Provision for loan losses                                                   -         42,000
      Amortization of premiums and discounts on securities held-to-
         maturity, net                                                          358         (1,185)
      Amortization of premiums and discounts on securities available-
         for-sale, net                                                       (2,741)             -
      Federal Home Loan Bank stock dividend                                 (28,900)       (22,400)
      Depreciation                                                           78,910         56,652
      Gain on sale of securities                                            (30,198)             -
      Loss on sale of equipment                                              21,097              -
      Gain on sale of other real estate owned                               (13,599)       (90,022)
      ESOP shares committed to be released                                   24,241              -
      Change in:
         Accrued interest receivable                                       (138,434)       (49,025)
         Other assets                                                        (9,222)        (3,745)
         Federal income taxes payable                                       (43,359)       (46,681)
         Deferred tax liability                                              51,779         29,925
         Accrued expenses and other liabilities                             178,737         21,443
                                                                        -----------     ---------- 
               Net cash provided by operating activities                    443,514        289,210
                                                                        -----------     ---------- 

Cash flows from investing activities:
   Net change in interest bearing deposits                                  594,000         25,751
   Purchases of securities available-for-sale                           (12,444,335)      (343,000)
   Maturities of securities available-for-sale                              206,385        473,975
   Sales of securities available-for-sale                                 1,006,339              -
   Purchases of securities held-to-maturity                              (6,709,353)    (4,606,636)
   Maturities and calls of securities held-to-maturity                    6,382,304      2,511,579
   Origination of loans receivable                                       (8,907,000)    (5,703,000)
   Repayment of principal on loans receivable                             6,054,180      5,102,485
   Purchases of premises and equipment                                      (59,305)      (221,606)
   Proceeds from sale of other real estate owned                             68,710        210,286
                                                                        -----------     ---------- 
               Net cash used in investing activities                    (13,808,075)    (2,550,166)
                                                                        -----------     ---------- 


Cash flows from financing activities:
   Net change in deposits                                                 1,162,453       (771,387)
   Advances from Federal Home Loan Bank                                   5,400,000      2,087,500
   Repayment of advances from Federal Home Loan Bank                     (2,469,220)             -
   Net change in advances from borrowers for taxes and insurance              6,368          1,175
   Sale of common stock, net of offering costs                            9,491,809              -
   Dividends paid to stockholders                                           (43,300)             -
                                                                        -----------    -----------
               Net cash provided by financing activities                 13,548,110      1,317,288


      Net (decrease) increase in cash and cash equivalents                  183,549       (943,668)

Cash and cash equivalents at beginning of year                              267,896      1,211,564
                                                                        -----------     ---------- 
Cash and cash equivalents at end of year                                $   451,445        267,896
                                                                        ===========     ========== 

Cash paid during the year for (in thousands):
   Interest                                                             $ 1,477,000      1,334,000
   Income taxes                                                             143,000        187,000
                                                                        ===========     ========== 

</TABLE>

See accompanying notes to consolidated financial statements.


                                      -16-


<PAGE>



(1)  Summary of Significant Accounting Policies
     -------------------------------------------

     The accompanying  consolidated financial statements include the accounts of
     Crazy  Woman Creek  Bancorp  Incorporated  (the  Holding  Company)  and its
     wholly-owned  subsidiary,  Buffalo  Federal  Savings Bank (BFSB).  The term
     "Bank" refers to the Holding  Company and Buffalo Federal Savings Bank. All
     significant intercompany balances and transactions have been eliminated.

     The Bank  provides a full range of banking  services  to  customers  in the
     Buffalo,  Wyoming  area.  The Bank is  subject  to  competition  from other
     financial  institutions and financial service  providers.  The Bank and the
     Holding Company are subject to the regulations of certain Federal and state
     agencies and undergo periodic examinations by those regulatory authorities.

     Significant  accounting  policies  of BFSB  and  the  Holding  Company  not
     described elsewhere in the notes to the consolidated  financial  statements
     are described below.

     Basis of Presentation
     ---------------------

     The consolidated financial statements have been prepared in conformity with
     generally  accepted  accounting  principles.  In preparing the consolidated
     financial  statements,   management  is  required  to  make  estimates  and
     assumptions  that affect the reported  amounts of assets and liabilities as
     of the date of the balance  sheet and income and  expenses  for the period.
     Actual results could differ significantly from those estimates.

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

     Management  believes that the allowance for loan losses is adequate.  While
     management uses available  information to recognize losses on loans, future
     additions to the  allowance  may be necessary  based on changes in economic
     conditions.  In addition,  various regulatory agencies, as an integral part
     of their examination process,  periodically review the Bank's allowance for
     losses on loans. Such agencies may require the Bank to recognize  additions
     to the allowance based on their judgments  about  information  available to
     them at the time of their examination.

     Conversion to Stock Ownership
     -----------------------------

     Crazy Woman Creek Bancorp  Incorporated was formed in December 1995, and is
     the holding company and owner of 100 percent of the common stock of BFSB, a
     federally  chartered  stock savings bank. On March 29, 1996, BFSB completed
     its conversion from a mutual to a stock form savings bank at which time the
     Holding  Company issued  1,058,000  shares of common stock at $10 per share
     realizing  $9,491,809  after deducting stock offering  expense of $448,191.
     The Employee Stock  Ownership  Plan (the ESOP)  borrowed  $640,000 from the
     Holding  Company to purchase  64,000 of these shares.  The Holding  Company
     contributed $5,065,904 of the net offering proceeds to BFSB.


                                                                    (Continued)

                                      -17-

<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


     As part of the conversion,  BFSB established a liquidation  account for the
     benefit of eligible  depositors  who  continue to  maintain  their  deposit
     accounts  in BFSB after  conversion.  In the  unlikely  event of a complete
     liquidation of BFSB, each eligible  depositor will be entitled to receive a
     liquidation distribution from the liquidation account, in the proportionate
     amount of the then  current  adjusted  balance for deposit  accounts  held,
     before  distribution may be made with respect to BFSB's common stock.  BFSB
     may not  declare  or pay a cash  dividend  to the  Holding  Company  on, or
     repurchase  any of, its common stock if the effect  thereof would cause the
     regulatory  capital of BFSB to be reduced below the amount required for the
     liquidation  account.  Except for such  restrictions,  the existence of the
     liquidation  account does not restrict the use or  application  of retained
     earnings.  In  addition,  savings  banks  that  before  and after  proposed
     dividend  distributions  meet  or  exceed  their  fully  phased-in  capital
     requirements,  may make  capital  distributions  with  prior  notice to the
     Office of Thrift  Supervision  (OTS) during any calendar year up to 100% of
     year-to-date  net income  plus 50% of the  amount in excess of their  fully
     phased-in  capital  requirements  as of the beginning of the calendar year.
     However,  the OTS may impose  greater  restrictions  if an  institution  is
     deemed  to be in need of  more  than  normal  supervision.  BFSB  currently
     exceeds its fully phased-in capital  requirements and has not been notified
     of a need for more than normal supervision.

