<PAGE>   1


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB

(Mark One)

[x] Annual report under Section 13 or 15(d) of the Securities Exchange
    Act of 1934 (Fee required) For the fiscal year ended DECEMBER 31, 1998

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange 
    Act of 1934 (No fee required) For the transition period 
    from                        to                       
         ----------------------    ----------------------
    Commission file number    000-29400

                             INVESTORSBANCORP, INC.
                 (Name of Small Business Issuer in Its Charter)

              WISCONSIN                              39-1854234
  (State or Other Jurisdiction of        (I.R.S. Employer Identification No.)
   Incorporation or Organization)

 W239 N1700 BUSSE ROAD, P.O. BOX 190
         PEWAUKEE, WISCONSIN                         53072-0190
(Address of Principal Executive Offices)             (Zip Code)

                                 (414) 523-1000
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:
                                      NONE.

         Securities registered under Section 12(g) of the Exchange Act:
                    COMMON STOCK, PAR VALUE $.01 PER SHARE.

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

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

The Issuer's revenues for its most recent fiscal year were $4,647,080

The aggregate market value of the voting stock held by non-affiliates of the
Issuer as of March 11, 1999 was approximately $5,300,000. As of said date, the
Issuer had 1,000,000 shares of Common Stock issued and outstanding.

                      Documents incorporated by reference:
         Part III of Form 10-KSB - Proxy statement for annual meeting of
                     shareholders to be held in May, 1999.

   Transitional Small Business Disclosure Format (check one): Yes [ ] No [ x ]

<PAGE>   2


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS
         -----------------------
GENERAL

         InvestorsBancorp, Inc. (the "Company"), a Wisconsin corporation, was
organized on June 12, 1996, to be the holding company of InvestorsBank, a
Wisconsin state bank located in Pewaukee, Wisconsin (the "Bank"). The Bank
commenced business on September 8, 1997. On September 6, 1997, Bando McGlocklin
Capital Corporation, the former principal shareholder of the Company ("BMCC"),
distributed all of the 880,000 shares of the Company it held on such date to its
shareholders, (the "Distribution"). In connection with the Distribution, the
Company filed a Form 10SB with the Securities and Exchange Commission (the
"SEC") to register its shares of Common Stock, $.01 par value per share, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Company currently maintains its offices at W239 N1700 Busse Road, P.O. Box 190,
Pewaukee, Wisconsin, 53072. The Company's telephone number is (414) 523-1000.

BUSINESS STRATEGY

         The Company offers a complete line of financial services to small
businesses and individuals in the community of Waukesha and in southeastern
Wisconsin. Pursuant to a management services agreement, the Bank also manages
the commercial loan and leased properties portfolio of Bando McGlocklin Small
Business Lending Corporation, a subsidiary of BMCC.

         The Bank offers a broad range of deposit services, including checking
accounts, money market accounts and certificates of deposit, as well as a full
range of short to intermediate term personal and commercial loans. The Bank
makes personal loans directly to individuals for various purposes, including
first mortgage loans and home equity lines of credit. The Bank also offers other
services, including credit cards, debit cards, cashier checks, money orders and
traveler's checks.

         The Bank's initial legal lending limit was $1,370,000. Management may
from time to time impose a lower "in-house" limit as it deems appropriate to
comply with safe and sound banking practices and respond to overall economic
conditions. In addition, the Company's relationship with BMCC may result in the
Bank being able to originate loans in larger principal amounts and sell
participations in such loans to BMCC and other financial institutions.

         The Bank's market area is competitive. The Bank faces competition from
numerous other banks, savings and loan associations, finance companies,
insurance companies, mortgage companies, securities brokerage firms, money
market funds, loan production offices and other providers of financial services.
Most of the Bank's competitors have been in business for many years, have
established customer bases, are substantially larger, have substantially larger
lending limits than the Bank and can offer certain services, including multiple
branches and international banking services, that the Bank will be able to offer
only through correspondent banks, if at all. In addition, most of these entities
have greater capital resources than the Bank, which among other things, may
allow them to price their services at levels more favorable to clients and to
provide larger credit facilities than could the Bank.

EMPLOYEES

         As of March 1, 1999, the Company had 24 full-time employees. None of
its employees are covered by a collective bargaining agreement with the Company
or the Bank. The Company considers its employee relations to be excellent.



<PAGE>   3


                           SUPERVISION AND REGULATION


GENERAL

         Financial institutions and their holding companies are extensively
regulated under federal and state law. As a result, the growth and earnings
performance of the Company can be affected not only by management decisions and
general economic conditions, but also by the requirements of applicable state
and federal statutes and regulations and the policies of various governmental
regulatory authorities, including the Division of Banking of the Wisconsin
Department of Financial Institutions (the "Banking Division"), the Federal
Reserve, the FDIC, the Internal Revenue Service and state taxing authorities and
the Securities and Exchange Commission (the "SEC"). The effect of applicable
statutes, regulations and regulatory 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, such as the Company and its subsidiaries, regulate,
among other things, the scope of business, investments, reserves against
deposits, capital levels relative to operations, 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 its subsidiaries establishes a comprehensive framework for their respective
operations and is intended primarily for the protection of the FDIC's deposit
insurance funds and the depositors, rather than the shareholders, of financial
institutions.

         The following is a summary of the material elements of the regulatory
framework that applies to the Company and its subsidiaries. It does not describe
all of the statutes, regulations and regulatory policies that apply to the
Company and its subsidiaries, nor does it restate all of the requirements of the
statutes, regulations and regulatory policies that are described. As such, the
following is qualified in its entirety by reference to the applicable statutes,
regulations and regulatory policies. Any change in applicable law, regulations
or regulatory policies may have a material effect on the business of the Company
and its subsidiaries.

RECENT REGULATORY DEVELOPMENTS

         PENDING LEGISLATION. Legislation has been introduced in the Congress
that would allow bank holding companies to engage in a wider range of nonbanking
activities, including greater authority to engage in securities and insurance
activities. The expanded powers generally would be available to a bank holding
company only if the bank holding company and its bank subsidiaries remain
well-capitalized and well-managed. At this time, the Company is unable to
predict whether the proposed legislation will be enacted and, therefore, is
unable to predict the impact such legislation may have on the Company and the
Bank.

THE COMPANY

         GENERAL. The Company, as the sole shareholder of the Bank, is a bank
holding company. As a bank holding company, the Company is registered with, and
is subject to regulation by, the Federal Reserve under the Bank Holding Company
Act, as amended (the "BHCA"). In accordance with Federal Reserve 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 otherwise do so. Under the BHCA, the Company is subject to periodic
examination by the Federal Reserve. The Company is also required to file with
the Federal Reserve periodic reports of the Company's operations and such
additional information regarding the Company and its subsidiaries as the Federal
Reserve may require.

         The Company is also subject to regulation by the Banking Division under
Wisconsin law.



                                       2


<PAGE>   4


         INVESTMENTS AND ACTIVITIES. Under the BHCA, a bank holding company must
obtain Federal Reserve approval before: (i) acquiring, directly or indirectly,
ownership or control of any voting shares of another bank or bank holding
company if, after the acquisition, it would own or control more than 5% of the
shares of the other bank or bank holding company (unless it already owns or
controls the majority of such shares); (ii) acquiring all or substantially all
of the assets of another bank; or (iii) merging or consolidating with another
bank holding company. Subject to certain conditions (including certain deposit
concentration limits established by the BHCA), the Federal Reserve may allow a
bank holding company to acquire banks located in any state of the United States
without regard to whether the acquisition is prohibited by the law of the state
in which the target bank is located. In approving interstate acquisitions,
however, the Federal Reserve is required to give effect to applicable state law
limitations on the aggregate amount of deposits that may be held by the
acquiring bank holding company and its insured depository institution affiliates
in the state in which the target bank is located (provided that those limits do
not discriminate against out-of-state depository institutions or their holding
companies) and state laws which require that the target bank have been in
existence for a minimum period of time (not to exceed five years) before being
acquired by an out-of-state bank holding company.

         The BHCA also generally prohibits the Company from acquiring direct or
indirect ownership or control of more than 5% of the voting shares of any
company which is not a bank and from engaging in any business other than that of
banking, managing and controlling banks or furnishing services to banks and
their subsidiaries. This general prohibition is subject to a number of
exceptions. The principal exception allows bank holding companies to engage in,
and to own shares of companies engaged in, certain businesses found by the
Federal Reserve to be "so closely related to banking ... as to be a proper
incident thereto." Under current regulations of the Federal Reserve, the Company
and its non-bank subsidiaries are permitted to engage in a variety of
banking-related businesses, including the operation of a thrift, sales and
consumer finance, equipment leasing, the operation of a computer service bureau
(including software development), and mortgage banking and brokerage. The BHCA
generally does not place territorial restrictions on the domestic activities of
non-bank subsidiaries of bank holding companies.

         Federal law also prohibits any person or company from acquiring
"control" of a bank or a bank holding company without prior notice to the
appropriate federal bank regulator. "Control" is defined in certain cases as the
acquisition of 10% of the outstanding shares of a bank or bank holding company.

         CAPITAL REQUIREMENTS. Bank holding companies are required to maintain
minimum levels of capital in accordance with Federal Reserve capital adequacy
guidelines. If capital falls below minimum guideline levels, a bank holding
company, among other things, may be denied approval to acquire or establish
additional banks or non-bank businesses.

         The Federal Reserve's capital guidelines establish the following
minimum regulatory capital requirements for bank holding companies: a risk-based
requirement expressed as a percentage of total risk-weighted assets, and a
leverage requirement expressed as a percentage of total assets. The risk-based
requirement consists 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. The leverage
requirement consists of a minimum ratio of Tier 1 capital to total assets of 3%
for the most highly rated companies, with a minimum requirement of 4% for all
others. For purposes of these capital standards, Tier 1 capital consists
primarily of permanent stockholders' equity less intangible assets (other than
certain mortgage servicing rights and purchased credit card relationships).
Total capital consists primarily of Tier 1 capital plus certain other debt and
equity instruments which do not qualify as Tier 1 capital and a portion of the
company's allowance for loan and lease losses.

         The risk-based and leverage standards described above are minimum
requirements. Higher capital levels will be required if warranted by the
particular circumstances or risk profiles of individual banking organizations.
For example, the Federal Reserve's capital guidelines contemplate that
additional capital may be required to take adequate account of, among other
things, interest rate risk, or the risks posed by concentrations of credit,
nontraditional activities or securities trading activities. Further, any banking



                                       3



<PAGE>   5




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.

         Under the Federal Reserve's guidelines, the capital standards described
above apply on a consolidated basis to bank holding companies that have more
than $150 million in total consolidated assets, but generally apply on a
bank-only basis to bank holding companies that, like the Company, have less than
$150 million in total consolidated assets. Nevertheless, as of December 31,
1998, the Company had regulatory capital, calculated on a consolidated basis, in
excess of the Federal Reserve's minimum requirements, with a risk-based capital
ratio of 15.3% and a leverage ratio of 16.7%.

         DIVIDENDS. The Wisconsin Business Corporation Law prohibits the Company
from paying dividends if the Company is insolvent or if the payment of dividends
would render the Company unable to pay its debts as they come due in the
ordinary course of business. Additionally, the Federal Reserve has issued a
policy statement with regard to the payment of cash dividends by bank holding
companies. The policy statement provides that a bank holding company should not
pay cash dividends which exceed its net income or which can only be funded in
ways that weaken the bank holding company's financial health, such as by
borrowing. The Federal Reserve also 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.

         FEDERAL SECURITIES REGULATION. The Company's common stock is registered
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Consequently, the Company is subject to the information, proxy
solicitation, insider trading and other restrictions and requirements of the SEC
under the Exchange Act.

THE BANK

         GENERAL. The Bank is a Wisconsin-chartered bank, the deposit accounts
of which are insured by the FDIC's Bank Insurance Fund ("BIF"). As a
BIF-insured, Wisconsin-chartered bank, the Bank is subject to the examination,
supervision, reporting and enforcement requirements of the Banking Division, as
the chartering authority for Wisconsin banks, and the FDIC, as administrator of
the BIF.

         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 evaluations.
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.

         During the year ended December 31, 1998, BIF assessments ranged from 0%
of deposits to 0.27% of deposits. For the semi-annual assessment period
beginning January 1, 1999, BIF assessment rates will continue to range from 0%
of deposits to 0.27% of deposits.

         The FDIC may terminate the deposit insurance of any insured depository
institution if the FDIC determines, after a hearing, that the institution (i)
has engaged or is engaging in unsafe or unsound practices, (ii) is in an unsafe
or unsound condition to continue operations or (iii) has violated any applicable
law, regulation, order, or any condition imposed in writing by, or written
agreement with, the FDIC. The FDIC may also suspend deposit insurance
temporarily during the hearing process for a permanent termination of 


                                       4


<PAGE>   6




insurance if the institution has no tangible capital. Management of the Company
is not aware of any activity or condition that could result in termination of
the deposit insurance of the Bank.

         FICO ASSESSMENTS. Since 1987, a portion of the deposit insurance
assessments paid by members of the FDIC's Savings Association Insurance Fund
("SAIF") has been used to cover interest payments due on the 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 SAIF's predecessor insurance fund. As a result of federal
legislation enacted in 1996, beginning as of January 1, 1997, both SAIF members
and BIF members became subject to assessments to cover the interest payments on
outstanding FICO obligations. These FICO assessments are in addition to amounts
assessed by the FDIC for deposit insurance. Until January 1, 2000, the FICO
assessments made against BIF members may not exceed 20% of the amount of the
FICO assessments made against SAIF members. Between January 1, 2000 and the
final 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. During the year ended December 31, 1998, the FICO assessment rate for
SAIF members ranged between approximately 0.061% of deposits and approximately
0.063% of deposits, while the FICO assessment rate for BIF members ranged
between approximately 0.012% of deposits and approximately 0.013% of deposits.
During the year ended December 31, 1998, the Bank paid FICO assessments totaling
$2,184.67.

