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, 1997

   [ ]  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 Identification No.)
     incorporation or organization)

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

   Issuer's telephone number (414) 789-1011

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

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

                           Common Stock, no par value
                                (Title of class)

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

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

   Issuer's revenues for its most recent fiscal year:  $4,436,756

   Aggregate  market  value of  voting stock  held  by non-affiliates  of the
   issuer:  $12,931,585

   Number of  shares of common stock,  no par value, outstanding  on March 2,
   1998: 834,340

                       DOCUMENTS INCORPORATED BY REFERENCE

   Proxy Statement for  the 1998  Annual Meeting  (incorporated by  reference
   into Part III)

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

   <PAGE>
                       Ridgestone Financial Services, Inc.

                                 Index to Annual
                              Report on Form 10-KSB
                   For The Fiscal Year Ended December 31, 1997

                                                                      Page

   PART I  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
        Item 1.  Description of Business . . . . . . . . . . . . . . .  1
        Item 2.  Description of Property . . . . . . . . . . . . . . .  7
        Item 3.  Legal Proceedings . . . . . . . . . . . . . . . . . .  8
        Item 4.  Submission of Matters to a Vote of Security Holders .  8

   PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
        Item 5.  Market for Common Equity and Related 
                 Stockholder Matters . . . . . . . . . . . . . . . . .  8
        Item 6.  Plan of Operation and Management's Discussion
                 and Analysis  . . . . . . . . . . . . . . . . . . . .  9
        Item 7.  Financial Statements  . . . . . . . . . . . . . . . . 18
        Item 8.  Changes In and Disagreements With Accountants
                 on Accounting and Financial Disclosure  . . . . . . . 40

   PART III  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
        Item 9.  Directors, Executive Officers, Promoters
                 and Control Persons; Compliance With 
                 Section 16(a) of the Exchange Act . . . . . . . . . . 40
        Item 10. Executive Compensation  . . . . . . . . . . . . . . . 40
        Item 11. Security Ownership of Certain Beneficial 
                 Owners and Management . . . . . . . . . . . . . . . . 40
        Item 12. Certain Relationships and Related Transactions  . . . 40
        Item 13. Exhibits and Reports on Form 8-K  . . . . . . . . . . 40

   SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

   <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 with other commercial banks, savings banks,
   savings and loan institutions, credit  unions and other financial  service
   organizations  in the  three-city area.   The  Bank is  one of  the newest
   financial institutions in its market.

   The Bank  was the  first bank  in Wisconsin  to introduce  full-service PC
   banking,  called RidgeStone  Connect.   This on-line  service enables  the
   Bank's  customers  to  access their  accounts  in  real  time, pay  bills,
   transfer funds, access lines  of credit, exchange e-mail and  view product
   and  rate information.  Approximately 19% of the Bank's consumer customers
   are  enrolled  in  RidgeStone Connect.    The  Bank plans  to  introduce a
   business version of this service sometime in 1998.

   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  and  other income.
   Operating  expenses of the Company include employee  compensation  and
   benefits, occupancy  and  equipment expense,  professional and  data
   processing fees, advertising and marketing expenses, and other
   administrative  expenses.    The  Company's  operating  results  are  also
   affected by economic and competitive conditions,  particularly changes in
   interest rates, government policies and actions of regulatory authorities.

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

   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
   are described in close  proximity to such statements and which could cause
   actual  results to  differ  materially from  those currently  anticipated.
   Additional factors that may cause actual results to differ materially from
   those contemplated  in the  forward-looking statements include:   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 on-site decision making and
   using technology  to enhance  customer  service.   While  the Bank  has  a
   lending limit of  $850,000 per loan, the Bank is  able to attract business
   loans  beyond its $850,000 lending limit by using bank participations with
   other banks in Wisconsin.  Likewise, the Bank has purchased participations
   from other area Wisconsin financial institutions.

   Loan Products

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

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

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

   In  December  1997,  the Bank  signed  a  contract  with Bankers'  Service
   Corporation,   a   wholly   owned   subsidiary   of   Bankers'   Bank   in
   Madison,Wisconsin  to assist in the  loan review process.  This process is
   designed to promote early identification of credit quality problems in the
   Bank's loan portfolio.   While the Bank will continue  to review all loans
   through  its Loan Review Administrator, these reviews will be augmented by
   the  Bankers  Bank  loan   review  function.    The  Bank's   Loan  Review
   Administrator is  responsible for conducting a  continuous internal review
   which  tests the Bank's compliance  with loan policy  and documentation of
   all  loans.  Any past due loans  and identified problem loans are reviewed
   with the Board of Directors of the Bank on a monthly basis.

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

   The retention of variable-rate loans in the Bank's loan portfolio helps to
   reduce  the Bank's exposure to  fluctuations in interest  rates.  However,
   such loans generally pose  credit risks different from the  risks inherent
   in  fixed  rate  loans, primarily  because  as  interest  rates rise,  the
   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-         80%
          residential

          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  $14,158,697   as  of
   December 31, 1997, and consisted primarily of lines of credit and loans to
   businesses.    Lines of  credit  are  generally used  for  the  purpose of
   financing working  capital and may  be secured with current  assets of the
   borrower.  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.  Loans are generally secured with
   the fixed assets of the borrower.

   Real  Estate  Commercial Loans.  As  of December  31,  1997, the  Bank had
   $13,474,318 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.

   Competition.  The  Company  has  identified as  its  primary  competitors,
   offices of either thrifts, credit unions or banks operating in Brookfield,
   Elm  Grove  and  Wauwatosa,  Wisconsin.    Although  the   Bank  commenced
   operations on  December 7, 1995, its deposits as of June 1997 exceed those
   of many  of  its area  competitors which  have been  operating for  longer
   periods of time.

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

   The Bank competes for loans principally through its ability to communicate
   effectively  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

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

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

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

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

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

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

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

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

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

   The  Bank.  As  a state-chartered  institution,  the  Bank  is subject  to
   regulation  and supervision  by the Department  and the  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 acquire control of a bank or holding
   company  or  to establish  a branch,  the  records of  regulated financial
   institutions in satisfying their continuing and affirmative obligations to
   help meet the credit needs of their local communities, including those  of
   low and moderate-income borrowers.

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

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

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

   Employees

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

   Directors and Executive Officers

   The directors  of the Company  and the  Bank as of  March 2, 1998  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

    Name of Director               Principal Occupation

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

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

    John E. Horning                Chairman of the Board and Chief Executive
                                   Officer   of  Shorewest   Realtors  Inc.,
                                   Wisconsin   Mortgage   Corporation,   and
                                   Heritage Title Service

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

    Charles G. Niebler             President of Eye Care Vision Centers

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

    James E. Renner                Owner of Renner Oldsmobile and Renner
                                   Mitsubishi

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

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


   The executive  officers of the  Company and the  Bank as of March  2, 1998
   were as follows:


    Name of Executive Officer      Position

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

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

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

   Item 2.      Description of Property

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

   The Bank  opened its  drive-up branch  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
   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, 1997.

   Part II

   Item 5.      Market for Common Equity and Related Stockholder Matters

   The Company's common stock has traded in the over-the-counter market since
   the completion of the company's  initial public offering in November 1995.
   High  and low bid prices, as reported  on the OTC Bulletin Board, for each
   quarter within the last two fiscal years are as follows:

       1996                                           High        Low

    1st Quarter                                      $10.75      $10.05

    2nd Quarter                                       11.50      10.438

    3rd Quarter                                      12.375       11.25

    4th Quarter                                      12.875       12.00

     
       1997                                           High        Low

    1st Quarter                                      $14.00      $13.25

    2nd Quarter                                       15.75      13.875

    3rd Quarter                                       16.25       14.50

    4th Quarter                                       17.75       16.00


   These  quotations reflect  inter-dealer  prices,  without retail  mark-up,
   mark-down or commission and may not represent actual transactions.  Fiscal
   1997 quotations do not include intra-day highs and lows.   On December 31,
   1997, there were approximately  40 owners of record and  approximately 600
   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 dividends  are
   declared,  the Company will be dependent upon  dividends paid to it by the
   Bank for funds to pay dividends on the common stock.  

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

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

   Plan of Operation

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

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

   Marketing and Sales.  In 1997, the Bank committed to continue to 
   implement the Bank's business strategy of focusing on providing banking
   services to targeted  individuals and businesses within  the Bank's market
   area.   This strategy has been implemented and has shown results.  The Bank
   has enjoyed significant  growth by emphasizing  its local  management  and
   by  providing a  high level  of personal service to  customers, employing 
   technology that is enabling Bank personnel  to  provide individualized 
   service  to  customers on  a  cost-effective basis.

   The  Bank currently  has  4,500 consumer  and  business deposit  and  loan
   accounts from over 1,800 customers. The demographic make-up of those 1,800
   customers continues to  mirror the  demographic make-up  of what  national
   studies indicate  to be among  the most  desirable customer  relationships
   available to banks.

   The Bank's  marketing efforts  in 1997  in developing  these relationships
   were primarily through direct mail, telephone solicitations and referrals.
   Throughout the year, the  Bank sent approximately 18,000 pieces  of direct
   mail to  persons residing in its  primary market area and  made over 4,700
   personal contacts with  customers and  prospects.  In  addition to  direct
   marketing,  the  Bank gained  a  significant number  of  new relationships
   through customer referrals.

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

   Recognizing  that the future value of the Company's franchise is dependent
   upon the quality of the Bank's customer base, the Bank invested heavily in
   1996  in  attracting  long-term,   high-value  customers.  The Bank spent
   1997 attracting new relationships and expanding existing ones.  The 
   significant improvement in the operating results of  the Company is a 
   direct result of the  effective implementation  of these  strategies.
   Industry statistics show that  retaining and expanding relationships with
   the right customers is less  costly, and therefore more profitable for 
   financial institutions.

   In part  through frequent contacts by the Bank's sales force, the Bank
   succeeded in retaining  91% of  its customer relationships  during 1997.  
   The average household deposit size  has grown from $30,000 to  $37,000 and
   average  loan size has grown from $97,000 to $117,000, excluding secondary
   market mortgage loans, indirect dealer loans and credit cards.

