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

                                    FORM 10-K


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

      For the fiscal year ended December 31, 1995
                                -----------------

                                       OR

[ ]   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

      For the transition report from __________________ to _____________________

                         Commission File Number 0-11889


                           FIRST FINANCIAL CORPORATION
                           ---------------------------
             (Exact name of registrant as specified in its charter)

         Wisconsin                                           39-1471963
-------------------------------                           ------------------
(State of other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                         Identification No.)

                                1305 Main Street
                         Stevens Point, Wisconsin 54481
                         ------------------------------
                     (Address of principal executive office)

        Registrant's telephone number, including area code (715) 341-0400
                                                            -------------
    Securities registered pursuant to Section 12(b) of the Act Not Applicable
                                                               --------------
           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $1.00 per share
                     ---------------------------------------
                                (Title of Class)

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

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

           Based upon the closing price of the  registrant's  common stock as of
March  1,  1996,  the  aggregate  market  value  of the  voting  stock  held  by
non-affiliates of the registrant is: $524,968,689.

           As of March 1, 1996,  29,880,322  shares of the  registrant's  common
stock were outstanding.

                      Documents Incorporated by Reference.
Part II:
           Portions  of First  Financial  Corporation's  1995  Annual  Report to
           Shareholders.

Part III:
           Portions of definitive proxy statement for the 1996 Annual Meeting of
           Shareholders.



<PAGE>



                                     PART I
ITEM 1.  BUSINESS
-----------------
FIRST FINANCIAL CORPORATION

         First Financial Corporation ("FFC"), which was formed in 1984, conducts
business  as a  unitary  savings  and  loan  holding  company.  As  a  Wisconsin
corporation,  FFC is  authorized  to engage  in any  activity  permitted  by the
Wisconsin Business Corporation Law.

         The  principal  asset of FFC is all of the  outstanding  stock of First
Financial Bank ("FF Bank" or the "Bank"). The business of FFC is the business of
the Bank. Other activities of FFC could be funded by dividends paid by the Bank,
borrowings  or the  issuance  of  additional  shares of  capital  stock.  FFC is
headquartered at 1305 Main Street,  Stevens Point,  Wisconsin,  54481, telephone
number is (715) 341-0400.


FIRST FINANCIAL BANK

         FF Bank  is a  federally-chartered,  stock  savings  institution  whose
deposits are insured by the Savings  Association  Insurance  Fund  ("SAIF"),  as
administered by the Federal Deposit Insurance Corporation ("FDIC").  Business is
conducted in both Wisconsin and Illinois through 129 full-service branch offices
and one limited loan origination  office.  Based on total assets of $5.5 billion
at December 31, 1995, FF Bank is the largest thrift institution headquartered in
Wisconsin.  The  principal  mortgage  lending area of FF Bank is  Wisconsin  and
Illinois.  In addition to real estate  loans,  FF Bank  originates a significant
volume of consumer  loans,  credit card loans and student  loans.  FF Bank has a
limited  volume of  commercial  business  lending  arising from a 1994  business
combination.   Consumer,   home  equity  and  student  lending   activities  are
principally conducted in Wisconsin and Illinois,  while the credit card base and
resulting  loans are principally  centered in the Midwest.  Nearly all long-term
fixed-rate real estate mortgage loans generated are sold in the secondary market
and to other  financial  institutions  with FF Bank  retaining  the servicing of
those loans.  FF Bank offers  brokerage  services and also  operates a full-line
independent insurance agency and a real estate appraisal company.

         FF Bank has grown significantly  through mergers and acquisitions since
its stock  conversion in 1980, when FF Bank had total assets of $244 million and
14 branch offices in central Wisconsin. In 1984, FF Bank and First State Savings
of Wisconsin ("First State"),  concurrently with First State's stock conversion,
combined  to form FFC,  which  operated as a multiple  savings and loan  holding
company from 1984 until late 1985 when FFC acquired First Savings Association of
Wisconsin ("First  Savings").  At that time, all three  institutions were merged
together.  In 1988,  FF Bank  acquired  National  Savings  and Loan  Association
("National") of Milwaukee,  Wisconsin through a merger conversion. By the end of
1988,  FF Bank's total assets had grown to $2.3 billion and FF Bank  operated 63
full-service banking offices throughout Wisconsin.

         Beginning  in  1990,  FF  Bank  expanded  into  the  southern  Illinois
(suburban St. Louis) and Peoria,  Illinois  markets by acquiring  Illini Federal
Savings and Loan  Association  of  Fairview  Heights  ("Illini")  in a voluntary
supervisory  merger  conversion  and by purchasing  the deposits and nine branch
banking  offices  of  two  former  Peoria  thrifts  from  the  Resolution  Trust
Corporation  ("RTC").  Also during 1990, FF Bank acquired two  western-Wisconsin
area branch  banking  offices from the RTC.  During 1992,  FF Bank  acquired ten
additional

                                       -1-

<PAGE>



branch banking offices in the Peoria market, including eight from LaSalle Talman
Bank,  FSB  ("Talman"),  and two  from  the  RTC.  In  1993,  FF  Bank  acquired
Westinghouse   Federal  Bank,  FSB  d/b/a  United  Federal  Bank  ("United")  of
Galesburg,  Illinois  and also  purchased  the  deposits  and the  four  Quincy,
Illinois-area   branch  banking   offices  of  Citizens   Federal  Bank,  a  FSB
("Citizens").

         In 1994,  FFC and FF Bank acquired  NorthLand  Bank of  Wisconsin,  SSB
("NorthLand") of Ashland,  Wisconsin through an exchange of stock. Also in 1994,
FFC merged First Financial - Port Savings Bank, FSB ("Port") of Port Washington,
Wisconsin,  which  had been  acquired  by FFC in 1989 and had  operated  under a
separate charter since that time, into FF Bank.

         In 1995, FFC and FF Bank acquired FirstRock Bancorp, Inc. ("FirstRock")
of Rockford,  Illinois through an exchange of stock. The five banking offices of
FirstRock's  subsidiary,  First Federal Savings Bank of Rockford,  Illinois were
merged into FF Bank. At the end of 1995, FFC's assets had grown to $5.5 billion.

         While  pursuing its strategy of expansion by  acquisition  in Wisconsin
and  Illinois,  management  of  FF  Bank  has  also  curtailed  certain  lending
activities  outside of the Midwest in recent years.  In 1988, FF Bank liquidated
the West Coast mortgage banking  operation which FF Bank had acquired as part of
the  acquisition  of First  Savings.  This  operation  had  incurred  continuing
operating  losses.  Also, in 1988 and 1994, FF Bank sold a segment of its credit
card loan portfolio,  consisting of loans concentrated in California, Texas, and
the Northeastern  states.  FF Bank's current credit card lending  activities are
now focused primarily on Wisconsin, Illinois and other Midwestern states. During
1989,  FF Bank  also  curtailed  manufactured  housing  lending  outside  of the
Midwest.  Subsequently,  in 1994, FF Bank exited the retail manufactured housing
lending business altogether due to competitive practices in the marketplace.

         FF Bank is a member of the Federal Home Loan  ("FHL")  Bank System.  FF
Bank is subject to comprehensive examination,  supervision and regulation by the
Office of Thrift  Supervision (the "OTS") and the FDIC, and is also regulated by
the Board of  Governors  of the Federal  Reserve  System (the  "Federal  Reserve
Board") as to reserves  required to be maintained  against  deposits and certain
other matters. See "Regulation."


RECENT DEVELOPMENTS

         FF  Bank's  deposits  are  insured  by the  SAIF of the  FDIC.  Deposit
insurance  premiums to both the SAIF and the Bank  Insurance Fund ("BIF") of the
FDIC were  identical  when both funds were  created in 1989,  with an eight cent
differential between the premiums paid by well-capitalized  institutions and the
premiums paid by  under-capitalized  institutions (23 cents to 31 cents per $100
of assessable  deposits).  Deposit insurance  premiums for the SAIF and the BIF,
which  insures  deposits  in  national  and  state-chartered  banks,  are set to
facilitate each fund achieving its designated reserve ratio. In August 1995, the
FDIC  determined  that the BIF had achieved  its  designated  reserve  ratio and
lowered  BIF  deposit   insurance   premium  rates  for  all  but  the  riskiest
institutions.  Effective  January 1, 1996,  BIF deposit  insurance  premiums for
well-capitalized  banks were further reduced to the statutory  minimum of $2,000
per  institution  per year.  Because the SAIF  remains  significantly  below its
designated  reserve ratio, SAIF deposit insurance  premiums were not reduced and
remain at 0.23% to 0.31% of deposits,  based upon an  institution's  supervisory
evaluations and

                                       -2-

<PAGE>



capital levels.  The current  discrepancy in deposit insurance  premiums between
the BIF and the SAIF could place FF Bank at a  competitive  disadvantage  to BIF
insured institutions.

         The current  financial  condition  of the SAIF has resulted in proposed
legislation to recapitalize the SAIF through a one-time  special  assessment (of
approximately  80 cents to 85 cents per $100 of  assessable  SAIF deposits as of
March 31, 1995) and in  legislation  to then merge the SAIF into the BIF. If the
special  assessment is enacted,  a special one-time  assessment of approximately
$24.0 million, net of tax effect, would be imposed on FF Bank. After the special
assessment,  it is expected that SAIF would achieve its designated reserve ratio
and that SAIF  premium  rates would then  become  comparable  to BIF rates.  The
proposed  legislation also contemplates a merger of the SAIF into the BIF, which
would  require  separate  legislation.  FFC is unable to  predict  whether  this
legislation will be enacted or the amount or applicable  retroactive date of any
one-time  assessment  or the rates  that would  then  apply to  assessable  SAIF
deposits.

         Legislation  also has been  proposed  that could  eliminate the federal
savings  association  charter.  If such legislation is enacted, FF Bank would be
required to convert its federal  savings bank charter to either a national  bank
charter or to a state depository  institution  charter.  Pending legislation may
provide  relief  as to  recapture  of the bad debt  deduction  for  federal  tax
purposes that  otherwise  would be applicable if FF Bank  converted its charter,
provided that FF Bank meets a proposed residential loan origination requirement.
Pending  legislation  also may result in FFC  becoming  regulated at the holding
company level by the Federal Reserve Board rather than by the OTS. Regulation by
the Federal Reserve Board could subject FFC to capital requirements that are not
currently  applicable to FFC as a holding  company under OTS  regulation and may
result in statutory  limitations on the type of business activities in which FFC
may engage at the holding company level, which business activities currently are
not  restricted.  FFC is unable to  predict  whether  such  legislation  will be
enacted or, if enacted,  whether it will contain  relief as to the  recapture of
bad debt deductions previously taken.

<TABLE>
<CAPTION>

FINANCIAL RATIOS

                                                                         Year Ended December 31,
                                                               -------------------------------------------
                                                               1995               1994                1993
                                                               ----               ----               -----
<S>                                                             <C>                 <C>                <C> 
Return on average assets                                        1.17%               .99%               .99%
Return on average equity                                       18.03              17.21              19.15
Average equity to average assets                                6.50               5.72               5.17
Dividend payout ratio                                          22.64              22.47              20.35
Net interest margin:
      During the period                                         3.51               3.46               3.43
      At end of period                                          3.46               3.37               3.38
</TABLE>



MARKET AREA AND COMPETITION

         At December 31, 1995, FF Bank conducted  business from 129 full-service
branch banking offices located in 60 Wisconsin and 36 Illinois communities.  The
offices are located throughout most of Wisconsin and much of Illinois, including
the Peoria,  Rockford and suburban St.  Louis areas.  These  offices  include 27
locations in the Milwaukee Metropolitan Statistical Area ("MSA"), the largest in
Wisconsin,  and 34  locations  in the  Peoria,  Rockford  and  St.  Louis  MSAs,
Illinois' largest outside of Chicago.


                                       -3-

<PAGE>



         The counties in Wisconsin and Illinois in which FF Bank has offices had
a total population of 5.3 million in 1990. Between 1980 and 1990, the population
of this area increased 1.3%, compared to 1.2% for the two-state area. The median
household  income in these  counties  was $30,497  according to the 1990 Census,
compared to $31,402 for the two- state area. It increased 62.7% between 1980 and
1990.  This area,  in both  states,  contains  a  diversity  of major  urban and
suburban  areas,  smaller  less-urbanized  communities and  predominantly  rural
areas.  Some of the larger  companies  headquartered in FF Bank's market include
Briggs & Stratton,  A.O. Smith, General Electric Medical Systems, Allen Bradley,
Miller Brewing, Johnson Controls, Caterpillar and Sundstrand.

         FF Bank also does  business  outside  of  Wisconsin  and  Illinois.  At
December 31, 1995,  outstanding credit card accounts of FF Bank were distributed
approximately 42% to Wisconsin residents, 11% to Illinois, 4% to California,  3%
to Texas,  3% to Michigan,  3% to New York, 2% to  Minnesota,  2% to Ohio, 2% to
Florida and 28% to other states. Consumer and student loans are made principally
to Wisconsin, Illinois and other Midwestern residents.

         FF Bank is subject to competition  from other savings  institutions  as
well as  commercial  banks and credit  unions in both  attracting  and retaining
deposits  and in real  estate  and other  lending  activities.  Competition  for
deposits  also  comes from  mutual  funds,  credit  unions,  corporate  debt and
government  securities.  Competition  for the  origination  of real estate loans
comes principally from other savings institutions, commercial banks and mortgage
banking  companies.  Consumer  loan  competition  comes  principally  from other
savings  institutions,  commercial  banks,  automobile  manufacturers  and their
financing subsidiaries, consumer finance companies and credit unions.

         The  principal  methods used by  competing  financial  institutions  to
attract deposit accounts include rates of return, types of accounts, convenience
of office  locations,  and other services.  The primary factors in competing for
loans are interest rates, loan fee charges, and timing and quality of service to
the borrower.


                                       -4-

<PAGE>

                    SELECTED HISTORICAL FINANCIAL INFORMATION

    The following tables present selected historical consolidated financial
information of FFC(a).
<TABLE>
<CAPTION>

                                                                                   December 31,
                                                           ---------------------------------------------------------------------
                                                               1995      1994 (f)     1993 (g)      1992 (h)            1991
                                                           ----------   ----------   ----------    ----------       ------------
                                                                               (Dollars in thousands)
<S>                                                        <C>          <C>          <C>           <C>                <C>       
Financial Condition and Other Data
Total assets..........................................     $5,471,108   $5,501,824   $5,181,772    $4,309,067         $3,609,917
Investments (b).......................................        249,155      223,174      360,804       241,703            164,504
Loans receivable and mortgage-related securities......      4,860,910    4,961,202    4,427,803     3,706,080          3,110,115
Loans held for sale-net...............................         26,651       11,736      104,653        89,003             61,685
Intangible assets.....................................         21,481       26,726       31,392        23,278             22,576
Deposits..............................................      4,424,525    4,381,455    4,388,122     3,531,062          3,234,078
Borrowings............................................        570,508      708,446      455,797       487,237            110,353
Shareholders' equity (substantially restricted)(c)....        384,917      327,308      280,643       239,979            190,405
Number of full-service offices........................            129          130          123           100                 92

                                                                              Year Ended December 31,
                                                           ---------------------------------------------------------------------
                                                               1995       1994 (f)     1993 (g)       1992(h)           1991
                                                           ----------   ----------    ----------    ----------        ----------
                                                                        (In thousands except per share amounts)
Operating Data
Interest income.......................................     $  417,308   $  381,864   $  366,711    $  325,057        $  333,157
Interest expense......................................        234,171      204,222      202,493       198,058           225,992
                                                           ----------    ----------   ----------    ----------        ----------
Net interest income...................................        183,137      177,642      164,218       126,999           107,165
Provision for losses on loans.........................         (9,738)      (6,824)     (10,570)      (15,779)          (19,037)
Unrealized loss on impairment of mortgage-related
 securities...........................................                      (9,000)
Loan fees and servicing income........................         18,234       17,551       17,166        15,959            19,085
Gain on sale of loans and securities..................          3,885        3,836        7,939         4,606             5,783
Other non-interest income.............................         22,172       20,907       19,653        17,458            16,599
Non-interest expense..................................       (118,602)    (120,367)    (118,964)     (101,540)          (93,095)
                                                            ----------    ----------  ----------    ----------        ----------
Income before income taxes and the cumulative effect
 of a change in accounting principle..................         99,088       83,745       79,442        47,703            36,500
Income taxes..........................................         35,104       30,716       29,691        17,327            14,672
                                                            ----------    ----------  ----------    ----------        ----------
Income before the cumulative effect of a change in
 accounting principle.................................         63,984       53,029       49,751        30,376            21,828
Cumulative effect of a change in accounting principle 
 (d)...............................                                                                     6,600
                                                            ----------    ----------  ----------    ----------        ----------
Net income............................................     $   63,984   $   53,029   $   49,751    $   36,976        $   21,828
                                                            ==========    ==========  ==========    ==========        ==========

Earnings per share (e):
  Primary:
    Income before the cumulative effect of a change in
      accounting principle (d) .......................     $     2.12   $     1.78   $     1.72    $     1.15        $      .80
    Net income........................................           2.12         1.78         1.72          1.42               .80
  Fully diluted:
    Income before the cumulative effect of a change in
      accounting principle (d)........................     $     2.11   $     1.77   $     1.71    $     1.14        $      .79
    Net income........................................           2.11         1.77         1.71          1.40               .79

Cash dividends declared and paid per share (e)........     $      .48   $      .40   $      .35    $      .22        $      .16



                                                                     -5-

<PAGE>
<FN>
(a)       In 1995, FFC completed the acquisition of FirstRock.  This transaction
          has been  accounted  for as a  pooling-of-interests  and  accordingly,
          results for all periods  presented  have been  restated to include the
          results  of  FirstRock.  See  Note B to FFC's  consolidated  financial
          statements.