         SUPERVISORY ASSESSMENTS. All Wisconsin banks are required to pay
supervisory assessments to the Banking Division to fund the operations of the
Banking Division. The amount of the assessment is calculated based on the
institution's total assets. During the year ended December 31, 1998, the Bank
paid supervisory assessments to the Banking Division totaling $473.18.

         CAPITAL REQUIREMENTS. The FDIC has established the following minimum
capital standards for state-chartered insured non-member banks, such as the
Bank: a leverage requirement consisting of a minimum ratio of Tier 1 capital to
total assets of 3% for the most highly-rated banks with a minimum requirement of
at least 4% 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. For purposes of these capital
standards, Tier 1 capital and total capital consist of substantially the same
components as Tier 1 capital and total capital under the Federal Reserve's
capital guidelines for bank holding companies (see "--The Company--Capital
Requirements").

         The capital requirements described above are minimum requirements.
Higher capital levels will be required if warranted by the particular
circumstances or risk profiles of individual institutions. For example, the
regulations of the FDIC provide that additional capital may be required to take
adequate account of, among other things, interest rate risk or the risks posed
by concentrations of credit, nontraditional activities or securities trading
activities.

         As a condition to the regulatory approvals incident to the Bank's
formation, the Bank is required to maintain a minimum Tier I capital to total
assets ratio of 8% during the Bank's first three years of operation.

         During the year ended December 31, 1998, the Bank was not required by
the FDIC to increase its capital to an amount in excess of the minimum
regulatory requirement. As of December 31, 1998, the Bank exceeded its minimum
regulatory capital requirements with a risk-based capital ratio of 15.3% and a
leverage ratio of 16.7%.

         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," in each case as defined by regulation. Depending upon the
capital category to which an institution is assigned, the regulators' corrective
powers include: requiring the institution to submit a capital restoration plan;
limiting the institution's asset growth and restricting its activities;
requiring the institution to issue additional capital stock (including
additional voting stock) or to be acquired; restricting transactions between the
institution and its affiliates; restricting 



                                       5



<PAGE>   7




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. As of December 31, 1998,
the Bank was "well capitalized", as defined by FDIC regulations.

         DIVIDENDS. Wisconsin law generally allows a Wisconsin bank to pay
dividends out of its undivided profits, in such amounts and at such times as the
bank's board of directors deems prudent. Without the prior approval of the
Banking Division, however, a Wisconsin bank may not pay dividends in any year
which, in the aggregate, exceed the bank's calendar year-to-date net income if,
during either of the two immediately preceding years the bank paid aggregate
dividends exceeding its net income for such year.

         The payment of dividends by any financial institution or its holding
company is affected by the requirement to maintain adequate capital pursuant to
applicable capital adequacy guidelines and regulations, and a financial
institution generally is prohibited from paying any dividends if, following
payment thereof, the institution would be undercapitalized. As described above,
the Bank exceeded its minimum capital requirements under applicable guidelines
as of December 31, 1998. As of December 31, 1998, approximately $194,000 was
available to be paid as dividends to the Company by the Bank. Notwithstanding
the availability of funds for dividends, however, the FDIC may prohibit the
payment of any dividends by the Bank if the FDIC determines such payment would
constitute an unsafe or unsound practice. In addition, the Bank made a statement
in its application for a bank charter and federal deposit insurance that it will
retain its earnings during the first three years of operation. As such, no
dividends will be paid to shareholders during that period.

         INSIDER TRANSACTIONS. The Bank is subject to certain restrictions
imposed by federal law on extensions of credit to the Company and its
subsidiaries, on investments in the stock or other securities of the Company and
its subsidiaries and the acceptance of the stock or other securities of the
Company or its subsidiaries as collateral for 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 stockholders of the Company, and to "related
interests" of such directors, officers and principal stockholders. 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
stockholder 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 which establish operational and managerial standards to
promote the safety and soundness of federally insured depository institutions.
The guidelines set forth 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 addition, in October 1998, the federal banking regulators issued
safety and soundness standards for achieving Year 2000 compliance, including
standards for developing and managing Year 2000 project plans, testing
remediation efforts and planning for contingencies.

         In general, the safety and soundness guidelines prescribe the goals to
be achieved in each area, and each institution is 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. If an institution fails to submit an acceptable
compliance plan, or fails in any material respect to implement a compliance plan
that has been accepted by its primary federal regulator, the regulator is
required to issue an order directing the institution to cure the deficiency.
Until the deficiency cited in the regulator's order is cured, the regulator may
restrict the institution's rate of growth, require the institution to increase
its capital, restrict the rates the institution pays on deposits or require the
institution to take any action the regulator deems appropriate under the
circumstances. Noncompliance with the standards established by the safety 



                                       6



<PAGE>   8




and soundness guidelines may also constitute grounds for other enforcement
action by the federal banking regulators, including cease and desist orders and
civil money penalty assessments.

         BRANCHING AUTHORITY. Wisconsin banks, such as the Bank, have the
authority under Wisconsin law to establish branches anywhere in the State of
Wisconsin, subject to receipt of all required regulatory approvals.

         Under the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 (the "Riegle-Neal Act"), both state and national banks are allowed 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 new 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 the
Riegle-Neal Act only if specifically authorized by state law. The legislation
allowed individual states to "opt-out" of certain provisions of the Riegle-Neal
Act by enacting appropriate legislation prior to June 1, 1997. Wisconsin has
enacted legislation permitting interstate mergers, subject to certain
conditions, including a prohibition against interstate mergers involving a
Wisconsin bank that has been in existence and continuous operation for fewer
than five years.

         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 and FDIC regulations also prohibit
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. These restrictions have not had, and are not
currently expected to have, a material impact on the operations of the Bank.

         FEDERAL RESERVE SYSTEM. Federal Reserve regulations, as presently in
effect, require depository institutions to maintain non-interest earning
reserves against their transaction accounts (primarily NOW and regular checking
accounts), as follows: for transaction accounts aggregating $46.5 million or
less, the reserve requirement is 3% of total transaction accounts; and for
transaction accounts aggregating in excess of $46.5 million, the reserve
requirement is $1.395 million plus 10% of the aggregate amount of total
transaction accounts in excess of $46.5 million. The first $4.9 million of
otherwise reservable balances are exempted from the reserve requirements. These
reserve requirements are subject to annual adjustment by the Federal Reserve.
The Bank is in compliance with the foregoing requirements.

ITEM 2.  PROPERTIES
         ----------

         The Company subleases premises for the Bank's main office at W239 N1700
Busse Road, Pewaukee, Wisconsin, which also serve as the Company's corporate
headquarters. The premises consist of approximately 4,700 square feet of a
single story, brick building constructed in 1996. The building, which overall
consists of approximately 16,000 square feet of office space, has parking for
approximately 60 automobiles.

         The Company subleases the premises from BMCC, which has its main office
in the same building. The Company's sublease with BMCC has a primary term of one
year, but the Company expects to be able to renew the sublease with BMCC on
substantially similar terms. The BMCC lease has nine years remaining on its
original term, and BMCC has an option to extend the term for an additional five
years. Under the sublease, the Company's rent is based on a pro rata portion of
BMCC's rent. The Company's monthly rent is currently $4,300, subject to
increases based on BMCC's lease. The Company is also obligated to pay a pro rata
share of BMCC's gas and maintenance expenses, and one-half of BMCC's electricity
expense.

         The Bank has three interior teller stations and a night depository
facility. The Company believes the facility will be adequate to meet the needs
of the Company and the Bank for the foreseeable future.



                                       7



<PAGE>   9




ITEM 3.  LEGAL PROCEEDINGS
         -----------------

         The Company is not aware of any legal proceedings against it or the
Bank.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

         No matters were submitted to a vote of the Company's security holders
during 1998.


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S STOCK AND RELATED SHAREHOLDER MATTERS.
         --------------------------------------------------------------

         The Company's Common Stock was held by approximately 1,100 holders of
record as of March 11, 1999, and is quoted on the OTC Bulletin Board under the
symbol "INVB." The following table shows, for the periods indicated, the high
and low closing prices per share of transactions in the Company's common stock
as quoted on the OTC Bulletin Board. Certain other private transactions may have
occurred during the periods indicated of which the Company has no knowledge. The
following prices represent inter-dealer prices without retail markups, markdowns
or commissions.

                                                  Closing Price/Share
                                               --------------------------
               Quarter ending:                 High                   Low
               ---------------                 ----                   ---
               March 31, 1997                   N/A                    N/A
               June 30, 1997                    N/A                    N/A
               September 30, 1997             $12.00                $10.00
               December 31, 1997              $13.00                $10.50

                                                  Closing Price/Share
                                               --------------------------
               Quarter ending:                 High                   Low
               ---------------                 ----                   ---
               March 31, 1998                 $10.75                 $8.50
               June 30, 1998                  $10.75                 $9.25
               September 30, 1998             $11.25                 $8.75
               December 31, 1998              $10.88                 $8.25

         No cash or other dividends were declared or paid during the fiscal year
ended December 31, 1998. The Company expects that all Company and Bank earnings,
if any, will be retained to finance the growth of the Company and the Bank and
that no cash dividends will be paid for the foreseeable future. If and when
dividends are declared, the Company will probably be largely dependent upon
dividends paid by the Bank for funds to pay dividends on the Common Stock. It is
also possible, however, that the Company will pay dividends in the future
generated from investment income and other activities of the Company.

         The Wisconsin Business Corporation Law prohibits the Company from
paying dividends if the Company is insolvent or if the payment of dividends
would render the Company unable to pay its debts as they come due in the
ordinary course of business. Wisconsin law generally allows the Bank to pay
dividends out of its undivided profits, in such amounts and at such times as the
Bank's board of directors deems prudent. However, without the prior approval of
the Banking Division, the Bank in any one year may not, pay dividends in an
amount which exceeds the Bank's calendar year-to-date net income if, during
either of the two immediately preceding years the Bank paid aggregate dividends
exceeding its net income for such year.


                                       8



<PAGE>   10


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATION
         ---------------------------------------------------------------

         The following discussion provides additional analysis of the financial
statements and should be read in conjunction with this information. This
discussion focuses on significant factors which affected the Company's financial
performance in 1998, with comparisons to 1997 where applicable. As of December
31, 1998, the Bank was the only subsidiary of the Company and its operations
contributed all of the revenue and expenses for the year.

RESULTS OF OPERATIONS

         During the first full fiscal year ended December 31, 1998, the Company
reported net income of $297,241 or $0.30 per share, as compared to a net loss of
$102,900 or ($0.10) per share for the period from September 3, 1997 through
December 31, 1997. This enhanced profitability is attributable to a significant
increase in earning assets and the absence of certain non-recurring expenses
incurred during the Company's initial development stage.

         The Company's return on average assets and average equity, as well as
other key financial ratios for the fiscal year ended December 31, 1998 and
period ended December 31, 1997 are detailed below. Due to the relatively short
period of operation in September, averages for 1997 are calculated based on the
fourth quarter only.


         Ratios                                         1998             1997
         ------                                         ----             ----

         Return on Average Assets                       0.71%           -0.87%
         Return on Average Equity                       4.30%           -1.49%
         Dividend Payout Ratio on Common Stock          None             None
         Average Equity to Average Assets              16.41%           58.68%


NET INTEREST INCOME

         Net interest income is the difference between interest income,
including fees on loans, and interest expense, and is the largest contributing
factor to net income for the Company. Total interest income increased from
$245,292 for the partial year ended December 31, 1997 to $3,260,592 for the full
year ended December 31, 1998. Significantly higher loan volumes resulted in a
substantial increase in interest and fee income on loans which totaled
$2,589,509 in 1998. The majority of interest income on loans is derived from the
commercial and commercial real estate loan portfolios which, in aggregate,
comprise 73.16% of total loans. Interest earned on investment securities and
federal funds sold totaling $347,858 and $323,225, respectively, were the other
components of interest income. While the direction of future interest rates,
competition, and other factors may have a significant impact, management
anticipates interest income will continue to increase proportionally with the
projected growth of the loan portfolio and other investments.

         Interest expense similarly increased from $49,373 for the period ended
December 31, 1997 to $1,765,668 for the year ended December 31, 1998. Interest
expense consisted predominantly of interest paid on money market accounts
totaling $1,196,591 and certificates of deposit totaling $531,741 as of year end
1998. Interest expense is anticipated to continue to rise in 1999 as management
expects these deposit instruments will remain the primary funding sources
utilized by the Company to fund additional growth.

         As presented on Schedule 1, the Company's interest spread in percentage
terms improved for the year ended December 31, 1998 as compared to the first
quarter of operations ended December 31, 1997. This is due to an increase in the
relative mix of loans versus investments and federal funds, despite a decline in
the loan yield. Conversely, the ratio of the interest margin to total earning
assets declined over this same period as a result of the anticipated increase in
the percentage of interest bearing liabilities to total earning assets. Schedule
1 sets forth an analysis of the interest rates and interest differential of
earning assets, which earn interest income, and interest bearing liabilities,
which accrue interest expense for the year ended December 31, 1998, as well as
the quarter ended December 31, 1997.




                                       9


<PAGE>   11



PROVISION FOR LOAN LOSSES

         The allowance for loan losses increased from $96,060 as of December 31,
1997 to $395,804 as of December 31, 1998. The allowance for loan losses is
established through a provision for loan losses charged to expense. Due to
substantial loan growth, loan loss provisions of $299,744 were expensed in 1998
to maintain the allowance for loan losses at 1.00% of total loans, net of
residential mortgage loans held for sale on the secondary market.