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

   The  application of current technology  is becoming a  priority within the
   banking  industry.  Significant dollars are being  spent to obtain and use
   technology to allow financial institutions to communicate and operate with
   increased  efficiency.     The  Bank  has   invested  in  state-of-the-art
   technology in an effort to provide better service to its customers and has
   recognized  improvement in  earnings due  partly to  the effective  use of
   these systems.  

   Results of Operations.  

   During  the fiscal year  ended December 31,  1997, the Company  reported a
   profit of $41,633 or $.05  per share compared to a net loss  of $1,271,070
   or $1.52 per share for fiscal 1996. Although a loss in  the second year of
   operation was anticipated  for a new banking venture, it  is noteworthy to
   indicate that  the modest profit in  1997 resulted even after  a loan loss
   provision of $290,000.

   Comparative information on results of operations between fiscal 1996 and
   fiscal 1995 is not provided herein since the Bank commenced operations on
   December 7, 1995, and, therefore, had only three weeks of operations during
   fiscal 1995.

   The Company's return on average equity and return on average assets during
   fiscal 1997 and fiscal 1996 are as follows:

                                                     1997           1996

        Return on average assets                     0.01%          -4.81%
        Return on average equity                     0.70%          -19.97%
        Dividend payout ratio on common stock        None           None
        Average equity to average assets             11.98%         24.06%


   Total interest  income for the year  ended December 31, 1997  increased to
   $3,739,811  from   $1,583,724  for the  year ended  December 31,  1996, an
   increase of $2,156,087.  This increase was primarily the result of greater
   average outstanding balances in  earning assets and improved yields.   The
   Company's earning assets  grew by  $20,207,554 or  52.40% in fiscal  1997 
   while  the yield on  total earning  assets improved  by 1.59%,  from 6.51% 
   to  8.10%.   Interest income consisted primarily  of interest on loans  
   (including loan fees),  federal funds  sold, securities  and interest-
   bearing  deposits at other financial institutions.  Management anticipates
   that interest income will  continue to  grow  as the  Bank's loan portfolio
   and  other assets increase. 

   The  following table summarizes the distribution of the Company's loans at
   December 31, 1997 and December 31, 1996.

                                           December 31,
                                 1997                        1996

     Commercial              $14,158,697                 $ 6,967,836

     Real Estate:

        Construction           4,640,119                   2,565,144

        Commercial            13,474,318                   4,632,272

        Residential           10,877,347                   4,634,990

     Installment and           3,108,540                     585,855
     Consumer
                             -----------                 -----------
         Total Loans         $46,259,201                 $19,386,097

                  
   Interest expense increased to $2,126,065 in fiscal 1997 from $1,025,524 in
   fiscal  1996,  an  increase  of  $1,100,541.  Interest  expense  primarily
   represents interest paid  to depositors.  The increase in  expense was due
   to greater  average outstanding balances in  interest bearing liabilities,
   primarily deposits.  The yield  on interest bearing liabilities  decreased
   by .22% from 5.75% in 1996 to 5.53% in 1997.

   Set  forth  below  is a  summary  of  the Company's  average  deposits and
   interest paid on such deposits during fiscal 1997 and fiscal 1996.

   <TABLE>
   <CAPTION>

                                               1997             Rate Paid       1996          Rate Paid
   <S>                                      <C>                   <C>      <C>                  <C>
   Non interest-bearing demand              $4,363,343               --    $2,086,618              --
   Interest-bearing demand                     827,094            1.76%       444,072           1.76%
   Money Market demand                      18,266,062            5.27%     8,316,058           5.69%
   Savings deposits                            827,824            2.93%       326,895           2.89%
   Time deposits                            18,506,745            6.07%     8,763,340           6.11%
   Purchased Funds                               9,603            6.12%             0           0.00%
                                            ----------         -------      ---------           -----
        Total Deposits                     $42,800,671            5.53%   $19,936,983           5.75%

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

   </TABLE>


                                        Over 3      Over 6
                         3 Months       mos.        mos.
                         
                         or less        thru 6      thru 12       Over 12
                                        mos.        mos.          mos.

   Certificates of     $ 1,825,000 $  309,366  $    3,289,460 $   106,517
   Deposit
                         
   Total               $ 1,825,000 $  309,366  $    3,289,460 $    106,517
                                     


   Net interest income  rose from  $558,200 for the  year ended  December 31,
   1996 to  $1,613,746 for the  year ended December 31, 1997,  an increase of
   $1,055,546  or  189.1%.   Net  interest income  represents  the difference
   between interest income earned on earning assets and interest expense paid
   on interest bearing liabilities.  

   The following  table sets forth an  analysis  of the  interest rates  and
   interest differential of the Company's earning assets, which earn interest
   income, and  interest bearing liabilities, which  accrue interest expense,
   for  fiscal 1996 and fiscal 1997. The   interest margin increased to 3.49%
   in  1997 from  2.29%  in 1996  as  the average  cost  of interest  bearing
   liabilities  declined  and  the  average yield  on  total  earning  assets
   improved.

   <TABLE>
   <CAPTION>
                                                   1997                              1996


                                    Average        Related     Yield      Average   Related   Yield
                                    Balance       Interest     Rate       Balance   Interest   Rate
   <S>                             <C>            <C>          <C>      <C>         <C>       <C>
   Earning assets:                                                                       
       Time deposits in bank       $ 177,939       15,740      8.85%     $680,715    37,226   5.47%
       Investments (taxable)       9,439,985      546,627      5.79%    5,171,489   289,707   5.60%
       Investments (nontaxable)            0            0                       0         0        
       Funds sold                  3,556,986      195,211      5.49%   11,642,626   614,803   5.28%
                                                                                                 
       Loans (a)                  33,004,074    2,982,233      9.04%    6,833,651   641,988   9.39%
                                  ----------    ---------     ------   ----------  --------   -----
           Total Earning assets  $46,178,984   $3,739,811      8.10%  $24,328,480 1,583,724   6.51%
                                  ==========    =========     ======   ==========  ========   =====
                                                                                                   
   Interest-bearing liabilities:                                                 
       NOW accounts                $ 827,094       14,547      1.76%     $444,072     7,818   1.76%
       Savings accounts              827,824       24,285      2.93%      326,895     9,460   2.89%
       Money Market accounts      18,266,062      963,322      5.27%    8,316,058   472,769   5.69%
       Time deposits              18,506,746    1,123,323      6.07%    8,763,340   535,477   6.11%
       Purchased Funds                 9,603          588      6.12%            0         0   0.00%
                                  ----------    ---------      -----    ---------   -------   -----
         Total Interest-bearing
           liabs                $ 38,434,329    2,126,065      5.53%  $17,850,366 1,025,524   5.75%
                                 ===========    =========      =====   ========== =========   =====
                                                                                 
   Interest spread                            $ 1,613,746      2.57%              $ 558,200   0.76%
                                                =========      =====               ========   =====
                                                                                                   
   Interest margin                            $ 1,613,746      3.49%              $ 558,200   2.29%
                                                =========      =====               ========   =====


   ----------
   (a) No loans  have been placed on  nonaccrual.  Loan interest  income includes net
       loan fees.
             
   </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 have 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.

   <TABLE>
   <CAPTION>
   
                                                Year Ended December 31,1996
                                                         Compared to
                                                 Year Ended December 31,1997
                                                  Increase (Decrease) Due To

                                     Volume           Rate          Rate/Volume        Net
   <S>                             <C>           <C>            <C>                <C>
   Earning assets:   

      Time deposits in bank        $(27,502)     $   23,008     $      (16,992)    $   (21,486)

      Investments(taxable)          239,036           9,774              8,110         256,920

      Investments(nontaxable)             0               0                  0               0

      Funds sold                   (426,922)         24,450            (17,120)       (419,592)

      Loans                       2,457,403         (23,918)           (93,241)      2,340,243
                                  ---------       ---------          ---------      ----------
          Total Earning          $2,242,015      $   33,314      $    (119,243)    $ 2,156,085
          assets                  =========      ==========        ===========      ==========
                              
   Interest-bearing
   liabilities:

      NOW accounts          $         6,729      $        0       $          0     $     6,729

      Savings accounts               14,477             131                217          14,825

      Money Market deposit
      accounts                      566,155         (34,927)           (40,675)        490,553

      Time deposits                 595,322          (3,505)            (3,971)        587,845

      Purchased funds                     0               0                588             588
                                 ----------       ---------         ----------       ---------
          Total           
          interest-bearing
          liabilities           $ 1,182,683      $  (38,302)       $   (43,841)    $ 1,100,540
                                  ---------      -----------       ------------     ----------   
          Net change in net
          interest income       $ 1,059,331      $   71,616        $   (75,402)    $ 1,055,545
                                  =========      ===========       ============     ==========

   </TABLE>

   The  provision  for loan  losses is  based  on management's  evaluation of
   factors  such as  the local and  national economy and  the risk associated
   with the  loans in the portfolio.   The Company's reserve  for loan losses
   was $624,740 at December 31, 1997 compared to $334,740 at December 31, 1996.
   Of the provision, $290,000 was charged against  earnings in  1997 and 
   $325,740 was  charged against  earnings in 1996.  As of December 31, 1997,
   the Company's loan loss reserve was 1.35% of outstanding loans compared to
   1.73% at December 31, 1996.  Set forth below is an analysis of the Company's
   provision for loan losses.


