U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

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

     For the quarterly period ended March 31, 1999

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from___________________to___________________

                         Commission File Number 0-25884

                             REDWOOD FINANCIAL, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

        Minnesota                                           41-1807233
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation      (IRS Employer Identification
                or organization)                            Number)

P.O. Box 317, 301 S. Washington St., Redwood Falls, Minnesota     56283-0317
-------------------------------------------------------------     ----------
               (Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code:   (507) 637-8730

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

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock as of January 15, 1999:

        Class                                    Outstanding
        -----                                    -----------
Common stock, par value $0.10 per share             653,993

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


<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

                                    CONTENTS

PART I - FINANCIAL INFORMATION

                                                                           Page
Item 1:     Financial Statements

            Consolidated Balance Sheets at March 31, 1999 and
            June 30, 1998                                                    3

            Consolidated Statements of Earnings for the Three and Nine
            months ended March 31, 1999 and 1998                             4

            Consolidated Statements of Comprehensive Income for              
            the Nine months ended March 31, 1999 and 1998                    5

            Consolidated Statement of Stockholders' Equity
            for the Nine months ended March 31, 1999                         6

            Consolidated Statements of Cash Flows for the
            Nine months ended March 31, 1999 and 1998                        7

            Notes to Consolidated Financial Statements                    8-16

Item 2:     Management's Discussion and Analysis of
            Financial Condition and Results of Operations                17-28

PART II - OTHER INFORMATION

Item 1:     Legal Proceedings                                               29
Item 2:     Changes in Securities and Use of Proceeds                       29
Item 3:     Defaults Upon Senior Securities                                 29
Item 4:     Submission of Matters to a Vote of Security Holders             29
Item 5:     Other Information                                               29
Item 6:     Exhibits and Reports on Form 8-K                                29
            Signatures                                                      30

                                        2

<PAGE>
<TABLE>
<CAPTION>


                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY
                         PART 1 - FINANCIAL INFORMATION
                          Item 1 - Financial Statements

                           Consolidated Balance Sheets
                                   (Unaudited)

                              Assets                                            March 31,        June 30,
                                                                                  1999              1998
                                                                                ----------       ---------

                                                                                                            
<S>                                                                          <C>              <C>         
Cash ......................................................................   $    115,591     $    20,448
Interest-bearing deposits with banks ......................................      2,970,788       1,988,780
                                                                                 ---------       ---------
                                                                                                            
                                         Cash and cash equivalents ........      3,086,379       2,009,228
                                                                                 ---------       ---------
                                                                                                            

Securities available for sale:
     Mortgage-backed and related securities (amortized cost ...............     44,956,001      33,937,175
       $45,089,920 and $33,726,372, respectively)
     Investment securities (amortized cost $7,541,035 and .................      7,479,910       9,793,500
       $9,784,454, respectively)                                                ----------      ----------
                                                                                                            
                                    Total securities available for sale ...     52,435,911      43,730,675
                                                                                ----------      ----------  

                                                                                                            

Loans receivable, net .....................................................     33,493,169      28,994,750
Federal Home Loan Bank stock, at cost .....................................      1,485,000         835,000
Accrued interest receivable ...............................................        558,443         547,898
Premises and equipment, net ...............................................      1,795,235         596,867
Investment in limited partnership .........................................        385,358         484,024
Other assets ..............................................................        286,503          88,163
                                                                                ----------      ----------  
                                                                                                            
                                                Total Assets ..............   $ 93,525,998     $77,286,605
                                                                                ----------      ----------  

                                    Liabilities and Stockholders' Equity

                                                                                                            
Deposits ..................................................................     51,569,947      48,101,806
Federal Home Loan Bank advances ...........................................     29,699,303      16,200,000
Accrued interest payable ..................................................        999,372         631,168
Advance payments by borrowers for taxes and insurance .....................        128,927          75,463
Due to broker .............................................................      2,000,000               0
Accrued expenses and other liabilities ....................................        139,306         340,142
                                                                                ----------      ----------  
                                             Total Liabilities ............     84,536,855      65,348,579
                                                                                ----------      ----------  

Common stock ($.10 par value):  Authorized and issued
  1,125,000 shares; outstanding 653,993 shares at
  March 31, 1999; 868,093 shares at June 30, 1998 .........................        112,500         112,500
Additional paid-in capital ................................................      8,509,854       8,490,163
Retained earnings, subject to certain restrictions ........................      6,937,119       6,794,926
Accumulated other comprehensive income (loss), net ........................       (117,027)        131,909
Unearned employee stock ownership plan shares .............................       (413,584)       (463,264)
Unearned management stock bonus plan shares ...............................       (155,204)       (220,172)
Treasury stock, at cost, 516,007 shares at
  March 31, 1999; 256,907 shares at June 30, 1998 .........................     (5,884,515)     (2,908,036)

                                                                                ----------      ----------  
                                         Total Stockholders' Equity .......      8,989,143      11,938,026
                                                                                ----------      ----------  

                                                                                                            
                                 Total Liabilities and Stockholders' Equity   $ 93,525,998     $ 77,286,605
                                                                                ----------      ----------  
</TABLE>

See accompanying notes to consolidated financial statements

                                        3

<PAGE>

<TABLE>
<CAPTION>

                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY
                      Consolidated Statements of Earnings
                                  (Unaudited)


                                                                    Three months              Nine months
                                                                   ended March 31,          ended March 31,
                                                                  1999         1998        1999         1998
                                                               ---------    ---------   ----------   ----------
<S>                                                         <C>             <C>        <C>          <C>      
Interest Income:
   Loans receivable .......................................   $  636,413      530,514    1,951,353    1,484,249
   Securities held to maturity:
      Mortgage-backed and related securities ..............            0            0            0      453,033
      Investment securities ...............................            0            0            0      314,217
   Securities available for sale:
      Mortgage-backed and related securities ..............      661,925      436,564    1,829,255      771,824
      Investment securities ...............................      123,293      217,146      325,009      437,883
   Cash equivalents and other .............................       39,557       18,035      124,421       53,560
                                                              ----------   ----------   ----------   ----------
Total interest income .....................................    1,461,188    1,202,259    4,230,038    3,514,766

Interest Expense:
   Deposits ...............................................      682,068      647,265    2,000,869    1,915,637
   Federal Home Loan Bank advances ........................      366,307      111,460      946,039      294,694
                                                              ----------   ----------   ----------   ----------
Total interest expense ....................................    1,048,375      758,725    2,946,908    2,210,331
                                                              ----------   ----------   ----------   ----------
Net interest income .......................................      412,813      443,534    1,283,130    1,304,435
                                                              ----------   ----------   ----------   ----------

Provision for losses on loans .............................       15,000       14,000       39,000       14,000
                                                              ----------   ----------   ----------   ----------

Net interest income after provision for losses on loans ...      397,813      429,534    1,244,130    1,290,435
                                                              ----------   ----------   ----------   ----------

Noninterest income:
   Gains on sale of securities available for sale, net ....            0        7,469       37,913       15,339
   Fees and service charges ...............................       17,918       21,137       77,098       58,940
   Other ..................................................        2,817        6,448        9,570        7,762
                                                              ----------   ----------   ----------   ----------
Total noninterest income ..................................       20,735       35,054      124,581       82,041
                                                              ----------   ----------   ----------   ----------

Noninterest expense:
   Compensation and employee benefits .....................      254,172      213,925      724,543      623,660
   Advertising ............................................       16,834        7,318       32,753       20,991
   Occupancy ..............................................       36,562       14,013       65,431       31,667
   Federal deposit insurance premiums .....................        7,361        7,430       22,114       21,967
   Professional fees ......................................       21,625       18,922       78,429       77,078
   Data processing expense ................................        5,270        3,659       18,788       11,741
   Loss on limited partnership ............................       12,527            0       98,666            0
   Other ..................................................       48,551       22,174      121,579       86,381
                                                              ----------   ----------   ----------   ----------
Total noninterest expense .................................      402,902      287,441    1,162,303      873,485
                                                              ----------   ----------   ----------   ----------

Earnings before income taxes ..............................       15,646      177,147      206,408      498,991

Income tax expense ........................................          145       65,270       64,215      182,071
                                                              ----------   ----------   ----------   ----------

Net earnings ..............................................   $   15,501      111,877      142,193      316,920
                                                              ----------   ----------   ----------   ----------

Net earnings per common share - Basic .....................   $     0.03         0.14         0.21         0.38
Net earnings per common share - Diluted ...................         0.03         0.13         0.20         0.37

</TABLE>

See accompanying notes to consolidated financial statements

                                       4
<PAGE>

<TABLE>
<CAPTION>


                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY
                Consolidated Statements of Comprehensive Income
                                  (unaudited)


                                                               Nine Months Ended March 31,
                                                         1999                          1998
                                                  -----------------------     ---------------------

<S>                                               <C>         <C>            <C>          <C>    
Net earnings ....................................               $ 142,193                   316,920

