U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                   FORM 10-KSB

   [x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the fiscal year ended December 31, 1996

   [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the transition period from ___________ to ___________

   Commission file number:  0-27984

                       Ridgestone Financial Services, Inc.
                 (Name of small business issuer in its charter)

                    Wisconsin                            39-1797151
         (State or other jurisdiction of              (I.R.S. Employer
          incorporation or organization)            Identification No.)

       13925 West North Avenue, Brookfield,
                    Wisconsin                              53005
     (Address of principal executive offices)            (Zip Code)

   Issuer's telephone number (414) 789-1011

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

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

                           Common Stock, no par value
                                (Title of class)

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

        Check if disclosure of delinquent filers in response to Item 405 of
   Regulation S-B is not contained in this form, and no disclosure will be
   contained, to the best of registrant's knowledge, in definitive proxy or
   information statements incorporated by reference in Part III of this Form
   10-KSB or any amendment to this Form 10-KSB.  [  ]

   Issuer's revenues for its most recent fiscal year:  $1,636,579

   Aggregate market value of voting stock held by non-affiliates of the
   issuer:  $9,878,490

   Number of shares of common stock, no par value, outstanding on March 3,
   1997: 834,340

                       DOCUMENTS INCORPORATED BY REFERENCE

   Proxy Statement for the 1997 Annual Meeting (incorporated by reference
   into Part III)

   Transitional Small Business Disclosure Format:  Yes ___; No  X .


   <PAGE>
                       Ridgestone Financial Services, Inc.

                                 Index to Annual
                              Report on Form 10-KSB
                   For The Fiscal Year Ended December 31, 1996

                                                                         Page

   Part I  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1
        Item 1.   Description of Business  . . . . . . . . . . . . . . .    1
        Item 2.   Description of Property  . . . . . . . . . . . . . . .   10
        Item 3.   Legal Proceedings  . . . . . . . . . . . . . . . . . .   10
        Item 4.   Submission of Matters to a Vote of Security Holders  .   10

   Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
        Item 5.   Market for Common Equity and Related Stockholder
                  Matters  . . . . . . . . . . . . . . . . . . . . . . .   10
        Item 6.   Management's Discussion and Analysis or Plan of
                  Operation  . . . . . . . . . . . . . . . . . . . . . .   12
        Item 7.   Financial Statements . . . . . . . . . . . . . . . . .   24
        Item 8.   Changes In and Disagreements With Accountants on
                  Accounting and Financial Disclosure  . . . . . . . . .   47

   Part III  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   47
        Item 9.   Directors, Executive Officers, Promoters and Control
                  Persons; Compliance With Section 16(a) of the Exchange
                  Act  . . . . . . . . . . . . . . . . . . . . . . . . .   47
        Item 10.  Executive Compensation . . . . . . . . . . . . . . . .   47
        Item 11.  Security Ownership of Certain Beneficial Owners and
                  Management . . . . . . . . . . . . . . . . . . . . . .   47
        Item 12.  Certain Relationships and Related Transactions . . . .   47
        Item 13.  Exhibits and Reports on Form 8-K . . . . . . . . . . .   47

   SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   48

   <PAGE>
   Part I

   Item 1.   Description of Business

   General

   Ridgestone Financial Services, Inc. (the "Company") was incorporated in
   Wisconsin on May 25, 1994.  The Company was formed to acquire all of the
   issued and outstanding stock of Ridgestone Bank (the "Bank") and to engage
   in the business of a bank holding company under the Bank Holding Company
   Act of 1956, as amended (the "BHCA").  The organizers received a
   certificate of authority to organize the Bank from the Wisconsin
   Commissioner of Banking on May 9, 1995.  The organizers' application for
   deposit insurance was approved on May 24, 1995 by the Federal Deposit
   Insurance Corporation ("FDIC"), subject to certain conditions including
   conditions related to capital adequacy.  The Company's application to
   become a bank holding company for the Bank was approved by the Federal
   Reserve Board on July 20, 1995.  In November 1995, the Company sold
   834,340 shares of its common stock, no par value, in an initial public
   offering.  The net proceeds received by the Company in this offering
   totalled approximately $7.8 million.  The Bank was capitalized on
   December 6, 1995, and commenced operations on December 7, 1995.

   The Bank provides full-service commercial and consumer banking services in
   its primary market areas of Brookfield, Elm Grove and Wauwatosa,
   Wisconsin.  The Bank competes with other commercial banks, savings banks,
   savings and loan institutions, credit unions and other financial service
   organizations in the three city area.  The bank is one of the newest
   financial institutions in its market.

   The Company's principal business consists of attracting deposits from the
   public and investing those deposits in loans and securities.  The Bank's
   deposits are insured to the maximum extent allowable by the FDIC.  The
   Company's results of operations are dependent primarily on net interest
   income, which is the difference between the interest earned on its loans
   and securities and the interest paid on deposits.  The Company's operating
   results are affected by deposit service charges and other income. 
   Operating expenses of the Company include employee compensation and
   benefits, occupancy and equipment expense, professional and data
   processing fees, advertising and marketing expenses, and other
   administrative expenses.  The Company's operating results are also
   affected by economic and competitive conditions, particularly changes in
   interest rates, government policies and actions of regulatory authorities.

   In 1996, the Bank received regulatory approval to open its first branch at
   15565 W. North Avenue, Brookfield, Wisconsin.  The branch opened for
   business on January 2, 1997 and houses a drive-thru branch banking
   facility and telephone banking center.

   Business Strategy

   The Bank's strategy is to concentrate on the financial service needs of
   individuals and small businesses by providing on-site decision making and
   using technology to enhance customer service.  While the Bank has a
   lending limit of $800,000 per loan, the Bank is able to attract business
   loans beyond its $800,000 lending limit by using bank participations with
   other banks in Wisconsin.  Likewise, the Bank has purchased participations
   from other area Wisconsin financial institutions.

   Loan Products

   The Bank offers a full range of retail and commercial lending services,
   including commercial revolving lines of credit, residential and commercial
   real estate mortgage loans, consumer loans and equipment financing.  These
   loan products are discussed below.

   Although the Bank's management takes a competitive approach to lending, it
   stresses high quality in its loans.  To promote such quality lending, the
   Board of Directors of the Bank has established maximum lending authority
   for each loan officer.  Each loan request exceeding a loan officer's
   authority has to be approved by one or more senior officers.  On a monthly
   basis, the entire Board of Directors of the Bank reviews all loans over
   $25,000 made in the preceding month.  In addition, a loan committee of the
   Board of Directors of the Bank reviews loans over $250,000 for prior
   approval when the loan request exceeds the established limits for the
   senior officers. The lending committee of the Bank reviews loans between
   the lending officer's lending authority and $250,000. The lending
   committee is comprised of the President of the Bank, the Executive Vice
   President and Loan Review Officer.  Because of the Bank's local nature,
   management believes that quality control is achievable while still
   providing prompt and personal service.

   Management of the Bank has established relationships with a correspondent
   bank and other independent financial institutions to provide other
   services required by its customers, including loan participations where
   the requested loan amounts exceed the Bank's policies or legal lending
   limits.

   The Bank has established a continuous loan review process designed to
   promote early identification of credit quality problems.  The Bank's
   credit review administrator is responsible for conducting a continuous
   internal review which tests compliance with loan policy and documentation
   of all loans.  Any past due loans and identified problem loans are
   reviewed with the Board of Directors of the Bank on a monthly basis.

   Real Estate Loans.  The Bank originates residential mortgage loans, which
   generally are long-term with either fixed or variable interest rates.  The
   Bank's policy is to retain all variable interest rate mortgage loans in
   the Bank's loan portfolio and to sell all fixed rate loans with their
   servicing rights in the secondary market.  This policy is subject to
   review by management as a result of changing market and economic
   conditions.

   The retention of variable-rate loans in the Bank's loan portfolio helps to
   reduce the Bank's exposure to fluctuations in interest rates.  However,
   such loans generally pose credit risks different from the risks inherent
   in fixed rate loans, primarily because as interest rates rise, the
   underlying payments from the borrowers rise, thereby increasing the
   potential for default.

   Regulatory and supervisory loan-to-value ("LTV") limits were established
   by Section 304 of the Federal Deposit Insurance Corporation Improvement
   Act of 1991 ("FDICIA").  The Bank's internal limitations follow those
   limits and in certain cases are more restrictive than those mandated by
   the regulators.  Proof of insurance is required on all collateral taken as
   security before loan proceeds are advanced.  The regulatory limits are as
   follows:

    Loan Category                                   LTV Limit

    Raw Land                                           65%

    Land Development                                   75%

    Construction:

    Commercial, multi-family, and non-residential      80%

    1-4 family residential                             85%

    Improved Property                                  85%

    Owner-occupied 1-4 family and home equity          90% (1)


   (1)  Residential loans exceeding the 90% guideline may be excluded from
        the reporting requirement if enhanced by mortgage insurance or
        readily marketable collateral.

   Personal Loans.  The Bank makes personal loans, lines of credit and credit
   cards available to consumers for various purposes, such as the purchase of
   automobiles, boats and other recreational vehicles, home improvements,
   education and personal investments.  The Bank retains substantially all
   such loans.

   Commercial Loans.  Commercial loans are made primarily to small and
   mid-sized businesses.  These loans may be secured or unsecured, and are
   available for general operating purposes, acquisition of fixed assets and
   real estate, purchases of equipment and machinery, and financing inventory
   and accounts receivable.  The Bank generally looks to a borrower's
   business operations as the principal source of repayment, but also
   receives, when appropriate, mortgages on real estate, security interests
   in inventory, accounts receivable and other personal property and/or
   personal guaranties to secure repayment.

   The Bank's commercial loan portfolio totalled $6,967,836 as of
   December 31, 1996 and consisted primarily of lines of credit and loans to
   businesses.  Lines of credit are generally used for the purpose of
   financing working capital and may be secured with current assets of the
   company.  Loans are written for a period of greater than one year and are
   amortized over a period of five to seven years and are used principally
   for financing fixed asset expenditures.  Loans are generally secured with
   the fixed assets of the company.

   Real Estate Commercial Loans. As of December 31, 1996, the Bank had
   $4,632,272 of real estate commercial loans outstanding.  These loans were
   made for the purpose of purchasing plant and multiple family commercial
   real estate holdings.

   Competition. The company has identified 50 offices of either thrifts,
   credit unions or banks operating in Brookfield, Elm Grove and Wauwatosa,
   Wisconsin.  Although the Company commenced operations on December 7, 1995,
   using the most recently available data as of June 1996, the Bank exceeds
   many of these offices in terms of deposits.

   The Bank also faces competition from finance companies, insurance
   companies, mortgage companies, securities brokerage firms, money market
   funds and other providers of financial services.  Most of the Bank's
   competitors have been in business for a number of years, have established
   customer bases, are larger and have higher lending limits than the Bank.

   The Bank competes for loans principally through its ability to communicate
   effectively with its customers in understanding and meeting their needs. 
   Management believes that its personal service philosophy continues to
   enhance its ability to compete favorably in attracting individual and
   business customers.  The Bank actively solicits retail customers and
   competes for deposits by offering customers personal attention,
   professional service and competitive interest rates.

   Supervision and Regulation

   The operations of financial institutions, including banks and bank holding
   companies, are highly regulated, both at the federal and state levels. 
   Numerous statutes and regulations affect the business of the Company and
   the Bank.  To the extent that the information below is a summary of
   statutory provisions, such information is qualified in its entirety by
   reference to the statutory provisions described.  There are additional
   laws and regulations having a direct or indirect effect on the business of
   the Company or the Bank.

