[Company Logo] Tri-County
                             Bancorp, Inc.
                          ------------------
                          1997 Annual Report
                          ------------------


<PAGE>




        ---------------------------------------------------------------

        TABLE OF CONTENTS
        ---------------------------------------------------------------

              Selected Financial Data                           1
        ---------------------------------------------------------------

              Letter to Stockholders                            2
        ---------------------------------------------------------------

              Management's Discussion and Analysis              3
        ---------------------------------------------------------------

              Report of Independent Auditors                   10
        ---------------------------------------------------------------

              Consolidated Statements of Financial Condition   11
        ---------------------------------------------------------------

              Consolidated Statements of Operations            12
        ---------------------------------------------------------------

              Consolidated Statements of Stockholders' Equity  13
        ---------------------------------------------------------------

              Consolidated Statements of Cash Flows            14
        ---------------------------------------------------------------

              Notes to Consolidated Financial Statements       15
        ---------------------------------------------------------------

              Corporate and Stockholders' Information          31
        ---------------------------------------------------------------


<PAGE>
SELECTED FINANCIAL DATA
                                                  At December 31,
                                     -------------------------------------------
                                         1997     1996    1995     1994    1993
                                     -------------------------------------------
                                                   (In Thousands)
       BALANCE SHEET DATA Total amount of:
         Assets                       $89,961  $85,888 $65,766  $59,583 $59,763
         Loans receivable, net         40,425   35,265  25,514   24,439  23,798
         Mortgage-backed               21,273   25,247  16,252   11,895  13,069
         securities, net
         Investment securities, net    23,240   21,466  21,268   20,221  19,184
         Deposits                      45,405   48,533  44,583   45,589  46,102
         FHLB advances                 29,697   23,460   7,000    1,000      --
         Stockholders' equity          13,827   13,146  13,496   12,705  13,247

                                               Year Ended December 31
                                     -------------------------------------------
                                         1997     1996    1995     1994    1993
                                     -------------------------------------------
                                                   (In Thousands)
       STATEMENT OF OPERATIONS
       DATA
         Interest income               $6,466   $5,494  $4,600   $4,100   $4,246
         Net interest income            2,744    2,468   2,266    2,396    2,347
         Provision for loan losses         --       --      --       --       --
         Non-interest income              105      159     171       71      117
         Non-interest expenses          1,623    1,811(1)1,458    1,416    1,176
         Net income                       901      540(1)  649      764      877

                                          At or For Year Ended December 31
                                     -------------------------------------------
                                         1997     1996    1995     1994    1993
                                     -------------------------------------------
       FINANCIAL RATIOS & OTHER
       DATA
         Return on average assets      1.02%    0.71%(1) 1.04%    1.28%   1.56%
         Return      on      average   6.68%    4.05%(1) 4.96%    5.89%  10.01%
         stockholders' equity
         Average    interest    rate   2.48%    2.68%    2.69%    3.30%   3.60%
         spread
         Net   yield   on    average   3.19%    3.35%    3.62%    4.12%   4.23%
         earning assets
         Non-interest   expense   to   1.80%    2.11%(1) 2.22%    2.38%   1.97%
         total assets
         Average equity/total assets  14.99%   15.51%   19.92%   21.78%  13.70%
         Non-performing  loans/total   0.00%    0.04%    0.03%    0.39%   0.41%
         assets

                                          At or For Year Ended December 31
                                     -------------------------------------------
                                         1997     1996    1995     1994    1993
                                     -------------------------------------------
       PER SHARE INFORMATION(2)
         Earnings    per   share   -    $.071    $0.41(1) $.47     $.53 $0.16(3)
         diluted
         Dividends per share              .33      .25     .19      .11   --
         Book value per share           11.84    10.80   10.53     9.42  8.86

----------------------------
(1)Includes the effect of a one-time special assessment to recapitaliz
   the SAIF.
(2)Restated  to reflect 100% stock split effected by a 100% stock
   dividend paid December 8, 1997.
(3)From Sept. 28, 1993.

<PAGE>

To Our Stockholders:

     Tri-County Bancorp, Inc. produced record earnings in 1997. Earnings for the
Company were  $901,004,  which  exceeded the previous year by 21.6% when 1996 is
normalized for the FDIC special  assessment  paid that year.  Earnings per share
also  increased to record  levels of $.71 per share on a fully diluted basis and
exceeded  1996 by 23.0% when  compared to that year  excluding  the FDIC special
assessment.  Previously,  our highest  income year was 1993.

     In addition to the record  earnings,  the Company  paid its highest  annual
dividends  of $.325 per share.  One 25,000  share  (before  the stock  dividend)
repurchase  was  completed  in 1997,  and a stock  dividend  of 100% was paid on
December 8th. Our stock performed well with the bid price on the stock moving up
$4.69 to $13.69 at year end, a 52.1% increase.

     Last  year in our  letter  to  stockholders,  we  discussed  our  financial
strategy  to  be  more  aggressive  in  adding   securities,   loans,  and  loan
participations.  We planned to fund these assets  primarily  through  borrowings
from the Federal  Home Loan Bank.  We also made a  commitment  to work harder at
adding  checking   account   customers.   These  strategies  were  employed  and
contributed to the record earnings.  Loans for 1997 increased over $5 million or
14.6%,  and our checking  account  numbers are rising  significantly.  As in the
past, our credit quality continues to be excellent.

     Despite a somewhat unfavorable interest rate forecast, the outlook for 1998
is good.  We will  continue to focus on the  financial  strategies  that we have
employed in the past to improve our Company.

     Thank you for your  continued  support,  and  please  contact  us with your
questions about Tri-County Bancorp, Inc.

Sincerely,



Robert L. Savage                        Larry C. Goddard
President and Chief Executive Officer   Chairman of the Board

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


ORGANIZATION

Tri-County  Bancorp,  Inc. (the  "Company") was organized in May of 1993 for the
purpose of acquiring all the capital stock of  Tri-County  Federal  Savings Bank
(the "Bank") upon  conversion of the Bank from mutual to stock form of ownership
("Conversion").  The  Conversion  was  completed on September  29, 1993.  In the
related  initial public  offering,  747,500 shares of Tri-County  Bancorp,  Inc.
common stock were sold at $10.00 per share. References throughout this report to
the Company  include the Company  and Bank on a  consolidated  basis  unless the
context otherwise requires.


THE COMPANY'S BUSINESS

The Company is a unitary savings and loan holding company which,  under existing
laws,  generally is not restricted in the types of business  activities in which
it may engage provided that the Bank retains a specified amount of its assets in
housing-related  investments. At the present time, since it does not conduct any
active  business,  the Company does not intend to employ any persons  other than
officers,  using the  support  staff from the Bank from time to time to meet its
administrative needs.

The  Bank  is  a  federally   chartered  stock  savings  bank  headquartered  in
Torrington, Wyoming with one additional branch office in Wheatland, Wyoming. The
Bank was founded in 1935 as a federally  chartered  savings and loan association
under the name  Tri-County  Federal  Savings  and Loan  Association.  The Bank's
deposits  are  federally  insured  by the  Savings  Association  Insurance  Fund
("SAIF").

The Bank is primarily engaged in attracting deposits from the general public and
using  those  funds  to  originate  real  estate  loans  on  one-to-four  family
residences  and, to a lesser  extent,  consumer  loans,  commercial  real estate
loans, and commercial business loans. The Bank's market area is primarily Goshen
and Platte  Counties,  Wyoming and Scottsbluff  County in western  Nebraska.  In
addition,   the  Bank  invests  in  investment  securities  and  mortgage-backed
securities.  The Bank offers its  customers  several types of real estate loans,
including  adjustable-rate and fixed-rate mortgage loans. The Bank has also been
an originator of  multi-family  and commercial  real estate loans,  and consumer
loans, including automobile and home equity loans. The Bank also purchases loans
and participates in loans with other financial and mortgage banking institutions
on a case by case basis.  These  activities  are  conducted in Wyoming and other
Rocky Mountain States.


CAPITAL STOCK

Since its issuance in September 1993, the Company's common stock has been traded
over-the-counter on the Nasdaq Stock MarketSM appearing under the symbol "TRIC."
The  following  table  reflects  the  stock  price as  published  by the  Nasdaq
statistical report.


<PAGE>


      1996                                LOW1              HIGH1
      First Quarter--03/31/96             $8.25              $9.25
      Second Quarter--06/30/96            $8.75              $9.25
      Third Quarter--09/30/96             $9.00              $9.44
      Fourth Quarter--12/31/96            $9.00              $9.50

      1997
      First Quarter--03/31/97             $9.00              $9.50
      Second Quarter--06/30/97            $9.50             $10.63
      Third Quarter--09/30/97            $10.75             $12.25
      Fourth Quarter--12/31/97           $11.50             $15.00

The number of shareholders  of record as of December 31, 1997 was  approximately
233.  This does not reflect the number of persons or entities  who held stock in
nominee or "street" name through various  brokerage firms. At December 31, 1997,
there were 1,167,498 shares outstanding. The Company completed one repurchase of
stock in 1997 of 50,000(1) shares.  The repurchase was completed in July with an
average price paid of $12.00(1) per share.

The Company's  ability to pay dividends to  stockholders  is dependent  upon the
dividends  it  receives  from the Bank.  The Bank may not  declare or pay a cash
dividend  on any of its stock if the  effect  thereof  would  cause  the  Bank's
regulatory  capital  to be  reduced  below  (1)  the  amount  required  for  the
liquidation  account  established in connection with the Bank's  conversion from
mutual to stock form, or (2) the regulatory capital  requirements imposed by the
Office of Thrift  Supervision  ("OTS"),  the  Bank's  chartering  authority  and
primary federal  regulator.  The Company paid per share,  dividends1 of $.075 on
March 31, June 30,  September  30, and $.10 on December 31, 1997.  The dividends
paid in 1997 exceeded 1996 dividends by $.075 or 30%. Additionally,  the Company
issued a 100% stock dividend on December 8, 1998.


