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

                           FORM 10-KSB

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

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

                Commission file number 000-25808
                                      ----------

                  GREAT AMERICAN BANCORP, INC.
                  ---------------------------------------
         (Name of small business issuer in its charter)

          Delaware                              52-1923366
-------------------------------            -------------------
(State or other jurisdiction of             (I.R.S. Employer
 incorporation or organization)            Identification No.)

1311 S. Neil St., P.O. Box 1010, Champaign, Illinois   61824-1010
----------------------------------------------------   ----------
(Address of principal executive offices)               (Zip Code)

Issuer's telephone number, including area code (217) 356-2265
                                                    -------------

           Securities registered under Section 12(b)
                  of the Exchange Act:   None
                                       -------
           Securities registered under Section 12(g)
                      of the Exchange Act:

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

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


Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation SB contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.   [ ]

   State issuer's revenues for its most recent fiscal year.

                           $13,829,000
                           -----------

The aggregate market value of the voting stock held by non-affiliates of the
Registrant, i.e., persons other than directors and executive officers of the
Registrant, at December 31, 2001 was $14,796,000.  For purposes of this
determination only, directors and executive officers of the Registrant have
been presumed to be affiliates.  The market value is based upon $22.72 per
share, the last sales price as quoted on the Nasdaq SmallCap Market for December
31, 2001.

The Registrant had 855,477 shares of Common Stock outstanding, for ownership
purposes, at February 28, 2002 which excludes 1,197,273 shares held as treasury
stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Stockholders for the year ended December 31,
2001 are incorporated by reference into Part II of this Form 10-KSB.  Portions
of the Proxy Statement for the 2002 Annual Meeting of Stockholders are
incorporated by reference into Part III of this Form 10-KSB.

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



                                   INDEX


PART I
                                                                    PAGE

Item 1.  Description of Business . . . . . . . . . . . . . . . . . .   4

Item 2.  Description of Property . . . . . . . . . . . . . . . . . .  43

Item 3.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . .  45

Item 4.  Submission of Matters to a
          Vote of Security Holders . . . . . . . . . . . . . . . . .  45

PART II

Item 5.  Market for Common Equity and
          Related Stockholder Matters. . . . . . . . . . . . . . . .  45

Item 6.  Management's Discussion
          and Analysis or Plan of Operation. . . . . . . . . . . . .  45

Item 7.  Financial Statements. . . . . . . . . . . . . . . . . . . .  45

Item 8.  Changes In and Disagreements With Accountants
          on Accounting and Financial Disclosure . . . . . . . . . .  45

PART III

Item 9.  Directors, Executive Officers, Promoters and
          Control Persons; Compliance with Section
          16(a) of the Exchange Act. . . . . . . . . . . . . . . . .  45

Item 10. Executive Compensation. . . . . . . . . . . . . . . . . . .  46

Item 11. Security Ownership of Certain Beneficial
          Owners and Management. . . . . . . . . . . . . . . . . . .  46

Item 12. Certain Relationships and Related Transactions. . . . . . .  46

Item 13. Exhibits, Lists and Reports on Form 8-K . . . . . . . . . .  46

SIGNATURES



                             PART I

Item 1.        Description of Business.

   In addition to historical information, this Annual Report may include
certain forward looking statements based on current management expectations.
The Company's actual results could differ materially from those management
expectations.  Factors that could cause future results to vary from current
management expectations include, but are not limited to, general economic
conditions, legislative and regulatory changes, monetary and fiscal policies
of the federal government, changes in tax policies, rates and regulations of
federal, state and local tax authorities, changes in interest rates, deposit
flows, the cost of funds, demand for loan products, demand for financial
services, competition, changes in the quality or competition, changes in the
quality or composition of the Company's loan and investment portfolios, changes
in accounting principles, policies or guidelines, and other economic,
competitive, governmental and technological factors affecting the Company's
operations, markets, products, services and prices.

General

   Great American Bancorp, Inc. (the "Company") was incorporated on February
23, 1995 and on June 30, 1995 acquired all of the outstanding shares of common
stock of First Federal Savings Bank of Champaign-Urbana, Illinois, (the "Bank")
upon the Bank's conversion from a federally chartered mutual savings bank to a
federally chartered stock savings bank (the "Conversion").  The Company
purchased 100% of the outstanding capital stock of the Bank using 50% of the net
proceeds from the Company's initial stock offering which was completed on June
30, 1995.  The Company sold 2,052,750 shares of common stock in the initial
offering at $10 per share.  The Company began trading on The Nasdaq Stock Market
on June 30, 1995 under the symbol "GTPS".  On April 23, 2001, the Company began
trading on the Nasdaq SmallCap Market under the symbol "GTPS."  The move to the
Nasdaq SmallCap Market resulted from having a public float below the required
minimum of 750,000 shares.

   The Company's assets at December 31, 2001 consist primarily of the investment
in the Bank of $10.3 million, multi-family real estate loans of $5.3 million,
commercial real estate loans totaling $2.0 million, one-to-four-family mortgage
loans of $231,000, commercial loans totaling $48,000 and cash and due from banks
of $811,000.  All loans were originated at the Bank and sold to the Company.
Currently, other than investing in various securities, the Company does not
transact any other material business except through its subsidiary, the Bank.
Accordingly, the discussion in this Report addresses the Company's operations as
they are conducted through the Bank.

Business of the Bank

   The Bank was originally chartered in 1908 and became a federally chartered
mutual savings institution in 1938.  Prior to changing its name to First
Federal Savings Bank of Champaign-Urbana in January, 1995, the Bank operated
as First Federal Savings and Loan Association of Champaign.  The Bank's
primary market area consists of Champaign County, Illinois, which includes the
cities of Champaign and Urbana.  The economy in the Bank's primary market area
is predominantly related to the University of Illinois, medical and health
care related businesses, a major food processing operation and agriculture.
The Bank maintains three offices, two in Champaign and one in Urbana, and
provides a full range of retail banking services at each office, with emphasis
on one-to-four-family residential mortgage loans and consumer and commercial
loans.  At December 31, 2001, the Bank had total assets, liabilities and
stockholders' equity of $160.7 million, $150.4 million, and $10.3 million,
respectively.

   The Bank's principal business consists of the acceptance of retail
deposits from the residents and small businesses surrounding its branch
offices and the investment of those deposits, together with funds generated
from operations, primarily in one-to-four-family residential mortgage loans.
The Bank also invests in multi-family mortgage loans, commercial real estate
loans, construction loans, land development loans and commercial and consumer
loans.  The Bank, from time to time, originates loans for sale during certain
designated periods and, to a lesser extent, may sell loans from its portfolio.
At December 31, 2001, the Bank had $2.3 million in one-to-four-family mortgage
loans classified as held for sale.  The Bank retains virtually all the servicing
rights of loans sold.  At December 31, 2001, the Bank's gross loan portfolio
totaled $138.9 million or 86.4% of total assets.  In addition to its lending
activities, the Bank also invests in U.S. Treasury and Agency securities, local
municipal securities, and mortgage-backed securities.  At December 31, 2001, the
Bank's securities portfolio included only mortgage-backed securities designated
as held-to-maturity and totaled $2.1 million.  The Bank also had $500,000
invested in an overnight money market fund and $5.8 million invested in
interest-bearing demand deposits at December 31, 2001.

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

Lending Activities

   General.  Historically, the principal lending activity of the Company has
been the origination of long-term fixed-rate mortgage loans for the purpose of
constructing, financing or refinancing one-to-four-family residential
properties.  In recent years, the Company has also emphasized the origination of
adjustable-rate and short-term fixed-rate mortgage loans, including both one-to-
four-family and multi-family loans, and has also increased the origination of
consumer loans, commercial and commercial real estate loans.

   Loan Portfolio Composition.  The following table sets forth the
composition of the consolidated loan portfolio in dollar amounts and in
percentages of the respective portfolios at the dates indicated:



<TABLE>
<CAPTION>
                                                  Amount of Loans Outstanding at
                                      ------------------------------------------------------
                                      December   December   December    December   December
                                      31, 2001   31, 2000   31, 1999    31,1998    31, 1997
                                      --------  ---------  ---------   ---------   ---------
                                                        (in thousands)
<S>                                  <C>         <C>        <C>        <C>         <C>
Real estate:
 One-to-four-family residential (1)  $  84,000   $ 77,001   $ 70,291   $ 66,694    $ 57,613
 Multi-family residential               19,775     19,750     18,492     16,956      18,174
 Commercial                             16,567     17,290     18,213     14,500      10,296
 Construction                            3,907      1,221      1,919      3,657       1,615
 Land                                       24        190        205        185         559
Commercial business                      9,553      6,569      7,747      9,435      11,967
Consumer                                12,620     11,599     11,564     11,245      12,088
                                       -------    -------    -------    -------     -------
   Total loans, gross                  146,446    133,620    128,431    122,672     112,312
 Allowance for loan losses              (1,040)      (889)      (703)      (925)       (497)
                                       -------    -------    -------    -------     -------
   Total loans, net                  $ 145,406  $ 132,731   $127,728   $121,747    $111,815
                                       =======    =======    =======    =======     =======

<CAPTION>
                                                 Percentage of Loans Outstanding at
                                     -------------------------------------------------------
                                      December   December   December   December    December
                                      31, 2001   31, 2000   31, 1999   31, 1998    31, 1997
                                      --------  ---------  ---------  ---------   ---------
<S>                                    <C>        <C>        <C>        <C>         <C>
Real estate:
 One-to-four-family                      57.36%     57.63%     54.74%     54.37%      51.30%
 Multi-family residential                13.50      14.78      14.40      13.82       16.18
 Commercial                              11.31      12.94      14.18      11.82        9.17
 Construction                             2.67        .91       1.49       2.98        1.44
 Land                                      .02        .14        .16        .15         .50
Commercial business                       6.52       4.92       6.03       7.69       10.66
Consumer                                  8.62       8.68       9.00       9.17       10.75
                                       -------     -------    -------    -------     -------
 Total loans                            100.00%    100.00%    100.00%    100.00%     100.00%
                                       =======     =======    =======    =======     =======
</TABLE>

(1) Includes mortgage loans held for sale.




   At December 31, 2001, the Company had $2.34 million in one-to-four-family
mortgage loans designated as held for sale.  At that same date, 32.4% of total
mortgage loans had adjustable interest rates, excluding consumer loans secured
by second mortgages on real property.

   The types of loans that the Company may originate are subject to
federal and state law and regulations.  Interest rates charged on loans are
affected by the demand for such loans and the supply of money available for
lending purposes and the rates offered by competitors.  These factors are, in
turn, affected by, among other things, economic conditions, monetary policies
of the federal government, including the Federal Reserve Board and legislative
tax policies.

Loan Maturity

   The following table shows the maturity of consolidated loans at December
31, 2001, and includes principal repayments.  Principal repayments totaled
$41.9 million, $39.2 million and $34.6 million for the years ended December 31,
2001, 2000 and 1999.  While future loan prepayment activity cannot be projected,
management anticipates that in periods of stable interest rates, prepayment
activity would be lower than prepayment activity experienced in periods of
declining interest rates.  In general, the Company originates adjustable and
fixed-rate one-to-four-family loans with maturities from 15 to 30 years, multi-
family loans with maturities from 10 to 20 years, adjustable-rate commercial
real estate loans with maturities of 15 to 25 years, commercial loans with
maturities of from 1 to 5 years, and consumer loans with maturities of 1 to 5
years.


<TABLE>
<CAPTION>
                                                                    At December 31, 2001
                                                                       (in thousands)
                                    ------------------------------------------------------------------------------------------
                                     One- to    Multi-       Real                                                  Total
                                       Four-    Family      Estate                                                 Loans
                                    Family(1) Residential  Commercial Construction   Land  Commercial  Consumer  Receivable
                                    ------------------------------------------------------------------------------------------
     <S>                           <C>        <C>          <C>          <C>         <C>     <C>       <C>       <C>
     Amounts due:
      One year or less             $  4,467   $    351     $    899     $ 3,907     $  17   $ 6,075   $  3,738  $  19,454

     After one year:
       More than one year to
        three years                   7,365      1,367        2,113          --         7     1,635      3,210     15,697
      More than three years
        to five years                 6,625      1,160        4,025          --        --       661      4,740     17,211
      More than five years
        to 10 years                  16,400     15,241        3,159          --        --       572        745     36,117
      More than 10 years
        to 20 years                  30,563      1,656        6,123          --        --       579        145     39,066
      More than 20 years             18,580         --          248          --        --        31         42     18,901

                                     -----------------------------------------------------------------------------------------
         Total due after
          December 31, 2002          79,533     19,424       15,668          --         7     3,478      8,882    126,992
                                     -----------------------------------------------------------------------------------------
         Total loans, gross          84,000     19,775       16,567       3,907        24     9,553     12,620    146,446

      Allowance for loan losses        (166)      (163)        (136)        (32)       --      (221)      (322)    (1,040)
                                     -----------------------------------------------------------------------------------------
         Total loans, net          $ 83,834   $ 19,612     $ 16,431     $ 3,875     $  24   $ 9,332   $ 12,298  $ 145,406
                                     =========================================================================================

</TABLE>

    (1)  Includes mortgage loans held for sale.


  The following table sets forth, at December 31, 2001, the dollar amount of
gross loans receivable, contractually due after December 31, 2002, and whether
such loans have fixed interest rates or adjustable interest rates.



                                            Due After December 31, 2002
                                      --------------------------------------
                                        Fixed       Adjustable        Total
                                      --------------------------------------
                                                  (in thousands)

Real estate:
 One-to-four-family residential (1)   $ 68,482       $ 11,051      $ 79,533
 Multi-family residential                6,376         13,048        19,424
 Commercial real estate                  2,096         13,572        15,668
 Construction                               --             --            --
 Land                                       --              7             7
Commercial business                      1,136          2,342         3,478
Consumer                                 8,882             --         8,882
                                        ------------------------------------
      Total loans                     $ 86,972       $ 40,020      $126,992
                                        ====================================


     (1)  Includes mortgage loans held for sale.

   Origination, Purchase, Sale and Servicing of Loans.   The Company's lending
activities are conducted primarily through its home office and two branch
offices.  The Company, from time to time, also sells mortgage loans that it
originates during certain designated periods and sells loans from its
portfolio and purchases participations in mortgage loans originated by other
institutions.  The Company has sold one-to-four-family mortgage loans during
periods in which management believes market interest rates are not conducive
to the Company holding such loans in its portfolio.  Additionally, the Company
may sell loans from its portfolio to, among other things, fund its commitments
for loan sales when circumstances result in the Company's inability to close
loans which have been committed for sale.  Historically, the substantial
majority of loans sold by the Company have been sold either to the Federal Home
Loan Mortgage Corporation ("FHLMC") or to the Federal National Mortgage
Association ("FNMA").  The determination to purchase participations in specific
loans or pools of loans is based upon criteria substantially similar to the
Company's underwriting policies which consider the financial condition of the
borrower, the location of the underlying property and the appraised value of
the property, among other factors.

   Mortgage loans held for sale are carried at the lower of cost or fair value,
determined on an aggregate basis.  Write-downs to fair value are recognized as
a charge to earnings at the time the decline in value occurs.  At the time of
sale, the cash gain or loss on the sale of the loans is determined based on the
difference between the net cash proceeds received and the carrying value of the
loans sold.  Mortgage servicing rights on loans sold are capitalized by
allocating the total cost of the mortgage loans between the mortgage servicing
rights and the loans based on their relative fair values.  Capitalized
servicing rights are amortized in proportion to and over the period of
estimated servicing revenues.

   The following table sets forth consolidated loan originations, purchases,
sales and principal repayments information for the periods indicated.

                                      Year Ended December 31,
                          ------------------------------------------------
                                 2001           2000            1999
                          ------------------------------------------------
                                           (in thousands)

Gross Loans (1)
Beginning balance           $ 133,620       $ 128,431       $ 122,672
 Loans originated:
  One-to-four-family           24,236          15,814          12,000
  Multi-family residential      1,422           3,699           3,315
  Commercial real estate        5,121           3,755           4,230
  Construction                  6,974           1,150           1,387
  Land                             --              --             154
  Commercial business          10,412          10,615           9,809
  Consumer                     11,889           9,403           9,448
                            ----------------------------------------------
   Total loans originated      60,054          44,436          40,343
                            ----------------------------------------------
   Total                      193,674         172,867         163,015

Less:
  Transfer to real
     estate owned                  --              --              --
  Principal repayments        (41,879)        (39,247)        (34,584)
  Sales of loans               (5,349)             --              --
                              --------------------------------------------
Total loans, gross          $ 146,446       $ 133,620       $ 128,431
                            ==============================================

     (1)  Gross loans include loans receivable and mortgage loans held for
          sale, net of loan origination fees, deferred loan fees, and
          unamortized premiums and discounts.

   One-to-Four-Family Mortgage Lending.  The Company offers both fixed rate
and adjustable rate mortgage loans secured by one-to-four-family residences,
primarily owner-occupied, located in the Company's primary market area, with
maturities up to thirty years.  Substantially all of such loans are secured
by property located in Champaign County, Illinois.  Loan originations are
generally obtained from existing or past customers and members of the local
community.

   At December 31, 2001, total consolidated gross loans outstanding, including
mortgage loans held for sale were $146.4 million, of which $84.0 million or
57.4% were one-to-four-family residential mortgage loans.  Of the one-to-four-
family residential mortgage loans outstanding at that date, 84.9% were fixed-
rate loans, and 15.1% were adjustable-rate mortgage loans.  The interest rate
for the majority of the Company's adjustable-rate mortgage loans adjusts
periodically based upon a spread above the one year U.S. Treasury index.  The
Company currently offers a number of adjustable-rate mortgage loan programs
with interest rates which adjust annually, either from the outset of the loan
or after a 3, 5 or 7-year initial period in which the loan has a fixed rate.
Such interest rate adjustments are limited to a 2% annual adjustment cap and a
6% life-of-the-loan cap.

   The origination of adjustable-rate residential mortgage loans, as opposed
to fixed-rate residential mortgage loans, helps reduce the Company's exposure
to increases in interest rates.  However, adjustable-rate loans generally pose
credit risks not inherent in fixed-rate loans, primarily because as interest
rates rise, the underlying payments of the borrower rise, thereby increasing
the potential for default.  At the same time, the marketability of the
underlying property may be adversely affected.  Periodic and lifetime caps on
adjustable-rate mortgage loans help to reduce these risks but also limit the
interest rate sensitivity of such loans.

   The Company's policy is to originate one-to-four-family residential mortgage
loans in amounts up to 80% of the lower of the appraised value or the selling
price of the property securing the loan and up to 95% of the appraised value
or selling price if private mortgage insurance is obtained.  Mortgage loans
originated by the Company generally include due-on-sale clauses which provide
the Company with the contractual right to deem the loan immediately due and
payable in the event the borrower transfers ownership of the property without
the Company's consent.  Due-on-sale clauses are an important means of adjusting
the rates on the Company's fixed-rate mortgage loan portfolio and the Company
has generally exercised its rights under these clauses.

   Multi-family Lending.  The Company originates fixed and adjustable-rate
multi-family residential mortgage loans generally secured by multiple unit
apartment and university housing buildings located in the Company's primary
market area.  At December 31, 2001, the consolidated multi-family loan
portfolio was $19.8 million, or 13.5% of total gross loans.  In reaching its
decision on whether to make a multi-family loan, management considers the
qualifications of the borrower as well as the underlying property.  The factors
considered include: the net operating income of the mortgaged premises before
debt service and depreciation; the debt service ratio (the ratio of net
earnings to debt service); and the ratio of loan amount to appraised value.
Pursuant to the Company's underwriting policies, an adjustable-rate multi-
family mortgage loan may only be made in an amount up to 80% of the appraised
value of the underlying property.  In addition, the Company generally requires
a debt service ratio of at least 1.2% and the personal guarantee of the
borrower.  Properties securing a loan are appraised by an independent appraiser
and title insurance is required on all loans.

   When evaluating the qualifications of the borrower for a multi-family
loan, management considers the financial resources and income level of the
borrower, the borrower's experience in owning or managing similar property
and the previous lending experience with the borrower.  The Company's
underwriting policies require that the borrower be able to demonstrate
strong management skills and the ability to maintain the property from
current rental income.  The borrower should also present evidence of the
ability to repay the mortgage and a history of making mortgage payments on a
timely basis. In making its assessment of the creditworthiness of the
borrower, management generally reviews the financial statements, employment
and credit history of the borrower, as well as other related documentation.
The largest multi-family loan at December 31, 2001 is a ten year fixed rate
loan with an outstanding balance of $5.4 million which is secured by an
apartment complex.

   Loans secured by apartment buildings and other multi-family residential
properties generally involve larger principal amounts and a greater degree of
risk than one-to-four-family residential mortgage loans.  Because payments
on loans secured by multi-family properties are often dependent on successful
operation or management of the properties, repayment of such loans may be
subject to a greater extent to adverse conditions in the real estate market
or the economy.  The Company seeks to minimize these risks through their
underwriting policies, which require such loans to be qualified at origination
on the basis of the property's income and debt coverage ratio.  As part of its
operating strategy, the Company intends to increase its multi-family lending in
its primary market area.

   Commercial Real Estate Lending.  The Company originates commercial real
estate loans that are generally secured by properties used for business
purposes such as small office buildings or a combination of residential and
retail facilities located in the Company's primary market area.  The Company's
underwriting procedures provide that commercial real estate loans may
generally be made in amounts up to 80% of the appraised value of the
property, subject to the Company's current loans-to-one-borrower limit.

   These loans generally may be made with terms up to 25 years, fully
amortized, and are generally offered at interest rates which adjust in
accordance with the prime rate as reported in the Wall Street Journal.  The
Company's underwriting standards and procedures are similar to those applicable
to its multi-family loans, whereby the Company considers the net operating
income of the property and the borrower's expertise, credit history and
profitability.  The Company has generally required that the properties securing
commercial real estate loans have debt service coverage ratios of at least 1.2%
to 1.5%. The largest commercial real estate loan in the Company's portfolio at
December 31, 2001, was a $1.6 million, five year fixed-rate, loan which was
originated in December, 2000 and is secured by a multi-tenant commercial
facility.  At December 31, 2001, the consolidated commercial real estate loan
portfolio totaled approximately $16.6 million or 11.3% of total consolidated
gross loans.  As part of its operating strategy, the Company intends to
increase its commercial real estate lending in its primary market area.

   Loans secured by commercial real estate properties, like multi-family
loans, usually involve larger principal amounts and, generally, the interest
rate on these loans is initially fixed for between one and five years and
adjusts between one and five years thereafter.  The Company currently has no
mortgage loans that are subject to negative amortization.

   Because payments on loans secured by commercial real estate properties
are often dependent on successful operation or management of the properties,
repayment of such loans may be subject to adverse conditions in the real
estate market or the economy.  The Company seeks to minimize these risks
through its underwriting standards, which require such loans to be qualified on
the basis of the property's income and debt service ratio.

   Construction and Land Development Lending.  The Company originates loans for
the acquisition and development of property to contractors and individuals in
its primary market area.  The Company has made construction loans primarily to
finance the construction of one-to-four-family, owner-occupied residential
properties and multi-family properties.  These loans generally have maturities
of one year or less.  Loans for the construction of one-to-four-family
residences may be made in amounts up to 80% of the appraised value of the
property or up to 90% of the appraised value of the property with private
mortgage insurance.  Loans for the construction of commercial and multi-family
properties may be made in amounts up to 80% of the appraised value of the
property, subject to the Company's current limitation on loans-to-one-borrower.

   The Company generally requires personal guarantees and may require an
irrevocable takeout commitment from a generally recognized lender for an
amount equal to or greater than the amount of the loan.  Loan proceeds are
disbursed in increments as construction progresses and as inspections
warrant.  Land development loans are determined on an individual basis, but
generally they do not exceed 70% of the actual cost or current appraised
value of the property, whichever is less.  The largest construction loan in
the Company's portfolio at December 31, 2001 was a $1.5 million commercial
construction loan originated in May 2001.  The interest rate on the loan is
fixed and the loan matures in September 2002.  The loan is secured by the land
and building for a church.  At December 31, 2001, the consolidated total of
construction and land development loans was $3.9 million, which amounted to
2.7% of the consolidated total loan portfolio.

   Construction and land development financing is generally considered to
involve a higher degree of credit risk than long-term financing on improved,
owner-occupied real estate.  Risk of loss on a construction loan is dependent
largely upon the accuracy of the initial estimate of the property's value at
completion of construction or development compared to the estimated cost
(including interest) of construction.  If the estimate of value proves to be
inaccurate, the Company may be confronted with a project, when completed,
having a value which is insufficient to assure full repayment.

   Commercial Lending.  The Company also offers secured and unsecured
commercial business loans.  At December 31, 2001, consolidated commercial
business loans totaled $9.5 million, or 6.5% of the total loan portfolio.
Commercial business loans consist of credit lines to support fluctuations in
accounts receivable and inventory, conventional term loans, including both
"owner-occupied" and "investment" real estate loans, working capital loans,
business acquisition loans and small business loans.  The Company's policy is
to generally make fixed-rate and variable rate commercial loans with terms of
from 1 to 5 years.  In making commercial loans, management considers primarily
the value of the collateral if the loan is secured, the financial history and
resources of the borrower, the borrower's ability to repay the loan out of net
operating income and the lending history with the borrower.  The Company's
policy has been generally to require the personal guarantee of all principal
shareholders or partners for loans to corporations or partnerships, and an
annual personal financial statement from all guarantors.  The largest
commercial loan or commercial credit relationship consisted of a variable rate
commercial loan which totaled $1.0 million at December 31, 2001, and was
secured by inventory and an assignment of equipment leases.

   As part of its overall strategy, management intends to increase the level
of commercial lending in the primary market area.  Unsecured commercial
business lending is generally considered to involve a higher degree of risk
than secured commercial and real estate lending.  Risk of loss on an unsecured
commercial business loan is dependent largely on the borrower's ability to
remain financially able to repay the loan out of ongoing operations.  If
management's estimate of the borrower's financial ability is inaccurate, the
Company may be confronted with a loss of principal on the loan.

   Consumer Lending.  The Company has developed a consumer loan program to
offer loans on a short term basis, generally up to five years, thereby reducing
its interest rate risk exposure.  The Company's portfolio of consumer loans
includes a combination of automobile, marine, home improvement, recreation,
home equity loans, credit cards loans and overdraft protection loans.  As of
December 31, 2001, the Company's consumer loans amounted to $12.6 million or
8.6% of the total loan portfolio.  Consumer loans are generally originated in
the Company's primary market area and generally have maturities of one to five
years.  Consumer loans may be collateralized by personal property or secondary
encumbrances on real estate.  Unsecured consumer loans are generally made with
a maximum maturity of 48 months.