(b)       Consists  of  federal  funds  sold,   interest-earning  deposits,  and
          investment securities.

(c)       See Note L to FFC's consolidated financial statements.

(d)       A $6.6 million credit was realized in 1992 from the cumulative  effect
          of the adoption of Statement of  Financial  Accounting  Standards  No.
          109, "Accounting for Income Taxes".

(e)       Per share data have been  adjusted to reflect A) a  two-for-one  stock
          split  distributed  in March  1993 and B) a  two-for-one  stock  split
          distributed in April 1992.

(f)       In 1994, FFC completed the  acquisition of NorthLand.  The acquisition
          of NorthLand has been accounted for as a  pooling-of-interests.  Since
          NorthLand was not material to the balance  sheet or operating  results
          of FFC, balances for prior years have not been restated. However, 1994
          amounts  have been  adjusted to reflect the  acquisition  as if it had
          occurred  on  January  1,  1994.  See  Note  B to  FFC's  consolidated
          financial statements.

(g)       In 1993, FF Bank acquired  United and also  purchased the deposits and
          the four Quincy,  Illinois-area  branch  banking  offices of Citizens.
          Each  transaction has been accounted for as a purchase and the related
          results  of  operations  have  been  included  in  FFC's  consolidated
          financial statements since the respective dates of acquisition.

(h)       During the first quarter of 1992, FF Bank  completed the assumption of
          deposits  and  the  purchase  of  branch  facilities  of  ten  Peoria,
          Illinois-area  branches  including  eight from Talman and two from the
          RTC. Each of these transactions was accounted for as a purchase.
</FN>
</TABLE>


                                       -6-

<PAGE>



Lending Activities, Including Mortgage-Related Securities

          General.  FF Bank has  traditionally  concentrated  on  origination of
conventional  mortgage  loans  secured  by first  liens  on one- to  four-family
residences.  FF Bank also makes loans  which are insured by the Federal  Housing
Authority ("FHA"),  Farmers Home Administration ("FmHA"), and the Rural Economic
Development   Community  ("REDC"),  or  partially  guaranteed  by  the  Veterans
Administration  ("VA") as well as home loans on behalf of or for immediate  sale
to the Wisconsin Department of Veterans Affairs ("WDVA"),  the Wisconsin Housing
and  Economic  Development  Authority  ("WHEDA")  and the  Illinois  Housing and
Development   Authority  ("IHDA").  At  December  31,  1995,  FFC's  total  loan
portfolio,  including  mortgage-related  securities,  amounted to $4.94 billion,
including mortgage loans totaling $2.41 billion of which $2.04 billion, or 41.3%
of the total loan  portfolio,  before net items,  were loans  secured by one- to
four-family  residences.  In addition,  FF Bank makes long-term,  first mortgage
real estate loans on multiple dwelling units and commercial  properties,  second
mortgages  and  short-term  construction  loans.  As a means of better  matching
maturities  of its asset and  liability  products,  FF Bank has also  originated
other types of  high-yielding  loan  products  which have either a short term to
maturity or contain adjustable-rate  features.  These products include education
loans,  credit card loans, home equity loans and consumer loans. At December 31,
1995, these loans amounted to $1.26 billion,  or 25.5%, before net items, of the
total loan  portfolio.  Fixed-rate  mortgage loans with terms up to 15 years and
loans with adjustable interest rates are originated for FF Bank's own portfolio,
while  longer-term  fixed-rate  mortgage  loans are  originated  for sale in the
secondary  market.  The  Federal  Reserve  Board  is  authorized  to  promulgate
regulations limiting the maximum interest rate that may apply during the term of
adjustable-rate  mortgage loans  originated by savings  institutions  such as FF
Bank.  Under the regulation  adopted by the Federal  Reserve Board,  no specific
interest  rate limit is set,  but lenders are required to impose  interest  rate
caps on all  adjustable-rate  mortgage loans and all  dwelling-secured  consumer
loans, including home equity loans, which provide for interest rate adjustments.
The regulation is applicable to loans made after December 8, 1987.

FF Bank also  periodically  purchases  mortgage-related  securities as a lending
alternative  when excess  liquidity is  available.  At December 31, 1995,  these
securities  amounted  to $1.27  billion,  or 25.7% of the total loan  portfolio,
before net items.  For further  discussion  of the  mortgage-related  securities
portfolio,  see "Mortgage-Related  Securities" below as well as Notes A and D to
FFC's consolidated financial statements, filed as an exhibit hereto.



                                       -7-

<PAGE>





          Loan Portfolio Composition. The following table sets forth information
concerning the  composition of FFC's total loan portfolio  including  loans held
for sale and  mortgage-related  securities,  on a consolidated basis, before net
items,  by type of  loan.  Total  loans  receivable,  including  net  items  but
excluding loans held for sale and  mortgage-related  securities are set forth in
Note E to FFC's consolidated  financial  statements.  The data presented in this
table include the accounts of FFC and FF Bank for all periods,  and the balances
of  interest-sensitive  assets and  liabilities  arising from the 1992, 1993 and
1994  acquisitions  are  included  from  the  respective  dates  of the  related
transactions.

<TABLE>
<CAPTION>


                                                                            December 31,
                                           1995               1994               1993                 1992               1991
                                    -----------------  ------------------  ------------------  ------------------  -----------------
                                     Amount   Percent   Amount    Percent   Amount    Percent   Amount    Percent   Amount   Percent
                                    --------  -------  ---------  -------  ---------  -------  ---------  -------  --------  -------
                                                                                      (Dollars in thousands)
<S>                                <C>         <C>    <C>          <C>    <C>          <C>    <C>          <C>    <C>          <C>  
Real estate mortgage loans:

 Conventional loans:
   One- to four-family............ $2,006,575  40.6%  $2,034,320   40.4%  $1,915,516   41.7%  $1,379,522   35.8%  $1,245,546   38.5%
   Multi-family...................    217,288   4.4      212,071    4.2      208,658    4.6      175,511    4.6      155,562    4.8
 FHA and VA.......................     36,093    .7       34,672     .7       40,133     .9       52,214    1.3       61,455    1.9
 Commercial and other real estate.    152,092   3.1      142,634    2.8      114,431    2.5      123,062    3.2      126,139    3.9
                                   ---------- -----   ----------  -----   ----------  -----   ----------  -----   ----------  -----

Total real estate mortgage loans..  2,412,048  48.8    2,423,697   48.1    2,278,738   49.7    1,730,309   44.9    1,588,702   49.1
                                   ---------- -----   ----------  -----   ----------  -----   ----------  -----   ----------  -----

Other loans:

 Consumer loans...................    362,659   7.3      304,771    6.1      180,776    3.9      115,205    3.0       89,698    2.8
 Home equity loans................    284,700   5.8      240,915    4.8      199,463    4.3      168,434    4.4      148,042    4.6
 Education loans..................    240,650   4.9      192,542    3.8      168,980    3.7      164,149    4.3      159,207    4.9
 Credit card loans................    214,107   4.3      200,747    4.0      209,414    4.6      178,436    4.6      160,712    5.0
 Manufactured housing loans.......    139,385   2.8      152,674    3.0      165,017    3.6      133,195    3.4      140,384    4.3
 Other loans......................     17,198    .4       19,023     .4          111               3,298     .1        4,831     .2
                                   ---------- -----   ----------  -----   ----------  -----   ----------  -----   ----------  -----

Total other loans.................  1,258,699  25.5    1,110,672   22.1      923,761   20.1      762,717   19.8      702,874   21.8
                                   ---------- -----   ----------  -----   ----------  -----   ----------  -----   ----------  -----

Total loans receivable before
   net items......................  3,670,747  74.3    3,534,369   70.2    3,202,499   69.8    2,493,026   64.7    2,291,576   70.9

Mortgage-related securities.......  1,270,761  25.7    1,502,491   29.8    1,387,259   30.2    1,361,068   35.3      941,626   29.1
                                   ---------- -----   ----------  -----   ----------  -----   ----------  -----   ----------  -----

Total loans receivable before
 net items and mortgage-
 related securities............... $4,941,508 100.0%  $5,036,860  100.0%  $4,589,758  100.0%  $3,854,094  100.0%  $3,233,202  100.0%
                                   ========== =====   ==========  =====   ==========  =====   ==========   =====   ==========  =====

</TABLE>






                                                                  -8-

<PAGE>
       A summary of FFC's loan portfolio, before net items, including loans held
for sale and  mortgage-related  securities is set forth below by adjustable-rate
loans, short-term loans and fixed-rate loans.
<TABLE>
<CAPTION>
                                               December 31, 1995            December 31, 1994           December 31, 1993
                                             ---------------------        ---------------------       ----------------------
                                                             Percent                     Percent                    Percent
                                              Balance        Of Total      Balance       Of Total      Balance      Of Total
                                             --------       ---------     ---------      --------     --------      --------
                                                                          (Dollars in thousands)
<S>                                          <C>                          <C>                         <C>       
Adjustable-rate:
   Mortgage-related securities.............  $ 1,130,750                  $1,350,342                  $1,159,035
   Mortgage................................    1,001,413                     893,380                     604,514
   Home equity.............................      284,700                     240,915                     199,463
   Education...............................      240,650                     192,542                     168,980
   Consumer................................       31,602                      14,346                       5,816
   Manufactured housing....................        2,987                       4,125                       5,857
   Other...................................       11,805                      13,947                          --
                                             -----------                  ----------                  ----------
       Total adjustable-rate...............    2,703,907      54.7%        2,709,597       53.8%       2,143,665      46.7%

Short-term*:
   Credit card.............................      214,107                     200,747                     209,414
   Mortgage................................       96,932                      47,973                     241,669
   Consumer................................       91,190                      83,730                      66,239
   Mortgage-related securities.............       32,121                      32,737                       2,522
   Deposit account.........................        4,026                       4,611                       4,300
   Manufactured housing....................        9,021                       2,869                       1,443
   Other...................................        4,847                       3,014                          --
                                              ----------                  ----------                  ----------
       Total short-term....................      452,244       9.2           375,681        7.5          525,587      11.5
                                              ----------     -----        ----------      -----       ----------     -----
       Total adjustable-rate and
         short-term........................    3,156,151      63.9         3,085,278       61.3        2,669,252      58.2

Maturities greater than three years:
   Conventional mortgage...................    1,277,610                   1,447,672                   1,392,422
   Consumer................................      235,841                     202,084                     104,421
   Mortgage-related securities.............      107,890                     119,412                     225,702
   FHA/VA manufactured housing.............       86,756                      85,384                      85,552
   Manufactured housing....................       40,621                      60,296                      72,165
   FHA/VA mortgage.........................       36,093                      34,672                      40,133
   Other...................................          546                       2,062                         111
                                              ----------                  ----------                  ----------
       Total fixed-rate....................    1,785,357      36.1         1,951,582       38.7        1,920,506      41.8
                                              ----------     -----        ----------      -----       ----------     -----

       Total loan portfolio................   $4,941,508     100.0%       $5,036,860      100.0%      $4,589,758     100.0%
                                              ==========     =====        ==========      =====       ==========     =====
<FN>
* Credit card and fixed-rate  loans or MBSs with remaining  contractual  life of
three years or less.
</FN>
</TABLE>
       As of  December  31,  1995,  the total  amount  of loans  held by FF Bank
repricing or maturing after December 31, 1996 was $2.56 billion. Of these loans,
$1.90  billion  have fixed rates of interest  and $653.6  million  have terms of
three years or less or adjustable interest rates.

       The following  table sets forth,  at December 31, 1995, the dollar amount
of loans maturing in FF Bank's loan portfolios before net items, plus loans held
for sale and  mortgage-related  securities,  based on either  their  contractual
terms to maturity or the remaining time before the loans can be repriced  during
the periods indicated.
<TABLE>
<CAPTION>
                                                            1997 -      1999 -      2001 -      2006 -     After
                                                   1996       1998        2000        2005        2015       2015        Total
                                                   ----      -----        ----        ----        ----       ----        -----
                                                                            (In thousands)
<S>                                             <C>         <C>         <C>         <C>        <C>         <C>         <C>       
Real estate mortgage loans....................  $  436,145  $491,987    $ 93,985    $449,744   $784,790    $ 87,128    $2,343,779
Construction mortgage loans...................      29,413    33,495       2,345         328      2,688          --        68,269
Mortgage-related securities...................   1,155,811     7,059       2,733      31,559     41,651      31,948     1,270,761
Credit card and home equity
   loans......................................     474,675    24,132          --          --         --          --       498,807
Other loans*..................................     289,871    96,891     113,083     185,368     71,596       3,083       759,892
                                                ----------  --------    --------    --------   --------    --------    ----------

       Total..................................  $2,385,915  $653,564    $212,146    $666,999   $900,725    $122,159    $4,941,508
                                                ==========  ========    ========    ========   ========    ========    ==========
<FN>
*  Includes consumer, manufactured housing, education and small business loans.
</FN>
</TABLE>
                                       -9-

<PAGE>



       One- to  Four-Family  First  Mortgage  Loans.  The primary  mortgage loan
product of FF Bank is the single  family home loan with some  additional  volume
being  secured  by two- to  four-family  residential  units.  In  addition  to a
conventional mortgage loan program, FF Bank has available various other programs
including  FHA-insured,  VA-guaranteed,  FmHA- guaranteed,  and RECD-guaranteed,
Wisconsin  and Illinois  state agency and veterans  programs and jumbo  mortgage
loans in excess  of a  specified  balance.  These  mortgage  loan  products  are
originated  using either a fixed rate, or an adjustable rate of interest indexed
primarily to one-year  U.S.  Treasury  securities  yields,  three-year  Treasury
securities  yields or the  national  cost of funds index as published by the FHL
Banks.  Original  terms to  maturity  vary  from 10 years to 30  years.  FF Bank
currently  holds in its  portfolio  loans for terms up to 15 years and generally
sells fixed-rate  mortgage loans having maturities  greater than 15 years in the
secondary mortgage market.

       Income-Producing  Real  Estate  Property  Loans.  FF  Bank,  through  its
commercial  mortgage  real estate  division,  has sought to  diversify  its loan
portfolio  through the  origination of loans on selected  income-producing  real
estate properties which meet strict internal  underwriting  guidelines.  FF Bank
also  periodically  seeks to limit its overall  exposure  relative to such loans
through the sale of  participation  interests and whole loans to other financial
institutions.  FF Bank provides  servicing of these loans for participants  (see
"Loan Servicing").

       Among the projects financed by FF Bank are apartments,  office buildings,
retail centers, medical clinics, industrial buildings, elderly housing and other
commercial  real estate  located  primarily  in  Wisconsin,  Illinois  and other
Midwestern  states.  FF Bank's  commercial  real estate  division has emphasized
multi-family  mortgage loans in recent years.  Multi-family  and commercial real
estate lending involves greater risks than does one- to four-family  residential
lending. The repayment of loans  collateralized by income-producing  real estate
is dependent upon the successful  operation of the related real estate  property
and also on the  credit  and net worth of the  borrower  and thus is  subject to
conditions in the real estate market,  interest-rate levels and overall economic
conditions.  The underwriting  process for such loans is structured to ascertain
that each property has  sufficient  value and market appeal to provide  adequate
security for the loan and that the property  will produce  sufficient  income to
meet minimum debt service  coverage  ratios  established by FF Bank,  which vary
depending  upon  the  property   type.   All  properties  are  also   inspected,
independently appraised in accordance with applicable regulatory standards,  and
reviewed by a qualified  engineer.  Loans on such  properties  are generally not
permitted  to  exceed a  loan-to-value  ratio of 75%.  Also,  each  borrower  is
reviewed as to management talent, integrity,  experience and available financial
resources.  FF Bank generally requires the personal guarantee of the debt by all
parties  holding  a major  equity  interest  in the  secured  property  when the
owner/borrower is a business entity.

