SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One):

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 [FEE REQUIRED] For the fiscal year ended September 30, 1997,
                                                             -------------------

[  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from 
                         to                     .
       ----------------     -------------------

Commission File No. 0-25546

                        MISSISSIPPI VIEW HOLDING COMPANY
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

Minnesota                                                      41-1795363
---------------                                             ------------------
(State or Other Jurisdiction of Incorporation                I.R.S. Employer
or Organization)                                            Identification No.

35 East Broadway, Little Falls, Minnesota                        56345
-----------------------------------------                    --------------
(Address of Principal Executive Offices)                       (Zip Code)

Issuer's Telephone Number, Including Area Code:         320-632-5461
                                                        ------------

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

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $0.10 per share
                     ---------------------------------------
                                (Title of Class)

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

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

        State issuer's revenues for its most recent fiscal year.   $739,715

        As of December 9, 1997, there were issued and outstanding 740,243 shares
of the registrant's Common Stock.

        The Registrant's voting stock trades on the Nasdaq SmallCap market under
the symbol  "MIVI."  The  aggregate  market  value of the  voting  stock held by
non-affiliates  of the  registrant,  based on the average bid and asked price of
the  registrant's  Common Stock on December 9, 1997, was $8,018,784  ($18.00 per
share based on 445,488 shares of Common Stock outstanding).

Transition Small Business Disclosure Format (check one) 
YES [ ] NO [X]

                       DOCUMENTS INCORPORATED BY REFERENCE

      1.    Portions of the Annual  Report to  Stockholders  for the Fiscal Year
            ended September 30, 1997. (Parts I, II, and IV)
      2.    Portions  of  the  Proxy   Statement  for  the  Annual   Meeting  of
            Stockholders. (Part III)

<PAGE>




PART I

Item 1.  Business
-----------------

General

        Mississippi   View  Holding  Company  (the  "Company")  is  a  Minnesota
corporation  organized in November  1994 at the  direction of Community  Federal
Savings and Loan Association of Little Falls (the  "Association")  in connection
with  the   Association's   conversion  from  the  mutual  to  stock  form  (the
"Conversion").  On March 23, 1995, the Association  completed the Conversion and
became a wholly  owned  subsidiary  of the  Company.  The  Company  is a unitary
savings and loan holding  company which,  under existing laws,  generally is not
restricted in the types of business  activities in which it may engage  provided
the  Association  retains a  specified  amount of its assets in  housing-related
investments.

        The  Association  is  a  federally  chartered  stock  savings  and  loan
association.  The Association's only office is located in Little Falls, Morrison
County,  Minnesota.  The  Association  was founded in 1934 under the name Little
Falls Federal  Savings and Loan  Association  of Little  Falls.  The name of the
Association  was changed to Community  Federal  Savings and Loan  Association of
Little  Falls in July  1977.  The  Association  is subject  to  examination  and
comprehensive  regulation  by the Office of Thrift  Supervision  ("OTS") and its
deposits  are  federally  insured  by the  Savings  Association  Insurance  Fund
("SAIF").  The  Association is a member of and owns capital stock in the Federal
Home Loan Bank ("FHLB") of Des Moines,  which is one of the 12 regional banks in
the FHLB System.

        The Association  attracts deposits from the general public and uses such
deposits,  without  outside  borrowings,   primarily  to  invest  in  investment
securities and to originate loans secured by first mortgages on  owner-occupied,
one- to  four-family  residences  in its market  area.  The  Association's  loan
portfolio predominantly consists of both adjustable-rate and fixed-rate mortgage
loans  secured  by  single  family  residences  and,  to a much  lesser  extent,
commercial  mortgage and construction loans. The Association also makes consumer
loans, consisting of savings account loans, home improvement loans, new and used
auto loans,  recreational  vehicle loans,  home equity line of credit loans, and
unsecured loans.

        The principal sources of funds for the Association's  lending activities
are  deposits  and the  amortization,  repayment,  and  maturity  of  loans  and
investment  securities.  The  Association  does not rely on  brokered  deposits.
Principal sources of income are interest on loans and investment securities. The
Association's principal expense is interest paid on deposits.

Market Area and Competition

        The  Association's  primary  market area  consists  of Morrison  County,
Minnesota.  Morrison County has traditionally been one of the lower income areas
of the state and has carried a comparatively higher unemployment rate than other
areas of the state. The county has been successful in recent years in attracting
new and in retaining existing  businesses through the progressive  activities of
its County Board, Little Falls City Council,  Little Falls Economic  Development
Authority,  Morrison County Rural Finance Development  Authority,  and Community
Development of Morrison County Corporation. Little Falls financial institutions,
including the  Association,  have  demonstrated  cooperation in providing needed
expertise  and gap financing to facilitate  the community  development  process.
Morrison  County is the home of three  major  recreational  boat  manufacturers;
Larson,  Crestliner, and Glastron. The financial performance and employment size
of the recreational boat industry have  historically been highly cyclical.  Also
located in Morrison  County are a hospital,  a paper  mill,  a national  mailing
distributor,  and Camp Ripley,  a prominent  National Guard  training  facility.
Little Falls is the county seat of Morrison  County.  According to the Minnesota
Department of Agriculture,  Morrison County is the third largest dairy producing
county in the State.

        The Association  encounters strong competition both in the attraction of
deposits  and  origination  of real estate and other  loans.  Competition  comes
primarily  from eight  banks and two credit  unions  with  offices in its market
area. In addition, the Association competes with investment and mortgage banking
companies that operate in the area. Due to their size, some of the Association's
competitors  possess  greater  financial  and  marketing  resources.   Based  on
published figures, the Association is the only thrift institution  headquartered
in  Morrison  County,   Minnesota,   and  third  largest  financial  institution
headquartered  in Morrison  County,  Minnesota on the basis of assets as of June
30, 1997. The Association  competes for savings accounts by offering  depositors
competitive  interest rates and a high level of personal service.  Over the past
five years,  the Association  has added low cost  noninterest  bearing  checking
accounts,  safety deposit  boxes, a drive-up 


                                       1
<PAGE>


ATM,  plastic cash and check cards,  checking account  overdraft  protection and
home equity line of credit loans in order to remain competitive in its market.

