SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-KSB

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

    For the Fiscal Year Ended June 30, 2001

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 [NO FEE REQUIRED]

    For the transition period from ______________________ to ___________________

    Commission File Number 0-25076

                               WASHINGTON BANCORP
              ----------------------------------------------------
              (Exact Name of Small Business Issuer in its Charter)

            Iowa                                           42-1446740
-------------------------------                ---------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
Incorporation or Organization)

        102 East Main Street
          Washington, Iowa                                   52353
----------------------------------------                   ----------
(Address of Principal Executive Offices)                   (Zip Code)

         Issuer's telephone number, including area code: (319) 653-7256

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

         Securities Registered under Section 12(g) of the Exchange Act:

                     Common Stock, par value $.01 per share
                     --------------------------------------
                                (Title of Class)

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has been
subject to such requirements for the past 90 days. YES X . NO ___.

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

The Issuer had $9,557,000 in revenues for the fiscal year ended June 30, 2001.

As of September 4, 2001, there were issued and outstanding 517,803 shares of the
Issuer's  Common Stock.  The aggregate  market value of the voting stock held by
non-affiliates of the Issuer, computed by reference to the last known sale price
of such stock as of August 28, 2001, was $6.9 million.  (The exclusion from such
amount of the market value of the shares owned by any person shall not be deemed
an admission by the Issuer that such person is an affiliate of the Issuer.)

                                        DOCUMENTS INCORPORATED BY REFERENCE

Part II of Form 10-KSB - Portions of the Annual Report to  Stockholders  for the
Fiscal Year Ended June 30, 200l.

Part III of Form  10-KSB - Portions of the Proxy  Statement  for the 2001 Annual
Meeting of Shareholders.

Transitional Small Business Disclosure Format YES [  ]   NO [ X ]
<PAGE>



                                     PART I

Item 1. Description of Business

General

Washington Bancorp  ("Washington," and with its subsidiaries,  the "Company") is
an Iowa  corporation  which was organized in October 1995 by Washington  Federal
Savings Bank  ("Washington  Federal")  for the purpose of becoming a savings and
loan holding company.  Washington Federal is a federally  chartered savings bank
headquartered  in Washington,  Iowa.  Originally  chartered in 1934,  Washington
Federal converted to a federal savings bank in 1994.

In March 1996,  Washington  Federal  converted to the stock form of organization
through the sale and issuance of its common stock to Washington.  Washington, on
June 24, 1997,  entered into a merger agreement to acquire Rubio Savings Bank of
Brighton,  Brighton,  Iowa ("Rubio") for an aggregate  merger  consideration  of
approximately  $4.6  million.   Rubio  is  held  as  a  separate  subsidiary  of
Washington.  In January 1998,  Washington became a bank holding company upon its
acquisition of Rubio. In December 1998,  Wellman Federal Savings, a full-service
branch of Washington  Federal,  was opened in Wellman,  Iowa. In September 2000,
Richland  Federal  Savings,  a full-service  branch of Washington  Federal,  was
opened in Richland,  Iowa.  The principal  assets of Washington  are  Washington
Federal and Rubio  (collectively,  the  "Banks").  Washington  presently  has no
separate  operations  and its  business  consists of the  business of the Banks.
Deposits  of both  institutions  are insured by the  Federal  Deposit  Insurance
Corporation (the "FDIC") to the fullest extent permitted by law and regulation.

Washington Federal attracts deposits from the general public in its local market
areas  and  uses  such  deposits  primarily  to  invest  in one- to  four-family
residential  loans  secured by owner  occupied  properties  and  non-residential
properties, as well as construction loans on such properties. Washington Federal
also  makes  commercial  loans,  consumer  loans,   automobile  loans,  and  has
occasionally been a purchaser of fixed-rate mortgage-backed securities.

Rubio  attracts  deposits  from the general  public and  businesses in its local
market area. The deposits are primarily  invested in U.S.  government  agencies,
agricultural operating loans,  commercial loans, one- to four-family residential
real estate loans, and farm real estate loans.  Rubio also makes commercial real
estate loans, automobile loans, and other consumer loans.

At June 30,  2001,  the  Company  had assets of  approximately  $119.7  million,
deposits  of   approximately   $72.9   million  and   stockholders'   equity  of
approximately $11.6 million.

The  executive  office  of the  Company  is  located  at 102 East  Main  Street,
Washington, Iowa 52353, telephone (319) 653-7256.

Forward-Looking Statements

When  used in this  Form  10-KSB  or  future  filings  by the  Company  with the
Securities  and Exchange  Commission,  in the Company's  press releases or other
public  or  shareholder  communications,  or in oral  statements  made  with the
approval of an authorized  executive officer,  the words or phrases "will likely
result," "are  expected  to," "will  continue,"  "is  anticipated,"  "estimate,"
"project,"   "believe"   or  similar   expressions   are  intended  to  identify
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995.

The Company  wishes to caution  readers not to place undue  reliance on any such
forward- looking statements, which speak only as of the date made, and to advise
readers  that  various  factors,   including   regional  and  national  economic
conditions,  changes in levels of market interest rates, credit risks of lending
activities,  and competitive and regulatory factors,  could affect the Company's
financial  performance  and could cause the Company's  actual results for future
periods to differ materially from those anticipated or projected.

The Company does not undertake,  and specifically disclaims any obligations,  to
revise any  forward-looking  statements to reflect the occurrence of anticipated
or unanticipated events or circumstances after the date of such statements.
<PAGE>

Lending Activities

General. The Company's loan portfolio  predominantly  consists of mortgage loans
secured by one- to  four-family  residences.  The Company also makes home equity
and second  mortgage  loans,  multi-family  and  commercial  real estate  loans,
construction loans, commercial business loans and consumer loans.

At June 30, 2001, the Company's net loan portfolio totaled $84.1 million.  Loans
secured by first  mortgages  on one- to  four-family  residences  totaled  $48.8
million,  or 57.6% of the Company's  total loan  portfolio at June 30, 2001. The
Company originates and retains substantially all of its mortgage loan portfolio,
but  recently  has  experienced  an  increase  in the number of  mortgage  loans
originated for sale to the secondary market.

Loan  Approval  Authority.  Loans for the purchase of real estate,  construction
loans,  first mortgage  refinances,  second  mortgages,  and commercial loans to
existing customers for more than $125,000,  secured consumer loans for more than
$35,000,  unsecured consumer loans for more than $20,000 and commercial loans to
new customers for more than $50,000 require loan committee  approval.  All other
loans  require the  approval of two loan  officers.  The Board of  Directors  is
provided a listing of all loans granted on a monthly basis for ratification.

Loans to One  Borrower.  Washington  Federal,  a savings bank, is subject to the
same  limits  as  those  applicable  to  national  banks  which,  under  current
regulations,  limit  loans-to-one  borrower to an amount equal to the greater of
$500,000  or 15% of  unimpaired  capital  and  surplus  (except  for loans fully
secured by certain readily  marketable  collateral,  in which case this limit is
increased  to 25% of  unimpaired  capital  and  surplus).  Washington  Federal's
maximum loan-to-one borrower limit was approximately $1.1 million as of June 30,
2001.  Washington  Federal's largest amount outstanding to one borrower or group
of  related  borrowers,  as of that date,  was a group of loans  secured by real
estate and commercial  operating loans in the aggregate amount of $703,000.  All
of the loans to this  borrower  have  performed in  accordance  with their terms
since their origination.

Rubio, a state bank, is subject to current  regulations which limit loans-to-one
borrower to an amount equal to 15% of the  aggregate  capital  (except for loans
fully secured by certain readily marketable collateral, in which case this limit
is increased to 25% of aggregate capital.) Rubio's maximum loan-to-one  borrower
limit was  approximately  $574,000 as of June 30, 2001.  Rubio's  largest amount
outstanding  to one borrower or group of related  borrowers was a group of loans
secured by  agricultural  real estate and  agricultural  operating  loans in the
aggregate  amount of $371,000.  All of the loans to this borrower have performed
in accordance with their terms since their origination.
<PAGE>

Loan Portfolio Composition. The following information sets forth the composition
of the Company's  loan  portfolio in dollar  amounts and in  percentages  at the
dates indicated. All of the loans in the table have fixed interest rates, except
for the  commercial  business  loans which have  adjustable  rates,  and certain
adjustable rate one- to four-family real estate loans offered beginning in March
1996.  The amount of  adjustable  rate one- to  four-family  loans totaled $10.0
million at June 30, 2001.
<TABLE>
                                                                                    At June 30,
                                          ------------------------------------------------------------------------------------------
                                                2001               2000               1999               1998             1997
                                          ------------------------------------------------------------------------------------------
                                           Amount  Percent    Amount  Percent     Amount  Percent   Amount  Percent  Amount  Percent
                                          ------------------------------------------------------------------------------------------
                                                                               (Dollars in Thousands)
<S>                                       <C>      <C>       <C>      <C>        <C>      <C>     <C>       <C>     <C>      <C>
Real Estate Loans:
-----------------
  One- to four-family ................... $48,771    57.6%   $50,766    60.0%    $49,464   67.5%  $45,303   68.4%   $40,696   77.1%
  Home equity and second mortgage .......   2,523     2.9      2,431     2.9       1,258    1.7     1,164    1.7      1,233    2.3
  Multi-family and commercial real estate  13,936    16.5     13,727    16.2       8,612   11.8     7,411   11.2      4,775    9.1
  Other .................................      --      --         --      --          --     --        --     --         99    0.2
                                          ------------------------------------------------------------------------------------------
     Total mortgages ....................  65,230    77.0     66,924    79.1      59,334   81.0    53,878   81.3     46,803   88.7
  Construction loans ....................   1,174     1.4      1,782     2.1         796    1.1       152    0.2        694    1.3
                                          ------------------------------------------------------------------------------------------
     Total real estate loans ............  66,404    78.4     68,706    81.2      60,130   82.1    54,030   81.5     47,497   90.0
                                          ------------------------------------------------------------------------------------------
Commercial business loans ...............  12,498    14.8     10,963    12.9       8,714   11.9     8,164   12.3      2,715    5.2
                                          ------------------------------------------------------------------------------------------

Consumer Loans:
  Automobile ............................   4,936     5.8      4,142     4.9       3,161    4.3     3,065    4.6      1,899    3.6
  Deposit account .......................     865     1.0        825     1.0       1,245    1.7     1,014    1.6        645    1.2
                                          ------------------------------------------------------------------------------------------
     Total consumer loans ...............   5,801     6.8      4,967     5.9       4,407    6.0     4,079    6.2      2,544    4.8
                                          ------------------------------------------------------------------------------------------

Total loans .............................  84,703   100.0%    84,636   100.0%     73,251  100.0%    66,273  100.0%   52,756  100.0%
                                          ==========================================================================================

Less:

  Allowance for loan losses .............     608               648                 472                388             226
                                          ------------------------------------------------------------------------------------------
     Total loans receivable, net ........ $84,095           $83,988             $72,779            $65,885         $52,530
                                          ==========================================================================================
</TABLE>

There are no foreign loans outstanding for any of the years presented.

Loan Maturities. The following schedule illustrates the contractual maturity and
weighted  average rates of the Company's loan portfolio at June 30, 2001.  Loans
which have  adjustable or  renegotiable  interest rates are shown as maturing in
the period  during which the contract is due. The schedule  does not reflect the
effects of possible prepayments or enforcement of due-on-sale clauses.
<TABLE>
                                       Real Estate
                        --------------------------------------------------------------------------------------------------
                             Mortgage          Construction     Commercial Business     Consumer              Total
                        --------------------------------------------------------------------------------------------------
                                  Weighted            Weighted           Weighted            Weighted             Weighted
                                   Average             Average            Average             Average              Average
                        Amount      Rate     Amount      Rate   Amount      Rate    Amount     Rate       Amount     Rate
                        --------------------------------------------------------------------------------------------------
                                                                        (In Thousands)
     Due during
    period ending
      June 30,
--------------------------------------------------------------------------------------------------------------------------
<S>                      <C>      <C>        <C>      <C>       <C>      <C>        <C>      <C>        <C>      <C>
2002.................    $13,279     8.58%   $1,174     8.59%   $ 6,549     9.43%   $1,453     10.14%   $22,455     8.93%
2003.................     13,188     8.49       ---      ---      2,314     8.78       985     10.50     16,487     8.66
2004.................     12,878     8.79       ---      ---      1,015     9.69     1,142     10.22     15,035     8.96
2005 and 2006........      8,170     8.38       ---      ---      1,996     9.46     2,196     10.30     12,362     8.89
2007 to 2011.........      2,757     8.13       ---      ---        321     9.20        19      9.25      3,097     8.25
2012 to 2016.........      5,960     8.02       ---      ---        303     9.09         6      9.24      6,269     8.07
2017 and thereafter..      8,998     8.24       ---      ---        ---      ---       ---       ---      8,998     8.24
                         -------             ------             -------             ------              -------
                         $65,230             $1,174             $12,498             $5,801              $84,703
                         =======             ======             =======             ======              =======
</TABLE>
<PAGE>

As of June 30,  2001,  the total  amount of loans due after June 30,  2002 which
have predetermined  interest rates was $52.3 million,  while the total amount of
loans due after such date which have floating or adjustable  interest  rates was
$10.0 million.