     Cash Equivalents
     ----------------

     For purposes of the statements of cash flows,  the Bank considers all cash,
     daily  interest  demand  deposits,  and  amounts  due from banks to be cash
     equivalents.

     Investment and Mortgage-Backed Securities
     -----------------------------------------

     Investment  and  mortgage-backed   securities   available-for-sale  include
     securities  that  management   intends  to  use  as  part  of  its  overall
     asset/liability  management  strategy  and that may be sold in  response to
     changes in interest rates and resultant  prepayment  risk and other related
     factors.  Securities  available-for-sale  are  carried  at fair  value  and
     unrealized  gains and losses (net of related tax effects) are excluded from
     earnings and  reported as a separate  component  of  stockholders'  equity.
     Investment  securities  and  mortgage-backed  securities,  other than those
     designated  as   available-for-sale  or  trading,  are  comprised  of  debt
     securities  for which the Bank has  positive  intent and ability to hold to
     maturity and are carried at cost, adjusted for amortization of premiums and
     accretion  of discounts  using the  level-yield  method over the  estimated
     lives of the securities.

     Debt and equity  securities  held for the  purpose  of selling  them in the
     near-term are classified as trading  securities and reported at fair value,
     with unrealized gains and losses included in operating results.  There were
     no securities  classified as trading  during the years ended  September 30,
     1996 or 1995.

     Management  determines  the  appropriate  classification  of investment and
     mortgage-backed securities as either available-for-sale,  held-to-maturity,
     or held for trading at the purchase date.

     Upon  realization,  gains and losses are  included  in  earnings  using the
     specific identification method.

     Stock in Federal Home Loan Bank
     -------------------------------

     Federal law  requires a member  institution  of the Federal  Home Loan Bank
     (FHLB)  System to hold  common  stock of its  district  FHLB  according  to
     predetermined formulas.

                                                                    (Continued)
                                      -18-

<PAGE>

              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


     Loans Receivable
     ----------------

     Loans receivable are stated at unpaid principal balances, less net deferred
     loan origination  fees.  Interest on loans is credited to income as earned.
     Accrued interest on loans that are  contractually  ninety days or more past
     due  is  generally   charged  against  income.   Interest  is  subsequently
     recognized  only  to the  extent  cash  payments  are  received  until,  in
     management's judgment, the borrower's ability to make periodic interest and
     principal  payments  is  reasonably  assured,  in  which  case  the loan is
     returned to accrual status.

     The  allowance  for loan  losses is  increased  by  charges  to income  and
     decreased  by  charge-offs  (net  of  recoveries).   Management's  periodic
     evaluation of the adequacy of the allowance is based on factors such as the
     Bank's  past  loan  loss  experience,  known  and  inherent  risks  in  the
     portfolio,  adverse  situations  that may affect the borrower's  ability to
     repay,   estimated  value  of  any  underlying   collateral,   current  and
     prospective economic conditions, and independent appraisals.

     Effective  July 1, 1995,  the Bank adopted the  provisions  of Statement of
     Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for
     Impairment  of a Loan," and SFAS No.  118,  "Accounting  by  Creditors  for
     Impairment of a Loan - Income Recognition and Disclosures,"  (collectively,
     the Statements). The Statements provide guidance for establishing a reserve
     for losses on specific loans which are deemed to be impaired and apply only
     to specific  impaired  loans.  Groups of small  balance  homogeneous  loans
     (generally  residential  real estate and consumer  loans) are evaluated for
     impairment  collectively.  A loan is considered  impaired when,  based upon
     current information and events, it is probable that the Bank will be unable
     to collect,  in a timely basis, all principal and interest according to the
     contractual terms of the loan's original agreement. When a specific loan is
     determined  to be  impaired,  the  allowance  for loan losses is  increased
     through a charge to expense for the amount of the impairment. For all loans
     secured by real estate,  the amount of the impairment is generally measured
     based on the value of the underlying collateral.  The Bank's impaired loans
     are those loans  currently  reported as  non-accrual.  The Bank  recognizes
     interest income on impaired loans only to the extent that cash payments are
     received.  The Bank's  adoption of the  Statements  did not have a material
     impact on consolidated financial position or results of operations.

     The allowance for loan losses, as described above, includes the reserve for
     impaired loans. The Bank's existing policies for evaluating the adequacy of
     the allowance for loan losses and policies for discontinuing the accrual of
     interest on loans are used to establish the basis for determining whether a
     loan is impaired.

     Loan Origination Fees and Related Costs
     ---------------------------------------

     Loan  origination  fees and  certain  direct  loan  origination  costs  are
     deferred,  and the net  fees are  being  recognized  as  income  using  the
     level-yield  method over the  contractual  life of the loans,  adjusted for
     estimated   prepayments   based  on  actual  prepayment   experience.   The
     amortization  of  deferred  loan  fees and  costs on  non-accrual  loans is
     discontinued during periods of non-performance.


                                                                   (Continued)

                                      -19-


<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     Other Real Estate Owned
     -----------------------

     Other real estate owned represents real estate acquired through foreclosure
     or in satisfaction  of loans and is initially  recorded at the lower of the
     related loan  balance,  less any specific  allowance for loss, or estimated
     fair  value  less  estimated  costs to sell.  Valuations  are  periodically
     performed by  management  and an allowance for losses is  established  by a
     charge to  operations  if the  carrying  value of a  property  exceeds  its
     estimated fair value less estimated costs to sell.

     Premises and Equipment
     ----------------------

     Premises and  equipment are stated at  depreciated  cost.  Depreciation  is
     provided using  straight-line  and  accelerated  methods over the estimated
     useful lives of 39 years for the  building and 5 to 7 years for  furniture,
     fixtures and equipment.

     Income Taxes
     ------------

     The  Holding  Company  and its  subsidiary  have  elected to file  separate
     Federal income tax returns.

     The Bank utilizes the asset and liability  method of accounting  for income
     taxes whereby  deferred tax assets and  liabilities  are recognized for the
     estimated  future  consequences  attributable  to  differences  between the
     financial  statement  carrying  amounts of assets and liabilities and their
     respective tax bases.  The effect on deferred tax assets and liabilities of
     a change in tax rates is  recognized  in tax  expense  in the  period  that
     includes the enactment date.

     Net Income Per Share
     --------------------

     Net income per common  share is  calculated  by dividing  net income by the
     weighted  average  number of common  shares  and common  share  equivalents
     outstanding during the period. Shares sold in the conversion from mutual to
     stock ownership on March 29, 1996 are assumed to have been  outstanding for
     all of fiscal year 1996 for the  purposes  of  computing  weighted  average
     shares outstanding. Additionally, unallocated ESOP shares are excluded from
     the weighted average common shares outstanding calculation, while allocated
     and shares committed to be released are considered to be outstanding.