CHANGES IN FINANCIAL CONDITION


ASSETS

The total assets of the Bank increased by $4,072,444, or 4.74%, during 1997.

Securities held-to-maturity decreased by $2,332,456. The decrease was the result
of principal  payments and prepayments of $1,839,685 on the Bank's  portfolio of
mortgage-backed  securities and the maturity of an agency security in the amount
of $500,000.

Securities   available-for-sale   decreased  by  $239,503  during  1997.  Agency
securities  totaling  $7,765,700  were purchased  during the year and the market
value of the portfolio  increased by $875,542.  These  increases  were offset by
principal payments and prepayments of $3,321,899 on mortgage-related  securities
and the sale of securities totaling $5,299,271.

----------------------
(1) Restated to reflect 100% stock split  effected by a 100% stock dividend paid
December 8, 1997.

<PAGE>

Loans receivable  increased  $5,160,010 during 1997. During this period the Bank
originated  or  purchased   portfolio   residential   mortgage   loans  totaling
$7,839,781,  non-residential mortgage loans totaling $1,970,712,  consumer loans
totaling  $2,270,330 and commercial loans totaling  $478,725.  By the end of the
period,  the Bank had  received  repayments  totaling  $7,073,898.  Of the total
mortgage  loans  originated  or  purchased  during  the  year,  $4,350,725  were
adjustable-rate  and  $5,459,768  were  fixed-rate  loans.  Because of a lack of
demand for certain types of loans in the Bank's primary lending area,  purchased
loans  totaled  43% of  mortgage  lending  during the  period.  The  majority of
purchased  loans  are  residential  and  non-residential  real  estate  loans in
Colorado and non-residential real estate loans in western New Mexico.  Purchased
loans are subjected to the same  underwriting  standards and loan terms as those
originated by the Bank for its portfolio.


LIABILITIES

Deposit balances  decreased by $3,127,829 or 6.44% and consisted of increases of
$174,030  and  $304,790  in  demand  accounts  and  savings  and  NOW  deposits,
respectively,  and a decrease of  $3,606,649 in time  deposits.  The decrease in
time deposits was due, in part, to the scheduled  maturity of deposits held by a
local school  district,  which were  originally  issued in the fourth quarter of
1996.

The Bank  continued  to increase its level of  borrowings  from the Federal Home
Loan Bank of Seattle from  $23,460,492  at December 31, 1996 to  $29,696,616  at
December 31, 1997.  The advances were used  primarily to fund loan  originations
and purchase additional securities.

Deferred  income  taxes  increased  by  $250,685  during 1997 and was mainly the
result of the application of SFAS No. 115, Accounting for Certain Investments in
Debt and  Equity  Securities,  which  requires  unrealized  gains and  losses on
available-for-sale securities to be reported, net of deferred income taxes, as a
separate component of stockholders' equity. The market value of these securities
increased $875,542 during the period,  which resulted in an increase in deferred
income taxes.


STOCKHOLDERS' EQUITY

On  November  4, 1997,  the Company  declared a 100% stock  dividend,  which was
distributed on December 8, 1997. In connection with the stock dividend,  $74,750
was transferred from retained earnings to common stock.

The  increase  in  additional  paid-in  capital of $70,996 was the result of the
application of an accounting  standard which requires  charging  current expense
for the fair value of shares of stock  committed  to be  released  by the Bank's
Employee  Stock  Ownership  Plan and crediting the  difference  between the fair
value and the cost of the shares to paid-in capital.

The  increase  in  retained  earnings  was the result of net  earnings  totaling
$901,004 which more than offset the decrease in retained  earnings caused by the
payments of  dividends  totaling  $386,937  and the  transfer to common stock of
$74,750 in connection with the stock split mentioned above.

<PAGE>

As  discussed  earlier,  SFAS No. 115  requires  unrealized  gains and losses on
securities classified  available-for-sale to be shown as a separate component of
stockholders'  equity in an amount that is net of  deferred  income  taxes.  The
market  value of these  securities  increased  during  1997 and  resulted  in an
increase, net of deferred income tax, of $577,857 in stockholders' equity.

On July 10, 1997, the Company  repurchased  50,000(1)  shares of its outstanding
Common Stock at $12.001 per share for a total cost of $600,000.


AVERAGE BALANCE SHEET

The following table sets forth certain  information  relating to average balance
sheets and reflects the average yield on assets and average cost of  liabilities
for the periods  indicated and the average  yields  earned and rates paid.  Such
yields and costs are  derived  by  dividing  income or  expense  by the  average
balance  of assets or  liabilities,  respectively,  for the  periods  presented.
Average  balances  are derived  from  month-end  balances.  Management  does not
believe that the use of month-end  instead of daily average  balances has caused
any material difference in the information presented.

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                              1997                                1996
                                          ----------------------------------------------------------------------
                                             Average              Average         Average             Average
                                             Balance  Interest   Yield/Cost       Balance  Interest  Yield/Cost
                                          -----------------------------------------------------------------------
                                                                  (Dollars in thousands)
<S>                                          <C>       <C>         <C>            <C>       <C>        <C>
Interest-earning assets:
   Loans receivable                           $37,581  $3,144      8.37%          $31,815   $2,633     8.28%
   Securities-Available for Sale               38,213   2,578      6.75%           28,676    1,884     6.57%
   Securities-Hold to maturity                  8,964     684      7.63%           12,671      944     7.45%
   Other  interest-earning assets               1,165      61      5.24%              447       33     7.38%
                                              -------  ------                     -------   ------
    Total interest-earning assets             $85,923  $6,467      7.53%          $73,609   $5,494     7.46%
                                                       ------                               ------
Non-interest earning assets                     2,278                               2,089
                                              -------                             -------
              Total Assets                    $88,201                             $75,698
                                              =======                             =======
Interest-bearing liabilities:
   Deposits                                   $47,111  $2,188      4.64%          $45,708   $2,083     4.56%
   Other borrowings                            26,625   1,534      5.76%           17,629      943     5.35%
                                              -------  ------                     -------   ------
    Total interest-bearing liabilities        $73,736  $3,722      5.05%          $63,337   $3,026     4.78%
                                                       ------                               ------
Non-interest bearing liabilities                1,057                               1,273
                                              -------                             -------
         Total liabilities                     74,793                             $64,610
Retained earnings                              13,408                              11,088
                                              -------                             -------
     Total liabilities and Retained Earnings  $88,201                             $75,698
                                              =======                             =======
Net interest income                                    $2,745                               $2,468
                                                       ======                               ======
Interest rate spread                                               2.48%                               2.68%
Net yield on interest earning assets                               3.19%                               3.35%
Ratio of average interest-earning assets                         116.53%                             116.22%
  to interest-bearing liabilities
</TABLE>

-------------------------------

(1)Restated  to reflect 100% stock split  effected by a 100% stock dividend
paid December 8, 1997.

<PAGE>

RATE/VOLUME ANALYSIS

The table below sets forth  certain  information  regarding  changes in interest
income and  interest  expense of the Bank for the  periods  indicated.  For each
category of interest-earning asset and interest-bearing  liability,  information
is provided on changes attributable to (i) changes in volume (changes in average
volume  multiplied  by old  rate);  (ii)  changes  in  rates  (changes  in  rate
multiplied by old average volume); (iii) changes in rate/volume (changes in rate
multiplied by the change in average volume).

<TABLE>
<CAPTION>
                                                      Year Ended December 31,             Year Ended December 31,
                                                          1997 vs. 1996                        1996 vs. 1995
                                                   -------------------------------   ------------------------------
                                                    Increase (Decrease) Due To         Increase (Decrease) Due To
                                                   -------------------------------   ------------------------------
                                                   Volume   Rate  Rate/Volume  Net   Volume  Rate  Rate/Volume  Net
                                                   ------   ----  -----------  ---   ------  ----  -----------  ---
                                                                      (Dollars in thousands)
<S>                                                 <C>    <C>      <C>      <C>       <C>     <C>     <C>    <C>
Interest-earning assets:
  Loans receivable                                   478    29        5       512       521    17        4     542
  Securities-Held to maturity                        625    50       17       692       689     8        5     702
  Securities-Held to maturity                       (276)   23       (7)     (260)     (308)   51      (13)   (270)
  Other interest-earning assets                       54   (10)     (15)       29       (85)   21      (16)    (80)
                                                    ----   ---      ---      ----      ----    --      ---    ----
Total interest-earning assets                        881    92        0       973       817    97      (20)    894

Interest-bearing liabilities:
  Deposit accounts                                    65    41        0       106        12    (4)       0       8
  Other liabilities                                  480    73       37       590       730   (12)     (33)    685
                                                    ----   ---      ---      ----      ----   ---      ---    ----
Total interest-bearing liabilities                   545   114       37       696       742   (16)     (33)    693
Net change in interest income                        336   (22)     (37)      277        75   113       13     201
interest income                                     ====   ===      ===      ====      ====   ===      ===    ====

</TABLE>

COMPARISON OF THE OPERATING RESULTS FOR THE
YEARS ENDED DECEMBER 31, 1997 AND 1996


NET INCOME

Net income  increased  $360,855 during 1997 and net interest income increased by
$276,205.  Non-interest  income  decreased by $53,846 and  non-interest  expense
decreased by $187,886. The provision for income taxes increased by $49,389.

The  comparison  of net income in 1997 to net  income of 1996 was  significantly
impacted by  legislation  passed in the third quarter of 1996 which provided for
the  recapitalization of the Savings  Association  Insurance Fund via a one-time
special  assessment to all  financial  institutions  whose deposit  insurance is
cover by this fund. The special  assessment  totaled $304,606 and was charged to
expense in the previous year.

