CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

                                                   DECEMBER 31
                                                1996       1995
                                              -------    --------
                                                 (IN THOUSANDS)
ASSETS
  Cash                                         $ 1,965   $  1,192
  Interest-earning deposits                      1,598         82
                                              --------   --------
                   CASH AND CASH EQUIVALENTS     3,563      1,274

  Securities available-for-sale, at fair value
    Investment securities                        5,635      2,978
    Mortgage-related securities                  1,837      2,013
  Securities held-to-maturity
    Investment securities
      (estimated fair value of
       $16,633,000 - 1996;
       $19,531,000 - 1995)                       16,583    19,364
    Mortgage-related securities
      (estimated fair value of
      $9,247,000 - 1996;
      $4,020,000 - 1995)                          9,325     4,024
    Loans held for sale                           2,532     2,989
    Loans receivable                            553,995   500,535
    Accrued interest receivable                   3,295     3,074
    Foreclosed properties and
      repossessed assets                            189       136
    Office properties and equipment               8,350     8,417
    Federal Home Loan Bank stock                  3,773     3,768
    Prepaid expenses and other assets             6,426     4,895
                                               --------  --------
                                               $615,503  $553,467
                                               ========  ========

LIABILITIES
    Deposits                                   $458,323   $449,954
    Borrowings                                   77,272     21,000
    Advance payments by borrowers
      for taxes and insurance                     5,447      6,550
    Other liabilities                             4,237      3,384
                                               --------   --------
                 TOTAL LIABILITIES              545,279    480,888
                                               --------   --------

STOCKHOLDERS' EQUITY
    Cumulative preferred stock, $1 par value;
    10,000,000 shares authorized; none outstanding
    Common stock, $1 par value; 30,000,000
    shares authorized; shares issued and
    outstanding: 4,568,052 - 1996;
     4,555,187 - 1995                             4,568      4,555
    Additional paid-in capital                   14,389     14,590
    Unrealized gain on securities
     available-for-sale, net of taxes               385        315
    Treasury stock at cost (180,623 shares)      (2,853)
    Retained earnings                            53,735     53,119
                                               --------   --------
              TOTAL STOCKHOLDERS' EQUITY         70,224     72,579
                                               --------   --------
                                               $615,503   $553,467
                                               ========   ========

See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

                                                      YEAR ENDED DECEMBER 31
                                                      1996     1995    1994
                                                     -------  ------  ------
                                                      (IN THOUSANDS, EXCEPT
                                                         PER SHARE AMOUNTS)
Interest income:
          Mortgage loans                             $28,831  $26,982 $25,294
          Consumer loans                              10,725    9,948   8,045
          Investment securities                        1,582    1,612   1,494
          Interest-earning deposits                       66      100     150
          Mortgage-related securities                    672      383     426
                                                     -------  ------- -------
                              TOTAL INTEREST INCOME   41,876   39,025  35,409
Interest expense:
          Deposits                                    20,244   19,572  15,778
          Borrowings                                   2,797    2,286     889
          Advance payments by borrowers
           for taxes and insurance                       162      178     187
                                                     -------  ------- -------
                             TOTAL INTEREST EXPENSE   23,203   22,036  16,854
                                                     -------  ------- -------
                                NET INTEREST INCOME   18,673   16,989  18,555
Provision for loan losses                                370      240     145
                                                     -------  ------- -------
                          NET INTEREST INCOME AFTER
                          PROVISION FOR LOAN LOSSES   18,303   16,749  18,410
Non-interest income:
          Fees on serviced loans                         354      364     383
          Loan fees and service charges                  234      226     191
          Deposit account service charges                960      813     762
          Insurance commissions                          320      269     246
          Gains on sales of loans                        259      649     170
          Unrealized losses on loans held for sale                       (172)
          Gains on sale of securities                             321     299
          Gains on sale of other assets                   29      186     141
          Other                                          530      382     238
                                                     -------   ------ -------
                          TOTAL NON-INTEREST INCOME    2,686    3,210   2,258
Non-interest expense:
          Compensation, payroll taxes and
            other employee benefits                    6,729    6,383   6,605
          Federal insurance premiums                     985      998     965
          SAIF special assessment                      2,856
          Occupancy                                      832      849     848
          Data processing                                926      917     764
          Furniture and equipment                        750      727     695
          Telephone and postage                          449      421     421
          Marketing                                      351      331     397
          Merger related costs                                            456
          Reorganization costs                                    108
          Other                                        2,061    1,917   2,127
                                                     -------  ------- -------
                         TOTAL NON-INTEREST EXPENSE   15,939   12,651  13,278
                                                     -------  ------- -------
                         INCOME BEFORE INCOME TAXES    5,050    7,308   7,390
Income taxes                                           1,767    2,718   3,192
                                                     -------  ------- -------
                                         NET INCOME  $ 3,283  $ 4,590 $ 4,198
                                                     =======  ======= =======
                         PRIMARY EARNINGS PER SHARE    $0.72    $0.99   $0.91
                                                       =====    =====   =====

                      CASH DIVIDENDS PAID PER SHARE    $0.60    $0.56   $0.52
                                                       =====    =====   =====
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
                                                    UNREALIZED GAIN
                                                     ON SECURITIES   DEFERRED
                                         ADDITIONAL   AVAILABLE-  COMPENSATION
                                COMMON     PAID-IN     FOR-SALE,         DUE      TREASURY  RETAINED
                                 STOCK     CAPITAL    NET OF TAXES   EMPLOYEES       STOCK   EARNINGS  TOTAL
                              ----------  ---------- -------------- -------------  -------- --------- -------
                                                     ( IN THOUSANDS)

Balance at
<S>                             <C>        <C>        <C>              <C>          <C>      <C>      <C>
 January 1, 1994                 $4,428     $13,992                    $ (223)                $48,766  $66,963

Net income                                                                                      4,198    4,198
Cash dividends
 ($.52 per share)                                                                              (2,223)  (2,223)
Exercise of stock options            67         224                                               291
Repayment of ESOP
 borrowing                                                               223                      223
Change in net unrealized
 gain on securities available-
 for-sale, net of income taxes                          $233                                      233
Adjustment to conform pooled
 companies' fiscal year-ends                                                                      322      322
                                 ------     -------    -----           -----         -------   ------    ------
Balance at
 December 31, 1994                4,495      14,216      233               0                    51,063  70,007

Net income                                                                                       4,590   4,590
Cash dividends
 ($.56 per share)                                                                               (2,534) (2,534)
Exercise of stock options            60         382                                                        442
Reorganization costs                             (8)                                                        (8)
Change in net unrealized
 gain on securities available-
 for-sale, net of income taxes                            82                                                82
                                 ------     -------     -----          -----          -------   ------  ------
Balance at
 December 31, 1995                4,555      14,590      315               0                    53,119  72,579