                                               1997              1996

   Beginning loan loss reserve          $    334,740         $    9,000 
   Charge-offs:                                                         
         Commercial                                0                  0 
      Real Estate:                                                      
         Construction                              0                  0 
         Commercial                                0                  0 
         Other Mortgages                           0                  0 
         Installment-consumer                      0                  0 
   Recoveries:
         Commercial                                0                  0 
      Real Estate:
         Construction                              0                  0 
         Commercial                                0                  0 
         Other Mortgages                           0                  0 
         Installment-consumer                      0                  0 
                                          ----------          ---------
   Net Charge-offs                                 0                  0  
   Additions charged to operations           290,000            325,740
                                          ----------          ---------
   Balance at end of period               $  624,740          $ 334,740
                                          ==========          =========

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

   Management believes that the majority of risk in the Bank's loan portfolio
   lies  in  commercial  loans,  which  include commercial  real  estate  and
   construction loans.  Accordingly,  the Bank has allocated $382,317  or 61%
   of the reserve for loan losses to these loans, which comprise about 69% of
   the loan  portfolio.  The  Bank has allocated $10,919  or about 2%  of the
   reserve for loan losses to residential mortgages, which comprise about 24%
   of  the loan  portfolio.   Consumer loans  comprise about  7% of  the loan
   portfolio,  and $31,959  or about  5% of  the reserve  for loan  losses is
   allocated to consumer loans.  The Bank has allocated $6,385 of the reserve
   for loan  losses to unfunded  loan commitments, which  total approximately
   $12,769,278.   The balance of the  reserve for loan losses  or $193,160 is
   unallocated.

   There were no loan charge-offs or recoveries or any impaired loans  during
   1997.   The Bank  evaluated the  adequacy of the  reserve for  loan losses
   based on an analysis of specific problem loans, as well as on an aggregate
   basis. The  reserve for loan  losses is  maintained at a  level management
   considers  adequate to provide for potential future losses.  The following
   table summarizes the Company's nonperforming loans as of December 31, 1997
   and December 31, 1996.


                                 December 31, 
                               1997        1996

     Nonaccrual Loans          0.00        0.00 

     Past Due 90 Days+ (1)     0.00        0.00 

     Restructured Loans (2)    0.00        0.00 

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

     (2)    There were no restructured loans for each of the presented
            years.

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

   As of December 31, 1997, management, to the best of  its knowledge, is not
   aware of  any significant loans,  group of loans  or segments of  the loan
   portfolio  not included above,  where there are  serious doubts as  to the
   ability of the borrowers to comply with the present loan payment terms.

   Other operating income  was  $696,945 for fiscal 1997  compared to $52,855
   for  fiscal 1996, an  increase of $644,090  or 1,218.6%.   Other operating
   income  consisted of service charges on  deposit accounts, merchant credit
   card processing  services, commission  income generated by  the investment
   center and gains on the sale of securities. The increased operating income
   for fiscal 1997 was in large part due to a gain  of $571,382 from the sale
   of securities.

   Operating expenses consisted primarily of salaries and benefits, occupancy
   and  equipment   expenses,  data  processing  fees,   marketing  expenses,
   professional  fees and other expenses.  Operating expenses for fiscal 1997
   were $1,944,782 compared  to $1,555,451  for fiscal 1996,  an increase  of
   $389,331 or 25.0%.  The primary increase  came in the area of salaries and
   benefits  which increased  by  $301,759 or  41.9%. This  increase occurred
   primarily as  a result of  the addition  of a commercial  lender, two  new
   retail banking  officers,  staffing  the new  drive-up  facility  and  the
   president drawing a  full year's salary. Occupancy  and equipment expenses
   increased by $57,739  or 19.3% and other expenses increased  by $29,832 or
   5.6% primarily due to the opening of the drive-thru branch. 

   In fiscal  1997,  the Bank's  FDIC  premiums were  assessed  at $3,263  as
   required by federal law.


   Financial Condition. 

   The Bank  reported total assets  of $65,103,697 at  December 31, 1997,  an
   increase of $23,298,163 or 55.7% from December 31, 1996. 

   Cash and  due from banks was  $2,671,050 at December 31,  1997 compared to
   $1,494,243   at December 31,  1996 and represents  cash maintained  at the
   Bank  and funds  that the  Bank and  the Company  have deposited  in other
   financial institutions.   The  Bank reported $7,994,000  of Federal  Funds
   sold on December 31, 1997 and $13,259,000 on December 31,  1996, which are
   inter-bank funds with  daily liquidity.  The  Bank's loan-to-deposit funds
   ratio on December 31, 1997 was 79% compared to 54% on December 31, 1996. 

   The Bank's investment portfolio  decreased from $6,057,419 as of  December
   31,  1996  to $5,127,501  at December  31, 1997  as  a result  of maturing
   securities.  A portion  of these securities was originally  purchased with
   the intent to  hold the securities until they mature.   Another portion of
   the  securities was  placed  in the  available  for sale  category as  the
   securities  may be liquidated to  provide cash for  operating or financing
   purposes.  As of December 31, 1997 and December 31, 1996, the book value of
   U.S. Treasuries, U.S. Government agencies and corporate securities were
   $5,122,404 and $6,031,688 respectively.  The following table summarizes the
   maturities of those securities:

   <TABLE>
   <CAPTION>

                                        1 Year or     After 1 year  After 5       After 10       Total
                                        less          through 5     years         years
                                                      years         through 10
                                                                    years
   <S>                               <C>              <C>              <C>            <C>          <C>
   Available for Sale Securities:

        U. S. Treasury and other 
           U. S. Govt. agencies
           and corporations          $  250,234      $501,124        $    0      $       0       $ 751,406 

             Weighted average yield        6.19%         6.63%         0.00%          0.00%           6.48%

        Corporate Securities            123,000             0             0              0         123,000 

             Weighted average yield        0.00%         0.00%         0.00%          0.00%           0.00%


        Total Available For Sale     $  373,234     $ 501,124        $    0      $       0       $ 874,406
                                     ----------     ---------        ------      ---------       ---------

             Weighted Avg. Yield of
             Total                         4.15%         6.63%         0.00%          0.00%           5.57%


   Held to Maturity Securities:

        U. S. Treasury and other 
           U. S. Govt. agencies 
           and corporations          $1,501,498  $ 2,251,597      $500,000      $        0     $4,253,095

             Weighted average yield        6.15%       6.87%          7.00%           0.00%          6.63%


        Total Held to Maturity       $1,501,498  $ 2,251,597      $500,000      $        0     $4,253,095
                                     ----------  -----------      --------      ----------     ----------

             Weighted Avg. Yield of        6.15%        6.87%         7.00%          0.00%           6.63%
             Total

   Total Securities                  $1,874,732   $2,752,769      $500,000      $        0     $5,127,501
                                      =========   ==========      ========      ==========     ==========

             Weighted Avg. Yield of        5.75%        6.83%         7.00%           0.00%          6.45%
             Total

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

   Loans prior to the allowance for loan losses increased from $19,386,097 at
   December  31, 1996 to  $46,259,021 at  December 31,  1997, an  increase of
   $26,872,924  or 139%.  In addition to the $46,259,000 in loans outstanding
   that the  Bank reported on December  31, 1997, the Bank  had unfunded loan
   commitments  of  $12,769,000.  Also, during  fiscal 1997  the Bank
   originated $4,101,128  in mortgage  loans sold  in  the secondary  market.

   The Company's allowance for  estimated loan losses was $624,740,  or 1.35%
   of loans at December  31, 1997 compared to $334,740, or  1.73% of loans at
   December 31, 1996. See AResults of Operations.

   The Company's  office building, leasehold improvements  and equipment less
   accumulated  depreciation  and  amortization decreased  to  $1,403,082  at
   December 31, 1997 from $1,511,222  at December 31, 1996.  On  December 31,
   1997  the  Bank  had  in  Other Real  Estate  Owned  $1,262,489  which  is
   represented by 24 fully improved residential lots. The Bank entered into a
   contract for the exclusive build-out of those lots by an area builder.  In
   addition, the Company  has on  its books as  an asset  three homes with  a
   value of $512,000.   These lots and  homes are carried  by the Company  as
   Other Real Estate Owned as a result of a real estate loan extended  by the
   Bank with an  original principal amount of $650,000 secured  by these real
   estate assets. This loan was placed in nonaccrual in the second quarter of
   1997.  The  entity owning the underlying real estate  assets securing this
   loan  filed  for bankruptcy  in  the  third quarter  of  1997.   The  Bank
   purchased  these real estate assets  from the bankruptcy  court on October
   27, 1997  for an additional $953,790.   All of  this real estate  has been
   placed for sale.  The Bank currently anticipates that the  three houses 
   will be sold in fiscal 1998, producing proceeds of approximately $512,000,
   and that the remaining parcels of land will be liquidated over a two year 
   period. 

   Accrued interest  receivable  on  loans  and  other  assets  increased  to
   $495,109 at December 31, 1997 compared to $247,656 at December 31, 1996. 

   The  Bank experienced significant  deposit growth  during fiscal  1996 and
   fiscal  1997.  Total deposits increased by $22,818,965 from $35,668,660 as
   of December 31, 1996 to $58,487,625 on December 31, 1997.  

   Accrued interest payable and other liabilities of $752,772 at December 31,
   1997 compared  to $268,869 at  December 31, 1996  were made up  of accrued
   interest payable on deposit accounts and accounts payable.

   Capital Resources.   The Bank's most  recent notification as of  April 28,
   1997  from the Department  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 Q to the Company's Consolidated Financial
   Statements.

   The Company has made a  commitment to the Federal Reserve Bank  of Chicago
   that  it will  not incur any  debt until  December 7, 2000,  without prior
   approval from the Federal Reserve System.  The Bank has committed to the 
   FDIC that it will maintain  a Tier I capital to total asset  ratio of not
   less than 8%  for its  first three years of operations starting 
   December 7, 1995.

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

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

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

   The  following table  summarizes  the maturities  and sensitivity  to
   changes in interest rates of the Company's loan portfolio at 
   December 31, 1997.