<PAGE>

INTEREST INCOME

Interest  income  from loans  increased  $512,308  or 19.46%  for the year.  The
increase  was  the  result  of an  increase  in the  average  balance  of  loans
outstanding  of  $5,766,369  and an increase in yield on the loans from 8.27% to
8.37%.

Interest  on  securities  held-to-maturity  decreased  $260,558  and was  caused
primarily by a decrease in the average  balance of the  portfolio of  $3,707,852
which offset an increase in the yield on the portfolio from 7.45% to 7.63%.  The
increase  in yield was the  result of the  maturity  of  securities,  which,  on
average,  had a lower  yield  than the  yield on the  remaining  portfolio.  The
proceeds   of  the   maturities   were   used  to  fund   loans   and   purchase
available-for-sale securities.

The increase of $692,111 in interest on  securities  available-for-sale  was the
result of an increase in the average  balance of securities of $9,537,741 and an
increase in the average yield on the portfolio from 6.57% to 6.74%. The increase
in yield was the result of the purchase of securities,  which, on average, had a
higher yield than the yield on the existing portfolio.

The  increase  in income  from  other  interest-earning  assets of  $28,683  was
primarily  caused by an increase in the average  balance of these  assets.  This
category  of assets  consists  primarily  of  interest-earning  demand  and time
deposits held at FHLB.


INTEREST EXPENSE

Interest  expense on deposits  increased  $105,846 during the year of 1997. This
was the result of an  increase in the  average  cost of  deposits  from 4.56% to
4.64%, which more than off-set a decrease of $1,403,32 in the average balance of
deposits.

The Bank took advantage of a relatively  inexpensive source of funding available
through the FHLB to fund loans and purchase  financial  instruments that yield a
slightly  higher  return  than the rate  charged on the  advances.  The  average
balance of these borrowings was $8,996,654 greater during 1997 than 1996 and the
average  cost  increased  from 5.35% to 5.76%  which  resulted in an increase of
$590,493 in interest expense.


PROVISION FOR LOAN LOSSES

No provision for loan losses was made during 1997. The allowance for loan losses
is based on  Management's  evaluation of the risk inherent in its loan portfolio
after giving due  consideration to the changes in general market  conditions and
in the  nature  and  volume of the Bank's  loan  activity.  The Bank  intends to
continue  to provide for loan losses  based on its  periodic  review of the loan
portfolio and general market conditions.  The allowance for loan losses amounted
to $412,456 at December 31, 1997.  While the Bank  maintains  its  allowance for
loan losses at a level  which it  considers  adequate  to provide for  potential
losses,  there can be no assurances  that further  additions will not be made to
the loss allowance and that such losses will not exceed the estimated amounts.

<PAGE>

NON-INTEREST INCOME

Non-interest  income  decreased  $53,847  during the  twelve-month  period ended
December 31, 1997.  The decrease was  primarily  attributable  to an increase in
losses on sale of  securities  of $65,825.  These  losses  were  incurred in the
redemption of $2,700,000 of available-for-sale  shares in a mutual fund. Service
charges and  deposits and gains on sale of loans  increased  $11,654 and $2,061,
respectively.   These  increases   partially  offset  the  overall  decrease  in
non-interest income.

NON-INTEREST EXPENSE

Overall, non-interest expense decreased $187,886 during 1997.

Compensation and benefits  increased by $80,884 in 1997 and was primarily caused
by an increase in overall salaries and pension costs.

Occupancy and equipment  expense  increased  $36,233 and was primarily caused by
increased data processing costs and by increased  depreciation expense caused by
the installation of new computer hardware.

Legislation  was  passed in the third  quarter  of 1996  that  provided  for the
recapitalization of the SAIF insurance fund via a one-time special assessment to
the  Bank in the  amount  of  $304,606.  Because  of the  recapitalization,  the
insurance  premiums  charged by the fund  decreased  from $97,894 during 1996 to
$30,518 for 1997.

Other,  net expenses  increased by $66,979 and was  primarily  the result of two
events. The Bank received rent during 1996 on a mini-warehouse  property held as
real estate  owned.  The receipt of the rents from the court  appointed  trustee
exceeded  the expenses of caring for the  property  and  collecting  the monthly
rents during the foreclosure  proceedings that were concluded in 1996. Also, the
Bank  abandoned  its  efforts  to start a de novo bank in  Colorado  in 1997 and
charged that cost to expense.


INCOME TAXES

The provision for income taxes increased $49,389 for the year ended December 31,
1997. This increase was due to an increase in earnings before taxes of $410,244.
Further, because the Bank had established reserves for loan losses which will be
charged with any  subsequent  loan losses and because the Bank will be allowed a
deduction for losses  incurred on loans  foreclosed  after December 31, 1995 for
tax  purposes,  the Bank will have a difference  in the treatment of loan losses
for tax and financial purposes. A deferred tax asset is being established by the
Bank and the effect of this  change was a  reduction  in the  expense for income
taxes totaling $70,000 for the current year.

<PAGE>


      Board of Directors
      Tri-County Bancorp, Inc. and Subsidiaries


                        REPORT OF INDEPENDENT AUDITORS

      We have  audited the  accompanying  consolidated  statements  of financial
      condition of Tri-County Bancorp, Inc. and Subsidiaries  (Tri-County) as of
      December 31, 1997 and 1996,  and the related  consolidated  statements  of
      operations,  stockholders' equity and cash flows for the years then ended.
      These  consolidated   financial   statements  are  the  responsibility  of
      Tri-County's  management.  Our  responsibility is to express an opinion on
      these consolidated financial statements based on our audits.

      We conducted our audits in accordance  with  generally  accepted  auditing
      standards.  Those standards require that we plan and perform the audits to
      obtain  reasonable  assurance  about  whether the  consolidated  financial
      statements are free of material misstatement. An audit includes examining,
      on a test basis,  evidence  supporting the amounts and  disclosures in the
      consolidated  financial  statements.  An audit also includes assessing the
      accounting  principles used and significant  estimates made by management,
      as  well  as  evaluating  the  overall  consolidated  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
      condition of Tri-County Bancorp,  Inc. and Subsidiaries as of December 31,
      1997 and 1996, and the consolidated  results of their operations and their
      cash flows for the years then ended, in conformity with generally accepted
      accounting principles.




      DALBY, WENDLAND & CO., P.C.
      Grand Junction, Colorado

      February 6, 1998


<PAGE>
<TABLE>
<CAPTION>
TRI-COUNTY BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                                                 December 31,
ASSETS                                                       1997           1996
                                                      -----------    -----------
<S>                                                   <C>            <C>
Cash and due from banks                               $   758,398    $   537,195
Interest earning deposits with banks                    1,880,407      1,751,397
Securities available for sale, at fair value           34,900,612     35,140,115
Securities held to maturity                             7,987,250     10,319,706
Loans held for sale, at market value                      117,111         90,000
Loans receivable, net of allowance for loan losses
  of $412,456 (1997) and 40,425,288 35,265,278
  $415,447 (1996)
Accrued interest receivable                               655,339        549,524
Federal Home Loan Bank stock                            1,625,400      1,253,300
Premises and equipment                                    886,879        921,681
Other assets                                              723,841         59,885
                                                      -----------    -----------
Total Assets                                          $89,960,525    $85,888,081
                                                      ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
  Demand deposits                                     $   541,510    $   367,480
  Savings and NOW deposits                             12,504,022     12,199,232
  Other time deposits                                  32,359,696     35,966,345
                                                      -----------    -----------
Total Deposits                                         45,405,228     48,533,057

  Advances from Federal Home Loan Bank                 29,696,616     23,460,492
  Advances by borrowers for taxes and insurance           101,267        104,387
  Accounts payable and accrued expenses                   269,105        234,141
  Deferred income taxes                                   661,125        410,440
                                                      -----------    -----------
Total Liabilities                                      76,133,341     72,742,517
                                                      -----------    -----------

Stockholders' Equity
  Preferred stock, authorized 5,000,000 shares,               --              --
    $.10 par value authorized, none issued or
    outstanding
  Common stock, authorized 10,000,000 shares,
    $.10 par value authorized, 1,495,000 (1997)
    and 747,500 (1996) shares issued                      149,500         74,750
  Additional paid-in capital                            7,100,600      7,029,604
  Retained earnings - substantially restricted          8,792,947      8,353,630
  Unearned compensation relating to Employee Stock
  Option Plan and Management Stock Bonus Plan            (388,025)      (506,725)
  Unrealized gain on securities available for
    sale, net of tax                                      817,476        239,619
  Treasury stock - 327,502 (1997) and 138,751
    shares (1996), at cost                             (2,645,314)    (2,045,314)
                                                      -----------    -----------
Total Stockholders' Equity                             13,827,184     13,145,564
                                                      -----------    -----------
Total Liabilities and Stockholders' Equity            $89,960,525    $85,888,081
                                                      ===========    ===========
</TABLE>

                           See accompanying notes.