     Reclassification
     ----------------

     Certain  reclassifications have been made to the 1995 amounts to conform to
     the 1996 presentation.


                                                                    (Continued)
                                      -20-

<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements




     (2)  Investment and Mortgage-Backed Securities Available-for-Sale
          ------------------------------------------------------------

          The amortized cost,  unrealized  gains and losses,  and estimated fair
          values of investment and mortgage-backed securities available-for-sale
          at September 30 are summarized as follows:

                                              Gross         Gross      Estimated
                                Amortized  Unrealized    Unrealized      Fair
          1996                    Cost        Gains        Losses        Value
          ----                  ---------    --------    ---------      ------

U.S. Agency obligations      $ 7,849,767      13,934      (27,699)     7,836,002
Mortgage-backed
   securities                  5,614,811           -      (86,115)     5,528,696
                             -----------      ------     --------     ----------
                             $13,464,578      13,934     (113,814)    13,364,698
                             ===========      ======     ========     ==========



                                              Gross         Gross      Estimated
                                Amortized  Unrealized    Unrealized      Fair
          1995                    Cost        Gains        Losses        Value
          ----                  ---------    --------    ---------      ------

U.S. Agency obligations     $    700,000           -      (14,310)       685,690
Mortgage-backed
   securities                  1,521,599      22,290            -      1,543,889
                             -----------      ------     --------     ----------
                            $  2,221,599      22,290      (14,310)     2,229,579
                             ===========      ======      =======      =========


     A comparison of the amortized  cost and estimated fair values of investment
     and mortgage-backed securities  available-for-sale by maturity at September
     30, 1996 is as follows:

                                                                       Estimated
                                                        Amortized        Fair
                                                          Cost           Value
                                                        ---------      ---------

        Due within one year                         $  3,350,686     3,352,056
        Due after one year through five years          6,066,315     6,003,335
        Due after five years through ten years         4,047,577     4,009,307
                                                      ----------     ---------

                                                    $ 13,464,578    13,364,698
                                                      ==========    ==========

     Mortgage-backed  securities  are  included in the above  maturity  schedule
     based on their expected average lives.

     Gross  gains  on the  sale of  investment  and  mortgage-backed  securities
     available-for-sale were $8,628 during the year ended September 30, 1996. No
     losses  were  realized  on  the  sale  of  investment  or   mortgage-backed
     securities  available-for-sale  during the year ended  September  30, 1996.
     There  were  no  sales  of   investment   or   mortgage-backed   securities
     available-for-sale during the year ended September 30, 1995.

                                                                    (Continued)

                                      -21-
<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     (3)  Investment and Mortgage-Backed Securities Held-to-Maturity
          ----------------------------------------------------------

          The amortized cost,  unrealized  gains and losses,  and estimated fair
          values of investment and mortgage-backed  securities  held-to-maturity
          at September 30 are summarized as follows:

                                              Gross         Gross      Estimated
                               Amortized  Unrealized    Unrealized      Fair
          1996                   Cost        Gains        Losses        Value
          ----                 ---------    --------     --------      ------

     U.S. Agency obligations $ 5,751,062      6,679      (132,508)    5,625,233
     Municipal securities        223,250      4,602          (282)      227,570
     Other                       109,624      1,500             -       111,124
     Mortgage-backed
        securities:
        FNMA certificates        775,016      9,813             -      784,829
        GNMA certificates      1,694,666     11,885        (7,118)    1,699,433
        FHLMC certificates     1,749,027      8,073       (24,573)    1,732,527
                             -----------     ------      --------    ----------
                               4,218,709     29,771       (31,691)    4,216,789
                             -----------     ------      --------    ----------

                             $10,302,645     42,552      (164,481)   10,180,716
                             ===========     ======      ========    ==========



                                              Gross         Gross      Estimated
                                Amortized  Unrealized    Unrealized      Fair
          1995                    Cost        Gains        Losses        Value
          ----                 ---------     --------     --------      ------

     U.S. Agency obligations  $6,490,726      21,608       (73,812)    6,438,522
     Municipal securities        215,000       7,426             -       222,425
     Other                       115,438       3,500             -       118,938
     Mortgage-backed
        securities:
        FNMA certificates        868,226       4,275        (5,535)      866,966
        GNMA certificates      1,544,056      26,891        (1,553)    1,569,394
        FHLMC certificates       720,937      39,093        (1,203)      758,827
                              ----------     -------       -------     ---------
                               3,133,219      70,259        (8,291)    3,195,187
                              ----------     -------       -------     ---------

                              $9,954,383     102,793       (82,103)    9,975,072
                              ==========     =======       =======     =========

     A comparison of the amortized  cost and estimated fair values of investment
     and  mortgage-backed  securities  held-to-maturity by maturity at September
     30, 1996 is as follows:

                                                                     Estimated
                                                       Amortized        Fair
                                                         Cost           Value
                                                       ---------     ----------

        Due within one year                          $ 1,109,211     1,108,643
        Due after one year through five years          5,080,167     4,986,128
        Due after five years through ten years         4,113,267     4,085,945
                                                      ----------     ---------

                                                     $10,302,645    10,180,716
                                                      ==========    ==========

     Mortgage-backed  securities  are  included in the above  maturity  schedule
     based on their expected average lives.

                                                                    (Continued)
                                      -22-

<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     Gross  gains  of  $21,570  and no  losses  were  realized  on the  sale  of
     investment and mortgage-backed securities  held-to-maturity during the year
     ended  September  30,  1996.  Amortized  cost of the  securities  sold  was
     approximately  $651,000. Such sales were considered maturities for purposes
     of classification under the provisions of SFAS No. 115.

     There  were  no  sales  of   investment   or   mortgage-backed   securities
     held-to-maturity during the year ended September 30, 1995.

(4)  Loans Receivable, Net
     ---------------------

     Net loans receivable at September 30 are summarized as follows:

                                                          1996           1995
                                                          ----           ----
Real estate mortgage loans, including commercial
   real estate                                     $22,218,028    20,161,016
Consumer loans                                       1,524,451     1,228,460
Home equity loans                                    1,316,976       925,461
Agricultural loans                                     701,298       581,725
Commercial loans                                        86,586       176,575
Savings account and other loans                        516,812       451,862
                                                    ----------    ----------
                                                    26,364,151    23,525,099

Less:
   Loans in process                                $    84,815       111,386
   Allowance for loan losses                           275,588       275,266
   Net deferred loan origination fees                  144,988       132,507
                                                    ----------    ----------

                                                   $25,858,760    23,005,940
                                                    ==========    ==========

     Adjustable rate mortgages  included in the loans  receivable  balance above
     were  approximately  $177,000 and $84,000 at  September  30, 1996 and 1995,
     respectively.

