<PAGE>
                                                                               .
                                                                               .
                                                                               .

EXHIBIT 13. THE ANNUAL REPORT TO SHAREHOLDERS OF THE COMPANY

SELECTED CONSOLIDATED FINANCIAL DATA
BLUE RIVER BANCSHARES, INC.
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                             YEAR ENDED              YEAR ENDED
                                                          DECEMBER 31, 2003       DECEMBER 31, 2002
                                                       (DOLLARS IN THOUSANDS)   (DOLLARS IN THOUSANDS)
<S>                                                    <C>                      <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA
Net Interest Income                                       $        3,717           $        2,363
Non-Interest Income                                                  745                      149
Provision for Loan Losses                                            240                      261
Non-Interest Expense                                               4,123                    4,479
Income (Loss) before Income Taxes                                     99                   (2,228)
Income Tax Benefit                                                   -0-                     (151)
Income (Loss) before cumulative effect of change in
accounting principle                                                  99                   (2,077)
Cumulative effect of change in accounting principle                  -0-                   (2,429)
Net Income (Loss)                                                     99                   (4,506)
CONSOLIDATED BALANCE SHEET DATA
Total Assets                                              $      198,810           $       95,118
Total Deposits                                                   160,686                   73,733
Loans, net                                                       126,985                   56,596
Investment Securities                                             48,961                   26,666
Shareholders' Equity                                              16,228                    9,873

GENERAL
Number of Employees                                       54 FTE / 9 PTE           36 FTE / 7 PTE
Number of Shares Outstanding at December 31                    3,406,150                1,859,802
Weighted Average Shares Outstanding during year - Basic
                                                               2,470,799                1,666,122

PER COMMON SHARE DATA
Basic and diluted earnings (loss) per Common Share
  before change in accounting principle                    $        0.04           $        (1.25)
Cumulative effect of change in accounting principle                                         (1.46)
                                                           -------------           --------------
Basic and diluted earnings (loss) per share                $        0.04           $        (2.71)
                                                           =============           ==============
SELECTED PERFORMANCE RATIOS
Return on Average Assets                                            0.09%                   (3.94)%
Return on Average Equity                                            0.79%                  (39.70)%
Average Shareholders' Equity to Average Assets
                                                                   11.07%                    9.94%
</TABLE>

<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

Statements in this report which express "belief", "intention", "expectation",
"prospects", as well as other statements which are not historical fact, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve risk and
uncertainties which may cause actual results to differ materially from those in
such statements. Some of the factors that may generally cause actual results to
differ materially from projection, forecasts, estimates and expectations
include, but are not limited to (i) changes in the interest rate environment,
(ii) competitive pressures among financial institutions, (iii) general economic
conditions on local or national levels, (iv) political developments, wars or
other hostilities may disrupt or increase volatility in securities markets, (v)
legislative or regulatory changes, (vi) changes in prepayment speeds of loans or
securities, (vi) changes in loan sale volumes, charge-offs and loan loss
provisions, (vii) changes in legal or regulatory proceedings, and (viii) the
impact of reputation risk created by these developments on such matters as
business generation or retention. The following information is intended to
provide an analysis of the consolidated financial condition of Blue River
Bancshares, Inc. (the "Company" or "Blue River") as of December 31, 2003 and
2002 and the consolidated statements of operations, shareholders' equity, and
cash flows for the years ended December 31, 2003 and 2002. The financial data in
this report should be read in conjunction with the audited Consolidated
Financial Statements and footnotes.

NEW ACCOUNTING PRONOUNCEMENTS

During June 2002, the Financial Accounting Standards Board issued SFAS No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities," which
nullifies Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. SFAS No. 146 is effective for exit
and disposal activities that are initiated after December 31, 2002. Management
has determined that the effect of this new standard on the consolidated
financial statements was not material.

SFAS 147, "Acquisitions of Certain Financial Institutions," was issued in
October 2002 and is effective for acquisitions for which the date of acquisition
is on or after October 1, 2002. SFAS 147 addresses the financial accounting and
reporting for the acquisition of all or part of a financial institution, except
for a transaction between two or more mutual enterprises. This statement also
provides guidance on the accounting for the impairment or disposal of acquired
long-term customer-relationship intangible assets (such as depositor- and
borrower-relationship intangible assets and credit cardholder intangible
assets), including those acquired in transactions between two or more mutual
enterprises. Management has implemented this new standard on the consolidated
financial statements in accounting for its acquisition of Unified Banking
Company.

SFAS 148, "Accounting for Stock-Based Compensation--Transition and Disclosure,
an amendment of FASB Statement No. 123," was issued in December 2002 and is
effective for fiscal years ending after December 15, 2002. SFAS 148 provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, SFAS
148 amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method on
reported results. Management has included the required disclosures in its
consolidated financial statements.

SFAS 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities" was issued in April of 2003. SFAS 149 amends and clarifies the
accounting guidance on (1) derivative instruments (including certain derivative
instruments embedded in other contracts and (2) hedging activities that fall
within

<PAGE>
the scope of FASB Statement No. 133 (SFAS 133), "Accounting for Derivative
Instruments and Hedging Activities". SFAS 149 amends 133 to reflect decisions
that were made (1) as part of the process undertaken by the Derivatives
Implementation Group (DIG), which necessitated amending SFAS 133; (2) in
connection with other projects dealing with financial instruments; and (3)
regarding implementation issues related to the application of the definition of
a derivative. SFAS 149 also amends certain other existing pronouncements, which
will result in more consistent reporting of contracts that are derivatives in
their entirety or that contain embedded derivatives that warrant separate
accounting. SFAS 149 is effective (1) for contracts entered into or modified
after June 30, 2003, with certain exceptions and (2) for hedging relationships
designated after June 30, 2002. The guidance is to be applied prospectively.
Management has determined that the effect of this new standard on the
consolidated financial statements is not material.

SFAS 150, "Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity," was issued in May 2003 and is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June
15, 2003. SFAS 150 establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities
and equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). The
requirements of SFAS 150 apply to issuers' classification and measurement of
freestanding financial instruments, including those that comprise more than one
option or forward contract. SFAS 150 does not apply to features that are
embedded in a financial instrument that is not a derivative in its entirety.
Management has determined that the statement will not have a material effect on
the Company's consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others". This Interpretation elaborates on the disclosures to be
made by a guarantor in its interim and annual financial statements about its
obligations under certain guarantees that it has issued. It also clarifies that
a guarantor is required to recognize, at the inception of a guarantee a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and initial measurement provisions of this
Interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002. The disclosure requirements in this
Interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002. Loan commitments and commercial letters
of credit are excluded from the scope of this Interpretation. Management does
not anticipate the Interpretation will have a material impact on its
consolidated financial statements. Management has determined that the
effect of this new standard on the consolidated financial statements is not
material.

In January 2003, the FASB issued FIN No. 46, Consolidation of Variable Interest
Entities, which was replaced by FIN No. 46 (Revised December 2003),
Consolidation of Variable Interest Entities (FIN No. 46(R)). FIN No. 46 requires
consolidation by business enterprises of variable interest entities that meet
certain requirements. FIN No. 46(R) changes the effective date of FIN No. 46 for
certain entities. Public companies shall apply either FIN No. 46 or FIN No.
46(R) to their interests in special purpose entities (SPEs) as of the first
interim or annual period ending after December 15, 2003. The decision to apply
FIN No. 46 or FIN No. 46(R) may be made on an SPE by SPE basis. The Company's
adoption of FIN No. 46 and FIN No. 46(R) did not have a significant impact on
its consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates. The estimate most susceptible to change in the near term is the
allowance for loan losses.

<PAGE>

The Company's critical accounting policies include the following:

Real estate owned represents real estate acquired through foreclosure or deed in
lieu of foreclosure and is recorded at the lower of cost or fair value less
estimated costs to sell. When property is acquired, it is recorded at the lower
of cost or estimated fair value at the date of acquisition, with any resulting
write-down charged against the allowance for loan losses. Any subsequent
deterioration of the property is charged directly to real estate owned expense.
Costs relating to the development and improvement of real estate owned are
capitalized, whereas costs relating to holding and maintaining the property are
charged to expense as incurred. Income generated from the property, if any, is
recorded as a reduction in its carrying value.

Interest on real estate, commercial and installment loans is accrued over the
term of the loans on a level yield basis. The Company discontinues accruing
interest on loans and reverses previously accrued amounts for loans that are
more than 90 days past due. Income is subsequently recognized only to the extent
that cash payments are received until, in management's judgment, the borrower's
ability to make periodic interest and principal payments returns to normal, in
which case the loan is returned to accrual status. In the event that a loan is
classified as impaired in accordance with SFAS 114, "Accounting by Creditors for
Impairment of a Loan" before it is 90 days past due, the Company will
discontinue accruing interest unless the loan is well secured and in the process
of collection.

Nonrefundable loan origination fees, net of certain direct loan origination
costs, are deferred and recognized as a yield adjustment over the life of the
underlying loan. Any unamortized fees on loans sold are included as part of the
gain/loss on sale of loans at time of sale.

An analysis of the allowance for loan losses is performed monthly by the Banks'
management to assess the appropriate levels of allowance for loan losses. This
analysis is performed to recognize specific reserves allocated to classified
assets, to monitor trends in loan delinquencies and charge-offs and to consider
portfolio growth. Specific reserves are established based upon review of
individual borrowers identified in the classified loan list, establishing the
probability of loss associated with such borrowers, including comparison of loan
balances versus estimated liquidation values of collateral based upon
independent information sources or appraisals performed by board-approved
licensed appraisers. The remaining pool of loans, excluding those classified or
delinquent is the source for the general loan loss reserve. Management evaluates
this general reserve using loan loss statistics by various types of loans, as
published periodically by the OTS, or the Banks' historical losses and
multiplying such loss percentages to the Banks' distribution of portfolio
balances. The calculated reserve is compared to the Banks' existing reserve to
establish the provision necessary to bring the actual reserve balance in
compliance with the findings of the allowance analysis.

The Banks hold certain investment securities as "available for sale". Available
for sale securities are stated at their current fair value. Unrealized gains and
losses associated with available for sale securities, net of taxes, are excluded
from earnings and reported as a net amount in shareholders' equity until
realized. Realized gains or losses from the sale of securities are reflected in
income on a specific identification basis. Interest income and the amortization
of the premium and discount arising at the time of acquisition are included in
interest income.

The Company establishes valuation allowances in accordance with the provisions
of SFAS 109, "Accounting for Income Taxes". The Company continually reviews the
adequacy of the valuation allowance and will recognize the benefits only as
reassessment indicates that it is more likely than not that the benefits will be
realized.

<PAGE>

OVERVIEW OF 2003

On November 17, 2003 the Company completed its acquisition of 100% of the issued
and outstanding shares of common stock of Unified Banking Company, a federal
savings bank with its principal office in Lexington, Kentucky, from Unified
Financial Services, Inc. The aggregate purchase price of $8.2 million was
determined through a competitive bidding process, which was subject to certain
adjustments made through arm's length negotiations during the due diligence
investigation of Unified Banking Company. The Company financed the purchase
price through a combination of cash on hand, an offering of its common stock to
its existing shareholders of 1,000,000 shares at $4.50 per share and a loan from
the Union Federal Bank of Indianapolis in the amount of $4,000,000. To secure
the loan, the capital stock of the Banks has been pledged to Union Federal Bank.
The Company operates Unified Banking Company separately from its other savings
bank subsidiary, Shelby County Bank. At the time of the acquisition, Unified
Banking Company had $81 million in assets, 17 full time employees and 2 part
time employees.

Shelby County Bank and Unified Banking Company are collectively referred to as
"the Banks".

Total assets as of December 31, 2003 were $198,810,000, a 109% increase from
December 31, 2002 balance of $95,118,000. An increase in assets of 86% was
primarily due to the acquisition of Unified Banking Company, and in part due to
efforts by the Company to strengthen capital ratios with increased loans and
deposits. The Banks' loan portfolio showed an increase of $70,389,000 from
December 31, 2002. The primary increase of $57,382,000 was a result of the
acquisition of Unified Banking Company. During 2003, the Banks focused their
efforts on commercial loan production to improve interest income, and in home
equity lending in order to strengthen its Qualified Thrift Lender ("QTL")
ratios. The Company is making efforts to originate sufficient loan volume to
stabilize the portfolio holdings. The Company has increased its
available-for-sale investment portfolio by $23,000,000 over December 31, 2002,
an overall increase of 85%; 82% was due to the acquisition of Unified Banking
Company. The Company continues to focus on agency securities and mortgage-backed
securities in its investing strategies. Both of these investment products
receive favorable risk-based capital treatment. The Banks are strategically
maintaining their "well capitalized" status while continuing to concentrate on
improving net interest income and overall profitability.

Total liabilities at December 31, 2003 were $182,582,000 compared to $85,245,000
at December 31, 2002. This 114% increase was primarily comprised of an increase
in deposits of $86,953,000, an increase in advances from the Federal Home Loan
Bank of Indianapolis and the Federal Home Loan Bank of Cincinnati ("FHLBs") and
$4,000,000 in long term debt from Union Federal Bank in Indianapolis to finance
the acquisition of Unified Banking Company. Of the primary increase in deposits,
$71,791,000 was the result of the acquisition of Unified Banking Company. There
was also an increase in certificates of deposits of $15,000,000 as the Banks
focused efforts on attracting these types of deposits as a mechanism to manage
liquidity due to loan growth. The increased volume in certificates was offset by
($3,780,000) in maturities of certain certificates of deposits retained by
Shelby County Bank after the sale of the Fort Wayne banking offices on December
31, 2001. Shelby County Bank also increased the use of FHLB advances, in order
to stabilize the Fort Wayne certificate maturities and to continue to manage its
liquidity position.

Total equity at December 31, 2003 was $16,228,000, an increase of $6,355,000
from December 31, 2002. The change in equity resulted from the net income of
$99,000, this is offset by a decrease of ($411,000) from a reduction in the fair
value of the Company's available-for-sale investment portfolio, net proceeds of
$2,483,000 from the private placement of common stock issued during the first
quarter and net proceeds of $4,184,000 from the rights offering during the
fourth quarter related to the acquisition of Unified Banking Company.

The Company's liquidity position is the primary source of additional capital for
infusion into its banking subsidiaries. As noted above, the Company raised
approximately $6.6 million from stock offerings in 2003. The Company then
contributed additional capital to Unified Banking Company in an amount equal to

<PAGE>
$500,000. Due to the Company's current liquidity sources and its increased use
of funds, the Company does not anticipate the need for any additional external
funding over the next twelve months.

RESULTS OF OPERATIONS

NET INCOME

For the year ended December 31, 2003, the Company reported net income of $99,000
compared to a net loss of ($4,506,000) reported for the year ended December 31,
2002. The increase was in part attributable to the write-off of goodwill of
($2,429,000) in 2002 due to the adoption of SFAS 142 and the resulting
cumulative effect of the change in accounting principle related to the goodwill
impairment. In December 2002, the Company also recognized a valuation allowance
of ($760,000) pertaining to the recoverability of its deferred tax assets.
Therefore, the Company's pre-tax income of $99,000 in 2003 is compared to a
pre-tax loss of ($2,228,000) in 2002. There was an increase in net interest
income of $1,353,000 compared to the year ended December 31, 2002. Interest
income decreased ($223,000), offset by a decline in interest expense of
($1,576,000). Provision for loan losses decreased ($21,000) to $240,000 for the
year ended December 31, 2003. The loan portfolio increased from $56.6 million at
December 31, 2002 to $127 million or 124% as of December 31, 2003. This increase
was primarily attributable to the acquisition of Unified Banking Company, offset
by the charge-off of two fully reserved loans totaling $657,000. In addition,
net charge-offs increased $474,000 compared to 2002. These charge-offs were
partly offset by $100,000 in recoveries pursuant to a legal settlement. Because
a significant amount of the loan portfolio consists of single family mortgage
loans, the non-performing loans do not adequately predict changes to our
provision. The underlying collateral of such loans has been historically
sufficient. The increase in net interest income resulted from the impact of
continued declines in market interest rates offset by the maturities of the Fort
Wayne certificates of deposits with higher yields. Additionally, the Banks'
variable rate lending and investing assets were subject to reduction in yields,
as the indices from which their rates are derived were rapidly falling.

NET INTEREST INCOME

For the year ended December 31, 2003, net interest income before provision for
loan losses increased $1,353,000. Interest income declined ($223,000) to
$6,185,000 from $6,408,000 for the year ended December 31, 2002. Interest
expense declined ($1,576,000) to $2,468,000 for the year ended December 31,
2003, compared to $4,045,000 for the year ended December 31, 2002.

Interest income decreased compared to the prior year due to a decrease in the
weighted average interest rate from 6.03% to 5.67%, between 2002 and 2003. This
was partially offset by an increase in interest income due to the acquisition of
Unified Banking Company effective on November 1, 2003. The impact of the sale of
the Fort Wayne branches at December 31, 2001 was a contributing factor in the
reductions in interest expense and overall increase in net interest income. As a
result of this transaction, Shelby County Bank retained $31,188,000 in high
yielding Fort Wayne certificates of deposits of which $24,600,000 matured in
2002 compared to $3,780,000 during 2003. Additionally, the average weighted
rates on deposits decreased from 4.16% in 2002 to 2.47 % in 2003 due to falling
yields in the market.

Results for 2003 were also impacted by the Banks' efforts to maintain regulatory
capital at "well capitalized" levels.

INTEREST INCOME

For the year ended December 31, 2003, interest income declined ($223,000). This
reduction was comprised of a $329,000 increase in the average balances of
earning assets; offset by a ($552,000) reduction due to lower yields on the
Company's earning assets.

<PAGE>

Interest income and fees on loans were $4,688,000 for the year ended December
31, 2003, a decrease of ($137,000) from the year ended December 31, 2002. The
reduction in yield on loans accounted for a ($419,000) unfavorable rate
variance, while an increase in average loan balances created a $282,000
favorable volume variance. As a result of the acquisition of Unified Banking
Company, the Company increased its gross loan portfolio by $58,000,000. The
reduction in yield was largely due to increased balances in variable rate
products, as well as lower yields on new loans originated during a period of
rapidly falling market interest rates. The overall yield on loans fell 60 basis
points to 6.68% from 7.28%.

There was no significant variance to interest income on investment securities
for the year ended December 31, 2003 as compared to the year ended December 31,
2002. An unfavorable variance of ($87,000) due to a lower portfolio yield was
offset by a favorable volume variance of $87,000. The favorable volume variance
was due to a larger average portfolio held during the year ended December 31,
2003. As a result of the acquisition of Unified Banking Company, $21,595,000 of
available-for sale securities were added. This portfolio increase was offset by
the portfolio purchases of ($24,976,418) and sales of $13,742,747 during 2003,
which were initiated to improve Shelby County Bank's interest rate sensitivity
measures and to reduce the use of volatile funding sources. There were also
principle payment reductions in the mortgage backed securities of ($9,845,000).

Interest income on interest-bearing deposits held at other financial
institutions decreased ($72,000) over the year ended December 31, 2002 to
$50,000 from $122,000. This decrease was due to a ($48,000) unfavorable volume
variance from lower balances in such liquid investments, and a ($24,000)
unfavorable rate variance due to a decline in yield on such instruments. This
category is very susceptible to changes in interest rates due to its liquidity
and strong correlation to short-term interest rates, such as federal funds and
LIBOR.