   In recent years, the banking and financial industry has been the subject
   of numerous legislative acts and proposals, administrative rules and
   regulations at both federal and state regulatory levels.  As a result of
   many of such regulatory changes, the nature of the banking industry in
   general has changed dramatically in recent years as increasing competition
   and a trend toward deregulation have caused the traditional distinctions
   among different types of financial institutions to be obscured.  Further
   changes along these lines could permit other financially oriented
   businesses to offer expanded services, thereby creating greater
   competition for the Company and the Bank with respect to services
   currently offered or which may in the future be offered by those entities. 
   Proposals for new legislation or rule making affecting the financial
   services industry are continuously being advanced and considered at both
   the national and state levels.  Neither the Company nor the Bank can
   predict the effect that future legislation or regulation will have on the
   financial services industry in general or on their businesses in
   particular.

   The performance and earnings of the Bank, like other commercial banks, are
   affected not only by general economic conditions but also by the policies
   of various governmental regulatory authorities.  In particular, the
   Federal Reserve System regulates money and credit conditions and interest
   rates in order to influence general economic conditions primarily through
   open-market operations in U.S. Government securities, varying the discount
   rate on bank borrowings, and setting reserve requirements against bank
   deposits.  The policies of the Federal Reserve System have a significant
   influence on overall growth and distribution of bank loans, investments
   and deposits, and affect interest rates earned on loans and investments. 
   The general effect, if any, of such policies upon the future business and
   earnings of the Bank cannot accurately be predicted.

   The Company

   As a registered bank holding company, the Company is subject to regulation
   under the BHCA.  The BHCA requires every bank holding company to obtain
   the prior approval of the Board of Governors of the Federal Reserve System
   (the "Board") before it may merge with or consolidate into another bank
   holding company, acquire substantially all the assets of any bank, or
   acquire ownership or control of any voting shares of any bank if after
   such acquisition it would own or control, directly or indirectly, more
   than 5% of the voting shares of such bank.

   Under the BHCA, the Company is prohibited, with certain exceptions, from
   acquiring direct or indirect ownership or control of more than 5% of the
   voting shares of any company which is not a bank or holding company, and
   neither the Company nor any subsidiary may engage in any business other
   than banking, managing or controlling banks or furnishing services to or
   performing services for its subsidiaries.  The Company may, however, own
   shares of a company the activities of which the Board has determined to be
   so closely related to banking or managing or controlling banks as to be a
   proper incident thereto, and the holding company itself may engage in such
   activities.  The Company has no pending acquisition plans.

   As a registered bank holding company, the Company is supervised and
   regularly examined by the Board.  Under the BHCA, the Company is required
   to file with the Board an annual report and such additional information as
   may be required.  The Board can order bank holding companies and their
   subsidiaries to cease and desist from any actions which in the opinion of
   the Board constitute serious risk to the financial safety, soundness or
   stability of a subsidiary bank and are inconsistent with sound banking
   principles or in violation of law.  The Board has adopted regulations
   which deal with the measure of capitalization for bank holding companies. 
   Such regulations are essentially the same as those adopted by the FDIC,
   described below.  The Board's regulations also provide that its capital
   requirements will generally be applied on a bank-only (rather than a
   consolidated) basis in the case of a bank holding company with less than
   $150 million in total consolidated assets.  The Board has also issued a
   policy statement on the payment of cash dividends by bank holding
   companies, wherein the board has stated that a bank holding company
   experiencing earnings weaknesses should not pay cash dividends exceeding
   its net income or which could only be funded in ways that weaken the bank
   holding company's financial health, such as by borrowing.

   Under Wisconsin law, the Company is also subject to supervision and
   examination by the Wisconsin Department of Financial Institutions (the
   "Department").  The Department is also empowered to issue orders to a bank
   holding company to remedy any condition or policy which, in its
   determination, endangers the safety of deposits in any subsidiary state
   bank, or the safety of the bank or its depositors.  In the event of
   noncompliance with such an order, the Department has the power to direct
   the operation of the state bank subsidiary and withholding dividends from
   the holding company.

   The Company, as the holder of the stock of a Wisconsin state-chartered
   bank, may be subject to assessment to restore impaired capital of the bank
   to the extent provided in Section 220.07, Wisconsin Statutes.  Any such
   assessment would apply only to the Company and not to any shareholder of
   the Company.  The Company has committed to the Department that if the
   Bank's contingent fund decreases to less than $250,000, the Company will
   transfer funds to the Bank's contingent fund sufficient to restore the
   contingent fund to at least $500,000.

   Federal law prohibits the acquisition of "control" of a bank holding
   company by individuals or business entities or groups or combinations of
   individuals or entities acting in concert without prior notice to the
   appropriate federal bank regulator.  For this purpose, "control" is
   defined in certain instances as the ownership of or power to vote 10% or
   more of the outstanding shares of the bank holding company.

   The Bank

   As a state-chartered institution, the Bank is subject to regulation and
   supervision by the Department and the Wisconin Banking Review Board and is
   periodically examined by the Department's staff.  Deposits of the Bank are
   insured by the Bank Insurance Fund administered by the FDIC and as a
   result the Bank is also subject to regulation by the FDIC and periodically
   examined by its staff.

   The Federal Deposit Insurance Act requires that the appropriate federal
   regulatory authority -- the FDIC in the case of the Bank (as an insured
   state bank which is not a member of the Federal Reserve System) -- approve
   any acquisition by it through merger, consolidation, purchase of assets,
   or assumption of deposits.  The same regulatory authority also supervises
   compliance by the Bank with provisions of federal banking laws which,
   among other things, prohibit the granting of preferential loans to
   executive officers, directors, and principal shareholders of banks which
   have a correspondent relationship with one another.

   Wisconsin banking laws restrict the payment of cash dividends by state
   banks by providing that (i) dividends may be paid only out of a bank's
   undivided profits, and (ii) prior consent of the Department is required
   for the payment of a dividend which exceeds current year income if
   dividends declared have exceeded net profits in either of the two
   immediately preceding years.  The various bank regulatory agencies have
   authority to prohibit a bank regulated by them from engaging in an unsafe
   or unsound practice; the payment of a dividend by a bank could, depending
   upon the circumstances, be considered such an unsafe or unsound practice. 
   In the event that (i) the FDIC or the Department should increase minimum
   required levels of capital; (ii) the total assets of the Bank increase
   significantly; (iii) the income of the Bank decreases significantly; or
   (iv) any combination of the foregoing occurs, then the Board of Directors
   of the Bank may decide or be required by the FDIC or the Department to
   retain a greater portion of the Bank's earnings to achieve or maintain the
   required capital.

   Subsidiary banks of a bank holding company are subject to certain
   restrictions imposed by the Federal Reserve Act on any extensions of
   credit to the bank holding company or any of its subsidiaries, on
   investments in stock or other securities of the bank holding company and
   on the taking of such stock or securities as collateral for loans to any
   borrower.  Under the BHCA and regulations of the Board, a bank holding
   company and its subsidiaries are prohibited from engaging in certain tie-
   in arrangements in connection with any extension of credit or of any
   property or service.

   The activities and operations of banks are subject to a number of
   additional detailed, complex and sometimes overlapping federal and state
   laws and regulations.  These include state usury and consumer credit laws,
   state laws relating to fiduciaries, the Federal Truth-in-Lending Act and
   Regulation Z, the Federal Equal Credit Opportunity Act and Regulation B,
   the Fair Credit Reporting Act, the Financial Institutions Reform, Recovery
   and Enforcement Act of 1989, FDICIA, the Community Reinvestment Act, anti-
   redlining legislation and the antitrust laws.  The Community Reinvestment
   Act includes provisions under which the federal bank regulatory agencies
   must consider, in connection with applications for certain required
   approvals, including applications to acquire control of a bank or holding
   company or to establish a branch, the records of regulated financial
   institutions in satisfying their continuing and affirmative obligations to
   help meet the credit needs of their local communities, including those of
   low and moderate-income borrowers.

   FDICIA, among other things, establishes five tiers of capital
   requirements:  well capitalized, adequately capitalized, undercapitalized,
   significantly undercapitalized, and critically undercapitalized.  The FDIC
   has adopted regulations which define the relevant capital measures for the
   five capital categories.  An institution is deemed to be "well
   capitalized" if it has a total risk-based capital ratio (total capital to
   risk-weighted assets) of 10% or greater, a Tier I risk-based capital ratio
   (Tier I Capital to risk weighted assets) of 6% or greater, and a Tier I
   leverage capital ratio (Tier I Capital to total assets) of 5% or greater,
   and is not subject to a regulatory order, agreement, or directive to meet
   and maintain a specific capital level for any capital measure.  An
   institution is deemed to be "adequately capitalized" if it has a total
   risk-based capital ratio of 8% or greater, a Tier I risk-based capital of
   4% or greater, and (generally) a Tier I leverage capital ratio of 4% or
   greater, and the institution does not meet the definition of a well
   capitalized institution.  An institution is deemed to be
   "undercapitalized" if it has a total risk-based capital ratio less than
   8%, or a Tier I risk-based capital ratio less than 4%, or (generally) a
   Tier I leverage ratio of less than 4%.  An institution is deemed to be
   "significantly undercapitalized" if it has a total risk-based capital
   ratio less than 6%, or a Tier I risk-based capital ratio less than 3%, or
   a Tier I leverage ratio less than 3%.  An institution is deemed to be
   "critically undercapitalized" if it has a ratio of tangible equity (as
   defined in the regulations) to total assets that is equal to or less than
   2%.  Undercapitalized banks are subject to growth limitations and are
   required to submit a capital restoration plan.  If an undercapitalized
   bank fails to submit an acceptable plan, it is treated as if it is
   "significantly undercapitalized."  Significantly undercapitalized banks
   may be subject to a number of requirements and restrictions, including
   orders to sell sufficient voting stock to become adequately capitalized,
   requirements to reduce total assets, and cessation of receipt of deposits
   from correspondent banks.  "Critically undercapitalized" institutions may
   not, beginning 60 days after becoming critically undercapitalized, make
   any payment of principal or interest on their subordinated debt.  The Bank
   currently exceeds the regulatory definitions of a well capitalized
   financial institution.

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

   The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
   (the "Riegle Act"), among other things, permits bank holding companies to
   acquire banks in any state effective September 29, 1995.  The Riegle Act
   contains certain exceptions relative to acquisitions.  For example, a
   holding company may not acquire a bank that has not been in existence for
   less than a minimum period established by the home state; however, the
   minimum period cannot exceed five years.  The Riegle Act makes a
   distinction between interstate banking and interstate branching.  Under
   the Riegle Act, banks can merge with banks in another state beginning June
   1, 1997, unless a state has adopted a law preventing interstate branching. 
   Under terms of the BHCA, an acquiring bank may not control more than 10
   percent of federal or 30 percent of state total deposits of insured
   depository institutions.  Wisconsin law requires approval by the
   Department for all acquisitions of Wisconsin banks, whether by an in-state
   or out-of-state purchaser and requires, in an interstate acquisition, that
   the acquired bank must have been in existence for at least five years.

   Employees

   The Company and the Bank together employ fourteen full-time and six part-
   time employees, including three personal bankers, an investment officer, a
   loan review officer, four operations specialists, five customer service
   representatives, a cashier, a business calling representative, a
   commercial loan officer, a senior officer in charge of retail banking, a
   computer specialist and the Bank president.