   Consumer loans are shorter in term and generally contain higher interest
rates than residential loans.  Management believes the consumer loan market
has been helpful in improving its spread between average loan yield and costs
of funds and at the same time improving the matching of its rate sensitive
assets and liabilities.

   The underwriting standards employed by the Bank for consumer loans include
a determination of the applicant's credit history and an assessment of the
applicant's ability to meet existing obligations and payments on the proposed
loan.  The stability of the applicant's monthly income may be determined by
verification of gross monthly income from primary employment, and additionally
from any verifiable secondary income.  Creditworthiness of the applicant is of
primary consideration; however, the underwriting process also includes a
comparison of the value of the collateral in relation to the proposed loan
amount.

   Consumer loans entail greater risks than one-to-four-family residential
mortgage loans, particularly consumer loans that are secured by rapidly
depreciable assets such as automobiles or that are unsecured.  In such cases,
repossessed collateral for a defaulted loan may not provide an adequate
source of repayment of the outstanding loan balance, since there is a greater
likelihood of damage, loss or depreciation of the underlying collateral.
Further, consumer loan collections are dependent on the borrower's continuing
financial stability, and therefore are more likely to be adversely affected
by job loss, divorce, illness or personal bankruptcy.  Finally, the
application of various federal and state laws, including federal bankruptcy
and insolvency laws, may limit the amount which can be recovered on such
loans in the event of a default.  At December 31, 2001, the Company had three
consumer loans 90 days or more delinquent, totaling $50,000.  As part of its
operating strategy, the Company intends to increase the level of its consumer
lending in its primary market area.

   Loan Approval Procedures and Authority.  The Board of Directors authorizes
the lending activities of the Company and establishes the lending policies.
The Board of Directors has authorized the following persons to approve loans up
to the amounts indicated:  Loans in the amount of $150,000 for secured loans
and $75,000 for unsecured loans may be approved by the President or Senior Vice
President of Lending.  Other lending personnel have smaller approved lending
authority.  One-to-four-family residential mortgage loans in an amount not
exceeding the maximum amount saleable to the secondary market (such amount
currently is $300,700) may be approved by specified officers within the lending
department.  All other loan commitments or renewals in excess of the maximum
amount saleable to the secondary market must be referred to and approved by the
Company's Loan Committee, which is made up of three directors, the President
and the Senior Vice President of Lending.

   For all loans originated, upon receipt of a completed loan application from
a prospective borrower, a credit report is ordered and certain other
information is verified by an independent credit agency.  If necessary,
additional financial information may be required.  An appraisal of real estate
intended to secure a proposed loan generally is required to be performed by an
appraiser designated and approved by the Company.  For proposed mortgage loans,
the Board of Directors annually approves independent appraisers to be used and
approves the appraisal policy.  The Company's policy is to obtain title and
hazard insurance on all mortgage loans.  If private mortgage insurance is
required, the borrower will be required to make payments to a mortgage impound
account from which the Company makes disbursements for property taxes and
mortgage insurance.

   Loan Servicing.  The Company also services mortgage loans for others.  Loan
servicing includes collecting and remitting loan payments, accounting for
principal and interest, making inspections as required of mortgaged premises,
contacting delinquent mortgagors, supervising foreclosures and property
dispositions in the event of unremedied defaults, making certain insurance
and tax payments on behalf of the borrowers and generally administering the
loans.  At December 31, 2001 the Company was servicing $9.1 million of loans
for others.

   Delinquencies and Classified Assets.  Management and the Board of
Directors perform a monthly review of all delinquent loans.  The procedures
taken by management with respect to delinquencies vary depending on the
nature of the loan and period of delinquency.  The Company generally requires
that delinquent mortgage loans be reviewed and that a written late charge
notice be mailed no later than the 15th day of delinquency.  The Company's
policies provide that telephone contact will be attempted to ascertain the
reasons for delinquency and the prospects of repayment.  When contact is made
with the borrower at any time prior to foreclosure, management will attempt to
obtain full payment or work out a repayment schedule with the borrower to avoid
foreclosure.  It is the general policy to continue to accrue interest on all
loans which are past due unless ultimate collection of principal and interest
is in doubt.  Property acquired as a result of foreclosure on a mortgage loan
is classified as "real estate owned", and is recorded at the lower of the
unpaid principal balance or fair value less costs to sell at the date of
acquisition and thereafter.  Upon foreclosure, it is the Company's policy
generally to require an appraisal of the property and, thereafter, appraisal of
the property on an annual basis and external inspections on at least a
quarterly basis.

   Federal regulations and the Company's Classification of Assets Policy
require that the Company utilize an internal asset classification system as a
means of reporting non-performing and potential problem assets.  The Company
has incorporated the asset classifications used by the Office of Thrift
Supervision ("OTS"), the Company's primary regulator, as part of its credit
monitoring system.  The Company currently classifies non-performing and
potential problem assets as "Substandard," "Doubtful" or "Loss" assets.  An
asset is considered Substandard if it is inadequately protected by the current
net worth and paying capacity of the obligor or of the collateral pledged, if
any.  Substandard assets include those characterized by the distinct
possibility that the insured institution will sustain "some loss" if the
deficiencies are not corrected. Assets classified as Doubtful have all of the
weaknesses inherent in those classified Substandard with the added
characteristic that the weaknesses present make collection or liquidation in
full, on the basis of currently existing facts, conditions and values, highly
questionable and improbable.  Assets classified as Loss are those considered
uncollectible and of such little value that their continuance as assets without
the establishment of a specific loss reserve is not warranted.  Assets which do
not currently expose the insured institution to sufficient risk to warrant
classification in one of the aforementioned categories but possess weaknesses
are required to be designated "Watch."

   When an insured institution classifies one or more assets, or portions
thereof, as Substandard or Doubtful, it is required to establish a general
valuation allowance for loan losses in an amount deemed prudent by management.
General valuation allowances, which is a regulatory term, represent loss
allowances which have been established to recognize the inherent risk
associated with lending activities, but which, unlike specific allowances,
have not been allocated to particular problem assets.  When an insured
institution classifies one or more assets, or portions thereof, as Loss, it is
required either to establish a specific allowance for losses equal to 100% of
the amount of the asset so classified or to charge off such amount.

   A savings institution's determination as to the classification of its
assets and the amount of its valuation allowances is subject to review by the
OTS, which can order the establishment of additional general or specific loss
allowances.  The OTS, in conjunction with the other federal banking agencies,
adopted an interagency policy statement on the allowance for loan and lease
losses.  The policy statement provides guidance for financial institutions on
both the responsibilities of management for the assessment and establishment
of adequate allowances and guidance for banking agency examiners to use in
determining the adequacy of general valuation guidelines.  Generally, the
policy statement recommends that institutions have effective systems and
controls to identify, monitor and address asset quality problems; that
management has analyzed all significant factors that affect the
collectibility of the portfolio in a reasonable manner; and that management
has established acceptable allowance evaluation processes that meet the
objectives set forth in the policy statement.  As a result of declines in
local and regional real estate market values and significant losses
experienced by many financial institutions, there has been a greater level of
scrutiny by regulatory authorities of the loan portfolios of financial
institutions undertaken as part of the examination of institutions by the OTS
and the Federal Deposit Insurance Corporation ("FDIC").  While the Company
believes that it has established an adequate allowance for loan losses, there
can be no assurance that regulators, in reviewing the Company's loan portfolio,
will not request the Company to materially increase at that time its allowance
for loan losses, thereby negatively affecting the Company's financial condition
and earnings at that time.  Although management believes that, based on
information currently available, adequate specific and general loan loss
allowances have been established, actual losses are dependent upon future
events and, as such, further additions to the level of specific and general
loan loss allowances may become necessary.

   The Company's Loan Committee reviews and classifies the Company's loans on a
monthly basis and reports the results of its reviews to the Board of
Directors.  The Company classifies loans in accordance with the management
guidelines described above.  At December 31, 2001, the Company had no other
real estate as a result of foreclosure, which is generally classified as
Substandard.  At December 31, 2001, the Company had $787,000 in assets
classified as Watch, $38,000 classified as Substandard, $9,000 classified as
Doubtful, and zero classified as Loss.

   The following table sets forth delinquencies in the Company's loan portfolio
as of the dates indicated



<TABLE>
<CAPTION>
                                              At December 31, 2001                        At December 31, 2000
                                   --------------------------------------------------------------------------------------
                                         60-89 Days          90 Days or More        60-89 Days        90 Days or More
                                   --------------------------------------------------------------------------------------
                                               Principal             Principal            Principal             Principal
                                     Number     Balance    Number     Balance   Number     Balance    Number     Balance
                                    of Loans   of Loans   of Loans   of Loans  of Loans   of Loans   of Loans   of Loans
                                   --------------------------------------------------------------------------------------
                                                                     (dollars in thousands)
 <S>                                    <C>     <C>          <C>     <C>           <C>       <C>         <C>    <C>
 One-to-four-family residential          4      $ 130         4      $   337        4        $ 273        3     $    48
 Multi-family residential               --         --        --           --       --           --       --          --
 Commercial real estate                 --         --        --           --       --           --       --          --
 Construction and land                  --         --        --           --       --           --       --          --
 Commercial business                     1         12        --           --       --           --        1         259
 Consumer                                3         44         3           50        1           10       --          --
                                   --------------------------------------------------------------------------------------
    Total                                8      $ 186         7      $   387        5        $ 283        4     $   307
 Delinquent loans to total         ======================================================================================
    gross loans                                  0.13%                  0.26%                 0.21%                0.23%
                                   ======================================================================================
<CAPTION>
                                                                                      At December 31, 1999
                                                                       -------------------------------------------------
                                                                            60-89 Days                90 Days or More
                                                                       -------------------------------------------------
                                                                                   Principal                   Principal
                                                                         Number     Balance       Number        Balance
                                                                        of Loans   of Loans      of Loans      of Loans
                                                                       -------------------------------------------------
                                                                                     (dollars in thousands)
 <S>                                                                       <C>      <C>             <C>      <C>
 One-to-four-family residential                                             3       $  41            4       $     92
 Multi-family residential                                                  --          --           --             --
 Commercial real estate                                                    --          --           --             --
 Construction and land                                                     --          --           --             --
 Commercial business                                                       --          --            1            375
 Consumer                                                                   1           1            1              1
                                                                       -------------------------------------------------
    Total                                                                   4       $  42            6       $    468
 Delinquent loans to total                                             =================================================
    gross loans                                                                      0.03%                       0.36%
                                                                       =================================================
</TABLE>


   Nonaccrual and Past Due Loans.  The following table sets forth information
regarding loans contractually past due 90 days or more.  At December 31, 2001,
there were no troubled-debt restructured loans within the meaning of Statement
of Financial Accounting Standards No. 15, no foreclosed properties classified
as real estate owned and no loans on nonaccrual.  At December 31, 2001, there
were seven accruing loans past due 90 days or more.  The Company continues to
accrue interest on loans which are past due unless ultimate collection of all
principal and interest is in doubt.


<TABLE>
<CAPTION>
                                                   -----------------------------------------------------------------
                                                     Dec 31,       Dec 31,      Dec 31,       Dec 31,      Dec 31,
                                                       2001          2000         1999          1998         1997
                                                   -----------------------------------------------------------------
                                                                         (dollars in thousands)
 <S>                                                <C>           <C>          <C>            <C>           <C>
 Loans contractually past due 90 days or more       $   387       $   307      $   468        $1,472        $  392
                                                   =================================================================
 Allowance for loan losses as a percent
   of loans (1)                                        0.71%         0.67%        0.55%         0.75%         0.44%
 Allowance for loan losses as a percent of
   non-performing loans                              268.73%       289.58%      150.21%        62.84%       126.79%
 Non-performing loans as a percent of loans (1)        0.26%         0.23%        0.36%         1.20%         0.35%
 Non-performing assets as a percent of total
   assets                                              0.23%         0.19%        0.30%         0.94%         0.28%

</TABLE>

 ---------------------------
    (1)  Loans include gross loans and mortgage loans held for sale less
                   loans in process, undisbursed loan proceeds and deferred loan
                   origination fees and discounts.




   Allowance for Loan Losses.  The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the
risks inherent in the loan portfolio and the general economy.  The allowance
for loan losses is maintained at an amount management considers adequate to
cover estimated losses in loans receivable which are deemed probable and can
be estimated based on information available to management at such time.
While management believes the allowance for loan losses is sufficient to
cover losses inherent in its loan portfolio at this time, no assurances can
be given that the level of the allowance for loan losses will be sufficient
to cover future loan losses incurred or that future adjustments to the
allowance for loan losses will not be necessary if economic and other
conditions differ substantially from the economic and other conditions used
by management to determine the current level of the allowance for loan
losses.  The allowance is based upon a number of factors, including asset
classifications, economic trends, industry experience and trends, industry
and geographic concentrations, estimated collateral values, management's
assessments of the credit risk inherent in the portfolio, historical loan
loss experience, and the Company's underwriting policies.  As of December 31,
2001 and 2000, the allowance for loan losses was 0.71% and 0.67%,
respectively, of total loans.  Management will continue to monitor and modify
the allowance for loan losses as conditions dictate.  Various regulatory
agencies, as an integral part of their examination process, periodically
review the allowance for loan losses.  These agencies may require additional
valuation allowances, based on their judgments of the information available
at the time of the examination.

   It is the policy of the Company to charge off consumer loans when it is
determined that they are no longer collectible.  The policy for loans secured
by real estate, which comprise the bulk of the loan portfolio, is to establish
loss reserves in accordance with the loan classification process, based on
generally accepted accounting practices.  It is the Company's policy to obtain
an appraisal on all real estate acquired through foreclosure at the time of
foreclosure.

   The following table sets forth activity in the allowance for loan losses
for the periods set forth in the table.


<TABLE>
<CAPTION>
                                          ---------------------------------------------------------------
                                              Dec 31,      Dec 31,       Dec 31,    Dec 31,    Dec 31,
                                               2001         2000          1999       1998       1997
                                          ---------------------------------------------------------------
                                                                (Dollars in thousands)
 <S>                                        <C>            <C>           <C>        <C>         <C>
 Balance at beginning of year               $   889        $ 703         $ 925      $ 497       $ 374
 Provision for loan losses                      162          300           573        456         156
 Charge-offs:
   One-to-four-family residential                --           --            --         --          --
   Multi-family residential                      --           --            --         --          --
   Commercial real estate                        --           --            --         --          --
   Construction and land                         --           --            --         --          --
   Commercial business                           12          116           800         --          20
   Consumer                                       7           15             1         36          18
                                           --------------------------------------------------------------
    Total charge-offs                            19          131           801         36          38
                                           --------------------------------------------------------------
 Recoveries:
   One-to-four-family residential                --           --            --         --          --
   Multi-family residential                      --           --            --         --          --
   Commercial real estate                        --           --            --         --          --
   Construction and land                         --           --            --         --          --
   Commercial business                            7            2             5          6          --
   Consumer                                       1           15             1          2           5
                                           --------------------------------------------------------------
    Total recoveries                              8           17             6          8           5
                                           --------------------------------------------------------------
 Net charge-offs                                 11          114           795         28          33
                                           --------------------------------------------------------------
 Balance at end of period                   $ 1,040        $ 889         $ 703      $ 925       $ 497
                                           ==============================================================
 Ratio of net charge-offs during the
   period to average loans outstanding
   during the period                           0.01%        0.09%         0.63%      0.02%       0.03%
                                           ==============================================================
</TABLE>



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


<TABLE>
<CAPTION>
                             -------------------------------------------------------------------------------------
                                       Amount of Allowance and Percentage of Allowance to Total Allowance
                             -------------------------------------------------------------------------------------
                               Dec 31, 2001     Dec 31, 2000     Dec 31, 1999     Dec 31, 1998     Dec 31, 1997
                              --------------   --------------   --------------   --------------    --------------
                              Amount Percent   Amount Percent   Amount Percent   Amount Percent    Amount Percent
                              ------ -------   ------ -------   ------ -------   ------ -------    ------ -------
                                                            (dollars in thousands)
 <S>                         <C>     <C>       <C>    <C>       <C>    <C>       <C>    <C>        <C>    <C>
 One-to four-
   family residential        $  166   15.96%   $ 166   18.67%   $  74   10.53%   $  73    7.89%    $  64   12.88%
 Multi-family residential       163   15.67      155   17.44       20    2.84       18    1.95        20    4.02
 Commercial real estate         136   13.08      164   18.45       19    2.70       16    1.73        11    2.21
 Construction and land           32    3.08       13    1.46        2    0.28        4    0.43         4    0.81
 Commercial business            221   21.25       77    8.66      321   45.67      571   61.73       194   39.03
 Consumer                       322   30.96      314   35.32      267   37.98      243   26.27       204   41.05
                             -----------------------------------------------------------------------------------
                             $1,040  100.00%   $ 889  100.00%   $ 703  100.00%   $ 925  100.00%    $ 497  100.00%
                             ====================================================================================

</TABLE>




Investment Activities

   Federally chartered savings institutions have the authority to invest in
various types of liquid assets, including U.S. Treasury and Agency
obligations, mortgage-backed and other securities of various federal agencies,
FHLB term deposits, certificates of deposit of insured banks and savings
institutions, bankers' acceptances, repurchase agreements and federal funds.
Subject to various restrictions, federally chartered savings institutions may
also invest their assets in commercial paper, investment-grade corporate debt
securities and mutual funds whose assets conform to the investments that a
federally chartered savings institution is otherwise authorized to make
directly.  Additionally, the Bank must maintain minimum levels of investments
that qualify as liquid assets under OTS regulations.  Historically, the Bank
has maintained liquid assets above the minimum OTS requirements and at a level
considered to be adequate to meet its normal daily activities.

   The Company's investment policy, as established by the Board of Directors,
attempts to provide and maintain liquidity, generate a favorable return on
investments without incurring undue interest rate and credit risk and
complement lending activities.  The investment policy generally limits
investments to government and federal agency-backed securities and other non-
government guaranteed securities, including corporate debt obligations, that
are investment grade.  The investment policy provides authority to invest in
U.S. Treasury and U.S. Government guaranteed securities, securities backed by
federal agencies such as the Government National Mortgage Association ("GNMA")
and the Federal National Mortgage Association ("FNMA"), FHLMC and the Federal
Farm Credit Bureau with maximum maturities of 10 years, mortgage-backed
securities with a maximum term of 30 years which are backed by federal agency
securities, obligations of state and political subdivisions with at least an
"A" rating, term deposits purchased through the FHLB and securities issued by
mutual funds which invest in securities consistent with the Company's allocable
investments.  The policy generally limits investments in each category to the
lesser of $5,000,000 or 50% of the Company's or Bank's equity.  The investment
policies provide that the President is authorized to execute all transactions
within specified limits which are reviewed by the Board of Directors on a
monthly basis.  From time to time the Board of Directors may authorize the
President to exceed the policy limitations.  The Company's Asset/Liability
Committee monitors compliance with the investment policies and generally meets
on a quarterly basis.

   At December 31, 2001, the Company had $2.1 million in investment securities
all classified as held-to-maturity and consisted of $1.3 million in GNMA
mortgage-backed securities and $800,000 in FNMA mortgage-backed securities.

   The following table sets forth certain information regarding the carrying
value, weighted average yields and contractual maturities of the Company's
short-term investments and securities as of December 31, 2001.  Expected
maturities of mortgage-backed securities will differ from contractual
maturities due to scheduled repayments and because borrowers may have the right
to call or prepay obligations with or without prepayment penalties.


<TABLE>
<CAPTION>
                                                       At December 31, 2001
                          -------------------------------------------------------------------------------------------------------
                                                  More than One          More than Five        More than Ten
                            One Year or Less    Year to Five Years     Years to Ten Years         Years               Total
                          -------------------------------------------------------------------------------------------------------
                                     Weighted              Weighted              Weighted             Weighted             Weighted
                           Carrying   Average    Carrying   Average    Carrying   Average    Carrying  Average    Carrying  Average
                             Value     Yield       Value     Yield      Value      Yield      Value     Yield      Value    Yield
                          -------------------------------------------------------------------------------------------------------
                                                         (dollars in thousands)
<S>                       <C>          <C>      <C>            <C>    <C>           <C>     <C>        <C>      <C>          <C>
Federated Liquid Cash
  Fund                    $    500     1.67%    $     --       --%    $    --       --%     $    --      --%    $    500     1.67%
                          =========================================================================================================
Securities:
 Held to maturity:
  Mortgage-Backed
   Securities                   --       --%    $     --       --%    $    --       --%     $ 2,056    6.81%    $  2,056     6.81%
                          -------------------------------------------------------------------------------------------------------
      Total securities    $     --       --%    $     --       --%    $    --       --%     $ 2,056    6.81%    $  2,056     6.81%
                          =========================================================================================================

</TABLE>


Deposit Activities and Other Sources of Funds

   General.  Deposits, loan repayments and prepayments, proceeds from sales of
loans, cash flows generated from operations and FHLB advances are the primary
sources of the Company's funds for use in lending, investing and for other
general purposes.

   Deposits.  The Company offers a variety of deposit accounts with a range of
interest rates and terms.  For the fiscal year ended December 31, 2001,
average certificates of deposit were $71.0 million and were 57.7% of total
average deposits of $123.0 million.  Average deposits were $122.9 million for
the year ended December 31, 2000.  The flow of deposits is influenced
significantly by general economic conditions, changes in money market rates,
prevailing interest rates and competition.  The Company's deposits are obtained
predominately from the areas in which its branch offices are located.  The
Company relies primarily on customer service and long-standing relationships
with customers to attract and retain these deposits; however, market interest
rates and rates offered by competing financial institutions significantly
affect the Company's ability to attract and retain deposits.  From time to
time, the Company solicits certificate accounts in excess of $100,000.

   The Company's current deposit products include savings, demand deposits, NOW
accounts, money market and certificate of deposit accounts ranging in terms
from thirty days to eight years.  Included in the Company's certificate of
deposit accounts are certificates of deposit with balances in excess of
$100,000, and Individual Retirement Accounts ("IRAs").

   Deposits are obtained primarily from residents of Champaign County,
Illinois.  The Company seeks to attract deposit accounts by offering a variety
of products, competitive rates and convenient locations and service hours.
The Company uses traditional methods of advertising to attract new customers
and deposits, including radio and print media advertising.  The Company does
not generally advertise outside of its market area or utilize the services of
deposit brokers.  Management believes that an insignificant number of deposit
accounts are held by nonresidents of the Company's primary market area.

   The Company sets interest rates on its deposits on a weekly basis, based
upon a number of factors including:  the previous week's deposit flow; a
current survey of a selected group of competitors' rates for similar
products; external data which may influence interest rates; investment
opportunities and loan demand; and scheduled maturities.

   At December 31, 2001, the Company had $10.9 million in certificate accounts
in amounts of $100,000 or more maturing as follows:

                                                  Amount         Weighted
      Maturity Period                         (in thousands)   Average Rate
     ----------------                             -------      ------------
Three months or less                              $ 2,914         5.05%
Over three through six months                       2,324         4.78%
Over six months through 12 months                   3,504         4.34%
Over 12 months                                      2,137         6.05%
                                                  -------
 Total                                           $ 10,879         4.96%
                                                  ========================


   The following table sets forth the distribution of the Company's average
deposit accounts for the periods indicated and the weighted average interest
rates on each category presented.



<TABLE>
<CAPTION>
                               ---------------------------------------------------------------------------------------------------
                                     December 31, 2001                 December 31, 2000                December 31, 1999
                               ---------------------------------------------------------------------------------------------------
                                           Percent                           Percent                           Percent
                                           of Total   Weighted               of Total   Weighted               of Total   Weighted
                                Average    Average    Average     Average    Average    Average     Average    Average    Average
                                Balance    Deposits     Rate      Balance    Deposits     Rate      Balance    Deposits    Rate
                                -------    ---------  --------    --------   ---------  --------    -------    --------  --------
                                                                      (dollars in thousands)
 <S>                           <C>          <C>          <C>      <C>        <C>         <C>       <C>         <C>          <C>
 Money market deposits         $ 10,949       8.90%      3.19%    $  9,946     8.16%     3.33%     $  8,783      7.19%      3.03%
 Passbook deposits               14,133      11.49       1.97       14,441    11.85      2.00        15,141     12.40       2.01
 NOW and other demand deposits   16,545      13.45       1.37       15,907    13.05      1.49        15,432     12.64       1.49
 Non-interest bearing deposits   10,367       8.43       0.00        8,979     7.36      0.00         7,552      6.18       0.00
                                -------     ------                  ------   ------                 -------    ------
    Total                        51,994      42.28       1.64%      49,273    40.42      1.74%       46,908     38.41       1.71%
                                -------     ------       ====       ------   ------      ====       -------    ------       ====
 Certificates accounts
   Three months or less             271        .22       3.32%         241      .20      3.53%          347       .28       3.55%
   Over three through six months 14,947      12.15       5.09       13,976    11.47      5.32        20,260     16.59       4.93
   Over six through 12 months     9,348       7.60       5.30       10,618     8.71      5.39        13,280     10.87       4.94
   Over one to three years       35,665      29.00       5.91       35,456    29.09      5.81        28,589     23.41       5.54
   Over three to five years       5,496       4.47       5.82        7,041     5.77      6.02         7,176      5.88       6.04
   Over five to ten years         5,257       4.28       6.62        5,288     4.34      6.68         5,572      4.56       6.68
                                -------     ------                 -------   ------                 -------    ------
    Total certificates           70,984      57.72       5.69%      72,620    59.58      5.73%       75,224     61.59       5.39%
                                -------     ------       ====      -------   ------      ====       -------    ------       ====
    Total average deposits     $122,978     100.00%               $121,893   100.00%               $122,132    100.00%
                                =======     ======                 =======   ======                 =======    ======

</TABLE>


   The following table presents, by various categories, the amount of
certificate accounts outstanding at the dates indicated and the periods to
maturity of the certificate accounts outstanding at December 31, 2001.


<TABLE>
<CAPTION>
                               Period to Maturity from December 31, 2001
                          ------------------------------------------------------------
                                                                                           At         At         At
                          Less than     One to       Two to      Three to    Over Four   Dec 31,    Dec 31,    Dec 31,
                           One Year   Two Years   Three Years   Four Years     Years      2001       2000       1999
                          ---------   ---------   -----------   ----------   ---------   ------     ------     ------
                                                        (in thousands)
 <S>                       <C>        <C>           <C>           <C>         <C>       <C>        <C>        <C>
 Certificate accounts:
   0 to 3.00%              $ 7,726    $   382       $    --       $    --     $    --   $ 8,108    $    --    $    --
   3.01% to 4.00%            9,154      2,298           378           266          12    12,108        220        303
   4.01% to 5.00%            7,609      2,533           625           633         194    11,594      6,772     27,621
   5.01% to 6.00%           11,686      5,449           614           736         535    19,020     22,179     27,055
   6.01% to 7.00%           11,546      1,785         2,090         2,033         876    18,330     40,471     19,254
   7.01% to 8.00%               --         --           190            --          --       190      1,706        100
                           ------------------------------------------------------------------------------------------
    Total                  $47,721    $12,447       $ 3,897       $ 3,668     $ 1,617   $69,350    $71,348    $74,333
                           ===========================================================================================

</TABLE>


   At December 31, 2001, the Company had $20.5 million in advances from the
FHLB and had no other borrowings.  The Company may obtain advances from the
FHLB as part of its operating strategy.  The maximum amount that the FHLB will
advance to member institutions, including the Company, fluctuates from time to
time in accordance with the policies of the OTS and the FHLB.