Dividends on FHLB stock declined ($14,000) from the year ended December 31,
2002, due to lower dividend yield provided by the stock of ($22,000) and an
increase in volume of $8,000. The Banks' investment in FHLB stock increased
$612,000 for the year ended December 31, 2003, $529,000 due to the acquisition
of Unified Banking Company and $83,000 due to reinvestment of the Shelby County
Bank stock dividend.

INTEREST EXPENSE

Interest expense decreased ($1,577,000) to $2,468,000 from $4,045,000 for the
year ended December 31, 2002. Interest expense on deposits decreased
($1,785,000) from $3,855,000 for the year ended December 31, 2002 to $2,070,000.
This decrease results from a ($507,000) variance due to a decrease in average
deposit balances, and a ($1,278,000) favorable rate variance due to a 146 basis
point reduction in cost. The cost of certificates of deposit decreased
($1,577,000) over 2002. Of this decrease, ($1,157,000) was due to a decrease in
the overall rate from 5.86% in 2002 to 3.45% in 2003. Approximately, ($420,000)
of the decrease can be attributable to volume. A contributing factor to this
decrease in cost and volume was the impact of $3,780,000 in maturities of
certain Fort Wayne certificates of deposit that were not included in the branch
sale but were retained by Shelby County Bank from the Fort Wayne market. These
certificates of deposits were not included in the sale due to severe discounting
that would have been required by the acquirer. Interest expense from FHLB
advances and other borrowings increased $185,000 from 2002, due to an increased
use of this funding source offset by a favorable rate variance from 4.78% in
2002 to 3.12% in 2003. In order to finance a portion of the acquisition of
Unified Banking Company, the Company borrowed $4,000,000 and incurred $24,000 in
interest expense for 2003 related to this borrowing. Rates on core deposit
products such as money market accounts, savings accounts, and NOW accounts also
decreased as a result of market conditions. The effective cost of money market
accounts declined 46 basis points from 1.98% for the year ended December 31,
2002. Savings account and NOW account rates have declined by 40 and 55 basis
points, respectively.

<PAGE>

NET INTEREST INCOME

<TABLE>
<CAPTION>
                                                YEAR ENDED            PERCENTAGE CHANGE
                                                DECEMBER 31,                FROM
                                             2003         2002         2002 TO 2003
                                           --------     ---------     -----------------
                                           (DOLLARS IN THOUSANDS)
<S>                                        <C>          <C>           <C>
Interest Income:
  Interest and fees on loans               $  4,688      $ 4,825           (2.84)%
  Interest on investment securities           1,331        1,331            0.00%
  FHLB dividends                                116          130          (10.77)%
  Interest on interest-bearing deposits          50          122          (59.02)%
                                           --------      -------
           Total interest income              6,185        6,408           (3.48)%
                                           ========      =======

Interest Expense:
  Interest on deposits                        2,070        3,855          (46.30)%
  Interest on borrowings                        398          190          109.47%
                                           --------      -------
           Total interest expense             2,468        4,045          (38.99)%
                                           --------      -------

Net interest income                        $  3,717      $ 2,363           57.30%
                                           ========      =======
</TABLE>

RATE VOLUME ANALYSIS OF CHANGE IN NET INCOME

<TABLE>
<CAPTION>
                                     YEAR ENDED DECEMBER 31, 2003      YEAR ENDED DECEMBER 31, 2002
                                    VOLUME      RATE       TOTAL       VOLUME      RATE        TOTAL
                                    ------     -------    -------     -------     -------     -------
                                       (DOLLARS IN THOUSANDS)              (DOLLARS IN THOUSANDS)
<S>                                 <C>        <C>        <C>         <C>         <C>         <C>
Interest Income on:
  Loans                             $  283     $  (420)   $  (137)    $(3,621)    $  (572)    $(4,193)
  Investment securities                 87         (87)                   592        (410)        182
  FHLB stock                             8         (22)       (14)                    (30)        (30)
  Interest-bearing deposits            (48)        (24)       (72)        (78)       (165)       (243)
                                    ------     -------    -------     -------     -------     -------

           Total interest income       330        (553)      (223)     (3,107)     (1,177)     (4,284)

Interest Expense on:
  Deposits                            (507)     (1,278)    (1,785)     (1,613)       (781)     (2,394)
  Borrowings                           420        (212)       208        (384)        (53)       (437)
                                    ------     -------    -------     -------     -------     -------

           Total interest expense      (87)     (1,489)    (1,577)     (1,997)       (834)     (2,831)
                                    ------     -------    -------     -------     -------     -------

Net interest income                 $  417     $   936    $ 1,353     $(1,110)    $  (343)    $(1,453)
                                    ======     =======    =======     =======     =======     =======
</TABLE>

This table represents causes of fluctuations in net interest income over the
reporting periods. The volume variance is calculated by multiplying the change
in balances by the prior year rate. Rate variance computed by multiplying the
change in rate/yield by the balance from the prior period. Variances that result
from both are allocated pro-rata to the volume and rate variances. Loan fees are
deferred and accounted for using the level yield method of accrual. Non-accruing
loans are included in the balances presented, while only amounts of interest
collected on such loans are included in the income amounts.

<PAGE>
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY AND INTEREST RATES
AND DIFFERENTIAL VARIANCE ANALYSIS

<TABLE>
<CAPTION>
                                                   YEAR ENDED DECEMBER 31, 2003     YEAR ENDED DECEMBER 31, 2002
                                                  ------------------------------    -----------------------------
                                                  AVERAGE                YIELD/     AVERAGE                YIELD/
                                                  BALANCE     INTEREST    RATE      BALANCE    INTEREST     RATE
                                                      (DOLLARS IN THOUSANDS)           (DOLLARS IN THOUSANDS)
<S>                                               <C>         <C>        <C>        <C>        <C>         <C>
Interest Earning Assets:
  Investment securities                           $ 32,144    $  1,331    4.14%     $ 30,165    $  1,331    4.41%
  Interest-bearing deposits                          4,588          50    1.09%        7,586         122    1.61%
  FHLB stock                                         2,278         116    5.09%        2,153         130    6.04%
  Loans (1)                                         70,168       4,688    6.68%       66,286       4,825    7.28%
                                                  --------    --------    ----      --------    --------    ----
           Total earning assets                    109,178       6,185    5.67%      106,190       6,408    6.03%
                                                  --------    --------    ----      --------    --------    ----

Interest and Non-Interest Bearing Liabilities:

  Savings accounts                                   7,172          70    0.98%        7,326         101    1.38%
  Non-interest bearing demand accounts               9,924           -    0.00%        5,300           -    0.00%
  NOW accounts                                      14,213         119    0.84%       13,966         195    1.39%
  Money market accounts                             14,370         218    1.52%       16,083         319    1.98%
  Certificates of deposit                           48,143       1,663    3.45%       55,312       3,240    5.86%
                                                  --------    --------    ----      --------    --------    ----

           Total interest bearing deposits          83,898       2,070    2.47%       92,687       3,855    4.16%
  Borrowings                                        12,755         398    3.12%        3,970         190    4.78%
                                                  --------    --------    ----      --------    --------    ----

           Total interest bearing liabilities     $ 96,653       2,468    2.55%     $ 96,657       4,045    4.18%
                                                  ========    --------    ----      ========    --------    ----
Net interest margin                                           $  3,717    3.40%                 $  2,363    2.23%
                                                              ========                          ========
</TABLE>

(1) Includes principal balances of non-accruing loans. Interest on non-accruing
loans is not included.

NON-INTEREST INCOME

The Company's non-interest income for the year ended December 31, 2003 was
$745,000. This represents an increase of $596,000 from the year ended December
31, 2002. The change in non-interest income results from a decrease of ($5,000)
in service charges on deposit accounts and an increase of $10,000 in other
service charges and fees. An additional factor increasing non-interest income
from the prior year was that the Company incurred a prepayment penalty of
$102,000 on FHLB advances in 2002. In addition there is an increase of $363,000
from the impact of sales of investment securities, loans and other assets of
which $54,000 can be attributed to the acquisition of Unified Banking Company.
There is also an increase of $126,000 on the gain (loss) on the disposal of
premises and equipment compared to 2002 due to a $100,000 market valuation write
off of the Rampart property in 2002.

<PAGE>
NON-INTEREST INCOME

<TABLE>
<CAPTION>
                                                                                           PERCENTAGE
                                                                                           CHANGE FROM
                                                                     YEAR ENDED           DECEMBER 31,
                                                                    DECEMBER 31,            2002 TO
                                                                ----------------------    DECEMBER 31,
                                                                  2003        2002            2003
                                                                (DOLLARS IN THOUSANDS)
<S>                                                              <C>         <C>          <C>
Service charges on deposit accounts                              $   218     $   223          (2.24)%
Other service charges and fees                                       198         188          17.02%
Securities/gains--net                                                229           4       5,625.00%
Gain on sale of loans and other assets                                60           -         100.00%
Prepayment penalty on FHLB advance                                     -        (102)        100.00%
Gain (Loss) on sale of real estate owned/repossessed assets           39         (39)        200.00%
Gain (Loss) on disposal/impairment of premises and equipment           1        (125)        100.80%
                                                                 -------     -------
Total Non-Interest Income                                        $   745     $   149         400.00%
                                                                 =======     =======
</TABLE>

NON-INTEREST EXPENSE

For the year ended December 31, 2003, non-interest expense was $4,123,000, a
decrease of ($356,000) from the year ended December 31, 2002 of $4,479,000.
Salary and benefit expenditures increased $213,000 from 2002. A reduction in
salary and benefit expenses of ($167,000) is directly related to the increase in
loan volume as it relates to Statement of Financial Accounting Standards No. 91
"Accounting for Nonrefundable Fees and Costs" as fees and costs relating to new
loans have been deferred against salaries and benefits. Loan volume at Shelby
County Bank increased while the number of employees remained constant. These
reductions to salaries and benefits were offset by an increase of $181,000
related to the acquisition of Unified Banking Company. In addition, the Company
added key personnel to the lending area in late 2002 and 2003 to promote loan
growth. The Company will continue to concentrate on decreasing staffing
expenditures related to clerical and administrative staff while diverting such
resources to sales and customer service personnel. Premises and equipment
expense increased $72,000. This increase is directly attributable to the
acquisition of the fixed assets of Unified Banking Company and its associated
two month depreciation and building expenses of $66,000. The addition of $49,000
in fixed assets for building remodeling at Shelby County Bank in 2003 increased
the bank's depreciation by $6,000. Advertising and promotional expenditures
increased $20,000. The primary increase of $12,000 is related to the acquisition
of Unified Banking Company with the remaining increase of $8,000 at Shelby
County Bank as this bank intensified its advertising since growth in both loans
and deposits was being pursued. Professional fees decreased ($69,000) from the
year ended December 31, 2002 to $387,000. Much of this decrease was due to a
reduction in accounting fees as the Company utilized in-house accounting
personnel. Data processing expenditures decreased ($34,000) over 2002 levels,
which represents the elimination of the Company's previous data processor for a
better and less costly system, offset by additional expenses of $25,000 for data
processing services at Unified Banking Company. Additional charges which were
incurred from the previous data processor for the continuation of service during
the conversion period to the new data processor, and additional conversion
expenses of $438,000 in 2002 were negligible in 2003. Deposit insurance premiums
decreased ($49,000) during the year ended December 31, 2003, due mostly to a
decrease in the deposit base for the period of assessment. Shelby County Bank
charged $112,000 to expense relating to the Voluntary Remediation Program at the
St. Paul location in 2002. There was no need to increase the accrual for the VRP
in 2003 therefore no additional expense was incurred. As a result of the
acquisition of Unified Banking Company and the associated purchase accounting,
Unified Banking Company has a core deposit intangible. The 2003 amortization
expense for this core deposit intangible was $11,000.
<PAGE>

NON-INTEREST EXPENSE

<TABLE>
<CAPTION>
                                                     YEAR ENDED          PERCENTAGE CHANGE
                                                    DECEMBER 31,               FROM
                                               ---------------------        DECEMBER 31,
                                                 2003          2002        2002 TO 2003
                                               (DOLLARS IN THOUSANDS)
<S>                                            <C>           <C>         <C>
Salaries and employee benefits                 $ 1,724       $ 1,511          14.10%
Premises and equipment                             532           460          15.65%
Advertising and public relations                    55            35          57.14%
Legal and professional services                    387           456         (15.13)%
Data processing                                    468           502          (6.77)%
Data processing conversion expenses                  1           438         (99.77)%
FDIC insurance assessment                          157           206         (23.79)%
Bank fees and other charges                         59            64          (7.81)%
Directors fees                                     145           126          15.08%
Core Deposit Intangible Amortization                11                       100.00%
Environmental charges                                            112        (100.00)%
Other                                              584           569           2.64%
                                               -------       -------
           Total                               $ 4,123       $ 4,479          (7.95)%
                                               =======       =======
</TABLE>

PROVISION FOR INCOME TAXES

The income tax expense/ benefit was $0 for the year ended December 31, 2003
compared to a benefit of ($151,000) for the year ended December 31, 2002. In
December 2002, the Company recognized a valuation allowance of $760,000
pertaining to the recoverability of its deferred tax assets. Management
concluded that it was more likely than not that a portion of the benefit
associated with the deferred tax asset would not be realized. The Company has
recorded a reduction in its valuation allowance for income tax expense that
arose in the current year. The effective tax rate was 0.00% and (6.8)% for 2003
and 2002, respectively.

CAPITAL RESOURCES AND CAPITAL ADEQUACY

The Company and the Banks are subject to various capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a direct
material effect on the financial statements. The Board of Directors of the
Company has set as an objective to maintain capital levels required for
qualification as "well-capitalized". The capital ratios of the Banks have been
diminished due to two primary factors: continued operating losses and the
disallowance of the Bank's deferred tax assets in determining regulatory capital
ratios.

Capital amounts and classification are also subject to qualitative judgments by
regulators involving capital components, risk weights and other factors. The
risk weights assigned to various financial instruments are taken into
consideration in setting operating parameters related to the mix of loans and
investments with the objective to maximize earnings attained through the use of
available equity capital.

On June 7, 2002, the Company entered into a stock purchase agreement with
Russell Breeden, III, Wayne C. Ramsey and L. Gene Tanner for the sale of common
stock. On September 17, 2002, the Company sold 309,889 shares of common stock at
a price of $4.73 per share or approximately $1,466,000 in the aggregate. Net
proceeds received totaled $1,401,148. As part of the stock purchase agreement,
the Company obtained shareholder approval for a subsequent private placement of
common stock in January 2003. In February 2003, the Company sold 546,348 shares
of the Company's common stock to Russell Breeden, III and Wayne C.

<PAGE>

Ramsey, directors of the Company and other accredited investors at a price of
$4.73 per share. The Company received net proceeds totaling $2,483,116. On
October 2, 2003, the Company completed a rights offering of 1,000,000 shares of
its common stock at $4.50 per share. The Company raised $4,184,157 in proceeds
net of $315,843 in offering costs.

On November 1, 2003, Blue River acquired Unified Banking Company from Unified
Financial Services, Inc. ("the Seller"). Blue River obtained financing through
Union Federal Bank in the amount of $4.0 million and raised $4.5 million through
a rights offering. Blue River acquired Unified Banking Company for $8.5 million
including acquisition costs. In addition, the Seller is required to maintain a
minimum of $8.5 million in non-interest bearing deposits at Unified Banking
Company through November 2006. Blue River then contributed $500,000 of
additional capital to Unified Banking Company.

Management believes that as of December 31, 2003, the Company meets all capital
adequacy requirements to which it is subject as well as objectives set by the
Company's management and Board of Directors. The following table sets forth the
actual and minimum capital amounts and ratios of Shelby County Bank as of
December 31, 2003:

For Capital Adequacy Purposes:

<TABLE>
<CAPTION>
                            SHELBY COUNTY BANK
                                               TOTAL
                   TANGIBLE       CORE       RISK-BASED
                    CAPITAL      CAPITAL      CAPITAL
                           (DOLLARS IN THOUSANDS)
<S>               <C>           <C>         <C>
Bank Amount       $   6,934     $   6,934   $     7,846
Required Amount       1,648         3,296         5,828
                  ---------     ---------   -----------

Excess            $   5,286     $   3,638   $     2,018
                  =========     =========   ===========

Bank Ratio             6.31%         6.31%        10.77%
Required Ratio         1.50%         3.00%         8.00%
                  ---------     ---------   -----------

Ratio Excess           4.81%         3.31%         2.77%
                  =========     =========   ===========
</TABLE>

To Be Well Capitalized Under Prompt Corrective Action Provisions:

<TABLE>
<CAPTION>
                   TIER 1      TIER 1        TOTAL
                    CORE     RISK-BASED   RISK-BASED
                   CAPITAL     CAPITAL     CAPITAL
                         (DOLLARS IN THOUSANDS)
<S>               <C>        <C>          <C>
Bank Amount       $  6,934   $    6,934   $    7,846
Required Amount      5,493        4,371        7,285
                  --------   ----------   ----------

Excess            $  1,441   $    2,563   $      561
                  ========   ==========   ==========

Bank Ratio            6.31%        9.52%       10.77%
Required Ratio        5.00%        6.00%       10.00%
                  --------   ----------   ----------

Ratio Excess          1.31%        3.52%        0.77%
                  ========   ==========   ==========
</TABLE>

<PAGE>

The following table sets forth the actual and minimum capital amounts and ratios
of Unified Banking Company as of December 31, 2003:

For Capital Adequacy Purposes:



<TABLE>
<CAPTION>
                                                     UNIFIED BANKING COMPANY
                                                                           TOTAL
                                                TANGIBLE       CORE      RISK-BASED
                                                CAPITAL      CAPITAL       CAPITAL
                                                      (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>          <C>
Bank Amount                                    $    5,309   $    5,309   $    5,942
Required Amount                                     1,233        2,466        4,582
                                               ----------   ----------   ----------

Excess                                         $    4,076   $    2,843   $    1,360
                                               ==========   ==========   ==========

Bank Ratio                                           6.46%        6.46%       10.37%
Required Ratio                                       1.50%        3.00%        8.00%
                                               ----------   ----------   ----------

Ratio Excess                                         4.96%        3.46%        2.37%
                                               ==========   ==========   ==========
</TABLE>

To Be Well Capitalized Under Prompt Corrective Action Provisions:

<TABLE>
<CAPTION>
                                                 TIER 1       TIER 1       TOTAL
                                                  CORE      RISK-BASED   RISK-BASED
                                                CAPITAL      CAPITAL      CAPITAL
                                                      (DOLLARS IN THOUSANDS)
<S>                                            <C>          <C>          <C>
Bank Amount                                    $    5,309   $    5,309   $    5,942
Required Amount                                     4,136        3,437        5,728
                                               ----------   ----------   ----------

Excess                                         $    1,173   $    1,872   $      214
                                               ==========   ==========   ==========

Bank Ratio                                           6.46%        9.27%       10.37%
Required Ratio                                       5.00%        6.00%       10.00%
                                               ----------   ----------   ----------

Ratio Excess                                         1.46%        3.27%        0.37%
                                               ==========   ==========   ==========
</TABLE>

USE OF FUNDS

INVESTMENT SECURITIES

Investment securities are the second major category of earning assets for the
Banks. This portfolio is used to manage the Banks' interest rate sensitivity and
liquidity as other components of the balance sheet change. Additionally,
investment securities receive favorable treatment for the purpose of computing
the Banks' risk-based capital ratios. Government issued and government agency
issued bonds, as well as certain agency-backed mortgage backed securities
contain low risk weight factors and can be used to mitigate the l00% risk weight
associated with commercial and consumer lending products. Management's objective
is to maximize, within quality standards, its net interest margin while
providing a stable source of liquidity through the scheduled stream of
maturities and interest income. The Banks have adopted an investment policy
which sets

<PAGE>

certain guidelines related to the portfolio mix, duration, and maximum allowable
investments within certain investment categories.