Loan Originations,  Purchases and Sales. Real estate loans are originated by the
Company's staff of salaried loan officers who receive applications from existing
customers,  walk-in  customers  from  the  local  community,   advertising,  and
referrals from realtors and contractors.

While the Company  originates  predominately  fixed-rate  loans,  its ability to
originate loans is dependent upon the relative  customer demand for loans in its
market area. Demand is affected by the interest rate environment.

The Company  originates  loans for its own  portfolio  and  originates a limited
number of loans for sale on the secondary market.  Washington Federal originated
26 one- to four-family  real estate loans for the secondary market during fiscal
2001, up from two during fiscal 2000. Washington Federal originated one 90% Farm
Service  Agency,  Guaranteed  Farm  Ownership,  and  Guaranteed  Operation  Loan
totaling  $300,000  during  fiscal  year 2001.  Rubio  originated  five 90% Farm
Service  Agency,  Guaranteed  Farm  Ownership,  and Guaranteed  Operation  Loans
totaling  $731,000  during  fiscal  year  2001.  The  loans  are  backed  by 90%
guarantees of the U.S. government.

In periods of rising  interest rates,  the Company's  ability to originate large
dollar volumes of real estate loans may be substantially  reduced or restricted,
with a resultant decrease in related fee income and operating earnings.

The following  table shows the loan  origination,  purchase,  sale and repayment
activities of the Company for the periods indicated.
<TABLE>
                                                          Year Ended June 30,
                                                   --------------------------------
                                                     2001        2000         1999
                                                   --------------------------------
                                                         (Dollars in Thousands)
<S>                                                <C>         <C>         <C>
Originations by type:
--------------------
Real estate
  One- to four-family ..........................   $ 11,404    $ 12,869    $ 22,118
   Home equity and second mortgage .............        885       1,072         992
   Multi-family and commercial real estate .....      5,888       9,070       5,860
   Construction ................................      1,877       3,914       1,623
Non real estate
   Commercial business .........................     13,855      10,906       6,827
   Consumer ....................................      5,259       4,748       4,728
                                                   --------------------------------
      Total loans originated ...................     39,168      42,579      42,148
Loans sold to secondary market .................     (2,660)       (157)       (522)
Principal (repayments) .........................    (36,441)    (31,037)    (34,648)
(Increase) decrease in allowance for loan losses         40        (175)        (84)
                                                   --------------------------------
Net increase (decrease) ........................   $    107    $ 11,210    $  6,894
                                                   ================================
</TABLE>

One- to Four-Family  Residential Mortgage Lending. The Company's primary lending
activity  consists of the  origination of residential  mortgage loans secured by
property  located in the Company's  market area of Washington  County,  Iowa and
adjoining  counties.  The  Company  will not  generally  originate  a loan which
exceeds  85% of the  lesser  of the  appraised  value  or  selling  price of the
mortgaged property.

The Company  primarily  originates  three year  balloon  mortgage  loans with an
amortization  of up to 25 years.  Interest  rates charged on mortgage  loans are
competitively priced based on market conditions and the Company's cost of funds.
The Company  generally does not charge  origination  fees for loans. The Company
originates  its loans for its own portfolio and  originates a limited  number of
loans for sale to the secondary  market.  Accordingly,  the Company's  portfolio
lending may not conform to secondary  market  guidelines,  such as Freddie Mac's
guidelines,  primarily  as they  relate  to  appraisal  requirements.  It is the
current policy of the Company to remain primarily a portfolio lender.
<PAGE>

Loan originations are generally obtained from existing customers, members of the
local  community,  advertisements,  and referrals from realtors and  contractors
within the Company's  market area.  Mortgage  loans  originated  and held by the
Company in its portfolio generally include due-on-sale clauses which provide the
Company with the contractual  right to deem the loan immediately due and payable
in the event that the borrower  transfers  ownership of the property without the
Company's consent.

The  Company  also  has  a  limited  amount  of   non-owner-occupied   permanent
residential one- to four-family mortgage loans in its portfolio. These loans are
underwritten  using  generally  the same  criteria as  owner-occupied  permanent
residential one- to four-family mortgage loans.

Home Equity and Second Mortgage Lending.  The Company originates home equity and
second  mortgage  improvement  loans.  Home  equity and second  mortgage  loans,
together with loans secured by all prior liens, are generally  limited to 90% or
less of the  appraised  value of the  property.  Generally,  such  loans  have a
maximum term of up to three years with an  amortization of up to 15 years. As of
June 30, 2001,  home equity and second  mortgage  loans amounted to $2.5 million
which represented 2.9% of the Company's total loan portfolio.

Multi-Family  and  Commercial  Real Estate Loans.  The Company has  historically
engaged in a limited amount of multi-family  and commercial real estate lending.
Generally such loans have a term of three years and an  amortization of up to 25
years,  and have  loan-to-value  ratios of up to 80%.  At June 30,  2001,  $13.9
million  or 16.5% of the  Company's  total  loan  portfolio  consisted  of loans
secured by existing  multi-family  residential  real estate and commercial  real
estate,  including  primarily farm real estate and one- to  four-family  housing
developments. All of the Company's multi-family and commercial real estate loans
are secured by properties  located in its market area. The largest  multi-family
and commercial  real estate loan as of June 30, 2001 totaled  $312,000,  and was
secured by farm land and  buildings.  The loan has performed in accordance  with
its terms since origination.

Multi-family  residential  and  commercial  real  estate  lending  is  generally
considered to involve a higher degree of risk than permanent residential one- to
four-family  lending.  Such  lending  typically  involves  large  loan  balances
concentrated in a single borrower or groups of related  borrowers.  In addition,
the  payment  experience  on loans  secured by income  producing  properties  is
typically  dependent  on the  successful  operation  of the related  real estate
project and thus may be subject to a greater extent to adverse conditions in the
real estate market or in the economy  generally.  The Company generally attempts
to mitigate the risks  associated with  multi-family  residential and commercial
real estate lending by, among other things, lending on collateral located in its
market area and generally to individuals who reside in its market.

The Company requires appraisals on all properties  securing  non-residential and
multi-family residential real estate loans. Such appraisals are completed by the
Company's  staff.  If these  loans  exceed  $250,000 a  certified  appraisal  is
completed  by a fee  appraiser  not  employed  by the  Company.  In  originating
multi-family  residential  and  non-residential  real estate loans,  the Company
considers  the quality of the property,  the credit of the  borrower,  cash flow
projections, location of real estate and the quality of management involved with
the property.

Construction   Loans.  The  Company  makes   construction   loans  primarily  to
individuals for the construction of single-family  residences. At June 30, 2001,
construction loans amounted to $1.2 million, or 1.4% of the Company's total loan
portfolio.  Construction  loan rates are fixed at prime-  based rates during the
construction  period.  The terms of these loans are generally six months with an
option to renew for an additional  six months,  at which time the loans are due.
During  the  construction  period,  only  interest  payments  are due,  and on a
case-by-case  basis,  the Company  may allow the  payment of interest  from loan
proceeds.  The Company  construction loan agreements generally provide that loan
proceeds are  disbursed in increments as  construction  progresses.  The Company
periodically  reviews  the  progress  of the  underlying  construction  project.
Construction loans are underwritten pursuant to the same general guidelines used
for originating  permanent one- to four-family  loans.  Construction  lending is
generally limited to the Company's market area.
<PAGE>

Construction  lending is  generally  considered  to  involve a higher  degree of
credit risk than long- term financing of residential  properties.  The Company's
risk of loss on a  construction  loan is dependent  largely upon the accuracy of
the initial  estimate of the property's  value at completion of construction and
the estimated cost of construction. If the estimate of construction cost and the
marketability  of the  property  upon  completion  of the  project  prove  to be
inaccurate, the Company may be compelled to advance additional funds to complete
the construction. Furthermore, if the estimate of value proves to be inaccurate,
the Company may be confronted,  at or prior to the maturity of the loan,  with a
property having a value that is  insufficient to assure full repayment.  For the
small number of  speculative  loans  originated to builders,  the ability of the
builder to sell  completed  dwelling units will depend,  among other things,  on
demand,  pricing  and  availability  of  comparable  properties,   and  economic
conditions.  As of June 30,  2001,  the Company had three  speculative  loans to
builders secured by the property being constructed totaling $555,000.

Commercial  Business  Lending.  At June 30, 2001,  $12.5 million or 14.8% of the
Company's total loans were comprised of commercial business loans. The Company's
current  commercial  business  lending  portfolio  is  predominantly  secured by
accounts receivable,  inventory,  and equipment. The Company's agricultural loan
portfolio,  totaling  $6.5  million at June 30, 2001,  is  primarily  secured by
livestock,  growing  crops,  machinery  and  equipment.  The largest  commercial
business loan totaled $335,000 at June 30, 2001.

Unlike residential  mortgage loans, which generally are made on the basis of the
borrower's ability to repay the loan from his or her employment and other income
and which are  secured by real  property,  the value of which is usually  easily
ascertainable,  commercial business loans typically are made on the basis of the
borrower's  ability  to repay  the loan  from  the cash  flow of the  borrower's
business. As a result, the availability of funds for the repayment of commercial
business  loans may be  substantially  dependent  on the success of the business
itself  (which,  in turn,  is likely to be dependent  upon the general  economic
environment).  The Company's  commercial  business loans are sometimes,  but not
always,  secured by business assets.  However, the collateral securing the loans
may  depreciate  over time,  may be difficult  to appraise and may  fluctuate in
value based on the success of the business.

Consumer  Lending.  The Company  offers a variety of consumer  loans,  including
automobile loans and loans secured by deposits. The Company currently originates
substantially  all of its consumer  loans in its market  area,  generally to its
existing  customers.  At June 30, 2001,  the Company's  consumer loan  portfolio
totaled $5.8 million or 6.8% of its total loan portfolio.

The largest  component of the  Company's  consumer  loan  portfolio  consists of
automobile  loans.  The Company  originates new and used  automobile  loans on a
direct basis,  where the Company extends credit directly to the borrower.  These
loans  generally have terms that do not exceed five years and carry a fixed rate
of interest.  Generally,  loans on new vehicles are made in amounts up to 90% of
dealer  cost and loans on used  vehicles  are made in  amounts  up to 90% of the
purchase price or the vehicle's published value,  whichever is less. At June 30,
2001,  the  Company's  automobile  loans  totaled  $4.9  million  or 5.8% of the
Company's total loan portfolio.

Consumer loan terms vary according to the type and value of  collateral,  length
of contract and  creditworthiness  of the borrower.  The underwriting  standards
employed  by  the  Company  for  consumer  loans  include  an   application,   a
determination  of  the  applicant's  payment  history  on  other  debts  and  an
assessment of the applicant's ability to meet existing  obligations and payments
on the proposed loan.  Although  creditworthiness  of the applicant is a primary
consideration,  the underwriting process also includes a comparison of the value
of the security, if any, in relation to the proposed loan amount.

Consumer  loans may entail  greater  credit  risk than do  residential  mortgage
loans,  particularly  in the case of consumer  loans which are  unsecured or are
secured  by  rapidly  depreciable  assets,  such as  automobiles.  Further,  any
repossessed collateral for a defaulted consumer loan may not provide an adequate
source of repayment of the  outstanding  loan balance as a result of the greater
likelihood  of  damage,  loss  or  depreciation.   In  addition,  consumer  loan
collections are dependent on the borrower's continuing financial stability,  and
thus  are  more  likely  to  be  affected  by  adverse  personal  circumstances.
Furthermore,  the  application  of various  federal  and state  laws,  including
bankruptcy and  insolvency  laws, may limit the amount which can be recovered on
such loans.  At June 30,  2001,  $53,000 of the  Company's  consumer  loans were
non-performing. See "-- Non-Performing Assets" and "-- Classified Assets." There
can be no  assurances,  however,  that  delinquencies  will not  increase in the
future.
<PAGE>

Asset Quality

Loan  Delinquencies.  The Company's  collection  procedures  provide that when a
mortgage loan is 15 days past due, a notice of nonpayment is sent. If payment is
still  delinquent  after 30 days,  the  customer  will  receive  letters  and/or
telephone calls from a representative of the Company. If the loan continues in a
delinquent  status for 90 days and no repayment  plan is in effect,  a notice of
right to cure default is mailed to the  customer  giving 30  additional  days to
bring the account  current before  foreclosure is commenced.  The loan committee
meets regularly to determine when  foreclosure  proceedings  should be initiated
and the customer is notified when foreclosure has been commenced.