<PAGE>

<TABLE>
<CAPTION>
                  TRI-COUNTY BANCORP, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                Year ended December 31,
                                                                     1997         1996
                                                               -----------------------
<S>                                                            <C>          <C>
INTEREST INCOME
  Interest and fees on loans                                   $3,144,917   $2,632,609
  Interest and  dividends  on  available  for sale securities:
    Taxable interest                                            2,459,395    1,781,693
    Dividends                                                     117,050      102,641
  Interest on held to maturity securities, taxable                683,848      944,406
  Other interest earning assets                                    61,236       32,553
                                                               ----------   ----------
Total Interest Income                                           6,466,446    5,493,902
                                                               ----------   ----------
INTEREST EXPENSE
  Deposits                                                      2,188,492    2,082,646
  Advances                                                      1,534,093      943,600
                                                               ----------   ----------
Total Interest Expense                                          3,722,585    3,026,246
                                                               ----------   ----------
Net Interest Income                                             2,743,861    2,467,656
PROVISION FOR LOAN LOSSES                                              --           --
                                                               ----------   ----------
  Net Interest Income After
  Provision for Loan Losses                                     2,743,861    2,467,656
                                                               ----------   ----------
NONINTEREST INCOME
  Service charges on deposits                                     112,449      100,795
  Gain on sale of loans                                            35,420       33,359
  Loss on sale of investments available for sale                  (71,421)      (5,596)
  Other income                                                     28,973       30,710
                                                               ----------   ----------
  Total Noninterest Income                                        105,421      159,268
                                                               ----------   ----------
NONINTEREST EXPENSE
  Compensation and benefits                                       891,096      810,212
  Occupancy and equipment                                         330,726      294,493
  SAIF assessment                                                      --      304,606
  Federal insurance premiums                                       30,518       97,894
  Other expenses                                                  370,476      303,497
                                                               ----------   ----------
Total Noninterest Expense                                       1,622,816    1,810,702
                                                               ----------   ----------
Net Income Before Income Taxes                                  1,226,466      816,222
PROVISION FOR INCOME TAXES                                        325,462      276,073
                                                               ----------   ----------
Net Income                                                     $  901,004   $  540,149
                                                               ==========   ==========
EARNINGS PER SHARE
  Basic                                                             $ .75        $ .44
                                                                    =====        =====
  Diluted                                                           $ .71        $ .41
                                                                    =====        =====
</TABLE>





                           See accompanying notes.

<PAGE>

<TABLE>
<CAPTION>
                                                         TRI-COUNTY BANCORP, INC. AND SUBSIDIARIES

                                                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                                                       For the years ended December 31, 1997 and 1996

                                                                        Employee             Unrealized
                                             Additional                    Stock  Management     Gains/
                                     Common     Paid-in    Retained    Ownership       Stock  Losses on       Treasury
                                      Stock     Capital    Earnings         Plan  Bonus Plan Securities          Stock         Total
                                  ---------  ----------  ----------   ----------  ----------  ---------   ------------  ------------
<S>                               <C>        <C>         <C>          <C>         <C>         <C>         <C>           <C>
BALANCE - January 1, 1996         $  74,750  $6,983,901  $8,125,865   $(463,450)  $(164,450)  $ 398,026   $(1,458,218)  $13,496,424
  Net income                              -           -     540,149           -           -           -             -       540,149
  Repayment of ESOP debt                  -           -           -      59,800           -           -             -        59,800
  Allocation of ESOP shares               -      45,703           -           -           -           -             -        45,703
  Amortization of deferred
    compensation-MSBP                     -           -           -           -      61,375           -             -        61,375
  Treasury stock purchased                -           -           -           -           -           -      (587,096)     (587,096)
  Change in unrealized loss on
    securities available
    for sale (net of taxes)               -           -           -           -           -    (158,407)            -      (158,407)
  Cash dividend                           -           -    (312,384)          -           -           -             -      (312,384)
                                  ---------  ----------  ----------   ---------   ---------    --------   -----------   -----------

BALANCE - December 31, 1996          74,750   7,029,604   8,353,630    (403,650)   (103,075)    239,619    (2,045,314)   13,145,564
  Net income                              -           -     901,004           -           -           -             -       901,004
  Repayment of ESOP debt                  -           -           -      59,800           -           -             -        59,800
  Allocation of ESOP shares               -      70,996           -           -           -           -             -        70,996
  Amortization of deferred
    compensation-MSBP                     -           -           -           -      58,900           -             -        58,900
  Treasury stock purchased                -           -           -           -           -           -      (600,000)     (600,000)
  Change in unrealized gain on
    securities available
    for sale (net of taxes)               -           -           -           -           -     577,857             -       577,857
  Two for one stock split
    effected as a stock dividend     74,750           -     (74,750)          -           -           -             -             -
  Cash dividend                           -           -    (386,937)          -           -           -             -      (386,937)
                                   --------  ----------  ----------   ---------   ---------   ---------   -----------   -----------

BALANCE - December 31, 1997        $149,500  $7,100,600  $8,792,947   $(343,850)  $ (44,175)  $ 817,476   $(2,645,314)  $13,827,184
                                   ========  ==========  ==========   =========   =========   =========   ===========   ===========
</TABLE>



                             See accompanying notes.

<PAGE>

<TABLE>
<CAPTION>
                    TRI-COUNTY BANCORP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                        Year ended December 31,
                                                                             1997         1996
                                                                         --------     --------
<S>                                                                     <C>          <C>
OPERATING ACTIVITIES
Net income                                                              $  901,004     $540,149
Adjustments to reconcile net income to net cash provided by operations:
  Depreciation and amortization                                             89,258       89,104
  Provision for deferred taxes                                            (47,000)      42,000
  Loss on sale of securities available for sale                             71,421        5,596
  Gain on sale of loans                                                    (35,420)     (33,359)
  Loss on sale of real estate owned                                              -        2,615
  FHLB stock dividends received                                           (106,400)     (93,400)
  Unvested forfeitable stock awarded                                        58,900       61,375
  Net change in other assets                                              (781,340)     (19,612)
  Net change in other liabilities                                           76,061      135,766
  Origination of loans held for sale                                    (1,603,145)  (1,780,506)
  Proceeds from sale of loans                                            1,611,454    1,808,794
                                                                         ---------    ---------
Net Cash Provided By Operations                                           234,793      758,522
                                                                         ---------    ---------
INVESTING ACTIVITIES
Net loan  origination  and principal  repayments on loans                  697,364       99,009
Purchase of loans                                                       (5,869,928)  (9,840,220)
Purchase of securities available for sale                               (7,765,700) (21,138,975)
Proceeds from sale of securities available for sale                      5,227,850    2,710,541
Principal received on securities available for sale                      3,321,899    1,154,524
Proceeds from maturity of securities held to maturity                      500,000            -
Principal received on securities held to maturity                        1,839,685    7,948,466
Proceeds from sale of real estate owned                                     75,786      210,777
Investment in property, equipment and real estate owned                    (89,574)     (81,370)
                                                                         ---------   ----------
Net Cash Used By Investing Activities                                   (2,062,618) (18,937,248)
                                                                         ---------   ----------
FINANCING ACTIVITIES
Net change in noninterest bearing demand, savings and NOW deposits         478,820    1,418,797
Net change in time deposits                                             (3,606,649)   2,530,961
Advances from Federal Home Loan Bank                                    53,218,250   49,784,625
Repayment of Federal Home Loan Bank advances                           (46,982,125) (33,324,133)
Decrease in advances by borrowers for taxes and insurance                   (3,121)     (11,984)
Dividends paid                                                            (386,937)    (312,384)
ESOP payments received                                                      59,800       59,800
Purchase of treasury stock                                                (600,000)    (587,096)
                                                                        ----------   ----------
Net Cash Provided by Financing Activities                                2,178,038   19,558,586
                                                                        ----------   ----------

Increase in Cash and Cash Equivalents                                      350,213    1,379,860
Cash and cash equivalents - Beginning of Period                          2,288,592      908,732
                                                                        ----------   ----------
Cash and cash equivalents - End of Period                               $2,638,805   $2,288,592
                                                                        ==========   ==========
</TABLE>

                             See accompanying notes.

<PAGE>

                    TRI-COUNTY BANCORP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 1997 and 1996



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
Tri-County Bancorp,  Inc. (Tri-County) is a bank holding company organized under
Wyoming  law in 1993 and  headquartered  in  Torrington,  Wyoming.  Through  its
subsidiaries,  Tri-County provides a wide range of banking services to customers
in its primary market area of eastern Wyoming.

Basis of Presentation
The consolidated  financial  statements include the accounts of Tri-County,  its
subsidiaries,  Tri-County  Federal Savings Bank (the Bank) and First  Tri-County
Services,  Inc. The  investment in the  subsidiaries  is accounted for using the
equity  method  of  accounting.   All  significant   intercompany  accounts  and
transactions have been eliminated in consolidation. Certain prior period amounts
have been reclassified to conform with the current year's presentation.

The preparation of financial  statements in conformity  with generally  accepted
accounting   principles  (GAAP)  requires   management  to  make  estimates  and
assumptions  that  affect  amounts   reported  in  the  consolidated   financial
statements.
Actual results could differ from those estimates.

On January 1, 1997,  Tri-County  adopted  Financial  Accounting  Standards Board
(FASB)  Statement No. 125,  Accounting  for Transfers and Servicing of Financial
Assets and  Extinguishment of Liabilities (SFAS 125). The Statement is effective
for transactions  occurring after December 31, 1996. However,  transactions such
as securities lending, repurchase agreements,  dollar rolls, and similar secured
financing  arrangements  are not  subject  to the  provisions  of SFAS 125 until
January 1, 1998. The standard  provides that,  following a transfer of financial
assets, an entity is to recognize the financial and servicing assets it controls
and the liabilities it has incurred,  derecognize  financial assets when control
has been surrendered and derecognize liabilities when extinguished. The adoption
of  SFAS  125  did not  have a  material  impact  on  Tri-County's  consolidated
financial statements.  The impact of the delayed provisions is also not expected
to be material.

In February  1997, the FASB issued  Statement No. 128,  Earnings Per Share (SFAS
128).  SFAS 128 replaced the  calculation of primary and fully diluted  earnings
per share  (EPS) with basic and  diluted  EPS.  Unlike  primary  EPS,  basic EPS
excludes any dilutive effects of options,  warrants, and convertible securities.
Diluted EPS is very similar to fully diluted EPS. All EPS amounts presented have
been restated, as applicable, to conform with the new requirements.

<PAGE>

In June 1997, the FASB issued Statement No. 130, Reporting  Comprehensive Income
(SFAS 130) and Statement No. 131,  Disclosures  about  Segments of an Enterprise
and Related  Information (SFAS 131). Each of the new statements is effective for
periods beginning after December 15, 1997, and requires that certain  additional
information  be  reported  in  the  financial   statements  and  related  notes.
Tri-County  will adopt SFAS 130 in the first quarter of 1998 but doesn't  expect
SFAS 131 to affect its 1998 financial statements.

