FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ----------------


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

                   For the fiscal year ended December 31, 2000

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

               For the transition period from _______ to ________

                         Commission file number 0-22461

                          O.A.K. FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

            MICHIGAN                                        38-2817345
   (State of other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                       Identification No.)

              2445 84th Street, S.W., Byron Center, Michigan 49315
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (616) 878-1591

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $1.00 par value
                                (Title of Class)
                                   -----------

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference in Part III of this Form 10-K or any  amendments  to
this Form 10-K.  __X__

The  aggregate  market value of the voting and  non-voting  common stock held by
non-affiliates  of the  Registrant,  based on a per share  price of $50.00 as of
February 26, 2001,  was  approximately  $102,126,600  (common  stock,  $1.00 par
value).  As of February 26 2001, there were outstanding  2,042,532 shares of the
Company's Common Stock ($1.00 par value).

Documents Incorporated by Reference:
Portions of the Company's Proxy Statement for the Annual Meeting of Shareholders
to be held April 26, 2001 are  incorporated  by reference  into Part III of this
report.
<PAGE>
Item 1.  Business.

     O.A.K.   Financial   Corporation  (the  "Company"),   a  Michigan  business
corporation,  is a one-bank holding  company,  which owns all of the outstanding
capital  stock of Byron  Center  State Bank (the  "Bank"),  a  Michigan  banking
corporation.  The Company was formed in 1988 for the purpose of acquiring all of
the common stock of the Bank in a  shareholder  approved  reorganization,  which
became effective October 13 of 1988.

     The Bank was  organized  in 1921 as a  Michigan  banking  corporation.  The
principal executive offices of the Company and the Bank are located at 2445 84th
Street, S.W., Byron Center, Michigan 49315. The Bank's main office is located in
Byron Center and it serves other  communities  with branch offices in Allendale,
Dorr, Grand Rapids, Grandville,  Hamilton,  Hudsonville,  Jamestown,  Moline and
Zeeland.  The Bank's  offices are located in Kent County,  Ottawa County and the
northern portion of Allegan County.

     The area in which the Bank's offices are located,  which is basically south
and west of the city of Grand Rapids,  has historically  been rural in character
but now has a growing  urban  population as the Grand Rapids  Metropolitan  Area
expands south and west.

     The Bank also owns a subsidiary,  O.A.K.  Financial Services,  which offers
mutual  fund  products,   securities  brokerage  services,  retirement  planning
services, investment management and advisory services. O.A.K. Financial Services
in turn owns  Dornbush  Insurance  Agency which was  acquired  February 1, 1999.
Dornbush  Insurance  Agency sells  property and casualty,  life,  disability and
long-term care insurance products. Beginning January 1, 2001 the Company and all
it's  subsidiaries are provided staff resources  through O.A.K. ELC, an employee
leasing company.

Bank Services

     The Bank is a full service  bank  offering a wide range of  commercial  and
personal banking services.  These traditional consumer services include checking
accounts,  savings  accounts,  certificates of deposit,  commercial  loans, real
estate loans,  installment  loans,  traveler's  checks,  night depository,  safe
deposit boxes and U.S. Savings Bonds.  Currently,  the Bank does not offer trust
services.  The Bank maintains  correspondent  relationships  with major banks in
Detroit and Grand  Rapids,  pursuant to which the Bank engages in federal  funds
sale and purchase  transactions,  the  clearance  of checks and certain  foreign
currency  transactions.  In addition, the Bank participates with other financial
institutions  to fund  certain  large  commercial  loans which would  exceed the
Bank's legal lending limit if made solely by the Bank.

     The Bank's deposits are generated in the normal course of business, and the
loss of any one  depositor  would not have a  materially  adverse  effect on the
business of the Bank.  No material  portion of the Bank's loans is  concentrated
within a single  industry or group of related  industries.  As of  December  31,
2000,  the Bank's  certificates  of deposits  of  $100,000  or more  constituted
approximately 29% of total deposit  liabilities.  The Bank's deposits  originate
primarily from its service area, however,  due to above average loan growth, the
Bank has recently relied more heavily on deposits from outside the Bank's market
area. The  utilization  of deposits  outside the market area is a cost effective
source of funding when compared to increasing local market deposit rates.

     The  Bank's  principal  sources of revenue  include  interest  on loans and
investments, fees from the sale of insurance plans, investment products, deposit
account fees,  loan fees and other banking  fees.  As  illustrated  in the table
below, net interest income is the primary source of revenue for the Company. The
Company has set as a strategic  objective to increase the  percentage of revenue
produced from fee based sources in 2001.
<TABLE>
         % of total revenue:                 2000          1999           1998
                                        ---------------------------------------------
         <S>                                <C>            <C>            <C>
         Net interest revenue               83.1%          82.5%          83.3%
         Fee based revenue                  16.9%          17.5%          16.7%
</TABLE>
     Excluding  security  gains,  fee based  revenue  increased  9.6% over 1999.
Service  charges on deposits  increased 67% in 2000 and 38% in 1999,  reflecting
the banks  ability to increase  fee  producing  transaction  income and improved
collection  of  assessed  fees.  As  detailed in Table 6, gains from the sale of
loans declined  significantly in 2000 and 1999 due to lower mortgage production,
resulting from higher interest rates.

                                      -1-
<PAGE>
     The Bank provides real estate,  consumer and commercial  loans to customers
in its market.  Eighty  percent  (80%) of the Bank's loan  portfolio  is held in
fixed rate loans as of December  31, 2000.  Most of these  loans,  approximately
86%,  mature within five years of issuance.  Approximately  $39,590,000 of loans
(or 11% of the Bank's  total loan  portfolio)  have fixed rates with  maturities
exceeding five years. Of the Bank's interest-bearing deposits, 31.7% are held in
savings,  NOW and  MMDAs,  all of  which  are  variable  rate  products.  Of the
$200,406,000  in  certificates  of deposit,  approximately  $162,164,000  mature
within one year, with the balance maturing within a five year period.

     Requests  to  the  Bank  for  credit  are   considered   on  the  basis  of
creditworthiness  of each  applicant,  without  consideration  of  race,  color,
religion,  national origin, sex, marital status,  physical handicap, age, or the
receipt of income from public assistance programs. Consideration is given to the
applicant's capacity for repayment,  collateral, capital and alternative sources
of repayment.  Loan  applications are accepted at all the Bank's offices and are
approved within the limits of each lending officer's authority. Loan requests in
excess of  $1,000,000  are required to be presented to the Board of Directors or
the Executive Loan Committee for review and approval.

     The Bank  sells  participations  in  commercial  loans  to other  financial
institutions  approved  by the Bank,  for the purpose of meeting  legal  lending
limit  requirements  or loan  concentration  considerations.  The Bank regularly
sells fixed rate and conforming  adjustable  rate  residential  mortgages to the
Federal Home Loan Mortgage  Corporation  ("Freddie Mac"). Those residential real
estate mortgage loan requests that do not meet Freddie Mac criteria are reviewed
by the Bank for  approval  and,  if  approved,  are  retained in the Bank's loan
portfolio.  The Bank has the  ability to  purchase  loans  which meet its normal
credit standards.

     The Bank's  investment  policy is  considered by management to be generally
conservative.  It provides for unlimited  investment in U.S.  government  bonds,
with the maximum size of a single  purchase  limited to $3,000,000 and a maximum
maturity  of fifteen  years.  Municipal  bonds with an A rating or better may be
purchased to provide nontaxable income, with the maximum life of municipal bonds
limited to fifteen years. Nonrated bonds may be purchased from local communities
that are familiar to the Bank,  with a maximum  block size of a single  purchase
limited to $250,000.  Investments  in states other than  Michigan may not exceed
10% of the  municipal  portfolio,  and  investments  in a single  issuer may not
exceed  5% of  equity  capital.  Mortgage  backed  securities,  which  are fully
collateralized by securities  issued by government  sponsored  agencies,  may be
purchased  in  block  sizes  of up to  $3,000,000,  provided  the  average  life
expectancy does not exceed fifteen years.

     In addition,  certain collateralized  mortgage obligations may be purchased
if  their  average  life  does not  exceed  five  years.  In  addition  to these
referenced  thresholds  affecting  the  acquisition  of  investment  securities,
holdings of approved  "non  high-risk  mortgage  securities"  are required to be
"stress  tested" at least  annually.  The  acquisition  of  "high-risk  mortgage
securities"  is  prohibited.  In no  case  may  the  Bank  participate  in  such
activities as "gains  trading,"  "when-issued"  trading,  "pair offs," corporate
settlement  of  government  and  agency  securities,   repositioning  repurchase
agreements,  and short sales. All securities  dealers effecting  transactions in
securities held or purchased by the Bank must be approved by the Bank's Board of
Directors.

Bank Competition

     The Bank has eleven offices,  one within each of the communities it serves.
See  "Properties"  below  for more  detail  on these  facilities.  Within  these
communities,  its principal  competitors  are Comerica Bank,  Bank One, Old Kent
Bank,  Fifth-Third  Bank,  Flagstar Bank,  National City Bank,  Huntington Bank,
Michigan  National  Bank,  Macatawa  Bank,  Mercantile  Bank and United  Bank of
Michigan.  Each of these  financial  institutions,  which are  headquartered  in
larger  metropolitan  areas,  have  significantly  greater  assets and financial
resources than the Company, with the exception of Macatawa Bank, Mercantile Bank
and United Bank of Michigan.  Based on deposit  information as of June 30, 2000,
the Bank holds approximately 2.3% of deposits in the Kent County market, 2.6% of
deposits in the Ottawa  County  market,  and 8.1% of the deposits in the Allegan
County market. Information as to asset size of competitor financial institutions
is  derived  from  publicly  available  reports  filed  by and  with  regulatory
agencies.

     The financial services industry  continues to be increasingly  competitive.
Principal methods of competition  include loan and deposit pricing,  advertising
and  marketing  programs  and the types and  quality of services  provided.  The
deregulation of the financial service industry has led to increased  competition
among banks and other financial  institutions for a significant portion of funds
which traditionally,  have been deposited with commercial banks.  However,  with
the enactment of recent legislation discussed under the caption "Supervision and
Regulation"  and the  increased  use

                                      -2-
<PAGE>
of internet  banking,  it is expected that  competition may become more intense.
Management continues to evaluate the opportunities for the expansion of products
and services, such as trust services, and additional branching opportunities.

     Bank mergers continue to re-shape the competitive landscape of the Company.
During  2000,   Fifth-Third   completed  the  acquisition  of  Ottawa  Financial
Corporation,  and its subsidiary Ameribank,  and announced their intent to merge
with Old Kent Bank during the  first-half of 2001. The mergers  involving  large
out-of-state  banks have increased the competitive  environment  among community
banks, seeking to provide local bank service to West Michigan communities.

Growth of Bank

     The following table sets forth certain financial  information regarding the
growth of the Bank (and accordingly, excludes holding company data):
<TABLE>
                                                                  Balances as of December 31,
                                               ---------------------------------------------------------------------
                                                                         (in thousands)
====================================================================================================================
                                                  2000           1999          1998          1997            1996
                                                  ----           ----          ----          ----            ----
<S>                                             <C>            <C>          <C>            <C>             <C>
Total Assets                                    $456,490       $375,741     $299,882       $241,283        $216,755
Loans, Net of Unearned Income                    347,760        288,330      222,133        168,953          45,069
Securities                                        73,437         62,818       54,734         59,988          57,302
Noninterest-Bearing Deposits                      44,599         40,352       35,919         26,459          23,807
Interest-Bearing Deposits                        293,593        215,160      181,789        158,244         146,442
Total Deposits                                   338,192        255,512      217,708        184,703         170,249
Stockholders' Equity                              44,164         39,655       37,983         35,107          34,744
====================================================================================================================
</TABLE>

     The Main Office in Byron Center  began in a small 600 square foot  building
in 1921.  It was expanded to 1,100  square feet in 1954.  In 1965 the Bank moved
next door to a new 10,000 square foot building.  In 1987 construction of another
new  building  of 30,000  square feet was begun.  The Main Office  moved to this
facility in 1988 and  currently  occupies  this  space.  In 1999 the Main Office
added an 8,000 square foot addition to its facility. The Bank's first branch was
opened in 1963 when the bank  refitted an old bank  building in  Jamestown.  The
building was once a bank which closed  during the Great  Depression.  The Bank's
next branch was opened in  Cutlerville  in 1972.  The original 2,500 square foot
building was expanded with a 1,000 square foot addition in 1987. The Bank's Dorr
office  was  opened  in 1986 at the site of the  Hillcrest  Mall.  It is a 2,500
square foot facility  with a 2,500 square foot storage  basement.  In 1991,  the
Bank opened its branch in  Hudsonville.  The Bank maximized this site for future
expansion  with a 10,000 square foot  building.  The Bank occupies  2,500 square
feet  and  plans  to  re-locate  some  of  the  insurance  subsidiary  staff  to
approximately  2,550  square feet in early 2001.  The  remainder  is rented,  or
available to rent to various office use tenants. During 1995, the Bank purchased
and remodeled a former bank branch in Grandville.  Also, the same year, the Bank
purchased  from  National  City Bank a building  and the  deposits of its Moline
branch. Currently, the Bank operates three off-site ATMs.

     The Bank opened  three new  branches  in 1998 at:  10500  Chicago  Drive in
Zeeland,  Michigan,  6163 Lake Michigan  Drive in  Allendale,  Michigan and 4601
134th  Avenue,  Suite C in  Hamilton,  Michigan.  All of these  facilities  were
initially leased. In February 1999, the Kentwood, Michigan branch was opened for
business in a former bank building  purchased from National City Bank. In August
1999, the Bank's Allendale branch was completed and opened at 5980 Lake Michigan
Drive in Allendale in a 10,000 square foot  building  owned by the Bank with the
Bank  occupying  2,500  square feet and the  remainder  available to be used for
office tenant rental.  In December 1999, the Bank moved its Hamilton Branch to a
newly  completed  3,600  square  foot  facility  owned by the Bank at 3614 M-40,
Hamilton,  Michigan. In 2000, the bank completed  construction and relocation of
the  Zeeland  staff from a temporary  location in Zeeland to a new full  service
banking facility.

                                      -3-
<PAGE>
                           SUPERVISION AND REGULATION

     The following is a summary of certain  statutes and  regulations  affecting
the Company and the Bank.  This  summary is  qualified  in its  entirety by such
statutes and regulations.  A change in applicable laws or regulations may have a
material effect on the Company, the Bank and the business of the Company and the
Bank.

General

     Financial   institutions  and  their  holding   companies  are  extensively
regulated  under  federal and state law.  Consequently,  the growth and earnings
performance  of the Company and the Bank can be affected not only by  management
decisions and general economic conditions, but also by the statutes administered
by,  and the  regulations  and  policies  of,  various  governmental  regulatory
authorities.  Those  authorities  include,  but are not limited to, the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), the FDIC,
the  Commissioner  of the Michigan  Office of Financial and  Insurance  Services
("Commissioner"),  the Internal Revenue Service,  and state taxing  authorities.
The effect of such statutes,  regulations and policies can be  significant,  and
cannot be predicted with a high degree of certainty.

     Federal and state laws and  regulations  generally  applicable to financial
institutions and their holding companies regulate, among other things, the scope
of business, investments,  reserves against deposits, capital levels relative to
operations,   lending  activities  and  practices,  the  nature  and  amount  of
collateral for loans, the establishment of branches, mergers, consolidations and
dividends.  The system of supervision  and regulation  applicable to the Company
and  the  Bank  establishes  a  comprehensive  framework  for  their  respective
operations  and is intended  primarily for the  protection of the FDIC's deposit
insurance  funds,  the  depositors  of the Bank,  and the  public,  rather  than
shareholders of the Bank or the Company.

     Federal law and regulations  establish  supervisory standards applicable to
the  lending  activities  of  the  Bank,  including  internal  controls,  credit
underwriting,  loan documentation and loan-to-value  ratios for loans secured by
real property.

Recent Legislation

     The  enactment  of the  Gramm-Leach-Bliley  Act of  1999  (the  "GLB  Act")
represents a pivotal  point in the history of the financial  services  industry.
The GLB Act modifies many of the principal federal laws which regulate financial
institutions and sweeps away large parts of a regulatory  framework that had its
origins in the Depression Era of the 1930s.

     Effective March 11, 2000, new  opportunities  became  available for banking
organizations, other depository institutions, insurance companies and securities
firms to enter  into  combinations  that  permit  a  single  financial  services
organization to offer customers a more complete array of financial  products and
services.  Specifically,  the GLB Act provides two new vehicles  through which a
banking  organization can engage in a variety of activities which,  prior to the
Act,  were  not  permitted.  First,  a bank  holding  company,  meeting  certain
requirements may elect to become a financial  holding company ("FHC").  FHCs are
generally authorized to engage in all "financial  activities" and, under certain
circumstances,  to make equity  investments in other companies  (i.e.,  merchant
banking).  In order to be  eligible  to elect to  become a FHC,  a bank  holding
company and all of its  depositary  financial  institutions  must:  (1) be "well
capitalized";  (2) be "well managed"; and (3) have a rating of "satisfactory" or
better in their most recent Community  Reinvestment  Act  examination.  Both the
bank holding company and all of its depositary financial  institutions must also
continue to satisfy these  requirements after the bank holding company elects to
become  a FHC or else the FHC  will be  subject  to  various  restrictions.  The
Federal  Reserve Board will be the umbrella  regulator of FHCs,  but  functional
regulation of a FHC's  separately  regulated  subsidiaries  will be conducted by
their primary functional regulator.

     Second,  the GLB Act also  provides that a national bank (and a state bank,
so long as otherwise  allowable under its state's law), which satisfies  certain
requirements,  may own a new type of  subsidiary  called a financial  subsidiary
("FS").  The GLB Act  authorizes  FSs to  engage  in many  (but  not all) of the
activities that FHCs are authorized to engage in. In order to be eligible to own
a FS, a bank must  satisfy the three  requirements  noted  above,  plus  several
additional requirements.

                                      -4-
<PAGE>
     The GLB Act also  imposes  several  rules that are  designed to protect the
privacy of the  customers of financial  institutions.  For example,  the GLB Act
requires  financial  institutions  to annually  adopt and  disseminate a privacy
policy and prohibits  financial  institutions  from disclosing  certain customer
information  to  "non-affiliated  third parties" for certain uses. All financial
institutions,  regardless  of whether  they elect to  utilize  FHCs or FSs,  are
subject to the GLB Act's privacy  provisions.  The Company and the Bank are also
subject  to  certain  state  laws  that deal  with the use and  distribution  of
non-public personal information.  In addition to its privacy provisions, the GLB
Act also contains various other provisions that apply to banking  organizations,
regardless of whether they elect to utilize FHCs or FSs.

     The  Company  believes  that  the  GLB  Act  could  significantly  increase
competition  in its business and is evaluating the  desirability  of electing to
become a FHC.


The Company

     General.  The Company is a bank holding company and, as such, is registered
with,  and subject to  regulation  by, the Federal  Reserve Board under the Bank
Holding  Company Act, as amended (the  "BHCA").  Under the BHCA,  the Company is
subject to periodic examination by the Federal Reserve Board, and is required to
file with the Federal Reserve Board periodic  reports of its operations and such
additional information as the Federal Reserve Board may require.

     In accordance with Federal Reserve Board policy, the Company is expected to
act as a source of  financial  strength to the Bank and to commit  resources  to
support the Bank in circumstances  where the Company might not do so absent such
policy.  In  addition,  if the  Commissioner  deems  the  Bank's  capital  to be
impaired,  the  Commissioner  may  require  the Bank to restore its capital by a
special  assessment  upon the  Company as the Bank's  sole  shareholder.  If the
Company were to fail to pay any such assessment, the directors of the Bank would
be required, under Michigan law, to sell the shares of the Bank's stock owned by
the Company to the highest bidder at either a public or private  auction and use
the proceeds of the sale to restore the Bank's capital.

     Investments and Activities.  In general, any direct or indirect acquisition
by the  Company  of any  voting  shares of any bank  which  would  result in the
Company's  direct or indirect  ownership or control of more than 5% of any class
of voting shares of such bank,  and any merger or  consolidation  of the Company
with  another  bank  company,  will  require the prior  written  approval of the
Federal  Reserve  Board  under the BHCA.  In  acting on such  applications,  the
Federal Reserve Board must consider various statutory  factors,  including among
others,  the effect of the  proposed  transaction  on  competition  in  relevant
geographic and product markets, and each party's financial condition, managerial
resources,  and record of  performance  under the  Community  Reinvestment  Act.
Effective  September 29, 1995, bank holding  companies may acquire banks located
in any state in the United States without regard to geographic  restrictions  or
reciprocity   requirements   imposed  by  state  law,  but  subject  to  certain
conditions,  including  limitations on the aggregate amount of deposits that may
be held by the acquiring company and all of its insured  depository  institution
affiliates.

     The merger or  consolidation  of an existing bank subsidiary of the Company
with another bank, or the  acquisition by such a subsidiary of assets of another
bank, or the assumption of liability by such a subsidiary to pay any deposits in
another bank, will require the prior written approval of the responsible Federal
depository institution regulatory agency under the Bank Merger Act, based upon a
consideration of statutory  factors similar to those outlined above with respect
to the BHCA. In addition, in certain such cases an application to, and the prior
approval of, the Federal  Reserve  Board under the BHCA and/or the  Commissioner
under the Michigan Banking Code, may be required.

     With  certain  limited  exceptions,  the BHCA  prohibits  any bank  holding
company from engaging,  either directly or indirectly  through a subsidiary,  in
any  activity  other than  managing or  controlling  banks  unless the  proposed
non-banking  activity is one that the Federal Reserve Board has determined to be
so closely related to banking or managing or controlling banks as to be a proper
incident  thereto.  Under  current  Federal  Reserve  Board  regulations,   such
permissible  non-banking  activities  include  such things as mortgage  banking,
equipment  leasing,  securities  brokerage,  and consumer and commercial finance
company   operations.   As  a  result   of  recent   amendments   to  the  BHCA,
well-capitalized  and well-managed  bank holding companies may engage de novo in
certain types of non-banking activities without prior notice to, or approval of,
the Federal  Reserve Board,  provided that written notice of the new activity is
given to the Federal Reserve Board within 10 business days after the activity is
commenced.  If a bank  company  wishes to engage in a  non-banking  activity  by
acquiring a going concern,  prior notice and/or prior approval will be required,

                                      -5-
<PAGE>
depending  upon the  activities  in which the company to be acquired is engaged,
the  size of the  company  to be  acquired  and  the  financial  and  managerial
condition of the acquiring bank company.

     In  evaluating  a  proposal  to  engage  (either  de  novo or  through  the
acquisition of a going concern) in a non-banking  activity,  the Federal Reserve
Board will consider  various  factors,  including among others the financial and
managerial  resources of the bank company,  and the relative public benefits and
adverse  effects  which may be expected to result  from the  performance  of the
activity by an  affiliate of the bank  company.  The Federal  Reserve  Board may
apply  different  standards to  activities  proposed to be commenced de novo and
activities commenced by acquisition, in whole or in part, of a going concern.

     Capital  Requirements.  The Federal  Reserve  Board uses  capital  adequacy
guidelines  in its  examination  and  regulation of bank holding  companies.  If
capital falls below minimum guidelines,  a bank holding company may, among other
things, be denied approval to acquire or establish  additional banks or non-bank
businesses.

     The Federal  Reserve  Board's  capital  guidelines  establish the following
minimum  regulatory  capital  requirements  for bank  holding  companies:  (i) a
leverage capital requirement  expressed as a percentage of total average assets,
and  (ii)  a  risk-based   requirement   expressed  as  a  percentage  of  total
risk-weighted  assets.  The leverage capital  requirement  consists of a minimum
ratio of Tier 1 capital (which consists principally of shareholders'  equity) to
total  average  assets of 3% for the most highly rated  companies,  with minimum
requirements of 4% to 5% for all others. The risk-based  requirement consists of
a minimum ratio of total capital to total  risk-weighted  assets of 8%, of which
at least one-half must be Tier 1 capital.

     The risk-based and leverage standards presently used by the Federal Reserve
Board are minimum  requirements,  and higher  capital levels will be required if
warranted by the particular circumstances or risk profiles of individual banking
organizations.  For example,  Federal  Reserve  Board  regulations  provide that
additional  capital  may be required to take  adequate  account of,  among other
things,  interest  rate risk and the risks  posed by  concentrations  of credit,
nontraditional activities or securities trading activities. Further, any banking
organization  experiencing or anticipating  significant growth would be expected
to maintain capital ratios,  including  tangible capital positions (i.e., Tier 1
capital less all intangible assets),  well above the minimum levels. The Federal
Reserve Board has not advised the Company of any specific minimum Tier 1 Capital
leverage ratio applicable to it.

     Dividends.  The Company is a  corporation  separate and  distinct  from the
Bank. Most of the Company's revenues are received by it in the form of dividends
paid  by  the  Bank.  Thus,  the  Company's  ability  to  pay  dividends  to its
shareholders  is  indirectly  limited by  statutory  restrictions  on the Bank's
ability  to  pay  dividends.  See  "SUPERVISION  AND  REGULATION  - The  Bank  -
Dividends."  Further, the Federal Reserve Board has issued a policy statement on
the  payment  of  cash  dividends  by  bank  holding  companies.  In the  policy
statement,  the Federal  Reserve  Board  expressed  its view that a bank holding
company experiencing earnings weaknesses should not pay cash dividends exceeding
its net  income  or which can only be  funded  in ways  that  weakened  the bank
holding company's  financial  health,  such as by borrowing.  Additionally,  the
Federal Reserve Board possesses  enforcement  powers over bank holding companies
and their  non-bank  subsidiaries  to prevent or remedy  actions that  represent
unsafe  or  unsound   practices  or  violations   of  applicable   statutes  and
regulations.  Among  these  powers is the  ability to  proscribe  the payment of
dividends by banks and bank holding companies.  Similar  enforcement powers over
the Bank are possessed by the FDIC. The "prompt corrective action" provisions of
federal law and regulation  authorizes the Federal Reserve Board to restrict the
payment of  dividends  by the  Company  for an insured  bank which fails to meet
specified capital levels.

     In addition to the restrictions on dividends imposed by the Federal Reserve
Board,  the Michigan  Business  Corporation  Act provides that  dividends may be
legally declared or paid only if after the  distribution a corporation,  such as
the Company,  can pay its debts as they come due in the usual course of business
and its total assets equal or exceed the sum of its liabilities  plus the amount
that would be needed to satisfy the preferential  rights upon dissolution of any
holders of  preferred  stock  whose  preferential  rights are  superior to those
receiving the  distribution.  The  Company's  Articles of  Incorporation  do not
authorize the issuance of preferred stock and there are no current plans to seek
such authorization.

                                      -6-
<PAGE>
The Bank

     General.  The  Bank is a  Michigan  banking  corporation  and  its  deposit
accounts are insured by the Bank  Insurance  Fund (the "BIF") of the FDIC.  As a
BIF-insured  Michigan  chartered  bank, the Bank is subject to the  examination,
supervision,  reporting and enforcement requirements of the Commissioner, as the
chartering  authority for Michigan banks,  and the FDIC, as administrator of the
BIF.  These  agencies and the federal and state laws  applicable to the Bank and
its operations,  extensively  regulate  various aspects of the banking  business
including,   among  other  things,  permissible  types  and  amounts  of  loans,
investments and other activities, capital adequacy, branching, interest rates on
loans and on deposits,  the  maintenance  of  non-interest  bearing  reserves on
deposit accounts, and the safety and soundness of banking practices.

     Deposit Insurance. As an FDIC-insured institution,  the Bank is required to
pay deposit  insurance  premium  assessments to the FDIC. The FDIC has adopted a
risk-based assessment system under which all insured depository institutions are
placed into one of nine categories and assessed insurance  premiums,  based upon
their  respective  levels of  capital  and  results of  supervisory  evaluation.
Institutions  classified  as  well-capitalized  (as  defined  by the  FDIC)  and
considered  healthy pay the lowest premium while institutions that are less than
adequately  capitalized  (as defined by the FDIC) and  considered of substantial
supervisory concern pay the highest premium.  Risk classification of all insured
institutions is made by the FDIC for each semi-annual assessment period.