   Directors and Executive Officers

   The directors of the Company and the Bank as of March 3, 1997 were as
   follows:

    Name of Director                    Principal Occupation

    Paul E. Menzel          President and Chief Executive Officer of
                            the Company and the Bank

    William R. Hayes        Vice President and Treasurer of the Company
                            and Vice President, Cashier/Controller of
                            the Bank

    Christine V. Lake       Vice President and Secretary of the Company
                            and Executive Vice President and Secretary
                            of the Bank

    Charles N. Ackley       Owner of C.N.A. Associates, Inc., a company
                            engaged in the sales representation of
                            manufacturers

    Gregory J. Hoesly       President of L.L. Richards Machinery Co.,
                            Inc., a machine tool dealer

    John E. Horning         Chairman of the Board and Chief Executive
                            Officer of Wauwatosa Realty Company, 
                            Wisconsin Mortgage Corporation, and
                            Heritage Title Service

    William F. Krause, Jr.  President of Krause Funeral Home, Inc.

    Charles G. Niebler      President of Eye Care Vision Centers

    Frederick I. Olson      Retired Professor of History at the
                            University of Wisconsin-Milwaukee and
                            former Associate Dean of the University's
                            College of Letters

    James E. Renner         Owner of Renner Oldsmobile and Renner
                            Mitsubishi

    Richard A. Streff       Chairman of the Board of Streff
                            Advertising, Inc.

    William J. Tetzlaff     President of Tetzlaff Associates, Inc., a
                            consulting services company; President of
                            Advanced Plastics Technology, Inc., a
                            distribution company; Vice President of
                            Executive Travel Services, Ltd., a travel
                            agency

   The executive officers of the Company and the Bank as of March 3, 1997
   were as follows:

    Name of Executive Officer                   Position

    Paul E. Menzel               President and Chief Executive Officer
                                 of the Company and the Bank

    William R. Hayes             Vice President and Treasurer of the
                                 Company and Vice President,
                                 Cashier/Controller of the Bank

    Christine V. Lake            Vice President and Secretary of the
                                 Company and Executive Vice President
                                 and Secretary of the Bank

   Item 2.   Description of Property

   The Company has leased space at 13925 West North Avenue, Brookfield,
   Wisconsin for use as the Bank's main office and the Company's
   headquarters.  The lease has a five-year term with renewal and purchase
   options.  The Bank's main office occupies approximately 5,000 square feet
   of a larger shopping mall which houses various retail establishments.  

   The Bank opened its drive-up branch and phone center on January 2, 1997 in
   a renovated one-room schoolhouse.  The branch is located in a turn-of-the-
   century schoolhouse building, which has been renovated to house a branch
   banking facility and a telephone banking center with state-of-the-art
   technology.  The Company owns this facility, which is located on
   approximately one acre of land at 15565 W. North Avenue, Brookfield,
   Wisconsin and has approximately 1,057 square feet of space.  It provides
   four drive-up kiosks and room for one drive-up automated teller machine. 
   In addition to the drive-up facilities, the branch houses the Company's
   telephone banking center, which enhances the Bank's ability to sell bank
   products through alternative delivery means.

   Item 3.   Legal Proceedings

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

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

   There were no matters submitted to the shareholders of the Company for a
   vote during the fourth quarter of the year ended December 31, 1996.

   Part II

   Item 5.   Market for Common Equity and Related Stockholder Matters

   The Company's common stock has traded in the over-the-counter market since
   the completion of the company's initial public offering in November 1995. 
   High and low bid prices, as reported on the OTC Bulletin Board, for the
   period from November 27, 1995 (the date the Company's common stock began
   trading) to December 31, 1996 are as follows:

                         1995           High          Low

                   1st Quarter           N/A          N/A

                   2nd Quarter           N/A          N/A

                   3rd Quarter           N/A          N/A

                   4th Quarter         $10.25        $9.75

                          1996          High         Low

                    1st Quarter        $10.75       $10.05

                    2nd Quarter         11.50        10.438

                    3rd Quarter         12.375       11.25

                    4th Quarter         12.875       12.00

   These quotations reflect inter-dealer prices, without retail mark-up,
   mark-down or commission and may not represent actual transactions.  On
   December 31, 1996, there were approximately 44 holders of record of the
   Company's common stock.

   No cash dividends have been declared to date on the Company's common
   stock.  The Company expects that all 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 be dependent upon dividends paid to it by the
   Bank for funds to pay dividends on the common stock.  

   Wisconsin banking laws restrict the payment of cash dividends by state
   banks by providing that (i) dividends may be paid only out of a bank's
   undivided profits, and (ii) prior consent of the Department is required
   for the payment of a dividend which exceeds current year income if
   dividends declared have exceeded net profits in either of the two
   immediately preceding years.  The various bank regulatory agencies have
   authority to prohibit a bank regulated by them from engaging in an unsafe
   or unsound practice; the payment of a dividend by a bank could, depending
   upon the circumstances, be considered such an unsafe or unsound practice. 
   In the event that (i) the FDIC or the Department should increase minimum
   required levels of capital; (ii) the total assets of the Bank increase
   significantly; (iii) the income of the Bank decreases significantly; or
   (iv) any combination of the foregoing occurs, then the Board of Directors
   of the Bank may decide or be required by the FDIC or the Department to
   retain a greater portion of the Bank's earnings to achieve or maintain the
   required capital.  In addition to the foregoing, Wisconsin corporations
   such as the Company are prohibited by the Wisconsin Business Corporation
   Law from paying dividends while they are insolvent or if the payment of
   dividends would render them unable to pay debts as they come due in the
   usual course of business.

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

   Plan of Operation

   Market Area.  The Company selected its market location because the area
   has a demographic profile with a large number of people that management
   believes are most likely to become long-term, high-yield customers.

   The Bank's main office is in Brookfield, Wisconsin and its primary market
   area is divided almost equally between Elm Grove, Brookfield and
   Wauwatosa, Wisconsin.  Per capita income and median home values in 1990
   were almost three times the Wisconsin average in Elm Grove, almost two
   times the state average in Brookfield, and almost one and a half times the
   state average in Wauwatosa.  The Bank's primary market area also has a
   mature population.  As of 1990, the percentage of residents 65 years or
   older was 12.6% in Brookfield, 19.8% in Wauwatosa and 20.6% in Elm Grove,
   compared to an overall national average of 12.6% of the total population.

   Marketing and Sales.  Over the next twelve months, the Company and the
   Bank will continue to implement the Bank's business strategy of focusing
   on providing banking services to targeted individuals and businesses
   within the Bank's market area.  The Bank plans to implement this strategy
   by emphasizing its local management, by providing a high level of personal
   service to individual customers and by developing and employing technology
   which will enable Bank personnel to provide individualized service to
   customers on a cost-effective basis.

   Since its inception, the Bank has opened over 2,900 consumer and business
   deposit and loan accounts from over 1,200 customers. The demographic make-
   up of those 1,200 customers mirrors the demographic make-up of what
   national studies indicate to be the most profitable household
   relationships available to banks.

   The Bank's marketing efforts in developing these relationships were
   primarily through direct mail, telephone solicitations and referrals. 
   Throughout the year, the Bank sent over 24,000 pieces of direct mail to
   persons residing in its primary market area and made over 4,000 personal
   contacts with customers and prospects.  In addition to direct marketing,
   the Bank gained a significant number of new relationships through customer
   referrals.

   Once an initial customer relationship is established with the Bank, the
   Bank's sales force then pursues expansion of that relationship through the
   sale of additional products and services. The Bank's salespeople manage a
   portfolio of assigned clients and prospects, and are measured by the
   overall profitability of those relationships.

   Recognizing that the future value of the Company's franchise is dependent
   upon the quality of the Bank's customer base, the Bank invested heavily in
   1996 in attracting long-term, high-yield customers. The initial investment
   of acquiring relationships is reflected in the financial performance of
   the Company in 1996.  Industry statistics show that retaining and
   expanding relationships with the right customers is less costly, and
   therefore more profitable, for financial institutions.  The Bank believes
   it has attracted a customer base that represents potentially high-yield
   relationships and is working aggressively to prioritize and expand those
   relationships.

   In part through frequent contacts by the Bank's salesforce, the Bank has
   succeeded in retaining 95% of its customer relationships since the Bank
   commenced operations.   During 1996, the average household deposit size
   has grown from $20,000 to $30,000 and average loan size has grown from
   $56,000 to $84,000.

   In an effort to expand customer satisfaction and profitability, the
   Company has developed and implemented a database to track customer
   financial goals, needs and banking preferences.  This database allows each
   employee to provide individualized service and product offerings, and to
   respond promptly to service requests. 

   Commercial loan activity at the Bank expanded rapidly in the third and
   fourth quarters of 1996 with a significant percentage of assets employed
   in business lines and/or loans. The Bank continues to receive loan
   referrals from its business clients.

   Technology supports every aspect of the Company's business. The Company
   has an ongoing commitment to invest in state-of-the-art systems that
   enables the Bank to provide better service to our customers.  On June 7,
   1996, the Bank was the first bank in Wisconsin to offer full-service PC
   banking, called RidgeStone Connect .  This on-line service enables the
   Bank's customers to access their accounts in  real time, pay bills,
   transfer funds, access lines of credit, exchange e-mail and view product
   and rate information.  About 18% of the Bank's consumer customers are
   enrolled in RidgeStone Connect .  The Bank plans to introduce a business
   version of this service in the second quarter of 1997.

   Management's Discussion and Analysis

   Results of Operations.  During the fiscal year ended December 31, 1996,
   the Company, as expected, reported a net loss of $1,271,070 or $1.52 per
   share, which was caused primarily by certain non-recurring expenses, the
   Company's early stage of development and the attraction strategies
   outlined earlier.  Prior year comparisons are not meaningful because the
   Bank commenced operations on December 7, 1995, and, therefore, had only
   3 weeks of operations during the prior fiscal year.

   The Company's return on average equity and return on average assets during
   fiscal 1996 is as follows:

        Return on average assets                -4.81%
        Return on average equity                -19.97%
        Dividend payout ratio on common stock   None
        Average equity to average assets        24.06%

   Net Interest Income.  Total interest income during the period ended
   December 31, 1996 increased from  $149,186  at the end of the first
   quarter to  $1,583,724 at the end of the fourth quarter.  The increase was
   due primarily to greater average outstanding balances in interest bearing
   assets, primarily loans.  Net interest income consisted primarily of
   interest on loans, federal funds sold and interest-bearing deposits in
   banks.  Management anticipates that interest income will continue to grow
   as the Bank's loan portfolio and other assets increase.  

   The following table summarizes the distribution of the Company's loans at
   December 31, 1996 and December 31, 1995.

                                              December 31,
                                                       
                                        1996                1995
                                                       
     Commercial                      $ 6,967,836            389,908
     Real Estate:
        Construction                   2,565,144              6,304
        Commercial                     4,632,272            300,000
        Residential                    4,634,990             25,000
     Installment and Consumer            585,855              8,558
                                      ----------           --------
               Total Loans           $19,386,097            729,770
                                      ==========           ========


   Interest expense increased to $1,025,524 at December 31, 1996 from $65,105
   at March 31, 1996 and represents interest paid to depositors.  The
   increase in expense was primarily due to greater average outstanding
   balances in interest bearing liabilities, primarily deposits.