Net income                                                                                       3,283   3,283
Cash dividends
 ($.60 per share)                                                                               (2,667) (2,667)
Retirement of common stock           (4)        (62)                                                       (66)
Purchase of treasury stock                                                             $(3,698)         (3,698)
Exercise of stock options            17        (139)                                       845             723
Change in net unrealized
 gain on securities available-
 for-sale, net of income taxes                             70                                               70                 70
                                 ------     -------     ------        ------          -------   ------ ------
Balance at
 December 31, 1996               $4,568     $14,389     $ 385          $  0            $(2,853) $53,735 $70,224
                                 =======    =======     =====          =====           =======  ======= ======
</TABLE>

See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES
<PAGE>
<TABLE>
<CAPTION>
                                                  YEAR ENDED DECEMBER 31
                                               ---------------------------
                                                  1996     1995     1994
                                               ---------  -------  -------
                                                       (IN THOUSANDS)
OPERATING ACTIVITIES:
<S>                                            <C>       <C>      <C>
Net income                                      $  3,283  $ 4,590  $ 4,198
Adjustments to reconcile net income to
 cash provided by operating activities:
  Provision for losses on loans                      370      240      145
  Provision for depreciation and amortization        756      732      721
  Gains on sales of loans                           (259)    (649)    (170)
  Gains on sale of securities                                (321)    (299)
  Unrealized losses on loans held for sale                             172
  Loans originated for sale                      (13,795) (14,572) (19,182)
  Proceeds from loan sales                        14,252   22,072   33,210
  Decrease in deferred compensation                                    223
  Increase in interest receivable                  (221)    (235)     (203)
  Increase in interest payable                       75      599       118
  Other                                            (245)     767    (3,607)
                                                --------  -------   -------
    NET CASH PROVIDED BY OPERATING ACTIVITIES      4,216   13,223    15,326

INVESTING ACTIVITIES:
Proceeds from maturities of
 investment securities and
 interest-earning deposits                        11,150     10,680   12,403
  Proceeds from the sale of securities                      156       33
  Purchases of investment securities             (10,782)   (10,987)  (8,980)
  Principal repayments of
    mortgage-related securities                      556        353    2,365
  Purchases of mortgage-related securities        (5,697)      (997)  (1,981)
  Loan originations and purchases               (177,809)  (118,923)(184,738)
  Loan principal repayments                      123,723    104,503  115,836
  Purchases of office properties
    and equipment                                   (745)      (697)  (1,179)
  Proceeds from sales of real estate                            226      193
  Purchase of Federal Home Loan Bank stock            (5)      (278)
  Sale of Federal Home Loan Bank stock                                   187
  Adjustment to conform pooled companies'
    fiscal year-ends                                                     322
                                                --------    -------  -------
     NET CASH USED BY INVESTING ACTIVITIES       (59,609)  (15,964)  (65,539)


FINANCING ACTIVITIES:
  Net increase in deposits                         8,294    25,562     1,823
  Net increase (decrease) in short-
   term borrowings                                17,622   (38,000)   39,900
  Proceeds from long term borrowings              51,150    41,000
  Repayment of long term borrowings              (13,000)  (23,000)     (223)
  Proceeds from securities sold under
   agreement to repurchase                         1,500
  Maturity of securities sold under
   agreement to repurchase                        (1,000)   (1,900)
  Cash dividends                                  (2,667)   (2,534)   (2,223)
  Purchase of treasury stock                      (3,698)
  Retirement of common stock                         (66)
  Proceeds from exercise of stock options            650       442       292
  Net decrease in advance payments
    by borrowers for taxes and insurance          (1,103)     (199)     (180)
                                                --------    -------  -------
    NET CASH PROVIDED BY FINANCING ACTIVITIES     57,682      1,371   39,389
                                                --------    -------  -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   2,289     (1,370) (10,824)
Cash and cash equivalents at beginning of year     1,274      2,644   13,468
                                                --------    -------  -------
    CASH AND CASH EQUIVALENTS AT END OF YEAR    $  3,563    $ 1,274  $ 2,644
                                                ========    =======  =======
</TABLE>
SUPPLEMENTAL INFORMATION TO THE STATEMENTS OF CASH FLOWS:

Interest credited and paid on deposits           $20,169    $19,151  $16,661

Interest paid on borrowings                        2,539      2,375      789

Payments for federal and state income taxes        2,193      2,826    3,391

Loans transferred to foreclosed properties
    and repossessed assets                           411        449      478

Loans held for sale transferred to loans receivable                    4,391

Securities transferred to available-for-sale                           5,002

Loans held for investment transferred to held for sale       11,152


               See notes to consolidated financial statements.



<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS:  First Northern Capital Corp. ("Company") is a Wisconsin corporation
incorporated in August 1995 for the purpose of becoming a unitary savings and
loan holding company for First Northern Savings Bank, S.A. ("Savings Bank").
The Company and subsidiaries provides a full range of financial services to
individual customers through their branch locations in Northeastern Wisconsin.
The Company is subject to competition from other traditional and nontraditional
financial institutions and is also subject to the regulations of certain
federal and state agencies and undergoes periodic examinations by those
regulatory authorities.

BASIS OF FINANCIAL STATEMENT PRESENTATION: The consolidated financial
statements include the accounts and operations of the Company since it became
operational (December 20, 1995) and the accounts and operations of the
Savings Bank and its wholly owned subsidiaries for the entire periods
presented.  Significant intercompany accounts and transactions have been
eliminated. Investment in its fifty percent owned subsidiary, which is not
material, is accounted for on the equity method.  On December 20, 1995,
stockholders of the Savings Bank exchanged shares of the Savings Bank for those
of the newly formed Company.  In preparing the consolidated financial
statements in accordance with generally accepted accounting principles,
management is required to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and accompanying
notes.  Actual results could differ from those estimates.  Material estimates
that are particularly susceptible to change in the near-term relate to the
determination of the allowance for losses on loans and the valuation of
investments and real estate acquired in connection with foreclosures or in
satisfaction of loans.  In connection with the determination of the allowance
for losses on loans and real estate owned, management obtains independent
appraisals for significant properties.

CASH AND CASH EQUIVALENTS:  The Company considers its interest-earning deposits
which have a maturity of three months or less when purchased, to be cash
equivalents.

INVESTMENT AND MORTGAGE-RELATED SECURITIES HELD-TO-MATURITY AND
AVAILABLE-FOR-SALE:  Securities are classified as held-to-maturity and carried
at amortized cost if management has the intent and ability to hold the
securities to maturity.  Securities not classified as held-to-maturity are
designated as available-for-sale and carried at fair value, with unrealized
gains and losses net of income taxes, reflected in stockholders' equity.

Interest and dividends are included in interest income from the related
securities as earned.  Realized gains and losses are computed on a specific
identification basis and declines in value judged to be other than temporary,
are included in gains (losses) on sale of securities.

LOANS HELD FOR SALE:  Loans held for sale generally consist of current
production of certain fixed interest rate first mortgage loans and education
loans which are recorded at the lower of aggregate cost or market value.  Fees
received from the borrower are deferred and recorded as an adjustment of the
sales price (Also see "Accounting Changes").