   The following schedule presents FHLB advances at December 31, 2001 by
maturity date:


    Date                  Fixed                          Next
     of        Interest     or        Maturity           Call        Amount
   Advance       Rate    Variable       Date             Date    (in thousands)
-----------------------------------------------------------------------------
May       2001   4.40%    Fixed    February  2002     non callable   $  2,000
December  2000   5.97     Fixed    June      2002     non callable      1,000
October   2000   6.00    Variable  October   2002     non callable      3,000
March     2001   4.48     Fixed    March     2006    March     2002     1,500
October   1998   4.30     Fixed    October   2008    January   2002     5,000
January   2001   4.55     Fixed    January   2011    January   2002     5,000
September 2001   3.80     Fixed    September 2011    September 2004     3,000
                                                                     --------
                                                                     $ 20,500
                                                                     ========

At December 31, 2000, the Company had $14.0 million in advances from the FHLB
and had no other borrowings.  FHLB advances at December 31, 2000 was comprised
of the following:

    Date                  Fixed                          Next
     of        Interest     or        Maturity           Call        Amount
   Advance       Rate    Variable       Date             Date    (in thousands)
------------------------------------------------------------------------------
November  2000   6.88%    Fixed    January   2001     non callable   $  2,000
October   2000   6.74     Fixed    April     2001     non callable      1,500
October   2000   6.70    Variable  October   2001     non callable      1,500
December  2000   5.97     Fixed    June      2002     non callable      1,000
October   2000   6.58    Variable  October   2002     non callable      3,000
January   2000   4.30     Fixed    October   2008    October   2001     5,000
                                                                     --------
                                                                     $ 14,000
                                                                     ========

   The following table sets forth certain information regarding the Company's
borrowed funds at or for the periods ended on the dates indicated:



<TABLE>
<CAPTION>

                                                                   At or for the Year Ended:

                                          December 31, 2001            December 31, 2000              December 31, 1999
                                         -------------------          -------------------            ------------------
                                                                    (Dollars in thousands)

 <S>                                            <C>                         <C>                           <C>
 Loans sold under repurchase agreement:
   Average balance outstanding                  $    --                     $    --                       $ 1,422
                                                =======                     =======                        ======
   Maximum amount outstanding at any
    month-end during the period                 $    --                     $    --                       $ 2,500
                                                =======                     =======                       =======
   Balance outstanding at end of period         $    --                     $    --                       $    --
                                                =======                     =======                       =======
   Weighted average interest rate
    during the period                                --%                        --%                         6.19%
                                                =======                     =======                       =======
   Weighted average interest rate
    at end of period                                 --%                        --%                           --%
                                                =======                     =======                       =======


 FHLB advances:
   Average balance outstanding                  $19,061                     $10,341                       $ 7,234
                                                =======                     =======                       =======
   Maximum amount outstanding at any
    month-end during the period                 $23,000                     $14,000                       $ 8,000
                                                =======                     =======                       =======
   Balance outstanding at end of period         $20,500                     $14,000                       $ 8,000
                                                =======                     =======                       =======
   Weighted average interest rate
    during the period                              4.87%                      5.36%                         4.69%
                                                =======                     =======                       =======
   Weighted average interest rate
    at end of period                               4.64%                      5.79%                         4.70%
                                                =======                     =======                       =======
</TABLE

Competition

   The Company faces significant competition both in making loans and in
attracting deposits.  The Company's competitors are the financial
institutions operating in its primary market area, many of which are
significantly larger and have greater financial resources than the Company.
The Company's competition for loans comes principally from commercial banks,
savings and loan associations, mortgage banking companies, credit unions and
insurance companies.  Its most direct competition for deposits has
historically come from savings and loan associations and commercial banks.
In addition, the Company faces increasing competition for deposits from
nonbank institutions such as brokerage firms and insurance companies in such
areas as short-term money market funds, corporate and government securities
funds, mutual funds and annuities.  Competition may also increase as a result
of the lifting of restrictions on the interstate operations of financial
institutions.

   The Company serves its market area with a variety of residential loan
products and other retail financial services.  Management considers the
Company's reputation for financial strength and competitive deposit and loan
products as its major competitive advantage in attracting and retaining
customers in its market area.

Personnel

   As of December 31, 2001, the Company, including the Bank and PASC, had 59
full-time employees and 28 part-time employees.  The employees are not
represented by a collective bargaining unit, and the Company considers its
relationship with its employees to be good.


                  INFORMATION REGARDING SUBSIDIARY ACTIVITIES

Description of Business

   The Bank's wholly-owned subsidiary, PASC, is currently engaged on an
agency basis in brokerage services through a third-party broker dealer, Scout
Brokerage Services, Inc. and in the sale of tax-deferred annuity products,
primarily to customers of the Bank and members of the local community.  In
September 1997, PASC formed the GTPS Insurance Agency ("Agency") to provide
insurance related products to customers.  The Agency sells a variety of
insurance products to both individuals and businesses, including life,
health, automobile, property and casualty insurance.  The revenue generated
by PASC is dependent upon maintaining relationships with the current
insurance and brokerage providers.  As of December 31, 2001 and 2000, PASC
had total assets of $968,000 and $888,000, respectively.  For the year ended
December 31, 2001, PASC had total revenues of $1,239,000 which was 8.9% of
total consolidated revenues (prior to the elimination on a consolidated basis
of inter-company transactions) and net income of $178,000, which was 14.8% of
total consolidated net income.  For the year ended December 31, 2000, PASC
had total revenues of $908,000 which was 7.0% of total consolidated revenues
(prior to the elimination on a consolidated basis of inter-company
transactions) and net income of $131,000, which was 13.3% of total
consolidated net income.




Competition

   PASC competes in the brokerage business primarily with local investment
brokerage offices, which are mainly branches of national firms, and with
several area banks that provide brokerage services.  Competition for
brokerage services is based on quality of service, fees charged and knowledge
of investment products offered.  The Agency mainly competes with several
locally owned insurance agencies and also with branches and agents of
national insurance companies.  Competition for insurance business is based
mainly on quality of services, including handling of claims, premiums quoted
and the availability of a broad range of products from a variety of insurance
companies.

                        REGULATION AND SUPERVISION

General

	As a savings and loan holding company, the Company is required by
federal law to file reports with, and otherwise comply with, the rules and
regulations of the Office of Thrift Supervision.  The Bank is subject to
extensive regulation, examination and supervision by the Office of Thrift
Supervision, as its primary federal regulator, and the Federal Deposit
Insurance Corporation, as the deposit insurer.  The Bank is a member of the
Federal Home Loan Bank System and, with respect to deposit insurance, of the
Savings Association Insurance Fund managed by the Federal Deposit Insurance
Corporation.  The Bank must file reports with the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation concerning its
activities and financial condition in addition to obtaining regulatory
approvals prior to entering into certain transactions such as mergers with,
or acquisitions of, other savings institutions.  The Office of Thrift
Supervision and/or the Federal Deposit Insurance Corporation conduct periodic
examinations to test the Bank's safety and soundness and compliance with
various regulatory requirements.  This regulation and supervision establishes
a comprehensive framework of activities in which an institution can engage
and is intended primarily for the protection of the insurance fund and
depositors.  The regulatory structure also gives the regulatory authorities
extensive discretion in connection with their supervisory and enforcement
activities and examination policies, including policies with respect to the
classification of assets and the establishment of adequate loan loss reserves
for regulatory purposes.  Any change in such regulatory requirements and
policies, whether by the Office of Thrift Supervision, the Federal Deposit
Insurance Corporation or Congress, could have a material adverse impact on
the Company, the Bank and their operations.  Certain of the regulatory
requirements applicable to the Bank and to the Company are referred to below
or elsewhere herein.  The description of statutory provisions and regulations
applicable to savings institutions and their holding companies set forth in
this Form 10-KSB does not purport to be a complete description of such
statutes and regulations and their effects on the Bank and the Company.

Holding Company Regulation

	The Company is a nondiversified unitary savings and loan holding
company within the meaning of federal law.  Under prior law, a unitary
savings and loan holding company, such as the Company, was not generally
restricted as to the types of business activities in which it may engage,
provided that the Bank continued to be a qualified thrift lender.  See
"Federal Savings Institution Regulation - QTL Test."  The Gramm-Leach-Bliley
Act of 1999 provides that no company may acquire control of a savings
association after May 4, 1999 unless it engages only in the financial
activities permitted for financial holding companies under the law or for
multiple savings and loan holding companies as described below.  Further, the
Gramm-Leach-Bliley Act specifies that existing savings and loan holding
companies may only engage in such activities.  The Gramm-Leach-Bliley Act,
however, grandfathered the unrestricted authority for activities with respect
to unitary savings and loan holding companies existing prior to May 4, 1999,
so long as the Bank continues to comply with the QTL Test.  The Company does
qualify for the grandfathering.  Upon any non-supervisory acquisition by the
Company of another savings institution or savings bank that meets the
qualified thrift lender test and is deemed to be a savings institution by the
Office of Thrift Supervision, the Company would become a multiple savings and
loan holding company (if the acquired institution is held as a separate
subsidiary) and would generally be limited to activities permissible for bank
holding companies under Section 4(c)(8) of the Bank Holding Company Act,
subject to the prior approval of the Office of Thrift Supervision, and
certain activities authorized by Office of Thrift Supervision regulation.

	A savings and loan holding company is prohibited from, directly or
indirectly, acquiring more than 5% of the voting stock of another savings
institution or savings and loan holding company, without prior written
approval of the Office of Thrift Supervision and from acquiring or retaining
control of a depository institution that is not insured by the Federal
Deposit Insurance Corporation.  In evaluating applications by holding
companies to acquire savings institutions, the Office of Thrift Supervision
considers the financial and managerial resources and future prospects of the
Company and institution involved, the effect of the acquisition on the risk
to the deposit insurance funds, the convenience and needs of the community
and competitive factors.

	The Office of Thrift Supervision may not approve any acquisition that
would result in a multiple savings and loan holding company controlling
savings institutions in more than one state, subject to two exceptions:
(i) the approval of interstate supervisory acquisitions by savings and loan
holding companies and (ii) the acquisition of a savings institution in
another state if the laws of the state of the target savings institution
specifically permit such acquisitions.  The states vary in the extent to
which they permit interstate savings and loan holding company acquisitions.

	Although savings and loan holding companies are not currently subject
to specific capital requirements or specific restrictions on the payment of
dividends or other capital distributions, federal regulations do prescribe
such restrictions on subsidiary savings institutions as described below.  The
Bank must notify the Office of Thrift Supervision 30 days before declaring
any dividend to the Company.  In addition, the financial impact of a holding
company on its subsidiary institution is a matter that is evaluated by the
Office of Thrift Supervision and the agency has authority to order cessation
of activities or divestiture of subsidiaries deemed to pose a threat to the
safety and soundness of the institution.

	Acquisition of the Company.  Under the Federal Change in Bank Control
Act ("CIBCA"), a notice must be submitted to the Office of Thrift Supervision
if any person (including a company), or group acting in concert, seeks to
acquire 10% or more of the Company's outstanding voting stock, unless the
Office of Thrift Supervision has found that the acquisition will not result
in a change of control of the Company.  Under the CIBCA, the Office of Thrift
Supervision has 60 days from the filing of a complete notice to act, taking
into consideration certain factors, including the financial and managerial
resources of the acquirer and the anti-trust effects of the acquisition.  Any
company that so acquires control would then be subject to regulation as a
savings and loan holding company.

Federal Savings Institution Regulation

	Business Activities.  The activities of federal savings banks are
governed by federal law and regulations.  These laws and regulations
delineate the nature and extent of the activities in which federal savings
banks may engage.  In particular, certain lending authority for federal
savings banks, e.g., commercial, non-residential real property loans and
consumer loans, is limited to a specified percentage of the institution's
capital or assets.

	Capital Requirements.  The Office of Thrift Supervision capital
regulations require savings institutions to meet three minimum capital
standards:  a 1.5% tangible capital ratio, a 4% leverage ratio (3% for
institutions receiving the highest rating on the CAMELS examination rating
system) and an 8% risk-based capital ratio.  In addition, the prompt
corrective action standards discussed below also establish, in effect, a
minimum 2% tangible capital standard, a 4% leverage ratio (3% for
institutions receiving the highest rating on the CAMELS system), and,
together with the risk-based capital standard itself, a 4% Tier 1 risk-based
capital standard.  The Office of Thrift Supervision regulations also require
that, in meeting the tangible, leverage and risk-based capital standards,
institutions must generally deduct investments in and loans to subsidiaries
engaged in activities as principal that are not permissible for a national
bank.

	The risk-based capital standard for savings institutions requires the
maintenance of Tier 1 (core) and total capital (which is defined as core
capital and supplementary capital) to risk-weighted assets of at least 4% and
8%, respectively.  In determining the amount of risk-weighted assets, all
assets, including certain off-balance sheet assets, are multiplied by a risk-
weight factor of 0% to 100%, assigned by the Office of Thrift Supervision
capital regulation based on the risks believed inherent in the type of asset.
Core (Tier 1) capital is defined as common stockholders' equity (including
retained earnings), certain noncumulative perpetual preferred stock and
related surplus, and minority interests in equity accounts of consolidated
subsidiaries less intangibles other than certain mortgage servicing rights
and credit card relationships.  The components of supplementary capital
currently include cumulative preferred stock, long-term perpetual preferred
stock, mandatory convertible securities, subordinated debt and intermediate
preferred stock, the allowance for loan and lease losses limited to a maximum
of 1.25% of risk-weighted assets and up to 45% of unrealized gains on
available-for-sale equity securities with readily determinable fair market
values.  Overall, the amount of supplementary capital included as part of
total capital cannot exceed 100% of core capital.

	The capital regulations also incorporate an interest rate risk
component.  Savings institutions with "above normal" interest rate risk
exposure are subject to a deduction from total capital for purposes of
calculating their risk-based capital requirements.  For the present time, the
Office of Thrift Supervision has deferred implementation of the interest rate
risk capital charge.  At December 31, 2001, the Bank met each of its capital
requirements.

	The following table presents the Bank's capital position at December
31, 2001.

                                                           Capital
                                          Excess     --------------------
                   Actual   Required   (Deficiency)    Actual    Required
                  Capital    Capital      Amount       Percent   Percent
                 --------------------------------------------------------
                                  (Dollars in thousands)

Tangible       $   9,790   $  2,401    $  7,389        6.11%      1.50%

Core
(Leverage)         9,790      6,404       3,386        6.11%      4.00%


Risk-based        10,825      7,934       2,891       10.91%      8.00%


	Prompt Corrective Regulatory Action.  The Office of Thrift Supervision
is required to take certain supervisory actions against undercapitalized
institutions, the severity of which depends upon the institution's degree of
undercapitalization.  Generally, a savings institution that has a ratio of
total capital to risk weighted assets of less than 8%, a ratio of Tier 1
(core) capital to risk-weighted assets of less than 4% or a ratio of core
capital to total assets of less than 4% (3% or less for institutions with the
highest examination rating) is considered to be "undercapitalized."  A
savings institution that has a total risk-based capital ratio less than 6%, a
Tier 1 capital ratio of less than 3% or a leverage ratio that is less than 3%
is considered to be "significantly undercapitalized" and a savings
institution that has a tangible capital to assets ratio equal to or less than
2% is deemed to be "critically undercapitalized."  Subject to a narrow
exception, the Office of Thrift Supervision is required to appoint a receiver
or conservator for an institution that is "critically undercapitalized."  The
regulation also provides that a capital restoration plan must be filed with
the Office of Thrift Supervision within 45 days of the date a savings
institution receives notice that it is "undercapitalized," "significantly
undercapitalized" or "critically undercapitalized."  Compliance with the plan
must be guaranteed by any parent holding company.  In addition, numerous
mandatory supervisory actions become immediately applicable to an
undercapitalized institution, including, but not limited to, increased
monitoring by regulators and restrictions on growth, capital distributions
and expansion.  The Office of Thrift Supervision could also take any one of a
number of discretionary supervisory actions, including the issuance of a
capital directive and the replacement of senior executive officers and
directors.

	Insurance of Deposit Accounts.  The Bank is a member of the Savings
Association Insurance Fund.  The Federal Deposit Insurance Corporation
maintains a risk-based assessment system by which institutions are assigned
to one of three categories based on their capitalization and one of three
subcategories based on examination ratings and other supervisory information.
An institution's assessment rate depends upon the categories to which it is
assigned.  Assessment rates for Savings Association Insurance Fund member
institutions are determined semi-annually by the Federal Deposit Insurance
Corporation and currently range from zero basis points for the healthiest
institutions to 27 basis points for the riskiest.

	The Bank's assessment rate for the fiscal year 2001 was zero basis
points.  The Federal Deposit Insurance Corporation has authority to increase
insurance assessments.  A significant increase in Savings Association
Insurance Fund insurance premiums would likely have an adverse effect on the
operating expenses and results of operations of the Bank.  Management cannot
predict what insurance assessment rates will be in the future.

	In addition to the assessment for deposit insurance, institutions are
required to make payments on bonds issued in the late 1980s by the Financing
Corporation ("FICO") to recapitalize the predecessor to the Savings
Association Insurance Fund.  During 2001, FICO payments for Savings
Association Insurance Fund members approximated 1.9 basis points and the
premium paid by the Bank for 2001 was $23,000.

	Insurance of deposits may be terminated by the Federal Deposit
Insurance Corporation upon a finding that the institution has engaged in
unsafe or unsound practices, is in an unsafe or unsound condition to continue
operations or has violated any applicable law, regulation, rule, order or
condition imposed by the Federal Deposit Insurance Corporation or the Office
of Thrift Supervision.  The management of the Bank does not know of any
practice, condition or violation that might lead to termination of deposit
insurance.

	Loans to One Borrower.  Federal law provides that savings institutions
are generally subject to the limits on loans to one borrower applicable to
national banks.  A savings institution may not make a loan or extend credit
to a single or related group of borrowers in excess of 15% of its unimpaired
capital and surplus.  An additional amount may be lent, equal to 10% of
unimpaired capital and surplus, if secured by specified readily-marketable
collateral.  At December 31, 2001, the Bank's limit on loans to one borrower
was $1.5 million, and the Bank's largest aggregate outstanding balance of
loans to one borrower was $3.4 million.

	QTL Test.  The HOLA requires savings institutions to meet a qualified
thrift lender test.  Under the test, a savings association is required to
either qualify as a "domestic building and loan association" under the
Internal Revenue Code or maintain at least 65% of its "portfolio assets"
(total assets less: (i) specified liquid assets up to 20% of total assets;
(ii) intangibles, including goodwill; and (iii) the value of property used to
conduct business) in certain "qualified thrift investments" (primarily
residential mortgages and related investments, including certain mortgage-
backed securities) in at least 9 months out of each 12 month period.

	A savings institution that fails the qualified thrift lender test is
subject to certain operating restrictions and may be required to convert to a
bank charter.  As of December 31, 2001, the Bank maintained 88.3% of its
portfolio assets in qualified thrift investments and, therefore, met the
qualified thrift lender test.  Recent legislation has expanded the extent to
which education loans, credit card loans and small business loans may be
considered "qualified thrift investments."

	Limitation on Capital Distributions.  Office of Thrift Supervision
regulations impose limitations upon all capital distributions by a savings
institution, including cash dividends, payments to repurchase its shares and
payments to shareholders of another institution in a cash-out merger.  Under
the regulations, an application to and the prior approval of the Office of
Thrift Supervision is required prior to any capital distribution if the
institution does not meet the criteria for "expedited treatment" of
applications under Office of Thrift Supervision regulations (i.e., generally,
examination ratings in the two top categories), the total capital
distributions for the calendar year exceed net income for that year plus the
amount of retained net income for the preceding two years, the institution
would be undercapitalized following the distribution or the distribution
would otherwise be contrary to a statute, regulation or agreement with the
Office of Thrift Supervision.  If an application is not required, the
institution must still provide prior notice to Office of Thrift Supervision
of the capital distribution if, like the Bank, it is a subsidiary of a
holding company.  In the event the Bank's capital fell below its regulatory
requirements or the Office of Thrift Supervision notified it that it was in
need of more than normal supervision, the Bank's ability to make capital
distributions could be restricted.  In addition, the Office of Thrift
Supervision could prohibit a proposed capital distribution by any
institution, which would otherwise be permitted by the regulation, if the
Office of Thrift Supervision determines that such distribution would
constitute an unsafe or unsound practice.

	Assessments.  Savings institutions are required to pay assessments to
the Office of Thrift Supervision to fund the agency's operations.  The
general assessments, paid on a semi-annual basis, are computed upon the
savings institution's total assets, including consolidated subsidiaries, as
reported in the Bank's latest quarterly thrift financial report.  The
assessments paid by the Bank for the fiscal year ended December 31, 2001
totaled $42,000.

	Transactions with Related Parties.  The Bank's authority to engage in
transactions with  "affiliates" (e.g., any company that controls or is under
common control with an institution, including the Company and its non-savings
institution subsidiaries) is limited by federal law.  The aggregate amount of
covered transactions with any individual affiliate is limited to 10% of the
capital and surplus of the savings institution.  The aggregate amount of
covered transactions with all affiliates is limited to 20% of the savings
institution's capital and surplus.  Certain transactions with affiliates are
required to be secured by collateral in an amount and of a type described in
federal law.  The purchase of low quality assets from affiliates is generally
prohibited.  The transactions with affiliates must be on terms and under
circumstances, that are at least as favorable to the institution as those
prevailing at the time for comparable transactions with non-affiliated
companies.  In addition, savings institutions are prohibited from lending to
any affiliate that is engaged in activities that are not permissible for bank
holding companies and no savings institution may purchase the securities of
any affiliate other than a subsidiary.

	The Bank's authority to extend credit to executive officers, directors
and 10% shareholders ("insiders"), as well as entities such persons control,
is also governed by federal law.  Such loans are required to be made on terms
substantially the same as those offered to unaffiliated individuals and not
involve more than the normal risk of repayment.  Recent legislation created
an exception for loans made pursuant to a benefit or compensation program
that is widely available to all employees of the institution and does not
give preference to insiders over other employees.  The law limits both the
individual and aggregate amount of loans the Bank may make to insiders based,
in part, on the Bank's capital position and requires certain board approval
procedures to be followed.

	Enforcement.  The Office of Thrift Supervision has primary enforcement
responsibility over savings institutions and has the authority to bring
actions against the institution and all institution-affiliated parties,
including stockholders, and any attorneys, appraisers and accountants who
knowingly or recklessly participate in wrongful action likely to have an
adverse effect on an insured institution.  Formal enforcement action may
range from the issuance of a capital directive or cease and desist order to
removal of officers and/or directors to institution of receivership,
conservatorship or termination of deposit insurance.  Civil penalties cover a
wide range of violations and can amount to $25,000 per day, or even $1
million per day in especially egregious cases.  The Federal Deposit Insurance
Corporation has the authority to recommend to the Director of the Office of
Thrift Supervision that enforcement action be taken with respect to a
particular savings institution.  If action is not taken by the Director, the
Federal Deposit Insurance Corporation has authority to take such action under
certain circumstances.  Federal law also establishes criminal penalties for
certain violations.

	Standards for Safety and Soundness. The federal banking agencies have
adopted Interagency Guidelines prescribing Standards for Safety and
Soundness.  The guidelines set forth the safety and soundness standards that
the federal banking agencies use to identify and address problems at insured
depository institutions before capital becomes impaired.  If the Office of
Thrift Supervision determines that a savings institution fails to meet any
standard prescribed by the guidelines, the Office of Thrift Supervision may
require the institution to submit an acceptable plan to achieve compliance
with the standard.

Federal Home Loan Bank System

	The Bank is a member of the Federal Home Loan Bank System, which
consists of 12 regional Federal Home Loan Banks.  The Federal Home Loan Bank
provides a central credit facility primarily for member institutions.  The
Bank, as a member of the Federal Home Loan Bank, is required to acquire and
hold shares of capital stock in the Federal Home Loan Bank in an amount at
least equal to 1.0% of the aggregate principal amount of its unpaid
residential mortgage loans and similar obligations at the beginning of each
year, or 1/20 of its advances (borrowings) from the Federal Home Loan Bank,
whichever is greater.  The Bank was in compliance with this requirement with
an investment in Federal Home Loan Bank stock at December 31, 2001 of $1.2
million.

	The Federal Home Loan Banks are required to provide funds for the
resolution of insolvent thrifts in the late 1980s and to contribute funds for
affordable housing programs.  These requirements could reduce the amount of
dividends that the Federal Home Loan Banks pay to their members and could
also result in the Federal Home Loan Banks imposing a higher rate of interest
on advances to their members.  If dividends were reduced, or interest on
future Federal Home Loan Bank advances increased, the Bank's net interest
income would likely also be reduced.  Recent legislation has changed the
structure of the Federal Home Loan Banks funding obligations for insolvent
thrifts, revised the capital structure of the Federal Home Loan Banks and
implemented entirely voluntary membership for Federal Home Loan Banks.
Management cannot predict the effect that these changes may have with respect
to its Federal Home Loan Bank membership.

Federal Reserve System

	The Federal Reserve Board regulations require savings institutions to
maintain non-interest earning reserves against their transaction accounts
(primarily NOW and regular checking accounts).  The regulations generally
provide that reserves be maintained against aggregate transaction accounts as
follows:  a 3% reserve ratio is assessed on net transaction accounts up to
and including $41.3 million; a 10% reserve ratio is applied above $41.3
million.  The first $5.7 million of otherwise reservable balances (subject to
adjustments by the Federal Reserve Board) are exempted from the reserve
requirements.  The amounts are adjusted annually.  The Bank complies with the
foregoing requirements.

                         FEDERAL AND STATE TAXATION

Federal Taxation

   General.  The Company and the Bank report their income on a calendar year,
consolidated basis and use the accrual method of accounting, and are subject
to federal income taxation in the same manner as other corporations with some
exceptions, including particularly the Bank's reserve for bad debts discussed
below.  The following discussion of tax matters is intended only as a summary
and does not purport to be a comprehensive description of the tax rules
applicable to the Bank or the Company.  Neither the Company or the Bank have
been audited by the IRS during the last seven years, which covered the tax
years 1995-2001.  For its 2001 taxable year, the Company and the Bank are
subject to a maximum federal income tax rate of 39%.