         Loans are charged against the allowance for loan losses when management
believes that the collectibility of the principal is unlikely. The allowance is
an amount that management believes will be adequate to absorb possible losses on
existing loans that may become uncollectible, based on evaluation of the
collectibility of loans and prior loan loss experience. The evaluations take
into consideration such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem loans, and
current economic conditions that may affect the borrower's ability to repay.
While management uses the best information available to make its evaluation,
future adjustments to the allowance may be necessary if there are significant
changes in economic conditions. Impaired loans are measured based on the present
value of expected future cash flows discounted at the loan's effective interest
rate or, as a practical expedient, at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent. A loan is
impaired when it is probable the creditor will be unable to collect all
contractual principal and interest payments due in accordance with the terms of
the loan agreement.

         There were no loan charge-offs nor recoveries, nor any impaired loans
for the periods ended December 31, 1998 and December 31, 1997. To date there
have been no loans or other assets adversely classified by regulatory
authorities related to their routine examinations of the Company. Management, to
the best of its knowledge, is not aware of any significant loans, group of
loans, or segments of the portfolio, where there are serious doubts as to the
ability of the borrower to comply with the present loan repayment terms. While a
comprehensive analysis of the allowance for loan losses is somewhat problematic
due to the Company's relatively short history, management believes that the
allowance is at an adequate level, based on the composition of the portfolio as
well as regulatory guidelines.

         The following table summarizes the Company's nonperforming loans as of
December 31, 1998 and December 31, 1997.
                                             1998            1997
                                             ----            ----
                 Nonaccrual Loans            None            None
         Past Due 90 Days or More(1)         None            None
                Restructured Loans           None            None

(1) Loans are generally placed on nonaccrual when contractually past due 90 days
or more.


NON-INTEREST INCOME AND EXPENSE

         Due primarily to the Company's sizable growth and relatively short
period of operation in 1997, non-interest income and non-interest expense were
significantly higher in 1998.

         Non-interest income for the year ended December 31, 1998 totaled
$1,386,488 as compared to $312,116 for the period ended December 31, 1997.
Management service fees totaling $775,892 were the largest component of
non-interest income in 1998. The Company charges Bando McGlocklin Capital
Corporation ( BMCC), an affiliate of the Company, a management fee for salaries
and employee benefits of common management, as well as a loan servicing fee
based on total loans and leases under management. As of December 31, 1998, BMCC
had loans under management totaling $127,998,930. Other sources of non-interest
income include $577,087 of service release fees received from the sale of
residential mortgages originated for the secondary market. In addition, service
charges related to deposit accounts totaled $19,131 in 1998.




                                       10


<PAGE>   12


         Non-interest expense increased to $2,202,479 for the year ended
December 31, 1998, and consisted primarily of salaries and employee benefits
totaling $1,549,210 and other operating expenses including occupancy and fixed
asset expense, data processing fees, advertising, investor communications, and
professional fees. Non-interest expense also includes salaries that are
reimbursed through the management services fee noted above.

         Amounts provided for income tax expense or benefit are based on income
reported for financial statement purposes and do not necessarily represent
amounts currently payable under tax laws. Deferred income tax assets and
liabilities are computed quarterly for differences between the financial
statement and tax basis of assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and rates applicable
to the periods in which the differences are expected to affect taxable income.
As changes in tax laws or rates are enacted, deferred tax assets and liabilities
are adjusted through the provision for income taxes. The differences relate
primarily to tax exempt interest income, allowance for loan losses,
depreciation, and operating loss carryforwards that will be used to offset
future net operating income.

         For the year ended December 31, 1998, the Company recorded federal and
state income tax expense of $81,948 and had a deferred tax asset of $93,589.
Management believes it is more likely than not that the deferred tax asset will
be fully realized. The effective rate for income tax expense for the year ended
December 31, 1998 was 21.6% which was primarily due to the effect of the tax
exempt interest income.


FINANCIAL CONDITION

         The Company reported total assets of $63,101,382 as of December 31,
1998 versus $16,039,771 as of December 31, 1997. Cash and due from banks and
federal funds sold declined from $5,792,803 as of December 31, 1997 to
$1,589,145 at December 31, 1998. Despite the decline in these liquid assets, the
Company established a sizable investment securities portfolio in 1998 which
totaled $18,960,493 at year end.

         Investment securities consist of various commercial paper issues
totaling $3,980,493 with a maximum maturity of 90 days, and $14,980,000 of
taxable variable rate demand notes secured by irrevocable letters of credit from
federally insured, domestic financial institutions. Although the notes have a
long term maturity structure (refer to Schedule 3), the interest rate is
adjustable weekly and the holder has the option to liquidate the security at
100% of par value within seven days upon proper notice. These instruments
provide the Company with ready liquidity to provide for loan funding
requirements. While management believes that the investment portfolio is
adequately diversified, a detailed listing of all investments which exceed 10%
of stockholders' equity is provided on Schedule 4.

         As detailed on Schedule 5, loans grew from $9,606,554, at December 31,
1997 to $39,580,516 as of year end 1998. While most of the growth occurred in
the commercial, industrial, and commercial real estate segments of the loan
portfolio, residential real estate loans including home equity credit facilities
also grew considerably. Residential mortgage loans originated for sale on the
secondary market totaled an additional $2,232,657 as of December 31, 1998.
Excluding the mortgage loans originated for sale, the allowance for loan losses
remained at 1.00% of gross loans, totaling $395,804 at year end. In addition to
loans outstanding, the Company had unfunded loan commitments totaling
$20,899,432 as of December 31, 1998, although the Bank has participated
$9,465,414 to BMCC. Loan demand continues to remain strong for both commercial
and residential loans in the Company's trade area.

         Other assets at December 31, 1998 totaled $1,134,375, and included net
furniture and equipment of $126,760, accrued interest receivable on loans and
investments of $326,334, organizational and start up costs of $183,780 which are
being amortized over a sixty-month period, excess servicing assets of $188,995
relating to loans sold to a third party, a receivable of $143,406 from a related
company, and other miscellaneous assets of $165,100.

         Total deposits increased from $8,861,640 at December 31, 1997 to
$55,004,590 as of year end 1998. Indexed money market accounts comprised the
largest portion of the deposit base totaling $35,842,546 as of December 31,
1998. Time certificates of deposit also grew substantially in 1998 to
$15,215,270 as of year end, 



                                       11


<PAGE>   13




and included $9,645,000 of retail brokered deposits with maturities ranging from
1 to 3 years. In order for the Company to facilitate continued loan growth,
management expects to continue to aggressively market and competitively price
its money market and certificate of deposit products. Other deposits outstanding
as of December 31, 1998 include non-interest bearing accounts totaling
$2,616,842 and interest bearing checking accounts (NOW accounts) of $1,329,932.

         Other liabilities of $912,551 at December 31, 1998 consisted primarily
of accrued interest payable totaling $453,051, as well as accrued expenses
payable of $116,650, retained loan discount relating to loans sold to a third
party totaling $194,681, and other miscellaneous liabilities of $148,169.


CAPITAL RESOURCES

         As of December 31, 1998, the Company's total risk-based capital, tier
one risk-based capital, and tier one leverage capital ratios were 15.3%, 14.5%,
and 16.7%, respectively. As anticipated by management, these ratios have
declined markedly from the December 31, 1997 levels of 64.9%, 64.0%, and 55.8%,
respectively, due to significant asset growth. The Company exceeds all
regulatory requirements regarding the maintenance of capital and was categorized
as "well-capitalized" under the regulatory framework for capital adequacy as of
December 31, 1998.

         Management anticipates its capital ratios will continue to decline in
1999 as additional loan growth occurs; however, management intends to maintain
capital levels well in excess of minimums established by the regulatory
authorities. The Bank has committed to the FDIC that the ratio of Tier 1 capital
to total assets will not be less than 8% for the first three years of operations
commencing September 8, 1997.

         The applications for a bank charter and for federal deposit insurance
stated that the Bank would retain its earnings during the first three years of
operation. As such, no dividends will be paid by the Company to the shareholders
during that period. The Company expects that all earnings will be retained to
finance the growth of the Company and the Bank and that no cash dividends will
be paid for the foreseeable future.


LIQUIDITY

         The liquidity of a financial institution reflects its ability to
provide funds to meet loan requests, accommodate possible deposit withdrawals,
and take advantage of interest rate market opportunities in a cost effective
manner. Although primary sources of funds are deposits and repayment of loan
principal, the Company also maintains a significant level of liquid assets to
provide for potential funding needs. In addition to federal funds sold and cash
balances as of December 31, 1998, the Company held $18,960,493 of marketable
securities and $2,232,657 of residential mortgage loans originated and intended
for sale in the secondary market. Should an immediate need for funds arise,
these assets may be readily liquidated with nominal risk of principal loss.
Additionally, the Company has access to various alternative sources of funds
including the purchase of federal funds from correspondent banks, the sale of
commercial loans, and the acquisition of brokered deposits. Further, the Bank
has a $3,000,000 revolving line of credit with one of its correspondent banks.
There was no outstanding balance on the note as of December 31, 1998. Management
believes that current liquidity levels are sufficient to meet anticipated loan
demand, as well as absorb deposit withdrawals.


ASSET/LIABILITY MANAGEMENT

         The primary function of asset/liability management is to identify,
measure and control the extent to which changes in interest rates, commodity
prices, or equity prices adversely impact a financial institution's earnings or
economic capital. The Company's strategy is to optimize and stabilize net income
across a wide range of interest rate cycles, while maintaining adequate
liquidity and conforming to all applicable capital and other regulatory
requirements.





                                       12



<PAGE>   14


         Changes in net interest income, other than volume related changes,
arise when interest rates on assets reprice in a time frame or interest rate
environment that is different from the repricing period for liabilities. Changes
in net interest income also arise from changes in the mix of interest earning
assets and interest-bearing liabilities.

         In the normal course of business, the bank engages in off-balance sheet
activity to hedge interest rate risk. On April 24, 1998, the bank had entered
into two interest rate swap agreements with a notional value totaling
$6,103,000, structured as hedges of specific fixed-rate deposits whose terms
coincide with the terms of the swap agreements. The swap agreements are
structured so that the Company receives a fixed interest rate and pays a
variable rate which is based on the federal funds rate. These instruments allow
management to more closely balance the repricing opportunities of the Company's
assets and liabilities, and thereby, reduce potential interest rate risk
exposure.

         The Company does not expect to experience any significant fluctuations
in its net interest income as a consequence of changes in interest rates.

         The following table summarizes the relationship between repricing
opportunities of interest-bearing assets and liabilities across various time
horizons as of December 31, 1998. "GAP" is defined as the difference between
interest-bearing assets and liabilities which mature or reprice within the
specified time period.

(000's Omitted)              0-90      91-180       181-360     +360
                             DAYS       DAYS         DAYS       DAYS     TOTAL
                          --------   --------      --------   --------  -------
Investments               $ 19,500       ----          ----      ----   $19,500
Loans                     $ 19,901    $ 1,128      $  3,329   $15,223   $39,581
-------------------------------------------------------------------------------
  Total Repriceable
    Assets                $ 39,401    $ 1,128     $   3,329   $15,223   $59,081

NOW                       $  1,330       ----          ----      ----   $ 1,330
Money Market              $ 35,843       ----          ----      ----   $35,843
Time Deposits of less
  than $100M              $  1,019    $ 1,306      $    779   $ 1,800   $ 4,904
Time Deposits of $100M 
  or more                 $  3,726   $  2,456      $    303   $ 3,826   $10,311
Interest Rate Swaps       $  6,103    ($3,076)         ----   ($3,027)  $     0
-------------------------------------------------------------------------------
  Total Repriceable
    Liabilities           $ 48,021   $    686      $  1,082   $ 2,599    52,388

GAP                        ($8,620)  $    442      $  2,247   $12,624   $ 6,693
Cumulative GAP             ($8,620)   ($8,178)      ($5,931)  $ 6,693
Cumulative GAP/
  Total Assets               (13.7%)    (13.0%)        (9.4%)    10.6%

Note: Time Deposits consist of certificates of deposit and are categorized
      according to remaining time to maturity.

IMPACT OF INFLATION AND CHANGING PRICES

         Unlike most industries, virtually all of the assets and liabilities of
the Company are monetary in nature. As a result, interest rates have more
significant impact on the Company's performance and results of operations than
the effect of general levels of inflation. Interest rates do not necessarily
move in the same direction or magnitude as the prices of goods and services as
measured by the Consumer Price Index. As discussed previously, the Company's
interest rate gap position in conjunction with the direction of the movement in
interest rates, is an important factor in the Company's operating results.


YEAR 2000 

         The federal banking regulators recently issued guidelines establishing
minimum safety and soundness standards for achieving Year 2000 compliance. The
guidelines, which took effect October 15, 1998 and apply to all FDIC-insured
depository institutions, establish standards for developing and managing Year
2000 project plans, testing remediation efforts and planning for contingencies.
The guidelines are based upon guidance previously 



                                       13


<PAGE>   15


issued by the agencies under the auspices of the Federal Financial Institutions
Examination Council (the "FFIEC"), but are not intended to replace or supplant
the FFIEC guidance which will continue to apply to all federally insured
depository institutions.