INTEREST ON LOANS:  Interest income on loans is accrued and credited to
operations based on the principal amount outstanding.  The accrual of interest
income is generally discontinued when a loan becomes 90 days past due as to
principal or interest and/or when, in the opinion of management, full
collection is unlikely.  Management may elect to continue the accrual of
interest when the loan is in the process of collection and the value of
collateral is sufficient to cover the principal balance and accrued interest.
Interest received on nonaccrual loans generally is either applied against
principal or reported as interest income, according to management's judgement
as to the collectibility of principal.  Generally, loans are restored to
accrual status when the obligation is brought current, has performed in
accordance with the contractual terms for a reasonable period of time and the
ultimate collectibility of the total contractual principal and interest is no
longer in doubt.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED


LOAN ORIGINATION FEES AND COSTS:  Loan origination and commitment fees and
certain direct loan origination costs relative to loans not held for sale are
being deferred.  The net amounts on loans held for investment are amortized as
an adjustment of the related loan's yield.  The Company is amortizing these
amounts using the level-yield method, adjusted for prepayments, over the
contractual life of the related loans.

FORECLOSED PROPERTIES AND REPOSSESSED ASSETS:  Foreclosed properties (which
were acquired by foreclosure, by deed in lieu of foreclosure or in-substance
foreclosure) and repossessed assets are carried at the lower of cost or fair
market value.  Costs relating to the development and improvement of the
property are capitalized; holding period costs are charged to expense.

ALLOWANCES FOR LOSSES ON LOANS, REAL ESTATE AND REPOSSESSED ASSETS:
Allowances for losses on loans, real estate and repossessed assets are
established when a loss is probable and can be reasonably estimated.
These allowances are provided based on past experience and on prevailing
market conditions.  Management's evaluation of loss considers various factors
including, but not limited to, general economic conditions, loan portfolio
composition, prior loss experience, estimated sales price, and holding and
selling costs.

The Savings Bank considers loans secured by one- to-four residential properties
and all consumer loans as homogeneous loans and therefore exempt for purposes
of measuring impairment as defined by Statement of Financial Accounting
Standards ("SFAS" or "Statement")  No. 114, "Accounting by Creditors for
Impairment of a Loan," which requires that impaired loans be measured at the
present value of expected future cash flows discounted at the loan's
effective interest rate or, as a practical expedient, at the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent.  Per this definition, the Savings Bank had no impaired loans in
1996 or 1995.

OFFICE PROPERTIES AND EQUIPMENT:   Office properties and equipment are recorded
at cost.  When properties are retired or otherwise disposed of, the related
cost and accumulated depreciation are removed from the respective accounts and
the resulting gain or loss is recorded in income or expense, respectively.

Provisions for depreciation of office properties and equipment are computed
principally using the straight-line method.  The cost of leasehold improvements
is amortized using the straight-line method over the lesser of the term of the
respective lease or estimated economic life of the improvements.

FEDERAL HOME LOAN BANK STOCK:  Members of the Federal Home Loan Bank ("FHLB")
system are required to maintain a specified investment in FHLB stock.  Even
though the investment in FHLB stock represents a form of equity interest,
because of restricted ownership and the lack of marketability, the stock is
carried at cost which equals redemption value.

EARNINGS PER SHARE:  Earnings per share are based on the weighted average
number shares of common stock and common stock equivalents, if dilutive,
outstanding during each year.  The resulting number of shares used in
computing primary earnings per share is 4,565,222, 4,636,478 and 4,599,462 for
the years ended December 31, 1996, 1995, and 1994, respectively.  The number of
shares used in computing fully diluted earnings per share is 4,598,965,
4,672,766 and 4,611,043 for the years ended December 31, 1996, 1995 and 1994,
respectively.  All earnings per share amounts, dividends per share amounts and
the average number of shares outstanding for 1994 have been restated throughout
the financial statements to reflect the Prime Federal Bank, FSB ("Prime
Federal") acquisition.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED


ACCOUNTING CHANGES: The Company adopted Statement No. 122, "Accounting for
Mortgage Servicing Rights," as of January 1, 1996. Statement No. 122 requires
that an allocation of costs be made between loans and their related servicing
rights for loans originated with a definitive plan to sell or securitize these
loans and retain the servicing rights.  The Company recognizes a separate asset
for servicing rights which effectively increases the gain on sale of loans
when the servicing rights are retained. This asset amount is amortized over the
period of and in proportion to the expected loan servicing fee revenue as a
reduction of "Fees on Serviced Loans."  The unamortized balance of the asset
is carried at the lower of cost or fair value.  In previous periods, costs were
fully allocated to the loan and servicing income was recognized as received
over the life of the loan.  The adoption of Statement No. 122 had the effect
of increasing income in the amount of $101,463 ($60,875 after tax or $0.01
per share) for the year ended December 31, 1996.

Pending Accounting Change: In June 1996, the Financial Accounting Standards
Board ("FASB") issued Statement No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," which
provides new accounting and reporting standards for sales, securitization, and
servicing of receivables and other financial assets and extinguishments of
liabilities. The provisions of the Statement are to be applied to transactions
occurring after December 31, 1996.  Management does not believe the Company
will be significantly impacted by the adoption of Statement No. 125 or the
amendment of Statement No. 125 by Statement No. 127.

RECLASSIFICATIONS: Certain amounts in the 1995 and 1994 financial statements
have been reclassified to confirm to the 1996 presentations.


NOTE B--SECURITIES AVAILABLE-FOR-SALE

The amortized cost and estimated fair value of securities available-for-sale
are as follows:

                                 AMORTIZED    GROSS UNREALIZED    ESTIMATED
                                   COST      GAINS    LOSSES      FAIR VALUE
                                 ---------  -------  ---------   -----------
                                                 (IN THOUSANDS)
          At December 31, 1996:
            U.S. Treasury Notes     $4,495    $  22    $ (15)      $4,502
            Asset Management Funds     476                (5)         471
            FHLMC stock                 33      629                   662
                                    ------    -----   ------       ------
                                     5,004      651      (20)       5,635
       Mortgage-related securities   1,828        9                 1,837
                                    ------    -----   ------       ------
                                    $6,832     $660    $ (20)      $7,472
                                    ======    =====    =====       ======
          At December 31, 1995:
            U.S. Treasury Notes     $2,002    $  20    $  -        $2,022
            Asset Management Funds     449        6                   455
            FHLMC stock                 33      468                   501
                                    ------    -----    ------      ------
                                     2,484      494                 2,978
        Mortgage-related securities  1,987       26                 2,013
                                    ------    -----    ------      ------
                                    $4,471     $520    $  -        $4,991
                                    ======     ====    =====       ======

Proceeds from sale of securities available-for-sale in 1996, 1995 and 1994 were
$0, $347,000 and $332,000, respectively.  Gross gains of $0,  $318,000 and
$299,000, respectively, were realized on those sales.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE B--SECURITIES AVAILABLE-FOR-SALE--CONTINUED

At December 31, 1996, U.S. Government and agency securities available-for-sale
have maturities of less than five years.