   Set forth below is a summary of the Company's average deposits and
   interest paid on such deposits during fiscal 1996 and fiscal 1995.


                                                 Rate                 Rate
                                     1996        Paid      1995       Paid

   Non-interest bearing demand    $2,086,618         --   $20,088        ---
   Interest-bearing demand           444,072      1.76%     7,720      1.45%
   Money Market demand             8,316,058      5.69%    68,032      4.95%
   Savings deposits                  326,895      2.89%     1,594      2.29%
   Time deposits                   8,763,340      6.11%     9,605      5.55%
                                   ---------     -----    -------      -----
        Total Deposits            $19,936,983     5.75%  $107,039      3.79%
                                   =========     =====    =======      =====



   Set forth below is a schedule of the maturities for the Company's time
   deposits of $100,000 or more.

                        3 Months   Over 3 mos.  Over 6 mos.
                         or less   thru 6 mos.  thru 12 mos.  Over 12 mos.
   Certificates of
     Deposit          $ 1,034,721     611,021       860,048       206,519 
   Other Time
     Deposits                   0           0             0             0 
                         --------     -------       -------       --------
                      $ 1,034,721     611,021       860,048       206,519 
                        =========      =======      =======       ======= 

   Net interest income rose from $84,081 as of March 31, 1996 to $558,200 as
   of December 31, 1996.  Net interest income represents the difference
   between interest income and interest expense.  The following table sets
   forth an analysis of the interest rates and interest differential of the
   Company's earning assets, which earn interest income, and interest bearing
   liabilities, which accrue interest expense.

                                                        1996
                                        Average       Related      Yield
                                         Balance      Interest      Rate
     Earning assets:                                  
        Time deposits in bank       $     680,715       37,226      5.47%
        Investments (taxable)           5,171,489      289,707      5.60%
        Investments (nontaxable)                0            0       
        Funds sold                     11,642,626      614,803      5.28%
        Loans (a)(b)                    6,833,651      641,988      9.39%
                                       ----------    ---------      ---- 
             Total earning assets   $  24,328,480    1,583,724      6.51%
                                       ==========    =========      ==== 
     Interest bearing liabilities:               
        NOW accounts                $     444,072        7,818      1.76%
        Savings accounts                  326,895        9,460      2.89%
        Money Market deposit
          accounts                      8,316,058      472,769      5.69%
        Time deposits                   8,763,340      535,477      6.11%
                                       ----------    ---------      ---- 
          Total interest bearing
            liabilities             $  17,850,366    1,025,524      5.75%
                                       ==========    =========      ==== 
                                                 
     Interest spread                               $   558,200      0.76%
                                                       =======      ==== 
     Interest margin                               $   558,200      2.29%
                                                       =======      ====

   (a)  No loans have been placed on nonaccrual.

   (b)  Loan interest income includes net loan fees.


   Provision for Loan Losses.  The provision for loan losses is based on
   management's evaluation of factors such as the local and national economy
   and the risk associated with the loans in the portfolio.  The Company's
   reserve for loan losses was $334,740 as of December 31, 1996.  Of that
   provision, $325,740 was charged against earnings in 1996.  As of
   December 31, 1996, the Company's loan loss reserve was 1.73% of
   outstanding loans, which compares favorably to the average loan loss
   reserve within the Company's industry peer group which was 1.40% as of
   December 31, 1996.  Set forth below is an analysis of the Company's
   provision for loan losses.

                                            1996         1995
      
   Beginning loan loss reserve              9,000            0 

   Charge-offs:                                    
        Commercial                              0            0 
     Real Estate:                                  
        Construction                            0            0 
        Commercial                              0            0 
        Other Mortgages                         0            0 
        Installment-consumer                    0            0 
   Recoveries:
        Commercial                              0            0 
     Real Estate:
        Construction                            0            0 
        Commercial                              0            0 
        Other Mortgages                         0            0 
        Installment-consumer                    0            0 
                                         --------     -------- 
   Net Charge-offs                              0            0 

   Additions charged to
    operations                            325,740        9,000 
                                         --------     -------- 
   Balance at end of period               334,740        9,000 
                                         ========     ======== 

   For each year ending December 31, the determination of the additions to
   loan loss reserve charged to operating expenses was based on an evaluation
   of the loan portfolio, current domestic economic conditions, and other
   factors.

   Management believes that the majority of risk in the Bank's loan portfolio
   lies in commercial loans, which include commercial real estate and
   construction loans.  Accordingly, the Bank has allocated $80,474 or 24% of
   the reserve for loan losses to these loans, which comprise about 60% of
   the loan portfolio.  The Bank has allocated $4,635 or about 1% of the
   reserve for loan losses to residential mortgages, which comprise about 24%
   of the loan portfolio.  Consumer loans comprise about 3% of the loan
   portfolio, and $5,899 or about 2% of the reserve for loan losses is
   allocated to consumer loans.  The Bank has allocated $4,366 of the reserve
   for loan losses to unfunded loan commitments, which total approximately
   $8,732,000.  The balance of the reserve for loan losses or $239,366 is
   unallocated.

   There were no loan charge-offs or recoveries or any impaired loans during
   1996.  The Bank evaluated the adequacy of the reserve for loan losses
   based on an analysis of specific problem loans, as well as on an aggregate
   basis. The reserve for loan losses is maintained at a level management
   considers adequate to provide for potential future losses.  The provision
   for loan losses accounted for 25.6% of the Company's net loss for the
   fiscal year ended December 31, 1996.  The following table summarizes the
   Company's nonperforming loans as of December 31, 1996 and December 31,
   1995.

                                      December 31, 
                                    1996         1995

   Nonaccrual Loans                 0.00          0.00 
   Past Due 90 Days+ (1)            0.00          0.00 
   Restructured Loans (2)           0.00          0.00 

   (1) Loans are generally placed in nonaccrual when contractually
       past due 90 days or more.
   (2) There were no restructured loans for each of the presented
       years.

   Each of the loans which becomes contractually past due 90 days or more as
   to principal or interest payments will be reviewed by management and
   reported to the Loan Committee of the Board of Directors of the Bank. 
   These loans would then be placed on a nonaccrual basis.

   As of December 31, 1996, management, to the best of its knowledge, is not
   aware of any significant loans, group of loans or segments of the loan
   portfolio not included above, where there are serious doubts as the
   ability of the borrowers to comply with the present loan payment terms.

   Non-Interest Income and Expense.  Other operating income was  $52,855  as
   of December 31, 1996 and consisted of service charges on deposit accounts,
   merchant credit card processing services,  loan fees, and commission
   income generated by the investment center.  The Bank also realized a gain
   of $22,500 from the sale of securities.

   Operating expenses consisted primarily of salaries and benefits, occupancy
   and equipment expenses, data processing fees, marketing expenses,
   professional fees and other expenses.  For 1996, payroll expense amounted
   to $719,544.  Of that number, $16,650 was the employer contribution to the
   Company's 401(k) program.  Occupancy expenses for the year amounted to
   $130,901. 

   In fiscal 1996, the Bank's FDIC premiums were assessed at $500 a quarter
   as required by federal law.

   Financial Condition. The Bank reported total assets of $41,805,534 as of
   December 31, 1996, an increase of $31,378,211 from December 31, 1995. 
   Loans prior to the allowance for loan losses increased from $729,770 to
   $19,386,097 or an increase of $18,656,327.  In addition to the $19,386,097
   in loans outstanding that the Bank reported on December 31, 1996, the Bank
   had unfunded loan commitments of $8,732,000.  Loan demand continues to
   increase primarily through referrals and is augmented by an aggressive
   calling campaign on commercial customers.

   Cash and due from banks was $1,494,243 at December 31, 1996, and
   represents cash maintained at the Bank and funds that the Bank and the
   Company have deposited in other financial institutions.  The Bank reported
   $13,259,000 of Federal Funds sold on December 31, 1996, which are inter-
   bank funds with daily liquidity.  The Bank's loan-to-deposit funds ratio
   on December 31, 1996 was 54%.  The Bank did not have any short-term
   borrowings during fiscal 1995 or fiscal 1996.

   The Bank increased its portfolio of investment securities during 1996.  A
   portion of these securities were purchased with the intent to hold the
   securities until they mature.  Another portion of the securities was
   placed in the available for sale category as the securities may be
   liquidated to provide cash for operating or financing purposes. The
   following table summarizes those securities:

   <TABLE>
   <CAPTION>
                                                            After 1      After 5
                                             1 Year or   year through years through
                                               less         5 years      10 years       Total

   <S>                                          <C>          <C>            <C>         <C>
   Available for Sale Securities:
       U. S. Treasury and other U. S.
          Gov't agencies and
          corporations                          $     0      $489,793       $     0     $489,793 
       Weighted average yield                      0.00%         6.27%         0.00%        6.27%
       Corporate Securities                     536,288             0             0      536,288 
       Weighted average yield                      0.86%         0.00%         0.00%        0.86%
            TOTAL AVAILABLE FOR
              SALE                              536,288       489,793             0     1,026,081
                                                ========      ========      ========    =========
            Weighted Avg. Yield of Total           0.86%         6.27%         0.00%        3.44%
                                                ========      ========      ========    =========
   Held to Maturity Securities:
       U. S. Treasury and other U. S.
         Gov't agencies and corporations       $249,766     $4,005,840     $750,000    $5,005,606
       Weighted average yield                      6.08%         6.59%         7.00%        6.62%
            TOTAL HELD TO
               MATURITY                         249,766      4,005,840      750,000     5,005,606
                                                ========     =========      ========   ==========
            Weighted Avg. Yield of Total           6.08%         6.59%         7.00%        6.62%
       TOTAL                                    786,054      4,495,633      750,000     6,031,687
                                                ========    ==========      ========   ==========
       Weighted Avg. Yield of Total                2.52%         6.55%         7.00%        6.08%
                                                ========    ==========      ========   ==========

   </TABLE>

   Amortized costs and fair values of available for sale securities are
   discussed in Notes C and D, respectively, to the Company's Consolidated
   Financial Statements.

   The Company's office building, leasehold improvements and equipment less
   accumulated depreciation and amortization increased from $1,056,738 to
   $1,511,222.  This increase was primarily due to the renovation of the new
   drive-up facility and phone center.

   The Bank experienced significant deposit growth during fiscal 1996.  Total
   deposits increased to $35,668,660 as of December 31, 1996 from $3,308,531
   on December 31, 1995.  Every category of deposits increased during each
   quarter of 1996.

   Accrued interest payables and other liabilities of $268,869 at December
   31, 1996 were made up of accrued interest payable on deposit accounts and
   accounts payable.

   Capital Resources.  The Bank's most recent notification from the
   regulatory agencies categorized the Bank as well-capitalized under the
   regulatory framework for prompt corrective action.  To be categorized as
   well-capitalized, the Bank must maintain the minimum total risk-based,
   Tier I risk-based, and leverage ratios as set forth in Item 1.
   "Description of Business--Supervision and Regulation."  There have been no
   conditions or events since these notifications that management believes
   will change the Bank's classification.  See Note Q to the Company's
   Consolidated Financial Statements.

   The Company has made a commitment to the Federal Reserve Bank of Chicago
   that it will not raise any debt until December 7, 2000, without prior
   approval from the Federal Reserve System.

   The Bank has committed to the FDIC that it will maintain a Tier I capital
   to total asset ratio of not less than 8% for its first three years of
   operations starting December 7, 1995.