       Additionally, the portfolio of income-producing properties is reviewed on
a  continuing  basis to  identify  any  potential  risk that  exists for FF Bank
through undue concentration of the portfolio in any one borrower,  property type
or geographic location. These and other underwriting standards are documented in
written policy statements,  which are periodically  updated,  and approved by FF
Bank's Board of Directors.

       Lending terms for FF Bank's  income-producing  real estate property loans
generally  call  for  a  maturity  of  five  to  fifteen  years  based  upon  an
amortization   schedule  of  fifteen  to  thirty  years  and  an  interest  rate
periodically adjustable based upon a cost of funds index.


                                      -10-

<PAGE>


       Borrowers  may  experience  a  cash  flow  from  the  property  which  is
inadequate  to  service  the debt.  This cash flow  shortage  may  result in the
failure to make loan payments.  Additionally,  the repayment of loans secured by
income-producing  properties  is  dependent on the  successful  operation of the
related real estate project and the financial  strength of the borrower and thus
is subject to adverse  conditions  in the real  estate  market or the economy in
general.

       Construction  Loans.  Loans made by FF Bank to provide interim  financing
during the construction period for i) builder-owned  residential  properties and
ii)  commercial  properties  are  typically  originated  for  periods  of six to
eighteen  months.  These loans are generally  limited to 75% of the value of the
property  upon  completion.  Construction  loans for  properties  intended to be
owner-occupied are typically  structured as adjustable-rate  permanent loans and
can be  granted  up to  95%  of the  value  of  the  property  upon  completion.
Construction loan funds are periodically  disbursed as construction  progresses.
At any  stage  of  construction,  remaining  undisbursed  funds  are in  amounts
estimated to be adequate for completion or sale of the property.

       Construction lending is generally considered to involve a higher level of
risk than lending secured by existing  properties  because  properties  securing
these loans are generally  more  speculative  and more difficult to evaluate and
monitor.  FF  Bank's  risk of loss  on  construction  or  development  loans  is
dependent upon the accuracy of the initial  estimate of the property's  value at
completion of the project and the estimated cost of the project. If the estimate
of  construction  or development  costs proves to be inaccurate,  FF Bank may be
required  to advance  funds  beyond the amount  originally  committed  to permit
completion of the project. If the estimate of the value proves to be inaccurate,
the  lender  may  be  confronted  with  a  property  having  a  value  which  is
insufficient to assure full repayment of the  construction  loan upon securing a
permanent  mortgage loan. FF Bank had  construction  loans  outstanding of $72.0
million at December  31,  1995,  of which $56.3  million was  collateralized  by
residential real estate.

       Manufactured  Housing Loans.  Through a series of dealer relationships in
Wisconsin  and  other  Midwestern  states,  FF Bank  had  indirectly  originated
manufactured  housing  loans until late 1994.  The  dealers  closed the loans at
their  locations  after  forwarding all necessary  documentation  to FF Bank for
underwriting,  processing,  and credit  checks in order to receive  approval  to
originate the loans for purchase by FF Bank. The loans were either  conventional
or originated  under the FHA-insured or  VA-guaranteed  programs  throughout the
various  states.  The term of such  loans  was  usually  up to 15 years at fixed
interest  rates.  During  1994,  FF Bank  ceased  originating  such loans due to
adverse  competitive  practices in this market.  However,  $18.3 million of such
loans were purchased in 1995 on a wholesale basis.

       Consumer and Other Loans. FF Bank offers a variety of lending products to
meet the  specific  needs of  consumers.  These  products  include  secured  and
unsecured  installment loans with fixed repayments,  student loans,  credit card
programs and home equity loans. Consumer loans are made directly to the customer
and are secured by automobiles, recreational vehicles, first or second mortgages
on real estate or deposit accounts.  FF Bank provides  financing on both new and
used  automobiles and  recreational  vehicles using different rates and terms to
maturity to compensate for the  difference in collateral  value and credit risk.
In  addition to secured  consumer  loans,  FF Bank  extends  unsecured  loans to
qualified borrowers based upon their financial statements and  creditworthiness.
The vast majority of the consumer loan  originations  are made within  Wisconsin
and Illinois through the extensive branch network of FF Bank.

                                      -11-

<PAGE>


       Several  student  loan  programs  are  offered by FF Bank  through  three
guarantor  programs,  with the majority being originated within  Wisconsin.  The
various  student  lending   programs  meet  a  variety  of  borrower   financial
qualifications  with varying  rate  structures.  Additionally,  FF Bank offers a
consolidation  loan plan whereby  various  student loans can be combined for the
convenience and benefit of the borrower.

       FF Bank offers  credit card  programs to the general  public and has also
placed  additional  emphasis  on  issuing  cards  through   organizations  whose
membership   substantially  meets  qualifying  criteria  ("affinity  programs").
Certain  additional  benefits  can be linked to card  usage  under the  affinity
programs.  These affinity programs are based on the Visa/Mastercard  credit card
programs which operate on a nationwide  basis. In addition to the regular credit
card  products,  FF Bank also  operates  the BasiCard  program  which offers the
consumer a lower cost,  no-frills  charge card bearing an interest rate of 14.9%
applied to all balances and advances.

       During the last  decade FF Bank  placed  additional  emphasis on its home
equity loan program. The new emphasis was tied to federal income tax law changes
which were  brought  about  during  1986,  causing  consumers  to look for a new
vehicle  through which to finance future needs on a  tax-deductible  basis. As a
result of federal tax legislation adopted in 1987,  however,  interest on a home
equity  line of credit is  deductible  only up to  $100,000  of  principal.  The
primary home equity loan  product  calls for a floating  interest  rate which is
linked to the prime interest rate and is secured by a mortgage, either a primary
or a junior lien, on the borrower's residence.  A fixed-rate home-equity product
is also offered.  As an  additional  convenience  to consumers,  the home equity
lines are generally tied to a Gold or a standard  Mastercard credit card account
whereby  consumers can conveniently draw against their approved line through the
use of their credit card.  Fixed-rate  non-revolving  second  mortgage loans are
also offered.

       Business  Loans.  With the  acquisition  of  NorthLand,  FFC  acquired  a
business loan  portfolio of  approximately  $23 million.  FF Bank,  however,  is
primarily a retail lender and its strategy has been to consider  business  loans
only to those customers who maintain  acceptable  deposit balances with FF Bank.
As such, FF Bank does not aggressively  market business loans and year-end loans
outstanding approximated $17.2 million.

       Mortgage   Related   Securities.   FF  Bank  purchases   mortgage-related
securities  as  a  lending  alternative  when  excess  liquidity  is  available.
Mortgage-related    securities   include   government   agency   mortgage-backed
securities,  privately  issued  adjustable rate  mortgage-backed  securities and
shorter-term  or  adjustable-rate   government  agency  collateralized  mortgage
obligations.  FF Bank reviews the  geographic  distribution  of collateral  when
purchasing  private issue  mortgage-related  securities and limits the portfolio
concentration of underlying collateral located in certain states or metropolitan
areas;  however,  FF Bank has not purchased  any private  issue  mortgage-backed
securities  since 1992.  With the exception of six  non-agency  securities,  all
securities in the  non-agency  mortgage-backed  securities  portfolio  are, at a
minimum,  of investment  grade quality.  The securities  rated below  investment
grade,  four of which continue to be performing,  are discussed as part of "Non-
Performing  MBSs" in Management's  Discussion and Analysis,  filed as an exhibit
hereto.  For a  related  discussion  of  the  accounting  for  debt  securities,
including mortgage-related  securities, see "Investment Securities". For further
discussion   of   the   mortgage-related    securities    portfolio,    see   i)
"Mortgage-Related  Securities" in  Management's  Discussion and Analysis and ii)
Notes A and D to FFC's consolidated financial statements, each of which is filed
as an exhibit hereto.

                                      -12-

<PAGE>

       Loan Originations,  Purchases and Sales. FF Bank's loan originations come
from  a  number  of  sources.   Residential   mortgage  loan   originations  are
attributable  primarily to depositors,  walk-in  customers,  referrals from real
estate brokers and builders,  out-of-state originators and direct solicitations.
In addition,  FF Bank also acquires refinanced  residential mortgage loans which
were  previously  originated  by FF Bank,  but sold to and  serviced  for  other
investors. Prior to acquisition,  these loans are refinanced to a lower rate, as
per the borrower's  request.  Commercial mortgage loan originations are obtained
by  direct  solicitation  and  referrals.  Prior  to late  1994,  VA-guaranteed,
FHA-insured  and  conventional  manufactured  housing  loans were  obtained from
approved dealers. Consumer loans are originated from walk-in customers, existing
depositors and mortgagors and direct solicitations. Student loans are originated
from solicitation of eligible students and from walk-in customers.  FF Bank also
periodically purchases student loan portfolios from other lenders.

       Real estate loans are primarily  originated by loan officers in FF Bank's
offices.  Relative to FF Bank's real estate  loans,  loans up to the  FHLMC/FNMA
upper limit authority (currently $203,150 for single-family  mortgage loans) for
one- to four-family residences are approved by an underwriter who is employed by
FF  Bank.  Loans in  excess  of this  amount  up to  $400,000  are  approved  by
designated officers. Individual loans in excess of $400,000 up to $1,500,000, as
well as loans to one  borrower  in  excess  of three  loans or in the  amount of
$500,000, or greater, are approved by an officer loan committee. Loans in excess
of  $1,500,000  require  approval  of the  Executive  Committee  of the Board of
Directors of FF Bank, and loans in excess of $5,000,000  require  approval of FF
Bank's full Board of Directors. The majority of conventional home mortgage loans
are written to comply with underwriting standards of FHLMC and/or FNMA to ensure
that  national  standards  are being met and that FF Bank's loans meet or exceed
national secondary market  requirements.  All loans are centrally reviewed by an
underwriting  staff  prior to final  approval  to  ensure  compliance  with loan
underwriting  policies.  With respect to the appraisal of properties,  borrowers
may use the appraisal subsidiary of FF Bank or outside appraisers preapproved by
FF Bank's Board of Directors.

       In general,  FF Bank may lend up to 100% of the  appraised  value of real
property for residential  purposes  provided loans in excess of 80% have private
mortgage  insurance,   a  government  guarantee,   additional  collateral  or  a
combination  thereof. In practice,  most of FF Bank's mortgage loans are written
in the range of 75% to 95% loan-to-value ratio.

       Real estate loans are secured by a first mortgage,  subject  primarily to
title insurance or an attorney's  title opinion in certain areas and are covered
by fire and  casualty  insurance.  When  appropriate,  flood  insurance  is also
required.  Related costs,  together with private mortgage insurance as required,
are paid by the borrower.

       FF Bank encounters certain environmental risks in its lending activities.
Under federal and state  environmental laws, lenders may become liable for costs
of cleaning up hazardous materials found on secured  properties.  Certain states
may also impose liens with higher  priorities than first mortgages on properties
to recover  funds used in such  efforts.  Although the  foregoing  environmental
risks  are  more  usually  associated  with  industrial  and  commercial  loans,
environmental  risks may be substantial for residential  lenders,  like FF Bank,
since environmental contamination may render the secured property unsuitable for
residential  use. In addition,  the value of  residential  properties may become
substantially diminished by


                                      -13-

<PAGE>

contamination  of nearby  properties.  In accordance with the guidelines of FNMA
and FHLMC,  appraisals  for  single-family  homes on which FF Bank lends include
comments on environmental influences and conditions. FF Bank attempts to control
its  exposure to  environmental  risks with  respect to loans  secured by larger
properties by monitoring available information on hazardous waste disposal sites
and requiring environmental  inspections of such properties prior to closing the
loan. No assurance can be given,  however, that the value of properties securing
loans in FF Bank's  portfolio will not be adversely  affected by the presence of
hazardous  materials  or that  future  changes in federal or state laws will not
increase FF Bank's exposure to liability for environmental cleanup.

       The   following   table  shows  loan  and   mortgage-related   securities
originations,  purchases,  sales  and  repayment  activities  of  FF  Bank  on a
consolidated basis for 1995, 1994 and 1993.
<TABLE>
<CAPTION>

                                                                                Year Ended December 31,
                                                                    --------------------------------------------
                                                                       1995              1994                1993
                                                                    ----------        ----------          -------
                                                                                    (In thousands)
<S>                                                                 <C>                <C>               <C>       
Loans originated:
  Mortgage loans:
     One- to four-family.........................................   $  476,783         $  756,589        $1,346,350
     Multi-family................................................       34,350             55,658            91,209
     Commercial real estate......................................       31,087             63,002            16,012
     Refinanced residential mortgage loans
      previously sold and serviced for others....................           --             24,643           344,862
                                                                    ----------         ----------        ----------
                                                                       542,220            899,892         1,798,433
  Consumer loans.................................................      229,697            237,651           145,474
  Education loans................................................       76,299             53,692            33,424
  Home equity loans - net increase...............................       43,785             58,791            42,888
  Credit card loans - net increase...............................       13,361              5,124            30,978
  Manufactured housing loans.....................................       18,288             16,669            23,405
  Other loans....................................................        5,560             10,074             2,604
  Refinanced manufactured housing loans pre-
    viously sold and serviced for others.........................           --                475            36,953
  Decrease (increase) in undisbursed
   loan proceeds.................................................        7,817            (10,829)            5,920
                                                                    ----------         ----------        ----------
           Total loans originated................................      937,027          1,271,539         2,120,079
Mortgage-related securities purchased............................           --            594,952           271,719
                                                                    ----------         ----------        ----------

           Total originations and purchases......................      937,027          1,866,491         2,391,798
                                                                    ----------         ----------        ----------

Add (deduct):
  Loans and mortgage-related securities
   from acquisitions (before net items)..........................           --            114,462           540,474

  Market valuation adjustment on
   available-for-sale mortgage-related
   securities....................................................        1,593            (12,470)            1,669

  Unrealized loss on impairment of
   mortgage-related securities...................................           --             (9,000)               --

  Loan repayments and sales:
   Repayments of loans and mortgage-
    related securities...........................................     (815,453)          (899,405)       (1,067,702)
   Sales of one- to four-family real
    estate loans.................................................     (195,231)          (393,154)       (1,017,740)
   Sales of multi-family and
    commercial real estate loans.................................      (15,471)           (25,741)          (25,621)
   Sales of consumer-related loans...............................           --            (22,712)               --
   Sales of mortgage-related
    securities...................................................           --           (182,234)          (81,294)
                                                                    ----------         ----------        ----------
           Total repayments and sales............................   (1,024,562)        (1,430,254)       (1,650,214)
                                                                    ----------         ----------        ----------

  Increase  (decrease)  in total  loans  before net items  (excluding  change in
   undisbursed loan proceeds), including loans held for sale
   and mortgage-related securities...............................   $  (87,535)        $  436,237        $  741,584
                                                                    ==========         ==========        ==========
</TABLE>

                                      -14-


<PAGE>




       FF Bank has been actively engaged in secondary mortgage market activities
on a  national  basis  through  the sale of whole  loans and  participations  to
pension  funds,  insurance  companies,  banks,  other savings  institutions  and
governmental  units such as FHLMC, FNMA, GNMA and special Wisconsin and Illinois
programs.  On a  limited  basis,  FF Bank and its  predecessors  have  purchased
selected groups of loans or a portfolio of loans. FF Bank also  periodically has
used its loans to  securitize  mortgage-related  securities  sold by  registered
broker-dealers. Sales of loans are used to provide additional funds for lending,
to  generate  servicing  fee  income  and to  reduce  the  risk  resulting  from
fluctuating  interest  rates  and loan  concentrations.  Under  loan  sales  and
participation  agreements,  FF Bank sells mortgage loans on a non-recourse basis
and pays participants an agreed upon yield on the  participant's  portion of the
loan out of monthly payments  received from the borrowers.  FF Bank, in general,
has forward sales commitments to cover the sale of all fixed-rate mortgage loans
having  maturities of greater than 15 years which are closed or approved as well
as a majority of accepted applications for such loans.

       Loan  Servicing.  FF Bank has  originated  the  majority  of the loans it
services for others. FF Bank receives fees for those servicing activities, which
include  collecting and remitting  loan payments,  inspecting the properties and
making  certain  insurance  and tax  payments  on  behalf of the  borrowers.  At
December  31,  1995,  FF Bank  was  servicing  $2.33  billion  of  mortgage  and
manufactured  housing  loans  owned by others.  Mortgage  loans  totaling  $2.30
billion were being serviced for annual fees ranging from 1/8 to 1/2 of 1% of the
unpaid  principal,  and $28.1 million of  manufactured  housing loans were being
serviced for investors.  Servicing fees retained on  manufactured  housing loans
average approximately 2.5% of the unpaid principal,  reflecting the higher costs
of servicing these loans.  The following  table sets forth  information as to FF
Bank's loan servicing portfolio, net of loans in process, at the dates shown.
<TABLE>
<CAPTION>

                                                                        December 31,
                                                     -----------------------------------------------------
                                                            1995                          1994
                                                     --------------------------     ----------------------
                                                       Amount              %         Amount             %
                                                     -----------       --------     ---------       ------
                                                                     (Dollars in thousands)

<S>                                                  <C>                 <C>       <C>                <C>  
Loans owned by FF Bank...........................    $3,642,000          61.0%     $3,498,000         59.1%
Loans serviced for others........................     2,326,000          39.0       2,424,000         40.9
                                                     ----------         -----      ----------        -----
      Total loans serviced.......................    $5,968,000         100.0%     $5,922,000        100.0%
                                                     ==========         =====      ==========        =====
</TABLE>


       Information concerning FF Bank's servicing income from loans serviced for
others is summarized in the following table for the periods indicated.