     Analysis of Loan  Portfolio.  Set forth below is selected  data relating to
   the  composition of the  Association's  loan portfolio by type of loan on the
   dates indicated:

<TABLE>
<CAPTION>
                                                                At September 30,
                                             -------------------------------------------------------
                                                       1997                            1996
                                             -----------------------        ------------------------
                                                $               %               $               %
                                             -------        --------        ---------        --------
                                                                  (Dollars in Thousands)

<S>                                          <C>           <C>               <C>           <C>  
Type of Loans:
  Construction ...........................      953           2.07%             627           1.40%
  Residential (includes held for sale)(1)    34,152          74.16%          33,682          75.54%
  Commercial real estate .................    1,227           2.67%           1,417           3.18%
  Commercial business ....................      393           0.85%             351           0.79%
  Consumer loans (includes held for sale):
  Low document mortgage (2) ..............    1,036           2.25%           1,619           3.63%
  Other consumer and land ................    8,289          18.00%           6,894          15.46%
                                             ------         ------           ------         ------ 

  Total loans ............................   46,050         100.00%          44,590         100.00%
                                                            ======                          ====== 
Less:
  Loans in process .......................      310                             228
  Deferred loan origination fees and costs      269                             236
  Allowance for loan losses ..............      861                             877
                                             ------                          ------
Total loans, net .........................   44,610                          43,249
                                             ======                          ======
</TABLE>

-----------------------------
(1)   Includes one- to four-family and multi-family residential real estate.
(2)   Consists primarily of second mortgage and low documentation mortgage loans
      with terms of ten years or less.

                                       2

<PAGE>


     Loan  Maturity  Tables.  The  following  table sets forth the  maturity  of
Association's  loan  portfolio at September 30, 1997. The table does not include
prepayments  of scheduled  principal  repayments  which totaled $5.5 million and
$6.0 million for the years ended September 30, 1997 and 1996, respectively.  All
mortgage loans are shown as maturing based on contractual maturities.

<TABLE>
<CAPTION>

                                                     Land, Multi
                                        1-4 Family    Family &                   Commercial
                                        Real Estate  Commercial                  Business &
                                          Mortgage  Real Estate    Construction   Consumer    Total
                                        ----------- -----------    ------------- ----------   -----
                                                             (Dollars in Thousands)
                                        -----------------------------------------------------------
<S>                                      <C>         <C>             <C>         <C>       <C>     
Non-performing ........................  $    223    $     --        $   --      $     11  $    234
Amounts Due:                                                                     
  Within 3 Months .....................        17         182           692           319     1,210
  3 Months to 1 Year ..................       143           3           261           416       823
                                                                                 
After 1 Year:                                                                    
  1 to 3 Years ........................       452         301            --         3,492     4,245
  3 to 5 Years ........................       930          73            --         3,019     4,022
  5 to 10 Years .......................     2,301         125            --           998     3,424
  10 to 20 Years ......................    14,590         937            --         1,463    16,990
  Over 20 Years .......................    15,028          74            --            --    15,102
                                         --------    --------        ------      --------  --------
     Total due after one year .........    33,301       1,510            --         8,972    43,783
                                         --------    --------        ------      --------  --------
     Total amount due .................  $ 33,684    $  1,695        $  953      $  9,718  $ 46,050
                                         ========    ========        ======      ========  
                                                                                 
Less:                                                                            
  Allowance for loan loss .............                                                         861
  Undisbursed portion of mortgage loans                                                         310
  Deferred loan fees ..................                                                         269
                                                                                           --------
     Loans receivable, net ............                                                    $ 44,610
                                                                                           ========
</TABLE>                                                               


     The  following  table sets  forth the dollar  amount of all loans due after
September  30, 1998,  which have  pre-determined  interest  rates and which have
floating or adjustable interest rates.
                                           Fixed        Floating or
                                           Rates      Adjustable Rates    Total
                                           -----      ----------------    -----
                                                  (Dollars in Thousands)
                                           -------------------------------------
One-to four-family ................        $ 9,349        $23,952        $33,301
Commercial real estate ............            965            545          1,510
Consumer ..........................          7,687          1,285          8,972
                                           -------        -------        -------
   Total ..........................        $18,001        $25,782        $43,783
                                           =======        =======        =======

                                       3

<PAGE>


        One- to Four-Family Residential Loans. The Association's primary lending
activity consists of the origination of single family residential mortgage loans
secured by  property  located in the  Association's  primary  market  area.  The
Association  generally originates one-to four-family  residential mortgage loans
in amounts up to 80% of the lesser of the  appraised  value or selling  price of
the mortgaged property.  The Association  requires private mortgage insurance on
loans  originated at 80 to 95% of the lesser of the  appraised  value or selling
price. Loans equal to 100% of the lesser of appraised value or selling price are
offered if  insured by Farmers  Home  Administration  ("FmHA")  or the  Veterans
Administration ("VA"). Loans with a 95 to 98% loan to value ratio are offered if
insured by the U.S. Department of Housing and Urban Development  ("HUD").  Loans
insured by other agencies are sold on the secondary market.

        Loan   originations  are  generally   obtained  from  existing  or  past
customers,  members of the local  community,  and referrals from realtors within
the  Association's  lending  area.  Mortgage  loans  originated  and held by the
Association in its portfolio generally include due-on sale clauses which provide
the Association with the contractual  right to deem the loan immediately due and
payable in the event  that the  borrower  transfers  ownership  of the  property
without the Association's consent.

        The Association  primarily originates for its portfolio  adjustable-rate
mortgage  loans  with up to 30 year terms that  adjust  annually  based upon the
one-year  Treasury Bill rate and fixed rate  mortgage  loans with 15 year terms.
The Association  also  originates 20 and 30 year  fixed-rate  mortgage loans for
sale in the secondary market. The Association had limited success in originating
ARMs during periods of prevailing low market interest rates. ARMs generally have
a 2% cap on any change in the interest  rate per year,  with an overall limit of
6% on any  increase  or  decrease  over  the  life  of the  loan.  Although  the
Association  occasionally  offers  discounts  on the  interest  rate on its ARMs
during the first year of the mortgage loan for competitive reasons, generally it
determines  a borrowers  ability to pay at the maximum  second year rate.  Three
year balloon mortgages are offered on greater than forty acre parcels,  seasonal
dwellings, multi-collateral parcels, and one- to four-unit rental properties.

        Adjustable-rate  mortgage  loans  decrease  the  risks  associated  with
changes in interest  rates,  but involve other risks because,  as interest rates
increase, the underlying payments by the borrower increase,  thus increasing the
potential for default.  At the same time,  the  marketability  of the underlying
collateral, may be adversely affected by higher interest rates. These risks have
not had an adverse effect on the Association to date.