     The Federal Deposit  Insurance Act ("FDIA")  requires the FDIC to establish
assessment  rates at levels which will maintain the Deposit  Insurance Fund at a
mandated  reserve  ratio of not less than 1.25% of estimated  insured  deposits.
Accordingly,  the FDIC established the schedule of BIF insurance assessments for
the assessment  period of 2000,  ranging from 0% of deposits for institutions in
the lowest risk  category to .27% of deposits  for  institutions  in the highest
risk category.  The Bank's BIF insurance assessment based on risk classification
was 0% in 2000.

     The FDIC may  terminate  the deposit  insurance  of any insured  depository
institution if the FDIC determines, after a hearing, that the institution or its
directors have engaged or are engaging in unsafe or unsound  practices,  or have
violated any applicable  law,  regulation,  order,  or any condition  imposed in
writing by, or written  agreement with, the FDIC, or if the institution is in an
unsafe or unsound  condition to continue  operations.  The FDIC may also suspend
deposit  insurance  temporarily  during  the  hearing  process  for a  permanent
termination of insurance if the institution has no tangible capital.

     Michigan  Assessments.  Michigan banks are required to pay supervisory fees
to the Division of  Financial  Institutions  ("DFI") of the  Michigan  Office of
Financial and Insurance Services ("OFIS") to fund the operations of the DFI. The
amount of supervisory fees paid by a bank is based upon the bank's total assets,
as reported to the DFI.

     FICO  Assessments.  Pursuant to federal  legislation  enacted September 30,
1996,  the Bank, as a member of the BIF, is subject to  assessments to cover the
payments on outstanding  obligations of the Financing Corporation ("FICO"). FICO
was created in 1987 to finance the  recapitalization  of the Federal Savings and
Loan Insurance  Corporation,  the predecessor to the FDIC's Savings  Association
Insurance  Fund (the "SAIF") which insures the deposits of thrift  institutions.
Until  January 1, 2000,  the FICO  assessments  made against BIF members may not
exceed 20% of the amount of FICO assessments made against SAIF members.  Between
January 1, 2000 and the maturity of the  outstanding  FICO  obligations in 2019,
BIF members  and SAIF  members  will share the cost of the  interest on the FICO
bonds on a pro rata  basis.  The  FICO  assessments  during  2000  were  .02% of
deposits, or $53,385.

     Capital  Requirements.  The Federal  Reserve has  established the following
minimum  capital  standards for  state-chartered,  FDIC-insured  Federal Reserve
member banks, such as the Bank: a leverage  requirement  consisting of a minimum
ratio of Tier 1 capital to total average assets of 3% for the most  highly-rated
banks with  minimum  requirements  of 4% to 5% for all others,  and a risk-based
capital  requirement  consisting  of a minimum  ratio of total  capital to total
risk-weighted  assets of 8%, at least  one-half of which must be Tier 1 capital.
Tier 1 capital  consists  principally  of  shareholders'  equity.  These capital
requirements are minimum requirements. Higher capital levels will be required if
warranted  by the  particular  circumstances  or  risk  profiles  of  individual
institutions.  For  example,  Federal  Reserve  regulations  provide that higher
capital may be  required  to take  adequate  account  of,  among  other  things,
interest   rate  risk  and  the  risks  posed  by   concentrations   of  credit,
nontraditional activities or securities trading activities.

                                      -7-
<PAGE>
     Federal law provides  the federal  banking  regulators  with broad power to
take  prompt  corrective  action to resolve  the  problems  of  undercapitalized
institutions.  The extent of the  regulators'  powers  depends  on  whether  the
institution  in  question  is  "well  capitalized,"   "adequately  capitalized,"
"undercapitalized,"    "significantly    undercapitalized,"    or    "critically
undercapitalized."  Federal  regulations  define  these  capital  categories  as
follows:
<TABLE>
                                            Total                Tier 1
                                            Risk-Based           Risk-Based
                                            Capital Ratio        Capital Ratio         Leverage Ratio
                                            -------------        -------------         --------------
<S>                                         <C>                  <C>                   <C>
Well capitalized                            10% or above         6% or above           5% or above
Adequately capitalized                       8% or above         4% or above           4% or above
Undercapitalized                            Less than 8%         Less than 4%          Less than 4%
Significantly undercapitalized              Less than 6%         Less than 3%          Less than 3%
Critically undercapitalized                           --                   --          A ratio of tangible
                                                                                       equity to total assets
                                                                                       of 2% or less
</TABLE>
     As of  December  31,  2000,  each of the  Bank's  ratios  exceeded  minimum
requirements for the well capitalized category.

     Depending  upon the capital  category to which an  institution is assigned,
the regulators' corrective powers include: requiring the submission of a capital
restoration plan; placing limits on asset growth and restrictions on activities;
requiring  the  institution  to  issue   additional   capital  stock  (including
additional  voting  stock)  or to be  acquired;  restricting  transactions  with
affiliates;  restricting  the interest rate the institution may pay on deposits;
ordering a new election of directors of the  institution;  requiring that senior
executive  officers or directors be dismissed;  prohibiting the institution from
accepting deposits from correspondent banks; requiring the institution to divest
certain  subsidiaries;  prohibiting  the  payment of  principal  or  interest on
subordinated debt; and ultimately, appointing a receiver for the institution.

     In  general,  a  depository  institution  may be  reclassified  to a  lower
category  than is indicated  by its capital  levels if the  appropriate  federal
depository  institution  regulatory  agency  determines  the  institution  to be
otherwise  in an unsafe or  unsound  condition  or to be engaged in an unsafe or
unsound  practice.  This could include a failure by the  institution,  following
receipt  of a  less-than-satisfactory  rating  on its  most  recent  examination
report, to correct the deficiency.

     Dividends.  Under  Michigan  law, the Bank is  restricted as to the maximum
amount  of  dividends  it may pay on its  common  stock.  The  Bank  may not pay
dividends  except out of net profits after deducting its losses and bad debts. A
Michigan state bank may not declare or pay a dividend  unless the bank will have
a surplus  amounting  to at least 20% of its  capital  after the  payment of the
dividend.  If the Bank has a surplus less than the amount of its capital, it may
not  declare or pay any  dividend  until an amount  equal to at least 10% of net
profits for the preceding one-half year (in the case of quarterly or semi-annual
dividends) or full-year (in the case of annual  dividends) has been  transferred
to surplus. A Michigan state bank may, with the approval of the Commissioner, by
vote of  shareholders  owning 2/3 of the stock  eligible  to vote  increase  its
capital  stock by a  declaration  of a stock  dividend,  provided that after the
increase  the  bank's  surplus  equals at least  20% of its  capital  stock,  as
increased.  The Bank may not declare or pay any  dividend  until the  cumulative
dividends on preferred  stock (should any such stock be issued and  outstanding)
have been paid in full. The Bank's  Articles of  Incorporation  do not authorize
the  issuance  of  preferred  stock and there are no current  plans to seek such
authorization.

     Federal law generally  prohibits a depository  institution  from making any
capital distribution  (including payment of a dividend) or paying any management
fee  to  its  company  if  the  depository   institution   would  thereafter  be
undercapitalized.  The FDIC may prevent an insured bank from paying dividends if
the  bank is in  default  of  payment  of any  assessment  due to the  FDIC.  In
addition,  the FDIC may prohibit  the payment of dividends by the Bank,  if such
payment is determined,  by reason of the financial  condition of the Bank, to be
an unsafe and unsound banking practice.

     Insider  Transactions.  The Bank is subject to certain restrictions imposed
by the  Federal  Reserve Act on any  extensions  of credit to the Company or its
subsidiaries,  on investments in the stock or other securities of the Company or
its  subsidiaries  and the  acceptance  of the stock or other  securities of the
Company or its subsidiaries as collateral for

                                      -8-
<PAGE>
loans.  Certain  limitations  and  reporting  requirements  are also  placed  on
extensions of credit by the Bank to its directors and officers, to directors and
officers of the Company and its subsidiaries,  to principal  shareholders of the
Company,  and to "related  interests" of such directors,  officers and principal
shareholders. In addition, federal law and regulations may affect the terms upon
which any person  becoming a  director  or officer of the  Company or one of its
subsidiaries  or a principal  shareholder  of the Company may obtain credit from
banks with which the Bank maintains a correspondent relationship.

     Safety and Soundness  Standards.  The federal banking agencies have adopted
guidelines to promote the safety and soundness of federally  insured  depository
institutions.  These  guidelines  establish  standards  for  internal  controls,
information  systems,   internal  audit  systems,  loan  documentation,   credit
underwriting,  interest  rate  exposure,  asset growth,  compensation,  fees and
benefits,  asset quality and earnings.  In general, the guidelines prescribe the
goals to be achieved in each area, and each  institution will be responsible for
establishing its own procedures to achieve those goals. If an institution  fails
to  comply  with  any  of  the  standards  set  forth  in  the  guidelines,  the
institution's  primary federal regulator may require the institution to submit a
plan for achieving and  maintaining  compliance.  The preamble to the guidelines
states that the agencies expect to require a compliance plan from an institution
whose  failure to meet one or more of the  standards is of such severity that it
could  threaten  the safe and sound  operation  of the  institution.  Failure to
submit an acceptable  compliance plan, or failure to adhere to a compliance plan
that has been accepted by the appropriate  regulator,  would constitute  grounds
for further enforcement action.

     State Bank Activities. Under federal law and FDIC regulations, FDIC-insured
state  banks are  prohibited,  subject to  certain  exceptions,  from  making or
retaining  equity  investments  of a  type,  or  in  an  amount,  that  are  not
permissible   for  a  national  bank.   Federal  law,  as  implemented  by  FDIC
regulations,  also prohibits  FDIC-insured  state banks and their  subsidiaries,
subject to certain  exceptions,  from engaging as principal in any activity that
is not permitted for a national bank or its subsidiary, respectively, unless the
bank meets, and continues to meet, its minimum regulatory  capital  requirements
and the FDIC  determines the activity  would not pose a significant  risk to the
deposit insurance fund of which the bank is a member.  Impermissible investments
and activities must be divested or  discontinued  within certain time frames set
by the FDIC in accordance with federal law. These restrictions are not currently
expected to have a material impact on the operations of the Bank.

     Consumer  Protection Laws. The Bank's business includes making a variety of
types of loans to  individuals.  In making these  loans,  the Bank is subject to
State usury and regulatory  laws and to various  federal  statutes,  such as the
Equal  Credit  Opportunity  Act,  the Fair Credit  Reporting  Act,  the Truth in
Lending Act, the Real Estate  Settlement  Procedures  Act, and the Home Mortgage
Disclosure  Act, and the  regulations  promulgated  thereunder,  which  prohibit
discrimination, specify disclosures to be made to borrowers regarding credit and
settlement  costs,  and regulate the mortgage loan  servicing  activities of the
Bank,  including  the  maintenance  and  operation  of escrow  accounts  and the
transfer of mortgage loan servicing.  In receiving deposits, the Bank is subject
to extensive  regulation under State and federal law and regulations,  including
the Truth in Savings Act, the Expedited Funds Availability Act, the Bank Secrecy
Act, the Electronic  Funds Transfer Act, and the Federal Deposit  Insurance Act.
Violation of these laws could result in the  imposition of  significant  damages
and fines upon the Bank and its directors and officers.

     Branching  Authority.  Michigan banks, such as the Bank, have the authority
under  Michigan  law to  establish  branches  anywhere in the State of Michigan,
subject to receipt of all required regulatory  approvals (including the approval
of the Commissioner and the Federal Reserve).

     Effective  June 1, 1997 (or earlier if expressly  authorized  by applicable
state law), the Riegle-Neal  Interstate Banking and Branching  Efficiency Act of
1994 (the "IBBEA") allows banks to establish  interstate branch networks through
acquisitions of other banks,  subject to certain  conditions,  including certain
limitations  on the  aggregate  amount  of  deposits  that  may be  held  by the
surviving bank and all of its insured  depository  institution  affiliates.  The
establishment  of de novo  interstate  branches or the acquisition of individual
branches  of a  bank  in  another  state  (rather  than  the  acquisition  of an
out-of-state  bank in its  entirety)  is allowed  by IBBEA only if  specifically
authorized by state law. The legislation  allowed individual states to "opt-out"
of interstate branching authority by enacting  appropriate  legislation prior to
June 1, 1997.

     Michigan  did not opt out of IBBEA,  and now permits both U.S. and non-U.S.
banks to  establish  branch  offices in  Michigan.  The  Michigan  Banking  Code
permits, in appropriate circumstances and with the approval of the Commissioner,
(i)  the  acquisition  of  all  or   substantially   all  of  the  assets  of  a
Michigan-chartered bank by an FDIC-insured

                                      -9-
<PAGE>
bank,  savings bank, or savings and loan  association  located in another state,
(ii) the acquisition by a Michigan-chartered bank of all or substantially all of
the assets of an FDIC-insured bank, savings bank or savings and loan association
located   in   another   state,   (iii)  the   consolidation   of  one  or  more
Michigan-chartered  banks and FDIC-insured  banks,  savings banks or savings and
loan   associations   located  in  other  states  having  laws  permitting  such
consolidation,  with the resulting organization chartered by Michigan,  (iv) the
establishment by a foreign bank,  which has not previously  designated any other
state as its home state under the International Banking Act of 1978, of branches
located in Michigan,  and (v) the  establishment  or  acquisition of branches in
Michigan by FDIC-insured banks located in other states, the District of Columbia
or U.S. territories or protectorates  having laws permitting  Michigan-chartered
banks to establish branches in such jurisdiction.  Further, the Michigan Banking
Code permits, upon written notice to the Commissioner,  (i) the acquisition by a
Michigan-chartered  bank  of  one  or  more  branches  (not  comprising  all  or
substantially  all of the  assets)  of an  FDIC-insured  bank,  savings  bank or
savings and loan association located in another state, the District of Columbia,
or   a   U.S.   territory   or   protectorate,   (ii)   the   establishment   by
Michigan-chartered  banks of branches  located in other states,  the District of
Columbia,  or U.S. territories or protectorates,  and (iii) the consolidation of
one or more  Michigan-chartered  banks and FDIC-insured banks,  savings banks or
savings  and loan  associations  located  in other  states,  with the  resulting
organization chartered by one of such other states.



                                      -10-
<PAGE>
Item 2.  Properties.

     The Bank  operates  from  eleven  facilities,  located in Kent,  Ottawa and
Allegan  Counties,  Michigan.  The  Bank's  main  office is located at 2445 84th
Street, S.W., Byron Center, Michigan. This facility is a two story 30,000 square
foot building  constructed  in 1988 with an 8,000 square foot two story addition
completed  in 1999  and is owned by the  Bank.  The  Bank's  branch  offices  in
Allendale,  Dorr, Grand Rapids,  Kentwood,  Grandville,  Hamilton,  Hudsonville,
Jamestown,  Moline and Zeeland are all single story  facilities  ranging in size
from 1,100 square feet to 10,000 square feet.  The Bank owns its branch  offices
in Allendale, Dorr, Grand Rapids, Kentwood, Grandville,  Hamilton,  Hudsonville,
Jamestown, Moline and Zeeland.

Item 3.  Legal Proceedings.

     Neither the Company nor the Bank is involved in any legal proceedings other
than routine  litigation  incidental to the ordinary  conduct of the business of
the Bank,  none of which would result in a material impact on the Company or the
Bank, individually or in the aggregate, in the event of an adverse outcome.

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

     No matters were  submitted to a vote of security  holders during the fourth
quarter of 2000.


                                      -11-
<PAGE>
Additional Item - Executive Officers

     The Board of Directors  appoints the executive  officers of the Bank. There
are no family  relationships  among the  officers  and/or the  directors  of the
Company,  or any arrangement or understanding  between any officer and any other
person pursuant to which the officer was elected.

     The  following  table sets forth  certain  information  with respect to the
Company's officers as of December 31, 2000:
<TABLE>
                                                                                                Year Became
            Name                  Age                 Position with Company                     an Officer
            ----                  ---                 ---------------------                     ----------
<S>                               <C>     <C>                                                      <C>
John A. Van Singel                46      President, CEO and director of the Company and           1976
                                          the Bank
John Peterson                     52      Director of the Company and the Bank,                    1983
                                          Executive Vice President of the Bank
James A. Luyk(1)                  38      Executive Vice President of the Bank                     2000
Lois Smalligan                    68      Director of the Company and the Bank, Vice               1975
                                          President of the Bank
</TABLE>

(1)      During  fiscal year 2000,  James Luyk  joined the Company as  Executive
         Vice-President and Chief Financial Officer. Mr. Luyk joined the Company
         from  Huntington  National  Bank,  where he  served  most  recently  as
         Regional  Controller.   Prior  to  Huntington,  he  served  in  various
         financial positions with First Michigan Bank Corporation.




                           [INTENTIONALLY LEFT BLANK]




                                      -12-
<PAGE>
                                     PART II

Item 5.  Market Price of and  Dividends  on the  Registrant's Common  Equity and
         Related Stockholder Matters.

     There is not an active market for the Company's  Common Stock, and there is
no published  information with respect to its market price. There are occasional
sales through  brokers and direct sales by  shareholders  of which the Company's
management is aware.  It is the  understanding  of the management of the Company
that over the last two years,  the Company's  Common Stock has sold at prices in
excess of book value.  From January 1, 1999,  through  December 31, 2000,  there
were,  so far as the  Company's  management  knows,  113  sales of shares of the
Company's Common Stock,  involving a total of 37,950 shares. During this period,
the  highest  price known by  management  to be paid was $69.00 per share in the
second  quarter of 2000,  and the lowest price was $46.00 per share in the first
quarter of 1999. To the knowledge of  management,  the last sale of Common Stock
occurred on February  13, 2001,  involving  the sale of 100 shares at a price of
$51.00 per share.

     The  following  table sets forth the range of high and low sales  prices of
the Company's  Common Stock during 1999 and through  February 19, 2001, based on
information  made available to the Company,  as well as per share cash dividends
declared  during  those  periods.  Although  management  is  not  aware  of  any
transactions  at higher or lower  prices,  there may have been  transactions  at
prices outside the ranges listed below:
<TABLE>
                                                                                                 Cash
                                                                                                 ----
                                                         Sales Prices                      Dividends Declared
                                                         ------------                      ------------------
====================================================================================================================
                1999                              High                      Low
                ----                              ----                      ---
<S>                                               <C>                      <C>                      <C>
First Quarter......................               $50.00                   $46.00
Second Quarter.....................                60.00                    50.00                   $ .40
Third Quarter......................                52.75                    51.00
Fourth Quarter.....................                60.00                    53.50                   $ .42

                2000                              High                      Low
                ----                              ----                      ---
First Quarter......................               $60.00                   $55.00
Second Quarter.....................                69.00                    56.50                   $ .42
Third Quarter......................                65.00                    55.00
Fourth Quarter.....................                61.00                    52.00                   $ .45

                2001
                ----
First Quarter......................               $55.00                   $50.00
====================================================================================================================
</TABLE>

There are 4,000,000  shares of the Company's Common Stock  authorized,  of which
2,042,532  shares were issued and  outstanding  as of March 1, 2001.  There were
approximately 1,069 shareholders of record,  including trusts and shares jointly
owned,  as of that date.  Directors  and officers of the Company hold options to
purchase  a total of  20,234  shares of the  Company's  Common  Stock.  No other
warrants or options  exist for the  purchase of  additional  common stock of the
Company.

     The holders of the Company's  Common Stock are entitled to dividends  when,
as and if declared by the Board of Directors of the Company out of funds legally
available  for that  purpose.  Cash  dividends  have been paid on a  semi-annual
basis. In determining dividends,  the Board of Directors considers the earnings,
capital  requirements and financial condition of the Company and the Bank, along
with other relevant  factors.  The Company's  principal source of funds for cash
dividends is the dividends  paid by the Bank. The ability of the Company and the
Bank to pay dividends is subject to regulatory  restrictions  and  requirements.
See the discussion under "Business-Supervision and Regulation" above.

                                      -13-
<PAGE>
Item 6.  Selected Financial Data.

<TABLE>
                 SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA
                      (in thousands, except per share data)

                                                                     Year Ended December 31,
                                        ------------------------------------------------------------------------
================================================================================================================
                                            2000           1999           1998           1997           1996
                                            ----           ----           ----           ----           ----
<S>                                     <C>            <C>            <C>             <C>            <C>
Income Statement Data:
  Interest income                       $    33,172    $    25,080    $   21,134      $   18,624     $   17,502
  Interest expense                           16,491         10,528         8,916           7,693          7,181
  Net interest income                        16,681         14,552        12,218          10,931         10,321
  Provision for loan losses                   3,120          1,250           400              50              0
  Noninterest income                          3,385          3,088         2,455           1,476          1,062
  Gains on sale of
  available-for-sale securities                 213            533           204              66             13
  Noninterest expenses                       12,057         10,603         7,334           5,782          5,169
  Income before federal                       5,102          6,320         7,144           6,641          6,227
    income taxes
  Net income                                  3,970          4,529         5,076           4,626          4,375

Per Share Data(1):
  Net income                            $      1.95    $      2.23    $     2.54      $     2.30     $     2.17
  Cash dividends declared                       .87            .82          1.18            1.55            .47
  Book Value                                  21.94          20.31         19.98           18.37          17.66
  Weighted average shares
     outstanding (2)                          2,034          2,031         2,000           2,010          2,014

Balance Sheet Data at year end:
  Total assets                          $   457,004    $   376,073    $  301,494      $  243,088     $  217,527
  Loans, net of unearned income             347,293        287,830       222,133         168,953        145,069
  Allowance for loan losses                   4,874          3,551         2,879           2,565          2,376
  Deposits                                  338,153        254,166       217,291         184,700        170,221
  Stockholders' equity                       44,629         41,258        39,953          36,915         35,544

Ratios:
  Tax equivalent net interest
     income to average earning
     assets                                   4.38%          4.89%          5.02%          5.24%          5.23%
  Return on average equity                    9.37          11.08          13.28          13.08          12.89
  Return on average assets                     .96           1.38           1.90           2.03           2.03

  Nonperforming loans to
  total loans                                  .77           1.90           0.26           0.14           0.82
  Efficiency ratio                           58.79          58.62          48.48          45.15          43.91
  Dividend payout ratio                      44.55          36.97          46.30          67.35          21.54
  Equity to asset ratio                       9.77          10.97          13.25          15.19          16.34
  Tier 1 leverage ratio                      10.52          12.64          14.74          15.03          15.97
================================================================================================================
</TABLE>
(1)      As restated for a 2-for-1 common stock split effected in the form of a
         dividend in 1998.
(2)      At year end in thousands.

                                      -14-
<PAGE>
ITEM 7.
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

     The  following  financial  review  presents  management's   discussion  and
analysis of consolidated  financial  condition and results of operations  during
the period of 1998 through 2000.  The  discussion  should be read in conjunction
with the Company's  consolidated  financial  statements and  accompanying  notes
thereto.

Summary

     The Company  has  experienced  exceptional  growth in loans,  deposits  and
assets  during  the past three  years.  The Bank  began to  implement  a plan to
leverage  its capital  more  effectively  by  expanding  into four new  markets.
Additionally  the Bank has  increased  the regular  dividend in each of the five
years presented,  as well as paying special  dividends in 1997 and 1998.  Future
payments of special dividends should not be expected.

     In 1999 the Company  purchased the Dornbush  Insurance Agency to expand the
menu of financial  products  the Company  could  provide to  customers  and also
diversify the Company's revenue sources.  To date, the insurance product revenue
is a relatively  small part of the Company's  total revenue,  but is expected to
provide revenue growth opportunities in future years.

     The recent expansion effort has temporarily  suppressed earnings as the new
offices and staff have not reached optimal performance levels. Furthermore,  the
recent  loan  growth  combined  with higher  losses has  required a  significant
increase in the allowance for loan losses.  Finally, the net interest margin has
come under  pressure due to an inverted  yield curve,  overall  higher  interest
rates, and an increased reliance on more costly purchased funding.


Results of Operations

Table 1  Earnings Performance (in thousands, except per share data)
<TABLE>
                                                             Year Ended December 31
                                                  ---------------------------------------------
                                                     2000            1999              1998
                                                     ----            ----              ----
<S>                                                 <C>              <C>               <C>
Net income.................................         $3,970           $4,529            $5,076
  Per share of common stock................          $1.95            $2.23             $2.54

Earnings ratios:
  Return on average assets.................           .96%            1.38%             1.90%
  Return on average equity.................          9.37%           11.08%            13.28%
</TABLE>

     Net income  declined  $559,000,  or 12.3% in 2000.  Most of the decrease is
attributable  to an increase of  $1,870,000  in the  provision  for loan losses.
Three factors contributed to the need for the increase in the provision for loan
losses.  First,  a substantial  part of the increase was required as a result of
losses on loans  originated  by one  relatively  new loan  officer who failed to
follow the Bank's established lending policies and procedures.  The loan officer
has  resigned  from the Bank and  controls  have been  strengthened  to  protect
against similar failures in the future.  Second,  during the year,  greater than
normal loan growth contributed to the need for a larger than usual provision for
loan losses. Finally, an increase to the provision for loan losses was booked to
expense  to  increase  the  allowance  for loan  loss,  to an  amount  that more
accurately reflects probable losses inherent in the portfolio.

     Another  contributing  factor  to the  decline  in  profitability  in 2000,
relates to both the  increase in general  interest  rates  during 1999 and 2000,
combined  with a change  in the  slope  of the  yield  curve  from  "normal"  to
inverted.  During  much of 2000,  it was more  expensive  for the bank to borrow
short-term  funds than the yield on  longer-term  assets.  As of early 2001, the
interest rate yield curve was still inverted,  however,  it has shifted toward a
"normal" slope.

                                      -15-
<PAGE>
     The decline in earnings  from 1998 to 1999 reflects the  implementation  of
the Bank's growth  strategy.  During the past three years,  the Bank opened four
new  branches  and  expanded  its  corporate  operations.   The  start-up  costs
associated  with this  strategy had an impact on short-term  profitability.  The
Bank is beginning recognize the benefits of this expansion phase.







                           [INTENTIONALLY LEFT BLANK]








                                      -16-
<PAGE>
Net Interest Income

     The following schedule presents the average daily balances, interest income
(on a fully  taxable  equivalent  basis) and interest  expense and average rates
earned and paid for the Company's major categories of assets,  liabilities,  and
stockholders' equity for the periods indicated:

Table 2 - Interest Yields and Costs (in thousands)
<TABLE>
                                                                Year ended December 31,
===============================================================================================================================
                                                2000                           1999                           1998
                                    Average               Yield/    Average             Yield/    Average               Yield/
                                    Balance    Interest    Cost     Balance   Interest   Cost     Balance    Interest    Cost
<S>                                 <C>        <C>         <C>      <C>        <C>       <C>      <C>        <C>         <C>
Assets
Fed. funds sold                        $ 387    $    25    6.35%    $ 1,079     $  53    4.91%    $   375       $  21    5.60%
Securities:
  Taxable                             44,770      3,017    6.74      36,551     2,280    6.23      38,030       2,410    6.34
  Tax-exempt                          23,491      1,601    6.82      20,885     1,514    7.25      19,442       1,497    7.70
Loans and leases(1)(2)               322,166     28,972    8.99     248,440    21,691    8.73     194,728      17,661    9.07
                                     -------     ------    ----     -------    ------    ----     -------      ------    ----
Total earning assets/total
interest income                      390,814     33,615    8.59     306,955    25,538    8.32     252,575      21,589    8.55
Cash and due from banks                9,320                          8,601                         6.507
Unrealized gain                       (1,099)                           212                         1,085
All other assets                      18,331                         14,968                         9,428
Allowance for loan loss               (3,999)                        (2,936)                       (2,663)
                                      ------                         ------                        ------
  Total assets                      $413,367                       $327,800                      $266,932
                                    ========                       ========                      ========
Liabilities and
  Stockholders' Equity
Interest bearing deposits:
MMDA, Savings/NOW accounts          $ 89,052    $ 2,518    2.83%    $83,740    $2,153    2.57%   $ 71,658     $ 2,027    2.83%
Time                                 159,326      9,370    5.88     120,114     6,215    5.17      98,870       5,547    5.61
Fed Funds Purchased                   41,876      2,268    5.42      28,901     1,242    4.30      15,767         686    4.35
Other Borrowed Money                  37,825      2,335    6.17      15,342       918    5.98      10,966         656    5.99
                                      ------      -----              ------       ---              ------        ----
Total interest bearing
liabilities/                         328,079     16,491    5.03     248,097    10,528    4.25     197,261       8,916    4.52
                                                 ------                        ------                           -----
   total interest expense
Noninterest bearing deposits          40,109                         36,452                        29,324
All other liabilities                  2,797                          2,369                         2,136
Stockholders' Equity:
Accumulated other comprehensive
  income                                (725)                           361                           716
Common Stock, Paid-in Capital,
   Retained Earnings                  43,107                         40,521                        37,495
                                      ------                         ------                        ------
Total liabilities and
  stockholders' equity              $413,367                       $327,800                      $266,932
                                    ========                       ========                      ========

Interest spread                                 $16,681    3.56%              $14,552    4.07%                $12,218    4.03%
                                                -------    -----              -------    -----                -------    -----
Net interest income-FTE                         $17,124                       $15,010                         $12,673
                                                =======                       =======                         =======
Net Interest Margin as a
Percentage of Average Earning                              4.38%                         4.89%                           5.02%
                                                           =====                         =====                           =====
Assets - FTE
===============================================================================================================================
</TABLE>
(1)      Nonaccrual loans and leases and loans held for sale have been  included
         in the average loans and lease balances.
(2)      Interest on loans  includes net  origination fees totaling  $165,791 in
         2000, $190,720 in 1999 and $183,443 in 1998.