Other  comprehensive income,  net of tax:
     Unrealized  gains  (losses)  on securities:
     Unrealized holding gains (losses) arising
       during period ............................    (226,188)                 201,134
     Less:  reclassification adjustment for gains
       included in net income ...................     (22,748)                  (9,203)
                                                    ---------                 --------
Other comprehensive income (loss) ...............                (248,936)                  210,337
                                                                 ---------                  -------
Comprehensive income  (loss) ....................               $(106,743)                  527,257
                                                                 ---------                  -------


</TABLE>

See accompanying notes to consolidated financial statements                 

                                       5

<PAGE>

<TABLE>
<CAPTION>

                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY
                 Consolidated Statement of Stockholders' Equity
                    For the Nine Months Ended March 31, 1999
                                  (unaudited)

                                                                         Unearned                        
                                                                         Employee    Unearned                
                                                           Accumulated     Stock    management              
                                   Additional              Other         Ownership     stock                     Total
                         Common      paid-in   Retained    Comprehensive    Plan       bonus       Treasury   stockholders'
                          Stock      capital   Earnings    Income (loss)   Shares    plan shares     stock       equity
----------------------------------------------------------------------------------------------------------------------------
<S>                    <C>        <C>         <C>         <C>            <C>         <C>          <C>          <C>       
Balance, June 30, 1998  $112,500   8,490,163   6,794,926   131,909        (463,264)   (220,172)    (2,908,036)  11,938,026

  Net earnings                                   142,193                                                           142,193

  Other comprehensive                                              
    income (loss), net                                    (248,936)                                               (248,936)

  Earned employee stock                                                    
    ownership plan 
    shares, net                       19,691                                49,680                                  69,371

  Repurchase of common stock                                                                       (2,976,479)  (2,976,479)

  Earned management stock                                                  
    bonus plan shares                                                                   64,968                      64,968

                        --------   ---------   ---------   --------        -------     -------      ---------    ---------
Balance, March 31, 1999 $112,500   8,509,854   6,937,119   (117,027)      (413,584)   (155,204)    (5,884,515)   8,989,143
                        --------   ---------   ---------   --------        -------     -------      ---------    ---------
</TABLE>

See accompanying notes to consolidated financial statements              

                                       6



<PAGE>
<TABLE>
<CAPTION>


                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY
                     Consolidated Statements of Cash Flows
                                  (unaudited)
                                                                                              Nine months
                                                                                             ended March 31,
                                                                                         1999             1998
                                                                                     -----------     ------------
<S>                                                                              <C>                <C>      
Operating Activities
   Net earnings $ ..............................................................        142,193         316,920
   Adjustments  to  reconcile  net  earnings to net cash  provided by  operating
     activities:
       Provision for loan losses ...............................................         39,000          14,000
       Depreciation ............................................................         47,426          19,665
       Amortization of premiums and discounts, net .............................         24,940         (22,096)
       Increase in other assets ................................................       (198,340)       (484,254)
       (Increase) decrease in accrued interest receivable ......................        (10,545)         76,280
       Increase in accrued interest payable ....................................        368,204         394,532
       Gains on sale of securities available for sale, net .....................        (37,913)        (15,339)
       Amortization of unearned ESOP shares ....................................         49,680          49,680
       Earned ESOP shares priced above original cost ...........................         19,691          15,059
       Earned Management Stock Bonus Plan shares ...............................         64,968          64,969
       Decrease in investment in limited partnership ...........................         98,666               0
       Deferred income taxes ...................................................        165,957        (116,895)
       Increase in due to broker ...............................................      2,000,000               0
       (Decrease) increase in accrued expenses and other liabilities ...........       (200,837)        217,044
                                                                                     ----------      ----------
Net cash provided by operating activities ......................................      2,573,090         529,565
                                                                                     ----------      ----------
Investing activities:
   Proceeds from maturities of investment securities held to maturity ..........              0         500,000
   Principal collected on mortgage-backed securities held to maturity ..........              0       2,034,858
   Proceeds from maturities of investment securities available for sale ........      7,390,000               0
   Proceeds from sales of mortgage-backed securities available for sale ........      2,547,575         885,305
   Purchases of mortgage-backed securities available for sale ..................    (22,956,124)     (9,918,914)
   Principal collected on mortgage-backed securities available for sale ........      8,320,341       2,279,766
   Proceeds from maturities of mortgage-backed securities available for sale ...        709,187       7,600,000
   Purchases of investment securities available for sale .......................     (6,138,781)     (1,990,093)
   Proceeds from sales of investment securities available for sale .............      1,016,085               0
   Purchases of Federal Home Loan Bank stock ...................................       (650,000)       (101,500)
   Increase in loans receivable, net ...........................................     (4,532,857)     (6,133,409)
   Purchases of premises and equipment .........................................     (1,245,794)       (287,206)
                                                                                     ----------      ----------
Net cash used by investing activities ..........................................    (15,540,368)     (5,131,193)
                                                                                     ----------      ----------
Financing Activities:
   Increase in deposits, net ...................................................      3,468,141       2,181,212
   Increase in advance payments by borrowers for taxes and insurance ...........         53,464          43,581
   Proceeds from Federal Home Loan Bank advances ...............................     27,200,000      12,200,000
   Repayment of Federal Home Loan Bank advances ................................    (13,700,697)     (7,000,000)
   Repurchase of common stock ..................................................     (2,976,479)     (1,139,581)
                                                                                     ----------      ----------
Net cash provided by financing activities ......................................     14,044,429       6,285,212
                                                                                     ----------      ----------
Increase in cash and cash equivalents ..........................................      1,077,151       1,683,584

Cash and cash equivalents, beginning of period .................................      2,009,228         763,792
                                                                                     ----------      ----------
Cash and cash equivalents, end of period .......................................   $  3,086,379       2,447,376
                                                                                     ----------      ----------
Supplemental  disclosures of cash flow information:  Cash paid during the period
   for:
      Interest .................................................................   $  2,578,704       1,815,799
      Income taxes .............................................................        266,420         163,259

Supplemental disclosures of cash flow information:
   Transfer of real estate to loans ............................................              0          13,520
   Transfer of investment and mortgage-backed and related securities from
      held to maturity to available for sale ...................................              0      36,531,995
</TABLE>

See accompanying notes to consolidated financial statements

                                       7


<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                                 March 31, 1999
                                   (Unaudited)


(1)  Redwood Financial, Inc.

     Redwood  Financial,  Inc. (the Company) was incorporated  under the laws of
     the State of  Minnesota  for the purpose of  becoming  the savings and loan
     holding company of HomeTown Bank (the "Bank",  previously  known as Redwood
     Falls  Federal  Savings  and  Loan  Association,   the   "Association")  in
     connection with the  Association's  conversion  from a  federally-chartered
     mutual savings and loan association to a federally-chartered  stock savings
     and loan association, pursuant to its Plan of Conversion.

     The Company commenced on May 22, 1995 a Subscription and Community Offering
     of its shares (the  Offering)  in  connection  with the  conversion  of the
     Association.  The Offering  was closed on June 22, 1995 and the  conversion
     was completed July 7, 1995 (see note 5).

(2)  Basis of Presentation

     The accompanying  unaudited consolidated financial statements were prepared
     in accordance  with  instructions  for Form 10-QSB and,  therefore,  do not
     include  all  disclosures  necessary  for a  complete  presentation  of the
     consolidated   balance   sheets,   consolidated   statements  of  earnings,
     consolidated statements of comprehensive income,  consolidated statement of
     stockholders'  equity,  and  consolidated   statements  of  cash  flows  in
     conformity with generally  accepted  accounting  principles.  However,  all
     adjustments, consisting only of normal recurring adjustments, which are, in
     the  opinion of  management,  necessary  for the fair  presentation  of the
     interim financial statements have been included. The statements of earnings
     for the three and nine  months  ended  March 31,  1999 are not  necessarily
     indicative of the results which may be expected for the entire year.

     The  material  contained  herein is written with the  presumption  that the
     users of the interim  financial  statements have read or have access to the
     most recent Annual Report on Form 10- KSB of Redwood Financial, Inc., which
     contains  the  latest  audited  financial  statements  and  notes  thereto,
     together with Management's  Discussion and Analysis of Financial  Condition
     and Results of Operations as of June 30, 1998 and for the year then ended.