         The guidelines were issued under section 39 of the Federal Deposit
Insurance Act, as amended (the "FDIA"), which requires the federal banking
regulators to establish standards for the safe and sound operation of federally
insured depository institutions. Under section 39 of the FDIA, if an institution
fails to meet any of the standards established in the guidelines, the
institution's primary federal regulator may require the institution to submit a
plan for achieving compliance. If an institution fails to submit an acceptable
compliance plan, or fails in any material respect to implement a compliance plan
that has been accepted by its primary federal regulator, the regulator is
required to issue an order directing the institution to cure the deficiency.
Such an order is enforceable in court in the same manner as a cease and desist
order. Until the deficiency cited in the regulator's order is cured, the
regulator may restrict the institution's rate of growth, require the
institutions to increase its capital, restrict the rates the institution pays on
deposits or require the institution to take any action the regulator deems
appropriate under the circumstances. In addition to the enforcement procedures
established in section 39 of the FDIA, noncompliance with the standards
established by the guidelines may also be grounds for other enforcement action
by the federal banking regulators, including cease and desist orders and civil
money penalty assessments.

         The Year 2000 has posed a unique set of challenges to those industries
reliant on information technology. As a result of methods employed by early
programmers, many software applications and operation programs may be unable to
distinguish the Year 2000 from the Year 1900. If not effectively addressed, this
problem could result in the production of inaccurate data, or, in the worst
cases, the inability of the systems to continue to function altogether.
Financial institutions are particularly vulnerable due to the industry's
dependence on electronic data processing systems.

         In 1997, the Company moved into a newly constructed building. The move
helped to make the Year 2000 problem manageable because most of the Company's
systems were new purchases and the Year 2000 problem was factored into the
Company's decisions. The move also started the process of identifying the
hardware and software issues required to assure Year 2000 compliance. The
Company began by assessing the issues related to the Year 2000 and the potential
for those issues to adversely affect the Company's operations.

         The Company has established a Year 2000 management committee to deal
with this issue. It is the mission of this committee to identify areas subject
to complication related to the Year 2000 and to initiate remedial measures
designed to eliminate any adverse effects on the Company's operations. The
committee has identified all mission-critical software and hardware that may be
adversely affected by the Year 2000 and has required vendors to represent that
the systems and products provided are or will be Year 2000 compliant.

         The Company licenses all software used in conducting its business from
third party vendors. None of the Company's software has been internally
developed. The Company has developed a comprehensive list of all software, all
hardware and all service providers used by the Company. Every vendor has been
contacted regarding the Year 2000 issue. The vendor of the primary software in
use at the Company released its Year 2000 complaint software in September 1998.
Testing at the Company, using test scripts developed by the vendor, was
completed on October 3, 1998. The vendor will be conducting ongoing proxy
testing and seminars and will report its progress monthly to the Company using a
management report. Members of the committee have joined a peer user group. In
addition, the Company continues to monitor all other major vendors of services
to the Company for Year 2000 issues in order to avoid shortages of supplies and
services in the coming months.

         There are three third party utilities with which the Company has an
important relationship, Ameritech, US Exchange (phone service) and Wisconsin
Electric Company (gas and electric service). The Company will be discontinuing
service in 1999 with Ameritech. The Company has not identified any practical,
long-term alternatives for these basic utility services. In the event that the
utilities significantly curtail or interrupt their services to the Company, it
would have a significant adverse effect on the Company's ability to conduct its
business.


                                       14


<PAGE>   16



         The Company also has tested all heating and air conditioning units,
vault doors, alarms systems, networks, etc. and is not aware of any significant
problems with such systems.

         The Company's cumulative costs of the Year 2000 project through the
year ended December 31, 1998 totaled $12,500. At the present time, no situations
that will require material cost expenditures to become fully compliant have been
identified. However, the Year 2000 problem is pervasive and complex and can
potentially affect any computer process. Accordingly, no assurance can be given
that Year 2000 compliance can be achieved without additional unanticipated
expenditures and uncertainties that might affect future financial results. The
estimated total cost of the Year 2000 project is currently $20,000. This
includes costs to upgrade software and replace equipment specifically for the
purpose of Year 2000 compliance and certain administrative expenditures.

         It is not possible at this time to quantify the estimated future costs
due to possible business disruption caused by vendors, suppliers, customers, or
even the possible loss of electric power or phone service; however, such costs
could be a substantial.

         The Company is committed to a plan for achieving compliance, focusing
not only on its own data processing systems, but also on its loan customers. The
management committee has proposed policy and procedure changes to help identify
potential risks to the Company and to gain an understanding of how customers are
managing the risks associated with the Year 2000. The Company is assessing the
impact, if any, the Year 2000 will have on its credit risk and loan
underwriting. In connection with potential credit risk related to the Year 2000
issue, the Company has contacted its commercial loan customers regarding their
level of preparedness for the Year 2000.

         The Company has developed contingency plans for various Year 2000
problems and continues to revise those plans based on testing results and vendor
notifications.


SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

         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 Exchange Act. 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, including the condition of the
local real estate market, 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 and
policies. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements.



                                       15





<PAGE>   17



                                   SCHEDULE 1
               SUMMARY OF INTEREST RATES AND INTEREST DIFFERENTIAL

<TABLE>
<CAPTION>

                                           Year Ended December 31, 1998            Quarter Ended December 31, 1997
                                      ------------------------------------       ----------------------------------
                                        AVERAGE        RELATED       YIELD         AVERAGE        RELATED     YIELD
                                        BALANCE       INTEREST       RATE          BALANCE       INTEREST     RATE
                                      ------------------------------------       ----------------------------------
<S>                                   <C>            <C>            <C>          <C>             <C>          <C>
Earning Assets:
  Federal Funds Sold                  $ 6,131,460    $  323,225     5.27%        $ 5,751,793     $ 79,245      5.47%
  Taxable Securities                    6,245,720       347,858     5.57%               ----         ----      ----
  Loans *                              28,223,006     2,589,509     9.18%          5,120,651      124,424      9.64%
                                      -----------    ----------     ----         -----------     --------      ----
     Total Earning Assets              40,600,186     3,260,592     8.03%         10,872,444      203,669      7.43%

Interest Bearing Liabilities:
  NOW Accounts                            781,378        37,408     4.79%            280,210        3,446      4.88%
  Money Market Accounts                22,515,705     1,196,519     5.31%          3,200,944       43,314      5.37%
  Time Deposits                         9,220,705       531,741     5.77%              7,314           97      5.26%
                                      -----------    ----------     ----         -----------     --------      -----
  Total Int. Bearing Liabilities       32,517,788     1,765,668     5.43%          3,488,468       46,857      5.33%

Interest Spread                                      $1,494,924     2.60%                        $156,812      2.10%

Interest Margin                                      $1,494,924     3.68%                        $156,812      5.72%
</TABLE>



*  Loan interest income includes net loan fees.


Yield rates for the quarter ended December 31, 1997 are calculated on an
annualized basis.





As illustrated by the above schedule, the variance between interest income and
expense for the quarter ended December 31, 1997 and the year ended December 31,
1998 is predicated on volume increases. Due to the relatively short period of
operation in 1997, a schedule summarizing the amount of change in interest
income and interest expense resulting from volume versus rate changes is not
considered by management to be particularly meaningful, and is therefore
omitted.




                                       16



<PAGE>   18



                                   SCHEDULE 2
          DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
                              AVERAGE BALANCE SHEET


                                          FOR YEAR ENDED      FOR QUARTER ENDED
                                         DECEMBER 31, 1998    DECEMBER 31, 1997
                                         -----------------    -----------------

Cash and Due From Banks                    $    900,146           $   508,571
Federal Funds Sold                            6,131,460             5,751,793
Investment Securities                         6,245,720                  ----
Loans:
       Commercial                             8,793,611             2,499,210
       Commercial Real Estate                13,519.798             1,784,156
       Residential Real Estate                5,787,793               836,093
       Installment and Consumer                 121,804                 1,194
                                           ------------           -----------
         Total Loans                         28,223,006             5,120,653
       Less:  Allowance for Loan losses        (233,614)               (2,528)
                                           ------------           -----------
         Net Loans                           27,989,392             5,118,125
Fixed Assets                                    124,374               128,181
Other Assets                                    722,592               271,525
                                           ------------           -----------
         Total Assets                      $ 42,113,684           $11,778,195
                                           ============           ===========


Demand Deposits                            $  2,157,659           $ 1,324,046
Interest Bearing Deposits
       NOW                                      781,378               280,210
       Money Market                          22,515,705             3,200,944
       Time Deposits                          9,220,705                 7,314
                                           ------------           -----------
         Total Deposits                      34,675,447             4,812,514
Other Liabilities                               525,487                54,264
                                           ------------           -----------
         Total Liabilities                   35,200,934             4,866,778
Equity Capital                                6,912,750             6,911,417
                                           ------------           -----------
         Total Liabilities and Capital     $ 42,113,684           $11,778,195
                                           ============           ===========


                                       17


<PAGE>   19


                                   SCHEDULE 3
                        MATURITY SCHEDULE OF INVESTMENTS



                                   AFTER     AFTER
                                   1 YEAR   5 YEARS
                          1 YEAR   THROUGH  THROUGH    AFTER
DECEMBER 31, 1998        OR LESS   5 YEARS  10 YEARS  10 YEARS        TOTAL
-----------------        -------   -------  --------  --------        -----

Available for Sale 
  Securities Corporate 
  Demand Notes         $     ----   ----      ----   $14,980,000   $14,980,000
      Weighted
        Ave. Yield           ----   ----      ----          5.59%         5.59%

Held to Maturity 
  Securities
  Commercial Paper      3,980,493   ----      ----          ----     3,980,493
     Weighted 
        Ave. Yield           5.47%  ----      ----          ----          5.47%
                       ========================================================
  Total Securities     $3,980,493   ----      ----   $14,980,000   $18,960,493
                       ========================================================
   Weighted Ave.
     Total Yield             5.47%  ----      ----          5.59%         5.57%
                       ========================================================


The Company held no investment securities as of December 31, 1997.



                                       18




<PAGE>   20


                                   SCHEDULE 4
                SCHEDULE OF INVESTMENTS EXCEEDING 10% OF CAPITAL

         The outstanding book and market values of the following taxable
variable rate demand notes exceeded 10% of stockholders' equity as of December
31, 1998. The domestic, federally insured financial institution issuing the
irrevocable letter of credit securing the note is also detailed below.
<TABLE>
<CAPTION>

ISSUER                                       FINANCIAL INSTITUTION                 BOOK VALUE    MARKET VALUE
------                                       ---------------------                 ----------    ------------
<S>                                          <C>                                <C>                <C>
Alpine Capital Investments, LLC              First of America Bank, N.A.        $   855,000        $   855,000
Cunat Capital Corporation                    LaSalle National Bank                1,350,000          1,350,000
JDV, LLC                                     Michigan National Bank               1,000,000          1,000,000
JPH Capital, LLC                             Ann Arbor Commerce Bank                965,000            965,000
Junction Point, LLC                          Johnson Bank                           805,000            805,000
Kalamazoo Funding Corp.                      Old Kent Bank                        1,305,000          1,305,000
Missouri Hecon Dev Export & Infra IDR        AmSouth                                950,000            950,000
Northern Motel of Munising                   North Country Bank & Trust           1,350,000          1,350,000
U-Stor-It Joint Venture A                    AMCORE Bank, N.A.                    1,025,000          1,025,000
                                                                                ------------------------------

                                                                                $ 9,605,000        $ 9,605,000
                                                                                ==============================
</TABLE>



                                       19


<PAGE>   21


                                   SCHEDULE 5
                                  LOAN SUMMARY



         The following table summarizes the distribution of the Company's loan
portfolio expressed in dollar amount and as a percentage of the total portfolio
as of December 31, 1998 and December 31, 1997.

                                          1998                    1997
                                  AMOUNT       PCT.        AMOUNT      PCT.
                               ---------------------   ---------------------

  Commercial                   $11,933,874    30.15%   $1,581,725     16.46%
  Real Estate: 
     Construction                1,940,338     4.90%    2,519,586     26.23%
     Commercial                 17,022,356    43.01%      896,289      9.33%
     Residential                 7,265,606    18.36%    1,161,558     12.09%
  Industrial Revenue Bonds 
    & Municipals                   959,778     2.42%    3,446,886     35.88%
  Installment & Consumer           458,564     1.16%          510      0.01%
                               ---------------------   ---------------------
  Total Loans                  $39,580,516   100.00%   $9,606,554    100.00%
                               =====================   =====================




                                       20



<PAGE>   22



                                   SCHEDULE 6
          LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES



         The following schedules summarize the maturities and sensitivity to
change in interest rates of the Company's loan portfolio at December 31, 1998
and December 31, 1997.