The following  table sets forth the  Company's  loan  delinquencies  by type, by
amount and by  percentage  of category at June 30, 2001.  The amounts  presented
represent the total remaining  principal  balances of the elapsed loans,  rather
than the actual payment amounts which are overdue.

                                                  Loans  Delinquent  at June 30,
2001 for:
<TABLE>
                                                 Loans Delinquent at June 30, 2001 for:
                       ----------------------------------------------------------------------------------------------
                           30-59 Days              60-89 Days            90 Days & Over             Total
                       ----------------------   -------------------  --------------------   -------------------------
                       No.    Amt.    Percent   No.  Amt.   Percent  No.   Amt.   Percent   No.     Amt.      Percent
                       ----------------------   -------------------  --------------------   -------------------------
                                                         (Dollars in Thousands)
<S>                    <C>  <C>       <C>       <C>  <C>    <C>      <C>   <C>    <C>       <C>    <C>       <C>
Real Estate:
  Mortgage Loans...    31   $   845    61.2%    7   $  422    52.6%    6   $  165    29.0%    44   $  1,432    52.1%
Consumer...........    34       138    10.0    11       87    10.8    17       53     9.3     62        278    10.1
Commercial Business    17       398    28.8     8      293    36.5     7      350    61.6     32      1,041    37.8
                       ----------------------------------------------------------------------------------------------
Total..............    82    $1,381   100.0%   26   $  802   100.0%   30   $  568   100.0%   138   $  2,751   100.0%
                       ==============================================================================================
</TABLE>

Non-Performing  Assets.  The following  table sets forth  information  regarding
accruing loans  delinquent  more than 90 days and foreclosed  assets.  Loans are
reviewed on a monthly  basis and are generally  placed on a  non-accrual  status
when the loan  becomes  more than 90 days  delinquent  and,  in the  opinion  of
management, the collection of additional interest is doubtful.  Interest accrued
and unpaid at the time a loan is placed on non-accrual status is charged against
interest  income.  Subsequent  payments,  if  any,  are  either  applied  to the
outstanding  principal balance or recorded as interest income,  depending on the
assessment of the ultimate  collectibility of the loan. For all years presented,
in the opinion of management, the collection of additional interest on all loans
delinquent  more  than  90  days  is  not  doubtful.  Therefore,  there  are  no
nonaccruing  loans.  For all years  presented,  the Company had no troubled debt
restructurings  (which involved  forgiving a portion of interest or principal on
any loans or making loans at a rate materially less than that of market rates).

                                                             At June 30
                                                       -------------------------
                                                       2001      2000      1999
                                                       -------------------------
                                                         (Dollars in Thousands)

Accruing loans delinquent more than 90 days:
    Mortgage .....................................     $165      $164      $144
    Consumer .....................................       53        29         7
    Commercial business ..........................      350       183         4

Foreclosed assets:
    One- to four-family ..........................      146        --        39
    Nonresidential real estate ...................       --       271       132
                                                       -------------------------

Total non-performing assets ......................     $714      $647      $326
                                                       =========================

Total as a percentage of total assets ............     0.60%     0.56%     0.32%
                                                       =========================
<PAGE>

Other Loans of Concern. In addition to the non-performing loans set forth in the
table above, as of June 30, 2001,  there was $1.9 million of loans designated as
special mention for which known  information  about the possible credit problems
of the  borrowers  or the cash  flows of the  security  properties  have  caused
management to have some doubts as to the ability of the borrowers to comply with
present  loan  repayment  terms and which may result in the future  inclusion of
such items in the non-performing  asset categories.  The largest loan classified
as special mention had an outstanding  balance of $158,000 on June 30, 2001, and
was secured by land for development of one- to four-family residences.

Foreclosed  Real  Estate.  Real  estate  acquired  by the Company as a result of
foreclosure or by deed in lieu of foreclosure is classified as real estate owned
until it is sold.  When property is acquired it is recorded at the fair value at
the date of foreclosure less estimated costs of disposition.

The Company  records  loans as  in-substance  foreclosures  if the  borrower has
little or no equity in the  property  based  upon its  documented  current  fair
value,  if the Company can only  expect  repayment  of the loan to come from the
sale of the property and if the borrower has  effectively  abandoned  control of
the collateral or has continued to retain control of the collateral, but because
of the current  financial  status of the  borrower,  it is doubtful the borrower
will  be  able  to  repay  the  loan  in the  foreseeable  future.  In-substance
foreclosures  are accounted  for as real estate  acquired  through  foreclosure.
There may be other  significant  expenses  incurred  such as attorney  and other
extraordinary  servicing  costs  involved with  in-substance  foreclosures.  The
Company  had three  foreclosed  real estate  properties  at June 30,  2001.  One
property has a pending purchase  agreement and the other two are currently being
rented.

Classified Assets.  Office of Thrift Supervision ("OTS") regulations provide for
a classification  system for problem assets of insured institutions which covers
all problem assets. Under this classification  system, problem assets of insured
institutions are classified as "substandard," "doubtful," or "loss." An asset is
considered  substandard if it is inadequately protected by the current net worth
and  paying  capacity  of the  obligor  or of the  collateral  pledged,  if any.
Substandard  assets include those  characterized  by the "distinct  possibility"
that the insured  institution  will sustain "some loss" if the  deficiencies are
not corrected. Assets classified as doubtful have all of the weaknesses inherent
in  those  classified  substandard,  with  the  added  characteristic  that  the
weaknesses  presented make  "collection or liquidation in full," on the basis of
currently  existing  facts,  conditions  and values,  "highly  questionable  and
improbable."  Assets  classified as a loss are those considered  "uncollectible"
and  of  such  little  value  that  their  continuance  as  assets  without  the
establishment  of a specific  loss  reserve is  unwarranted.  Assets may also be
designated "special mention" because of potential weakness that do not currently
warrant classification in one of the aforementioned categories.

When an insured  institution  classifies problem assets as either substandard or
doubtful,  it may  establish  general  allowances  for loan  losses in an amount
deemed prudent by management. General allowances represent loss allowances which
have been  established  to recognize the inherent risk  associated  with lending
activities,  but  unlike  specific  allowances,   have  not  been  allocated  to
particular problem assets. When an insured institution classifies problem assets
as a loss,  it is required  either to establish a specific  allowance for losses
equal to 100% of that portion of the asset so  classified  or to charge off such
amount.  An institution's  determination as to the  classification of its assets
and the  amount of its  valuation  allowances  is  subject to review by the OTS,
which may  order the  establishment  of  additional  general  or  specific  loss
allowances.  A portion of general loss allowances  established to cover possible
losses  related to assets  classified as substandard or doubtful may be included
in determining an institution's  regulatory  capital,  while specific  valuation
allowances for loan losses  generally do not qualify as regulatory  capital.  At
June 30, 2001, the Company had classified $337,000 of its assets as substandard,
and $5,000 as doubtful  as  compared  to  $830,000  and $10,000 at June 30, 2000
classified as substandard and doubtful, respectively.

Allowances for Loan Losses

It is  management's  policy to provide for losses on  unidentified  loans in the
Company's loan  portfolio.  A provision for loan losses is charged to operations
based on management's evaluation of the potential losses that may be incurred in
the Company's loan portfolio.  Such  evaluation,  which includes a review of all
loans  of  which  full  collectibility  of  interest  and  principal  may not be
reasonably assured, considers the Company's past loan loss experience, known and
inherent  risks  in the  portfolio,  adverse  situations  that  may  affect  the
borrower's ability to repay, estimated value of any underlying  collateral,  and
current economic conditions. The amount of provisions recorded in future periods
may be  significantly  greater or less than the provisions taken in the past. At
June 30, 2001,  the allowance  for loan losses was  $608,000,  or 0.72% of total
loans.
<PAGE>

The Company's reserve for loan loss requirement is calculated as a percentage of
the total  loans  outstanding  and  total  delinquent  loans as of a  particular
quarter  end.  The Banks  anticipate  continuing  with the  current  schedule of
provisions to keep up with expected  increases in loans  outstanding  during the
next fiscal year.

Allocation  of Allowance  for Loan Losses.  The  following  table sets forth the
allocation of the  Company's  allowance for loan losses by loan category and the
percent  of loans  in each  category  to total  loans  receivable  at the  dates
indicated.  The  portion  of the loan  loss  allowance  allocated  to each  loan
category does not represent the total available for future losses that may occur
within the loan  category  because the total loan loss  allowance is a valuation
reserve applicable to the entire loan portfolio.
<TABLE>
                                                           At June 30,
                                ----------------------------------------------------------------
                                        2001                 2000                 1999
                                ----------------------------------------------------------------
                                         Percent of            Percent of             Percent of
                                         Loans in              Loans in               Loans in
                                           Each                  Each                   Each
                                        Category to           Category to            Category to
                                Amount  Total Loans   Amount  Total Loans   Amount   Total Loans
                                ----------------------------------------------------------------
                                                     (Dollars in Thousands)
<S>                             <C>     <C>           <C>     <C>           <C>      <C>
Mortgage Loans ..............   $350       78.4%       $403      81.2%      $205       82.1%
Commercial Business Loans ...    154       14.8         152      12.9        155       11.9
Consumer Loans ..............    104        6.8          86       5.9         74        6.0
Unallocated .................     --         --           7        --         38         --
                                ---------------------------------------------------------------
                                $608      100.0%       $648     100.0%      $472      100.0%
                                ===============================================================
</TABLE>

Analysis  of the  Allowance  for Loan  Losses.  The  following  table sets forth
information with respect to the Company's allowance for loan losses at the dates
and for the periods indicated:
<TABLE>
                                                                             Year Ended June 30,
                                                                          -------------------------

                                                                           2001     2000       1999
                                                                          -------------------------
                                                                            (Dollars in Thousands)
<S>                                                                       <C>       <C>       <C>
Balance at beginning of period ........................................   $ 648     $ 472     $ 388

Charge offs:
    Mortgage ..........................................................      --        --        --
    Consumer ..........................................................    (197)      (44)      (47)
                                                                          -------------------------
       Total charge offs ..............................................    (197)      (44)      (47)

Recoveries ............................................................      20        33        18
                                                                          -------------------------

Net charge offs .......................................................    (177)      (11)      (29)
                                                                          -------------------------
Provisions charged to operations ......................................     137       187       113
                                                                          ------------------------

Balance at end of period ..............................................   $ 608     $ 648     $ 472
                                                                          =========================

Ratio of net charge offs during the period to average loans outstanding
 during the period ....................................................    0.23%     0.01%     0.04%
                                                                          =========================

Ratio of net charge offs during the period to  average nonperforming
 assets ...............................................................    24.0%     2.16%     14.8%
                                                                          =========================
</TABLE>
<PAGE>

Investment Activities

The Company is required  under federal  regulations to maintain a minimum amount
of liquid assets which may be invested in specified  short-term  securities  and
certain other investments. See "Regulation -- Regulation of Savings Associations
and Savings  Banks" and  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of  Operations -- Liquidity and Capital  Resources" in the
Annual  Report to  Stockholders  attached  hereto as Exhibit 13. The Company has
continuously   maintained  a  liquidity   portfolio  in  excess  of   regulatory
requirements.  Liquidity levels may be increased or decreased depending upon the
yields on  investment  alternatives  and upon  management's  judgment  as to the
attractiveness  of the yields then available in relation to other  opportunities
and its expectation of future yield levels, as well as management's  projections
as to  the  short-term  demand  for  funds  to be  used  in the  Company's  loan
origination  and  other  activities.  At  June  30,  2001,  the  Company  had an
investment  portfolio of approximately  $25.0 million,  consisting  primarily of
U.S. government agency obligations and corporate securities. To a lesser extent,
the portfolio  also  includes  U.S.  Treasury  Securities,  mortgage-backed  and
related  securities,  municipal  bonds,  and FHLB stock, as permitted by federal
banking regulations.  The Company classifies its investments as held to maturity
or available for sale.

Federally chartered savings institutions have the authority to invest in various
types of liquid  assets,  including  U.S.  treasury  obligations,  securities of
various federal agencies,  certain  certificates of deposit of insured banks and
savings institutions,  certain bankers'  acceptances,  repurchase agreements and
federal funds.  Subject to various  restrictions,  federally  chartered  savings
institutions may also invest their assets in commercial paper,  investment grade
corporate  debt  securities  and  mutual  funds  whose  assets  conform  to  the
investments  that  a  federally   chartered  savings  institution  is  otherwise
authorized to make directly.