                                                                     (Continued)
                                        8

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


(3)  Earnings Per Share

     The  following  tables  illustrate  the  calculation  of basic and  diluted
     earnings per share for the three months ended March 31, 1999 and 1998.
<TABLE>
<CAPTION>


        For the Three Months Ended:               March 31, 1999                        March 31, 1998
        ---------------------------               --------------                        --------------
                                                              Per Share                               Per Share
                                          Income   Shares      Amount             Income    Shares      Amount
                                          ------   ------      ------             ------    ------      ------
<S>                                    <C>        <C>          <C>             <C>        <C>        <C>  
        Net Earnings:                    $15,501                                  $111,877

        Basic EPS:
        Earnings available to
         common stockholders              15,501   589,730      $0.03              111,877   790,772      $0.14

        Effect of Dilutive Securities:
        Options on common stock                     26,698                                    28,466
        Unvested restricted stock awards            11,760                                    17,160
                                                    ------                                    ------

        Diluted EPS:
        Earnings available to common
         stockholders plus assumed
         conversions                     $15,501   628,188      $0.03             $111,877   836,398      $0.13

        For the Nine months Ended:                  March 31, 1999                        March 31, 1998
        --------------------------                  --------------                        --------------
                                                              Per Share                               Per Share
                                          Income   Shares      Amount             Income    Shares      Amount
                                          ------   ------      ------             ------    ------      ------
        Net Earnings:                   $142,193                                  $316,920

        Basic EPS:
        Earnings available to
         common stockholders             142,193   676,784      $0.21              316,920   824,558      $0.38

        Effect of Dilutive Securities:
        Options on common stock                     25,430                                    22,253
        Unvested restricted stock awards            14,742                                    17,028
                                                    ------                                    ------

        Diluted EPS:
        Earnings available to common
         stockholders plus assumed
         conversions                    $142,193   716,956      $0.20             $316,920   863,839      $0.37

</TABLE>



                                        9

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

(4)  Regulatory Capital Requirements

     At  March  31,  1999,  the  Bank  met  each of the  three  current  minimum
     regulatory capital requirements.  The following table summarizes the Bank's
     regulatory capital position at March 31, 1999:
<TABLE>
<CAPTION>

                                                                                                 To Be Well
       (In thousands of dollars)                                                             Capitalized Under
                                                                                             Prompt Corrective
                                                Actual                 Required              Action Provisions
                                                ------                 --------              -----------------
                                        Amount       Ratio        Amount        Ratio        Amount       Ratio
                                        ------       -----        ------        -----        ------       -----

<S>                                    <C>           <C>         <C>           <C>           <C>          <C>  
       Bank's Net Worth                 $7,015

       Plus:  Available For Sale
                 Market Valuation          117
                                        ------
       Tangible Capital                  7,132         7.72%      $1,385         1.50%           n/a        n/a
         (to tangible assets)

       Core Capital                      7,132         7.72%       2,771         3.00%         $4,618       5.00%
         (to adjusted tangible assets)

       Core Capital                      7,132        20.90%         n/a          n/a           2,048       6.00%
         (to risk-weighted assets)

       Plus: Allowable portion of
         general allowance for
         loan losses                       290
                                        ------
       Risk-based Capital               $7,422        21.75%      $2,730         8.00%         $3,413      10.00%
         (to risk-weighted assets)

</TABLE>

(5)  Stockholders' Equity and Stock Conversion

     The  Association  converted from a  federally-chartered  mutual savings and
     loan   association  to  a   federally-chartered   stock  savings  and  loan
     association  pursuant to its plan of  Conversion  which was approved by the
     Association's members on June 23, 1995. The conversion was effected on July
     7, 1995,  and resulted in the issuance of 1,125,000  shares of common stock
     (par value $0.10) at $8.00 per share for a gross sales price of $9,000,000.
     Costs related to conversion (primarily underwriters' commission,  printing,
     and professional  fees) aggregated  $450,639 and were deducted to arrive at
     the net proceeds of $8,549,361.  The Company  established an employee stock
     ownership  trust  which  purchased  82,748  shares of  common  stock of the
     Company at the issuance  price of $8.00 per share from funds  borrowed from
     the holding company.
                                                                     (Continued)

                                       10

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

(6)  Stock Repurchases

     During the three  months ended March 31, 1999,  the Company  completed  all
     stock  repurchase  programs  announced  to date.  As a result,  the Company
     purchased 11,291 shares of its outstanding common stock during the quarter.
     For the nine months ended March 31,  1999,  the Company  purchased  214,100
     shares, or 24.7% of its 868,093  outstanding shares of common stock at June
     30, 1998.  As a result of the stock  repurchase  programs,  the Company has
     outstanding 653,993 shares of common stock at March 31, 1999. The following
     summarizes the Company's common stock repurchases  during the quarter ended
     March 31, 1999:

     Settlement Date              Shares Purchased       Price per share
     January 5, 1999                     8,000              $15.75
     January 7, 1999                     3,291              $15.25
     
     Average price per share                                $15.60
     
(7)  New Accounting Standards

     In February 1997, the FASB issued SFAS No. 133,  "Accounting for Derivative
     Instruments  and  Hedging   Activities"   (SFAS  133),  which   establishes
     accounting and reporting  standards for derivative  instruments,  including
     certain derivative  instruments  embedded in other contracts  (collectively
     referred  to as  derivatives),  and for  hedging  activities.  SFAS  133 is
     effective for all fiscal  quarters of fiscal years beginning after June 15,
     1999. Management is currently studying the impact of adopting SFAS 133.

(8)  Business Segment Performance Disclosure

     SFAS No.  131,  Disclosures  about  Segments  of an  Operation  and Related
     Information,   requires  the   disclosure  of  financial  and   descriptive
     information about the operating  segments of a public business  enterprise.
     For purposes of this  disclosure,  Redwood  Financial,  Inc. has deemed its
     operating  segments to follow its  corporate  structure.  The rationale for
     this segmentation is a result of the differing  operational purposes of its
     corporate entities.

     To this  extent,  the Company has  determined  that it has three  operating
     segments.  These include (1) the parent holding company, Redwood Financial,
     Inc. (the Holding Company), (2) the insured financial institution, HomeTown
     Bank (the Bank),  and (3) a subsidiary  of the Bank,  Redwood Falls Service
     Corporation (the Service Corporation).

                                       11

<PAGE>

                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

     The following is a brief description of the three operating segments:

     Holding  Company:  Redwood  Financial,  Inc.  is  a  Minnesota  corporation
     organized in 1995 at the  direction of Redwood  Falls  Federal  Savings and
     Loan   Association   (now  HomeTown  Bank)  in  connection  with  the  then
     Association's conversion from mutual savings association to a stock savings
     association. The Parent Company was organized primarily to acquire and hold
     the common stock of the then  Association.  This continues to be the Parent
     Company's  primary  purpose.  The Parent  Company also  contributes  to the
     operational  performance of the consolidated  Company through (1) retention
     and  servicing  of several  loans which were not  eligible  for  investment
     within the Bank's  operating  segment due to regulatory  restrictions,  (2)
     management of a small  investment  portfolio,  including an investment in a
     limited partnership, and (3) providing and incurring expense as a result of
     employee  benefits  available to Bank  personnel for the  remuneration  and
     retention of Bank personnel.

     The Bank: HomeTown Bank is a federal stock savings association organized in
     1924. The Bank provides standard banking services to communities in Redwood
     and Renville  Counties,  Minnesota  including  lending and deposit products
     services.  The Bank is the largest of the consolidated  Company's operating
     segments.

     The Service  Corporation:  Redwood Falls Service Corporation is a Minnesota
     corporation  organized  in 1993 for the sole purpose of providing insurance
     sales  separate  from the Bank as a result of previous  federal  regulatory
     requirements.  These  requirements  have since  been  lifted.  The  Service
     Corporation  has been inactive since June 1996 and as a result has not been
     included in any summarization of consolidated Company performance.

     The  following  tables  summarize the  contribution  of each segment to the
     operating  performance of the  consolidated  Company for the three and nine
     months ended March 31, 1999 and 1998.


                                       12

<PAGE>

REDWOOD FINANCIAL, INC. AND SUBSIDIARY                                  

<TABLE>
<CAPTION>

                   For the three months ended March 31, 1999

                                                    Holding                   Inter-company    Reconciling     Total
                                                    Company        Bank      Reconciliation    Adjustments  Corporation
                                                    -------        ----      --------------    -----------  -----------
<S>                                             <C>           <C>              <C>            <C>         <C>       
Interest Income:
   Loans receivable ........................        19,658        616,755                                      636,413
   Securities held to maturity:
      Mortgage-backed and related securities
      Investment securities
   Securities available for sale:
      Mortgage-backed and related securities                      661,925                                      661,925
      Investment securities ................                      123,293                                      123,293
   Cash equivalents and other ..............         2,124         39,557          (2,124)                      39,557
                                                  --------      ---------      ----------       --------    ---------- 
Total interest income ......................        21,782      1,441,530          (2,124)             0     1,461,188