<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                    ----------------------------------
                                                                      1995           1994          1993
                                                                    --------       --------      ------
                                                                            (Dollars in thousands)

<S>                                                                 <C>             <C>           <C>   
Loan servicing income...........................................    $ 7,125         $7,737        $6,587
Servicing spread for the year*..................................       .300%          .344%         .312%
<FN>

*   The servicing  spread  represents  the average fee earned as a percentage of
    average balances of loans serviced for others, net of undisbursed  proceeds,
    as reduced by the periodic  amortization of purchased and capitalized excess
    mortgage servicing rights.
</FN>
</TABLE>







                                      -15-


<PAGE>



       Net loan  servicing  income has  fluctuated  between 1993 and 1995 as the
result of i) changes in the average volume of loans serviced during a particular
year, ii) changes in the average servicing spread maintained as new servicing is
added each year and iii)  fluctuations in the periodic  amortization of the cost
associated with purchased  servicing  rights,  excess  servicing rights recorded
prior to 1995 and originated servicing rights recorded beginning in 1995.

       The $1.1 million  increase in net servicing  income from 1993 to 1994 was
primarily the result of a $2.2 million decrease in amortization of purchased and
excess  servicing  costs in 1994 compared to 1993. The 1993 lower  interest-rate
environment  resulted  in higher  loan  prepayments  and,  consequently,  higher
amortization  of  servicing  costs.  This was  partially  offset by higher  1994
servicing volume but at lower average gross servicing  spreads.  This additional
volume was a combination of purchased servicing and originated servicing.

       The $600,000  decrease in net servicing  income from 1994 to 1995 was the
result of both lower  average  volume of loans  serviced for others  during 1995
compared to 1994, as the table above demonstrates, and increased amortization of
capitalized servicing rights.

       During  1995 FF Bank  began  recognizing  as an asset  the fair  value of
originated  servicing  rights  as  discussed  in  Note A to  FFC's  consolidated
financial  statements,  filed as an exhibit hereto.  Also, see Note P, similarly
referenced,  for  additional  loan  servicing  information  as part of  mortgage
banking activities.

       Fee Income From Lending Activities.  Loan origination and commitment fees
and certain direct loan origination costs are being deferred and the net amounts
amortized as an  adjustment of the related  loan's yield.  FF Bank is amortizing
these amounts,  using the level yield method,  over the contractual lives of the
related loans.

       FF Bank  also  receives  other  fees and  charges  relating  to  existing
mortgage  loans  which  include  prepayment  penalties,  late  charges  and fees
collected in connection  with a change in borrower or other loan  modifications.
Other types of loans also generate fee income for FF Bank.  These include annual
fees  assessed on credit card  accounts,  transactional  fees relating to credit
card usage and late charges on consumer loans and manufactured housing loans.

       Collateralized  Industrial  Development Revenue Bonds.  Additional income
has been earned by FF Bank by offering  loans and securities in its portfolio to
third parties for their use as collateral.  FF Bank has previously  entered into
agreements  under  which  mortgage  loans  and  investment  securities  held  in
portfolio are pledged as secondary collateral in connection with the issuance of
Industrial Development Revenue Bonds. The bonds were issued by municipalities to
finance  multi-family or commercial real estate owned by third parties unrelated
to  FF  Bank.  Under  the  terms  of  these   agreements,   FF  Bank  i)  issues
uncollateralized  letters of credit or ii) maintains,  with a trustee,  mortgage
loans or securities with a fair market value, as defined, aggregating up to 180%
of the outstanding  principal  balance of the bonds to provide  security for the
payment of principal, interest and any mandatory redemption premium owing on the
bonds.  FF Bank  continues to receive  principal  and  interest  payments on the
mortgage loans or securities  used as  collateral.  If any of such bonds were in
default,  FF Bank would have the primary  obligation to either pay any amount in
default or to acquire the bonds on which the default  had  occurred.  If FF Bank
was  required  to perform  under these  agreements,  it would  foreclose  on the
existing mortgage and


                                      -16-

<PAGE>



security  interest in the real and personal  property financed with the proceeds
of the  bonds.  FF Bank has  discontinued  this  line of  business  and does not
currently anticipate entering into any new agreements, except for the purpose of
facilitating the refinancing of existing bond issues.

       At December 31, 1995, certain mortgage-related  securities and investment
securities with a carrying value of  approximately  $6.3 million were pledged as
collateral  for bonds in the aggregate of $3.9 million.  Additional  bond issues
totaling  $7.1 million are  supported by letters of credit  issued by FF Bank in
lieu of specific  collateral.  The bond agreements have expiration dates through
2008.

       At December 31, 1995, each of the outstanding agreements was current with
regard to bond debt-service payments. Management has considered these agreements
in its review of the adequacy of  allowances  for losses  relating to contingent
liabilities.

       Usury   Limitations.   Federal   law  has   preempted   state  usury  law
interest-rate  limitations on first-lien  residential  mortgage loans unless the
state  legislature  acted before a certain date to override the  exemption.  The
Wisconsin  legislature  acted to override the preemption and,  therefore,  loans
made by FF  Bank in  Wisconsin  are  subject  to  Wisconsin  usury  limitations,
described below.

       The Illinois legislature did not override the federal preemption,  and at
present  Illinois law imposes no ceiling on interest rates for residential  real
estate  loans,  including  junior  mortgage  loans.  Additionally,  in Illinois,
federally-insured savings institutions can charge the highest rate permitted any
other lender in Illinois. The Illinois State Legislature has allowed state banks
to  charge  any  interest  rate on any  type  of  loan,  and,  thus,  there  are
effectively  no ceilings on the interest  rate which a federal  savings bank may
charge on a loan in Illinois.

       On November 1, 1981,  Wisconsin  enacted a comprehensive  revision of its
usury statutes  overriding federal  preemption and deregulating  interest rates.
After that date,  maximum  interest  rates were  eliminated for loans secured by
first lien mortgages on  residential  real estate.  Maximum  interest rates have
also been  eliminated  for most forms of fixed and variable rate consumer  loans
made by savings  institutions  after October 31, 1984.  Variable rate  revolving
consumer  loans which are not secured by real estate remain subject to a maximum
interest rate of 18%, except that the limit does not apply  following  notice to
the borrower if the auction  yield on two-year U.S.  Treasury  notes exceeds 15%
per year for five consecutive weeks.

       With  respect to  first-lien  residential  real  estate  loans,  the 1981
Wisconsin  usury  legislation  clarified  the  Wisconsin  law  requirement  that
unearned interest be refunded.  However,  certain items are now deemed not to be
interest for purposes of  calculating  the rebate.  These items include  charges
paid to third  parties,  fees and  other  amounts  required  to be  passed on to
secondary  market  purchasers  of any loans,  up to two points to the lender for
"loan  administration",  commitment  fees,  loan  fees  paid  by  third  parties
("seller's  points") and a prepayment  penalty of not more than 60 days interest
on that amount of the prepayment which exceeds 20% of the original amount of the
loan, provided the prepayment is made




                                      -17-

<PAGE>



within five years of the date of the loan and the parties  have agreed to such a
prepayment penalty.

       Since November 1, 1981,  savings  institutions have been permitted to use
two forms of interest-rate  adjustment clauses in mortgage loans secured by one-
to four-family homes.  Interest rates may either be adjusted based on changes in
an "approved index" ("indexed adjustable rate") or by providing for no more than
a 1% increase  in the  interest  rate not more than once  during each  six-month
period and by  permitting  decreases in the interest rate to be made at any time
("non-indexed  adjustable  rate").  An  "approved  index" is  defined as (i) the
national  average  mortgage  contract  rate for major lenders on the purchase of
previously  occupied  houses,  as  computed  by the FHL Banks;  (ii) the monthly
average of weekly auction rates on U.S.  Treasury bills with a maturity of three
months or six months made  available  by the Federal  Reserve  Board;  (iii) the
monthly  average  yield  on U.S.  Treasury  securities  adjusted  to a  constant
maturity of one, two, three or five years, made available by the Federal Reserve
Board;  or (iv) an index approved by the Wisconsin  Commissioner  of Savings and
Loans.  Loans made after November 1, 1981,  containing either form of adjustment
mechanism,  are  not  subject  to any  maximum  usury  interest  rate;  however,
increases  in the rate based on  increases  in the index are  optional  with the
lender.  Adjustments  under the non-indexed  version are solely at the option of
the lender and if no increase is made during any  six-month  period,  the lender
may  accumulate  such  increases  and impose  them at any time.  A notice to the
borrower  is  required  at least 30 days prior to an  interest  rate  adjustment
during which period the loan may be prepaid without penalty. Loans originated by
FF Bank prior to its conversion to a federal savings bank charter may be subject
to the above provisions.

       Other states in which FF Bank makes loans have  varying  laws  concerning
usury. Management believes that all loans made by FF Bank in other states are in
compliance with the applicable usury provisions.

       Collection  Procedures - Residential and Commercial Mortgage Loans. Under
Wisconsin  and Illinois  law, a mortgage  loan  borrower is afforded a period of
time,  subsequent  to the entry of judgment  and prior to sale of the  mortgaged
property,   within  which  to  redeem  the  foreclosure   judgment  ("equity  of
redemption"). During this period, the loan is generally a non-earning asset. The
length of the equity of redemption  available in any case is dependent  upon the
form of  legal  proceeding  selected  by the  lender  at the  time  the  suit is
initiated  and can vary between two months and one year.  Further  delays can be
incurred if bankruptcy  proceedings  intervene.  A judgment of  foreclosure  for
residential  mortgage  loans will normally  provide for the recovery of all sums
advanced by the mortgagor  including,  but not limited to,  insurance,  repairs,
taxes,   appraisals,   post-judgment   interest,   attorneys'  fees,  costs  and
disbursements.  The  majority  of  foreclosure  actions by FF Bank follow a form
which  provides  for a  six-month  equity of  redemption.  Unless  the equity of
redemption  is  exercised,  FF Bank  generally  acquires  title to the  property
pursuant to public bidding at a sheriff's sale. Thereafter,  FF Bank attempts to
sell the property.

       Collection  Procedures - Non-Mortgage  Loans.  Collection  procedures for
manufactured housing loans, credit card loans,  consumer loans and student loans
are done in  accordance  with state and federal Fair Debt  Collection  Practices
Acts and, where applicable,  governmental agencies procedures. The intent of the
collection  procedures  is  either to  assist  the  borrower  in  performing  in
accordance  with  contract  terms  or to work out the  problem  loan in a timely
manner so as to  minimize  FF Bank's  loss.  Generally,  collection  efforts are
started 10 to 15 days after the payment on account was due.

                                      -18-

<PAGE>




       Procedures  for  Nonaccrual   Loans,   Delinquencies   and  Foreclosures.
Delinquent and problem loans are a normal part of any lending  business.  When a
borrower  fails to make a required  payment within 15 days following the date on
which  the  payment  is due,  the loan is  considered  delinquent  and  internal
collection  procedures generally are instituted.  The borrower is contacted by a
Bank  representative who seeks to determine the reason for the delinquency,  and
attempts  are made to  effect  a cure.  In most  cases  deficiencies  are  cured
promptly.  The loan status is reviewed and, where appropriate,  the condition of
the  property and the  financial  circumstances  of the borrower are  evaluated.
Based upon the results of any such investigation, (i) a repayment program of the
arrearage from the borrower may be accepted; (ii) evidence may be sought (in the
form of a listing  contract)  of efforts by the borrower to sell the property if
the  borrower  has stated  that he is  seeking to sell;  (iii) a deed in lieu of
foreclosure or voluntary surrender of the property may be effected in compliance
with applicable laws; or (iv)  foreclosure,  replevin or collection  proceedings
may be initiated.

       A decision as to whether and when to initiate legal  proceedings is based
upon such  factors  as the amount of the  outstanding  loan in  relation  to the
original indebtedness,  the extent of delinquency and the borrower's ability and
willingness  to  cooperate  in  curing  deficiencies.  At  a  foreclosure  sale,
representatives of FF Bank will generally bid an amount reasonably equivalent to
the lower of the fair value of the foreclosed property or the amount of judgment
due to FF Bank.

       If the  sum of the  outstanding  loan  principal  balance  and  costs  of
foreclosure  that have been  capitalized  exceed  the fair  market  value of the
property,  in the judgment of  management,  an  allowance  for loss in an amount
equal  to such  excess  is  established.  In such  circumstances,  a  deficiency
judgment may be sought against the borrower.

       When FF Bank acquires real estate through  foreclosure or deed in lieu of
foreclosure,  such  real  estate  is  placed  on its  books at the  lower of the
carrying  value of the loan or the fair market  value of the real  estate  based
upon a current  appraisal.  Any reduction from the value previously  recorded on
the books is charged against the appropriate allowance for loan losses.

       Loan  Delinquencies.  FF Bank monitors the delinquency status of its loan
portfolio  on a regular  basis and  initiates  borrower  contact and  additional
collection procedures as necessary at an early date.  Delinquencies and past due
loans are, however, a normal part of the lending function.  When the delinquency
reaches the status of greater than 90 days,  the loan is placed on a non-accrual
basis until such time as the  delinquency  is reduced  again to 90 days or less.
Non-accrual loans at December 31, 1995 have been presented separately as

                                      -19-

<PAGE>



a part of the discussion of Non-Performing Assets in Management's Discussion and
Analysis,  filed  as an  exhibit  hereto.  Delinquencies  of 30 to 90  days  are
summarized as follows:
<TABLE>
<CAPTION>

                                                                        Balance At December 31,
                                                                       ------------------------
                                                                     1995                     1994
                                                                    ------                   -----
                                                                           (In thousands)
<S>                                                                 <C>                      <C>     
30 - 59 Days Delinquent
-----------------------
Residential real estate loans                                       $ 7,945                  $  8,796
Manufactured housing loans                                            2,888                     2,886
Credit card loans                                                     2,555                     1,964
Commercial real estate loans                                            303                     1,079
Consumer, student and other loans                                     9,519                     7,219
                                                                    -------                  --------
                                                                    $23,210                  $ 21,944
                                                                    =======                  ========

60 - 90 Days Delinquent
-----------------------
Residential real estate loans                                       $ 1,193                  $  1,950
Manufactured housing loans                                              766                       974
Credit card loans                                                     1,315                       883
Commercial real estate loans                                            606                     1,696
Consumer, student and other loans                                     9,734                     5,835
                                                                    -------                  --------
                                                                    $13,614                  $ 11,338
                                                                    =======                  ========

Total 30 - 90 Day Delinquent Loans
----------------------------------
Residential real estate loans                                       $ 9,138                  $ 10,746
Manufactured housing loans                                            3,654                     3,860
Credit card loans                                                     3,870                     2,847
Commercial real estate loans                                            909                     2,775
Consumer, student and other loans                                    19,253                    13,054
                                                                    -------                  --------
                                                                    $36,824                  $ 33,282
                                                                    =======                  ========
</TABLE>


       At December 31, 1995, the 30-90 day delinquencies increased approximately
$3.5 million to $36.8 million from $33.3 million at year-end  1994. As a percent
of total loans receivable, loan delinquencies increased from 0.96% at the end of
1994 to 1.02% at December 31, 1995.

       The most  significant  factor in the overall increase was the increase of
$6.8 million in student loan  delinquencies  of 30-90 days from year-end 1994 to
December 31, 1995.  These loans are  government  guaranteed and the servicing of
this portfolio is performed by a third-party  under  contract.  Credit card loan
30-90 day delinquencies  have also increased from year-end 1994 to year-end 1995
by $1.1 million.  This  increase is  reflective of the national  trend of higher
delinquencies for this product as further discussed in the Non-Performing  Asset
section of Management's Discussion and Analysis,  referred to above. Despite the
increase,  the  delinquency  levels in FF Bank's credit card portfolio are lower
than national averages.

       Decreases in 30-90 day  delinquencies  were  experienced  in certain loan
categories  from  year-end  1994 to  December  31,  1995.  The more  significant
decreases were i) a $1.9 million  decrease for commercial  real estate  mortgage
loans,  ii) a $1.6 million  decrease for  residential  mortgage loans and iii) a
$500,000 decrease for commercial business loans.

       All of these  delinquent  loans have been considered by management in its
evaluation of the adequacy of the allowances for loan losses.