Generally,  the investment policy of the Company, as established by the Board of
Directors,  is to invest  funds among  various  categories  of  investments  and
maturities based upon the Company's liquidity needs,  asset/liability management
policies, investment quality, marketability and performance objectives.
<PAGE>

Investment  Portfolio.  The following table sets forth the carrying value of the
Company's investment securities portfolio,  short-term investments,  FHLB stock,
and  mortgage-backed  and  related  securities  at  the  dates  indicated.   For
additional information  concerning the Company's investments,  see Note 3 of the
Notes to Consolidated  Financial Statements in the Annual Report to Stockholders
attached hereto as Exhibit 13.
<TABLE>
                                                                   At June 30,
                                          ------------------------------------------------------------
                                               2001                 2000                1999
                                          ------------------------------------------------------------
                                          Book   Percent of    Book   Percent of   Book    Percent of
                                          Value     Total      Value    Total      Value     Total
                                          -----------------------------------------------------------
                                                                 (Dollars in Thousands)
<S>                                       <C>    <C>          <C>     <C>         <C>      <C>
Investment Securities:
   Available for sale (1):
       U.S. treasury securities .......   $ 1,995    7.98%    $   300    1.24%    $ 1,708     7.65%
       U.S. government agencies .......    11,276   45.13      16,056   66.60      13,623    61.05
       State and political subdivisions       460    1.84         326    1.35         439     1.97
       Mortgage-backed securities .....     2,470    9.88          --      --          --       --
       Corporations ...................     5,890   23.57       4,920   20.41       4,925    22.07
                                          ---------------------------------------------------------
             Total Available for Sale .    22,091   88.40      21,602   89.61      20,695    92.74
                                          ---------------------------------------------------------
  Held to maturity(1):
       State and political subdivisions     1,143    4.57        775     3.21        761      3.41
       Mortgage-backed securities .....        --      --         --       --         --        --
                                          ---------------------------------------------------------
             Total held to maturity ...     1,143    4.57        775     3.21        761      3.41
                                          ---------------------------------------------------------
         Total Investment Securities ..    23,234   92.97     22,377    92.82     21,456     96.15
                                          ---------------------------------------------------------
FHLB Stock ............................     1,756    7.03      1,730     7.18        860      3.85
                                          ---------------------------------------------------------
        Total Investment Securities ...
        and FHLB Stock ..............     $24,990  100.00%   $22,316   100.00%  $24,107     100.00%
                                          =========================================================
Average remaining life of investment
  securities (excluding FHLB Stock) ...   3.7 Years        4.3 years           3.9 Years
Interest-Earning Assets:
   Interest-bearing deposits with
     banks ............................   $ 2,462  100.00%   $ 1,859   100.00%  $   901     100.00%
                                          =========================================================
<FN>
(1)      Securities  classified as available for sale were carried at fair value
         at June 30,  2001,  2000 and  1999.  Securities  classified  as held to
         maturity were carried at historical cost at all respective dates.
</FN>
</TABLE>

The fair value of the available for sale  investment  portfolio at June 30, 2001
was $22.1 million  resulting in an unrealized  loss,  net of income tax, at that
date of approximately $30,000.

The category of investment  securities  entitled  "corporations" is comprised of
investments in corporate  bonds.  The corporate bonds are considered  investment
grade bonds,  but carry  additional  credit risk compared to bonds guaranteed by
the U.S.  government or agencies  thereof.  The Company evaluates the benefit of
higher  yields on these bonds versus  increased  credit risk as compared to U.S.
Treasury or agency securities. The quality of these bonds is monitored primarily
by reviewing the investment ratings assigned to the bonds by independent sources
such as Standard & Poors, etc.  Maturities and sales of U.S. treasury securities
have been  reinvested  primarily in U.S.  agency  securities to realize a higher
interest yield.
<PAGE>

Investment  Portfolio  Maturities.   The  following  table  sets  forth  certain
information   regarding  the  carrying  values,   weighted  average  yields  and
maturities of the Company's investment securities portfolio at June 30, 2001.
<TABLE>
                                                         At June 30, 2001
                                   ---------------------------------------------------------
                                        Book Value of Investment Securities Maturing In
                                   ---------------------------------------------------------
                                                                                    Total
                                   Less Than                              Over    Investment
                                    1 Year    1- 5 Years   5-10 Years   10 Years  Securities
                                   ---------------------------------------------------------
                                                    (Dollars in Thousands)
<S>                                <C>        <C>         <C>          <C>        <C>
U.S. treasury securities .......    $ 1,995    $    --     $    --     $    --      $ 1,995
U.S. government agencies .......        116     10,664         496          --       11,276
Mortgage-backed securities .....         28        131         220       2,091        2,470
State and political subdivisions        305        548         549         201        1,603
Corporations ...................        405      4,637         848          --        5,890
                                    -------------------------------------------------------
     Total .....................    $ 2,849    $15,980     $ 2,113      $ 2,292     $23,234
                                    =======================================================

Weighted average yield .........       4.06%      5.86%       6.22%       6.40%       5.73%
                                    =======================================================
</TABLE>

Sources of Funds

General.  Deposits  are the major  external  source of the  Company's  funds for
lending  and  other  investment   purposes.   The  Company  derives  funds  from
amortization and prepayment of loans and, to a much lesser extent, maturities of
investment securities,  borrowings,  mortgage-backed  securities and operations.
Scheduled  loan principal  repayments  are a relatively  stable source of funds,
while  deposit  inflows and  outflows  and loan  prepayments  are  significantly
influenced  by general  interest  rates and market  conditions.  The Company had
$32.3 million in FHLB advances outstanding at June 30, 2001.

Deposits. Consumer and commercial deposits are attracted principally from within
the Banks'  market area  through the  offering of a broad  selection  of deposit
instruments including regular savings accounts,  money market accounts, and term
certificate  accounts.  The Banks  also  offer  individual  retirement  accounts
("IRA"),  NOW  accounts,  checking  accounts and money market  deposit  accounts
("MMDA").  Deposit account terms vary according to the minimum balance required,
the time period the funds must remain on deposit,  and the interest rate,  among
other factors.

The  interest  rates  paid by the Banks on  deposits  are set  bi-weekly  at the
direction of  management.  The Banks  determine  the interest  rate to offer the
public on new and maturing  accounts by reviewing the current  Treasury rate for
the term and the market interest rates offered by competitors. The Banks review,
weekly,  the  interest  rates  being  offered by the other  principal  financial
institutions within its market area.

Savings  accounts  constituted  $5.6 million,  or 7.6% of the Company's  deposit
portfolio at June 30, 2001. Certificates of deposit constituted $47.0 million or
64.1% of the  deposit  portfolio  of which $3.2  million or 4.3% of the  deposit
portfolio were  certificates  of deposit with balances of $100,000 or more. MMDA
accounts  constituted  $10.9 million or 14.8% of the Company's deposit portfolio
at June 30, 2001. As of June 30, 2001, the Banks had one brokered  deposit for a
total of $99,000.  At June 30, 2001,  transaction  deposits were $9.4 million or
12.8% of total deposits.
<PAGE>

Savings Deposit Activities.  The following table sets forth the savings activity
at the Banks during the period indicated.
<TABLE>
                                                          Year Ended June 30,
                                                   ----------------------------------
                                                     2001         2000        1999
                                                   ----------------------------------
                                                         (Dollars in Thousands)
<S>                                                <C>          <C>          <C>
Opening balance ................................   $ 73,297     $ 75,689     $ 66,595
Net increase (decrease) before interest credited     (2,589)      (4,576)       6,647
Interest credited ..............................      2,196        2,184        2,447
                                                   ----------------------------------

Ending balance .................................   $ 72,904     $ 73,297     $ 75,689
                                                   ==================================

Net increase (decrease) ........................   $   (393)    $ (2,932)    $  9,094
                                                   ==================================

Percent increase (decrease) ....................     (0.54)%      (3.16)%      13.66%
                                                   ==================================
</TABLE>

The  following  table sets forth the dollar  amount of savings  deposits  in the
various  types  of  deposit  programs  offered  by the  Banks  for  the  periods
indicated.
<TABLE>
                                                                  June 30,
                                            ------------------------------------------------------
                                                  2001              2000               1999
                                            ------------------------------------------------------
                                                     Percent            Percent           Percent
                                             Amount  of Total   Amount  of Total  Amount  of Total
                                            ------------------------------------------------------
                                                           (Dollars in Thousands)
<S>                                         <C>      <C>       <C>      <C>       <C>     <C>
Transaction and Savings Deposits(1)
--------------------------------
Demand and NOW Accounts (0.00%-2.40%) ...   $ 9,382   12.78%   $9,4569   12.83%   $8,536   11.22%
Money Market Accounts (1.75% - 4.00%) ...    10,879   14.82     11,580   15.71    11,471   15.08
Passbook Savings Accounts (1.75% - 2.40%)     5,604    7.64      5,531    7.50     5,728    7.53
                                            ----------------------------------------------------
Total Non-Certificates ..................    25,865   35.25     26,570   36.04    25,735   33.83
                                            ----------------------------------------------------
Certificates
1.00% - 2.00% ...........................       132    0.18
2.01% - 3.00% ...........................       124    0.17       260     0.35      361     0.47
3.01% - 4.00% ...........................       154    0.21       185     0.25       --       --
4.01% - 5.00% ...........................    10,275   14.00     9,843    13.35   11,423    15.01
5.01% - 6.00% ...........................    20,468   27.89    21,965    29.80   31,959    42.01
6.01% - 7.00% ...........................    15,886   21.65    14,473    19.63    6,211     8.17
                                            ----------------------------------------------------
Total Certificates ......................    47,039   64.10    46,726    63.39   49,954    65.66
                                            ----------------------------------------------------
Accrued Interest ........................       482    0.66       421     0.57      388     0.51
                                            ----------------------------------------------------
Total Deposits and Accrued Interest .....   $73,386  100.00%  $73,717   100.00% $76,077   100.00%
                                            ====================================================
<FN>
(1)  Rates shown are at June 30, 2001.
</FN>
</TABLE>
<PAGE>

The  following  table  shows rate and  maturity  information  for the  Company's
certificates of deposit as of June 30, 2001.
<TABLE>
                                           0.00-        4.01-        5.01-       6.01-                 Percent of
                                           4.00%        5.00%        6.00%       7.00%        Total      Total
                                          -----------------------------------------------------------------------
                                                                   (Dollars in Thousands)
<S>                                       <C>         <C>         <C>          <C>           <C>       <C>
Certificate accounts maturing in quarter ending:

September 30, 2001..................      $   36      $  1,803    $  9,353     $  1,936      $13,128      27.91%
December 31, 2001...................         118         2,583       3,101        1,494        7,296      15.51
March 31, 2002......................         257         1,310       1,685        4,999        8,251      17.54
June 30, 2002.......................         ---         1,367         601        1,412        3,380       7.19
September 30, 2002..................         ---           214         761        2,056        3,031       6.44
December 31, 2002...................         ---           763       1,247        1,231        3,241       6.89
March 31, 2003......................         ---           193         295        1,252        1,740       3.70
June 30, 2003.......................         ---           696         227          139        1,062       2.26
September 30, 2003..................         ---            47         241          133          421       0.90
December 31, 2003...................         ---           503         669          245        1,417       3.01
March 31, 2004......................         ---           480         260          228          968       2.06
June 30, 2004.......................         ---           316         726          675        1,717       3.65
Thereafter..........................         ---           ---       1,301           86        1,387       2.95
                                          -----------------------------------------------------------------------
Total...............................      $  411       $10,275     $20,467      $15,886      $47,039     100.00%
                                          ======================================================================

   Percent of Total.................       0.87%        21.84%      43.51%       33.77%      100.00%
                                          ==========================================================
</TABLE>

The  following  table  indicates  the amount of the  Company's  certificates  of
deposit by time remaining until maturity as of June 30, 2001.
<TABLE>
                                                                MATURITY
                                       ----------------------------------------------------------
                                       3 Months    Over 3- 6    Over 6-12     Over 12
                                       or Less       Months       Months       Months      Total
                                       ----------------------------------------------------------
                                                        (Dollars in Thousands)
<S>                                    <C>         <C>          <C>           <C>         <C>
Certificates of Deposit less than
$100,000.............................   $12,781      $6,746      $10,059      $14,302     $43,888

Certificates of Deposit of
$100,000 or More.....................       347         550        1,572          682       3,151
                                        ---------------------------------------------------------

Total Certificates of Deposit........   $13,128      $7,296      $11,631      $14,984     $47,039
                                        =========================================================
</TABLE>

Borrowings

Deposits are the primary source of funds of the Company's lending and investment
activities and for its general business purposes.  In addition,  the Company may
obtain advances from the FHLB of Des Moines to supplement its supply of lendable
funds. Advances from the FHLB of Des Moines are typically secured by a pledge of
the  Company's  stock in the FHLB of Des Moines  and a portion of the  Company's
first mortgage loans and certain other assets. The Company,  if the need arises,
may also access the Federal Reserve  discount window to supplement its supply of
lendable funds and to meet deposit  withdrawal  requirements.  At June 30, 2001,
the Company had $32.3 million of borrowings.

The following table sets forth the maximum month-end balance and average balance
of FHLB advances for the dates indicated.