Securities
Debt securities that Tri-County has both the positive intent and ability to hold
to maturity are classified as securities held to maturity.  These are carried at
amortized  cost.   Securities   purchased  with  the  intention  of  recognizing
short-term  profits  are placed in the  trading  account and are carried at fair
value.  Tri-County  does not have any such  securities  at December  31, 1997 or
1996,  or during the years then  ended.  Securities  not  classified  as held to
maturity or trading are designated available for sale and carried at fair value.
Unrealized gains and losses (net of taxes) on securities  available for sale are
carried as a separate  component of stockholders'  equity.  Unrealized gains and
losses on securities  classified  as trading would be reported in earnings.  The
amortized cost of specific securities sold is used to compute realized gains and
losses. Amortization of premiums and discounts are recognized in interest income
using the interest method.

Loans
Tri-County has established a lending policy where the credit  worthiness of each
customer  is  reviewed  and the amount  and type of  collateral  obtained,  upon
approval, is based on management's credit evaluation of the customer.  Generally
the loans are collateralized by mortgages held by Tri-County.

Loans are stated at the principal amount outstanding, net of deferred loan fees,
discounts, and the allowance for loan losses. Interest on loans is calculated by
using  the  simple  interest  method  on the  balance  of the  principal  amount
outstanding.  Interest income on loans  receivable is accrued as earned based on
the  principal  balance  outstanding.  Tri-County  discontinues  the  accrual of
interest when the related loan is 90 days delinquent.

Net  direct  loan  origination  costs/fees,  when  material,  are  deferred  and
amortized over the term of the loan as a yield adjustment.

The accrual of interest on impaired loans is discontinued  when, in management's
opinion,  the borrower may be unable to meet  payments as they become due.  When
interest accrual is discontinued,  all unpaid accrued interest is reversed.  For
impaired loans,  cash receipts are applied entirely against  principal until the
loan has been collected in full,  after which time any additional  cash receipts
are recognized as interest income.

Allowance for Loan Losses The allowance  for loan losses  reflects  management's
judgment as to the level considered adequate to absorb potential losses inherent
in the loan portfolio.  This judgment is based on a review of individual  loans,
historical loss  experience,  economic  conditions,  portfolio  trends and other
factors.  Allowances  for  impaired  loans  are  generally  determined  based on
collateral values or the present value of estimated cash flows. The allowance is
increased by provisions  charged to earnings and reduced by charge-offs,  net of
recoveries.  Changes in the allowance  relating to impaired loans are charged or
credited to the provision for loan losses.  Because of uncertainties inherent in
the estimation process,  management's  estimate of credit losses inherent in the
loan portfolio and the related allowance may change in the near term.

<PAGE>

Mortgage Banking Operations
Mortgage  loans  originated  and intended for sale in the  secondary  market are
carried at the lower of cost or  estimated  market value in the  aggregate.  All
loans sold by Tri-County are sold with servicing released. Net unrealized losses
are recognized in a valuation allowance by a charge to income. The cost of loans
held for sale at December 31, 1997 and 1996 approximated  their estimated market
value.

Other Real Estate
Other real estate,  acquired through partial or total  satisfaction of loans, is
included  in other  assets  and  carried at the lower of cost or fair value less
estimated  costs of  disposition.  At the date of  acquisition,  any  losses are
charged to the allowance for loan losses. Subsequent write-downs are included in
noninterest  expense.  Realized  losses from  disposition  of the  property  and
declines in fair value that are considered  permanent are charged to the reserve
for other real estate, as applicable.

Federal Home Loan Bank Stock
The Bank,  as a member of the  Federal  Home Loan Bank  (FHLB),  is  required to
maintain an  investment in capital stock of the FHLB. No ready market exists for
the FHLB stock,  and it has no quoted market value. The stock is carried at cost
and is assumed to have a market value which is equal to cost.

Property and Equipment
Property and equipment are recorded at cost.  Depreciation is provided using the
straight-line method over the estimated useful lives of the related assets.

Income Taxes
Deferred tax assets and  liabilities  are reflected at currently  enacted income
tax  rates  applicable  to the  period  in which  the  deferred  tax  assets  or
liabilities  are  expected to be realized or settled.  As changes in tax laws or
rates are enacted,  deferred tax assets and liabilities are adjusted through the
provision for income taxes.

Stock Options
In October 1995,  FASB issued  Statement of Financial  Accounting  Standards No.
123,  Accounting for  Stock-Based  Compensation  (SFAS 123).  Under SFAS 123, an
entity can choose to compute compensation expense related to stock options using
a fair value method or can continue to use the intrinsic  value  method.  If the
intrinsic  value method is chosen,  then  Tri-County will be required to present
pro forma data for all awards granted in future fiscal years.  If the fair value
method is selected,  SFAS 123 would be effective  for all  transactions  entered
into for fiscal years that began after December 15, 1995.

Tri-County   had  no  stock   option   transactions   that  would   require  the
implementation  of SFAS 123 in the years ended December 31, 1997 and 1996. It is
currently  anticipated  that Tri-County will continue to account for stock-based
compensation plans under the intrinsic value method.  Final determination of the
method selected will be done in the year Tri-County has transactions  covered by
this accounting pronouncement.

<PAGE>

Cash and Cash Equivalents and Supplemental Disclosures
For the purpose of reporting cash flows, cash and cash equivalents  include cash
on hand, demand deposits at other financial institutions and overnight deposits.
Supplemental cash payments and noncash activities were as follows:


                                                 1997         1996
                                           ----------   ----------
Interest paid                              $3,729,293   $2,927,883
Income taxes paid                          $  367,300   $  243,600
Noncash transactions:
  Loans transferred to real estate owned   $   34,367  $    17,947

Earnings Per Share
Basic  earnings per share is the amount of earnings for the period  available to
each share of common stock  outstanding  during the  reporting  period.  Diluted
earnings  per share is the amount of earnings  available to each share of common
stock  outstanding  during  the  reporting  period  adjusted  for the  potential
issuance of common shares for stock options.

The  calculation  of basic and  diluted  earnings  per share for the years ended
December 31 is as follows:

                                                 1997       1996
                                           ---------- ----------
Net income                                 $  901,004 $  540,149
                                           ========== ==========

Average common shares outstanding           1,194,210  1,239,775
Dilutive effect of stock options               79,000     63,237
                                            ---------  ---------
                                            1,273,210  1,303,012
                                            =========  =========
Earnings per share                             $  .75 $      .44
Diluted                                        $  .71 $      .41

Average common shares  outstanding and the dilutive effect of stock options have
been adjusted for Tri-County's  December 8, 1997 two-for-one  stock split effect
as a dividend.

<PAGE>

NOTE 2 -    SECURITIES

The amortized cost and estimated fair value at December 31 were as follows:
<TABLE>
<CAPTION>
                                                                    Gross        Gross
                                                   Amortized   Unrealized   Unrealized         Fair
Securities Available for Sale                           Cost        Gains       Losses        Value
                                                 -----------  -----------  -----------  -----------
<S>                                              <C>          <C>          <C>          <C>
December 31, 1997
-----------------
Debt Securities
  U.S. Government and Federal
    Agency/Corporation Obligations               $13,496,353  $   108,732  $   (20,000) $13,585,085
  U.S. Agency mortgage-backed securities          13,621,365      190,988      (23,240)  13,789,113
                                                 -----------  -----------  -----------  -----------
Total Debt Securities                             27,117,718      299,720      (43,240)  27,374,198
                                                 -----------  -----------  -----------  -----------

Equity Securities
  U.S. Government and Federal
    Agency/Corporation Obligations                    25,662    1,073,436            -    1,099,098
  Asset management funds
    ARM portfolio                                    536,085            -       (2,095)     533,990
    Mortgage securities performance portfolio      5,982,545            -      (89,219)   5,893,326
                                                 -----------  -----------  -----------  -----------
Total Equity Securities                            6,544,292    1,073,436      (91,314)   7,526,414
                                                 -----------  -----------  -----------  -----------
                                                 $33,662,010  $ 1,373,156  $  (134,554) $34,900,612
                                                 ===========  ===========  ===========  ===========
December 31, 1996
-----------------
Debt Securities
  U.S. Government and Federal
    Agency/Corporation Obligations               $ 8,928,006  $    29,549  $   (36,291) $ 8,921,264
  U.S. Agency mortgage-backed securities          15,932,166       61,955      (61,709)  15,932,412
                                                 -----------  -----------  -----------  -----------
Total Debt Securities                             24,860,172       91,504      (98,000)  24,853,676
                                                 -----------  -----------  -----------  -----------

Equity Securities
  U.S. Government and Federal
    Agency/Corporation Obligations                    25,662      697,515            -      723,177
  Asset management funds
    ARM portfolio                                  1,137,836            -       (7,854)   1,129,982
    Mortgage performance portfolio securities      8,753,387            -     (320,107)   8,433,280
                                                 -----------  -----------  -----------  -----------
Total Equity Securities                            9,916,885      697,515     (327,961)  10,286,439
                                                 -----------  -----------  -----------  -----------
                                                 $34,777,057  $   789,019  $  (425,961) $35,140,115
                                                 ===========  ===========  ===========  ===========

Securities Held to Maturity
December 31, 1997
-----------------
U.S. Government and Federal
  Agency/Corporation Obligations                 $   503,321  $    18,394  $         -  $   521,715
U.S. Agency mortgage-backed securities             7,483,929      264,543       (9,196)   7,739,276
                                                 -----------  -----------  -----------  -----------
                                                  $7,987,250  $   282,937  $    (9,196) $ 8,260,991
                                                 ===========  ===========  ===========  ===========
December 31, 1996
-----------------
U.S. Government and Federal
  Agency/Corporation Obligations                 $1,005,570   $    27,380  $         -  $ 1,032,950
U.S. Agency mortgage-backed securities            9,314,136       264,217      (21,895)   9,556,458
                                                 -----------  -----------  -----------  -----------
                                                 $10,319,706  $   291,597  $   (21,895) $10,589,408
                                                 ===========  ===========  ===========  ===========
</TABLE>