NOTE C--SECURITIES HELD-TO-MATURITY

The amortized cost and estimated fair values of investment securities held-to-
maturity are as follows:


                                 Amortized Gross Unrealized   Estimated
                                   Cost    Gains      Losses  Fair Value
                                 --------- -----      -----   --------
                                              (In Thousands)
At December 31, 1996:
 US Government and agency
   securities                     $16,583    $86       $(36)   $16,633
                                  =======    ===       ====    =======
At December 31, 1995:
 US Government and agency
   securities                     $19,364   $190       $(23)   $19,531
                                  =======   ====       ====    =======

At December 31, 1996, securities held-to-maturity have the following
maturities:

                                                     Amortized    Estimated
                                                       Cost      Fair Value
                                                     ----------  ------------
                                                           (IN THOUSANDS)
Due in one year or less                                 $ 4,800    $  3,805
Due after one year through five years                    11,783      12,828
                                                        -------     -------
                                                        $16,583     $16,633
                                                        =======     =======

The amortized cost and estimated fair values of mortgage-related securities
held-to-maturity are as follows:

                               AMORTIZED  GROSS UNREALIZED      ESTIMATED
                                 COST      GAINS   LOSSES       FAIR VALUE
                               ---------  -------  ------      -------------
                                               (IN THOUSANDS)
At December 31, 1996:
 Federal Home Loan
  Mortgage Corporation           $4,715     $46   $ (89)            $4,672
 Federal National
  Mortgage Association            3,730      17     (56)             3,691
 Other                              880       4                        884
                                 ------   -----   -----             ------
                                 $9,325     $67   $(145)            $9,247
                                 ======     ===   =====             ======
At December 31, 1995:
 Federal Home Loan
  Mortgage Corporation           $3,019     $54    $(25)            $3,048
 Federal National
  Mortgage Association              998             (33)               965
 Other                                7                                  7
                                 ------    ----    ----             ------
                                 $4,024     $54    $(58)            $4,020
                                 ======    ====   =====             ======

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE D--LOANS RECEIVABLE

Loans receivable consist of the following:
                                                  DECEMBER 31
                                              -------------------
                                                 1996     1995
                                              --------- ---------
                                                 (IN THOUSANDS)
First mortgage loans:
   One to four-family residential              $376,189 $352,449
   Five or more family residential               20,154   17,591
   Commercial real estate                         9,975   10,028
   Construction, primarily one
     family residential                          18,007   12,007
   Other                                          1,900    1,788
                                                ------- --------
                                                426,225  393,863
Consumer loans:
   Consumer                                      18,179   20,307
   Second mortgage                               59,148   46,528
   Automobile                                    60,339   49,504
                                                ------- --------
                                                137,666  116,339
                                                ------- --------
                                                563,891  510,202
Less:
   Undisbursed loan proceeds                      5,942    6,071
   Allowance for losses on loans                  2,937    2,608
   Unearned loan fees                             1,017      988
                                               -------- --------
                                                  9,896    9,667
                                               -------- --------
                                               $553,995 $500,535
                                               ======== ========

The majority of the Company's lending activity is with borrowers within its
primary market area of Northeastern Wisconsin.

Loans serviced for investors were $120,999,358, $123,901,000 and $120,999,000
at December 31, 1996, 1995 and 1994, respectively.

These loans are not reflected in the consolidated financial statements.

Transactions in the allowance for losses on loans are as follows:

                                            Year Ended December 31
                                     -------------------------------
                                      1996        1995         1994
                                     ------      ------       ------
                                              (In Thousands)
Balance at beginning of year          $2,608      $2,400       $2,306
Provisions                               370         240          145
Charge-offs                              (66)        (71)        (147)
Recoveries                                25          39           45
Adjustment to conform pooled
   companies' fiscal year ends                                     51
                                      ------     -------       ------
    BALANCE AT END OF YEAR            $2,937      $2,608       $2,400
                                      ======      ======       ======
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE E--OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment are summarized as follows:
                                           DECEMBER 31
                                        -----------------
                                         1996      1995
                                        -------  --------
                                          (IN THOUSANDS)
Land                                    $ 2,117   $ 2,090
Office buildings                          7,177     7,088
Furniture and equipment                   2,822     2,609
Leasehold improvements                       74        74
                                        -------   -------
                                         12,190    11,861
Less allowance for depreciation
  and amortization                        3,840     3,444
                                        -------   -------
                                        $ 8,350   $ 8,417
                                        =======   =======

NOTE F--DEPOSITS

Deposits are summarized as follows:
                                                 DECEMBER 31
                                            -------------------
                                               1996      1995
                                            ---------  --------
                                                (IN THOUSANDS)
Passbook                                    $  57,354  $ 56,969

Negotiable Order
 of Withdrawal accounts:
   Non-interest bearing                        18,010    16,483
   Interest bearing                            36,224    36,908

Variable rate insured money
   market accounts                             50,017    44,886

Certificate accounts:
   2.00% to 3.99%                               1,801        62
   4.00% to 4.99%                              40,720    51,250
   5.00% to 5.99%                             191,536   125,955
    6.00% to 7.99%                             60,283   115,111
    8.00% to 9.99%                                 24        51
                                             --------  --------
                                              294,364   292,429
                                             --------  --------
                                              455,969   447,675
Accrued interest                                2,354     2,279
                                             --------  --------
                                             $458,323  $449,954
                                             ========  ========

Weighted average interest rate                   4.42%     4.56%
                                                 ====      ====

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE F--DEPOSITS--CONTINUED

Aggregate annual maturities of certificate accounts at December 31, 1996 are
as follows (in thousands):

Maturities during the twelve months ending
    December 31:
           1997                   $193,095
           1998                     67,528
           1999                     27,666
           2000                      2,754
           2001                      3,321
                                  --------
                                  $294,364
                                  ========

Deposit accounts with balances greater than $100,000 were $37,751,000 and
$31,456,000 at December 31, 1996 and 1995, respectively.