LOAN MATURITIES
                                      AFTER 1 YEAR
                      1 YEAR OR LESS  THROUGH 5 YEARS  AFTER 5 YEARS   TOTAL
                      --------------  ---------------  -------------   -----

December 31, 1998
  Commercial          $4,802,830       $3,403,949      $3,727,095   $11,933,874
  Real Estate 
    Construction       1,470,000          470,338            ----     1,940,338
                      ---------------------------------------------------------
      Total           $6,272,830       $3,874,287      $3,727,095   $13,874,212

December 31, 1997
  Commercial          $  430,369       $  294,274      $  857,082   $ 1,581,725
  Real Estate
    Construction            ----             ----       2,519,586     2,519,586
                      =========================================================
     Total            $  430,369       $  294,274      $3,376,668   $ 4,101,311
                      =========================================================



AMOUNTS WITH MATURITIES EXCEEDING 1 YEAR

                                                   FLOATING OR 
                           PREDETERMINED RATES   ADJUSTABLE RATE      TOTAL
                           -------------------   ---------------    ----------
December 31, 1998
  Commercial                   $1,997,815          $5,133,229       $7,131,044
  Real Estate Construction        470,338                ----          470,338
                               -----------------------------------------------
      Total                    $2,468,153          $5,133,229       $7,601,382

December 31, 1997
  Commercial                   $  260,000          $  891,356       $1,151,356
  Real Estate Construction        910,983           1,608,603        2,519,586
                               ===============================================
     Total                     $1,170,983          $2,499,959       $3,670,942
                               ===============================================



                                       21






<PAGE>   23


                                   SCHEDULE 7
                           SUMMARY OF AVERAGE DEPOSITS

<TABLE>
<CAPTION>


                         YEAR ENDED DEC. 31, 1998    QTR. ENDED DEC. 31, 1997
                         ------------------------   -------------------------
                            AVERAGE      RATE          AVERAGE       RATE
                            BALANCE      PAID          BALANCE       PAID
                         ------------------------   -------------------------

<S>                      <C>             <C>         <C>             <C> 
Deposits in Domestic 
  Bank Offices:

  Non-Interest 
    Bearing Demand       $ 2,157,659     ----        $1,324,046      ----
  NOW Accounts               781,378     4.76%          280,210      4.88%
  Money Market Accounts   22,515,705     5.31%        3,200,944      5.37%
  Time Deposits            9,220,705     5.77%            7,314      5.26%
                         --------------------       ---------------------
Total Deposits           $34,675,447     5.09%       $4,812,514      3.89%
                         ====================       =====================
</TABLE>






ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------

                          Index to Financial Statements




         Independent Auditor's Report.......................................23

         Consolidated Balance Sheet (December 31, 1998).....................24

         Consolidated Statement of Income (for the period from
            September 3, 1997 through December 31, 1998)....................25

         Consolidated Statement of Changes in Stockholder's Equity
            (for the period from September 3, 1997 
            through December 31, 1998)......................................26

         Consolidated Statement of Cash Flows (for the period from
            September 3, 1997 through December 31, 1998)....................27

         Notes..............................................................28



                                       22



<PAGE>   24





[VIRCHOW, KRAUSE & COMPANY, LLP LOGO]


                          INDEPENDENT AUDITOR'S REPORT


Board of Directors
InvestorsBancorp, Inc.
Pewaukee, Wisconsin


We have audited the accompanying consolidated balance sheets of
InvestorsBancorp, Inc and Subsidiary as of December 31, 1998 and 1997, and the
related consolidated statements of income, changes in stockholders' equity, and
cash flows for the year ended December 31, 1998 and period from September 3,
1997 through December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of InvestorsBancorp,
Inc. and Subsidiary as of December 31, 1998 and 1997, and the results of its
operations and its cash flows for the year ended December 31, 1998 and period
from September 3, 1997 through December 31, 1997, in conformity with generally
accepted accounting principles.

                                           VIRCHOW, KRAUSE & COMPANY, LLP
                                           
                                           /s/ Virchow Krause & Company LLP
                                           --------------------------------



Brookfield, Wisconsin
January 20, 1999


                                       23
<PAGE>   25

INVESTORSBANCORP, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
------------------------------------------------------------------------------

ASSETS                                            1998                 1997
------------------------------------------------------------------------------
<S>                                           <C>                  <C>
Cash and due from banks (Note B)              $ 1,049,145          $ 1,248,803
Federal funds sold                                540,000            4,544,000
Available for sale securities - stated 
  at fair value (Note C)                       14,980,000                    -
Held to maturity securities, fair value 
  of $3,980,493 (Note D                         3,980,493                    -
Loans, less allowance for loan 
  losses of $395,804 and $96,060 in 1998 
  and 1997 respectively (Notes E and F)        39,184,712            9,510,494
Mortgage loans held for sale                    2,232,657                    -
Furniture and equipment, net (Note G)             126,760              124,159
Accrued interest receivable and
  other assets (Note J)                         1,007,615              612,315
                                              --------------------------------

       TOTAL ASSETS                           $63,101,382          $16,039,771
                                              ================================
</TABLE>

<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------
<S>                                           <C>                  <C>  
LIABILITIES:
  Deposits: (Note H)
    Demand                                    $ 2,616,842          $ 2,087,484
    Savings and NOW accounts                   37,172,478            6,752,256
    Time                                       15,215,270               21,900
                                              --------------------------------
       TOTAL DEPOSITS                          55,004,590            8,861,640
  Accrued interest payable and 
    other liabilities (Note J)                    912,551              291,131
                                              --------------------------------
       TOTAL LIABILITIES                       55,917,141            9,152,771
                                              --------------------------------

COMMITMENTS AND CONTINGENCIES (NOTE L)

STOCKHOLDERS' EQUITY: (NOTES N, O AND P)
  Preferred stock, $.01 par value; 
    1,000,000 shares authorized,
    -0- shares issued and outstanding                   -                    -
  Common stock, $.01 par value; 
    9,000,000 shares authorized, 
    1,000,000 shares issued and outstanding        10,000               10,000
  Surplus                                       6,979,900            6,979,900
  Retained earnings (deficit) (Note O)            194,341             (102,900)
                                              --------------------------------
       TOTAL STOCKHOLDERS' EQUITY               7,184,241            6,887,000
                                              --------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $63,101,382          $16,039,771
                                              ================================
</TABLE>

See Notes to Consolidated Financial Statements.


                                       24


<PAGE>   26


INVESTORSBANCORP, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1998
     AND THE PERIOD FROM SEPTEMBER 3, 1997 THROUGH DECEMBER 31, 1997
------------------------------------------------------------------------------

                                                         1998           1997
<S>                                                  <C>             <C>
INTEREST INCOME:
  Interest and fees on loans (Note E)                $ 2,589,509     $ 136,796
  Interest on investment securities - taxable            347,858             -
  Interest on federal funds sold                         323,225       108,496
                                                     -------------------------
       TOTAL INTEREST INCOME                           3,260,592       245,292

Interest expense - interest on deposits (Note H)       1,765,668        49,373
                                                     -------------------------

       Net interest income before provision 
         for loan losses                               1,494,924       195,919
Provision for loan losses                                299,744        96,060
                                                     -------------------------

       Net interest income after provision 
         for loan losses                               1,195,180        99,859
                                                     -------------------------

Noninterest income:
  Service charges on deposit accounts                     19,131           911
  Service release premiums                               577,087        81,898
  Management service fees (Note T)                       775,892       229,285
  Other income                                            14,378            22
                                                     -------------------------
       TOTAL NONINTEREST INCOME                        1,386,488       312,116
                                                     -------------------------

Noninterest expenses:
  Salaries and employee benefits (Note Q)              1,549,210       385,383
  Occupancy expenses (Note G)                             88,237        27,613
  Equipment expenses (Note G)                             83,146        21,808
  Data processing fees                                    65,118         8,571
  Other expenses                                         416,768       137,900
                                                     -------------------------
       TOTAL NONINTEREST EXPENSES                      2,202,479       581,275
                                                     -------------------------

       Income (loss) before income taxes                 379,189      (169,300)

Income tax (benefits) (Note J)                            81,948       (66,400)
                                                     -------------------------

       Net income (loss)                             $   297,241     $(102,900)
                                                     =========================

       Income (loss) per share of common stock       $      0.30     $   (0.10)
                                                     =========================

       Income (loss) per share of common stock - 
         assuming dilution                           $      0.29     $   (0.10)
                                                     =========================

       Weighted average shares outstanding             1,000,000     1,000,000
                                                     ==========================
</TABLE>


See Notes to Consolidated Financial Statements.

                                       25
<PAGE>   27



INVESTORSBANCORP, INC. AND SUBSIDIARY
 
CONSOLIDATED STATEMENTS OF CHANGES
  IN STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1998 AND
  PERIOD FROM SEPTEMBER 3, 1997 THROUGH DECEMBER 31, 1997

<TABLE>
<CAPTION>
------------------------------------------------------------------------------
                                                    Retained         Total
                            Common                  earnings     stockholders'
                            stock       Surplus     deficit)       equity
                          ----------------------------------------------------
<S>                        <C>         <C>         <C>           <C>
BALANCES, 
  September 3, 1997       $   -       $    -        $    -         $    -

    Proceeds from sale
      of shares of 
      common stock,
      net of stock 
      offering costs       10,000      6,979,900         -          6,989,900
                          ----------------------------------------------------
    Net loss - 1997           -            -         (102,900)       (102,900)
                          ----------------------------------------------------

BALANCES, 
  December 31, 1997        10,000      6,979,900     (102,900)      6,887,000
    Net income - 1998         -            -          297,241         297,241
                          ----------------------------------------------------
BALANCES,
  December 31, 1998       $10,000     $6,979,900    $ 194,341      $7,184,241
                          ====================================================
</TABLE>


See Notes to Consolidated Financial Statements.




                                       26


<PAGE>   28



INVESTORSBANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31, 1998 and
  Period from September 3, 1997 through December 31, 1997
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                       1998             1997
<S>                                                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                $   297,241     $  (102,900)
                                                   ---------------------------
  Adjustments to reconcile net income 
    (loss) to net cash used in operating 
    activities:
  Depreciation                                          27,086           8,163
  Provision for loan losses                            299,744          96,060
  Provision (benefit) for deferred taxes               (27,189)        (66,400)
  Net increase in mortgage loans held for sale      (2,232,657)              -
  Increase in assets:
    Interest receivable                               (267,200)       (545,915)
    Other assets                                      (100,911)              -
  Increase in liabilities:
    Interest payable                                   438,760          14,288
    Taxes payable                                      109,086               -
    Other liabilities                                   73,574         276,843
                                                   ---------------------------
             TOTAL ADJUSTMENTS                      (1,679,707)       (216,961)
                                                   ---------------------------
             NET CASH USED IN 
               OPERATING ACTIVITIES                 (1,382,466)       (319,861)
                                                   ---------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net (increase) decrease in federal funds           4,004,000      (4,544,000)
  Proceeds from sale of available for 
    sale securities                                  4,815,000               -
  Purchase of available for sale securities        (19,795,000)              -
  Proceeds from maturity of held to 
    maturity securities                              6,050,000               -
  Purchase of held to maturity securities          (10,030,493)              -
  Net increase in loans                            (29,973,962)     (9,606,554)
  Purchase of furniture and equipment                  (29,687)       (132,322)
                                                   ---------------------------
             NET CASH USED IN 
               INVESTING ACTIVITIES                (44,960,142)    (14,282,876)
                                                   ===========================

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits                          46,142,950       8,861,640
  Proceeds from the issuance of common stock, net            -       6,989,900
                                                   ---------------------------
             NET CASH PROVIDED BY 
               FINANCING ACTIVITIES                 46,142,950      15,851,540
                                                   ===========================
             INCREASE (DECREASE) IN CASH 
               AND DUE FROM BANKS                     (199,658)      1,248,803

CASH AND DUE FROM BANKS 
  at beginning of year (period)                      1,248,803               -
                                                   ---------------------------
CASH AND DUE FROM BANKS at end of year (period)    $ 1,049,145     $ 1,248,803
                                                   ===========================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for:
    Interest                                       $ 1,326,908     $    35,083
                                                   ===========================
    Income taxes                                   $        50     $         -
                                                   ===========================
</TABLE>

See Notes to Consolidated Financial Statements.



                                       27

<PAGE>   29



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF ACTIVITIES

1. NATURE OF BUSINESS:

InvestorsBancorp, Inc. (the "Company"), a Wisconsin corporation, was organized
on June 12, 1996, to be the holding company of InvestorsBank, a Wisconsin state
bank located in Pewaukee, Wisconsin (the "subsidiary Bank"). The subsidiary Bank
commenced business on September 8, 1997. On September 6, 1997, Bando McGlocklin
Capital Corporation, the former principal stockholder of the Company,
distributed all of the 880,000 shares of the Company it held on such date to its
shareholders.

The consolidated income of the Company is principally from income of its
subsidiary Bank. The subsidiary Bank grants commercial, installment and
residential loans and accepts deposits from customers primarily in southeastern
Wisconsin. The subsidiary Bank is subject to competition from other financial
institutions and nonfinancial institutions providing financial products.
Additionally, the Company and the subsidiary Bank are subject to the regulations
of certain regulatory agencies and undergo periodic examinations by those
regulatory agencies. 

2. CONSOLIDATION: 

The consolidated financial statements of InvestorsBancorp, Inc. include the
accounts of its wholly owned subsidiary, InvestorsBank. The consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles and conform to general practices within the banking
industry. All significant intercompany accounts and transactions have been
eliminated in the consolidated financial statements.

3. BASIS OF FINANCIAL STATEMENT PRESENTATION: 

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the year. Actual results
could differ from those estimates.

4. CASH AND CASH EQUIVALENTS: 

For purposes of reporting cash flows, cash and cash equivalents are defined as
those amounts included in the balance sheet caption "cash and due from banks."

The subsidiary Bank maintains amounts due from banks, which, at times, may
exceed federally insured limits. The subsidiary Bank has not experienced any
losses in such accounts.

5. AVAILABLE FOR SALE SECURITIES:

Securities classified as available for sale are those debt securities that the
subsidiary Bank intends to hold for an indefinite period of time, but not
necessarily to maturity. Any decision to sell a security classified as available
for sale would be based on various factors, including significant movements in
interest rates, changes in the maturity mix of the subsidiary Bank's assets and
liabilities, liquidity needs, regulatory capital consideration, and other
similar factors. Securities classified as available for sale are carried at fair
value. Unrealized gains or losses are reported as increases or decreases in
accumulated other comprehensive income, net of the related deferred tax effect.
Realized gains or losses, determined on the basis of the cost of specific
securities sold, are included in earnings.



                                       28


<PAGE>   30


INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

6. HELD TO MATURITY SECURITIES:

Securities classified as held to maturity are those debt securities the
subsidiary bank has both the intent and ability to hold to maturity regardless
of changes in market conditions, liquidity needs or changes in general economic
conditions. These securities are carried at cost, adjusted for amortization of
premium and accretion of discount, computed by the interest method over their
contractual lives. The sale of a security within three months of its maturity
date or after collection of at least 85 percent of the principal outstanding at
the time the security was acquired is considered a maturity for purposes of
classification and disclosure.