     Net interest income is the principal  source of income for the Corporation.
In  the  current  year,  tax  equivalent  net  income  increased  $2,114,000  to
$17,124,000, a 14.1% increase from 1999. The increase was a result of the growth
of the  Corporation's  average  earning  assets  which  grew  27.3%  from a year
earlier.  The growth in earning  assets was fueled by a 29.7%  growth in average
loan balances. The Bank's investment portfolio grew 18.8% over the prior year.

                                      -17-
<PAGE>
     Both the net interest  spread and net interest  margin were  compressed  in
2000 due to higher general interest rates and an increased reliance on purchased
funding.  Purchased funding includes  borrowings from the Federal Home Loan Bank
and  brokered  certificates  from  outside the Bank's  market  area.  The Bank's
exceptional loan growth precipitated the need for purchased funding.

     In 2000,  the yield on total  earning  assets  increased  27 basis  points,
compared to a 78 basis point rise in the total interest bearing liabilities cost
of funds.

     Management  expects the declining  trend in the fully tax equivalent  (FTE)
net interest  margin to continue  because of fierce  competition for deposits in
its local  markets and shift of deposit  funding  sources from low cost funds to
higher cost  funds.  This is a result of high  funding  needs,  increased  local
competition,  and  increased  sophistication  of funds  management by the Bank's
customers.  Management  expects the net  interest  margin of the Bank to benefit
from generally  lower rates in 2001.  However,  there is no assurance rates will
decline or that the Bank's net interest margin will improve.

     Net interest  income is the difference  between  interest  earned on loans,
securities,  and other earning assets and interest paid on deposits and borrowed
funds.  In Table 2 and Table 3 the interest  earned on investments  and loans is
expressed on a fully  taxable  equivalent  (FTE) basis.  Tax exempt  interest is
increased to an amount comparable to interest subject to federal income taxes in
order to properly  evaluate the effective  yields earned on earning assets.  The
tax equivalent  adjustment is based on a federal income tax rate of 34%. Table 3
analyzes the reasons for the  increases  and  decreases  in interest  income and
expense. The change in interest due to changes in both balance and rate has been
allocated  between the factors in proportion to the relationship of the absolute
dollar amounts of change in each.

Table 3 - Change in Tax Equivalent Net Interest Income (in thousands)
<TABLE>
                                           2000 Compared to 1999                    1999 Compared to 1998
                                   -------------------------------------    ------------------------------------
                                                Amount of                                 Amount of
                                           Increase/(Decrease)                       Increase/(Decrease)
                                             Due to Change In                         Due to Change In
                                   -------------------------------------    -------------------------------------
                                                                Net                                       Net
                                                             Amount of                                 Amount of
                                                Average     Increase/                    Average      Increase/
                                   Volume         Rate      (Decrease)      Volume         Rate       (Decrease)
                                   ------       --------    ----------      ------       --------     ----------
Interest Income
<S>                              <C>            <C>         <C>            <C>          <C>            <C>
Federal funds sold...........    $       (44)   $      16   $     (28)     $     36     $     (4)      $     32
Securities:
   Taxable...................            554          183         737           (92)         (38)          (130)
   Tax Exempt................            178          (91)         87           105          (88)            17
Loans........................          6,628          653       7,281         4,689         (659)         4,030
                                 -----------    ---------   ---------      --------     ---------      --------
Total interest income........          7,316          761       8,077         4,738         (789)         3,949
                                 -----------    ---------   ---------      --------     ---------      --------

Interest Expense
Interest bearing deposits:

   Savings/NOW Accounts......            150          215         365           310         (184)           126
   Time......................          2,306          849       3,155         1,098         (430)           668
   Fed Funds Purchased.......            703          323       1,026           565           (9)           556
   Other Borrowed Money......          1,387           30       1,417           261            1            262
                                 -----------    ---------   --------       -------      --------       --------
   Total Interest Expense....          4,546        1,417       5,963         2,234         (622)         1,612
                                 -----------    ---------   ---------      --------     --------       --------

Net interest income (FTE)....    $     2,770    $    (656)  $   2,114      $  2,504     $   (167)      $  2,337
                                 ===========    =========   =========      ========     =========      ========
</TABLE>

                                      -18-
<PAGE>
     Interest from loans  represents  86.2%,  84.9% and 81.8% of total  interest
income for 2000,  1999 and 1998,  respectively.  Net interest income is strongly
influenced by results of the Bank's lending activities.

     Total interest expense increased 56.6% from 1999 to 2000 and also increased
18.1% from 1998 to 1999:  such  variances are detailed in Table 3. Cost of funds
are influenced by economic conditions and activities of the Federal Reserve. The
Bank's asset/liability  committee seeks to manage sources and uses of funds, and
to  monitor  the gap in  maturities  of these  funds to  maintain  a steady  net
interest margin in varying market conditions.


Table 4 - Composition of Average Earning Assets and Interest Paying Liabilities
<TABLE>
                                                                 Year ended December 31
                                                       -----------------------------------------
                                                       2000              1999               1998
                                                       ----              ----               ----
<S>                                                    <C>               <C>                <C>
As a percent of average earning assets
  Loans.....................................            82%                81%               77%
  Other earning assets......................            18%                19%               23%
                                                        ---                ---               ---
     Average earning assets.................           100%               100%              100%

  Savings and NOW accounts..................            27%                34%               36%
  Time deposits.............................            49%                48%               50%
  Other borrowings..........................            24%                18%               14%
                                                        ---                ---               ---
     Average interest bearing liabilities...           100%               100%              100%

Average earning asset ratio.................            95%                94%               95%
</TABLE>

     Table 4 illustrates the shift of earning assets into loans and the shift of
funding  sources from lower cost savings and NOW accounts to higher costing time
and borrowed funds. The Bank has been able to maintain an earning asset ratio of
approximately 95% during the past three years.  Non-earning assets include cash,
fixed assets and certain other assets.

Provision and Allowance for Loan Loss

     The  provision  for loan losses  reflects  management's  evaluation  of the
adequacy of the allowance for loan losses. The allowance represents management's
assessment of probable losses inherent in the loan portfolio. The Bank allocates
the allowance to each loan category based on management's evaluation of relevant
risk factors such as past performance, collateral type, and economic conditions.
A specific  reserve is determined for commercial  loans over a specified  amount
with certain risk characteristics.

     Actual losses experienced in the future,  could significantly vary from the
estimated  allocation  of the loan loss  reserve.  Changes in local and national
economic  factors could  significantly  affect the adequacy of the allowance for
loan losses.  While amounts are  allocated to various  portfolios as directed by
Statement of Financial  Accounting  Standards No. 114, the entire  allowance for
loan losses is available to absorb losses from any portfolio segment.

     The provision for loan losses charged to earnings was $3.1 million in 2000,
significantly higher than $1.3 million in 1999. The increase in the provision is
attributed to three sources.  First,  the Bank incurred a large loss on a single
commercial  loan customer;  second,  a higher  provision was required due to the
exceptional  loan growth,  and third a higher provision was recorded to increase
the  allowance  for loan loss ratio from 1.23% of total  loans to 1.40% of total
loans.  The increase in the loan loss ratio  reflects the amount  necessary  for
probable losses inherent in the portfolio.

                                      -19-
<PAGE>
Table 5 - Noninterest Income (in thousands)
<TABLE>
                                                                   Year Ended December 31
                                                   ----------------------------------------------------
                                                      2000                 1999                1998
                                                      ----                 ----                ----
<S>                                                 <C>                   <C>                  <C>
Service charges on deposit accounts ......          $ 1,353               $ 811                $ 588

Net gains on asset sales:
  Loans...................................              344                 600                1,367
  Securities..............................              213                 533                  204
Loan servicing fees.......................              153                 148                  184
Insurance premium revenue.................              961               1,043                    0
Brokerage revenue.........................              310                 322                  166
Other.....................................              264                 164                  150
                                                        ---                 ---                  ---
     Total noninterest income.............           $3,598              $3,621               $2,659
                                                     ======              ======               ======
</TABLE>

Noninterest Income

     Noninterest  income  consists  of  service  charges  on  deposit  accounts,
brokerage fees,  insurance fees,  service fees,  gains on investment  securities
available  for sale and gains from loan sales to the Federal Home Loan  Mortgage
Corporation  (Freddie Mac) loans.  The Bank retains the servicing  rights on the
loans sold to Freddie Mac.  Excluding  the sale of assets,  non-interest  income
increased $553,000,  or 22% over 1999. The increase was driven by a 67% increase
in service charges on deposits.  This increase was a result of continued account
growth,  fee  increases  and  improved  collection  of  certain  assessed  fees.
Non-interest income increased $962,000 or 36% for 1999 versus 1998. The increase
was due primarily to the February 1, 1999 merger with Dornbush Insurance Agency.


Table 6  Net Gains on the Sale of Real Estate Mortgage Loans (in thousands)
<TABLE>
                                                                Year ended December 31
                                                  ----------------------------------------------------
                                                      2000                1999               1998
                                                      ----                ----               ----
<S>                                                 <C>                 <C>                 <C>
Total Real estate mortgage loan
      originations........................          $45,098             $65,668             $91,446

Real estate mortgage loan sales...........           20,224              44,764              72,075

Real estate mortgage loans servicing
    rights sold...........................                -                   -                   -

Net gains on the sale of real
    estate mortgage loans.................              344                 600               1,367

Net gains as a percent of real
    estate mortgage loan sales............            1.70%               1.34%               1.90%
</TABLE>

     Net  gains on the sale of real  estate  mortgage  loans  totaled  $344,000,
$600,000 and $1,367,000 in 2000, 1999 and 1998, respectively.  The decreases are
a result of the less  favorable  interest  rate  environment  which  slowed  new
mortgage  loan business and caused a major  slowdown in the refinance  business.
The Bank sells the majority of its fixed-rate  obligations.  Such loans are sold
without  recourse.  The Bank retains  servicing  rights on real estate  mortgage
loans sold.

                                      -20-
<PAGE>
Noninterest Expense

Table 7 - Noninterest Expense (in thousands)
<TABLE>
                                                                 Year ended December 31
                                                  --------------------------------------------------
                                                       2000                1999               1998
                                                       ----                ----               ----
<S>                                                  <C>                 <C>                 <C>
Salaries and employee benefits............           $ 6,650             $ 5,933             $3,918
Occupancy.................................               808                 786                465
Equipment.................................             1,255                 942                678
FDIC assessment...........................                53                  32                 28
Postage...................................               170                 152                115
Printing and supplies.....................               321                 286                268
Marketing.................................               334                 233                213
Michigan Single Business Tax..............               215                 192                192
Other.....................................             2,251               2,047              1,457
                                                       -----               -----              -----
  Total noninterest expense...............           $12,057             $10,603             $7,334
                                                     =======             =======             ======
</TABLE>

     Non-interest  expense  increased  $1,454,000  or 13.7% in 2000  compared to
1999.  This follows a 44.6%  increase in 1999 compared to 1998. The increases in
both 2000 and 1999 are  generally  the result of the  overall  expansion  of the
Bank's  business.  The increase in 1999 includes the February 1,1999 merger with
Dornbush Insurance Agency which increased noninterest expenses $924,000 in 1999.
The increased level of  non-interest  expense is both a result of, and necessary
to achieve  the Bank's  aggressive  growth  plan.  During the past two years the
Bank's  assets  have  increased  over 51%.  The growth of  non-interest  expense
includes  four new banking  offices,  expansion of the  corporate  offices,  and
affiliation with the Dornbush Insurance Agency.

Provision for Income Taxes
     The  provision  for  income  taxes was  $1,132,000  in 2000  compared  with
$1,791,000 in 1999,  and  $2,068,000 in 1998.  The Company's  effective tax rate
approximated  22% in  2000,  28% in 1999 and 29% in 1998.  The  decrease  in the
effective tax rate for the year 2000 was a result of a valuation  allowance that
started to reverse in 2000 and will continue through year 2001.

Financial Condition --Summary

     During 2000, total assets increased 22% to $457,004,000, deposits increased
33% to  $338,153,000  and  loans  increased  21% to  $347,293,000.  The  Bank is
emphasizing  relationship  banking  and  has  competed  aggressively  to  obtain
deposits and loans.  A discussion  of changes in balance  sheet amounts by major
categories follows:

The Loan Portfolio

     The  majority  of loans are made to  businesses  in the form of  commercial
loans and real estate  mortgages.  The Bank's consumer lending activity includes
direct consumer loans,  indirect  consumer loans,  home equity loans,  unsecured
lines  of  credit  and  residential  real  estate  loans.  Although  most of the
residential  real  estate  loans  are sold to the  Federal  Home  Loan  Mortgage
Corporation("FHLMC"),  the Bank retains  servicing rights on  substantially  all
such loans sold. At December 31, 2000 and 1999, the Bank was servicing loans for
FHLMC totalling $147,566,000 and $147,956,000,  respectively. The loan portfolio
mix at December 31,2000 consists of 48% commercial real estate,  15% residential
real estate, 19% commercial and 18% consumer  installment.  Consumer installment
loans as a percentage of the loan portfolio have increased  recently as a result
of the Bank's indirect lending program, substantially all are vehicle loans.

                                      -21-
<PAGE>
Table 8 - Loan Portfolio Composition (in thousands)
<TABLE>
                                                                       Year ended December 31
                                             ------------------------------------------------------------------------
                                                        2000                     1999                    1998
                                                  Amount         %        Amount         %        Amount          %
                                                  ------         -        ------         -        ------          -
<S>                                              <C>            <C>       <C>           <C>       <C>            <C>
Commercial Real Estate....................       $ 165,978       48       $140,648       49       $ 114,248       51
Residential Real Estate...................          53,644       15         41,985       15          36,554       17
Other Commercial..........................          64,511       19         58,793       20          40,825       18
Installment...............................          63,160       18         46,404       16          30,506       14
                                                  --------       --         ------       --          ------       --
  Total loans............................          347,293      100%       287,830      100%        222,133      100%
                                                                ====                    ====                     ====
Less:
Allowance for Loan Losses................           (4,874)                 (3,551)                  (2,879)
                                                   -------                 -------                  -------
Total Loans Receivable, Net...............        $342,419                $284,279                 $219,254
                                                  ========                ========                 ========
</TABLE>
     The lending  policy of the Bank was written to reduce credit risk,  enhance
earnings and guide the lending officers in making credit decisions.  There are 8
levels in the loan  authorization  procedure for secured loans  depending on the
dollar amount of the loan request.


                $2,400,001 to $6,000,000  Board of Directors
                $1,000,001 to $2,400,000  Executive Loan Committee
                         0 to $1,000,000  Loan Committee
                         0 to $  300,000  Class 1 Lender
                         0 to $  200,000  Class 2 Lender
                         0 to $   75,000  Class 3 Lender
                         0 to $   30,000  Class 4 Lender
               Student Loans Only         Class 5 Lender

     The Board of Directors of the Bank  approves  the loan  authority  for each
lender and has  appointed a Chief  Lending  Officer who is  responsible  for the
supervision  of the lending  activities  of the Bank.  The Board has appointed a
loan  review  officer  who  monitors  the credit  quality of the loan  portfolio
independent of the loan approval process.  Periodic reviews are submitted by the
loan review officer to the Chief Lending Officer and these reviews are submitted
to the Audit/Compliance  Committee on a quarterly basis. The Bank has no foreign
loans and there were no concentrations  greater than 10% of total loans that are
not disclosed as a separate category in Table 8.

     Loan  quality is  demonstrated  by the ratios of  non-performing  loans and
charge offs as a percentage of the loan portfolio.  As referenced in more detail
in Table 10 below,  the Bank's ratio of  non-performing  loans to total loans at
December  31, 2000 was .77%  compared to 1.90% in 1999.  The  December  31, 1999
ratio was significantly higher than the historical average and the Bank does not
expect this high of a percentage in the future.

                                      -22-
<PAGE>
Table 9  Maturities and Sensitivities of Loans to Changes in Interest Rates

     The  following  table  shows the amount of total  loans  outstanding  as of
December  31, 2000 which,  based on  scheduled  maturity  dates,  are due in the
periods indicated.
<TABLE>
                                                                             Maturing
                                        --------------------------------------------------------------------------
                                                                       (in thousands of dollars)
                                                               After one but
                                         Within one Year     within five years    After five years          Total
                                         ---------------     -----------------    ----------------          -----
<S>                                      <C>                    <C>                   <C>                <C>
Residential Real Estate...........            $15,606              $22,831            $ 15,207           $ 53,644
Installment.......................              2,736               44,874              15,550             63,160
Commercial Real Estate............             32,561              117,265              16,152            165,978
Other Commercial..................             36,001               26,320               2,190             64,511
                                               ------               ------               -----             ------
       Totals.....................            $86,904             $211,290             $49,099            347,293
                                              =======             ========             =======
Allowance for Loan Losses.........                                                                         (4,874)
                                                                                                          -------
Total Loans Receivable, Net.......                                                                       $342,419
                                                                                                         ========
</TABLE>
     Below  is a  schedule  of the  amounts  maturing  or  repricing  which  are
classified according to their sensitivity to changes in interest rates.

<TABLE>
                                                                                 Interest Sensitivity
                                                             ------------------------------------------------------
                                                                              (in thousands of dollars)
                                                                 Fixed Rate         Variable Rate        Total
                                                                 ----------         -------------        -----
<S>                                                               <C>                 <C>             <C>
Due within 3 months.................................              $14,376             $70,437         $  84,813
Due after 3 months within 1 year....................               12,992                   -            12,992
Due after one but within five years.................              209,898                   -           209,898
Due after five years................................               39,590                   -            39,590
                                                                   ------             -------          --------
Total...............................................             $276,856             $70,437           347,293
                                                                 ========             =======
Allowance for loan losses...........................                                                     (4,874)
                                                                                                       ---------
Total loans receivable, net.........................                                                    $342,419
                                                                                                       =========
</TABLE>

Table 10 - Nonperforming Assets (in thousands)

<TABLE>
                                                                                     December 31
                                                                      ------------------------------------------
                                                                       2000             1999              1998
                                                                       ----             ----              ----
<S>                                                                    <C>             <C>                <C>
Nonaccrual loans.............................................          $2,535          $2,471             $353
90 days or more past due & still accruing....................             151           3,003              217
                                                                          ---           -----              ---
    Total nonperforming loans................................           2,686           5,474              570
Other real estate............................................               -               -              116
                                                                       ------          ------              ---
    Total nonperforming assets...............................          $2,686          $5,474             $686
                                                                       ======          ======             ====

Nonperforming loans as a percent of total loans..............            .77%           1.90%            0.26%
Nonperforming assets as a percent of total loans.............            .77%           1.90%            0.31%
Allowance for loan losses as a % of non-performing loans......           181%             65%             505%
</TABLE>

                                      -23-
<PAGE>
     Nonperforming  assets  are  comprised  of loans for which  the  accrual  of
interest  has been  discontinued,  accruing  loans  90 days or more  past due in
payments,  collateral  for loans which have been  in-substance  foreclosed,  and
other real estate which has been acquired  primarily through  foreclosure and is
awaiting disposition.  Loans, including loans considered impaired under SFAS No.
118, are generally  placed on a nonaccrual  basis when  principal or interest is
past due 90 days or more and when, in the opinion of management, full collection
of principal and interest is unlikely.

     The allowance for loan losses is 181% of the total  non-performing loans as
of December 31, 2000.  Management believes that the allowance for loan losses is
adequate  for these  loans and the  remainder  of the lending  portfolio.  As of
December 31, 2000 there were no other  interest  bearing  assets which  required
classification.  Management  is not aware of any  recommendations  by regulatory
agencies,  which if  implemented,  would have a material impact on the Company's
liquidity, capital or results of operations.

     The table below presents the interest income that would have been earned on
non-performing  loans  outstanding at December 31, 2000, 1999 and 1998 had those
loans been accruing  interest in accordance  with the original terms of the loan
agreement  (pro forma  interest)  and the  amount of  interest  income  actually
included in net interest income for those years.


Table 11 - Foregone Interest on Non-Performing Loans
<TABLE>
                                                               For the Year Ended December 31
                                                                       (in thousands)
                               ---------------------------------------------------------------------------------------------
                                            2000                            1999                            1998
                               Non-accrual     Restructured    Non-accrual     Restructured    Non-accrual     Restructured
<S>                              <C>             <C>             <C>               <C>           <C>               <C>
Pro forma interest               $ 284           $ 372           $ 139             $   -         $  33             $   -
Interest earned                    146             372             108                 -            32                 -
                                 -----           -----           -----             -----         -----             -----
Foregone interest income         $ 138           $   -           $  31             $   -         $   1             $   -
                                 =====           =====           =====             =====         =====             =====
</TABLE>


Table 12 - Loan Loss Experience (in thousands)

     The following is a summary of loan balances (excluding loans held for sale)
at the end of each  period  and their  daily  average  balances,  changes in the
allowance for the loan losses  arising from loans charged off and  recoveries on
loans  previously  charged off, and additions to the  allowance  which have been
expensed.

     For the year ended  December  31,  2000,  both the  dollar  amount of loans
charged  off as  uncollectable,  and the  amount  charged  against  earnings  as
additions to the allowance for loan losses increased substantially. The increase
in loans charged off as uncollectable  was  significantly  affected by losses on
commercial  loans. A significant  portion of the commercial loan losses resulted
from loans  originated by a relatively new loan officer who failed to follow the
Bank's  established  lending  policies  and  procedures.  The loan  officer  has
resigned  from the Bank and  controls  have  been  strengthened  to  reduce  the
likelihood  of similar  losses in the  future.  The  provision  for loan  losses
charged against earnings increased $1,870,000,  or approximately 150% over 1999.
This significant increase is the result of the commercial loan losses referenced
above,  the strong loan growth in 2000, and an additional  provision to increase
the level of the  allowance  for loan  losses  from 1.23% to 1.40% of total loan
balances. The higher level of the allowance reflects probable losses inherent in
the portfolio.  The average daily balance of loans increased  approximately  65%
during  the  past  two  years.  Starting  in the 2nd  quarter  of 1998  the bank
aggressively  targeted the indirect consumer loan market,  primarily auto loans.
The program has increased the consumer loan portfolio balance  substantially and
has raised the net charge off percentage. Consumer loan net charge-offs declined
$71,000 in 2000 compared to 1999. Net  charge-offs in the Real Estate  portfolio
continue to be very low.

                                      -24-
<PAGE>
<TABLE>
                                                                                  Year Ended December 31
                                                                      ---------------------------------------------
                                                                         2000             1999            1998
                                                                         ----             ----            ----
<S>                                                                     <C>             <C>              <C>
Loans:
  Average daily balance of loans for the year.................          $321,579        $245,349         $190,472
  Amount of loans outstanding at end of period................          $347,293        $287,830         $222,133

Allowance for loan losses
  Balance at beginning of year................................            $3,551          $2,879           $2,565
  Loans charged off:
    Real estate...............................................                 1               -                -
    Commercial................................................             1,400              45               90
    Consumer..................................................               642             625              117
                                                                        --------        --------         --------
        Total charge-offs.....................................             2,043             670              207
  Recoveries of loans previously charged off
    Real estate...............................................                 -               -                -
    Commercial................................................                90              24               33
    Consumer..................................................               156              68               88
                                                                        --------        --------         --------
        Total recoveries......................................               246              92              121
                                                                        --------        --------         --------
  Net charge-offs.............................................            (1,797)           (578)             (86)
  Additions to allowance charged to operations................             3,120           1,250              400
                                                                        --------        --------         --------
        Balance at end of year................................            $4,874          $3,551          $ 2,879
                                                                        ========        ========         ========
Ratios:
  Net charge-offs as a percent of average loans...............              .56%            .24%             .05%
  Allowance for loan losses to loans outstanding at year end..             1.40%           1.23%            1.30%
</TABLE>


Table 13 - Allocation of the Allowance for Loan Losses

     The allowance for loan losses is analyzed  quarterly by  management.  In so
doing,  management  assigns a portion of the allowance to specific  credits that
have been  identified  as problem  loans and reviews past loss  experience.  The
local economy and particular  concentrations are considered, as well as a number
of other factors.
<TABLE>
                                                                  Year ended December 31
                                   -----------------------------------------------------------------------------------
                                           2000                         1999                         1998
                                           ----                         ----                         ----
                                                  % of each                   % of each                     % of each
                                                  category                     category                      category
                                   Allowance      to total      Allowance      to total       Allowance      to total
                                     Amount         loans         Amount         loans          Amount         loans
                                   ---------       -------       --------      --------        --------      -------
<S>                                 <C>             <C>           <C>           <C>             <C>           <C>
Commercial.................         $3,849           66.4%        $2,723         69.3%          $2,175         69.8%
Real estate mortgages......            107           15.4            151         14.6              310         16.5
Consumer...................            863           18.2            637         16.1              378         13.7
Unallocated................             55             .0             40           .0               16           .0
                                    ------          -----         ------        -----           ------        -----
  Total....................         $4,874          100.0%        $3,551        100.0%          $2,879        100.0%
                                    ======          ======        ======        ======          ======        ======
</TABLE>
     The above allocations are not intended to imply limitations on usage of the
allowance. The entire allowance is available for any future loans without regard
to loan type. Management has provided additions to the allowance for loan losses
to support the 2000 loan growth and to replenish  the  allowance  for  unusually
high charge-offs of commercial loans. Investment Securities

                                      -25-
<PAGE>
     Securities  are purchased and  classified  as  "available-for-sale."  These
securities  may be sold to meet the Bank's  liquidity  needs or to  improve  the
quality of the  investment  portfolio.  The primary  objective of the  Company's
investing  activities  is to  provide  for  safety  of the  principal  invested.
Secondary  considerations include earnings,  liquidity, and the overall exposure
to  changes  in  interest  rates.  The  Company's  net  holdings  of  investment
securities  increased  $10.8 million in 2000 and increased $7.3 million in 1999.
The mortgage  backed  securities  are issues of the Federal  Home Loan  Mortgage
Corporation,  GNMA and FNMA which pay monthly  amortized  principal and interest
payments.


Table 14 - Available-for-Sale Securities Portfolio
<TABLE>

Year Ended December 31
                                                                       2000             1999             1998
                                                                       ----             ----             ----
<S>                                                                   <C>             <C>               <C>
U. S. Treasury and U.S. Government Agencies..................         $47,784         $37,578           $32,453
State and political subdivisions.............................          25,615          23,201            21,007
Other........................................................           1,047             871             2,887
                                                                        -----         -------             -----
                                                                      $74,446         $61,650           $56,347
                                                                      =======         =======           =======
</TABLE>
     Excluding those holdings of the investment  portfolio in U.S.  Treasury and
U.S.  Government Agency  Securities,  there were no investments in securities of
any one issuer which exceeded 10% of shareholders' equity.