NOTE G--BORROWINGS

Borrowings consist of the following:
                                          INTEREST RATE
NOTES                                   AT DECEMBER 31  DECEMBER 31
PAYABLE      MATURITY                   -------------- --------------
 TO            DATE                      1996    1995   1996    1995
------    ------------------            ------  ------ ------  ------
                                                        (IN THOUSANDS)

FHLB      On Deman                                     $17,622
FHLB      April 1, 1996                          6.72%         $ 2,000
FHLB      April 30, 1996                         5.99%           1,000
FHLB      November 20, 1996                      5.65%           5,000
Reverse
repurchase
agreement December 27, 1996               5.65%                  1,000
FHLB      February 16, 1997               5.08%         12,500
FHLB      March 18, 1997                  5.51%          3,000
FHLB      May 20, 1997                    5.71%          2,000
FHLB      May 24, 1997                           6.38%           2,000
Reverse
repurchase
agreement June 20, 1997                   5.50%          1,000
FHLB      July 29, 1997                   5.40%          5,000
FHLB      August 7, 1997                  5.72%          1,900
FHLB      September 15, 1997              6.04%  6.04%   2,000   2,000
Reverse
repurchase
agreement November 1, 1997  5.75%          500
FHLB      November 2, 1997                5.85%  5.85%   3,000   3,000
FHLB      May 27, 1998                    5.74%          5,000
FHLB      June 21, 1998                   6.12%  6.12%   5,000   5,000
FHLB      September 13, 1998              6.18%          3,000
FHLB      October 2, 1998                 6.08%          5,000
FHLB      March 28, 1999                  6.12%          2,000
FHLB      October 16, 1999                6.15%          2,000
FHLB      April 29, 2000                  6.19%          2,700
FHLB      November 12, 2001               6.18%          4,050
                                                       ------- -------
                                                       $77,272 $21,000
                                                       ======= =======
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE G--BORROWINGS--CONTINUED

The Company is required to maintain unencumbered mortgage loans in its
portfolio aggregating at least 167% of the amount of outstanding advances from
the FHLB as collateral.  In addition, these advances are collateralized by FHLB
stock.

The Company enters into sales of securities under agreements to repurchase
(reverse purchase agreements).  Fixed-coupon reverse purchase agreements are
treated as financings and the obligations to repurchase securities sold are
reflected as a borrowing in the statements of financial condition.  The dollar
amount of securities underlying the agreements remains in the asset accounts.
Reverse repurchase agreements entered into with local municipalities did not
require delivery of securities.  At December 31, 1996 and 1995, these
agreements had a weighted average interest rate of 5.59% and 5.65%,
respectively, and mature within one year.  At December 31, 1996 and 1995,
securities sold under agreements to repurchase involve U.S. government or
agency securities with a book value, including accrued interest of $1,510,190
and $1,008,000 and a market value of $1,497,657 and $1,004,000, respectively.
Based on the month-end balances, securities sold under agreements to repurchase
averaged $1,125,000,  $2,500,000 and $1,158,000 during the years ended
December 31, 1996, 1995 and 1994, respectively.  The maximum amount outstanding
at any month end during the years ended December 31, 1996, 1995 and 1994 was
$1,500,000, $2,900,000 and $2,900,000, respectively.


NOTE H--INCOME TAXES

The Savings Bank qualifies under provisions of the Internal Revenue Code that
previously permitted it to deduct from taxable income an allowance for bad
debts that differs from the provision for such losses charged to income for
financial reporting purposes.  Such amounts accumulated prior to 1988 are
considered permanently deferred and accordingly, no provision for federal
income taxes has been made for approximately $15,883,000 of retained income as
of December 31, 1996.  If the Company no longer qualifies as a bank for tax
purposes, income taxes of approximately $6,226,000 would be imposed.

The income tax provision, for the years ended December 31, consists of the
following:

                                              1996       1995      1994
                                            -------    -------   --------
                                                    (In Thousands)
Current:
          Federal                            $1,616     $2,163     $2,501
          State                                 324        454        613
                                             ------     ------     ------
                                              1,940      2,617      3,114
Deferred:
          Federal                              (132)        88         62
          State                                 (41)        13         16
                                             ------     ------     ------
                                               (173)       101         78
                                             ------     ------     ------
                                             $1,767     $2,718     $3,192
                                             ======     ======     ======
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE H--INCOME TAXES--CONTINUED

The provision for income taxes, for the years ended December 31, differs from
that computed at the federal statutory corporate tax rate as follows:


                                       1996      1995      1994
                                      ------    ------    ------
                                            (In Thousands)

Income before income taxes
 and cumulative effect of
 a change in accounting principle     $5,050     $7,308    $7,390
                                      ======     ======    ======
Income tax expense at federal
  statutory rate of 34%               $1,717     $2,485     $2,513
Increase (decrease) resulting from:
  Nondeductible merger costs                                   157
  Nondeductible reorganization costs                 26
  State income taxes, net of federal
    income tax benefits                  187        310        403
  Other                                 (137)      (103)       119
                                      ------     ------     ------
                                      $1,767     $2,718     $3,192
                                      ======     ======     ======


The components of the Savings Bank's deferred tax assets and liabilities as of
December 31 are as follows:

                                              1996       1995
                                            --------   --------
                                               (IN THOUSANDS)
 Deferred tax assets:
         Deferred compensation               $  619     $  557
         Deferred loan fees                     197        199
         Loss reserves                          460        332
         Excess servicing gains                  62         75
         Tax net operating loss carryforwards     5
         Other                                   10          5
                                             ------     ------
           Total deferred tax assets          1,353      1,168

Deferred tax liabilities:
         FHLB stock dividends                   160        141
         Depreciation                           231        257
         Unrealized securities gains            251        204
         Other                                   28          9
                                             ------     ------
           Total deferred tax liabilities       670        611
                                             ------     ------
                                             $  683     $  557
                                             ======     ======

There is no valuation allowance recognized for financial statement purposes
at December 31, 1996 or 1995.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE I--STOCKHOLDERS' EQUITY

The Board of Directors of the Company is authorized to issue cumulative
preferred stock in series and to establish the relative rights and preferences
of each series with respect to rates, redemption rights and prices, conversion
terms, voluntary liquidation rights and voting powers.  Cumulative preferred
stock will rank prior to common stock as to dividend rights and liquidation
preferences.  Under Wisconsin State law, preferred stockholders are entitled
to vote as a separate class or series in certain circumstances, including any
amendment which would adversely change the specific terms of such series of
stock or which would create or enlarge any class or series ranking prior
thereto in rights and preferences (excluding substituting the surviving
entity in a merger or consolidation of the Company).

The Savings Bank is subject to various regulatory capital requirements
administered by federal and state banking agencies.  Failure to meet minimum
capital requirements can initiate certain mandatory--and possibly additional
discretionary-- actions by regulators that, if undertaken, could have a direct
material effect on the Savings Bank's financial statements.  Under federal
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Savings Bank must meet specific capital guidelines that involve
quantitative measures of the Savings Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Savings Bank's capital amounts and classification are also subject to
qualitative judgements by the regulators about components, risk weightings,
and other factors.

As of December 31, 1996, the most recent notification from the Office of Thrift
Supervision ("OTS") categorized the Savings Bank as well capitalized under the
regulatory framework for prompt corrective action.  To be categorized as well
capitalized the Savings Bank must maintain minimum tangible, core and risk
based ratios as set forth in the table.  As a state-chartered savings
institution, the Savings Bank is also subject to a minimum capital requirement
of the State of Wisconsin.  Management believes, as of December 31, 1996, that
the Savings Bank meets all capital adequacy requirements to which it is
subject.  There are no conditions or events since that notification that
management believes have changed the Savings Bank's category.

The Savings Bank's required and actual capital amounts and ratios are presented
in the following table.