7. MORTGAGE LOANS HELD FOR SALE:

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. Net
unrealized losses are recognized through a valuation allowance by charges to
income. All sales are made without recourse. 

8. LOANS: 

Loans that management has the intent and ability to hold for the foreseeable
future or until maturity or payoff are reported at the amount of unpaid
principal, reduced by the allowance for loan losses. Interest on loans is
calculated by using the simple interest method on daily balances of the
principal amount outstanding. The accrual of interest income on impaired loans
is discontinued when, in the opinion of management, there is reasonable doubt as
to the borrower's ability to meet payment of interest or principal when they
become due. When interest accrual is discontinued, all unpaid accrued interest
is reversed. Cash collections on impaired loans are credited to the loan
receivable balance, and no interest income is recognized on those loans until
the principal balance is current. Accrual of interest is generally resumed when
the customer is current on all principal and interest payments and has been
paying on a timely basis for a period of time.

9. LOAN SERVICING: 

The subsidiary Bank has entered into a Management Services Agreement with Bando
McGlocklin Capital Corporation to manage loans held by Bando. Such loans are not
included in the accompanying Consolidated Balance Sheets.


                                       29


<PAGE>   31


INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

10.  ALLOWANCE FOR LOAN LOSSES:

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management believes that the collectibility of the principal is unlikely. The
allowance for loan losses is adequate to cover probable credit losses relating
to specifically identified loans, as well as probable credit losses inherent in
the balance of the loan portfolio. In accordance with FASB Statements 5 and 114,
the allowance is provided for losses that have been incurred as of the balance
sheet date. The allowance is based on past events and current economic
conditions, and does not include the effects of expected losses on specific
loans or groups of loans that are related to future events or expected changes
in economic conditions. While management uses the best information available to
make its evaluation, future adjustments to the allowance may be necessary if
there are significant changes in economic conditions. Impaired loans are
measured based on the present value of expected future cash flows discounted at
the loan's effective interest rate or, as a practical expedient, at the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. A loan is impaired when it is probable the creditor will
be unable to collect all contractual principal and interest payments due in
accordance with the terms of the loan agreement.

In addition, various regulatory agencies periodically review the allowance for
loan losses. These agencies may require the subsidiary Bank to make additions to
the allowance for loan losses based on their judgments of collectibility based
on information available to them at the time of their examination.

11.  FURNITURE AND EQUIPMENT:

Depreciable assets are stated at cost less accumulated depreciation. Provisions
for depreciation are computed on straight-line and accelerated methods over the
estimated useful lives of the assets, which are 3 to 7 years for furniture and
equipment. 

12.  OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS: 

In the ordinary course of business, the subsidiary Bank has entered into
off-balance-sheet financial instruments consisting of commitments to extend
credit, commitments under credit card arrangements, commercial letters of credit
and standby letters of credit. Such financial instruments are recorded in the
financial statements when they are funded or related fees are incurred or
received.




                                       30
<PAGE>   32



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

13.  INCOME TAXES:

The Company files a consolidated Federal income tax return and individual
subsidiary State income tax returns. Accordingly, amounts equal to tax benefits
of those companies having taxable Federal losses or credits are reimbursed by
the other companies that incur Federal tax liabilities.

Amounts provided for income tax expense are based on income reported for
financial statement purposes and do not necessarily represent amounts currently
payable under tax laws. Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and tax bases of assets
and liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. As changes in tax laws or
rates are enacted, deferred tax assets and liabilities are adjusted through the
provision for income taxes. The differences relate principally to allowance for
loan losses, depreciation and operating loss carryforwards. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount
expected to be realized. 

14.  PENSION AND PROFIT-SHARING PLAN: 

The Company has a contributory 401(k) profit-sharing plan in which contributions
are made in accordance with specified formulas or at the discretion of the Board
of Directors of the Company. The Plan covers substantially all employees.

15.  PER SHARE DATA: 

Net income (loss) per common share data has been computed based upon the
weighted average number of shares outstanding during the period.

16.  RECLASSIFICATION:

Certain 1997 amounts have been reclassified to conform with the 1998
presentation.

17.  FAIR VALUE OF FINANCIAL INSTRUMENTS: 

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



                                       31

<PAGE>   33
INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

17. FAIR VALUE OF FINANCIAL INSTRUMENTS: (continued)

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

         CARRYING AMOUNTS APPROXIMATE FAIR VALUES FOR THE FOLLOWING
         INSTRUMENTS:

               Cash and cash equivalents
               Federal funds sold
               Available for sale securities
               Variable rate loans that reprice frequently where no significant
                  change in credit risk has occurred
               Mortgage loans held for sale
               Accrued interest receivable
               Accrued interest payable
               Demand deposits
               Variable rate money market accounts
               Variable rate certificate of deposit

           QUOTED MARKET PRICES:

           Where available, or if not available, based on quoted market prices
           of comparable instruments for the following instrument:

               Held to maturity securities

           DISCOUNTED CASH FLOWS:

           Using interest rates currently being offered on instruments with
           similar terms and with similar credit quality:

               All loans except variable rate loans described above
               Fixed rate certificates of deposit

           QUOTED FEES CURRENTLY BEING CHARGED FOR SIMILAR INSTRUMENTS:

           Taking into account the remaining terms of the agreements and the
           counterparties' credit standing:

               Off-balance-sheet instruments:
                  Letters of credit
                  Lending commitments

Since the majority of the Company's off-balance-sheet instruments consist of
nonfee-producing, variable rate commitments, the Company has determined it does
not have a distinguishable fair value.

NOTE B.  CASH AND DUE FROM BANKS

At this time, the Federal Reserve Bank has not required the subsidiary Bank to
maintain vault cash or reserve balances with the Federal Reserve Bank based upon
a percentage of deposits.


                                       32

<PAGE>   34

INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE C. AVAILABLE FOR SALE SECURITIES

Amortized cost and fair value of available for sale securities as of 
December 31, 1998 are summarized as follows:
<TABLE>
<CAPTION>

                                           DECEMBER 31, 1998
                          ----------------------------------------------------
                                          GROSS        GROSS
                           AMORTIZED   UNREALIZED    UNREALIZED        FAIR
                              COST        GAINS         LOSSES        VALUE
                          ----------------------------------------------------
<S>                       <C>          <C>           <C>           <C>
Corporate bonds           $14,980,000  $         -   $         -   $14,980,000
                          ====================================================
</TABLE>


The amortized cost and fair value of available for sale securities as of 
December 31, 1998, by contractural maturity, are as follows:
<TABLE>
<CAPTION>


                                                        DECEMBER 31, 1998
                                                     -------------------------
                                                      AMORTIZED       FAIR
                                                        COST         VALUE
                                                     -------------------------
<S>                                                  <C>           <C>  
Due in one year or less                              $14,980,000   $14,980,000
                                                     =========================
</TABLE>

NOTE D. HELD TO MATURITY SECURITIES

Amortized cost and fair value of held to maturity securities as of December
31, 1998 are summarized as follows:
<TABLE>
<CAPTION>


                                           DECEMBER 31, 1998
                          ----------------------------------------------------
                                          GROSS        GROSS
                           AMORTIZED   UNREALIZED    UNREALIZED        FAIR
                              COST        GAINS         LOSSES        VALUE
                          ----------------------------------------------------
<S>                       <C>          <C>           <C>           <C>
Commercial paper          $ 3,980,493  $         -   $         -   $ 3,980,493
                          ====================================================
</TABLE>

The amortized cost and fair value of held to maturity securities as of 
December 31, 1998, by contractual maturity, are as follows:
<TABLE>
<CAPTION>

                                                        DECEMBER 31, 1998
                                                     -------------------------
                                                      AMORTIZED       FAIR
                                                        COST         VALUE
                                                     -------------------------
<S>                                                  <C>           <C>
Due in one year or less                              $ 3,980,493   $ 3,980,493
                                                     =========================
</TABLE>



                                       33

<PAGE>   35



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE E. LOANS
Major classifications of loans at December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>

                                                      1998             1997
                                                  ----------------------------
<S>                                               <C>              <C>
Commercial                                        $11,933,874      $ 1,581,725
Real estate:
    Construction                                    1,940,338        2,519,586
    Commercial                                     17,022,356          896,289
    Residential                                     7,265,606        1,161,558
Industrial revenue bonds and municipals               959,778        3,446,886
Installment and consumer                              458,564              510
                                                  ----------------------------
                                                   39,580,516        9,606,554
Allowance for loan losses                            (395,804)         (96,060)
                                                  ----------------------------

          NET LOANS                               $39,184,712      $ 9,510,494
                                                  ============================
</TABLE>


There were no loans that were impaired at December 31, 1998 and 1997.

Certain directors and executive officers of InvestorsBank, and their related
interests, had loans outstanding in the aggregate amounts of $192,839 and $-0-
at December 31, 1998 and 1997 respectively. During 1998, $1,614,871 of new loans
were made and repayments totaled $1,422,032. These loans were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with other persons and
did not involve more than normal risks of collectibility or present other
unfavorable features.

The subsidiary Bank services loans for Bando McGlocklin Capital Corporation, a
related company with balances of $127,998,930 and $140,275,911 at December 31,
1998 and 1997 respectively. Revenue relating to loan servicing for Bando
McGlocklin Capital Corporation was $356,487 for the year ended December 31, 1998
and $111,996 for the period from September 3, 1997 to December 31, 1997. 


NOTE F. ALLOWANCE FOR LOAN LOSSES 

The allowance for loan losses reflected in the consolidated financial statements
represents the allowance available to absorb loan losses. An analysis of changes
in the allowance at December 31, 1998 and 1997 is presented in the following
tabulation:

<TABLE>
<CAPTION>


                                                       1998            1997
                                                     -------------------------
<S>                                                  <C>              <C>
BALANCE, beginning                                   $ 96,060         $     -
Provision charged to operations                       299,744          96,060
                                                     -------------------------

BALANCE, end of year                                 $395,804         $96,060
                                                     =========================
</TABLE>


                                       34

<PAGE>   36

INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE G. FURNITURE AND EQUIPMENT

Furniture and equipment at December 31, 1998 and 1997 are stated at cost less
accumulated depreciation and amortization are summarized as follows:
<TABLE>
<CAPTION>

                                                       1998            1997
                                                   --------------------------
<S>                                                <C>              <C>
Furniture and equipment                            $  162,009       $ 132,322
  Less accumulated depreciation and amortization       35,249           8,163
                                                   --------------------------

           TOTAL FURNITURE AND EQUIPMENT           $  126,760       $ 124,159
                                                   ==========================
</TABLE>

Depreciation expense amounted to $27,086 and $8,163 in 1998 and 1997
respectively.

NOTE H.  DEPOSITS

The aggregate amount of time deposits, each within a minimum denomination of
$100,000, was approximately $10,315,453 and $0 in 1998 and 1997 respectively.

At December 31, 1998, the scheduled maturities of Time deposits is as follows:
<TABLE>

<S>                                                                <C>
1999                                                               $ 9,589,256
2000                                                                 1,709,000
2001                                                                 3,009,495
2002                                                                    20,000
2003                                                                   887,519
                                                                   -----------
                                                                   $15,215,270
                                                                   ===========
</TABLE>

Interest expense on deposits for the year ended December 31, 1998 and the period
from September 3, 1997 through December 31, 1997 is as follows:
<TABLE>
<CAPTION>
                                                           December 31,
                                                     -------------------------
                                                          1998         1997
                                                     -------------------------
<S>                                                  <C>             <C>
Savings and NOW                                      $ 1,233,927     $  49,273
Time deposits                                            531,741           100
                                                     -------------------------
                                                     $ 1,765,668     $  49,373
                                                     =========================
</TABLE>


NOTE I.  LINE OF CREDIT

During 1998, the subsidiary Bank established a line of credit with a
correspondent bank in the amount of $3,000,000. The line of credit agreement
provides for interest at the correspondent bank's prevailing prime rate (7.75%
at December 31, 1998), and terminates February 1, 1999. The Company did not have
any outstanding borrowings on the line of credit at December 31, 1998. 


                                       35




<PAGE>   37



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE J. INCOME TAXES

The provision for income taxes included in the accompanying consolidated
financial statements consists of the following:
<TABLE>
<CAPTION>
                                                             December 31,
                                                        ----------------------
                                                            1998         1997
                                                        ----------------------
<S>                                                     <C>          <C>
CURRENT TAXES:
  Federal                                               $ 72,092     $        -
  State                                                   37,045              -
                                                        -----------------------
                                                         109,137              -
                                                        -----------------------
DEFERRED INCOME TAXES (BENEFIT):
  Federal                                                (22,839)       (53,000)
  State                                                   (4,350)       (13,400)
                                                        -----------------------
                                                         (27,189)       (66,400)
                                                        -----------------------
               TOTAL PROVISION FOR INCOME TAXES         $ 81,948     $  (66,400)
                                                        =======================
</TABLE>

The net deferred tax assets in the accompanying consolidated balance sheets
include the following amounts of deferred tax assets and liabilities:
<TABLE>
<CAPTION>

                                                             December 31,
                                                        ----------------------
                                                            1998        1997
                                                        ----------------------
<S>                                                     <C>          <C>
DEFERRED TAX ASSETS:
  Allowance for loan losses                             $112,885     $       -
  Net operating loss                                           -        66,400
DEFERRED TAX LIABILITIES -
  depreciation                                           (19,296)            -
                                                        ----------------------
                                                        $ 93,589     $  66,400
                                                        ======================
</TABLE>

Management believes it is more likely than not, that the gross deferred tax
assets will be fully realized. Therefore, no valuation allowance has been
recorded as of December 31, 1998 or 1997.