   Bad Debt Reserves.  For fiscal years beginning prior to December 31, 1995,
thrift institutions which qualified under certain definitional tests and
other conditions of the Internal Revenue Code of 1986 (the "Code") were
permitted to use certain favorable provisions to calculate their deductions
from taxable income for annual additions to their bad debt reserve.  A
reserve could be established for bad debts on qualifying real property loans
(generally secured by interests in real property improved or to be improved)
under (i) the Percentage of Taxable Income Method (the "PTI Method") or (ii)
the Experience Method.  The reserve for nonqualifying loans was computed
using the Experience Method.

   The Small Business Job Protection Act of 1996 (the "1996 Act"), which was
enacted on August 20, 1996, repeals the reserve method of accounting for bad
debts for tax years beginning after 1995 and requires savings institutions to
recapture (i.e., take into income) certain portions of their accumulated bad
debt reserves.  Thrift institutions eligible to be treated as "small banks"
(assets of $500 million or less) are allowed to use the Experience Method
applicable to such institutions, while thrift institutions that are treated
as large banks (assets exceeding $500 million) are required to use only the
specific charge-off method.  Thus, the PTI Method of accounting for bad debts
is no longer available for any financial institution.

   A thrift institution required to change its method of computing reserves
for bad debts will treat such change as a change in method of accounting,
initiated by the taxpayer, and having been made with the consent of the IRS.
Any Section 481(a) adjustment required to be taken into income with respect
to such change generally will be taken into income ratably over a six-taxable
year period, beginning with the first taxable year beginning after 1995,
subject to a 2-year suspension if the "residential loan requirement" is
satisfied.

   Under the residential loan requirement provision, the recapture required
by the 1996 Act will be suspended for each of two successive taxable years,
beginning with the Bank's 1996 taxable year, in which the Bank originates a
minimum of certain residential loans based upon the average of the principal
amounts of such loans made by the Bank during its six taxable years preceding
its current taxable year.

   The Bank is required to recapture (i.e., take into income) over a six year
period the excess of the balance of its tax bad debt reserves as of December
31, 1995, other than its supplemental reserve for losses on loans over the
balance of such reserves as of September 30, 1988.  As a result of such
recapture, the Bank incurred an additional tax liability of approximately
$125,000 which was taken into income beginning in 1998 over a six year
period.

   Distributions.  Under the 1996 Act, if the Bank makes "non-dividend
distributions" to the Company, such distributions will be considered to have
been made from the Bank's unrecaptured tax bad debt reserves (including the
balance of its reserves as of December 31, 1987) to the extent thereof, and
then from the Bank's supplemental reserve for losses on loans, to the extent
thereof, and an amount based on the amount distributed (but not in excess of
the amount of such reserves) will be included in the Bank's income.  Non-
dividend distributions include distributions in excess of the Bank's current
and accumulated earnings and profits, as calculated for federal income tax
purposes, distributions in redemption of stock, and distributions in partial
or complete liquidation.  Dividends paid out of the Bank's current or
accumulated earnings and profits will not be so included in the Bank's
income.

   The amount of additional taxable income triggered by a non-dividend is an
amount that, when reduced by the tax attributable to the income, is equal to
the amount of the distribution.  Thus, if the Bank makes a non-dividend
distribution to the Company, approximately one and one-half times the amount
of such distribution (but not in excess of the amount of such reserves) would
be includable in income for federal income tax purposes, assuming a 35%
federal corporate income tax rate.  The Bank does not intend to pay dividends
that would result in a recapture of any portion of its bad debt reserves.

   SAIF Recapitalization Assessment.  The Funds Act levied a 65.7-cent fee on
every $100 of thrift deposits held on March 31, 1995.  For financial
statement purposes, this assessment was reported as an expense for the
quarter ended September 30, 1996.  The Funds Act includes a provision which
states that the amount of any special assessment paid to capitalize SAIF
under this legislation is deductible under Section 162 of the Code in the
year of payment.

State and Local Taxation

   State of Illinois.  The Company files a consolidated Illinois income tax
return.  For Illinois income tax purposes, the Company is taxed at an
effective rate equal to 7.2% of Illinois Taxable Income.  For these purposes,
"Illinois Taxable Income" generally means federal taxable income, subject to
certain adjustments (including the addition of interest income on state and
municipal obligations and the exclusion of interest income on United States
Treasury obligations).  The exclusion of income on United State Treasury
obligations has the effect of reducing the Illinois taxable income of the
Bank.

   Delaware Taxation.  As a Delaware holding company not earning income in
Delaware, the Company is exempted from Delaware corporation income tax but is
required to file an annual report with and pay an annual franchise tax to the
State of Delaware.

                  EXECUTIVE OFFICERS OF THE REGISTRANT

   The following table sets forth certain information regarding the executive
officers of the Company and the Bank who are not directors or Named Executive
Officers as set forth in the Registrant's Proxy Statement for the Annual
Meeting of Shareholders to be held on April 23, 2002 at pages 7 through 9.

                   Age at
     Name         12/31/01                   Position
---------------- ----------    ---------------------------------------------
Jane F. Adams        44        Chief Financial Officer, Secretary, Treasurer
                               of Great American Bancorp, Inc. since April,
1995. Senior Vice President - Finance,
                               Secretary, Treasurer of Bank since February,
1996. Prior thereto, Vice President -
                               Finance, Secretary, Treasurer of Bank
                               since April, 1995.  Secretary, Treasurer of
                               PASC since April, 1995.

Mark D. Piper        37        Senior Vice President - Operations of Bank
                               since February 2002.  Prior thereto Vice
                               President - Operations of Bank since 1996.

Melinda K. Waller    42        Senior Vice President - Deposit Acquisitions
                               of Bank since February 1997.  Prior thereto
                               Vice President - Deposit Acquisitions of
                               Bank since 1991.

Paul D. Wilson       50        Senior Vice President - Lending of Bank since
                               November, 1995.

Item 2.   Description of Property.

   The Bank conducts its business through an administrative office located
in Champaign and two branch offices.  The Company believes that the Bank's
current facilities are adequate to meet the present and immediately foresee
able needs of the Bank and the Company.  The following table sets forth
certain information relating to the Bank's administrative and branch offices.




<TABLE>
<CAPTION>

                                                                                    Net Book Value
                                                                                    of Property or
                                                   Original                           Leasehold
                                       Leased        Date                          Improvements at
                                         or        Leased or     Date of Lease       December 31,
Location                                Owned      Acquired       Expiration             2001
                                       -------     ---------     -------------     ----------------
<S>                                    <C>         <C>             <C>               <C>
Administrative and Branch Office:
1311 South Neil Street
Champaign, Illinois                     owned      04/12/93            --            $ 4,796,000

Branch Offices:
1912 West Springfield (1)
Champaign, Illinois                    leased      12/01/79        12/01/04              131,000

301 West Springfield
Urbana, Illinois                        owned      01/27/80            --                723,000
                                                                                     -----------
                                                                      Total          $ 5,650,000
                                                                                     ===========

</TABLE>

---------------
(1) The Bank has the option to extend the lease term for three consecutive
    ten-year periods.

   The Bank presently owns electronic data processing equipment, consisting
of personal computers, printers, and item processing equipment with an
approximate net book value of $524,000.  The Bank does not provide data
processing services for other financial institutions.  In May 1998, the Bank
installed an area network and in October 1998, the Bank converted its primary
computer application to an in-house system.  The Bank previously operated its
main banking system through a third party service bureau.

Item 3.   Legal Proceedings.

   The Company is not involved in any pending legal proceedings other than
routine legal proceedings occurring in the ordinary course of business.  Such
routine legal proceedings in the aggregate are believed by management to be
immaterial to the Company's financial condition or results of operations.

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

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

                            PART II

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

   Information relating to the market for Registrant's common stock and
related stockholder matters appears under "Shareholder Information" in the
2001 Annual Report to Stockholders on pages 56 through 57 and is incorporated
herein by reference.

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

   The above captioned information appears under the caption "Management's
Discussion and Analysis" in the 2001 Annual Report to Stockholders on pages 2
to 24 and is incorporated herein by reference.

Item 7.   Financial Statements

   The Consolidated Financial Statements of Great American Bancorp, Inc. and
its subsidiary as of December 31, 2001 and 2000, together with the report of
BKD, LLP appears in the 2001 Annual Report to Stockholders on pages 25 to 55
and is incorporated herein by reference.

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

          None.
                                 PART III

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

   The information relating to directors and executive officers of the
Registrant is incorporated herein by reference to the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on April 23, 2002
at pages 4 through 7, filed on March 22, 2002 with the SEC.


Item 10.  Executive Compensation

   The information relating to executive an director compensation is
incorporated herein by reference to the Registrant's Proxy Statement for the
Annual Meeting of Stockholders to be held on April 23, 2002 at pages 7
through 9, filed on March 22, 2002 with the SEC.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

   The information relating to security ownership of certain beneficial
owners and management is incorporated herein by reference to the Registrant's
Proxy Statement for the Annual Meeting of Stockholders to be held on April
23, 2002 at pages 3 through 4, filed on March 22, 2002 with the SEC.

Item 12.  Certain Relationships and Related Transactions

   The information relating to certain relationships and related transactions
is incorporated herein by reference to the Registrant's Proxy Statement for
the Annual Meeting of Stockholders to be held on April 23, 2002 at page 9,
filed on March 22, 2002 with the SEC.

Item 13.  Exhibits, Lists and Reports on Form 8-K.

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

          (1)    Financial Statements

          Consolidated Financial Statements of the Company are incorporated
          by reference to the following indicated pages of the 2001 Annual
          Report to Stockholders.


          Independent Accountants' Report  . . . . . . . . . . . . . . . .25

          Consolidated Balance Sheets as of
          December 31, 2001 and 2000. . . . . . . . . . . . . . . . . . . 26

          Consolidated Statements of Income for the year
          ended December 31, 2001 and 2000  . . . . . . . . . . . . . . . 28

          Consolidated Statements of Stockholders' Equity for
          the year ended December 31, 2001 and 2000 . . . . . . . . . . . 30

          Consolidated Statements of Cash Flows for the year
          ended December 31, 2001 and 2000. . . . . . . . . . . . . . . . 31

          Notes to Consolidated Financial Statements  . . . . . . . . .32-55

          The remaining information appearing in the 2001 Annual Report to
          Stockholders is not deemed to be filed as part of this report,
          except as expressly provided herein.

          (2)   Schedules

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

          (3) Exhibits

          The following exhibits are filed as part of this report:

3.1 Certificate of Incorporation of Great American Bancorp,
       Inc.*
          3.2    Bylaws of Great American Bancorp, Inc.*
          4.0    Stock Certificate of Great American Bancorp, Inc.*
10.1 First Federal Savings Bank of Champaign-Urbana Employee
Stock Ownership Plan*
         10.2    Form of Employment Agreement between First Federal Savings
                 Bank of Champaign-Urbana and George R. Rouse*
         10.3    Form of Employment Agreement between Great American Bancorp,
                 Inc. and George R. Rouse*
         10.4    Form of Change of Control Agreements between First Federal
                 Savings Bank of Champaign-Urbana and Jane F. Adams, Dale
                 Pelg and Melinda Waller.*
         10.5    Great American Bancorp, Inc. 1995 Incentive Plan**
         10.6    Great American Bancorp, Inc. 1995 Incentive Plan***
                 (as amended and restated as of January 13, 1997)
         11.0    Computation of earnings per share (filed herewith)
         13.0    2001 Annual Report to Stockholders (only portions
                 incorporated by reference filed herewith)
21.0 Subsidiary information is incorporated herein by reference
to "Part I - Subsidiaries"
         23.0    Consent of Independent Accountants

__________________

            *    Incorporated herein by reference into this document from the
                 Exhibits to Form S-1, Registration Statement, as amended,
                 filed on March 24, 1995, Registration No. 33-90614.

           **    Incorporated herein by reference into this document from the
                 Registrant's Proxy Statement for the Annual Meeting of
                 Stockholders held on February 14, 1996 which was filed on
                 January 11, 1996 at Exhibit A.

          ***    Incorporated herein by reference into this document from the
                 Registrant's Report on Form 10-KSB for the fiscal year ended
                 December 31, 1996.

     (b)    Reports on Form 8-K

            On October 17, 2001, the Registrant filed a Current Report on
            Form 8-K under Items 5 and 7, incorporating by reference a press
            release dated October 16, 2001, relating to the Registrant's
            unaudited results for the nine months ended September 30, 2001

            On December 12, 2001, the Registrant filed a Current Report on
            Form 8-K under Items 5 and 7, incorporating by reference a press
            release dated December 12, 2001 relating to the Company's
            announcement that its Board of Directors has approved a 5% stock
            repurchase program.


                           SIGNATURES

   Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                      GREAT AMERICAN BANCORP, INC.

Date:    March 26, 2002               /s/ George R. Rouse
     -----------------------          -------------------------------
                                      George R. Rouse
                                      President, Chief Executive
                                      Officer and Director

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

Date:    March 26, 2002               /s/ George R. Rouse
     -----------------------          -------------------------------
                                      George R. Rouse
                                      President, Chief Executive
                                      Officer and Director

Date:    March 26, 2002               /s/ Ronald E. Guenther
     -----------------------          -------------------------------
                                      Ronald E. Guenther
                                      Chairman of the Board
                                      of Directors

Date:
     -----------------------          -------------------------------
                                      Clinton C. Atkins, Director

Date:    March 27, 2002               /s/ Ronald Kiddoo
     -----------------------          ------------------------
                                      Ronald Kiddoo, Director

Date:    March 26, 2002               /s/ Jack B. Troxell
     -----------------------          -------------------------------
                                      Jack B. Troxell, Director

Date:    March 26, 2002               /s/ Jane F. Adams
     -----------------------          -------------------------------
                                      Jane F. Adams
                                      Chief Financial Officer,
                                      Secretary and Treasurer
                                      (Principal Senior Accounting
                                      and Financial Officer)







                Exhibit 11.0  Computation of Earnings Per Share



Earnings per share

Earnings per share (EPS) were computed as follows
(dollar amounts in thousands except share data):

                                               Year Ended December 31, 2001
                                             -------------------------------
                                                        Weighted
                                                         Average   Per Share
                                              Income      Shares     Amount
                                             -------------------------------
Basic earnings per share

  Income available to common stockholders    $ 1,201     929,350    $  1.29

Effect of dilutive securities
  Stock options                                           24,477
  Unearned incentive plan shares                           6,106
                                              -------------------------------
Diluted earnings per share
  Income available to common stockholders
   and assumed conversion                    $ 1,201     959,933    $  1.25
                                             ===============================



                                              Period Ended December 31, 2000
                                             -------------------------------
                                                        Weighted
                                                         Average    Per Share
                                              Income      Shares     Amount
                                             -------------------------------
Basic earnings per share
  Income available to common stockholders    $   983   1,065,224    $  0.92

Effect of dilutive securities
  Unearned incentive plan shares                          14,763
                                             -------------------------------
Diluted Earnings Per Share
  Income available to common stockholders
   and assumed conversion                    $   983   1,079,987    $  0.91
                                             ===============================

Options to purchase 180,101 shares of common stock at $14.22 were outstanding
at December, 31, 2000, but were excluded from the computation of the diluted
earnings per share because the options exercise price was greater than the
average market price of the common shares for 2000.




                  Exhibit 13.0   Annual Report to Shareholders

GREAT AMERICAN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Table dollar amounts in thousands, except per share data)

Great American Bancorp, Inc. (the "Company") is based in east central
Illinois and is the parent company of First Federal Savings Bank of
Champaign-Urbana (the "Bank"). The Company purchases loans from the Bank, but
otherwise conducts no significant business except for through the Bank.  In
addition to traditional banking services, the Bank, through its subsidiary
Park Avenue Service Corporation ("PASC"), provides securities brokerage
services through a third-party broker-dealer, Scout Brokerage Services, Inc.,
and also engages in the sale of tax deferred annuities, and through the GTPS
Insurance Agency ("Agency") provides insurance related products to customers.
The Agency sells a variety of insurance products including life, health,
automobile, property and casualty insurance.  Refer to Note 17 - "Business
Industry Segments" of the Notes to the Consolidated Financial Statements for
financial information relating to the Company's industry segments, including
banking services and insurance/brokerage services.  All references to the
Company include the Bank and PASC, unless otherwise indicated.

Forward-Looking Statements

In addition to historical information, this Annual Report may include certain
forward-looking statements based on current management expectations.  The
Company's actual results could differ materially from those management
expectations.  Factors that could cause future results to vary from current
management expectations include, but are not limited to, general economic
conditions, legislative and regulatory changes, monetary and fiscal policies
of the federal government, changes in tax policies, rates and regulations of
federal, state and local tax authorities, changes in interest rates, deposit
flows, the cost of funds, demand for loan products, demand for financial
services, competition, changes in the quality or competition, changes in the
quality or composition of the Bank's loan and investment portfolios, changes
in accounting principles, policies or guidelines, and other economic,
competitive, governmental and technological factors affecting the Company's
operations, markets, products, services and prices.  Further description of
the risks and uncertainties to the business are included in detail in Item 1,
"Business" of the Company's 2001 Form 10-KSB.  The Company does not undertake
- and specifically disclaims any obligation - to publicly release the result
of any revisions which may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.

Results of Operations

General

The Company recorded net income of $1,201,000 in 2001 which was $218,000, or
22.2%, higher than the $983,000 reported for 2000.  Basic earnings per share
increased $0.37, or 40.2%, from $0.92 in 2000 to $1.29 in 2001 and diluted
earnings per share increased $0.34, or 37.4%, from $0.91 per share in 2000 to
$1.25 in 2001.  Earnings per share was higher in 2001 due to the combination
of the growth in net income and a reduction in weighted average shares
outstanding, which declined as a result of stock repurchased by the Company
during both 2000 and 2001.  The return on average assets was 0.73% for 2001
compared to 0.63% for 2000 and the return on average equity was 6.23% in 2001
compared to 4.73% for 2000.

Earnings were higher in 2001 due to an increase in net interest income of
$94,000, a reduction in the provision for loan losses of $138,000, and an
increase in noninterest income of $487,000, offset by an increase in
noninterest expense of $185,000 and an increase in income tax expense of
$316,000.

Net income from banking services was $1,023,000 for the year ended December
31, 2001, an increase of $171,000, or 20.1%, from the $852,000 recorded for
the year ended December 31, 2000.  Net income from banking services was
higher in 2001 due primarily to an increase in net interest income of
$94,000, a reduction in the provision for loan losses of $138,000, an
increase in noninterest income of $176,000 and a decrease in noninterest
expense of $49,000, offset by an increase in income tax expense of $286,000.
Noninterest income from banking services was higher in 2001 mainly due to
gains on the sale of mortgage loans totaling $127,000, which includes both
the cash gain on loans sold of $76,000 and gains on the recording of
capitalized mortgage servicing rights of $51,000.  Service charges on deposit
accounts and other customer fees were also higher in 2001.  Noninterest
expense from banking services was lower in 2001 due to reductions in office
building, furniture and fixture expenses, and legal fees, offset by an
increase in salaries and benefits expenses.

Net income from insurance/brokerage services increased $47,000, or 35.9%,
from $131,000 in 2000 to $178,000 in 2001.  Total commission income increased
$325,000, or 35.8% from $908,000 in 2000 to $1,233,000 in 2001, primarily
insurance sales commissions due mainly to the addition of several larger new
customers.  Noninterest expenses related to insurance/brokerage services
increased $254,000, from $684,000 in 2000 to $938,000 in 2001, primarily
salaries and benefits expenses, furniture and fixture expenses, advertising,
and office expenses.  Income tax expense associated with insurance/brokerage
services increased $30,000 in 2001.

Net Interest Income

Net interest income increased $94,000, or 1.6%, from $5,755,000 in 2000 to
$5,849,000 in 2001.  Growth in net interest income was mainly due to an
increase in interest income from loans and a reduction in deposit interest
expense, offset by a decrease in interest income from investment securities
and an increase in interest expense on Federal Home Loan Bank ("FHLB")
advances.

Interest Income - Interest income was $11,707,000 in 2001, an increase of
$341,000, or 3.0%, from the $11,366,000 reported in 2000.  Interest income
earned on loans totaled $11,138,000 in 2001, an increase of $496,000, or
4.7%, from the $10,642,000 total for 2000.  Interest income from investment
securities decreased $123,000, from $406,000 in 2000 to $283,000 in 2001.
Interest income from deposits with financial institutions and other
institutions, which includes interest generated from interest-bearing demand
deposits, interest on balances maintained in the Federated Liquid Cash Trust
fund and dividends received on FHLB stock decreased from $318,000 in 2000 to
$286,000 in 2001.

Interest income from loans receivable increased in 2001 due to growth in
average net loans and an increase in loan fees, offset by a decrease in the
average yield on loans.  The average balance of net loans increased from
$130.16 million in 2000 to $138.53 million in 2001, an increase of $8.37
million, or 6.4%.  The following schedule compares average total loan
balances by major categories:

                                 Average     Average
                                 Balance     Balance              Percentage
                                   2001        2000      Change     Change
----------------------------------------------------------------------------
One-to-four-family
  mortgage loans                $ 81,178    $ 73,610    $ 7,568      10.3%
Multi-family mortgage loans       19,527      19,912       (385)     (1.9)
Commercial mortgage loans         16,589      18,326     (1,737)     (9.5)
Construction loans                 2,168       1,360        808      59.4
----------------------------------------------------------------------------
  Total real estate loans        119,462     113,208      6,254       5.5
Commercial loans                   8,032       6,363      1,669      26.2
Consumer loans                    11,999      11,414        585       5.1
----------------------------------------------------------------------------
  Total loans                    139,493     130,985      8,508       6.5
Allowance for loan losses           (964)       (827)      (137)     16.6
----------------------------------------------------------------------------
  Total loans, net              $138,529    $130,158    $ 8,371       6.4%
============================================================================

In 2001, a stable local economy and a decline in general market interest
rates were both factors contributing to loan growth.  During 2001, the
Federal Open Market Committee, or "FOMC", the governing body that establishes
the Federal funds rate and the discount rate, lowered these key interest
rates a total of 11 times.  The Federal funds rate dropped from a high of
6.50% in January 2001 to 1.75% in December 2001.  The prime rate, a key
indicator used by the Company in establishing interest rates charged to
consumer and commercial customers, decreased from 9.50% in January 2001 to
4.75% by December 2001.  Long-term mortgage rates also decreased during 2001,
however, the declines were not as substantial.  The 30-year Freddie Mac
commitment rate, for example, averaged 8.05% in 2000 decreasing to an average
of 6.97% in 2001.  The Company uses published rates such as the Freddie Mac
commitment rate in setting one-to-four-family residential mortgage rates.
The Company's 30-year offering rate averaged 7.05% in 2001, down from 8.11%
in 2000.

The decline in mortgage rates accompanied by a steady local housing market
were the primary reasons for the $7.57 million increase in average total one-
to-four-family mortgage loans in 2001.  Lower interest rates were also a
factor in the increase in average total construction loans during 2001.
Average total construction loans increased $808,000 in 2001.  Average total
commercial mortgage loans declined $1.74 million in 2001 due mainly to two
larger loan payoffs, one loan totaling $1.49 million paid off in July 2000,
and an additional loan totaling $930,000 paid off in January 2001.

Average total commercial loans increased $1.67 million in 2001 due mainly to
one loan to a new commercial customer totaling $1.08 million and several
smaller loans which were originated in late 2000 and during 2001.  Average
total consumer loans grew by $585,000 from 2000 to 2001, mainly due to new
home equity loans.  The Company introduced a new revolving home equity loan
product in June 2000.  The interest rate on this new product floats daily
with the prime lending rate.  Total average home equity loans increased from
$350,000 in 2000 to $1.30 million in 2001, an increase of $950,000.  Average
total fixed rate secured consumer loans declined $385,000 in 2001.

Loan fees, which are included in interest income on loans, increased $60,000,
or 36.6% from $164,000 in 2000 to $224,000 in 2001.  This increase was mainly
due to fees generated on a higher volume of construction loans originated in
2001 and an increase in deferred fees recognized.

The average yield on loans declined from 8.18% in 2000 to 8.04% in 2001.
Since the majority of the growth in average loans from 2000 to 2001 occurred
in fixed rate, one-to-four-family residential mortgage loans, the average
yield on loans did not decline significantly.  As discussed above, the market
interest rates used by the Company in setting rates for home mortgage loans
did not decline as steeply as short-term market interest rates.

Average total investment securities were $4.28 million in 2001, a decrease of
$1.97 million, or 31.5%, from the average $6.25 million maintained during
2000.  This decline was the primary reason that interest income from
investment securities declined from $406,000 in 2000 to $283,000 in 2000, a
decrease of $123,000, or 30.3%.  During 2001, a municipal security totaling
$425,000 matured in January 2001 and Federal agency securities totaling $3.00
million were called in the second and third quarters.  The Company also
received principal repayments on mortgage-backed securities of $672,000
during 2001.  As of December 31, 2001, mortgage-backed securities totaling
$2.06 million with maturities ranging from seventeen to twenty-seven years
and a weighted average rate of 6.81% were the only securities in the
investment portfolio.

Interest income earned on deposits with financial institutions and other
declined from $318,000 in 2000 to $286,000 in 2001 mainly due to the decline
in short-term interest rates.  Interest income earned on deposits with
financial institutions and other includes interest generated from interest-
bearing demand deposits, Federated Liquid Cash Trust fund interest and
dividends earned on FHLB stock.  The interest-bearing demand deposits
maintained by the Company during 2001 and 2000 were chiefly deposits used for
short-term cash needs and were primarily maintained at the FHLB.  The
Federated Liquid Cash Trust is a money market fund used for depositing funds
that may be required in the short-term.  The total average balances
maintained with the FHLB and Federated Liquid Cash Trust fund were higher in
2001.  The average total balances of interest-bearing demand deposits
increased $550,000, from $3.19 million in 2000 to $3.74 million in 2001.  The
average balance of the Federated Liquid Cash Trust fund was $2.13 million in
2001, $890,000 greater than the $1.24 million maintained in 2000.

The average yield on interest-earning assets decreased from 8.02% in 2000 to
7.82% in 2001, due mainly to the decline in short-term market interest rates
during 2001.  The yield on average interest-bearing demand deposits fell from
5.64% in 2000 to 3.23% in 2001, and the yield on the Federal Liquid Cash
Trust fund decreased from 6.15% in 2000 to 4.70% in 2001.  The average yield
on FHLB stock also decreased from 7.37% in 2000 to 6.46% in 2001.  The yield
on average investment securities increased from 6.49% in 2001 to 6.62% in
2001 due to the maturity of municipal securities yielding 3.74% in January
2001.  The average yield on net loans was 8.04% in 2001, down from 8.18% in
2000.

