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, 2000

[ ]       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: (262) 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. [X]

Issuer's revenues for its most recent fiscal year:  $5,610,111

Aggregate market value of voting stock held by non-affiliates of the issuer as
of March 1, 2001: $3,998,376

Number of shares of common stock, no par value, outstanding on March 1, 2001:
876,492

                       DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the 2001 Annual Meeting (incorporated by reference into Part
III to the extent indicated therein)

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, 2000

                                                                            Page
                                                                            ----
Part I
     Item 1.  Description of Business..........................................1
     Item 2.  Description of Property..........................................8
     Item 3.  Legal Proceedings................................................9
     Item 4.  Submission of Matters to a Vote of Security Holders..............9

Part II
     Item 5.  Market for Common Equity and Related Stockholder Matters.........9
     Item 6.  Management's Discussion and Analysis............................10
     Item 7.  Financial Statements............................................25
     Item 8.  Changes In and Disagreements With Accountants on
              Accounting and Financial Disclosure.............................49

Part III
     Item 9.  Directors, Executive Officers, Promoters and Control
              Persons; Compliance With Section 16(a) of
              the Exchange Act................................................49
     Item 10. Executive Compensation..........................................49
     Item 11. Security Ownership of Certain Beneficial Owners
              and Management..................................................49
     Item 12. Certain Relationships and Related Transactions..................49
     Item 13. Exhibits and Reports on Form 8-K................................49


                                      -i-

<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 totaled 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 primarily with other commercial banks, savings banks, savings and loan
institutions, credit unions and other financial service organizations in the
three-city area and surrounding locations.

The Bank was the first bank in Wisconsin to introduce full-service PC banking,
called RidgeStone Connect SM to consumers. 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. In 2000, the Bank introduced two business versions of RidgeStone
ConnectSM to its commercial clients and plans to offer these PC banking services
over the internet in the near future. As of December 31, 2000, approximately 44%
of the Bank's consumer checking account customers were enrolled in RidgeStone
Connect SM and approximately 21% of the Bank's commercial checking account
customers were enrolled in RidgeStone Connect for Business.SM

The Company's principal business is the business of the Bank. The Bank'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,
secondary market loan fees, commissions generated by the investment center and
other income. 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. Operating expenses of the
Company include employee compensation and benefits, occupancy and equipment
expense, professional and data processing fees, and other administrative
expenses.

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 banking
operations center.

During the third quarter of fiscal 2000, the Bank agreed to enter into a
Memorandum of Understanding (the "Memorandum") with the Federal Deposit
Insurance Corporation and the State of Wisconsin Department of Financial
Institutions, as previously disclosed. Management has devoted significant time
to the issues raised by the Memorandum and believes that the Bank is in
compliance with substantially all of the conditions and covenants contained in
the Memorandum and intends to continue to comply therewith. Management does not
currently anticipate that the Memorandum will result in any material adverse
effect on the results of operations or financial condition of the Company or the
Bank.

                                      -1-
<PAGE>

In October 2000, the Bank received regulatory approval to form a real estate
subsidiary. On December 13, 2000, the Bank formed the real estate subsidiary
which then purchased a home from the Bank's Other Real Estate Owned. Management
intends to use this subsidiary in liquidating the parcel of property the Bank
acquired in October 1997 when the entity owning the underlying real estate
assets securing a loan with the Bank filed for bankruptcy.

Special Note Regarding Forward-Looking Statements

Certain matters discussed in this Annual Report on Form 10-KSB are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes,"
"anticipates," "expects," or other words of similar import. Similarly,
statements that describe the Company's future plans, objectives or goals are
also forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially from those contemplated in the forward-looking statements. Such risks
include, among others: interest rate trends, the general economic climate in the
Company's market area, loan delinquency rates, and legislative enactments or
regulatory changes which adversely affect the business of the Company and/or the
Bank. Shareholders, potential investors and other readers are urged to consider
these factors in evaluating the forward-looking statements. The forward-looking
statements included herein are only made as of the date of this Annual Report on
Form 10-KSB and the Company undertakes no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.

Business Strategy

The Bank's strategy is to concentrate on the financial service needs of
individuals and small businesses by providing them with quality service,
products and on-site decision making. The Bank pursues this strategy by
attracting highly-qualified employees and utilizing state-of-the-art technology,
both in its operations and in the services it provides its customers. The Bank
also directs its marketing efforts toward a customer base it identifies as
having the potential to be highly profitable.

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, a system for purchasing and managing commercial
customers' accounts receivable, 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, the 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 of senior loan officers. The Loan Committee of the Bank
reviews loans with aggregate principal amounts between the lending officer's
lending authority and $250,000. The Loan Committee is comprised of the President
of the Bank, the Executive Vice President and a Senior Commercial Lender.
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. As of December 31, 2000, the
Bank had a lending limit of $1,290,000. The Bank is able to attract business
loans beyond its lending limit by using bank participations with other banks in
Wisconsin. Likewise, the Bank has purchased participations from other area
Wisconsin financial institutions.

                                      -2-
<PAGE>
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 periodic 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 interest payments due
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% limit may be excluded from reporting
     requirements of FDICIA 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 totaled $17,503,514 as of December 31,
2000, and consisted primarily of lines of credit and loans to businesses.
Commercial lines of credit are generally used for the purpose of financing
working capital and may be secured with current assets of the borrower.
Commercial loans are written for a period of greater than one year, are
amortized over a period of five to seven years and are used principally for
financing fixed asset expenditures. Commercial loans are generally secured with
the fixed assets of the borrower.

The Bank is a licensee of the Business Manager system from Private Business Inc.
(PBI). Business Manager is a complete system for purchasing and managing the
accounts receivable of a commercial customer (a merchant) on a full recourse
basis with a flexible cash collateral reserve. From the Bank's prospective, the
program provides a way to bank small businesses more profitably, to offer a
unique combination of funding and receivable management benefits, and to control
the risks associated with the funding of accounts receivable. From the
merchant's perspective, the program unlocks the cash typically frozen in the
accounts receivable, provides ongoing cash flow as the business generates new
sales, and offers the merchant's management team information on which to base
better business decisions. The Bank typically purchases two insurance policies
from CNA as additional collateral on these facilities: Traditional and Fraud.
The Traditional policy covers the Bank if the

                                      -3-
<PAGE>

merchant or its debtors become insolvent. The Fraud policy protects the Bank in
the event of fraud committed against the Bank by the merchant. The Bank's
Business Manager portfolio totaled $1,337,801 as of December 31, 2000 and
consists entirely of Business Manager Accounts Receivable Agreements with
businesses and professionals.

Real Estate Commercial Loans. As of December 31, 2000, the Bank had $15,992,871
of real estate commercial loans outstanding. These loans were generally made for
the purpose of purchasing manufacturing facilities, warehouses, office buildings
and multiple family commercial real estate holdings, and are fully secured.

Other Products and Services

The Bank offers a broad range of deposit services to both personal and business
customers, including checking accounts, money markets, savings, and time deposit
accounts. Additional related services include safe deposit boxes, check
services, money transfer services, debit cards and ATM access cards as well as
courier deposit pick-up and lock box services for business customers.

The Bank also employs a licensed representative who provides a variety of
investment and insurance products through arrangements with other service
providers. These products include mutual fund products, annuities, and life
insurance products.

Competition

The Company has identified as its primary competitors, offices of thrifts,
credit unions or banks operating in Brookfield, Elm Grove and Wauwatosa,
Wisconsin.

The Bank also faces competition from finance companies, insurance companies,
mortgage companies, securities brokerage firms, money market funds and other
providers of financial services throughout the three-city area. 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 and professionally 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

General. 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

                                      -4-
<PAGE>
future legislation or regulation will have on the financial services industry in
general or on their businesses in particular.

The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (the "Act")
made significant changes in the laws governing financial institutions, including
changes which expand the permissible range of activities for bank holding
companies and their affiliates (including non-banking financial activities);
permit affiliations between banks, securities firms and insurance companies;
make substantial changes in the regulatory structure for financial institutions;
prohibit new unitary savings and loan holding companies; make changes to the
Community Reinvestment Act of 1977; and enact substantial new financial privacy
rules. The new financial privacy rules may impose some additional regulatory
burden on the Bank. It is too early to make specific predictions about how the
Act will otherwise impact the Bank and the Company.

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.

As described above, the Act now permits banks and bank holding companies to
engage in non-banking financial activities. In order for a bank or a bank
holding company to engage in such activities, however, the bank holding company
must comply with certain capital and asset requirements and elect to become a
financial holding company with the Federal Reserve Board of Governors. At this
time, the Company has not made such an election, nor does it plan to do so in
the immediate future. Therefore, subject to a future election to financial
holding company status, the Company remains under the rules of the BHCA. 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 a bank 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. After notice to or approval of the Board, the Company may,
however, own more than 5% of the 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 bank 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.

                                      -5-
<PAGE>

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 withhold
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 Wisconsin 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

                                      -6-
<PAGE>
acquire control of a bank or bank 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
average 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 may be 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.

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 bank 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 mergers; however, banks may acquire a branch only of a
bank in another state only if that state permits out-of-state banks to acquire
in-state branches without acquiring the entire bank. 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
by an out-of-state bank holding company, that the acquired bank, or subsidiary
banks if acquiring an in-state bank holding company, must have been in existence
for at least five years.

Employees

As of December 31, 2000, the Company and the Bank together employed 19 full-time
and 6 part-time employees, including 3 personal bankers, an investment officer,
5 operations specialists, 6 customer service representatives, a cashier, a
receptionist, a courier, 3 commercial loan officers, a senior officer in charge
of retail banking, a technology specialist, an administrative assistant and the
Bank president.

                                      -7-
<PAGE>
Directors and Executive Officers

The directors of the Company and the Bank as of March 2, 2001 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

Bernard E. Adee                     Senior Vice President of Marshall Financial
                                    Consulting, LLC

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 Shorewest Realtors Inc.,
                                    Wisconsin Mortgage Corporation, and
                                    Heritage Title Service

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

Charles G. Niebler                  President of Eye Care Vision Centers

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; Vice President
                                    of Around the Globe Travel, a travel agency

The executive officers of the Company and the Bank as of March 2, 2001 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

On May 31, 2000, the Company purchased the building it had previously leased for
use as the Bank's main office and the Company's headquarters at 13925 West North
Avenue, Brookfield, Wisconsin. In 1999, the Bank took over additional retail
space which became available within the building housing its main office. The
remodeling of this additional space for use as bank office space was completed
in May 2000. The Bank's main office now occupies approximately 8,124 square feet
of a larger shopping mall that houses various retail establishments.

The Bank opened its drive-up branch on January 2, 1997. The branch is located in
a turn-of-the-century schoolhouse building, which has been renovated to house a
branch banking facility. The Company owns this

                                      -8-
<PAGE>

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.

Item 3.  Legal Proceedings

Neither the Company nor the Bank is party to any material legal proceedings.

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, 2000.

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 under the
symbol "RFSV" 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 each quarter within the last two fiscal years were as follows:

                         1999            High           Low
                         ----            ----           ---
                     1st Quarter        $12.380       $10.000
                     2nd Quarter        $11.750       $ 9.000
                     3rd Quarter        $ 9.750       $ 8.500
                     4th Quarter        $ 8.500       $ 7.000

                         2000            High           Low
                         ----            ----           ---
                     1st Quarter        $ 8.000       $ 6.000
                     2nd Quarter        $ 6.250       $ 4.500
                     3rd Quarter        $ 5.500       $ 5.125
                     4th Quarter        $ 5.750       $ 4.875

These quotations reflect inter-dealer prices, without retail mark-up, markdown
or commission, and may not represent actual transactions. These quotations do
not include intra-day highs and lows. On December 31, 2000, there were
approximately 38 owners of record and approximately 400 beneficial owners 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 cash dividends are declared, the Company
will be dependent upon dividends paid to it by the Bank for funds to pay
dividends on its 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 the current year's income if dividends declared have
exceeded net profits in either of the two immediately preceding years.
Additionally, 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, generally speaking,
Wisconsin corporations such as the Company are prohibited by the

                                      -9-
<PAGE>

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

Comparison of Operating Results for the Years Ended December 31, 2000 and
December 31, 1999

Net Income. Pretax net income for fiscal 2000 increased by 101% to $209,004 from
pre-tax net income of $104,143 for fiscal 1999. After-tax net income for the
fiscal year ended December 31, 2000 decreased to $160,661 compared with
after-tax net income of $479,178 for fiscal 1999. Earnings per share were $0.18
per diluted common share for fiscal 2000 compared to $0.55 per diluted common
share for fiscal 1999. During the twelve months ended December 31, 1999, the
Company recognized an income tax benefit of $375,035 related to the carryforward
of prior years' losses. As of the end of 1999, all of the Company's loss
carryforward benefits had been recognized. As a result, after-tax earnings for
the twelve months ended December 31, 2000 do not include loss carryforward tax
benefits.

Interest Income. Interest income consists primarily of interest on loans
(including loan fees), securities, federal funds sold, and interest-bearing
deposits at other financial institutions. Total interest income for the year
ended December 31, 2000 was $5,257,153 compared to $4,831,816 for the year ended
December 31, 1999, an increase of $425,337 or 9%. This increase was primarily
the result of higher yields in the loan portfolio and higher loan demand, which
shifted funds from lower-yielding investments to higher-yielding loans. The
interest yield on average earning assets improved to 8.66% in fiscal 2000 from
7.93% in fiscal 1999.