Available-for-sale investment securities comprise 24.6 % of total assets and
26.9% of total earning assets at December 31, 2003. The Company has classified
all of its investment purchases as available-for-sale to maintain liquidity.
Additionally, the Company has concentrated efforts on acquiring investments with
favorable risk-based capital treatment, as well as increasing its holdings in
adjustable rate mortgage-backed securities to reduce interest rate sensitivity.
During 2003, the Banks' liquidity levels had fallen from 29.1% at December 31,
2002 to 8.68% at December 31, 2003. A contributing factor in the decrease was
the result of the acquisition of Unified Banking Company as 98% of Unified's
available-for-sale government agencies are pledged. The Company has taken
actions to improve liquidity in the first quarter of 2004. Additionally, loan
demand increased in levels which diminished liquidity or its supply of cash,
Shelby County Bank resumed purchasing securities to improve its interest income
derived from interest-earning assets. To offset these actions there were
accelerated repayment streams of mortgage-backed securities, call options of
agency securities and sales of corporate securities. Management continues to
concentrate on bonds that have strong liquidity characteristics, while
exhibiting acceptable levels of market sensitivity risks.

The available-for-sale investment portfolio was $48,826,000 at fair value, with
a cost basis of $48,702,000. Of the total available-for-sale investment
portfolio, $21,595,000 at fair value was through the acquisition of Unified
Banking Company. The held-to-maturity portfolio currently is comprised of bonds
totaling $135,000. The Company also owns $2,236,000 of stock in the Federal Home
Loan Bank of Indianapolis and $529,000 of stock in the Federal Home Loan Bank of
Cincinnati. This equity position is required as a member bank of the FHLB
system, and the credit policy of the FHLB states that member banks must own
sufficient stock to serve as collateral against funding provided through
advances held by the Banks.

Weighted average yields of the investment securities portfolio were 4.56% at
December 31, 2003 compared to 4.89% at December 31, 2002. This yield was
impacted by the Banks' position in adjustable-rate mortgage-backed securities
acquired to assist in reducing interest rate sensitivity, purchasing of new
securities in a period of significantly lower market rates, and increased
repayments related to bonds with higher coupon rates.

Investment securities held in the Banks' portfolio consist primarily of U.S.
government agency issued debt securities, mortgage-backed securities with both
fixed and adjustable interest rates, municipal bonds, and corporate debt issues.
The mortgage-backed securities are subject to both prepayment and interest rate
risk. Management continues the use of adjustable-rate mortgage-backed securities
to reduce the Banks' interest rate sensitivity. Mortgage-backed securities not
only contain favorable characteristics related to risk-based capital, but also
assist in the management of the Banks' Qualified Thrift Lender (QTL) ratio.

<PAGE>

INVESTMENT SECURITIES PORTFOLIO

<TABLE>
<CAPTION>
                                                              AMORTIZED    UNREALIZED    UNREALIZED       FAIR
                                                                COST          GAINS        LOSSES         VALUE
                                                             -----------------------------------------------------
                                                                            (DOLLARS IN THOUSANDS)
<S>                                                          <C>           <C>           <C>           <C>
December 31, 2003:
  Investment securities held to maturity:
    Mortgage-backed securities                               $        35   $         -   $         -   $        35
    Municipals                                                       100             -             -           100
                                                             -----------   -----------   -----------   -----------

           Total investment securities held to maturity              135             -             -           135
                                                             -----------   -----------   -----------   -----------

Investment securities available for sale:
  Mortgage-backed securities                                      30,362           284            29        30,617
  U.S. government agencies                                        16,011            88           220        15,879
  Municipals                                                       1,104            11            10         1,105
  Corporate bonds                                                  1,225            22            22         1,225
                                                             -----------   -----------   -----------   -----------

           Total investment securities available for  sale        48,702           405           281        48,826
                                                             -----------   -----------   -----------   -----------

           Total investments                                 $    48,837   $       405   $       281   $    48,961
                                                             ===========   ===========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                             AMORTIZED     UNREALIZED    UNREALIZED       FAIR
                                                                COST          GAINS        LOSSES         VALUE
                                                             -----------------------------------------------------
                                                                             (DOLLARS IN THOUSANDS)
<S>                                                          <C>           <C>           <C>           <C>
December 31, 2002:
  Investment securities held to maturity:
    Mortgage-backed securities                               $        56   $         1   $         1   $        56
    Municipals                                                       203             3             -           206
                                                             -----------   -----------   -----------   -----------

           Total investment securities held to maturity              259             4             1           262
                                                             -----------   -----------   -----------   -----------

Investment securities available for sale:
  Mortgage-backed securities                                      17,849           574             2        18,421
  U.S. government agencies                                         5,542           186             -         5,728
  Municipals                                                       1,986            62             -         2,048
  Corporate bonds                                                    212             7             9           210
                                                             -----------   -----------   -----------   -----------

           Total investment securities available for  sale        25,589           829            11        26,407
                                                             -----------   -----------   -----------   -----------

           Total investments                                 $    25,848   $       833   $        12   $    26,669
                                                             ===========   ===========   ===========   ===========
</TABLE>

<PAGE>

MATURITY DISTRIBUTION OF INVESTMENT SECURITIES

As of December 31, 2003

<TABLE>
<CAPTION>
                                                                         HELD TO MATURITY       AVAILABLE FOR SALE
                                                                       ---------------------   ---------------------
                                                                                     FAIR                    FAIR
                                                                          COST       VALUE       COST        VALUE
                                                                                  (DOLLARS IN THOUSANDS)
<S>                                                                    <C>         <C>         <C>         <C>
Mortgage-Backed Securities:                                            $      35   $      35   $  30,362   $  30,617
U.S. Government Agencies:
    Due within one year                                                        -           -       1,021       1,042
    1 to 5 Years                                                               -           -       1,992       2,041
    5 to 10 Years                                                              -           -      11,998      11,792
    Due after ten years                                                        -           -       1,000       1,004
                                                                       ---------   ---------   ---------   ---------

        Total U.S. government agencies                                         -           -      16,011      15,879
                                                                       ---------   ---------   ---------   ---------

Obligations of State and Political Subdivisions:
  Due within one year                                                        100         100         251         252
  1 to 5 Years                                                                 -           -         398         408
  5 to 10 Years                                                                -           -         455         445
                                                                       ---------   ---------   ---------   ---------

        Total obligations of state and political subdivisions                100         100       1,104       1,105
                                                                       ---------   ---------   ---------   ---------

Corporate Bonds:
  1 to 5 Years                                                                 -           -         100         103
  5 to 10 Years                                                                -           -       1,125       1,122
                                                                       ---------   ---------   ---------   ---------
        Total corporate bonds                                                  -           -       1,225       1,225
                                                                       ---------   ---------   ---------   ---------

        Total investments                                              $     135   $     135   $  48,702   $  48,826
                                                                       =========   =========   =========   =========
</TABLE>

<PAGE>

As of December 31, 2002:

<TABLE>
<CAPTION>
                                                                     HELD TO MATURITY    AVAILABLE FOR SALE
                                                                                FAIR                 FAIR
                                                                     COST       VALUE      COST      VALUE
                                                                            (DOLLARS IN THOUSANDS)
                                                                   -----------------------------------------
<S>                                                                <C>        <C>        <C>        <C>
Mortgage-Backed Securities:                                        $     56   $     56   $ 17,849   $ 18,421
U.S. Government Agencies:
    1 to 5 Years                                                          -          -        500        520
    5 to 10 Years                                                         -          -      5,042      5,208
                                                                   --------   --------   --------   --------

           Total U.S. government agencies                                 -          -      5,542      5,728
                                                                   --------   --------   --------   --------

Obligations of State and Political Subdivisions:
  Due within one year                                                   100        100        201        207
  1 to 5 Years                                                          103        105        898        931
  5 to 10 Years                                                           -          -        537        553
  Due after ten years                                                     -          -        350        357
                                                                   --------   --------   --------   --------

           Total obligations of state and political subdivisions        203        205      1,986      2,048
                                                                   --------   --------   --------   --------

Corporate Bonds:
  1 to 5 Years                                                            -          -        212        210
                                                                   --------   --------   --------   --------

           Total corporate bonds                                          -          -        212        210
                                                                   --------   --------   --------   --------

           Total investments                                       $    259   $    261   $ 25,589   $ 26,407
                                                                   ========   ========   ========   ========
</TABLE>

INVESTMENT SECURITIES WEIGHTED AVERAGE YIELD

<TABLE>
<CAPTION>
                     DUE      ONE      FIVE     DUE
                    WITHIN     TO       TO     AFTER
                     ONE      FIVE     TEN      TEN
                     YEAR    YEARS    YEARS     YEARS   TOTAL
<S>                 <C>      <C>      <C>      <C>      <C>
December 31, 2003   4.35%    4.59%    4.49%    4.73%    4.56%
December 31, 2002   5.88%    4.69%    5.05%    4.89%    4.89%
</TABLE>

<PAGE>

LOANS

Total net loans at December 31, 2003 were $126,985,000, a $70,400,000 increase
from December 31, 2002. The majority of this increase or $57,380,000 is related
to the acquisition of Unified Banking Company. The Banks are concentrating on
loan products that provide the opportunity for shorter maturity terms and
variable rate pricing in an effort to continue to improve its interest rate
sensitivity. At December 31, 2003, 32.15% of the net loan portfolio was
comprised of residential mortgages, a decrease over 2002 levels. Commercial
loans secured by commercial real estate increased to $29,625,000, representing
for 23.33% of the total net loans at December 31, 2003. Consumer loans increased
$2,365,000 for the twelve months ended December 31, 2003 to $9,122,000. There is
an increase in consumer loans of $4,904,000 related to the acquisition of
Unified Banking Company offset by a decline in Shelby County Bank consumer loans
of ($2,539,000) primarily due to the maturing of the portfolio when loan
production has slowed. The Banks have continued to pursue opportunities to
expand their portfolios of home equity loan products, with loans outstanding of
$20,646,000 at December 31, 2003. These loans have increased $17,459,000 over
2002 levels. Of this increase, $9,754,000 is attributable to the acquisition of
Unified Banking Company and the majority of the remaining increase at Shelby
County Bank is due to the hiring of an experienced home equity lender in mid
2003 who generated over $6,800,000 in new home equity loans. The Company
continues to concentrate retail lending efforts to home equity loans due to
lower credit risks involved in loans secured by the borrower's primary
residence. However, as market rates decline, this portfolio is susceptible to
rapid repayment as borrowers refinance their principal mortgages. Commercial
lending products increased to $28,445,000 at December 31, 2003. An increase of
$13,677,000 is directly related to the acquisition of Unified Banking Company
with the remaining increase of $14,768,000 at Shelby County Bank. The Commercial
lending increases were mostly impacted by rapid growth on this type of lending
due to better capital ratios of Shelby County Bank and the hiring of a new
commercial loan officer in late 2002. Future growth is expected to increase in
the commercial lending market. Shelby County Bank's capital ratios have improved
due to the private placements of common stock during the third quarter of 2002
and the first quarter of 2003 and the rights offering of the fourth quarter of
2003. The Banks will continue to monitor closely its risk-weighted assets and
risk-based capital to maximize returns while striving to maintain the
"well-capitalized" designation.

At December 31, 2003, the Banks did not have any significant outstanding loan
concentration in similar industries that could cause an adverse impact during an
economic downturn in any one industry segment.

LOAN PORTFOLIO

<TABLE>
<CAPTION>
                                                  DECEMBER 31,
                                               2003         2002
                                             (DOLLARS IN THOUSANDS)
<S>                                          <C>          <C>
Real Estate Mortgage Loans:

  One-to-four family                         $  40,828    $ 27,504
  Non residential                               29,625      16,659
  Home equity loans                             20,646       3,187
Consumer loans                                   9,122       6,757
Commercial loans, including participations      28,445       4,206
Less allowance for loan losses                  (1,681)     (1,717)
                                             ---------    --------

Net loans                                    $ 126,985    $ 56,596
                                             =========    ========
</TABLE>

<PAGE>

COMPOSITION OF LOAN BY TYPE

<TABLE>
<CAPTION>
                                                  DECEMBER 31,
                                                2003       2002
                                             (DOLLARS IN THOUSANDS)
<S>                                          <C>         <C>
Real Estate Mortgage Loans:

  One-to-four family                           32.15%      48.60%
  Non residential                              23.33%      29.43%
  Home equity loans                            16.26%       5.63%
Consumer loans                                  7.18%      11.94%
Commercial loans, including participations     22.40%       7.43%
Less allowance for loan losses                 (1.32)%     (3.03)%
                                             -------     -------

Net loans                                     100.00%     100.00%
                                             =======     =======
</TABLE>

<PAGE>

LENDING ACTIVITIES

<TABLE>
<CAPTION>
                                                         DECEMBER 31, 2003     DECEMBER 31, 2002
                                                        -------------------   -------------------
                                                                   PERCENT               PERCENT
                                                         AMOUNT    OF TOTAL    AMOUNT    OF TOTAL
                                                       (DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
<S>                                                    <C>         <C>        <C>        <C>
Mortgage Loans:
  One to four family                                    $ 40,828    31.73%    $ 27,504    47.17%
  Non residential                                         29,625    23.02%      16,659    28.57%
  Home equity                                             20,646    16.05%       3,187     5.47%
Consumer loans                                             9,122     7.09%       6,757    11.58%
Commercial loans                                          28,445    22.11%       4,206     7.21%
                                                        --------   ------     --------   ------

           Total gross loans                            $128,666   100.00%    $ 58,313   100.00%
                                                        ========   ======     ========   ======

Type of Security:
  One-to-four family                                    $ 63,664              $ 28,122
  Non-residential                                         20,104                15,906
  Inventory, Accounts Receivables, Securities, Other      18,993                 3,585
  Multi-family                                             4,000                 3,481
  Equipment                                                4,836                 2,603
  Autos                                                    2,988                 2,100
  Unsecured                                                8,088                 1,410
  Land                                                     5,993                 1,106
                                                        --------              --------

           Total gross loans                            $128,666              $ 58,313
                                                        ========              ========
</TABLE>

<TABLE>
<CAPTION>
                                      DUE DURING THE YEARS ENDING DECEMBER 31,
                       ---------------------------------------------------------------------
                                              (DOLLARS IN THOUSANDS)
                                                             2006        2009        2014
                                                              TO          TO          AND
                         TOTAL        2004       2005        2008        2013      FOLLOWING
<S>                    <C>         <C>         <C>         <C>         <C>         <C>
Mortgage Loans:
  One-to-four family   $  40,828   $   8,004   $   1,198   $  11,909   $   3,267   $  16,450
  Non residential         29,625       7,375       2,164      14,903       1,918       3,265
  Home equity             20,646         955       1,329       1,769           -      16,593
Consumer loans             9,122       4,064         952       1,887         992       1,227
Commercial loans          28,445      17,764         925       7,408       1,348       1,000
                       ---------   ---------   ---------   ---------   ---------   ---------
   Total gross loans   $ 128,666   $  38,162   $   6,568   $  37,876   $   7,525   $  38,535
                       =========   =========   =========   =========   =========   =========
</TABLE>

<PAGE>
LOAN DISTRIBUTION

<TABLE>
<CAPTION>
                        DUE AFTER DECEMBER 31, 2004
                       ------------------------------
                         FIXED    VARIABLE
                         RATES     RATES      TOTAL
                       ------------------------------
                           (DOLLARS IN THOUSANDS)
<S>                    <C>        <C>        <C>
Mortgage Loans:
  One-to-four family   $ 28,218   $  4,605   $ 32,823
  Non residential        16,300      5,950     22,250
  Home equity lines          52     19,640     19,692
Consumer loans            4,666        393      5,059
Commercial loans          7,696      2,984     10,680
                       --------   --------   --------

           Total       $ 56,932   $ 33,572   $ 90,504
                       ========   ========   ========
</TABLE>

LOAN ACTIVITY

<TABLE>
<CAPTION>
                                              FOR THE         FOR THE
                                             YEAR ENDED      YEAR ENDED
                                            DECEMBER 31,    DECEMBER 31,
                                                2003            2002
                                               (DOLLARS IN THOUSANDS)
<S>                                         <C>             <C>
Gross Loans Receivable, beginning
 of year                                    $     58,313    $     73,827
Acquisition of Unified Banking
 Company                                          57,916               -
Mortgage loan originations:
  One to four family                              15,542           4,110
  Home equity                                     11,630           1,142
  Non residential                                  6,325           2,237
                                            ------------    ------------
       Total mortgage loans                       33,497           7,489

Consumer loans:
 Installment loans                                 1,953           1,843
 Loans secured by deposits                            33             201
                                            ------------    ------------

       Total consumer loans                        1,986           2,044

Commercial loans                                  24,451           1,927
                                            ------------    ------------
       Total originations                         59,934          11,460

Repayments and other deductions                  (47,497)        (26,974)
Gross Loans Receivable, end of year         $    128,666    $     58,313
                                            ============    ============
</TABLE>

<PAGE>

LOAN QUALITY

The Company's loan portfolios are subject to varying degrees of credit risk.
Credit risk is mitigated through portfolio diversification, limiting exposure to
any single industry or customer, collateral protection, and standard lending
policies and underwriting criteria. The Company's primary lending products are
commercial, consumer, and single-family mortgage loans including home equity
loans.

Commercial loans generally have shorter terms and higher interest rates than
residential mortgage loans and usually involve more credit risk than mortgage
loans because of the type and nature of the collateral. Commercial loans rely
primarily on the operations of the borrower for repayment and secondarily on the
underlying collateral. At December 31, 2003, our portfolio of commercial loans
totaled $58.1 million, or 45.7% of total gross loans. Commercial loans generally
expose a lender to greater risk of non-payment and loss than one-to-four family
residential mortgage loans because repayment of the loans often depends on the
successful operations and the income stream of the borrowers. Such loans
typically involve larger loan balances to single borrowers or groups of related
borrowers compared to one-to-four family residential mortgage loans.

Consumer lending collections are dependent on the borrower's continuing
financial stability, and are thus likely to be adversely affected by job loss,
illness and personal bankruptcy. In many cases, repossessed collateral for a
defaulted consumer loan will not provide an adequate source of repayment of the
outstanding loan balance because of depreciation of the underlying collateral.

Single-family mortgage lending collections are dependent on the borrower's
continuing financial stability, and are thus likely to be adversely affected by
job loss, illness and personal bankruptcy. Secondarily, the Company can
foreclose on the property for a defaulted single-family mortgage loan.

Management of the Banks and the Board of Directors of the Banks have established
a formalized, written loan policy and specific lending authority for each loan
officer based upon the loan officer's experience and performance. Each of the
Banks has also formed two additional levels of review for credits which exceed
the lending authority of the sponsoring officer. The Officer Loan Committees
approve loans in excess of individual lending officer limits. The Board of
Directors or Director Loan Committee approve all credits in excess of the
Officer Loan Committees limits up to the Banks' in-house limits.