Interest Expense - Interest expense increased from $5,611,000 in 2000 to
$5,858,000 in 2001, an increase of $247,000, or 4.4%.  Interest expense on
deposits decreased $122,000, or 2.4%, from $5,017,000 in 2000 to $4,895,000
in 2001.  The majority of the decline in interest expense on deposits
occurred in interest expense on certificates of deposit.  Interest expense on
certificates of deposit was $4,041,000 in 2001, $119,000 lower than the
$4,160,000 recorded in 2000.  Interest expense on certificates of deposit was
lower in 2001 due to lower offering rates in 2001, a decline in total average
certificates of deposit and a shift in the mix of certificates away from
longer-term maturities to shorter-term, lower rate maturities.

Interest expense on interest-bearing demand deposits was relatively unchanged
due to higher average balances offset by a decline in deposit rates.
Interest expense on insured money market accounts ("IMMA"), savings deposits,
NOW and other deposits decreased only slightly, from $857,000 in 2000 to
$854,000 in 2001.  The average total balances of interest-bearing demand
deposits increased $1.34 million, or 3.3%, from $40.29 million in 2000 to
$41.63 million in 2001.  This increase primarily resulted from growth in the
Company's Club Fed IMMA and NOW accounts, offset by declines in regular IMMA
and savings deposits.  Club Fed is an array of products and services provided
to customers that maintain required minimum balances.  Club Fed customers
receive a higher annual percentage yield on their IMMA deposits than non Club
Fed customers.  The average total balance of Club Fed IMMA deposits increased
$1.36 million, from $6.30 million in 2000 to $7.66 million in 2001.  The
average total balance of Club Fed NOW deposits increased $350,000, from $6.74
million in 2000 to $7.09 million in 2001.

The following schedule compares average total deposit balances by major
categories.

                                   Average     Average
                                   Balance     Balance             Percentage
                                     2001        2000      Change    Change
-----------------------------------------------------------------------------
Insured money market deposits     $ 10,949    $  9,946    $ 1,003      10.1%
Savings deposits                    14,133      14,441       (308)     (2.1)
NOW and other demand deposits       16,545      15,907        638       4.0
-----------------------------------------------------------------------------
  Total interest-bearing
    demand deposits                 41,627      40,294      1,333       3.3
-----------------------------------------------------------------------------
Certificates of deposit:
  Three months or less                 271         241         30      12.4
  Over three through six months     14,947      13,976        971       6.9
  Over six through twelve months     9,348      10,618     (1,270)    (12.0)
  Over one through three years      35,665      35,456        209       0.6
  Over three through five years      5,496       7,041     (1,545)    (21.9)
  Over five through ten years        5,257       5,288        (31)     (0.6)
-----------------------------------------------------------------------------
  Total certificates of deposit     70,984      72,620     (1,636)     (2.3)
-----------------------------------------------------------------------------
  Total interest-bearing
    deposits                       112,611     112,914       (303)     (0.3)

Noninterest-bearing
  demand deposits                   10,367       9,973        394       4.0
-----------------------------------------------------------------------------
  Total deposits                  $122,978    $122,887    $    91       0.1%
=============================================================================

Interest expense on FHLB advances increased $375,000, or 67.7%, from $554,000
in 2000 to $929,000 in 2001.  The Company increased its level of borrowings
during 2001 mainly to provide funding for loan growth and to purchase
treasury stock.  The Company was able to borrow funds from the FHLB at rates
lower than comparable certificates of deposit.  Total average FHLB advances
increased $8.72 million, or 84.3%, from $10.34 million in 2000 to $19.06
million in 2001.

The average cost of interest-bearing liabilities decreased from 4.53% in 2000
to 4.43% in 2001, due primarily to the shift in average deposits from
certificates of deposit to lower-rate interest-bearing demand deposits and
the overall decline in deposit and FHLB advance interest rates.  The average
cost of interest-bearing demand deposits declined from 2.13% in 2000 to 2.05%
in 2001.  The average cost of certificates of deposit fell from 5.73% in 2000
to 5.69% in 2001.  The average cost of FHLB advances was 5.36% in 2000 and
4.87% in 2001.

Net interest income was $5,755,000 in 2000, an increase of $45,000 from
$5,710,000 recorded for 1999.  Interest income increased $341,000 in 2000,
from $11,025,000 in 1999 to $11,366,000 in 2000, primarily interest income
from loans and investment securities.  Interest expense increased from
$5,315,000 in 1999 to $5,611,000 in 2000, an increase of $296,000, or 5.6%,
due mainly to higher interest expense on deposits and FHLB advances.

Average Balance Sheet - The following table presents the average balance
sheet for the Company for the years ended December 31, 2001, 2000 and 1999,
the interest on interest-earning assets and interest-bearing liabilities and
the related average yield or cost.  The average balances are derived from
average daily balances.  The yields or cost are calculated by dividing income
or expense by the average balance of assets or liabilities, respectively, for
the years shown except where noted otherwise.  The yields and costs include
fees which are considered adjustments to yields

<TABLE>
<CAPTION>
                                       Consolidated Average Balance Sheet

                                                                      Period Ended
                                     -------------------------------------------------------------------------------------
                                         December 31, 2001             December 31, 2000          December 31, 1999
                                     --------------------------    --------------------------   --------------------------
                                                       Average                      Average                       Average
                                     Average            Yield/     Average            Yield/     Average            Yield/
                                     Balance  Interest   Cost      Balance  Interest   Cost      Balance  Interest   Cost
                                     -------  -------- -------     -------  --------  ------     -------  --------  ------
<S>                                <C>         <C>      <C>      <C>         <C>     <C>       <C>         <C>     <C>
Assets
 Interest-earning assets:
  Interest-bearing demand deposits $   3,741   $   121    3.23%  $   3,191   $   180   5.64%   $   4,941   $   226   4.57%
  Federated Liquid Cash Fund           2,127       100    4.70       1,236        76   6.15        7,368       352   4.78
  Investment securities, net (1)       4,278       283    6.62       6,253       406   6.49        3,949       239   6.05
  Loans, net (2)                     138,529    11,138    8.04     130,158    10,642   8.18      124,898    10,157   8.13
  FHLB stock                           1,006        65    6.46         841        62   7.37          757        51   6.74
                                  ----------------------------------------------------------------------------------------
   Total interest-earning assets     149,681    11,707    7.82%    141,679    11,366   8.02%     141,913    11,025   7.77%
Noninterest-earning assets            13,956                        14,449                        14,687
                                  ----------------------------------------------------------------------------------------
   Total assets                    $ 163,637                     $ 156,128                     $ 156,600
                                  ========================================================================================

Liabilities and Stockholders' Equity
 Interest-bearing liabilities:
  Insured money market deposits    $  10,949   $   349    3.19%  $   9,946   $   331   3.33%   $   8,783   $   266   3.03%
  Savings deposits                    14,133       278    1.97      14,441       289   2.00       15,141       304   2.01
  NOW and other demand deposits       16,545       227    1.37      15,907       237   1.49       15,432       230   1.49
  Certificates of deposit             70,984     4,041    5.69      72,620     4,160   5.73       75,224     4,056   5.39
                                  ----------------------------------------------------------------------------------------
   Total deposits                    112,611     4,895    4.35     112,914     5,017   4.44      114,580     4,856   4.24
  Loans sold under repurchase
    agreements                            --        --      --          --        --     --        1,422        88   6.19
  Federal Home Loan bank advances     19,061       929    4.87      10,341       554   5.36        7,234       339   4.69
  Other interest-bearing
    liabilities                          613        34    5.55         604        40   6.62          570        32   5.61
                                  ----------------------------------------------------------------------------------------
   Total interest-bearing
     liabilities                     132,285     5,858    4.43%    123,859     5,611   4.53%     123,806     5,315   4.29%
 Noninterest-bearing liabilities      12,085                        11,483                        10,239
                                  ----------------------------------------------------------------------------------------
   Total liabilities                 144,370                       135,342                       134,045
 Stockholders' equity                 19,267                        20,786                        22,555
                                  ----------------------------------------------------------------------------------------
   Total liabilities and
     stockholders' equity          $ 163,637                     $ 156,128                     $ 156,600
                                  ========================================================================================
Net interest rate spread (3)                   $ 5,849    3.39%              $ 5,755   3.49%               $ 5,710   3.48%
                                  ========================================================================================
Net interest margin (4)                                   3.91%                        4.06%                         4.02%
                                  ========================================================================================
Ratio of interest-earning assets to
  interest-bearing liabilities                          113.15%                      114.39%                       114.63%
                                  ========================================================================================
</TABLE

Notes to Consolidated Average Balance Sheet:

      (1)  Includes securities available for sale and unamortized discounts
           and premiums.  Municipal securities are not on a tax equivalent
           basis as they are not considered material.
      (2)  Amount includes mortgage loans held for sale and is net of
           deferred loan fees, loan discounts and premiums, loans in process,
           allowance for loan losses and non-performing loans.
      (3)  Net interest rate spread represents the difference between the
           yield on average interest-earning assets and the cost of average
           interest-bearing liabilities.
      (4)  Net interest margin represents net interest income divided by
           average interest-earning assets.





     Rate/Volume Analysis - The following table presents the extent to which
changes in interest rates and changes in the volume of interest-earning
assets and interest-bearing liabilities have affected the Company's interest
income and expense during the periods indicated.  Information is provided in
each category with respect to (i) changes attributable to changes in volume
(changes in volume multiplied by prior rate); (ii) changes attributable to
changes in rate (change in rate multiplied by prior volume); and (iii) the
net change.  The changes attributable to the combined impact of volume and
rate have been allocated proportionately to the changes due to volume and the
changes due to rate.


<TABLE>
<CAPTION>

                                              Year Ended                     Year Ended
                                           December 31, 2001              December 31, 2000
                                              Compared to                    Compared to
                                              Year Ended                     Year Ended
                                           December 31, 2000              December 31, 1999
                                      --------------------------     ---------------------------
                                           Increase                       Increase
                                          (Decrease)                     (Decrease)
                                            Due to                         Due to
                                      --------------------------     ---------------------------
                                       Volume     Rate      Net       Volume     Rate      Net
                                      --------------------------     ---------------------------
<S>                                    <C>     <C>       <C>         <C>       <C>      <C>
Interest-earning assets:
  Interest-bearing demand deposits     $   27  $   (86)  $  (59)     $  (91)   $   45   $   (46)
  Federated Liquid Cash Fund               45      (21)      24        (355)       79      (276)
  Investment securities, net             (131)       8     (123)        148        19       167
  Loans, net                              675     (179)     496         430        55       485
  FHLB stock                               11       (8)       3           6         5        11
                                      ----------------------------------------------------------
    Total interest-earning assets         631     (290)     341         (18)      359       341
                                      ----------------------------------------------------------

Interest-bearing liabilities:
  Insured money market deposits            32      (14)      18          37        28        65
  Savings deposits                         (6)      (5)     (11)        (14)       (1)      (15)
  NOW and other demand deposits             9      (19)     (10)          7        --         7
  Certificates of deposit                 (93)     (26)    (119)       (144)      248       104
  Loans sold under repurchase
   agreements                              --       --       --         (88)       --       (88)
  FHLB advances                           429      (54)     375         161        54       215
  Other interest-bearing
   liabilities                              1       (7)      (6)          2         6         8
                                      ----------------------------------------------------------
    Total interest-bearing
      liabilities                         375     (128)     247           2       294       296
                                      ----------------------------------------------------------
    Net change in net interest
      income                           $  256  $  (162)  $   94      $  (20)   $   65   $    45
                                      ==========================================================
</TABLE>




Provision for Loan Losses

The provision for loan losses for the year ended December 31, 2001 was
$162,000 compared to $300,000 for the year ended December 31, 2000.  The
provision for both periods reflects management's analysis of the Company's
loan portfolio based on information which is currently available to it at
such time.  In particular, management considers the level of non-performing
loans and potential problem loans.  The Company recorded a higher provision
for loan losses in 2000 due to potential losses associated with one non-
performing commercial loan.  This loan became non-performing in late 1998
when the balance was $1.36 million.  During 1999, the Company collected
$185,000 in principal payments on this loan and charged-off $800,000.  In
2000, the Company collected $26,000 in principal payments and charged-off
$90,000.  During 2001, the Company collected $247,000 and charged-off the
remaining $12,000.

Total charge-offs for 2001 were $19,000 compared to $131,000 in 2000.  The
Company recorded charge-offs unrelated to the $1.36 million non-performing
loan in 2001 of $7,000 which represented loans to five separate consumer
borrowers.  The Company recorded charge-offs unrelated to the $1.36 million
non-performing loan in 2000 of $41,000 which represented loans to two
different commercial borrowers totaling $26,000 and consumer loans with five
separate consumer borrowers which totaled $15,000.  While Company management
believes that the allowance for loan losses is sufficient based on
information currently available to it, no assurances can be made that future
events, conditions, or regulatory directives will not result in increased
provisions for loan losses or additions to the allowance for loan losses
which may adversely affect net income.

Noninterest Income

Noninterest income totaled $2,122,000 in 2001, compared to $1,635,000 in
2000, an increase of $487,000, or 29.8%, primarily due to growth in insurance
sales commissions and gains from the sale of mortgage loans, offset by a
decline in brokerage commissions.

Insurance sales commissions were $1,111,000 in 2001 compared to $702,000 in
2000, an increase of $409,000, or 58.3%, primarily due to commissions
generated from new customers.  During 2001, the Company sold $5.35 million in
one-to-four-family residential mortgage loans to Fannie Mae recording gains
of $127,000, which includes both the cash gains on the sale of loans totaling
$76,000 and the gains from capitalizing mortgage servicing rights of $51,000.
The Company had no loan sales during 2000.

Brokerage commissions fell from $206,000 in 2001 to $122,000 due to a
reduction in transaction activity by existing brokerage customers.  This
reduction was mainly due to the downturn in the stock market during 2001.

Noninterest Expenses

Total noninterest expenses increased from $5,610,000 in 2000 to $5,795,000 in
2001, an increase of $185,000, or 3.3%, due primarily to increases in
salaries and employee benefits, printing and office supplies, marketing and
advertising expenses and other expenses, offset by declines in net occupancy
expenses, equipment expenses and legal and professional expenses.

Salaries and employee benefits totaled $3,248,000 in 2001 and $3,055,000 in
2000, reflecting an increase of $193,000, or 6.3%, in 2001.  The higher
expense for 2001 is due to normal salary raises, an increase in bonuses paid
in 2001, and increases in Employee Stock Option Plan ("ESOP") expense and
health insurance expenses, offset by a decrease in incentive plan expenses.
Total salaries, including bonuses, were $2,418,000 in 2001 compared to
$2,168,000 in 2000, a difference of $250,000, or 11.5%.  ESOP expense totaled
$325,000 in 2001, an increase of $41,000, or 14.4%, from the $284,000
recorded in 2000.  ESOP expense was higher in 2001 due to an increase in the
average price of the Company's stock.  The Company fully allocated shares of
common stock held by the ESOP as of December 31, 2001.  Accordingly, the
Company does not expect to incur any additional compensation expense related
to the allocation of ESOP benefits.  However, the Company is considering
other benefit plans and may incur compensation expenses related to other
benefit plans in the future.  Incentive plan expense decreased from $188,000
in 2000 to $35,000 in 2001 due to a reduction in total shares earned by
participants in 2001.  The final vesting year for the majority of
participants in the incentive plan ended in February 2001.

Printing and office supplies expense increased $28,000, from $271,000 in 2000
to $299,000 in 2001 due to printing and postage related to the Bank's privacy
notice mailing and an increase in postage rates in early 2001.  Marketing and
advertising expenses totaled $188,000 in 2001 compared to $167,000 in 2000,
increasing by $21,000 due to additional advertising by the GTPS Insurance
Agency.  Other expenses were $403,000 in 2001, $28,000 higher than the
$375,000 recorded for 2000, primarily service charges for check clearing
activities, charitable contributions, and annual meeting expenses.

Net occupancy expenses decreased from $638,000 in 2000 to $588,000 in 2001, a
difference of $50,000, or 7.8%.  Expenses were lower in 2001 due to a
reduction in building maintenance costs, lower real estate taxes and a
reduction in depreciation expense.  Equipment expenses declined from $620,000
in 2000 to $603,000 in 2001, a decrease of $17,000, due primarily to lower
depreciation expense.  Legal and professional fees decreased from $230,000 in
2000 to $212,000 in 2001, a decrease of $18,000, or 7.8%.  The Company
incurred higher legal expenses in 2000 due to fees associated with one large
non-performing loan.

Income Tax Expense

Total income tax expense was $813,000 in 2001, compared to $497,000 in 2000,
an increase of $316,000, or 63.6%.  The increase is attributable to higher
taxable income in 2001.  The effective tax rates for the years ended December
31, 2001 and 2000 were 40.4% and 33.6%.  The 2001 effective tax rate is
higher than the rate for 2000 due mainly to less state tax exempt interest
income from qualified Federal agency securities being earned in 2001 and a
reduction in enterprise zone credits recorded.

Financial Condition

Total consolidated assets of the Company increased from $159.68 million as of
December 31, 2000 to $168.35 million as of December 31, 2001, an increase of
$8.67 million, or 5.4%.  The growth in assets occurred primarily in loans,
mortgage loans held for sale, cash and cash equivalents and FHLB stock,
offset by decreases in investment securities and premises and equipment.

Total assets associated with banking services increased $8.97 million, or
5.6%, from $159.55 million at December 31, 2000 to $168.52 million at
December 31, 2001, mainly increases in net loans.  Net loans, including
mortgage loans held for sale, grew $12.68 million, or 9.6%.  Cash and cash
equivalents related to banking services increased by $530,000 from December
31, 2000 to December 31, 2001 while investment securities decreased by $4.10
million, from $6.16 million at December 31, 2000 to $2.06 million at December
31, 2001.  Total deposits related to banking services increased $4.06 million
in 2001, from $123.74 million at December 31, 2000 to $127.80 million at
December 31, 2001.  Total Federal Home Loan Bank advances increased $6.50
million in 2001 from $14.00 million at December 31, 2000 to $20.50 million at
December 31, 2001.  Total assets related to insurance/ brokerage services
increased from $888,000 at December 31, 2000 to $968,000 at December 31,
2001, primarily cash and cash equivalents offset by reductions in premiums
receivable and goodwill.  Total liabilities related to insurance/brokerage
services decreased $99,000 from $185,000 at December 31, 2000 to $86,000 at
December 31, 2001, due mainly to premiums due insurance companies.

Total consolidated cash and cash equivalents increased $530,000, or 5.0%,
from $10.64 million at December 31, 2000 to $11.17 million at December 31,
2001, primarily the result of cash proceeds from FHLB borrowings, mortgage
loan sales and an increase in deposits, net of loan originations and treasury
stock repurchases.

Total investment securities decreased $4.10 million, from $6.16 million at
December 31, 2000 to $2.06 million at December 31, 2001.  During 2001,
municipal securities totaling $425,000 matured, Federal agency securities
totaling $3.00 million were called and the Company also received $672,000 in
principal repayments on mortgage-backed securities.  At December 31, 2001,
the Company held $2.06 million in mortgage-backed securities with an average
yield of 6.81%.  The final maturity for mortgage-backed securities totaling
$1.29 million is in 2029, while the remaining $770,000 mature in 2019.

In July 2001, the Company started selling one-to-four-family fixed rate
residential mortgage loans to Fannie Mae.  The Company commenced this loan
sales program in order to provide funding for additional loans and also to
reduce interest rate risk due to the decline in home mortgage interest rates
during 2001.  In 2001, the Company sold $5.35 million in home mortgage loans
to Fannie Mae, generating proceeds of $5.48 million and recording gains of
$127,000.  At December 31, 2001, mortgage loans held for sale, which includes
loans committed to be sold and loans which the Company has designated as
being held for sale, totaled $2.34 million.  The unrealized gain on mortgage
loans held for sale as of December 31, 2001 was $2,900.

Total net loans grew $10.33 million, or 7.8%, from $132.73 million at
December 31, 2000 to $143.06 million at December 31, 2001.  The following
schedule shows the balances by loan category at December 31 of each year,
along with the change and percentage change:

                               Balance       Balance
                             December 31,  December 31,            Percentage
                                 2001          2000       Change     Change
-----------------------------------------------------------------------------
One-to-four-family
  mortgage loans              $  81,657    $  77,001     $  4,656       6.0%
Multi-family mortgage loans      19,775       19,750           25       0.1
Commercial mortgage loans        16,591       17,480         (889)     (5.1)
Construction loans                3,907        1,221        2,686     220.0
-----------------------------------------------------------------------------
  Total real estate loans       121,930      115,452        6,478       5.6
Commercial loans                  9,553        6,569        2,984      45.4
Consumer loans                   12,620       11,599        1,021       8.8
-----------------------------------------------------------------------------
  Total loans                   144,103      133,620       10,483       7.8
Allowance for loan losses        (1,040)        (889)        (151)     17.0
-----------------------------------------------------------------------------
  Total loans, net            $ 143,063    $ 132,731     $ 10,332       7.8%
=============================================================================

The decline in mortgage rates accompanied by a steady local housing market
were the primary reasons for the $4.66 million increase in total one-to-four-
family mortgage loans in 2001.  Lower interest rates were also a factor in
the increase in construction loans, which grew $2.69 million in 2001.  Total
commercial mortgage loans declined $889,000 in 2001 due mainly to one larger
loan payoff totaling $930,000 that was paid off in January 2001.

Total commercial loans increased $2.98 million from December 31, 2000 to
December 31, 2001 due mainly to one loan to a new commercial customer
totaling $1.08 million and several smaller loans which were originated in
2001.  Total consumer loans grew by $1.02 million from 2000 to 2001, mainly
due to new home equity loans, offset by a decline in fixed rate secured
consumer loans.  The Company introduced a new revolving home equity loan
product in June 2000.  Total home equity loans increased from $619,000 at
December 31, 2000 to $2.03 million at December 31, 2001, an increase of $1.41
million.  Fixed rate secured consumer loans declined $263,000 in 2001.

The allowance for loan losses increased from $889,000 at December 31, 2000 to
$1,040,000 at December 31, 2001 due to the total provision recorded of
$162,000, offset by net charge-offs of $11,000.  The allowance for loan
losses is maintained to absorb loan losses based on management's continuing
review and evaluation of the loan portfolio and its judgment as to the impact
of economic conditions on the portfolio.

The following table sets forth the Company's allocation of the allowance for
loan losses by loan category and as a percentage of the total balance for
each specific loan category as of December 31, 2001 and 2000:

                                December 31, 2001         December 31, 2000
                              ---------------------     ---------------------
                              Balance    Percentage     Balance    Percentage
-----------------------------------------------------------------------------
One-to-four-family
  mortgage loans              $   166       0.20%       $   166       0.22%
Multi-family mortgage loans       163       0.82            155       0.78
Commercial mortgage loans         136       0.82            164       0.94
Construction loans                 32       0.82             13       1.06
-----------------------------------------------------------------------------
  Total real estate loans         497       0.41            498       0.43
Commercial loans                  221       2.31             77       1.17
Consumer loans                    322       2.55            314       2.71
-----------------------------------------------------------------------------
  Total allowance for loan
    losses                    $ 1,040       0.72%       $   889       0.67%
=============================================================================

The Company's methodology for assessing the appropriateness of the allowance
for loan losses consists of two key elements: the formula allowance and
specific allowances for identified problem loans.

The formula allowance is calculated by applying loss factors to outstanding
loans and certain unused commitments, in each case based on the internal risk
classification of such loans, or commitments.  Changes in risk
classifications of both performing and non-performing loans affect the amount
of the formula allowance.  Loss factors are based on the Company's historical
loss experience and industry averages and may be adjusted for significant
factors that, in management's judgement, affect the collectibility of the
portfolio as of the evaluation date.  These significant factors may include
existing general economic and business conditions affecting the Company's key
lending areas, credit quality trends, collateral value, loan volumes and
concentrations, seasoning of the loan portfolio, specific industry conditions
within portfolio segments, recent loss experience in particular segments of
the portfolio, duration of the current business cycle and bank regulatory
examination results.  In evaluating historical loss experience, Company
management reviews charge-off history for the prior ten years for each
category of loans.

The increase in the allocation of the allowance for commercial loans from
$77,000 as of December 31, 2000 to $221,000 as of December 31, 2001 was due
to an increase in the formula allowance for commercial loans and was mainly
attributable to the growth in this category of loans in 2001.  The allocation
of the allowance for consumer loans was $322,000 at December 31, 2001 and was
the highest allocation for any category of loans.  This allocation is based
primarily on the Company's historical loss experience and industry averages
for losses on consumer loans.

Specific allowances are established in cases where management has identified
significant conditions or circumstances related to a credit that management
believes indicate the probability that a loss has been incurred in excess of
the amount determined by the application of the formula allowance.

The following table sets forth the composition of the allowance for loan
losses by each loan category as of December 31, 2001 and 2000:


                             As of December 31, 2001
                             -----------------------

                                             Formula     Specific      Total
----------------------------------------------------------------------------
One-to-four-family
  mortgage loans                           $   166       $   --      $   166
Multi-family mortgage loans                    163           --          163
Commercial mortgage loans                      136           --          136
Construction loans                              32           --           32
-----------------------------------------------------------------------------
  Total real estate loans                      497           --          497
Commercial loans                               216            5          221
Consumer loans                                 322           --          322
-----------------------------------------------------------------------------
  Total allowance for loan
    losses                                 $ 1,035       $    5      $ 1,040
=============================================================================

                             As of December 31, 2000
                             -----------------------

                                             Formula     Specific      Total
----------------------------------------------------------------------------
One-to-four-family
  mortgage loans                           $   166       $   --      $   166
Multi-family mortgage loans                    155           --          155
Commercial mortgage loans                      164           --          164
Construction loans                              13           --           13
-----------------------------------------------------------------------------
  Total real estate loans                      498           --          498
Commercial loans                                69            8           77
Consumer loans                                 295           19          314
-----------------------------------------------------------------------------
  Total allowance for loan
    losses                                 $   862       $   27      $   889
=============================================================================

Total non-performing loans, which are loans past due 90 days or more and
nonaccruing loans, were $387,000 as of December 31, 2001 compared to $307,000
as of December 31, 2000.  The ratios of the Company's allowance for loan
losses to total non-performing loans were 268.7% and 289.6% at December 31,
2001 and 2000, respectively.