                                       36


<PAGE>   38




INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE J. INCOME TAXES (continued)

A reconciliation of statutory Federal income taxes based upon income before
taxes, to the provision for federal and state income taxes, as summarized above,
is as follows:
<TABLE>
<CAPTION>
                                                  December 31,
                                     -----------------------------------------
                                           1998                1997
                                                % of                 % of
                                               pretax                pretax
                                      Amount   income       Amount   income
                                     -----------------------------------------
<S>                                  <C>        <C>      <C>          <C>
Reconciliation of statutory
  to effective taxes:
    Federal income taxes (benefit)
      at statutory rate              $128,924   34.0%    $ (57,562)   (34.0%)
    Adjustments for:
      Tax-exempt interest on
        municipal obligations         (55,275) (14.6)      (10,316)    (6.1)
      Increases (decreases) in 
        taxes resulting
        from state income taxes        24,450    6.4        (8,861)    (5.2)
      Other - net                     (16,151)  (4.2)       10,339      6.1
                                     -----------------------------------------
          EFFECTIVE INCOME
          TAXES - OPERATIONS         $ 81,948   21.6%    $ (66,400)   (39.2%)
                                     =========================================
</TABLE>


NOTE K.  FACILITIES LEASE

The Company subleases premises from Bando McGlocklin Capital Corporation through
its management services agreement. Monthly rents are variable based on LIBOR
interest rates and the agreement is for a one-year renewable term. Lease expense
for the year ended December 31, 1998 and period from September 3, 1997 through
December 31, 1997 was $67,452 and $24,330 respectively.

NOTE L.  COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company is involved in
various legal proceedings. In the opinion of management, any liability resulting
from such proceedings would not have a material adverse effect on the financial
statements.

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 financial guarantees
and standby letters of credit. They involve, to varying degrees, elements of
credit risk in excess of amounts recognized on the balance sheet.

The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual notional amount of
those instruments. The Company uses the same credit policies in making
commitments and issuing letters of credit as it does for on-balance-sheet
instruments.



                                       37


<PAGE>   39



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE L. COMMITMENTS AND CONTINGENCIES (continued)

A summary of the contract or notional amount of the Company's exposure to
off-balance-sheet risk as of December 31, 1998 is as follows:
<TABLE>
<CAPTION>

                                                      1998            1997
                                                  ----------------------------
<S>                                               <C>              <C>
FINANCIAL INSTRUMENTS WHOSE CONTRACT AMOUNTS
REPRESENT CREDIT RISK:
 Commitments to extend credit                     $ 10,934,249     $ 2,757,556
 Standby letters of credit                        $    268,900     $         -
 Credit cards                                     $    230,869     $    93,000
 Notional of financial instruments -
   Interest rate swap                             $  6,103,000     $         -
</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. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. Standby letters of credit are conditional
commitments issued by the Company to guarantee the performance of a customer to
a third party. Those guarantees are primarily issued to support public and
private borrowing arrangements. The credit risk involved in issuing letters of
credit is essentially the same as that involved in extending loan facilities to
customers. The Company evaluates each customer's credit worthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by
the Company upon extension of credit, is based on management's credit evaluation
of the counterparty. Collateral held varies but may include accounts receivable,
inventory, property and equipment, and income-producing commercial properties.
Credit card commitments are unsecured.

On April 24, 1998, the Company entered into two separate interest rate swap
agreements with another company to manage interest rate exposure. The interest
rate swap agreements are structured as hedges of specific fixed-rate deposits
whose terms coincide with the terms of the swap agreements. Under the terms of
the swap agreements, the parties exchange interest payment streams calculated on
the notional principal amount. The swap agreements are structured so that the
Company receives a fixed interest rate and pays a variable rate based on the
federal funds rate. The variable rate of the swap agreements at December 31,
1998 was 4.07% and the weighted average for the year ended December 31, 1998 was
5.28%. The swap agreements' expirations coincide with the maturity of the fixed
rate deposits. The notional amount, fixed rate and expiration dates at December
31, 1998 are as follows:
<TABLE>
<CAPTION>
                                       Fixed
                                      interest
                Notional                rate                Expiration
                 amount               received                 date
                 ------               --------                 ----
<S>                                    <C>                 <C>
              $ 3,076,000              5.60%               April 26, 1999
              $ 3,027,000              5.58%               April 24, 2001 
</TABLE>


The Company and the subsidiary Bank do not engage in the use of futures,
forwards or option contracts. 



                                       38



<PAGE>   40



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE M.  CONCENTRATION OF CREDIT RISK

Practically all of the subsidiary Bank's loans, commitments, and commercial and
standby letters of credit have been granted to customers in the subsidiary
Bank's market area. Although the subsidiary Bank has a diversified loan
portfolio, the ability of its debtors to honor their contracts is dependent on
the economic conditions of the counties surrounding the subsidiary Bank. The
concentration of credit by type of loan is set forth in Note E. 

NOTE N.  STOCKHOLDER EQUITY 

In 1997, the Company established a Nonqualified Stock Option Plan which was
approved by the directors at the September 1997 Board of Directors meeting,
providing for the granting of options for up to 100,000 shares of common stock
to key officers and employees of the Company. Options are granted at the current
market value. Options may be exercised based on the vesting schedule outlined in
each agreement.

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1997: dividend yield of 0%; expected volatility
of 63.7%; risk-free interest rates of 5.6%; and expected life of 10 years.

Activity of the Nonqualified Stock Option Plan is summarized in the following
table:

<TABLE>
<CAPTION>

                               Weighted-
                                average                                            Weighted-
                              fair value                                            average
                              of option   Options                    Options        exercise
                               granted   available   Exercisable   outstanding        price
                              --------------------------------------------------------------
<S>                             <C>      <C>             <C>         <C>               <C>

BALANCE, September 3, 1997                     -             -            -               -
  Stock options authorized               100,000
  Granted                       8.93      (7,500)                     7,500            7.70
  Exercise of stock option                     -                          -
                                         -------                     ------

BALANCE, December 31, 1997                92,500         2,250        7,500            7.70
  Granted                                      -                          -
  Exercise of stock option                     -                          -
                                         ---------                   ------

BALANCE, December 31, 1998                92,500         3,000        7,500            7.70
                                         =========                   ======

</TABLE>
During 1997, the Company authorized and issued 100,000 stock warrants to its
chief executive officer, exercisable at $7.70 per share. The weighted average
fair value of each warrant is 8.93. The warrants expire September 3, 2004.




                                       39



<PAGE>   41



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE N.  STOCKHOLDERS' EQUITY (continued)

The Company applies APB Opinion 25 and related interpretation in accounting for
its plan. Accordingly, no compensation cost was recognized for the 1997 grants
under the incentive stock option plan. There were no grants of options or
warrants during 1998. Had compensation cost for the Company's stock-based
compensation plan been determined based upon the fair value at the grant dates
for awards under the plan consistent with the method of FASB Statement 123, the
Company's net income and earnings per share would be reduced to the pro forma
amounts indicated below:
<TABLE>
<CAPTION>
                                                        1998           1997
                                                     -------------------------
<S>                                                  <C>            <C>
Net income - as reported                             $ 297,241      $ (102,900)
Pro forma                                            $ 295,924      $ (106,850)
Basic earnings (loss) per share - as reported        $    0.30      $    (0.10)
Pro forma                                            $    0.29      $     0.11
Diluted earnings (loss) per share - as reported      $    0.29      $    (0.10)
Pro forma                                            $    0.28      $     0.11
</TABLE>

A reconciliation of the numerators and the denominators of earnings per share
and earnings per share assuming dilution are:
<TABLE>
<CAPTION>
                                                                    Per share
                                         Income       Shares         amount
                                       ---------------------------------------
<S>                                    <C>           <C>            <C>
1998:
  Earnings per share                   $ 297,241     1,000,000      $     0.30
                                                                    ==========

  Effect of options                            -        21,455
                                       -----------------------
  Earnings per share - 
    assuming dilution                  $ 297,241     1,021,455      $     0.29
                                       =======================================

1997:
  Earnings per share                   $(102,900)    1,000,000      $    (0.10)
                                                                    ==========

  Effect of options                            -        29,889
                                       -----------------------
  Earnings per share - 
    assuming dilution                  $(102,900)    1,029,889      $    (0.10)
                                       =======================================
</TABLE>

NOTE O.  RETAINED EARNINGS AND RESTRICTIONS ON DIVIDENDS

The principal source of income and funds of the Company will be dividends from
the subsidiary Bank. Under Wisconsin law, the subsidiary Bank will be restricted
as to the maximum amount of dividends it may pay on its common stock. A
Wisconsin bank may not pay dividends except out of net profits. Unless exempted
by the Wisconsin Department of Financial Institutions, Division of Banking, a
state bank may not pay any dividend until an amount equal to at least 20% of net
profits for the preceding half year or dividend period has been transferred to
surplus. Such transfers are required until the surplus fund equals 100% of the
bank's capital stock. A bank's ability to pay dividends may also be restricted
in the event that losses in excess of undivided profits have been charged
against surplus and in certain other circumstances. Federal regulators have
authority to prohibit a bank from engaging in any action deemed by them to
constitute an unsafe or unsound practice, including the payment of dividends.



                                       40

<PAGE>   42



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE O. RETAINED EARNINGS AND RESTRICTIONS ON DIVIDENDS (continued)

The subsidiary Bank made a statement in its application for a bank charter and
federal deposit insurance that it will retain its earnings during the first
three years of operation. As such, no dividends will be paid to the shareholders
during that period.

Federal Reserve Board policy provides that a bank holding bank should not pay
dividends unless (i) the dividends can be fully funded out of net income from
the bank's net earnings over the prior year and (ii) the prospective rate of
earnings retention appears consistent with the Company (and its subsidiary's)
capital needs, asset quality and overall financial conditions. 

NOTE P. REGULATORY CAPITAL REQUIREMENTS 

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

Quantitative measures established by regulation to ensure capital adequacy
requires the Company to maintain minimum amounts and ratios (set forth in the
table below) of Total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined) and Tier 1 capital (as defined) to average
assets (as defined). Management believes, as of December 31, 1998, the Company
meets all capital adequacy requirements to which it is subject.

As of December 31, 1998, the most recent notification from the regulatory
agencies categorized the Company as well-capitalized under the regulatory
framework for prompt corrective action. To be categorized as well-capitalized,
the Company must maintain minimum total risk-based, Tier I risk-based, and
leverage ratios as set forth in the table. There are no conditions or events
since these notifications that management believes have changed the
institution's category.




                                       41



<PAGE>   43


INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE P.  REGULATORY CAPITAL REQUIREMENTS (continued)

Listed below is a comparison of the Company and subsidiary Bank's 1998 and 1997
actual with the minimum requirements for well-capitalized and adequately
capitalized banks, as defined by the federal regulatory agencies' Prompt
Corrective Action Rules.

<TABLE>
<CAPTION>                                                                                         To be well
                                                                          For capital         capitalized under
                                                                           adequacy           prompt corrective
                                                     Actual                purposes           action provisions
                                                ------------------------------------------------------------------
                                                  Amount      Ratio        Amount     Ratio     Amount       Ratio
                                                ------------------------------------------------------------------
<S>                                             <C>           <C>       <C>            <C>    <C>            <C>

As of December 31, 1998:
  Total capital (to risk-weighted assets):
   InvestorsBancorp, Inc.                       $ 7,396,265   15.3%     $ 3,862,310    8.0%           N/A
   InvestorsBank                                $ 7,396,265   15.3%     $ 3,862,310    8.0%   $ 4,827,888    10.0%
  Tier I capital (to risk-weighted assets):
   InvestorsBancorp, Inc.                       $ 7,000,461   14.5%     $ 1,931,155    4.0%           N/A
   InvestorsBank                                $ 7,000,461   14.5%     $ 1,931,155    4.0%   $ 2,896,733     6.0%
  Tier I capital (to average assets):
   InvestorsBancorp, Inc.                       $ 7,000,461   16.7%     $ 1,676,988    4.0%           N/A
  InvestorsBank                                 $ 7,000,461   16.7%     $ 1,676,988    4.0%   $ 2,096,235     5.0%

As of December 31, 1997:
  Total capital (to risk-weighted assets):
   InvestorsBancorp, Inc.                       $ 6,817,161   64.9%     $   840,334    8.0%           N/A
   InvestorsBank                                $ 6,817,161   64.9%     $   840,334    8.0%   $ 1,050,417    10.0%
  Tier I capital (to risk-weighted assets):
   InvestorsBancorp, Inc.                       $ 6,721,101   64.0%     $   420,167    4.0%           N/A
   InvestorsBank                                $ 6,721,101   64.0%     $   420,167    4.0%   $   630,250     6.0%
  Tier I capital (to average assets):
   InvestorsBancorp, Inc.                       $ 6,721,101   55.8%     $   481,606    4.0%           N/A
   InvestorsBank                                $ 6,721,101   55.8%     $   481,606    4.0%   $   602,008     5.0%

</TABLE>

NOTE Q.  RETIREMENT PLANS

The Company has a contributory 401(k) profit-sharing plan covering substantially
all of its employees. The total profit sharing expense for the year ended
December 31, 1998 amounted to $41,424. The total pension expense and
profit-sharing expense at December 31, 1997 amounted to $35,310.

The Company had a non-contributory defined contribution pension plan covering
substantially all of its employees in 1997. The defined contribution pension
plan was dissolved in 1997.

The Company provides additional supplemental retirement benefits for an
executive officer. Such benefits totaled $23,089 in 1998 and $7,536 in 1997, net
of reimbursement from Bando McGlocklin Capital Corporation's management fee. The
payments were made at the sole discretion of the Board of Directors. The
payments are included in the calculation of management fee charged to a related
Company. 