   Asset/Liability Management.  The principal function of asset/liability
   management is to manage the balance sheet mix, maturities, repricing
   characteristics and pricing components to provide an adequate and stable
   net interest margin with an acceptable level of risk over time and through
   interest rate cycles.

   Interest-sensitive assets and liabilities are those that are subject to
   repricing within a specific relevant time horizon.  The Company measures
   interest-sensitive assets and liabilities, and their relationship with
   each other at terms of immediate, quarterly intervals up to one year, and
   over one year.

   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.

             The following table summarizes the maturities and sensitivity to
   changes in interest rates of the Company's loan portfolio at December 31,
   1996.

   <TABLE>
   <CAPTION>
                                              Loan Maturities                        Amount over one year with
                                                                                             Floating or 
                                             After 1                                Pre-         adj.
                                 1 Year     Through 5    After 5                 determined    interest     Total
                                 or less       yrs        years       Total         rates       rates
                                                                                                         
   <S>                           <C>         <C>         <C>         <C>           <C>        <C>          <C>
   December 31,                             
      1996
     Commercial                  6,718,000   4,844,000      38,000   11,600,000    4,246,000     386,000   4,632,000
     Real estate-
       construction              2,179,000     386,000            0   2,565,000            0           0           0
                                 ---------   ---------   ----------  ----------   ----------  ----------   ---------
   TOTAL                         8,897,000   5,230,000       38,000  14,165,000    4,246,000     386,000   4,632,000
                                 =========   =========   ==========  ==========   ==========  ==========   =========
   </TABLE>


   The Company's strategy with respect to asset/liability management is to
   maximize net interest income while limiting exposure to potential downward
   movement.  This strategy is implemented by the Bank's management, which
   takes action based upon its analysis of the Bank's present positioning,
   its desired future positioning, economic forecasts, and its goals.  The
   Company's goal is to maintain a cumulative GAP of +or- 25% of assets at
   the 0 to 359 day time frame.

   The following table summarizes the repricing opportunities as of December
   31, 1996, for each major category of interest-bearing asset and interest-
   bearing liability:

                         0-89     90-179     180-359     +360
    (Millions)           Days      Days       Days       Days     Total

    Investments         $13.3        0.0         0.2      4.5     18.0
    Loans               $ 9.8        0.7         1.4      6.7     18.6
    Total Rate
     Sensitive Assets   $23.1        0.7         1.6     11.2     36.6
    Rate Sensitive
     Liabilities (1)    $23.8        3.4         3.5      1.6     32.3
    GAP                  (0.7)      (2.7)       (1.9)     9.6
    Cumulative GAP       (0.7)      (3.4)       (5.3)     4.3
    GAP/Rate
     Sensitive Assets      -3%       -14%        -21%      12%
                 

        (1)  Savings, NOW, and Money Market Demand Deposits are considered as
   immediately repricable.

   Liquidity.  For banks, liquidity generally represents the ability to meet
   withdrawals from deposits and the funding of loans.  The assets that
   provide liquidity are cash, federal funds sold and short-term loans and
   securities.  Liquidity needs are influenced by economic conditions,
   interest rates and competition.  Management believes that current
   liquidity levels are sufficient to meet future demands.  Management
   believes the current liquidity position of the Bank allows it opportunity
   to expand the Bank's loan portfolio and account for any deposit
   withdrawals which may occur.  As of December 31, 1996, the Bank had
   $15,989,693 available to meet future demand.

   Impact of Inflation and Changing Prices.  Unlike most industries,
   essentially all of the assets and liabilities of a bank are monetary in
   nature.  As such, the level of prices has less effect than do interest
   rates.  Prices and interest rates do not always move in the same
   direction.  The Company's consolidated financial statements and notes are
   generally prepared in terms of historical dollars without considering the
   changes in the relative purchasing power of money over time due to
   inflation.

       DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
                       Average Balance Sheet

                                                    1996
                                       
   Cash and due from banks                  $        900,071

   Federal funds sold and securities
    purchased under agreement to
    resell                                        11,642,626
   Interest-bearing deposits in other
    banks                                            680,715
   Investment securities:              
       U.S. Treasury agency and other              5,171,489
       Unrealized Gain (Loss) on
        securities                     

   Loans:
       Real estate mortgages                         709,204
       Consumer-net                                1,901,982
       Commercial and other                        4,264,643
                                                  ----------
            Total                                  6,875,829
       Less allowance for loan losses                 42,178
                                                  ----------
            Net loans                              6,833,651
   Fixed assets                                    1,087,955
   Other assets                                      133,839
                                                  ----------
            Total assets                    $     26,450,345
                                                  ==========
   Interest-bearing deposits:
       NOW accounts                         $        444,072
       Savings accounts                              326,895
       Money Market deposit accounts               8,316,058
       Time deposits                               8,763,340
                                                  ----------
            Total interest-bearing
              deposits                            17,850,366

       Demand deposits                             2,086,618
                                                  ----------
             Total deposits                       19,936,983
   Other liabilities                                 148,611
                                                  ----------
             Total liabilities                    20,085,594
   Equity capital                                  6,364,750
                                                  ----------

             Total liabilities and
                capital                     $     26,450,345
                                                  ==========


   Item 7.   Financial Statements

                                                                         Page

   Independent Auditor's Report  . . . . . . . . . . . . . . . . . . . . . 25

   Consolidated Balance Sheet  . . . . . . . . . . . . . . . . . . . . . . 26

   Consolidated Statement of Income  . . . . . . . . . . . . . . . . . . . 27

   Consolidated Statement of Changes in Stockholders' Equity . . . . . . . 28

   Consolidated Statement of Cash Flows  . . . . . . . . . . . . . . . . . 29

   Notes to Consolidated Financial Statements  . . . . . . . . . . . . . . 30

   <PAGE>

                                                      CONLEY McDONALD
                                                Certified Public Accountants
                                                        & Consultants

 
                         INDEPENDENT AUDITOR'S REPORT


   Board of Directors
   RidgeStone Financial Services, Inc.
   Brookfield, Wisconsin

   We have audited the accompanying consolidated balance sheets of
   RidgeStone Financial Services, Inc. as of December 31, 1996 and
   1995, and the related consolidated statements of income, changes
   in stockholders' equity, and cash flows for the year ended
   December 31, 1996 and period from March 31, 1995 through
   December 31, 1995. These consolidated financial statements are
   the responsibility of the Company's management.  Our
   responsibility is to express an opinion on these financial
   statements based on our audits.

   We conducted our audits in accordance with generally accepted
   auditing standards. Those standards require that we plan and
   perform the audits to obtain reasonable assurance about whether
   the consolidated financial statements are free of material
   misstatement. An audit includes examining, on a test basis,
   evidence supporting the amounts and disclosures in the
   consolidated financial statements. An audit also includes
   assessing the accounting principles used and significant
   estimates made by management, as well as evaluating the overall
   consolidated 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 RidgeStone Financial Services, Inc. as of December
   31, 1996 and 1995, and the results of its operations and its
   cash flows for the year ended December 31, 1996 and period from
   March 31, 1995 through December 31, 1995, in conformity with
   generally accepted accounting principles.


                                                                   
                                  CONLEY McDONALD LLP


   Brookfield, Wisconsin
   January 24, 1997

   <PAGE>
   RIDGESTONE FINANCIAL SERVICES, INC.

   CONSOLIDATED BALANCE SHEETS
   December 31, 1996 and 1995 

   ASSETS                                   1996                1995  

      Cash and due from banks (Note B)     $  1,494,243        $   527,132 

      Federal funds sold                     13,259,000          5,627,000 

      Interest-bearing deposits in banks        184,637          2,444,031 
                                             ----------          ---------
            Cash and cash equivalents        14,937,880          8,598,163 

      Available for sale securities
         stated at fair value (Note C)        1,051,813               -
      Held to maturity securities, fair
         value of $5,041,826 and $-0- in
         1996 and 1995 respectively
         (Note D)                             5,005,606               -
      Loans, less allowance for loan
         losses of $334,740 and $9,000
         in 1996 and 1995 respectively
         (Notes E, F and N)                  19,051,357            720,770 

      Office building, leasehold
         improvements and equipment,
         net (Note G)                         1,511,222          1,056,738 

      Accrued interest receivable
         and other assets                       247,656             51,652 
                                            -----------         ----------
            Total assets                   $ 41,805,534        $10,427,323 
                                            ===========         ==========

   LIABILITIES & STOCKHOLDERS' EQUITY 

   Liabilities: 
      Deposits: (Note H) 
         Demand                            $  3,365,496        $ 1,492,249 
         Savings and NOW accounts            17,282,081               -
         Other Time                          15,021,083          1,816,282 
                                            -----------         ----------
            Total deposits                   35,668,660          3,308,531

      Accrued interest payable and
         other liabilities                      268,869              5,449 
                                            -----------         ----------
            Total liabilities                35,937,529          3,313,980 
                                            -----------         ----------

   Commitments and contingencies
      (Notes L, M and T) 

   Stockholders' equity: (Note O)

      Common stock, no par value;
         1,000,000 shares authorized, 
         834,340 shares issued and
         outstanding (Note O)                 7,721,399          7,721,399 

      Retained deficit (Notes P,
         Q and T)                            (1,879,126)          (608,056) 
                                            -----------         ----------
                                              5,842,273          7,113,343 
      Unrealized gain on available
         for sale securities, net                25,732              -
                                            -----------         ----------
            Total stockholders' equity        5,868,005          7,113,343 
                                            -----------         ----------
            Total liabilities and
               stockholders' equity        $ 41,805,534        $10,427,323 
                                            ===========         ==========

   See Notes to Consolidated Financial Statements.

   <PAGE>
   RIDGESTONE FINANCIAL SERVICES, INC.

   CONSOLIDATED STATEMENTS OF INCOME
   Year ended December 31, 1996 and Period from
   March 31, 1995 through December 31, 1995 

                                               1996                1995  

   Interest income:
      Interest and fees on loans
         (Note E)                          $    641,988        $     4,927 
      Interest on securities - taxable          289,707              -
      Interest on Federal funds                 614,803             20,307 
      Interest on deposits in banks              37,226              6,156 
                                            -----------         ----------
            Total interest income             1,583,724             31,390 
                                            -----------         ----------

   Interest expense - interest on
      deposits (Note I)                       1,025,524              4,055 

   Net interest income before
      provision for loan losses                 558,200             27,335 
   Provision for loan losses (Note F)           325,740              9,000 
                                            -----------         ----------
            Net interest income after
              provision for loan losses         232,460             18,335 
                                            -----------         ----------

   Other operating income: 
      Service charges on deposit accounts         7,829                335 
      Gain on sale of securities, net
         (Note C)                                22,500                -
      Other                                      22,526                -
                                            -----------         ----------
            Total other operating income         52,855                335 

   Other operating expenses: 
      Salaries and employee benefits
         (Note K)                               719,544             39,220 
      Occupancy expenses (Notes G and L)        130,901             10,375 
      Equipment expenses (Note G)               167,700                -
      Data processing fees                       80,632                -
      Other                                     456,674              1,682 
      Pre-opening expenses (Notes
         R and S)                                 -                575,449 
                                            -----------         ----------
            Total other operating
              expenses                        1,555,451            626,726 
                                            -----------         ----------

   Loss before income taxes                  (1,270,136)          (608,056) 
   Income taxes (Note J)                            934                -
                                            -----------         ----------

            Net loss                       $ (1,271,070)       $  (608,056) 
                                            ===========         ==========
            Loss per share of
              common stock                 $      (1.52)       $     (0.73) 
                                            ===========         ==========
            Weighted average shares
              outstanding                       834,340            834,340 
                                            ===========         ==========

   See Notes to Consolidated Financial Statements.