Table 15 - Schedule of Maturities of Investment Securities and Weighted Average
           Yields

     The following is a schedule of maturities and their weighted  average yield
of each category of investment  securities as of December 31, 2000. The weighted
average interest rates have been computed on a fully taxable  equivalent  basis,
based on  amortized  cost.  The rates shown on  securities  issued by states and
political  subdivisions are stated on a taxable equivalent basis using a 34% tax
rate.
<TABLE>

                                                               Maturing
                    -------------------------------------------------------------------------------------------------
                                                         (Dollars n Thousands)
                                                                                                  Investments With
                         Due Within            One to             Five to            After         No Contractual
                          One Year           Five Years          Ten Years         Ten Years          Maturity
                       Fair       Avg.      Fair     Avg.      Fair     Avg.      Fair     Avg.     Fair      Avg.
                      Value      Yield     Value     Yield    Value     Yield    Value    Yield     Value    Yield
                      -----      -----     -----     -----    -----     -----    -----    -----     -----    -----
<S>                      <C>       <C>     <C>        <C>     <C>        <C>      <C>      <C>         <C>     <C>
Available for Sale:
U.S. Treasury
and U.S.
Government
Agencies.......           $ 95     6.61%   $27,589    7.07%   $15,260    6.95%    $4,840   7.46%       $  -       -
States and
Political
Subdivisions...          1,274     8.81%     6,926    7.81%    13,217    7.40%     4,198   7.60%          -       -
Other Securities             -        -          -       -          -       -          -      -       1,047    3.16%
                        ------     -----   -------    -----   -------    -----    ------   -----     ------    -----
                        $1,369     8.66%   $34,515    7.14%   $28,477    7.16%    $9,038   7.53%     $1,047    3.16%
                        ======     =====   =======    =====   =======    =====    ======   =====     ======    =====
</TABLE>

Deposits

     Deposits are gathered from the  communities  the Bank serves.  Recently the
Bank has emphasized  relationship  marketing to reinforce the core nature of its
deposit base.

                                      -26-
<PAGE>
     Table 16  indicates a  relatively  stable base of deposits  spread over the
Bank's product lines. Average total deposits grew 20% from 1999 to 2000 and grew
20% from 1998 to 1999.  The  increase in 2000  resulted  primarily  from gaining
market share in the Bank's  market areas and the use of brokered  time  deposits
outside the banks market area.

     The Bank is  continually  enhancing  its deposit  products.  In addition to
relationship  pricing the Bank has  instituted  telephone and personal  computer
banking as new  alternatives  to customer  access.  The Bank  operates  thirteen
automated teller machines, three of which are off-site.

Table 16 - Average Daily Deposits (in thousands)
<TABLE>
                                                                       Average for the Year
                                        -------------------------------------------------------------------------------------
                                                  2000                        1999                         1998
                                          Amount     % of Assets      Amount      % of Assets      Amount       % of Assets
                                          ------     -----------      -----       -----------      ------       -----------
<S>                                       <C>            <C>          <C>             <C>          <C>              <C>
Noninterest bearing demand........        $40,109        10%          $36,452         11%          $ 29,324         11%
NOW accounts......................         21,554         5            18,038          6             15,352          6
MMDA/Savings .....................         67,498        16            65,702         20             56,306         21
Time - negotiable brokered........         18,241         5                 -          -                  -          -
Time..............................        141,085        34           120,114         37             98,870         37
                                          -------        --           -------        ---             ------        ---
   Total Deposits.................       $288,487        70%         $240,306         73%          $199,852         75%
                                         ========        ===         ========        ===           ========        ===
</TABLE>
     The recent surge in loan growth and lending  opportunities  has resulted in
the Banks' need to rely on funding sources outside its local market.  The use of
such  funding  sources is  monitored  very  closely to provide  the lowest  cost
funding  available  to the  Bank.  As  illustrated  in Table 17,  brokered  time
deposits are more expensive than traditional sources of funding.


Table 17 - Average Deposit Balances

     The  following  table  sets  forth the  average  deposit  balances  and the
weighted average rates paid thereon:
<TABLE>
                                                                          Average for the Year
                                             -------------------------------------------------------------------------------
                                                     2000                         1999                       1998
                                             Average       Average       Average       Average      Average      Average
                                             Balance         Rate        Balance         Rate       Balance        Rate
                                             -------         ----        -------         ----       -------        ----
<S>                                          <C>           <C>           <C>             <C>      <C>             <C>
Noninterest bearing demand.........          $40,109                     $36,452                  $ 29,324
NOW Accounts.......................           21,554        2.41%         18,038         2.19%      15,352          2.45%
MMDA/Savings.......................           67,498        2.96          65,702         2.68       56,306
                                                                                                                    2.93
Time - negotiable brokered.........           18,241        6.91               -            -            -             -
Time...............................          141,085        5.75         120,114         5.17       98,870          5.61
                                             -------     -------         -------       ------       ------          ----
   Total Deposits..................         $288,487       4.12%        $240,306         3.48%    $199,852          3.79%
                                            ========                    ========                  ========
</TABLE>
At December  31,2000,  the Bank had  approximately  $52,915,000 in brokered time
deposits.

Table 18 - Maturity Distribution of Time Deposits of $100,000 Or More

     The following table summarizes time deposits in amounts of $100,000 or more
by time remaining until maturity as of December 31, 2000:
<TABLE>
                                                                   Amount
                                                                   ------
         <S>                                                      <C>
         Three months or less...........................          $46,733
         Over 3 months through 6 months.................           34,533
         Over 6 months through 1 year...................            6,816
         Over 1 year....................................           11,196
                                                                   ------
                                                                  $99,278
</TABLE>

                                      -27-
<PAGE>
     The Bank operates in a very competitive  environment.  Management  monitors
rates at other  financial  institutions  in the area to ascertain that its rates
are  competitive  with the  market.  Management  also  attempts  to offer a wide
variety of products to meet the needs of its customers. The Bank offers business
and consumer checking accounts,  regular and money market savings accounts,  and
certificates of deposit having many options in their terms.


Market Risk

     The Bank complements its stable core deposit base with alternate sources of
funds,  which  includes  advances  from the  Federal  Home Loan Bank,  and jumbo
certificates of deposit from outside its market area.  Management  evaluates the
funding  needs and makes a decision  based on current  interest  rates and terms
whether to fund internally or from alternate sources.  To date, the Bank has not
employed the use of  derivative  financial  instruments  in managing the risk of
changes in interest rates.


Capital

     A financial  institution's  capital ratio is looked upon by the  regulators
and the  public as an  indication  of its  soundness.  Table 19  summarizes  the
Company's  regulatory capital and its capital ratios. Also shown are the capital
requirements   established  by  the  regulatory   agencies  for  adequately  and
well-capitalized  institutions.  The Bank's strong  capital ratio puts it in the
best classification on which the FDIC bases its assessment charge.

     In 2000, the Company paid cash dividends totaling $1,768,647, approximately
45% of earnings.  The higher percentage was the result of lower earnings in 2000
and not a  change  in the  dividend  policy.  In 1999,  the  Company  paid  cash
dividends  totaling  $1,674,256,  approximately  37% of  earnings.  Special cash
dividends  were paid in 1998,  resulting  in the Company  paying cash  dividends
totaling $2,350,000,  approximately 46% of earnings.  The Company remains in all
the top regulatory  categories for adequately and well-capitalized  institutions
after paying such dividends.

Table 19 - Capital Resources (in thousands)
<TABLE>
                                        Regulatory Requirements                         December 31
                                       Adequately         Well           ---------------------------------------
                                      Capitalized      Capitalized        2000            1999           1998
                                                                          ----            ----           ----
<S>                                       <C>             <C>            <C>              <C>            <C>
Tier 1 capital..................                                         $43,499          $41,183        $39,232
Tier 2 capital..................                                           4,765            3,551          2,879
                                                                         -------          -------         ------
  Total qualifying capital......                                         $48,264          $44,734        $42,111
                                                                         =======          =======        =======

Tier 1 leverage ratio...........          4%               5%             10.52%           12.64%         14.74%
Tier 1 risk-based capital.......          4%               6%             11.41%           13.07%         16.02%
Total risk-based capital........          8%              10%             12.67%           14.19%         17.20%
</TABLE>

Interest Rate Risk

     The primary  components of the balance sheet are  interest-earning  assets,
which are funded by interest-bearing  liabilities. The differences in cash flows
of these rate sensitive assets and liabilities, combined with shifts, or changes
in the overall  market yield curve result in interest  rate risk.  Interest rate
risk is the change in net interest income due to interest rate changes. Interest
rate risk is inherent to banking and cannot be eliminated.

     The Asset and Liability  Management  Committee  (ALCO) is  responsible  for
overseeing  the  financial   management  of  net  interest  income,   liquidity,
investment activities,  and other related activities. In regard to interest rate
risk, management has relied most heavily on re-pricing GAP analysis,  which is a
traditional method of assessing interest rate risk. Recognizing that there is no
single measure that adequately  measures  current or future risk,  management is
beginning to rely more heavily on a simulation analysis.

                                      -28-
<PAGE>
     The  Bank's one year GAP at the end of the year was .82.  This  measurement
indicates that the bank's net interest  income would most likely rise if general
interest rate fall and that the net interest income would decline if rates rise.
Management is comfortable  with the banks current GAP position and interest rate
exposure,  but will continue to invest in assets and fund  liabilities  with the
intent of moving the GAP  position to a more  neutral  position.  To  accomplish
this, the bank will seek to invest short-term re-pricing assets such as floating
rate securities and loans, and will extend liability maturities.

     The Bank's  interest rate  simulation  model indicates that 3% of the banks
net interest  income is at risk to a 100 basis point  change in market  interest
rates.  Simulations  models are useful tools, but require  numerous  assumptions
that have a significant  impact on the measured interest rate risk. The use of a
simulation  model is relatively  new at the Bank and changes in the  assumptions
could impact the results.  Simulation  models  require the ability to accurately
predict customer  behavior to interest rate changes,  changes in the competitive
environment, and other economic factors.

     The Bank does not currently,  nor does it have plans to, use derivatives to
assist in the management of interest risk.


Liquidity

     Liquidity management is also a significant  responsibility of the ALCO. The
objective of liquidity management is to ensure the availability of funds to meet
the  demands of  depositors  and  borrowers.  The primary  sources of  liquidity
included the  repayment  of customer  loans,  maturity of and  repayment of Bank
investments,  deposits,  and  borrowings.  The Bank also has at its disposal the
ability to borrow  funds from other  banks,  borrow  funds from the Federal Home
Loan Bank,  and  purchase  brokered  certificates  of deposits  from outside the
Bank's market area.  Advances from the Federal Home Loan Bank  increased by $6.8
million  and the use of  brokered  certificates  of deposit  increased  by $52.9
million.

     The  Bank's  liquidity  ratio  at the end of the year  was  8.7%,  which is
considered adequate by management.





                           [INTENTIONALLY LEFT BLANK]



                                      -29-
<PAGE>
Table 20 - Asset/Liability Gap Position (in thousands)
<TABLE>
                                                                           December 31, 2000
                                             ---------------------------------------------------------------------
                                                0-3            4-12           1-5           5+
                                               Months         Months         Years         Years         Total
                                               ------         ------         -----         -----         -----
<S>                                           <C>           <C>            <C>             <C>           <C>
Interest earning assets:
  Fed Funds Sold.......................        $ 6,000      $      -        $      -       $     -       $  6,000
  Loans................................         96,525        53,916         190,565         6,287        347,293
  Securities (including restricted
         investments)                           21,071         4,397          13,339        38,349         77,156
  Loans held for sale..................            726             -               -             -            726
                                              --------      --------        --------       -------       --------
  Total interest earning assets........       $124,322       $58,313        $203,904       $44,636       $431,175
                                              ========       =======        ========       =======       ========

Interest bearing liabilities:
  Savings & NOW........................        $15,497      $      -        $      -       $77,690        $93,187
  Time.................................         63,410        98,755          38,241             -        200,406
                                              --------      --------        --------       -------        -------
                                                                                                 -
  Total deposits.......................         78,907        98,755          38,241        77,690        293,593
  Other borrowings.....................         37,724         8,000           8,166        16,800         70,690
                                              --------      --------        --------       -------       --------

   Total interest bearing liabilities..       $116,631      $106,755         $46,407       $94,490       $364,283
                                              ========      ========        ========       =======       ========

Rate sensitivity gap and ratios:
  Gap for period $.....................          7,691       (48,442)        157,497       (49,854)
  Cumulative gap $.....................          7,691       (40,751)        116,746        66,892
  Period gap ratio.....................           1.07           .55            4.39           .47
  Cumulative gap ratio.................           1.07           .82            1.43          1.18
Gap /Total Earning assets
  Period...............................           1.8%        (11.2)%          36.5%        (11.6)%
  Cumulative...........................           1.8%         (9.5)%          27.1%         15.5%
</TABLE>

     The  asset/liability gap reflects the scheduled repayment and maturities of
the Banks' loans and investments. Management has made a number of assumptions to
improve the usefulness of the gap analysis and to manage interest rate risk. The
assumptions  include,  but are not limited to,  prepayments on loans,  repayment
speeds on certain investment securities,  and the likelihood of certain call and
put features on financial  instruments  being exercised.  Also,  savings and NOW
accounts,  which have a variable  interest rate, are treated as not  immediately
sensitive  to  changes  in  interest  rates,  based  on  the  Bank's  historical
experience and future intentions.

     As of December  31,2000 the  cumulative one year gap position was liability
sensitive,  approximately 9.5% of earning assets.  Management  regularly reviews
the asset liability gap position and other  available  information to manage the
overall interest rate risk of the Bank.

Impact of Inflation

     The  majority  of assets and  liabilities  of  financial  institutions  are
monetary in nature. Generally, changes in interest rates have a more significant
impact on earnings of the Bank than inflation. Although influenced by inflation,
changes  in rates do not  necessarily  move in  either  the  same  magnitude  or
direction as changes in the price of goods and services.  Inflation  does impact
the growth of total  assets,  creating a need to  increase  equity  capital at a
higher  rate to  maintain  an  adequate  equity to assets  ratio,  which in turn
reduces the amount of earnings available for cash dividends.

                                      -30-
<PAGE>
<TABLE>
Selected Quarterly Financial Data (Unaudited):
   (in thousands, except per share data)

                                                                 Three Months Ended
                                           March 31          June 30        September 31      December 31
<S>                                        <C>               <C>              <C>              <C>
Year Ending December 31, 2000
             Total Assets                  $ 396,913         $ 416,548        $ 429,146        $ 457,004
Net Interest Income                            4,030             4,148            4,260            4,243
Provision for loan losses                        330               470              400            1,920
Net Income                                       994             1,258            1,397              321

Earnings per Share                               .49               .62              .68             .16
Book Value per Share                           20.64             20.72            21.89           21.95
Return on average assets                        1.04%             1.24%            1.31%            .26%
Return on Shareholders' equity                  9.61%            12.03%           12.83%           3.02%
Efficiency Ratio                               63.97%            55.21%           56.38%          59.95%

Year Ending December 31, 1999
             Total Assets                  $ 307,893         $ 317,942         $344,016        $ 376,073
         Net Interest Income                   3,358             3,555            3,705            3,934
Provision for loan losses                        150               150              250              700
Net Income                                     1,256             1,219            1,134              920

Earnings per Share                               .63               .60              .56              .44
Book Value per Share                           20.17             19.96            20.38            20.31
Return on total assets                          1.68%             1.56%            1.34%             .95%
Return on Shareholders' equity                 12.71%            12.12%           10.99%            8.51%
Efficiency Ratio                               53.88%            61.33%           62.06%           57.28%
</TABLE>

Forward Looking Statements

     This report contains certain forward-looking  statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.   The  Company  intends  such
forward-looking  statements  to be covered  by the safe  harbor  provisions  for
forward-looking  statements  contained in the Private  Securities  Reform Act of
1995,  and is  including  this  statement  for  purposes  of these  safe  harbor
provisions.  Forward-looking statements,  which are based on certain assumptions
and describe  future plans,  strategies  and  expectations  of the Company,  are
generally  identifiable  by use of the  words;  "believe,"  "expect,"  "intend,"
"anticipate,"  "estimate,"  "project"  or  similar  expressions.  The  Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain.  Factors which could have a material adverse affect on the
operations and future prospects of the Company and the subsidiaries include, but
are not limited to, changes in: interest  rates,  general  economic  conditions,
legislative/regulatory  changes,  monetary  and  fiscal  policies  of  the  U.S.
Government,  including  policies of the U.S.  Treasury  and the Federal  Reserve
Board, the quality or composition of the loan or investment  portfolios,  demand
for loan products, deposit flows, competition,  demand for financial services in
the Company's  market area and accounting  principles,  policies and guidelines.
These risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such  statements.  Further
information  concerning  the  Company  and its  business,  including  additional
factors  that  could  materially  affect the  Company's  financial  results,  is
included in the Company's filings with the Securities and Exchange Commission.


Recent Legislation

     Reference is made to the "Supervision and Regulation - Recent  Legislation"
section of Item 1 which notes the potential competitive impact of the GLB Act on
the Company.

                                      -31-
<PAGE>
ITEM 7A:  Quantitative and Qualitative Disclosures About Market Risk

     A derivative financial instrument includes futures, forwards, interest rate
swaps,   option  contracts,   and  other  financial   instruments  with  similar
characteristics.  The Company  currently does not enter into futures,  forwards,
swaps, or options.  However, the Company is party to financial  instruments with
off-balance  sheet risk in the normal  course of business to meet the  financing
needs of its  customers.  These  financial  instruments  include  commitments to
extend  credit  and  standby  letters of credit.  These  instruments  involve to
varying  degrees,  elements  of credit and  interest  rate risk in excess of the
amount  recognized in the  consolidated  balance  sheets.  Commitments to extend
credit are  agreements to lend to a customer as long as there is no violation of
any condition  established  in the contract.  Commitments  generally  have fixed
expiration  dates  and may  require  collateral  from  the  borrower  if  deemed
necessary by the Company.  Standby letters of credit are conditional commitments
issued by the  Company to  guarantee  the  performance  of a customer to a third
party up to a stipulated amount and with specified terms and conditions.

     Commitments to extend credit and standby letters of credit are not recorded
as an asset or liability by the Company until the instrument is exercised.

     The Company's exposure to market risk is reviewed on a regular basis by the
Asset/Liability  Committee.  Interest  rate risk is the  potential  of  economic
losses  due to future  interest  rate  changes.  These  economic  losses  can be
reflected as a loss of future net interest  income and/or a loss of current fair
market values. The objective is to measure the effect on net interest income and
to adjust the balance  sheet to manage the inherent  risk while at the same time
maximize  income.  Management  realizes  certain risks are inherent and that the
goal is to identify and minimize the risks. Tools used by management include the
standard  GAP report and a  simulation  model.  The  Company  has no market risk
sensitive instruments held for trading purposes.

                                      -32-
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.



O.A.K. FINANCIAL CORPORATION          |                TABLE OF CONTENTS
       AND SUBSIDIARY                 |
--------------------------------------------------------------------------------


                                                                            PAGE

Independent Auditors' Report                                                 34

Consolidated Financial Statements

   Consolidated Balance Sheets                                               35

   Consolidated Statements of Income                                         36

   Consolidated Statements of Comprehensive Income                           37

   Consolidated Statements of Changes in Stockholders' Equity                38

   Consolidated Statements of Cash Flows                                     39

   Notes to Consolidated Financial Statements                              40-56


                                      -33-
<PAGE>
                          INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholders
O.A.K. Financial Corporation and Subsidiary
Byron Center, Michigan

We have audited the accompanying consolidated balance sheets of O.A.K. Financial
Corporation  and  Subsidiary  as of December 31, 2000 and 1999,  and the related
consolidated   statements   of   income,   comprehensive   income,   changes  in
stockholders'  equity and cash  flows for each of the three  years in the period
ended  December  31,  2000.  These  consolidated  financial  statements  are the
responsibility of O.A.K. Financial Corporation's management.  Our responsibility
is to express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of O.A.K.  Financial
Corporation  and Subsidiary as of December 31, 2000 and 1999, and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 2000 in  conformity  with  accounting  principles  generally
accepted in the United States of America.

                                             /s/ Rehmann Robson, P.C.


Grand Rapids, Michigan
January 26, 2001


                                      -34-
<PAGE>
   O.A.K. FINANCIAL CORPORATION            |      CONSOLIDATED BALANCE SHEETS
          AND SUBSIDIARY                   |
--------------------------------------------------------------------------------
<TABLE>
                                                                                                December 31
      ASSETS                                                                           2000                   1999
<S>                                                                               <C>                    <C>
Cash and due from banks                                                           $  10,759,837          $  10,054,389
Federal funds sold                                                                    6,000,000                      -
                                                                                     ----------             ----------
Cash and cash equivalents                                                            16,759,837             10,054,389
Available-for-sale securities - amortized cost of
     $73,712,745 ($62,592,629 - 1999)                                                74,446,393             61,649,881
Loans receivable, net                                                               342,419,431            284,279,189
Loans held for sale                                                                     725,857                632,038
Accrued interest receivable                                                           3,445,573              2,716,837
Premises and equipment, net                                                          12,293,881             10,618,570
Restricted investments                                                                2,710,000              2,000,000
Other assets                                                                          4,202,688              4,121,705
                                                                                     ----------             ----------
Total assets                                                                      $ 457,003,660          $ 376,072,609
                                                                                  =============          =============

                   LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
     Interest bearing                                                             $ 293,593,320          $ 215,159,729
     Noninterest bearing                                                             44,559,923             39,006,319

Total deposits                                                                      338,153,243            254,166,048

Borrowed funds                                                                       38,455,955             54,405,599
Securities sold under agreements to repurchase                                       32,233,984             24,424,351
Other liabilities                                                                     3,531,662              1,819,097

Total liabilities                                                                   412,374,844            334,815,095
                                                                                   ------------            -----------

Stockholders' equity
     Common stock, $1 par value; 4,000,000 shares authorized,
        2,041,775 shares issued and outstanding                                       2,041,775              2,041,775
     Additional paid-in capital                                                       6,265,446              6,259,681
     Retained earnings                                                               36,280,076             34,078,585
     Accumulated other comprehensive income (loss)                                      483,869               (622,527)
     Unallocated common stock held by ESOP                                             (442,350)              (500,000)
                                                                                      ---------              ---------
Total stockholders' equity                                                           44,628,816             41,257,514
                                                                                    -----------             ----------

Total liabilities and stockholders' equity                                        $ 457,003,660          $ 376,072,609
                                                                                  =============          =============
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      -35-
<PAGE>
O.A.K. FINANCIAL CORPORATION            |     CONSOLIDATED STATEMENTS OF INCOME
      AND SUBSIDIARY                    |
--------------------------------------------------------------------------------
<TABLE>
                                                                               Year Ended December 31
                                                                 2000                   1999                  1998
                                                            --------------        --------------         -------------
<S>                                                          <C>                    <C>                   <C>
Interest income
     Loans                                                   $ 28,942,504           $ 21,656,573          $ 17,629,417
     Available-for-sale securities                              4,003,757              3,264,615             3,396,933
     Restricted investments                                       201,369                106,473                88,281
     Federal funds sold                                            24,589                 52,644                19,827
                                                                  -------                -------                ------
Total interest income                                          33,172,219             25,080,305            21,134,458
                                                              -----------            -----------            ----------

Interest expense
     Deposits                                                  11,888,486              8,368,069             7,574,458
     Borrowed funds                                             3,159,406              1,327,843               849,088
     Securities sold under agreements to repurchase             1,442,904                832,353               492,626
                                                               ----------               --------               -------

Total interest expense                                         16,490,796             10,528,265             8,916,172
                                                              -----------             ----------             ---------

Net interest income                                            16,681,423             14,552,040            12,218,286

Provision for loan losses                                       3,120,000              1,250,000               400,000
                                                              -----------            -----------           -----------

Net interest income after provision for
     loan losses                                               13,561,423             13,302,040            11,818,286
                                                              -----------            -----------            ----------

Noninterest income
     Service charges                                            1,353,040                811,369               587,786
     Net gain on sales of loans held for sale                     344,111                599,935             1,367,075
     Loan servicing fees                                          152,639                148,042               183,735
     Net gain on sales of availiable-for-sale securities          213,287                532,915               204,076
     Insurance premiums                                           960,907              1,042,618                     -
     Brokerage fees                                               310,318                321,615               165,801
     Other                                                        263,701                164,311               150,832
                                                                 --------               --------               -------

Total noninterest income                                        3,598,003              3,620,805             2,659,305
                                                               ----------             ----------            ----------

Noninterest expenses
     Salaries and employee benefits                             6,650,057              5,933,049             3,917,992
     Occupancy                                                    807,960                785,886               465,271
     Furniture and fixtures                                     1,255,318                941,788               678,055
     Printing and supplies                                        321,191                286,216               267,682
     Other                                                      3,022,762              2,655,883             2,005,072
                                                              -----------            -----------            ----------

Total noninterest expenses                                     12,057,288             10,602,852             7,334,072
                                                              -----------            -----------          ------------

Income before federal income taxes                              5,102,138              6,319,993             7,143,519

Federal income taxes                                            1,132,000              1,791,000             2,068,000
                                                               ----------            -----------             ---------

Net income                                                    $ 3,970,138            $ 4,528,993           $ 5,075,519
                                                              ===========           ============           ===========

Net income per share of common
     stock (basic and diluted)                                      $1.95                  $2.23                 $2.54
                                                                    =====                  =====                 =====
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      -36-
<PAGE>
   O.A.K. FINANCIAL CORPORATION             |       CONSOLIDATED STATEMENTS OF
         AND SUBSIDIARY                     |           COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
<TABLE>
                                                                                     Year Ended December 31
                                                                        2000                1999                 1998
                                                                    --------------    ----------------    -----------------
Other comprehensive income (loss)
<S>                                                                  <C>               <C>                     <C>
Unrealized gains (losses) on available-
     for-sale securities arising during the year                     $ 1,889,683       $ (2,742,692)           $  676,764

Reclassification adjustment for realized
     gains included in net income                                        213,287            532,915               204,076
                                                                     -----------         ----------            ----------
Comprehensive income (loss)
     before income taxes                                               1,676,396         (3,275,607)              472,688

Income taxes (benefit) related to
     comprehensive income                                                570,000           (751,000)              160,000
                                                                     -----------        -----------           -----------

Other comprehensive income (loss)                                      1,106,396         (1,458,777)              312,688

Net income                                                             3,970,138          4,528,993             5,075,519
                                                                     -----------

Comprehensive income                                                 $ 5,076,534        $ 3,070,216           $ 5,388,207
                                                                     -----------        ------------          -----------
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      -37-
<PAGE>
  O.A.K. FINANCIAL CORPORATION       |            CONSOLIDATED STATEMENTS OF
        AND SUBSIDIARY               |         CHANGES IN STOCKHOLDERS' EQUITY
--------------------------------------------------------------------------------
<TABLE>
                                                                                   Year Ended December 31
                                                                       2000                 1999                 1998
                                                                -------------------   ------------------   ------------------
<S>                                                                    <C>                 <C>                 <C>
Shares of common stock issued and outstanding
     Balance, beginning of year                                        2,041,775            2,000,000            1,000,000
     Common stock dividends                                                    -                    -            1,000,000
     Common stock issued                                                       -               13,000                    -
     Issuance of common stock for business combination                         -               28,775                    -
                                                                      ----------           ----------           ----------
     Balance, end of year                                              2,041,775            2,041,775            2,000,000
                                                                      ==========           ==========           ==========
Common stock
     Balance, beginning of year                                      $ 2,041,775          $ 2,000,000          $ 1,000,000
     Common stock dividends                                                    -                    -            1,000,000
     Common stock issued                                                       -               13,000                    -
     Issuance of common stock for business combination                         -               28,775                    -
                                                                     -----------           ----------           ----------
     Balance, end of year                                              2,041,775            2,041,775            2,000,000
                                                                     -----------           ----------           ----------
Additional paid-in-capital
     Balance, beginning of year                                        6,259,681            5,622,680            5,622,680
     Issuance of common stock                                                  -              637,001                    -
     Allocation of ESOP shares                                             5,765                    -                    -
                                                                     -----------           ----------           ----------
     Balance, end of year                                              6,265,446            6,259,681            5,622,680