Interest Expense:
   Deposits ................................                      684,192          (2,124)                           682,068
   Federal Home Loan Bank advances .........                      366,307               0                      366,307
                                                  --------      ---------      ----------       --------    ----------    
Total interest expense .....................             0      1,050,499          (2,124)             0     1,048,375
                                                  --------      ---------      ----------       --------    ---------- 
Net interest income ........................        21,782        391,031               0              0       412,813
                                                  --------      ---------      ----------       --------    ----------
Provision for losses on loans ..............             0         15,000               0              0        15,000
                                                  --------      ---------      ----------       --------    ---------- 
Net interest income after
  provision for losses on loans ............        21,782        376,031               0              0       397,813
                                                  --------      ---------      ----------       --------    ----------
Noninterest income:
   Gains on sale of securities
     available for sale ....................                                                                         0
   Fees and service charges ................                       17,918                                       17,918
   Other ...................................                       14,817         (12,000)                       2,817
                                                  --------      ---------      ----------       --------    ----------
Total noninterest income ...................             0         32,735         (12,000)             0        20,735
                                                  --------      ---------      ----------       --------    ----------   
Noninterest expense:
   Compensation and employee benefits ......        51,993        202,179                                      254,172
   Advertising .............................                       16,834                                       16,834
   Occupancy ...............................                       36,562                                       36,562
   Federal deposit insurance premiums ......                        7,361                                        7,361
   Professional fees .......................         2,575         19,050                                       21,625
   Data processing expense .................                        5,270                                        5,270
   Loss (gain) on limited partnership ......        12,527                                                      12,527
   Other ...................................        12,956         47,595         (12,000)                      48,551
                                                  --------      ---------      ----------       --------    ----------
Total noninterest expense ..................        80,051        334,851         (12,000)             0       402,902
                                                  --------      ---------      ----------       --------    ----------
Earnings (loss) before income taxes ........       (58,269)        73,915               0              0        15,646

Income tax expense (benefit) ...............       (26,981)        27,126                                          145
                                                  --------      ---------      ----------       --------    ----------
Net earnings (loss) ........................       (31,288)        46,789               0              0        15,501
                                                  --------      ---------      ----------       --------    ----------

Segment assets .............................     1,429,866     92,096,132               0              0    93,525,998
                                                 ---------     ----------      ----------       --------    ---------- 
</TABLE>

All of the income and  expense  amounts  presented  in the table  above are with
external customers, except as summarized below:

Included in interest income of the Holding  Company and interest  expense of the
Bank is $2,124 of  inter-segment  income and  expense for  deposits  held by the
Holding Company at the Bank.

The other  inter-segment  revenue and expense is $12,000 included in with income
at the Bank and  other  expense  at the  Holding  Company.  These  inter-segment
amounts  relate to  management  services  provided  by the Bank on behalf of the
Holding Company.


                                       13


<PAGE>


REDWOOD FINANCIAL, INC. AND SUBSIDIARY                                  


<TABLE>
<CAPTION>
                   For the three months ended March 31, 1998

                                                   Holding                Inter-company     Reconciling    Total
                                                   Company      Bank      Reconciliations   Adjustments    Corporation
                                                   -------      ----      ---------------   -----------    -----------
<S>                                            <C>         <C>              <C>           <C>           <C>       
Interest Income:
   Loans receivable ........................        21,292      509,222                                     530,514
   Securities held to maturity:
      Mortgage-backed and related securities                                                                      0
      Investment securities ................                                                                      0
   Securities available for sale:
      Mortgage-backed and related securities                    436,564                                     436,564
      Investment securities ................         3,981      213,165                                     217,146
   Cash equivalents and other ..............         8,686       18,035         (8,686)                      18,035
                                                  --------    ---------       --------       --------    ----------
Total interest income ......................        33,959    1,176,986         (8,686)             0     1,202,259

Interest Expense:
   Deposits ................................                    655,951         (8,686)                     647,265
   Federal Home Loan Bank advances .........                    111,460              0                      111,460
                                                  --------    ---------       --------       --------    ----------
Total interest expense .....................             0      767,411         (8,686)             0       758,725
                                                  --------    ---------       --------       --------    ----------
Net interest income ........................        33,959      409,575              0              0       443,534
                                                  --------    ---------       --------       --------    ----------
Provision for losses on loans ..............             0       14,000              0              0        14,000
                                                  --------    ---------       --------       --------    ----------
Net interest income after
  provision for losses on loans  .....              33,959      395,575              0              0       429,534
                                                  --------    ---------       --------       --------    ----------
Noninterest income:
   Gains on sale of securities
     available for sale ....................                      7,469                                       7,469
   Fees and service charges ................                     21,137                                      21,137
   Other ...................................                     18,448        (12,000)                       6,448
                                                  --------    ---------       --------       --------    ----------
Total noninterest income ...................             0       47,054        (12,000)             0        35,054
                                                  --------    ---------       --------       --------    ----------
Noninterest expense:
   Compensation and employee benefits ......        48,566      165,359                                     213,925
   Advertising .............................                      7,318                                       7,318
   Occupancy ...............................                     14,013                                      14,013
   Federal deposit insurance premiums ......                      7,430                                       7,430
   Professional fees .......................         1,153       17,769                                      18,922
   Data processing expense .................                      3,659                                       3,659
   Other ...................................        14,540       19,634        (12,000)                      22,174
                                                  --------    ---------       --------       -------     ----------
Total noninterest expense ..................        64,259      235,182        (12,000)            0        287,441
                                                  --------    ---------       --------       -------     ----------
Earnings (loss) before income taxes ........       (30,300)     207,447              0             0        177,147

Income tax expense (benefit) ...............       (17,075)      82,345                                      65,270
                                                  --------    ---------       --------       -------     ----------
Net earnings (loss) ........................       (13,225)     125,102              0             0        111,877
                                                  --------    ---------       --------       -------     ----------
Segment assets .............................     2,061,567   67,626,104              0             0     69,687,671
                                                 ---------   ----------       --------       -------     ----------
</TABLE>

All of the income and  expense  amounts  presented  in the table  above are with
external customers, except as summarized below:

Included in interest income of the Holding  Company and interest  expense of the
Bank is $8,686 of  inter-segment  income and  expense for  deposits  held by the
Holding Company at the Bank.

The other  inter-segment  revenue and expense is $12,000 included in with income
at the Bank and  other  expense  at the  Holding  Company.  These  inter-segment
amounts  relate to  management  services  provided  by the Bank on behalf of the
Holding Company.


                                       14


<PAGE>


REDWOOD FINANCIAL, INC. AND SUBSIDIARY                                  

<TABLE>
<CAPTION>
For the nine months ended March 31, 1999                                        

                                                    Holding                 Inter-company    Reconciling     Total
                                                    Company       Bank     Reconciliations   Adjustments   Corporation
                                                    -------       ----     ---------------   -----------   -----------
<S>                                            <C>           <C>              <C>           <C>           <C>       
Interest Income:
   Loans receivable ........................        70,167      1,881,186                                   1,951,353
   Securities held to maturity:
      Mortgage-backed and related securities
      Investment securities
   Securities available for sale:
      Mortgage-backed and related securities                    1,829,255                                   1,829,255
      Investment securities ................                      325,009                                     325,009
   Cash equivalents and other ..............        20,355        124,421        (20,335)                     124,421
                                                ----------     ----------     ----------     ----------    ----------
Total interest income ......................        90,522      4,159,871        (20,355)             0     4,230,038

Interest Expense:
   Deposits ................................                    2,021,224        (20,355)                   2,000,869
   Federal Home Loan Bank advances .........                      946,039              0                      946,039
                                                ----------     ----------     ----------     ----------    ----------
Total interest expense .....................             0      2,967,263        (20,355)             0     2,946,908
                                                ----------     ----------     ----------     ----------    ----------
Net interest income ........................        90,522      1,192,608              0              0     1,283,130
                                                ----------     ----------     ----------     ----------    ----------
Provision for losses on loans ..............             0         39,000              0              0        39,000
                                                ----------     ----------     ----------     ----------    ----------
Net interest income after
  provision for losses on loans.............        90,522      1,153,608              0              0     1,244,130
                                                ----------     ----------     ----------     ----------    ----------
Noninterest income:
   Gains on sale of securities
     available for sale ....................                       37,913                                      37,913
   Fees and service charges ................                       77,098                                      77,098
   Other ...................................                       45,570        (36,000)                       9,570
                                                ----------     ----------     ----------     ----------    ----------
Total noninterest income ...................             0        160,581        (36,000)             0       124,581
                                                ----------     ----------     ----------     ----------    ----------
Noninterest expense:
   Compensation and employee benefits ......       150,132        574,411                                     724,543
   Advertising .............................                       32,753                                      32,753
   Occupancy ...............................                       65,431                                      65,431
   Federal deposit insurance premiums ......                       22,114                                      22,114
   Professional fees .......................        23,570         54,859                                      78,429
   Data processing expense .................                       18,788                                      18,788
   Loss (gain) on limited partnership ......        98,666                                                     98,666
   Other ...................................        41,647        115,932        (36,000)                     121,579
                                                ----------     ----------     ----------      ---------    ----------
Total noninterest expense ..................       314,015        884,288        (36,000)             0     1,162,303
                                                ----------     ----------     ----------      ---------    ----------
Earnings (loss) before income taxes ........      (223,493)       429,901              0              0       206,408

Income tax expense (benefit) ...............      (104,069)       168,284                                      64,215
                                                ----------     ----------     ----------      ---------     ---------
Net earnings (loss) ........................      (119,424)       261,617              0              0       142,193
                                                ----------     ----------     ----------      ---------     ---------
Segment assets .............................     1,429,866     92,096,132              0              0    93,525,998
                                                ----------     ----------     ----------      ---------    ----------

</TABLE>

All of the income and  expense  amounts  presented  in the table  above are with
external customers, except as summarized below:

Included in interest income of the Holding  Company and interest  expense of the
Bank is $20,355 of  inter-segment  income and expense for  deposits  held by the
Holding Company at the Bank.