   <TABLE>
   <CAPTION>

                                                     Loan Maturities                         Amount over one year with

                                   1 year         After 1     After 5                 Predetermined  Floating or  adj.
                                   or less       through 5     years     Total           rates        interest rates   Total
                                                    years

     <S>                       <C>             <C>           <C>       <C>              <C>             <C>           <C>
     Commercial                $16,069,000     13,526,000    184,000  $29,779,000       14,688,000      2,139,000    $16,827,000
     Real estate-construction      749,000        703,000          0    1,452,000                0              0              0
                               -----------     ----------   --------   ----------       ----------      ---------     ----------
   TOTAL                       $16,818,000     14,229,000    184,000  $31,231,000       14,688,000      2,139,000    $16,827,000
                               ===========     ==========   ========   ==========       ==========      =========     ==========

   </TABLE>

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

   The following table summarizes the repricing opportunities as of  December
   31, 1997 for each  major category of interest-bearing asset  and interest-
   bearing liability:

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

    Investments         $0.1       1.0          .8         3.2     5.1

    Loans              $21.6       4.6        13.5         6.5    46.2

    Total Rate         $21.7       5.6        14.3         9.7    51.3
    Sensitive Assets

    Rate Sensitive     $34.1       1.7        13.9         1.5    51.2
    Liabilities (1)

    GAP                (12.4)      3.9          .4         8.2

    Cumulative GAP     (12.4)     (8.5)       (8.1)         .1

    GAP/Rate           (0.6%)   (31.0%)     (19.0%)       (0.0%)
    Sensitive Assets

                  

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

   Liquidity.  For  banks, liquidity generally represents the ability to meet
   withdrawals  from deposits  and the  funding of  loans.   The  assets that
   provide liquidity are  cash, federal funds sold  and short-term loans  and
   securities.    Liquidity  needs  are influenced  by  economic  conditions,
   interest  rates  and  competition.     Management  believes  that  current
   liquidity  levels  are sufficient  to  meet  future  demands.   Management
   believes the current  liquidity position of the Bank allows it opportunity
   to  expand  the   Bank's  loan  portfolio  and  account  for  any  deposit
   withdrawals  which  may occur.    As of  December  31, 1997  the  Bank had
   $11,543,643 available to meet future demand.

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

   Year 2000 Matters.  Many computer programs use two digits rather than four
   to describe  a year  in  a date  field.   As a  result,  certain of  these
   programs will experience  malfunctions associated with the  turning of the
   year 2000.   The Bank has  appointed a committee to  conduct an assessment
   and  recommend methods of remediation  of internal and  external year 2000
   software concerns. This  committee reports to the Board of  Directors on a
   regular  basis.    While  the  Company  expects  to  incur  certain  costs
   associated  with becoming fully operable during the year 2000, the Company
   does  not anticipate  those costs  to be  material or  to have  a material
   affect on the business or results of operation of the Company or the Bank.
   The  committee has contacted certain outside service providers used by the
   Bank to perform data processing and other services to determine the status
   of those vendors' year  2000 compliance processes, and has  generally been
   informed  that such  vendors  have undertaken  review  and remediation  of
   potential year  2000 issues.  However, there can be no assurance that such
   vendors  will not experience system  malfunctions associated with the year
   2000 which could  have a material adverse effect on  the Company's results
   of  operations.  The  Company expects its  internal operations  to be year
   2000 compliant by early 1999. 

   <TABLE>
                     DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY 
   <CAPTION>
                                       Average Balance Sheet

                                                                             1997            1996
     <S>                                                                 <C>             <C>
     Cash and due from banks                                             $1,411,013      $   900,071

     Federal funds sold and securities purchased under                    3,556,986       11,642,626
     agreement to resell

     Interest-bearing deposits in other banks                                72,096          680,715

     Investment securities:
       U.S. Treasury agency
         and other                                                        9,439,985        5,171,489

       Unrealized Gain (Loss) on securities

     Loans:

        Real estate mortgages                                             8,527,547          709,204

        Consumer-net                                                      2,094,599        1,901,982

        Commercial and other                                             22,381,928        4,264,643
                                                                         ----------        ---------
          Total                                                          33,004,074        6,875,829

     Less allowance for loan losses                                         335,534           42,178

          Net loans                                                      32,668,540        6,833,651

     Fixed assets                                                         1,475,555        1,087,955

     Other real estate owned                                                416,353                0

     Other assets                                                           389,910          133,839
                                                                         ----------        ---------
          Total assets                                                $  49,425,438      $26,450,345
                                                                         ==========       ==========
     Interest-bearing deposits:

        NOW accounts                                                  $     827,094      $   444,072

        Savings accounts                                                    827,824          326,895

        Money Market deposit accounts                                    18,266,062        8,316,058

        Time deposits                                                    18,506,745        8,763,340
                                                                        -----------       ----------
          Total interest-bearing deposits                                38,427,725       17,850,366

        Demand deposits                                                   4,363,343        2,086,618

          Total deposits                                                 42,791,068       19,936,983
                                                                                          
     Other liabilities                                                      714,924          148,611
                                                                        -----------       ----------
          Total liabilities                                              43,505,992       20,085,594

     Equity capital                                                       5,919,446        6,364,750
                                                                        -----------       ----------
          Total liabilities and capital                                $ 49,425,438      $26,450,345
                                                                        ===========       ==========
   </TABLE>

   <PAGE>

   Item 7. Financial Statements
                                                                         Page
   Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . 19

   Consolidated Balance Sheet   . . . . . . . . . . . . . . . . . . . . . 20 

   Consolidated Statement of Income . . . . . . . . . . . . . . . . . . . 21

   Consolidated Statement of Changes in Stockholders' Equity. . . . . . . 22

   Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . 23

   Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 24

   <PAGE>  

                          INDEPENDENT AUDITOR'S REPORT


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

   We have audited the accompanying consolidated balance sheets of RidgeStone
   Financial Services, Inc. as of December 31, 1997 and 1996, and the related
   consolidated  statements of  income,  statements of  comprehensive income,
   changes  in stockholders'  equity,  and cash  flows  for the  years  ended
   December 31, 1997 and 1996 and period from March 31, 1995 through December
   31, 1995.  These consolidated financial statements  are the responsibility
   of the Company's management.  Our responsibility is to express  an opinion
   on these financial statements based on our audits.

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

   In our  opinion, the consolidated  financial statements referred  to above
   present  fairly,  in all  material  respects,  the financial  position  of
   RidgeStone Financial Services, Inc. as of December 31, 1997  and 1996, and
   the  results of  its operations  and its  cash flows  for the  years ended
   December 31, 1997 and 1996 and period from March 31, 1995 through December
   31, 1995, in conformity with generally accepted accounting principles.

   As described  in Note B  to the  financial statements, the  1996 and  1995
   financial  statements have been restated  to reflect the  adoption of FASB
   No. 130.

   /s/ CONLEY MCDONALD LLP



   Brookfield, Wisconsin
   January 30, 1998

   <PAGE>

   RIDGESTONE FINANCIAL SERVICES, INC.

   CONSOLIDATED BALANCE SHEETS
   December 31, 1997 and 1996


   ASSETS                                            1997         1996

     Cash and due from banks (Note C)            $ 2,671,050  $  1,494,243
     Federal funds sold                            7,994,000    13,259,000
     Interest-bearing deposits in banks                4,185       184,637
                                                  ----------    ----------
           Cash and cash equivalents              10,669,235    14,937,880
     Available for sale securities stated 
       at fair value (Note D)                        874,406     1,051,813
     Held to maturity securities, fair value of
      $4,298,356 and $5,041,826 in 1997 and 
      1996 respectively (Note E)                   4,253,095     5,005,606
     Loans, less allowance for loan losses of
      $624,740 and $334,740 in 1997 and 1996 
      respectively (Notes F, G and O)             44,933,031    18,206,257
     Mortgage loans held for sale                    701,250       845,100
     Office building, leasehold improvements and
       equipment, net (Note H)                     1,403,082     1,511,222
     Other real estate                             1,774,489             -
     Accrued interest receivable and other assets    495,109       247,656
                                                  ----------    ----------
           Total assets                          $65,103,697   $41,805,534
                                                  ==========   ===========

   LIABILITIES AND STOCKHOLDERS' EQUITY
   Liabilities:
     Deposits: (Note I)
      Demand                                     $ 7,296,264   $ 3,365,496
      Savings and NOW accounts                    28,221,885    17,282,081
      Other Time                                  22,969,476    15,021,083
                                                  ----------   -----------
           Total deposits                         58,487,625    35,668,660
     Accrued interest payable and other 
       liabilities                                   752,772       268,869
                                                  ----------   -----------
           Total liabilities                      59,240,397    35,937,529
                                                  ----------   -----------
   Commitments and contingencies (Notes M, 
   N and S)

   Stockholders' equity: (Note P)
     Common stock, no par value; 1,000,000 
     shares unauthorized, 834,340 shares 
     issued and outstanding (Note P)               7,721,399     7,721,399
     Retained deficit (Notes Q, R and S)          (1,837,493)   (1,879,126)
                                                  ----------    ----------
                                                   5,883,906     5,842,273
     Accumulated other comprehensive 
     income (loss) -                                 (20,606)       25,732
                                                  ----------    ----------
           Total stockholders' equity              5,863,300     5,868,005
                                                  ----------    ----------

           Total liabilities and stockholders'
           equity                               $ 65,103,697  $ 41,805,534
                                                 ===========    ==========

   See Notes to Consolidated Financial Statements.