                                      -20-

<PAGE>



       Foreclosed   Properties  and  Real  Estate  Investments  Held  For  Sale.
Non-performing  assets of $29.8  million and $32.3  million at December 31, 1995
and 1994,  respectively,  are discussed as a part of Management's Discussion and
Analysis,  filed as an exhibit hereto.  In that  discussion,  it is noted that a
portion of the balances of  foreclosed  properties  and real estate  investments
held for sale  included in the  non-performing  assets at December  31, 1995 and
1994 are comprised of large (having a carrying value of $1.0 million or greater)
commercial real estate properties.  A list of the properties referred to in that
discussion is presented below.
<TABLE>
<CAPTION>

                                                                    Carrying Value At December 31,
                                                                   -------------------------------
Property Type             Location                                   1995                    1994
-------------             --------                                 --------                 ------
                                                                             (In thousands)

<S>                                                                <C>                      <C>   
Retail                    Milwaukee, Wisconsin                     $ 1,089                  $1,089
Retail                    Fort Worth, Texas                          1,000                   1,012
</TABLE>



       The retail property in Milwaukee, Wisconsin had previously been developed
and owned by a wholly-owned  subsidiary of FF Bank.  The subsidiary  carried the
property as real estate held for  investment  prior to foreclosure in 1994 by FF
Bank.  At  December  31, 1994 the  property  was  transferred  to FFC and is now
classified as a real estate  investment  held for sale. At December 31, 1995 the
occupancy level was 78%.  Management will continue  efforts to both increase the
occupancy level and sell the property  during 1996. The Milwaukee  property fair
value is considered to approximate the carrying value.

       The second property,  acquired in the FirstRock acquisition,  is a retail
shopping strip center which is approximately 39% leased at December 31, 1995. At
that date, the fair value is considered to be the carrying value.

       Foreclosed properties are valued at the lower of cost or fair value.

       The  above   listed   foreclosed   properties,   as  well  as  all  other
non-performing assets, have been considered in the evaluation of the adequacy of
allowances for losses.  See  Management's  Discussion  and Analysis  referred to
above for  management's  review of adequacy of allowances for losses relative to
these properties.


Classified Assets:

       For regulatory purposes, FF Bank utilizes a comprehensive  classification
system  for  thrift  institution  problem  assets.  This  classification  system
requires  that problem  assets be  classified  as  "substandard",  "doubtful" or
"loss",  depending upon certain characteristics of the particular asset or group
of assets as defined by supervisory regulators.

       An  asset   is   classified   "substandard"   if  it   contains   defined
characteristics  relating to  borrower  net worth,  paying  capacity or value of
collateral  which  indicate  that  some  loss is  distinctly  possible  if noted
deficiencies are not corrected.  "Doubtful" assets have the same characteristics
present  in  substandard  assets  but to a more  serious  degree  so  that it is
improbable  that the asset could be  collected  or  liquidated  in full.  "Loss"
assets  are  deemed to be  uncollectible  or of such  minimal  value  that their
continuance  as assets  without being  specifically  reserved is not  warranted.
Substandard and doubtful classifications require the

                                      -21-


<PAGE>


establishment  of prudent general  allowances for loss amounts while loss assets
require a 100% specific allowance or that the asset be charged off.

       In general,  classified assets include  non-performing  assets plus other
loans and assets,  including  contingent  liabilities,  meeting the criteria for
classification.  Non-performing  assets  include  loans  or  assets  which  were
previously  loans i) which  are not  performing  to a serious  degree  under the
contractual terms of the original notes or ii) for which known information about
possible credit problems of borrowers  causes  management to have serious doubts
as to the ability of such  borrowers to comply with current  contractual  terms.
This  non-performance  characteristic  impacts directly upon the interest income
normally expected from such assets.  Specifically included are the loans held on
a non-accrual basis, real estate judgments subject to redemption, and foreclosed
properties for which FF Bank has obtained title.

       Classified assets,  including non-performing assets, for FF Bank and FFC,
are set  forth in the  following  table,  as of  December  31,  1995  and  1994,
respectively.
<TABLE>
<CAPTION>

                                                                                      December 31,
                                                                               ------------------------
                                                                                 1995              1994
                                                                               --------          ------
                                                                                     (In thousands)

<S>                                                                            <C>               <C>     
Classified assets:
   Non-performing assets:
      Non-accrual loans                                                        $ 12,246          $ 10,564
      Non-performing MBSs                                                        12,858            15,455
      Real estate held for sale by FFC                                            1,309             1,089
      Foreclosed properties and other
         repossessed assets                                                       3,379             5,216
                                                                               --------          --------
            Total Non-Performing Assets                                          29,792            32,324

   Add back valuation allowances netted against
     foreclosed properties above                                                    993             1,146
   Adjustment for non-performing residential loans
      not classified due to low loan-to-
      appraisal value                                                              (584)             (414)
   Adjustment for real estate held for sale
     not included in FFB classified assets                                       (1,309)           (1,089)
   Additional classified performing loans:
      Residential real estate                                                     1,013             1,858
      Commercial real estate                                                      5,890             8,057
      Consumer (including manufactured housing
         and credit cards)                                                          280               453
      Commercial business                                                           418               219
   Other assets                                                                                       135
                                                                               --------          --------
            Total Classified Assets                                            $ 36,493          $ 42,689
                                                                               ========          ========
</TABLE>


         During the year ended December 31, 1995,  classified assets decreased $
6.2 million to $36.5  million from the December 31, 1994 total of $42.7  million
as the net result of various  1995  events.  As a  percentage  of total  assets,
classified assets decreased from 0.78% at December 31, 1994 to 0.67% at December
31, 1995.

         The  non-performing   asset  segment  of  classified  assets  similarly
decreased   $2.5  million   during  1995.   For  further   discussions  of  such
non-performing  assets,  see Management's  Discussion and Analysis,  filed as an
exhibit  hereto,  as  well as the  "Foreclosed  Properties"  review  immediately
preceding this discussion of classified assets. Other significant changes in the
remaining classified asset categories are discussed below.


                                      -22-

<PAGE>



         Performing  commercial  real estate loans which had been classified due
to the possible  adverse  effects of identifiable  future events  decreased $2.2
million in 1995.  This  decrease is due to the net effect of i) the removal from
classified asset status of a contractually performing loan totaling $2.6 million
which had previously  been  classified due to cash flow problems which have been
resolved, ii) principal payments received on performing loans and offset by iii)
the  inclusion  in this  category of a $500,000  group of loans  purchased  from
another financial institution.

         Classified  performing  residential  real  estate  mortgage  loans also
decreased  from 1994  year-end by $900,000 to $1.0 million at December 31, 1995.
The reduction was primarily the result of efforts  involving  certain  borrowers
with groups of loans requiring intensive monitoring and some charge-offs.

         At December 31, 1995,  exclusive of  non-performing  assets,  the major
concentration of classified assets consists of the approximately $5.9 million of
currently performing  commercial real estate loans that have been classified due
to  prior   delinquency   and/or  the  potential  adverse  effects  of  possible
identifiable  future  events or other  factors.  Loans in excess of $1.0 million
included in this category are noted below (in thousands):
<TABLE>
<CAPTION>

                                                                          Loan Amount Classified
                                                                    -----------------------------------
Property Type Of                     Property                       December 31,            December 31,
Loan Collateral                      Location                           1995                    1994
----------------                 ----------------                   ------------            ------------

<S>                              <C>                                 <C>                     <C>    
Office/Land                      Sheboygan, Wisconsin                $ 3,596                 $ 3,633
Motels                           Various-Tennessee                        --                   2,553(a)

<FN>
(a)     Represented FF Bank's 20% interest in loans,  aggregating $12.3 million,
        for which FF Bank is also the lead  lender.  The loans have been removed
        from the  classification  listing  during 1995 based upon the receipt of
        certain contractual principal payments in early 1995.
</FN>
</TABLE>


    All adversely classified assets at December 31, 1995 have been considered by
management in its evaluation of the adequacy of allowances for losses.


Investment Activities

    In  addition  to  lending  activities,  FF Bank  conducts  other  investment
activities  on an ongoing  basis in order to diversify  assets,  obtain  maximum
yield and meet  levels of liquid  assets  required  by  regulatory  authorities.
Investment decisions are made by authorized officers in accordance with policies
established  by the Board of  Directors.  In addition to  satisfying  regulatory
liquidity  requirements,  investments  are used as part of FF  Bank's  asset and
liability  program to minimize  FF Bank's  vulnerability  to  changing  interest
rates. At December 31, 1995,  71.6% of FF Bank's  investments  mature or reprice
within one year or less.

    Certain  of FF  Bank's  investment  policies  relate  to  the  term  of  the
investment.  For  example,  FF Bank  invests  in  U.S.  government,  agency  and
instrumentality  obligations  maturing  in three years or less;  obligations  of
state  and  other  political   subdivisions  maturing  in  two  years  or  less;
certificates  of  deposits  of insured  institutions  which will  mature in nine
months or less;  negotiable  federal  funds  which will mature in nine months or
less;  nonnegotiable  federal  funds  which  will  mature  in 30 days  or  less;
corporate debt obligations maturing in three years or less; and commercial paper
maturing in 270 days or less.

                                      -23-

<PAGE>



Additionally,  corporate  debt  obligations  must be  rated  in one of the  four
highest  categories by a nationally  recognized  investment rating service,  and
commercial  paper  must be rated  in one of the two  highest  categories  by two
nationally recognized rating services.

    Other  investment  policies  relate  to  the  aggregate  amount  of  certain
investments.  For example,  state and municipal general  obligations and revenue
bonds are limited to 1% of assets;  industrial  revenue bonds to 2% of assets in
the aggregate and 1% of assets for any single  issue;  repurchase  agreements to
10% of  stockholders'  equity  plus an  additional  10% if  secured  by  readily
marketable  collateral;  banker's  acceptances to no more than 1/4 of 1% of such
institution's  total deposits;  and all other  obligations,  except those of the
U.S. or guaranteed thereby,  to the lesser of 10% of stockholders'  equity or 1%
of total assets.

    Management  determines the  appropriate  classification  of debt  securities
(including  mortgage-related  securities)  at the time of purchase in accordance
with its investment  policy.  Debt securities are classified as held to maturity
when FFC has the positive intent and ability to hold the securities to maturity.
Held-to-maturity securities are stated at amortized cost.

    Debt  securities  not  classified  as held to  maturity  are  classified  as
available for sale.  Available-for-sale securities are stated at fair value with
the unrealized  gains and losses (net of income tax effect),  which are believed
to be other than permanent,  reported as a separate  component of  stockholders'
equity.

    The cost of debt securities  classified as held to maturity or available for
sale is adjusted  for  amortization  of premiums  and  accretion of discounts to
maturity,  or, in the case of  mortgage-related  securities,  over the estimated
life of the security.  Such amortization is included in interest income from the
related  security.  Interest and dividends are included in interest  income from
the related securities.  Realized gains and losses, and declines in value judged
to be other than temporary are included in net securities  gains  (losses).  The
costs of securities sold is based on the specific identification method.

    For a breakdown of investment  securities  held by FF Bank at certain dates,
see Note C to  FFC's  consolidated  financial  statements,  filed as an  exhibit
hereto.



                                      -24-


<PAGE>



    The following table sets forth the maturity/repricing  characteristics of FF
Bank's  investment  securities  at December  31, 1995 and the  weighted  average
yields of such securities.
<TABLE>
<CAPTION>

                                                         After One, But       After Five, But
                                    Within One Year     Within Five Years     Within 10 Years      After 10 Years
                                   -----------------    ------------------   -----------------    ---------------
                                            Weighted             Weighted             Weighted             Weighted
                                             Average              Average              Average              Average
                                   Amount     Yield     Amount     Yield     Amount     Yield     Amount     Yield
                                   ------    ------    -------   --------   -------   --------   --------  --------
                                                                 (Dollars in thousands)

<S>                               <C>         <C>      <C>          <C>      <C>        <C>       <C>             
U.S. Government and agency
    obligations.................. $ 78,121    5.01%    $67,833      5.84%    $  242     7.02%     $   --       --%
Interest-earning deposits
    in banks.....................   13,801    5.26
Federal funds sold...............   34,929    4.86
Corporate and bank notes
    receivable...................    4,303    5.39       1,615      6.81
State and municipal
    obligations..................                          718      5.85        330     8.00
Adjustable-rate mortgage
    mutual fund..................   47,263    6.06
                                  --------             -------               ------               -----

    Total........................ $178,417    5.29%    $70,166      5.86%    $  572     7.59%     $   --       --%
                                  ========             =======               ======               ======
</TABLE>


       At December 31, 1995, FF Bank had no  investments in any issuer in excess
of 10% of net worth.

       The following table sets forth the aggregate amortized cost and estimated
fair value of investment securities at the dates indicated.

<TABLE>
<CAPTION>
  
                                                                                 December 31,
                                                                   ------------------------------------
                                                                     1995            1994           1993
                                                                   --------        --------       ------
                                                                                (In thousands)

<S>                                                                <C>             <C>            <C>     
U.S. Government and agency obligations..........................   $145,331        $107,250       $161,494
Adjustable-rate mortgage mutual fund............................     47,905          47,227         77,532
Interest-earning deposits.......................................     13,801           1,024         40,838
Federal funds sold..............................................     34,929          23,890         21,873
Corporate and bank notes
    (investment grade)..........................................      5,856          38,952         50,807
State and municipal obligations.................................      1,048           4,433          4,453
Certificates of deposit.........................................         --             504             --
Real estate investment trust....................................         --           2,371          2,243
                                                                   --------        --------       --------

    Total amortized cost........................................   $248,870        $225,651       $359,240
                                                                   ========        ========       ========

    Total estimated fair value..................................   $248,792        $218,307       $360,684
                                                                   ========        ========       ========
</TABLE>

Sources of Funds

       General.  Deposit  accounts,  sales of loans in the secondary  market and
loan  repayments  are the  primary  sources of funds for use in lending  and for
other  general  business  purposes.  In  addition,  FF Bank  derives  funds from
maturity  of  investments,  advances  from the FHL Bank  and  other  borrowings.
Repayments  of loans and  mortgage-related  securities  are a relatively  stable
source of funds, while deposit inflows and outflows are significantly influenced
by general interest rates and money market and economic  conditions.  Borrowings
may be used on a short-term  basis to compensate for reduction in normal sources
of funds, such as deposit inflows,  at less than projected levels. They may also
be used on a  longer-term  basis to  support  expanded  lending  and  investment
activities. FF Bank has not generally

                                      -25-


<PAGE>
solicited deposits outside the market area served by its offices or used brokers
to obtain deposits and has no brokered deposits at December 31, 1995.

       Deposit  Activities.  FF Bank offers a variety of deposits  having a wide
range of interest rates and terms.

       The following  table presents,  by various  interest-rate  intervals,  FF
Bank's long-term (one year and over) certificates as of the date indicated.
<TABLE>
<CAPTION>

                                                                               December 31,
                                                              ------------------------------------------
    Interest Rate                                               1995              1994              1993
    -------------                                             --------          --------          ------
                                                                             (In thousands)

<C>                                                          <C>              <C>               <C>       
3.50 -  4.00%...........................................     $       --       $  157,220        $  237,407
4.01 -  6.00%...........................................      1,672,639        1,979,280         1,507,747
6.01 -  8.00%...........................................        568,953          186,950           287,107
8.01 - 10.00%...........................................          4,977          125,603           246,888
                                                             ----------       ----------        ----------
                                                             $2,246,569       $2,449,053        $2,279,149
                                                             ==========       ==========        ==========
</TABLE>

    The following table presents,  by various similar  interest-rate  intervals,
the amounts of long-term  (one year and over) time deposits at December 31, 1995
maturing during the period indicated.

<TABLE>
<CAPTION>
                                                                      Interest Rates
                                            --------------------------------------------------------------
                                            4.01-6.00%          6.01-8.00%       8.01-10.00%         Total
                                            ----------          ----------       -----------         -----
                                                                         (In thousands)
Certificate accounts
  maturing in the twelve
  months ending:

<S>                                         <C>                 <C>              <C>              <C>       
December 31, 1996...........................$1,058,826          $157,995         $  1,717         $1,218,538

December 31, 1997...........................   406,279           240,238              133            646,650

December 31, 1998...........................   147,552            53,389              323            201,264

After December 31, 1998.....................    59,982           117,331            2,804            180,117
                                            ----------          --------         --------         ----------
                                            $1,672,639          $568,953          $  4,977         $2,246,569
                                            ==========          ========          ========         ==========
</TABLE>


       The following table presents the maturities of FF Bank's  certificates in
amounts of $100,000 or more at December 31, 1995 by time remaining to maturity.
<TABLE>
<CAPTION>


                                                                                       December 31,
Maturities                                                                                 1995
----------                                                                           --------------
                                                                                      (In thousands)
<S>                                                                                      <C>     
January 1, 1996 through March 31, 1996..............................................     $ 72,790

April 1, 1996 through June 30, 1996.................................................       34,745

July 1, 1996 through December 31, 1996..............................................       41,598

January 1, 1997 and after...........................................................       65,810
                                                                                         --------
                                                                                         $214,943
                                                                                         ========
</TABLE>

       FF Bank's  deposit base at December 31, 1995 included  $2.945  billion of
certificates  of  deposit  with a  weighted  average  rate of  5.72%.  Of  these
certificates  of deposit,  $1.917 billion with a weighted  average rate of 5.63%
will mature during the 12 months

                                      -26-

<PAGE>



ending  December  31, 1996.  FF Bank will seek to retain  these  deposits to the
extent consistent with its long-term objective of maintaining  positive interest
rate  spreads.   Depending  upon  interest  rates  existing  at  the  time  such
certificates  mature,  FF Bank's cost of funds may be significantly  affected by
the rollover of these funds.