                                               REQUIRED     EXCESS ACTUAL
                                              REGULATORY    CAPITAL OVER
                                  ACTUAL        CAPITAL    REGULATORY CAPITAL
                               ------------  -------------  -------------
                               AMOUNT RATIO  AMOUNT  RATIO  AMOUNT  RATIO
                               ------ -----  ------- -----  ------- -----
                                            (DOLLARS IN THOUSANDS)
As of December 31, 1996:
  Tangible Capital            $64,489  10.5% $ 9,204   1.5% $55,285   9.0%
    (to Tangible Assets)
  Core Capital                 64,489  10.5%  18,409   3.0%  46,080   7.5%
    (to Tangible Assets)
  Risk-Based Capital           67,426  17.8%  30,295   8.0%  37,131   9.8%
    (to Risk-Weighted Assets)
  State of Wisconsin Capital   68,754  11.2%  36,915   6.0% 31,839    5.2%
    (to Total Assets)

As of December 31, 1995:
  Tangible Capital             71,317  12.9%   8,282   1.5%  63,035  11.4%
    (to Tangible Assets)
  Core Capital                 71,317  12.9%  16,564   3.0%  54,753   9.9%
    (to Tangible Assets)
  Risk-Based Capital           73,925  21.9%  27,005   8.0%  46,920  13.9%
    (to Risk-Weighted Assets)
  State of Wisconsin Capital   75,187  13.6%  33,208   5.8%  43,363   7.8%
    (to Total Assets)

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE I--STOCKHOLDERS' EQUITY--CONTINUED

Applicable rules and regulations of the OTS impose limitations on dividends by
the Savings Bank.  Within those limitations, certain "safe harbor" dividends
are permitted, subject to providing the OTS at least 30 days advance notice.
The safe harbor amounts are based upon an institution's regulatory capital
level.  Thrift institutions which have capital in excess of all capital
requirements before and after the proposed dividend are permitted to make
capital distributions during any calendar year up to the greater of (1) 100%
of net income to date during the calendar year, plus one-half of the surplus
over such institution's capital requirements at the beginning of the calendar
year, or (2) 75% of net income over the most recent four-quarter period.
Additional restrictions would apply to an institution which does not meet its
capital requirement before or after a proposed dividend.

Unlike the Savings Bank, the Company is not subject to these regulatory capital
requirements or restrictions on the payment of dividends to its stockholders.
However, the source of its future dividends may depend upon dividends from the
Savings Bank.

On March 20,1996, the Company began its first stock repurchase program for its
common stock to be used for the exercise of stock options.  During 1996, the
Company purchased 228,467 shares at an average price of $15.82 under this
program.  A second repurchase program began on October 18, 1996 for up to
219,057 shares to be used for general corporate purposes, including the
exercise of stock options under the stock option plans.

NOTE J--EMPLOYEE BENEFIT PLANS

The Savings Bank has a participatory defined contribution 401(k) plan.  The
plan covers all employees with at least one year of service and who have
attained age twenty-one.  The Savings Bank will annually contribute three
percent of an employee's cash compensation and may fund an additional
discretionary dollar amount to the plan.  Employees may annually contribute up
to 4% of their compensation and the Savings Bank will contribute 50% of the
amount of each employee's contribution up to 4%.  In addition, each employee
may contribute amounts in excess of the 4% limit, up to the lesser of 15% of
compensation or federal tax limits, with no Savings Bank participation.

The Savings Bank has an unfunded deferred retirement plan for directors.  All
members of the Savings Bank's Board of Directors are eligible under the plan.
Directors of a predecessor institution and who are members of an advisory board
are eligible at the discretion of the Savings Bank.  Currently, there are four
advisory board members in the plan.  The Savings Bank, also has supplemental
retirement plans for several of its executives.  Total expense relating to
these plans for 1996, 1995 and 1994 was $265,000, $256,000 and $349,000,
respectively.  The Savings Bank does not, as a policy, offer post retirement
benefits other than the plans discussed above.

The Company has elected to continue following Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" and related
interpretations in accounting for its employee and directors' stock options
because, as discussed below, the alternative fair value accounting provided
for under FASB Statement No. 123, "Accounting for Stock-Based Compensation"
requires the use of option valuation models that were not developed for use
in valuing the Company's employee and directors' stock options.  Under APB
No. 25, because the exercise price of the Company's employee and directors'
stock options equals the market price of the underlying stock on the date of
grant, no compensation expense is recognized.

The Company has a "1984 Stock Option Plan," "1989 Executive Stock Option Plan,"
"1989 Directors' Stock Option Plan," a "1989 Stock Option and Incentive Plan,"
a "1992 Advisory Directors' Stock Option Plan," a "1994 Directors' Stock Option
Plan" and a "1994 Executive Stock Plan."  The 1984 Stock Option Plan had
240,000 shares of common stock reserved for the grant of incentive stock
options or non-qualified stock options to key officers and non-qualified stock
options to directors.  The plan provided that incentive stock option prices
will not be less than the fair market value of the stock at the grant date and
non-incentive stock option prices will not be less than 95% nor more than 99%
of the fair value of the stock at the grant date.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE J--EMPLOYEE BENEFIT PLANS--CONTINUED

The 1989 Executive Stock Option Plan had 170,000 shares of common stock
reserved for executive officers and the 1989 Directors' Stock Option Plan had
70,000 shares of common stock reserved for directors.  The executive officers
were granted incentive stock options.  Since February 1, 1990, directors have
been receiving 1,800 non-qualified stock options annually on the first business
day of February.  The option price for the directors' non-qualified stock
options will be equal to the fair value on the date of the grant.  Upon a
director's retirement, the options become fully vested. All options vest at a
maximum of 33 1/3% for each year of completed continuous service from the
grant date and expire no later than ten years from the grant date.

The 1989 Stock Option and Incentive Plan was acquired with the merger of Prime
Federal and has 23,140 stock options outstanding at December 31, 1996.  All
options are vested and will expire no later than ten years from date of grant.

The 1992 Advisory Directors' Stock Option Plan had 24,000 shares of common
stock reserved for the grant of non-qualified stock options to certain
advisory directors.  The option price for the 1992 Advisory Directors non-
qualified stock options will be equal to the fair market value on the date of
the grant.  All options vest at the end of one year and expire no later than
ten years from the grant date.  All options in the 1992 Advisory Directors'
Stock Option Plan were granted in 1992.

The 1994 Directors' Stock Option Plan has 70,000 shares of common stock
reserved for directors.  Directors will receive 1,800 non-qualified stock
options on the first business day of February of each year.  The option price
for the directors' non-qualified stock options will be equal to the fair market
value on the date of the grant.  All options vest at a maximum of 33 1/3% for
each year.  Upon a director's retirement, the options become fully vested.
Options expire no later than ten years from the grant date.