        Interest rates charged on fixed-rate  mortgage  loans are  competitively
priced  based on market  conditions  and the  Association's  cost of funds.  The
origination  fees for fixed rate loans were  generally 1% at September 30, 1997.
Generally,  the Association's  standard  underwriting  guidelines for fixed rate
mortgage loans conform to Federal Home Loan Mortgage  Corporation  ("FHLMC") and
Federal National Mortgage Association ("Fannie Mae") guidelines. The Association
currently  sells  essentially  all  30-year  fixed-rate  mortgage  loans  in the
secondary   market,   servicing   released.   As  of  September  30,  1997,  the
Association's  portfolio of loans previously originated,  sold, and serviced for
others totaled approximately $2.4 million.

        Multi-Family   and  Commercial   Real  Estate  Loans.   The  Association
originates a limited  number of  commercial  real estate and  multi-family  real
estate  loans.  Commercial  loans must be  approved  by the  President,  who has
authority to lend up to $500,000 on secured  commercial  real estate loans.  Any
loan in  excess  of this  limit  must be  approved  in  advance  by the Board of
Directors.  The  President,  informs  the Board of  Directors  at their  monthly
meeting of all  commercial  real estate  loans  originated  during the  previous
month.  The  Association's  commercial  real estate loan  portfolio  consists of
seasoned  permanent  loans secured by improved  property such as retail  stores,
manufacturing facilities,  and other non-residential  buildings. As of September
30, 1997, the  Association  had  multi-family  and commercial  real estate loans
totaling $2.2 million,  or 4.87% of the  Association's  loan  portfolio of which
$840,550 were secured by multi-family real estate.

        Loans  secured by  multi-family  and  commercial  real estate  generally
involve a  greater  degree of risk  than  residential  mortgage  loans and carry
larger loan balances. This increased credit risk is a result of several factors,
including  the  concentration  of  principal  in a  limited  number of loans and
borrowers,  the  effects  of general  economic  conditions  on income  producing
properties,  and the increased  difficulty of evaluating  and  monitoring  these
types of loans. Furthermore,  the repayment of loans secured by multi-family and
commercial real estate is typically  dependent upon the successful  operation of
the related real estate  project or business.  If the cash flow from the project
or  business  is  reduced,  the  borrower's  ability  to  repay  the loan may be
impaired.  As of September  30, 1997,  the largest  permanent  multi-family  and
commercial  real  estate  loan was  secured by a  commercial  property in Little
Falls, Minnesota and had a balance of $532,357 and payments were current.

                                       4
<PAGE>


        Construction  Loans. The Association  primarily makes loans to construct
single-family owner occupied homes which upon completion of construction convert
to permanent financing.  For at least the past 10 years, the Association has not
made construction loans to builders for the purpose of spec homes.

        Construction  loans are made to owners for construction of their primary
residence on a  construction/permanent  basis.  Construction/permanent  loans to
owner/borrowers  have either fixed or adjustable  rates and are  underwritten in
accordance with the same terms and requirements as the  Association's  permanent
mortgages on existing  properties except that the building  contractor must meet
the  Association's  Board  approved   construction  lending  policy.  The  loans
generally  provide  for  disbursements  of loan  proceeds  in  stages  during  a
construction  period of up to six months.  Borrowers are required to pay accrued
interest on the outstanding  balance monthly during the  construction  phase. At
September 30, 1997,  there was $953,265  outstanding  in  construction  loans to
owner/borrowers with $271,924 in outstanding loans in process allocated to these
projects.  The Association originated $1.4 million in construction loans on one-
to four-family properties during fiscal 1997.

        Construction  financing  is  generally  considered  to  involve a higher
degree of risk of loss than  long-term  financing  on  improved,  occupied  real
estate.  Risk of loss on a  construction  loan is  dependent  largely  upon  the
accuracy  of the initial  estimate  of the  property's  value at  completion  of
construction  or  development  and the estimated  cost  (including  interest) of
construction. During the construction phase, a number of factors could result in
delays and cost  overruns.  If the estimate of  construction  costs proves to be
inaccurate,  the  Association may be required to advance funds beyond the amount
originally committed to permit completion of the development. If the estimate of
value proves to be inaccurate, the Association may be confronted, at or prior to
the maturity of the loan, with a project having a value which is insufficient to
assure full repayment.

        The  Association  is not  engaged  in any  other  significant  loans for
commercial  development,  land  acquisition,  and development of condominiums or
apartment buildings.

        Consumer and Other Loans. The Association also offers consumer and other
loans in the form of first and second low document three year balloon  mortgages
with 10 to 20-year  amortizations which totaled $3.1 million and $3.2 million at
September 30, 1997 and 1996, respectively, and automobile,  recreational vehicle
and mobile home loans,  home  improvement  loans,  home equity  lines of credit,
savings account loans, and commercial  business loans which totaled $6.5 million
and $5.6 million at September 30, 1997 and 1996, respectively.  At September 30,
1997,  4.65%  of  total  loans  consisted  of  second  mortgage  loans.  Federal
regulations permit federally  chartered thrift  institutions to make secured and
unsecured  consumer loans up to 35% of an institution's  assets. In addition,  a
federal thrift has lending authority above the 35% category for certain consumer
loans,  property  improvement loans, and loans secured by savings accounts.  The
Association  originates  consumer  loans in order to  provide  a wider  range of
financial  services to its  customers.  Consumer  loans have  shorter  terms and
higher  interest  rates than mortgage  loans,  however,  they are more costly to
originate and  administer  and generally  involve more credit risk than mortgage
loans because of type and nature of the collateral  and, in certain  cases,  the
absence of collateral.  In addition,  consumer lending collections are dependent
on the borrower's continuing financial stability, and thus are more likely to be
adversely effected by job loss, divorce,  illness, and personal  bankruptcy.  In
most cases,  any repossessed  collateral for a defaulted  consumer loan will not
provide an adequate source of repayment of the outstanding  loan balance because
of improper  repair and  maintenance of the underlying  security.  The remaining
deficiency often does not warrant further substantial collection efforts against
the borrower.  The Association  believes that the generally higher yields earned
on consumer loans  compensate for the increased  credit risk and  administration
costs  associated  with such loans and that consumer  loans are important to its
efforts to  increase  the  interest  rate  sensitivity  and  shorten the average
maturity of its loan portfolio.