Retained earnings
     Balance, beginning of year                                       34,078,585           31,494,055           29,768,536
     Accumulated deficit in business combination                               -             (270,207)                   -
     Net income                                                        3,970,138            4,528,993            5,075,519
     Common stock dividends                                                    -                    -           (1,000,000)
     Cash dividends                                                   (1,768,647)          (1,674,256)          (2,350,000)
                                                                      ----------           ----------           ----------
     Balance, end of year                                             36,280,076           34,078,585           31,494,055
                                                                     -----------           ----------           ----------
Accumulated other comprehensive (loss) income
     Balance, beginning of year                                         (622,527)             836,250              523,562
     Other comprehensive income (loss)                                 1,106,396           (1,458,777)             312,688
                                                                       ---------            ---------            ---------
     Balance, end of year                                                483,869             (622,527)             836,250
                                                                       ---------            ---------            ---------
Unallocated common stock held by ESOP
     Balance, beginning of year                                         (500,000)                   -                    -
     Unearned ESOP compensation                                                -             (500,000)                   -
     Allocation of ESOP shares                                            57,650                    -                    -
                                                                      ----------            ---------             --------
     Balance, end of year                                               (442,350)            (500,000)                   -
                                                                      ----------            ---------             --------
Total stockholders' equity                                           $44,628,816          $41,257,514          $39,952,985
                                                                     ===========          ===========          ===========
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      -38-
<PAGE>
 O.A.K. FINANCIAL CORPORATION           |         CONSOLIDATED STATEMENTS OF
      AND SUBSIDIARY                    |                CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
                                                                             Year Ended December 31
                                                                   2000               1999                1998
                                                             -----------------  -----------------   -----------------
<S>                                                            <C>                <C>                 <C>
Cash flows from operating activities
    Net income                                                 $   3,970,138      $   4,528,993       $   5,075,519
    Adjustments to reconcile net income to net
       cash provided by operating activities
          Depreciation and amortization                            1,108,809            916,515             553,789
          Provision for loan losses                                3,120,000          1,250,000             400,000
          Proceeds from sales of loans held                                          45,364,562          73,442,003
          for sale                                                20,568,196
          Originations of loans held for sale                    (20,317,904)       (40,716,703)        (75,409,274)
          Net gain on sales of available-for-sale
              securities
                                                                    (213,287)          (532,915)           (204,076)
          Net gain on sales of loans held for sale                  (344,111)          (599,935)         (1,367,075)
          Net amortization of investment premiums                    112,885            163,506             203,231
          (Gain) loss on sales of property and equipment             (65,500)             7,769                   -
          Deferred income taxes (benefit)                           (743,000)           (85,000)            121,000
          Changes in operating assets and liabilities
               which (used) provided cash
          Accrued interest receivable                               (728,736)          (690,652)           (513,039)
          Other assets                                               179,631           (186,327)         (1,034,556)
          Other liabilities                                        1,688,352           (304,994)            487,860
                                                                 -----------          ---------          ----------
Net cash provided by operating activities                          8,335,473          9,114,819           1,755,382
                                                                 -----------          ---------          ----------

Cash flows from investing activities
    Available-for-sale securities
       Proceeds from maturities                                    8,331,637         11,425,763          11,773,936
       Proceeds from sales                                           968,939          3,313,371           2,213,374
       Purchases                                                 (20,320,276)       (23,146,715)         (8,163,135)
    Purchases of restricted investments                             (710,000)          (736,100)            (65,300)
    Net increase in loans held for investment                    (61,260,242)       (66,275,365)        (53,266,174)
    Purchases of premises and equipment                           (2,874,735)        (4,361,920)         (3,111,510)
    Proceeds from the sale of premises and equipment                 156,115             11,858                   -
                                                                 -----------        -----------         -----------
Net cash used in investing activities                            (75,708,562)       (79,769,108)        (50,618,809)
                                                                 -----------        -----------         -----------
Cash flows from financing activities
    Net increase in deposits                                      83,987,195         36,875,241          32,590,479
    Net borrowed funds (repayments)                              (15,949,644)        26,393,132          16,452,803
    Net increase in securities sold under agreements
       to repurchase                                               7,809,633         10,051,047           5,715,721
    Dividends paid                                                (1,768,647)        (1,674,256)         (2,350,000)
    Proceeds from issuance of common stock                                 -            150,001                   -
Net cash provided by financing activities                         74,078,537         71,795,165          52,409,003
                                                                 -----------        -----------         -----------
Net increase in cash and cash equivalents                          6,705,448          1,140,876           3,545,576

Cash and cash equivalents, beginning of year                      10,054,389          8,913,513           5,367,937
                                                                ------------       ------------        ------------
Cash and cash equivalents, end of year                          $ 16,759,837       $ 10,054,389        $  8,913,513
                                                                ============       ============        ============

Supplementary cash flows information
    Interest paid                                               $ 15,762,060       $ 10,320,794        $  8,838,116
    Income taxes paid                                              1,869,167          1,948,430           1,795,773
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      -39-
<PAGE>
  O.A.K. FINANCIAL CORPORATION         |                 NOTES TO CONSOLIDATED
        AND SUBSIDIARY                 |                 FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business - O.A.K.  Financial Corporation (the "Corporation")  through its wholly
owned  subsidiary,  Byron Center  State Bank (the "Bank")  provides a variety of
financial  services to individuals  and businesses in the western  Michigan area
through its eleven  branches  located in Byron Center,  Jamestown,  Cutlerville,
Hudsonville,   Grandville,   Moline,  Dorr,  Hamilton,  Allendale,  Zeeland  and
Kentwood. Active competition, principally from other commercial banks and credit
unions,  exists in all of the Bank's  principal  markets.  The Bank's results of
operations can be significantly affected by changes in interest rates or changes
in the local economic environment.

The Bank's  primary  deposit  products  are  interest  and  noninterest  bearing
checking  accounts,  savings  accounts and time deposits and its primary lending
products are commercial loans, real estate mortgages, and consumer loans. Note 3
further  describes  the types of lending the Bank engages in and Note 6 provides
additional information on deposits. Note 2 discusses the types of securities the
Corporation invests in.

The Bank is a state  chartered  bank and a member of the  Federal  Reserve  Bank
("FRB").  Deposits are insured by the Federal  Deposit  Insurance  Corporation's
("FDIC")  Bank  Insurance  Fund.  The Bank is  subject  to the  regulations  and
supervision  of  the  FDIC,  the  FRB  and  the  Michigan  Office  of  Financial
Institutions and Insurance Services ("OFIS") and undergoes periodic examinations
by these regulatory authorities (see Note 12).

Business Combination - Effective February 1, 1999, the Corporation issued 28,775
shares of its common stock in exchange for all of the  outstanding  common stock
of Dornbush Insurance Agency,  Inc. (DIA) based on a conversion ratio of .719475
shares of the Corporation's common stock. DIA, now a wholly-owned  subsidiary of
the Bank,  operates in the general  insurance  agency  business  and sells life,
health, property and casualty insurance.  The merger has been accounted for as a
pooling of interests.  Due to the insignificance of the financial  statements of
DIA, the Corporation's  consolidated financial statements have not been restated
for all periods  prior to the  business  combination  to reflect  the  financial
position and results of operations of DIA, and pro-forma  financial  information
has not been disclosed.

Use of Estimates - In preparing  consolidated financial statements in conformity
with generally accepted  accounting  principles,  management is required to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  at the date of the  consolidated  balance  sheet  and the  reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from those  estimates.  The material  estimate that is particularly
susceptible to significant  change in the near term relates to the determination
of the allowance for loan losses.

Accounting  Policies - The  accounting  policies used in the  preparation of the
accompanying  consolidated  financial  statements conform to predominant banking
industry  practices and are based on generally accepted  accounting  principles.
The principles which materially  affect the  determination of the  Corporation's
consolidated  financial  position or results of  operations  are  summarized  as
follows:

Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Corporation
and the Bank. All significant  intercompany  accounts and transactions have been
eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash  equivalents  include  cash on hand,  amounts  due from  banks and
federal funds sold. Generally,  federal funds are sold for a one-day period. The
Corporation  maintains deposit accounts in various financial  institutions which
generally exceed FDIC insured limits or are not insured. Management believes the
Corporation is not exposed to any  significant  interest rate or other financial
risk as a result of these deposits.

Available-For-Sale Securities

Available-for-sale  securities  consist  of  bonds,  notes  and  debentures  not
classified as  held-to-maturity  securities and are recorded at their  estimated
fair  value.  Unrealized  appreciation  and  depreciation,  net of the effect of
deferred  income taxes, on  available-for-sale  securities are reported as a net
amount in other comprehensive  income.  Premiums and discounts are recognized in
interest income using the interest method over the period to maturity.  Declines
in the fair value of securities  below cost that are determined to be other than
temporary are reflected in earnings as realized  losses.  Gains or losses on the
sale  of  available-for-sale   securities  are  determined  using  the  specific
identification method.


Loans Held for Investment and Related Income

Loans that  management  has the intent and  ability to hold for the  foreseeable
future or until  maturity or pay-off are  reported at their  outstanding  unpaid
principal balances adjusted for any charge-offs,  the allowance for loan losses,
and any deferred fees or costs on originated loans. Interest on loans is accrued
over the term of the loan based on the principal amount outstanding. The accrual
of  interest  on  impaired  loans  is  discontinued  when,  in  the  opinion  of
management, the borrower may be unable to meet payments as scheduled. When the

                                      -40-
<PAGE>
     O.A.K. FINANCIAL CORPORATION       |              NOTES TO CONSOLIDATED
            AND SUBSIDIARY              |               FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

accrual of  interest  is  discontinued,  all  uncollected  accrued  interest  is
reversed.  Interest  income on such loans is recognized  only to the extent cash
payment is received. Loans are returned to accrual status when all the principal
and interest amounts  contractually  due are brought current and future payments
are  reasonably  assured.  For  impaired  loans not  classified  as  nonaccrual,
interest  income  continues to be accrued over the term of the loan based on the
principal amount outstanding.

Loan  origination  fees,  net of certain  direct  loan  origination  costs,  are
deferred and  recognized  as an  adjustment  of the related loan yield using the
interest method.

Mortgage Banking Activities

Mortgage  loans  originated  and intended for sale in the  secondary  market are
carried at the lower of cost or estimated  market value in the aggregate.  Gains
and  losses on sales of such  loans are  recognized  at the time of sale and are
determined  by the  difference  between  the net sales  proceeds  and the unpaid
principal  balance  of the loans  sold,  adjusted  for any  yield  differential,
servicing fees and servicing  costs  applicable to future years.  Net unrealized
losses are recognized in a valuation allowance by charges to income.

The Bank currently  retains  servicing on all loans originated and sold into the
secondary  market.  Originated  mortgage  servicing rights ("OMRS") retained are
recognized for loans sold by allocating  total costs  incurred  between the loan
and the  servicing  rights based on their  relative  fair  values.  The mortgage
servicing  rights  are  amortized  in  proportion  to,  and over the  period of,
estimated net future servicing revenue. The expected period of the estimated net
servicing  income is based,  in part,  on the  expected  prepayment  rate of the
underlying  mortgage.  The carrying  value of the mortgage  servicing  rights is
periodically evaluated for impairment.

Loan  administration  fees earned for  servicing  loans for others are generally
calculated  based on the outstanding  principal  balances for the loans serviced
and are recorded as revenue when received.

Allowance for Loan Losses

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

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

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

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

Foreclosed Real Estate

Real estate  properties  acquired  through,  or in lieu of, loan foreclosure are
held for sale and  initially  recorded at fair value at the date of  foreclosure
less estimated cost to sell, thereby  establishing a new cost basis.  Subsequent
to foreclosure, valuations are periodically performed by management and the real
estate is recorded  at the lower of carrying  amount or fair value less costs to
sell.  Revenue  and  expenses  from  operations  and  changes  in the  valuation
allowance are included in net expenses from foreclosed assets.

                                      -41-
<PAGE>
   O.A.K. FINANCIAL CORPORATION        |            NOTES TO CONSOLIDATED
        AND SUBSIDIARY                 |            FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Credit Related Financial Instruments

In the ordinary  course of business,  the Bank has entered into  commitments  to
extend credit, including commitments under credit card arrangements,  commercial
letters of credit, and standby letters of credit. Such financial instruments are
recorded when they are funded.

Premises and Equipment

Premises  and  equipment  are  stated  at cost  less  accumulated  depreciation.
Depreciation is computed using both the  straight-line  and accelerated  methods
based upon the useful lives of related  assets which  generally  range from 5 to
approximately 40 years.  Maintenance,  repairs and minor alterations are charged
to  current   operations  as  expenditures  occur  and  major  improvements  are
capitalized.  Management  annually  reviews  these assets to  determine  whether
carrying values have been impaired.

Net Income Per Share

Net income per share of common stock is  calculated on the basis of the weighted
average number of common shares outstanding including shares allocated under the
employee  stock  ownership  plan,  which was  approximately  2,034,000  in 2000,
2,031,000 in 1999 and 2,000,000 in 1998.  The effect of the assumed  issuance of
the performance  based  incentive  share awards and the assumed  exercise of the
outstanding  stock  options had no effect in the  calculation  of net income per
share assuming dilution.

Federal Income Taxes

Federal income taxes are provided for the tax effects of  transactions  reported
in the consolidated  financial statements and consist of the taxes currently due
plus  deferred  taxes.  Deferred  income  taxes  are  recognized  for  temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Deferred income
tax assets and liabilities represent the future tax return consequences of those
differences,  which  will  either be taxable  or  deductible  when the assets or
liabilities are recorded or settled.  Valuation  allowances are established when
necessary to reduce  deferred tax assets to the amount  expected to be realized.
As changes in income tax laws or rates are enacted,  deferred  income tax assets
and liabilities are adjusted through the provision for income taxes.

The Corporation and its subsidiary file a consolidated federal income tax return
on a calendar year basis.

Restricted Investments

The Bank is a member of the  Federal  Home Loan Bank  System and is  required to
invest in capital stock of the Federal Home Loan Bank of Indianapolis  ("FHLB").
The amount of the required investment is determined and adjusted annually by the
FHLB.  The  investment  is  carried  at cost  plus the value  assigned  to stock
dividends.

The Bank is also a member of the Federal Reserve Bank System.  The amount of the
required  investment  is  determined  by the FRB at the time the Bank  becomes a
member.  The amount of the investment may be adjusted  thereafter and is carried
at cost.

New Accounting Standards

The Financial  Accounting  Standards Board (FASB) issued  Statement of Financial
Accounting Standards No. 138, Accounting for Certain Derivative  Instruments and
Certain Hedging Activities, for an entity that has not adopted Statement No. 133
before  June 15,  2000.  This  statement  shall  be  adopted  concurrently  with
Statement No. 133. These statements  require companies to record  derivatives on
the  balance  sheet as  assets  and  liabilities  measured  at fair  value.  The
accounting  for  changes in value of  derivatives  will  depend  upon the use of
derivatives and whether they qualify for hedge accounting.

This  statement is effective for all fiscal  quarters of fiscal years  beginning
after  June 15,  2000 with  earlier  applications  allowed  and is to be applied
prospectively.  The  Corporation  does  not use  interest  rate  swaps  or other
derivatives  in its  management of risk and  accordingly  this  statement is not
expected  to  have a  material  impact  on  financial  position  or  results  of
operations.

                                      -42-
<PAGE>
    O.A.K. FINANCIAL CORPORATION        |            NOTES TO CONSOLIDATED
         AND SUBSIDIARY                 |            FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

FASB issued  Statement  No. 140,  Accounting  for  Transfers  and  Servicing  of
Financial Assets and  Extinguishment of Liabilities.  The statement is generally
effective for transfers of financial  assets occurring after March 31, 2001, and
is effective for disclosures about securitizations and for reclassifications and
disclosure  about  collateral  in financial  statements  for fiscal years ending
after December 15, 2000.  Statement No. 140,  provides  accounting and reporting
standards for transfers and servicing of financial assets and  extinguishment of
liabilities and criteria for  distinguishing  transfers of financial assets that
are sales from  transfers that are secured  borrowings.  It is not expected that
adoption  of this  Statement  will have a material  impact on the  Corporation's
financial position or results of operations.


2.   AVAILABLE-FOR-SALE SECURITIES

The amortized cost, gross  unrealized  gains,  gross unrealized  losses and fair
value   of   investment   securities,   all   of   which   are   classified   as
available-for-sale as of December 31, are as follows:
<TABLE>
                                                                     Gross               Gross
                                              Amortized           Unrealized            Unrealized             Fair
   2000                                          Cost                Gains                Losses              Value
   ----                                    ----------------    ------------------    ----------------    ----------------
   <S>                                         <C>                     <C>                  <C>            <C>
   U.S. government and
       federal agency                          $47,735,658               $287,456            $238,978        $47,784,136
   States and political subdivisions            25,188,019                486,964              60,352         25,614,631
   Other                                           789,068                265,675               7,117          1,047,626
                                           ----------------    ------------------    ----------------    ----------------

   Total                                       $73,712,745             $1,040,095            $306,447        $74,446,393
                                           ================    ==================    ================    ================

   1999
   ----
   U.S. government and
       federal agency                          $38,328,604     $           55,647           $ 805,829        $37,578,422
   States and political subdivisions            23,393,327                162,987             355,553         23,200,761
   Other                                           870,698                      -                   -            870,698
                                           ----------------    ------------------    ----------------    ----------------

   Total                                       $62,592,629     $          218,634          $1,161,382        $61,649,881
                                           ================    ==================    ================    ================
</TABLE>

The  amortized  cost  and  fair  value  of   available-for-sale   securities  by
contractual  maturity at December 31, 2000 is shown below.  Expected  maturities
will differ from contractual  maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
<TABLE>
                                                                                        Amortized             Fair
                                                                                           Cost               Value
                                                                                     ----------------    ----------------
     <S>                                                                             <C>                  <C>
     Due in one year or less                                                               $1,267,964         $1,273,330
     Due after one year through five years                                                 14,014,263         14,130,157
     Due after five years through ten years                                                20,358,927         20,793,876
     Due after ten years                                                                    5,958,216          6,046,769
                                                                                     ----------------    ----------------

     Subtotal                                                                              41,599,370         42,244,132
     Mortgage-backed securities                                                            32,113,375         32,202,261
                                                                                     ----------------    ----------------

     Total                                                                                $73,712,745        $74,446,393
                                                                                     ================    ================
</TABLE>

                                      -43-
<PAGE>
  O.A.K. FINANCIAL CORPORATION          |             NOTES TO CONSOLIDATED
        AND SUBSIDIARY                  |             FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Investment  income from taxable and  nontaxable  securities  for the years ended
December 31, is as follows:
<TABLE>
                                                                        2000               1999               1998
                                                                   ----------------    --------------    ---------------
     <S>                                                             <C>                <C>                 <C>
     Taxable                                                            $2,815,554        $2,173,429         $2,322,330
     Nontaxable                                                          1,188,203         1,091,186          1,074,603
                                                                   ----------------    --------------    ---------------

     Total                                                              $4,003,757        $3,264,615         $3,396,933
                                                                   ================    ==============    ===============
</TABLE>
The gross gains and gross losses  realized on sales for the years ended December
31 are as follows:
<TABLE>
                                                             2000              1999            1998
                                                         -------------     -------------    -------------
     <S>                                                  <C>                <C>            <C>
     Gross realized gains                                   $217,785           $532,915       $231,259
     Gross realized losses                                    (4,498)                 -        (27,183)
                                                         -------------     -------------    -----------
           Net realized gain on sales of
          available-for-sale securities                     $213,287           $532,915       $204,076
                                                         =============     ============     ===========
</TABLE>

The  tax  provision   applicable  to  these  net  realized   gains  amounted  to
approximately  $73,000,  $181,000  and  $69,000  during  2000,  1999  and  1998,
respectively.

Investment  securities  with carrying  values of  approximately  $72,356,000 and
$53,069,000 at December 31, 2000 and 1999, respectively,  were pledged to secure
public deposits or for other purposes as required or permitted by law.

3.   LOANS

The  Bank  grants  commercial,  consumer  and  residential  loans  to  customers
primarily in a fifteen mile radius of its branches  which are located  south and
west  of  Grand  Rapids,  Michigan.   Substantially  all  of  the  consumer  and
residential  loans are secured by various  items of property,  while  commercial
loans are  secured  primarily  by business  assets and  personal  guarantees;  a
portion of loans are unsecured.  The source of repayment of approximately 20% of
the loan  portfolio is generated  from cash flows from  developers and owners of
commercial real estate.

Major loan classifications at December 31 are as follows:
<TABLE>
                                                                                    2000                 1999
                                                                               -----------------    -----------------
     <S>                                                                          <C>                  <C>
     Commercial real estate                                                         $165,977,721         $140,647,468
     Residential real estate                                                          53,644,229           41,985,097
     Commercial                                                                       64,511,214           58,792,864
     Consumer                                                                         63,160,287           46,404,313
                                                                               -----------------    -----------------
     Total loans receivable, net of deferred loan
         fees of $128,117 ($135,189 - 1999)                                          347,293,451          287,829,742
     Less allowance for loan losses                                                    4,874,020            3,550,553
                                                                               -----------------    -----------------

     Loans receivable, net                                                         $342,419,431          $284,279,189
                                                                               =================    =================
</TABLE>
At December 31, 2000, scheduled maturities of loans with fixed rates of interest
are as follows:
<TABLE>
     <S>                                                             <C>
     One year or less                                                      $27,368,854
     One to five years                                                     209,897,521
     Over five years                                                        39,590,349
                                                                     ------------------
     Total                                                                $276,856,724
                                                                     ==================
</TABLE>
                                      -44-
<PAGE>
    O.A.K. FINANCIAL CORPORATION        |               NOTES TO CONSOLIDATED
          AND SUBSIDIARY                |               FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Variable  rate loans in the amount of  $70,436,727  at December 31, 2000 reprice
quarterly or more frequently.

The Bank  services  loans for others  which  generally  consists  of  collecting
mortgage payments, maintaining escrow accounts, disbursing payments to investors
and taxing authorities,  and processing  foreclosures.  Loans being serviced for
others  as of  December  31,  2000,  1999 and 1998,  approximated  $152,000,000,
$146,000,000 and $127,000,000,  respectively; such loans are not included in the
accompanying consolidated balance sheets.

The  following  table  summarizes  mortgage  servicing  rights  capitalized  and
amortized  and the fair value of  mortgage  servicing  rights  included in other
assets in the accompanying consolidated balance sheets as of December 31:
<TABLE>
                                                                2000                1999              1998
                                                          -----------------    ----------------    -------------
    <S>                                                   <C>                   <C>                 <C>
    Balance, beginning of year                               $1,215,373          $  918,093           $213,827
      Mortgage servicing rights capitalized                     223,465             491,995            798,975
      Amortization                                             (215,030)           (194,715)           (94,709)
                                                          -----------------    ----------------    -------------
    Balance, end of year                                     $1,223,808          $1,215,373           $918,093
                                                          =================    ================    =============
</TABLE>
Information  regarding  impaired loans is as follows for the year ended December
31:
<TABLE>
                                                                   2000                 1999                  1998
                                                            ------------------    -----------------    ----------------
     <S>                                                        <C>                  <C>                   <C>
     Balance of impaired loans at year-end                      $2,685,702           $5,474,469            $570,280

     Allowance for loan losses allocated
         to the impaired loan balance                              699,334              401,467             202,021

     Average investment in impaired loans                        2,618,756            1,607,204             445,645

     Interest income recognized on
              impaired loans (no interest
              income was recognized on the
         cash basis)                                               172,775              151,414              44,818
</TABLE>

No additional  funds are  committed to be advanced in  connection  with impaired
loans.

4.   ALLOWANCE FOR LOAN LOSSES

The following is an analysis of changes in the allowance for loan losses for the
years ended December 31:
<TABLE>
                                                               2000                  1999                1998
                                                         ------------------    ---------------      ---------------
     <S>                                                   <C>                 <C>                    <C>
     Balance, beginning of year                               $3,550,553         $2,879,376           $2,565,430

     Provision for loan losses                                 3,120,000          1,250,000              400,000
     Recoveries                                                  245,826             91,451              121,382
     Loans charged off                                        (2,042,359)          (670,274)            (207,436)
                                                          ----------------     ---------------       --------------

                Balance, end of year                          $4,874,020         $3,550,553           $2,879,376
                                                          ================     ===============      ===============
</TABLE>
                                      -45-
<PAGE>
    O.A.K. FINANCIAL CORPORATION         |              NOTES TO CONSOLIDATED
         AND SUBSIDIARY                  |              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

5.   PREMISES AND EQUIPMENT

A summary of premises and equipment at December 31 follows:
<TABLE>
                                                                                   2000                 1999
                                                                              -----------------    ----------------
     <S>                                                                        <C>                 <C>
     Land                                                                           $2,130,069          $2,164,869
     Buildings and improvements                                                     10,118,577           8,206,963
     Furniture and equipment                                                         5,769,263           4,924,288
                                                                              -----------------    ----------------

     Total premises and equipment                                                   18,017,909          15,296,120

            Less accumulated depreciation                                            5,724,028           4,677,550
                                                                              -----------------    ----------------

     Premises and equipment, net                                                   $12,293,881         $10,618,570
                                                                              =================    ================
</TABLE>

6.   DEPOSITS

The following is a summary of the distribution of deposits at December 31:
<TABLE>
                                                                                   2000                 1999
                                                                              -----------------    -----------------
     <S>                                                                        <C>                  <C>
     Interest bearing
       NOW accounts                                                                $25,669,232          $19,812,110
       Savings                                                                      37,072,247           38,760,645
       Money market demand                                                          30,445,440           30,461,552
       Time, $100,000 and over                                                      99,277,916           32,610,542
       Other time                                                                  101,128,485           93,514,880
                                                                              -----------------    -----------------

     Total interest bearing                                                        293,593,320          215,159,729

     Noninterest bearing demand                                                     44,559,923           39,006,319
                                                                              -----------------    -----------------

     Total deposits                                                               $338,153,243         $254,166,048
                                                                              =================    =================
</TABLE>

At December 31, 2000, scheduled maturities of time deposits are as follows:
<TABLE>
     <S>                                                                          <C>
     2001                                                                         $162,164,137
     2002                                                                           24,828,790
     2003                                                                            4,778,240
     2004                                                                            3,643,848
     2005                                                                            4,991,386
                                                                              -----------------
     Total time deposits                                                          $200,406,401
                                                                              =================
</TABLE>

Interest  expense on time deposits issued in  denominations  of $100,000 or more
was approximately $3,874,000 in 2000, $1,365,000 in 1999 and $721,000 in 1998.

                                      -46-
<PAGE>
     O.A.K. FINANCIAL CORPORATION       |             NOTES TO CONSOLIDATED
         AND SUBSIDIARY                 |              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

7.   BORROWED FUNDS

Borrowed funds at December 31, consist of the following obligations:
<TABLE>
                                                                                   2000                 1999
                                                                              -----------------    -----------------
     <S>                                                                         <C>                 <C>
     Federal Home Loan Bank advances                                               $34,800,000          $28,000,000
     Treasury tax and loan note option                                               3,490,180            4,000,000
     Federal funds purchased                                                                 -           22,200,000
     Other borrowings                                                                  165,775              205,599
                                                                              -----------------    -----------------

     Total borrowed funds                                                          $38,455,955          $54,405,599
                                                                              =================    =================
</TABLE>


The Federal Home Loan Bank  borrowings are  collateralized  by a blanket lien on
all qualified  1-to-4 family whole  mortgage  loans and U.S.  government  agency
securities  with a combined  carrying  value of  approximately  $40,869,000  and
$39,898,000 at December 31, 2000 and 1999, respectively.

The  Treasury  Tax and Loan Note  option is  collateralized  by U.S.  government
agency  securities  with  a  carrying  value  of  approximately  $6,314,000  and
$2,714,000  at December  31, 2000 and 1999,  respectively.  The Treasury Tax and
Loan Note option is a daily  borrowing  with the Federal  Reserve  Bank,  due on
demand at 25 basis points below the national  federal fund  interest rate (6.00%
at December 31, 2000).