The other  inter-segment  revenue and expense is $36,000 included in with income
at the Bank and  other  expense  at the  Holding  Company.  These  inter-segment
amounts  relate to  management  services  provided  by the Bank on behalf of the
Holding Company.


                                       15


<PAGE>


REDWOOD FINANCIAL, INC. AND SUBSIDIARY                                  

<TABLE>
<CAPTION>

                    For the nine months ended March 31, 1998

                                                         Holding                  Inter-company      Reconciling         Total
                                                         Company       Bank       Reconciliations    Adjustments     Corporation
                                                         -------       ----       ---------------    -----------     -----------
<S>                                                 <C>           <C>              <C>            <C>              <C>       
Interest Income:
   Loans receivable .............................        52,673      1,431,576                                        1,484,249
   Securities held to maturity:
      Mortgage-backed and related securities ....                      453,033                                          453,033
      Investment securities .....................        18,815        295,402                                          314,217
   Securities available for sale:
      Mortgage-backed and related securities ....                      771,824                                          771,824
      Investment securities .....................         3,981        433,902                                          437,883
   Cash equivalents and other ...................        36,603         53,560        (36,603)                           53,560
                                                      ---------    -----------      ---------      ---------        -----------
Total interest income ...........................       112,072      3,439,297        (36,603)             0          3,514,766
                                                                                                                     
Interest Expense:                                                                                                    
   Deposits .....................................                    1,952,240        (36,603)                        1,915,637
   Federal Home Loan Bank advances ..............                      294,694              0                           294,694
                                                      ---------    -----------      ---------      ---------        -----------
Total interest expense ..........................             0      2,246,934        (36,603)             0          2,210,331
                                                      ---------    -----------      ---------      ---------        -----------
Net interest income .............................       112,072      1,192,363              0              0          1,304,435
                                                      ---------    -----------      ---------      ---------        -----------
Provision for losses on loans ...................             0         14,000              0              0             14,000
                                                      ---------    -----------      ---------      ---------        -----------
Net interest income after                                                                                            
  provision for losses on loans                         112,072      1,178,363              0              0          1,290,435
                                                      ---------    -----------      ---------      ---------        -----------
Noninterest income:                                                                                                  
   Gains on sale of securities                                                                                       
     available for sale .........................                       15,339                                           15,339
   Fees and service charges .....................                       58,940                                           58,940
   Other ........................................                       43,762        (36,000)                            7,762
                                                      ---------    -----------      ---------      ---------        -----------
Total noninterest income ........................             0        118,041        (36,000)             0             82,041
                                                      ---------    -----------      ---------      ---------        -----------
Noninterest expense:                                                                                        
   Compensation and employee benefits ...........       139,748        483,912                                          623,660
   Advertising ..................................                       20,991                                           20,991
   Occupancy ....................................                       31,667                                           31,667
   Federal deposit insurance premiums ...........                       21,967                                           21,967
   Professional fees ............................        26,861         50,217                                           77,078
   Data processing expense ......................                       11,741                                           11,741
   Other ........................................        56,716         65,665        (36,000)                           86,381
                                                     ----------     ----------       --------      ---------        -----------
Total noninterest expense .......................       223,325        686,160        (36,000)             0            873,485
                                                     ----------     ----------       --------      ---------        -----------
Earnings (loss) before income taxes .............      (111,253)       610,244              0              0            498,991
                                                                                                                     
Income tax expense (benefit) ....................       (57,940)       240,011                                          182,071
                                                     ----------     ----------       ---------     ---------        -----------
Net earnings (loss) .............................       (53,313)       370,233              0              0            316,920
                                                     ----------     ----------       ---------     ---------       ------------
Segment assets ..................................     2,061,567     67,626,104              0              0         69,687,671
                                                     ----------     ----------       ---------     ---------        -----------
                                                                                                                     
</TABLE>
                                                                               
All of the income and  expense  amounts  presented  in the table  above are with
external customers, except as summarized below:                              
                                                                             
Included in interest income of the Holding  Company and interest  expense of the
Bank is $36,603 of  inter-segment  income and expense for  deposits  held by the
Holding Company at the Bank.

The other  inter-segment  revenue and expense is $36,000 included in with income
at the Bank and  other  expense  at the  Holding  Company.  These  inter-segment
amounts  relate to  management  services  provided  by the Bank on behalf of the
Holding Company.


                                       16




<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

                   Item 2-Management's Discussion and Analysis
                of Financial Condition and Results of Operations


General

The Company's net earnings are dependent  primarily on its net interest  income,
which is the  difference  between  interest  income earned on its investment and
loan portfolio and interest paid on interest-bearing  liabilities.  Net interest
income  is  determined  by  (1)  the   difference   between   yields  earned  on
interest-earning assets and rates paid on interest-bearing liabilities (interest
rate  spread)  and (2) the  relative  amounts  of  interest-earning  assets  and
interest-bearing  liabilities. The Company's interest rate spread is affected by
regulatory,  economic,  and competitive  factors that influence  interest rates,
loan demand,  and deposit flows. To a lesser extent,  the Company's net earnings
also are affected by the level of noninterest  income,  which primarily consists
of service charges and other fees. In addition, net earnings are affected by the
level of noninterest (general and administrative) expenses.

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

Financial Condition

The Company's total assets increased by $16,239,000, or 21.01%, from $77,287,000
at June 30, 1998 to $93,526,000 at March 31, 1999. The increase in the Company's
assets  reflected  an  increase  in the level of Federal  Home Loan Bank  (FHLB)
advances  and  deposits  during the nine  months  ended  March 31,  1999.  These
advances and deposits were used primarily to fund increased loan  production and
purchases of mortgage-backed securities during this nine month period.

Cash and cash equivalents increased by $1,077,000, or 53.61%, from $2,009,000 at
June 30, 1998 to $3,086,000 at March 31, 1999. The increase in cash was a result
of the timing between when funds are received  through loan and  mortgage-backed
securities  payments,  deposits,  and FHLB  advances  and when  those  funds are
reinvested  in loans and  mortgage-backed  securities.  The Company  attempts to
maintain lower levels of cash and cash  equivalents in order to enhance  overall
yield.


                                                           (Continued)

                                       17

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


The Company's loans receivable,  net, increased $4,498,000, or 15.51% during the
nine  months  ended  March  31,  1999.  The  increase  in loans  was a result of
increased  loan  demand  in  the  Company's   market  and  includes  1-4  family
residential  mortgage loans and agricultural and commercial loans. The aggregate
growth  in  the  Company's  loan   portfolio   combined  with  the  increase  in
agricultural  and  commercial  loans will  increase  the  Company's  credit risk
exposure.

The  Company's  investment  securities,   including  mortgage-backed  securities
designated available for sale increased 19.91% or $8,705,000 from $43,731,000 to
$52,436,000  during the nine  months  ended  March 31,  1999.  The  increase  is
primarily  due to the use of  funds  provided  by FHLB  advances  and  increased
deposits  over the nine months ended March 31, 1999.  The increase was partially
offset  be a  decrease  in  the  carrying  value  of  the  Company's  investment
securities,  including mortgage-backed securities designated available for sale.
The   market   value  of  the   Company's   investment   securities,   including
mortgage-backed  securities  available for sale reflected a $211,000  before tax
unrealized  gain at June 30, 1998 and a $195,000  before tax unrealized  loss at
March 31, 1999. The Company is no longer designating any investment  securities,
including mortgage-backed securities, as held to maturity.

The Company's  deposits  increased by $3,468,000,  or 7.21%, from $48,102,000 at
June 30, 1998 to $51,570,000 at March 31, 1999. At March 31, 1999, the Company's
FHLB advances totaled  $29,699,000,  an increase of $13,499,000,  or 83.33% from
$16,200,000  at June 30, 1998.  The  advances  were  primarily  utilized to fund
increased  loan  production  and  purchase  investment   securities,   including
mortgage-backed  securities.  In  order  to  fund  loan  growth  and  investment
purchases and to leverage its capital,  the Company continues to seek additional
deposits through traditional deposit products and new deposit products,  as well
as increase utilization of FHLB advances.  To this extent, in December 1998, the
Company  introduced  checking to its product  line.  This product is intended to
reduce the  Company's  overall  cost of funds as well as attract new  customers.
Checking deposits totaled $809,000 at March 31, 1999.

Stockholders'  equity declined by $2,949,000 or 24.70% from  $11,938,000 at June
30, 1998 to $8,989,000  at March 31, 1999.  The decrease is primarily due to the
Company's stock repurchase  programs,  described  elsewhere in this 10-QSB. As a
result Treasury stock increased $2,976,000,  or 102.35%, from $2,908,000 at June
30, 1998 to $5,885,000 at March 31, 1999.  The use of interest  earning funds to
repurchase stock will decrease interest income in future periods.