   <PAGE>

   RIDGESTONE FINANCIAL SERVICES, INC.

   CONSOLIDATED STATEMENTS OF CHANGES
       IN STOCKHOLDERS' EQUITY

   Year ended December 31, 1996 and Period from
       March 31, 1995 through December 31, 1995

                                                    Unrealized
                                                      gain on         Total
                                                     available       stock-
                          Common       Retained      for sale       holders'
                           stock        deficit     securities       equity

   Balance, March 31,
    1995                 $      -     $      -      $      -      $      -  

      Proceeds from sale
       of 834,340 shares
       of common stock,
       net of stock
       offering costs
       (Note O)           7,721,399          -             -       7,721,399
      Net loss                  -       (608,056)          -        (608,056)
                          ---------    ---------      --------     ---------

   Balance, December 31,
    1995                  7,721,399     (608,056)          -       7,113,343
      Net loss                  -     (1,271,070)          -      (1,271,070)
      Change in
       unrealized
       gain on avail-
       able for sale
       securities, net          -            -          25,732        25,732
                          ---------    ---------      --------     ---------
   Balance, December 31,
    1996                $ 7,721,399 $ (1,879,126)    $  25,732    $5,868,005
                          =========    =========      ========     =========


   See Notes to Consolidated Financial Statements.

   <PAGE>
   RIDGESTONE FINANCIAL SERVICES, INC.

   CONSOLIDATED STATEMENTS OF CASH FLOWS
   Year ended December 31, 1996 and Period from
      March 31, 1995 through December 31, 1995

                                                     1996           1995  

   Cash flows from operating activities: 

      Net loss                                 $ (1,271,070)    $ (608,056)
      Adjustments to reconcile net
       loss to net cash used in
       operating activities: 
         Depreciation                               182,032         96,689
         Provision for loan losses                  325,740          9,000
         Gain on sale of investment
          securities                                (22,500)          -   
         Amortization of organizational
          costs                                       2,275            519
         (Increase) decrease in assets:
            Interest receivable                    (200,631)        (2,483)
            Other assets                              2,352        (49,688)
         Increase in liabilities:
            Accrued interest                        250,002          3,921
            Other liabilities                        13,418          1,528
                                                 ----------      ---------
               Total adjustments                    552,688         59,486
                                                 ----------      ---------
               Net cash used in operating
                activities                         (718,382)      (548,570)
                                                 ----------      ---------

   Cash flows from investing activities: 
      Proceeds from sales of available for
         sale securities                          9,335,817           -   
      Purchase of available for sale
         securities                             (10,339,643)          -   
      Proceeds from maturities of held to
         maturity securities                        500,000           -   
      Purchase of held to maturity
         securities                              (5,505,361)          -   
      Purchase of office building,
         leasehold improvements and
         equipment                                 (636,516)    (1,153,427)
      Net increase in loans                     (18,656,327)      (729,770)
                                                 ----------      ---------
            Net cash used in investing
               activities:                      (25,302,030)    (1,883,197)
                                                 ----------      ---------

   Cash flows from financing activities:
      Net increase in deposits                   32,360,129      3,308,531
      Proceeds from the issuance of
         common stock, net                             -         7,721,399
      Proceeds from notes payable                      -           414,900
      Payment of notes payable                         -          (414,900)
                                                 ----------      ---------
            Net cash provided by financing
               activities                        32,360,129     11,029,930
                                                 ----------      ---------
            Increase in cash and cash
               equivalents                        6,339,717      8,598,163

   Cash and cash equivalents: 
      Beginning                                   8,598,163           -   
                                                 ----------      ---------
      Ending                                   $ 14,937,880    $ 8,598,163
                                                 ==========      =========
   Supplemental disclosures of cash
      flow information: 
      Cash paid for:
         Interest                              $    775,522     $    5,212
                                                 ==========      =========
         Income taxes                          $        934     $     -   
                                                 ==========      =========
   Supplemental schedule of non-cash
    investing and financing activities: 
      Net change in unrealized gain on
         available for sale securities          $    25,732     $     -   
                                                 ==========      =========


   See Notes to Consolidated Financial Statements.

   <PAGE>
   RIDGESTONE FINANCIAL SERVICES, INC.

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   Note A.  Summary of Significant Accounting Policies

   1.   Consolidation:

   The consolidated financial statements of RidgeStone Financial
   Services, Inc. include the accounts of its wholly owned
   subsidiary, RidgeStone Bank. 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.

   2.   Nature of banking activities:

   The consolidated income of RidgeStone Financial Services, Inc.
   (the "Company") is principally from income of its subsidiary,
   RidgeStone Bank.  RidgeStone 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.

   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 period.
   Actual results could differ from those estimates.

   4.   Cash and cash equivalents:

   For purposes of reporting cash flows, cash and cash equivalents
   include cash on hand, amounts due from banks, federal funds sold
   and investments with an original maturity of three months or
   less. Generally, federal funds are sold for one-day periods. 

   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 Company and its subsidiary Bank intend 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 available for sale are carried at fair
   value.  Unrealized gains or losses are reported as increases or
   decreases in stockholders' equity, 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.

   6.   Held to maturity securities:

   Securities classified as held to maturity are those debt
   securities the Company and its 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.   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.

   Loan fees and certain direct loan origination costs are
   deferred, and the net fee or cost is recognized as an adjustment
   to interest income using the interest method over the
   contractual life of the loans, adjusted for estimated
   prepayments based on the subsidiary Bank's historical prepayment
   experience.

   8.   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 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 pay. 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 (primarily
   commercial 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.

   9.   Office building, leasehold improvements 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 39 years for office building and
   leasehold improvements and 3 to 7 years for equipment.

   10.  Profit-sharing plan:

   The Company has established a trusteed contributory 401(k)
   profit-sharing plan for qualified employees.  The Company's
   policy is to fund contributions as accrued.

   11.  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 the reserve for loan losses, operating loss
   carryforwards and fixed assets. Valuation allowances are
   established when necessary to reduce deferred tax assets to the
   amount expected to be realized.

   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.

   13.  Per share data:

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

   14.  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.

   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
            Accrued interest receivable
            Accrued interest payable
            Variable rate loans that reprice frequently where no
               significant change in credit risk has occurred
            Demand deposits
            Variable rate money market accounts
            Variable rate certificate of deposit
            Available for sale securities

        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 consists 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
   Company's bank subsidiary to maintain vault cash or reserve
   balances with the Federal Reserve Bank based upon a percentage
   of deposits.

   Note C. Available for Sale Securities

   Amortized costs and fair values of available for sale securities
   as of December 31, 1996 are summarized as follows:

                                            December 31, 1996
                                         Gross         Gross
                         Amortized    unrealized    unrealized     Fair
                           cost          gains        losses       value

   U.S. Treasury
    securities         $  489,793      $  8,709     $ (2,564)  $  495,938

   Equity securities      536,288        26,775       (7,188)     555,875
                        ---------        ------      -------    ---------
                       $1,026,081      $ 35,484     $ (9,752)  $1,051,813
                        =========        ======      =======    =========

   The amortized cost and fair value of available for sale
   securities as of December 31, 1996, by contractual maturity, are
   shown below.  Expected maturities will differ from contractual
   maturities in other equity securities since the anticipated
   maturities are not readily determinable.  Therefore, these
   securities are not included in the maturity categories in the
   following maturity summary:

                                               December 31, 1996
                                       Amortized                Fair
                                         Cost                   Value

   Due after one year through
      5 years                         $ 489,793              $ 495,938
                                       ========              =========


   Realized gains and losses on sale of available for sale
   securities as of December 31, 1996 are as follows:

   Gross gains                                                $ 22,500
   Gross losses                                                    -  
                                                               -------
                                                              $ 22,500
                                                               =======


   There were no available for sale securities at December 31, 1995.

   Note D.   Held to Maturity Securities

   Amortized costs and fair values of held to maturity securities
   as of December 31, 1996 are summarized as follows:

                                            December 31, 1996
                                         Gross         Gross
                         Amortized    unrealized    unrealized     Fair
                           cost          gains        losses       value

   U.S. Treasury
    securities        $ 2,757,325      $ 25,800    $    -      $2,783,125

   Obligations of
    other U.S.
    government 
    agencies and
    corporations        2,248,281        10,850         (430)   2,258,701
                        ---------        ------        -----   ----------
                      $ 5,005,606      $ 36,650       $ (430) $ 5,041,826
                        =========        ======        =====   ==========

   The amortized cost and fair value of held to maturity securities
   as of December 31, 1996, by contractual maturity, are shown
   below.  Expected maturities will differ from contractual
   maturities in mortgage-backed securities since the anticipated
   maturities are not readily determinable.  Therefore, these
   securities are not included in the maturity categories in the
   following maturity summary.

                                               December 31, 1996
                                       Amortized                Fair
                                         Cost                   Value

   Due in one year or less           $  249,766             $  250,859
   Due after one year
    through five years                4,005,840              4,037,747
                                      ---------              ---------
   Due after five years
    through ten years                   750,000                753,220
                                      ---------              ---------
                                    $ 5,005,606            $ 5,041,826
                                      =========              =========

   There were no held to maturity securities at December 31, 1995.

   Note E.   Loans

   Major classifications of loans are as follows:

                                               December 31, 1996
                                         1996                   1995

   Commercial                      $  6,967,836              $ 389,908
   Real estate:
      Construction                    2,565,144                  6,304
      Commercial                      4,632,272                300,000
      Residential                     4,634,990                 25,000
   Installment and consumer             585,855                  8,558
                                     ----------               --------
                                     19,386,097                729,770
   Allowance for loan losses           (334,740)                (9,000)
                                     ----------               --------
          Net loans                $ 19,051,357              $ 720,770
                                     ==========               ========

   There were no loans that were impaired at December 31, 1996 or
   1995.  There was no interest income recognized on a cash basis
   during the year ended December 31, 1996 or the period ended
   December 31, 1995.

   Certain directors, executive officers and principal shareholders
   of the Company, and their related interests, had loans
   outstanding in the aggregate amounts of $1,223,122 and $312,815
   at December 31, 1996 and 1995 respectively.  During 1996,
   $1,197,581 of new loans were made with $287,274 of repayments.
   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.

   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 is
   presented in the following tabulation:

                                               December 31, 1996
                                         1996                   1995

   Balance, beginning                 $   9,000               $   -   
      Loans charged off                    -                      -   
      Recoveries on loans previously
          charged off                      -                      -   
      Provision charged to operations   325,740                  9,000
                                        -------                -------

   Balance, ending                    $ 334,740               $  9,000
                                        =======                =======


   Note G.   Office Building, Leasehold Improvements and Equipment

   Office building, leasehold improvements and equipment are stated
   at cost less accumulated depreciation and amortization and are
   summarized as follows:

                                               December 31, 1996
                                         1996                   1995

   Land                              $   72,200             $   72,200
   Building and leasehold
      improvements                    1,015,898                549,578
   Furniture and equipment              701,845                531,649
                                      ---------              ---------
                                      1,789,943              1,153,427
      Less accumulated depreciation
          and amortization              278,721                 96,689
                                      ---------              ---------
            Total office building,
              leasehold improve-
              ments and equipment    $1,511,222             $1,056,738
                                      =========              =========

   Depreciation and amortization expense amounted to $182,032 and
   $96,689 in 1996 and 1995 respectively.