Interest Expense. Interest expense primarily represents interest paid to
depositors. Interest expense increased to $2,815,791 in fiscal 2000 from
$2,417,939 in fiscal 1999, an increase of $397,852 or 16%. The increase in
interest expense was primarily due to a combination of growth in deposits,
higher interest rates paid on deposits, and a shift in lower-rate money market
balances to higher-rate time deposits. Additionally, deposit interest rate
yields increased from 4.68% in fiscal 1999 to 5.44% in fiscal 2000.

Set forth below is a summary of the Company's average deposits and interest paid
on such deposits during fiscal 2000 and fiscal 1999.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                         2000             Rate Paid            1999            Rate Paid
                                      -----------       ------------     ---------------    ---------------
<S>                                   <C>                  <C>             <C>                    <C>
Non interest-bearing demand           $ 8,781,695            --            $ 8,697,185            --
Interest-bearing demand                 1,795,118           1.03%            1,683,475            1.06%
Money market accounts                  26,321,412           5.18%           30,601,480            4.64%
Savings deposits                        1,367,929           2.08%            1,590,674            2.12%
Time deposits                          22,230,805           6.32%           17,738,976            5.34%
Federal funds purchased                     2,262           6.94%                    0               0%
                                            -----           -----                    -              --
     Total deposits                   $60,499,221           4.65%          $60,311,790            4.01%
                                      ===========           =====          ===========            =====
</TABLE>

Net Interest Income. Net interest income represents the difference between
interest income earned on interest-earning assets and interest expense paid on
interest-bearing liabilities. Net interest income before provision for loan
losses was $2,441,362 for the year ended December 31, 2000, an increase of
$27,485 or 1% compared with net interest income of $2,413,877 for the year ended
December 31, 1999. The net interest margin increased to 4.02% at December 31,
2000 from 3.96% at December 31, 1999.

The following table sets forth the average balances and 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, for fiscal 2000 and fiscal 1999.

                                      -10-
<PAGE>
<TABLE>
<CAPTION>
                                                                    Average Balance Sheet and
                                                                 Analysis of Net Interest Income
                                                                     Year Ended December 31,
                                    ------------------------------------------------------------------------------------------
                                                       2000                                           1999
                                    -------------------------------------------     ------------------------------------------
                                       Average          Related        Yield          Average          Related         Yield
                                       Balance          Interest        Rate          Balance          Interest         Rate
                                    --------------    ------------    ---------     -------------    ------------     --------
Earning assets:
<S>                                  <C>              <C>               <C>         <C>             <C>               <C>
    Deposits in bank                 $   136,024      $    7,465         5.49%      $    98,958      $    6,025        6.09%
    Investments (taxable)                639,562          55,449         8.67%        5,274,559         276,087        5.23%
    Funds sold and securities
       purchased under
       agreements to resell            5,891,847         364,852         6.19%        5,488,217         286,165        5.21%
    Loans(a)                          54,018,271       4,829,387         8.94%       50,068,153       4,263,539        8.52%
                                      ----------       ---------                     ----------       ---------
       Total earning assets          $60,685,704      $5,257,153         8.66%      $60,929,887      $4,831,816        7.93%
                                      ==========       =========         ====        ==========       =========        ====

Interest-bearing liabilities:
    NOW accounts                     $ 1,795,118      $   18,520         1.03%      $ 1,683,475      $   17,908        1.06%
    Savings accounts                   1,367,929          28,423         2.08%        1,590,674          33,694        2.12%
    Money market accounts             26,321,412       1,364,426         5.18%       30,601,480       1,418,807        4.64%
    Time deposits                     22,230,805       1,404,265         6.32%       17,738,976         947,530        5.34%
    Fund purchased                         2,262             157         6.94%                0               0        0.00%
                                     -----------       ---------                     ----------       ---------
       Total interest-bearing liabs  $51,717,526      $2,815,791         5.44%      $51,614,605      $2,417,939        4.68%
                                      ==========       =========         ====        ==========       =========        ====

Interest spread(b)                                    $2,441,362         3.22%                       $2,413,877        3.25%
                                                       =========         ====                         =========        ====

Interest margin(c)                                    $2,441,362         4.02%                       $2,413,877        3.96%
                                                       =========         ====                         =========        ====

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

(a)  Non-accruing loans are included in the computation of average balances.  Loan interest income includes net loan fees.
(b)  The interest spread is the difference between the yield on earning assets and the yield on interest-bearing liabilities.
(c)  The interest margin is the net interest income divided by total earning assets.
</TABLE>

The following table describes the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities affected the Company's interest income and interest expense for the
period indicated. Information is provided in each category with respect to (i)
changes attributable to changes in volume (changes in volume multiplied by prior
rate), (ii) changes attributable to changes in rate (changes in rate multiplied
by prior volume), (iii) changes attributable to changes in rate/volume (changes
in rate multiplied by changes in volume), and (iv) the net change.

The changes attributable to the combined impact of volume and rate have been
allocated proportionately to the changes due to volume and the changes due to
rate.

                                      -11-
<PAGE>
<TABLE>
<CAPTION>
                                                            Rate/Volume Analysis of Net Interest Income
                                                                    Year Ended December 31, 2000
                                                                            Compared to
                                                                    Year Ended December 31, 1999
                                               -----------------------------------------------------------------------
                                                                     Increase (Decrease) Due To
                                               -----------------------------------------------------------------------
                                                   Volume              Rate             Rate/Volume           Net
                                               ---------------    ----------------    ----------------    ------------

Earning assets:
<S>                                            <C>                <C>                 <C>                 <C>
     Deposits in bank                          $       2,257      $        (594)      $        (223)      $    1,440
     Investments (taxable)                          (242,609)           181,209            (159,235)        (220,635)
     Funds sold and securities purchased
            under agreements to resell                21,046             53,692               3,949           78,687
     Loans                                           336,372            212,693              16,781          565,845
                                               ---------------    ----------------    ----------------    ------------
         Total earning assets                  $     117,065      $     447,000       $    (138,728)      $  425,337
                                               ===============    ================    ================    ============

Interest-bearing liabilities:
     NOW accounts                              $       1,188      $        (540)      $         (36)      $      615
     Savings accounts                                 (4,718)              (643)                 90           (5,271)
     Money market accounts                          (198,441)           167,485             (23,425)         (54,381)
     Time deposits                                   239,932            172,997              43,806          456,735
     Fund purchased                                        0                  0                 157              157
                                               ---------------    ----------------    ----------------    ------------
         Total interest-bearing liabilities    $      37,691      $     339,299       $      20,592       $  397,852
                                               ---------------    ----------------    ----------------    ------------

         Net change in net interest income     $      79,104      $     107,701       $    (159,320)      $   27,485
                                               ===============    ================    ================    ============
</TABLE>

Provision for Loan Losses. The provision for loan losses is based on
management's evaluation of factors such as the local and national economies and
the risks associated with the loans in the portfolio. In accordance with
Financial Accounting Standards Board ("FASB") Statements No. 5 and 114, the
allowance is provided for losses that have potentially been incurred based on
the Bank's outstanding loan balance as of the balance sheet date. The Bank
evaluates the adequacy of the loan loss reserve based on past events and current
economic conditions, and does not include the effects of potential losses on
specific loans or groups of loans that are related to future events or changes
in economic conditions which are then unknown to the Bank.

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

The Company made a loan loss provision of $42,500 in 2000 compared with $282,500
in 1999. The provision was made to bring the reserve to adequate levels as a
result of increasing balances in the loan portfolio. During fiscal 2000, the
Bank charged $24,154 against the loan loss reserve, which related primarily to
two consumer loan charge-offs and a business loan related to a customer that
declared bankruptcy. The Company also recovered $24,590 related to a prior loan
charge-off which was added to the loan loss reserve.

As of December 31, 2000, the Company's loan loss reserve was $696,206 or 1.28%
of outstanding loans compared to $653,270 or 1.26% of outstanding loans at
December 31, 1999.

Set forth below is an analysis of the Company's provision for loan losses.


                                      -12-
<PAGE>
                         Summary of Loan Loss Experience
                            And Loan Loss Provisions

                                                2000                1999
                                         -----------------    ----------------

Beginning loan loss reserve              $        653,270     $       562,747
Charge-offs:

    Commercial                                     12,830                   0
    Real Estate:
      Construction                                      0                   0
      Commercial                                        0             179,396
      Other Mortgages                                   0                   0
    Installment-consumer                           11,324              12,581

Recoveries:
    Commercial                                          0                   0
    Real Estate:
      Construction                                      0                   0
      Commercial                                   24,590                   0
      Other mortgages                                   0                   0
    Installment-consumer                                0                   0
                                         -----------------    ----------------
                                         $           (436)    $       191,977
Net charge-offs (recoveries)
Additions charged to operations                    42,500             282,500
                                         -----------------    ----------------
Balance at end of period                 $        696,206     $       653,270
                                         =================    ================

Ratio of net charge-offs (recoveries
during the period to average loans
outstanding during the period                        0.00               0.38%

Noninterest Income. Total noninterest income consisted of service charges on
deposit accounts, secondary market loan fees, merchant credit card processing
services, rental income, commission income generated by the investment center
and employee benefit plan income. Total noninterest income (excluding losses on
the sale of securities) was $362,122 for fiscal 2000 compared to $327,598 for
fiscal 1999, an increase of $34,524 or an 11% improvement. Due to a higher
interest rate environment during 2000, secondary mortgage loan originations
declined, which was the primary cause of a decrease in secondary market loan fee
income of $36,228 as compared to fiscal 1999. However, this decline was offset
by an increase in brokerage commissions of $33,347 from increased sales and an
increase of $36,581 in rental income from the purchase of the building housing
the bank's operations.

Noninterest Expenses. Total noninterest expenses consisted primarily of salaries
and employee benefits, occupancy and equipment expenses, professional fees, and
data processing fees. Total noninterest expenses for fiscal 2000 (excluding
gains and losses on the sale of assets) were $2,576,823 compared to $2,291,227
for fiscal 1999, an increase of $285,596 or 12%. The majority of the increase in
noninterest expenses is attributed to higher salary expense relating to
increased staffing in the loan area and additional expenses related to
remodeling of the building housing the Bank premises. Also, as the Bank has
continued to grow, the expenses associated with its audit increased, which led
the Bank to begin accruing those expenses throughout the year as opposed to
paying them as incurred. As a result, operating expenses included additional
accrued expenses associated with the 2000 audit as well as certain overlapping
expenses associated with the 1999 audit.

In fiscal 2000, the Bank's FDIC premiums were assessed at $28,887 as required by
federal law.


                                      -13-
<PAGE>

Selected Financial Ratios. Set forth below are selected financial ratios of the
Company for fiscal 2000 and fiscal 1999:

                                                         2000         1999
                                                         ----         ----
         Return on average assets                        0.23%        0.71%
         Return on average equity                        2.37%        7.38%
         Dividend payout ratio on common stock           NONE         NONE
         Average equity to average assets                9.91%        9.61%

Provision for Income Taxes. A tax provision of $48,343 was made in fiscal 2000
as compared to a tax benefit of $375,035 which was recognized in fiscal 1999 as
a result of recognizing previous years' net operating loss carryforwards.

Comparison of Operating Results for the Years Ended December 31, 1999 and
December 31, 1998

Net Income. Net income for the fiscal year ended December 31, 1999 increased by
45% to $479,178 compared with net income of $331,377 for fiscal 1998. Earnings
per share rose by 49% to $0.55 per diluted common share for fiscal 1999 compared
to $0.37 per diluted common share for fiscal 1998. A tax benefit related to a
tax loss carryforward accounted for $375,035 of net income for fiscal 1999 and
$202,500 of net income for fiscal 1998.

Interest Income. Interest income consists primarily of interest on loans
(including loan fees), securities, federal funds sold, and interest-bearing
deposits at other financial institutions. Total interest income for the year
ended December 31, 1999 was $4,831,816 compared to $4,940,943 for the year ended
December 31, 1998, a decrease of $109,127 or 2%. This decrease was primarily the
result of overall lower asset yields. The interest yield on average earning
assets declined to 7.93% in fiscal 1999 compared to 8.17% in fiscal 1998. The
reason for the decline in interest yields in 1999 as compared to 1998 is due
primarily to the Federal Reserve's actions in reducing interest rates in the
third and fourth quarters of 1998.

Interest Expense. Interest expense primarily represents interest paid to
depositors. Interest expense decreased to $2,417,939 in fiscal 1999 from
$2,881,181 in fiscal 1998, a decrease of $463,242 or 16%. The decrease in
interest expense was primarily due to an overall decrease in the interest yield
on interest-bearing liabilities from 5.52% in 1998 to 4.68% in 1999. Also
contributing to lower interest expense was a shift in balances of higher cost
time deposits to lower cost money market accounts and a decline in balances of
higher cost time deposits.

Set forth below is a summary of the Company's average deposits and interest paid
on such deposits during fiscal 1999 and fiscal 1998.

                              --------------------------------------------------
                                    1999     Rate Paid        1998     Rate Paid
                              -------------  ---------   -----------   ---------
Non interest-bearing demand     $ 8,697,185       --     $ 6,489,824        --
Interest-bearing demand           1,683,475     1.06%      1,454,223      1.72%
Money market accounts            30,601,480     4.64%     24,363,265      5.29%
Savings deposits                  1,590,674     2.12%      1,258,761      2.77%
Time deposits                    17,738,976     5.34%     25,075,721      6.11%
                                 ----------     -----     ----------      -----
     Total deposits             $60,311,790     4.01%    $58,641,794      4.91%
                                ===========     =====    ===========      =====

Net Interest Income. Net interest income represents the difference between
interest income earned on interest-earning assets and interest expense paid on
interest-bearing liabilities. Net interest income was $2,413,877 for the year
ended December 31, 1999, an increase of $354,115 or 17% compared with net
interest income of $2,059,762 for the year ended December 31, 1998. The $463,242
decrease in interest costs, driven primarily by a reduction in deposit interest
rates and decreasing balances in time deposits, more than offset the $109,127
decline in interest income. The net interest margin increased to 3.96% at
December 31, 1999 from 3.41% at December 31, 1998.