                                       42


<PAGE>   44



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------


NOTE R. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments at December
31,1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                                1998                           1997
                                                     -----------------------------------------------------------
                                                     Carrying         Estimated       Carrying       Estimated
                                                       amount         fair value        amount       fair value
                                                    ------------------------------------------------------------
<S>                                                 <C>              <C>             <C>             <C>
FINANCIAL ASSETS:
  Cash and due from banks                           $ 1,049,145      $ 1,049,145     $ 1,248,803     $ 1,248,803
                                                    ============================================================
  Federal funds sold                                $   540,000      $   540,000     $ 4,544,000     $ 4,544,000
                                                    ============================================================
  Securities                                        $18,960,493      $18,960,493     $         -     $         - 
                                                    ============================================================
  Net loans                                         $39,184,712      $39,410,779     $ 9,510,494     $ 9,548,783
                                                    ============================================================
  Mortgage loans held for sale                      $ 2,232,657      $ 2,232,657     $         -     $         -
                                                    ============================================================
  Accrued interest receivable                       $   326,334      $   326,334     $    59,134     $    59,134
                                                    ============================================================

FINANCIAL LIABILITIES:
  Deposits                                          $55,004,590      $55,050,270     $ 8,861,640     $ 8,861,640
                                                    ============================================================
  Accrued interest payable                          $   453,050      $   453,050     $    14,290     $    14,290
                                                    ============================================================
</TABLE>



The estimated fair value of fee income on letters of credit at December 31, 1998
and 1997 is insignificant. Loan commitments on which the committed interest rate
is less than the current market rate are also insignificant at December 31, 1998
and 1997.

The Company assumes interest rate risk (the risk that general interest rate
levels will change) as a result of its normal operations. As a result, fair
values of the Company's financial instruments will change when interest rate
levels change and that change may be either favorable or unfavorable to the
Company. Management attempts to match maturities of assets and liabilities to
the extent believed necessary to minimize interest rate risk. However, borrowers
with fixed rate obligations are less likely to prepay in a rising rate
environment and more likely to repay in a falling rate environment. Conversely,
depositors who are receiving fixed rates are more likely to withdraw funds
before maturity in a rising rate environment and less likely to do so in a
falling rate environment. Management monitors rates and maturities of assets and
liabilities and attempts to minimize interest rate risk by adjusting terms of
new loans and deposits and by investing in securities with terms that mitigate
the Company's overall interest rate risk.


                                       43

<PAGE>   45



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE S. DEVELOPMENT STAGE BANK

During a portion of 1997, the subsidiary Bank was a development stage bank as it
had not yet commenced its planned principal operations of banking. The
subsidiary Bank commenced operations on September 3, 1997 and at that time the
subsidiary Bank ceased to be a development stage bank. Pre-opening expenses were
paid by Bando McGlocklin Capital Corporation prior to the spin-off of
InvestorsBank to Bando McGlocklin Capital Corporation's shareholders. 

NOTE T. RELATED ENTITY 

The Company shares common ownership and management with Bando McGlocklin Capital
Corporation. The Company charges Bando McGlocklin Capital Corporation a
management fee for salaries and employee benefits of common management. The
Company also charges a loan servicing fee for loans serviced for the related
entity. The management services fee for the year ended December 31, 1998 and the
period from September 3, 1997 through December 31, 1997 is as follows:

<TABLE>
<CAPTION>
                                                           December 31,
                                                    --------------------------
                                                       1998            1997
                                                    --------------------------
<S>                                                <C>                <C>
Salaries and benefits                               $ 419,405       $ 117,289
Loan servicing                                        356,487         111,996
                                                    --------------------------
                                                    $ 775,892       $ 229,285
                                                    ==========================
NOTE U. INVESTORSBANCORP, INC. (PARENT COMPANY ONLY) FINANCIAL INFORMATION


CONDENSED BALANCE SHEETS
------------------------------------------------------------------------------
<CAPTION>
                                                      1998            1997
                                                  ----------------------------

ASSETS - investment in subsidiary                 $ 7,184,241     $ 6,887,000
                                                  ============================

LIABILITIES                                       $         -     $          -
                                                  ----------------------------

STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value; 
    1,000,000 shares authorized; 
    -0- shares issued and outstanding                       -                -
  Common stock, $.01 par value; 
    9,000,000 shares authorized; 
    $1,000,000 shares issued and 
    outstanding                                        10,000           10,000
  Surplus                                           6,979,900        6,979,900
  Retained earnings (deficit)                         194,341         (102,900)
                                                  ----------------------------
      TOTAL STOCKHOLDERS' EQUITY                    7,184,241        6,887,000
                                                  ----------------------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 7,184,241     $ 6,887,000
                                                  ============================

</TABLE>

                                       44


<PAGE>   46



INVESTORSBANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

NOTE U. INVESTORSBANCORP, INC. (PARENT COMPANY ONLY) 
        FINANCIAL INFORMATION (continued)

CONDENSED STATEMENTS OF INCOME
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                      1998            1997
                                                  ----------------------------
<S>                                               <C>              <C>
Equity in undistributed income (loss) 
  of subsidiary                                   $   297,241     $   (102,900)
                                                  ============================
Net income (loss)                                 $   297,241     $   (102,900)
                                                  ============================


CONDENSED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------
<CAPTION>
                                                      1998           1997
                                                  ----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES -
                                                 
Net income (loss)                                 $   297,241     $   (102,900)
Adjustment to reconcile net income and net 
  loss to net cash provided by operating 
  activities - equity in undistributed
  (income) loss of subsidiary                        (297,241)         102,900
                                                 -----------------------------
        NET CASH PROVIDED BY
        OPERATING ACTIVITIES                                -                -

CASH FLOWS FROM INVESTING ACTIVITIES - 
  investment in subsidiary                                  -       (6,989,900)

CASH FLOWS FROM FINANCING ACTIVITIES -
  proceeds from issuance of common stock, net               -        6,989,900
                                                 -----------------------------
        INCREASE IN CASH AND DUE FROM BANKS                 -                -

CASH AND DUE FROM BANKS at beginning of year                               
 (period)                                                   -                -
                                                 -----------------------------

CASH AND DUE FROM BANKS at end of year
  (period)                                       $          -     $          -
                                                 =============================
</TABLE>



                                       45



<PAGE>   47


ITEM 8.  CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
         -------------------------------------------------------------------

         In connection with the audit of the Company's financial statements from
September 3, 1997 through December 31,1998, there were no unresolved issues,
scope restrictions, unanswered questions or disagreements with Virchow, Krause &
Company, LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to
the satisfaction of Virchow, Krause & Company, LLP, would have caused Virchow,
Krause & Company, LLP to make reference to the matter in their report, and
Virchow, Krause & Company, LLP did not advise the Company that any of the events
described in Item 304 (a)(1)(iv)(B) of Regulation S-B had occurred. During the
Company's fiscal years ended December 31, 1997 and December 31, 1998, the
Company (or anyone on the Company's behalf) did not consult Virchow, Krause &
Company, LLP regarding: (i) either the application of accounting principles to a
specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's financial statements; and as
such no written report was provided to the Company and no oral advice was
provided that the new accountant concluded was an important factor considered by
the Company in reaching a decision as to any accounting, auditing or financial
reporting issue, or (ii) any matter that was either the subject of disagreement
or a reportable event.


                                    PART III

ITEM 9.  DIRECTORS AND OFFICERS OF THE REGISTRANT
         ----------------------------------------

         DIRECTORS. The information on pages 2-3 of the 1999 Proxy Statement
under the caption "Election of Directors" is incorporated by reference.

         EXECUTIVE OFFICERS. The Company's executive officers who are not also
directors are as follows:

         SUSAN J. HAUKE, 33, has been the Company's Controller, Vice President -
Finance and Assistant Secretary since 1997. In 1997 Ms. Hauke was also appointed
Secretary and Treasurer of the Bank and Vice President Finance, Secretary and
Treasurer of BMCC. From 1991 until 1997, Ms. Hauke served as Controller for
BMCC, and was a senior accountant at Price Waterhouse LLP before joining BMCC.

         JOEL C. OBERMEIER, 32, was elected Senior Vice President of the Company
and the Bank in January, 1999. He has served as the senior mortgage banking
officer since joining the Company in 1997. From March, 1997 to September, 1997,
Mr. Obermeier served as Vice President-Residential Lending of BMCC. Prior to
joining BMCC, he served as Loan Originator/Manager of Approved Mortgage, Inc.
from 1995 to 1997, and Vice President of Creative Home Mortgage Corp. from 1989
to 1995.

         SCOTT J. RUSSELL, 39, has been a Senior Vice President of the Company
since February, 1998, and a Senior Vice President and Lending Officer of the
Bank since 1997. In 1997 Mr. Russell was also appointed Senior Vice President of
BMCC. From 1994 until 1997, Mr. Russell served as a Vice President of BMCC, and
was a corporate banker with the Bank of Tokyo, Chicago, Illinois, prior to
joining BMCC.

         There are no arrangements or understandings between any of the
executive officers or any other persons pursuant to which any of the executive
officers have been selected for their respective positions.

         COMPLIANCE WITH SECTION 16(a). The information on pages 4-5 of the 1999
Proxy Statement under the caption "Security Ownership of Certain Beneficial
Owners and Management" is incorporated by reference.

ITEM 10. EXECUTIVE COMPENSATION
         ----------------------

         The information on page 3 of the 1999 Proxy Statement under the
Subcaption "Compensation of Directors" and the information on page 5-6 of the
1999 Proxy Statement under the caption "Executive Compensation" is incorporated
by reference.



                                       46


<PAGE>   48
ITEM. 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGERS
          -------------------------------------------------------------

         The information on page 4 of the 1999 Proxy Statement, under the
caption "Security Ownership of Certain Beneficial Owners and Management" is
incorporated by reference.


ITEM 12.  CERTAIN RELATIONSHIPS AND TRANSACTIONS
          --------------------------------------

         The information on page 6 of the 1999 Proxy Statement under the caption
"Transactions with Management" is incorporated by reference.


                                     PART IV

ITEM 13.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

         (a)(1)   INDEX TO FINANCIAL STATEMENTS

         See page 22.

         (a)(2)   FINANCIAL STATEMENT SCHEDULES

         [None required]

         (a)(3)   SCHEDULE OF EXHIBITS

         The Exhibit Index which immediately follows the signature pages to this
Form 10-KSB is incorporated by reference.

         (b)      REPORTS ON FORM 8-K

         N/A

         (c)      EXHIBITS

         The Exhibit Index to this Form 10-KSB is incorporated by reference.

         The exhibits required to be filed with this Form 10-KSB are included
with this Form 10-KSB and are located immediately following the Exhibit Index to
this Form 10-KSB.

         (d)      FINANCIAL DATA SCHEDULE

         Exhibit 27.1




                                       47


<PAGE>   49
                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, as amended, the
Issuer caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on March 29, 1999.


                                INVESTORSBANCORP, INC.


                                By:  /s/ George R. Schonath                     
                                     ------------------------------------------
                                     George R. Schonath
                                     Chief Executive Officer

                                By:  /s/ Susan J. Hauke
                                     ------------------------------------------
                                     Susan J. Hauke, Vice President Finance and
                                     Chief Accounting Officer





     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Issuer and in the capacities and on March
29, 1999.



                              Signature                 Title

               /s/ Salvatore L. Bando                   Director
             -------------------------------
             Salvatore L. Bando

               /s/ Terry L. Mather                      Director
             -------------------------------
             Terry L. Mather

               /s/ Jon McGlocklin                       Director
             -------------------------------
             Jon McGlocklin

               /s/ George R. Schonath                   Director
             -------------------------------
             George R. Schonath

               /s/ Donald E. Sydow                      Director
             -------------------------------
             Donald E. Sydow



                                       48
<PAGE>   50


                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>

            .                                   INCORPORATED HEREIN BY       FILED          SEQUENTIAL PAGE NUMBER
  EXHIBIT NO.    DESCRIPTION OF EXHIBITS             REFERENCE TO           HEREWITH
<S>    <C>     <C>                            <C>                              <C>            <C>
       3.1     Restated Articles of           Exhibit 2(a) to the Form
               Incorporation, as amended,     10-SB filed with the
               of InvestorsBancorp, Inc.      Commission on July 24,
                                              1997 (SEC File No.
                                              000-29400

       3.2     Bylaws  of  InvestorsBancorp,  Exhibit  2(b) to the Form
               Inc.                           10-SB filed with the
                                              Commission on July 24,
                                              1997 (SEC File No.
                                              000-29400)

       4.1     Specimen Common Stock          Exhibit 4.1 to the Form
               Certificate of                 10-SB filed with the
               InvestorsBancorp, Inc.         Commission on July 24,
                                              1997 (SEC File No.
                                              000-29400)

      10.1     InvestorsBancorp, Inc. 1997    Exhibit  6(c) to the Form
               Equity Incentive Plan          10-SB filed with the
                                              Commission on July 24,
                                              1997 (SEC File No.
                                              000-29400)

      10.2     Management Services and        Exhibit 6(a) to the Form
               Allocation of Expenses         10-SB filed with the
               Agreement                      Commission on July 24,
                                              1997 (SEC File No.
                                              000-29400)

      10.3     Tax  Allocation  and Services  Exhibit 6(b) to the Form
               Agreement                      10-SB filed with the
                                              Commission on July 24,
                                              1997 (SEC File No.
                                              000-29400)

      21.1     Subsidiaries of                                                  X
               InvestorsBancorp, Inc.

      27.1     Financial Data Schedule                                          X

      99.1     Proxy Statement                                                  X
</TABLE>


                                       49