   Note H.   Deposits

   The aggregate amount of other Time deposits (including CD's),
   each with a minimum denomination of $100,000, was $2,712,309 and
   $100,000  in 1996 and 1995 respectively.

   At December 31, 1996, the scheduled maturities of other Time
   deposits are as follows:

   1997                                    $    13,427,578 
   1998                                            822,131 
   1999                                            345,440 
   2000                                            265,863 
   2001                                            160,071 
                                                ----------
                                           $    15,021,083 
                                                ==========


   Note I.   Interest on Deposits

   Interest expense on deposits is as follows:

                                               December 31, 1996
                                         1996                   1995

   NOW accounts                     $     7,818              $     112
   Money market demand accounts         472,769                  3,369
   Savings deposits                       9,460                     36
   Time, $100,000 or greater             94,837                    356
   Time, under $100,000                 440,640                    182
                                      ---------               --------
          Total                     $ 1,025,524              $   4,055
                                      =========               ========

   Note J.   Income Taxes

   The provision for income taxes included in the accompanying
   consolidated financial statements consists of the following:

                                               December 31, 1996
                                         1996                   1995

   Current taxes: 
      Federal                        $     -                 $    -   
      State                                 934                   -   
                                      ---------               --------
                                            934                   -   

   Deferred income taxes (benefit): 
      Federal                              -                      -   
      State                                -                      -   
                                      ---------               --------

          Total provision for
            income taxes             $      934              $    -   
                                      =========               ========


   At December 31, 1996, the Company had a net operating loss
   carryforward for income tax purposes of approximately
   $1,279,000, of which, if not utilized to reduce taxable income
   in future periods will expire as follows:

   Year ending December 31, 
      2010                          $   77,000 
      2011                           1,202,000 
                                     --------- 
                                   $ 1,279,000 
                                     ========= 

   The following amounts make up the deferred tax assets and
   liabilities reduced by a valuation allowance:

                                               December 31, 1996
                                         1996                   1995

   Deferred tax assets: 
      Allowance for loan losses        $ 70,681              $    -   
      Depreciation                       22,942                 32,255
      Start up costs                    150,224                188,580

          Net operating loss
             carryforward               496,684                 30,429

   Deferred tax liabilities: 
      Allowance for loan losses         (11,561)                  -   
      Unrealized gain on available
        for sale securities              (1,016)                  -   
      Other                                (419)                  -   
      Valuation                        (739,096)              (239,703)


   Note K.   Profit Sharing Plan

   The Company established a 401(k) plan during 1996.  The Company
   contributed $16,650 in 1996.

   Note L.   Facilities Lease

   Lease expense for the years ended December 31, 1996 and 1995 was
   $88,771 and $41,275 respectively. The lease term which is
   accounted for as an operating lease, expires on May 31, 2000,
   requires monthly base rental payments of $6,828 and has two
   five-year renewal options. The Company also has the option of
   purchasing the building upon the fourth anniversary of the
   commencement of the lease for $1,000,000.

   In connection with the lease of the subsidiary Bank's main
   office, the Company paid broker's commissions to an organizer of
   the subsidiary Bank, and to an affiliate of a director of the
   Company and director of the subsidiary Bank, in the amount of
   $6,584 and $2,425 in 1996 and 1995 respectively. Additional
   commissions may be payable if the Company exercises its options
   for further lease terms and if the Company later purchases the
   shopping mall in which the subsidiary Bank premises are located.

   Minimum future rental payments under the noncancelable operating
   lease are:

   Year ending December 31,

        1997                          $  81,936
        1998                             81,936
        1999                             81,936
        2000                             34,140
                                        -------
             Total minimum future
               rental payments        $ 279,948
                                        =======


   Note M.   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 consolidated 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 consolidated 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.

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

                                         1996                   1995  

   Financial instruments whose
      contract amounts represent
      credit risk: 

         Commitments to extend
            credit                  $ 8,373,142            $ 1,007,754
         Credit card commitments    $   297,615            $    15,500
         Commercial letters of
            credit                  $    60,955            $      -   


   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 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.

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

   Note N.  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 are set forth
   in note E.

   Note O.  Stockholders' Equity

   Common stock at December 31, 1996 represents 834,340 shares
   issued at no par value per share less associated costs for
   professional fees and underwriting discounts and commissions.

   Proceeds from public stock offering
      at $10 per share                                     $ 8,343,400
   Associated costs                                           (622,001)
                                                            ----------
   Common stock (net)                                      $ 7,721,399
                                                            ==========

   In 1996, the Company established an Incentive Stock Option Plan
   which was approved by the directors at the July 1996 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.  These stock option grants have been awarded to
   employees in 1996, but not exercisable until shareholder
   approval of the Plan takes place at the 1997 annual meeting. 
   Options are granted at the current market value unless the stock
   is traded on a public market which it is then granted at the
   average of the high and the low for the year, provided, however,
   if the principal market is a national exchange, the grant price
   shall be the last reported sales price.  Options may be
   exercised 33.33% per year beginning one year after the date of
   the grant and must be exercised within a ten year period.

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

                                     Options       Options     Option price
                                    available    outstanding     per share

   Balance, December 31, 1995            -             -         $     -  
      Stock options authorized       100,000           -               -  
      Granted                        (49,025)        49,025          11.75
      Exercise of stock option           -             -               -  
      Canceled                           -             -               -  
                                    --------        -------       --------
   Balance, December 31, 1996         50,975         49,025
                                    ========        =======


   The Company applies APB Opinion 25 and related interpretation in
   accounting for its Plan.  Accordingly, no compensation cost has
   been recognized for its incentive stock option plan.  The effect
   on net income had the Company adopted FASB Statement No. 123
   would be immaterial.

   Note P. Retained Earnings and Restriction 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 Office of Commissioner of Banking for the State of Wisconsin
   (the "Commissioner"), 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. In addition to the foregoing,
   Wisconsin business corporations such as the Company are
   prohibited by Wisconsin law from paying dividends while they are
   insolvent or if the payment of dividends would render them
   unable to pay debts as they come due in the usual course of
   business.

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

   Note Q.  Regulatory Capital Requirements

   The subsidiary Bank 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 subsidiary Bank's financial
   statements. Under capital adequacy guidelines and the regulatory
   framework for prompt corrective action,  the subsidiary Bank
   must meet specific capital guidelines that involve quantitative
   measures of the subsidiary Bank's assets, liabilities, and
   certain off-balance-sheet items as calculated under regulatory
   accounting practices. The subsidiary Bank'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 subsidiary Bank 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, 1996, the subsidiary Bank meets all capital
   adequacy requirements to which it is subject.


   As of December 31, 1996, the most recent notification from the
   regulatory agencies categorized the subsidiary Bank as
   well-capitalized under the regulatory framework for prompt
   corrective action. To be categorized as well-capitalized, the
   subsidiary Bank 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.

   Below is a comparison of the Company and subsidiary Bank's 1996
   and 1995 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
                                                                                             capitalized under
                                                                  For capital                prompt corrective
                                            Actual             adequacy purposes             action provisions
                                      Amount      Ratio      Amount         Ratio            Amount         Ratio

   <S>                            <C>             <C>       <C>                  <C>      <C>                  <C>
   As of December 31, 1996: 
      Total capital (to risk
       weighted assets): 
         RidgeStone Financial 
            Services, Inc.        $ 6,125,583      27.1%    $ 1,809,072          8.0%     $ 2,261,340          10.0%
         RidgeStone Bank            5,074,748      23.1%      1,754,262          8.0%       2,192,828          10.0%

      Tier I capital (to risk
       weighted assets): 
         RidgeStone Financial 
            Services, Inc.        $ 5,842,273      25.8%    $   904,536          4.0%      $1,356,804           6.0%
         RidgeStone Bank            4,799,897      21.9%        877,131          4.0%       1,315,697           6.0%

      Tier I capital (to average
       assets): 
         RidgeStone Financial
            Services, Inc.        $ 5,842,273      21.5%    $ 1,085,076          4.0%      $1,356,345           5.0%
         RidgeStone Bank            4,799,897      19.0%      1,009,802          4.0%       1,262,253           5.0%

   As of December 31, 1995: 
      Total capital (to risk
       weighted assets):
         RidgeStone Financial
            Services, Inc.        $ 7,122,343     201.9%      $ 282,212          8.0%        $352,766          10.0%
         RidgeStone Bank            4,438,577     152.7%        231,892          8.0%         289,864          10.0%

      Tier I capital (to risk
       weighted assets): 
         RidgeStone Financial 
            Services, Inc.        $ 7,113,343     201.6%      $ 141,106          4.0%        $211,659           6.0%
         RidgeStone Bank            4,429,577     152.4%        115,946          4.0%         173,919           6.0%

      Tier I capital (to average
       assets): 
         RidgeStone Financial
            Services, Inc.        $ 7,113,343      68.2%      $ 329,257          4.0%        $411,571           5.0%
         RidgeStone Bank            4,429,577      80.0%        221,552          4.0%         276,940           5.0%
   </TABLE>


   Note R.  Development Stage Company

   During a portion of 1995, the Company was a development stage
   company as its wholly owned subsidiary, RidgeStone Bank, had not
   yet commenced its planned principal operations of banking. The
   subsidiary Bank commenced operations on December 7, 1995 and at
   that time the Company ceased to be a development stage company.

   Note S.  Pre-Opening Expenses

   Pre-opening expenses represent expenses incurred by the Company
   and the subsidiary Bank while the Company was a development
   stage company in 1995. Below is a breakdown of these expenses
   into the other operating expense categories:

   Salary and employee benefits                    $    210,581 
   Employee training                                     19,544 
   Occupancy and equipment expenses                     142,238 
   Computer expenses                                     23,113 
   Other expenses                                       135,819 
   Printing, forms and supplies                          39,076 
   Interest expenses on borrowed money                    5,078 
                                                        -------        
   Total pre-opening expenses                      $    575,449 
                                                        =======        


   Note T.  Regulatory Restriction

   RidgeStone Financial Services, Inc. (Holding Company only) has
   made a commitment to the Federal Reserve Bank, Chicago not to
   raise any debt until the later of August 31, 2000 or five years
   from the date of consummation of operation (December 7, 1995),
   without prior approval from the Federal Reserve System.
   RidgeStone Bank has committed to the FDIC that its Tier-I
   capital to total asset ratio will not fall below 8% during the
   first three years of operations starting December 7, 1995.

   Note U.  Fair Values of Financial Instruments

   The estimated fair values of the Company's financial instruments
   are as follows:


                            December 31, 1996          December 31, 1995 
                         Carrying       Estimated   Carrying      Estimated 
                          amount        fair value   amount       fair value 

   Financial assets: 
      Cash and cash
       equivalents    $ 14,937,880    $ 14,937,880  $ 8,598,163  $ 8,598,163 
                       ===========     ===========   ==========   ==========
      Securities      $  6,057,419    $  6,093,639  $      -     $      -
                       ===========     ===========   ==========   ==========
      Net loans       $ 19,051,357    $ 19,017,760  $   720,770  $   720,770 
                       ===========     ===========   ==========   ==========
      Accrued interest
       receivable     $    203,114    $    203,114  $     2,483  $     2,483 
                       ===========     ===========   ==========   ==========
   Financial
    liabilities: 
      Deposits        $ 35,668,660    $ 35,679,914  $ 3,308,531  $ 3,308,531 
                       ===========     ===========   ==========   ==========
      Accrued interest
       payable        $    253,923    $    253,923  $     3,921  $     3,921 
                       ===========     ===========   ==========   ==========


   The estimated fair value of fee income on letters of credit at
   December 31, 1996 and 1995 is insignificant.  Loan commitments
   on which the committed interest rate is less than the current
   market rate are also insignificant at December 31, 1996 and 1995.