       Other  Sources  of  Funds.   The  following   table  sets  forth  certain
information as to FFC's  advances and other  borrowings at the dates and for the
periods  indicated.  See  Note J to  FFC's  consolidated  financial  statements,
incorporated herein by reference.
<TABLE>
<CAPTION>

                                                                                  December 31,
                                                                  ------------------------------------------
                                                                    1995              1994              1993
                                                                  --------          --------          ------
                                                                                (In thousands)

<S>                                                               <C>               <C>               <C>     
Short-term borrowings..........................................   $ 25,972          $ 13,127          $     --
FHL Bank advances..............................................    475,368           622,209           372,381
Subordinated notes.............................................     54,925            54,977            54,997
Industrial development revenue bonds...........................      6,219             6,315             6,410
Collateralized mortgage obligations............................      8,024            11,818            22,009
                                                                  --------          --------          --------

       Total borrowings........................................   $570,508          $708,446          $455,797
                                                                  ========          ========          ========

Weighted average interest cost of total
    borrowings during the year.................................      6.45%             5.58%             5.71%

Average month-end balance of short-term
    borrowings.................................................   $ 59,092          $ 14,006          $    --

Weighted average interest rate of short-term
    borrowings during the year.................................      5.91%             6.02%               --%

Weighted average interest rate of short-term
    borrowings at end of year..................................      5.89%             5.76%               --%
</TABLE>



Service Corporations and Operating/Finance Subsidiaries

       FF Bank has i) five active,  wholly-owned  service  corporations,  ii) an
operating subsidiary, and iii) two limited-purpose finance subsidiaries. The net
book value of FF Bank's aggregate  investment in active service  corporations at
December 31, 1995 was as follows (in thousands):
<TABLE>
<CAPTION>



<S>                                                                             <C>   
Wisconsin Insurance Management, Inc.....................................        $1,169
Appraisal Services, Inc.................................................           150
First Service Corporation of Wisconsin..................................             4
Illini Service Corporation..............................................            --
Mortgage Finance Corporation............................................            --
                                                                                ------

    Total...............................................................        $1,323
                                                                                ======
</TABLE>


       Wisconsin   Insurance   Management,   Inc.  ("WIM")  is  a  full-service,
independent  insurance agency. This subsidiary offers a broad range of insurance
products, including hazard, mortgage, life and disability policies, to FF Bank's
customers,  as well as a full line of commercial  and personal  coverages to the
general public.  Brokerage  services are also provided  through this subsidiary.
WIM had net income of $1.7 million, $1.6 million and $1.3 million for 1995, 1994
and 1993, respectively.



                                      -27-

<PAGE>



       Appraisal  Services,  Inc.  performs real estate appraisals for FF Bank's
loan  customers,   governmental  agencies  and  the  general  public.  Insurance
valuations and ad valorem tax services for outside  sources are also  performed.
Appraisal  Services,  Inc. had net income of $121,000,  $69,000 and $111,000 for
1995, 1994 and 1993, respectively.

       First Service  Corporation of Wisconsin ("FSC") previously engaged in the
management  and sale of commercial  real estate and  apartments  for FF Bank and
others,   as  well  as  acting  as  general  partner  for  several  real  estate
partnerships.  In 1993, FSC's activities were sharply cut back and its principal
assets were  transferred to FF Bank.  This subsidiary had a net loss of $207,000
for 1993.  FSC's  remaining  function is to serve as general  partner for a real
estate partnership.

       Illini Service  Corporation  ("ISC") was acquired in conjunction with the
Illini  transaction  and acts as nominal  trustee on deeds of trust in Missouri.
ISC's sole corporate function is to provide the trustee's signature capability.

       Mortgage  Finance  Corporation  ("MFC")  was  a  subsidiary  of a  former
mortgage banking  affiliate of FF Bank and acts as a nominal trustee on deeds of
trust in  California  and other  states.  MFC's sole  corporate  function  is to
provide the trustee's signature capability on such deeds of trust acquired by FF
Bank from the former affiliate.

       First Financial Investments,  Inc. ("FFII") is an operating subsidiary of
FF Bank and was  incorporated  in 1991.  FFII,  which is located in the state of
Nevada, was formed for the purpose of managing a portion of FF Bank's investment
portfolio  (primarily  mortgage-related  securities  purchased subsequent to the
recent Illinois-area  acquisitions) having primarily long-term maturities. As an
operating  subsidiary,  FFII's results of operations are combined with FF Bank's
for financial and regulatory reporting purposes.

       UFS Capital  Corporation  ("UFSCC") and FFS Funding Corp.,  Inc. ("FFS"),
which were acquired in conjunction  with the United and FirstRock  acquisitions,
respectively,  are limited-purpose  finance subsidiaries of FF Bank and function
as issuers of  certain  collateralized  mortgage  obligation  bonds.  As finance
subsidiaries,  UFSCC's and FFS's  results of  operations  are  combined  with FF
Bank's for financial and regulatory reporting purposes.


Employees of FFC

       At December 31, 1995, FFC and its  subsidiaries  employed 1,377 full-time
employees and 404 part-time employees. FFC promotes equal employment opportunity
and  considers  its  employee  relations  to be good.  FFC's  employees  are not
represented by any collective bargaining group.

       FFC sponsors  retirement plans covering all full-time  employees with one
or more  years of  service  who are at least 21  years  old.  Additionally,  FFC
maintains   an  employee   benefit   program   providing,   among  other  items,
hospitalization and major medical insurance,  limited dental and life insurance,
and educational assistance.  Such employee benefits are considered by management
to  be  competitive   with  employee   benefits   provided  by  other  financial
institutions and major employers in the counties in which FF Bank has offices.

                                      -28-

<PAGE>



Executive Officers

       The  following  table  sets  forth  information  regarding  each  of  the
executive officers of FFC and FF Bank:
<TABLE>
<CAPTION>


                                 Age At
Executive                      December 31,           Business Experience
Officer                           1995                During Past Five Years
---------------               -------------           --------------------------

<S>                                <C>                <C>            
John C. Seramur                    53                 Mr. Seramur joined FF Bank in 1966 and serves
                                                      as Director, President, Chief Executive Officer
                                                      and Chief Operating Officer of FFC and FF
                                                      Bank.

Robert M. Salinger                 45                 Mr. Salinger joined FFC as Corporate Secretary
                                                      and General Counsel in 1985.  He also serves as
                                                      an Executive Vice President of FF Bank.  In
                                                      1984, he had served as General Counsel and
                                                      Corporate Secretary for an institution acquired by
                                                      FFC.  Prior to 1984, he was a partner in the law
                                                      firm of Petrie & Stocking, S.C., and associated
                                                      with the law firm of Whyte, Hirschboeck &
                                                      Dudek, S.C.

Thomas H. Neuschaefer              49                 Mr. Neuschaefer joined FF Bank in 1988 and
                                                      serves as Vice President, Treasurer and Chief
                                                      Financial Officer of FFC.  He also serves as
                                                      Executive Vice President-Finance of FF Bank.
                                                      From 1978 to 1988, he served as Chief Financial
                                                      Officer of National.  Prior to 1978, he was
                                                      associated with the national accounting firm of
                                                      Ernst & Young LLP.

Donald E. Peters                   46                 Mr. Peters joined FF Bank in 1982 and serves as
                                                      Executive Vice President - Retail Banking of FF
                                                      Bank.  Prior to 1982, he was an officer of
                                                      another thrift institution.

Harry K. Hammerling                45                 Mr. Hammerling joined FF Bank in 1984 and
                                                      serves as Executive Vice President -
                                                      Administration and Servicing for FF Bank.
                                                      From 1972 to 1984, he served as an officer of
                                                      First State.

Kenneth F. Csinicsek               56                 Mr. Csinicsek joined FF Bank in 1987 and serves
                                                      as Senior Vice President of Marketing and
                                                      Investor Relations.  Prior to joining FF Bank, he
                                                      served as president of another thrift institution for
                                                      two years and operated two financial institution
                                                      consulting firms over a thirteen year period.
</TABLE>

                                      -29-


<PAGE>



                                   REGULATION


         FFC, as a savings and loan holding company, and FF Bank, as a federally
chartered  savings bank, are subject to regulation,  supervision and examination
by the OTS as their  primary  federal  regulator.  FF Bank  also is  subject  to
regulation, supervision and examination by the FDIC and as to certain matters by
the Federal Reserve Board. See "Management's Discussion and Analysis" and "Notes
to Consolidated  Financial  Statements" as to the impact of certain laws,  rules
and  regulations  on the  operations  of FFC and FF Bank.  Set forth  below is a
description of certain recent regulatory developments.

         During 1995,  the OTS, along with the other federal  banking  agencies,
adopted  safety and  soundness  guidelines  relating to (i)  internal  controls,
information systems and internal audit systems;  (ii) loan documentation;  (iii)
credit  underwriting;  (iv)  interest rate  exposure;  (v) asset growth and (vi)
compensation  and benefit  standards  for  officers,  directors,  employees  and
principal shareholders. Such guidelines set out standards that the agencies will
use to identify and address  problems at  institutions  before  capital  becomes
impaired.  Pursuant to such  guidelines  FF Bank is required  to  establish  and
maintain a system to identify problem assets and prevent  deterioration of those
assets in a manner  commensurate  with its size and the  nature and scope of its
operations.  FF Bank also must  establish  and maintain a system to evaluate and
monitor  earnings and ensure that earnings are  sufficient to maintain  adequate
capital and reserves in a manner  commensurate  with its size and the nature and
scope of its operations.

         If FF Bank  does  not  meet  one or more of the  safety  and  soundness
standards set forth in the guidelines,  it is required to file a compliance plan
with the OTS. In the event that FF Bank fails to submit an acceptable compliance
plan or fails in any material  respect to implement an accepted  compliance plan
within the time  allowed by the OTS,  FF Bank would be  required  to correct the
deficiency  and the OTS would be  authorized  to: (i)  restrict FF Bank's  asset
growth; (ii) require FF Bank to increase its ratio of tangible equity to assets;
(iii)  restrict  the rates of  interest  that FF Bank may pay;  or (iv) take any
other action that would better carry out the purpose of the  corrective  action.
FF Bank  believes it currently is in  compliance  with the safety and  soundness
standards set forth by the OTS.

         During  1995,  in  accordance  with changes  mandated by the  Community
Development and Regulatory  Improvement Act of 1994 (the "Community  Development
Act"),  the  OTS  and  the  other  federal  banking  agencies  proposed  certain
amendments  to  the  regulations   implementing   the  Depository   Institutions
Management  Interlocks Act (the "Interlocks  Act"),  which restricts  management
interlocks in order to foster competition between unaffiliated institutions. The
proposed  amendments would narrow the circumstances  under which an exception to
the  prohibitions  of the  Interlocks  Act could be granted by agency  order and
would  clarify  certain  language  as used  within the  regulations.  Management
officials at FFC and FF Bank are in full compliance with the Interlocks Act.

         The Community  Development  Act, also requires that each banking agency
implement a comprehensive  review of its  regulations to eliminate  duplicative,
unduly  burdensome and  unnecessary  regulations.  During 1995 the OTS announced
that it will review each of its regulations to determine if: (i) the regulations
are current;  (ii) the regulation could be eliminated without endangering safety
and  soundness,   diminishing   consumer   protection  or  violating   statutory
requirements; (iii) the regulation's subject matter is more suited for a

                                      -30-

<PAGE>



policy  statement or handbook  guidance;  (iv) the regulation is consistent with
the regulation of the other federal banking agencies;  and (v) the regulation is
easily  understood.  Based upon the first part of this review,  the OTS formally
deleted eight percent of its  regulations  including  outdated,  duplicative and
otherwise unnecessary regulations.

         The OTS also recently issued a notice of proposed rulemaking concerning
a comprehensive  revision to its regulations  and policy  statements  concerning
lending  and  investments.   Under  the  proposal  certain  loan   documentation
requirements  will be  replaced  by  general  safety  and  soundness  standards,
commercial  loans  made  by a  service  corporation  will  be  exempted  from an
institution's overall 10% limit on commercial loans, an institution will be able
to use its own cost-of-funds index in structuring adjustable rate mortgages, and
the 35% of assets limitation on credit card lending will be eliminated.  The OTS
has announced  that it expects to issue  proposals  that will reduce the burdens
imposed  by  its  regulations  governing,  among  other  things,   subsidiaries,
corporate governance and preemption.  Similarly, the FDIC has issued a notice of
opportunity for comment with respect to its review of all of its regulations and
written policies.


                                      -31-

<PAGE>




                                    TAXATION

Federal

      FFC files on behalf of itself,  FF Bank,  and its  subsidiaries a calendar
tax year consolidated federal income tax return. Income and expense are reported
on the accrual method of accounting.

      Savings  institutions,  such as FF Bank,  are generally  taxed in the same
manner as other  corporations.  Unlike other corporations,  however,  qualifying
savings institutions that meet certain definitional tests relating to the nature
of their  supervision,  income,  assets and business  operations  are allowed to
establish  a reserve  for bad debts  and each tax year are  permitted  to deduct
additions  to that  reserve on  qualifying  real  property  loans using the more
favorable of the following two  alternative  methods:  (i) a method based on the
institution's  actual loss experience (the "experience" method) or (ii) a method
based upon a  specified  percentage  of the  institution's  taxable  income (the
"percentage of taxable income"  method).  Qualifying real property loans are, in
general,  loans secured by interests in improved real property.  The addition to
the  reserve  for  nonqualifying  loans must be  computed  under the  experience
method.  In recent  years,  FF Bank  generally  has  computed  additions  to its
reserves  for losses on  qualifying  loans using the  experience  method.  It is
anticipated that FF Bank will continue to use this method in future years.

      To the extent that FF Bank makes  distributions to its  stockholders  that
are  considered  withdrawals  from that  excess bad debt  reserve,  the  amounts
withdrawn will be included in FF Bank's taxable income. The amount considered to
be withdrawn by such a distribution will be the amount of the distribution, plus
the amount  necessary to pay the tax with respect to the  withdrawal.  Dividends
paid out of FF Bank's current or accumulated  earnings and profits as calculated
for federal  income tax purposes,  however,  will not be considered to result in
withdrawals  from their bad debt reserves.  Distributions in excess of FF Bank's
current and accumulated  earnings and profits,  distributions  in redemptions of
stock, and  distributions in partial or complete  liquidation of FF Bank will be
considered  to result in  withdrawals  from the  Bank's  bad debt  reserves.  At
December 31, 1995, FF Bank had $79.2 million in  accumulated  federal income tax
bad debt reserves that would not be available  for  distribution  to FFC without
the imposition of additional tax.

      Depending on the composition of its items of income and expense, a savings
institution may be subject to the alternative  minimum tax ("AMT") to the extent
the AMT exceeds the regular tax  liability.  AMT is  calculated  by  multiplying
alternative  minimum taxable income ("AMTI") by 20%. AMTI equals regular taxable
income increased by certain tax preferences,  including depreciation  deductions
in excess of that allowable for alternative minimum tax purposes,  the amount of
the bad debt reserve  deduction  claimed in excess of the deduction based on the
experience  method,  and 75% of the excess of adjusted  current earnings ("ACE")
over AMTI. ACE is defined as AMTI adjusted for certain items such as accelerated
tax depreciation,  tax exempt interest,  the dividends received  deduction,  and
other tax  preferences.  Only 90% of AMTI may be reduced by net  operating  loss
carryovers and most alternative minimum tax paid may be used as a credit against
regular tax paid in future years.



                                      -32-

<PAGE>




State

      FFC and FF Bank  are  headquartered  in  Wisconsin  and  have  significant
operations in Illinois. The State of Wisconsin imposes a corporate franchise tax
measured by the separate  Wisconsin  taxable income of each of the members.  The
State of Illinois imposes a corporate  income tax based on the  apportionment of
Illinois  taxable income by the entire group to their Illinois  activities.  The
current corporate tax rates imposed by Wisconsin and Illinois are 7.9% and 7.3%,
respectively.  FF Bank also has an operating subsidiary (FFII) located in Nevada
which manages a portion of FF Bank's investment portfolio. The income of FFII is
only subject to taxation in Nevada which  currently  does not impose a corporate
income or franchise tax other than a nominal registration fee.