The Board of Directors and or the Directors Loan Committee also monitor loan
administration, loan review and monitors the overall quality of the Banks' loan
portfolio.

A loan review program is maintained. Shelby County Bank has outsourced this
function in the past in order to improve independence and to maintain a high
level of expertise. Currently and moving forward this function is provided for
both Banks by an officer at Unified Banking Company. Particular attention is
focused on the largest aggregate borrowers, and additionally to any credits
recommended for reclassification. The reviews are conducted quarterly with a
written report provided to management and the Loan Committees to provide
documentation of actions necessary to correct documentation deficiencies.

The Board of Directors and or the Directors Loan Committee meet monthly to
review the overall administration of the loan portfolio, as well as many other
matters. The Boards at each of the banks review problem loans; delinquency
reports and discuss lending activities at each meeting.

Both of the Banks maintain a watch list of loans which do not meet the Banks'
established criteria. These are not under-performing loans, but simply monitored
as a precautionary matter, many based upon documentation deficiencies. This
management report also contains loans which are considered to be
under-performing or non-performing, loans criticized by examiners or any other
case where the borrower has exhibited characteristics requiring special
attention. A provision for estimated losses on loans and real estate owned is
charged to operations based upon management's evaluation of the probable losses.
Such an evaluation, which includes a review of all loans for which full
collectibility may not be reasonably assured considers, among

<PAGE>

other matters, the estimated net realizable value of the underlying collateral,
as applicable, economic conditions, historical loan loss experience and other
factors that are particularly susceptible to changes that could result in a
material adjustment in the near term. While management endeavors to use the best
information available in making its evaluations, future allowance adjustments
may be necessary if economic conditions change substantially from the
assumptions used in making the evaluations.

Under-performing assets are defined as: (1) loans in non-accrual status where
the ultimate collection of interest is uncertain but the principal is considered
collectible; (2) loans past due ninety days or more as to principal or interest
(and where continued accrual has not been specifically approved); and (3) loans
which have been renegotiated to provide a reduction or deferral of interest or
principal because of deterioration in the financial condition of the borrower.
At December 31, 2003, the Banks reported approximately $901,000 of impaired
loans. The Banks maintain a reserve for loan losses to cover losses incurred
when loans default. Loans are charged off when they are deemed uncollectible.

Loans in all categories are charged-off when the loan is 180 days past due or
when management determines the loan to be a loss.

UNDER-PERFORMING ASSETS

<TABLE>
<CAPTION>
                                                                 YEAR ENDED
                                                                DECEMBER 31,
                                                           ---------------------
                                                             2003        2002
                                                           (DOLLARS IN THOUSANDS)
<S>                                                        <C>         <C>
Non-accruing loans                                         $     901   $   2,056
Ninety (90) days past due                                      1,094       1,952
                                                           ---------   ---------

           Total under-performing assets                   $   1,995   $   4,008
                                                           =========   =========

Under-performing assets as a percentage of total loans          1.55%       6.87%

Past due loans (90 days or more): Real estate mortgages:

    One to four family                                     $     956   $   1,273
    Non residential                                              100         513
    Home equity loans                                              7          10
  Consumer loans                                                  31          89
  Commercial loans, including participations                       -          67
                                                           ---------   ---------

           Total                                           $   1,094   $   1,952
                                                           =========   =========
</TABLE>

The non-accruing loans that are reported as of December 31, 2003 would have
provided approximately $50,000 of interest income had they been performing in
accordance with their contractual terms. The interest income and fees on loans
reported for the year ended December 31, 2003 included approximately $31,000
that was received from loans reported as non-accrual as of December 31, 2003.

<PAGE>

ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                                         YEAR ENDED
                                                        DECEMBER 31,
                                                      2003       2002
                                                   (DOLLARS IN THOUSANDS)
<S>                                                <C>         <C>
Beginning allowance for loan losses                $   1,717   $   1,891
Acquisition of Unified Banking Company                   633           -
Loans charged off:
  Real estate mortgages:
    One-to-four family                                    46          71
    Non residential                                      530         253
  Consumer loans                                         211         219
  Commercial loans, including participations             229         273
                                                   ---------   ---------

           Total charged-off loans                     1,016         816
                                                   ---------   ---------

Recoveries on charged-off loans:
  Real estate mortgages:
    One-to-four family                                     1           -
    Non residential                                        -           5
Consumer loans                                             5          21
Commercial loans, including participations               101         355
                                                   ---------   ---------

           Total recoveries on charged-off loans         107         381
                                                   ---------   ---------

Provision for loan losses                          $     240   $     261
                                                   =========   =========

Ending allowance for loan losses                   $   1,681   $   1,717
                                                   =========   =========

Average loans outstanding                          $  70,168   $  66,286
Net charged-off loans to average loans                  1.30%       0.66%
</TABLE>

An analysis of the allowance for loan losses is performed quarterly by
management to assess the appropriate levels of allowance for loan losses. This
analysis is performed to recognize specific reserves allocated to classified
assets, assess portfolio growth, and to monitor trends in loan delinquencies and
charge-offs. Specific reserves are established based upon review of individual
borrowers identified in the classified loan list, establishing the probability
of loss associated with such borrowers, including comparison of loan balances
versus estimated liquidation values of collateral based upon independent
information sources or appraisals performed by board-approved licensed
appraisers. The remaining pool of loans, excluding those classified or
delinquent is the source for the general loan loss reserve. Management evaluates
this general reserve using loan loss statistics by various types of loans, as
published periodically by the OTS, or the Banks' historical losses and
multiplying such loss percentages to the Banks' distribution of portfolio
balances since management believes this will be representative of future losses
inherent in the portfolio. The calculated reserve is compared to the Banks'
existing reserve to establish the provision necessary to bring the actual
reserve balance in compliance with the findings of the allowance analysis
performed by management. The following is a breakdown of the loans identified in
the review which are classified as non-performing as of December 31, 2003:

<PAGE>

<TABLE>
<CAPTION>
                          DECEMBER 31, 2003
                       -----------------------
                         NUMBER
                        OF LOANS     BALANCES
<S>                    <C>          <C>
Residential mortgage           27   $1,382,477
Consumer secured                9       86,769
Commercial secured              8      526,057
                       ----------   ----------

           Total               44   $1,995,303
                       ==========   ==========
</TABLE>

ALLOCATION OF ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                              DECEMBER 31, PERCENT OF LOANS TO TOTAL
                         ------------------------------------------------
                          2003            2002         2003          2002
                         (DOLLARS IN THOUSANDS)
<S>                      <C>             <C>           <C>           <C>
Real estate mortgages:

  One-to-four family     $  397          $  236        0.31%         0.40%
  Non residential           340             881        0.26%         1.51%
  Home Equity                40              49        0.03%         0.08%
Consumer                    167             260        0.13%         0.45%
Commercial                  737             291        0.57%         0.50%
                         ------          ------        ----          ----

Total                    $1,681          $1,717        1.30%         2.94%
                         ======          ======        ====          ====
</TABLE>

FUNDING SOURCES

The Banks' primary funding source is its base of core customer deposits, which
includes interest and non-interest bearing demand deposits, savings accounts,
money market accounts and certificates of deposit. Other sources of funds have
been through advances from FHLB. The following table presents information with
respect to the average balances of these funding sources.

The Banks' average total deposits were $93,822,000 for the year ended December
31, 2003, compared to $97,987,000 for the year ended December 31, 2002; these
averages include a combined 12 month year to date period for Shelby County Bank
and a two month year to date period for Unified Banking Company. The Banks have
increased funding from Demand and NOW accounts by $4,871,000 over 2002. The
primary increase in average balances is attributable to the acquisition of
Unified Banking Company as the Demand and NOW account average balances for
Shelby County Bank were approximately the same for the years ending 2003 and
2002. The average balances of money market and savings accounts have decreased
by ($1,867,000) inclusive of the additional deposits of $6,856,000 acquired from
Unified Banking Company. Management continues to emphasize the benefits of
gathering non-certificate depository funding as a means of decreasing the Banks'
overall funding costs, improving levels of fee income derived from depository
relationships, and encouraging a stronger relationship with its customer base.
By acquiring primary transaction accounts, the Banks are less susceptible to
loss of accounts during periods of volatile interest rates. Funding in
certificates of deposits decreased by ($7,169,000) from 2002 inclusive of the
additional certificates of deposits of $47,702,000 acquired from Unified Banking
Company to an average of $48,143,000 for the year ended December 31, 2003. The
decrease in average balances in certificates of deposits was in part due to the
certificate maturities of those retained high interest rate Fort Wayne
certificates of deposit by Shelby County Bank and a falling interest rate
environment. The lack of growth in certificates of deposits was offset by
increased borrowings at the FHLB in Indianapolis with lower cost of funds in
order to facilitate strong loan demand.
<PAGE>

FUNDING SOURCES--AVERAGE BALANCES

<TABLE>
<CAPTION>
                                                              YEAR ENDED
                                                             DECEMBER 31,
                                                          2003            2002
                                                        -----------------------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                     <C>             <C>
Core Deposits:
  Non-interest bearing demand and NOW accounts          $ 24,137        $ 19,266
  Money market accounts                                   14,370          16,083
  Savings accounts                                         7,172           7,326
  Certificates of deposit                                 48,143          55,312
                                                        --------        --------

           Total deposits                                 93,822          97,987

FHLB advances and other borrowings                        12,755           3,970
                                                        --------        --------

           Total funding sources                        $106,577        $101,957
                                                        ========        ========
</TABLE>

FUNDING SOURCES--YIELDS

<TABLE>
<CAPTION>
                                                                                   PERCENTAGE
                                                          YEAR ENDED                 CHANGE
                                                          DECEMBER 31,               2003 TO
                                                       2003          2002             2002
<S>                                                   <C>           <C>            <C>
Core Deposits:
  Non-interest bearing demand and NOW accounts        0.84%         1.01%           (16.83)%
  Money market accounts                               1.52%         1.98%           (23.23)%
  Savings accounts                                    0.98%         1.38%           (28.99)%
  Certificates of deposit                             3.45%         5.86%           (41.13)%
                                                      ----          ----            ------

           Total deposits                             2.47%         3.93%           (37.15)%

FHLB advances and other borrowings                    3.12%         4.79%           (34.86)%
                                                      ----          ----            ------

           Total funding sources                      2.55%         3.96%           (35.61)%
                                                      ----          ----            ------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                               MINIMUM RANGE       BALANCE             %         WEIGHTED
                                                OF OPENING       DECEMBER 31,          OF         AVERAGE
                                                 BALANCES            2003           DEPOSITS       RATE
                                              --------------     ------------      ---------     ---------
                                                                      (DOLLARS IN THOUSANDS)
<S>                                           <C>                <C>               <C>           <C>
Withdrawable:
  Savings accounts                               $5 - $100        $   6,865             4.27%      0.78%
  Non-interest bearing checking                   25 - 50            23,384            14.55%         -
  NOW accounts                                    50 - 500           17,073            10.63%      0.60%
  Money market accounts                       1,000 - 10,000         20,623            12.83%      1.50%
                                                                  ---------            -----
           Total withdrawable                                        67,945            42.28%
                                                                  ---------            -----

Certificates (original terms):
  12 months or less                                 Various          19,781            12.31%      2.47%
  13 to 36 months                                50 - 1,000          22,372            13.92%      3.57%
  37 months and greater                          50 - 1,000          24,200            15.06%      4.36%
  Jumbo certificates                                100,000          26,388            16.43%      4.46%
                                                                  ---------         --------

           Total certificates                                        92,741            57.72%      3.73%
                                                                  ---------         --------

           Total deposits                                         $ 160,686           100.00%
                                                                  =========         ========
</TABLE>

CERTIFICATES OF DEPOSITS, BY RATE

<TABLE>
<CAPTION>
                              DECEMBER 31,
                                  2003
                         (DOLLARS IN THOUSANDS)
<S>                      <C>
Under 3%                        $ 46,012
3% to 3.99%                       12,893
4% to 4.99%                       12,579
5% to 5.99%                        1,691
6% to 6.99%                        6,131
7% and over                       13,435
                                --------
                                $ 92,741
                                ========
</TABLE>

<PAGE>

CERTIFICATES OF DEPOSITS, BY RATE AND TERM

<TABLE>
<CAPTION>
                                  AMOUNT AT DECEMBER 31, 2202 MATURING IN
                   --------------------------------------------------------------------
                                                                GREATER
                   ONE YEAR                                      THAN
                      OR            TWO           THREE          THREE
                     LESS          YEARS          YEARS          YEARS          TOTAL
                                         (DOLLARS IN THOUSANDS)
<S>                <C>            <C>            <C>            <C>            <C>
Under 3%           $33,102        $11,549        $ 1,006        $   355        $46,012
3% to 3.99%          2,554          5,177            729          4,433         12,893
4% to 4.99%          6,123            450          1,707          4,299         12,579
5% to 5.99%            634            252            801              4          1,691
6% to 6.99%          1,133          1,190          3,703            105          6,131
7% and over          1,206          6,316          5,856             57         13,435
                   -------        -------        -------        -------        -------
                   $44,752        $24,934        $13,802        $ 9,253        $92,741
                   =======        =======        =======        =======        =======
</TABLE>

TIME DEPOSIT OF $100,000 AND OVER

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                     ----------------------
                                                      2003           2002
                                                      (DOLLARS IN THOUSANDS)
<S>                                                  <C>            <C>
Three months or less                                 $ 3,368        $ 1,321
Greater than three months through six months             203            300
Greater than six months through twelve months          8,460            713
Over twelve months                                    14,357          2,478
                                                     -------        -------
Total                                                $26,388        $ 4,812
                                                     =======        =======
</TABLE>

FHLB ADVANCES

<TABLE>
<CAPTION>
                                                                  AT OR FOR THE YEAR ENDED
                                                                         DECEMBER 31,
                                                                   ----------------------
                                                                    2003            2002
                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                <C>            <C>
FHLB advances outstandings at end of year                          $16,712        $11,000
Average balance for year                                            15,244          3,970
Maximum amount outstanding at any month-end during the year         16,712         11,000
Weighted average interest rate during the year                        3.08%          4.77%
Weighted average interest rate at end of year                         3.41%          3.06%
</TABLE>

<PAGE>

LIQUIDITY AND RATE SENSITIVITY

The Company's liquidity position is the primary source of additional capital for
infusion into its banking subsidiaries. During the year ended December 31, 2003,
the Banks have significantly increased their use of funds as a result of
increased loan demand, maturities of higher interest rate certificates of
deposit and $3,780,000 in maturities of the retained Fort Wayne certificates of
deposit. Due to the Company's current liquidity sources, the private placement
of common stock during the third quarter 2002, a subsequent private placement
which occurred during the first quarter of 2003 and the rights offering and
borrowing related to the acquisition of Unified Banking Company in the fourth
quarter of 2003, the Company does not anticipate the need for any additional
external funding over the next twelve months.

The primary function of liquidity and interest rate sensitivity management is to
provide for and assure an ongoing flow of funds that is adequate to meet all
current and future financial needs of the Banks. Such financial needs include
funding credit commitments, satisfying deposit withdrawal requests, purchasing
property and equipment and paying operating expenses. The funding sources of
liquidity are principally the maturing assets, payments on loans issued by the
Banks, net deposit growth, and other borrowings. The purpose of liquidity
management is to match sources of funds with anticipated customer borrowings and
withdrawals and other obligations along with ensuring a dependable funding base.
Alternative sources of liquidity include acquiring jumbo certificates resulting
from local government bidding, liquidation of marketable investment securities,
sales and/or securitization of pools of loans, and additional draws against
available credit at the FHLB.

Rate sensitivity analysis places each of the Banks' balance sheet components in
its appropriate maturity and/or repricing frequency, thus allowing management to
measure the exposure to changes in interest rates. The Banks are required to
provide quarterly reporting to the Office of Thrift Supervision (OTS) in the
form of Schedule CMR, which accompanies the Banks' filing of the Thrift
Financial Report (TFR). This data is modeled by the OTS and is reported back to
the Banks representing the Banks' NPV (net portfolio value), which reflects the
economic value of the Banks' balance sheet when discounted against current
market rates and assumptions regarding prepayments and other factors influencing
cash flows of the financial instruments contained therein. The base value is
then shocked against assumed changes in market interest rates with particular
attention to the scenario of rates increasing 200 basis points. This information
is reviewed by management to determine appropriate action to be taken to
reposition the balance sheet to reduce the sensitivity of the institution. The
results of the OTS modeling and management's strategies are then presented to
the Board of Directors to establish the Banks' status with regard to its
Asset/Liability and Interest Rate Sensitivity policies.

The Banks' Asset/Liability Committees, which set forth guidelines under which
the Banks manage funding sources, its investments and loan portfolios, is
responsible for monitoring the Banks' sensitivity measures. The objective of
these committees is to provide for the maintenance of an adequate net interest
margin, appropriate NPV levels, and adequate level of liquidity to keep the
Banks sound and profitable during all stages of an interest rate cycle. The
Presidents of each Bank have been authorized by the Board of Directors to
perform the daily management functions related to asset/liability management and
investment trading activities for the Banks.

At December 31, 2003, $70,619,000 of the loan portfolio is due to mature or
reprice within one year, compared to $18,251,000 of the portfolio at December
31, 2002. In the investment securities category, $16,210,000 of the portfolio
matures or reprices within one year, compared to $8,523,000 at December 31,
2002. The adjustable rate mortgages prepaid rapidly during a time when fixed
rate financing could be acquired at favorable rates to the consumer. The
repayment of this portion of the portfolio was $9,845,000 offset by the net
purchases and sales of securities of $11,234,000 and $21,595,000, respectively,
of available-for-sale securities acquired with Unified Banking Company in 2003.

The Banks use the same credit policies and collateral requirements in making
commitments as they do for on-balance sheet financial instruments. The following
table details the amounts and expected maturities of significant commitments as
of December 31, 2003.

<PAGE>

<TABLE>
<CAPTION>
                                       ONE YEAR     ONE TO       THREE TO    OVER FIVE
                                       OR LESS    THREE YEARS   FIVE YEARS     YEAR         TOTAL
                                       ----------------------------------------------------------
                                                         (DOLLARS IN THOUSANDS)
<S>                                    <C>        <C>           <C>          <C>           <C>
Commitments to extend credit:

    Commercial                         $8,474     $   496       $   24      $    -         $8,994
    Residential real estate             3,887         122            4           -          4,013
    Revolving Home Equity               8,939           -            -           -          8,939
    Other                                 508           -            -           -            508

Standby letters of credit                   -          65            -           -             65
Commercial letters of credit              436           -          393           -            829
Net commitments to sell mortgage
  loans and mortgage-backed
  securities                                -           -            -           -              -
Principal maturities of
  term debt                                 -         503          903       2,594          4,000
</TABLE>

Commitments to extend credit, including loan commitments, standby letters of
credit, and commercial letters of credit do not necessarily represent future
cash requirements, in that these commitments often expire without being drawn
upon.

Management's objective in interest rate sensitivity is to reduce the Banks'
vulnerability to future interest rate fluctuations while providing for growth
and stability of net interest margin.

The cumulative GAP ratio of the Bank on December 31, 2003 was 22.64% for
interest rate sensitive assets and liabilities of ninety days or less and 10.42%
for interest rate sensitive assets and liabilities for one year or less. These
ratios show an improvement in the 90-day and the one-year gap when compared to
2002 levels.