                                      -14-
<PAGE>

The following table sets forth the average balances and 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, for fiscal 1999 and fiscal 1998.
<TABLE>
<CAPTION>
                                                              Average Balance Sheet and
                                                           Analysis of Net Interest Income
                                                               Year Ended December 31,
                                                 1999                                         1998
                                     -------------------------------------------------------------------------------

                                       Average       Related       Yield         Average        Related      Yield
                                       Balance       Interest      Rate          Balance        Interest     Rate
                                     -----------   -----------   --------      ------------    ----------   -------
Earning assets:
<S>                                  <C>            <C>             <C>         <C>            <C>           <C>
    Deposits in bank                 $    98,958    $    6,025      6.09%       $   105,954    $    7,553    7.13%
    Investments (taxable)              5,274,559       276,087      5.23%         3,690,491       237,396    6.43%
    Funds sold and securities
    purchased under agreements
    to resell                          5,488,217       286,165      5.21%         7,721,729       411,276    5.33%
    Loans (a)                         50,068,153     4,263,539      8.52%        48,971,885     4,284,718    8.75%
                                      ----------     ---------                   ----------     ---------

        Total earning assets         $60,929,887    $4,831,816      7.93%       $60,490,059    $4,940,943    8.17%
                                      ==========     =========      ====         ==========     =========    ====

Interest-bearing liabilities:
    NOW accounts                     $ 1,683,475    $   17,908      1.06%       $ 1,454,223    $   25,039    1.72%
    Savings accounts                   1,590,674        33,694      2.12%         1,258,761        34,839    2.77%
    Money market accounts             30,601,480     1,418,807      4.64%        24,363,265     1,289,271    5.29%
    Time deposits                     17,738,976       947,530      5.34%        25,075,721     1,532,032    6.11%
                                      ----------       -------                   ----------     ---------
      Total interest-bearing liabs   $51,614,605    $2,417,939      4.68%       $52,151,970    $2,881,181    5.52%
                                      ==========     =========      ====         ==========     =========    ====

Interest spread (b)                                 $2,413,877      3.25%                      $2,059,762    2.65%
                                                     =========      ====                        =========    ====

Interest margin (c)                                 $2,413,877      3.96%                      $2,059,762    3.41%
                                                     =========      ====                        =========    ====
----------------

(a)  Non-accruing loans are included in the computation of average balances.  Loan interest income includes net loan
     fees.
(b)  The interest spread is the difference between the yield on earning assets and the yield on interest-bearing liabilities.
(c)  The interest margin is the net interest income divided by total earning assets.
</TABLE>

The following table describes the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities affected the Company's interest income and interest expense for the
period indicated. Information is provided in each category with respect to (i)
changes attributable to changes in volume (changes in volume multiplied by prior
rate), (ii) changes attributable to changes in rate (changes in rate multiplied
by prior volume), (iii) changes attributable to changes in rate/volume (changes
in rate multiplied by changes in volume), and (iv) the net change.

The changes attributable to the combined impact of volume and rate have been
allocated proportionately to the changes due to volume and the changes due to
rate.


                                      -15-
<PAGE>
<TABLE>
<CAPTION>
                                                               Rate/Volume Analysis of Net Interest Income
                                                                       Year Ended December 31, 1999
                                                                               Compared to
                                                                       Year Ended December 31, 1998
                                                          ---------------------------------------------------------------------
                                                                               Increase (Decrease) Due To
                                                          ---------------------------------------------------------------------
                                                             Volume              Rate           Rate/Volume           Net
                                                          --------------     ------------       -------------     -------------
    Earning assets:
<S>                                                       <C>                <C>               <C>                <C>
           Deposits in bank                               $        (499)     $    (1,102)      $          73      $     (1,528)
           Investments (taxable)                                101,897          (44,224)            (18,982)           38,691
           Funds sold and securities purchased
             under agreements to resell                        (118,962)          (8,652)              2,503          (125,111)
           Loans                                                 95,917         (114,531)             (2,565)          (21,179)
                                                          --------------     ------------       -------------     -------------
                Total earning assets                      $      78,353      $  (168,509)      $     (18,971)     $   (109,127)
                                                          ==============     ============       =============     =============

    Interest-bearing liabilities:
           NOW accounts                                   $       3,947      $    (9,570)      $      (1,509)     $     (7,132)
           Savings accounts                                       9,186           (8,176)             (2,156)           (1,146)
           Money market accounts                                330,118         (159,693)            (40,889)          129,536
           Time deposits                                       (448,247)        (192,607)             56,354          (584,500)
                                                          --------------     ------------       -------------     -------------
                Total interest-bearing liabilities        $    (104,996)     $  (370,046)      $      11,800      $   (463,242)
                                                          --------------     ------------       -------------     -------------

                Net change in net interest income         $     183,349      $   201,537       $      30,771      $    354,115
                                                          ==============     ============       =============     =============
</TABLE>

Provision for Loan Losses. The provision for loan losses is based on
management's evaluation of factors such as the local and national economies and
the risks associated with the loans in the portfolio. In accordance with
Financial Accounting Standards Board ("FASB") Statements No. 5 and 114, the
allowance is provided for losses that have potentially been incurred based on
the Bank's outstanding loan balance as of the balance sheet date. The Bank
evaluates the adequacy of the loan loss reserve based on past events and current
economic conditions, and does not include the effects of potential losses on
specific loans or groups of loans that are related to future events or changes
in economic conditions which are then unknown to the Bank.

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

The Company made a loan loss provision of $282,500 in 1999 compared with $65,000
in 1998. The increased provision was made to bring the reserve to adequate
levels as a result of increasing balances in the loan portfolio and loan
charge-offs during 1999. During fiscal 1999, the Bank charged $191,977 against
the loan loss reserve, which related primarily to a commercial loan whose
guarantors filed personal bankruptcy. The Bank also reduced Other Real Estate
Owned by $356,815 as a result of the sale of real estate assets owned by the
Bank and reclassification of $35,082 of prior year expenses.

As of December 31, 1999, the Company's loan loss reserve was $653,270 or 1.26%
of outstanding loans compared to $562,747 or 1.15% of outstanding loans at
December 31, 1998.

Set forth below is an analysis of the Company's provision for loan losses.


                                      -16-
<PAGE>

                                      Summary of Loan Experience
                                       And Loan Loss Provisions

                                                    1999              1998
                                                  ----------    -----------
Beginning loan loss reserve                       $  562,747    $   624,740

Charge-offs:
     Commercial                                            0              0
     Real Estate:
          Construction                                     0              0
          Commercial                                 179,396        122,489
          Other Mortgages                                  0              0
     Installment-consumer                             12,581          4,504

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

Net charge-offs                                   $  191,977    $   126,993
Additions charged to operations                      282,500         65,000
                                                  ----------    -----------
Balance at end of period                          $  653,270    $   562,747
                                                  ==========    ===========

Ratio of net charge-offs during the period to
average loans outstanding during the period            0.38%          0.26%

Noninterest Income. Total noninterest income consisted of service charges on
deposit accounts, secondary market loan fees, merchant credit card processing
services, commission income generated by the investment center and employee
benefit plan income. Total noninterest income (excluding losses on the sale of
securities) was $327,598 for fiscal 1999 compared to $289,859 for fiscal 1998,
an increase of $37,739 or a 13% improvement. The Bank instituted a service
charge program on business checking accounts, surcharges on noncustomer ATM
transactions and increased miscellaneous charges on both business and consumer
accounts during 1999. These service charge changes accounted for a $50,156
increase in service charge income over 1998. However, due to a higher interest
rate environment during 1999, secondary mortgage loan originations declined
which caused secondary market loan fee income to be reduced by $97,829 from
fiscal 1998. A portion of the increase in noninterest income was related to a
$104,832 increase in the cash surrender value of life insurance.

Noninterest Expenses. Total noninterest expenses consisted primarily of salaries
and employee benefits, occupancy and equipment expenses, professional fees, data
processing fees, and employee benefit plans. Total noninterest expenses for
fiscal 1999 (excluding losses on the sale of assets) were $2,291,227 compared to
$2,137,760 for fiscal 1998, an increase of $153,467 or 7%. The majority of the
increase in noninterest expenses is attributed to employee benefit plans and
occupancy expenses. The bulk of the employee benefit plan expense was offset by
income related to the employee benefit plans in noninterest income while the
increase in occupancy expense was primarily due to increases in rent and repairs
related to Other Real Estate Owned.

In fiscal 1999, the Bank's FDIC premiums were assessed at $7,275 as required by
federal law.


                                      -17-
<PAGE>
Selected Financial Ratios. Set forth below are selected financial ratios of the
Company for fiscal 1999 and fiscal 1998:

                                                      1999           1998
                                                      ----           ----
         Return on average assets                    0.71%         0.51%
         Return on average equity                    7.38%         5.60%
         Dividend payout ratio on common stock       NONE        208.30%(a)
         Average equity to average assets            9.61%         9.02%

-----------
(a) This number reflects a 5% stock dividend on the Company's common stock paid
on May 21, 1998.

Provision for Income Taxes. A tax benefit of $375,035 was recognized in fiscal
1999 resulting from a net operating loss carryforward, which will be utilized to
reduce taxable income in future periods.

Financial Condition

Total Assets. The Company reported total assets of $73,348,883 at December 31,
2000, an increase of $8,510,660 or 13% from December 31, 1999 with assets of
$64,838,223.

Cash and Cash Equivalents. Cash and due from banks was $2,166,942 at December
31, 2000 compared to $2,664,584 at December 31, 1999 and represents cash
maintained at the Bank and funds that the Bank and the Company have deposited in
other financial institutions. The Bank reported $8,914,000 of federal funds sold
(which are inter-bank funds with daily liquidity) and securities purchased under
agreements to resell on December 31, 2000 and $4,532,173 on December 31, 1999.
The $4,381,827 increase in federal funds sold is primarily a result of increased
liquidity due to deposit growth resulting from the Company's marketing efforts
to increase deposits to match increased loan demand. The Bank's loan-to-deposit
funds ratio prior to loan loss reserve on December 31, 2000 was 83% compared to
90% on December 31, 1999.

Investment Securities. The Company's investment portfolio increased from
$1,127,881 as of December 31, 1999 to $1,708,618 at December 31, 2000 as a
result of the purchase of securities in excess of amounts which matured. A
portion of the securities in the Company's investment portfolio was originally
purchased with the intent to hold the securities until they mature. Another
portion was placed in the available for sale category as the securities may be
liquidated to provide cash for operating or financing purposes. The book values
of (i) U.S. Treasuries, (ii) U.S. Government agencies and (iii) other corporate
securities as of December 31, 2000 and December 31, 1999 were $1,708,618 and
$1,127,881 respectively.

The following table summarizes the maturity dates of those securities as of
December 31, 2000.


                                      -18-
<PAGE>
<TABLE>
<CAPTION>
                                                                      Investment Portfolio
                                                                       Repricing Schedule

                                                                     After 1 year
                                             1 year or less        through 5 years        After 5 years           Total
                                             ----------------      -----------------      ---------------      ------------
Available for Sale Securities:
    U.S. Treasury and other U.S.
<S>                                       <C>                   <C>                    <C>                  <C>
      Govt. agencies and corporations     $                0    $                 0    $               0    $            0
       Weighted Average Yield                             0%                     0%                   0%                0%
    Corporate Securities                             218,477                      0                    0           218,477
      Weighted Average Yield                           5.71%                     0%                   0%             5.71%

                                             ----------------      -----------------      ---------------      ------------
Total Available for Sale                  $          218,477    $                 0    $               0    $      218,477
      Weighted Avg. Yield of Total                     5.71%                     0%                   0%             5.71%

Held to Maturity Securities:
    U.S. Treasury and other U.S.
Govt. agencies and corporations           $                0    $         1,490,141    $               0    $    1,490,141
       Weighted Average Yield                          0.00%                  5.93%                0.00%             5.93%

                                             ----------------      -----------------      ---------------      ------------
Total Held to Maturity                    $                0    $         1,490,141    $               0    $    1,490,141
      Weighted Avg. Yield of Total                     0.00%                  5.93%                0.00%             5.93%

Total Securities                          $          218,477    $         1,490,141    $               0    $    1,708,618
      Weighted Avg. Yield of Total                     5.71%                  5.93%                0.00%             5.90%
                                             ================      =================      ===============      ============
</TABLE>

Amortized costs and fair values of available for sale securities are discussed
in Notes 4 and 5, respectively, to the Company's Consolidated Financial
Statements.

Loans. Loans prior to the allowance for loan losses increased from $51,692,567
at December 31, 1999 to $54,273,820 at December 31, 2000, an increase of
$2,581,253 or 5%. In addition to the $54,273,820 in loans outstanding that the
Bank reported on December 31, 2000, the Bank had unfunded loan commitments of
$14,393,269. Also, during fiscal year 2000 the Bank originated $1,574,050 in
mortgage loans sold in the secondary market compared to $4,815,550 secondary
market loans originated in 1999. The decline in secondary market loan volume was
primarily driven by lower mortgage loan demand due to higher interest rates.
There were $555,000 and $136,000 of mortgage loans held for sale at December 31,
2000 and December 31, 1999, respectively.