Examinations

      The Internal Revenue Service has examined the consolidated  federal income
tax returns of FFC and FF Bank through 1991. The separate Wisconsin state income
tax  returns of the  members of the group have been  examined  by the  Wisconsin
Department  of Revenue  through  1990.  The  Illinois  Department  of Revenue is
currently engaged in an examination of the years 1991, 1992 and 1993.

ITEM 2.   PROPERTIES

      At December 31, 1995, FF Bank operated  through 129  full-service  savings
bank branch  offices,  one loan  origination  limited  office and one  insurance
agency office,  located in Wisconsin and Illinois.  The aggregate net book value
at December 31, 1995 of the properties owned or leased,  including headquarters,
properties and leasehold  improvements at the leased offices, was $42.4 million.
The  leases  expire  between  1996 and  2021.  See Note H to FFC's  consolidated
financial  statements,  filed as an exhibit hereto, for information regarding FF
Bank's premises and equipment.  Management believes that all of these properties
are in good  condition.  The  following  tables set forth the  location of FFC's
banking and other offices.


Wisconsin

      Address                                               City
----------------------                              -----------------------
609 East Spruce Street                              Abbotsford, Wisconsin
103 West Cleveland                                  Arcadia, Wisconsin
926 West College Avenue                             Appleton, Wisconsin
221 Fourth Avenue West                              Ashland, Wisconsin
117 South Broad Street                              Bayfield, Wisconsin
201 Park Avenue                                     Beaver Dam, Wisconsin
203 Main Street                                     Black River Falls, Wisconsin




----------
(a) Leased

                                      -33-

<PAGE>



Wisconsin (Continued)

        Address                                               City
-----------------------                              -----------------------
1 North Moorland Road                                Brookfield, Wisconsin (a)
197 West Chestnut Street                             Burlington, Wisconsin
709 East Geneva Street                               Delavan, Wisconsin
308 Third Avenue West                                Durand, Wisconsin
3292 Main Street                                     East Troy, Wisconsin (a)
130 South Barstow Commons                            Eau Claire, Wisconsin
806 South Hastings Way                               Eau Claire, Wisconsin
23 South Washington                                  Elkhorn, Wisconsin
One North Madison Street                             Evansville, Wisconsin
211 North Highland Drive                             Fredonia, Wisconsin
1930 Wisconsin Avenue                                Grafton, Wisconsin (a)
1482 West Mason Street                               Green Bay, Wisconsin
2235 Main Street                                     Green Bay, Wisconsin
5651 Broad Street                                    Greendale, Wisconsin
4981 South 76th Street                               Greenfield, Wisconsin
10 Main Street                                       Hayward, Wisconsin
Holmen Square                                        Holmen, Wisconsin
117 Second Avenue North                              Hurley, Wisconsin (a)
420 South Main Street                                Iron River, Wisconsin
2525 Milton Avenue                                   Janesville, Wisconsin (a)
620 Main Street                                      LaCrosse, Wisconsin
300 East Lake Street                                 Lake Mills, Wisconsin
205 North Eighth Street                              Manitowoc, Wisconsin
630 South Central Avenue                             Marshfield, Wisconsin (a)
705 North Center Avenue                              Merrill, Wisconsin
200 East Wisconsin Avenue                            Milwaukee, Wisconsin (a)
829 West Mitchell Street                             Milwaukee, Wisconsin
3027 West Lincoln Avenue                             Milwaukee, Wisconsin
3432 South 27th Street                               Milwaukee, Wisconsin (a)
5350 West Fond du Lac Avenue                         Milwaukee, Wisconsin
5900 West North Avenue                               Milwaukee, Wisconsin
7900 West Brown Deer Road                            Milwaukee, Wisconsin
Highways 51 & 70 West                                Minocqua, Wisconsin (a)
600 East Main Street                                 Mondovi, Wisconsin
306 North Rochester Street                           Mukwonago, Wisconsin
600 Hewett Street                                    Neillsville, Wisconsin
15665 West National Avenue                           New Berlin, Wisconsin
1093 Summit Avenue                                   Oconomowoc, Wisconsin (a)
1101 Main Street                                     Onalaska, Wisconsin
429 North Sawyer Street                              Oshkosh, Wisconsin



----------
(a) Leased


                                      -34-

<PAGE>



Wisconsin (Continued)

      Address                                            City
-----------------------                          ---------------------------
1414 South Fourth Avenue                         Park Falls, Wisconsin
Post Road & South Drive                          Plover, Wisconsin
222 North Wisconsin Street                       Port Washington, Wisconsin
1733 Douglas Avenue                              Racine, Wisconsin
140 South Brown                                  Rhinelander, Wisconsin
135 South Mill Street                            Saukville, Wisconsin
1230 North Taylor Drive                          Sheboygan, Wisconsin
2815 South Chicago Avenue                        South Milwaukee, Wisconsin (a)
1325 Church Street                               Stevens Point, Wisconsin
108 West Prospect                                Thorp, Wisconsin (a)
213 North Lake Avenue                            Twin Lakes, Wisconsin
104 South Washington Avenue                      Washburn, Wisconsin
600 Main Street                                  Watertown, Wisconsin
633 South Church Street                          Watertown, Wisconsin (a)
100 East Sunset Drive                            Waukesha, Wisconsin (a)
300 Wisconsin Avenue*                            Waukesha, Wisconsin
704 North Grand Avenue                           Waukesha, Wisconsin
1200 Delafield Street                            Waukesha, Wisconsin (a)
2306 West St. Paul Avenue                        Waukesha, Wisconsin (a)
2831 North Grandview Boulevard                   Waukesha, Wisconsin (a)
330 Third Street                                 Wausau, Wisconsin (a)
2711 West Stewart Avenue                         Wausau, Wisconsin
2645 North Mayfair Road                          Wauwatosa, Wisconsin
2825 South 108th Street                          West Allis, Wisconsin (a)
7101 West Greenfield Avenue                      West Allis, Wisconsin (a)
430 East Silver Spring Drive                     Whitefish Bay, Wisconsin
1714 Scranton Street                             Whitehall, Wisconsin
219 Center Street                                Whitewater, Wisconsin
711 West Grand Avenue                            Wisconsin Rapids, Wisconsin (a)



----------
(a) Leased
*   Insurance Agency Office

                                      -35-

<PAGE>



Illinois

       Address                                             City
------------------------                             --------------------
104 Southeast 3rd Avenue                             Aledo, Illinois
104 Homer Adams Parkway                              Alton, Illinois
301 West Galena Boulevard                            Aurora, Illinois
100 East Washington                                  Belleville, Illinois
6902 West Main                                       Belleville, Illinois (a)
1007 North Fourth Street                             Chillicothe, Illinois
238 North Main                                       Columbia, Illinois
305 East Locust                                      DeKalb, Illinois (a)
1325 Sycamore Road                                   DeKalb, Illinois (a)
12200 North Route 88                                 Dunlap, Illinois (a)
300 East Washington Street                           East Peoria, Illinois
326 Missouri Avenue                                  East St. Louis, Illinois
101 East Evergreen                                   Elmwood, Illinois
6550 North Illinois                                  Fairview Heights, Illinois
10280 Lincoln Trail                                  Fairview Heights, Illinois
16 East Fort Street                                  Farmington, Illinois (a)
50 East Main Street                                  Galesburg, Illinois
1865 North Henderson                                 Galesburg, Illinois
#1 Junction Drive West                               Glen Carbon, Illinois
318 West College                                     Greenville, Illinois
1035 Broadway                                        Hamilton, Illinois
333 West Main                                        Havana, Illinois
313 Fifth Street                                     Lacon, Illinois
143 South Main Street                                Lewistown, Illinois
622 Machesney Road                                   Machesney Park, Illinois
217 West Washington                                  Millstadt, Illinois
119 West 5th Street                                  Minonk, Illinois
122 West Boston Avenue                               Monmouth, Illinois
21 Boulder Hill Pass                                 Montgomery, Illinois (a)
1645 State Highway 121                               Mount Zion, Illinois
300 South 4th Street                                 Pekin, Illinois
3500 Court Street                                    Pekin, Illinois (a)
103 West Forrest Hill                                Peoria, Illinois
111 North Jefferson Avenue                           Peoria, Illinois
201B Northwoods Mall                                 Peoria, Illinois (a)
700 Main Street                                      Peoria, Illinois (a)
2515 West Lake Avenue                                Peoria, Illinois
3222 West Harmon Highway                             Peoria, Illinois
4125 North Sheridan Road                             Peoria, Illinois (a)
4600 Brandywine Drive                                Peoria, Illinois
7620 North University                                Peoria, Illinois (a)
525 West Washington Street                           Pittsfield, Illinois


----------
(a) Leased

                                      -36-

<PAGE>



Illinois (Continued)

      Address                                               City
--------------------                                  ----------------------
116 East Main Street                                  Princeville, Illinois
706 Maine Street                                      Quincy, Illinois (a)
24th and Broadway                                     Quincy, Illinois
416 West Front Street                                 Roanoke, Illinois
308 Eagle Drive                                       Rochelle, Illinois (a)
612 North Main Street                                 Rockford, Illinois (a)
1601 North Alpine Road                                Rockford, Illinois
4400 Center Terrace                                   Rockford, Illinois
3333 North Rockton Avenue                             Rockford, Illinois
116 South Congress                                    Rushville, Illinois
2659 Farragut Drive**                                 Springfield, Illinois (a)
1881 Washington Road                                  Washington, Illinois
200 South Market                                      Waterloo, Illinois


----------
(a) Leased
**  Loan Origination Office


ITEM 3.  LEGAL PROCEEDINGS

       FFC and FF Bank are involved as  plaintiff or defendant in various  legal
actions incidental to their business, all of which in the aggregate are believed
by  management  of FFC not to  represent  an adverse risk of loss which would be
material to the  financial  condition or  operations of FFC. See Note Q to FFC's
consolidated  financial  statements,  filed at Exhibit 13(a) hereto, for further
discussion.


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

       None.


                                     PART II

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

       The information required by this item is incorporated herein by reference
from Management's  Discussion and Analysis filed at Exhibit 13(b) hereto.  FFC's
Board of Directors  has  discretion to declare and pay dividends on FFC's common
stock from time to time under  Wisconsin  law,  unless such payment would render
FFC  insolvent.  Also,  see  Exhibit  10(k),  "Form of  Indenture",  for further
limitations on payment of dividends on FFC's common stock.


                                      -37-

<PAGE>



       Also, relative to OTS restrictions on the payment of dividends by FF Bank
to FFC, see Note L to FFC's consolidated  financial  statements filed at Exhibit
13(a) hereto. Also, see Item 1, "Business - Regulation".


ITEM 6.  SELECTED FINANCIAL DATA

       The selected financial data required by this item is incorporated  herein
by reference from "Management's  Discussion and Analysis" filed at Exhibit 13(b)
hereto.


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

       "Management's  Discussion and Analysis of Financial Condition and Results
of Operations" is filed at Exhibit 13(b) hereto.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       FFC's  consolidated  financial  statements  are  filed at  Exhibit  13(a)
hereto.  Quarterly financial  information is included as a part of "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" filed
at Exhibit 13(b) hereto.  Schedule II, filed as an exhibit hereto,  includes the
required schedule for "Guarantees of Securities of Other Issuers".


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

       None.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

       Information  required by this item regarding directors is incorporated by
reference from pages 5 to 9 and 16 of the proxy  statement for FFC's 1996 annual
meeting of  shareholders,  filed with the Securities and Exchange  Commission on
March 12, 1996.  Information  required by this item regarding executive officers
is  included  herein at page 28 and  regarding  directors  at pages 5 - 7 of the
proxy statement.


ITEM 11.  EXECUTIVE COMPENSATION

       The information regarding executive compensation required by this item is
incorporated  herein by reference  from pages 9 - 15 of the proxy  statement for
FFC's  1996  annual  meeting of  shareholders,  filed  with the  Securities  and
Exchange Commission on March 12, 1996.


                                      -38-

<PAGE>




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       The information required by this item is incorporated herein by reference
from  pages 3 - 4 of the  proxy  statement  for FFC's  1996  annual  meeting  of
shareholders,  filed with the  Securities  and Exchange  Commission on March 12,
1996.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

       The information required by this item is incorporated herein by reference
from  page  17  of  the  proxy  statement  for  FFC's  1996  annual  meeting  of
shareholders,  filed with the  Securities  and Exchange  Commission on March 12,
1996.


                                     PART IV

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

       (a)(1) The following  consolidated financial statements of the Registrant
and its subsidiaries for the year ended December 31, 1995, including the related
notes and the report of the  independent  auditors  are  incorporated  herein by
reference from Exhibit 13(a) of this Report.

       Report of Independent Auditors

       Consolidated Balance Sheets - December 31, 1995 and 1994.

       Consolidated  Statements of Income - Years ended December 31, 1995,  1994
       and 1993.

       Consolidated  Statements of  Stockholders'  Equity - Years Ended December
       31, 1995, 1994 and 1993.

       Consolidated  Statements  of Cash Flows - Years Ended  December 31, 1995,
       1994 and 1993.

       Notes to Consolidated Financial Statements.

       (a)(2) The following  consolidated  financial  statement  schedule of the
Registrant  is  filed  at  Exhibit  13(a)  to this  Report  in  response  to the
requirement  of  Items  8 and  14(d)  of  this  Report  and  should  be  read in
conjunction with the consolidated  financial  statements  incorporated herein by
reference to Item 8 of this Report:

          Schedule II - Guarantees of Securities of Other Issuers

       All  other  schedules  for  which  provision  is made  in the  applicable
accounting  regulations  of the  Securities  and  Exchange  Commission  are  not
required under the related instructions or are inapplicable, and therefore, have
been omitted.


                                      -39-

<PAGE>



       (a)(3) The following  exhibits are either filed as part of this Report on
Form 10-K or are incorporated herein by reference.

       3(a)     Articles of Incorporation of Registrant dated February 21, 1984,
                as amended,  and  restated on January  18,  1995.  (Incorporated
                herein by  reference to Exhibit 3.1 to  Pre-Effective  Amendment
                No.  1  to  Registrant's  Registration  Statement  on  Form  S-4
                [Registration No. 33-56823] filed on January 26, 1995).

       3(b)     Bylaws of the  Registrant,  as amended  (incorporated  herein by
                reference to the  Registrant's  Annual Report on Form 10-K filed
                on March 25, 1985).

       4(b)     Form of  Certificate  of Common  Stock  (incorporated  herein by
                reference  to  Exhibit  4.3  of  the  Registrant's  Registration
                Statement  on Form  S-1  [Registration  No.  2-88289]  filed  on
                December 7, 1983).

       10(a)    Employment  Contract of  Registrant  with John C. Seramur  dated
                January 1, 1989,  (incorporated  by reference from Annual Report
                on Form 10-K for 1989 filed on March 26, 1990).

       10(b)    Employment  Agreement between  Registrant and Robert M. Salinger
                dated August 16, 1989,  (incorporated  by reference  from Annual
                Report on Form 10-K for 1989 filed on March 26, 1990).

       10(c)    Deferred  Compensation  Agreement between First State Savings of
                Wisconsin and Paul C. Kehrer  (incorporated  herein by reference
                to Exhibit 10.8 to Amendment No. 2 to Registrant's  Registration
                Statement  on Form  S-1  [Registration  No.  2-88289]  filed  on
                February 14, 1984).

       10(d)    Stock  Option  Plan  of  Registrant   (incorporated   herein  by
                reference  to Exhibit 10.4 to  Amendment  No. 2 to  Registrant's
                Registration  Statement on Form S-1  [Registration  No. 2-88289]
                filed on February 14, 1984).

       10(e)    Supplemental  Executive  Profit  Sharing Plan dated December 21,
                1987  (incorporated  herein by  reference  to  Exhibit  10(q) to
                Post-Effective  Amendment  No.  2 to  Registrant's  Registration
                Statement  on Form S-1  [Registration  No. 33-  16948]  filed on
                February 29, 1988).

       10(f)    Form of Executive  Supplemental  Life Insurance Plan dated April
                10, 1989 (incorporated herein by reference from Annual Report on
                Form 10-K for 1989 filed on March 26, 1990).

       10(g)    Form of Supplemental  Executive  Retirement Plan dated August 1,
                1989,  and amended on November 1, 1991  (incorporated  herein by
                reference  from  Annual  Report on Form  10-K for 1991  filed on
                March 27, 1992).

       10(h)    Employment  Agreement  between  Registrant  and Donald E. Peters
                dated August 16, 1989 and amended August 19, 1992. (Incorporated
                herein by  reference  from  Annual  Report on Form 10-K for 1992
                filed on March 26, 1993.)

       10(i)    Employment  Agreement between Registrant and Harry K. Hammerling
                dated

                                      -40-

<PAGE>



                August  16,  1989 and  amended  August 19,  1992.  (Incorporated
                herein by  reference  from  Annual  Report on Form 10-K for 1992
                filed on March 26, 1993.)