The 1994 Executive Stock Plan has 380,000 shares of common stock reserved for
the grant of incentive stock options, non-qualified stock options, stock
appreciation rights ("SARs") or restrictive stock to key executives.  The plan
provides that incentive stock option prices will not be less than the fair
value of the stock at the grant date and non-incentive stock option prices
will not be less than 90% of the fair value of the stock at the grant date.

The fair value for these options was estimated at the date of grant of using
Black-Scholes option pricing model with the following weighted-average
assumptions for both 1996 and 1995, risk-free interest rates of 6.4%; dividend
yield of 5%; volatility factors of the expected market price of the Company's
common stock of .174; and a weighted-average expected life of the options of
7 years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable.  In addition, option valuation models require the input
of highly subjective assumptions including the expected stock price volatility.
Because the Company's employee and directors' stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its
employee and directors' stock options.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE J--EMPLOYEE BENEFIT PLANS--CONTINUED
For the purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period.  The
Company's pro forma information follows:

                                           DECEMBER 31
                                   --------------------------
                                      1996             1995
                                   ---------        ---------
                            (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Net income                           $3,283            $4,590
                                     ======            ======
Pro forma net income                 $3,220            $4,560
                                     ======            ======
Pro forma earnings per share          $0.71             $0.98
                                      =====             =====

A summary of stock option transactions for each of the three years ended
December 31, 1996 is as follows:

                                       Number        Weighted Average
                                     of Shares        Exercise Price
                                     ----------     ------------------
Balance at January 1, 1994             353,661               $  7.67
         Granted                        36,200                 14.94
         Exercised                     (41,298)                 4.81
                                       -------                ------
Balance at December 31, 1994           348,563                  8.76
         Granted                        54,000                 12.75
         Exercised                     (60,171)                 7.34
         Expired                       (10,600)                14.54
                                       -------                ------
Balance at December 31, 1995           331,792                  9.49
         Granted                        45,800                 15.75
         Exercised                     (69,782)                 9.31
         Expired                        (4,000)                15.75
                                       -------                ------
Balance at December 31, 1996           303,810                $10.39
                                       =======                ======

At December 31, 1996, options for 220,777 shares were exercisable.

Concurrent with the merger the Company approved the termination of Prime
Federal's Employee Stock Ownership Plan ("ESOP") and the ESOP was terminated
in February of 1995.  Participants in the ESOP had the option of receiving
their benefits in a lump-sum distribution or rolling them over into the
Savings Bank's defined contribution 401(k) plan.  For ESOP Plan year ended
September 30, 1994, expenses related to the ESOP were $41,700.

NOTE K--COMMITMENTS

The Company is party to financial instruments with off-balance sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments consist of commitments to extend credit and forward
commitments to sell mortgage loans.  These instruments involve, to varying
degrees, elements of credit and interest rate risk in excess of the amount
recognized in the statements of financial condition.  The contract amounts
reflect the extent of involvement the Company has in the particular class of
financial instrument.  The Company's maximum exposure to credit loss for
commitments to extend credit is represented by the contract amount of those
instruments.  For forward commitments to sell loans, the contract amounts do
not represent exposure to credit loss.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE K--COMMITMENTS--CONTINUED

Off-balance sheet financial instruments whose contract amounts represent credit
and/or interest rate risk are as follows:


                                                       December 31
                                                  ---------------------
                                                      1996     1995
                                                    -------   -------
                                                      (In Thousands)
Commitments to extend credit:
  Fixed rate (7.375% to 7.875% at
    December 31, 1996)                              $   511    $  394
  Adjustable (6.12 % to 7.62% at
    December 31, 1996)                                 1,983     2,401

Commitments to sell loans
  (7.625% to 8.25% at December 31, 1996)                 974       571

Unused overdraft protection lines
  of credit for checking accounts                      1,476     1,438


Unused equity lines of credit                          12,869   11,979


Unused commercial real estate lines of credit             237      114


Unused credit card lines of credit                      2,636    8,852


Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and generally require payment of a
fee.  As some commitments expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.  The Company
evaluates the credit worthiness of each customer on a case-by-case basis.  The
Company generally extends credit only on a secured basis.  Collateral obtained
varies, but consists primarily of one- to four-family residences.

Commitments to extend credit on a fixed rate basis expose the Company to a
certain amount of interest rate risk if market rates of interest substantially
increase during the commitment period.

Forward commitments to sell mortgage loans represent commitments obtained by
the Company from a secondary market agency to purchase mortgages from the
Company and place them in a mortgage-related security pool with a defined
yield.  Commitments to sell loans expose the Company to interest rate risk if
market rates of interest decrease during the commitment period. Commitments to
sell loans are made to mitigate interest rate risk on the existing loan
portfolio and on commitments to extend credit.

The Company neither has any investments in nor is a party to transactions
involving derivative investments, except mortgage related securities which
represent minimal risk to the Company.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE L--FAIR VALUES OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," requires
disclosure of fair value information about financial instruments, whether or
not recognized in the statements of financial condition, for which it is
practicable to estimate that value.  In cases where quoted market prices are
not available, fair values are based on estimates using present value or
other valuation techniques.  Those techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows.  In that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases, could
not be realized in immediate settlement to the instrument.  SFAS No. 107
excludes certain financial instruments and all nonfinancial instruments from
its disclosure requirements.  Accordingly, the aggregate fair value amounts
presented do not represent the underlying value of the Company.

The Company does not routinely measure the market value of financial
instruments because such measurements represent point-in-time estimates of
value.  It is not the intent of the Company to liquidate and therefore realize
the difference between market value and carrying value and even if it were,
there is no assurance that the estimated market values could be realized.
Thus, the information presented is not particularly relevant to predicting the
Company's future earnings or cash flows.

The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:

    CASH AND CASH EQUIVALENTS:  The carrying amounts reported in the statements
    of financial condition for cash and interest-earning deposits approximate
    those assets' fair values.

    SECURITIES AVAILABLE-FOR-SALE AND HELD TO MATURITY:  Fair values for
    securities available-for-sale and held to maturity are based on quoted
    market prices, where available.  If quoted market prices are not available,
    fair values are based on quoted market prices of comparable instruments.

    LOANS HELD FOR SALE AND LOANS RECEIVABLE:  For variable-rate mortgage loans
    that reprice frequently and with no significant change in credit risk, fair
    values are based on carrying values.  The fair values for all other loans
    are estimated using discounted cash flow analyses, using interest rates
    currently being offered for loans with similar terms to borrowers of
    similar credit quality.

    ACCRUED INTEREST RECEIVABLE AND PAYABLE: The carrying amounts reported in
    the statements of financial condition approximate their fair values.

    FEDERAL HOME LOAN BANK STOCK:  Fair value for the Federal Home Loan Bank
    stock is based on its redeemable (carrying) value, as a market for this
    stock is restricted.

    MORTGAGE SERVICING RIGHTS: The estimated fair value of mortgage servicing
    rights is determined using discounted cash flow techniques.  Expected cash
    flows are adjusted for estimated future loan prepayments as provided by
    third-party market sources or as estimated by management using historical
    prepayment expense.