The following table summarizes the distribution of the Company's loans at
December 31, 2000 and December 31, 1999.

                                            Loan Portfolio Composition
                                                   December 31,
                               -------------------------------------------------
                                    2000                     1999
                               -----------------------  ------------------------
 Commercial                               $17,503,514              $ 19,086,012
 Real Estate:
    Construction                            3,835,587                 1,527,805
    Commercial                             15,992,871                13,948,074
    Residential                            14,935,218                14,128,501
 Installment and Consumer                   2,006,630                 3,002,175
                                            ---------                 ---------
                   Total Loans            $54,273,820               $51,692,567
                                          ===========               ===========


                                      -19-
<PAGE>

Some loans were reclassified during 2000 to conform more closely to regulatory
reporting classifications. The balances shown above reflect this
reclassification.

The following table summarizes the maturities of the Company's loan portfolio at
December 31, 2000 (excluding residential real estate, consumer and installment).
<TABLE>
<CAPTION>
                                                             Loan Maturities
--------------------------------------------------------------------------------------------------------------
                                 1 year                 After 1              After 5            Total
                                 or less            Through 5 Years           Years
--------------------------------------------------------------------------------------------------------------

<S>                         <C>                   <C>                    <C>                 <C>
  Commercial                $      13,739,771     $       18,019,348     $     1,737,266     $     33,496,385
  Real estate-construction          1,270,176              2,565,411                   0            3,835,587
                            -----------------     ------------------     ---------------     ----------------
                Total       $      15,009,947     $       20,584,759     $     1,737,266     $     37,331,972
</TABLE>

The following table summarizes the sensitivity of the Company's loan portfolio
to interest rate changes by fixed and adjustable-rate loans due after one year
at December 31, 2000 (excluding residential real estate, consumer and
installment).
<TABLE>
<CAPTION>
                                                        Amount of Loans Due After One Year With
           --------------------------------------------------------------------------------------------------
                                                Predetermined          Floating or adj.
                                                    Rates              interest rates            Total
           --------------------------------------------------------------------------------------------------

<S>                                              <C>                  <C>                  <C>
             Commercial                          $      17,772,835    $      1,983,779     $      19,756,614
             Real estate-construction                    2,565,411                   0             2,565,411
                                                 -----------------    ----------------     -----------------
                           Total                 $      20,338,246    $      1,983,779     $      22,322,025
</TABLE>

Non-Performing Assets. The Bank undertakes a continuous loan review process to
promote early identification of credit quality problems in its loan portfolio
and to ensure compliance with its loan policy and documentation. Any past due
loans and identified problem loans are reviewed with the Board of Directors of
the Bank on a monthly basis. An outside consulting firm assisted the Bank in its
loan review function in fiscal 2000. 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 non-accrual status
and all past accrued interest would be reversed.

As of December 31, 2000, management was not aware of any significant loans,
group of loans or segments of the loan portfolio not included above, where there
were serious doubts as to the ability of the borrowers to comply with the loan
payment terms.

The following table summarizes the Company's nonperforming loans as of December
31, 2000 and December 31, 1999.

                                                         December 31,
                                               ----------------------------
                                                    2000            1999
                                               ----------     ------------
     Non-accrual Loans                         $        0     $    325,055
     Accruing Loans, Past Due 90 Days + (1)    $        0     $          0

----------------
Loans are generally placed in non-accrual when contractually past due 90 days or
more.

For fiscal 2000 and fiscal 1999 the gross interest income which would have been
recorded had the non-accruing loans been current in accordance with their
original terms was $0 and $18,731, respectively, none of which was

                                      -20-
<PAGE>
recognized. The amounts of interest income on non-accruing loans that were
included in net income for fiscal 2000 and fiscal 1999 were $22,495 and $8,499,
respectively.

Allowance for Loan Losses. The Company's allowance for estimated loan losses was
$696,206, or 1.28% of loans at December 31, 2000 compared to $653,270, or 1.26%
of loans at December 31, 1999. See "Comparison of Operating Results for the
Years Ended December 31, 2000 and December 31, 1999 - Provision for Loan
Losses."

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 $519,514 (or 75% of the reserve for
loan losses) to these loans, which comprise about 69% of the loan portfolio. The
Bank has allocated $35,196 (or approximately 5.1% of the reserve for loan
losses) to residential mortgages, which comprise about 27% of the loan
portfolio. Consumer loans comprise about 4% of the loan portfolio, and $21,078
(or about 3.0% of the reserve for loan losses) is allocated to consumer loans.
The Bank has allocated $7,197 of the reserve for loan losses to unfunded loan
commitments, which total approximately $14,393,269. The balance of the reserve
for loan losses of $113,221 is unallocated.

Other Assets. The Company's office building, leasehold improvements and
equipment less accumulated depreciation and amortization increased to $2,601,253
at December 31, 2000 from $1,352,995 at December 31, 1999 as a result of
purchasing the building housing the bank's operations.

On December 31, 2000, the Bank and its subsidiary, had $656,947 in Other Real
Estate Owned compared to $905,938 on December 31, 1999, a decline of $248,991,
as a result of the sale of real estate assets owned by the Bank. Other Real
Estate Owned represents nine fully improved residential lots and one completed
model home. The Bank purchased these real estate assets from the bankruptcy
court in fiscal 1997 after the Bank's borrower filed for bankruptcy. The Bank
has a contract for the exclusive build-out of those lots by an area builder. All
of this real estate has been placed for sale.

Accrued interest receivable on loans and other assets was $3,168,509 at December
31, 2000 compared to $3,079,355 at December 31, 1999.

Deposits. The Bank began a marketing campaign in early 2000 to generate deposit
growth. The Bank was successful in increasing deposits by $7,858,210 from
$57,464,391 as of December 31, 1999 to $65,322,601 on December 31, 2000.

As of December 31, 2000, time deposits over $100,000 represented 12% of total
deposits. Set forth below is a schedule of the maturities as of December 31,
2000 for the Company's time deposits of $100,000 or more.

                                    Time Deposits of $100,000 or more
                                          Maturity Schedule
                            3 mos.    Over 3 mos.    Over 6 mos.
                           or less    thru 6 mos.    thru 12 mos.   Over 12 mos.
                          ---------  -----------     -----------    -----------

Certificates of Deposit   $    0     $ 1,713,428     $ 5,258,823    $   647,221

Other Liabilities. Accrued interest payable and other liabilities of $1,224,827
at December 31, 2000 compared to $712,424 at December 31, 1999 were made up of
accrued interest payable on deposit accounts, accounts payable and deferred
employee benefits. The majority of the increase was due to growth in time
deposits and higher rates paid on those time deposits.

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

                                      -21-
<PAGE>
of the Bank allows it the opportunity to expand the Bank's loan portfolio and
account for any deposit withdrawals which may occur. As of December 31, 2000 the
Bank had $11,299,419, primarily in federal funds, available to meet future
liquidity demands.

Capital Resources. The Bank's most recent notification as of July 15, 2000 from
the FDIC 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 "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 18 to the
Company's Consolidated Financial Statements for actual ratios for 2000 and 1999.

Asset/Liability Management. Closely related to liquidity management is the
management of interest-earning assets and interest-bearing liabilities. The
Company manages its rate sensitivity position to avoid wide swings in net
interest margins and to minimize risk due to changes in interest rates.

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 Company currently does not expect to experience any material fluctuations in
its net interest income in the short term as a consequence of changes in
interest rates.

The Company's strategy with respect to asset/liability management is to maximize
net interest income while limiting exposure to interest rate volatility. 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 monthly
GAP position within + or - 25% of 1.00.

The following table summarizes the repricing opportunities as of December 31,
2000 for each major category of interest-earning assets and interest-bearing
liabilities:
<TABLE>
<CAPTION>
                                                Interest-Rate-Sensitive Assets and Liabilities
                                                                (In thousands)

                                              0-89       90-179      180-359         360+
                                              Days         Days         Days         Days          Total
                                              ----         ----         ----         ----          -----

<S>                                 <C>                <C>          <C>            <C>       <C>
                    Investments     $          219            0            0        1,490    $     1,709

                          Loans     $       17,472        1,565        3,943       31,294    $    54,274
------------------------------------------------------------------------------------------------------------
    Total Rate Sensitive Assets     $       17,691        1,565        3,943       32,784    $    55,983

 Rate Sensitive Liabilities (1)     $       29,358(2)     7,108       13,105        5.637    $    55,208
------------------------------------------------------------------------------------------------------------

                            GAP     $      (11,667)      (5,543)      (9,162)      27,147

                 Cumulative GAP     $      (11,667)     (17,210)     (26,372)         775

      GAP/Rate Sensitive Assets             (66.0%)      (89.4%)     (113.7%)        1.38%

(1)      Savings, NOW, and Money Market Demand Deposits are considered as immediately repricable.
(2)      Includes total money market demand account balances.
</TABLE>

                                      -22-
<PAGE>
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.


                                      -23-
<PAGE>
<TABLE>
                     DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
                                         Average Balance Sheet
<CAPTION>
                                                                     2000                   1999
                                                              -------------------    -------------------
<S>                                                          <C>                    <C>
    Cash and due from banks                                  $         2,322,097    $         2,185,088
    Federal funds sold and
       securities purchased under agreement to resell                  5,891,847              8,625,770
    Interest-bearing deposits in other banks                             136,024                 98,958
    Investment securities:
        U.S. Treasury, agency and other securities                       639,562              2,137,006
    Loans:
        Real estate mortgages                                         14,411,155             15,531,501
        Consumer-net                                                   2,619,778              3,099,319
        Commercial and other                                          36,987,338             35,437,333
                                                              -------------------    -------------------
             Total                                                    54,018,271             50,068,153
        Less allowance for loan losses                                 (678,927)              (516,397)
                                                              -------------------    -------------------
             Net loans                                                53,339,344             49,551,756
    Fixed assets                                                       2,119,615              1,364,062
    Other real estate owned                                              809,412              1,077,062
    Cash surrender value of life insurance                             1,989,417              1,184,816
    Other assets                                                       1,222,291              1,364,965
                                                              -------------------    -------------------
             Total assets                                    $        68,469,609    $        67,589,483
                                                              ===================    ===================

    Interest-bearing deposits:
        NOW accounts                                         $         1,795,118    $         1,683,475
        Savings accounts                                               1,367,929              1,590,674
        Money Market deposit accounts                                 26,321,412             30,601,480
        Time deposits                                                 22,230,805             17,738,976
        Federal funds purchased                                            2,262                      0
                                                              -------------------    -------------------
             Total interest-bearing deposits                          51,717,526             51,614,605
        Demand deposits                                                8,781,695              8,697,185
                                                              -------------------    -------------------
              Total deposits                                          60,499,221             60,311,790
    Other liabilities                                                  1,184,193                784,150
                                                              -------------------    -------------------
              Total liabilities                                       61,683,414             61,095,940
    Equity capital                                                     6,786,195              6,493,543
                                                              -------------------    -------------------
              Total liabilities and capital                  $        68,469,609    $        67,589,483
                                                              ===================    ===================
</TABLE>
                                      -24-
<PAGE>
Item 7.  Financial Statements

                                                                           Page

Independent Auditor's Report.............................................     26
Consolidated Balance Sheets..............................................     27
Consolidated Statements of Income........................................     28
Consolidated Statements of Changes in Stockholders' Equity...............     29
Consolidated Statements of Cash Flows....................................     30
Notes to Consolidated Financial Statements...............................     31


                                      -25-
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT



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

We have audited the accompanying consolidated balance sheets of RidgeStone
Financial Services, Inc. and Subsidiary as of December 31, 2000 and 1999, and
the related consolidated statements of income, changes in stockholders' equity,
and cash flows for the years ended December 31, 2000, 1999 and 1998. These
consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall 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. and Subsidiary as of December 31, 2000 and 1999, and the results
of its operations and its cash flows for the years ended December 31, 2000, 1999
and 1998, in conformity with accounting principles generally accepted in the
United States of America.