                                               For the Year Ended June 30,
                                         ---------------------------------------
                                          2001            2000            1999
                                         ---------------------------------------
                                                 (Dollars in Thousands)

Maximum Balance ................         $32,335         $30,193         $16,628

Average Balance ................         $29,832         $23,441         $15,537
<PAGE>

The following  table sets forth certain  information as to Washington  Federal's
FHLB advances at the dates indicated.
<TABLE>
                                                                    June 30,
                                                     --------------------------------------
                                                        2001          2000          1999
                                                     --------------------------------------
                                                            (Dollars in Thousands)
<S>                                                  <C>           <C>           <C>
FHLB Advances ....................................   $   32,335    $   30,193    $   15,706

Weighted average interest rate during the period
of FHLB advances .................................         6.01%         5.89%         5.68%

Weighted average interest rate at end of period of
FHLB advances ....................................         5.35%         6.38%         5.66%
</TABLE>

Competition

Washington Federal is one of five financial  institutions  serving its immediate
market area of Washington, Iowa. The competition for deposit products comes from
two banks owned by multi-bank holding companies,  a local independent  community
bank and a credit union. Deposit competition also includes a number of insurance
products sold by local agents, and investment  products such as mutual funds and
other securities sold by local and regional  brokers.  Loan  competition  varies
depending upon market conditions.

Rubio is located in Brighton,  Iowa, a small rural community of 800 people.  The
competition   for  deposits  comes  from  financial   institutions  in  outlying
communities.  The  closest  community  with  another  financial  institution  is
approximately ten miles away.  Deposit  competition also includes  insurance and
investment  products such as annuities,  mutual funds, and other securities sold
by local and  regional  brokers.  Loan  competition  varies  depending on market
conditions.

Wellman  Federal  Savings,  a  division  of  Washington  Federal,  is one of two
financial  institutions serving its immediate market area of Wellman,  Iowa. The
competition  for  deposits  comes from a branch  owned by a  multi-bank  holding
company as well as financial  institutions in outlying communities.  The closest
community  is  approximately  seven  miles  away  and has  two  banks  owned  by
multi-bank  holding  companies.  Loan  competition  varies depending upon market
conditions.

Richland  Federal  Savings,  a division  of  Washington  Federal,  is one of two
financial institutions serving its immediate market area of Richland,  Iowa. The
competition for deposits comes from a branch owned by a large multi-bank holding
company as well as financial  institutions in outlying communities.  The closest
community  is  approximately  ten  miles  away  and has  three  banks  owned  by
multi-bank holding companies,  a local independent bank and three credit unions.
Loan competition varies depending upon market conditions.

Washington  Federal  has  traditionally  maintained  a  competitive  position in
mortgage  loan  originations  and market  share  throughout  its service area by
virtue of its local presence and its  involvement  in the  community.  Rubio has
traditionally  maintained a competitive  position in commercial and agricultural
loan originations and market share throughout its services area by virtue of its
local presence and its involvement in the community.  The Company  believes that
it has been able to effectively  market its loans and other  financial  products
and services when compared to other local-based institutions and it has superior
customer service when compared to other  institutions and mortgage bankers based
outside of the Company's market area.

The  Company  believes  that  it is  one  of  the  few  area  lenders  that  has
consistently  offered  a  variety  of loans  throughout  all  types of  economic
conditions. The Company believes that it has been able to effectively market its
loans  and  other  financial  products  and  services  when  compared  to  other
local-based institutions,  and it has superior customer service when compared to
the branch of a larger institution based outside of the Company's market area.

Subsidiary Activity

Washington  Federal is permitted to invest up to 2% of its assets in the capital
stock of, or secured or unsecured  loans to,  subsidiary  corporations,  with an
additional  investment  of 1% of  assets  when  such  additional  investment  is
utilized primarily for community development  purposes.  Under such limitations,
as of  June  30,  2001,  Washington  Federal  was  authorized  to  invest  up to
approximately  $1.9 million in the stock of, or loans to,  service  corporations
(based upon the 2% limitation).
<PAGE>

Washington  Federal has one wholly owned  subsidiary.  The  subsidiary  conducts
business  under the name of Washington  Financial  Services,  Inc.  ("Washington
Financial").  Washington  Federal's investment in its subsidiary totaled $70,000
at June 30, 2001. The  subsidiary's  source of income is brokerage  fees, and it
had net income of  $52,000,  $18,000  and  $23,000  for the years ended June 30,
2001, 2000 and 1999, respectively. The primary activity of the subsidiary is the
brokering  of  credit  life and  disability  insurance  products.  In  addition,
Washington  Federal has an arrangement  with Eagle One Investment  Group ("Eagle
One") to provide support for Washington  Financial's investment services office.
Washington Financial began offering non-insured  investment products to meet the
needs of current  customers  and the  community on July 1, 1999.  Eagle One is a
locally-owned  investment  firm with  offices in banks  throughout  the Midwest.
Eagle One offers  investment  options to include  stocks,  bonds,  mutual funds,
tax-advantaged investments and insurance. Washington Financial is the only Eagle
One retail office in Washington Federal's market area.

Regulation

General.  Washington Federal is a federally chartered savings bank, the deposits
of which are  federally  insured  by the FDIC and  backed by the full  faith and
credit of the U.S.  government.  Accordingly,  Washington  Federal is subject to
broad federal  regulation  and oversight  extending to all its operations by the
OTS.  Washington Federal is a member of the FHLB of Des Moines and is subject to
certain limited regulation by the Federal Reserve Board (the "FRB").  Washington
Federal is a member of the Savings  Association  Insurance Fund ("SAIF"),  which
together  with the Bank  Insurance  Fund  ("BIF") are the two deposit  insurance
funds administered by the FDIC. As a result, the FDIC has certain regulatory and
examination authority over Washington Federal.

Rubio is an Iowa  chartered  savings bank and, as such,  is subject to extensive
regulation,  supervision and examination by the Iowa  Superintendent  of Banking
(the "ISB") and the FDIC,  which are its state and primary  federal  regulators,
respectively.  As with  Washington  Federal,  such  regulation  and  supervision
governs the activities in which Rubio can engage in and the manner in which such
activities  are  conducted and is intended  primarily for the  protection of the
insurance fund and depositors.

Washington  is  regulated  as a bank  holding  company by the FRB.  Bank holding
companies are subject to  comprehensive  regulation  and  supervision by the FRB
under the Bank  Holding  Company Act of 1956,  as amended  (the  "BHCA") and the
regulations of the FRB. As a bank holding company,  Washington must file reports
with the FRB and such  additional  information  as the FRB may  require,  and is
subject to regular inspections by the FRB. Washington is subject to the activity
limitations  imposed  under the BHCA and in  general  may  engage in only  those
activities that the FRB has determined to be closely related to banking.

Certain of these regulatory requirements and restrictions are discussed below or
elsewhere in this document.

Regulation  of Savings  Associations  and Savings  Banks.  The OTS has extensive
authority  over  the  operations  of  savings  associations.  As  part  of  this
authority,  Washington Federal is required to file periodic reports with the OTS
and is subject to periodic  examinations  by the OTS and the FDIC.  Under agency
scheduling  guidelines,  it is likely that another examination will be initiated
within 18 months. When these examinations are conducted by the OTS and the FDIC,
the examiners may require  Washington  Federal to provide for higher  general or
specific  loan  loss  reserves.  All  savings  associations  are  subject  to  a
semi-annual  assessment,  based upon the savings  association's total assets, to
fund the  operations of the OTS. The Bank's OTS  assessment  for the fiscal year
ended June 30,  2001 was  $29,000.  Rubio is subject to similar  regulation  and
oversight by the ISB and the FRB.

Each federal  banking  regulator has extensive  enforcement  authority  over its
regulated institutions. This enforcement authority includes, among other things,
the  ability to assess  civil  money  penalties,  to issue  cease-and-desist  or
removal orders and to initiate injunctive actions. In general, these enforcement
actions may be initiated for  violations of laws and  regulations  and unsafe or
unsound  practices.  Other  actions  or  inactions  may  provide  the  basis for
enforcement  action,  including  misleading  or untimely  reports.  Except under
certain  circumstances,  public disclosure of final  enforcement  actions by the
regulator is required.

In addition,  the  investment,  lending and  branching  authority of  Washington
Federal is prescribed by federal laws and it is prohibited  from engaging in any
activities not permitted by such laws. Rubio is subject to similar  restrictions
under state law and federal law. Federal savings associations are also generally
authorized to branch  nationwide  regardless of state law whereas Iowa chartered
banks, such as Rubio, are subject to certain state law restrictions. At June 30,
2001   Washington   Federal  and  Rubio  were  in  compliance   with  the  noted
restrictions.
<PAGE>

Washington Federal's general permissible lending limit for loans-to-one-borrower
is equal to the  greater of $500,000  or 15% of  unimpaired  capital and surplus
(except for loans fully secured by certain  readily  marketable  collateral,  in
which case this limit is increased to 25% of  unimpaired  capital and  surplus).
Rubio's general permissible lending limit for loans-to-one borrower is an amount
equal to 15% of the aggregate capital (except for loans fully secured by certain
readily marketable  collateral,  in which case this limit is increased to 25% of
aggregate capital).  At June 30, 2001,  Washington Federal's and Rubio's lending
limit under these  restrictions  were $1.1 million and  $574,000,  respectively.
Washington  Federal and Rubio are in compliance with the loans-to-one-  borrower
limitation.

The federal banking  agencies have adopted  guidelines  establishing  safety and
soundness  standards on such  matters as loan  underwriting  and  documentation,
asset quality earnings standards,  internal controls and audit systems, interest
rate risk exposure and compensation and other employee benefits. Any institution
which fails to comply with these  standards  must submit a  compliance  plan.  A
failure to submit a plan or to comply  with an  approved  plan will  subject the
institution to further enforcement action.

Insurance of Accounts and Regulation by the FDIC. Washington Federal is a member
of the SAIF and Rubio is a member of BIF, each of which is  administered  by the
FDIC.  Deposits  are  insured  up to  applicable  limits  by the  FDIC  and such
insurance  is backed by the full  faith and  credit of the U.S.  government.  As
insurer,  the FDIC  imposes  deposit  insurance  premiums and is  authorized  to
conduct  examinations of and to require reporting by FDIC-insured  institutions.
It also may prohibit any FDIC-insured  institution from engaging in any activity
the FDIC determines by regulation or order to pose a serious risk to the SAIF or
the BIF. The FDIC also has the authority to initiate enforcement actions against
savings  associations,  after giving the OTS an opportunity to take such action,
and may terminate the deposit insurance if it determines that an institution has
engaged in unsafe or unsound practices, or is in an unsafe or unsound condition.

The FDIC's deposit  insurance  premiums are assessed through a risk-based system
under  which all  insured  depository  institutions  are placed into one of nine
categories and assessed insurance premiums based upon their level of capital and
supervisory   evaluation.   Under  the  system,   institutions   classified   as
"well-capitalized" (i.e., a core capital ratio of at least 5%, a ratio of Tier 1
or core capital to  risk-weighted  assets  ("Tier 1  risk-based  capital") of at
least 6% and a risk-based  capital ratio of at least 10%) and considered healthy
pay the  lowest  premium  while  institutions  that  are less  than  "adequately
capitalized"  (i.e., core or Tier 1 risk-based capital ratios of less than 4% or
a  risk-based  capital  ratio of less  than 8%) and  considered  of  substantial
supervisory concern pay the highest premium.  Risk classification of all insured
institutions will be made by the FDIC for each semi-annual assessment period.

The FDIC is authorized to increase  assessment rates, on a semi-annual basis, if
it  determines  that the reserve  ratio of the SAIF or the BIF will be less than
the  designated  reserve  ratio of 1.25%  of SAIF or the BIF  insured  deposits,
respectively.  In setting  these  increased  assessments,  the FDIC must seek to
restore the  reserve  ratio to that  designated  reserve  level,  or such higher
reserve  ratio as  established  by the FDIC.  The FDIC may also  impose  special
assessments on SAIF members to repay amounts borrowed from the U.S.  Treasury or
for any other reason deemed necessary by the FDIC.

For fiscal 2001, the SAIF  insurance  premium range was 0 to 27 basis points per
$100 of domestic  deposits.  Washington  Federal  qualified for the minimum SAIF
assessment.

In addition,  insured  institutions are required to pay a Financing  Corporation
(FICO)  assessment  in order to fund the  interest  on bonds  issued to  resolve
thrift  failures  in the  1980s,  equal to 1.88  basis  points  for each $100 in
domestic  deposits for both BIF and SAIF-insured  deposits.  These  assessments,
which may be revised based upon the level of BIF and SAIF deposits will continue
until the bonds mature in the years 2017 through 2019.