     The weighted  average stated interest rate of loans receivable at September
     30, 1996 and 1995 was 8.05% and 8.10%,  respectively.  The average yield on
     loans receivable, including amortization of unearned discounts and deferred
     loan  origination  fees, was 8.01% and 8.09% for the years ended  September
     30, 1996 and 1995, respectively.

     Real  estate  loans  serviced  for others  were  approximately  $81,000 and
     $128,000 at September 30, 1996 and 1995, respectively.

     First  mortgage  loans pledged as collateral  for public funds or for other
     funds on deposit with the Bank  approximated  $4,787,000  and $3,537,000 at
     September 30, 1996 and 1995, respectively.

     A summary of activity in the allowance for loan losses is as follows:

                                                          1996           1995
                                                          ----           ----

        Balance at beginning of year                  $ 275,266        207,356
        Provision for loan losses                             -         42,000
        Losses charged against the allowance            (11,584)          (930)
        Recoveries of amounts previously charged off     11,906         26,840
                                                      ---------        -------
        Balance at end of year                        $ 275,588        275,266
                                                      =========        =======

                                                                    (Continued)

                                      -23-


<PAGE>
              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     Nonaccrual  and  renegotiated  loans for which  interest  has been  reduced
     totaled  approximately  $55,000 and $93,000 at September 30, 1996 and 1995,
     respectively. The resulting impact on interest income is nominal.

     The Bank is not committed to lend  additional  funds to debtors whose loans
     have been modified.  The Bank's impaired  loans,  which include those loans
     currently  reported as  nonaccrual,  amounted to  approximately  $32,000 at
     September  30, 1996 and were not subject to a related  allowance for credit
     losses  because of the estimated net realizable  value of loan  collateral,
     guarantees and other factors.

(5)  Accrued Interest Receivable
     ---------------------------

     Accrued interest receivable at September 30 is summarized as follows:

                                                          1996           1995
                                                          ----           ----

        Investment securities                          $ 257,790       122,197
        Mortgage-backed securities                        52,287        33,201
        Loans receivable                                 185,673       201,918
                                                         -------      --------

                                                       $ 495,750       357,316
                                                         =======       =======

(6)  Premises and Equipment
     ----------------------

     Premises and equipment at September 30 are summarized as follows:

                                                          1996           1995
                                                          ----           ----

        Land and building                             $  507,395       502,562
        Furniture, fixtures and equipment                465,028       471,815
                                                        --------     ---------
                                                         972,423       974,377
        Less accumulated depreciation                    470,368       431,620
                                                        --------     ---------

                                                      $  502,055       542,757
                                                        ========     =========

(7)  Deposits
     --------

     Deposits at September 30 are summarized as follows:

<TABLE>
<CAPTION>
                                   Weighted
                                   average                1996                      1995
                                                  --------------------       --------------------
                                    rate          Amount       Percent       Amount       Percent
                                -------------    --------      -------       ------       -------
     Certificates of deposit,
<S>                             <C>              <C>            <C>       <C>             <C> 
        by interest rate        3.01 to 4.00%    $       -          - %   $   791,000       2.8%
                                4.01 to 5.00      2,123,194       7.2       2,447,155       8.7
                                5.01 to 6.00     14,450,989      49.2      10,252,544      36.3
                                                                          
                                6.01 to 7.00      2,515,333       8.6       5,362,409      19.0
                                7.01 to 8.00        232,932        .8         301,111       1.1
                                8.01 to 9.00              -         -           3,988         -
                                                 ----------      ----      ----------      ----
                                                 19,322,448      65.8      19,158,207      67.9
                                                 ----------      ----      ----------      ----

     NOW accounts and                                                     
        MMDA                     3.00 to 4.70     6,219,911      21.2       5,790,132      20.5
                                                                          
     Passbook savings            3.7 to 4.25      3,828,626      13.0       3,260,193      11.6
                                                 ----------      ----      ----------      ----
           Total deposits           4.88%       $29,370,985     100.0%   $ 28,208,532     100.0%
                                                 ==========     =====      ==========     ===== 
</TABLE>
                                                                  (Continued)

                                      -24-

<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements


     Certificates  of deposit and savings  accounts of $100,000 or greater  were
     approximately  $5,040,000  and  $3,955,000  at September 30, 1996 and 1995,
     respectively.

     Certificates  of deposit at September  30, 1996 are  scheduled to mature as
follows:

        Due in:
           One year or less                                        $14,204,958
           Greater than one year through three years                 4,764,591
           Greater than three years through five years                 352,899
                                                                    ----------
                                                                   $19,322,448

     Interest expense on deposits for the years ended September 30 is summarized
as follows:

                                                          1996           1995
                                                          ----           ----

        Certificates of deposit and savings          $1,223,577      1,128,299
        NOW accounts                                    214,985        227,177
                                                      ---------      ---------
                                                     $1,438,562      1,355,476

(8)  Advances From Federal Home Loan Bank
     ------------------------------------

     Advances  from Federal Home Loan Bank at  September  30 are  summarized  as
follows:

<TABLE>
<CAPTION>


                                                                  1996          1995
                                                                  ----          ----
        5.26%-6.54% Fixed Rate Advances, interest
<S>                                                           <C>            <C>      
           payable monthly                                    $6,000,000     2,600,000
        4.35% Amortizing Advance, paid in 1996                         -        56,720
        4.36% Amortizing Advance, due in monthly
           installments of $9,375 plus interest, through
           September 1997                                        113,438       225,938
        Variable rate Cash Management Advance, paid in 1996            -       300,000
                                                               ---------     ---------
                                                              $6,113,438     3,182,658
</TABLE>


     At September 30, 1996, the Bank had a Cash  Management  Advance note with a
     maximum allowable advance of $1,035,300 maturing on May 29, 1997. There was
     no outstanding balance as of September 30, 1996.

     Principal  payments on advances  from Federal Home Loan Bank  subsequent to
     September 30, 1996 are as follows:

             Year ending
            September 30,                    Amount
            -------------                    ------

                1997                      $ 5,213,438
                1998                          600,000
                1999                          300,000
                                            ---------
                                          $ 6,113,438
                                            =========

                                                                   (Continued)

                                      -25-


<PAGE>


              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     The  advances  are  subject  to  a  "blanket  pledge   agreement"   whereby
     substantially  all assets of the Bank are pledged to the Federal  Home Loan
     Bank.

(9)  Income Taxes
     ------------

   U.S. Federal income tax expense for the year ended September 30 consists of:

                                                         1996          1995
                                                         ----          ----

        Current                                      $  99,641       140,660
        Deferred                                        51,779        29,925
                                                      --------      --------

           Total                                     $ 151,420       170,585
                                                      ========      ========

     Income  tax  expense  for the year ended  September  30  differed  from the
     amounts  computed by applying  the U.S.  Federal  income tax rate of 34% to
     income before income taxes as a result of the following:

                                                          1996           1995
                                                          ----           ----

        Computed "expected" tax expense               $172,130        177,763
        Decrease resulting from tax exempt interest     (7,359)        (7,178)
        Other                                          (13,351)             -
                                                       -------        -------
                                                      $151,420        170,585

     At September  30, 1996,  the Bank has capital loss  carryforwards  totaling
     approximately $259,000 which expire December 31, 1996.