Company management and the Board of Directors perform ongoing reviews of the
loan portfolio in order to identify non-performing loans and potential
problem loans.  In performing its reviews, management classifies non-
performing and potential problem loans as either substandard, doubtful, loss
or watch loans.  A loan is considered substandard if it is inadequately
protected by the current net worth and paying capacity of the borrower or of
the collateral pledged, if any.  Substandard loans include those
characterized by the distinct possibility that the Company will sustain some
loss if the deficiencies are not corrected.  Loans classified as doubtful
have all of the weaknesses inherent in those classified as substandard with
the added characteristic that the weaknesses present make collection or
liquidation in full, on the basis of currently existing facts and conditions,
highly questionable and improbable.  Loans classified as loss are those
considered uncollectible and of such little value that their continuance as
loans without the establishment of a specific loss reserve is not warranted.
Loans which do not currently expose the Company to sufficient risk to warrant
classification in one of the categories described above but possess
weaknesses are classified as watch.  The total of internally classified loans
equals the sum of non-performing loans and potential problem loans.

Total classified loans at December 31, 2001 and 2000 are summarized as
follows:

December 31                                            2001             2000
----------------------------------------------------------------------------
Watch                                             $     787       $       84
Substandard                                              38              360
Doubtful                                                  9               53
----------------------------------------------------------------------------
  Total classified loans                          $     834       $      497
============================================================================
Non-performing                                    $     387       $      307
Potential problem loans                                 447              190
----------------------------------------------------------------------------
  Total classified loans                          $     834       $      497
============================================================================
Impaired loans                                    $      47       $      406
============================================================================

There were no loans considered loss as of December 31, 2001 or December 31,
2000.  Impaired loans include loans where, based on current information and
events, it is probable that the Company will be unable to collect all amounts
due according to the contractual terms of the loan agreement.  If the present
value of expected future cash flows, or in certain instances the observable
market price of the loan or the fair value of the underlying collateral, is
less than the recorded investment in the loan, then the Company recognizes an
impairment by adjusting the allowance for loan losses with a corresponding
charge to the provision for loan losses.  The allowance for impaired loans
included in the Company's allowance for loan losses was $9,000 and $48,000
at December 31, 2001 and 2000, respectively.  All loans considered impaired
at December 31, 2001 and 2000 were included in total classified loans.

Total classified assets increased $337,000, or 67.8%, from $497,000 at
December 31, 2000 to $834,000 at December 31, 2001.  This increase was
primarily due to mortgage loans to one borrower which were classified as
watch during 2001.  These loans totaled $414,000 at December 31, 2001 and
included a commercial mortgage loan for $181,000 secured by the borrower's
office and a $233,000 loan secured by the borrower's residence.  The
residential loan was also 90 days past due as of December 31, 2001 and was
included in the total $387,000 balance of non-performing loans.  The Company
has initiated foreclosure proceedings on both of these properties.  The
Company does not expect to incur a loss related to these loans because the
appraised values are sufficient to support the loan balances.

Also included in classified assets as of December 31, 2001 were one-to-four-
family mortgage loans totaling $282,000 to seven other borrowers, consumer
loans to seven borrowers totaling $120,000 and commercial loans to two
borrowers totaling $18,000.  The majority of these loans are substantially
secured and the Company anticipates that the loans will be repaid
satisfactorily either from repayment by the customer or from the sale of the
underlying collateral.

Total premises and equipment decreased $440,000 from $6.80 million at
December 31, 2000 to $6.36 million at December 31, 2001, primarily due to
depreciation expense exceeding asset acquisitions.  Fixed asset purchases
totaled $152,000 in 2001 and depreciation expense was $592,000.  In 2001,
fixed assets acquired included a chemical fire protection system for the
Bank's main computer room, various computer hardware and software, including
computers, printers, and timekeeping software, an encoding machine, a new
flagpole and one new vehicle.

Federal Home Loan Bank stock increased $276,000, or 31.0%, from $890,000 at
December 31, 2000 to $1.17 million at December 31, 2001, due partly to stock
purchases totaling $211,000 and stock dividends earned of $65,000.  The
Company was required to purchase additional stock due to an increase in FHLB
advances in 2001.

Interest receivable declined by $80,000 from $869,000 at December 31, 2000 to
$789,000 at December 31, 2001.  This decrease was mainly attributable to the
general decline in interest rates during 2001.  Insurance premiums receivable
at the Agency decreased $88,000, from $292,000 at December 31, 2000 to
$204,000 at December 31, 2001, due partly to the timing of receipts from
customers.  Also, the number of customers with receivable balances decreased
from 2000 to 2001 due to the Agency moving some customers to "direct billed",
meaning that the premiums are billed by the insurance companies rather than
the Agency.  Deferred income taxes were $81,000 at December 31, 2001,
compared to $125,000 at December 31, 2000.  Mortgage servicing rights
increased $46,000 in 2001 due to servicing rights capitalized of $51,000 less
amortization recorded of $5,000.  Goodwill decreased $44,000 due to
amortization recorded in 2001.  Other assets totaling $328,000 at December
31, 2001 were $52,000 higher than the $276,000 balance at December 31, 2000,
primarily prepaid insurance and prepaid supplies.

Total deposits increased by $3.85 million, from $123.69 million at December
31, 2000 to $127.54 million at December 31, 2001.  The following table
summarizes the balances of deposits at December 31, 2001 and 2000, the change
in the balances and the percentage change:

                               Balance       Balance
                             December 31,  December 31,            Percentage
                                 2001          2000       Change     Change
-----------------------------------------------------------------------------
Noninterest bearing
 checking accounts            $  11,890    $  11,573     $    317       2.7%

Interest bearing:
 NOW accounts                    17,955       16,885        1,070       6.3
 IMMA accounts                   13,326        9,850        3,476      35.3
 Savings accounts                15,019       14,029          990       7.1
 Certificates of deposit         69,350       71,348       (1,998)     (2.8)
-----------------------------------------------------------------------------
  Total interest
   bearing deposits             115,650      112,112        3,538       3.2
-----------------------------------------------------------------------------
  Total deposits              $ 127,540    $ 123,685     $  3,855       3.1%
=============================================================================

Growth in NOW and IMMA accounts occurred primarily in the Company's Club Fed
deposit products, due mainly to new accounts opened.  The Company's Club Fed
products provide enhanced services to customers including a higher rate of
interest for maintaining required minimum balances.  Club Fed NOW accounts
increased $1.25 million from December 31, 2000 to December 31, 2001 while
Club Fed IMMA deposits increased $3.51 million.  Savings accounts increased
$990,000 from December 31, 2000 to December 31, 2001 due mainly to higher
balances being maintained by customers.

Part of the growth in NOW, IMMA and Savings accounts was due to customers
transferring proceeds from matured certificates of deposit into their demand
accounts.  Customers also transferred proceeds from maturing certificates
into shorter-term certificates of deposit, mainly certificates maturing in
six months to one year.  Total six month certificates of deposit increased
$5.42 million from December 31, 2000 to December 31, 2001 and one year
certificates increased $1.68 million.  Certificates of deposit categories
with the largest declines from December 31, 2000 to December 31, 2001
included the eighteen-month and two year categories.  Total eighteen month
certificates of deposit dropped $4.27 million from December 31, 2000 to
December 31, 2001 and two year certificates declined $5.54 million.

FHLB advances increased $6.5 million, from $14.00 million at December 31,
2000 to $20.5 million at December 31, 2001 due to additional borrowings in
2001, net of maturities.  During 2001, new advances entered into by the
Company totaled $13.50 million and advances totaling $7.00 million matured.
The following schedule presents FHLB advances at December 31, 2001, by
maturity date:


    Date                  Fixed                          Next
     of        Interest     or        Maturity           Call
   Advance       Rate    Variable       Date             Date         Amount
-----------------------------------------------------------------------------
May       2001   4.40     Fixed    February  2002     non callable    $ 2,000
December  2000   5.97     Fixed    June      2002     non callable      1,000
October   2000   6.00    Variable  October   2002     non callable      3,000
March     2001   4.48     Fixed    March     2006    March     2002     1,500
October   1998   4.30     Fixed    October   2008    January   2002     5,000
January   2001   4.55     Fixed    January   2011    January   2002     5,000
September 2001   3.80     Fixed    September 2011    September 2004     3,000
                                                                      -------
                                                                      $20,500
                                                                      =======

Proceeds from advances have provided liquidity for loans and treasury stock
purchases.  The $10.00 million in advances callable in January 2002 are
callable quarterly.  These advances were not called in January 2002.

Deferred compensation - directors decreased slightly from December 31, 2000
to December 31, 2001 due to payments to retired directors exceeding the sum
of fees deferred and interest accrued on deferred balances.  The Company
deferred fees totaling $42,000, accrued interest to the plan of $34,000 and
paid retired directors a total of $80,000 in 2001.  Premiums due insurance
companies decreased $68,000 in 2001 due partly to the timing of payments to
insurance companies.  Also, the Agency moved the billing for some customers
to "direct billed", meaning that premiums are billed by the insurance
companies and not by the Agency.

Total stockholders' equity declined from $20.23 million at December 31, 2000
to $18.56 million at December 31, 2001, a decrease of $1.67 million, or 8.3%.
This decline resulted from net income of $1,201,000, plus ESOP and incentive
plan shares earned of $325,000 and $35,000, respectively, less $5,000 from
the decrease in the unrealized gain on securities available for sale,
$406,000 in dividends declared and $2.82 million in treasury stock purchased.

In September 2001, the Company announced a 5% common stock repurchase program
which was equal to 44,873 shares.  As of February 28, 2002, the Company had
repurchased a total of 41,990 shares related to this program at an average
price of $18.73 per share.  In December 2001, the Company announced plans to
repurchase an additional 5% of the Company's common stock, or 43,358 shares.
All repurchased shares will be held as treasury shares to be used for general
corporate purposes.

Liquidity and Capital Resources of the Company and Bank

The Bank's primary sources of funds are deposits, principal and interest
payments on loans, proceeds from sales of mortgage loans held for sale and
proceeds from FHLB advances.  While maturities and scheduled amortization of
loans are predictable sources of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates, economic
conditions, and competition.  Recent legislation repealed the Office of
Thrift Supervision's ("OTS") minimum liquidity ratio requirement for the
Bank.  The OTS is the Bank's primary regulator.  OTS regulations now require
the Bank to maintain sufficient liquidity to ensure its safe and sound
operation.  The Bank's liquidity ratios were 9.36% and 7.37% at December 31,
2001 and 2000, respectively.  The primary source of funding for the Company
is dividend payments from the Bank, principal and interest payments on loans
purchased from the Bank and, to a lesser extent, earnings on investments and
deposits held by the Company.  Dividend payments by the Bank have primarily
been used to fund stock repurchase programs.  The OTS limits all capital
distributions by the Bank directly or indirectly to the Company, including
dividend payments.  As the subsidiary of a savings and loan holding company,
the Bank must file a notice, which is subject to disapproval, with the OTS
prior to each proposed capital distribution.  However, if the total amount of
all capital distributions (including each proposed capital distribution) for
the applicable calendar year exceeds net income to date for that year plus
the retained net income (i.e. net income after deducting prior capital
distributions) for the preceding two years, or if the amount of the proposed
capital distribution would cause the Bank to fail to remain "adequately
capitalized" under applicable laws and regulations, then the Bank must file
an application to receive the approval of the OTS for the proposed capital
distribution.  As of December 31, 2001, the Bank could not pay any dividends
to the Company without prior application to and approval from the OTS.  The
Company is not required to maintain a minimum level of regulatory liquidity.

The primary investment activity of the Bank is the origination of mortgage
loans, commercial and consumer loans, and the purchase of mortgage-backed and
Federal agency securities.  Asset acquisitions during the year ended December
31, 2001 were primarily funded by deposits, FHLB advances and proceeds from
sales of mortgage loans held for sale.  Asset acquisitions during the year
ended December 31, 2000 were primarily funded by deposits and FHLB advances.
The primary investment activity of the Company is the investment in the
Bank's stock and purchases of loans from the Bank.

A review of the Consolidated Statement of Cash Flows included in the
accompanying financial statements shows that the Company's cash and cash
equivalents ("cash") increased $523,000 and $630,000 for the years ended
December 31, 2001 and December 31, 2000, respectively.  Cash increased in
2001 due to net cash provided by operating activities of $117,000 and net
cash provided by financing activities of $7.13 million, offset by net cash
used by investing activities of $6.73 million.  Cash provided by operating
activities included net income of $1,201,000, plus non cash adjustments to
net income including proceeds from sales of loans totaling $5.48 million, the
provision for loan losses of $162,000, depreciation expense of $592,000 and
ESOP expense of $325,000, less loans originated for sale of $7.69 million.
Net cash provided by financing activities included the $5.85 million increase
in demand deposits, money market, NOW, and savings accounts and $13.50
million generated from FHLB advances, offset by the $2.00 million decline in
certificates of deposit, $7.00 million in FHLB advances that matured in 2001,
$421,000 in cash dividends paid, and the purchase of treasury stock totaling
$2.82 million.  Cash used by investing activities included the $10.46 million
net originations of loans, $211,000 purchase of FHLB stock and $152,000 in
purchases of premises and equipment, offset by proceeds from maturing
available-for-sale securities of $3.00 million, proceeds from maturities of
held-to-maturity securities of $425,000 and principal repayments of mortgage-
backed securities totaling $672,000.

Cash increased in 2000 due to net cash provided by operating activities of
$2.08 million and net cash provided by financing activities of $3.85 million,
offset by net cash used by investing activities of $5.30 million.  Cash
provided by operating activities included net income of $983,000, plus non
cash adjustments to net income including the provision for loan losses of
$300,000, depreciation expense of $630,000, ESOP expense of $284,000 and
incentive plan expense of $188,000.  Net cash provided by financing
activities included the $3.83 million increase in demand deposits, money
market, NOW, and savings accounts and $9.00 million generated from FHLB
advances, offset by the $2.99 million decline in certificates of deposit,
$3.00 million in FHLB advances that matured or were called in 2000, $480,000
in cash dividends paid, and the purchase of treasury stock totaling $2.55
million.  Cash used by investing activities included the $5.28 million net
originations of loans, $78,000 purchase of FHLB stock and $243,000 in
purchases of premises and equipment, offset by proceeds from maturing
securities held to maturity of $100,000 and principal repayments of mortgage-
backed securities totaling $209,000.

At December 31, 2001, the Bank exceeded all of its regulatory capital
requirements with tangible capital and tier 1 capital both at $9.79 million
or 6.1% of adjusted total assets and risk-based capital at $10.83 million or
10.9% of total risk-weighted assets.  The required ratios are 1.5% for
tangible capital to adjusted total assets, 4.0% for tier 1 capital to average
assets and 8.0% for risk-based capital to risk-weighted assets.  See Note 11
-- "Regulatory Matters" in the accompanying Notes to Consolidated Financial
Statements for the Bank's capital calculations as of December 31, 2001 and
2000.

The Bank's most liquid assets are cash and cash equivalents.  The level of
cash and cash equivalents is dependent on the Bank's operating, financing,
lending and investing activities during any given period.  At December 31,
2001, cash and cash equivalents totaled $11.17 million.  The Company's and
Bank's future short-term requirements for cash are not expected to
significantly change.  However, in the event that the Bank should require
funds beyond its ability to generate them internally, additional sources of
funds are available, such as FHLB advances.  With no parent company debt and
sound capital levels, the Company has several options for longer-term cash
needs, such as for future expansion and acquisitions.  These options include
issuing debt securities, raising equity capital if market conditions are
favorable and issuing trust preferred securities.

Management is not aware of any current recommendations or government
proposals which if implemented would have a material effect on the Company's
liquidity, capital resources or operations.

Management of Interest Rate Risk

The principal objective of the Company's interest rate risk management
function is to evaluate the interest rate risk included in certain balance
sheet accounts, determine the level of risk appropriate given the Company's
business focus, operating environment, capital and liquidity requirements and
performance objectives, establish asset concentration guidelines and manage
the risk consistent with Board-approved guidelines.  Through such management,
the Company seeks to reduce the vulnerability of its operations to changes in
interest rates and to manage the ratio of interest rate sensitive assets to
interest rate sensitive liabilities within specified maturities or repricing
dates.  The Company's Board of Directors has established an Asset/Liability
Committee consisting of management officers, which is responsible for
reviewing the Company's asset/liability policies and interest rate risk
position.  Such committee generally meets on a quarterly basis, and at other
times as dictated by market conditions, and reports to the Board of Directors
after each such meeting.

The Company's interest rate risk strategy primarily consists of: (i)
emphasizing the attraction and retention of core deposits, which tend to be a
more stable source of funding; (ii) emphasizing the origination of adjustable
rate mortgage loan products and short-term commercial loans, the origination
of which is largely dependent on the market demand for such loans; (iii) when
market conditions are favorable and in consideration of the regulatory
requirements relating to required levels of residential loans which must be
maintained by the Bank, selling fixed-rate one-to-four-family mortgage
loans; (iv) investing primarily in short-term U.S. Government securities and
mortgage-backed securities; and (v) using FHLB advances as a funding source
when rates on FHLB advances compare favorably to local competitive deposit
rates.  As a traditional thrift lender, the Company has a significant amount
of its earning assets invested in fixed-rate mortgages with contractual
maturities greater than one year.  At December 31, 2001, an aggregate of
$76.96 million, or 45.7% of total assets, were invested in such assets.

The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 2001 which mature or
reprice in the periods shown.  Except as stated in the table, the amount of
assets and liabilities shown which reprice or mature during a particular
period were determined in accordance with the earlier of term to repricing or
the contractual maturity

<TABLE>
<CAPTION>

 Interest Rate Sensitivity (in thousands)
 At December 31, 2001
                                                           Over One      Over Three     Over Six
                                                            Month          Months        Months
                                              Within       Through        Through        Through
                                               One          Three           Six          Twelve      Over One
                                              Month         Months         Months        Months        Year         Total
                                            --------------------------------------------------------------------------------
<S>                                         <C>           <C>             <C>          <C>          <C>            <C>
Interest-earning assets:
  Interest-bearing demand deposits          $   6,334     $     --        $     --     $     --     $      --      $   6,334
  Investment securities, net (1)                   14           29              43           86         3,050          3,222
  Loans, net (2)                                8,600        2,988           5,502        8,778       119,538        145,406
                                            --------------------------------------------------------------------------------
    Total interest-earning assets           $  14,948     $  3,017        $  5,545     $  8,864     $ 122,588      $ 154,962
                                            ================================================================================
Interest-bearing liabilities:
  NOW, savings and money
    market deposits                         $  46,300     $     --        $     --     $     --     $      --      $  46,300
  Certificates of deposit                       6,753        7,840          13,425       19,703        21,629         69,350
                                            --------------------------------------------------------------------------------
    Total interest-bearing deposits            53,053        7,840          13,425       19,703        21,629        115,650
  FHLB advances and other
    interest-bearing liabilities (3)               --        2,000           1,000        3,000        15,148         21,148
                                            --------------------------------------------------------------------------------
    Total interest-bearing liabilities         53,053        9,840          14,425       22,703        36,777        136,798
                                            --------------------------------------------------------------------------------
Excess (deficiency) of interest-earning
  assets over interest-bearing liabilities  $ (38,105)    $ (6,823)       $ (8,880)    $(13,839)    $  85,811      $  18,164
                                            ================================================================================
Cumulative excess (deficiency) of
  interest-earning assets over interest-
  bearing liabilities                       $ (38,105)    $(44,928)       $(53,808)    $(67,647)    $  18,164      $  18,164
                                            ================================================================================
Cumulative interest-earning assets
 divided by interest-bearing liabilities          .28          .29             .30          .32          1.13           1.13
                                            ================================================================================
</TABLE>

(1) Includes FHLB stock and reflects repricing, contractual maturity or
    anticipated call date.
(2) Loans, which include mortgage loans held for sale, are placed in the various
    interest-sensitive periods based on historical prepayment tendencies as well
    as contractual terms.
(3) FHLB advances reflect contractual maturity or anticipated call date

The Company tends to be liability sensitive due to the levels of short-term
NOW, savings and insured money market deposits maintained.  However, the
effect of rate increases on these deposits, which are mainly core retail
deposits, tends to lag behind the change in market rates.  This lag generally
lessens the negative impact on net interest income during a period of rising
interest rates.  Based on the information provided in the table, assuming no
management intervention, the effect of an increase in interest rates of 100
basis points would reduce annualized net interest income by approximately
$381,000 in the one month category or approximately $449,000 in the three
month category.  A decrease in interest rates would have the opposite effect.

Management believes that the assumptions used to evaluate interest rate
sensitivity approximate actual experience and considers this method a
reasonable tool; however, the interest rate sensitivity of the Company's
assets and liabilities and the estimated effects of changes in interest rates
on net interest income could vary substantially if different assumptions were
used or actual experience differs from the historical experiences on which
these assumptions were based.

Current Accounting Issues

In September 2001, Statement of Financial Accounting Standards ("SFAS") No.
141, "Business Combinations" was issued establishing accounting and reporting
standards requiring all business combinations initiated after September 30,
2001 to be accounted for using the purchase method.  SFAS No. 141 is
effective for the Company for the fiscal quarter beginning July 1, 2001.  The
impact of this statement is dependent on future acquisition activity.

Also in September 2001, SFAS No. 142 "Goodwill and Other Intangible Assets"
was issued effective for the first period of all fiscal years beginning after
December 13, 2001, with early adoption permitted for entities with fiscal
years beginning after March 15, 2001.  SFAS No. 142 addresses how acquired
intangible assets should be accounted for in financial statements upon their
acquisition, and also how goodwill and other intangible assets should be
accounted for after they have been initially recognized in the financial
statements.  In general, non-goodwill intangible assets are to be amortized
in accordance with their estimated useful lives.  In addition, amortization
of goodwill has been eliminated, with capitalized goodwill now being
subjected to at least an annual assessment for impairment.  A two-step
process is to be used to determine, first whether an impairment exists, and
then whether an adjustment is required.  SFAS No. 142 is effective for the
Company for the fiscal quarter beginning January 1, 2002.  The Company has
not yet quantified the impact of adopting this statement on its financial
position or results of its operation.

In July 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations" was
issued.  SFAS No. 143 establishes standards for accounting and reporting of
obligations associated with the retirement of tangible long-lived assets and
associated asset retirement costs.  SFAS No. 143 is effective beginning June
15, 2002.  The adoption of this Statement is not expected to have an impact
on the Company.

In October 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" was issued.  Under SFAS No. 144, long-lived assets to be
sold within one year must be separately identified and carried at the lower
of carrying value or fair value less costs to sell.

Long-lived assets expected to be held longer than one year are subject to
depreciation and must be written down to fair value upon impairment.  Long-
lived assets no longer expected to be sold within one year, such as some
foreclosed real estate, must be written down to the lower of current fair
value or fair value at the date of foreclosure adjusted to reflect
depreciation since acquisition.  SFAS No. 144 must be implemented by January
1, 2002.  The adoption of this Statement is not expected to have an impact on
the Company.








                      Independent Accountants' Report



Board of Directors and Stockholders
Great American Bancorp, Inc.
Champaign, Illinois


We have audited the accompanying consolidated balance sheets of Great
American Bancorp, Inc. and subsidiary as of December 31, 2001 and 2000, and
the related consolidated statements of income, stockholders' equity, and cash
flows for the years then ended.  These consolidated financial statements are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Great American Bancorp, Inc. and subsidiary as of December 31, 2001 and
2000, 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.


BKD, LLP

/s/ BKD, LLP

Decatur, Illinois
February 1, 2002



<TABLE>
<CAPTION>
GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 2001 and 2000
(in thousands, except share data)


                                                                2001             2000
                                                           --------------------------
<S>                                                        <C>             <C>
Assets

  Cash and due from banks                                  $   4,832       $    6,104
  Interest-bearing demand deposits                             6,334            4,539
                                                           --------------------------
          Cash and cash equivalents                           11,166           10,643

  Available-for-sale securities                                   --            3,009
  Held-to-maturity securities                                  2,056            3,153
  Mortgage loans held for sale                                 2,343               --
  Loans, net of allowance for loan losses of $1,040
    and $889 in 2001 and 2000, respectively                  143,063          132,731
  Premises and equipment                                       6,362            6,802
  Federal Home Loan Bank stock                                 1,166              890
  Interest receivable                                            789              869
  Cash surrender value of life insurance                         251              237
  Insurance premiums receivable                                  204              292
  Deferred income taxes                                           81              125
  Income taxes receivable                                         --              116
  Mortgage servicing rights                                       51                5
  Goodwill                                                       485              529
  Other                                                          328              276
                                                           --------------------------
          Total assets                                     $ 168,345       $  159,677
                                                           ==========================

Liabilities and Stockholders' Equity

  Liabilities
    Deposits
      Noninterest-bearing deposits                         $  11,890       $   11,573
      Interest-bearing deposits
        Savings, NOW and money market                         46,300           40,764
        Time                                                  69,350           71,348
                                                           --------------------------
          Total deposits                                     127,540          123,685

    Federal Home Loan Bank advances                           20,500           14,000
    Deferred compensation - directors                            648              652
    Advances from borrowers for taxes and insurance              319              298
    Accrued postretirement benefit obligation                    211              171
    Accrued real estate taxes                                    136              134
    Premiums due insurance companies                             101              169
    Dividend payable                                              95              110
    Income taxes payable                                          23               --
    Interest payable                                              91               80
    Other                                                        122              146
                                                           --------------------------
          Total liabilities                                  149,786          139,445
                                                           --------------------------

Commitments and Contingent Liabilities





See Notes to Consolidated Financial Statements.

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

  Stockholders' Equity
    Preferred stock, $0.01 par value
      Authorized and unissued - 1,000,000 shares           $      --       $       --
    Common stock, $0.01 par value
      Authorized - 7,000,000 shares
      Issued and outstanding - 2,052,750 shares                   21               21
    Additional paid-in capital                                20,165           20,036
    Retained earnings                                         17,838           17,043
    Accumulated other comprehensive income
      Unrealized appreciation on available-for-sale
        securities, net of income taxes 2000 - $4                 --                5
                                                           --------------------------
                                                              38,024           37,105

    Treasury stock, at cost
      Common: 2001 - 1,185,583 shares,
        2000 - 1,014,250 shares                              (19,393)         (16,570)
    Unallocated employee stock ownership plan
      shares: 2000 - 19,748 shares                                --             (197)
    Unearned incentive plan shares: 2001 - 5,010,
      2000 - 7,377 shares                                        (72)            (106)
                                                           --------------------------
          Total stockholders' equity                          18,559           20,232
                                                           --------------------------
          Total liabilities and
            stockholders' equity                           $ 168,345       $  159,677
                                                           ==========================

</TABLE>






See Notes to Consolidated Financial Statements.