<PAGE>

The  amortized  cost and fair value of debt  securities at December 31, 1997, by
contractual  maturity,  are shown below.  Expected  maturities  will differ from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
                                           Held to Maturity          Available for Sale
                                        -----------------------   ------------------------
                                         Amortized         Fair    Amortized          Fair
                                              Cost        Value         Cost         Value
                                        ----------   ----------   ----------   -----------
<S>                                     <C>          <C>          <C>          <C>
Due in one year or less                 $        -   $        -   $ 1,998,121  $ 1,999,780
Due after one year through five years      503,321      521,715     3,500,000    3,495,955
Due after five years through ten years           -            -     5,998,232    6,094,160
Due after ten years                              -            -     2,000,000    1,995,190
                                        ----------   ----------   -----------  -----------
                                           503,321      521,715    13,496,353   13,585,085
Mortgage-backed securities               7,483,929    7,739,276    13,621,365   13,789,113
                                        ----------   ----------   -----------  -----------
                                        $7,987,250   $8,260,991   $27,117,718  $27,374,198
                                        ==========   ==========   ===========  ===========
</TABLE>
Sales of  securities  available  for sale  during the years  ended  December  31
follows:

                      Proceeds       Gross Gains     Gross Losses
                    ----------       -----------     ------------
1997                $5,227,850            $1,173          $72,593
1996                $2,710,541            $    -          $ 5,596

Tri-County  pledges  investments for public deposits held in excess of $100,000.
The carrying and fair values of the pledged investments at December 31 follows:

                      Carrying        Fair
                         Value       Value
                    ----------  ----------
1997                $9,085,820  $9,119,775
1996                $9,325,332  $9,337,688


NOTE 3 -   LOANS RECEIVABLE
                                                  December 31,
                                              1997           1996
                                       -----------    -----------
Real estate - mortgage                 $31,395,063    $28,970,513
Real estate - commercial                 4,623,723      3,937,312
Real estate - construction               1,537,295         51,785
Commercial                                 472,418        228,348
Installment loans to individuals         2,911,034      2,585,360
                                       -----------    -----------
                                        40,939,533     35,773,318
Less:
  Allowance for loan losses               (412,456)      (415,447)
  Deferred  loan  fees and  unearned
  discounts                               (101,789)       (92,593)
                                       -----------    -----------
                                       $40,425,288    $35,265,278
                                       ===========    ===========


<PAGE>

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

                                                       Year Ended December 31,
                                                             1997        1996
                                                         --------    --------
Beginning of the period                                  $415,447    $423,079
Provision for losses                                            -           -
Loan charge-offs                                           (3,637)     (7,632)
Recoveries                                                    646           -
                                                         --------    --------
                                                         $412,456    $415,447
                                                         ========    ========

At December 31, 1996, non-accrual loans were  approximately$35,000 with foregone
interest of $3,400. There were no non-accrual loans at December 31, 1997.

Loans  serviced  by  Tri-County  for the  benefit of others at  December 31 were
$163,598 (1997) and $171,770 (1996).


NOTE 4 -     PROPERTY AND EQUIPMENT

                                                 December 31,
                                              1997          1996
                                        ----------    ----------
Land                                    $   65,776    $   65,776
Building and improvements                1,102,357     1,095,749
Furniture, fixtures and equipment          598,764       626,624
                                        ----------    ----------
                                         1,766,897     1,788,149
Less accumulated depreciation             (880,018)     (866,468)
                                        ----------    ----------
                                        $  886,879    $  921,681
                                        ==========    ==========

Depreciation  expense for the years ended  December 31 was  $124,426  (1997) and
$112,916 (1996).


NOTE 5 -    DEPOSITS

At December 31, 1997,  scheduled  maturities of  certificates of deposit were as
follows:

Year
1998                        $24,169,888
1999                          5,605,389
2000                          1,361,254
2001                          1,223,165
                            -----------
                     Total  $32,359,696
                            ===========

The  Federal  Deposit  Insurance  Corporation  (FDIC),  an  agency  of the  U.S.
Government,  insures all depositors up to $100,000 in accordance  with the rules
and regulations of the FDIC.  Deposits in excess of $100,000 at December 31 were
$5,207,027 (1997) and $9,245,806 (1996), see Note 2.

<PAGE>

NOTE 6 -     ADVANCES FROM FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank (FHLB) at December 31 were  $29,696,616
(1997) and $23,460,492 (1996) . The following table summarizes the maturities of
the FHLB advances:

Year
1998                             5.70% - 6.16%   $21,350,000
1999                             5.92% - 6.07%     2,168,250
2000                                     6.08%       300,000
2002                             5.39% - 5.62%     5,000,000
2016                                     5.96%       878,366
                                                 -----------
                                                 $29,696,616
                                                 ===========

Pursuant to a blanket  pledge  agreement with the FHLB, the advances are secured
by the FHLB stock, real estate loans and other securities not otherwise pledged.


NOTE 7 -   INCOME TAXES

The provisions for federal income taxes are as follows:

                                Year ended December 31,
                                   1997          1996
                               --------      --------
Current                        $372,462      $234,073
Deferred                        (47,000)       42,000
                               --------      --------
                               $325,462      $276,073

Deferred  income taxes and benefits  are  provided  for  significant  income and
expense  items  recognized in different  years for tax and  financial  reporting
purposes.  Temporary  differences  which give rise to  significant  deferred tax
assets (liabilities) follow:

                                                   December 31,
                                                1997         1996
                                          ----------   ----------
Joint Venture income                      $   20,000   $   10,000
Loan origination fees                          5,000        6,000
Bad debt reserve                              88,000       18,000
Valuation allowance                                -            -
                                          ----------   ----------
                  Total Deferred Assets      113,000       34,000
                                          ----------   ----------
Federal Home Loan Bank stock dividends      (323,000)    (287,000)
Net  unrealized  gain on available  for     (421,125)    (123,440)
sale securities
Accelerated depreciation                     (30,000)     (34,000)
                                          ----------   ----------
             Total Deferred Liabilities     (774,125)    (444,440)
                                          ----------   ----------
               Net Deferred Liabilities   $ (661,125)  $ (410,440)
                                          ==========   ==========


<PAGE>

Total income tax expense differed from the amounts computed by applying the U.S.
federal  income tax rate of 34 percent in 1997 and 1996 to income  before income
taxes as a result of the following:

                                         Year ended December 31,
                                             1997        1996
                                         --------    --------
Normal "expected" corporate taxes        $417,000    $277,500
Change in tax provision resulting from
Income tax refunds                        (62,690)          -
Other                                     (28,848)     (1,427)
                                         --------    --------
                                         $325,462    $276,073
                                         ========    ========

Tri-County and its subsidiaries file a consolidated income tax return. Excess of
bad debt reserves for income tax purposes over book  provisions  for the Bank at
December  31,  1997  were  approximately  $2,005,000.  No  deferred  income  tax
liability  has been provided for these  reserves.  If such reserves are used for
purposes  other than to absorb the Bank's bad debts,  the amount used is subject
to the then current federal corporate tax rates. Tri-County and its subsidiaries
are not subject to state income taxes.


NOTE 8 - RELATED PARTY TRANSACTIONS

Tri-County  has  had,  and may be  expected  to have  in the  future,  financial
transactions  in the  ordinary  course of  business  with  directors,  principal
officers,  their immediate  families and affiliated  companies in which they are
principal  stockholders  (commonly referred to as related parties), all of which
have been made in compliance with federal regulations.

Activity in loans to related parties for the years ended December 31:


                                     1997        1996
                                 --------    --------
Balance, beginning of year       $209,739    $289,897
  New loans                        10,300       6,300
  Repayments                      (72,446)    (86,458)
                                 --------    --------
Balance, end of year             $147,593    $209,739
                                 ========    ========

Terms and rates of interest on deposit  accounts of  directors  and officers are
substantially the same as those extended to unrelated Tri-County  customers.  At
December 31 deposits of related  parties  totaled  $458,941  (1997) and $429,917
(1996).


NOTE 9 - EMPLOYEE RETIREMENT PLAN

Tri-County  sponsors  a 401(k)  plan  where  Tri-County  matches up to 3% of the
employees qualifying  compensation.  Employees may contribute up to 12% of their
qualifying  compensation.  Tri-County's  expense was $17,054  (1997) and $15,632
(1996).

<PAGE>

NOTE 10 -   STOCK BENEFIT PLANS

Stock Option Plan
Tri-County  adopted a stock option plan (Option  Plan)  whereby stock options of
149,500  common  shares may be granted to  directors  and  officers of the Bank.
Options  granted  under the Option Plan may be either  options  that  qualify as
Incentive  Stock Options as defined in Section 422 of the Internal  Revenue Code
of 1986, as amended, or options that do not qualify. In the event of a change in
control, as defined, all options are immediately exercisable.

On September 28, 1993,  qualified stock options were granted for the purchase of
143,522  shares  exercisable  at the market price at the date of grant of $5 per
share.  All  options  expire ten years  from the date of the grant.  None of the
options had been  exercised at December 31, 1997. The options vest over a 5 year
period.  Stock options  vested as of December 31 were 138,138 (1997) and 132,756
(1996).

Employee Stock Ownership Plan
Tri-County  sponsors an employee stock ownership plan (ESOP).  Tri-County issued
stock for a note receivable from the ESOP, which is  unconditionally  guaranteed
by the Bank. The note is at prime (determined at the beginning of each quarter),
payable  quarterly  through  2003.  The ESOP's loan payments are provided by the
Bank's contributions to the ESOP and dividends on Tri-County's stock held by the
ESOP's Trustee.