        In connection with consumer loan applications,  the Association verifies
the  borrower's  income and reviews a credit  bureau  report.  In addition,  the
relationship  of the loan to the value of the  collateral is considered  and the
borrower  debt  to  income  ratio  must  meet  the  Association's   underwriting
guidelines.

         Federal thrift  institutions are permitted to make secured or unsecured
loans for commercial,  corporate,  business, or agricultural purposes, including
the issuance of letters of credit  secured by real estate,  business  equipment,
inventories,  accounts receivable, and cash equivalents. The aggregate amount of
such loans outstanding may not exceed 20% of such institution's assets.  Amounts
in excess of 10% of the  institution's  assets must be used for qualifying small
business loans.

                                       5

<PAGE>


        The Association  makes commercial  business loans on a secured basis and
generally requires collateral  consisting of real estate,  accounts  receivable,
inventory,  and equipment. The Association's commercial business loans primarily
consist of short term loans for equipment,  working capital, business expansion,
and  inventory  financing.  The  Association  customarily  reviews the financial
statements  and  income  tax  returns  of the  guarantors.  The  origination  of
commercial  loans must be approved by the President of the  Association  who has
authority  to lend up to $500,000 on secured  nonmortgage  loans and $100,000 on
unsecured  commercial  lending.  Any  loan in  excess  of these  limits  must be
approved  by the Board of  Directors.  Each  month  the  President  reports  all
commercial loans originated the previous month to the Board of Directors.  As of
September  30,  1997,  the  Association  had   approximately   $1.3  million  in
outstanding  commercial business loans, which represented  approximately 2.8% of
its loan portfolio.

        Loan  Purchases.  It is the  current  policy of the  Association  not to
purchase  loans.  Although  some  loans  that were  purchased  in the past still
remain, the Association has not purchased any material amounts of whole loans or
loan participations since 1984. In 1984, the Association purchased approximately
$3.5 million in loans from a third party originator. These loans were secured by
residential,  multi-family,  and commercial  properties in various  states.  The
originator  eventually  filed  for  bankruptcy  and the  Association  wrote  off
approximately  $700,000  of such loans in 1986.  Approximately  $55,074 of these
loans  remained in the  Association's  loan portfolio at September 30, 1997. The
Association  has made  reserves  for these loans and does not expect any further
loss  provisions;  however,  no assurance can be given that additional  reserves
will not be required. Furthermore, the Association also purchased whole loans or
participations  therein throughout the country, such loans being secured by one-
to four-family residential, multi-family, commercial, and land-tract development
real estate. At September 30, 1997, $699,080 or 1.57% of the Association's total
loan portfolio  consisted of purchased loans.  Although it is the current policy
of the  Association not to purchase whole loans or  participations  in loans, no
assurances  can be  given  that  the  Association  will  not  purchase  loans or
participations therein in the future.

        Loan  Approval  Authority  and  Underwriting.  Certain loan officers may
approve  loans  on  one- to  four-family  residences  up to  $50,000.  The  Loan
Committee has the authority to approve loans on one- to  four-family  residences
above $50,000 up to $150,000.  Loans on one- to four-family residences exceeding
$150,000  requires the Board of Director's  approval.  Certain loan officers may
approve  consumer  loans in a range  from  $20,000  to $50,000 as defined in the
lending policy if secured by real estate mortgages on owner occupied  residences
with a loan to  value  of 80% or less  and up to 100% of loan to  value  on home
equity lines of credit.

        For all loans originated by the Association, upon receipt of a completed
loan application from a prospective borrower, a credit report is ordered, income
and  certain  other  information  is  verified,  and  if  necessary,  additional
financial information is requested.  If an appraisal of the real estate intended
to secure the proposed  loan is required,  the appraisal is performed by a state
certified  independent  appraiser  designated  and  approved  by  the  Board  of
Directors.  The  Association  makes  construction/permanent  loans on individual
properties.  Funds  advanced  during  the  construction  phase  are  held  in  a
loan-in-process  account and disbursed  based upon various stages of completion.
The  independent  appraiser or loan officer  determines  the stage of completion
based upon a physical inspection of the construction.  The Association  requires
title insurance on all loans originated for sale on the secondary market.  Title
insurance  is also  required  where a purchase of real estate is involved and on
all fixed rate loans.  Borrowers must also obtain hazard or flood insurance (for
loans on property  located in a flood zone) prior to closing the loan. For loans
in excess of 80% of the loan to value ratio, borrowers are generally required to
advance  funds on a monthly  basis  together  with each payment of principal and
interest to an escrow account from which the Association makes disbursements for
items such as real estate taxes and hazard insurance premiums.

        Loan  Commitments.  With the exception of some low document  installment
loans,  the  Association  issues  written,  formal  commitments  to  prospective
borrowers  on real  estate  approved  loans.  The  commitment  usually  requires
acceptance within 60 days of the date of issuance,  however, on loans originated
for sale in the secondary market,  the term depends on the time remaining on the
rate lock. As of September 30, 1997, the Association had $660,750 of commitments
to originate mortgage loans.

         Loan  Processing  Fees.  In addition to interest  earned on loans,  the
Association   recognizes   service  charges  which  consist  primarily  of  loan
application fees, processing fees, and late charges. The Association  recognized
loan processing fees of $79,000 and $71,000 for the fiscal years ended September
30, 1997 and 1996, respectively.

                                       6

<PAGE>


        Loans to One  Borrower.  Savings  associations  are  subject to the same
limits as those  applicable to national banks,  which under current  regulations
limit loans-to-one  borrower in an amount equal to 15% of unimpaired capital and
unimpaired  surplus,  calculated  as  the  sum  of the  Association's  core  and
supplementary capital included in total capital, plus the balance of the general
valuation  allowances  for loan and lease losses not  included in  supplementary
capital,  plus investments in subsidiaries  that are not included in calculating
core  capital,  or $500,000,  whichever  is higher.  The  Association's  maximum
loan-to-one  borrower limit was  approximately  $1.8 million as of September 30,
1997. At September 30, 1997, the  Association's  largest  aggregate loans to one
borrower  relationship  consisted  of  several  loans  secured  by a  commercial
property,  business  inventory,  and  residential  real estate with a balance of
$818,854 and all payments were current.