<PAGE>

INTEREST RATE SENSITIVITY ANALYSIS

<TABLE>
<CAPTION>
                                                       1-90           91-365            1-5              BEYOND
                                                       DAYS            DAYS             YEARS            5 YEARS         TOTAL
                                                     ---------------------------------------------------------------------------
                                                                              (DOLLARS IN THOUSANDS)
<S>                                                  <C>             <C>              <C>               <C>             <C>
Earning Assets:
  Investment securities                              $ 13,885        $  2,325         $  8,767          $ 23,960        $ 48,937
  Interest-bearing deposits                             1,192                                                              1,192
  Loans (excluding non-accruing)                       61,170           9,449           29,238            26,735         126,592
                                                     --------        --------         --------          --------        --------

           Total earning assets                        76,247          11,774           38,005            50,695         176,721
                                                     --------        --------         --------          --------        --------

Interest-Bearing Liabilities:
  Savings and transaction deposits                     12,106           7,480           18,231             6,743          44,560
  Time deposits                                        18,528          26,386           47,634               193          92,741
  Borrowed funds                                          596           2,211           13,134             4,937          20,878
                                                     --------        --------         --------          --------        --------

           Total interest-bearing liabilities          31,230          36,077           78,999            11,873         158,179
                                                     --------        --------         --------          --------        ========

Interest rate sensitivity gap per period             $ 45,017        $(24,303)        $(40,994)         $ 38,822
                                                     ========        ========         ========          ========

Cumulative interest rate gap                         $ 45,017        $ 20,714         $(20,280)         $ 18,542
                                                     ========        ========         ========          ========

Cumulative interest sensitivity gap as
  a percentage of total assets                          22.64 %         10.42 %         (10.20)%            9.33 %
</TABLE>

NET PORTFOLIO VALUE

<TABLE>
<CAPTION>
                 DOLLAR          DOLLAR             %             NPV
                 AMOUNT          CHANGE           CHANGE         RATIO         CHANGE
                                      (DOLLARS IN THOUSANDS)
<S>             <C>             <C>               <C>           <C>            <C>
+300  bp        $ 19,943        $ (1,985)           -9%         10.20%          -61 bp
+200  bp          20,813          (1,115)           -5%         10.51%          -30 bp
+100  bp          21,509            (419)           -2%         10.72%          -09 bp
   0  bp          21,928                                        10.81%
-100  bp          21,459            (469)           -2%         10.50%          -31 bp
</TABLE>

The OTS' Net Portfolio Value model data for December 31, 2003 excluded the -200
bp and -300 bp scenarios because of the abnormally low prevailing interest rate
environment.

<PAGE>

EFFECTS OF INFLATION

The assets and liabilities of a banking entity are unlike companies with
investments in inventory, plant and equipment. Assets are primarily monetary in
nature and differ from the assets of most non-financial services companies. The
performance of a bank is affected more by changes in interest rates than by
inflation.

Because of the relatively low rate of inflation over the past years, the impact
upon the Company's balance sheet and levels of income and expense has been
minimal.

<PAGE>

INDEPENDENT AUDITORS' REPORT

Shareholders and Board of Directors
Blue River Bancshares, Inc. and Subsidiaries
Shelbyville, Indiana

We have audited the accompanying consolidated balance sheets of Blue River
Bancshares, Inc. and Subsidiaries (the "Company") as of December 31, 2003 and
2002, and the consolidated statements of operations, shareholders' equity, and
cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2003
and 2002, and the results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.

As discussed in Note 1 to the consolidated financial statements, effective
January 1, 2002, the Company changed its method of accounting for goodwill.

Deloitte & Touche LLP
Indianapolis, Indiana

March 29, 2004

<PAGE>

BLUE RIVER BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                           2003                 2002
<S>                                                                                   <C>                   <C>
ASSETS

ASSETS:
  Cash and cash equivalents:
    Cash and due from banks                                                           $   6,609,803         $   2,269,908
    Interest-bearing deposits                                                             1,192,500             1,169,170
                                                                                      -------------         -------------

           Total cash and cash equivalents                                                7,802,303             3,439,078

  Securities available for sale, at fair value (amortized cost $48,701,589 and
   $25,588,551)                                                                          48,825,911            26,407,360
  Securities held to maturity, at amortized cost (fair value $134,765 and
   $261,005)                                                                                134,663               258,721
  Loans receivable, net of allowance for loan losses of  $1,681,005 and
   $1,717,072                                                                           126,985,289            56,595,711
  Stock in FHLB, at cost                                                                  2,765,500             2,153,000
  Accrued interest receivable                                                             1,008,822               582,016
  Deferred income taxes, net                                                              2,749,610             1,899,346
  Premises and equipment, net                                                             2,288,022             1,781,775
  Other real estate owned                                                                 2,052,223             1,627,505
  Prepaid expenses and other assets                                                         798,306               373,454
  Core deposit intangible, net                                                              427,066                     -
  Goodwill                                                                                2,972,743                     -
                                                                                      -------------         -------------
TOTAL ASSETS                                                                          $ 198,810,458         $  95,117,966
                                                                                      =============         =============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
  Interest bearing deposits                                                           $ 137,301,356         $  68,200,843
  Non-interest bearing deposits                                                          23,384,534             5,531,911
  Advances from FHLB and other borrowings                                                16,878,276            11,000,000
  Term debt                                                                               4,000,000                     -
  Accrued interest on deposits and FHLB advances                                            302,745                73,759
  Accrued expenses and other liabilities                                                    715,253               438,675
                                                                                      -------------         -------------
           Total liabilities                                                            182,582,164            85,245,188
                                                                                      -------------         -------------
COMMITMENTS                                                                                       -                     -
SHAREHOLDERS' EQUITY:
  Preferred stock, no par value, 2,000,000 shares
    authorized, none issued
  Common stock, no par value, 15,000,000 shares authorized, 3,406,150
    and 1,859,802 shares issued and outstanding                                          24,647,617            17,980,344
  Accumulated deficit                                                                    (8,499,910)           (8,598,851)
  Accumulated other comprehensive income, net of deferred taxes                              80,587               491,285
                                                                                      -------------         -------------
           Total shareholders' equity                                                    16,228,294             9,872,778
                                                                                      -------------         -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                            $ 198,810,458         $  95,117,966
                                                                                      =============         =============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

BLUE RIVER BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                            2003                2002
<S>                                                                                      <C>                 <C>
INTEREST INCOME:
  Loans receivable                                                                       $ 4,687,905         $ 4,825,049
  Mortgage-backed and investment securities                                                1,330,662           1,330,646
  Interest-bearing deposits                                                                   50,113             122,028
  Dividends from FHLB and other                                                              116,393             130,522
                                                                                         -----------         -----------

           Total interest income                                                           6,185,073           6,408,245
                                                                                         -----------         -----------
INTEREST EXPENSE:
  Interest expense on deposits                                                             2,069,986           3,854,760
  Interest expense on FHLB advances and other borrowings                                     398,392             189,933
                                                                                         -----------         -----------

           Total interest expense                                                          2,468,378           4,044,693
                                                                                         -----------         -----------
NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES                                       3,716,695           2,363,552

PROVISION FOR LOAN LOSSES                                                                    240,000             261,187
                                                                                         -----------         -----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                                        3,476,695           2,102,365
                                                                                         -----------         -----------
NON-INTEREST INCOME:
  Service charges and fees on deposit accounts                                               217,747             222,921
  Other service charges and fees                                                             198,057             188,030
  Gain (loss) on disposal/impairment of premises and equipment                                   981            (125,168)
  Gain (loss) on sale of securities and other assets                                         328,353             (34,820)
  Other, net                                                                                       -            (102,255)
                                                                                         -----------         -----------
           Total non-interest income                                                         745,138             148,708
                                                                                         -----------         -----------
NON-INTEREST EXPENSE:
  Salaries and employee benefits                                                           1,723,901           1,511,369
  Premises and equipment                                                                     532,099             460,412
  Data processing                                                                            469,195             502,323
  Data processing conversion                                                                       -             438,072
  Professional fees                                                                          386,522             456,333
  Federal deposit insurance                                                                  156,700             205,939
  Directors fees                                                                             144,500             126,300
  Environmental expense                                                                            -             112,000
  Core deposit intangible amortization                                                        10,950                   -
  Other                                                                                      699,025             666,079
                                                                                         -----------         -----------
           Total non-interest expense                                                      4,122,892           4,478,827
                                                                                         -----------         -----------
INCOME (LOSS) BEFORE INCOME TAX BENEFIT                                                       98,941          (2,227,754)

INCOME TAX BENEFIT                                                                                 -             150,607
                                                                                         -----------         -----------

NET INCOME (LOSS) before cumulative effect of change in accounting principle                       -          (2,077,147)
Cumulative effect of change in accounting principle                                                           (2,429,081)
                                                                                         -----------         -----------
NET INCOME (LOSS)                                                                        $    98,941         $(4,506,228)
                                                                                         ===========         ===========
Basic and diluted earnings (loss) per share before change in accounting principle        $      0.04         $     (1.25)
Cumulative effect of change in accounting principle                                                -               (1.46)
                                                                                         -----------         -----------
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                                              $      0.04         $     (2.71)
                                                                                         ===========         ===========
WEIGHTED AVERAGE BASIC SHARES OUTSTANDING                                                  2,470,799           1,666,122
WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING                                                2,472,886           1,666,122
</TABLE>

See accompanying notes to consolidated financial statements
<PAGE>

BLUE RIVER BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM JANUARY 1, 2002 TO DECEMBER 31, 2003

<TABLE>
<CAPTION>
                                                                                                       ACCUMULATED
                                                                                                          OTHER
                                                                                                      COMPREHENSIVE
                                                                                                         INCOME,
                                                            NUMBER  OF                                    NET OF         TOTAL
                                            COMPREHENSIVE     SHARES        COMMON      ACCUMULATED      DEFERRED     SHAREHOLDERS'
                                                LOSS        OUTSTANDING      STOCK        DEFICIT         TAXES          EQUITY
<S>                                         <C>             <C>          <C>            <C>           <C>             <C>
BALANCE, January 1, 2002                                     1,549,913   $ 16,579,196   $(4,092,623)  $     106,330   $  12,592,903

 Net loss                                   $  (4,506,228)                               (4,506,228)                     (4,506,228)
                                            -------------

Issuance of Common Stock                                        309,889     1,401,148                                     1,401,148

   Other comprehensive income:
   Unrealized gain on securities, net
   of reclassification adjustment                 384,955                                                   384,955         384,955
                                            -------------

 Other comprehensive income                       384,955
                                            -------------

COMPREHENSIVE LOSS                          $  (4,121,273)
                                            =============     ---------  ------------   -----------   -------------   -------------

BALANCE, December 31, 2002                                    1,859,802    17,980,344    (8,598,851)        491,285       9,872,778

 Net income                                 $      98,941                                    98,941                          98,941
                                            -------------

Issuance of Common Stock                                      1,546,348     6,667,273                                     6,667,273

   Other comprehensive income (loss):
   Unrealized (loss) on securities, net
   of reclassification adjustment                (410,698)                                                 (410,698)       (410,698)
                                            -------------

 Other comprehensive (loss)                      (410,698)
                                            -------------
COMPREHENSIVE LOSS                          $    (311,757)
                                            =============     ---------  ------------   -----------   -------------   -------------

BALANCE, December 31, 2003                                    3,406,150  $ 24,647,617   $(8,499,910)  $      80,587   $  16,228,294
                                                              =========  ============   ===========   =============   =============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
BLUE RIVER BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                                  2003              2002
<S>                                                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                           $     98,941      $ (4,506,228)
  Adjustments to reconcile net income (loss) to net cash from operating activities:
    Depreciation and amortization                                                                  473,338           562,918
    Net amortization of premiums and discounts                                                     331,630            89,684
    Cumulative effect of change in accounting principle                                                  -         2,429,081
    Gain on sale of securities available for sale                                                 (229,312)           (4,200)
    Gain on sale of other assets                                                                   (99,041)                -
    Prepayment penalty on FHLB advance                                                                   -           102,255
    Impairment charge to premises and equipment                                                          -           100,000
    Loss on sale/disposal of premises and equipment                                                   (981)           64,189
    Provision for loan losses                                                                      240,000           261,187
    Deferred income taxes                                                                                -           203,015
  Changes in assets and liabilities:
    Accrued interest receivable                                                                   (334,551)          136,570
    Other assets                                                                                  (784,562)          131,819
    Other liabilities                                                                              131,625           (64,513)
                                                                                              ------------      ------------

           Net cash from operating activities                                                     (172,913)         (494,223)
                                                                                              ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Payment for Unified Banking Company acquisition, net of
  cash acquired                                                                                 (6,787,154)                -
  Investment in FHLB stock and other                                                               (60,245)                -
  Loans funded, net of collections                                                             (13,705,189)       14,014,924
  Maturities of securities available for sale                                                    9,844,658        10,616,623
  Proceeds from sale of securities available for sale                                           13,742,747         4,925,735
  Purchase of securities available for sale                                                    (24,976,418)      (14,292,006)
  Purchase of premises and equipment                                                               (49,139)         (131,346)
  Proceeds from sale of real estate owned                                                          546,051           344,648
                                                                                              ------------      ------------

           Net cash from investing activities                                                  (21,444,689)       15,478,578
                                                                                              ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock, net of offering costs of $416,953 and $64,527          6,667,273         1,401,148
  Repayment of FHLB advances and other borrowings                                               (4,053,648)       (5,102,255)
  Proceeds from FHLB advances and other borrowings                                               6,000,000        11,000,000
  Proceeds from term debt                                                                        4,000,000                 -
  Net increase (decrease) in deposits                                                           13,367,202       (33,881,498)
                                                                                              ------------      ------------

           Net cash from financing activities                                                   25,980,827       (26,582,605)
                                                                                              ------------      ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                             4,363,225       (11,598,250)

CASH AND CASH EQUIVALENTS, Beginning of year                                                     3,439,078        15,037,328
                                                                                              ------------      ------------

CASH AND CASH EQUIVALENTS, End of year                                                        $  7,802,303      $  3,439,078
                                                                                              ============      ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest paid during the year                                                               $  2,239,000      $  4,214,000
                                                                                              ============      ============

  Income tax refund                                                                           $          -      $    353,000
                                                                                              ============      ============

  Net Loans transferred to other real estate owned                                            $    425,000      $    624,000
                                                                                              ============      ============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

BLUE RIVER BANCSHARES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The accounting policies of Blue River Bancshares, Inc. (the "Company")
     conform to accounting principles generally accepted in the United States of
     America and prevailing practices within the banking and thrift industry. A
     summary of the more significant accounting policies follows:

     BASIS OF PRESENTATION--The consolidated financial statements include the
     accounts of the Company and its wholly owned subsidiaries Shelby County
     Bank and Unified Banking Company (collectively the "Banks") and the wholly
     owned subsidiaries of Shelby County Bank. All significant intercompany
     balances and transactions have been eliminated.

     DESCRIPTION OF BUSINESS--The Banks provide financial services to south
     central Indiana through its main office in Shelbyville and three other full
     service branches in Shelbyville, Morristown, and St. Paul, Indiana and to
     the city of Lexington, and Fayette County, Kentucky through one office
     located in Lexington, Kentucky.

     The Banks are subject to competition from other financial institutions and
     other financial services providers and are regulated by certain federal
     agencies and undergo periodic examinations by those regulatory authorities.
     (See Note 11).

     On September 22, 2003 the OTS issued a letter to Shelby County Bank
     indicating their "troubled condition" status (previously imposed by the OTS
     on July 10, 2000) had been lifted, and that restrictions associated with
     the "troubled condition" status had been removed. In a separate letter
     dated September 22, 2003 the OTS informed Blue River Bancshares, Inc. that
     their "troubled condition" status (previously imposed by the OTS on
     February 7, 2001) had been lifted, and associated restrictions no longer
     applied.

     ACQUISITION - On November 17, 2003, Blue River Bancshares, Inc. acquired
     Unified Banking Company of Lexington, Kentucky, a wholly owned subsidiary
     of Unified Financial Services, Inc. The results of operations and financial
     position were included in the Company's consolidated financial statements
     beginning November 1, 2003 as if the transaction was effective November 1,
     2003.

     In connection with the acquisition, the Company paid cash of $8,200,000 to
     Unified Bank's shareholders and $344,863 in acquisition related costs. In
     addition, the seller is required to maintain a minimum of $8.5 million in
     non-interest bearing deposits at Unified Banking Company through November
     2006.

     The acquisition was accounted for under the purchase method of accounting,
     and accordingly, the net assets were recorded at their estimated fair
     values at the date of acquisition. Fair value adjustments on the assets
     acquired and liabilities assumed are being amortized over the estimated
     useful lives of the related assets and liabilities. The excess of the
     purchase price over the estimated fair value of the underlying net assets
     of $2,972,743 was allocated to goodwill and is not deductible for tax
     purposes. Additionally, a core deposit intangible of $438,016 was
     recognized and is being amortized over approximately seven years. The fair
     value of the net assets acquired was based on preliminary estimates and may
     be revised at a later date.

<PAGE>

     The following table summarizes the estimated fair values of the assets
     acquired and liabilities assumed at the date of acquisition.

<TABLE>
<S>                                                <C>
Cash and cash equivalents                          $ 1,757,709
Investments                                         22,124,689
Loans receivable, net of allowance of $633,297      57,382,493
Other assets                                         1,539,652
Core deposit intangible                                438,016
Goodwill                                             2,972,743
                                                   -----------

Total assets acquired                              $86,215,302
                                                   -----------

Deposits                                           $73,364,574
Borrowed Funds                                       3,931,924
Other Liabilities                                      373,941
                                                   -----------

Total liabilities acquired                         $77,670,439
                                                   -----------

Net assets acquired                                $ 8,544,863
                                                   ===========
</TABLE>

     The following pro forma information, including the effect of purchase
     accounting adjustments, depicts the results of operations as though the
     acquisition had taken place at the beginning of each period.

<TABLE>
<CAPTION>
                                                      2003            2002
<S>                                                <C>            <C>
Net interest income                                $5,678,599     $  4,684,845
Net income                                         $  580,208     $ (4,412,351)
Net income per share - basic and diluted           $     0.23     $      (2.65)
</TABLE>
     In management's opinion, these unaudited pro forma amounts are not
     necessarily indicative of what the actual combined results of operations
     might have been if the acquisition had been effective at the beginning of
     2002 and 2003.

     USE OF ESTIMATES--The preparation of financial statements in conformity
     with accounting principles generally accepted in the United States of
     America requires management to make estimates and assumptions that affect
     the amounts reported in the financial statements and accompanying notes.
     Actual results could differ from those estimates. Estimates most
     susceptible to change in the near term include the allowance for loan
     losses, valuation of real estate owned, and the fair value of securities.

     CASH AND CASH EQUIVALENTS--All highly liquid investments with an original
     maturity of three months or less are considered to be cash equivalents.

     SECURITIES--Securities are required to be classified as held to maturity,
     available for sale or trading. Debt securities that the Banks have the
     positive intent and ability to hold to maturity are classified as held to
     maturity. Debt and equity securities not classified as either held to
     maturity or trading securities are classified as available for sale. Only
     those securities classified as held to maturity are reported at amortized
     cost, with those available for sale reported at fair value with unrealized
     gains and losses excluded from earnings and reported as other comprehensive
     income (loss). Premiums and discounts are amortized over the contractual
     lives of the related securities using the level yield method. Gain or loss
     on sale of securities is based on the specific identification method.