The Federal  Home Loan Bank  advances  at  December  31, 2000 and 1999 and their
contractual maturities are as follows:
<TABLE>
                                                     Rate at
                                                   December 31                2000                 1999
                                                 -----------------       ---------------      ---------------
     <S>                                              <C>                    <C>                  <C>
     Putable fixed rate advances:

     July 10, 2000                                    6.20%                     $     -           $2,000,000
     September 25, 2000                               6.05%                           -            2,000,000
     December 13, 2000                                6.26%                           -            4,000,000
     January 22, 2001                                 5.57%                   2,000,000            2,000,000
     May 4, 2001                                      5.96%                   2,000,000            2,000,000
     September 24, 2001                               6.26%                   2,000,000            2,000,000
     November 2, 2001                                 6.36%                   2,000,000            2,000,000
     December 12, 2001                                6.37%                   2,000,000                    -
     March 13, 2002                                   6.44%                   2,000,000                    -
     May 1, 2002                                      6.44%                   2,000,000            2,000,000
     December 12, 2002                                6.23%                   2,000,000                    -
     August 21, 2003                                  5.73%                   2,000,000            2,000,000
     March 24, 2010 Putable Advance                   5.99%                   8,500,000                    -
     April 12, 2010 Putable Advance                   5.99%                   5,000,000                    -
     June 23, 2010 Putable Advance                    5.99%                   3,300,000                    -
                                                                         ---------------      ---------------

     Short-term variable rate advances:                                      34,800,000           20,000,000

     January 31, 2000                                 4.05%                           -            6,000,000
     July 12, 2000                                    5.13%                           -            2,000,000
                                                                         ---------------      ---------------
                                                                            $34,800,000          $28,000,000
                                                                         ===============      ===============
</TABLE>

8.  SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities  sold under  agreements  to  repurchase at December 31, 2000 and 1999
mature  within one day from the  transaction  date and have an average  interest
rate of 5.03% and 4.29%,  respectively.  The U.S.  government  agency securities
underlying  the   agreements   have  a  carrying  value  and  a  fair  value  of
approximately  $43,847,000  and  $29,049,000  at  December  31,  2000 and  1999,
respectively.  Such securities remain under the control of the Bank. The maximum
amount outstanding at any month end during the years ended December 31, 2000 and
1999 was $36,045,000 and  $28,965,000,  respectively;  the daily average balance
was $28,976,000 and $21,221,000, respectively.

                                      -47-
<PAGE>
    O.A.K. FINANCIAL CORPORATION        |              NOTES TO CONSOLIDATED
         AND SUBSIDIARY                 |               FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

9.  FEDERAL INCOME TAXES

The provision for federal  income taxes for the years ended December 31 consists
of:
<TABLE>
                                                            2000                  1999               1998
                                                      ------------------    -----------------   ----------------
<S>                                                      <C>                  <C>                  <C>
Current                                                    $1,875,000          $1,876,000            $1,947,000
Deferred (benefit)                                           (743,000)            (85,000)              121,000
                                                      ------------------   ------------------   ----------------

Federal income tax expense                                 $1,132,000          $1,791,000            $2,068,000
                                                      ==================    =================   ================
</TABLE>

A  reconciliation  between federal income tax expense and the amount computed by
applying the statutory federal income tax rate of 34% to income before taxes for
the years ended December 31, is as follows:
<TABLE>
                                                           2000                 1999                1998
                                                     ------------------    ----------------    --------------
<S>                                                     <C>                   <C>                <C>
Statutory rate applied to income
  before income taxes                                     $1,734,727          $2,148,798         $2,428,756
Effect of tax-exempt interest
  income                                                    (354,990)           (341,898)          (387,285)
Change in valuation allowance                               (260,000)            (20,000)                 -
Other - net                                                   12,263               4,100             26,529
                                                     ------------------    ---------------    --------------

Federal income tax expense                                $1,132,000          $1,791,000         $2,068,000
                                                     ==================    ===============    ==============
</TABLE>

The net  deferred  income tax asset as of December  31, is  comprised of the tax
effect of the following temporary differences:
<TABLE>
                                                                               2000                1999
                                                                           ---------------     ---------------
<S>                                                                         <C>                <C>
Deferred tax assets
  Allowance for loan losses                                                  $1,555,000          $1,106,000
  Deferred compensation plan                                                    301,000             264,000
  Deferred loan fees                                                              1,000               2,000
                                                                           ---------------     ---------------

Total deferred tax assets                                                     1,857,000           1,372,000
Valuation allowance                                                            (439,000)           (699,000)
                                                                           ---------------     ---------------

          Net deferred tax assets                                             1,418,000             673,000
                                                                           ---------------     ---------------
Deferred tax liabilities
  Depreciation                                                                  (73,000)            (74,000)
  Discount accretion                                                            (31,000)            (31,000)
  Loan servicing rights                                                        (416,000)           (413,000)
                                                                           ---------------     ---------------

Total deferred tax liabilities                                                 (520,000)           (518,000)
                                                                           ---------------     ---------------

Net deferred tax assets entering into the determination
  of the provision for federal income taxes                                     898,000             155,000

Additional deferred tax (liability) asset related to
  other comprehensive income                                                   (249,000)            321,000
                                                                           ---------------     ---------------
           Net deferred tax asset included in other assets
  on the accompanying consolidated balance sheets                           $   649,000         $   476,000
                                                                           ===============     ===============
</TABLE>
                                      -48-
<PAGE>
     O.A.K. FINANCIAL CORPORATION       |             NOTES TO CONSOLIDATED
          AND SUBSIDIARY                |              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

10.      RELATED PARTY TRANSACTIONS

Loans

Certain  directors,  executive  officers and their related  interests  were loan
customers of the Bank. All such loans were made on substantially the same terms,
including  interest rates and collateral,  as those  prevailing at the same time
for  comparable  transactions  and do not  represent  more than a normal risk of
collectibility   or  present  other  unfavorable   features.   The  total  loans
outstanding  to  these  customers   aggregated   approximately   $4,577,000  and
$5,282,000 at December 31, 2000 and 1999, respectively; new loans and repayments
during 2000 were approximately $5,136,000 and $5,841,000, respectively.

Deposits

Deposits of Bank directors,  executive officers and their related interests were
approximately   $2,273,000  and  $1,863,000  at  December  31,  2000  and  1999,
respectively.

11.      OFF-BALANCE SHEET ACTIVITIES

The  Bank  is  a  party   to   credit   related   financial   instruments   with
off-balance-sheet  risk in the normal  course of business to meet the  financing
needs of its  customers.  These  financial  instruments  include  commitments to
extend credit,  standby letters of credit and commercial letters of credit. Such
commitments involve to varying degrees elements of credit and interest rate risk
in excess of the amount recognized in the consolidated  balance sheets. The Bank
follows the same credit policy to make such commitments, including collateral as
is followed for those loans recorded in the consolidated  financial  statements;
no significant losses are anticipated as a result of these commitments.

The Bank's exposure to credit loss is represented by the  contractual  amount of
these  commitments.  The  Bank  follows  the  same  credit  policies  in  making
commitments as it does for on-balance-sheet instruments.

At  December  31,  2000 and  1999,  the  following  financial  instruments  were
outstanding whose contract amounts represent credit risk:
<TABLE>
                                                                 Contract Amount
                                                       -------------------------------------
                                                            2000                1999
                                                       ----------------    ----------------
<S>                                                      <C>               <C>
Commitments to grant loans                                 $29,949,000         $22,056,000
Unfunded commitments under lines of credit                  82,352,000          82,005,000
Commercial and standby letters of credit                     3,406,000           2,506,000
</TABLE>

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require  payment of a fee. The commitments for equity lines of credit may expire
without  being  drawn  upon.  Therefore,  the total  commitment  amounts  do not
necessarily  represent  future  cash  requirements.  The  amount  of  collateral
obtained, if it is deemed necessary by the Bank, is based on management's credit
evaluation of the customer.

Unfunded  commitments under commercial  lines-of-credit,  revolving credit lines
and  overdraft  protection   agreements  are  commitments  for  possible  future
extensions of credit to existing customers. These lines-of-credit usually do not
contain a specified  maturity date and may not be drawn upon to the total extent
to which the Bank is committed; a portion are unsecured.

Commercial and standby  letters-of-credit are conditional  commitments issued by
the Bank to guarantee  the  performance  of a customer to a third  party.  Those
letters-of-credit  are primarily issued to support public and private  borrowing
arrangements.  Essentially  all letters of credit issued have  expiration  dates
within one year.  The credit  risk  involved  in  issuing  letters-of-credit  is
essentially the same as that involved in extending loan facilities to customers.
The Bank  generally  holds  collateral  supporting  those  commitments if deemed
necessary.

                                      -49-
<PAGE>
    O.A.K. FINANCIAL CORPORATION        |          NOTES TO CONSOLIDATED
           AND SUBSIDIARY               |           FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

12.      REGULATORY MATTERS

The  Corporation  (on a consolidated  basis) and the Bank are subject to various
regulatory capital requirements  administered by its primary regulator, the FRB.
Failure to meet minimum capital  requirements can initiate certain mandatory and
possibly additional discretionary actions by the FRB, that if undertaken,  could
have a direct  material  effect on the  Corporation's  and the Bank's  financial
statements.  Under capital adequacy guidelines and the regulatory  framework for
prompt  corrective  action,  the  Corporation  and the Bank must  meet  specific
capital  guidelines  that  involve  quantitative  measures of the their  assets,
liabilities,  capital  and  certain  off-balance-sheet  items as  defined in the
regulations and calculated under regulatory  accounting  practices.  The capital
amounts and  classification  are also  subject to  qualitative  judgments by the
regulators  about  components,   risk  weightings  and  other  factors.   Prompt
corrective action provisions are not applicable to bank holding companies.

Quantitative  measurements  established by regulation to ensure capital adequacy
require the Corporation and the Bank to maintain minimum amounts and ratios (set
forth in the  following  table)  of total  capital  and Tier 1  capital  to risk
weighted assets and Tier 1 capital to average assets. Management believes, as of
December 31, 2000, that the  Corporation and the Bank meet all capital  adequacy
requirements to which they are subject.  As of December 31, 2000 the most recent
notification  from the FRB  categorized the Bank as well  capitalized  under the
regulatory  framework for prompt  corrective  action.  To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based,
and Tier 1 leverage  ratios as set forth in the  following  table.  There are no
conditions or events since the most recent notification that management believes
has changed the Bank's category. The Corporation's and the Bank's actual capital
amounts and ratios as of December  31, 2000 and 1999 are also  presented  in the
table.
<TABLE>
                                                                                           Minimum To Be Well
                                                                                            Capitalized Under
                                                                Minimum Capital             Prompt Corrective
                                      Actual                       Requirement              Action Provisions
                                 -----------------              -----------------          -------------------
                                 Amount     Ratio               Amount      Ratio        Amount           Ratio
                                 ------     ------             -------      ------       ------           ------
                                                              (Dollars in thousands)
<S>                              <C>        <C>                <C>           <C>         <C>              <C>
As of December 31, 2000
Total capital to risk
  weighted assets
   Consolidated                  $48,264    12.67%             $30,494       8.0%        $     N/A        N/A%
   Bank                           47,963    12.60               30,453       8.0            38,066        10.0
Tier 1 capital to risk
  weighted assets
   Consolidated                   43,499    11.41               15,247       4.0               N/A         N/A
   Bank                           43,205    11.35               15,227       4.0            22,840         6.0
Tier 1 capital to
  average assets
   Consolidated                   43,499    10.52               16,542       4.0               N/A         N/A
   Bank                           43,205    10.48               16,489       4.0            20,611         5.0
</TABLE>
                                      -50-
<PAGE>
   O.A.K. FINANCIAL CORPORATION         |              NOTES TO CONSOLIDATED
          AND SUBSIDIARY                |              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
                                                                                          Minimum To Be Well
                                                                                           Capitalized Under
                                                                 Minimum Capital           Prompt Corrective
                                       Actual                      Requirement            Action Provisions
                                ------------------             ------------------         -------------------
                                 Amount     Ratio                Amount      Ratio      Amount           Ratio
                                --------    ------             ---------    ------      -------          -----
                                                             (Dollars in thousands)
<S>                              <C>        <C>                <C>            <C>       <C>              <C>
As of December 31, 1999
Total capital to risk
  weighted assets
   Consolidated                  $44,734    14.19%             $25,216        8.0%      $   N/A          N/A%
   Bank                           43,131    13.70               25,190        8.0        31,164          10.0
Tier 1 capital to risk
  weighted assets
   Consolidated                   41,183    13.07               12,608        4.0           N/A           N/A
   Bank                           39,580    12.57               12,595        4.0        18,893           6.0
Tier 1 capital to
  average assets
   Consolidated                   41,183    12.64               13,038        4.0           N/A           N/A
   Bank                           39,580    12.15               13,027        4.0        16,284           5.0
</TABLE>

The Bank is required to deposit  certain  amounts with the Federal Reserve Bank.
These  reserve  balances  vary  depending  upon the  level of  certain  customer
deposits in the Bank.  At December  31, 2000 and 1999,  those  required  reserve
balances were $3,215,000 and $2,711,000, respectively.

The Bank is also  subject to  limitations  under the Federal  Reserve Act on the
amount  of loans  or  advances  that  can be  extended  to the  Corporation  and
dividends  that can be paid to the  Corporation.  The total  amount of dividends
which may be paid at any date is generally  limited to the retained  earnings of
the Bank,  and loans or advances are limited to 10 percent of the Bank's capital
stock and  surplus on a secured  basis.  Approval  is needed if total  dividends
declared in any calendar  year exceed the  retained  "net profit" (as defined in
the Federal  Reserve  Act) of that year plus the  retained  "net  profit" of the
preceding  two years.  The amount  that was not subject to this  restriction  is
approximately $9,508,000 at January 1, 2001. In addition,  dividends paid by the
Bank to the  Corporation  would be prohibited if the effect  thereof would cause
the Bank's capital to be reduced below applicable minimum capital requirements.

13.  EMPLOYEE BENEFIT PLANS

401(k),  Profit  Sharing and  Employee  Stock  Ownership  Plan (ESOP) - The Bank
maintains a qualified  401(k) Profit Sharing and Employee  Stock  Ownership Plan
(the "Plan") for  substantially  all employees.  Under the 401(k) feature of the
Plan,  employees  may make  voluntary  contributions  based on a  percentage  of
covered compensation. The Bank, at the discretion of the Board of Directors, may
make matching  contributions  and/or a profit sharing  contribution.  The Bank's
matching and profit sharing  contributions were $247,373,  $200,332 and $240,200
for 2000, 1999 and 1998, respectively.

The 401(k) and Profit Sharing Plan was amended as of January 29, 1999 to include
the ESOP.  Under the  guidelines  of the  amended  Plan,  any  employee  who has
attained the age of 21 and has completed six months of employment is eligible to
participate  in the ESOP.  The ESOP borrowed  $500,000 from the  Corporation  to
purchase 10,000 shares of O.A.K. Financial Corporation's common stock at a price
of $50 per share.  The loan is  collateralized  by the unearned shares of common
stock  purchased  by the ESOP;  interest  is charged  at 7.5%.  The loan will be
repaid  over a period of 10 years  principally  from the  portion  of the Bank's
discretionary  contribution  and with any dividends  received on the unallocated
shares of common stock.  Shares purchased by the ESOP are held in suspense until
allocated among Plan  participants as the loan is repaid.  Contributions  to the
ESOP were $60,050 and $63,415 during 2000 and 1999, respectively.

                                      -51-
<PAGE>
     O.A.K. FINANCIAL CORPORATION       |             NOTES TO CONSOLIDATED
           AND SUBSIDIARY               |             FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Contributions to the ESOP and shares released from suspense  proportional to the
repayment of the ESOP loan are allocated among Plan participants on the basis of
compensation  in the year of allocation.  Benefits are vested as the participant
accumulates  years of service  with the Bank. A  participant  becomes 20% vested
after three  years of service  and is 100% vested  after seven years of credited
service.  Prior to the seven years of credited service,  a person who terminates
employment for reasons other than death,  normal  retirement or disability  will
receive  only  their  vested  portion  of  the  ESOP  benefit.  Forfeitures  are
reallocated  among remaining  participating  employees in the same proportion as
contributions.  Benefits  are  payable  in stock  or cash  upon  termination  of
employment.  The Bank's  contributions  to the ESOP are not fixed,  so  benefits
under the ESOP cannot be estimated. ESOP participants receive distributions from
their ESOP accounts only upon termination of service.

For the year ended  December 31, 2000,  1,201 common shares with a fair value of
$55 per share,  were committed to be released.  No shares have been allocated as
of that date; these shares were allocated on February 2, 2001. The fair value of
unearned shares at December 31, 2000 was $442,350.

For the year ended  December 31, 1999,  1,153 common shares with an average fair
value of $50 per share,  were  committed  to be  released.  No shares  have been
allocated as of that date;  these shares were allocated on February 3, 2000. The
fair value of unearned shares at December 31, 1999 was $550,000.

Stock  Compensation  and  Stock  Option  Plans - A Stock  Compensation  Plan was
established as of January 28, 1999 to enable key employees to participate in the
future growth and  profitability  of the  Corporation by offering them incentive
compensation  through the issuance of stock  options,  which are vested based on
achievement of performance goals.

Performance  option awards are earned and vested at the rate of 10% per year and
become  exercisable  after the first  anniversary  of the award date. The option
exercise  price is at least 100% of the market  value of the common stock at the
grant date.  During 2000, 9,627  performance  options were awarded at an average
weighted  fair value of $55 per share  totaling  $529,485.  During  1999,  9,250
performance  options were awarded at an average  weighted  fair value of $50 per
share totaling $462,500.

The Company also has a Stock Option Plan for non-employee  directors in addition
to the Stock  Compensation  plan for key employees.  During 2000 and 1999, 2,500
options were awarded each year at an average  weighted fair value of $55 and $50
per share, respectively.

The following tables summarize information about stock option transactions:
<TABLE>
                                                               2000                                1999
                                                   -------------------------------    -------------------------------
                                                                       Average                            Average
                                                                       Option                              Option
                                                      Shares            Price            Shares            Price
                                                  --------------    --------------    -------------    --------------
  <S>                                             <C>                 <C>               <C>              <C>
  Outstanding, beginning of year                      11,750            $50.00                    -              $  -

  Granted                                             12,127             55.00               11,750             50.00

  Exercised                                                -                 -                    -                 -

  Forfeited/expired                                   (1,393)           (52.72)                   -                 -
                                                  --------------    --------------    -------------    --------------

  Outstanding, end of year                            22,484             52.53               11,750             50.00
                                                  ==============    ==============    =============    ==============

  Exercisable, end of year                            11,114            $50.00                    -              $  -
                                                  ==============    ==============    =============    ==============
</TABLE>
                                      -52-
<PAGE>
   O.A.K. FINANCIAL CORPORATION        |               NOTES TO CONSOLIDATED
      AND SUBSIDIARY                   |              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

<TABLE>
                                                         Options Outstanding
                                              ------------------------------------------      Number of
                                                    Number              Wgt. Avg.              Options
      Exercise                                   Outstanding            Remaining             Exercisable
        Price                                   Dec. 31, 2000        Contractual Life        Dec. 31, 2000
  ------------------                          -----------------    ---------------------    -----------------
      <S>                                      <C>                  <C>                       <C>
        $50                                         11,114              8.1 years                   11,114
         55                                         11,370              9.0                              -
                                              -----------------    ---------------------    -----------------

    Total                                           22,484              8.6 years                   11,114
                                              =================    =====================    =================
</TABLE>

All  options  expire 10 years  after the date of the grant;  147,516  shares are
reserved for future issuance under the Stock Compensation Plan and 30,000 shares
are reserved for future  issuance  under the Stock Option Plan for  non-employee
directors.

The  Corporation  has elected to apply the  provisions of Accounting  Principles
Board  Opinion  No.  25  "Accounting   for  Stock  Issued  to  Employees"   and,
accordingly,  stock  options  do  not  constitute  compensation  expense  in the
determination  of net income.  Had stock  compensation  expense been  determined
pursuant to the methodology provided in


Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  there  would  have been no  proforma  effect on the  consolidated
results of operations.

Deferred  Compensation - The Bank sponsors a deferred  compensation plan for all
directors who wish to participate.  The cost of the plan was $179,000,  $204,000
and  $152,000  in  2000,  1999  and  1998,  respectively.  The  accrued  benefit
obligation  for this plan was  $820,952 and $775,707 as of December 31, 2000 and
1999, respectively, and is included in other liabilities. The Bank has purchased
life insurance policies on participating directors.


14.   CONTINGENCIES

The Bank is party to litigation arising in the normal course of business. In the
opinion of management,  based on  consultation  with legal counsel,  liabilities
from  such  litigation,  if  any,  would  not  have  a  material  effect  on the
Corporation's consolidated financial statements.

As a result of acquiring real estate from foreclosure  proceedings,  the Bank is
subject  to  potential   claims  and  possible   legal   proceedings   involving
environmental matters. No such claims have been asserted at December 31, 2000.


15.   FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair value of a financial  instrument  is the  current  amount that would be
exchanged  between willing  parties,  other than in a forced  liquidation.  Fair
value is best  determined  based upon quoted  market  prices.  However,  in many
instances,  there are no quoted  market  prices  for the  Corporation's  various
financial  instruments.  In cases where quoted market prices are not  available,
fair  values  are based on  estimates  using  present  value or other  valuation
techniques. Those techniques are significantly affected by the assumptions used,
including the discount rate and estimates of future cash flows. Accordingly, the
fair value  estimates  may not be realized  in an  immediate  settlement  of the
instrument.   The  fair  values  of  certain   financial   instruments  and  all
nonfinancial  instruments  are excluded from  disclosure.  These include,  among
other  elements,  the  estimated  earning  power of core deposit  accounts,  the
trained  work force,  customer  goodwill  and similar  items.  Accordingly,  the
aggregate fair values are not necessarily  indicative of the underlying value of
the Corporation.

The following methods and assumptions were used by the Corporation in estimating
the fair value disclosures for financial instruments.

Cash and Cash  Equivalents - The carrying  amounts  reported in the consolidated
balance  sheets for cash and cash  equivalents  approximate  those  assets' fair
values.

                                      -53-
<PAGE>
     O.A.K. FINANCIAL CORPORATION       |               NOTES TO CONSOLIDATED
           AND SUBSIDIARY               |               FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


Investment  Securities - Fair values for  investment  securities  are  generally
based on quoted market prices.

Restricted  Investments - The carrying value of Federal Home Loan Bank stock and
Federal  Reserve  Bank stock  approximates  fair value  based on the  redemption
provisions of the Federal Home Loan Bank and the Federal Reserve Bank.

Loans  Receivable - For variable rate loans that reprice  frequently and with no
significant change in credit risk, fair values approximate  carrying values. The
fair values for other loans are estimated  using  discounted cash flow analyses,
using  interest  rates  currently  being offered for loans with similar terms to
borrowers  of similar  credit  quality.  The  resulting  amounts are adjusted to
estimate  the effect of  declines,  if any, in the credit  quality of  borrowers
since the loans were  originated.  Fair values for impaired  loans are estimated
using  discounted  cash flow analyses or  underlying  collateral  values,  where
applicable.

Loans Held for Sale - The fair value of loans held for sale,  including the fair
value of associated mortgage servicing rights, is estimated based on the present
value of estimated  future cash flows of the loan and related  servicing  rights
using a discount rate commensurate with the risks associated with the respective
financial instruments.

Deposit  Liabilities - The fair values for demand deposits  (e.g.,  interest and
noninterest checking, passbook savings, and money market accounts) which have no
stated  maturity  are,  by  definition,  equal to the amount  payable on demand.
Approximately  41% and 50% of the Bank's deposits at December 31, 2000 and 1999,
respectively have fair values equal to carrying values. The carrying amounts for
variable  rate  certificates  of deposit and other  variable  rate time deposits
approximate  their fair values at the reporting date. Fair values for fixed rate
time deposits and other time deposits with stated maturities are estimated using
a discounted cash flow  calculation  that applies interest rates currently being
offered for deposits of similar remaining maturities to a schedule of aggregated
expected monthly maturities.

Securities  Sold Under  Agreements to  Repurchase  Fair value  approximates  the
carrying value since the majority of these  instruments were entered into at our
near December 31, 2000 and 1999.

Borrowed Funds - The carrying amounts of federal funds  purchased,  treasury tax
and loan note options, and variable rate advances approximate their fair values.
The fair values of the  Corporation's  long-term  borrowings are estimated using
discounted  cash flow analyses based on the  Corporation's  current  incremental
borrowing rates for similar types of borrowing arrangements.

Off-Balance-Sheet  Instruments - Commitments to extend credit were evaluated and
fair value was estimated using the fees currently  charged to enter into similar
agreements,  taking into consideration the remaining terms of the agreements and
the  present  credit  worthiness  of the  counterparties.  For  fixed-rate  loan
commitments,  fair value also considers the difference between current levels of
interest  rates and the  committed  rates.  As the Bank does not charge fees for
lending  commitments,  it is not practicable to estimate the fair value of these
instruments.

                                      -54-
<PAGE>
    O.A.K. FINANCIAL CORPORATION        |              NOTES TO CONSOLIDATED
         AND SUBSIDIARY                 |              FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
The estimated  fair values of the Bank's  financial  instruments at December 31,
are as follows:
<TABLE>
                                                                                    Carrying              Fair
     2000                                                                            Amount               Value
     ----                                                                        ---------------      --------------
     <S>                                                                           <C>                 <C>
     Financial assets
         Cash and cash equivalents                                                 $ 16,759,837        $ 16,759,837
         Available-for-sale securities                                               74,446,393          74,446,393
         Loans receivable, net                                                      342,419,431         340,881,056
         Loans held for sale                                                            725,857             725,857
         Accrued interest receivable                                                  3,445,573           3,445,573
         Restricted investments                                                       2,710,000           2,710,000

     Financial liabilities
         Deposits                                                                    338,153,243        338,538,491
         Borrowed funds                                                               38,455,955         39,314,326
         Securities sold under agreements
           to repurchase                                                              32,233,984         32,233,984
         Other liabilities                                                             3,531,662          3,531,662

     1999
     ----
     Financial assets
         Cash and cash equivalents                                                 $ 10,054,389        $ 10,054,389
         Available-for-sale securities                                               61,649,881          61,649,881
         Loans receivable, net                                                      284,279,189         282,255,966
         Loans held for sale                                                            632,038             632,038
         Accrued interest receivable                                                  2,716,837           2,716,837
                 Restricted investments                                               2,000,000           2,000,000

     Financial liabilities
         Deposits                                                                    254,166,048        254,105,180
         Borrowed funds                                                               54,405,599         54,230,776
         Securities sold under agreements
           to repurchase                                                              24,424,351         24,424,351
         Other liabilities                                                             1,819,097          1,819,097
</TABLE>

16.    O.A.K. FINANCIAL CORPORATION (PARENT COMPANY ONLY) CONDENSED FINANCIAL
       INFORMATION

The following  summarizes  parent  company only  condensed  balance sheets as of
December 31, 2000 and 1999 and the related  condensed  statements  of income and
cash flows for each of the three years in the period  ended  December  31, 2000,
1999 and 1998:
<TABLE>
                            Condensed Balance Sheets
                                                                                    2000                 1999
                                                                               -----------------    ----------------
     <S>                                                                       <C>                  <C>
     Assets
         Cash                                                                  $      38,517        $    1,346,061
         Investment in subsidiary                                                 44,164,309            39,655,037
         Available-for-sale securities                                             1,008,952               832,023
                                                                               --------------       ---------------
     Total assets                                                                $45,211,778           $41,833,121
                                                                               ==============       ===============
     Other borrowed funds                                                      $     467,031        $      500,000

     Other liabilities                                                               115,931                75,607

     Stockholders' equity                                                         44,628,816            41,257,514
                                                                               --------------       ---------------
     Total liabilities and stockholders' equity                                $  45,211,778           $41,833,121
                                                                               ==============       ===============
</TABLE>
                                      -55-
<PAGE>
     O.A.K. FINANCIAL CORPORATION        |         NOTES TO CONSOLIDATED
           AND SUBSIDIARY                |         FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
                         Condensed Statements of Income

                                                                  2000                  1999                1998
                                                             --------------      ---------------      --------------
     <S>                                                     <C>                   <C>                  <C>
     Income
         Dividends from subsidiary                               $325,000          $    816,710         $2,362,500
         Interest from available-for-sale securities               24,076                36,045             59,065
         Net realized gain on sale of
           available-for-sale securities                          215,785               507,134            209,722
                                                             --------------      ---------------      --------------
     Total income                                                 564,861             1,359,889          2,631,287

     Other expenses                                               167,599               202,937            119,307
                                                             --------------      ---------------      --------------
     Income before equity in undistributed net
         income of subsidiary                                     397,262             1,156,952          2,511,980
     Equity in undistributed net income of
         subsidiary                                             3,572,876             3,372,041          2,563,539
                                                             --------------      ---------------      --------------

     Net income                                                $3,970,138            $4,528,993         $5,075,519
                                                             ==============      ===============      ==============

                       Condensed Statements of Cash Flows

                                                                  2000                  1999                 1998
                                                             --------------      ---------------      --------------
  Cash flows from operating activities
      Net income                                               $3,970,138           $4,528,993          $5,075,519
      Adjustments to reconcile net income
        to net cash provided by operating
        activities
           Net gain on available-for-sale securities             (215,785)            (507,134)                  -
           Undistributed earnings of subsidiary                (3,572,876)          (3,372,041)         (2,563,539)
           Changes in other liabilities                           (47,305)              15,685              59,922
                                                             --------------      ---------------      --------------
  Net cash provided by operating
      activities                                                  134,172              665,503           2,571,902
                                                             --------------      ---------------      --------------
  Cash flows from investing activities
            Available-for-sale securities
        Proceeds from sales                                       594,959            1,287,854             204,823
        Purchases                                                (298,474)                   -             (12,500)
                                                             --------------      ---------------      --------------
  Net cash provided by investing
      activities                                                  296,485            1,287,854             192,323
                                                             --------------      ---------------      --------------
  Cash flows from financing activities
      Repayment of long-term debt                                 (32,969)                   -                   -
      Proceeds from allocation of ESOP                             63,415                    -                   -
      Proceeds from common stock issued                                 -              650,001                   -
      Dividends paid                                           (1,768,647)          (1,674,256)         (2,350,000)
                                                             --------------      ---------------      --------------
  Net cash used in financing activities                        (1,738,201)          (1,024,255)         (2,350,000)
                                                             --------------      ---------------      --------------
  Net (decrease) increase in cash and cash
      equivalents                                              (1,307,544)             929,102             414,225

  Cash and cash equivalents, beginning
      of year                                                   1,346,061              416,959               2,734
                                                             --------------      ---------------      --------------
  Cash and cash equivalents, end of year                     $     38,517           $1,346,061         $   416,959
                                                             ==============      ===============      ==============
</TABLE>
                                      -56-
<PAGE>
Item 9.     Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure.