   <TABLE>

   CONSOLIDATED STATEMENTS OF INCOME

   <CAPTION>

   Years ended December 31, 1997 and 1996
        and Period from March 31, 1995 through December 31, 1995

                                                                     1997            1996            1995
   <S>                                                         <C>            <C>             <C>
   Interest income:
     Interest and fees on loans (Note F)                       $2,982,233     $  641,988      $     4,927
     Interest on securities - taxable                             546,627        289,707               -
     Interest on federal funds sold                               195,211        614,803           20,307
     Interest on deposits in banks                                 15,740         37,226            6,156
                                                               ----------     ----------      -----------
           Total interest income                                3,739,811      1,583,724           31,390
                                                               ----------     ----------      -----------
   Interest expense:
     Interest on deposits (Note J)                              2,125,477      1,025,524            4,055
     Interest on federal funds purchased                              588             -                -
                                                               ----------     ----------      -----------
           Total interest expense                               2,126,065      1,025,524            4,055
                                                               ----------     ----------      -----------

           Net interest income before provision for loan losses 1,613,746        558,200           27,335
   Provision for loan losses (Note G)                             290,000        325,740            9,000
                                                               ----------     ----------      -----------
           Net interest income after provision for loan losses  1,323,746        232,460           18,335
                                                               ----------     ----------      -----------
   Other operating income:
     Service charges on deposit accounts                           24,418          7,829              335
     Gain on sale of securities, net (Note D)                     571,382         22,500               - 
     Other                                                        101,145         22,526               -
                                                               ----------     ----------      -----------
           Total other operating income                           696,945         52,855              335
                                                               ----------     ----------      -----------

   Other operating expenses:
     Salaries and employee benefits (Note L)                    1,021,304        719,544           39,220
     Occupancy expenses (Notes H and M)                           205,833        130,901           10,375
     Equipment expenses (Note H)                                  150,507        167,700               - 
     Professional fees                                            137,767         92,889               -
     Data processing fees                                          91,346         80,632               -
     Other                                                        338,025        363,785            1,682
     Pre-opening expenses (Notes S and T)                              -              -           575,449
                                                              -----------    -----------     ------------
           Total other operating expenses                       1,944,782      1,555,451          626,726
                                                              -----------    -----------     ------------
           Income (loss) before income taxes                       75,909     (1,270,136)        (608,056)
   Less applicable income taxes (Note K)                           34,276            934               -
                                                              -----------    -----------     ------------
           Net income (loss)                                   $   41,633    $(1,271,070)     $  (608,056)
                                                              ===========    ===========     ============
           Earnings (loss) per share:
               Basic                                           $     0.05     $    (1.52)     $     (0.73)
                                                              ===========    ===========     ============
               Diluted                                         $     0.05     $    (1.52)     $     (0.73)
                                                              ===========    ===========     ============
           Weighted average shares outstanding                    834,340        834,340          834,340
                                                              ===========    ===========     ============

   See Notes to Consolidated Financial Statements.

   </TABLE>

   <PAGE>

   <TABLE>

   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

   <CAPTION>

                                                            1997            1996              1995
   <S>                                               <C>             <C>              <C>
   Net income (loss)                                 $    41,633     $ (1,271,070)    $    (608,056)
                                                       ---------       ----------       -----------

   Other comprehensive income, net of taxes:
     Unrealized gains (losses) arising during period     (12,338)          25,732               --
      Less reclassified adjustment for 
        gains included in net income                     (34,000)             --                --
                                                       ---------       ----------        ----------
           Total other comprehensive income              (46,338)          25,732               --
                                                       ---------       ----------        ----------
           Comprehensive income                      $    (4,705)    $ (1,245,338)    $    (608,056)
                                                       =========       ==========        ==========
   </TABLE>

   <TABLE>

   CONSOLIDATED STATEMENTS OF CHANGES 
       IN STOCKHOLDERS' EQUITY

   <CAPTION>

   Years ended December 31, 1997 and 1996
        and Period from March 31, 1995 through December 31, 1995
                                                                                      Accumulated         
                                                                                         other            Total         
                                                      Common        Retained         comprehensive     stockholders'
                                                       stock         deficit          income (loss)       equity
   <S>                                               <C>             <C>                <C>              <C>
   Balance, March 31, 1995                           $         -     $        -         $        -       $       -
     Proceeds from sale of 834,340 shares of common
      stock, net of stock offering costs (Note O)      7,721,399              -                  -       7,721,399
     Net loss                                                  -       (608,056)                 -        (608,056)
                                                     -----------     ----------         ----------       ---------

   Balance, December 31, 1995                          7,721,399       (608,056)                 -       7,113,343
      Net loss                                                 -     (1,271,070)                 -      (1,271,070)
      Other comprehensive income - change 
        in unrealized gain on securities                       -              -             25,732          25,732
                                                     -----------     ----------         ----------      ----------
   Balance, December 31, 1996                          7,721,399     (1,879,126)            25,732       5,868,005
      Net income                                               -         41,633                  -          41,633
      Other comprehensive income - change in
        unrealized gain (loss) on securities                   -              -            (46,338)        (46,338)
                                                     -----------     ----------         ----------      ----------
   Balance, December 31, 1997                        $ 7,721,399    $(1,837,493)       $   (20,606)     $5,863,300
                                                     ===========     ==========         ==========      ==========

   See Notes to Consolidated Financial Statements.

   </TABLE>

   <PAGE>
   
   <TABLE>
   <CAPTION>

   CONSOLIDATED STATEMENTS OF CASH FLOWS
   Years ended December 31, 1997 and 1996
        and Period from March 31, 1995 through December 31, 1995
                                                                     1997              1996                1995
   <S>                                                       <C>               <C>                <C>
   Cash flows from operating activities:
       Net income (loss)                                     $      41,633     $   (1,271,070)    $      (608,056)
                                                               -----------       ------------       -------------
       Adjustments to reconcile net income (loss) to net 
        cash provided by (used in) operating activities:
          Depreciation                                             184,473            182,032              96,689
          Provision for loan losses                                290,000            325,740               9,000
          Gain on sale of investment securities                   (571,382)           (22,500)                  -
          Amortization and accretion of bond premiums
           and discounts - net                                      (1,752)                 -                   -
          Amortization of organizational costs                       2,120              2,275                 519
          (Increase) decrease in assets:
            Interest receivable                                   (227,625)          (200,631)             (2,483)
            Other assets                                           (21,948)             2,352             (49,688)
          Increase in liabilities:
            Accrued interest                                       260,671            250,002               3,921
            Other liabilities                                      223,232             13,418               1,528
                                                                 ---------           --------            --------
             Total adjustments                                     137,789            552,688              59,486
                                                                 ---------           --------            --------
             Net cash provided by (used in) operating 
              activities                                           179,422           (718,382)           (548,570)
                                                                 ---------           --------            --------
   Cash flows from investing activities:
     Proceeds from sales of available for sale securities        2,701,397          9,335,817                   -
     Purchase of available for sale securities                  (1,994,683)       (10,339,643)                  -
     Proceeds from maturities of held to maturity securities       750,000            500,000                   -
     Purchase of held to maturity securities                             -         (5,505,361)                  -
     Purchase of office building, leasehold improvements
      and equipment                                                (76,333)          (636,516)         (1,153,427)
     Net expenditures on other real estate                      (1,125,790)                 -                   -
     Net increase in loans                                     (27,521,623)       (18,656,327)           (729,770)
                                                                 ---------         ----------           ---------
           Net cash used in investing activities:              (27,267,032)       (25,302,030)         (1,883,197)
                                                                ----------         ----------           ---------
   Cash flows from financing activities:
     Net increase in deposits                                   22,818,965         32,360,129           3,308,531
     Proceeds from the issuance of common stock, net                     -                  -           7,721,399
     Proceeds from notes payable                                         -                  -             414,900
     Payment of notes payable                                            -                  -            (414,900)
                                                                 ---------         ----------          ----------
           Net cash provided by financing activities            22,818,965         32,360,129          11,029,930
                                                                 ---------         ----------          ----------
           Increase (decrease) in cash and cash equivalents     (4,268,645)         6,339,717           8,598,163
   Cash and cash equivalents:
     Beginning                                                  14,937,880          8,598,163                   -
                                                                ----------         ----------          ----------
     Ending                                                  $  10,669,235     $   14,937,880     $     8,598,163
                                                                ==========         ==========          ==========
   Supplemental disclosures of cash flow information:
      Cash paid for:
      Interest                                               $   1,865,394     $      775,522     $         5,212
                                                                 =========         ==========          ==========
      Income taxes                                           $      30,096     $          934     $             -
                                                                 =========         ==========          ==========
   Supplemental schedule of non-cash investing and
   financing activities:
     Net change in unrealized gain on
       available for sale securities                         $     (46,338)    $       25,732     $             -
                                                                 =========         ==========          ==========
     Transfer of foreclosed assets from
       loans to other assets                                 $     648,699     $            -     $             -
                                                                 =========         ==========          ==========

   See Notes to Consolidated Financial Statements.

   </TABLE>

   <PAGE>

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   Note A.  Summary of Significant Accounting Policies

   1.  Consolidation:

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

   2.  Nature of banking activities:

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

   3.  Basis of financial statement presentation:

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

   4.  Cash and cash equivalents:

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

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

   5.  Available for sale securities:

   Securities classified as available for sale are those debt securities that
   the  Company and  its subsidiary  Bank  intend to  hold for  an indefinite
   period of time, but not  necessarily to maturity.  Any decision to  sell a
   security  classified as  available  for sale  would  be based  on  various
   factors, including significant movements in interest rates, changes in the
   maturity  mix of the  subsidiary Bank's assets  and liabilities, liquidity
   needs,  regulatory  capital  consideration,  and  other  similar  factors.
   Securities 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.

   6.  Held to maturity securities:

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

   7.  Loans:

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

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

   8.  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.

   9.  Allowance for loan losses:

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

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

   10.  Office building, leasehold improvements and equipment:

   Depreciable  assets  are stated  at  cost  less accumulated  depreciation.
   Provisions for depreciation are  computed on straight-line and accelerated
   methods over  the estimated useful lives of the assets, which are 39 years
   for  office building  and  leasehold improvements  and  3 to  7 years  for
   equipment.

   11.  Foreclosed real estate:

   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 loss on foreclosed real estate.

   12.  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.

   13.  Income taxes:

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

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

   14.  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.

   15.  Per share data:

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

   16.  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.

   Listed on the following page are the methods and assumptions used by the 
   Company in estimating the fair value of its financial instruments:

         Carrying   amounts  approximate  fair   values  for   the  following
         instruments:
             Cash and cash equivalents
             Federal funds sold
             Accrued interest receivable
             Accrued interest payable
             Variable rate loans that reprice frequently where no
               significant change in credit risk has occurred
             Demand deposits
             Variable rate money market accounts
             Variable rate certificates of deposit
             Available for sale securities

         Quoted market prices:

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

         Discounted cash flows:

         Using interest  rates currently  being  offered on  instruments
         with similar terms and with similar credit quality:
             All loans except variable rate loans described above
             Fixed rate certificates of deposit
         Quoted fees currently being charged for similar instruments:
             Taking into  account the remaining  terms of the  agreements and
             the counterparties' credit standing:
             Off-balance-sheet instruments:
               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 has determined
   it does not have a distinguishable fair value.