        Loan Delinquencies. The Association's collection procedures provide that
when a mortgage  loan is 15 days past due, a notice of  nonpayment  is sent.  If
payment is still  delinquent  after 30 days,  the customer will receive a letter
and/or telephone call. If the delinquency continues,  similar subsequent efforts
are made to eliminate  the  delinquency.  If the loan  continues in a delinquent
status for 90 days or more and no repayment plan is in effect, a notice of right
to cure  default is mailed to the  customer  giving 30 days to bring the account
current before foreclosure is commenced.

        Loans are  reviewed  on a monthly  basis and are  generally  placed on a
non-accrual  status when the loan becomes more than 90 days  delinquent  and, in
the opinion of management,  the  collection of additional  interest is doubtful.
Interest  accrued and unpaid at the time a loan is placed on non-accrual  status
is charged against interest income.  Subsequent  interest payments,  if any, are
either  applied to the  outstanding  principal  balance or  recorded as interest
income, depending on the assessment of the ultimate collectibility of the loan.

         Real estate  acquired by the  Association as a result of foreclosure or
by deed in lieu of  foreclosure  is  classified  as real estate owned until such
time as it is sold. When  foreclosed real estate is acquired,  it is recorded at
the fair value at the date of foreclosure. Valuations are periodically performed
by  management  and  subsequent  charges  to  operations  are  taken  when it is
determined  that the carrying  value of the property  exceeds the  estimated net
realizable  value. The Association was the owner of property  classified as real
estate  owned and other  repossessed  assets,  with  original  loan  balances of
$15,700  that had been written  down to $0.00 at  September  30,  1997.  See " -
Classified Assets."







                                       7
<PAGE>


         Non-performing  and  Problem  Assets.  The  following  table sets forth
information   regarding   non-accrual   loans,  real  estate  owned,  and  other
repossessed  assets,  and  loans 90 days or more  delinquent  but on  which  the
Association was accruing interest at the date indicated.

                                                                At September 30,
                                                                ----------------
                                                                  1997    1996
                                                                -------- -------
                                                                  (In Thousands)
                                                                ----------------
Loans accounted for on a non-accrual basis:
Mortgage loans:
  Permanent loans secured by 1-4 dwelling units ................ $  190  $   --
  All other mortgage loans .....................................     --      --
Non-mortgage loans .............................................     11      17
                                                                 ------  ------
Total ..........................................................    201      17

Accruing loans which are contractually past due 90 days or more:
Mortgage loans:
  Construction loans ...........................................     --      --
  Permanent loans secured by 1-4 dwelling units ................     33      31
  All other mortgage loans .....................................     --      --
Non-mortgage loans .............................................     --      --
                                                                 ------  ------
Total ..........................................................     33      31
                                                                 ------  ------
Total non-accrual and accrual loans ............................    234      48
                                                                 ------  ------
Real estate owned (net) ........................................     --      --
Other non-performing assets ....................................     --      --
                                                                 ------  ------
Total non-performing assets .................................... $  234  $   48
                                                                 ======  ======

Total non-accrual and accrual loans to net loans ...............   0.52%   0.11%
Total non-accrual and accrual loans to total assets ............   0.34%   0.07%
Total non-performing assets to total assets ....................   0.34%   0.07%


        Interest  income that would have been recorded on loans accounted for on
a nonaccrual  basis under the original terms of such loans was $8,506 and $1,148
for the  fiscal  years  ended  September  30,  1997 and 1996,  respectively.  No
interest income on non-accrual loans was included in income for the fiscal years
ended September 30, 1997 and 1996.

     Classified Assets. OTS regulations provide for a classification  system for
problems assets of insured  institutions which covers all problem assets.  Under
this  classification   system,   problem  assets  of  insured  institutions  are
classified  as  "substandard,"  "doubtful,"  or "loss."  An asset is  considered
substandard if it is inadequately  protected by the current net worth and paying
capacity of the obligor or of the collateral pledged, if any. Substandard assets
include  those  characterized  by the  "distinct  possibility"  that the insured
institution  will sustain  "some loss" if the  deficiencies  are not  corrected.
Assets  classified  as  doubtful  have all of the  weaknesses  inherent in those
classified  substandard,  with the  added  characteristic  that  the  weaknesses
present  make  "collection  or  liquidation  in full," on the basis of currently
existing facts,  conditions,  and values,  "highly questionable and improbable."
Assets  classified  as loss are  those  considered  "uncollectible"  and of such
little value that their  continuance  as assets without the  establishment  of a
specific  loss  reserve  is not  warranted.  Assets may be  designated  "special
mention"  because  of  potential   weaknesses  that  do  not  currently  warrant
classification in one of the aforementioned categories.

        When  an  insured  institution   classifies  problem  assets  as  either
substandard or doubtful,  it may establish general allowances for loan losses in
amount  deemed  prudent  by  management.   General  allowances   represent  loss
allowances which have been established to recognize the inherent risk associated
with lending activities,  but which, unlike specific  allowances,  have not been
allocated to particular problem assets. When an insured  institution  classifies
problem assets as loss, it is required either to establish a specific  allowance
for losses equal to 100% of that portion of the asset so classified or to charge
off such amount. An institution's  determination as to the classification of its
assets and the amount of its  valuation  allowances  is subject to review by the
OTS, which may order the  establishment  of additional  general or specific loss

                                       8

<PAGE>

allowances.  A portion of general loss allowances  established to cover possible
losses  related to assets  classified as substandard or doubtful may be included
in determining an institution's  regulatory  capital,  while specific  valuation
allowances for loan losses generally do not qualify as regulatory capital.

        At September 30, 1997, The Association's  classified assets consisted of
special mention loans of $621,197, substandard loans of $1,051,991, and doubtful
loans of $0.00. A $861,170  general  reserve  allowance was established for both
classified and unclassified assets.  Assets classified as "loss" totaled $15,700
with a $15,700  specific  reserve  established.  The  Association had delinquent
loans of 60 days or more of $246,455.

        Doubtful loans may be classified due to particular  aspects of the loan;
such as, delinquency,  high loan-to-value ratio, poor market conditions,  future
employment of owner, or environmental issues. As of September 30, 1997, no loans
were  classified  doubtful,  therefore,  no  doubtful  loans  are  reflected  as
non-performing loans in the prior table.

        Foreclosed  Real Estate.  Real estate  acquired by the  Association as a
result of  foreclosure  or by deed in lieu of  foreclosure is classified as real
estate owned until it is sold.  When  property is acquired it is recorded at the
fair value at the date of foreclosure less estimated costs of disposition.