       10(j)    Acquisition  Agreement among  Westinghouse  Financial  Services,
                Inc.,   Westinghouse  Savings  Corporation  and  FF  Bank  dated
                September  14, 1992  (incorporated  herein by  reference  to the
                Current  Report filed by the Registrant on Form 8-K on September
                29, 1992).

       10(k)    Form of  Indenture  between  the  Registrant  and  Norwest  Bank
                Wisconsin,   N.A.  as  trustee  relative  to  issuance  of  8.0%
                Subordinated Notes due November 1, 1999 (incorporated  herein by
                reference  to Exhibit  4.2 to  Amendment  No. 1 to  Registrant's
                Registration  Statement on Form S-3  [Registration No. 33-52638]
                on October 9, 1992).

       10(l)    Directors'    Retirement   Plan   dated   November   18,   1992.
                (Incorporated  herein by  reference  from Annual  Report on Form
                10-K for 1992 filed on March 26, 1993.)

       10(m)    Consulting   Agreement   between   Registrant   and   Robert  S.
                Gaiswinkler  dated  January  1,  1993.  (Incorporated  herein by
                reference  from  Annual  Report on Form  10-K for 1992  filed on
                March 26, 1993.)

       10(n)    Agreement  and Plan of  Merger by and  among  NorthLand  Bank of
                Wisconsin,  SSB, First  Financial  Corporation and FF Bank dated
                October 13, 1993 (incorporated  herein by reference to Exhibit 2
                to  the   Registrant's   Registration   Statement  on  Form  S-4
                [Registration No. 33-51487] filed on December 16, 1993.)

       10(o)    Deferred  Compensation Plan and Trust, dated January 1, 1988 and
                amended January 1, 1993.  (Incorporated herein by reference from
                Annual Report on Form 10-K for 1993 filed on March 29, 1994.)

       10(p)    Agreement  and  Plan of  Reorganization  among  First  Financial
                Corporation,  First Financial Acquisition Company, and FirstRock
                Bancorp,  Inc.  dated  October 26, 1994 and amended  December 5,
                1994  (incorporated  herein by reference to Exhibits 2.1 and 2.2
                to  the   Registrant's   Registration   Statement  on  Form  S-4
                [Registration No. 33-56823] filed on December 12, 1994).

       10(q)    Employment   Agreement   between   Registrant   and   Thomas  H.
                Neuschaefer  dated  June  14,  1994.   (Incorporated  herein  by
                reference  from  Annual  Report on Form  10-K for 1994  filed on
                March 28, 1995.)

       10(r)    Employment Agreement between Registrant and Kenneth F. Csinicsek
                dated June 14,  1994.  (Incorporated  herein by  reference  from
                Annual Report on Form 10-K for 1994 filed on March 28, 1995.)

       10(s)    Promissory  Note  relating  to   Registrant's   commercial  bank
                line-of-credit agreement dated April 30, 1995.


                                      -41-

<PAGE>



       10(t)    First  Financial  Corporation  Stock Option Plan III dated April
                24, 1991 and restated August 16, 1995.

       10(u)    First Federal Savings Bank of Rockford,  Illinois Employee Stock
                Ownership Plan and Trust,  amended  February 28, 1995 to reflect
                a) adoption by FF Bank as successor  plan sponsor and b) related
                amendments thereto.

       11       Computation of Earnings Per Share

       13(a)    Consolidated Financial Statements

       13(b)    Management's  Discussion and Analysis of Financial Condition and
                Results of Operations

       22       Subsidiaries of the Registrant

       24       Consent  of Ernst & Young  LLP for  Registration  Statement  No.
                2-90005 as filed with the  Securities  and  Exchange  Commission
                ("SEC") on March 16, 1984,  Registration  Statement No. 33-17304
                as filed  with the SEC on  September  17,  1987,  Post-Effective
                Amendment  No.  5 to Form  S-1 on  Form  S-8  [Registration  No.
                33-16948]  as filed with the SEC on May 12,  1988,  Registration
                Statement No.  33-36295 as filed with the SEC on August 9, 1990,
                Registration  Statement  No.  33-69856  as filed with the SEC on
                October 1, 1993,  Registration Statement No. 33-51487 filed with
                the SEC on  January  13,  1994 and  Registration  Statement  No.
                33-55823 filed with the SEC on January 27, 1995.

       27       Financial Data Schedule

       (b)      Reports on Form 8-K.

                None.

       (c)      Exhibits  to this  Report on Form 10-K  required  by Item 601 of
                Regulation S-K are attached or incorporated  herein by reference
                as stated in the Index to Exhibits.

       (d)      The report of independent  auditors and the financial  statement
                schedules  listed in subsections  (a)(1) and (2) above are filed
                at Exhibits 13(a) to this Report on Form 10-K in response to the
                requirements of Items 8 and 14(d) of this Report on Form 10-K.

                                      -42-

<PAGE>



                                   SIGNATURES


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

                                         FIRST FINANCIAL CORPORATION


                                         By:        /s/ John C. Seramur
                                             ----------------------------------
                                                        John C. Seramur
                                                        President
                                                        Chief Executive Officer


                                         Date: March 20, 1996


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



By:       /s/ John C. Seramur          By:       /s/ Thomas H. Neuschaefer
       ------------------------------         ----------------------------
              John C. Seramur                 Thomas H. Neuschaefer
              President                       Vice President, Treasurer and
              Chief Executive Officer         Chief Financial Officer
              Director                        Date: March 20, 1996
              Date: March 20, 1996


                                       By:      /s/ Robert S. Gaiswinkler
                                              ----------------------------
                                              Robert S. Gaiswinkler
                                              Chairman of the Board
                                              Director
                                              Date: March 20, 1996


By:       /s/ Gordon M. Haferbecker    By:       /s/ James O. Heinecke
       ------------------------------         ------------------------
              Gordon M. Haferbecker                  James O. Heinecke
              Director                               Director
              Date: March 20, 1996                   Date: March 20, 1996


                                      -43-

<PAGE>





By:      /s/ Robert T. Kehr             By:       /s/ Paul C. Kehrer
       -------------------------------        ---------------------
             Robert T. Kehr                           Paul C. Kehrer
             Director                                 Director
             Date: March 20, 1996                     Date: March 20, 1996


By:       /s/ Robert P. Konopacky       By:       /s/ Dr. George R. Leach
       --------------------------------       --------------------------
              Robert P. Konopacky                     Dr. George R. Leach
              Director                                Director
              Date: March 20, 1996                    Date: March 20, 1996


By:       /s/ Ignatius H. Robers        By:       /s/ John H. Sproule
       --------------------------------       ----------------------
              Ignatius H. Robers                      John H. Sproule
              Director                                Director
              Date: March 20, 1996                    Date: March 20, 1996


By:       /s/ Ralph R. Staven           By:      /s/ Norman L. Wanta
       --------------------------------       ---------------------
              Ralph R. Staven                        Norman L. Wanta
              Director                               Director
              Date: March 20, 1996                   Date: March 20, 1996


By:       /s/ Arlyn G. West
       --------------------------------
              Arlyn G. West
              Director
              Date: March 20, 1996


                                      -44-

<PAGE>




                                  EXHIBIT INDEX

Schedule II     Guarantees of Securities of Other Issuers


       3(a)     Articles of Incorporation of Registrant dated February 21, 1984,
                as amended,  and  restated on January  18,  1995.  (Incorporated
                herein by  reference to Exhibit 3.1 to  Pre-Effective  Amendment
                No.  1  to  Registrant's  Registration  Statement  on  Form  S-4
                [Registration No. 33-56823] filed on January 26, 1995).

       3(b)     Bylaws of the  Registrant,  as amended  (incorporated  herein by
                reference to the  Registrant's  Annual Report on Form 10-K filed
                on March 25, 1985).

       4(b)     Form of  Certificate  of Common  Stock  (incorporated  herein by
                reference  to  Exhibit  4.3  of  the  Registrant's  Registration
                Statement  on Form  S-1  [Registration  No.  2-88289]  filed  on
                December 7, 1983).

       10(a)    Employment  Contract of  Registrant  with John C. Seramur  dated
                January 1, 1989,  (incorporated  by reference from Annual Report
                on Form 10-K for 1989 filed on March 26, 1990).

       10(b)    Employment  Agreement between  Registrant and Robert M. Salinger
                dated August 16, 1989,  (incorporated  by reference  from Annual
                Report on Form 10-K for 1989 filed on March 26, 1990).

       10(c)    Deferred  Compensation  Agreement between First State Savings of
                Wisconsin and Paul C. Kehrer  (incorporated  herein by reference
                to Exhibit 10.8 to Amendment No. 2 to Registrant's  Registration
                Statement  on Form  S-1  [Registration  No.  2-88289]  filed  on
                February 14, 1984).

       10(d)    Stock  Option  Plan  of  Registrant   (incorporated   herein  by
                reference  to Exhibit 10.4 to  Amendment  No. 2 to  Registrant's
                Registration  Statement on Form S-1  [Registration  No. 2-88289]
                filed on February 14, 1984).

       10(e)    Supplemental  Executive  Profit  Sharing Plan dated December 21,
                1987  (incorporated  herein by  reference  to  Exhibit  10(q) to
                Post-Effective  Amendment  No.  2 to  Registrant's  Registration
                Statement  on Form S-1  [Registration  No. 33-  16948]  filed on
                February 29, 1988).

       10(f)    Form of Executive  Supplemental  Life Insurance Plan dated April
                10, 1989 (incorporated herein by reference from Annual Report on
                Form 10-K for 1989 filed on March 26, 1990).

       10(g)    Form of Supplemental  Executive  Retirement Plan dated August 1,
                1989,  and amended on November 1, 1991  (incorporated  herein by
                reference  from  Annual  Report on Form  10-K for 1991  filed on
                March 27, 1992).

       10(h)    Employment  Agreement  between  Registrant  and Donald E. Peters
                dated August 16, 1989 and amended August 19, 1992. (Incorporated
                herein by  reference  from  Annual  Report on Form 10-K for 1992
                filed on March 26, 1993.)

                                      -45-

<PAGE>




       10(i)    Employment  Agreement between Registrant and Harry K. Hammerling
                dated August 16, 1989 and amended August 19, 1992. (Incorporated
                herein by  reference  from  Annual  Report on Form 10-K for 1992
                filed on March 26, 1993.)

       10(j)    Acquisition  Agreement among  Westinghouse  Financial  Services,
                Inc.,   Westinghouse  Savings  Corporation  and  FF  Bank  dated
                September  14, 1992  (incorporated  herein by  reference  to the
                Current  Report filed by the Registrant on Form 8-K on September
                29, 1992).

       10(k)    Form of  Indenture  between  the  Registrant  and  Norwest  Bank
                Wisconsin,   N.A.  as  trustee  relative  to  issuance  of  8.0%
                Subordinated Notes due November 1, 1999 (incorporated  herein by
                reference  to Exhibit  4.2 to  Amendment  No. 1 to  Registrant's
                Registration  Statement on Form S-3  [Registration No. 33-52638]
                on October 9, 1992).

       10(l)    Directors'    Retirement   Plan   dated   November   18,   1992.
                (Incorporated  herein by  reference  from Annual  Report on Form
                10-K for 1992 filed on March 26, 1993.)

       10(m)    Consulting   Agreement   between   Registrant   and   Robert  S.
                Gaiswinkler  dated  January  1,  1993.  (Incorporated  herein by
                reference  from  Annual  Report on Form  10-K for 1992  filed on
                March 26, 1993.)

       10(n)    Agreement  and Plan of  Merger by and  among  NorthLand  Bank of
                Wisconsin,  SSB, First  Financial  Corporation and FF Bank dated
                October 13, 1993 (incorporated  herein by reference to Exhibit 2
                to  the   Registrant's   Registration   Statement  on  Form  S-4
                [Registration No. 33-51487] filed on December 16, 1993.)

       10(o)    Deferred  Compensation Plan and Trust, dated January 1, 1988 and
                amended January 1, 1993.  (Incorporated herein by reference from
                Annual Report on Form 10-K for 1993 filed on March 29, 1994.)

       10(p)    Agreement  and  Plan of  Reorganization  among  First  Financial
                Corporation,  First Financial Acquisition Company, and FirstRock
                Bancorp,  Inc.  dated  October 26, 1994 and amended  December 5,
                1994  (incorporated  herein by reference to Exhibits 2.1 and 2.2
                to  the   Registrant's   Registration   Statement  on  Form  S-4
                [Registration No. 33-56823] filed on December 12, 1994).

       10(q)    Employment   Agreement   between   Registrant   and   Thomas  H.
                Neuschaefer  dated  June  14,  1994.   (Incorporated  herein  by
                reference  from  Annual  Report on Form  10-K for 1994  filed on
                March 28, 1995.)

       10(r)    Employment Agreement between Registrant and Kenneth F. Csinicsek
                dated June 14,  1994.  (Incorporated  herein by  reference  from
                Annual Report on Form 10-K for 1994 filed on March 28, 1995.)

       10(s)    Promissory  Note  relating  to   Registrant's   commercial  bank
                line-of-credit agreement dated April 30, 1995.


                                      -46-

<PAGE>



       10(t)    First  Financial  Corporation  Stock Option Plan III dated April
                24, 1991 and restated August 16, 1995.

       10(u)    First Federal Savings Bank of Rockford,  Illinois Employee Stock
                Ownership Plan and Trust,  amended  February 28, 1995 to reflect
                a) adoption by FF Bank as successor  plan sponsor and b) related
                amendments thereto.

       11       Computation of Earnings Per Share

       13(a)    Consolidated Financial Statements

       13(b)    Management's  Discussion and Analysis of Financial Condition and
                Results of Operations

       22       Subsidiaries of the Registrant

       24       Consent  of Ernst & Young  LLP for  Registration  Statement  No.
                2-90005  as filed with the SEC on March 16,  1984,  Registration
                Statement  No.  33-17304 as filed with the SEC on September  17,
                1987,  Post-Effective  Amendment  No.  5 to Form S-1 on Form S-8
                [Registration  No.  33-16948]  as filed  with the SEC on May 12,
                1988,  Registration Statement No. 33-36295 as filed with the SEC
                on August 9, 1990,  Registration Statement No. 33-69856 as filed
                with the SEC on  October  1, 1993,  Registration  Statement  No.
                33-51487 filed with the SEC on January 13, 1994 and Registration
                Statement No. 33-55823 filed with the SEC on January 27, 1995.

       27       Financial Data Schedule


                                      -47-

<PAGE>





             SCHEDULE II - GUARANTEES OF SECURITIES OF OTHER ISSUERS




                                      -48-

<PAGE>
<TABLE>
<CAPTION>



                                        SCHEDULE II - GUARANTEES OF SECURITIES OF OTHER ISSUERS
                                                       FIRST FINANCIAL CORPORATION
                                                            DECEMBER 31, 1995


         Column A                  Column B             Column C    Column D    Column E      Column F         Column G

                                                                    Amount                               Default By Issuer
                                                                   Owned By                                 Of Securities
                                                                    Person       Amount In                    Guaranteed
                                                        Total         Or         Treasury                   In Principal,
        Name Of                                         Amount      Persons         Of                    Interest, Sinking
  Issuer of Securities          Title Of Issue        Guaranteed   For Which    Issuer Of                Fund or Redemption
Guaranteed By Person For       Of Each Class Of           And      Statement    Securities   Nature Of      Provisions, or
Which Statement Is Filed     Securities Guaranteed    Outstanding   Is Filed    Guaranteed   Guarantee        Payment Of

<S>                           <C>                     <C>              <C>          <C>          <C>            <C>
Industrial Development Revenue Bonds:

City of Greenfield, WI       $3,185,000 Industrial
Edgewood Plaza Joint          Development Revenue
Venture                       Refunding Bonds,
                              Series 1992             $ 2,580,000      None         None         P&I            None

City of Maplewood, MN        $4,525,000 Variable
Angeles Partners 16, A        Rate Demand Multi-
California Limited            family Housing Revenue
Partnership                   Refunding Bonds,
                              Series 1993               4,525,000      None         None         P&I            None

City of Maple Grove, MN
Maple Investments, a         $2,300,000 Industrial
Minnesota General Part-       Revenue Bonds, Series
nership                       1986                      2,000,000      None         None         P&I            None

Housing Authority For        $7,000,000 Convertible
The City of Waukesha,         Variable Rate Demand
WI, Caroline Apart-           Multifamily Housing
ments Limited Part-           Revenue Bonds,
nership                       Series A                  1,890,000(1)   None         None         P&I            None

   TOTAL                                              $10,995,000


<FN>
P&I = Principal and Interest Payments on Securities Guaranteed.

(1)  Refinanced on February 5, 1996 without the guarantee of FF Bank.
</FN>
</TABLE>
                                      -49-

<PAGE>