   Note B.  Accounting Change

   In 1997, the  Financial Accounting Standards Board (FASB) issued Statement
   No. 130, "Reporting Comprehensive Income",  which requires all entities to
   report comprehensive income in the  financial statements.  This  Statement
   is effective for fiscal years beginning after December 15, 1997 with early
   adoption permitted.  The Company has  elected to early adopt FASB No. 130.
   As  provided  by  this  Statement, 1996  and  1995  comparative  financial
   statements  have  been restated  for the  change in  accounting principle.
   Adoption of this Statement has no effect on total stockholders' equity.

   Note C.  Cash and Due from Banks

   The  Company's subsidiary  Bank  is required  to  maintain vault  cash  or
   reserve balances with  Federal Reserve  Banks based upon  a percentage  of
   deposits. These  requirements approximated  $58,000 at December  31, 1997.
   At  December 31, 1996,  the subsidiary Bank  was not required  to maintain
   vault  cash or  reserve balances with  Federal Reserve Banks  based upon a
   percentage of deposits.

   Note D.  Available for Sale Securities

   Amortized costs  and fair values  of available for  sale securities as  of
   December 31, 1997 and 1996 are summarized as follows:

   <TABLE>
   <CAPTION>

                                                                             December 31, 1997
                                                                         Gross              Gross
                                                  Amortized            unrealized         unrealized          Fair
                                                     cost                gains              losses           values
   <S>                                      <C>                  <C>                  <C>             <C>
   U.S. Treasury securities                 $       496,009      $         2,350      $         -     $     498,359
   Obligations of other U.S. government
     agencies and corporations                      250,000                3,047                -           253,047
                                                -----------           ----------         --------        ----------
                                                    746,009                5,397                -           751,406
   Equity securities                                149,003                1,000           27,003           123,000
                                                -----------           ----------         --------        ----------
                                            $       895,012      $         6,397      $    27,003     $     874,406
                                                ===========           ==========         ========        ==========
   <CAPTION>

                                                                            December 31, 1996
                                                                           Gross          Gross
                                                    Amortized            unrealized     unrealized           Fair
                                                      cost                 gains          losses            values
   <S>                                      <C>                  <C>                  <C>             <C>
   U.S. Treasury securities                 $       489,793      $         8,709      $     2,564     $     495,938
   Equity securities                                536,288               26,775            7,188           555,875
                                                -----------           ----------        ---------        ----------
                                            $     1,026,081      $        35,484      $     9,752     $   1,051,813
                                                ===========           ==========        =========        ==========
   </TABLE>


   The amortized cost  and fair value of available for  sale securities as of
   December  31, 1997, by  contractual maturity,  are shown below.   Expected
   maturities  will  differ  from  contractual  maturities  in  other  equity
   securities since the anticipated  maturities are not readily determinable.
   Therefore, these securities are not included in the maturity categories in
   the following maturity summary:
                                                         December 31, 1997
                                                        Amortized       Fair
                                                          cost         value

   Due in one year or less                         $    249,495 $     250,234
   Due after one year through 5 years                   496,514       501,172
                                                     ----------   -----------
                                                   $    746,009 $     751,406
                                                     ==========   ===========

   Realized gains and  losses on sale of available for  sale securities as of
   December 31, 1997 and 1996 are as follows:

                                                       December 31,
                                                1997        1996       1995
   Proceeds from sales of available for
     sale securities                        $2,701,397    $9,355,817  $     -
                                            ==========    ==========  =======
   Gross gains on sales                     $  574,885    $   22,500  $     -
   Gross losses on sales                        (3,503)            -        -
                                            ----------    ----------  -------
                                            $  571,382    $   22,500  $     -
                                            ==========    ==========  =======
   Related income taxes                     $   34,276    $        -  $     -
                                            ==========    ==========  =======

   Note E.  Held to Maturity Securities

   Amortized costs  and fair  values of  held  to maturity  securities as  of
   December 31, 1997 and 1996 are summarized as follows:

                                             December 31, 1997
                                              Gross       Gross
                                 Amortized  unrealized   unrealized  Fair
                                   cost       gains       losses     value

   U.S. Treasury securities    $ 2,503,095  $  22,764     $   -    $2,525,859
   Obligations of other U.S.
     government agencies and
     corporations                1,750,000     22,497         -     1,772,497
                                ----------  ---------     ------   ----------
                               $ 4,253,095  $  45,261     $   -    $4,298,356
                                ==========  =========     ======   ==========

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

   U.S. Treasury securities    $ 2,757,325  $  25,800     $   -    $2,783,125
   Obligations of other U.S.
     government agencies and 
     corporations                2,248,281     10,850      (430)    2,258,701
                                ----------   --------     -------   ---------
                               $ 5,005,606  $  36,650     $(430)   $5,041,826
                                ==========   ========     =======   =========


   The  amortized cost and  fair value of  held to maturity  securities as of
   December 31, 1997, by contractual maturity, are shown below. 

                                                        December 31, 1997
                                                        Amortized     Fair
                                                           cost       value

   Due in one year or less                            $ 1,501,498 $ 1,505,781
   Due after one year through five years                2,251,597   2,279,725
   Due after five years through ten years                 500,000     512,850
                                                       ----------  ----------
                                                      $ 4,253,095 $ 4,298,356
                                                       ==========  ==========
   Note F.  Loans

   Major classifications of loans are as follows:
                                                         December 31, 
                                                     1997             1996 

   Commercial                                    $ 14,158,697    $  6,967,836
   Real estate:
     Construction                                   4,640,119       2,565,144
     Commercial                                    13,474,318       4,632,272
     Residential                                   10,877,347       4,634,990
   Installment and consumer                         3,108,540         585,855
                                                 ------------    ------------
                                                   46,259,021      19,386,097
   Allowance for loan losses                         (624,740)       (334,740)
                                                 ------------    ------------
           Net loans                             $ 45,634,281    $ 19,051,357
                                                 ============    ============


   There  were no  loans that  were impaired  at December  31, 1997  or 1996.
   There  was no interest income recognized on  a cash basis during the years
   ended December 31, 1997, 1996 or 1995.

   Certain directors, executive  officers and principal  shareholders of  the
   Company,  and  their  related  interests, had  loans  outstanding  in  the
   aggregate  amounts of $3,969,100 and  $1,223,122 at December  31, 1997 and
   1996  respectively.  During  1997, $3,569,336 of new  loans were made with
   $823,358  of repayments. These loans  were made on  substantially the same
   terms, including interest rates and collateral, as those prevailing at the
   same  time  for comparable  transactions with  other  persons and  did not
   involve  more  than  normal  risks  of  collectibility  or  present  other
   unfavorable features.

   Note G.  Allowance for Loan Losses

   The allowance  for loan  losses  reflected in  the consolidated  financial
   statements represents  the allowance available  to absorb loan  losses. An
   analysis  of  changes  in the  allowance  is  presented  in the  following
   tabulation:
                                                            December 31, 
                                                          1997        1996 

   Balance, beginning                                    $334,740    $9,000
     Loans charged off                                          -         -
     Recoveries on loans previously charged off                 -         -
     Provision charged to operations                      290,000   325,740
                                                         --------   -------
   Balance, ending                                       $624,740  $334,740
                                                         ========   =======

   Note H.  Office Building, Leasehold Improvements and Equipment
   Office  building, leasehold improvements and  equipment are stated at cost
   less  accumulated  depreciation and  amortization  and  are summarized  as
   follows:
                                                        December 31, 
                                                    1997          1996 

   Land                                            $ 72,200      $72,200
   Building and leasehold improvements            1,034,147    1,015,898
   Furniture and equipment                          756,869      701,845
                                                  ---------    ---------
                                                  1,863,216    1,789,943
     Less accumulated depreciation and
       amortization                                 460,134      278,721
                                                  ---------    ---------
           Total office building, leasehold
                improvements and equipment       $1,403,082   $1,511,222
                                                  =========    =========

   Depreciation and  amortization expense amounted to  $184,473, $182,032 and
   $96,689 in 1997, 1996 and 1995 respectively.

   Note I.  Deposits

   The  aggregate amount of other Time deposits (including CD's), each with a
   minimum denomination  of $100,000, was  $5,530,343 and $2,712,309  in 1997
   and 1996 respectively.

   At December 31, 1997, the scheduled maturities of other  Time deposits are
   as follows:

     1998                                                 $      21,443,687
     1999                                                           226,050
     2000                                                           267,515
     2001                                                           579,839
     2002                                                           452,385
                                                              -------------
                                                          $      22,969,476
                                                              =============

   Note J.  Interest on Deposits

   Interest expense on deposits is as follows:
                                                    December 31,
                                            1997        1996       1995 

   Interest bearing demand accounts      $ 14,547    $  7,818      $  112
   Money market demand accounts           963,323     472,769       3,369
   Savings deposits                        24,285       9,460          36
   Time, $100,000 and over                248,636      94,837         356
   Time, under $100,000                   874,686     440,640         182
                                        ---------   ---------     -------
           Total                       $2,125,477  $1,025,524      $4,055
                                        =========   =========     =======
   Note K.  Income Taxes

   The  provision for income taxes  included in the accompanying consolidated
   financial statements consists of the following:
                                                         December 31,
                                                   1997     1996      1995
   Current taxes:
     Federal                                    $      -  $     -   $      -
     State                                        34,276      934          -
                                                 -------  -------   --------
                                                  34,276      934          -
                                                 -------  -------   --------
   Deferred income taxes (benefit):
     Federal                                           -        -          -
     State                                             -        -          -
                                                 -------  -------   --------
                                                       -        -          -
                                                 -------  -------   --------
         Total provision for income taxes       $ 34,276  $   934   $      -
                                                 =======  =======   ========

   At December 31, 1997,  the Company had  a net operating loss  carryforward
   for income tax purposes of approximately $1,044,000 which, if not utilized
   to reduce taxable income  in future periods, will  expire at December  31,
   2011.