                                                               (Continued)

                                       18

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


Results of Operations

Net Earnings

Net earnings were $16,000 for the three months ended March 31, 1999, as compared
to $112,000  for the three  months  ended March 31,  1998.  This  represented  a
decrease of $96,000,  or 85.71%.  The  decrease in net  earnings  was  primarily
attributable  to a $116,000,  or 40.42%  increase in  noninterest  expense.  The
increase in noninterest  expense primarily includes  increased  compensation and
employee  benefits as a result of increased  staff,  increased  office occupancy
owing to the  opening of a new bank  facility,  and other  noninterest  expense.
Other  increases  in various  noninterest  expense  items are also noted and are
discussed in more detail in the Noninterest Expense section of this 10-QSB.

In addition, the decrease in net earnings was also due to decreased net interest
income during the quarter due to the placement of a $378,000 loan on nonaccrual,
and the  resulting  reversal  of $36,000 in  previously  accrued  interest.  The
decrease in net income  during the quarter  was also  affected by a $14,000,  or
40.00% decrease in noninterest  income. The decrease in net income was partially
offset by a $65,000, or 100.00% decrease in income tax expense.

Net earnings were $142,000 for the nine months ended March 31, 1999, as compared
to  $317,000  for the nine months  ended  March 31,  1998.  This  represented  a
decrease of $175,000,  or 55.21%.  The  decrease in net  earnings was  primarily
attributable  to a $289,000,  or 33.10%  increase in  noninterest  expense owing
primarily  to a  $101,000,  or 16.19%  increase  in  compensation  and  employee
benefits. The increase in noninterest expense was also due to a $99,000 decrease
in the carrying value of a limited partnership, a $36,000, or 41.86% increase in
other expenses,  and a $33,000,  or 103.13% increase in occupancy  expense.  The
limited partnership invests in equity securities of financial institutions.  The
value of the securities held by this limited  partnership  decreased as a result
of equity  market  depreciation  in the nine months ended March 31, 1999.  Other
increases in various  noninterest expense items are also noted and are discussed
in more detail in the Noninterest Expense section of this 10-QSB.

In addition, the decrease in net income was also affected by a $21,000, or 1.61%
decrease in net  interest  income  owing  primarily  to the  reversal of accrued
interest on the aforementioned  problem loan, and a $25,000, or 178.57% increase
in provision for loan losses. The decrease in net income was partially offset by
a $43,000,  or 52.44% increase in noninterest income including gains on the sale
of  securities  of  $38,000,  and a $118,000,  or 64.84%  decrease in income tax
expense.





                                                                (Continued)

                                       19

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


Net Interest Income

Net interest income decreased by $31,000,  or 6.98%, from $444,000 for the three
months  ended March 31, 1998 to $413,000  for the three  months  ended March 31,
1999. The decrease in net interest  income was primarily due to the placement of
a $378,000 agricultural loan on nonaccrual and the resulting reversal of $36,000
in previously accrued interest. In addition, the decrease in net interest income
was also a result of a decrease in the Company's net interest spread, from 1.74%
for the three  months  ended to March 31,  1998,  to 1.45% for the three  months
ended March 31, 1999.

Net interest income decreased by $21,000, or 1.61%, from $1,304,000 for the nine
months  ended March 31, 1998 to  $1,283,000  for the nine months ended March 31,
1999.  The  decrease is largely a result of the  aforementioned  placement  of a
large balance loan on  nonaccrual.  The decrease was also affected by a decrease
in the  Company's net interest  spread,  from 1.68% for the nine months ended to
March 31, 1998, to 1.49% for the nine months ended March 31, 1999.

Interest Income

Interest  income was  $1,461,000  for the three months ended March 31, 1999,  as
compared to $1,202,000  for the three months ended March 31, 1998,  representing
an  increase  of  $259,000,  or 21.55%.  The  increase  in  interest  income was
primarily  due to an  increase  in  interest-earning  assets  as a result of the
Company's growth.  Average  interest-earning  assets increased  $20,969,000,  or
31.88%  from  $65,784,000  for  the  three  months  ended  March  31,  1998,  to
$86,753,000  for the three months ended March 31, 1999. The increase in interest
income  was   partially   offset  by  a  decrease  in  the   overall   yield  on
interest-earning assets. For the three months ended March 31, 1999, the yield on
interest-earning  assets was 6.74%,  as compared  to 7.31% for the three  months
ended March 31, 1998. The decrease in yield on  interest-earning  assets was due
primarily to lower yields on the Company's loan and securities portfolios.

Interest  income was  $4,230,000  for the nine months ended March 31,  1999,  as
compared to $3,515,000 for the nine months ended March 31, 1998, representing an
increase of $715,000,  or 20.34%.  The increase in interest income was primarily
due to an  increase  in  interest-earning  assets as a result  of the  Company's
growth. Average  interest-earning  assets increased $17,305,000,  or 27.04% from
$64,002,000  for the nine months ended March 31, 1998,  to  $81,307,000  for the
nine months ended March 31, 1999. The increase in interest  income was offset by
a decrease in the overall yield on interest-earning  assets. For the nine months
ended  March 31,  1999,  the yield on  interest-earning  assets  was  6.94%,  as
compared to 7.32% for the nine  months  ended March 31,  1998.  The  decrease in
yield on  interest-earning  assets also was due primarily to lower yields on the
Company's loan and securities portfolios.


                                                             (Continued)

                                       20

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


Interest on loans receivable  increased by $105,000,  or 19.77%, to $636,000 for
the three  months  ended March 31,  1999,  as compared to $531,000 for the three
months ended March 31, 1998.  Such increase was due to a  $8,469,000,  or 34.11%
increase in the average  balance of loans  receivable  from  $24,830,000 for the
three  months  ended March 31, 1998 to  $33,299,000  for the three  months ended
March 31,  1999.  The increase in interest on loans  receivable  was offset by a
decrease  in the  average  yield on loans  receivable  from  8.55% for the three
months ended March 31, 1998, to 7.64% for the three months ended March 31, 1999.
The  decrease  in  interest  income on loans  receivable  during the quarter was
substantially affected by the placement of the aforementioned large balance loan
on nonaccrual and the resulting reversal of previously accrued interest.

Interest on loans receivable increased by $467,000, or 31.47%, to $1,951,000 for
the nine months ended March 31,  1999,  as compared to  $1,484,000  for the nine
months ended March 31, 1998.  Such increase was due to a  $9,177,000,  or 39.89%
increase in the average  balance of loans  receivable  from  $23,006,000 for the
nine months ended March 31, 1998 to $32,183,000  for the nine months ended March
31, 1999. The increase in interest on loans  receivable was offset by a decrease
in the average  yield on loans  receivable  from 8.60% for the nine months ended
March 31, 1998, to 8.08% for the nine months ended March 31, 1999.  The decrease
in  interest  income  on loans  receivable  was  substantially  affected  by the
placement  of the  aforementioned  large  balance  loan  on  nonaccrual  and the
resulting reversal of previously accrued interest.

Interest income on mortgage-backed and related securities available for sale was
$662,000  and  $437,000  for the three  months  ended  March 31,  1999 and 1998,
respectively.  The yield on the Company's  mortgage-backed  securities portfolio
available for sale was 6.29% and 6.66% for the three months ended March 31, 1999
and  1998,  respectively.  A  decrease  in  the  yield  on  the  mortgage-backed
securities  portfolio  has  occurred as a result of recent  declines in mortgage
rates. In January 1998, the Company redesignated all mortgage-backed and related
securities  as available  for sale.  As such,  the Company  reported no interest
income on mortgage-backed  and related securities held to maturity for the three
or nine months ended March 31, 1999.

Interest income on mortgage-backed and related securities available for sale was
$1,829,000  and  $772,000  for the nine  months  ended  March 31, 1999 and 1998,
respectively.  The yield on the Company's  mortgage-backed  securities portfolio
available  for sale was 6.27% and 6.90% for the nine months ended March 31, 1999
and  1998,  respectively.  A  decrease  in  the  yield  on  the  mortgage-backed
securities  portfolio  has  occurred as a result of recent  declines in mortgage
rates.






                                                              (Continued)

                                       21

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

Interest  income on  investment  securities  available for sale was $123,000 and
$217,000 for the three months ended March 31, 1999 and 1998,  respectively.  The
yield on the Company's  investment  securities  portfolio available for sale was
6.08%  and  6.48%  for  the  three   months  ended  March  31,  1999  and  1998,
respectively. A decrease in the yield on the investment securities portfolio has
occurred as a result of recent  declines in interest rates. In January 1998, the
Company  redesignated all investment  securities as available for sale. As such,
the  Company  reported  no  interest  income on  investment  securities  held to
maturity for the three or nine months ended March 31, 1999.

Interest  income on  investment  securities  available for sale was $325,000 and
$438,000  for the nine months ended March 31, 1999 and 1998,  respectively.  The
yield on the Company's  investment  securities  portfolio available for sale was
5.94%  and  6.82%  for  the  three   months  ended  March  31,  1999  and  1998,
respectively. A decrease in the yield on the investment securities portfolio has
occurred as a result of recent declines in interest rates.