<PAGE>

     REVENUE RECOGNITION--Interest on real estate, commercial and installment
     loans is accrued over the term of the loans on a level yield basis. The
     recognition of interest income is discontinued when, in management's
     judgment, the interest will not be collectible in the normal course of
     business.

     Nonrefundable loan origination fees, net of certain direct loan origination
     costs, are deferred and recognized as a yield adjustment over the life of
     the underlying loan. Any unamortized net fees on loans sold are included as
     part of the gain (loss) on sale of loans at time of sale.

     Generally, any loan greater than 90 days past due must be well secured and
     in the process of collection to continue accruing interest. In the event
     that a loan is classified as impaired in accordance with SFAS 114,
     "Accounting by Creditors for Impairment of a Loan" before it is 90 days
     past due, the Company will discontinue accruing interest unless the loan is
     well secured and in the process of collection. Cash payments received on
     nonaccrual loans generally are applied against principal, and interest
     income is only recorded once principal recovery is reasonably assured.
     Loans are not reclassified as accruing until principal and interest
     payments are brought current and future payments appear reasonably certain.

     PROVISION FOR LOAN LOSSES--A provision for estimated losses on loans and
     real estate owned is charged to operations based upon management's
     evaluation of the probable losses. Such an analysis of the allowance for
     loan losses is performed quarterly by management to assess the appropriate
     levels of allowance for loan losses. This analysis is performed to
     recognize specific reserves allocated to classified assets. Specific
     reserves are established based upon an analysis of individual borrowers
     identified in the classified loan list, establishing the probability of
     loss associated with such borrowers, including comparison of loan balances
     versus estimated liquidation values of collateral based upon independent
     information sources or appraisals performed by board-approved licensed
     appraisers. The remaining pool of loans, excluding those classified or
     delinquent is the source for the general loan loss reserve. Management
     evaluates this general reserve using loan loss statistics by various types
     of loan categories, as published periodically by the OTS, or the Banks'
     historical losses and multiplying such loss percentages to the Banks'
     distribution of portfolio balances. The calculated reserve is compared to
     the Banks' existing reserve to establish the provision necessary to bring
     the actual reserve balance in compliance with the findings of the allowance
     analysis. Such an analysis is susceptible to changes that could result in a
     material adjustment in the near term. While management endeavors to use the
     best information available in making its evaluations, future allowance
     adjustments may be necessary if economic conditions change substantially
     from the assumptions used in making the evaluations.

     FHLB STOCK--Federal law requires a member institution of the Federal Home
     Loan Bank ("FHLB") system to hold common stock of its district FHLB
     according to a predetermined formula. This investment is stated at cost,
     which represents redemption value, and may be pledged to secure FHLB
     advances.

     REAL ESTATE OWNED-- Real estate owned represents real estate acquired
     through foreclosure or deed in lieu of foreclosure which provides the Banks
     fee simple ownership. Real estate owned is recorded at the lower of cost or
     fair value less estimated costs to sell. The Banks then have the ability to
     sell the property. When property is acquired, it is recorded at the lower
     of cost or estimated fair value at the date of acquisition, with any
     resulting write-down charged against the allowance for loan losses. Any
     subsequent deterioration of the property is charged directly to real estate
     owned expense. Costs relating to the development and improvement of real
     estate owned are capitalized, whereas costs relating to holding and
     maintaining the property are charged to expense as incurred.

     PREMISES AND EQUIPMENT--Premises and equipment are carried at cost less
     accumulated depreciation. Depreciation is computed on the straight-line
     method over the estimated useful lives that range from 2 to 40 years.

<PAGE>

     INCOME TAXES--The Company and its wholly owned subsidiaries file
     consolidated income tax returns. Deferred income tax assets and liabilities
     reflect the impact of temporary differences between amounts of assets and
     liabilities for financial reporting purposes and the basis of such assets
     and liabilities as measured by tax laws and regulations.

     INCOME TAX VALUATION ALLOWANCE-- The Company establishes valuation
     allowances in accordance with the provisions of SFAS 109, "Accounting for
     Income Taxes". The Company continually reviews the adequacy of the
     valuation allowance and will recognize the benefits only as reassessment
     indicates that it is more likely than not that the benefits will be
     realized.

     EARNINGS PER COMMON SHARE--Income (loss) per share of common stock is
     based on the weighted average number of basic shares and dilutive shares
     outstanding during the year.

     The following is a reconciliation of the weighted average common shares for
     the basic and diluted income (loss) per share computations:

<TABLE>
<CAPTION>
                                                            2003         2002
<S>                                                       <C>          <C>
Basic earnings per share:
  Weighted average common shares                          2,470,799    1,666,122
                                                          =========    =========

Diluted earnings per share:
  Weighted average common shares                          2,470,799    1,666,122

Diluted effect of stock options                               2,087            -
                                                          ---------    ---------
  Weighted average common and incremental shares          2,472,886    1,666,122
                                                          =========    =========

</TABLE>

     During the year ended December 31, 2002, there were no incremental shares
     relating to the dilutive effect of stock options.

     COMPREHENSIVE INCOME--Reclassification adjustments have been determined for
     all components of other comprehensive income (loss) reported in the
     consolidated statements of changes in shareholders' equity. Amounts
     presented within those statements for the years ended December 31, 2003 and
     December 31, 2002 are as follows:

<TABLE>
<CAPTION>
                                                                      2003          2002
<S>                                                                <C>            <C>
Other comprehensive income:
  Net unrealized holding gains (losses)                            $(452,447)     $ 643,225
  Less reclassification adjustment for (gains) losses realized      (229,312)        (4,200)
                                                                   ---------      ---------

Other comprehensive income (loss) before income tax                 (681,759)       639,025
Income tax benefit (expense) related to items of other
  comprehensive income                                               271,061       (254,070)
                                                                   ---------      ---------

Other comprehensive income (loss), net of tax                      $(410,698)     $ 384,955
                                                                   =========      =========
</TABLE>

     SEGMENT INFORMATION--The Company has disclosed all required information
     relating to its one operating segment, community banking.

     STOCK BASED COMPENSATION--At December 31, 2003, the Company had stock-based
     employee compensation plans, which are described more fully in Note 14. The
     Company accounts for those plans under the recognition and measurement
     principles of APB Opinion No. 25, "Accounting for Stock Issued to
     Employees," and related interpretations. No stock-based employee
     compensation

<PAGE>
     cost is reflected in net income (loss), as all options granted under those
     plans had an exercise price equal to the market value of the underlying
     common stock on the date of grant. The following table illustrates the
     effect on net income (loss) and income (loss) per share if the company had
     applied the fair value recognition provisions of SFAS 123, "Accounting for
     Stock-Based Compensation," to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                   2003             2002
<S>                                                            <C>              <C>
Net loss:
  Net income (loss) as reported                                $      98,941    $  (4,506,228)
    Deduct total stock based employee compensation
      expense determined under fair value based method for
      all awards, net of related tax effects                         (79,450)         (76,775)
                                                               -------------    -------------
  Pro forma, net income (loss)                                 $     178,391    $  (4,583,003)
                                                               =============    =============
Net earnings (loss) per share:
  Basic earnings (loss) per share                              $        0.04    $       (2.71)
  Dilutive earnings (loss) per share                           $        0.04    $       (2.71)
Pro forma earnings (loss) per share:
  Basic earnings (loss) per share                              $        0.01    $       (2.75)
  Dilutive earnings (loss) per share                           $        0.01    $       (2.75)
</TABLE>

     GOODWILL AND OTHER INTANGIBLE ASSETS--Goodwill and Other Intangible Assets
     under SFAS 142, ceases when the new standard is adopted and requires an
     initial goodwill impairment assessment in the year of adoption and at least
     annual impairment tests thereafter. SFAS 142 is effective for the Company
     January 1, 2002. Annual goodwill amortization ceased on January 1, 2002.

     Management completed the assessment and evaluation process of determining
     the impairment of goodwill in accordance with SFAS 142 during the second
     quarter of 2002. The measurement of impairment was considered necessary as
     the Company had several consecutive quarters of losses.

     Based on the pattern of losses and a significant reduction in the market
     capitalization of the Company, an independent third party valuation
     specialist performed a valuation analysis of the Company. Management
     completed its initial assessment and determined that the goodwill was
     impaired in accordance with SFAS 142 during the second quarter of 2002. The
     measurement of the impairment resulted in a reduction of goodwill and a
     cumulative change in accounting principle of $2,429,081 in 2002.

     On November 17, 2003, Blue River Bancshares, Inc. acquired Unified Banking
     Company of Lexington, Kentucky, a wholly owned subsidiary of Unified
     Financial Services, Inc. The results of operations and financial position
     were included in the Company's consolidated financial statements beginning
     November 1, 2003 as if the transaction was effective November 1, 2003.

     The following table shows changes in carrying amounts of goodwill and core
     deposit intangibles for the year ended December 31, 2003.

<Table>
<Caption>
                                               Core Deposit
                                                Intangible        Goodwill
                                               ------------     -------------
<S>                                            <C>              <C>
Balance as of January 1, 2003
Acquisition of Unified Banking Company            $438,016         $2,972,743
Less Accumulated Amortization                      (10,950)                 -
                                               -----------      -------------
Balance as of December 31, 2003                   $427,066         $2,972,743
                                               ===========      =============

Amount recognized in 2003                         $ 10,950                  -
</Table>


Projected annual intangible amortization for the years 2004 through 2010 is
included in the table as follows:

<Table>
<S>                                                  <C>
                                  2004                $ 65,702
                                  2005                  65,702
                                  2006                  65,702
                                  2007                  65,702
                                  2008                  65,702
                                  2009                  65,702
                                  2010                  32,854
                                                      --------
                                  Total               $427,066
                                                      ========
</Table>

     NEW ACCOUNTING PRONOUNCEMENTS--During June 2002, the Financial Accounting
     Standards Board issued SFAS 146, "Accounting for Costs Associated with Exit
     or Disposal Activities," which nullifies Emerging Issues Task Force Issue
     No. 94-3, "Liability Recognition for Certain Employee Termination Benefits
     and Other Costs to Exit an Activity (including Certain Costs Incurred in a
     Restructuring)." SFAS 146 requires that a liability for a cost associated
     with an exit or disposal activity be recognized when the liability is
     incurred. SFAS 146 is effective for exit and disposal activities that are
     initiated after December 31, 2002. The adoption of SFAS 146 did not have a
     material effect on the Company's financial statements.

     SFAS 147, "Acquisitions of Certain Financial Institutions," was issued in
     October 2002 and is effective for acquisitions for which the date of
     acquisition is on or after October 1, 2002. SFAS 147 addresses the
     financial accounting and reporting for the acquisition of all or part of a
     financial institution, except for a transaction between two or more mutual
     enterprises. This statement also provides guidance on the accounting for
     the impairment or disposal of acquired long-term customer-relationship
     intangible assets (such as depositor- and borrower-relationship intangible
     assets and
<PAGE>

     credit cardholder intangible assets), including those acquired in
     transactions between two or more mutual enterprises. Management has
     implemented this new standard on the consolidated financial statements in
     accounting for its acquisition of Unified Banking Company.

     SFAS 148, "Accounting for Stock-Based Compensation--Transition and
     Disclosure, an amendment of FASB Statement No. 123," was issued in December
     2002 and is effective for fiscal years ending after December 15, 2002. SFAS
     148 provides alternative methods of transition for a voluntary change to
     the fair value based method of accounting for stock-based employee
     compensation. In addition, SFAS 148 amends the disclosure requirements of
     Statement 123 to require prominent disclosures in both annual and interim
     financial statements about the method of accounting for stock-based
     employee compensation and the effect of the method on reported results.
     Management has included the required disclosures in its consolidated
     financial statements.

     SFAS 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
     Activities" was issued in April of 2003. SFAS 149 amends and clarifies the
     accounting guidance on (1) derivative instruments (including certain
     derivative instruments embedded in other contracts and (2) hedging
     activities that fall within the scope of FASB Statement No. 133 (SFAS 133),
     "Accounting for Derivative Instruments and Hedging Activities". SFAS 149
     amends 133 to reflect decisions that were made (1) as part of the process
     undertaken by the Derivatives Implementation Group (DIG), which
     necessitated amending SFAS 133; (2) in connection with other projects
     dealing with financial instruments; and (3) regarding implementation issues
     related to the application of the definition of a derivative. SFAS 149 also
     amends certain other existing pronouncements, which will result in more
     consistent reporting of contracts that are derivatives in their entirety or
     that contain embedded derivatives that warrant separate accounting. SFAS
     149 is effective (1) for contracts entered into or modified after June 30,
     2003, with certain exceptions and (2) for hedging relationships designated
     after June 30, 2002. The guidance is to be applied prospectively.
     Management has determined that the effect of this new standard on the
     consolidated financial statements is not material.

     SFAS 150, "Accounting for Certain Financial Instruments with
     Characteristics of both Liabilities and Equity," was issued in May 2003 and
     is effective for financial instruments entered into or modified after May
     31, 2003, and otherwise is effective at the beginning of the first interim
     period beginning after June 15, 2003. SFAS 150 establishes standards for
     how an issuer classifies and measures certain financial instruments with
     characteristics of both liabilities and equity. It requires that an issuer
     classify a financial instrument that is within its scope as a liability (or
     an asset in some circumstances). The requirements of SFAS 150 apply to
     issuers' classification and measurement of freestanding financial
     instruments, including those that comprise more than one option or forward
     contract. SFAS 150 does not apply to features that are embedded in a
     financial instrument that is not a derivative in its entirety. Management
     has determined that the effect of this new standard on its consolidated
     financial statements is not material.

     In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
     Accounting and Disclosure Requirements for Guarantees, Including Indirect
     Guarantees of Indebtedness of Others". This Interpretation elaborates on
     the disclosures to be made by a guarantor in its interim and annual
     financial statements about its obligations under certain guarantees that it
     has issued. It also clarifies that a guarantor is required to recognize, at
     the inception of a guarantee a liability for the fair value of the
     obligation undertaken in issuing the guarantee. The initial recognition and
     initial measurement provisions of this Interpretation are applicable on a
     prospective basis to guarantees issued or modified after December 31, 2002.
     The disclosure requirements in this Interpretation are effective for
     financial statements of interim or annual periods ending after December 15,
     2002. Loan commitments and commercial letters of credit are excluded from
     the scope of this Interpretation. Management has determined that the
     statement will not have a material effect on the Company's consolidated
     financial statements.

     In January 2003, the FASB issued FIN No. 46, Consolidation of Variable
     Interest Entities, which was replaced by FIN No. 46 (Revised December
     2003), Consolidation of Variable Interest Entities (FIN No. 46(R)). FIN No.
     46 requires consolidation by business enterprises of variable interest

<PAGE>

     entities that meet certain requirements. FIN No. 46(R) changes the
     effective date of FIN No. 46 for certain entities. Public companies shall
     apply either FIN No. 46 or FIN No. 46(R) to their interests in special
     purpose entities (SPEs) as of the first interim or annual period ending
     after December 15, 2003. The decision to apply FIN No. 46 or FIN No. 46(R)
     may be made on an SPE by SPE basis. The Company's adoption of FIN No. 46
     and FIN No. 46(R) did not have a significant impact on its consolidated
     financial statements.

     RECLASSIFICATION--Certain amounts in the 2002 financial statements have
     been reclassified to conform to the 2003 presentation.

2.   SECURITIES

     Securities at December 31, 2003 are as follows:

<TABLE>
<CAPTION>
                                                       AMORTIZED           GROSS UNREALIZED               FAIR
                                                         COST            GAINS          LOSSES            VALUE
<S>                                                   <C>             <C>             <C>              <C>
Securities available for sale:
  Mortgage-backed securities                          $30,361,325     $   283,900     $   (29,476)     $30,615,749
  Corporate bonds                                       1,225,224          22,248         (21,997)       1,225,475
  Obligations of State and Political Subdivisions       1,104,336          11,026         (10,045)       1,105,317
  U.S. Treasury and agency securities                  16,010,704          88,445        (219,779)      15,879,370
                                                      -----------     -----------     -----------      -----------

Total available for sale                              $48,701,589     $   405,619     $  (281,297)     $48,825,911
                                                      ===========     ===========     ===========      ===========

Securities held to maturity:
  Mortgage-backed securities                          $    34,663     $       102     $         -      $    34,765
  Municipal bonds                                         100,000               -               -          100,000
                                                      -----------     -----------     -----------      -----------

Total held to maturity                                $   134,663     $       102     $         -      $   134,765
                                                      ===========     ===========     ===========      ===========
</TABLE>

<PAGE>

     Securities at December 31, 2002 are as follows:

<TABLE>
<CAPTION>
                                                       AMORTIZED           GROSS UNREALIZED               FAIR
                                                         COST            GAINS          LOSSES            VALUE
<S>                                                   <C>             <C>             <C>              <C>
Securities available for sale:
  Mortgage-backed securities                          $17,849,169     $   573,742     $    (1,600)     $18,421,311
  Corporate bonds                                         211,460           7,412          (9,000)         209,872
  Obligations of State and Political Subdivisions       1,986,077          62,389               -        2,048,466
  U.S. Treasury and agency securities                   5,541,845         185,866               -        5,727,711
                                                      -----------     -----------     -----------      -----------

Total available for sale                              $25,588,551     $   829,409     $   (10,600)     $26,407,360
                                                      ===========     ===========     ===========      ===========

Securities held to maturity:
  Mortgage-backed securities                          $    55,721     $       764     $      (771)     $    55,714
  Municipal bonds                                         203,000           2,753            (462)         205,291
                                                      -----------     -----------     -----------      -----------

Total held to maturity                                $   258,721     $     3,517     $    (1,233)     $   261,005
                                                      ===========     ===========     ===========      ===========
</TABLE>

     The carrying value of mortgage-backed securities, corporate bonds, and U.S.
     treasury and agencies at December 31, 2003 are shown below by their
     contractual maturity date. Actual maturities will differ because borrowers
     may have the right to call or prepay obligations with or without call or
     prepayment penalties.

<TABLE>
<CAPTION>
                                                         AVAILABLE FOR SALE              HELD TO MATURITY
                                                     AMORTIZED         FAIR          AMORTIZED         FAIR
                                                       COST            VALUE           COST            VALUE
<S>                                                 <C>             <C>             <C>             <C>
Mortgage-backed securities:
  Due after one year through five years             $   395,814     $   402,515     $     2,485     $     2,677
  Due after five years through ten years             17,877,977      18,042,718           3,466           3,807
  Due after ten years                                12,087,534      12,170,516          28,712          28,281
Corporate bonds:
  Due within one year                                   100,000         103,000               -               -
  Due after five years through ten years              1,125,224       1,122,475               -               -
Obligation of State and Political Subdivisions:
  Due within one year                                   250,906         252,333         100,000         100,000
  Due after one year through five years                 398,430         408,029               -               -
  Due after five years through ten years                455,000         444,955               -               -
U.S. Treasury and agency securities:                                                          -               -
  Due within one year                                 1,020,972       1,042,500               -               -
  Due after one year through five years               1,991,676       2,040,640               -               -
  Due after five years through ten years             11,998,056      11,792,170               -               -
  Due after ten years                                 1,000,000       1,004,060               -               -
                                                    -----------     -----------     -----------     -----------

Total                                               $48,701,589     $48,825,911     $   134,663     $   134,765
                                                    ===========     ===========     ===========     ===========
</TABLE>

     Securities totaling approximately $38.0 million are pledged to secure
     Federal Home Loan Bank Advances (see Note 6).