   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.

   Note V.   Financial Services, Inc. (Parent Company only) Financial
             Information

                                                      December 31, 
   CONDENSED BALANCE SHEETS                          1996         1995  

   Assets: 
        Cash and cash equivalents                $  468,535    $ 2,507,495 
        Available for sale securities
         stated at fair value                       555,875          -
        Investment in subsidiary                  4,806,041      4,429,577 
        Leasehold improvements and
         equipment, net                              32,933        169,482 
        Other assets                                 13,474         15,642 
                                                  ---------      ---------

             Total assets                        $5,876,858    $ 7,122,196 
                                                  =========     ==========


   LIABILITIES AND STOCKHOLDERS' EQUITY 

   Liabilities - other liabilities               $    8,853    $     8,853 
                                                  ---------     ----------
   Stockholders' equity:

        Common stock, no par value;
             1,000,000 shares authorized, 
             834,340 shares issued                7,721,399      7,721,399 
        Retained deficit                         (1,879,126)      (608,056) 
        Unrealized gain on available for
             sale securities, net                    25,732          -
                                                  ---------      ---------
             Total stockholders'
               equity                             5,868,005      7,113,343 
                                                  ---------      ---------
             Total liabilities and
               stockholders'
               equity                            $5,876,858    $ 7,122,196 
                                                  =========     ==========


   CONDENSED STATEMENTS OF INCOME

   Income: 
        Interest                                 $   37,226    $     6,156 
        Gain on sale of securities                   22,500          -
        Other                                         1,900          -
                                                  ---------     ----------
             Total income                            61,626          6,156 
                                                  ---------     ----------
   Expenses: 
        Salaries and employee benefits                3,766          -
        Occupancy and depreciation                    7,892            418 
        Pre-opening                                   -             43,371 
        Other                                        31,097          -
                                                  ---------     ----------
             Total expenses                          42,755         43,789 
                                                  ---------     ----------

   Gain (loss) before equity in undistributed
    loss at subsidiary                               18,871        (37,633) 
        Equity in undistributed loss at
             subsidiary                          (1,289,941)      (570,423) 
                                                  ---------     ----------
             Net loss                           $(1,271,070)   $  (608,056) 
                                                 ==========     ==========


   CONDENSED STATEMENTS OF CASH FLOWS

   Cash flows from operating activities: 
        Net loss                                $(1,271,070)   $  (608,056)
        Adjustments to reconcile net
         loss to net cash provided by
         (used in) operating activities: 
           Depreciation                               5,983            418 
           Gain on sale of investment
             securities                             (22,500)           -
           Amortization of organizational
             costs                                    2,120            265 
           Increase (decrease) in other
             assets                                      48        (15,907) 
           Increase in other liabilities                -            8,853 
           Equity in undistributed loss
             of subsidiary                        1,289,941        570,423 
                                                  ---------       --------
             Total adjustments                    1,275,592        564,052 
                                                  ---------       --------
             Net cash provided by 
              (used in) operating
              activities                              4,522        (44,004) 
                                                  ---------       --------

   Cash flows from investing activities: 

        Proceeds from sales of available
          for sale securities                     1,446,042           -
        Purchase of available for sale
          securities                             (1,959,829)          -
        Investment in subsidiary Bank            (1,660,261)    (5,000,000) 
        Purchase of office building and
          equipment                                 (36,411)      (169,900) 
        Proceeds from sale of office
          building and equipment                    166,977           -
                                                  ---------      ---------
             Net cash used in
              investing activities               (2,043,482)    (5,169,900) 
                                                  ---------      ---------
   Cash flows from financing activities: 
        Proceeds from issuance of common
          stock, net                                  -          7,721,399 
        Proceeds from notes payable                   -            414,900 
        Payment of notes payable                      -           (414,900) 
                                                  ---------      ---------
             Net cash provided by
              financing activities                    -          7,721,399 
                                                  ---------      ---------
             Increase (decrease) in cash
              and cash equivalents               (2,038,960)     2,507,495 
                                                  ---------      ---------
   Cash and cash equivalents: 
        Beginning                                 2,507,495           -
                                                  ---------      ---------
        Ending                                   $  468,535    $ 2,507,495 
                                                  =========      =========

   Supplemental disclosures of cash
    flow information:
        Cash paid during the year for:
             Interest                            $     -       $     5,078 
                                                  =========      =========
             Income taxes                        $      909    $      -
                                                  =========      =========

   Supplemental schedule of non-cash
    investing and financing activities: 
        Net change in unrealized gain on
          available for sale securities          $   25,732    $      -
                                                  =========      =========


   <PAGE>
   Item 8.   Changes In and Disagreements With Accountants on Accounting and
             Financial Disclosure

   There have been no changes in or disagreements with the Company's
   independent auditors regarding accounting and financial disclosure
   required to be reported pursuant to this Item.

   Part III

   Item 9.   Directors, Executive Officers, Promoters and Control Persons;
             Compliance With Section 16(a) of the Exchange Act

   The information required by this Item is hereby incorporated by reference
   to the information under the captions entitled "Election of Directors,"
   "Executive Officers" and "Compliance With Section 16(a) of The Exchange
   Act" set forth in the Company's definitive Proxy Statement for its 1997
   Annual Meeting of Shareholders.

   Item 10.  Executive Compensation

   The information required by this Item is hereby incorporated by reference
   to the information under the captions entitled "Board of Directors -
   Director Compensation" and "Executive Compensation" set forth in the
   Company's definitive Proxy Statement for its 1997 Annual Meeting of
   Shareholders.

   Item 11.  Security Ownership of Certain Beneficial Owners and Management

   The information required by this Item is hereby incorporated by reference
   herein to the information under the caption entitled "Principal
   Shareholders" set forth in the Company's definitive Proxy Statement for
   its 1997 Annual Meeting of Shareholders.

   Item 12.  Certain Relationships and Related Transactions

   The information required by this Item is hereby incorporated by reference
   herein to the  information under the caption entitled "Certain
   Transactions" set forth in the Company's definitive Proxy Statement for
   its 1997 Annual Meeting of Shareholders.

   Item 13.  Exhibits and Reports on Form 8-K

   (a) Exhibits

   Reference is made to the separate exhibit index contained on page E-1
   hereof.

   (b) Reports on Form 8-K

   No reports on Form 8-K were filed by the Company during the quarter ended
   December 31, 1996.

   <PAGE>
                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act
   of 1934, the Registrant caused this report to be signed on its behalf by
   the undersigned, thereunto duly authorized, on March 18, 1997.

                            RIDGESTONE FINANCIAL
                               SERVICES, INC.


                            By:  /s/ Paul E. Menzel                      
                                 Paul E. Menzel
                                 President and Chief Executive Officer

     In accordance with the requirements of the Securities Exchange Act of
   1934, this report has been signed below by the following persons on behalf
   of the Registrant in the capacities indicated on March 18, 1997:

                 Signatures                          Title

    /s/ Paul E. Menzel                   President, Chief Executive
    Paul E. Menzel                       Officer and Director
                                         (Principal Executive
                                         Officer)

    /s/ William R. Hayes                 Vice President, Treasurer
    William R. Hayes                     and Director (Principal
                                         Financial and Accounting
                                         Officer)

    /s/ Christine V. Lake                Vice President, Secretary
    Christine V. Lake                    and Director 


    /s/ Charles N. Ackley                          Director
    Charles N. Ackley


    /s/ Gregory J. Hoesly                          Director
    Gregory J. Hoesly


    /s/ John E. Horning                            Director
    John E. Horning


                                                   Director
    William F. Krause, Jr.



    /s/ Charles G. Niebler                         Director
    Charles G. Niebler


                                                   Director
    Frederick I. Olson


    /s/ James E. Renner                            Director
    James E. Renner


    /s/ Richard A. Streff                          Director
    Richard A. Streff

                                                   Director
    William J. Tetzlaff

   <PAGE>
                                INDEX TO EXHIBITS

     Exhibit No.                    Exhibit Description

          3.1     Articles of Incorporation of Ridgestone Financial
                  Services, Inc., as amended [Incorporated by reference
                  to Exhibit 3.1 to Ridgestone Financial Services,
                  Inc.'s Registration Statement on Form SB-2
                  (Registration No. 33-97644)]

          3.2     By-Laws of Ridgestone Financial Services, Inc.
                  [Incorporated by reference to Exhibit 3.2 to
                  Ridgestone Financial Services, Inc.'s Registration
                  Statement on Form SB-2 (Registration No. 33-97644)]

         10.1     Lease Agreement between CDJLT Investments and
                  Ridgestone Financial Services, Inc. dated as of March
                  31, 1995 [Incorporated by reference to Exhibit 10.2 to
                  Ridgestone Financial Services, Inc.'s Registration
                  Statement on Form SB-2 (Registration No. 33-97644)]

         10.2     Consolidated Agreement between Ridgestone Financial
                  Services, Inc. and Unisys Corporation, dated as of May
                  31, 1995 [Incorporated by reference to Exhibit 10.3 to
                  Ridgestone Financial Services, Inc.'s Registration
                  Statement on Form SB-2 (Registration No. 33-97644)]

         10.3     Real Estate Purchase Contract between J.M. and P.L.
                  Wilson and Ridgestone Financial Services, Inc. dated
                  June 23, 1995 [Incorporated by reference to Exhibit
                  10.5 to Ridgestone Financial Services, Inc.'s
                  Registration Statement on Form SB-2 (Registration No.
                  33-97644)]

         10.4     Data Processing Service Agreement between Ridgestone
                  Bank and United Financial Services, Inc. dated as of
                  September 1, 1995 [Incorporated by reference to
                  Exhibit 10.10 to Ridgestone Financial Services, Inc.'s
                  Registration Statement on Form SB-2 (Registration No.
                  33-97644)]

         10.5     Ridgestone Financial Services, Inc. 1996 Stock Option
                  Plan [Incorporated by reference to Exhibit 10.1 to
                  Ridgestone Financial Services, Inc.'s Quarterly Report
                  on Form 10-Q for the quarter ended September 30, 1996
                  (File No. 0-27984)]

         10.6     Employment Agreement, dated as of December 31, 1996,
                  between Ridgestone Financial Services, Inc. and
                  Paul E. Menzel.

         10.7     Employment Agreement, dated as of December 31, 1996,
                  between Ridgestone Financial Services, Inc. and
                  William R. Hayes.

         10.8     Employment Agreement, dated as of December 31, 1996,
                  between Ridgestone Financial Services, Inc. and
                  Christine V. Lake.

         21       Subsidiaries of Ridgestone Financial Services, Inc.
                  [Incorporated by reference to Exhibit 21.1 to
                  Ridgestone Financial Services, Inc.'s Registration
                  Statement on Form SB-2 (Registration No. 33-97644)]

         27       Financial Data Schedule (EDGAR version only)