    DEPOSITS:  The fair values disclosed for interest- and non interest-bearing
    negotiable order of withdrawal accounts, passbook accounts and money market
    accounts and advances from borrowers for taxes and insurance are, by
    definition, equal to the amount payable on demand at the reporting date
    (i.e., their carrying amounts).  The fair values for fixed-rate
    certificates of deposit are estimated using discounted cash flow analysis
    that applies interest rates currently being offered on certificates to a
    schedule of aggregated expected monthly maturities of the outstanding
    certificates of deposit.

    BORROWINGS: The fair values disclosed for borrowings are based on a
    discounted cash flows basis using current offering rates of like term
    borrowings.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES


NOTE L--FAIR VALUES OF FINANCIAL INSTRUMENTS--CONTINUED

    OFF-BALANCE-SHEET INSTRUMENTS:  Fair values for the Company's off-balance
    sheet instruments (lending commitments and unused lines of credit) are
    based on quoted market prices or fees currently charged to enter into
    similar agreements, taking into account the remaining terms of the
    agreements and the credit standing of the related counter party.  The fair
    value of these off-balance sheet items approximates the recorded amounts of
    the related fees and is not material at December 31, 1996.

The carrying amounts and fair values of the Company's financial instruments
consist of the following at December 31:
                                       1996                  1995
                                 -----------------    ------------------
                                 CARRYING  FAIR        CARRYING  FAIR
                                  AMOUNT   VALUE        AMOUNT   VALUE
                                 -------- --------     -------  --------
                                   (IN THOUSANDS)        (IN THOUSANDS)

Cash and cash equivalents        $  3,563 $  3,563     $  1,274  $  1,274
                                 ======== ========     ========  ========
Investment and mortgage-related
   securities available-for-sale $  7,472 $  7,472     $  4,991  $  4,991
                                 ======== ========     ========  ========
Investment and mortgage-related
   securities held-to-maturity   $ 25,908 $ 25,880     $ 23,388  $ 23,551
                                 ======== ========     ========  ========
Loans receivable                 $559,464 $555,171     $506,132  $505,861
                                 ======== ========     ========  ========
Accrued interest receivable      $  3,295 $  3,295     $  3,074  $  3,074
                                 ======== ========     ========  ========
Mortgage servicing rights        $    101 $    101
                                 ======== ========
Federal Home Loan Bank stock     $  3,773 $  3,773     $  3,768  $  3,768
                                 ======== ========     ========  ========
Deposits                         $455,969 $416,775     $447,675  $447,693
                                 ======== ========     ========  ========
Accrued interest on deposits     $  2,354 $  2,354     $  2,279  $  2,279
                                 ======== ========     ========  ========
Borrowings                       $ 77,272 $ 77,109     $ 21,000  $ 19,466
                                 ======== ========     ========  ========

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE M--CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

The following condensed statements of financial condition as of December 31,
1996 and 1995 and the condensed statements of income and cash flows for the
two years ended December 31, 1996 should be read in conjunction only with the
consolidated financial statements and the notes thereto.  The statements of
income and cash flows have been presented as if the Company had been formed
as of January 1, 1995.


                      STATEMENTS OF FINANCIAL CONDITION
                        FIRST NORTHERN CAPITAL CORP.

                                              DECEMBER 31
                                          ------------------
                                            1996      1995
                                          --------   -------
                                            (IN THOUSANDS)
ASSETS
  Cash                                    $  4,337   $     1
  Equity in net assets of subsidiaries      65,817    72,579
  Other assets                                  74
                                          --------   -------
                                          $ 70,228   $72,580
                                          ========   =======

LIABILITIES
  Other liabilities                       $      4   $     1
                                          --------   -------
  Total Liabilities                              4         1

STOCKHOLDERS' EQUITY
  Common stock                               4,568     4,555
  Additional paid-in capital                14,389    14,590
  Unrealized gain on securities
    available for sale, net of taxes           385       315
  Treasury stock at cost                    (2,853)
  Retained earnings                         53,735    53,119
                                          --------   -------
    Total stockholders' equity              70,224    72,579
                                          --------   -------
                                           $70,228   $72,580
                                          ========   =======
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
FIRST NORTHERN CAPITAL CORP. AND SUBSIDIARIES

NOTE M--CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS--CONTINUED

                            STATEMENTS OF INCOME
                        FIRST NORTHERN CAPITAL CORP.
                                              YEAR ENDED DECEMBER 31
                                              ----------------------
                                                 1996       1995
                                              ---------   --------
                                                   (IN THOUSANDS)
INTEREST INCOME
  Interest-earning deposits                    $   46

NON-INTEREST INCOME
  Equity in net income of Savings Bank          3,373      $4,590

NON-INTEREST EXPENSE
  Compensation                                     13
  Postage                                           4
  Other                                           119
                                              -------     -------
  Total non-interest expense                      136
                                              -------     -------
Income before taxes                             3,283       4,590
Income taxes
                                              -------     -------

NET INCOME                                     $3,283      $4,590
                                              =======      ======


                          STATEMENTS OF CASH FLOWS
                        FIRST NORTHERN CAPITAL CORP.
                                             YEAR ENDED DECEMBER 31
                                             ----------------------
                                               1996           1995
                                             ---------      --------
                                                  (IN THOUSANDS)
OPERATING ACTIVITIES:
  Net income                                  $ 3,283     $ 4,590
  Adjustments to reconcile net
   income to cash provided
   (used) by operating activities:
   Less equity in earnings of the Bank        (3,373)     (4,590)
   Increase in other liabilities                   2           1
                                             -------      ------
                  NET CASH PROVIDED (USED)
                   BY OPERATING ACTIVITIES       (88)          1
                                             -------      ------
FINANCING ACTIVITIES:
 Cash dividends received                      10,205
 Cash dividends paid                          (2,667)
 Purchase of treasury stock                   (3,698)
 Retirement of common stock                      (66)
 Proceeds from exercise of stock options         650
                                             -------      ------
NET CASH PROVIDED BY FINANCING ACTIVITIES      4,424
                                             -------      ------
       INCREASE IN CASH AND CASH EQUIVALENTS   4,336           1
Cash and cash equivalents at
 beginning of period                                           1
                                             -------      ------
  CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,337     $     1
                                             =======     =======


SUPPLEMENTAL INFORMATION TO THE STATEMENT OF CASH FLOWS:

Investment in subsidiary swapped for shares in
 First Northern Capital Corp.                            $71,859


<PAGE>



FIRST NORTHERN CAPITAL COPR.


REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS








Board of Directors and Stockholders
First Northern Capital Corp.


We have audited the accompanying consolidated statements of financial condition
of First Northern Capital Corp. (the "Company") and subsidiaries as of
December 31, 1996 and 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the
period ended December 31, 1996.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company and
subsidiaries at December 31, 1996 and 1995, and the consolidated results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles.



/Ernst & Young LLP
ERRNST & YOUNG LLP


January 24, 1997
Milwaukee,  Wisconsin