        Allowances  for Loan Losses.  It is  management's  policy to provide for
inherent losses on loans in its loan  portfolio.  A provision for loan losses is
charged to operations  based on management's  evaluation of the potential losses
that may be incurred in the Association's loan portfolio. Such evaluation, which
includes  a review of all loans of which full  collectibility  of  interest  and
principal may not be reasonably  assured,  considers the Association's past loan
loss experience,  known and inherent risks in the portfolio,  adverse situations
that  may  affect  the  borrower's  ability  to  repay,  estimated  value of any
underlying collateral, and current economic conditions.

        Impaired loans,  including all loans that are restructured in a troubled
debt  restructuring  involving  a  modification  of terms,  are  measured at the
present value of expected  future cash flows  discounted  at the loan's  initial
effective  interest  rate.  The fair  value  of the  collateral  of an  impaired
collateral-dependent  loan or an observable market price, if one exists,  may be
used as an  alternative to  discounting.  If the measure of the impaired loan is
less than the recorded investment in the loan,  impairment is recognized through
the allowance  for loan losses.  A loan is considered  impaired  when,  based on
current  information  and events,  it is probable that the  Association  will be
unable to collect all amounts due according to the contractual terms of the loan
agreement.

         Management  will  continue  to review  the  entire  loan  portfolio  to
determine the extent, if any, to which further additional loss provisions may be
deemed  necessary.  There can be no assurance that the allowance for losses will
be adequate to cover losses which may in fact be realized in the future and that
additional provisions for losses will not be required.


                                       9
<PAGE>


       Allocation  of Allowance  for Loan.  The  following  table sets forth the
allocation of the  Association's  allowance for loan losses by loan category and
the percent of loans in each  category to total  loans  receivable  at the dates
indicated.  The  portion  of the loan  loss  allowance  allocated  to each  loan
category does not represent the total available for future losses that may occur
within the loan  category  because the total loan loss  allowance is a valuation
reserve applicable to the entire loan portfolio.

<TABLE>
<CAPTION>
                                                    At September 30,    
                                  -----------------------------------------------------
                                               1997                         1996
                                  ------------------------     ------------------------
                                             Percent of                   Percent of
                                           Loans to Total               Loans to Total
                                  Amount        Loans          Amount       Loans 
                                  ------   ---------------     ------   ---------------
                                                  (Dollars in Thousands)
<S>                                <C>          <C>              <C>       <C>   
At end of period allocated to:   
  One-to four-family residential
   (includes held for sale) ....   $726          89.11%          $746       88.41%
  Multi-family and commercial                                   
   real estate .................     93           3.73%           102        5.07%
  Construction .................      3           2.07%             3        1.40%
  Consumer and other loans .....     39           5.09%            26        5.12%
                                   ----         ------           ----      ------ 
      Total allowance ..........   $861         100.00%          $877      100.00%
                                   ====         ======           ====      ====== 
                                                          
</TABLE>

         Due  to  the  size  of  the  institution  and  the  minimal  amount  of
non-performing  loans (see - "Non-performing and Problem Assets") the percentage
of non-performing loans to allowance for loan losses will seem high. Movement of
even  one  loan  into or out of  non-performing  status  may  result  in a large
percentage change due to the size of the portfolio.

                                       10
<PAGE>


     Analysis of the Allowance for Loan Losses.  The following  table sets forth
information with respect to the  Association's  allowance for loan losses at the
dates and for the periods indicated.


                                                            At September 30,
                                                         -----------------------
                                                           1997         1996
                                                         ---------    ----------
                                                          (Dollars in Thousands)
                                                         -----------------------

Gross loans outstanding (1) ..........................   $ 45,741     $ 44,362
                                                         ========     ========
Average loans outstanding ............................     45,267       43,435
                                                         ========     ========

Allowance balance (at beginning of period) ...........   $    877     $    962
                                                         --------     --------

Provision (credit):
  Residential (2) ....................................        (12)         (54)
  Commercial real estate .............................         (7)          26
  Construction .......................................          1           (2)
  Non-mortgage and other (including land) ............         18           34
                                                         --------     --------
Total Provision ......................................         --            4
                                                         --------     --------

Charge-offs:
  Residential (2) ....................................         12            5
  Commercial real estate .............................         --            2
  Non-mortgage and other (including land) ............          5           85
                                                         --------     --------
Total Charge-offs ....................................         17           92
                                                         --------     --------

Recoveries:
  Residential (2) ....................................         --            2
  Commercial real estate .............................         --           --
  Non-mortgage and other (including land) ............          1            1
                                                         --------     --------
Total Recoveries .....................................          1            3
                                                         --------     --------

Allowance balance (at end of period) .................   $    861     $    877
                                                         ========     ========

Allowance for loan losses as a percent of gross loans        1.88%        1.98%

Net loans charged off as a percentage of average loans
   outstanding .......................................       0.04%        0.21%

----------------
(1)   Includes  total  loans  (including  loans held for sale),  net of loans in
      process.
(2)   Includes one- to  four-family  and  multi-family  residential  real estate
      loans.



<PAGE>


Investment Portfolio

        Mortgage-backed   and  Related   Securities.   To   supplement   lending
activities, the Association invests in residential  mortgage-backed  securities.
Although such securities are held for  investment,  they can serve as collateral
for borrowings and, through repayments, as a source of liquidity.

        The  mortgage-backed  securities  portfolio  as of  September  30, 1997,
consisted  primarily of certificates  issued by FHLMC.  To a lesser extent,  the
mortgage-backed securities portfolio also contains certificates issued by Fannie
Mae and the Government National Mortgage Association  ("GNMA").  As of September
30, 1997, the carrying value of mortgage-backed securities totaled $5.0 million,
or  7.39%  of  total  assets.  The  market  value  of  such  securities  totaled
approximately $5.1 million at September 30, 1997.

        Mortgage-backed  securities represent a participation interest in a pool
of single-family or multi-family mortgages,  the principal and interest payments
on which  are  passed  from the  mortgage  originators,  through  intermediaries
(generally   quasi-governmental   agencies)   that   pool  and   repackage   the
participation  interests in the form of  securities,  to  investors  such as the
Association.  Such quasi-governmental  agencies,  which guarantee the payment of
principal and interest to investors,  primarily  include FHLMC,  Fannie Mae, and
GNMA.