Interest income on cash  equivalents and other increased by $22,000,  or 122.22%
in comparison of the three months ended March 31, 1999 and 1998. Interest income
on cash equivalents and other increased by $70,000,  or 129.63% in comparison of
the nine  months  ended  March 31,  1999 and 1998.  Cash  equivalents  and other
includes  dividends  on FHLB stock.  The  increase in both  periods  reflects an
increased investment in FHLB stock.

Interest Expense

Interest expense increased by $289,000,  or 38.08%,  from $759,000 for the three
months ended March 31, 1998 to  $1,048,000  for the three months ended March 31,
1999. The increase in interest expense  resulted from a $20,177,000,  or 272.51%
increase in the average  balance of FHLB advances from  $7,404,000 for the three
months ended March 31, 1998 to $27,581,000  for the three months ended March 31,
1999.  The increase in interest  expense was also impacted by a  $4,660,000,  or
9.90%  increase in the average  balance of deposits in  comparison  of the three
months  ended March 31,  1999 and 1998.  The  increase  in interest  expense was
partially  offset a  decrease  in the cost of funds  from 5.57% to 5.29% for the
three months ended March 31, 1998 and 1999, respectively. As noted previously in
this 10-QSB,  the Company recently began offering checking in order to lower its
cost of funds.  The Company has made  substantial  progress in  developing  this
program, resulting in an average balance of $530,000 for the quarter ended March
31, 1999 at an average cost of 1.70%.








                                                                 (Continued)

                                       22

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


Interest expense increased by $737,000,  or 33.35%, from $2,210,000 for the nine
months  ended March 31, 1998 to  $2,947,000  for the nine months ended March 31,
1999. The increase in interest expense  resulted from a $16,656,000,  or 260.62%
increase in the average  balance of FHLB advances from  $6,391,000  for the nine
months ended March 31, 1998 to  $23,047,000  for the nine months ended March 31,
1999.  The increase in interest  expense was also impacted by a  $3,213,000,  or
7.01%  increase in the average  balance of  deposits in  comparison  of the nine
months ended March 31, 1999 and 1998. The increase in interest  expense was also
partially  offset a  decrease  in the cost of funds  from 5.64% to 5.45% for the
nine months ended March 31, 1998 and 1999, respectively.

Provision for Loan Losses

The  Company's  provision  for loan losses was $15,000 and $14,000 for the three
months  ended March 31, 1999 and 1998,  respectively.  For the nine months ended
March 31, 1999 and 1998,  the  Company's  provision for loan losses were $39,000
and $14,000,  respectively.  As noted, the Company has experienced growth in its
loan portfolio. The provision was increased in response to loan growth, a change
in the  composition of the loan portfolio  through  increased  agricultural  and
commercial loan  originations,  and inherent  losses in the loan  portfolio.  As
such,  the  Company has  provided  for losses.  The level of this  provision  is
dependent on loan growth, delinquencies,  economic conditions, and other various
factors used by management in the  assessment of its loan  portfolio and overall
level of loan loss reserves.

At March 31, 1999 and June 30,  1998,  the  allowance  for loan  losses  totaled
$290,000 and $251,000,  respectively. The Company's net loan charge-offs were $0
and $0 for the nine months ended March 31, 1999 and twelve months ended June 30,
1998, respectively.  At March 31, 1999 and June 30, 1998, the allowance for loan
losses represented 0.86% and 0.86% of loans receivable, respectively. Nonaccrual
loans totaled $378,000 and $0 at March 31, 1999 and June 30, 1998, respectively.
At March 31, 1999 and June 30,  1998,  classified  assets  totaled  $494,000 and
$37,000, respectively.

Noninterest Income

Noninterest  income decreased by $14,000,  or 40.00% from $35,000 to $21,000 for
the three  months  ended March 31, 1999 as  compared to the three  months  ended
March 31,  1998.  The  decrease  was due to a  decrease  in gains on the sale of
securities  available  for sale of $7,000,  or 100.00%  and a decrease  in other
income of $3,000, or 50.00%.

Noninterest income increased by $43,000,  or 52.44% from $82,000 to $125,000 for
the nine months  ended March 31, 1999 as compared to the nine months ended March
31, 1998.  The  increase  was due to an increase in fees and service  charges of
$18,000, or 30.51% and an increase in gains on the sale of securities  available
for sale of $23,000, or 153.33%.
                                                               (Continued)

                                       23

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


Noninterest Expense

Noninterest  expense  increased by $116,000,  or 40.42%,  from  $287,000 for the
three  months  ended March 31, 1998 to $403,000 for the three months ended March
31, 1999.  Noninterest  expense increased by $289,000,  or 33.10%, from $873,000
for the nine months ended March 31, 1998 to $1,162,000 for the nine months ended
March 31, 1999.

As previously  noted,  these  increases in  noninterest  expense are largely the
cause of overall decreased earnings by the Company.  The increase in noninterest
expense is primarily due to (1) increased  compensation and employee benefits as
a  result  of  staff  additions,  (2)  increased  occupancy  costs  owing to the
Company's  recent  addition of a new bank building in Redwood Falls,  Minnesota,
and (3) increased other expenses, many of which management believes are one time
expenses   associated   with  the   addition  of  the  new  bank   building  and
implementation  of new  deposit  products,  including  checking  and debit  card
products. The increase in noninterest expense was also substantially affected by
a decrease in the carrying value of an investment in a limited partnership, most
notably in the six months ended December 31, 1998.

The increase in staff is primarily a result of the new bank  building  opened in
Redwood Falls in January 1999.  Prior to the start of this quarter,  the Company
employed 16 full time and 3 part time  employees.  Comparatively,  on January 1,
1998, the Company employed 10 full time and 3 part time employees.  The increase
in staff was required to staff the new bank facility and to assist in developing
and maintaining  new deposit and loan products.  As a result,  compensation  and
employee benefits increased $40,000, or 18.69% in comparison of the three months
ended March 31, 1999 and 1998.  In comparison of the nine months ended March 31,
1999 and 1998, compensation and employee benefits increased $101,000, or 16.19%.

The  increase  in  occupancy  costs is also  primarily  a result of the new bank
building  opened in Redwood  Falls in January  1999.  As  detailed  in  previous
10-QSB's  and press  releases,  the Company  expected the new building to have a
substantial  increase  in  occupancy  expenses.  As a  result,  occupancy  costs
increased $23,000,  or 164.29% in comparison of the three months ended March 31,
1999 and 1998.  In  comparison of the nine months ended March 31, 1999 and 1998,
occupancy costs increased $33,000, or 103.13%.









                                                                 (Continued)

                                       24

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


The  increase  in other  noninterest  expenses  is due to the new bank  building
opened in Redwood Falls in January 1999, new deposit products  introduced by the
Company over the previous four months and Year 2000 related  expenses,  included
in the Company's Year 2000 budget as detailed elsewhere in this 10-QSB. The Bank
began  offering  checking in December  1998 and debit  cards,  including  an ATM
machine in March 1999. These programs required substantive initial outlays which
are not  considered  repetitive.  The new bank building  required  provisions of
substantial  supplies and other outfittings not directly related to the physical
building. Year 2000 compliancy costs totaled approximately $4,000 this quarter.

As a  result,  other  noninterest  expense  increased  $27,000,  or  122.73%  in
comparison  of the three months ended March 31, 1999 and 1998.  In comparison of
the nine  months  ended  March 31,  1999 and  1998,  other  noninterest  expense
increased $36,000, or 41.86%.  Although many of the aforementioned costs are not
repetitive,  the increasing complexity and size of the Company's operations will
result in higher other expenses than has been recorded in previous periods.

During the three and nine months  ended March 31, 1999,  the Company  wrote down
the carrying  value of its  investment in a limited  partnership  by $13,000 and
$99,000,  respectively.  The limited partnership invests in equity securities of
financial institutions.  The carrying value of the limited partnership decreased
as a result of market depreciation.

The  increase  in  noninterest   expense  was  also  affected  by  increases  in
advertising expense and data processing  expense.  For the three and nine months
ended March 31, 1999,  advertising  expense increased $10,000,  or 142.86%,  and
$12,000,  or 57.14%.  For the three and nine months ended March 31,  1999,  data
processing  costs  increased  $1,000,  or 25.00%,  and $7,000,  or 58.33%.  Both
increases are a result of the new bank building and additional deposit products.
The Bank converted to an automated data processing  system in October 1997 which
overstates the percentage  increase in comparison of the nine months ended March
31, 1999 and 1998.

Income Taxes

The Company's  income taxes decreased by $65,000,  or 100.00%,  from $65,000 for
the three months ended March 31, 1998,  to less than $1,000 for the three months
ended March 31, 1999. The change in income taxes was due primarily to a decrease
in pre-tax  earnings of $161,000,  or 90.96% from  $177,000 for the three months
ended March 31, 1998 to $16,000 for the three months  ended March 31, 1999.  The
Company's  effective  tax rate was 0.93% and 36.85% for the three  months  ended
March 31, 1999 and 1998,  respectively.  The Company  maintains a balance of tax
exempt investments which decreases its effective tax rate.