<TABLE>
<CAPTION>
GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Income
Years Ended December 31, 2001 and 2000
(in thousands, except share data)


                                                                2001             2000
                                                          ---------------------------
<S>                                                        <C>               <C>
Interest Income
  Loans                                                    $  11,138         $ 10,642
  Available-for-sale securities                                  120              197
  Held-to-maturity securities                                    163              209
  Deposits with banks and other                                  286              318
                                                           --------------------------
        Total interest income                                 11,707           11,366
                                                           --------------------------
Interest Expense
  Deposits                                                     4,895            5,017
  Federal Home Loan Bank advances                                929              554
  Other                                                           34               40
                                                           --------------------------
        Total interest expense                                 5,858            5,611
                                                           --------------------------
Net Interest Income                                            5,849            5,755

Provision for Loan Losses                                        162              300
                                                           --------------------------
Net Interest Income After Provision for Loan Losses            5,687            5,455
                                                           --------------------------
Noninterest Income
  Insurance sales commissions                                  1,111              702
  Brokerage commissions                                          122              206
  Customer service fees                                          573              560
  Other service charges and fees                                 164              145
  Sale of mortgage loans, net of commissions                     127               --
  Loan servicing fees                                             13               16
  Other                                                           12                6
                                                           --------------------------
         Total noninterest income                              2,122            1,635
                                                           --------------------------






See Notes to Consolidated Financial Statements.

                                                                2001             2000
                                                           --------------------------
Noninterest Expense
  Salaries and employee benefits                           $   3,248         $  3,055
  Net occupancy expense                                          588              638
  Equipment expense                                              603              620
  Data processing fees                                            76               86
  Deposit insurance premium                                       23               25
  Printing and office supplies                                   299              271
  Legal and professional fees                                    212              230
  Directors and committee fees                                   100               98
  Insurance expense                                               55               45
  Marketing and advertising expense                              188              167
  Other                                                          403              375
                                                           --------------------------
          Total noninterest expenses                           5,795            5,610
                                                           --------------------------
Income Before Income Taxes                                     2,014            1,480

Provision for Income Taxes                                       813              497
                                                           --------------------------
Net Income                                                 $   1,201         $    983
                                                           --------------------------
Other Comprehensive Income
  Unrealized appreciation (depreciation) on
    available-for-sale securities, net of
    income taxes (credit) of ($4) and $13,
    for 2001 and 2000, respectively                               (5)              18
                                                          ---------------------------
Comprehensive Income                                       $   1,196         $  1,001
                                                          ===========================
Basic Earnings per Share                                   $    1.29         $   0.92
                                                           ==========================
Diluted Earnings per Share                                 $    1.25         $   0.91
                                                           ==========================



</TABLE>
See Notes to Consolidated Financial Statements.


<TABLE>
<CAPTION>
GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity
(in thousands, except share data)

                                                                                                   Unallocated
                                                                           Accumulated               Employee    Unearned
                                                    Additional                Other                Stock Owner-  Incentive
                                            Common    Paid-in   Retained  Comprehensive  Treasury    ship Plan     Plan
                                             Stock    Capital   Earnings  Income (Loss)   Stock       Shares      Shares     Total
                                            --------------------------------------------------------------------------------------
<S>                                         <C>      <C>        <C>         <C>        <C>         <C>          <C>       <C>
Balance, January 1, 2000                    $   21   $ 19,968   $ 16,521    $    (13)  $(14,019)   $     (410)  $  (297)  $ 21,771
  Net income                                    --         --        983          --         --            --        --        983
  Dividends on common stock,
    $0.44 per share                             --         --       (461)         --         --            --        --       (461)
  Purchase of treasury stock,
    (185,215 shares)                            --         --         --          --     (2,551)           --        --     (2,551)
  Change in unrealized appreciation
    on available-for-sale securities
    net of income taxes of $13                  --         --         --          18         --            --        --         18
  Employee stock ownership plan
    shares allocated (21,238 shares)            --         71         --          --         --           213        --        284
  Incentive plan shares
    earned (13,249 shares)                      --         (3)        --          --         --            --       191        188
                                            --------------------------------------------------------------------------------------
Balance, December 31, 2000                  $   21   $ 20,036   $ 17,043    $      5   $(16,570)   $     (197)  $  (106)  $ 20,232
  Net income                                    --         --      1,201          --         --            --        --      1,201
  Dividends on common stock
    $.44 per share                              --         --       (406)         --         --            --        --       (406)
  Purchase of treasury stock,
    (171,333 shares)                            --         --         --          --     (2,823)           --        --     (2,823)
  Change in unrealized depreciation
    on available-for-sale securities
    net of income tax credit of ($4)            --         --         --          (5)        --            --        --         (5)
  Employee stock ownership plan
   shares allocated (19,748 shares)             --        128         --          --         --           197        --        325
  Incentive plan shares
   earned (2,367 shares)                        --          1         --          --         --            --        34         35
                                            --------------------------------------------------------------------------------------
Balance, December 31, 2001                  $   21   $ 20,165   $ 17,838    $     --   $(19,393)   $       --   $   (72)  $ 18,559
                                            ======================================================================================

</TABLE>
See Notes to Consolidated Financial Statements

<TABLE>
<CAPTION>
GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years Ended December 31, 2001 and 2000
(in thousands)
                                                                2001              2000
                                                            --------------------------
<S>                                                         <C>               <C>
Operating Activities
Net income                                                  $  1,201          $    983
Items not requiring (providing) cash
  Depreciation expense                                           592               630
  Amortization of goodwill                                        44                43
  Provision for loan losses                                      162               300
  Amortization of premiums and discounts on securities            --                 1
  Amortization of loan servicing rights                            5                 5
  Amortization of deferred loan fees                             (34)              (20)
  Deferred income taxes                                           48               (82)
  Federal Home Loan Bank stock dividends                         (65)              (45)
  Employees stock ownership plan compensation expense            325               284
  Incentive plan expense                                          35               188
  Net gains on sales of loans                                   (127)               --
  Loans originated for sale                                   (7,692)               --
  Proceeds from sales of loans                                 5,476                --
  Changes in
    Accrued interest receivable                                   80               (19)
    Income taxes receivable                                      116                22
    Prepaid expenses and other assets                            (29)             (246)
    Interest payable                                              11                31
    Other liabilities                                            (54)                2
    Income taxes payable                                          23                --
                                                            --------------------------
        Net cash provided by operating activities                117             2,077
                                                            --------------------------
Investing Activities
  Net originations of loans                                  (10,460)           (5,283)
  Purchase of premises and equipment                            (152)             (243)
  Proceeds from maturities of
    available-for-sale securities                              3,000                --
  Proceeds from maturities of
    held-to-maturity securities                                  425               100
  Proceeds from paydowns of mortgage backed securities           672               209
  Purchase of Federal Home Loan Bank stock                      (211)              (78)
                                                            --------------------------
        Net cash used by investing activities                 (6,726)           (5,295)
                                                            --------------------------
Financing Activities
  Net increase in demand deposits, money market,
    NOW and savings accounts                                   5,853             3,825
  Net decrease in certificates of deposit                     (1,998)           (2,985)
  Repayment of Federal Home Loan Bank advances                (7,000)           (3,000)
  Proceeds from Federal Home Loan Bank advances               13,500             9,000
  Dividends paid                                                (421)             (480)
  Purchase of treasury stock                                  (2,823)           (2,551)
  Net increases in advances from borrowers
    for taxes and insurance                                       21                39
                                                            --------------------------
        Net cash provided by financing activities              7,132             3,848
                                                            --------------------------
Increase in Cash and Cash Equivalents                            523               630

Cash and Cash Equivalents, Beginning of Year                  10,643            10,013
                                                            --------------------------
Cash and Cash Equivalents, End of Year                      $ 11,166          $ 10,643
                                                            ==========================
Supplemental Cash Flows Information
  Interest paid                                             $  5,847          $  5,580
  Income taxes paid (net of refunds)                             626               600

</TABLE>
See Notes to Consolidated Financial Statements.


GREAT AMERICAN BANCORP, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 2001 and 2000
(Table dollar amounts in thousands, except share data)

Note 1:  Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Great American Bancorp, Inc. ("Company") is a thrift holding company whose
principal activity is the ownership and management of First Federal Savings
Bank of Champaign-Urbana ("Bank").  The Bank operates under a federal savings
charter and provides full banking and mortgage services to individual and
corporate customers in Champaign County, Illinois and surrounding counties.
The Company and Bank are subject to regulation by certain federal agencies
and undergo periodic examinations by those regulatory authorities.  The
Company and Bank are subject to competition from other financial
institutions.

The Bank's subsidiary, Park Avenue Service Corporation ("PASC"), offers
insurance and brokerage services to customers located primarily in Champaign
County, Illinois and surrounding counties.  GTPS Insurance Agency, a division
of PASC, sells a variety of insurance products to both individuals and
businesses, including life, health, auto, property and casualty insurance.
PASC also provides full service brokerage activities through a third-party
broker-dealer and engages in the sale of tax deferred annuities.  The revenue
generated by PASC is dependent upon maintaining relationships with the
current insurance and brokerage providers.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary, the Bank, and the Bank's wholly-owned
subsidiary, PASC.  All significant intercompany accounts and transactions
have been eliminated in consolidation.

Use of Estimates

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

Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for loan losses.  In connection
with the determination of the allowance for loan losses, management obtains
independent appraisals for significant properties.

Cash Equivalents

The Company considers all liquid investments with original maturities of
three months or less to be cash equivalents.  At December 31, 2001 and 2000,
cash equivalents consisted of interest-bearing demand deposits held primarily
at the Federal Home Loan Bank and in a money market fund.


Securities

Available-for-sale securities, which include any security for which the
Company has no immediate plan to sell but which may be sold in the future,
are carried at fair value.  Realized gains and losses, based on amortized
cost of the specific security, are included in other income.  Unrealized
gains and losses are recorded, net of related income tax effects, in
stockholders' equity.  Premiums and discounts are amortized and accreted,
respectively, to interest income using the level-yield method over the period
to maturity.

Held-to-maturity securities, which include any security for which the Company
has the positive intent and ability to hold until maturity, are carried at
historical cost adjusted for amortization of premiums and accretion of
discounts.  Premiums and discounts are amortized and accreted, respectively,
to interest income using the level-yield method over the period to maturity.

Interest and dividends on investments in debt and equity securities are
included in income when earned.

Mortgage Loans Held for Sale

Mortgage loans held for sale are carried at the lower of cost or fair value,
determined using an aggregate basis.  Write-downs to fair value are
recognized as a charge to earnings at the time the decline in value occurs.
Gains and losses resulting from sales of mortgage loans are recognized when
the respective loans are sold to investors.  Gains and losses are determined
by the difference between the selling price and the carrying amount of the
loans sold, net of discounts collected or paid and considering a normal
servicing rate.

Loans

Loans are carried at the principal amount outstanding.  Interest income is
accrued on the principal balances of loans.  Certain loan fees and direct
costs are deferred and amortized as an adjustment of yield on the loans.

Allowance for Loan Losses

The allowance for loan losses is established as losses are estimated to have
occurred through a provision for loan losses charged to earnings.  Loan
losses are charged against the allowance when management believes the
uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if
any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management
and is based upon management's periodic review of the collectibility of the
loans in light of historical experience, the nature and volume of the loan
portfolio, adverse situations that may affect the borrower's ability to
repay, estimated value of any underlying collateral and prevailing economic
conditions.  This evaluation is inherently subjective as it requires
estimates that are susceptible to significant revision as more information
becomes available.

A loan is considered impaired when, based on current information and events,
it is probable that the Bank will be unable to collect the scheduled payments
of principal or interest when due according to the contractual terms of the
loan agreement.  Factors considered by management in determining impairment
include payment status, collateral value and the probability of collecting
scheduled principal and interest payments when due.  Loans that experience
insignificant payment delays and payment shortfalls generally are not
classified as impaired.  Management determines the significance of payment
delays and payment shortfalls on a case-by-case basis, taking into
consideration all of the circumstances surrounding the loan and the borrower,
including the length of the delay, the reasons for the delay, the borrower's
prior payment record and the amount of the shortfall in relation to the
principal and interest owed.  Impairment is measured on a loan-by-loan basis
for commercial and construction loans by either the present value of expected
future cash flows discounted at the loan's effective interest rate, the
loan's obtainable market price or the fair value of the collateral if the
loan is collateral dependent.

Large groups of smaller balance homogenous loans are collectively evaluated
for impairment.  Accordingly, the Company does not separately identify
individual consumer and residential loans for impairment disclosures.

Premises and Equipment

Depreciable assets are stated at cost less accumulated depreciation.
Depreciation is charged to expense using the straight-line method over the
estimated useful lives of the assets.  Leasehold improvements are capitalized
and depreciated using the straight-line method over the terms of the
respective leases or the estimated useful lives of the improvements,
whichever is shorter.

Goodwill

Goodwill is being amortized on the straight-line basis over fifteen years.
Such assets are periodically evaluated as to the recoverability of their
carrying value.

Federal Home Loan Bank Stock

Federal Home Loan Bank stock is a required investment for institutions that
are members of the Federal Home Loan Bank system.  The required investment in
the common stock is based on a predetermined formula.

Fee Income

Loan origination fees, net of direct origination costs, are recognized as
income using the level-yield method over the term of the loans.  Loan
servicing income represents fees earned for servicing real estate mortgage
loans owned by various investors.

Loan Servicing

The cost of mortgage-servicing rights acquired is amortized in proportion to,
and over the period of, estimated net servicing revenues.  Impairment of
mortgage-servicing rights is assessed based on the fair value of those
rights.  Fair values are estimated using discounted cash flows based on a
current market interest rate.  For purposes of measuring impairment, the
rights are stratified based on the predominant risk characteristics of the
underlying loans.  The predominant characteristic currently used for
stratification is type of loan.  The amount of impairment recognized is the
amount by which the capitalized mortgage servicing rights for a stratum
exceed their fair value.


Incentive Plan

The Company accounts for its stock award program, or incentive plan, in
accordance with Accounting Principles Board Opinion ("APB") No. 25.  The
purchase price of unearned shares owned by the incentive plan is reflected as
a reduction of stockholders' equity.  Compensation expense is based on the
market price of the Company's stock on the date the shares are granted and is
recorded over the vesting period.  The difference between the aggregate
purchase price and the fair value on the date granted of the shares earned is
recorded as an adjustment to paid-in capital.

Employee Stock Ownership Plan

The Company accounts for its employee stock ownership plan ("ESOP") in
accordance with American Institute of Certified Public Accountants ("AICPA")
Statement of Position 93-6.  The cost of shares issued to the ESOP but not
yet committed to be released to participants is presented in the consolidated
balance sheet as a reduction of stockholders' equity.  Compensation expense
is recorded based on the market price of the shares as they are committed to
be released for allocation to participant accounts.  The difference between
the market price and the cost of shares committed to be released is recorded
as an adjustment to paid-in capital.  Dividends on allocated ESOP shares are
recorded as a reduction of retained earnings; dividends on unallocated ESOP
shares are not considered dividends for financial statement purposes.

ESOP shares are considered outstanding for earnings per share calculations as
they are committed to be released; uncommitted shares are not considered
outstanding.

Stock options are granted for a fixed number of shares to employees with an
exercise price equal to the fair value of the shares at the date of grant.
The Company accounts for stock option grants in accordance with APB Opinion
No. 25, "Accounting for Stock Issued to Employees," and accordingly,
recognizes no compensation expense for the stock option grants.

Postretirement Benefits

The Company is recognizing the transition obligation using the straight-line
method over the plan participants' remaining average future service period.

Income Taxes

Deferred tax liabilities and assets are recognized for the tax effects of
differences between the financial statement and tax bases of assets and
liabilities.  The Company files consolidated income tax returns with its
subsidiary.

Treasury Stock

Treasury stock is stated at cost.  Cost is determined by the first-in, first-
out method.

Earnings Per Share

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

Reclassifications

Certain reclassifications have been made to the 2000 financial statements to
conform to the 2001 financial statement presentation.  These
reclassifications had no effect on net earnings.

Note 2:  Restriction on Cash and Due from Banks

The Bank is required to maintain reserve funds in cash and/or on deposit with
the Federal Reserve Bank.  The reserve required at December 31, 2001 was
$1,050,000.

Note 3:  Investments

Available-for-Sale Securities

The amortized cost and approximate fair values of securities classified as
available for sale are as follows:

<TABLE>
<CAPTION>
                                                            December 31, 2000
                                           ---------------------------------------------------
                                                          Gross          Gross     Approximate
                                           Amortized    Unrealized     Unrealized      Fair
                                              Cost        Gains         (Losses)       Value
                                           ---------------------------------------------------
<S>                                        <C>           <C>           <C>            <C>
U.S. government agencies                   $   3,000     $     10      $      (1)     $  3,009
                                           ---------------------------------------------------
                                           $   3,000     $     10      $      (1)     $  3,009
                                           ===================================================
</TABLE>
Held-to-Maturity Securities

The amortized cost and approximate fair values of securities classified as
held-to-maturity are as follows:
<TABLE>
<CAPTION>
                                                            December 31, 2001
                                           ---------------------------------------------------
                                                          Gross          Gross     Approximate
                                           Amortized    Unrealized     Unrealized      Fair
                                              Cost        Gains         (Losses)       Value
                                           ---------------------------------------------------
<S>                                        <C>           <C>           <C>            <C>
Mortgage-backed securities                 $   2,056     $     34      $      --      $  2,090
                                           ---------------------------------------------------
                                           $   2,056     $     34      $      --      $  2,090
                                           ===================================================
<CAPTION>
                                                            December 31, 2000
                                           ---------------------------------------------------
                                                          Gross          Gross     Approximate
                                           Amortized    Unrealized     Unrealized      Fair
                                              Cost        Gains         (Losses)       Value
                                           ---------------------------------------------------
<S>                                        <C>           <C>           <C>            <C>
Mortgage-backed securities                 $   2,728     $     --      $     (37)     $  2,691
State and political subdivisions                 425           --             --           425
                                           ---------------------------------------------------
                                           $   3,153     $     --      $     (37)     $  3,116
                                           ===================================================
</TABLE>


The Company did not hold any securities of a single issuer, payable from and
secured by the same source of revenue or taxing authority, the book value of
which exceeded 10% of stockholders' equity at December 31, 2001.

Note 4:  Loans and Allowance for Loan Losses

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

                                                      2001              2000
                                                  --------------------------
First mortgage loans (principally conventional)
  Principal balances
    Secured by one-to-four-family residences      $ 81,725         $  77,064
    Secured by other properties                     36,366            37,230
    Construction loans                               3,907             1,221
                                                  --------------------------
                                                   121,998           115,515
  Less
    Net deferred loan origination fees                 (68)              (63)
                                                  --------------------------
    Total first mortgage loans                     121,930           115,452
                                                  --------------------------
Commercial and consumer loans
  Principal balances
    Commercial                                       9,553             6,569
    Consumer                                        12,620            11,599
                                                  --------------------------
    Total commercial and consumer loans             22,173            18,168
                                                  --------------------------
    Total loans                                    144,103           133,620

Less allowance for loan losses                      (1,040)             (889)
                                                  --------------------------
                                                  $143,063         $ 132,731
                                                  ==========================

Information on impaired loans as of December 31, 2001 and 2000 is summarized
as follows:

2001 2000
                                                  --------------------------
Impaired loans with an allowance                  $     47           $   406
Allowance for impaired loans (included in the
 Company's allowance for loan losses)                    9                48

                                                           For the Year
                                                        Ended December 31
                                                      2001              2000
                                                  --------------------------
Average balance of impaired loans                 $    175         $     496
Interest income recognized on impaired loans             7                13
Cash-basis interest included above                       7                13

Activity in the allowance for loan losses was as follows:

2001 2000
                                                  --------------------------
  Balance, beginning of year                      $    889         $     703
  Provision charged to expense                         162               300
  Losses charged off, net of recoveries
    of $8 for 2001 and $17 for 2000                    (11)             (114)
                                                  --------------------------
  Balance, end of year                            $  1,040         $     889
                                                  ==========================

Note 5:  Premises and Equipment

Major classifications of premises and equipment, stated at cost, are as
follows:

                                                      2001              2000
                                                  --------------------------
Land                                              $  1,545         $   1,545
Buildings and improvements                           5,252             5,233
Leasehold improvements                                 867               867
Equipment                                            3,513             3,380
                                                  --------------------------
                                                    11,177            11,025
Less accumulated depreciation                       (4,815)           (4,223)
                                                  --------------------------
    Net premises and equipment                    $  6,362         $   6,802
                                                  ==========================

Note 6:  Leases

The Company leases one branch office and another office previously operated
as a branch office under operating leases.  The branch office is rented on a
twenty-five year lease with four ten-year options with escalating rental
payments.

The previous branch office is currently on a thirty-month lease which is
renewable for two additional thirty-month terms at the lessee's option.
This office is being subleased to an unrelated party.  In addition, the
lessee is required to pay the property taxes, normal maintenance and
insurance on the property.

The total minimum lease commitment at December 31, 2001 under these leases is
$275,000 which is due as follows:

                                   Lease          Rent from        Net Lease
                                  Payments        Sublease          Payment
                                  ------------------------------------------
Years ending December 31
 2002                             $     58        $     30         $      28
 2003                                   58              30                28
 2004                                   58              30                28
 2005                                   18              30               (12)
 2006                                   18              30               (12)
During the remaining lease term         65             109               (44)
                                  ------------------------------------------
    Total                         $    275        $    259         $      16
                                  ==========================================
Total rent expense was $58,000 for both of the years ended December 31,
2001 and 2000.

Note 7:  Loan Servicing

Mortgage loans serviced for others are not included in the accompanying
consolidated balance sheets.  The unpaid principal balances of mortgage loans
serviced for others was $9,146,000 and $5,188,000 at December 31, 2001 and
December 31, 2000, respectively.

Custodial escrow balances maintained in connection with the foregoing loan
servicing, and included in demand deposits, were approximately $33,000 and
$12,000 at December 31, 2001 and 2000, respectively.

Information on mortgage servicing rights is presented below:

                                                      2001              2000
                                                  --------------------------
Mortgage Servicing Rights
 Balance, beginning of year                       $      5         $      10
 Servicing rights capitalized                           51                --
 Amortization of servicing rights                       (5)               (5)
                                                  --------------------------
 Balance, end of year                             $     51         $       5
                                                  ==========================

Note 8:  Deposits

Deposits in denominations of $100,000 or more were $20,364,000 on December
31, 2001 and $18,076,000 on December 31, 2000.

At December 31, 2001, the scheduled maturities of time deposits are as
follows:

   2002                                                            $  47,721
   2003                                                               12,447
   2004                                                                3,897
   2005                                                                3,668
   2006                                                                  843
   Thereafter                                                            774
                                                                   ---------
                                                                   $  69,350
                                                                   =========

Note 9:  Income Taxes

The provision for income taxes includes these components:

                                                      2001              2000
                                                  --------------------------
 Taxes currently payable
   Federal                                        $    630         $     564
   State                                               135                15
 Deferred income taxes
   Federal                                              39               (67)
   State                                                 9               (15)
                                                  --------------------------
      Income tax expense                          $    813         $     497
                                                  ==========================
A reconciliation of income tax expense at the statutory rate to the Company's
actual income tax expense is shown below:

                                                      2001              2000
                                                  --------------------------
  Computed at the statutory rate (34%)            $    685         $     503
  Increase (decrease) resulting from
     State income taxes                                 95                --
     Allocating ESOP shares                             31                17
     Other                                               2               (23)
                                                  --------------------------
      Actual tax expense                          $    813         $     497
                                                  ==========================

The tax effects of temporary differences related to deferred taxes shown on
the balance sheets were:

                                                      2001              2000
                                                  --------------------------
Deferred tax assets
 Allowance for loan losses                        $    381         $     311
 Deferred compensation                                 251               253
 Postretirement benefit obligation                      82                66
 Deferred loan fees                                     17                13
 Other                                                  --                50
                                                   --------------------------
                                                       731               693
                                                   --------------------------
Deferred tax liabilities
 Federal Home Loan Bank stock basis                    (69)              (38)
 Depreciation                                         (538)             (518)
 Mortgage servicing rights                             (20)               (2)
 Unrealized gains on available-for-sale securities      --                (4)
 Other                                                 (23)               (6)
                                                  --------------------------
                                                      (650)             (568)
                                                  --------------------------
      Net deferred tax asset                      $     81         $     125
                                                  ==========================

Retained earnings at December 31, 2001 and 2000 include approximately
$4,300,000 for which no deferred income tax liability has been recognized.
This amount represents an allocation of income to bad debt deductions as of
December 31, 1987 for tax purposes only.  Reduction of amounts so allocated
for purposes other than tax bad debt losses or adjustments arising from
carryback of net operating losses would create income for tax purposes only,
which income would be subject to the then-current corporate income tax rate.
The deferred income tax liability on the preceding amount that would have
been recorded if they were expected to reverse into taxable income in the
foreseeable future was approximately $1,669,000 at December 31, 2001 and
2000.


Note 10:  Federal Home Loan Bank Advances

Federal Home Loan Bank advances at December 31, 2001 and 2000 were as
follows:

                                                      2001              2000
                                                  --------------------------
Federal Home Loan Bank advances, variable
 and fixed rates, (3.80% to 6.00% at
 December 31, 2001) due at various dates
 through October, 2011                            $ 20,500         $  14,000
                                                  ==========================

Aggregate annual maturities of Federal Home Loan Bank advances at December
31, 2001, are:

2002                                                               $   6,000
2006                                                                   1,500
Thereafter                                                            13,000
                                                                   ---------
                                                                   $  20,500
                                                                   =========

The $1,500,000 advance maturing in 2006 is callable on a one-time basis by
the Federal Home Loan Bank in March 2002 and has a rate of 4.48%.  The
Company also has a $5,000,000 advance maturing in 2008 and an additional
$5,000,000 advance maturing in 2011 that are both callable on a quarterly
basis.  The rate on the $5,000,000 advance maturing in 2008 is 4.30% and the
rate on the $5,000,000 advance maturing in 2011 is 4.55%.  A $3,000,000
advance maturing in 2011 is also callable on a one-time basis in September
2004 and has a rate of 3.80%.

Note 11:  Regulatory Matters

The Bank is subject to various regulatory 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 Bank's financial statements.  Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Bank must meet specific capital guidelines that involve quantitative measures
of the Bank's assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices.  The Bank's capital amounts
and classification are also subject to qualitative judgments by the
regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as defined) to
average assets (as defined).  Management believes, as of December 31, 2001
and 2000, that the Bank meets all capital adequacy requirements to which it
is subject.

As of December 31, 2001, the most recent notification from the Office of
Thrift Supervision categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action.  To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier I risk-
based and Tier I leverage ratios as set forth in the table.  There are no
conditions or events since that notification that management believes have
changed the Bank's category.

The Bank's actual capital amounts and ratios are also presented in the table.