Regulatory Capital Requirements. Federally insured depository institutions, such
as  Washington  Federal and Rubio,  are required to maintain a minimum  level of
regulatory capital.  For savings  associations,  the OTS has established capital
standards,  including a tangible capital requirement,  a leverage ratio (or core
capital)  requirement and a risk-based  capital  requirement  applicable to such
savings associations.  The OTS is also authorized to impose capital requirements
in excess of these standards on individual associations on a case-by-case basis.
<PAGE>

The OTS  capital  regulations  require  tangible  capital  of at  least  1.5% of
adjusted total assets (as defined by  regulation).  Tangible  capital  generally
includes  common   stockholders'   equity  and  retained  income,   and  certain
noncumulative  perpetual  preferred stock and related income.  In addition,  all
intangible  assets,  other than a limited amount of purchased mortgage servicing
rights,  must be deducted from tangible  capital.  At June 30, 2001,  Washington
Federal did not have any intangible  assets and accumulated  losses on available
for sale securities, net of tax of $12,000.

The OTS regulations  establish special  capitalization  requirements for savings
associations that own subsidiaries.  In determining  compliance with the capital
requirements,  all  subsidiaries  engaged solely in activities  permissible  for
national  banks or engaged in certain other  activities  solely as agent for its
customers  are  "includable"  subsidiaries  that are  consolidated  for  capital
purposes in proportion to the association's  level of ownership.  For excludable
subsidiaries the debt and equity  investments in such  subsidiaries are deducted
from assets and capital. At June 30, 2001, Washington Federal had one excludable
subsidiary.

At June 30, 2001,  Washington  Federal had tangible capital of $7.8 million,  or
8.25% of adjusted total assets,  which is  approximately  $6.4 million above the
minimum requirement of 1.5% of adjusted total assets in effect on that date.

The OTS capital  standards  also require  core  capital  equal to at least 4% of
adjusted total assets.  Core capital generally consists of tangible capital plus
certain intangible  assets,  including a limited amount of purchased credit card
relationships.  As a result of the prompt corrective action provisions discussed
below,  however, a savings  association must maintain a core capital ratio of at
least  4% to be  considered  "adequately  capitalized"  unless  its  supervisory
condition allows it to maintain a 3% ratio. At June 30, 2001, Washington Federal
had no intangibles which were subject to these tests.

At June 30, 2001,  Washington Federal had core capital equal to $7.8 million, or
8.25% of adjusted total assets, which is $4.0 million above the minimum leverage
ratio requirement of 4% as in effect on that date.

The OTS  risk-based  requirement  requires  savings  associations  to have total
capital of at least 8% of risk-weighted  assets.  Total capital consists of core
capital,  as defined above, and  supplementary  capital.  Supplementary  capital
consists of certain  permanent  and  maturing  capital  instruments  that do not
qualify as core capital and general  valuation loan and lease loss allowances up
to a maximum of 1.25% of risk-weighted assets. Supplementary capital may be used
to satisfy the risk-based  requirement  only to the extent of core capital.  The
OTS is also authorized to require a saving association to maintain an additional
amount of total capital to account for concentration of credit risk and the risk
of  non-traditional  activities.  At June 30,  2001,  Washington  Federal had no
capital  instruments  that  qualify as  supplementary  capital  and  $460,000 of
general loss reserves, which was less than 1.25% of risk-weighted assets.

Certain  exclusions  from  capital  and assets are  required  to be made for the
purpose  of  calculating  total  capital.  Such  exclusions  consist  of  equity
investments  (as  defined  by  regulation)  and that  portion  of land loans and
nonresidential  construction  loans in excess of an 80% loan-to- value ratio and
reciprocal  holdings of qualifying capital  instruments.  Washington Federal had
$21,000 of such exclusions from capital and assets at June 30, 2001.

In determining the amount of risk-weighted assets, all assets, including certain
off-balance sheet items, will be multiplied by a risk weight, ranging from 0% to
100%, based on the risk inherent in the type of asset. For example,  the OTS has
assigned  a risk  weight of 50% for  prudently  underwritten  permanent  one- to
four-family  first  lien  mortgage  loans not more than 90 days  delinquent  and
having a loan-to-value  ratio of not more than 80% at origination unless insured
to such ratio by an insurer approved by the FNMA or FHLMC.

The OTS has adopted a final rule that requires  every savings  association  with
more than normal  interest rate risk exposure to deduct from its total  capital,
for purposes of determining compliance with such requirement, an amount equal to
50% of its  interest-rate  risk exposure  multiplied by the present value of its
assets. This exposure is a measure of the potential decline in the net portfolio
value of a savings  association,  greater  than 2% of the  present  value of its
assets,  based upon a  hypothetical  200 basis  point  increase  or  decrease in
interest rates (whichever results in a greater decline).  Net portfolio value is
the  present  value  of  expected  cash  flows  from  assets,   liabilities  and
off-balance  sheet  contracts.  The rule provides for a two-quarter  lag between
calculating  interest rate risk and recognizing any deduction from capital.  The
rule will not become  effective  until the OTS  evaluates  the  process by which
savings  associations may appeal an interest rate risk deduction  determination.
It is also uncertain as to when this  evaluation  may be completed.  Any savings
association  with less than $300 million in assets and a total  capital ratio in
excess  of 12% is  exempt  from  this  requirement  unless  the  OTS  determines
otherwise.
<PAGE>

On June 30,  2001,  Washington  Federal  had total  capital of $8.3  million and
risk-weighted   assets  of  $64.9   million  or  total   capital  of  12.77%  of
risk-weighted  assets.  This amount was $3.1 million above the 8% requirement in
effect on that date.

Rubio is subject to capital requirements similar to those required of Washington
Federal. At June 30, 2001, Rubio had Tier 1 or leverage capital of $2.6 million,
or 11.69% of average total assets, which is approximately $1.9 million above the
minimum requirement of 3% of average total assets in effect on that date.

At June 30, 2001, Rubio had Tier 1 risk-based capital of $2.6 million, or 17.83%
of total risk- based  assets,  which is  approximately  $2.0  million  above the
minimum requirement of 4% of total risk-based assets in effect on that date.

At June 30, 2001,  Rubio had  risk-based  capital of $2.7 million,  or 18.85% of
total risk-based  assets,  which is approximately $1.6 million above the minimum
requirement of 8% of total risk- based assets in effect on that date.

The OTS and the FDIC are authorized and, under certain  circumstances  required,
to take certain  actions  against  institutions  that fail to meet their capital
requirements.  They are  generally  required  to take  action  to  restrict  the
activities of an  "undercapitalized  association"  (generally  defined to be one
with less than either a 4% core capital ratio, a 4% Tier 1 risked-based  capital
ratio or an 8% risk-based  capital ratio).  Any such  institution  must submit a
capital  restoration plan and until such plan is approved by its primary federal
regulator may not increase its assets, acquire another institution,  establish a
branch or engage  in any new  activities,  and  generally  may not make  capital
distributions.  The OTS and the FDIC are  authorized  to impose  the  additional
restrictions that are applicable to significantly undercapitalized associations.

As a condition  to the  approval of the capital  restoration  plan,  any company
controlling an undercapitalized association must agree that it will enter into a
limited  capital  maintenance   guarantee  with  respect  to  the  institution's
achievement of its capital requirements.

Any institution that fails to comply with its capital plan or is  "significantly
undercapitalized"  (i.e.,  Tier 1 risk-based or core capital ratios of less than
3% or a risk-based capital ratio of less than 6%) must be made subject to one or
more of additional specified actions and operating  restrictions which may cover
all aspects of its  operations and include a forced merger or acquisition of the
association. An institution that becomes "critically  undercapitalized" (i.e., a
tangible  capital  ratio  of  2%  or  less)  is  subject  to  further  mandatory
restrictions on its activities in addition to those  applicable to significantly
undercapitalized  institutions.  In addition, the institutions must be placed in
receivership or conservatorship, with certain limited exceptions, within 90 days
after it becomes critically undercapitalized.

Any  undercapitalized  institution  is also  subject to the general  enforcement
authority of the OTS and the FDIC, including the appointment of a conservator or
a receiver.

The OTS and the FDIC are also generally  authorized to reclassify an association
into a lower  capital  category and impose the  restrictions  applicable to such
category if the  institution is engaged in unsafe or unsound  practices or is in
an unsafe or unsound condition.

The  imposition  by the OTS or the FDIC of any of these  measures on  Washington
Federal or Rubio may have a substantial  adverse effect on their  operations and
profitability.   Company   shareholders  do  not  have  preemptive  rights,  and
therefore, if the Company is directed by the OTS or the FDIC to issue additional
shares of  common  stock,  such  issuance  may  result  in the  dilution  in the
percentage of ownership of the Company.

Limitations on Dividends and Other Capital Distributions. OTS regulations impose
various  restrictions on savings  associations  with respect to their ability to
make  distributions of capital,  which include  dividends,  stock redemptions or
repurchases,  cash-out  mergers  and other  transactions  charged to the capital
account.  OTS regulations also prohibit a savings  association from declaring or
paying any dividends or from repurchasing any of its stock if, as a result,  the
regulatory capital of the association would be reduced below the amount required
to be maintained for the liquidation  account established in connection with its
mutual to stock conversion.
<PAGE>

Generally,  savings  associations,  such as Washington Federal,  that before and
after  the  proposed  distribution  remain  well-capitalized,  may make  capital
distributions  during  any  calendar  year  equal to the  greater of 100% of net
income for the  year-to-date  plus  retained  net  income for the two  preceding
years.  However,  an  institution  deemed  to be in  need of  more  than  normal
supervision  by the OTS may have its dividend  authority  restricted by the OTS.
Washington Federal may pay dividends in accordance with this general authority.

Savings associations proposing to make any capital distribution need only submit
written  notice  to  the  OTS  30  days  prior  to  such  distribution.  Savings
associations  that do not,  or would  not meet  their  current  minimum  capital
requirements following a proposed capital distribution, however, must obtain OTS
approval  prior  to  making  such  distribution.  The  OTS  may  object  to  the
distribution  during that 30-day  notice  period  based on safety and  soundness
concerns. See "-- Regulatory Capital Requirements."

Rubio may pay dividends, in cash or property, only out of its undivided profits.
In addition, FRB regulations prohibit the payment of dividends by a state member
bank if losses have at any time been sustained by such bank that equal or exceed
its undivided profits then on hand, unless (i) the prior approval of the FRB has
been obtained and (ii) at least  two-thirds of the shares of each class of stock
outstanding  have approved the dividend  payment.  FRB regulations also prohibit
the payment of any dividend by a state member bank without the prior approval of
the FRB if the total of all dividends  declared by the bank in any calendar year
exceeds the total of its net profits for that year  combined  with its  retained
net profits of the previous two calendar years (minus any required  transfers to
a surplus or to a fund for the retirement of any preferred stock).

Liquidity. All savings associations,  including Washington Federal, are required
to maintain sufficient  liquidity to ensure its safe and sound operation.  For a
discussion  of  what  Washington   Federal   includes  in  liquid  assets,   see
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations  --  Liquidity  and  Capital  Resources"  in  the  Annual  Report  to
Stockholders filed as Exhibit 13 hereto. Rubio has no liquidity requirement.  At
June 30,  2001,  Washington  Federal  had a liquidity  ratio of 14.1%,  which is
believed  to  be  sufficient  to  satisfy  present  and  foreseeable   financial
obligations.

Accounting.  An OTS policy  statement  applicable  to all  savings  associations
clarifies  and  re-emphasizes  that  the  investment  activities  of  a  savings
association  must be in  compliance  with  approved  and  documented  investment
policies and  strategies,  and must be accounted  for in  accordance  with GAAP.
Under the policy  statement,  management must support its  classification of and
accounting for loans and securities (i.e., whether held for investment,  sale or
trading) with  appropriate  documentation.  Washington  Federal is in compliance
with these amended rules.

The OTS has adopted an amendment to its  accounting  regulations,  which the OTS
may make more stringent than GAAP, to require that transactions be reported in a
manner that best reflects their underlying  economic substance and inherent risk
and that financial reports must incorporate any other accounting  regulations or
orders prescribed by the OTS.

Qualified  Thrift Lender Test. All savings  associations,  including  Washington
Federal,  are required to meet a qualified  thrift lender  ("QTL") test to avoid
certain  restrictions  on  their  operations.   This  test  requires  a  savings
association  to have  at  least  65% of its  portfolio  assets  (as  defined  by
regulation) in qualified thrift investments on a monthly average for nine out of
every 12 months on a rolling basis. As an alternative,  the savings  association
may maintain 60% of its assets in those assets specified in Section  7701(a)(19)
of the Code.  Under either test,  such assets  primarily  consist of residential
housing related loans and investments.  At June 30, 2001, Washington Federal met
the test and has always met the test since its effectiveness.