        Mortgage-backed  securities  typically are issued with stated  principal
amounts,  and the  securities  are backed by pools of mortgages  that have loans
with  interest  rates that are within a range and have varying  maturities.  The
underlying pool of mortgages can be composed of either  fixed-rate  mortgages or
adjustable-rate  mortgage  loans.   Mortgage-backed   securities  are  generally
referred to as mortgage participation certificates or pass-through certificates.
As a result,  the interest rate risk  characteristics  of the underlying pool of
mortgages (i.e.,  fixed rate or adjustable rate) as well as prepayment risk, are
passed on to the certificate holder. The life of a mortgage-backed  pass-through
security  is  equal  to the life of the  underlying  mortgages.  Mortgage-backed
securities  issued by FHLMC,  Fannie  Mae,  and GNMA make up a  majority  of the
pass-through certificates market.

         Investment  Activities.  The  Association  is  required  under  federal
regulations  to maintain a minimum  amount of liquid assets that may be invested
in  specified  short-term  securities  and  certain  other  investments.  See "-
Regulation  - Federal  Home Loan Bank  System." The  Association  has  generally
maintained  a liquidity  portfolio  well in excess of  regulatory  requirements.
Liquidity  levels may be  increased or  decreased  depending  upon the yields on
investment  alternatives and upon management's judgment as to the attractiveness
of the  yields  then  available  in  relation  to  other  opportunities  and its
expectation of future yield levels,  as well as  management's  projections as to
the short-term demand for funds to be used in the Association's loan origination
and  other  activities.  As of  September  30,  1997,  the  Association  had  an
investment  portfolio of approximately  $16.0 million,  consisting  primarily of
U.S.   government   agency   obligation,   certificates   of  deposit  at  other
institutions,  and FHLB stock, as permitted by OTS regulations.  The Association
has found its level of investment  securities has increased in recent years as a
result of repayments  and  prepayments on loans and  mortgage-backed  securities
exceeding  loan demand.  The market value of  investments at September 30, 1997,
was $16.0 million which is equivalent  to its carrying  value.  The  Association
anticipates  having the  ability to fund all of its  investing  activities  from
funds held on deposit at the FHLB of Des Moines.  The Association  will continue
to seek high  quality  investments  with short to  intermediate  maturities  and
duration from one to three years.

                                       12

<PAGE>



     Investment Portfolio.  The following table sets forth the carrying value of
the Association's investment securities portfolio,  short-term investments, FHLB
stock, and mortgage-backed securities at the dates indicated.


                                                   At September 30,
                                                ----------------------
                                                   1997       1996
                                                ----------  ----------
                                                (Dollars in Thousands)
Investment Securities:
  U.S. Government Securities Held-to-Maturity .   $    --    $   --
  U.S. Government Securities Available-for-Sale       999     2,499
  U.S. Agency Securities Held-to-Maturity .....        --     1,750
  U.S. Agency Securities Available-for-Sale ...     7,592     7,836
  Certificates of Deposit .....................     4,755     4,065
  Mutual Funds ................................        93        87
  FHLMC Stock .................................     1,866       436
  FHLB Stock ..................................       651       651
                                                  -------   -------
    Total Investment Securities ...............    15,956    17,324

Mortgage-backed Securities Held-to-Maturity ...     2,650     3,479
Mortgage-backed Securities Available-for-Sale .     2,413     1,377
Interest Bearing Deposits (1) .................       890     2,266
                                                  -------   -------
   Total Investments .........................    $21,909   $24,446
                                                  =======   =======

----------------------
(1)  Consisted of FHLB demand deposits and daily time deposits,  considered cash
     equivalents.




                                       13




<PAGE>

       Investment Portfolio  Maturities.  The following table sets forth certain
information regarding the carrying value, weighted average yields and maturities
of the Association's investment securities portfolio at September 30, 1997.

<TABLE>
<CAPTION>
                                                                       As of September 30, 1997
                                     -----------------------------------------------------------------------------------------------
                                            One Year         One to            Five to          More than            Total
                                            or Less        Five Years         Ten Years         Ten Years    Investment Securities
                                     ----------------- -----------------  ---------------- ----------------- -----------------------
                                     Carrying  Average Carrying  Average  Carryig  Average Carrying  Average Carrying Average Market
                                       Value    Yield   Value     Yield    Value    Yield   Value     Yield   Value    Yield  Value 
                                     --------  ------- --------  -------  -------  ------- --------  ------- -------- ------- ------
                                                                        (Dollars in Thousands)
<S>                                   <C>       <C>      <C>       <C>    <C>        <C>    <C>       <C>    <C>       <C>   <C> 
U.S. Government obligations
held-to-maturity...................   $    --      --%   $   --      --%  $    --      --%  $   --      --%  $    --     --% $    --

U.S. Government obligations
available-for-sale ................       999    5.45        --      --        --      --       --      --       999   5.45      999

U.S. Agency obligations held-to-
maturity ..........................        --      --        --      --        --      --       --      --        --     --       --

U.S. Agency obligations
available-for-sale ................     4,216    5.97     2,529    6.75       502    8.78      346    7.20     7,593   6.47    7,592
 
Other Securities (1) ..............     5,640    5.94        97    6.25        --      --       --      --     5,737   5.95    5,738

FHLB stock (2) ....................       n/a     n/a       n/a     n/a       n/a     n/a      n/a     n/a       651   7.00      651

FHLMC stock, available-for-sale (3)       n/a     n/a       n/a     n/a       n/a     n/a      n/a     n/a     1,866     --    1,866

Mortgage-backed securities
held-to-maturity ..................       630    6.05       611    8.42       222    7.58    1,187    8.92     2,650   8.01    2,715

Mortgage-backed securities
available-for-sale ................       717    6.50       497    5.05       555    6.95      644    6.38     2,413   6.27    2,413
                                      -------    ----   -------    ----   -------    ----   ------    ----   -------   ----  -------

  Total ...........................   $12,202    5.95%  $ 3,734    6.78%  $ 1,279    7.78%  $2,177    7.90%  $21,909   6.47% $21,974
                                      =======    ====   =======    ====   =======    ====   ======    ====   =======   ====  =======
</TABLE>

---------------------
(1)  Consists of Certificates of Deposit and other interest-bearing deposits.
(2)  As of September 30, 1997, FHLB stock paid a return of 7.00%.
(3)  FHLMC stock noninterest earning market value only.