                                             VIRCHOW, KRAUSE & COMPANY, LLP


Milwaukee, Wisconsin
February 1, 2001


                                      -26-
<PAGE>
<TABLE>
                                   RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                               CONSOLIDATED BALANCE SHEETS

                                               December 31, 2000 and 1999

--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                     ASSETS
                                                                                             2000               1999
                                                                                    ------------------ ------------------
<S>                                                                                 <C>                <C>
   Cash and due from banks                                                          $        2,050,908 $        2,400,560
   Interest bearing deposits in banks                                                          116,034            264,024
   Federal funds sold and securities purchased under agreements to resell                    8,914,000          4,532,173
   Available for sale securities - stated at fair value                                        218,477            128,500
   Held to maturity securities, fair value of $1,493,700 and
       $995,203                                                                              1,490,141            999,381
   Loans, less allowance for loan losses of $696,206 and
       $653,270                                                                             53,577,614         51,039,297
   Mortgage loans held for sale                                                                555,000            136,000
   Premises and equipment, net                                                               2,601,253          1,352,995
   Accrued interest receivable and other assets                                              3,825,456          3,985,293
                                                                                    ------------------ ------------------

          TOTAL ASSETS                                                              $       73,348,883 $       64,838,223
                                                                                    ================== ==================

                                          LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
   Deposits
       Demand                                                                       $       10,114,636 $       10,935,647
       Savings and NOW                                                                      27,603,851         29,609,892
       Other Time                                                                           27,604,114         16,918,852
                                                                                    ------------------ ------------------
          Total Deposits                                                                    65,322,601         57,464,391
   Accrued interest payable and other liabilities                                            1,224,827            712,424
                                                                                    ------------------ ------------------
       Total Liabilities                                                                    66,547,428         58,176,815
                                                                                    ------------------ ------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Preferred stock, no par value, 2,000,000 shares authorized,
       no shares issued                                                                              -                  -
   Common stock, no par value, 10,000,000 shares
       authorized, 876,492 shares issued and outstanding                                     8,417,117          8,417,117
   Retained deficit                                                                         (1,556,610)        (1,717,271)
                                                                                    ------------------ ------------------
                                                                                             6,860,507          6,699,846
   Accumulated other comprehensive loss                                                        (59,052)           (38,438)
                                                                                    ------------------ ------------------
       Total Stockholders' Equity                                                            6,801,455          6,661,408
                                                                                    ------------------ ------------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                $       73,348,883 $       64,838,223
                                                                                    ================== ==================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      -27-
<PAGE>
<TABLE>
                                   RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                            CONSOLIDATED STATEMENTS OF INCOME

                                      Years Ended December 31, 2000, 1999 and 1998

---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                2000             1999              1998
                                                                      -----------------  ---------------  ----------------
INTEREST INCOME
<S>                                                                   <C>                <C>              <C>
   Interest and fees on loans                                         $       4,829,387  $     4,263,539  $      4,284,718
   Interest on investment securities-
       taxable                                                                   55,449          276,087           237,396
   Interest on federal funds sold and securities purchased under
       agreements to resell                                                     364,852          286,165           411,276
   Interest on deposits in banks                                                  7,465            6,025             7,553
                                                                      -----------------  ---------------  ----------------
       Total Interest Income                                                  5,257,153        4,831,816         4,940,943
                                                                      -----------------  ---------------  ----------------

INTEREST EXPENSE
   Interest on deposits                                                       2,815,634        2,417,939         2,881,181

   Interest on federal funds purchased                                              157                -                 -
                                                                      -----------------  ---------------  ----------------
       Total Interest Expense                                                 2,815,791        2,417,939         2,881,181
                                                                      -----------------  ---------------  ----------------
Net interest income before provision for loan losses                          2,441,362        2,413,877         2,059,762
   Provision for loan losses                                                     42,500          282,500            65,000
                                                                      -----------------  ---------------  ----------------
Net interest income after provision for loan losses                           2,398,862        2,131,377         1,994,762
                                                                      -----------------  ---------------  ----------------

NONINTEREST INCOME
   Service charges on deposit accounts                                           94,222           87,322            40,532
   Secondary market fees                                                         19,218           55,446           153,275

   Increase in cash surrender value of life insurance                           108,206          104,832                 -
   Securities losses                                                             (9,164)         (15,402)           (7,687)
   Other income                                                                 140,476           79,998            96,052
                                                                      -----------------  ---------------  ----------------
       Total Noninterest Income                                                 352,958          312,196           282,172
                                                                      -----------------  ---------------  ----------------

NONINTEREST EXPENSES
   Salaries                                                                     968,395          855,383           852,399
   Pension, profit sharing and other employee benefits                          386,755          368,149           277,297
   Occupancy                                                                    345,800          313,395           260,134
   Furniture and equipment expenses                                             143,598          116,550           130,922
   Data processing fees                                                         133,059          136,573           104,626
   Professional fees                                                            237,337          124,078           169,483
   Other expenses                                                               327,872          425,302           342,899
                                                                      -----------------  ---------------  ----------------
       Total Noninterest Expenses                                             2,542,816        2,339,430         2,137,760
                                                                      -----------------  ---------------  ----------------

Income before income taxes                                                      209,004          104,143           139,174
   Less:  Applicable income taxes (benefits)                                     48,343         (375,035)         (192,203)
                                                                      -----------------  ---------------  ----------------

       NET INCOME                                                     $         160,661  $       479,178  $        331,377
                                                                      =================  ===============  ================

         Basic earnings per share                                     $            0.18  $          0.55  $           0.38
                                                                      =================  ===============  ================
         Diluted earnings per share                                   $            0.18  $          0.55  $           0.37
                                                                      =================  ===============  ================
         Weighted average shares outstanding                                    876,492          876,492           876,239
                                                                      =================  ===============  ================

</TABLE>

          See accompanying notes to consolidated financial statements.

                                      -28-
<PAGE>
<TABLE>
                                   RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                      Years Ended December 31, 2000, 1999 and 1998

-----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                                               Accumulated
                                                                                                  other
                                                                    Common        Retained    comprehensive
                                                                    stock         deficit         loss            Total
                                                                 -------------  -----------   -------------   --------------
<S>                                                               <C>           <C>           <C>             <C>
BALANCES - December 31, 1997                                      $  7,721,399  $(1,837,493)  $     (20,606)  $    5,863,300
                                                                                                              --------------

   Comprehensive income

       Net income - 1998                                                     -      331,377               -          331,377
       Change in unrealized gains (losses) on securities
          available for sale                                                 -            -           4,543            4,543
       Reclassification adjustment for gains
          (losses) realized in net income                                    -            -          (7,687)          (7,687)

       Income tax effect                                                     -            -           1,226            1,226
                                                                                                             ---------------
          Total Comprehensive Income                                                                                 329,459
                                                                                                             ---------------

   5% Stock dividend                                                   690,333    (690,333)               -                -
   Issuance of 437 shares of stock for the exercise of stock
       options                                                           5,385            -               -            5,385
                                                                 -------------  -----------   -------------   --------------


BALANCES - December 31, 1998                                         8,417,117   (2,196,449)        (22,524)       6,198,144
                                                                                                              --------------

   Comprehensive income

       Net income - 1999                                                     -      479,178               -          479,178
       Change in unrealized gains (losses) on securities
          available for sale                                                 -            -         (10,687)         (10,687)
       Reclassification adjustment for gains (losses)
          realized in net income                                             -            -         (15,402)         (15,402)

       Income tax effect                                                     -            -          10,175           10,175
                                                                                                              --------------
          Total Comprehensive Income                                                                                 463,264
                                                                 -------------  -----------   -------------   --------------

BALANCES - December 31, 1999                                         8,417,117   (1,717,271)        (38,438)       6,661,408
                                                                                                              --------------

   Comprehensive income

       Net income - 2000                                                     -      160,661               -          160,661
       Change in unrealized gains (losses) on securities
          available for sale                                                 -            -         (24,629)         (24,629)
       Reclassification adjustment for gains (losses)
          realized in net income                                             -            -          (9,164)          (9,164)

       Income tax effect                                                     -            -          13,179           13,179
                                                                                                              --------------
          Total Comprehensive Income                                                                                 140,047
                                                                 -------------  -----------   -------------   --------------


BALANCES - December 31, 2000                                      $  8,417,117  $(1,556,610)  $     (59,052)  $    6,801,455
                                                                  ============  ===========   =============   ==============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      -29-

<PAGE>
<TABLE>
                                     RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                            CONSOLIDATED STATEMENTS OF CASH FLOWS

                                        Years Ended December 31, 2000, 1999 and 1998

---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                        2000                1999                1998
                                                                ------------------  ------------------  ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                             <C>                 <C>                 <C>
    Net Income                                                  $          160,661  $          479,178  $          331,377
    Adjustments to reconcile net income to
      net cash flows from operating
      activities
        Depreciation                                                       190,433             152,026             170,166
        Amortization and accretion of bond
         premiums and discounts - net                                        9,240                 562                (839)
        Loss on sale of investment securities                                9,164              15,402               7,687
        Gain on disposal of premises and equipment                            (754)                  -                   -
        Provision for loan losses                                           42,500             282,500              65,000
        Provision (benefit) for deferred taxes                              48,343            (375,035)           (202,500)
        (Gain) loss on other real estate owned                             (34,007)             80,986                   -
        Net change in
           Mortgage loans held for sale                                   (419,000)            123,000             442,250
           Accrued interest receivable and other assets                   (128,497)           (243,550)         (1,763,161)
           Accrued interest payable and other liabilities                  512,403              97,889            (138,237)
                                                                ------------------  ------------------  ------------------
        Net Cash Flows from Operating Activities                           390,486             612,958          (1,088,257)
                                                                ------------------  ------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Net change in interest bearing deposits
      in banks                                                             147,990            (261,375)              1,536
    Net change in federal funds sold and
      securities purchased under agreements
      to resell                                                         (4,381,827)          7,992,827          (4,531,000)
    Activity in available for sale securities
        Sales                                                                8,086              55,548             391,316
        Maturities, prepayments and calls                                   45,000           1,465,000                   -
        Purchases                                                         (172,841)         (1,064,688)           (138,200)
    Activity in held to maturity securities
        Maturities, prepayments and calls                                1,000,000           1,000,000           2,500,000
        Purchases                                                       (1,500,000)           (250,000)                  -
    Net increase in loans                                               (2,580,817)         (3,015,467)         (3,438,299)
    Proceeds from sales of premises and equipment                           13,600                   -                   -
    Additions to premises and equipment                                 (1,451,537)           (128,361)           (143,744)
    Net disbursements on other real estate owned                           (22,502)           (622,589)           (186,681)
    Proceeds from other real estate owned                                  296,500             933,500             663,335
                                                                ------------------  ------------------  ------------------
        Net Cash Flows from Investing Activities                        (8,598,348)          6,104,395          (4,881,737)
                                                                ------------------  ------------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Net increase (decrease) in deposits                                  7,858,210          (7,058,465)          6,035,231
    Proceeds from stock options exercised                                        -                   -               5,385
                                                                ------------------  ------------------  ------------------
        Net Cash Flows from Financing Activities                         7,858,210          (7,058,465)          6,040,616
                                                                ------------------  ------------------  ------------------

           Net Change in Cash and Due From Banks                          (349,652)           (341,112)             70,622

CASH AND DUE FROM BANKS - BEGINNING OF YEAR                              2,400,560           2,741,672           2,671,050
                                                                ------------------  ------------------  ------------------

    CASH AND DUE FROM BANKS - END OF YEAR                       $        2,050,908  $        2,400,560  $        2,741,672
                                                                ==================  ==================  ==================

SUPPLEMENTAL CASH FLOW DISCLOSURES
    Cash paid for interest                                      $        2,415,698  $        2,641,890  $        2,862,321
    Cash paid for income taxes                                                   -                  50              10,297

</TABLE>

          See accompanying notes to consolidated financial statements.

                                      -30-

<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999

--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies
--------------------------------------------------------------------------------

    Consolidation

The consolidated financial statements of RidgeStone Financial Services, Inc. and
Subsidiary (the Company) include the accounts of its wholly owned subsidiary,
RidgeStone Bank (the "subsidiary Bank"). RidgeStone Bank includes the accounts
of its wholly owned subsidiary, RidgeStone Real Estate Divestitures, Inc. The
consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America and
conform to general practices within the banking industry. All significant
intercompany accounts and transactions have been eliminated in the consolidated
financial statements.

    Nature of Banking Activities

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

    Use of Estimates

In preparing consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance sheet and reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates. Material estimates that are particularly
susceptible to significant change in the near term relate to the determination
of the allowance for loan losses, and the valuation of foreclosed real estate
and deferred tax assets.

    Cash and Cash Equivalents

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

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


    Interest Bearing Deposits in Banks

Interest bearing deposits in banks mature within one year and are carried at
cost.


    Available for Sale Securities

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


                                      -31-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999
--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
--------------------------------------------------------------------------------

    Held to Maturity Securities

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

    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 income is accrued
on the unpaid principal balance. 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 payments 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.

    Mortgage Loans Held for Sale

Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated market value in the aggregate. Net
unrealized losses are recognized through a valuation allowance by charges to
income. All sales are made without recourse.

    Allowance for Loan Losses

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

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


                                      -32-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999
--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
--------------------------------------------------------------------------------

    Premises 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 range from 15 to 40 years for
buildings and leasehold improvements and 3 to 10 years for equipment.

    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.

    Other Real Estate Owned

Other real estate owned, acquired through partial or total satisfaction of
loans, is carried at the lower of cost or fair value less cost to sell. At the
date of acquisition, losses are charged to the allowance for loan losses.
Revenue and expenses from operations and changes in the valuation allowance are
included in losses on foreclosed real estate.

    Income Taxes

The Company files a consolidated federal income tax return and individual 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, nonaccrual loan income, deferred compensation, pension, fixed
assets, net operating losses and unrealized gains and losses on available for
sale securities. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.

    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.

    Earnings Per Share

Earnings per share are computed based upon the weighted average number of common
shares outstanding during each year. In the computation of diluted earnings per
share, all dilutive stock options are assumed to be exercised at the beginning
of each year and the proceeds are used to purchase shares of the Company's
common stock at the average market price during the year.


                                      -33-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999
--------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies (cont.)
--------------------------------------------------------------------------------

    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 due from banks
                  Federal funds sold and securities purchased under agreements
                    to resell Interest-bearing deposits
                  in banks
                  Available for sale securities
                  Accrued interest receivable
                  Variable rate loans that reprice frequently where no
                    significant change in credit risk has occurred
                  Mortgage loans held for sale
                  Cash surrender value of life insurance
                  Demand deposits
                  Variable rate money market accounts
                  Variable rate certificates of deposit
                  Accrued interest payable

         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
             -----------------------------
                  Guarantees
                  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 determined it does not
have a distinguishable fair value.