     Temporary  differences between the financial statement carrying amounts and
     the tax  bases of assets  and  liabilities  that  give rise to  significant
     portions  of the  deferred  tax  liability  at  September  30 relate to the
     following:
                                                          1996           1995
                                                          ----           ----
        Deferred tax assets:
           Deferred loan fees                           $ 30,904        43,628
           Allowance for loan losses                       93,700        93,590
           Available-for-sale securities                   33,959             -
                                                         --------     ---------
              Gross deferred tax assets                   158,563       137,218
                                                         --------     ---------


        Deferred tax liabilities:
           FHLB stock dividends                           135,966       126,140
           Tax bad reserve in excess of base year amount   83,731        74,183
           Prepaid deposit insurance premium               11,461             -
           Available-for-sale securities                        -         2,713
             Other                                          8,330             -
                                                         --------     ---------
              Gross deferred tax liabilities              239,488       203,036
                                                         --------     ---------

              Net deferred tax liability                $  80,925        65,818
                                                         ========     ==========

                                                                    (Continued)

                                      -26-


<PAGE>

              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely than not that some portion or all of the deferred
     tax assets will not be realized.  The ultimate  realization of deferred tax
     assets is dependent upon the existence of, or generation of, taxable income
     in the periods which those temporary differences are deductible. Management
     considers the scheduled reversal of deferred tax liabilities, taxes paid in
     carryback  years,   projected  future  taxable  income,  and  tax  planning
     strategies  in making this  assessment.  Based upon the level of historical
     taxable  income and  estimates  of future  taxable  income over the periods
     which the  deferred  tax assets  are  deductible,  at  September  30,  1996
     management  believes it is more likely than not that the Bank will  realize
     the benefits of these deductible differences.

     If  certain  conditions  are met,  the Bank is  allowed a special  bad debt
     deduction  for  income tax  purposes.  The  deduction  is based on either a
     specified  experience formula or a percentage of taxable income before such
     deduction  (presently  8%). The Bank does not qualify for use of either bad
     debt  deduction.  As such,  no bad debt  deduction has been included in the
     provision for federal  income taxes for the years ended  September 30, 1996
     and 1995.  Under new legislation  enacted in August 1996, the percentage of
     income bad debt deduction was eliminated beginning January 1, 1996.

     Retained earnings at September 30, 1996 include approximately  $398,000 for
     which no  provision  for  federal  income  tax has been made.  This  amount
     represents the base year tax bad debt reserve which is  essentially  income
     offset by the  percentage  bad debt deduction for income tax purposes only.
     This amount is treated as a permanent difference and deferred taxes are not
     recognized  unless it appears  that this amount will be reduced and thereby
     result in taxable  income in the  foreseeable  future.  Under  current  tax
     regulations,  management  does not foresee  any changes in its  business or
     operations  which  would  result in a  recapture  of its  federal  bad debt
     reserve into taxable income.

     A deferred tax liability of $83,731 has been recognized by the Bank for the
     tax bad debt  reserve  in  excess  of the base  year  reserve.  The new tax
     legislation  enacted in August 1996 requires this excess be recaptured  and
     included in taxable  income over a six year period  beginning  with the tax
     return filed for the year ending December 31, 1996 (Bank is a calendar year
     taxpayer) or December 31, 1998 if certain residential lending  requirements
     are met.

(10)    Employee Benefit Plans
        ----------------------

     Retirement  Plan.  The  Bank has a  non-contributory  defined  contribution
     retirement plan for all eligible employees. The Plan provides for a minimum
     Bank  contribution  of 5% of taxable  income  before  provision  for income
     taxes,  but not to exceed 15% of salaries and wages.  Total pension expense
     for the years ended September 30, 1996 and 1995 was  approximately  $29,000
     and $38,000, respectively.


                                                                   (Continued)

                                      -27-


<PAGE>
              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     Employee Stock Ownership Plan (ESOP).  Effective  January 1, 1996 the Board
     of Directors  approved the adoption of an ESOP covering  substantially  all
     employees. The ESOP purchased 64,000 shares of the Holding Company's common
     stock  for $10 per  share  in  connection  with  the  conversion  to  stock
     ownership.  The ESOP borrowed $640,000 from the Holding Company to fund the
     purchase,  evidenced by a note  receivable  recorded by the Holding Company
     and secured by the common  stock  purchased  by the ESOP.  The terms of the
     note require  quarterly  principal  payments from the ESOP of approximately
     $11,400,  bearing interest at prime (8.25% at September 30, 1996), maturing
     February, 2010. Contributions of cash or common stock are made from BFSB to
     the  ESOP at the  discretion  of the  Board  of  Directors.  For  financial
     reporting  purposes,  the unearned  ESOP  compensation  is  classified as a
     reduction  of  consolidated  stockholders'  equity and amounts  paid to the
     Holding Company for interest have been eliminated in consolidation.

     The Bank records  compensation expense equal to the fair value of shares at
     the date such shares are committed to be released.  Shares are committed to
     be released as the ESOP repays the note receivable  recorded by the Holding
     Company.  Shares  committed  to be released are  allocated  to  participant
     accounts at the end of each calendar year. For the year ended September 30,
     1996, ESOP principal and interest  payments of  approximately  $49,000 were
     funded by Bank  contributions  of  approximately  $39,000 to the ESOP.  The
     remainder of the ESOP  payments was funded by dividends on the  unallocated
     ESOP shares.  At  September  30,  1996,  2,286 shares were  committed to be
     released to participant accounts and the fair value of the remaining shares
     was  approximately  $654,000.  The  Bank  recognized  compensation  expense
     relating to the ESOP of $24,241 during the year ended September 30, 1996.

     Restricted  Stock Plan.  Within one year of the  conversion  from mutual to
     stock  ownership which occurred March 29, 1996, the Bank intends to adopt a
     restricted stock plan which would purchase up to 42,320 shares for grant to
     officers  and  directors  of BFSB.  Such awards would vest over a five year
     period  beginning  one year after the date of the grant of the  award.  The
     plan is subject to approval by the Board of Directors and stockholders.

     Option Plan. With one year of the conversion from mutual to stock ownership
     which  occurred  March 29,  1996,  the Bank intends to adopt an option plan
     which would purchase up to 105,800 shares for grant to employees,  officers
     and  directors  of BFSB.  The  options  would vest over a five year  period
     beginning  one year after the date of the grant of the option.  The plan is
     subject to approval by the Board of Directors and stockholders.