Any  savings  association  that  fails to meet the QTL test  must  convert  to a
national bank charter,  unless it requalifies as a QTL and thereafter  remains a
QTL. If an  association  does not  requalify  and  converts  to a national  bank
charter,  it must remain  SAIF-insured  until the FDIC permits it to transfer to
the BIF.  If such an  association  has not yet  requalified  or  converted  to a
national  bank,  its  new  investments  and  activities  are  limited  to  those
permissible  for both a  savings  association  and a  national  bank,  and it is
limited to national bank branching  rights in its home state.  In addition,  the
association is immediately  ineligible to receive any new FHLB borrowings and is
subject to national  bank limits for payment of dividends.  If such  association
has not requalified or converted to a national bank within three years after the
failure,  it must  divest  of all  investments  and  cease  all  activities  not
permissible  for a  national  bank.  In  addition,  it must repay  promptly  any
outstanding FHLB borrowings,  which may result in prepayment  penalties.  If any
association  that fails the QTL test is  controlled by a holding  company,  then
within one year after the failure,  the holding  company must register as a bank
holding  company  and  become  subject  to  all  restrictions  on  bank  holding
companies. See "-- Holding Company Regulation."
<PAGE>

Community  Reinvestment Act. Under the Community Reinvestment Act ("CRA"), every
FDIC insured institution has a continuing and affirmative  obligation consistent
with safe and sound  banking  practices  to help  meet the  credit  needs of its
entire community, including low and moderate income neighborhoods.  The CRA does
not  establish   specific   lending   requirements  or  programs  for  financial
institutions nor does it limit an institution's  discretion to develop the types
of products  and  services  that it believes  are best suited to its  particular
community,  consistent  with the CRA. The CRA requires the OTS and the FDIC,  in
connection with the examination of Washington  Federal and Rubio,  respectively,
to assess the institution's  record of meeting the credit needs of its community
and to take such record into account in its evaluation of certain  applications,
such as a merger or the  establishment of a branch,  by Washington  Federal.  An
unsatisfactory  rating may be used as the basis for the denial of an application
by the OTS and the FDIC.

The federal  banking  agencies,  including  the OTS and the FDIC,  have recently
revised the CRA regulations and the methodology for determining an institution's
compliance with the CRA. Due to the heightened  attention being given to the CRA
in the past few years,  Washington  Federal  and Rubio may be required to devote
additional funds for investment and lending in its local  community.  Washington
Federal was  examined for CRA  compliance  in July 1998 and received a rating of
satisfactory.  Rubio was examined for CRA compliance in August 1999 and received
a rating of satisfactory.

Transactions with Affiliates.  Generally,  transactions  between an FDIC-insured
institution or its  subsidiaries  and its affiliates are required to be on terms
as  favorable  to  the  association  as  transactions  with  non-affiliates.  In
addition,  certain of these  transactions,  such as loans to an  affiliate,  are
restricted  to  a  percentage  of  the  institution's  capital.   Affiliates  of
Washington  Federal and Rubio include the Company and any company which is under
common  control  with  Washington  Federal  and Rubio.  Directors,  officers  or
controlling  persons are also subject to regulations that restrict loans to such
persons and their related interests. Among other things, such loans must be made
on terms substantially the same as for loans to unaffiliated individuals, except
if the loans are made  pursuant to an employee  benefit  plan. At June 30, 2001,
Washington Federal and Rubio were in compliance with the above restrictions.

Certain  transactions with directors,  officers or controlling  persons are also
subject to conflict of  interest  regulations  enforced by the OTS and the FDIC.
These  conflict  of  interest   regulations   and  other  statutes  also  impose
restrictions on loans to such persons and their related  interests.  Among other
things,  such loans must be made on terms substantially the same as for loans to
unaffiliated individuals.

Holding  Company  Regulation.  Bank holding  companies  such as  Washington  are
subject  to  comprehensive  regulation  by  the  FRB  under  the  BHCA  and  the
regulations  of the FRB. As a bank holding  company,  Washington  is required to
file  reports  with  the  FRB and  such  additional  information  as the FRB may
require,  and is  subject to regular  inspections  by the FRB.  The FRB also has
extensive  enforcement authority over bank holding companies,  including,  among
other things,  the ability to assess civil money  penalties,  to issue cease and
desist  or  removal  orders  and  to  require  that  a  holding  company  divest
subsidiaries (including its bank subsidiaries).  In general, enforcement actions
may be initiated  for  violations of law and  regulations  and unsafe or unsound
practices.

Under FRB policy,  a bank holding company must serve as a source of strength for
its subsidiary banks. Under this policy the FRB may require, and has required in
the  past,  a  holding   company  to   contribute   additional   capital  to  an
undercapitalized subsidiary bank.

Under the BHCA, a bank holding  company  must obtain FRB  approval  before:  (i)
acquiring, directly or indirectly,  ownership or control of any voting shares of
another bank or bank holding company if, after such acquisition, it would own or
control  more than 5% of such shares  (unless it already  owns or  controls  the
majority of such shares);  (ii) acquiring all or substantially all of the assets
of another bank or bank holding company;  or (iii) merging or consolidating with
another bank holding company.
<PAGE>

The BHCA  prohibits  a bank  holding  company,  with  certain  exceptions,  from
acquiring direct or indirect  ownership or control of more than 5% of the voting
shares  of any  company  which is not a bank or bank  holding  company,  or from
engaging  directly  or  indirectly  in  activities  other than those of banking,
managing or controlling banks, or providing  services for its subsidiaries.  The
principal  exceptions to these prohibitions  involve certain non-bank activities
which,  by  statute  or by FRB  regulation  or order,  have been  identified  as
activities closely related to the business of banking or managing or controlling
banks. The list of activities permitted by the FRB includes, among other things,
operating a savings institution (such as Washington Federal),  mortgage company,
finance company,  credit card company or factoring  company;  performing certain
data processing  operations;  providing certain investment and financial advice;
underwriting   and  acting  as  an   insurance   agent  for  certain   types  of
credit-related  insurance;  leasing  property  on a  full-payout,  non-operating
basis;  real estate and personal  property  appraising;  and, subject to certain
limitations, providing securities brokerage services for customers. The scope of
permissible  activities  may be  expanded  from  time to time by the  FRB.  Such
activities may also be affected by federal legislation.

In 1994, the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Riegle-Neal Act") was enacted to ease restrictions on interstate  banking.
Effective  September 29, 1995, the  Riegle-Neal Act allows the FRB to approve an
application of an adequately  capitalized  and  adequately  managed bank holding
company to acquire control of, or acquire all or substantially all of the assets
of, a bank  located in a state  other than such  holding  company's  home state,
without  regard to whether  the  transaction  is  prohibited  by the laws of any
state.  The FRB may not approve the  acquisition  of a bank that has not been in
existence for the minimum time period (not  exceeding  five years)  specified by
the  statutory  law of the host state or if the  applicant  (and its  depository
institution  affiliates)  controls or would control more than 10% of the insured
deposits  in the  United  States or 30% or more of the  deposits  in the  target
bank's home state or in any state in which the target  bank  maintains a branch.
Iowa has adopted a five year minimum existence requirement.  The Riegle-Neal Act
does not affect the authority of states to limit the percentage of total insured
deposits in the state which may be held or  controlled by a bank or bank holding
company to the extent such limitation does not discriminate against out-of-state
banks or bank  holding  companies.  Individual  states  may also  waive  the 30%
state-wide concentration limit.

Additionally,  since  June 1,  1997,  the  federal  banking  agencies  have been
authorized to approve interstate merger  transactions  without regard to whether
such transaction is prohibited by the law of any state, unless the home state of
one of the banks  opts out of the  Riegle-Neal  Act by  adopting a law after the
date of enactment of the Riegle-Neal Act and prior to June 1, 1997 which applies
equally to all out-of-state  banks and expressly  prohibits merger  transactions
involving   out-of-state  banks.  States  were  also  permitted  to  allow  such
transactions before such time by enacting  authorizing  legislation.  Interstate
acquisitions of branches or the  establishment of a new branch is permitted only
if  the  law  of  the  state  in  which  the  branch  is  located  permits  such
acquisitions. Interstate mergers and branch acquisitions are also subject to the
nationwide and statewide insured deposit  concentration amounts described above.
Iowa permits interstate branching only by merger.

The FRB has issued a policy  statement on the payment of cash  dividends by bank
holding  companies,  which  expresses the FRB's view that a bank holding company
should pay cash  dividends  only to the extent  that its net income for the past
year is  sufficient  to  cover  both the cash  dividends  and a rate of  earning
retention that is consistent  with the holding  company's  capital needs,  asset
quality and overall financial condition. The FRB also indicated that it would be
inappropriate for a company  experiencing  serious financial  problems to borrow
funds  to  pay  dividends.  Furthermore,  under  the  prompt  corrective  action
regulations adopted by the FRB, the FRB may prohibit a bank holding company from
paying any dividends if the holding  company's bank  subsidiary is classified as
"undercapitalized."

Bank holding  companies are required to give the FRB prior written notice of any
purchase  or  redemption  of its  outstanding  equity  securities  if the  gross
consideration  for the  purchase  or  redemption,  when  combined  with  the net
consideration paid for all such purchases or redemptions during the preceding 12
months,  is equal to 10% or more of their  consolidated  net worth.  The FRB may
disapprove  such a purchase or  redemption  if it  determines  that the proposal
would  constitute  an unsafe  or  unsound  practice  or would  violate  any law,
regulation,  FRB order, or any condition  imposed by, or written agreement with,
the FRB. This notification  requirement does not apply to any company that meets
the "well-capitalized" standard for commercial banks, has a safety and soundness
examination  rating  of at  least a "2"  and is not  subject  to any  unresolved
supervisory issues.
<PAGE>

The FRB has established  capital  requirements  for bank holding  companies that
generally  parallel the capital  requirements  for commercial  banks and federal
thrift  institutions  such as  Washington  Federal and Rubio.  Washington  is in
compliance with these requirements.

Federal  Securities  Law.  The stock of the Company is  registered  with the SEC
under the Securities  Exchange Act of 1934, as amended (the "Exchange Act"). The
Company is subject  to the  information,  proxy  solicitation,  insider  trading
restrictions and other requirements of the SEC under the Exchange Act.

Company stock held by persons who are affiliates (generally officers,  directors
and  principal   stockholders)   of  the  Company  may  not  be  resold  without
registration or unless sold in accordance with certain resale  restrictions.  If
the Company  meets  specified  current  public  information  requirements,  each
affiliate  of the  Company  is  able  to  sell  in the  public  market,  without
registration, a limited number of shares in any three-month period.

Federal Reserve System. The FRB requires all depository institutions to maintain
non-interest  bearing  reserves at specified  levels  against their  transaction
accounts (primarily checking, NOW and Super NOW checking accounts).  At June 30,
2001, Washington was in compliance with these reserve requirements. The balances
maintained  to meet the reserve  requirements  imposed by the FRB may be used to
satisfy  liquidity  requirements  that  may be  imposed  by  the  OTS.  See  "--
Liquidity."

Depository  institutions  are authorized to borrow from the Federal Reserve Bank
"discount  window," but FRB  regulations  require such  institutions  to exhaust
other reasonable alternative sources of funds, including FHLB borrowings, before
borrowing from the Federal Reserve Bank.

Federal Home Loan Bank System.  Washington  Federal and Rubio are members of the
FHLB of Des Moines, which is one of 12 regional FHLBs, that administers the home
financing credit function of savings associations. Each FHLB serves as a reserve
or  central  bank for its  members  within  its  assigned  region.  It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB  System.  It makes loans to members  (i.e.,  advances) in  accordance  with
policies and procedures established by the board of directors of the FHLB. These
policies  and  procedures  are subject to the  regulation  and  oversight of the
Federal  Housing  Finance  Board.  All advances from the FHLB are required to be
fully secured by  sufficient  collateral as determined by the FHLB. In addition,
all  long-term  advances  are  required to provide  funds for  residential  home
financing.

As a member,  Washington Federal and Rubio are required to purchase and maintain
stock in the FHLB of Des Moines.  At June 30,  2001,  Washington  Federal had an
aggregate  of $1.7  million and Rubio had an aggregate of $74,000 in FHLB stock,
which was in compliance with this requirement. In past years, Washington Federal
has received substantial  dividends on its FHLB stock. Over the past five fiscal
years, such dividends have averaged 6.58% and were 6.07% for fiscal year 2001.

Under federal law, the FHLBs are required to provide funds for the resolution of
troubled  savings  associations  and to contribute to low and moderately  priced
housing programs through direct loans or interest subsidies on advances targeted
for community  investment and low- and moderate-income  housing projects.  These
contributions have affected adversely the level of FHLB dividends paid and could
continue to do so in the future.  These contributions could also have an adverse
effect  on the  value  of FHLB  stock in the  future.  A  reduction  in value of
Washington  Federal's FHLB stock may result in a corresponding  reduction to its
capital.