    Reclassification

Certain 1999 and 1998 amounts have been reclassified to conform with the 2000
presentation. The reclassifications have no effect on reported amounts of net
income or equity.


                                      -34-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999
--------------------------------------------------------------------------------
NOTE 2 - Cash and Due From Banks
--------------------------------------------------------------------------------

The subsidiary Bank is required to maintain vault cash and reserve balances with
Federal Reserve Banks based upon a percentage of deposits. These requirements
approximated $143,000 and $158,000 at December 31, 2000 and 1999, respectively.

--------------------------------------------------------------------------------
NOTE 3 - Securities Purchased Under Agreements To Resell
--------------------------------------------------------------------------------

The subsidiary Bank enters into purchases of securities under agreements to
resell substantially identical securities. These agreements are classified as
secured loans. Securities purchased under agreements to resell at December 31,
1999 consisted of SBA Loans. There were no securities purchased under agreements
to resell at December 31, 2000.

The amounts advanced under these agreements are reflected as assets in the
consolidated balance sheet. It is the subsidiary Bank's policy to take
possession of securities purchased under agreements to resell. Agreements with
third parties specify the subsidiary Bank's rights to request additional
collateral, based on its monitoring of the fair value of the underlying
securities on a daily basis. The securities are delivered by appropriate entry
into a third-party custodian's account designated by the subsidiary Bank under a
written custodial agreement that explicitly recognizes the subsidiary Bank's
interest in the securities. At December 31, 1999, these agreements matured
within 90 days and no material amount of agreements to resell securities
purchased was outstanding with any individual dealer.

--------------------------------------------------------------------------------
NOTE 4 - Available for Sale Securities
--------------------------------------------------------------------------------

Amortized costs and fair values of available for sale securities as of December
31, 2000 and 1999 are summarized as follows:

                                                  2000
                             --------------------------------------------------
                                              Gross        Gross
                               Amortized    Unrealized   Unrealized
                                 Cost        Gains        Losses      Fair Value
                             -----------    --------     --------     ---------
Federal Home Loan Bank stock   $ 159,300    $      -     $      -     $ 159,300
Other equity securities          118,229           -       59,052        59,177
                             -----------    --------     --------     ---------
        Totals                 $ 277,529    $      -     $ 59,052     $ 218,477
                             ===========    ========     ========     =========

                                                  1999
                             --------------------------------------------------
                                              Gross        Gross
                               Amortized    Unrealized   Unrealized
                                 Cost        Gains        Losses      Fair Value
                             -----------    --------     --------     ---------
Equity securities              $ 121,938    $      -     $ 38,438     $  83,500
Corporate securities              45,000           -            -        45,000
                             -----------    --------     --------     ---------
        Totals                 $ 166,938    $      -     $ 38,438     $ 128,500
                             ===========    ========     ========     =========

Expected maturities will differ from contractual maturities in corporate and
other equity securities since the anticipated maturities are not readily
determinable.


                                      -35-
<PAGE>
<TABLE>
                                     RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                 December 31, 2000 and 1999

---------------------------------------------------------------------------------------------------------------------------
NOTE 4 - Available For Sale Securities (cont.)
---------------------------------------------------------------------------------------------------------------------------

Following is a summary of the proceeds from sales of investment securities available for sale, as well as gross gains and
losses for the years ended December 31:
<CAPTION>
                                                                          2000                1999               1998
<S>                                                                <C>                 <C>                <C>
    Proceeds from sales of available for sale securities           $            8,086  $          55,548  $         391,316
                                                                   ==================  =================  =================

    Gross gains on sales                                           $                -  $               -  $          23,748
    Gross losses on sales                                                      (9,164)           (15,402)           (31,435)
                                                                   ------------------  -----------------  -----------------
                                                                   $           (9,164) $         (15,402) $          (7,687)
                                                                   ==================  =================  =================

    Related income taxes (benefit)                                 $          (3,666)  $         (6,084)  $         (3,036)
                                                                   ==================  =================  =================

There were no securities pledged as collateral at December 31, 2000 and 1999.

---------------------------------------------------------------------------------------------------------------------------
NOTE 5 - Held to Maturity Securities
---------------------------------------------------------------------------------------------------------------------------

Amortized costs and fair values of held to maturity securities as of December 31, 2000 and 1999 are summarized as follows:
<CAPTION>
                                                                               2000
                                                ---------------------------------------------------------------------------
                                                                         Gross               Gross
                                                   Amortized           Unrealized          Unrealized
                                                     Cost                Gains               Losses          Fair Value
                                                -----------------  ------------------  -----------------  -----------------
Obligations of other U.S. government
<S>                                             <C>                <C>                 <C>                <C>
    agencies and corporations                   $       1,490,141  $            3,609  $              50  $       1,493,700
                                                =================  ==================  =================  =================
<CAPTION>
                                                                               1999
                                                ---------------------------------------------------------------------------
                                                                         Gross               Gross
                                                   Amortized           Unrealized          Unrealized
                                                     Cost                Gains               Losses          Fair Value
                                                -----------------  ------------------  -----------------  -----------------
<S>                                             <C>                <C>                 <C>                <C>
U.S. Treasury securities                        $         749,381  $            2,572  $               -  $         751,953
Obligations of other U.S. government
    agencies and corporations                             250,000                   -              6,750            243,250
                                                -----------------  ------------------  -----------------  -----------------
        Totals                                  $         999,381  $            2,572  $           6,750  $         995,203
                                                =================  ==================  =================  =================

The amortized cost and fair value of held to maturity securities as of December 31, 2000, by contractual maturity are shown
below.
<CAPTION>
                                                                                                       2000
                                                                                     --------------------------------------
                                                                                           Amortized
                                                                                             Cost             Fair Value
<S>                                                                                  <C>                  <C>
    Due after one year through 5 years                                                 $       1,490,141  $       1,493,700
                                                                                      ==================  =================

There were no securities pledged at December 31, 2000 and 1999.
</TABLE>


                                      -36-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999

--------------------------------------------------------------------------------
NOTE 6 - Loans
--------------------------------------------------------------------------------

Major classifications of loans are as follows at December 31:

                                               2000               1999
                                        -----------------  -----------------
    Commercial                          $      17,503,514  $      19,086,012
    Real estate
         Construction                           3,835,587          1,527,805
         Commercial                            15,992,871         13,948,074
         Residential                           14,935,218         14,128,501
    Installment and consumer                    2,006,630          3,002,175
                                        ------------------ -----------------
                                               54,273,820         51,692,567
    Less: Allowance for loan losses             (696,206)          (653,270)
                                        ------------------ -----------------
         Net Loans                      $      53,577,614  $      51,039,297
                                        ================== =================

Impaired loans of $0 and $325,055 at December 31, 2000 and 1999, respectively,
have been recognized in conformity with FASB Statement No. 114 as amended by
FASB Statement No. 118. The average recorded amount of impaired loans during
2000 and 1999 was $122,160 and $320,466, respectively. The total allowance for
loan losses related to these loans was $0 and $28,023 at December 31, 2000 and
1999, respectively. Interest income on impaired loans of $22,495, $8,499, and
$64,157 was recognized for cash payments received in 2000, 1999 and 1998,
respectively.

Certain directors and executive officers of the Company, and their related
interests, had loans outstanding in the aggregate amounts of $1,387,952 and
$1,143,159 at December 31, 2000 and 1999, respectively. During 2000, $744,487 of
new loans were made and repayments totaled $499,694. 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 7 -  Allowance for Loan Losses
--------------------------------------------------------------------------------

The allowance for loan losses reflected in the accompanying consolidated
financial statements represents the allowance available to absorb loan losses.
An analysis of changes in the allowance is presented in the following tabulation
as of December 31:

                                        2000            1999          1998
                                      ----------     -----------   ----------
BALANCE - Beginning of Year           $  653,270     $   562,747   $  624,740
  Charge-offs                            (24,154)       (191,977)    (126,993)
  Recoveries                              24,590               -            -
  Provision charged to operations         42,500         282,500       65,000
                                      -----------    -----------   ----------
BALANCE - End of Year                 $  696,206     $   653,270   $  562,747
                                      ==========     ===========   ==========

                                      -37-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999
--------------------------------------------------------------------------------
NOTE 8 - Premises and Equipment
--------------------------------------------------------------------------------

Premises and equipment are stated at cost less accumulated depreciation at
December 31 and are summarized as follows:

                                                   2000           1999
                                                -------------- --------------
    Land                                        $     232,200  $      72,200
    Building and leasehold improvements             2,159,316      1,041,147
    Furniture and equipment                         1,121,188      1,021,974
                                                -------------- -------------
                                                    3,512,704      2,135,321
    Less: Accumulated depreciation                  (911,451)      (782,326)
                                                -------------- -------------
        Net Premises and Equipment              $   2,601,253  $   1,352,995
                                                ============== =============

Depreciation expense amounted to $190,433, $152,026, and $170,166 in 2000, 1999
and 1998, respectively.

--------------------------------------------------------------------------------
NOTE 9 - Deposits
--------------------------------------------------------------------------------

The aggregate amount of Time deposits, each with a minimum denomination of
$100,000, was $7,619,472 and $4,254,004 at December 31, 2000 and 1999,
respectively.

At December 31, 2000, the scheduled maturities of Time deposits are as follows:

    2001                                        $      21,966,876
    2002                                                5,203,472
    2003                                                  362,596
    2004                                                   62,384
    2005                                                    8,786
                                                -----------------
                                                $      27,604,114
                                                =================

--------------------------------------------------------------------------------
NOTE 10 - Stockholders' Equity
--------------------------------------------------------------------------------

The RidgeStone Financial Services, Inc. Stock Option Plan (the "Plan") provides
for the granting of options to purchase up to 525,000 shares of common stock to
key officers and employees of the Company. Options granted to date under the
Plan have been granted at the fair market value of the common stock on the date
of the grant. Options granted under the Plan 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 Plan is summarized in the following table:
<TABLE>
<CAPTION>
                                                   2000                       1999                        1998
                                         -------------------------  --------------------------  ---------------------------
                                                          Weighted                    Weighted                     Weighted
                                                          Average                     Average                      Average
                                           Shares         Price        Shares         Price        Shares           Price
                                         -------------    --------  ------------   -----------  ----------         --------
<S>                                      <C>              <C>       <C>              <C>        <C>                <C>
OUTSTANDING - Beginning of Year                213,037    $  13.78       150,412      $  14.96      96,875         $  13.20
      Granted                                   74,025        6.00        63,300         11.00      52,050            18.50
      Exercised                                      -           -             -             -        (437)           12.32
      Cancelled or forfeited                      (587)      14.09          (675)        14.37      (2,923)           17.24
      Stock dividend                                 -           -             -             -       4,847            13.20
                                         -------------              ------------                ----------         --------
OUTSTANDING - End of Year                      286,475       11.79       213,037         13.78     150,412            14.96
                                         =============              ============                ==========

Exercisable at year end                        153,842                    99,823                    50,174
Weighted average fair value of:
    Options granted                      $        2.73              $       5.48                $     6.06
Available for future grant at year end         238,088                   311,526                   374,151
</TABLE>

                                      -38-
<PAGE>
<TABLE>
                                      RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                  December 31, 2000 and 1999

---------------------------------------------------------------------------------------------------------------------------
NOTE 10 - Stockholders' Equity (cont.)
---------------------------------------------------------------------------------------------------------------------------

The following table summarizes information about Plan awards outstanding at December 31, 2000:
<CAPTION>
                                                  Options Outstanding                           Options Exercisable
                                                       Weighted-           Weighted-                         Weighted-
                                                       Average             Average                           Average
                                     Number           Remaining          Exercisable          Number         Exercise
        Exercise Price            Outstanding       Contractual Life         Price         Exercisable         Price
 -----------------------------  -----------------  ------------------   ---------------  ----------------   ---------------
<S>                    <C>                <C>           <C>             <C>                   <C>            <C>
                       $ 11.75            49,717        5.5 years       $       11.75            49,717      $      11.75
                         14.63            49,983        6.3 years               14.63            49,983             14.63
                         18.50            49,600        7.3 years               18.50            33,068             18.50
                         11.00            63,225        8.5 years               11.00            21,074             11.00
                          6.00            73,950        9.3 years                6.00                 -              6.00
                                ------------------                                       -----------------
                                         286,475                                                153,842
                                ==================                                       =================

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

The Company applies APB Opinion 25 and related interpretations in accounting for the Plan. Accordingly, no compensation cost
has been recognized for its stock option awards. Had compensation cost for the Plan been determined based upon fair value at
the grant dates for awards under the Plan consistent with the method of FASB Statement 123, the Company's net income and
earnings per share would have been reduced to the pro forma amounts indicated below:.
<CAPTION>
                                                                          2000                1999               1998
                                                                   -----------------   -----------------  -----------------
<S>                                                                <C>                 <C>                <C>
    Net income - as reported                                       $         160,661   $         479,178  $         331,377
         Pro forma                                                 $         (10,664)  $         336,501  $         248,306
    Basic earnings per share - as reported                         $            0.18   $            0.55  $            0.38
         Pro forma                                                 $           (0.01)  $            0.38  $            0.28
    Diluted earnings per share - as reported                       $            0.18   $            0.55  $            0.37
         Pro forma                                                 $           (0.01)  $            0.38  $            0.28
---------------------------------------------------------------------------------------------------------------------------

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions used for the grants in 2000, 1999 and 1998, respectively: expected volatility of
24.34, 25.93 and 24.22, risk-free interest rates of 5.94%, 7.04% and 5.35%; and expected lives of 8 years, 8 years, and 8
years, respectively with assumption of no dividend yield.