(11)    Regulatory Capital
        ------------------

     BFSB is required to meet three OTS capital requirements: a tangible capital
     requirement  equal to not less than 1.5% of tangible  assets (as defined in
     the regulations), a core capital requirement, comprised of tangible capital
     adjusted for supervisory  goodwill and other defined factors,  equal to not
     less than 3% of tangible assets, and a risk-based capital requirement equal
     to at least 8% of all risk-weighted  assets. For  risk-weighting,  selected
     assets  are  given  a risk  assignment  of 0% to  100%.  The  Bank's  total
     risk-weighted assets at September 30, 1996 were approximately $20,691,000.

                                                                   (Continued)

                                      -28-


<PAGE>
              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

        The following  table  presents,  as of September 30, 1996, the extent to
     which BFSB  exceeds in dollars and in percent,  the three  minimum  capital
     requirements.

                                                   Regulatory Basis
                                            (dollars rounded to thousands)
                                         -------------------------------------
                                                     Approximate
                                          Actual     requirement     Excess
                                          ------     -----------     ------
Tangible capital:
   Dollar amount                         $10,589       774,000      9,815,000
   Percent of tangible assets               20.5%          1.5%          19.0%
Core capital:
   Dollar amount                         $10,589     1,548,000      9,041,000
   Percent of adjusted tangible assets      20.5%          3.0%          17.5%
Risk-based capital:
   Dollar amount                         $10,847     1,655,000      9,192,000
   Percent of risk-weighted assets          52.4%          8.0%          44.4%


     Failure to comply  with  applicable  regulatory  capital  requirements  can
     result in capital directives from the director of the OTS,  restrictions on
     growth, and other limitations on a savings bank's operations.

     Generally  accepted  accounting  principles  (GAAP)  capital  differs  from
     tangible,  core, and risk- based capital at September 30 as a result of the
     following (dollars rounded to thousands):

                                                          1996           1995
                                                          ----           ----

Consolidated capital measured by GAAP               $15,508,000    5,857,000
   Less Holding Company assets                        4,985,000            -
                                                     ----------    ---------
Bank capital measured by GAAP                        10,523,000    5,857,000
   Unrealized gain (loss) on securities available-
   for-sale, net                                         66,000       (5,000)
                                                     ----------    ---------
Tangible and core capital                            10,589,000    5,852,000

   Allowance for loan losses (limited to 1.25% of
   risk-weighted assets)                                258,000      220,000
                                                     ----------    ---------

Risk-based capital                                  $10,847,000    6,072,000
                                                     ==========    =========

(12)    Financial Instruments With Off-Balance-Sheet Risk
        -------------------------------------------------

     The Bank is a party to financial instruments with off-balance-sheet risk in
     the normal course of business to meet the financing needs of its customers.
     These  financial  instruments  include  commitments  to extend  credit  and
     involve, to varying degrees, elements of credit risk.

     The Bank's  exposure to credit loss in the event of  nonperformance  by the
     other party to the financial instrument for commitments to extend credit is
     represented by the contractual amount of those  instruments.  The Bank uses
     the same credit policies in making commitments and conditional  obligations
     as it does for on-balance-sheet instruments.

                                                                  (Continued)

                                      -29-


<PAGE>
              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     Financial  instruments  outstanding  at September  30, 1996 whose  contract
     amounts  represent credit risk are fixed-rate  commitments to extend credit
     totaling approximately $708,000.

     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  customers'  creditworthiness  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 evaluation of the counter-party. Collateral
     held varies but may include personal  property,  residential real property,
     and income-producing commercial properties.

(13)    Commitments and Contingencies
        -----------------------------

     Special  Assessment  by the SAIF.  The  deposits of BFSB are insured by the
     Savings Association Insurance Fund ("SAIF"),  one of two funds administered
     by the Federal Deposit Insurance Corporation ("FDIC"). BFSB previously paid
     premiums of approximately 0.23% of certain deposits. On September 30, 1996,
     the Deposit  Insurance Funds Act of 1996 was signed,  which  authorizes the
     FDIC to impose a special  assessment  on  certain  deposits  held by thrift
     institutions.  This special assessment, which is based on $.657 per $100 of
     outstanding  thrift deposits at March 31, 1995, is intended to recapitalize
     the SAIF.  The  special  assessment  resulted in an  additional  expense of
     approximately  $187,000 and a related tax benefit of approximately  $63,000
     which were  recorded by the Bank on September 30, 1996.  The  assessment is
     payable no later than November 29, 1996.

     Severance  Agreements.  On March 29, 1996 the Bank entered into  employment
     agreements  with its executive  officers.  Such  agreements  have a term of
     three years and provide for  payments to be made to the  officers  equal to
     three times average  salary for the previous  five years,  in the event the
     Bank experiences a change in control. A change in control is defined as (1)
     a sale of more than 25% of the assets of BFSB or the Holding  Company;  (2)
     any merger or  recapitalization  whereby BFSB or the Holding Company is not
     the surviving entity;  (3) a change in control as determined by the OTS; or
     (4)  acquisition  directly or indirectly of 25% or more of the voting stock
     of BFSB or the  Holding  Company  by an  individual,  entity or group.  The
     agreement may be extended for an additional  one year term upon approval of
     the Board of Directors.

(14)    Recent Accounting Pronouncements Not Yet Adopted
        ------------------------------------------------

     On March 31,  1995,  the FASB  issued  SFAS No.  121,  "Accounting  for the
     Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
     of."  SFAS  No.  121  provides  that  long-lived  assets  and  identifiable
     intangibles   should  be  reviewed  for  impairment   whenever   events  or
     circumstances  provide  evidence that  suggests the carrying  amount of the
     asset may not be  recoverable.  An impairment loss is recognized if the sum
     of the expected  future cash flows is less than the carrying  amount of the
     asset.  SFAS No. 121 is  effective  for  financial  statements  issued with
     fiscal  years   beginning  after  December  15,  1995,   although   earlier
     application is encouraged. The Bank intends to adopt the provisions of SFAS
     No. 121 on October 1, 1996, and management expects adoption will not have a
     material  effect on the financial  position or results of operations of the
     Bank.

                                                                   (Continued)

                                      -30-


<PAGE>
              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

     In October 1995, the FASB issued SFAS No. 123,  "Accounting for Stock-Based
     Compensation."  SFAS  No.  123  defines  a "fair  value  based  method"  of
     accounting  for stock- based  compensation  whereby  compensation  costs is
     measured  at the  grant  date  based  on the  value  of  the  award  and is
     recognized  over the service  period.  The FASB  encourages all entities to
     adopt the fair value  based  method,  however,  it will allow  entities  to
     continue to use the "intrinsic  value based method"  prescribed by previous
     pronouncements  for grants to employees.  Under the  intrinsic  value based
     method, compensation cost is the excess of the market price of the stock at
     the grant date over the amount an  employee  must pay to acquire the stock.
     Entities  electing to continue use of the accounting  treatment of previous
     pronouncements must make certain pro forma disclosures as if the fair value
     based method had been applied. The accounting  requirements of SFAS No. 123
     are effective for transactions entered into in fiscal years beginning after
     December  15,  1995.  Pro forma  disclosures  are required for fiscal years
     beginning  after  December  15,  1995 and must  include  the effects of all
     awards  granted  in  fiscal  years   beginning  after  December  15,  1994.
     Management  has elected to follow the accounting  requirements  of previous
     pronouncements  and does not expect  adoption to have a material  impact on
     the Bank's financial position or results of operations.