Federal and State Taxation

Federal  Taxation.  Prior  to  the  enactment  of  legislation  in  August  1996
(discussed  below),  savings  associations  such as Washington  Federal that met
certain  definitional  tests  relating  to the  composition  of assets and other
conditions  prescribed  by the Internal  Revenue  Code of 1986,  as amended (the
"Code"),  had been  permitted  to  establish  reserves for bad debts and to make
annual additions thereto which could,  within specified formula limits, be taken
as a deduction in computing taxable income for federal income tax purposes.  The
amount of the bad debt reserve deduction for "non-qualifying loans" was computed
under the experience  method.  The amount of the bad debt reserve  deduction for
"qualifying  real  property  loans"  (generally  loans  secured by improved real
estate) is computed under the experience method.
<PAGE>

In August 1996,  legislation was enacted that repealed the percentage of taxable
income method of accounting used by many thrifts,  including Washington Federal,
to  calculate  their bad debt  reserve for  federal  income tax  purposes.  As a
result,  large thrifts must  recapture  that portion of the reserve that exceeds
the amount that could have been taken under the experience  method for post-1987
tax years.  The legislation  also requires  thrifts to account for bad debts for
federal income tax purposes on the same basis as commercial  banks for tax years
beginning  after  December 31, 1995.  The  recapture  will occur over a six-year
period,  the  commencement  of which was delayed  until the first  taxable  year
beginning  after  December  31,  1997,  for   institutions   which  met  certain
residential lending  requirements.  The management of the Company and Washington
Federal do not believe that the  legislation  will have a material impact on the
Company or Washington Federal.

In  addition  to  the  regular  income  tax,  corporations,   including  savings
associations such as Washington Federal, generally are subject to a minimum tax.
An  alternative  minimum  tax  is  imposed  at a  minimum  tax  rate  of  20% on
alternative minimum taxable income, which is the sum of a corporation's  regular
taxable income (with certain  adjustments)  and tax preference  items,  less any
available  exemption.  The  alternative  minimum tax is imposed to the extent it
exceeds the corporation's regular income tax and net operating losses can offset
no more than 90% of alternative minimum taxable income.

To the extent earnings appropriated to a savings association's bad debt reserves
for  "qualifying  real  property  loans" and  deducted  for  federal  income tax
purposes  exceed  the  allowable  amount  of such  reserves  computed  under the
experience method and to the extent of the association's  supplemental  reserves
for  losses on loans  ("Excess"),  such  Excess  may not,  without  adverse  tax
consequences,   be  utilized  for  the  payment  of  cash   dividends  or  other
distributions   to  a  shareholder   (including   distributions  on  redemption,
dissolution or  liquidation) or for any other purpose (except to absorb bad debt
losses).  As of June 30,  2001  Washington  Federal's  Excess  for tax  purposes
totaled approximately $174,000.

The Company files  consolidated  federal  income tax returns with the Banks on a
calendar   year  basis  using  the  accrual   method  of   accounting.   Savings
associations,  such as Washington Federal,  that file federal income tax returns
as part of a consolidated group are required by applicable Treasury  regulations
to reduce their taxable income for purposes of computing the percentage bad debt
deduction for losses  attributable to activities of the non-savings  association
members  of  the  consolidated  group  that  are  functionally  related  to  the
activities of the savings association member.

The  Company  has not been  audited  by the IRS for the last  five  years.  With
respect  to years  examined  by the  IRS,  either  all  deficiencies  have  been
satisfied or  sufficient  reserves  have been  established  to satisfy  asserted
deficiencies.  In the  opinion  of  management,  any  examination  of still open
returns  would not result in a  deficiency  which could have a material  adverse
effect on the financial condition of the Company.

Iowa  Taxation.  Washington  Federal and Rubio are subject to a franchise tax by
the state of Iowa.  The franchise tax is imposed  annually in an amount equal to
5% of the  Banks'  adjusted  federal  taxable  income,  computed  before any net
operating loss deduction.  An alternative minimum tax is imposed on the Banks to
the extent such tax exceeds the Banks' regular tax liability.  The franchise tax
is in lieu of Iowa income tax imposed on corporations  doing business within the
State.  The Company is not subject to the Iowa  franchise tax, but is subject to
Iowa's regular corporate income tax.

Executive Officers

Set forth  below are the  names,  ages and  positions  of each of the  executive
officers of the Company.  Except as otherwise indicated,  the persons named have
served as  officers  of the  Company  since it became  the  holding  company  of
Washington  Federal,  and all offices and positions described below are with the
Company and the Banks.  There are no arrangements or understandings  between the
persons  named  and any  other  person  pursuant  to which  such  officers  were
selected.

Stan Carlson,  age 44, was appointed  President and Chief  Executive  Officer of
Washington  Federal  in 1993 and  President  of Rubio in 2000.  Prior to joining
Washington  Federal,  he was Executive Vice President of Northwoods  State Bank,
Northwoods, Iowa.

Gary J. Collier,  age 29, became  Executive Vice  President and Chief  Executive
Officer of Rubio  Savings Bank of Brighton in 2000.  Prior to that,  he was Vice
President and Cashier of Rubio. From 1994 to 1999 he was a loan officer.

Leisha A. Linge,  age 37, was appointed  Executive  Vice President of Washington
Federal in 1999 and has acted as the  financial  and  accounting  officer  since
1995. From 1992 to 1995 she was a loan officer for Washington Federal.
<PAGE>

Employees

As of June 30, 2001,  the Company had 27 full time and 13 part-time and seasonal
employees.  None of the  Company's  employees  are  represented  by a collective
bargaining  group. The Company believes that its relationship with its employees
is satisfactory.

Item 2. Description of Property

The Company  conducts  its business at its main  offices.  The  Company's  total
investment in offices,  office property and equipment is $1.9 million with a net
book  value of  $987,000  at June 30,  2001.  The  following  table  sets  forth
information regarding the Company's properties:
<TABLE>
                                                              Net Book Value
                                                             of Real Property
                                               Leased/   or Leasehold Improvements      Year
                                                Owned        at June 30, 2001          Opened
                                               ----------------------------------------------
<S>                                            <C>       <C>                           <C>
Washington Federal Locations:
Main Office
102 East Main Street
Washington, Iowa .........................       Owned           $193,000               1976

Drive-thru
220 East Washington Street
Washington, Iowa .........................       Owned           $206,000              1994

Wellman Branch Office
801 6th Street
Wellman, Iowa ............................       Owned           $ 92,000              1999

Richland Branch Office
107 Richland Street
Richland, Iowa ...........................       Owned           $ 82,000              2000

Rubio Location:
Main Office ..............................       Owned           $198,000              1984
122 East Washington
Rubio, Iowa
</TABLE>

Item 3. Legal Proceedings

The Company, from time to time, is a party to ordinary routine litigation, which
arises in the  normal  course of  business,  such as  claims to  enforce  liens,
condemnation  proceedings  on  properties  in which the Company  holds  security
interests, claims involving the making and servicing of real property loans, and
other issues  incident to the  business of the Banks.  The  resolution  of these
proceedings should not have a material adverse effect on the Company.

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

No matter was submitted to a vote of security holders,  through the solicitation
of proxies or otherwise, during the quarter ended June 30, 2001.

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Pages 54 and 55 of the attached  2001 Annual  Report to  Stockholder  are herein
incorporated by reference.

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

Pages 6 to 19 of the  attached  2001 Annual  Report to  Stockholders  are herein
incorporated by reference.

Item 7. Financial Statements

Pages 20 to 52 of the Company's  2001 Annual Report to  Stockholders  are herein
incorporated by reference.

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure

Not applicable.
<PAGE>


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons;

Compliance with Section 16(a) of the Exchange Act

Directors

Information  concerning  directors  of the  Company  is  incorporated  herein by
reference from the Company's  definitive  Proxy Statement for the Annual Meeting
of Shareholders, a copy of which will be filed not later than 120 days after the
close of the fiscal year.

Executive Officers

Information  regarding the business  experience of the executive officers of the
Company and the Banks,  who are not also  directors  contained in Part I of this
Form 10-KSB, is incorporated herein by reference.

Compliance With Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company's directors and executive
officers,  and  persons  who own  more  than  10% of a  registered  class of the
Company's equity  securities,  to file with the SEC initial reports of ownership
and reports of changes in  ownership  of Company  common  stock and other equity
securities  of the  Company  by the  tenth  of the  month  following  a  change.
Officers,  directors  and  greater  than 10%  stockholders  are  required by SEC
regulation  to furnish the Company  with copies of all Section  16(a) forms they
file.

To the  Company's  knowledge,  based  solely on a review  of the  copies of such
reports  furnished  to the  Company and  written  representations  that no other
reports were  required,  during the fiscal year ended June 30, 2001, all Section
16(a)  filing  requirements  applicable  to  its  officers,  directors  and  10%
beneficial owners were complied with by such persons.

Item 10. Executive Compensation

Information   concerning  executive   compensation  is  incorporated  herein  by
reference from the Company's  definitive  Proxy Statement for the Annual Meeting
of Shareholders, a copy of which will be filed not later than 120 days after the
close of the fiscal year.

Item 11. Security Ownership of Certain Beneficial Owners and Management

Information  concerning  security  ownership  of certain  beneficial  owners and
management is  incorporated  herein by reference  from the Company's  definitive
Proxy Statement for the Annual Meeting of Shareholders,  a copy of which will be
filed not later than 120 days after the close of the fiscal year.

Item 12. Certain Relationships and Related Transactions

Information  concerning  certain  relationships and transactions is incorporated
herein by reference from the Company's definitive Proxy Statement for the Annual
Meeting of  Shareholders,  a copy of which will be filed not later than 120 days
after the close of the fiscal year.
<PAGE>

Item 13. Exhibits and Reports on Form 8-K

         (a)  Exhibits:
<TABLE>

                                                                                                   Reference to
Regulation                                                                                      Prior Filing or
S-B Exhibit                                                                                       Exhibit Number
  Number                                         Document                                       Attached Hereto
------------------------------------------------------------------------------------------------------------------------------------
<S>           <C>                                                                               <C>
2             Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession               None
3             (i)  Articles of Incorporation and amendments thereto                                      *
              (ii)  Bylaws                                                                               *
4             Instruments defining the rights of holders                                                None
9             Voting Trust Agreement                                                                    None
10            Material Contracts
                 Employment Agreement with Stan Carlson                                                  *
                 Employee Stock Ownership Plan                                                           *
                 Stock Option Plan                                                                       *
                 Recognition and Retention Plan                                                          *
11            Statement:  re computation of per share earnings                                           11
13            Annual Report to Security Holders                                                          13
16            Letter:  re change in certifying accountant                                               None
18            Letter:  re change in accounting principles                                               None
21            Subsidiaries of Registrant                                                                 21
22            Published report regarding matter submitted to vote                                       None
23            Consent of  Accountants                                                                   None
24            Power of Attorney                                                                     Not Required
99            Additional Exhibits                                                                       None
---------------------
<FN>
*    Filed  on  January  3,  1996,  as  exhibits  to  the  Company's   Form  S-1
     registration statement (File number 33-98778). All of such previously filed
     documents are hereby  incorporated  herein by reference in accordance  with
     Item 601 of Regulation S-B.
</FN>
</TABLE>

         (b)  Reports on Form 8-K:

         No current  reports on Form 8-K were  filed by the  Company  during the
         three months ended June 30, 2001.

<PAGE>



                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                 WASHINGTON BANCORP

Date:  September 27, 2001    By: /s/ Stan Carlson
       --------------------      -----------------------------------------------
                                 Stan Carlson
                                 President, Chief Executive Officer and Director
                                 (Duly Authorized Representative)

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.

/s/ Stan Carlson                           /s/ Rick R. Hofer
---------------------------------          -------------------------------------
Stan Carlson, President, Chief             Rick R. Hofer, Director
Excutive Officer and Director
(Principal Executive Officer)

Date: September 27, 2001                   Date: September 27, 2001
     ----------------------------               --------------------------------


/s/ Myron L. Graber                        /s/ Richard L. Weeks
---------------------------------          -------------------------------------
Myron L. Graber, Director                  Richard L. Weeks, Director

Date: September 27, 2001                   Date: September 27, 2001
     ---------------------------                --------------------------------


/s/ Mary Levy                              /s/ James D. Gorham
--------------------------------           -------------------------------------
Mary Levy, Chairman of the Board           James D. Gorham, Director

Date: September 27, 2001                   Date: September 27, 2001
     ---------------------------                --------------------------------


/s/ Ja. Richard Wiley                      /s/ Leisha A. Ling
--------------------------------           -------------------------------------
J. Richard Wiley, Director                 Leisha A. Linge, Executive Vice
                                           President and Treasurer
                                           (Principal Financial and Accounting
                                           Officer)

Date: September 27, 2001                   Date: September 27, 2001
     ---------------------------                --------------------------------


/s/ Dean Edwards
--------------------------------
Dean Edwards, Director

Date: September 27, 2001
     ---------------------------