A reconciliation of the numerators and the denominators of earnings per share and earnings per share assuming dilution is:

<CAPTION>
                                                                         Income             Shares         Per Share Amount
                                                                   ------------------  -----------------  -----------------
    2000
<S>                                                                <C>                          <C>       <C>
         Earnings per share                                        $          160,661            876,492  $            0.18
                                                                                                          =================
         Effect of options                                                          -                  -
                                                                   ------------------  -----------------
             Earnings per share - assuming dilution                $          160,661            876,492  $            0.18
                                                                   ==================  =================  =================
    1999
         Earnings per share                                        $          479,178            876,492  $            0.55
                                                                                                          =================
         Effect of options                                                          -                  -
                                                                   ------------------  -----------------
             Earnings per share - assuming dilution                $          479,178            876,492  $            0.55
                                                                   ==================  =================  =================
    1998
         Earnings per share                                        $          331,337            876,239  $            0.38
                                                                                                          =================
         Effect of options                                                          -             13,118
                                                                   ------------------  -----------------
             Earnings per share - assuming dilution                $          331,337            889,357  $            0.37
                                                                   ==================  =================  =================
</TABLE>

                                      -39-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999

--------------------------------------------------------------------------------
NOTE 11 - Income Taxes
--------------------------------------------------------------------------------

The provision for income taxes included in the accompanying consolidated
financial statements consists of the following components at December 31:

                                               2000        1999         1998
                                           -----------  ----------  ----------
    Current Taxes
         Federal                           $         -  $        -  $        -
                                           -----------  ----------  ----------
         State                                       -  -               10,297
                                           -----------  ----------  ----------
                                                     -  -               10,297
                                           -----------  ----------  ----------

    Deferred Income Taxes (Benefit)
         Federal                                41,770    (324,045)   (170,100)
         State                                   6,573     (50,990)    (32,400)
                                           -----------  ----------  ----------
                                                48,343    (375,035)   (202,500)
                                           -----------  ----------  ----------
         Total Provision for Income Taxes  $    48,343  $ (375,035) $ (192,203)
                                           ===========  ==========  ==========


At December 31, 2000, the Company had a net operating loss carryforward for
income tax purposes of approximately $573,000 which, if not utilized to reduce
taxable income in future periods, will expire at the end of 2011


The net deferred tax assets in the accompanying consolidated balance sheets
include the following amounts of deferred tax assets and liabilities at December
31:

                                                           2000        1999
                                                         ---------   ---------
  Deferred Tax Assets
       Allowance for loan losses                         $ 233,521   $ 216,797
       Deferred compensation                               128,155      69,919
       Start up costs                                            -      36,171
       Salary continuation                                  10,776       5,388
       Net operating loss carryforward                     233,071     318,829
       Other                                                 1,847      11,268
  Deferred Tax Liabilities
       Unrealized gain on available for sale securities     (5,939)     (8,598)
                                                         ----------  ---------
                                                         $ 601,431   $ 649,774
                                                         ==========  =========


Management believes it is more likely than not that the gross deferred tax
assets will be fully realized. Therefore, no valuation allowance has been
recorded as of December 31, 2000 and 1999.

                                      -40-
<PAGE>
<TABLE>
                                      RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                  December 31, 2000 and 1999

---------------------------------------------------------------------------------------------------------------------------
NOTE 11 - Income Taxes (cont.)
---------------------------------------------------------------------------------------------------------------------------

A reconciliation of statutory federal income taxes based upon income before
taxes to the provision for federal and state income taxes for the period, as
summarized previously, is as follows:
<CAPTION>
                                                   2000                      1999                      1998
                                                        % of                       % of                        % of
                                                       Pretax                     Pretax                      Pretax
                                         Amount        Income       Amount        Income        Amount        Income
                                     --------------   ---------   ----------    ----------   ------------   -----------
    Reconciliation of statutory to
<S>                                  <C>                 <C>      <C>           <C>          <C>            <C>
      effective rates
      Federal income taxes at
        statutory rate               $       71,061      34.00%   $   35,409         34.00%   $    47,319         34.00%
          Adjustments for
             Increases in taxes
               resulting from
               state income
               taxes                              -          -             -             -          6,178          4.40
             Increase in cash
               surrender value of
               life insurance               (36,790)    (17.60)      (35,643)       (34.23)             -             -
             Reduction of
               deferred tax
               valuation
               allowance                          -          -      (385,211)      (369.89)      (235,179)      (162.50)
             Other - net                     14,072       6.73        10,410         10.00        (10,521)       (14.00)
                                     --------------   --------    ----------    ----------    -----------   -----------
    Effective Income Taxes -
      Operations                     $       48,343      23.13%   $ (375,035)      (360.12)%  $  (192,203)      (138.10)%
                                     ==============   ========    ==========    ==========    ===========   ===========
</TABLE>

--------------------------------------------------------------------------------
NOTE 12 - Profit-Sharing Plan
--------------------------------------------------------------------------------

The Company has a trusteed 401 (k) plan. The Company contributed $8,077,
$32,938, and $20,592 in 2000, 1999 and 1998, respectively.

--------------------------------------------------------------------------------
NOTE 13 - Salary Continuation Agreement
--------------------------------------------------------------------------------

The Company has entered into salary continuation agreements with various
executive officers. The agreements provide for the payment of specified amounts
upon the employee's retirement or death which is being accrued over the
anticipated remaining period of employment. The salary continuation accrual
balance was $325,681 and $183,818 at December 31, 2000 and 1999, respectively.
Expenses recognized for future benefits under these agreements totaled $155,555,
$141,877 and $49,000 in 2000, 1999 and 1998, respectively.

Although not part of the agreement, the Company purchased paid-up split dollar
life insurance on the officers which could provide funding for the payment of
benefits. Included in other assets is $2,037,186 and $1,942,672 of related cash
surrender value as of December 31, 2000 and 1999, respectively.

--------------------------------------------------------------------------------
NOTE 14 - Facilities Lease
--------------------------------------------------------------------------------

On May 31, 2000, the Company exercised the option to purchase the building they
had been leasing. Lease expense for the years ended December 31, 2000, 1999 and
1998 was $94,956, $113,167 and $94,235, respectively.

                                      -41-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999

--------------------------------------------------------------------------------
NOTE 15 - 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 sheets.

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, 2000 and 1999 is as follows:

                                                      2000          1999
Financial instruments whose contract amounts       -----------  ------------
 represent credit risk:
         Commitments to extend credit              $13,231,961  $12,497,170
         Credit card commitments                   $ 1,053,558  $   916,854
         Standby letters of credit                 $   107,750  $   109,200

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.

As of December 31, 2000, the Company and the subsidiary Bank do not engage in
the use of interest rate swaps, futures or option contracts.

----------------------------------------------------------------------------
NOTE 16 - Concentration of Credit Risk
----------------------------------------------------------------------------

Practically all of the subsidiary Bank's loans, commitments, and commercial and
standby letters of credit have been granted to customers in the subsidiary
Bank's market area. Although the subsidiary Bank has a diversified loan
portfolio, the ability of its debtors to honor their contracts is dependent on
the economic conditions of the counties surrounding the subsidiary Bank. The
concentration of credit by type of loan is set forth in Note 6.

                                      -42-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999

-------------------------------------------------------------------------------
NOTE 17 - Retained Earnings
-------------------------------------------------------------------------------

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 earnings. 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. Unless exempted
by the Wisconsin Department of Financial Institutions, Division of Banking, a
state bank may not pay or declare dividends on capital stock in excess of 50% of
its net earnings until its surplus fund is fully restored to an amount equal to
100% of the bank's capital stock. Federal regulators have authority to prohibit
a bank from engaging in any action deemed by them to constitute an unsafe or
unsound practice, including payment of dividends.

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 18 - Regulatory Capital Requirements
-------------------------------------------------------------------------------

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

Quantitative measures established by regulation to ensure capital adequacy
require the Company and the subsidiary Bank to maintain minimum amounts and
ratios (set forth in the table on the following page) 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
that as of December 31, 2000 and 1999 the Company and the subsidiary Bank met
all capital adequacy requirements to which they are subject.

As of December 31, 2000, 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, an institution must maintain minimum total risk-based, Tier I
risk-based, and Tier 1 leverage ratios as set forth in the following table.
There are no conditions or events since these notifications that management
believes have changed the institution's category.

                                      -43-
<PAGE>
<TABLE>

                                      RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                  December 31, 2000 and 1999

---------------------------------------------------------------------------------------------------------------------------------
NOTE 18 - Regulatory Capital Requirements (cont.)
---------------------------------------------------------------------------------------------------------------------------------

Listed below is a comparison of the Company's and the subsidiary Bank's actual capital amounts with the minimum requirements
for well capitalized and adequately capitalized banks, as defined by the federal regulatory agencies' Prompt Corrective
Action Rules, as of December 31, 2000 and 1999.
<CAPTION>
                                                                                                     To Be Well Capitalized
                                                                          For Capital Adequacy       Under Prompt Corrective
                                                        Actual                 Purposes                 Action Provisions
                                             -----------------------     -----------------------    ------------------------
                                               Amount         Ratio        Amount         Ratio        Amount         Ratio
                                             -------------  --------     -----------     -------    ------------      ------
As of December 31, 2000
   Total capital (to risk weighted assets)
<S>                                          <C>                <C>      <C>                <C>     <C>               <C>
      RidgeStone Financial Services, Inc     $   7,206,713      12.2%    $  4,708,870       8.0%        N/A           N/A
      RidgeStone Bank                        $   6,823,319      11.6%    $  4,706,074       8.0%    $  5,882,592      10.0%
   Tier 1 capital (to risk weighted assets)
      RidgeStone Financial Services, Inc     $   6,510,507      11.1%    $  2,354,435       4.0%        N/A           N/A
      RidgeStone Bank                        $   6,127,113      10.4%    $  2,353,037       4.0%    $  3,529,555       6.0%
   Tier 1 capital (to average assets)
      RidgeStone Financial Services, Inc     $   6,510,507       8.7%    $  2,980,999       4.0%        N/A           N/A
      RidgeStone Bank                        $   6,127,113       8.3%    $  2,963,849       4.0%    $  3,704,811       5.0%
As of December 31, 1999
   Total capital (to risk weighted assets)
      RidgeStone Financial Services, Inc     $   6,936,116      12.4%    $  4,476,857       8.0%        N/A           N/A
      RidgeStone Bank                        $   6,534,774      11.7%    $  4,465,039       8.0%    $  5,581,298      10.0%
   Tier 1 capital (to risk weighted assets)
      RidgeStone Financial Services, Inc     $   6,282,846      11.2%    $  2,238,428       4.0%        N/A           N/A
      RidgeStone Bank                        $   5,881,504      10.5%    $  2,232,519       4.0%    $  3,348,778       6.0%
   Tier 1 capital (to average assets)
      RidgeStone Financial Services, Inc     $   6,282,846       9.5%    $  2,631,706       4.0%        N/A           N/A
      RidgeStone Bank                        $   5,881,504       9.0%    $  2,626,440       4.0%    $  3,283,050       5.0%

---------------------------------------------------------------------------------------------------------------------------
NOTE 19 - Fair Value of Financial Instruments
---------------------------------------------------------------------------------------------------------------------------

The estimated fair values of financial instruments at December 31, 2000 and 1999 are as follows:
<CAPTION>
                                                              2000                                    1999
                                                    Carrying          Estimated            Carrying        Estimated
                                                     Amount          Fair Value             Amount         Fair  Value
FINANCIAL ASSETS
<S>                                            <C>                <C>                 <C>                <C>
    Cash and due from banks                    $        2,050,908 $        2,050,908  $        2,400,560 $       2,400,560
                                               ================== ==================  ================== =================
    Interest bearing deposits in banks         $          116,034 $          116,034  $          264,024 $         264,024
                                               ================== ==================  ================== =================
    Federal funds sold and securities
      purchased under agreements to resell     $        8,914,000 $        8,914,000  $        4,532,173 $       4,532,173
                                               ================== ==================  ================== =================
    Securities                                 $        1,708,618 $        1,712,177  $        1,127,881 $       1,123,703
                                               ================== ==================  ================== =================
    Loans, net                                 $       53,577,614 $       52,800,132  $       51,039,297 $      51,216,732
                                               ================== ==================  ================== =================
    Mortgage loans held for sale               $          555,000 $          555,000  $          136,000 $         136,000
                                               ================== ==================  ================== =================
    Cash surrender of life insurance policies  $        2,037,186 $        2,037,186  $        1,942,672 $       1,942,672
                                               ================== ==================  ================== =================
    Accrued interest receivable                $          421,288 $          421,288  $          401,784 $         401,784
                                               ================== ==================  ================== =================
FINANCIAL LIABILITIES
    Deposits                                   $       65,322,601 $       65,353,717  $       57,464,391 $      57,472,425
                                               ================== ==================  ================== =================
    Accrued interest payable                   $          709,596 $          709,596  $          309,503 $         309,503
                                               ================== ==================  ================== =================
</TABLE>

                                      -44-
<PAGE>
               RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 2000 and 1999

--------------------------------------------------------------------------------
NOTE 19 - Fair Value of Financial Instruments (cont.)
--------------------------------------------------------------------------------

The estimated fair value of fee income on letters of credit at December 31, 2000
and 1999 is insignificant. Loan commitments on which the committed interest rate
is less than the current market rate are also insignificant at December 31, 2000
and 1999.