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

                                                              December 31,
                                                           1997         1996 
   Deferred tax assets:
     Allowance for loan losses                       $    144,502  $   70,681
     Depreciation                                          14,834      22,942
     Start up costs                                       101,876     150,224
     Net operating loss carryforward                      412,467     496,684
     Unrealized loss on available for sale
      securities                                            7,000           -
     Other                                                 11,949           -
   Deferred tax liabilities:
     Unrealized gain on available for sale
      securities                                                -      (1,016)
     Other                                                      -        (419)
   Valuation                                             (692,628)   (739,096)
                                                       ----------    --------
                                                      $         -   $       -
                                                       ==========   =========

   Note L.  Profit-Sharing Plan

   The  Company  established  a  401(k)  plan  during  1996.     The  Company
   contributed $28,700 and $16,650 in 1997 and 1996  respectively.  There was
   no contribution in 1995.

   Note M.  Facilities Lease

   Lease  expense for the  years ended December  31, 1997, 1996  and 1995 was
   $81,936,  $88,771  and  $41,275  respectively.  The lease  term  which  is
   accounted  for as an  operating lease, expires  on May 31,  2000, requires
   monthly base  rental payments  of  $6,828 and  has two  five-year  renewal
   options.  The Company also has the option  of purchasing the building upon
   the fourth anniversary of the commencement of the lease for $1,000,000.

   In connection with  the lease of  the subsidiary Bank's  main office,  the
   Company  paid broker's  commissions to an  entity whose  principals are an
   organizer  of the subsidiary  Bank and a  director of the  Company, in the
   amount of $4,518,  $6,584 and $2,425 in 1997, 1996  and 1995 respectively.
   Additional commissions may be payable if the Company exercises its options
   for further  lease terms and  if the Company later  purchases the shopping
   mall in which the subsidiary Bank premises are located.

   Minimum  future rental  payments under  the noncancelable  operating lease
   are:

   Year ending December 31,
     1998                                                   $       81,936
     1999                                                           81,936
     2000                                                           34,140
                                                                ----------
           Total minimum future rental payments             $      198,012
                                                                ==========

   Note N.  Commitments and Contingencies

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

   The Company  is party to financial instruments with off-balance-sheet risk
   in  the  normal course  of business  to meet  the  financing needs  of its
   customers.  These financial  instruments  include  commitments  to  extend
   credit, financial guarantees  and standby letters of credit. They involve,
   to  varying  degrees,  elements  of  credit  risk  in  excess  of  amounts
   recognized on the consolidated balance sheet.

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

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

                                                      1997          1996 
   Financial instruments whose contract amounts
    represent credit risk
     Commitments to extend credit               $    12,031,882 $   8,373,142
     Credit card commitments                    $       599,716 $     297,615
     Commercial letters of credit               $       137,680 $      60,955

   Commitments to  extend credit are agreements to lend to a customer as long
   as there  is no violation  of any condition  established in  the contract.
   Commitments  generally have  fixed expiration  dates or  other termination
   clauses and  may require payment of  a fee. Since many  of the commitments
   are  expected to  expire without  being drawn  upon, the  total commitment
   amounts  do not  necessarily represent  future cash  requirements. Standby
   letters  of credit  are conditional  commitments issued  to guarantee  the
   performance of a customer to a third party. Those guarantees are primarily
   issued to  support public and  private borrowing arrangements.  The credit
   risk involved in issuing letters of credit is essentially the same as that
   involved in extending  loan facilities to customers. The Company evaluates
   each customer's credit worthiness  on a case-by-case basis. The  amount of
   collateral  obtained, if deemed necessary by the Company upon extension of
   credit, is based  on management's credit  evaluation of the  counterparty.
   Collateral  held varies  but may  include accounts  receivable, inventory,
   property  and  equipment,  and  income-producing   commercial  properties.
   Credit card commitments are unsecured.

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

   Note O.  Concentration of Credit Risk

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

   Note P.  Stockholders' Equity

   Common stock  at December 31, 1997 represents  834,340 shares issued at no
   par  value per  share  less associated  costs  for professional  fees  and
   underwriting discounts and commissions.

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

   In  1996, the Company  established a Stock Option  Plan (the "Plan") which
   was approved by the shareholders at the 1997 annual meeting, providing for
   the  granting of options for  up to 100,000 shares of  common stock to key
   officers and employees of the Company.   Options 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  to date  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:

                                         Options      Options     Option price
                                        available   outstanding    per share

   Balance, December 31, 1995                   -            -   $        -
     Stock options authorized             100,000                         -
     Granted                              (49,025)      49,025        11.75
     Exercise of stock option                   -            -            -
     Canceled                                   -            -            -
                                          -------     --------     
   Balance, December 31, 1996              50,975       49,025        11.75
     Granted                              (49,000)      49,000        14.63
     Canceled                               1,150       (1,150) 11.75-14.63
                                          -------     --------  
   Balance, December 31, 1997               3,125       96,875  11.75-14.63
                                          =======     ========  

   The  Company  applies   APB  Opinion  25  and  related  interpretation  in
   accounting for its Plan.   Accordingly,  no  compensation cost  has been
   recognized for  the  Plan.    Had compensation  cost  for  the  Plan  been
   determined  based upon the fair value at  the grant dates for awards under
   the Plan consistent with the  method of FASB Statement 123,  the Company's
   net  income  and earnings  per share  would be  reduced  to the  pro forma
   amounts indicated below:

                                          1997        1996         1995

   Net income - as reported          $   41,633  $(1,270,136)  $(608,056)
     Pro forma                       $  (59,840) $(1,270,136)  $(608,056)
   Basic earnings per share - as
   reported                          $     0.05  $     (1.52)  $   (0.73) 
     Pro forma                       $    (0.07) $     (1.52)  $   (0.73)
   Diluted earnings per share - as
   reported                          $     0.05  $     (1.52)  $   (0.73)  
     Pro forma                       $    (0.07) $     (1.52)  $   (0.73)


                                                               Per share
                                        Income      Shares       amount
   1997:
     Earnings per share              $  41,633      834,340    $    0.05
                                                                ========
     Effect of options                       -       12,056
                                      --------      -------   
     Earnings per share - assuming
       dilution                      $  41,633      846,396    $    0.05
                                      ========      =======     ========

   1996:
     Loss per share                $(1,271,070)     834,340    $   (1.52)
                                                                ========
     Effect of options                       -            -
                                    ----------     --------  
     Loss per share - assuming
      dilution                     $(1,271,070)     834,340    $   (1.52)
                                    ==========     ========     ========

   1995:
     Loss per share                $  (608,056)     834,340    $   (0.73)
                                                                ========
     Effect of options                       -            -     
                                    ----------     --------  
     Loss per share - assuming
      dilution                     $  (608,056)     834,340    $   (0.73)
                                    ==========     ========     ========

   Note Q.  Retained Earnings and Restriction on Dividends

   Under Wisconsin law,  the subsidiary Bank is restricted as  to the maximum
   amount of dividends it  may pay on its common stock.  A Wisconsin bank may
   not  pay dividends  except  out of  net  profits. Unless  exempted by  the
   Wisconsin  Department of  Financial Institutions,  Division of  Banking, a
   state bank may  not pay any dividend until an amount equal to at least 20%
   of  net profits for  the preceding half  year or dividend  period has been
   transferred to surplus. Such transfers are required until the surplus fund
   equals 100% of the bank's capital stock. A bank's ability to pay dividends
   may  also be restricted  in the event  that losses in  excess of undivided
   profits  have  been   charged  against  surplus   and  in  certain   other
   circumstances. Federal regulators  have authority to prohibit  a bank from
   engaging in any action deemed  by them to constitute an unsafe  or unsound
   practice,  including  the  payment  of  dividends.  In  addition  to   the
   foregoing, Wisconsin business corporations such as the subsidiary Bank are
   prohibited by Wisconsin law from paying dividends while they are insolvent
   or if the  payment of dividends would render  them unable to pay  debts as
   they come due in the usual course of business.

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

   Note R.  Regulatory Capital Requirements

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

   Quantitative measures established by regulation to ensure capital adequacy
   require  the subsidiary Bank to  maintain minimum amounts  and ratios (set
   forth in  the table below) of total and Tier  1 capital (as defined in the
   regulations) to risk-weighted assets  (as defined) and Tier 1  capital (as
   defined) to  average  assets  (as defined).  Management  believes,  as  of
   December  31,  1997,  the  subsidiary  Bank  meets  all  capital  adequacy
   requirements to which it is subject.

   As of  December 31, 1997, the most recent notification from the regulatory
   agencies categorized  the Company and subsidiary  Bank as well-capitalized
   under  the  regulatory  framework  for  prompt corrective  action.  To  be
   categorized  as well-capitalized,  the  Company and  subsidiary Bank  must
   maintain  minimum total risk-based, Tier I risk-based, and leverage ratios
   as set forth in the  table. There are no conditions or  events since these
   notifications  that management  believes  have  changed the  institution's
   category.

   Following is a comparison of the Company and subsidiary Bank's 1997 and 1996
   actual with the minimum requirements for well-capitalized and adequately 
   capitalized banks, as defined by the federal regulatory agencies' Prompt 
   Corrective Action Rules:

   <TABLE>
   <CAPTION>

               
                                                                                      To be well 
                                                                                   capitalized under
                                                                  For capital       prompt corrective
                                                 Actual        adequacy purposes   action provisions
  As of December 31, 1997:                  Amount      Ratio    Amount     Ratio   Amount       Ratio
     <S>                                <C>             <C>     <C>         <C>    <C>            <C>
     Total capital (to risk-weighted 
     assets):
      RidgeStone Financial
        Services, Inc.                  $  6,493,883    13.3%  $ 3,902,674   8.0%  $4,878,343      10.0%
      RidgeStone Bank                      5,457,770    11.4%    3,810,246   8.0%   4,762,808      10.0%

     Tier I capital (to risk-weighted 
     assets):
      RidgeStone Financial
        Services, Inc.                  $  5,883,906    12.1%  $ 1,951,337   4.0%  $2,927,006       6.0%
      RidgeStone Bank                      4,842,056    10.2%    1,905,123   4.0%   2,857,685       6.0%

     Tier I capital (to average assets):
      RidgeStone Financial
        Services, Inc.                  $  5,883,906    10.5%  $ 2,234,412   4.0%  $2,793,015       5.0%
      RidgeStone Bank                      4,842,056     9.9%    1,961,142   4.0%   2,451,428       5.0%

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

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

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

   </TABLE>

   Note S.  Regulatory Restriction

   RidgeStone  Financial Services,  Inc. (Holding  Company  only) has  made a
   commitment to  the Federal  Reserve Bank,  Chicago not to  incur any  debt
   until  the  later of  August  31,  2000 or  five  years from  the  date of
   consummation of operation (December 7, 1995), without  prior approval from
   the Federal Reserve Bank.