     The following tables provide the gross unrealized losses and fair value,
     aggregated by investment category and length of time the individual
     securities have been in a continuous unrealized loss position, at December
     31, 2003 (dollars in thousands):
<PAGE>

<TABLE>
<CAPTION>
                                               LESS THAN 12 MONTHS         12 MONTHS OR MORE             TOTAL
                                            -------------------------      ------------------    -----------------------
                                            FAIR VALUE     UNREALIZED      FAIR    UNREALIZED    FAIR VALUE   UNREALIZED
                                                             (LOSS)                  (LOSS)                     (LOSS)
<S>                                         <C>            <C>             <C>     <C>           <C>          <C>
Available for Sale:
U.S. Government and agencies obligations      $ 11,777       $ (220)                               $ 11,777      $  (220)
Agency mortgage-backed securities                8,127          (26)       $ 91       $  (3)          8,218          (29)
Other bonds, note and debentures                   811          (32)          -           -             811          (32)
                                              --------       ------        ----       -----        --------      -------
Total                                           20,715         (278)         91          (3)         20,806         (281)
                                              ========       ======        ====       =====        ========      =======
</TABLE>

As of December 31, 2003, there were a total of $20,806,000 securities in an
unrealized loss position, 96% of which were comprised of securities issued by
U.S. Government agencies, U.S. Government sponsored agencies and agency
mortgage-backed securities. The Company believes that the price movements in
these securities are dependent upon the fluctuations in market interest rates
given the negligible inherent credit risk of these securities. At December 31,
2003, the percentage of unrealized losses in the available-for-sale security
portfolio represented by bonds was 4%.

3.       LOANS RECEIVABLE

         Loans receivable at December 31 by major categories are as follows:

<TABLE>
<CAPTION>
                                               2003                2002
<S>                                        <C>                 <C>
Real estate mortgage loan:
 One-to-four family                        $  40,826,997       $ 27,503,516
 Non Residential                              29,624,474         16,658,767
 Home equity loans                            20,646,169          3,187,104
Consumer loans                                 9,122,657          6,757,173
Commercial loans                              28,445,997          4,206,223
Less allowance for loan losses                (1,681,005)        (1,717,072)
                                           -------------       ------------
                                           $ 126,985,289       $ 56,595,711
                                           =============       ============
</TABLE>

Activity in the allowance for loan losses for the years ended December 31 is as
follows:

<TABLE>
<CAPTION>
                                                2003          2002
<S>                                          <C>           <C>
Beginning balance                            $ 1,717,072   $ 1,891,366
Acquisition of Unified Banking Company           633,297
Provision for loan losses                        240,000       261,187
Charge-offs                                   (1,015,769)     (816,280)
Recoveries                                       106,405       380,799
                                             -----------   -----------

Ending balance                               $ 1,681,005   $ 1,717,072
                                             ===========   ===========
</TABLE>

As of December 31, 2003 and 2002, loans which were impaired in accordance with
SFAS 114 and SFAS 118 totaled approximately $901,000 and $2,056,000,
respectively. Specific reserves for credit losses allocated to these loans
totaled approximately $892,000 and $1,559,000 as of December 31, 2003 and 2002,
respectively. The Banks' policy for recognizing income on impaired loans is to
accrue interest until a loan is classified as impaired. For loans that are
determined to be impaired, interest accrued in excess of 90 days past the due
date is charged against current earnings. No interest is accrued after a loan is
classified as impaired. All payments received for loans which are classified as
impaired are utilized to reduce the principal balance outstanding.

<PAGE>

The average recorded investment in total impaired loans for the years ended
December 31, 2003 and 2002 amounted to $1,036,000 and $2,377,000, respectively.
Interest income that would have been recognized had such loans been performing
in accordance with their original terms would have been $50,000 and $138,000,
respectively.

4.       PREMISES AND EQUIPMENT

         Premises and equipment at December 31 consists of the following:

<TABLE>
<CAPTION>
                                       2003            2002
<S>                                <C>              <C>
Land and improvements              $    288,009     $   288,009
Buildings and improvements            1,664,342       1,814,666
Furniture and equipment               1,707,157         950,270
                                   ------------     -----------
                                      3,659,508       3,052,945
Less accumulated depreciation        (1,371,486)     (1,271,170)
                                   ------------     -----------
                                   $  2,288,022     $ 1,781,775
                                   ============     ===========
</TABLE>

During the second quarter of 2002, the Company completed the transfer of the
Rampart Bank Branch facility from the holding company of Shelby County Bank. As
required by the Office of Thrift and Supervision, this transfer was completed at
fair value. Management concluded that the Rampart Bank Branch was impaired. The
measurement of impairment resulted in a write-down of property of approximately
$100,000 and a corresponding charge included in other expense.

5.       DEPOSITS

         Deposits at December 31 are as follows:

<TABLE>
<CAPTION>
                                                    2003                         2002
                                         --------------------------     ------------------------
                                                           WEIGHTED                     WEIGHTED
                                                           AVERAGE                      AVERAGE
                                             AMOUNT          RATE          AMOUNT         RATE
<S>                                      <C>               <C>          <C>             <C>
Passbook Savings Account                 $    6,865,440        0.78%    $   6,916,341       1.24%
Non-interest Bearing Checking                23,384,534           -         5,531,911          -
Interest-Bearing Demand Deposit
  Accounts                                   17,072,590        0.60%       12,759,793       1.42%
Money Market Accounts                        20,622,519        1.50%       14,112,278       1.82%
                                         --------------    --------     -------------   --------

     Total Transaction Accounts              67,945,083        0.69%       39,320,323       1.33%
                                         --------------    --------     -------------   --------
Certificate Accounts by Original Term:
 Under 12 Months                             36,664,890        2.61%        4,276,125       1.96%
 12 to 23 Months                             15,086,844        3.28%        6,010,252       2.58%
 24 to 35 Months                             21,600,626        4.73%        9,500,791       5.02%
 36 to 59 Months                              5,484,451        4.56%        3,530,965       5.77%
 Over 60 Months                              13,903,996        5.25%       11,094,298       5.95%
                                         --------------    --------     -------------   --------
                                             92,740,807        3.73%       34,412,431       4.59%
                                         --------------    --------     -------------   --------

                                         $  160,685,890        2.85%    $  73,732,754       2.85%
                                         ==============    ========     =============   ========
</TABLE>

<PAGE>

A summary of certificate accounts by scheduled maturities at December 31, 2003
is as follows:

<TABLE>
<CAPTION>
                     2004          2005           2006         2007           2008          THEREAFTER       TOTAL
<S>              <C>           <C>            <C>           <C>           <C>              <C>            <C>
Under 3%         $ 33,100,628  $ 11,549,010   $  1,005,975  $   218,293   $      1,324     $    135,933   $ 46,011,163
3% - 3.99%          2,554,161     5,177,043        729,286    1,306,427      3,126,407                -     12,893,324
4% - 4.99%          6,124,015       449,920      1,707,039    2,160,631      2,137,969                -     12,579,574
5% - 5.99%            633,825       252,554        801,202        3,470              -                -      1,691,051
6% - 6.99%          1,132,740     1,190,567      3,703,292      104,638              -                -      6,131,237
Over 7%             1,206,864     6,315,549      5,855,128                                       56,917     13,434,458
                 ------------  ------------   ------------  -----------   ------------     ------------   ------------

                 $ 44,752,233  $ 24,934,643   $ 13,801,922  $ 3,793,459   $  5,265,700     $    192,850   $ 92,740,807
                 ============  ============   ============  ===========   ============     ============   ============
</TABLE>

Certificates of deposit of $100,000 and over at December 31, 2003 are as
follows:

<TABLE>
<S>                                                     <C>
Three Months or Less                                    $ 3,367,694
Greater than Three Months Through Six Months                202,605
Greater than Six Months Through Twelve Months             8,460,405
Over Twelve Months                                       14,357,167
                                                        -----------

Total                                                   $26,387,871
                                                        ===========
</TABLE>

A summary of interest expense for the years ended December 31, 2003 and 2002 are
as follows:

<TABLE>
<CAPTION>
                                                           2003             2002
<S>                                                     <C>              <C>
Account type:
 Passbook Savings Accounts                              $    69,943      $  101,061
 Interest-Bearing Demand Deposit Accounts                   119,282         194,520
 Money Market Accounts                                      217,931         318,922
 Certificates                                             1,662,830       3,240,257
                                                        -----------      ----------

                                                        $ 2,069,986      $3,854,760
                                                        ===========      ==========
</TABLE>

6.       FEDERAL HOME LOAN BANK ADVANCES

Federal Home Loan Bank advances at December 31 are as follows:

<TABLE>
<CAPTION>
                                            2003                          2002
                                 -----------------------     -------------------------
                                                WEIGHTED                      WEIGHTED
FISCAL                                          AVERAGE                       AVERAGE
YEAR                                            INTEREST                      INTEREST
MATURITY                           AMOUNT        RATES           AMOUNT        RATES
<S>                              <C>            <C>          <C>              <C>
2004                             $ 4,000,000        2.39%    $   2,000,000        2.46%
2005                               1,000,000        3.15%        1,000,000        3.15%
2006                               3,000,000        2.64%        3,000,000        2.64%
2007                               5,000,000        3.53%        5,000,000        3.53%
2012                               2,161,585        4.36%               --         N/A
2017                               1,550,592        4.71%               --         N/A
                                 -----------                 -------------

                                 $16,712,177        3.41%    $  11,000,000        3.06%
                                 ===========                 =============
</TABLE>

<PAGE>
 The advances from the Federal Home Loan Bank ("FHLB") are collateralized by
mortgage loans and investment securities pledged by the Bank. The total mortgage
loans and investment securities pledged at December 31, 2003 and 2002 were
$38,000,000 and $14,200,000 respectively. The FHLB holds original notes and
mortgages of the pledged loan products and provides safekeeping services related
to the pledged investment securities. All FHLB advances are due at maturity and
are neither callable nor convertible.

7.       OTHER BORROWINGS

The Company has a term note with Union Federal Bank in the amount of $4,000,000
at December 31, 2003, which matures on November 19, 2013. The note requires
interest-only payments through November 19, 2005. The note accrues interest for
the full term of the loan at a variable rate based on prime plus a margin. The
interest rate was 5.00% at December 31, 2003. Beginning on November 19, 2005,
and continuing on the 19th day of each calender month thereafter until the term
note is paid in full, the Company will make a payment of principal and interest
invoiced by the lender each month that represents the level monthly payment
amount to pay interest at the interest rate in effect during the prior month and
amortize the remaining outstanding principal amount over the period ending on
November 19, 2013. The Company used the funds to acquire Unified Banking
Company. The note is secured by the capital stock of the Banks. Under the terms
of the agreement, the Company is bound by certain restrictive debt covenants
relating to earnings, net worth and various financial ratios. As of December 31,
2003, the Company was in compliance with the debt covenants. The Company also
has on deposit $500,000 at the lending bank, which will be used for principal
and interest payments beginning in November 2005.

8.       STOCK OPTION PLANS

The Company has adopted separate stock option plans for Directors of the Company
and the subsidiaries (the 1997 Directors' Stock Option Plan and the 2000
Directors' Stock Option Plan) and the officers and key employees of the Company
and the subsidiaries (the 1997 Key Employee Stock Option Plan, 2000 Key Employee
Stock Option Plan and the 2002 Key Employee Stock Option Plan). The Company has
reserved a total of 62,400 shares pursuant to the Directors' Stock Option Plans
and 103,000 shares pursuant to the Key Employee Stock Option Plans. The option
exercise price per share for the 1997 plan is the greater of $12.00 per share
or the fair value of a share on the date of grant, for the 2000 plans is $8.27
per share or the fair value of a share on the date of the grant, and $4.98 per
share or the fair value of a share on the date of the grant for options granted
under the 2002 plan. The stock options are exercisable at any time within the
maximum term of five years for incentive stock options and ten years for
non-qualified stock options of the employee stock option plan and fifteen years
under the Directors' Stock Option Plan from the grant date. The options are
nontransferable and are forfeited upon termination of employment or as a
director.

The following is an analysis of the activity for the years ended December 31,
2003 and 2002 and the stock options outstanding at the end of the respective
years:

<TABLE>
<CAPTION>
                                                         WEIGHTED
                                                         AVERAGE
OPTIONS                                        SHARES     RATES
<S>                                            <C>       <C>
Outstanding at January 1, 2002                  83,350   $  10.96
Granted                                         69,000   $   4.98
Forfeited or expired                            (6,000)  $  12.00
                                               -------
Outstanding at December 31, 2002               146,350   $   8.26

Granted                                         45,000   $   7.41
                                               -------

Outstanding at December 31, 2003               191,350   $   7.94
                                               =======
</TABLE>

<TABLE>
<CAPTION>
                                                          WEIGHTED AVERAGE
                          NUMBER OF SHARES                 EXERCISE PRICE              WEIGHTED-
                   ------------------------------    ----------------------------       AVERAGE
EXERCISE                                                                            REMAINING LIFE
 PRICE               OUTSTANDING      EXERCISABLE    OUTSTANDING      EXERCISABLE      (IN YEARS)
<S>                <C>                <C>            <C>              <C>           <C>
$   4.75                     37,500         7,500    $      4.75                             10.0
    5.25                     31,500         6,300           5.25                              9.0
    5.70                     15,000                         5.70                              9.0
    8.27                     52,750        13,650           8.27      $      8.27             8.0
   12.00                     54,600        43,680          12.00            12.00             8.0
                   ----------------   -----------    -----------      -----------   --------------

Total                       191,350        71,130    $      7.94      $      8.96             8.90
                   ================   ===========    ===========      ===========   ==============
</TABLE>
<PAGE>


The weighted average fair value of options granted was $2.52 and $2.84 in 2003
and 2002, respectively. The fair value of the option grants is estimated on the
date of grant using an option pricing model with the following assumptions:
risk-free interest rates ranging from 2.95% to 5.81%, expected volatility
ranging from 30% to 34% and an expected life of 5 years.

9.       INCOME TAXES

An analysis of the income tax provision for the years ended December 31, 2003
and 2002 is as follows:

<TABLE>
<CAPTION>
                            2003           2002
<S>                        <C>          <C>
Deferred                  $ 10,000      $   (910,607)
Valuation allowance        (10,000)          760,000
                          --------      ------------

                          $      0      $   (150,607)
                          ========      ============
</TABLE>

A reconciliation between the effective tax rate and the statutory tax rate for
the years ended December 31, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                             2003       2002
<S>                                                         <C>        <C>
U.S. federal statutory rate                                   34.0%     (34.0)%
State income tax, net of federal income tax benefit            5.1%      (5.1)%
Tax exempt interest                                           17.7%      (2.2)%
Increase in valuation allowance                              (53.4)%     34.1%
Other, net                                                    (3.4)%      0.4%
                                                            ------     ------

Effective Tax Rate                                             0.0%      (6.8)%
                                                            ======     ======
</TABLE>

<PAGE>

The significant components of the Company's net deferred tax asset as of
December 31, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                                     2003           2002
<S>                                                               <C>           <C>
Accrued expenses not currently deductible                         $   15,298    $      35,664
Allowance for loan losses                                          1,574,396        1,453,167
Net operating loss carryforwards                                   1,805,856        1,609,132
Investment securities available for sale                             (43,732)        (331,123)
Other, net                                                          (173,034)        (107,494)
Fair market value of net assets acquired allocated for
financial reporting purposes to deposits                             521,446                -
Fair market value of net assets acquired allocated for
financial reporting purposes to loans                               (200,620)               -
Valuation allowance                                                 (750,000)        (760,000)
                                                                  ----------    -------------

Net deferred tax asset                                            $2,749,610    $   1,899,346
                                                                  ==========    =============
</TABLE>

During 2002 the Company recorded a valuation allowance against a portion of the
deferred taxes because management believes it is more likely than not that a
portion of the benefit associated with this deferred tax asset will not be
realized. Accordingly, no income tax expense or benefit was recorded for the
year ended December 31, 2003. However, before 2002, no valuation allowance was
considered necessary as management believed it was more likely than not that
benefits associated with the deferred assets would be realized. The Company has
generated federal and state operating losses carryforwards totaling $4.5
million. The net operating loss carryforwards, if unused, will begin to expire
in 2018 through 2023.

Under the Internal Revenue Code, prior to 1997, the Company was allowed a
special bad debt deduction for additions to tax bad debt reserves established
for the purpose of absorbing losses. Subject to certain limitations, the
allowable bad debt deduction was computed based on one of two alternative
methods: (1) a percent of taxable income before such deduction or (2) loss
experience method. The Company generally computed its annual addition to its tax
bad debt reserves using the percentage of taxable income prior to 1997.

Beginning in fiscal 1997, the Company is no longer allowed a special bad debt
deduction using the percentage of taxable income method and is required to
recapture its excess tax bad debt reserve over its 1987 base year reserve over a
six-year period. This amount has been provided for the Company's net deferred
tax liability.

Approximately $1.1 million, for which no provision for Federal income taxes has
been made, represents allocations of earnings to tax bad debt deductions prior
to 1987 for federal income tax purposes. Reduction of amounts so allocated for
purposes other than tax bad debt losses will create taxable income, which will
be subject to the then current corporate income tax rate. It is not contemplated
that amounts allocated to bad debt deductions will be used in any manner to
create taxable income.

10.      SHAREHOLDERS' EQUITY

On June 7, 2002, the Company entered into a stock purchase agreement with a
group of investors for the sale of common stock. On September 17, 2002, the
Company sold 309,889 shares of common stock at a price of $4.73 per share which
raised approximately $1,401,000 in the proceeds net of $65,000 of acquisition
costs. As part of the stock purchase agreement, the Company in a subsequent
closing during February 2003 issued 546,348 shares to individuals of high net
worth identified by the initial investors at a price of $4.73 per share which
raised approximately $2,483,000 in proceeds net of $101,000 in offering costs.
Pursuant to the stock

<PAGE>

purchase agreement with the investors, Russell Breeden, III and Wayne C. Ramsey
were elected to the Board of Directors.

On October 2, 2003, the Company completed a rights offering of 1,000,000 shares
of its common stock at $4.50 per share. The Company raised $4,184,157 in
proceeds net of $315,843 in offering costs.

11.      RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company has loan, deposit and other
transactions with executive officers, directors and principal shareholders, and
with organizations and individuals with which they are financially or otherwise
closely associated. As defined, total loans to executive officers, directors and
principal shareholders were approximately $3,342,000 and $680,000 at December
31, 2003 and 2002, respectively.

A law firm in which a director is a member received payments of $1,217 and
$15,322 for 2003 and 2002, respectively. The firm provides legal services
primarily in loan-related matters.

A real estate appraisal company, owned by a director, received payments of
$32,500 and $18,475 for 2003 and 2002, respectively.

A company, owned by a director, which provides title and abstract work for
Shelby County Bank received payments of $5,167 and $7,404 for 2003 and 2002,
respectively.

An oil company, owned by a director was paid $103 and $1,294 for 2003 and 2002,
respectively, for petroleum products and auto maintenance related to
company-owned vehicles used for courier services between the banking offices.

A travel company, co-owned by a director, received payments of $2,391 and $3,514
for 2003 and 2002, respectively for travel services related to meetings and
conferences attended by executive officers of the Company.