The subsidiary Bank 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 subsidiary Bank's financial instruments will change when interest
rate levels change and that change may be either favorable or unfavorable to the
subsidiary Bank. 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 subsidiary Bank's overall interest rate risk.

-------------------------------------------------------------------------------
NOTE 20 - Regulatory Understanding
-------------------------------------------------------------------------------

During 2000, the subsidiary Bank entered into an agreement with the Federal
Deposit Insurance Corporation and the State of Wisconsin Department of Financial
Institutions. The agreement requires the subsidiary Bank to develop written
profit and liquidity plans and places certain restrictions on the subsidiary
Bank's activities. Some of the restrictions include maintaining Tier 1 capital
at a level equal to or exceeding 8.0% of the Bank's total assets, and refraining
from payment of any cash dividends. At December 31, 2000, the management
believes it is in compliance with the regulatory agreement.


                                      -45-
<PAGE>
<TABLE>

                                     RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                 December 31, 2000 and 1999

-------------------------------------------------------------------------------------------------------------------------
NOTE 21 - RidgeStone Financial Services, Inc (Parent Company Only) Financial Information
-------------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                                  CONDENSED BALANCE SHEETS

                                                                                                 December 31,
                                                                                    -------------------------------------
                                                                                            2000               1999
                                                                                    ------------------ ------------------
ASSETS
<S>                                                                                 <C>                <C>
   Cash and due from banks                                                          $           27,381 $            8,740
   Interest bearing deposits in banks                                                          116,034            258,165
   Available for sale securities - stated at fair value                                         59,177             83,500
   Investment in subsidiary                                                                  6,477,114          6,298,503
   Accrued interest receivable and other assets                                                121,749             12,500
                                                                                    ------------------ ------------------

          TOTAL ASSETS                                                              $        6,801,455 $        6,661,408
                                                                                    ================== ==================


STOCKHOLDERS' EQUITY
   Preferred stock, no par value, 2,000,000 shares authorized, no
       shares issued                                                                $                - $                -
   Common stock, no par value,
       10,000,000 shares authorized, 876,492 shares issued and outstanding                   8,417,117          8,417,117
   Retained deficit                                                                         (1,556,610)        (1,717,271)
                                                                                    ------------------ ------------------
                                                                                             6,860,507          6,699,846
   Accumulated other comprehensive loss                                                        (59,052)           (38,438)
                                                                                    ------------------ ------------------
       Total Stockholders' Equity                                                            6,801,455          6,661,408
                                                                                    ------------------ ------------------

          TOTAL STOCKHOLDERS' EQUITY                                                $        6,801,455 $        6,661,408
                                                                                    ================== ==================
</TABLE>

                                      -46-
<PAGE>
<TABLE>
                                     RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                 December 31, 2000 and 1999

--------------------------------------------------------------------------------------------------------------------------
NOTE 21 - RidgeStone Financial Services, Inc. (Parent Company Only) Financial Information (cont.)
--------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                               CONDENSED STATEMENTS OF INCOME

                                                                                    Years Ended December 31,
                                                                      ----------------------------------------------------
                                                                                 2000            1999            1998
                                                                      ----------------- ---------------- -----------------
INCOME
<S>                                                                   <C>               <C>              <C>
   Interest on deposits in banks                                      $           7,465 $          6,025 $           7,553
   Securities losses                                                             (9,164)         (15,402)           (7,687)
   Other income                                                                   4,500            4,765             3,364
                                                                      ----------------- ---------------- -----------------
       Total Income                                                               2,801           (4,612)            3,230
                                                                      ----------------- ---------------- -----------------

EXPENSES

   Pension, profit sharing and other employee benefits                                -                -             2,827
   Professional fees                                                             24,517           30,033            38,493
   Other expenses                                                                 5,483           65,940             4,396
                                                                      ----------------- ---------------- -----------------
       Total Expenses                                                            30,000           95,973            45,716
                                                                      ----------------- ---------------- -----------------

Income before income taxes and equity in
   undistributed earnings of subsidiary                                        (27,199)        (100,585)          (42,486)
   Less:  Applicable income taxes (benefit)                                     (9,249)               25             7,797
                                                                      ----------------- ---------------- -----------------

Income before equity in undistributed earnings of
   subsidiary                                                                  (17,950)        (100,610)          (50,283)
   Equity in undistributed earnings of subsidiary                               178,611          579,788           381,660
                                                                      ----------------- ---------------- -----------------

       NET INCOME                                                     $         160,661 $        479,178 $         331,377
                                                                      ================= ================ =================
</TABLE>

                                      -47-
<PAGE>
<TABLE>
                                     RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY

                                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                 December 31, 2000 and 1999

----------------------------------------------------------------------------------------------------------------------------
NOTE 21 - RidgeStone Financial Services, Inc. (Parent Company Only) Financial Information (cont.)
----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                        CONDENSED STATEMENTS OF CASH FLOW

                                                                                     Years Ended December 31,
                                                                       ---------------------------------------------------

                                                                               2000              1999              1998
                                                                       ---------------- ---------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                    <C>              <C>              <C>
    Net Income                                                         $        160,661 $        479,178 $         331,377
    Adjustments to reconcile net income to net cash
      flows from operating activities
        Loss on sale of investment securities                                     9,164           15,402             7,687
        Loss on sale of other real estate owned                                       -           54,497                 -
        Equity in undistributed income of subsidiary                           (178,611)        (579,788)         (381,660)
        Net change in
           Accrued interest receivable and other assets                        (109,249)           1,620            (2,500)
           Accrued interest payable and other liabilities                             -           (9,118)                1
                                                                       ---------------- ---------------- -----------------
        Net Cash Flows from Operating Activities                               (118,035)         (38,209)          (45,095)
                                                                       ---------------- ---------------- -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Net change in interest bearing deposits in banks                            142,131         (255,516)            1,536
    Activity in available for sale securities
        Sales                                                                     8,086           55,548           141,316
        Purchases                                                               (13,541)         (54,688)         (138,200)

    Investment in subsidiary bank                                                     -                -          (495,000)
    Proceeds from sales of other real estate owned                                    -           32,015           430,778
    Net disbursement on other real estate owned                                       -           (5,290)                -
                                                                       ---------------- ---------------- -----------------
        Net Cash Flows from Investing Activities                                136,676         (227,931)          (59,570)
                                                                       ---------------- ---------------- -----------------

CASH FLOWS FROM FINANCING ACTIVITIES

    Proceeds from stock options exercised                                             -                -             5,385
                                                                       ---------------- ---------------- -----------------

        Net Cash Flows from Financing Activities                                      -                -             5,385
                                                                       ---------------- ---------------- -----------------
           Net Change in Cash                                                    18,641         (266,140)          (99,280)

CASH AND DUE FROM BANKS - BEGINNING OF YEAR                                       8,740          274,880           374,160
                                                                       ---------------- ---------------- -----------------
    CASH AND DUE FROM BANKS - END OF YEAR                              $         27,381 $          8,740 $         274,880
                                                                       ================ ================ =================

</TABLE>

                                      -48-
<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 "Miscellaneous - Section 16(a) Beneficial Ownership Reporting
Compliance" set forth in the Company's definitive Proxy Statement for its 2001
Annual Meeting of Shareholders (the "Proxy Statement").

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 Proxy Statement.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The information required by this Item is hereby incorporated by reference to the
information under the caption entitled "Principal Shareholders" set forth in the
Proxy Statement.

Item 12. Certain Relationships and Related Transactions

The information required by this Item is hereby incorporated by reference to the
information under the caption entitled "Certain Transactions" set forth in the
Proxy Statement.

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, 2000.


                                      -49-
<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 20, 2001.

                                        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 20, 2001:

         Signatures                               Title
         ----------                               -----

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

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

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

/s/ Bernard E. Adee                     Director
------------------------------
Bernard E. Adee

/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

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

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

/s/ William J. Tetzlaff                 Director
------------------------------
William J. Tetzlaff

                                      -50-
<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 4.4 to
               Ridgestone Financial Services, Inc.'s Registration Statement on
               Form S-8 (Registration No. 333-52323)]

3.2            By-Laws of Ridgestone Financial Services, Inc., as amended.
               [Incorporated by reference to Exhibit 4.6 to Ridgestone Financial
               Services, Inc.'s Registration Statement on Form S-8 (Registration
               No. 333-52323)]

*10.1          Ridgestone Financial Services, Inc. 1996 Stock Option Plan, as
               amended. [Incorporated by reference to Exhibit 4.1 to Ridgestone
               Financial Services, Inc.'s Registration Statement on Form S-8
               (Registration No. 333-52323)]

*10.2          Form of Stock Option Agreement used in conjunction with the
               Ridgestone Financial Services, Inc. 1996 Stock Option Plan, as
               amended. [Incorporated by reference to Exhibit 4.2 to Ridgestone
               Financial Services, Inc.'s Registration Statement on Form S-8
               (Registration No. 333-52323)]

*10.3          Employment Agreement, dated as of December 31, 1996, between
               Ridgestone Financial Services, Inc. and Paul E. Menzel.
               [Incorporated by reference to Exhibit 10.6 to Ridgestone
               Financial Services, Inc.'s Annual Report on Form 10-KSB for the
               fiscal year ended December 31, 1996 (File No. 0-27984)]

*10.4          First Amendment to Employment Agreement, dated as of December 31,
               1997, between Ridgestone Financial Services, Inc. and Paul E.
               Menzel. [Incorporated by reference to Exhibit 10.8 to Ridgestone
               Financial Services, Inc.'s Annual Report on Form 10-KSB for the
               fiscal year ended December 31, 1997 (File No. 0-27984)]

*10.5          Employment Agreement, dated as of December 31, 1996, between
               Ridgestone Financial Services, Inc. and William R. Hayes.
               [Incorporated by reference to Exhibit 10.7 to Ridgestone
               Financial Services, Inc.'s Annual Report on Form 10-KSB for the
               fiscal year ended December 31, 1996 (File No. 0-27984)]

*10.6          First Amendment to Employment Agreement, dated as of December 31,
               1997, between Ridgestone Financial Services, Inc. and William R.
               Hayes. [Incorporated by reference to Exhibit 10.10 to Ridgestone
               Financial Services, Inc.'s Annual Report on Form 10-KSB for the
               fiscal year ended December 31, 1997 (File No. 0-27984)]

*10.7          Employment Agreement, dated as of December 31, 1996, between
               Ridgestone Financial Services, Inc. and Christine V. Lake.
               [Incorporated by reference to Exhibit 10.8 to Ridgestone
               Financial Services, Inc.'s Annual Report on Form 10-KSB for the
               fiscal year ended December 31, 1996 (File No. 0-27984)]

*10.8          First Amendment to Employment Agreement, dated as of December 31,
               1997, between Ridgestone Financial Services, Inc. and Christine
               V. Lake. [Incorporated by reference to Exhibit 10.12 to
               Ridgestone Financial Services, Inc.'s Annual Report on Form
               10-KSB for the fiscal year ended December 31, 1997 (File No.
               0-27984)]

*10.9          Salary Continuation Agreement, dated October 20, 1998, by and
               between Ridgestone Bank and Paul E. Menzel. [Incorporated by
               reference to Exhibit 10.1 to Ridgestone Financial Services,
               Inc.'s Quarterly Report on Form 10-QSB for the quarter ended
               September 30, 1998 (File No. 0-27984)]

*10.10         Split Dollar Agreement, dated October 20, 1998, by and between
               Ridgestone Bank and Paul E. Menzel. [Incorporated by reference to
               Exhibit 10.2 to Ridgestone Financial Services, Inc.'s Quarterly
               Report on Form 10-QSB for the quarter ended September 30, 1998
               (File No. 0-27984)]

                                      E-1
<PAGE>
                                INDEX TO EXHIBITS
                                -----------------

Exhibit No.                Exhibit Description
----------                 -------------------

*10.11         Split Dollar Agreement, dated October 20, 1998, by and between
               Ridgestone Bank and Paul E. Menzel. [Incorporated by reference to
               Exhibit 10.3 to Ridgestone Financial Services, Inc.'s Quarterly
               Report on Form 10-QSB for the quarter ended September 30, 1998
               (File No. 0-27984)]

*10.12         Form of Executive Incentive Retirement Agreement, dated October
               20, 1998, by and between Ridgestone Bank and each of Christine V.
               Lake and William R. Hayes. [Incorporated by reference to Exhibit
               10.4 to Ridgestone Financial Services, Inc.'s Quarterly Report on
               Form 10-QSB for the quarter ended September 30, 1998 (File No.
               0-27984)]

*10.13         Form of Split Dollar Agreement, dated October 20, 1998, by and
               between Ridgestone Bank and each of Christine V. Lake and William
               R. Hayes. [Incorporated by reference to Exhibit 10.5 to
               Ridgestone Financial Services, Inc.'s Quarterly Report on Form
               10-QSB for the quarter ended September 30, 1998 (File No.
               0-27984)]

21             Subsidiaries of Ridgestone Financial Services, Inc.

23             Independent Auditor's Consent

99             Definitive Proxy Statement for the Company's 2001 annual meeting
               of shareholders scheduled to he held on April 24, 2001
               (previously filed with the Commission under Regulation 14A on
               March 20, 2001 and incorporated by reference herein to extent
               indicated in this Form 10-KSB).

         * This exhibit is a management contract or compensatory plan or
arrangement required to be filed as an exhibit to this Form 10-KSB pursuant to
Item 13(a) of Form 10-KSB.


                                      E-2