   RidgeStone Bank has committed to the FDIC that its Tier-I capital to total
   asset  ratio  will not  fall  below 8%  during  the first  three  years of
   operations starting December 7, 1995.

   Note T.  Fair Values of Financial Instruments

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

   <TABLE>
   <CAPTION>
                                                      December 31, 1997                     December 31, 1996
                                                  Carrying         Estimated           Carrying              Estimated
                                                   amount          fair value           amount              fair value
     <S>                                     <C>                 <C>                <C>                   <C>
     Financial assets:
       Cash and cash equivalents             $  10,669,235       $ 10,669,235       $ 14,937,880          $ 14,937,880
                                               ===========         ==========         ==========            ==========
     Securities                              $   5,127,501       $  5,172,762       $  6,057,419          $  6,093,639
                                               ===========         ==========         ==========            ==========
     Net loans                               $  45,634,281       $ 45,776,376       $ 19,051,357          $ 19,017,760
                                               ===========         ==========         ==========            ==========
     Accrued interest receivable             $     430,739       $    430,739       $    203,114          $    203,114
                                               ===========         ==========         ==========            ==========
   Financial liabilities:
       Deposits                              $  58,487,625       $ 58,489,781       $ 35,668,660          $ 35,679,914
                                               ===========         ==========         ==========            ==========

     Accrued interest payable                $     514,594       $    514,594       $    253,923          $    253,923
                                               ===========         ==========         ==========            ==========

   </TABLE>


   The estimated  fair value of fee  income on letters of  credit at December
   31, 1997  and  1996 is  insignificant.    Loan commitments  on  which  the
   committed  interest rate  is less than  the current  market rate  are also
   insignificant at December 31, 1997 and 1996.

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

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


   CONDENSED BALANCE SHEETS
                                                            December 31,
   ASSETS                                                 1997         1996 

     Cash and cash equivalents                     $     378,345 $    468,535
     Available for sale securities stated at fair
       value                                             123,000      555,875
     Investment in subsidiary                          4,847,453    4,806,041
     Leasehold improvements and equipment, net                 -       32,933
     Other real estate                                   512,000            -
     Other assets                                         11,619       13,474
                                                       ---------   ----------
           Total assets                            $   5,872,417 $  5,876,858
                                                       =========   ==========

   LIABILITIES AND STOCKHOLDERS' EQUITY
   Liabilities - other liabilities                 $       9,117 $      8,853
                                                       ---------   ----------
   Stockholders' equity:
     Common stock, no par value; 1,000,000 shares
      authorized, 834,340 shares issued                7,721,399    7,721,399
     Retained deficit                                 (1,837,493)  (1,879,126)
     Accumulated other comprehensive 
      income (loss) -                                    (20,606)      25,732
                                                      ----------    ---------
      Total stockholders' equity                       5,863,300    5,868,005
                                                      ----------    ---------
           Total liabilities and stockholders'
           equity                                  $   5,872,417 $  5,876,858
                                                      ==========   ==========

   CONDENSED STATEMENTS OF INCOME
                                                       December 31,
                                              1997        1996        1995
   Income:

     Interest                            $     15,742     $ 37,226 $    6,156
     Gain on sale of securities               569,429       22,500          -
     Other                                          -        1,900          -
                                              -------      -------    -------
           Total income                       585,171       61,626      6,156
                                              -------      -------    -------
   Expenses:
     Salaries and employee benefits             9,532        3,766          -
     Occupancy and depreciation                     -        7,892        418
     Pre-opening                                    -            -     43,371
     Other                                     41,914       31,097          -
                                              -------      -------    -------
           Total expenses                      51,446       42,755     43,789
                                              -------      -------    -------
   Income (loss) before income taxes and
     equity in undistributed loss at 
     subsidiary                               533,725       18,871    (37,633)
   Income taxes                                34,251            -          - 
                                             --------      -------    -------
   Income (loss) before equity  in
     undistributed loss at subsidiary         499,474       18,871    (37,633)
   Equity in undistributed net loss at
     subsidiary                              (457,841)  (1,289,941)  (570,423)
                                             --------    ---------   --------
           Net income (loss)                $  41,633  $(1,271,070) $(608,056)
                                             ========    =========   ========

   CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
                                                       December 31,
                                              1997         1996         1995

   Net income (loss)                      $   41,633   $(1,271,070) $(608,056)
                                           ---------    ----------   --------
   Other comprehensive income, net of
     taxes:
     Unrealized gains (losses) on
       securities arising during period   $  (12,338)  $    25,732  $       -
     Less reclassified adjustment for
       (gains) losses included in 
       net income                            (34,000)            -          -
                                           ---------     ---------    -------
           Total other comprehensive
           income                            (46,338)       25,732          -
                                           ---------     ---------    -------
           Comprehensive income           $   (4,705)  $(1,245,338)  (608,056)
                                           =========     =========    =======

   CONDENSED STATEMENTS OF CASH FLOWS
                                                          December 31,
                                                1997         1996       1995
   Cash flows from operating activities:
       Net income (loss)                  $   41,633   $(1,271,070) $ (608,056)
                                           ---------    ----------   ---------
       Adjustments to reconcile net
        income (loss) to net cash
        provided by (used in) operating
        activities:
          Depreciation                             -         5,983         418
          Gain on sale of investment  
            securities                      (569,429)      (22,500)          -
          Amortization of organizational 
            costs                              2,120         2,120         265
          (Increase) decrease in other 
            assets                              (265)           48     (15,907)
          Increase in other liabilities          264             -       8,853
          Equity in undistributed loss of 
          subsidiary                         457,841     1,289,941     570,423
                                            --------     ---------    --------
           Total adjustments                (109,469)    1,275,592     564,052
                                            --------     ---------    --------
           Net cash provided by (used in)
           operating activities              (67,836)        4,522     (44,004)
                                            --------     ---------    --------
   Cash flows from investing activities:
     Proceeds from sales of available for
       sale securities                     2,701,397     1,446,042           -
     Purchase of available for sale
       securities                         (1,744,684)   (1,959,829)          -
     Investment in subsidiary Bank          (500,000)   (1,660,261) (5,000,000)
     Purchase of office building and
       equipment                                   -       (36,411)   (169,900)
     Proceeds from sale of office
      building and equipment to 
      subsidiary Bank                         32,933       166,977           -
     Purchase of other real estate from
      subsidiary Bank                       (512,000)                        -
                                           ---------     ---------    --------
           Net cash used in investing
           activities                        (22,354)   (2,043,482) (5,169,900)
                                           ---------     ---------   ---------
   Cash flows from financing activities:
     Proceeds from issuance of common
       stock, net                                  -             -   7,721,399
     Proceeds from notes payable                   -             -     414,900
     Payment of notes payable                      -             -    (414,900)
                                           ---------     ---------   ---------
           Net cash provided by financing
           activities                              -             -   7,721,399
                                           ---------     ---------   ---------
           Increase (decrease) in cash
           and cash equivalents              (90,190)   (2,038,960)  2,507,495
                                           ---------     ---------   ---------
   Cash and cash equivalents:
     Beginning                               468,535     2,507,495           -
                                           ---------     ---------   ---------
     Ending                               $  378,345  $    468,535  $2,507,495
                                           =========     =========   =========
   Supplemental disclosures of  cash flow
   information
     Cash paid during the year for:
      Interest                            $        -  $          -  $    5,078
                                           =========     =========   =========
      Income taxes                        $   30,071  $        909  $        -
                                           =========     =========   =========
   Supplemental schedule of non-cash 
   investing and financing activities:
     Net change in unrealized gain 
     (loss) on available for sale
     securities                           $ (46,338)  $     25,732  $        -
                                           =========     =========    ========


   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 1998  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
   herein  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
   herein  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, 1997.

   <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 17,
   1998.

                                 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 17, 1998:

           Signatures                              Title

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


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


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


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


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


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


                                                       Director
    William F. Krause, Jr.


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


    /s/ Frederick I. Olson                             Director
    Frederick I. Olson


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


                                                       Director 
    Richard A. Streff

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

   <PAGE>

                                INDEX TO EXHIBITS

           Exhibit No.            Exhibit Description

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

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

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

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

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

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

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

             *10.6       Form of Stock Option Agreement used in conjunction
                         with the Ridgestone Financial Services, Inc. 1996
                         Stock Option Plan [Incorporated by reference to
                         Exhibit 4.4 to Ridgestone Financial Services, Inc.'s
                         Registration Statement on Form S-8 (Registration No.
                         333-28299)]

             *10.7       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-K for the fiscal year ended December
                         31, 1997 (File No. 0-27984)]

             *10.8       First Amendment to Employment Agreement, dated
                         as of December 31, 1997, between Ridgestone
                         Financial Services, Inc. and Paul E. Menzel.

             *10.9       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-K for the fiscal year ended December
                         31, 1997 (File No. 0-27984)]

             *10.10      First Amendment to Employment Agreement, dated
                         as of December 31, 1997, between Ridgestone
                         Financial Services, Inc. and William R. Hayes.

             *10.11      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-K for the fiscal year ended December
                         31, 1997 (File No. 0-27984)]

             *10.12      First Amendment to Employment Agreement, dated
                         as of December 31, 1997, between Ridgestone
                         Financial Services, Inc. and Christine V.
                         Lake.

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

                 23      Independent Auditor's Consent

                 27      Financial Data Schedule (EDGAR version only)

   --------------------
   *  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.