     Change in Registrant's Certifying Accountant.
     --------------------------------------------

     On December 30, 2000, the Registrant  dismissed Rehmann Robson, P.C. as the
Registrant's  principal  accountants,  effective upon completion of their report
with  respect  to the  Registrant's  financial  statements  for the  year  ended
December 31, 2000. The former accountants' reports on the Registrant's financial
statements  for the past two years ended December 31, 1999 and December 31, 2000
did not  contain  any  adverse  opinion or  disclaimer  of opinion nor were they
qualified or modified as to uncertainty,  audit scope or accounting  principles.
The decision to change  accountants  was  recommended  and approved by the Audit
Committee  of  the  Registrant  and  by  its  Board  of  Directors.  During  the
Registrant's  two most  recent  fiscal  years and  subsequent  interim  periods,
preceding the dismissal, there were no disagreements with the former accountants
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure, or auditing scope or procedure which disagreements,  if not resolved
to the  satisfaction of the former  accountants,  would have caused them to make
reference to the subject  matter of the  disagreement  in connection  with their
report. No "reportable  events" as defined in Item 304(a)(1)(v)  occurred within
the Registrant's two most recent fiscal years and any subsequent interim periods
preceding the former accountants dismissal.

     On  January  8,  2001,  the  Registrant  engaged  Plante & Moran LLP as its
principal  accountants to audit the  Registrant's  financial  statements for the
year ending December 31, 2001.  During the  Registrant's  two most recent fiscal
years and any subsequent  interim period prior to engaging the new  accountants,
the Registrant did not consult with the newly engaged accountants  regarding any
of the matters described in Item 304(a)(2)(i) or (ii).

     The letter of the former accountants  required by Items 304(a)(3) was filed
as Exhibit 16 to the  Registrant's  Report on Form 8-K  reporting  the change in
certifying  accountant  and that letter is  incorporated  by  reference  in this
Report on Form 10-K.


PART III

Item 10.  Directors and Executive Officers of the Registrant.

Directors

     The  information  with respect to Directors and Nominees of the Registrant,
set forth under the caption  "Information About Directors and Nominees" on pages
3 through 4 of the  Company's  definitive  proxy  statement,  as filed  with the
Commission  and dated  March 20,  2001,  relating  to the April 26,  2001 Annual
Meeting of Shareholders, is incorporated herein by reference.

Executive Officers

     The information called for by this item is contained in Part I of this Form
10-K Report.

Item 11.  Executive Compensation.

     The  information  set  forth  under  the  caption  "Executive  Compensation
Summary" on pages 6 and 7 of the Company's definitive proxy statement,  as filed
with the  Commission  and dated March 20,  2001,  relating to the April 26, 2001
Annual Meeting of Shareholders, is incorporated herein by reference. Information
under the caption "Committee Report on Executive  Compensation" on page 5 of the
definitive  proxy statement is not  incorporated by reference  herein and is not
deemed to be filed with the Securities and Exchange Commission.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

     The  information  set  forth  under  the  caption  "Voting  Securities  and
Beneficial Ownership of Management" on pages 2 and 3 of the Company's definitive
proxy statement, as filed with the Commission and dated March 20, 2001, relating
to the April 26, 2001 Annual Meeting of Shareholders,  is incorporated herein by
reference.

                                      -57-
<PAGE>
Item 13.  Certain Relationships and Related Transactions.

     The information set forth under the caption "Certain  Transactions" on page
7 of the Company's definitive proxy statement,  as filed with the Commission and
dated  March 20,  2001,  relating  to the  April  26,  2001  Annual  Meeting  of
Shareholders, is incorporated herein by reference.


Item 14.  Exhibits, Financial Statement Schedules and Report on Form 8-K.

(a)  1.   Financial Statements

          Independent Auditors' Report
          Consolidated Financial Statements
               Consolidated Balance Sheets as of
                    December 31, 2000 and 1999
               Consolidated Statements of Income for the Years Ended
                    December 31, 2000, 1999 and 1998
               Consolidated Statements of Comprehensive Income for the
                    Years Ended December 31, 2000, 1999 and 1998
               Consolidated Statements of Changes in Stockholders'
                    Equity for the Years Ended December 31, 2000, 1999 and 1998
               Consolidated Statements of Cash Flows for each of the
                    Years Ended December 31, 2000, 1999 and 1998
               Notes to Consolidated Financial Statements

     2.   Financial Statement Schedules
          Not applicable

     3.   Exhibits (Numbered in accordance  with Item 601 of Regulation S-K)
          The Exhibit Index is located on the final page of this report on
          Form 10-K.

(b)  Reports on Form 8-K

     On January 8, 2001, the Registrant filed an 8-K report  reflecting a change
in Registrant's  Certifying  Accountants.  This change is described in Item 9 of
this Report on Form 10-K.


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, dated March 9, 2001.

                                             O.A.K. FINANCIAL CORPORATION


                                             /s/ John A. Van Singel
                                             John A. Van Singel
                                             President, Chief Executive Officer
                                             (Principal Executive Officer)

                                             /s/ James A. Luyk
                                             James A. Luyk
                                             Executive Vice President
                                             (Chief Financial Officer)

                                      -58-
<PAGE>
     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed by the following  persons on behalf of the Registrant and
in the capacities and on the dates  indicated.  Each director of the Registrant,
whose signature appears below,  hereby appoints David G. Van Solkema and John A.
Van Singel, and each of them severally, as his or her attorney-in-fact,  to sign
in his or her name and on his or her behalf,  as a director  of the  Registrant,
and to file with the  Commission  any and all  Amendments to this Report on Form
10-K.

       Signature                                                 Date
       ---------                                                 ----

/s/ Robert Deppe                                             March 7, 2001
Robert Deppe

/s/ Norm Fifelski                                            March 7, 2001
Norman Fifelski

/s/ Dellvan Hoezee                                           March 7, 2001
Dellvan Hoezee

/s/ John Peterson                                            March 7, 2001
John Peterson

/s/ Lois Smalligan                                           March 7, 2001
Lois Smalligan

/s/ John A. Van Singel                                       March 7, 2001
John A. Van Singel

/s/ David Van Solkema                                        March 7, 2001
David Van Solkema

__________________________________                           March 7, 2001
Gerald Williams

                                  EXHIBIT INDEX

     The  following  exhibits  are  filed  herewith,  indexed  according  to the
applicable assigned number:

Exhibit
Number

10       Director Deferred Compensation Plan

21       Subsidiaries of Registrant



     The  following  exhibits,  indexed  according  to the  applicable  assigned
number,  were  previously  filed  by the  Registrant  and  are  incorporated  by
reference in this Form 10-K Annual Report.

Exhibit
Number

3.1       Articles  of  Incorporation  of the  Registrant  are  incorporated  by
          reference to Exhibit 3.1 of the Registrant's Registration Statement on
          Form 10, as amended.

                                      -59-
<PAGE>
3.2       Amendment to the Articles of  Incorporation  of Registrant filed April
          28, 1998,  increasing authorized shares of common stock from 2,000,000
          to  4,000,000  shares,  incorporated  by  reference  to  Exhibit  3 of
          Registrant's Report on Form 10-K for the year ended December 31, 1998.

3.3       Bylaws of the Registrant are  incorporated by reference to Exhibit 3.1
          of the Registrant's Registration Statement on Form 10, as amended.

4         Form of Registrant's  Stock  Certificate are incorporated by reference
          to Exhibit 3.1 of the Registrant's  Registration Statement on Form 10,
          as amended.

10.1      1999 Stock Compensation Plan,  incorporated by reference to Appendix A
          to the  Registrant's  Definitive Proxy Statement filed with respect to
          its April 22, 1999 annual meeting of shareholders.

10.2      Nonemployee Directors' Stock Option Plan, incorporated by reference to
          Appendix A to the  Registrant's  Definitive Proxy Statement filed with
          respect to its April 22, 1999 annual meeting of shareholders.

10.3      1988 Director Deferred  Compensation Plan is incorporated by reference
          to Exhibit 10 of the Registrant's  Registration  Statement on Form 10,
          as amended.

16        Letter of former accountants  required by Item 304(a)(3) of Regulation
          S-K is  incorporated  by reference  to Exhibit 16 of the  Registrant's
          Report on Form 8-K dated December 30, 2000.


                                      -60-
<PAGE>
EXHIBIT 10 - FORM OF DIRECTOR DEFERRED COMPENSATION PLAN

                         DEFERRED COMPENSATION AGREEMENT

     THIS  DEFERRED   COMPENSATION   AGREEMENT  dated  this  __________  day  of
_________________  by and  between  BYRON  CENTER  STATE BANK,  hereinafter  the
"Company", and __________________________________, hereinafter the "Director".


                                    RECITALS

     WHEREAS, Director is a director of the Company; and

     WHEREAS,  the  services  of  Director  and  Director's  experience  and the
knowledge of the affairs of the Company are  extremely  valuable to the Company;
and

     WHEREAS, the Company desires that Director remain in its service, wishes to
continue to receive the benefit of Director's  knowledge and experience,  and is
willing to offer Director an incentive in the form of deferred compensation.

                                    AGREEMENT

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Duties and Compensation. Director shall remain a director of the Company
with Director's duties, compensation and terms of employment in that capacity to
be such as may be determined  from time to time by the Board of Directors  until
such  service is  terminated  by either the  Company or  Director.  If  Director
remains as a director of the Company until retirement, Director shall further be
entitled to such amounts of deferred compensation as are provided hereinafter.

     2. Deferred Compensation Account.

          (a) In lieu of paying the Director an annual  retainer for services as
     a director of the Company,  the Company  shall each year credit as deferred
     compensation  to an account for  Director's  benefit an amount equal to the
     amount of the  annual  retainer  which  would  otherwise  be payable to the
     Director for service as a director of the Company for the following  twelve
     months.  The  Company  shall  maintain  the  account  on  its  records  and
     designated  as the Deferred  Compensation  Account for  Director.  Director
     shall be  informed  in  writing by the  Company  of the amount of  deferred
     compensation,  and the  time as of  which  such  deferred  compensation  is
     credited  to  Director's  Deferred  Compensation  Account.  Any  amounts of
     deferred  compensation credited to Director's Deferred Compensation Account
     may be kept in cash or invested and  reinvested  in mutual  funds,  stocks,
     bonds,  securities,  a policy or policies of life  insurance on  Director's
     life,  or any other  assets,  or such  amount may be used by the Company in
     connection with the operation of its business,  as may be determined by the
     Board of Directors of the Company.

          (b) As an investment for Director's Deferred Compensation Account, the
     Board of  Directors  may  direct the  Company to  purchase a policy of life
     insurance on the life of Director.  In the event that such a life insurance
     policy is purchased  for purposes of this  Agreement,  the Company shall be
     the applicant,  owner and beneficiary of the policy. The Company shall have
     all rights  under the  policy  and all  incidents  of  ownership  under the
     policy.

     3.  Payment  of  Deferred  Compensation  at  Retirement.   Upon  Director's
retirement, the Company shall pay Director deferred compensation in equal annual
installments for 15 years certain, an amount determined to be the greater of (a)
or (b) as follows:

          (a) One-fifteenth (1/15) of the amount credited to Director's Deferred
     Compensation Account, if any, upon the date Director retires.

                                      -61-
<PAGE>
          (b) The sum of the following:

               (i) An amount equal to one-fifteenth (1/15) of the cash value, if
          any, on the date Director retires of any insurance policy purchased by
          the Company on Director's  life as an investment  for purposes of this
          Deferred Compensation Agreement; plus

               (ii) An amount equal to the increase, if any, in cash value, from
          the policy  anniversary  date in the year of  retirement to the policy
          anniversary date following the year of retirement.

     4. Commencement of Deferred  Compensation  Payments.  Deferred Compensation
payments shall commence at retirement of the Director.  Normal  retirement shall
be age 65.

     At the  request of the  Director  and  subject to  approval of the Board of
Directors, retirement of the Director can commence at an age other than 65.

     The amount of such  payments  will be  determined  in  accordance  with the
formula in paragraph 3, as of the date the Director actually retires.

     Postponing or accelerating  the normal  retirement age under this paragraph
is subject to the sole and absolute  discretion of the Board of  Directors.  The
Director shall not participate in any way in the Board's decision as to any such
postponement or acceleration.  Once the Director attains normal  retirement age,
or is  granted  early  retirement  by the  Board of  Directors  of the  Company,
benefits will not be subject to a risk of forfeiture.

     5.  Payment  of  Deferred  Compensation  In Event of  Director's  Total And
Permanent Disability.  In the event of Director's total and permanent disability
prior to commencement of payments  provided under paragraphs 3 or 4, the Company
shall pay  Director the  deferred  compensation  in the same amount and the same
manner and schedule as set forth in paragraphs 3 and 4 when the Director attains
normal retirement age.

     6. Payment of Death Benefit In Lieu Of Deferred Compensation.  In the event
of Director's  death when Director has not begun receiving  payments of deferred
compensation  under  paragraphs  3  or  4,  the  Company  shall  pay  Director's
designated beneficiary a death benefit, in lieu of deferred compensation,  in an
amount determined to be the greater of (a) or (b) as follows:

          (a) The amount credited to Director's Deferred  Compensation  Account,
     if any, upon the date of Director's death.

          (b) An  amount  equal to 10  percent  of the  death  benefit,  if any,
     received by the Company as a result of Director's  death from any insurance
     policy  purchased by the Company on Director's  life as an  investment  for
     purposes of this Deferred Compensation Agreement,  payable each year for 10
     years.

     Payment under this paragraph shall commence  within 6 months  following the
date of the  Director's  death.  Payment  of this  benefit  shall  be in lieu of
deferred  compensation  benefits  described in paragraphs 3 and 4. Payment under
this  paragraph  will  constitute   complete  and  total   satisfaction  of  the
obligations of the Company provided under this Agreement.

     7.  Payment of  Deferred  Compensation  In Event of  Director's  Death When
Director Has Begun Receiving  Payments Under  Paragraphs 3 or 4. In the event of
Director's  death when Director has begun receiving  payments under paragraphs 3
or 4, the Company  shall pay  Director's  designated  beneficiary  the remaining
annual deferred  compensation  payments, if any, to complete the 15 year certain
requirement.

     Any payments becoming due to the Director's designated beneficiary shall be
made in the same  amount  and at the same  time as would  have  been paid to the
Director,  until the Company has paid a total of 15 annual  installments  to the
Director and/or the Director's designated beneficiary.

                                      -62-
<PAGE>
     8. No Duplication of Deferred Compensation. Deferred compensation shall not
be paid to Director, or to his designated beneficiary, under greater than one of
the following paragraphs of the Agreement: 3, 4, 6 and 7.

     9. Designated Beneficiary.  For purposes of this Agreement,  the designated
beneficiary  shall be as  provided on Exhibit  "A"  attached to this  Agreement.
Director  may  change  the  designated  beneficiary  by notice in writing to the
Company at any time. If the designated  beneficiary shall die after commencement
of payments to the designated beneficiary,  remaining payments, if any, shall be
paid to the estate of the designated beneficiary.

     10. Prohibition Against Assignment.  Except as otherwise expressly provided
herein,  Director  agrees  on behalf of  himself  and on behalf of his  personal
representatives,  heirs, legatees,  distributees and any other person or persons
claiming any benefits under him by virtue of this Agreement, that this Agreement
and  the  rights,  interests  and  benefits  hereunder  shall  not be  assigned,
transferred,  pledged or  hypothecated  in any way by Director  or any  personal
representative,  heir,  legatee,  distributee  or other  person  claiming  under
Director  by virtue of this  Agreement  and shall not be subject  to  execution,
attachment or similar process.  Any attempted  assignment,  transfer,  pledge or
hypothecation or other disposition of the Agreement or of such rights, interests
and benefits contrary to the foregoing provisions, or the levy of any attachment
or similar process thereupon,  shall be null and void and without effect and the
Company shall have no further liability hereunder.

     11.  Notices and  Elections.  Any notice or election to be given  hereunder
shall be sent by certified mail, return receipt requested, to the Company at its
registered  office and to Director at such  address as is carried on the records
of the Company.  Either party may change the address to which  notices are to be
addressed by notice in writing given to the other in  accordance  with the terms
hereof.  The effective date of any such notice shall be the date of mailing,  as
determined by postmark.

     12. Funds. Nothing contained in this Agreement and no action taken pursuant
to the  provisions  of this  Agreement  shall create or be construed to create a
trust of any kind, a fund, or fiduciary relationship between the Company and the
Director,  his designated  beneficiary or any other person. Any funds, including
all investments and any life insurance policies, used to determine payment under
the Agreement shall be a part of the general funds and assets of the Company and
subject to the claims of the  Company's  general  creditors  and no person other
than the Company shall by virtue of the  provisions of this  Agreement  have any
right,  interest, or title in such funds. To the extent that any person acquires
a right to receive  payments from the Company under this  Agreement,  such right
shall be not greater  than the right of any  unsecured  general  creditor of the
Company.  Benefits provided by this Agreement are separate from and unrelated to
the  proceeds  or value of any  insurance  policy  purchased  by the  Company to
informally  fund this  Agreement.  Director  shall not have any present right or
interest  in,  nor any  deferred  claim  to, or  beneficial  ownership  of,  any
insurance policy held by the Company with respect to this Agreement.

     13.  Acceleration of Benefits.  At the discretion of the Board of Directors
of the Company acting  without any  participation  by the Director,  the Company
shall retain the right to accelerate  the payment of any benefits  remaining due
to the Director or the Director's designated beneficiaries under this agreement.
Any  acceleration  of benefits  shall be discounted at an interest rate equal to
the  "Federal  Funds  Rate"  which  shall be the mean of the high and low  rates
quoted for Federal Funds in the "Money Rates" column of The Wall Street  Journal
for the  business  day  preceding  the date on which the  Company  notifies  the
Director or the Director's  designated  beneficiaries of the Company's intention
to  accelerate  payment.  Any such  payment will  constitute  complete and total
satisfaction of the obligations of the Company provided under this Agreement.

     14. Effect Upon Director  Relationship.  Nothing in this Agreement shall be
construed  as granting  Director  the right to be continued as a director of the
Company, or as a limitation on the right of the Company to terminate the service
of Director at any time.

     15. Binding  Effect.  This Agreement shall be binding upon and inure to the
benefit of any successor of the Company and any such  successor  shall be deemed
substituted for the Company under the terms of this  Agreement.  As used in this
agreement, the term "successor" shall include any person, firm, corporation,  or
other  business  entity  which at any  time,  whether  by  merger,  purchase  or
otherwise,  acquires all or  substantially  all of the assets or business of the
Company.

                                      -63-
<PAGE>
     16.  Governing  Law.  This  Agreement  shall  be  interpreted,   construed,
enforced, and performed in accordance with the laws of the State of Michigan.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first written above.

DIRECTOR:                                      COMPANY:


_________________________                      By: _____________________________

                                                   Its _________________________





                                      -64-
<PAGE>
                                   EXHIBIT "A"

                         DEFERRED COMPENSATION AGREEMENT

                           BENEFICIARY DESIGNATION FOR

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


In the event of my death, my primary beneficiary shall be:

________________________________________________________

In the event my primary  beneficiary  predeceases  me my contingent  beneficiary
shall be:

________________________________________________________



__________________________________             _________________________________
Print Witness Name                                  Print Director Name



__________________________________             _________________________________
Witness Signature                                   Director Signature


                                                    Date:_______________________



                                      -65-
<PAGE>
Exhibit 21 - Subsidiaries of Registrant - 100% Owned

         Byron Center State Bank
         2445  84th Street, S.W.
         Byron Center, MI  49315

               O.A.K. Financial Services, Inc. (100% owned subsidiary of Byron
               Center State Bank)
               2445  84th Street, S.W.
               Byron Center, MI  49315

               Dornbush Insurance Agency, Inc. (100% owned subsidiary of O.A.K.
               Financial Services, Inc.)
               5445  32nd Avenue
               Hudsonville, MI 49426



                                      -66-
<PAGE>
                          O.A.K. FINANCIAL CORPORATION

                             2445 84th Street, S.W.
                          Byron Center, Michigan 49315

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                            To Be Held April 26, 2001


     NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting")  of O.A.K.  Financial  Corporation  (the  "Corporation"),  a  Michigan
corporation, will be held on April 26, 2001, at 9:00 a.m., at the Byron Township
Hall,  8085 Byron  Center,  S.W.,  Byron  Center,  Michigan,  for the  following
purposes:

     1. To elect three directors, each to hold office for a 3-year term.

     2. To transact such other  business as may properly come before the meeting
or any adjournment thereof.

     The Board of Directors has fixed March 12, 2001, as the record date for the
determination  of shareholders  entitled to notice of and to vote at the meeting
or any adjournment thereof.

                                    By order of the Board of Directors,



                                    /s/ John A. Van Singel, Secretary


     Your vote is important. Even if you plan to attend the meeting, please
     date and sign the  enclosed  proxy  form,  indicate  your  choice with
     respect to the matters to be voted upon, and return it promptly in the
     enclosed  envelope.  Note  that if the  stock is held in more than one
     name, all parties must sign the proxy form.


Dated:  March 20, 2001
<PAGE>
                          O.A.K. FINANCIAL CORPORATION
                             2445 84th Street, S.W.
                          Byron Center, Michigan 49315

                                 PROXY STATEMENT

     This Proxy  Statement  and the enclosed  proxy are  furnished in connection
with the  solicitation of proxies by the Board of Directors of O.A.K.  Financial
Corporation (the "Corporation"), a Michigan bank holding company, to be voted at
the Annual Meeting of  Shareholders  of the  Corporation to be held on Thursday,
April 26, 2001, at 9:00 a.m.,  at the Byron  Township  Hall,  8085 Byron Center,
S.W., Byron Center, Michigan, or at any adjournment or adjournments thereof, for
the  purposes  set  forth  in the  accompanying  Notice  of  Annual  Meeting  of
Shareholders and in this Proxy Statement.

                              VOTING AT THE MEETING

     This Proxy  Statement  has been mailed on or about March 20,  2001,  to all
holders of record of common stock of the  Corporation as of the record date. The
Board of Directors of the  Corporation  has fixed the close of business on March
12, 2001, as the record date for the  determination of shareholders  entitled to
notice of and to vote at the Annual Meeting of Shareholders  and any adjournment
thereof.

     The  Corporation has only one class of capital stock  authorized,  which is
common stock of the par value of $1.00 per share. There are presently  2,042,532
shares of common stock of the Corporation  outstanding.  Each outstanding  share
will entitle the holder  thereof to one vote on each separate  matter  presented
for vote at the meeting. The inspectors of the meeting, who are appointed by the
Corporation, count votes cast at the meeting and submitted by proxy.

     If a Proxy in the  enclosed  form is properly  executed and returned to the
Corporation,  the  shares  represented  by the Proxy will be voted at the Annual
Meeting and any adjournment  thereof.  If a shareholder  specifies a choice, the
Proxy  will be voted  as  specified.  If no  choice  is  specified,  the  shares
represented  by the Proxy will be voted for the  election of all of the nominees
named in the Proxy  Statement and for the  proposals,  if any, set forth in this
Proxy  Statement,  and in  accordance  with the judgment of the persons named as
proxies with  respect to any other  matter which may come before the meeting.  A
proxy  may  be  revoked  before  exercise  by  notifying  the  Secretary  of the
Corporation  in writing or in open  meeting,  by  submitting  a proxy of a later
date,  or  attending  the meeting  and voting in person.  All  shareholders  are
encouraged to date and sign the enclosed  proxy form,  indicate your choice with
respect to the matters to be voted upon, and return it to the Corporation.

                              ELECTION OF DIRECTORS

     The Articles of  Incorporation  of the  Corporation  authorize the Board of
Directors  to  establish  the size of the  Board.  The  Board of  Directors  has
established  the  size of the  Board  for  2001 at eight  (8)  persons  with the
authority to increase to nine (9) persons.  The Articles of  Incorporation  also
provide  for the  division of the Board of  Directors  into three (3) classes of
nearly equal size with staggered 3-year terms of office.  Three people have been
nominated  by the  Board  of  Directors  for  election  to the  Board to serve a
three-year term expiring at the 2004 Annual Meeting of  Shareholders.  The Board
has nominated Norman Fifelski, Dellvan Hoezee and Robert Deppe each for a 3-year
term.  All of the nominees are  incumbent  directors  previously  elected by the
Corporation's shareholders.

     Unless  otherwise  directed by a shareholder's  proxy, the persons named as
proxy holders in the accompanying  proxy will vote for the nominees named above.
In the  event  any of such  nominees  shall  become  unavailable,  which  is not
anticipated,  the Board of Directors in its discretion may designate  substitute
nominees,  in which event the enclosed  proxy will be voted for such  substitute
nominees.  Proxies  cannot  be voted for a greater  number of  persons  than the
number of nominees named.

     Except for those  persons  nominated  by the Board of  Directors,  no other
persons  may  be  nominated  for  election  at  the  2001  annual  meeting.  The
Corporation's  Articles of Incorporation  require at least 60 days prior written
notice of any other proposed shareholder  nomination and no such notice has been
received.
                                      -1-
<PAGE>
     A  plurality  of the votes  cast at the  meeting is  required  to elect the
nominees as directors of the Corporation.  As such,  individuals who receive the
largest number of votes cast at the meeting will be elected as directors. Shares
not voted at the meeting,  whether by abstention,  broker nonvote, or otherwise,
will not be treated as votes cast at the meeting.

     The  Board  of  Directors  recommends  a vote FOR the  election  of all the
persons nominated by the Board.