     In June 1996, the FASB issued SFAS No. 125,  "Accounting  for Transfers and
     Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No.
     125  provides  guidance  on  accounting  for  transfers  and  servicing  of
     financial  assets,  recognition  and  measurement  of servicing  assets and
     liabilities, financial assets subject to prepayment, secured borrowings and
     collateral, and extinguishment of liabilities.

     SFAS No. 125 generally  requires the Bank recognize as separate  assets the
     rights to service  mortgage loans for others,  whether the servicing rights
     are acquired through purchases or loan  originations.  Servicing rights are
     initially  recorded at fair value based upon the present value of estimated
     future cash flows.  Subsequently,  the  servicing  rights are  assessed for
     impairment,  which is recognized in the statement of earnings in the period
     the   impairment   occurs.   For  purposes  of  performing  the  impairment
     evaluation,  the  related  portfolio  must be  stratified  on the  basis of
     certain risk  characteristics  including loan type and note rate.  SFAS No.
     125 also specifies that financial  assets subject to prepayment,  including
     loans that can be contractually  prepaid or otherwise settled in such a way
     that  the  holder  would  not  recover  substantially  all of its  recorded
     investment, be measured like debt securities  available-for-sale or trading
     securities  under SFAS No. 115. The Bank intends to adopt the provisions of
     SFAS No. 125 on January 1, 1997, and management  expects  adoption will not
     have a material effect on the financial position or operations of the Bank.

(15)    Noncash Investing Activities
        ----------------------------

     The Bank  acquired  $55,111 of other real estate  owned by  foreclosing  on
     loans receivable during the year ended September 30, 1995.

(16)    Loans to Directors and Executive Officers
        -----------------------------------------

     Activity in loans to directors  and  executive  officers for the year ended
     September 30, 1996 follows:

           Balance at October 1, 1995               $  332,602
           Additional borrowings                       311,710
           Principal repayments                        (93,458)
                                                      --------

           Balance at September 30, 1996            $  550,854
                                                      ========

                                                                   (Continued)

                                      -31-


<PAGE>

              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

(17)  Disclosures About Fair Value of Financial Instruments
      -----------------------------------------------------

     The  following  disclosures  of  fair  value  information  about  financial
     instruments are presented,  whether or not recognized in the balance sheet,
     for which it is practicable  to estimate that value.  In cases where quoted
     market prices are not available,  fair values are based on estimates  using
     present  value  or  other  valuation   techniques.   Those  techniques  are
     significantly affected by the assumptions used, including the discount rate
     and estimates of future cash flows. In that regard,  the derived fair value
     estimates  cannot always be  substantiated  by  comparison  to  independent
     markets  and,  in  certain  cases,  could  not  be  realized  in  immediate
     settlement of the instrument.  These disclosures  exclude certain financial
     instruments and all nonfinancial  instruments.  Accordingly,  the aggregate
     fair value amounts  presented do not represent the underlying  value of the
     Bank.

     The following  methods and assumptions  were used by the Bank in estimating
     the fair value of its financial instruments:

          Cash and Cash Equivalents and Interest Bearing Deposits.  The carrying
          amounts for cash and cash  equivalents and interest  bearing  deposits
          approximate  fair value  because they mature in 90 days or less and do
          not present unanticipated credit concerns.

          Investment Securities, Mortgage-Backed Securities and Stock in Federal
          Home Loan Bank.  The fair value of investment  securities is estimated
          based  on  bid  prices  published  in  financial   newspapers  or  bid
          quotations received from securities  dealers.  The fair value of stock
          in Federal Home Loan Bank approximates redemption value.

          Loans  Receivable.  Fair values are estimated by stratifying  the loan
          portfolio into groups of loans with similar financial characteristics.
          Loans are  segregated  by type such as real  estate,  commercial,  and
          consumer,   with  each  category  further  segmented  into  fixed  and
          adjustable rate interest categories.

          The fair  value of fixed  rate  loans  is  calculated  by  discounting
          scheduled  cash flows through the  anticipated  maturity  adjusted for
          prepayment  estimates.  For mortgage  loans,  the Bank uses  secondary
          market  interest rates for loans of similar size as the discount rate.
          For other fixed rate loans,  cash flows are  discounted at prime rate.
          Adjustable  interest rate loans are assumed to approximate  fair value
          because they generally reprice within the near-term.

          The fair values are  adjusted for credit risk based on  assessment  of
          risk  identified  with specific  loans,  and risk  adjustments  on the
          remaining  portfolio  based on  credit  loss  experience.  Assumptions
          regarding  credit  risk are  judgmentally  determined  using  specific
          borrower information, internal credit quality analysis, and historical
          information on segmented loan categories for non-specific borrowers.

          Accrued  Interest  Receivable.  The  fair  value of  accrued  interest
          receivable  approximates carrying value as the Bank expects to collect
          accrued interest in the near-term.

          Deposits. The fair value of deposits with no stated maturity,  such as
          savings accounts, NOW accounts, and money market accounts, is equal to
          the amount  payable on demand as of September 30, 1996. The fair value
          of  certificates  of  deposit  is  based  on the  discounted  value of
          contractual cash flows. The discount rate is estimated using the rates
          offered as of September 30, 1996 for deposits of similar maturities.

                                                                  (Continued)

                                      -32-


<PAGE>
              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

          Advances from Federal Home Loan Bank. The fair value of the fixed rate
          long-term  advances is calculated by  discounting  scheduled  payments
          using the Bank's FHLB  long-term  borrowing  rate as of September  30,
          1996.

          Accrued  Expenses  and Other  Liabilities.  The fair  value of accrued
          expenses  and other  liabilities  approximates  carrying  value as the
          amounts accrued will be paid in the near-term.

          Commitments to Extend Credit.  The fair value of commitments to extend
          credit is  estimated  using the fees  currently  charged to enter into
          similar arrangements.  The commitments to extend credit are fixed rate
          loans. No fair value adjustment for interest rates is necessary as the
          stated rates do not differ  materially  from market rates at September
          30, 1996.