                                                                (Continued)

                                       25

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


The Company's income taxes decreased by $118,000,  or 64.84%,  from $182,000 for
the nine months ended March 31, 1998, to $64,000 for the nine months ended March
31, 1999.  The change in income taxes was due primarily to a decrease in pre-tax
earnings of  $293,000,  or 58.72% from  $499,000 for the nine months ended March
31, 1998 to $206,000  for the nine months ended March 31,  1999.  The  Company's
effective  tax rate was 31.10% and 36.49% for the nine  months  ended  March 31,
1999 and 1998, respectively.


Forward Looking Information

In recent years,  significant new federal  legislation has imposed  numerous new
legal and regulatory requirements on financial institutions.  In addition to the
uncertainties  posed by  possible  legislative  change,  there  are  many  other
uncertainties that may make the Company's  historical  performance an unreliable
indicator of its future performance, and forward-looking information,  including
projections  of future  performance,  is subject to  numerous  possible  adverse
developments,  including but not limited to the possibility of adverse  economic
developments  which may increase default and delinquency  risks in the Company's
loan portfolios; shifts in interest rates which may result in shrinking interest
margins; deposits outflows; interest rates on competing investments;  demand for
financial  services  and  loan  products;  increases  generally  in  competitive
pressure in the banking and financial services  industry;  changes in accounting
policies  or  guidelines,  or  monetary  and  fiscal  policies  of  the  federal
government;  changes in the quality or  composition  of the  Company's  loan and
investment  portfolios;  potential  operational  disruptions  due to  Year  2000
considerations; or other significant uncertainties.


Liquidity and Capital Resources

The Company's primary sources of funds are deposits,  FHLB advances and proceeds
from maturing investment securities and principal and interest payments on loans
and  mortgage-backed  and related  securities.  While  maturities  and scheduled
amortization  of  mortgage-backed   and  related  securities  and  loans  are  a
predictable  source  of  funds,  deposit  flows  and  mortgage  prepayments  are
generally   influenced  by  general   interest   rates,   economic   conditions,
competition,  and other factors. A substantial portion of the Company's deposits
are funds from local  government  entities.  At March 31, 1999,  these  deposits
totaled  $17,108,000.  Government  deposits are typically in larger amounts than
traditional  retail  deposits and are bid more frequently and at higher interest
rates than retail  deposits.  The Company has utilized  government  deposits for
several years and has procedures for addressing these  operational and liquidity
concerns.




                                                              (Continued)

                                       26

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY


The primary investing activities of the Company are the origination of loans and
the purchase of investment and mortgage-backed  and related  securities.  During
the nine months ended March 31, 1999 and 1998,  the  Company's  loan  portfolio,
net, increased $4,533,000 and $6,133,000, respectively. During the same periods,
the Company purchased  investment and  mortgage-backed and related securities in
the amounts of $22,956,000 and $9,919,000,  respectively.  The primary financing
activity of the Company is the attraction of savings deposits and utilization of
FHLB advances.

The Company has other  sources of  liquidity  if there is a need for funds.  The
Bank has the ability to obtain  additional  advances  from the Federal Home Loan
Bank of Des Moines.  During the nine months  ended March 31, 1999 and 1998,  the
Bank  utilized  advances  of  $27,200,000  and  $12,200,000,   respectively.  In
addition,  the Company's  designation  of all  investments  and  mortgage-backed
securities as available  for sale is intended to increase  liquidity and overall
operational flexibility.

The Bank is required to maintain  minimum  levels of liquid assets as defined by
OTS regulations. This requirement,  which may be changed at the direction of the
OTS  depending  upon  economic  conditions  and deposit  flows,  is based upon a
percentage of deposits and short-term borrowings.
The required minimum ratio is currently 4.0%.

The Company's most liquid assets are cash and cash equivalents. In addition, the
Company  maintains  a portfolio  of readily  marketable  investment  securities,
including  mortgage-backed and related securities which are designated available
for  sale.   The   levels   of  cash  and   investment   securities,   including
mortgage-backed  and  related   securities,   are  dependent  on  the  Company's
operating, financing, and investing activities during any given period. At March
31, 1999 and June 30, 1998,  cash and cash  equivalents  totaled  $3,086,000 and
$2,009,000,  respectively.  Investment securities, including mortgage-backed and
related  securities  designated  available  for  sale  totaled  $52,436,000  and
$43,731,000 at March 31, 1999 and June 30, 1998, respectively.

Since the  conversion  of the  Association  and the  formation of the Company in
1995, the Company has regularly  repurchased  shares of its common stock through
open market  transactions in publically  announced  repurchase  programs.  These
repurchase programs are intended to promote higher earnings per share and return
on equity in future periods by reducing the level of capital.  These repurchases
have been  completed with liquid  resources,  sales and maturities of investment
securities  available  for sale,  loan  repayments,  increases in deposits,  and
advances procured from the FHLB.  Management  believes the Company is adequately
capitalized.  As such, the Company  believes that these  repurchases have not in
the past, nor should not in the future present substantial  liquidity or capital
concerns based upon current and anticipated  economic  considerations.  Previous
common stock repurchase programs should not be construed as indicative of future
repurchase  programs  by the  Company.  The  Company  has no  outstanding  stock
repurchase programs currently.
                                                                 (Continued)

                                       27

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

Federal savings institutions are required to satisfy three capital requirements:
(i) a  requirement  that  "tangible  capital"  equal or excess  1.5% of tangible
assets,  (ii) a requirement that "core capital" equal or excess 3.0% of adjusted
tangible assets,  and (iii) a risk-based capital  requirement  currently 8.0% of
"risk-adjusted" assets. The Bank currently meets all three capital requirements.


Year 2000 Consideration

The Company's primary exposure is its automated data processing system which had
been  determined to be Year 2000  noncompliant.  On August 4, 1998,  the Company
received its Year 2000 compliant  release from its software  vendor.  Management
has tested the release  through both  internal and external  resources to ensure
that the software  properly  addresses risks identified by the Federal Financial
Institutions Examination Council and its data processing vendor. The Company has
substantially  completed its testing,  although the Company  expects to continue
testing other related applications during 1999.

The Company  anticipates  its exposure to Year 2000 issues is reduced due to its
1-4 family residential lending emphasis.  However, the Company is broadening its
lending  activities  to  include  commercial  lending.  As  part  of its  credit
underwriting,  the  Company  is  assessing  the  Year  2000  sensitivity  of all
commercial loan applicants.

At this time, the Company expects to expend approximately  $10,000 to $15,000 on
its Year 2000 compliance efforts.  In addition,  a substantial amount of current
staff time is being  expended on Year 2000  assessment  and testing.  Should the
Company fail to correct its Year 2000  deficiencies  by December  31, 1999,  the
Company  could  expect  a  substantial  disruption  to  daily  operations.  Such
disruption could have a material effect on the Company's  financial position and
future  earnings.   To  this  extent,  the  Company's  contingency  plan  is  to
re-commence  manual data  processing  operations.  As the Company only  recently
converted from manual to automated data  processing in October 1997, the Company
still retains the equipment and trained staff  necessary to  re-commence  manual
data processing operations.

As part of its  contingency  planning,  the Company has decided to increase  its
liquidity  levels  in late  1999 in order to  ensure  sufficient  cash and other
liquidity  to offset a  possible  deposit  outflow.  Specifically,  the  Company
intends to limit investment  securities purchases during the last four months of
calendar 1999 in order to increase  cash reserves and cash  resources to a range
of $5.0 to $10.0 million.  In addition,  the Bank has the additional  ability to
obtain  further  advances  from the FHLB.  The Bank  currently  maintains a $1.0
million  line of  credit  with  the  FHLB.  Sales  of  loans  and/or  investment
securities are also under  consideration  as a method for increasing  liquidity.
The  implementation  of these  contingency  plans will  result in a decrease  in
overall profitability during this period and possibly subsequent periods.


                                                               (Continued)

                                       28

<PAGE>



                     REDWOOD FINANCIAL, INC. AND SUBSIDIARY

                           PART II - OTHER INFORMATION

ITEM 1:     Legal Proceedings.

            None.

ITEM 2:     Changes in Securities and Use of Proceeds.

            Not Applicable.

ITEM 3:     Defaults Upon Senior Securities.

            Not Applicable.

ITEM 4:     Submission of Matters to a Vote of Security Holders.

            None

ITEM 5:     Other Information.

            None.

ITEM 6:     Exhibits and Reports on Form 8-K.

            None













                                       29

<PAGE>


                                   SIGNATURES


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

                                    REDWOOD FINANCIAL, INC.
                                    Registrant


Date: April 29, 1999                /s/ Paul W. Pryor
      --------------                --------------------------------------------
                                    Paul W. Pryor, President and Chief Executive
                                    Officer (Duly Authorized Officer)

Date: April 29, 1999                /s/ Anthony H. Acker
      --------------                --------------------------------------------
                                    Anthony H. Acker, Chief Financial Officer
                                    (Principal Financial and Accounting Officer)






















                                       30