            VOTING SECURITIES AND BENEFICIAL OWNERSHIP OF MANAGEMENT

     At March 12, 2001, the  Corporation  had  outstanding  2,042,532  shares of
common stock,  par value $1.00 per share.  Shareholders are entitled to one vote
for each full share of common  stock  registered  in their names at the close of
business on March 12, 2001, the record date fixed by the Board of Directors. The
inspectors  of the meeting,  who are appointed by the  Corporation,  count votes
cast at the meeting and submitted by proxy.

     As of  March  12,  2001,  no  person  was  known  by  management  to be the
beneficial  owner  of  more  than  5% of the  outstanding  common  stock  of the
Corporation except as follows:
<TABLE>
---------------------------------------------------------------------------------------------------------
             Name and Address of                    Amount and Nature of              Approximate
                Beneficial Owner                    Beneficial Ownership           Percent of Class
---------------------------------------------------------------------------------------------------------
           <S>                                         <C>                              <C>
           Charles Andringa                             113,532                          5.6%
           2807 Bridgeside Drive
           Caledonia, MI 49316
---------------------------------------------------------------------------------------------------------
           Willard and Jane Van Singel (1)              277,969 (1)                     13.61%
           8977 Lindsey Lane, S.W.
           Byron Center, MI 49315
---------------------------------------------------------------------------------------------------------
</TABLE>
(1)  Willard  and Jane Van  Singel are  husband  and wife.  Of the shares  shown
     above,  Mr. Van Singel has sole voting and investment power with respect to
     120,629  shares  (5.91%) and Mrs. Van Singel has sole voting and investment
     power with  respect to 110,000  shares  (5.39%).  Mr. & Mrs. Van Singel own
     47,340 shares  (2.3%)  jointly and share voting and  investment  power with
     certain of their adult children.

     The information in the following table sets forth the beneficial  ownership
of the  Corporation's  common stock by each of the executive  officers listed in
the  Summary  Compensation  Table  presented  later  and  by all  directors  and
executive officers as a group.
<TABLE>
--------------------------------------------------------------------------------------------------------------------
                      Person                             Amount and Nature of                 Approximate
                                                          Beneficial Ownership             Percent of Class
--------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                                   <C>
John A. Van Singel.............................             49,678 (1)(2)                        2.43%
--------------------------------------------------------------------------------------------------------------------
John Peterson..................................              2,261 (2)                              *%
--------------------------------------------------------------------------------------------------------------------
All executive officers and directors as a                  138,265 (2)(3)                        6.77%
group (consisting of 15 persons).........
--------------------------------------------------------------------------------------------------------------------
</TABLE>
*Less than one percent

(1)  Includes  9,706 shares owned by Mr. Van Singel's  minor children and 19,482
     shares owned  jointly by Mr. Van Singel with his parents,  Willard and Jane
     Van Singel.
(2)  Includes  shares  subject to stock  options  exercisable  within 60 days as
     follows:  Mr. Van Singel - 4,000;  Mr. Peterson - 2,008;  and all executive
     officers and directors as a group - 19,541.
(3)  Included for informational purposes are 20,546 shares to which officers and
     directors disclaim beneficial ownership.

                                      -2-
<PAGE>
                INFORMATION ABOUT DIRECTORS AND DIRECTOR NOMINEES

     The  following   information   relating  to  the  principal  occupation  or
employment has been furnished to the Corporation by the respective directors and
director  nominees.  Each of those  persons has been engaged in the  occupations
stated below for more than 5 years.
<TABLE>
====================================================================================================================
                            Nominee for Election as Director for Term Expiring in 2004
--------------------------------------------------------------------------------------------------------------------
                                                                             Amount and Nature
                                                                               of Beneficial
                                                          Director of            Ownership           Approximate
                                               Age     Corporation Since      3/12/01(1) (6)      Percent of Class
--------------------------------------------------------------------------------------------------------------------
<S>                                            <C>           <C>                 <C>                    <C>
Norman Fifelski...........................      55           1988                 4,699                *
      Owner, Hillcrest Foods and Fuel
--------------------------------------------------------------------------------------------------------------------
Dellvan Hoezee............................      66           1991                 7,138 (5)            *
      President, Hudsonville Creamery
--------------------------------------------------------------------------------------------------------------------
Robert Deppe..............................      40           1997                 1,388                *
      President, Robert Deppe Building
      and Development Inc.
--------------------------------------------------------------------------------------------------------------------
                                       Directors Whose Terms Expire in 2003
--------------------------------------------------------------------------------------------------------------------
John Peterson.............................      52           1999                 2,261                *
      Executive Vice President,
      Byron Center State Bank
--------------------------------------------------------------------------------------------------------------------
David Van Solkema.........................      59           1988                 3,672                *
     President, Jobbers Warehouse
      Service, Inc.
      (an auto parts distributor)
--------------------------------------------------------------------------------------------------------------------
Gerald Williams...........................      68           1988                12,030 (4)            *
      President, Dorr Farm Products
      (Farm equipment retailer)
--------------------------------------------------------------------------------------------------------------------
                                       Directors Whose Terms Expire in 2002
--------------------------------------------------------------------------------------------------------------------
Lois Smalligan............................      68           1988                44,932 (2)            2.20%
      Vice President and Mortgage Loan
      Officer, Byron Center State Bank
--------------------------------------------------------------------------------------------------------------------
John A. Van Singel........................      46           1988                49,678 (3)            2.43%
      President, Byron Center State Bank
====================================================================================================================
</TABLE>
*Represents less than one percent

(1)  This  information is based upon the  Corporation's  records as of March 12,
     2001, and information  supplied by the persons listed above.  The number of
     shares  stated  in this  column  includes  shares  owned of  record  by the
     shareholder and shares,  which, under federal securities  regulations,  are
     deemed  to be  beneficially  owned  by the  shareholder,  including  shares
     subject  to stock  options  exercisable  within 60 days.  Unless  otherwise
     indicated  below,  the persons named in the table have sole voting and sole
     investment power or share voting and investment power with their respective
     spouses, with respect to all shares beneficially owned.
(2)  Includes 11,656 shares owned by Ms.  Smalligan's  husband and 20,546 shares
     owned by Ms. Smalligan's children and grandchild, as to which she disclaims
     beneficial ownership.
(3)  Includes  9,706 shares owned by Mr. Van Singel's  minor children and 19,482
     shares owned  jointly by Mr. Van Singel with his parents,  Willard and Jane
     Van Singel.
(4)  10,030 of these shares are owned by Mr. Williams' wife.
(5)  Includes  3,160  shares  owned by  Hudsonville  Creamery & Ice Cream Co., a
     corporation in which Mr. Hoezee owns a one-third interest.
(6)  Includes  shares  held in ESOP as  follows:  Mr. Van Singel 70 shares,  Mr.
     Peterson 35 shares, and Ms. Smalligan 26 shares.

                                      -3-
<PAGE>
Director Compensation

     Directors of the  Corporation  and the Bank are paid an annual retainer fee
of  $10,000  for their  service  on both  boards.  No  compensation  is paid for
attendance  at  Corporation  or  Bank  Board  or  committee  meetings;  although
discretionary  bonuses  were paid to each  non-employee  director  amounting  to
$2,000,  $2,500 and $8,000 for the years ended December 31, 2000, 1999 and 1998,
respectively.  During 2000,  the Board of Directors of the  Corporation  and the
Bank held a total of 24 regular meetings.  Various  committees of the Board held
meetings as needed.  Each director  attended at least 75% of the total number of
meetings of the Board of  Directors  and  meetings of  committees  on which they
served.

     In 1988, the Bank adopted a deferred  compensation  plan for directors that
provide  for  benefit  payments  to the  participant  and his or her family upon
retirement  or death.  All of the  Corporation's  directors,  except for Messrs.
Deppe and Peterson,  are  participants  in this plan.  This plan allowed for the
deferral of director fees in return for the payment of certain defined  benefits
payable upon termination of one's service as a director of the Bank. The cost of
this  plan  was  $109,670,  $109,670  and  $109,670  in  2000,  1999  and  1998,
respectively.  The  total  accrued  liability  of the Bank  under  this plan was
$820,952 as of December 31, 2000. The Bank has purchased life insurance policies
on the  lives of the  participating  directors  with the Bank as the  owner  and
beneficiary. The life insurance policies will be used to fund the benefits under
the plan. The cash surrender value of the policies was $1,131,351 as of December
31, 2000. As of January 1, 1997, no further  deferrals of directors' fees may be
made under this plan.

     In 1998, the Bank adopted a new deferred  compensation  plan for directors.
The plan  permits  the Board to defer the  payment  of fees for  service  on the
Board.  Fees,  which are  deferred,  are credited to the  deferred  compensation
accounts of the  individual  participating  directors  and  invested in a manner
determined by the board.  The Board is authorized to direct the Bank to purchase
policies of life insurance on the life of participating  directors as one of the
investment vehicles under the plan. If a life insurance policy is purchased with
respect  to  a  participating  director's  life,  the  Bank  is  the  owner  and
beneficiary of the policy. Upon a director's  retirement,  the cash value of the
policy  is paid out to the  director  in  annual  installments  over a period of
fifteen  years.  If a  participating  director dies before  beginning to receive
payments,  the Bank will pay a  beneficiary  designated  by the director a death
benefit in lieu of deferred  compensation  in an amount  equal to the greater of
the amount of fees credited to the director's deferred  compensation  account or
an amount  payable  each year for ten years  equal to ten  percent  of the death
benefit,  if any,  received by the Bank as a result of the director's death from
any  insurance  policy  purchased  by the  Bank  on the  director's  life  as an
investment for purposes of the deferred compensation plan. The cost of this plan
was $68,994, $93,989, and $42,000 in 2000, 1999 and 1998 respectively.  The cash
surrender value and liability of this plan are both $169,926.

     On January 28, 1999,  the Board of Directors  adopted the O.A.K.  Financial
Corporation  1999  Directors'  Stock  Option  Plan,  which was  approved  by the
Corporation's shareholders at the April 22, 1999 Annual Meeting. On February 18,
1999,  stock  options to purchase 500 shares were  granted to each  non-employee
director.  On January 21,  2000,  stock  options to purchase an  additional  500
shares were granted to each nonemployee director.

Audit Committee

     The Audit Committee,  comprised of Messrs.  Fifelski,  Hoezee and Williams,
met on four occasions during 2000. Each of the members of the Audit Committee is
"independent"  as defined in Rule  4200(a) of the NASD  Listing  Standards.  Its
primary duties and responsibilities  include annually  recommending to the Board
of Directors an independent  public accounting firm to be appointed  auditors of
the  Corporation  and the Bank,  reviewing  the  scope  and fees for the  audit,
reviewing  all the  reports  received  from  the  independent  certified  public
accountants,  reviewing the activities of, and  coordinating  matters,  with the
internal  auditing  department.  The  Corporation's  Board of Directors  has not
adopted an Audit Committee Charter.

                             Audit Committee Report

     We have reviewed and discussed with  management the  Corporation's  audited
financial statements as of and for the year ended December 31, 2000.

                                      -4-
<PAGE>
     We have discussed with the independent  auditors the matters required to be
discussed by Statement on Auditing  Standards No. 61,  Communication  with Audit
Committees,  as  amended,  by the  Auditing  Standards  Board  of  the  American
Institute of Certified Public Accountants.

     We have received and reviewed the written  disclosures  and the letter from
the independent  auditors required by Independence  Standard No. 1, Independence
Discussions with Audit  Committees,  as amended,  by the Independence  Standards
Board, and have discussed with the auditors the auditors' independence.

     Based on the reviews and discussions referred to above, we recommend to the
Board of Directors that the financial  statements  referred to above be included
in the Corporation's Form 10-K for the year ended December 31, 2000.

     Respectfully  submitted,   Norman  Fifelski,   Dellvan  Hoezee  and  Gerald
Williams.

                       COMPENSATION OF EXECUTIVE OFFICERS

                   Committee Report on Executive Compensation

     Decisions on the compensation of the Corporation's  executive  officers are
made by the Board's nonemployee directors consisting of Messrs. Deppe, Fifelski,
Hoezee, Van Solkema and Williams. To ensure this Committee's  independence,  the
Board of Directors  has, from time to time,  used outside  consultants to assist
the  Committee  in  its  deliberations.  This  Committee  report  addresses  the
Corporation's compensation policies and programs for the year ended December 31,
2000.

     Base Salary - Excluding  consideration of other relevant factors, which may
include  individual  performance,  experience,  expertise and tenure,  the Board
intends to maintain the base salaries of the  Corporation's  executive  officers
and senior managers within peer group levels.

     Annually, the Committee establishes a base wage for the President and Chief
Executive Officer,  Mr. Van Singel, and for Mr. Peterson and Ms. Smalligan.  The
Committee's  determination is based upon compensation  levels established by the
Corporation's peers and evaluations by consultants.

     The base salaries of all other  executive  officers are  established by the
Corporation's President and Chief Executive Officer.

     Annual Cash Incentive - To provide performance incentives and to compensate
for lower base  salary,  the  strategy  provides for annual cash awards that are
payable if the Corporation and the Byron Center State Bank meet or exceed annual
performance objectives established by the Board of Directors.

     Long-Term Incentives - To align the interests of its executive officers and
senior managers with the Corporation's  shareholders,  the compensation strategy
includes  the 1999 Stock  Compensation  Plan ("1999 Stock Plan") and a qualified
employee stock  ownership and 401(K) plan.  During 2000,  9,627  incentive stock
options were granted to a total of fourteen  executives of the Corporation.  The
number of shares  subject  to each  option  was based  upon the  position  and a
discretionary assessment of the performance of each grantee. The options awarded
in 2000 vest after one year. The 1999 Stock Plan also allows the  Corporation to
issue  restricted  stock to officers and  employees of the  Corporation  and its
subsidiaries. However, no shares of restricted stock were awarded in 2000.

     Respectfully  submitted,  Robert Deppe,  Norman  Fifelski,  Dellvan Hoezee,
David Van Solkema, Gerald Williams

                                      -5-
<PAGE>
                         EXECUTIVE COMPENSATION SUMMARY

     The following table sets forth the compensation paid by the Bank during the
last three years to its Chief Executive  Officer and during the past year to its
Executive  Vice  President.  There  are no  employees  of the  Corporation;  all
personnel  are  employed  by  the  Bank.  No  other  executive  officers  of the
Corporation  or the Bank  received  annual  compensation  in excess of  $100,000
during this period.
<TABLE>
                                                                              Long -Term
                                             Annual Compensation             Compensation
                                       ---------------------------------     ------------
                                                                              Securities
                                                                              Underlying            All Other
    Name and Principal Position        Year         Salary        Bonus        Options          Compensation(1)
    ---------------------------        ----         ------        -----        ------           ---------------
<S>                                    <C>        <C>           <C>            <C>                <C>
John Van Singel, President and         2000       $180,000      $38,250        2,000              $13,110
    Chief Executive Officer            1999        170,000       45,000        2,000               15,174
                                       1998        160,000       45,000            0               15,306

John Peterson, Executive               2000        $98,000      $14,250        1,002               $7,164
    Vice President                     1999         93,000       17,500        1,006               12,819
                                       1998         87,000       14,000            0               10,349
</TABLE>
(1)      The amount set forth in this column includes (a) Bank  contributions to
         the Bank's Profit  Sharing Plan of $9,350,  $10,200 and $12,750 for Mr.
         Van Singel for 2000, 1999 and 1998, respectively, Bank contributions of
         $5,390,  $7,791 and $9,148 for Mr.  Peterson  for 2000,  1999 and 1998,
         respectively,  (b) Bank  contributions  to  401(k)  plan as a  matching
         contribution of $3,600, $4,818, and $2,400 for Mr. Van Singel for 2000,
         1999, 1998,  respectively,  Bank  contributions  of $1,470,  $2,272 and
         $1,045 for Mr. Peterson for 2000, 1999 and 1998  respectively,  and (c)
         the dollar value of premiums  paid by the Bank for term life  insurance
         on behalf of Mr. Van Singel and Mr. Peterson.

     The  Corporation  and the Bank maintain the 1999 Stock  Compensation  Plan.
They also maintain the Employee Stock Ownership Plan implemented in January 1999
as a part of the Corporation's  401(k) Profit Sharing Plan. The Bank maintains a
bonus plan,  whereby  cash  bonuses are paid to  employees  if the Bank  exceeds
certain  predetermined  levels of earnings established each year by the Board of
Directors.

     Stock  options are believed to help align the  interests of employees  with
the interests of  shareholders  by promoting stock ownership by employees and by
rewarding them for appreciation in the price of the Corporation's  stock.  Stock
options  granted and  outstanding  during 2000 were granted under the 1999 Stock
Compensation Plan.

     The following table sets forth information concerning stock options granted
to and retained by the named executive  officers of the Corporation during 2000.
None of the named officers exercised stock options during 2000:
<TABLE>
                                     EXECUTIVE OPTION GRANTS IN LAST FISCAL YEAR

                                         Percent of                                   Potential Realizable Value at
                                            Total                                        Assumed Annual Rates of
                           Number of       Options                                         Stock Appreciation
                            Shares       Granted to                                          for Option Term
                          Underlying      Employees                                      -----------------------
                            Options       in Fiscal      Exercise     Expiration
                            Granted         Year           Price         Date              5%               10%
                           ---------       ------         ------        ------             --               ---
<S>                          <C>            <C>           <C>        <C>                <C>              <C>
John A. Van Singel           2,000          20.8%         $55.00     1/13/2010          $69,178          $175,312
John Peterson                1,002          10.4%         $55.00     1/13/2010          $34,658           $87,831
</TABLE>
                                      -6-
<PAGE>
     The per share exercise price of each option is equal to the market value of
the common stock on the date each option was granted.  All  outstanding  options
were  granted  for a term of ten years.  Options  terminate,  subject to certain
limited  exercise  provisions,  in the  event  of  death,  retirement,  or other
termination  of employment.  No option is exercisable  until twelve months after
the date of grant.
<TABLE>
                                               YEAR END OPTION VALUES

                                              Number of Shares Underlying               Value of Unexercised
                                                Unexercised Options at                 In-the-Money Options at
                                                       Year end                               Year End
                 Name                          Exercisable/Unexercisable              Exercisable/Unexercisable
                 ----                          -------------------------              -------------------------
<S>                                                   <C>                                     <C>
John A. Van Singel                                    2,000/2,000                             $10,000/0
John Peterson                                         1,006/1,002                             $5,030/0
</TABLE>

     The per share exercise price of each option is equal to the market value of
the common stock on the date each option was granted. The unexercisable  options
noted above became exercisable as of February 2001.

                              CERTAIN TRANSACTIONS

     Certain directors and officers of the Corporation have had and are expected
to have in the future,  transactions  with the Bank,  or have been  directors or
officers of  corporations,  or members of  partnerships,  which have had and are
expected  to  have  in  the  future,   transactions  with  the  Bank.  All  such
transactions  with officers and directors,  either directly or indirectly,  have
been made in the  ordinary  course of  business  and on  substantially  the same
terms, including interest rates and collateral,  as those prevailing at the same
time for comparable transactions with other customers, and these transactions do
not  involve  more than the  normal  risk of  collectibility  or  present  other
unfavorable features. All such future transactions,  including transactions with
principal  shareholders and other  Corporation  affiliates,  will be made in the
ordinary course of business,  on terms no less favorable to the Corporation than
with  other  customers,  and will be subject to  approval  by a majority  of the
Corporation's independent, outside disinterested directors.


                                      -7-
<PAGE>
                      SHAREHOLDER RETURN PERFORMANCE GRAPH

     Set forth below is a line graph comparing the yearly  percentage  change in
the cumulative total shareholder  return on the Corporation's  common stock with
that of the  cumulative  total return on the MG Group Index and the NASDAQ Stock
Market Index for the five year period ended December 31,2000. The MG Group Index
is an index  composed  of 90 banks and bank  holding  companies  located  in the
Midwest  and  published  by Media  General  Financial  Services.  The  following
information  is based on an  investment  of $100,  on December 31, 1995,  in the
Corporation's  common  stock,  the MG Group  Index,  and the NASDAQ Stock Market
Index,  with  dividends  reinvested.  There  has  been  limited  trading  in the
Corporation's  Common Stock and the Corporation's common stock does not trade on
any stock exchange.  Accordingly,  the returns  reflected in the following graph
and  table  are  based  on sale  prices  of the  Corporation's  stock  of  which
management  is aware.  There may have  been  sales at higher or lower  prices of
which management is not aware.



[GRAPHIC OMITTED]



<TABLE>
-------------------------------------------------------------------------------------------------------------------
                                       1995         1996          1997         1998          1999         2000
-------------------------------------------------------------------------------------------------------------------
<S>                                    <C>         <C>           <C>          <C>           <C>          <C>
O.A.K. Financial                       100         120.04        149.22       223.10        249.27       253.12
-------------------------------------------------------------------------------------------------------------------
MG Group Index                         100         133.59        228.03       252.99        209.94       255.66
-------------------------------------------------------------------------------------------------------------------
NASDAQ Market Index                    100         124.27        152.00       214.39        378.12       237.66
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Source: Media General Financial Services, Richmond, Virginia

                                      -8-
<PAGE>
                      COMPLIANCE WITH SECTION 16 REPORTING

     The  rules of the  Securities  and  Exchange  Commission  require  that the
Corporation  disclose late filings of reports of stock ownership (and changes in
stock ownership) by its directors,  executive  officers and beneficial owners of
more than 10% of the Corporation's  common stock.  Based solely on its review of
the copies of such  reports  received  by it, and written  representations  from
certain reporting persons,  the Corporation  believes that during the year ended
December 31, 2000, its directors,  executive  officers and beneficial  owners of
more than 10% of the  Corporation's  common stock have  complied with all filing
requirements applicable to them.


           RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

     The financial statements of the Corporation for the year ended December 31,
2000 have been  audited  by  Rehmann  Robson PC,  independent  certified  public
accountants.  Representatives of Rehmann Robson PC are not expected to be at the
Annual Meeting of Shareholders

     The Corporation has dismissed  Rehmann Robson PC ("Rehmann  Robson") as its
principal accountants, effective upon completion of their report with respect to
the  Corporation's  financial  statements  for the year ended December 31, 2000.
Rehmann Robson reports on the  Corporation's  financial  statements for the past
two years ended  December 31, 1999 and  December  31, 2000,  did not contain any
adverse  opinion or disclaimer of opinion nor were they qualified or modified as
to  uncertainty,  audit scope or accounting  principles.  The decision to change
accountants  was  recommended  and  approved  by  the  Audit  Committee  of  the
Corporation  and by its Board of Directors.  During the  Corporation's  two most
recent  fiscal years,  there were no  disagreements  with Rehmann  Robson on any
matter of accounting principles or practices, financial statement disclosure, or
auditing  scope  or  procedure  which  disagreements,  if  not  resolved  to the
satisfaction of Rehmann Robson,  would have caused them to make reference to the
subject matter of the disagreement in connection with their report.

     On January  8,  2001,  the  Corporation  engaged  Plante & Moran LLP as its
principal  accountants to audit the Corporation's  financial  statements for the
year ending  December  31, 2001.  Representatives  of Plante & Moran LLP are not
expected to be at the Annual Meeting.

     Audit Fees

     Aggregate fees billed for professional  services  rendered for the audit of
the Corporation's  annual consolidated  financial statements for the fiscal year
ended  December  31,  2000 and the review of  financial  statements  included in
Corporation's  Forms 10-K filed with the Securities and Exchange  Commission for
that fiscal year were: $48,000.

     Financial Information System Design and Implementation Fees

     No  professional  services were rendered by Rehmann  Robson PC for the year
ended December 31, 2000, with respect to, directly or indirectly,  operating, or
supervising the operation of, the Corporation's  information systems or managing
the Corporation's  local area network or designing or implementing a hardware or
software system that aggregates source data underlying the financial  statements
or generates  information  that is  significant to the  Corporation's  financial
statements taken as a whole.

     All Other Fees

     The aggregate  fees billed for services  rendered by Rehmann  Robson PC for
services not covered under the two preceding  captions  totaled  $92,108,  which
includes loan review,  internal  audit support and a cost  segregation  recovery
analysis.

     The  Corporation's  Audit  Committee  has  concluded  that the provision of
services  covered  under the caption All Other Fees is  compatible  with Rehmann
Robson PC maintaining their independence.  None of the hours expended on Rehmann
Robson's engagement to audit the Corporation's consolidated financial statements
for the year ended  December  31, 2000,  were  attributed  to work  performed by
persons other than Rehmann Robson's full-time, permanent employees.

                                      -9-
<PAGE>
                              SHAREHOLDER PROPOSALS

     No shareholder may present a proposal for  consideration at the 2002 Annual
Meeting of Shareholders  unless notice is given not later than February 18, 2002
to the Corporation in compliance with Article XI of the  Corporation's  Articles
of Incorporation  stating the shareholder's  intention to do so. Any shareholder
proposal to be  considered by the  Corporation  for inclusion in the 2002 Annual
Meeting of  Shareholders  proxy materials must be received by the Corporation no
later than November 20, 2001.


                                 OTHER BUSINESS

     The Board of  Directors  is not aware of any  matter  to be  presented  for
action at the  meeting,  other than the matters set forth  herein.  If any other
business  should  come  before the  meeting,  the proxy will be voted in respect
thereof in accordance with the best judgment of the persons authorized  therein,
and  discretionary  authority  to do so is  included  in the proxy.  The cost of
soliciting proxies will be borne by the Corporation. In addition to solicitation
by mail,  officers and other employees of the  Corporation and its  subsidiaries
may solicit proxies by telephone or in person,  without  compensation other than
their regular compensation.

     The Annual Report on Form 10-K of the Corporation for 2000 is included with
this  Proxy  Statement.  Copies of the  report  will also be  available  for all
shareholders  attending  the Annual  Meeting.  The Form 10-K and  certain  other
periodic  filings are filed with the  Securities  and Exchange  Commission  (the
"Commission").  The  Commission  maintains  an Internet  web site that  contains
reports and other information  regarding  companies,  including the Corporation,
which   file   electronically.    The   Commission's   web   site   address   is
http:\\www.sec.gov.

     Shareholders  are  urged  to sign  and  return  the  enclosed  proxy in the
enclosed envelope. A prompt response will be helpful and appreciated.


                                        BY ORDER OF THE BOARD OF DIRECTORS


                                             /s/ John A. Van Singel

                                        John A. Van Singel
                                        Secretary
                                      -10-
<PAGE>
O.A.K. Financial Corporation                             This Proxy is solicited
2445  84th Street, S.W.                                         on behalf of the
Byron Center, Michigan 49315                                  Board of Directors
                                      PROXY

     The  undersigned  hereby  appoints David Van Solkema and John Van Singel as
Proxies,  each with the power to appoint his substitute,  and hereby  authorizes
them to represent  and to vote, as  designated  below,  all the shares of Common
Stock of O.A.K. Financial Corporation held of record by the undersigned on March
12, 2001, at the annual meeting of  shareholders  to be held April 26, 2001, and
at any adjournment thereof.

1.   In the election of three directors, each to be elected for a term expiring
     in 2004

     [  ] FOR the nominee listed below      [  ] WITHHOLD AUTHORITY
                                            to vote for the nominee listed below

                 Norman Fifelski - Dellvan Hoezee - Robert Deppe

      (INSTRUCTION:  To withhold  authority to vote for  any individual  nominee
      strike a line through the nominee's name in the list above.)

2.    In their  discretion, the Proxies are  authorized  to vote upon such other
      business as may properly come before the meeting.


This Proxy, when properly executed,  will be voted in the manner directed herein
by the  undersigned  shareholder.  If no direction  is made,  this Proxy will be
voted FOR all nominees listed in Proposal 1.

Please  sign  exactly  as name  appears  below.  When  shares  are held by joint
tenants,  both should sign. When signing as attorney,  executor,  administrator,
trustee or guardian,  please give full title as such. If a  corporation,  please
sign in full  corporate  name by president  or other  authorized  officer.  If a
partnership, please sign in partnership name by authorized person.


_____________________________________         __________________________________
           Signature                               Signature if held jointly


Dated: __________________, 2001



PLEASE MARK,  SIGN,  DATE AND RETURN THE PROXY CARD PROMPTLY  USING THE ENCLOSED
ENVELOPE.