          Limitations.  Fair value  estimates  are made at a  specific  point in
          time, based on relevant market  information and information  about the
          financial  instrument.  These  estimates do not reflect any premium or
          discount  that could  result  from  offering  for sale at one time the
          Bank's entire holdings of a particular financial  instrument.  Because
          no market  exists for a portion of the Bank's  financial  instruments,
          fair value estimates are based on judgements regarding future expected
          loss experience,  current economic conditions, risk characteristics of
          various financial instruments,  and other factors. These estimates are
          subjective  in  nature  and  involve   uncertainties  and  matters  of
          significant   judgment  and  therefore   cannot  be  determined   with
          precision.  Changes  in  assumptions  could  significantly  affect the
          estimates.

          Fair value  estimates are based on existing on- and  off-balance-sheet
          financial  instruments  without  attempting  to estimate  the value of
          anticipated  future  business and the value of assets and  liabilities
          that are not considered financial instruments.  Significant assets and
          liabilities  that are not  considered  financial  instruments  include
          deferred tax assets and  liabilities  and premises and  equipment.  In
          addition,  the tax  ramifications  related to the  realization  of the
          unrealized  gains and  losses  can have a  significant  effect on fair
          value estimates and have not been considered in the estimates.

          The  carrying and  estimated  fair values of the  Company's  financial
          instruments as of September 30, 1996 are as follows:


                                                                     Estimated
                                                       Carrying         fair
                                                        value          value
                                                       ---------     ---------
Assets:
   Cash and cash equivalents                      $   451,445       451,000
   Interest-bearing deposits                           99,000        99,000
      Investment and mortgage-backed securities
      available-for-sale                           13,364,698    13,365,000
   Investment and mortgage-backed securities
      held-to-maturity                             10,302,645    10,181,000
   Stock in Federal Home Loan Bank                    399,900       400,000
   Loans receivable, net                           25,858,760    25,869,000
   Accrued interest receivable                        495,750       496,000

Liabilities:
   Deposits                                        29,370,985    29,356,000
   Advances from Federal Home Loan Bank             6,113,438     6,107,000
   Accrued expenses and other liabilities             269,381       269,000
Off-balance-sheet items:
   Commitments to extend credit                             -         6,150

                                                                  (Continued)

                                      -33-


<PAGE>
              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

(18)  Holding Company Information (Condensed)
      ---------------------------------------

     The  summarized  financial   information  for  Crazy  Woman  Creek  Bancorp
     Incorporated is presented below. Intercompany balances and transactions are
     noted parenthetically.

     Condensed Balance Sheet
                                                              September 30,
            Assets                                                1996
            ------                                                ----

Cash (NOW account with BFSB)                                  $    54,233
Investment in subsidiary                                       11,140,175
Loan to BFSB                                                    4,424,000
                                                              -----------
         Total assets                                         $15,618,408
                                                              ===========

Liabilities and Stockholders' Equity

Income taxes payable                                                4,600
Dividends payable                                                 105,800
Stockholders' equity:
   Common stock                                                   105,800
   Additional paid-in capital                                  10,027,393
   ESOP loan                                                     (617,143)
   Retained earnings                                            6,057,879
   Unrealized gain (loss) on securities available-for-sale,
   net                                                            (65,921)
                                                              -----------
         Total stockholders' equity                            15,508,008
                                                              -----------
      Total liabilities and stockholders' equity              $15,618,408
                                                              ===========

Condensed Statement of Income
                                                                Year ended
                                                            September 30, 1996
                                                            ------------------

Interest income (Passbook account, ESOP loan, loan to BFSB)       $159,235
Management fee from BFSB                                            (2,300)
Other operating expenses                                           (39,363)
                                                                   -------
   Income before equity in undistributed earnings of
   subsidiary                                                      117,572
Equity in undistributed earnings of subsidiary                     277,073
   Income before income taxes                                      394,645

           Income taxes                                             39,800

           Net income                                             $354,845
                                                                   =======


                                                                (Continued)

                                      -34-


<PAGE>

              CRAZY WOMAN CREEK BANCORP INCORPORATED AND SUBSIDIARY

                   Notes to Consolidated Financial Statements




     Condensed Statement of Cash Flows

<TABLE>
<CAPTION>

                                                                                Year ended
                                                                            September 30, 1996

<S>                                                                              <C>       
        Net income                                                               $  354,845
        Adjustments to reconcile net income to net cash provided by
           operating activities:
              Equity in undistributed earnings of subsidiary                       (277,073)
              Increase in income taxes payable                                        4,600
                                                                                 
                  Net cash provided by operating activities                          82,372


        Cash flows from investing activities:
           Loan to BFSB                                                          (4,424,000)
           Principal payments on ESOP note receivable                                13,257
           Investment in BFSB                                                    (5,065,905)
                                                                                 
                  Net cash used in investing activities                          (9,476,648)


        Cash flows from financing activities:
           Sale of common stock, net of offering costs                            9,491,809
           Cash dividends paid                                                      (43,300)
                                                                                 
                  Net cash provided by financing activities                       9,448,509


        Net increase in cash                                                         54,233

        Cash at inception                                                                 -

        Cash at end of year                                                      $   54,233
                                                                                  =========

</TABLE>



<PAGE>







                                  Corporate Office
       Crazy Woman Creek Bancorp Incorporated and Buffalo Federal Savings Bank

                                   106 Fort Street
                            Buffalo, Wyoming  82834-1889
                                   (307) 684-5591



            Board of Directors of Crazy Woman Creek Bancorp Incorporated

            Richard Reimann                              Greg L. Goddard
            Chairman of the Board

            Deane D. Bjerke                              Douglas D. Osborn

            Thomas J. Berry                              Sandra K. Todd


                                 Executive Officers

            Deane D. Bjerke                              Arnold R. Griffith, Jr.
            President and Chief Executive Officer        Senior Vice President

                                   Dalen C. Slater
                              Senior Vice President and
                               Chief Financial Officer
            Corporate Counsel                        Special Counsel
            Kirven and Kirven              Malizia, Spidi, Sloane & Fisch, P.C.
            104 Fort Street                One Franklin Square
            Buffalo, WY  82834             1301 K Street, N.W., Suite 700 East
                                           Washington, D.C.  20005

            Independent Auditors           Transfer Agent and Registrar
            KPMG Peat Marwick LLP          American Securities Transfer & Trust,
            1000 First Interstate Center        Incorporated
            401 North 31st Street          1825 Lawrence Street, Suite 444
            Billings, MT  59103            Denver, CO  80202

                                     Form 10-KSB

            Crazy Woman Creek Bancorp  Incorporated's Annual Report for the year
            ended  September  30, 1996 filed with the  Securities  and  Exchange
            Commission on Form 10- KSB, excluding exhibits, is available without
            charge upon  written  request.  For a copy of the Form 10-KSB or any
            other  investor  information,  please  write or call  the  Corporate
            Secretary at the Company's Corporate Office in Buffalo, Wyoming. The
            Annual Meeting of  Stockholders  will be held on January 29, 1997 at
            3:00 p.m. at the Company's  main office  located at 106 Fort Street,
            Buffalo, Wyoming.





                                     - 36 -