Since the Bank  guarantees  the note, the receivable is reflected as a reduction
of stockholders' equity in the consolidated financial statements. At December 31
the balance was $343,850 (1997) and $403,650 (1996).

The ESOP covers  substantially all employees.  The Bank's ESOP contributions are
based  on  the  note's  scheduled  principal  and  interest  payments,   net  of
Tri-County's  cash  dividends  paid to the ESOP. The released stock is allocated
based upon the ratio of each participating  employee's eligible  compensation to
total  eligible  compensation.  The shares held by the ESOP are  released in the
proportion each year's principal  payment bears to the total principal  payments
due. This is currently scheduled as 11,960 shares per year.

The Bank's ESOP  contributions are recorded as compensation  expense and totaled
$126,553  (1997) and $114,197  (1996).  Dividends  used to satisfy note payments
were $38,292 (1997) and $29,678 (1996).  As of December 31, the ESOP held 66,990
(1997) and 80,730 (1996) unallocated  shares. The unallocated shares' fair value
at December 31 (based on NASDAQ) was $913,744 (1997) and $736,661 (1996).

Management  Stock Bonus Plan Tri-County and Bank have adopted a management stock
bonus  plan  (MSBP) to enable the Bank to attract  and  retain  experienced  and
capable personnel in key positions of  responsibility.  A total of 59,800 shares
of restricted  stock were awarded on September 28, 1993, the conversion date, in
the form of restricted  stock  payable over a five-year  vesting  period,  at 20
percent per year,  beginning  September  28,  1994.  Tri-County  will  recognize
compensation  expense in the amount of the fair market value of the common stock
at the grant date,  prorata  over the years during which the shares are payable.
The  unvested  shares are entitled to all voting and other  stockholder  rights,
except that the shares,  while restricted,  cannot be sold, pledged or otherwise
disposed of, and are required to be held in escrow.

<PAGE>

If a holder of restricted stock under the MSBP terminates employment for reasons
other than death,  disability,  retirement  or change in control of  Tri-County,
such  employee  forfeits  all  rights to any  allocated  shares  which are still
restricted. If termination is caused by death, disability,  retirement or change
in control of Tri-County,  allocated shares become unrestricted. The unamortized
deferred   compensation   related  to  the  MSBP  conversion  is  deducted  from
stockholders' equity.


NOTE 11 -   REGULATORY CAPITAL

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. These actions, 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,  banks 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.  Bank's  capital  amounts  and  classifications  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 banks to maintain minimum amounts and ratios of total and Tier 1 capital
(as defined in the regulations) to risk-weighted assets (as defined). Management
believes  that,  as of December  31, 1997,  the Bank meets all capital  adequacy
requirements to which it is subject.

As of December 31, 1997, the most recent notification from applicable regulatory
agencies  categorize  the Bank as adequately  capitalized  under the  regulatory
framework  for  prompt  corrective  action.  To  be  categorized  as  adequately
capitalized, the Bank must maintain minimum ratios as set forth in the following
table (amounts in thousands):
<TABLE>
<CAPTION>
                                                                           To Be Well
                                                                    Capitalized Under
                                                       For Capital  Prompt Corrective
                                         Actual  Adequacy Purposes  Action Provisions
                                 --------------  -----------------  -----------------
                                 Dollars  Ratio  Dollars     Ratio  Dollars     Ratio
                                 -------  -----  -------     -----  -------     -----
<S>                              <C>      <C>    <C>         <C>    <C>         <C>
December 31, 1997
Total Adjusted Capital
    (to risk-weighted assets)    $12,185  34.0%   $2,784      8.0%   $3,480     10.0%
Tier 1 Capital
   (to risk-weighted assets)     $11,842  34.0%   $1,392      4.0%   $2,088      6.0%
Tier 1 Capital
   (to adjusted total assets)    $11,842  13.3%   $2,664      3.0%   $4,438      5.0%
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                                           To Be Well
                                                                    Capitalized Under
                                                       For Capital  Prompt Corrective
                                         Actual  Adequacy Purposes  Action Provisions
                                 --------------  -----------------  -----------------
                                 Dollars  Ratio  Dollars     Ratio  Dollars     Ratio
                                 -------  -----  -------     -----  -------     -----
<S>                              <C>      <C>    <C>         <C>    <C>         <C>
December 31, 1996
Total Adjusted Capital
   (to risk-weighted assets)     $11,145  34.4%  $2,592      8.0%   $3,240      10.0%
Tier 1 Capital
   (to risk-weighted assets)     $10,740  33.2%  $1,296      4.0%   $1,944       6.0%
Tier 1 Capital
   (to adjusted total assets)    $10,740  12.6%  $2,547      3.0%   $4,246       5.0%
</TABLE>

At December  31, the Bank's  tangible  equity and tangible  capital  ratios were
13.3% (1997) and 12.7% (1996). This exceeds the capital adequacy requirements of
2% and 1.5%, respectively.


NOTE 12 - CONCENTRATION OF CREDIT RISK

In the normal course of business,  Tri-County  enters into commitments to extend
credit with off-balance-sheet risk to meet the financing needs of its customers.
Commitments  to extend  credit are  agreements  to lend to a customer as long as
there  is  no  violation  of  any  condition   established  in  the  commitment.
Commitments  generally have fixed expiration dates or other termination  clauses
and may require  payment of a fee. As some  commitments  normally expire without
being drawn upon, the total  commitment  amount does not  necessarily  represent
future cash requirements.

Tri-County  evaluates each customer's credit worthiness on a case-by-case basis,
using the same credit policies in making commitments and conditional obligations
as it does for on-balance-sheet  instruments.  The amount and type of collateral
obtained,  if deemed necessary by Tri-County upon extension of credit,  is based
upon management's  credit  evaluation.  Tri-County's  underwriting  policies for
mortgage  loans  generally  require  a  maximum  loan-to-value  of 80% for owner
occupied  residential  loans and 75% on non-owner  occupied  one-to-four  family
loans. Owner occupied  residential loans in excess of 80% are generally required
to obtain private mortgage insurance.

Tri-County had the following commitments at December 31, 1997:

Loan commitments                    $1,239,400
Lines of credit                    $   692,000
Available overdraft protection     $   135,500

The loan commitments  ($869,400 fixed rate and $370,000  adjustable rate) are at
interest rates ranging from 7.375% to 9.75%.

Tri-County's  loans and  commitments  include  commitments  to purchase loans in
western Colorado ($643,700) as well as commitments to extend credit to customers
in  Tri-County's  market  area.  The market area  primarily  consists of eastern
Wyoming.  Agriculture and related support industries are a significant factor in
the primary market area's economy.

<PAGE>

The loans purchased in Colorado,  through a mortgage banking  relationship,  are
located in  various  resort  areas and  comprise  approximately  31% of the loan
portfolio.


NOTE 13 -  CONTINGENCIES

Self-Insured Health Plan
The Bank sponsors a self-insured  health plan for eligible  employees.  The Plan
provides  for  payment by the Bank of health  claims up to $3,000  per  eligible
employee,  with  reinsurance  coverage for all claims  greater  than $3,000.  An
estimate of claims  incurred but not reported and claims reported but not funded
is included in accounts payable at December 31, 1997 and 1996.

Year 2000 Compliance
Tri-County  relies upon  computers for the daily conduct of its business and for
general data  processing.  Significant  national  attention has been directed at
possible  problems  that may occur with  computer  programs and data  processing
systems when they start  utilizing  the year 2000 in data  fields.  Accordingly,
Tri-County  has adopted a Year 2000 plan (the Plan) to  identify  all areas that
may be affected by the change to the year 2000. The Plan includes  ensuring that
external vendors and services are adequately  addressing the system and software
issues  related to the year 2000 by requiring  written  certifications  that the
systems and  software are fully Year 2000  compliant  by December 31, 1998.  The
majority of Tri-County's data is processed by a third party service bureau.  The
service  bureau has notified  Tri-County  that it will be Year 2000 compliant by
December  31, 1998.  If  Tri-County's  service  bureau is unable to resolve this
potential problem in time,  Tri-County would likely experience  significant data
processing  delays,  mistakes or failures.  These  delays,  mistakes or failures
could have a significant adverse impact on the consolidated  financial condition
and results of operations of Tri-County.

Other
In the normal  course of  business,  Tri-County  is  involved  in various  legal
actions  arising from its lending and collection  activities.  In the opinion of
management, the outcome of these legal actions will not significantly affect the
consolidated financial position of Tri-County.


NOTE 14 - STOCKHOLDERS' EQUITY

In 1993,  Tri-County was formed when the Bank converted from a mutual to a stock
form of ownership.  A  "liquidation  account" was  established  that restricts a
portion of net worth for the benefit of deposit accounts at the Bank at the time
of the  conversion.  Eligible  account  holders who close their accounts cause a
corresponding reduction in the liquidation account. Except for the repurchase of
stock,  payment of dividends  and  complete  liquidation,  the  existence of the
account does not restrict the use of the Bank's net worth. At December 31, 1997,
the liquidation account was $2,098,184 as compared to $6,432,095 at inception.

Payment  of  dividends  to  Tri-County  by the Bank  are  subject  to the  above
restriction as well as various other regulatory restrictions and approvals.

<PAGE>

NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is the amount at which a financial instrument could be exchanged in a
current  transaction  between  willing  parties,  other than in a forced sale or
liquidation, and is best evidenced by a quoted market price, if one exists.