Additionally, Russell Breeden III received $35,000 from the Company during the
fourth quarter of 2003 for his role in initiating the discussions with Unified
Financial Services, Inc., and negotiating, analyzing and finalizing the
acquisition of Unified Banking Company.

12.      REGULATORY CAPITAL REQUIREMENTS

The Banks are subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory -- and possible additional discretionary -- actions
by regulators that, if undertaken, could have a direct material effect on the
Banks' financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Banks must meet specific
capital guidelines that involve quantitative measures of the Banks' assets,
liabilities and certain off-balance sheet items as calculated under regulatory
accounting practices.

The Banks' capital amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings, and other
factors.

Quantitative measures that have been established by regulation to ensure capital
adequacy require the Banks to maintain minimum capital amounts and ratios (set
forth in the table below). The Banks' primary regulatory agency, the OTS,
requires that the Banks maintain minimum ratios of tangible capital (as defined
in the regulations) of 1.5%, core capital (as defined) of 4%, or 3% for banks
with a composite rating of "1" and total risk-based capital (as defined) of 8%.
The Banks are also subject to prompt corrective action capital requirement
regulations set forth by the Federal

<PAGE>

Deposit Insurance Corporation ("FDIC"). The FDIC requires the Banks to maintain
minimum capital amounts and ratios of weighted assets (as defined), and of Tier
1 capital (as defined) to average assets (as defined). As of December 31, 2003,
management believes that the Banks meet all capital adequacy requirements to
which they are subject.

In November of 2003, the Company completed its acquisition of Unified Banking
Company. Unified Banking Company has continued to operate as a separate
federally-chartered savings association.

As of December 31, 2003 and 2002, the most recent notifications from the OTS
categorized the Banks as "well-capitalized" under the regulatory framework for
prompt corrective action. To be categorized as "well capitalized", the Banks
must maintain minimum total risk based, Tier 1 risk based, and Tier 1 leverage
ratios for as set forth in the tables below.

Capital ratios for Shelby County Bank are as follows:

<TABLE>
<CAPTION>
                                                                          AS OF DECEMBER 31, 2003
                                                                  ---------------------------------------
                                                                     ACTUAL CAPITAL      REQUIRED CAPITAL
                                                                  -------------------   -----------------
                                                                    AMOUNT      RATIO     AMOUNT    RATIO
<S>                                                               <C>           <C>     <C>         <C>
OTS capital adequacy:
   Tangible capital                                               $6,934,000      6.3%  $1,648,000    1.5%
   Core capital                                                    6,934,000      6.3%   3,296,000    3.0%
   Total risk-based capital                                        7,846,000     10.8%   5,828,000    8.0%
FDICIA regulations to be classified "well capitalized":
   Tier 1 leverage capital                                         6,934,000      6.3%   5,493,000    5.0%
   Tier 1 risk based capital                                       6,934,000      9.5%   4,371,000    6.0%
   Total risk-based capital                                        7,846,000     10.8%   7,285,000   10.0%
</TABLE>

<TABLE>
<CAPTION>
                                                                       AS OF DECEMBER 31, 2002
                                                               ----------------------------------------
                                                                 ACTUAL CAPITAL       REQUIRED CAPITAL
                                                               ------------------    ------------------
                                                                 AMOUNT     RATIO      AMOUNT     RATIO
<S>                                                            <C>          <C>      <C>          <C>
OTS capital adequacy:
   Tangible capital                                            $ 6,670,000    7.3%   $ 1,378,000    1.5%
   Core capital                                                  6,670,000    7.3%     2,755,000    3.0%
   Total risk-based capital                                      7,410,000   12.7%     4,658,000    8.0%
FDICIA regulations to be classified "well capitalized":
   Tier 1 leverage capital                                       6,670,000    7.3%     4,592,000    5.0%
   Tier 1 risk based capital                                     6,670,000   11.5%     3,493,000    6.0%
   Total risk-based capital                                      7,410,000   12.7%     5,822,000   10.0%
</TABLE>

Capital ratios for Unified Banking Company for December 31, 2003 are set forth
in the table below:

<PAGE>

<TABLE>
<CAPTION>
                                                                      UNIFIED BANKING COMPANY

                                                                      AS OF DECEMBER 31, 2003
                                                           --------------------------------------------
                                                             ACTUAL CAPITAL         REQUIRED CAPITAL
                                                           -------------------    ---------------------
                                                             AMOUNT      RATIO       AMOUNT       RATIOS
<S>                                                        <C>           <C>      <C>             <C>
OTS capital adequacy:
Tangible capital                                           $ 5,309,000     6.5%   $  1,233,000      1.5%
Core capital                                                 5,309,000     6.5%      2,466,000      3.0%
Total risk-based capital                                     5,942,000    10.4%      4,582,000      8.0%
FDICIA regulations to be classified "well capitalized":
Tier 1 leverage capital                                      5,309,000     6.5%      4,136,000      5.0%
Tier 1 risk based capital                                    5,309,000     9.3%      3,437,000      6.0%
Total risk-based capital                                     5,942,000    10.4%      5,728,000     10.0%
</TABLE>

On July 10, 2000 the Office of Thrift Supervision (the "OTS") issued a letter
which formally designated Shelby County Bank to be in "troubled condition" based
upon the preliminary findings of the OTS' then ongoing examination of the Bank.
On September 22, 2003, the OTS issued a letter which deemed the Shelby County
Bank to no longer be in "troubled condition" and stated that restrictions
contained in their letter of July 10, 2000, no longer apply.

On February 7, 2001 the OTS issued a letter which formally designated Blue River
Bancshares, Inc. to be in "troubled condition" pursuant to the results of a
March 13, 2000 examination. On September 22, 2003, the OTS issued a letter which
deemed Blue River Bancshares, Inc. to no longer be in "troubled condition" and
stated that restrictions contained in the letter of February 7, 2001, no longer
apply.

13.      EMPLOYEE BENEFIT PLANS

The Company has an employee 401(k) plan established for substantially all
full-time employees, as defined. The Company has elected to match contributions
equal to 50% of the employee contributions, up to a maximum of 6% of an
individual's total eligible salary, as defined. Contributions totaled
approximately $30,000 and $24,000 for the years ended December 31, 2003 and
2002, respectively.

14.      COMMITMENTS

In the normal course of business, the Bank makes various commitments to extend
credit, which are not reflected in the accompanying consolidated financial
statements. At December 31, 2003 and 2002, the Banks had loan commitments
approximating $13,515,000 and $673,000, respectively, excluding undisbursed
portions of loans in process, and unused portions of lines of credit of
approximately $8,939,000 and $1,541,000, respectively. Outstanding letters of
credit totaled approximately $894,000 and $637,000 at December 31, 2003 and
2002, respectively.

In the event of nonperformance by the other parties to the financial
instruments, the Banks' exposure to credit loss for commitments to extend credit
is represented by the contract amount of those instruments. The Banks use the
same credit policies and collateral requirements in making commitments as they
do for on-balance sheet financial instruments.

<PAGE>

15.  PARENT COMPANY FINANCIAL INFORMATION

     Condensed Balance Sheets as of December 31:

<TABLE>
<CAPTION>
                                                                  2003                       2002
<S>                                                          <C>                         <C>
Assets:
  Cash and cash equivalents                                  $   1,712,294               $    451,842
  Securities available for sale                                    103,000                     91,000
  Investment in subsidiaries                                    18,155,918                  9,168,384
  Other                                                            376,767                    248,215
                                                             -------------               ------------
Total assets                                                 $  20,347,979               $  9,959,441
                                                             =============               ============
Liabilities and Shareholders' Equity:
  Term debt                                                  $   4,000,000               $          -
  Other liabilities                                                119,685                     86,663
  Shareholders' equity                                          16,228,294                  9,872,778
                                                             -------------               ------------
Total liabilities and shareholders' equity                   $  20,347,979               $  9,959,441
                                                             =============               ============
</TABLE>

     Condensed Statement of Operations for the years ended December 31 is as
     follows:

<TABLE>
<CAPTION>
                                                                  2003                       2002
<S>                                                          <C>                         <C>
Interest income, net of interest expense                     $       3,031               $     14,150
Non-interest income                                                 28,200                     28,200
Non-interest expense                                              (292,860)                  (303,140)
                                                             -------------               ------------
Loss before income taxes and equity
  in undistributed earnings (loss) of subsidiaries                (261,629)                  (260,790)
Income tax (benefit)                                                     -                   (591,555)
                                                             -------------               ------------
Loss before equity in undistributed
  earnings of subsidiaries                                        (261,629)                  (852,345)
Equity in undistributed earnings (loss) of subsidiaries            360,570                 (3,653,883)
                                                             -------------               ------------
Net income (loss)                                            $      98,941               $ (4,506,228)
                                                             =============               ============
</TABLE>

<PAGE>

     Condensed Statements of Cash Flows for the years ended December 31, 2003
     and 2002 are as follows:

<TABLE>
<CAPTION>
                                                                                   2003                      2002
<S>                                                                           <C>                        <C>
Cash flows from operating activities:
  Net income (loss)                                                           $      98,941              $ (4,506,228)
  Adjustments to reconcile net cash from operating activities:
    Equity in undistributed earnings (loss) of subsidiary                          (360,570)                3,653,883
    Depreciation and amortization                                                    12,586                    12,586
    (Increase) decrease in other assets                                            (145,937)                  558,799
    Increase (decrease) in other liabilities                                         33,022                     5,362
                                                                              -------------              ------------
    Net cash from operating activities                                             (361,958)                 (275,598)

Cash flows from investing activities:
  Capital contribution to Banks                                                    (500,000)               (1,500,000)
  Acquisition of Unified Banking Company                                         (8,544,863)                       --
                                                                              -------------              ------------
    Net cash from investing activities                                           (9,044,863)               (1,500,000)
                                                                              -------------              ------------
Cash flows from financing activities:
  Proceeds from issuance of term debt                                             4,000,000                        --
  Proceeds from issuance of common stock                                          6,667,273                 1,401,148
                                                                              -------------              ------------
    Net cash from financing activities                                           10,667,273                 1,401,148
                                                                              -------------              ------------
  Net increase (decrease) in cash and cash equivalents                            1,260,452                  (374,450)
  Cash and cash equivalents, beginning of year                                      451,842                   826,292
                                                                              -------------              ------------
  Cash and cash equivalents, end of year                                      $   1,712,294              $    451,842
                                                                              =============              ============
</TABLE>

16.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following disclosure of fair value information is made in accordance
     with the requirements of SFAS 107, Disclosures About Fair Value of
     Financial Instruments. SFAS 107 requires disclosure of fair value
     information about financial instruments, whether or not recognized in the
     balance sheet, for which it is practicable to estimate fair value. The
     estimated fair value amounts have been determined by the Company using
     available market information and other appropriate valuation techniques.
     These techniques are significantly affected by the assumptions used, such
     as the discount rate and estimates of future cash flows. Accordingly, the
     estimates made herein are not necessarily indicative of the amounts the
     Company could realize in a current market exchange and the use of different
     market assumptions and/or estimation methods may have a material effect on
     the estimated fair value amount.

     CASH AND CASH EQUIVALENTS -- For these instruments, the carrying amount is
     a reasonable estimate of fair value.

     INVESTMENT SECURITIES -- For investment securities, fair values are based
     on quoted market prices, if available. For securities where quoted prices
     are not available, fair value is estimated based on market prices of
     similar securities.
<PAGE>

     LOANS RECEIVABLE -- The fair value of loans is estimated by discounting
     future cash flows using current rates at which similar loans would be made
     to borrowers with similar credit ratings and for the same remaining
     maturities.

     DEPOSITS -- The fair value of non-interest bearing demand deposits and
     savings and NOW accounts is the amount payable as of the reporting date.
     The fair value of fixed-maturity certificates of deposit is estimated using
     rates currently offered for deposits of similar remaining maturities.

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

     ACCRUED INTEREST RECEIVABLE -- The fair value approximates carrying value.

     FHLB ADVANCES -- The fair values of the FHLB advances approximate carrying
     values as the interest rates are variable and adjust to market rates.

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

     ACCRUED INTEREST PAYABLE -- The fair value approximates carrying value.

     COMMITMENTS--The commitments to originate and purchase loans have terms
     that are consistent with current market conditions. Accordingly, the
     Company estimated that the face amounts of these commitments approximate
     carrying values.

     The estimated carrying and fair values of the Company's financial
     instruments as of December 31 are as follows:

<TABLE>
<CAPTION>
                                                                 2003                                        2002
                                                 ---------------------------------            ------------------------------------
                                                    CARRYING           ESTIMATED                CARRYING              ESTIMATED
                                                     AMOUNT            FAIR VALUE                AMOUNT               FAIR VALUE
<S>                                              <C>                 <C>                      <C>                    <C>
Assets:
  Cash and cash equivalents                      $   7,802,000       $   7,802,000            $   3,439,000          $   3,439,000
  Investment securities, held to maturity              135,000             135,000                  259,000                295,000
  Investment securities, available for sale         48,702,000          48,826,000               25,589,000             26,407,000
  Loans receivable                                 128,666,000         129,651,000               58,313,000             61,595,000
  Stock in FHLB                                      2,766,000           2,766,000                2,153,000              2,153,000
  Accrued interest receivable                        1,009,000           1,009,000                  582,000                582,000
Liabilities:
  Deposits                                         160,686,000         161,690,000               73,733,000             75,264,000
  FHLB advances                                     16,878,000          17,438,000               11,000,000             11,110,000
  Term debt                                          4,000,000           4,000,000                        -                      -
  Accrued interest payable                             303,000             303,000                   74,000                 74,000
  Commitments                                                -                   -                        -                      -
</TABLE>

                                     ******

<PAGE>

BLUE RIVER BANCSHARES, INC.

SHAREHOLDER INFORMATION

STOCK INFORMATION

The Company's common stock is traded on the NASDAQ SmallCap Market under the
symbol "BRBI".

The Company had 188 Shareholders of Record as of March 24, 2004.

SALE PRICE PER SHARE

<TABLE>
<CAPTION>
                                                  2003                                   2002
QUARTER                                 HIGH               LOW                  HIGH              LOW
<S>                                    <C>               <C>                   <C>              <C>
First quarter                          $ 4.89            $ 4.25                $ 5.50           $ 4.15
Second quarter                           4.88              4.35                  5.23             4.40
Third quarter                            5.80              4.55                  4.88             4.26
Fourth quarter                           6.70              4.90                  4.90             4.25
</TABLE>

ANNUAL REPORT ON FORM 10-KSB

A copy of the company's annual report on Form 10-KSB, filed with the Securities
and Exchange Commission, is available without charge by writing:

                                Patrice M. Lima
                                Vice President
                                Controller
                                Blue River Bancshares, Inc.
                                29 E. Washington Street
                                Shelbyville, IN 46176

STOCK TRANSFER AGENT

Inquiries regarding stock transfer, registration, lost certificates or changes
in name and address should be directed to the stock transfer agent and registrar
by writing:

                        Continental Stock Transfer & Trust Co.
                        17 Battery Place
                        New York, NY 10004

INVESTOR INFORMATION

Stockholders, investors, and analysts interested in additional information may
contact Terry Smith, Director of Investor Relations, Lawrence T. Toombs,
President or Russell Breeden, III, Chief Executive Officer, Blue River
Bancshares, Inc.

<TABLE>
<CAPTION>
Legal Counsel                       Corporate Offices
<S>                                 <C>
KRIEG DEVAULT LLP                   BLUE RIVER
                                    BANCSHARES, INC.
One Indiana Square                  29 E. Washington St.
Suite 2800                          Shelbyville, IN 46176
Indianapolis, IN 46204              888-842-2265
</TABLE>

<PAGE>

BLUE RIVER BANCSHARES, INC.

DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>
BOARD OF DIRECTORS                        BOARD OF DIRECTORS                                   BOARD OF DIRECTORS
BLUE RIVER BANCSHARES, INC.               SHELBY COUNTY BANK                                   UNIFIED BANKING COMPANY
---------------------------               ---------------------------                          -----------------------
<S>                                       <C>                                                  <C>
STEVEN R. ABEL                            STEVEN R. ABEL                                       RUSSELL BREEDEN, III
Owner                                     Owner                                                Self Employed
Hoosier Appraisal Service                 Hoosier Appraisal Service                            Chairman of the Board
Chairman of the Board                     Chairman of the Board

RUSSELL BREEDEN, III                      RUSSELL BREEDEN, III                                 OLIN W. BRYANT
Self Employed                             Self Employed                                        President, Chief Executive Officer
Chief Executive Officer                                                                        Unified Banking Company

LAWRENCE T. TOOMBS                        LAWRENCE T. TOOMBS                                   DONALD E. MAGUIRE
President                                 President, Chief Executive Officer                   President
                                                                                               Maguire & Associates

WENDELL L. BERNARD                        WENDELL L. BERNARD                                   C.C. HOWARD GRAY
Owner                                     Owner                                                President/CEO
Bernard Realty                            Bernard Realty                                       James N. Gray Company

PETER G. DEPREZ                           PETER G. DEPREZ                                      JOHN ROBERT OWENS
Attorney                                  Attorney                                             President
Brown, DePrez & Johnson                   Brown, DePrez & Johnson                              Equity Kingsley

MICHAEL J. VAUGHT                         MICHAEL J. VAUGHT                                    WAYNE C. RAMSEY
Owner                                     Owner                                                Vice President
Economy Oil Corporation                   Economy Oil Corporation                              Lynch & Associates

D. WARREN ROBISON                         D. WARREN ROBISON                                    STEVEN R. ABEL
Owner                                     Owner                                                Owner
Hale Abstract                             Hale Abstract                                        Hoosier Appraisal Service

RALPH VAN NATTA                           RALPH VAN NATTA
Retired                                   Retired

WAYNE C. RAMSEY
Vice President
Lynch & Associates
</TABLE>

<TABLE>
<CAPTION>
OFFICERS                           OFFICERS                                        OFFICERS
BLUE RIVER BANCSHARES, INC.        SHELBY COUNTY BANK                              UNIFIED BANKING COMPANY
---------------------------        ------------------                              -----------------------
<S>                                <C>                                             <C>
STEVEN R. ABEL                     STEVEN R. ABEL                                  RUSSELL BREEDEN, III
Chairman of the Board              Chairman of the Board                           Chairman of the Board

RUSSELL BREEDEN, III               LAWRENCE T. TOOMBS                              OLIN W. BRYANT, JR.
Chief Executive Officer            President, Chief Executive Officer              President, Chief Executive Officer

LAWRENCE T. TOOMBS                 RANDY J. COLLIER                                RODNEY L. MITCHELL
President                          Executive Vice President, Chief Credit Officer  Executive Vice President, Chief Lending Officer

D. WARREN ROBISON                  PATRICE M. LIMA                                 SARITA S. GRACE
Senior Vice President, Secretary   Senior Vice President, Chief Financial Officer  Executive Vice President, Chief Financial Officer

RANDY J. COLLIER                   TERRY A. SMITH                                  RAYMOND T. WEBER
Exec. Vice President               Vice President, Retail Banking                  Vice President, Chief Credit Officer

PATRICE M. LIMA                    RONALD L. LANTER                                SUSAN POTTER
Vice President, Controller         Vice President, Lending                         Vice President, Mortgage Sales

TERRY A. SMITH
Vice President

RICHARD E. WALKE
Vice President, Auditor
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