<TABLE>
<CAPTION>
                              ------------------------------------------------------------------
                                                                          To Be Well Capitalized
                                                For Capital Adequacy     Under Prompt Corrective
                                   Actual            Purposes               Action Provisions
                              ------------------------------------------------------------------
                               Amount   Ratio      Amount   Ratio             Amount   Ratio
                              ------------------------------------------------------------------
As of December 31, 2001
<S>                          <C>        <C>        <C>       <C>             <C>       <C>
Total Capital
 (to Risk-Weighted Assets)   $ 10,825   10.9%      $ 7,934   8.0%            $ 9,918   10.0%

Tier 1 Capital
 (to Risk-Weighted Assets)      9,790    9.9         3,967   4.0               5,951    6.0

Tier 1 Capital
 (to Average Assets)            9,790    6.1         6,404   4.0               8,006    5.0

Tangible Capital
 (to Adjusted Total Assets)     9,790    6.1         2,401   1.5                        N/A

<CAPTION>

As of December 31, 2000
<S>                          <C>        <C>        <C>       <C>             <C>       <C>
Total Capital
 (to Risk-Weighted Assets)   $ 10,589   11.9%      $ 7,137   8.0%            $ 8,921   10.0%

Tier 1 Capital
 (to Risk-Weighted Assets)      9,728   10.9         3,568   4.0               5,352    6.0

Tier 1 Capital
 (to Average Assets)            9,728    6.5         6,019   4.0               7,524    5.0

Tangible Capital
 (to Adjusted Total Assets)     9,728    6.5         2,257   1.5                        N/A


</TABLE>

The Bank is subject to certain restrictions on the amount of dividends that
it may declare without prior regulatory approval.  At December 31, 2001,
there were no retained earnings available for dividend declaration without
prior regulatory approval.

Note 12:  Related Party Transactions

At December 31, 2001 and 2000, the Company had loans outstanding to executive
officers, directors and companies in which the Company's executive officers
or directors were principal owners in the amount of $1,297,000 and
$1,399,000, respectively.


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

Balances, January 1, 2001                                          $   1,399
Change in composition of related parties                                (181)
New loans, including renewals                                            844
Payments, etc.                                                          (765)
                                                                   ---------
 Balances, December 31, 2001                                       $   1,297
                                                                   =========

In management's opinion, such loans and other extensions of credit and
deposits were made in the ordinary course of business and were made on
substantially the same terms (including interest rates and collateral) as
those prevailing at the time for comparable transactions with other persons.
Further, in management's opinion, these loans did not involve more than
normal risk of collectibility or present other unfavorable features.

Deposits from related parties held by the Company at December 31, 2001 and
2000 totaled $513,000 and $646,000, respectively.

Note 13:  Employee Benefit Plans

The Company has an employee stock ownership plan ("ESOP") covering
substantially all of its employees.  The ESOP borrowed $1,642,000 from the
Company and used those funds to acquire 164,220 shares of the Company's
common stock at $10 per share.  The ESOP covers employees who complete at
least twelve consecutive months of service for the Bank during which the
employee performs at least 1,000 hours of service.  A participant is 100
percent vested after seven years of credited service.

The ESOP shares are held in trust and allocated to ESOP participants based on
the interest and principal payments made by the ESOP on the loan from the
Company.  The loan, which was repaid during 2001, was secured by shares
purchased with the loan proceeds and was repaid by the ESOP with funds from
the Company's discretionary contributions to the ESOP and earnings on ESOP
assets.  Dividends on unallocated ESOP shares were applied to reduce the
loan.  Principal payments occurred in even annual amounts over a seven year
period.

During the year ended December 31, 2001, 19,748 shares of stock with an
average fair value of $16.46 were committed to be released, resulting in ESOP
compensation expense of $325,000.  During the year ended December 31, 2000,
21,238 shares of stock with an average fair value of $13.37 were committed to
be released, resulting in ESOP compensation expense of $284,000.

The following table reflects the shares held by the plan as of and for the
years ended December 31, 2001 and 2000:

                                                      2001              2000
                                                 ---------------------------
Shares earned by participants                      164,220           144,472
Shares distributed to participants                 (24,752)          (17,660)
Unallocated shares                                      --            19,748
                                                 ---------------------------
    Total ESOP shares                              139,468           146,560
                                                 ===========================
Fair value of unallocated shares                  $     --         $     267
                                                 ===========================

The Board of Directors of the Company may direct payment of cash dividends on
shares allocated to participants to be paid in cash to the participants or to
be credited to participant accounts and invested.

The Company has a stock-based compensation program which provides for the
granting of stock of the Company as stock awards and options to purchase
stock of the Company (the "Incentive Plan").

The Incentive Plan covers key employees and directors and is authorized to
acquire and grant as stock awards 82,110 shares of the Company's common stock
or 4 percent of the shares issued in the Company's initial public offering.
The 82,110 shares were acquired in 1997 by funds contributed by the Company.
Participants in the Incentive Plan vest at a rate of 20 percent per year
commencing one year after the date such shares are granted.  In the event of
a change in control or death or disability, all unvested stock awards would
vest immediately.

The following is a summary of the status of the stock awards and changes in
the stock awards as of and for the years ended December 31, 2001 and 2000:

                                                      2001              2000
                                                  --------------------------
Stock Awards:                                       Shares            Shares
                                                  --------------------------
Outstanding, beginning of year                      15,139            30,391
Granted                                              1,200                --
Distributed                                        (14,050)          (14,652)
Forfeited                                               --              (600)
                                                  --------------------------
Outstanding, end of year                             2,289            15,139
Shares available for future stock awards             3,829             5,029
                                                  --------------------------
    Total stock awards                               6,118            20,168
                                                  ==========================

During the year ended December 31, 2001, 2,367 shares representing stock
awards were earned by participants and resulted in compensation expense of
$35,000.  For the year ended December 31, 2000, 13,249 shares were earned and
resulted in compensation expense of $188,000.  The shares forfeited in 2000
were shares that would have been earned by the participants in subsequent
years.

Note 14:  Stock Option Plan

Under the Company's incentive stock option plan, which is accounted for in
accordance with APB No. 25, "Accounting for Stock Issued to Employees," and
related interpretations, the Company grants directors, selected executives
and other key employees stock option awards which vest at a rate of 20
percent per year commencing one year after the date the shares are granted.
The plan provides that in the event of a change in control or death or
disability, all unvested options will be immediately exercisable.  During
1996, the Company authorized the grant of options for up to 205,275 shares of
the Company's common stock or 10 percent of the shares issued in the
Company's initial public offering.  The exercise price of each option, which
has a 10-year life, was equal to the market price of the Company's stock on
the date of grant; therefore, no compensation expense was recognized.


The following is a summary of the status of the Company's stock option plan
and changes in that plan as of and for the years ended December 31, 2001 and
2000:

<TABLE>
<CAPTION>
                                                           2001                    2000
                                                    --------------------------------------------
                                                               Weighted                Weighted
                                                                Average                 Average
                                                               Exercise                Exercise
Options:                                             Shares      Price        Shares     Price
                                                    --------------------------------------------
<S>                                                 <C>        <C>           <C>        <C>
Outstanding, beginning of year                      180,101    $ 14.22       187,601    $ 14.21
Granted                                               2,800      15.94            --         --
Exercised                                                --         --            --         --
Forfeited                                                --         --        (7,500)     14.00
                                                    -------                  -------
Outstanding, end of year                            182,901    $ 14.25       180,101    $ 14.22
                                                    =======                  =======
Options exercisable at
  year end                                          176,745                  142,124
Weighted-average fair value of
  Options granted during the year                              $  3.46                  $    --

</TABLE>

As of December 31, 2001, the 182,901 options outstanding have exercise prices
ranging from $14.00 to $16.38 and a weighted-average remaining contractual
life of 4.3 years.

Although the Company has elected to follow APB No. 25, SFAS No. 123 requires
pro forma disclosures of net income and earnings per share as if the Company
had accounted for its stock options under that Statement.  For options
granted in 2001, the fair value of each option grant was estimated on the
grant date using an option-pricing model with the following assumptions:

                                                                        2001
                                                                   ---------
Risk-free interest rates                                                4.32%
Dividend yields                                                         2.76%
Volatility factors of expected market price of common stock            18.00%
Weighted-average expected life of the options (years)                  10.00

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

                                                      2001              2000
                                                  --------------------------
Net income                        As reported     $  1,201         $     983
                                  Pro forma          1,163               849

Basic earnings per share          As reported     $   1.29         $    0.92
                                  Pro forma           1.25              0.80

Diluted earnings per share        As reported     $   1.25         $    0.91
                                  Pro forma           1.21              0.79




Note 15:  Postretirement Plan

The Company sponsors a defined-benefit postretirement plan that covers both
salaried and nonsalaried employees.  The following table sets forth the
plan's funded status, and amounts recognized in the consolidated financial
statements as of December 31, 2001 and 2000:

                                                      2001              2000
                                                  --------------------------
Change in benefit obligation
  Benefit obligation at beginning of year         $    264         $     228
  Service cost                                          22                16
  Interest cost                                         19                16
  Actuarial gain                                        12                11
  Benefits paid                                         (9)               (7)
                                                  --------------------------
  Benefit obligation at end of year                    308               264
                                                  --------------------------
Change in plan assets
  Fair value of plan assets at
     end of year                                        --                --
                                                  --------------------------
  Funded status                                       (308)             (264)
  Unrecognized net actuarial gain                      (10)              (22)
  Unrecognized transition liability                    107               115
                                                  --------------------------
  Accrued benefit cost                            $   (211)         $   (171)
                                                  ==========================
Components of net periodic benefit cost
  Service cost                                          22                16
  Interest cost                                         19                16
  Amortization of prior service cost                     8                 8
                                                  --------------------------
  Net periodic benefit cost                       $     49         $      40
                                                  ==========================

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 9 percent, gradually declining to 5
percent in the year 2005.

The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25 percent in 2001 and 2000.

Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans.  A one percentage-point change in assumed
health care cost trend rates would have the following effects:

                                                     One Percentage Point
                                                  --------------------------
                                                  Increase          Decrease
                                                  --------------------------
Effect on total service components                $     17         $      (6)
Effect on postretirement benefit obligation             69               (52)






Note 16:  Deferred Compensation

The Company has a deferred compensation plan for its directors whereby each
director may elect to defer his annual fees.  For the years ended December
31, 2001 and 2000, fees deferred totaled $42,000 and $54,000, interest
expense related to this plan was $34,000 and $40,000, and payments to
directors totaled $80,000 in 2001 and $53,000 in 2000.


Note 17:  Business Industry Segments

The Company's primary business involves the typical banking services of
generating loans and receiving deposits.  Through PASC, the Company also
provides insurance and brokerage services to customers.  The following
schedule is a summary of selected data for the Company's various business
segments:

<TABLE>
<CAPTION>
                                           Insurance/
                                Banking    Brokerage
                                Services   Services      Company     Eliminations    Total
                              -------------------------------------------------------------
<S>                            <C>         <C>          <C>           <C>         <C>
2001
  Total interest income        $ 11,707    $     --     $ 11,707      $    --     $ 11,707
  Total noninterest income          923       1,239        2,162          (40)       2,122
  Total interest expense          5,858          --        5,858           --        5,858
  Total noninterest expense       4,897         938        5,835          (40)       5,795
  Income before income tax        1,713         301        2,014           --        2,014
  Income tax expense                690         123          813           --          813
  Net income                      1,023         178        1,201           --        1,201
  Total assets                  168,516         968      169,484       (1,139)     168,345


2000
  Total interest income        $ 11,366    $     --     $ 11,366      $    --     $ 11,366
  Total noninterest income          747         908        1,655          (20)       1,635
  Total interest expense          5,611          --        5,611           --        5,611
  Total noninterest expense       4,946         684        5,630          (20)       5,610
  Income before income tax        1,256         224        1,480           --        1,480
  Income tax expense                404          93          497           --          497
  Net income                        852         131          983           --          983
  Total assets                  159,545         888      160,433         (756)     159,677


</TABLE

Note 18:  Earnings per share

<TABLE>
<CAPTION>

Earnings per share (EPS) were computed as follows:

                                                        Year Ended December 31, 2001
                                                  ---------------------------------------
                                                                   Weighted
                                                                    Average     Per Share
                                                    Income          Shares        Amount
                                                  ---------------------------------------
<S>                                                <C>              <C>         <C>
Basic earnings per share
  Income available to common stockholders          $  1,201         929,350     $   1.29

Effect of dilutive securities
  Stock options                                                      24,477
  Unearned incentive plan shares                                      6,106
                                                  -------------------------
Diluted earnings per share
  Income available to common stockholders
   and assumed conversions                         $  1,201         959,933     $   1.25
                                                  =======================================


<CAPTION>
                                                        Year Ended December 31, 2000
                                                  ---------------------------------------
                                                                   Weighted
                                                                    Average     Per Share
                                                    Income          Shares        Amount
                                                  ---------------------------------------
<S>                                                <C>            <C>           <C>
Basic earnings per share
  Income available to common stockholders          $    983       1,065,224     $   0.92

Effect of dilutive securities
  Unearned incentive plan shares                                     14,763
                                                  -------------------------
Diluted earnings per share
  Income available to common stockholders
   and assumed conversions                         $    983       1,079,987     $   0.91
                                                  =======================================
</TABLE>

Options to purchase 180,101 shares of common stock at $14.22 were outstanding
at December, 31, 2000, but were excluded from the computation of the diluted
earnings per share because the options exercise price was greater than the
average market price of the common shares for 2000.

Note 19:  Fair Values of Financial Instruments

The following table presents estimated fair values of the Company's financial
instruments.  The fair values of certain of these instruments were calculated
by discounting expected cash flows, which method involves significant
judgments by management and uncertainties.  Fair value is the estimated
amount at which financial assets or liabilities could be exchanged in a
current transaction between willing parties, other than in a forced or
liquidation sale.  Because no market exists for certain of these financial
instruments and because management does not intend to sell these financial
instruments, the Company does not know whether the fair values shown below
represent values at which the respective financial instruments could be sold
individually or in the aggregate.


<TABLE>
<CAPTION>

                                            December 31, 2001         December 31, 2000
                                         -----------------------------------------------
                                            Carrying     Fair         Carrying     Fair
                                             Amount      Value         Amount      Value
                                         -----------------------------------------------
<S>                                      <C>           <C>          <C>         <C>
Financial assets
  Cash and cash equivalents              $   11,166    $ 11,166     $  10,643   $ 10,643
  Available-for-sale securities                  --          --         3,009      3,009
  Held-to-maturity securities                 2,056       2,090         3,153      3,116
  Mortgage loans held for sale                2,343       2,346            --         --
  Interest receivable                           789         789           869        869
  Loans, net of allowance for
    loan losses                             143,063     144,665       132,731    133,794
  Federal Home Loan Bank stock                1,166       1,166           890        890
  Cash surrender value of life insurance        251         251           237        237

Financial liabilities
  Deposits                                  127,540     127,157       123,685    123,675
  Federal Home Loan Bank advances            20,500      21,682        14,000     13,902
  Advances from borrowers for taxes
    and insurance                               319         319           298        298
  Interest payable                               91          91            80         80
  Unrecognized financial
    instruments (net of contract
    amount)
     Commitments to extend credit                --          --            --         --
     Letters of credit                           --          --            --         --
     Lines of credit                             --          --            --         --

</TABLE>

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

Cash and Cash Equivalents -- For these short-term instruments, the carrying
amount approximates fair value.

Investment Securities -- Fair values for investment securities equal quoted
market prices, if available.  If quoted market prices are not available, fair
value is estimated based on quoted market prices of similar securities.

Mortgage Loans Held for Sale -- For homogeneous categories of loans, such as
mortgage loans held for sale, fair value is estimated using the quoted market
prices for securities backed by similar loans, adjusted for differences in
loan characteristics.

Loans -- The fair value of loans is estimated by discounting the future cash
flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings and for the same remaining maturities.
Loans with similar characteristics were aggregated for purposes of the
calculations.  The carrying amount of accrued interest approximates its fair
value.

Federal Home Loan Bank stock -- Fair value of Federal Home Loan Bank stock is
based on the price at which it may be resold to the Federal Home Loan Bank.

Cash Surrender Value of Life Insurance -- Fair values are based on estimated
net realizable value.

Deposits -- The fair value of demand deposits, savings accounts, NOW
accounts, and certain money market deposits is the amount payable on demand
at the reporting date, i.e., their carrying amount.  The fair value of fixed-
maturity time deposits is estimated using a discounted cash flow calculation
that applies the rates currently offered for deposits of similar remaining
maturities.  The carrying amount of accrued interest payable approximates its
fair value.

Federal Home Loan Bank Advances -- The fair value of these borrowings are
estimated using a discounted cash flow calculation, based on current rates
for similar debt.

Advances from Borrowers for Taxes and Insurance -- The fair value of advances
from borrowers for taxes and insurance approximates carrying value.

Commitments to Extend Credit, Letters of Credit and Lines of Credit -- The
fair value of commitments is estimated using the fees currently charged to
enter into similar agreements, taking into account the remaining terms of the
agreements and the present creditworthiness of the counterparties.  For
fixed-rate loan commitments, fair value also considers the difference between
current levels of interest rates and the committed rates.  The fair value of
letters of credit and lines of credit is based on fees currently charged for
similar agreements or on the estimated cost to terminate or otherwise settle
the obligations with the counterparties at the reporting date.

Note 20:  Significant Estimates and Concentrations

Generally accepted accounting principles require disclosure of certain
significant estimates and current vulnerabilities due to certain
concentrations.  Estimates related to the allowance for loan losses are
reflected in the footnote regarding loans.  Assumptions used in the
postretirement benefit obligation estimate are reflected in the footnote
regarding the postretirement plan.  Current vulnerabilities due to certain
concentrations of credit risk are discussed in the footnote on commitments
and credit risk.

Note 21:  Commitments and Credit Risk

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

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee.  Since a portion of the commitments
may expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements.  Each customer's
creditworthiness is evaluated on a case-by-case basis.  The amount of
collateral obtained, if deemed necessary, is based on management's credit
evaluation of the counterparty.  Collateral held varies, but may include
accounts receivable, inventory, property, plant and equipment, commercial
real estate and residential real estate.

At December 31, 2001 and 2000, the Bank had outstanding commitments to
originate loans aggregating approximately $1,325,000 and $4,652,000,
respectively.  The commitments extended over varying periods of time with the
majority being disbursed within a one-year period.  Loan commitments at fixed
rates of interest amounted to $850,000 and $3,100,000 at December 31, 2001
and 2000, respectively, with the remainder at floating market rates.

Mortgage loans in the process of origination represent amounts that the Bank
plans to fund within a normal period of 60 to 90 days and which are intended
for sale to investors in the secondary market.  Total mortgage loans in the
process of origination amounted to $1,182,000 at December 31, 2001.  Included
in mortgage loans in the process of origination were commitments to originate
loans at fixed rates of interest of $448,000 at December 31, 2001.  There
were no mortgage loans in the process of origination at December 31, 2000.

Letters of credit are conditional commitments issued by the Bank to guarantee
the performance of a customer to a third party.  Those guarantees are
primarily issued to support public and private borrowing arrangements,
including commercial paper, bond financing and similar transactions.  The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loans to customers.

The Bank had total outstanding letters of credit amounting to $214,000 and
$199,000, at December 31, 2001 and 2000, respectively, all with terms
approximating one year.

Lines of credit are agreements to lend to a customer as long as there is no
violation of any condition established in the contract.  Lines of credit
generally have fixed expiration dates.  Since a portion of the line may
expire without being drawn upon, the total unused lines do not necessarily
represent future cash requirements.  Each customer's creditworthiness is
evaluated on a case-by-case basis.  The amount of collateral obtained, if
deemed necessary, is based on management's credit evaluation of the
counterparty.  Collateral held varies but may include accounts receivable,
inventory, property, plant and equipment, commercial real estate and
residential real estate.  Management uses the same credit policies in
granting lines of credit as it does for on-balance-sheet instruments.

At December 31, 2001, the Bank had granted unused lines of credit to
borrowers aggregating approximately $1,530,000 for mortgage lines, $2,640,000
for commercial lines, and $2,452,000 for open-end consumers lines,
respectively.  At December 31, 2000, unused lines of credit to borrowers
aggregated approximately $406,000 for mortgage lines, $1,835,000 for
commercial lines and $1,593,000 for open-end consumer lines.

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

The Company has a concentration of funds on deposit with the Federal Home
Loan Bank totaling $5,798,000 and $3,997,000 at December 31, 2001 and 2000.

Note 22:  Future Change in Accounting Principles

The Financial Accounting Standards Board recently adopted Statement No. 142,
"Goodwill and Other Intangible Assets", which addresses how goodwill and
intangible assets should be accounted for at acquisition and in subsequent
periods.  The Company expects to apply the new Statement during 2002.  The
Company has not yet determined the impact of Statement No. 142 on the
Company's consolidated financial position or results of operation.  Goodwill
amortization expense for the years ended December 31, 2001 and 2000, was
$44,000 and $43,000, respectively.

GREAT AMERICAN BANCORP, INC.
SHAREHOLDER INFORMATION

Stock Listing and Price Information

The Company's common stock trades on the Nasdaq SmallCap Market under the
symbol "GTPS".  At December 31, 2001, 867,167 shares of the Company's common
stock were held of record by 326 persons or entities, not including the
number of persons or entities holding stock in nominee or street name through
various brokers or banks.

The following schedule shows the high and low bid prices for each of the
quarters in the years ended December 31, 2001 and 2000:

                Quarter Ended:             High        Low
              ------------------          ------      ------
             March 31, 2000             $ 13.13     $ 10.88
             June 30, 2000                15.00       12.00
             September 30, 2000           15.00       11.75
             December 31, 2000            15.00       13.00
             March 31, 2001               16.38	      12.63
             June 30, 2001                16.12       14.12
             September 30, 2001           17.76       15.37
             December 31, 2001            23.37       17.25


At December 31, 2001 the closing price of a common share was $22.72.  Such
prices do not necessarily reflect retail markups, markdowns, or commissions.
During the years ended December 31, 2001 and 2000, the Company declared
dividends as follows:

  Date Declared          Record Date          Payable Date        Amount
----------------      -----------------    -----------------      ------
February 14, 2000    March 15, 2000         April 3, 2000        $  .11
May 8, 2000          June 15, 2000          July 3, 2000            .11
August 14, 2000      September 15, 2000     October 2, 2000         .11
November 13, 2000    December 15, 2000      January 2, 2001         .11
February 12, 2001    March 15, 2001         April 2, 2001           .11
May 14, 2001         June 15, 2001          July 2, 2001            .11
August 13, 2001      September 15, 2001     October 1, 2001         .11
November 19, 2001    December 14, 2001      January 2, 2002         .11
                                                                 -------
                                                                 $  .88
                                                                 =======



Investor Information

Stockholders, investors and analysts interested in additional information may
contact:

Jane F. Adams
Chief Financial Officer
Great American Bancorp, Inc.
1311 S. Neil Street
Champaign, IL  61820

Annual Report on Form 10-KSB

A copy of the annual report on Form 10-KSB for the fiscal year ended December
31, 2001, which has been filed with the Securities and Exchange Commission is
available to stockholders (excluding exhibits) at no charge, upon written
request to the above address.

Corporate Counsel

Muldoon Murphy and Faucette LLP
5101 Wisconsin Avenue N.W.
Washington, D C  20016

Independent Accountants

BKD, LLP
225 N. Water, Suite 400
Decatur, IL  62525

Annual Meeting of Stockholders

The Annual Meeting of Stockholders of Great American Bancorp, Inc. will be
held at 9:30 a.m. April 23, 2002 at:

First Federal Savings Bank of Champaign-Urbana
1311 S. Neil Street
Champaign IL  61820

Shareholders are welcome to attend.

Stock Transfer Agent and Registrar

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

Computershare Investor Services
12039 West Alameda Parkway
Suite Z-2
Lakewood, CO  80228

GREAT AMERICAN BANCORP, INC.
DIRECTORS AND EXECUTIVE OFFICERS

Great American Bancorp, Inc. Directors and Executive Officers

  Ronald E. Guenther, Chairman of the Board of the Company
    Athletic Director, University of Illinois

  Clinton C. Atkins, Director
    Chairman of Hobbico Inc., a hobby retailer and supplier, and owner of The
      Atkins Group, North Point Development, all real estate concerns.

  Ronald Kiddoo, Director
    Chairman of the Board and Chief Investment Officer, Cozad Asset
      Management,Inc., an investment advisory concern.

  George R. Rouse, Director
    President and Chief Executive Officer of the Company

  Jack B. Troxell, Director
    Owner and President of C-U Liquor LTD, retail beverage stores.

  Jane F. Adams
    Chief Financial Officer, Secretary and Treasurer of the Company


First Federal Savings Bank Directors and Executive Officers

  Jack B. Troxell, Director and Chairman of the Board of the Bank*
    Owner and President of C-U Liquor LTD, retail beverage stores.

  Craig Bazzani, Director
    Vice President - Administration, University of Illinois

  Dr. Kenneth DePersio, Director
    Orthopedic Surgeon

  Ronald E. Guenther, Director
    Athletic Director, University of Illinois

  John Z. Hecker, Director
    Partner, Stipes Publishing, LLC, book publishing.

  Ronald Kiddoo, Director*
    Chairman of the Board and Chief Investment Officer, Cozad Asset
      Management,Inc., an investment advisory concern.

  Michael J. Martin, Director*
    General Manager, The Atkins Group, real estate development.

  George R. Rouse, Director*
    President and Chief Executive Officer of the Bank

  Jane F. Adams
    Senior Vice President - Finance, Secretary-Treasurer of the Bank

  Mark D. Piper
    Senior Vice President - Operations of the Bank

  Melinda K. Waller
    Senior Vice President - Deposit Acquisitions of the Bank

  Paul D. Wilson
    Senior Vice President - Lending of the Bank

          * Also Director of Park Avenue Service Corporation.


Park Avenue Service Corporation Officers

  George R. Rouse
    President

  Jane F. Adams
    Secretary and Treasurer

  Larry Grill
    Investment Representative
    UMB Scout Brokerage Services, Inc.
    Member NASD/SIPC

  Michael Tennant
    President, GTPS Insurance Agency

  Gerald Cox
    Senior Vice President, GTPS Insurance Agency







               Exhibit 23.0   Consent of Independent Accountants


                      INDEPENDENT ACCOUNTANTS' CONSENT

The Board of Directors
Great American Bancorp, Inc.

We have issued our report dated February 1, 2002 on the consolidated
financial statements of Great American Bancorp, Inc. and Subsidiary appearing
in the Company's 2001 Annual Report to Stockholders.  We consent to the
incorporation by reference into the previously filed Registration Statement
on Form S-8 (No. 33-04491) of Great American Bancorp, Inc. of the
aforementioned report.


/s/ BKD, LLP

Decatur, Illinois
March 27, 2002





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