Fair  value  estimates  are made as of a  specific  point  in time  based on the
characteristics  of the financial  instruments and relevant market  information.
Where available,  quoted market prices are used. In other cases, fair values are
based on estimates  using present  value or other  valuation  techniques.  These
techniques  involve   uncertainties  and  are  significantly   affected  by  the
assumptions  used and judgments made regarding risk  characteristics  of various
financial  instruments,  discount rates,  estimates of future cash flows, future
expected  loss  experience  and other  factors.  Changes  in  assumptions  could
significantly affect these estimates and the resulting fair values. Derived fair
value estimates  cannot be  substantiated  by comparison to independent  markets
and,  in  many  cases,  could  not  be  realized  in an  immediate  sale  of the
instrument.  Also,  because of differences in methodologies and assumptions used
to estimate  fair  values,  Tri-County's  fair values  should not be compared to
those of other financial institutions.

Fair  value  estimates  are  based on  existing  financial  instruments  without
attempting to estimate the value of anticipated future business and the value of
assets  and  liabilities   that  are  not  considered   financial   instruments.
Accordingly,  the  aggregate  fair value  amounts  presented  do not  purport to
represent the underlying market of Tri-County.

The  following  summary  presents  the  methodologies  and  assumptions  used to
estimate the fair value of Tri-County's financial instruments.

Assets for Which  Fair  Value  Approximates  Carrying  Value:  The fair value of
certain  financial  assets  carried at cost,  including cash and due from banks,
deposits  with  banks,  and  accrued  interest   receivable  are  considered  to
approximate their respective  carrying values due to their short-term nature and
negligible credit losses. In addition, as discussed in Note 1, Tri-County valued
loans held for sale at fair value.

Federal  Home Loan Bank Stock:  As  discussed  in Note 1, the stock's fair value
approximates carrying value due to the limited marketability.

Securities:  Held  to  maturity  securities  are  carried  at  amortized  costs.
Available for sale securities are carried at fair value.  Fair value of actively
traded securities is determined by the secondary market, while the fair value of
nonactively traded securities is based on independent broker quotations.

Loans:  Loans are  valued  using  methodologies  suitable  for each  loan  type.
Variable rate loans that reprice  frequently and have no  significant  change in
credit risk, fair value is assumed to approximate carrying amount. Fair value of
other loans is estimated using a discounted cash flow analysis based on interest
rates currently offered for similar loan products.

<PAGE>

Liabilities for Which Fair Value Approximates  Carrying Value: The fair value of
accounts payable, accrued liabilities and accrued interest payable is considered
to approximate  their respective book values due to their short-term  nature. By
definition,  fair values of deposits with no stated  maturities,  such as demand
deposits,  savings and NOW accounts and money market deposit  accounts are equal
to the amounts payable on demand at the reporting date.

Time Deposits:  The fair value of time deposits is estimated by discounting cash
flows based on  contractual  maturities  at current  interest  rates offered for
similar products.

Long-Term Debt: The valuation of long-term debt with floating rates is estimated
to be the same as carrying value.  Fair value of long-term debt with fixed rates
is  estimated  based on quoted  market  prices for similar  issues,  or by using
current rates offered to Tri-County for debt of the same remaining maturity.

Unused  Commitments and Letters of Credit:  Tri-County has reviewed the unfunded
portion  of  commitments  to extend  credit as well as letters of credit and has
determined that the fair value of such financial instruments is not material.

Following are the estimated fair values of Tri-County's financial instruments:
<TABLE>
<CAPTION>
                                                             December 31, 1997       December 31, 1996
                                                        ------------------------  ------------------------
                                                           Carrying         Fair     Carrying         Fair
                                                             Amount        Value       Amount        Value
                                                        -----------  -----------  -----------  -----------
<S>                                                     <C>          <C>          <C>          <C>
Financial assets
   Assets for which fair value approximates book value  $ 5,021,975  $ 5,021,975  $ 2,928,116  $ 2,928,116
   Securities                                           $44,513,262  $44,787,003  $45,459,821  $45,729,523
   Loans                                                $40,425,288  $41,149,803  $35,265,278  $35,371,313
Financial liabilities
   Liabilities for which fair value approximates
     book value                                         $14,077,029  $14,077,029  $12,722,895  $12,722,895
   Time deposits                                        $32,359,696  $32,436,396  $35,966,345  $36,045,962
   Long-term debt                                       $29,696,616  $29,573,248  $23,460,492  $23,380,663

</TABLE>
NOTE 16 - PARENT COMPANY FINANCIAL INFORMATION

                        CONDENSED PARENT COMPANY ONLY
                           STATEMENTS OF CONDITION
                                                                  December 31,
                                                             1997         1996
                                                      -----------  -----------
Assets
   Cash                                               $   250,308  $   613,000
   Investment in subsidiary                            12,229,216   11,246,946
   Securities available for sale                          533,990    1,129,983
   Other assets, net                                       40,952       13,908
                                                      -----------  -----------
                                        Total Assets  $13,054,466  $13,003,837
                                                      ===========  ===========
Liabilities and stockholders' equity
   Other liabilities                                  $     1,965  $         -
   Stockholders' equity                                13,052,501   13,003,837
                                                      -----------  -----------
          Total Liabilities and Stockholders' Equity  $13,054,466  $13,003,837
                                                      ===========  ===========
<PAGE>

                           STATEMENTS OF OPERATIONS
                                                         Year ended December 31,
                                                              1997         1996
                                                         ---------     --------
Revenue
   Equity in earnings of subsidiary                      $ 911,272     $512,482
   Other income                                             82,734      105,989
Expense
   Operating expenses                                     (118,002)     (79,357)
   Income tax benefit                                       25,000        1,035
                                                         ---------     --------
                                          Net Income     $ 901,004     $540,149
                                                         =========     ========



                           STATEMENTS OF CASH FLOWS
                                                         Year ended December 31,
                                                             1997         1996
                                                        ---------   ----------
Operating activities
   Net income                                           $ 901,004   $  540,149
   Adjustments to reconcile net income to net
      cash provided (used) by operating activities:
     Earnings of subsidiary                              (911,272)    (512,482)
     Amortization of organization expense                   1,068        1,068
     Loss on sale of securities                             1,751        1,593
     (Increase) decrease in other assets and
        accrued liabilities                               (28,106)       6,601
                                                        ---------   ----------
   Net Cash Provided (Used)  by Operating Activities      (35,555)      36,929
                                                        ---------   ----------
Investing activities
   Sale of securities available for sale                  600,000      200,000
   Dividends received                                           -    1,000,000
                                                        ---------   ----------
           Net Cash Provided by Investing Activities      600,000    1,200,000
                                                        ---------   ----------
Financing activities
   Dividends paid                                        (386,937)    (312,385)
   ESOP payments received                                  59,800       59,800
   Treasury stock purchased                              (600,000)    (587,096)
                                                        ---------   ----------
               Net Cash Used by Financing Activities     (927,137)    (839,681)
                                                        ---------   ----------
                     Net Increase (Decrease) in Cash     (362,692)     397,248
Cash and cash equivalents - Beginning of Period           613,000      215,752
                                                        ---------   ----------
Cash and cash equivalents - End of Period               $ 250,308   $  613,000
                                                        =========   ==========

<PAGE>

                                    DIRECTORS
                           LARRY C. GODDARD, Chairman
              ROBERT L. SAVAGE, President & Chief Executive Officer
                             CARL F. RUPP, Secretary
                                 LANCE H. GRIGGS
                                 DAVID C. KELLAM
                                 WILLIAM J. RUEB


                                    AUDITORS
                           DALBY, WENDLAND & CO., P.C.
                          464 Main Street, P.O. Box 430
                         Grand Junction, Colorado 81502



LEGAL COUNSEL                               SPECIAL COUNSEL
JOHN B. PATRICK                             MALIZIA, SPIDI, SLOANE & FISCHE P.C.
241 East 21st Avenue                        1301 K Street, N.W., Suite 700E
Torrington, Wyoming  82240                  Washington, D.C. 20005



REGISTRAR AND STOCK TRANSFER AGENT
Inquiries regarding stock transfer,  registration,  lost certificates or changes
in name  and/or  address  should be  directed  to the stock  transfer  agent and
registrar in writing.

ATTN:  Investor Relations
AMERICAN SECURITIES TRANSFER, INCORPORATED
938 Quail Street, Suite 101
Lakewood, Colorado 80215-5513


MARKET MAKERS
As of December 31, 1997, the following firms were market makers in the Company's
shares:

Friedman, Billings, Ramsey & Co., Inc. - Washington D.C.
Herzog, Heine and Geduld - New York, New York
Sandler O'Neill & Partners - Chicago, Illinois


FORM 10-KSB
A copy of Form 10-KSB for the year ended December 31, 1997,  excluding exhibits,
as filed with the Securities and Exchange Commission,  will be furnished without
charge to  stockholders  as of the record  date upon  request to the  Secretary,
Tri-County Bancorp, Inc., P.O. Box 1057, Torrington, Wyoming 82240.


<PAGE>




MAIN OFFICE                                       BRANCH OFFICE
2201 Main Street, P.O. Box 1057                   957 Maple, P.O. Box 337
Torrington, Wyoming 82240                         Wheatland, Wyoming 82201
Telephone - (307)532-2111                         Telephone - (307)322-9215
Fax - (307)532-7631                               Fax - (307)322-4080
Email - TRICFSB@PRAIRIEWEB.COM



                               EXECUTIVE OFFICERS

                                Robert L. Savage
                       President & Chief Executive Officer

                               Earl F. Warren, Jr.
                              Senior Vice President

                                Tommy A. Gardner
                    Vice President & Chief Financial Officer



                                      STAFF

              Roseanne L. Burnett, Vice President & Branch Manager
                       Jane E. Faber, Assistant Secretary
                        Richard R. Yates, Vice President
                              Colleen M. Holtzclaw
                                 Nancy A. Martin
                                Michele L. Nation
                                Terri J. Pindell
                                 Denny L. Ramos
                                Becky J. Shaffer
                                 Linda L. Smith
                                Darlene L. Sorge
                                Debra K. Stoeger
                               Lynette K. Strecker
                                 Diana R. Toner
                                 Scott L. Vasko
                                Mona Kay Williams