                                       14
<PAGE>




Sources of Funds

        General.  Deposits are the major  external  source of the  Association's
funds for lending and other investment  purposes.  The Association derives funds
from the  amortization and prepayment of loans and  mortgage-backed  securities,
maturities of investment  securities,  and operations.  Scheduled loan principal
repayments are a relatively  stable source of funds,  while deposit  inflows and
outflows and loan prepayments are  significantly  influenced by general interest
rates and market  conditions.  The  Association  also has the  ability to obtain
advances from the FHLB of Des Moines as a source of funds.

        Deposits.  Consumer and  commercial  deposits are attracted  principally
from within the  Association's  primary  market area  through the  offering of a
broad selection of deposit instruments including regular savings, demand and NOW
accounts, and term certificate accounts. Deposit account terms vary according to
the minimum balance required,  the time period the funds must remain on deposit,
and the interest rate, among other factors.

        Regular  savings  accounts,  money  market  accounts,  and NOW  accounts
constituted $18.9 million,  or 34.3% of the  Association's  deposit portfolio at
September 30, 1997.  Certificates of deposit  constituted $36.3 million or 65.7%
of the deposit  portfolio.  As of September  30, 1997,  the  Association  had no
brokered deposits.

       Jumbo Certificate  Accounts.  The following table indicates the amount of
the Association's  certificates of deposit of $100,000 or more by time remaining
until maturity as of September 30, 1997.

Maturity Period                       Certificates of Deposit
--------------------------            -----------------------
                                          (In Thousands)
                                      -----------------------
Within three months .....             $        1,029
Three through six months                         100
Six through twelve months                        926
Over twelve months ......                        434
                                       -------------
   Total ................             $        2,489
                                       =============
                             

Borrowings

        Deposits are the primary  source of funds of the  Association's  lending
and investment activities and for its general business purposes. The Association
may  obtain  advances  from the FHLB of Des Moines to  supplement  its supply of
lendable funds.  Advances from the FHLB of Des Moines are typically secured by a
pledge of the Association's stock in the FHLB of Des Moines and a portion of the
Association's first mortgage loans and certain other assets. The Association, if
the need arises,  may also access the Federal  Reserve Bank  discount  window to
supplement  its  supply  of  lendable  funds  and  to  meet  deposit  withdrawal
requirements.  As of  September  30,  1997,  the  Association  had  no  advances
outstanding  from  the  FHLB  of Des  Moines.  As of  September  30,  1997,  the
Association had no other borrowings.

Subsidiary Activity

        The  Company  has one  wholly-owned  subsidiary,  the  Association.  The
Association  is permitted to invest up to 2% of its assets in the capital  stock
of,  or  secured  or  unsecured  loans  to,  subsidiary  corporations,  with  an
additional  investment  of 1% of  assets  when  such  additional  investment  is
utilized primarily for community development  purposes.  Under such limitations,
as of  September  30,  1997,  the  Association  was  authorized  to invest up to
approximately  $1.4  million in the stock of, or loan to,  service  corporations
(based upon the 2%  limitation).  At September 30, 1997, the  Association had no
subsidiaries.

                                       15
<PAGE>


Personnel

        As of  September  30,  1997,  the  Association  had 19  full-time  and 2
part-time  employees.  None of the Association's  employees are represented by a
collective bargaining group.

Regulation

        Set forth below is a brief  description  of certain  laws that relate to
the  regulation of the Company and the  Association.  The  description  does not
purport  to be  complete  and is  qualified  in its  entirety  by  reference  to
applicable laws and regulations.

Company Regulation

        General.  The  Company is a unitary  savings  and loan  holding  company
subject to regulatory  oversight by the OTS. As such, the Company is required to
register  and  file  reports  with  the OTS and is  subject  to  regulation  and
examination by the OTS. In addition,  the OTS has enforcement authority over the
Company and its non-savings association  subsidiaries,  should such subsidiaries
be formed,  which also permits the OTS to restrict or prohibit  activities  that
are determined to be a serious risk to the subsidiary savings association.  This
regulation  and  oversight  is  intended  primarily  for the  protection  of the
depositors of the  Association  and not for the benefit of  stockholders  of the
Company.

        Qualified  Thrift  Lender  Test.  As a unitary  savings and loan holding
company, the Company generally is not subject to activity restrictions, provided
the Association  satisfies the Qualified Thrift Lender ("QTL") test or meets the
definition of domestic building and loan association pursuant to section 7701 of
the Internal  Revenue  Code of 1986,  as amended  (the  "Code").  If the Company
acquires  control of another savings  association as a separate  subsidiary,  it
would become a multiple savings and loan holding company,  and the activities of
the Company and any of its subsidiaries (other than the Association or any other
SAIF-insured   savings   association)   would  become  subject  to  restrictions
applicable to bank holding  companies unless such other  associations  each also
qualify as a QTL or domestic  building and loan association and were acquired in
a supervisory  acquisition.  See "-  Regulation  of the  Association - Qualified
Thrift Lender Test."

        Restrictions on Acquisitions.  The Company must obtain approval from the
appropriate  federal  regulatory  agency before  acquiring  control of any other
insured  institution.  Such acquisitions are generally prohibited if they result
in a multiple savings and loan holding company controlling savings  associations
in more than one state.  However,  such  interstate  acquisitions  are permitted
based on specific  state  authorization  or in a  supervisory  acquisition  of a
failing savings association.

        Federal law  generally  provides  that no "person,"  acting  directly or
indirectly or through or in concert with one or more other persons,  may acquire
"control," as that term is defined in OTS  regulations,  of a federally  insured
savings  institution  without  giving at least 60 days written notice to the OTS
and providing the OTS an opportunity to disapprove the proposed acquisition.  In
addition,  no company may acquire  control of such an institution  without prior
OTS approval.

        Federal  Securities  Law. The Company is subject to filing and reporting
requirements  by  virtue  of  having  its  common  stock  registered  under  the
Securities Exchange Act of 1934. Furthermore,  company stock held by persons who
are affiliates (generally officers, directors and principal stockholders) of the
Company may not be resold without registration or unless sold in accordance with
certain  resale  restrictions.  If the Company meets  specified  current  public
information  requirements,  each affiliate of the Company is able to sell in the
public  market,  without  registration,  a  limited  number  of  shares  in  any
three-month period.

Regulation of the Association

        General. As a federally chartered, SAIF-insured savings association, the
Association  is  subject  to  extensive  regulation  by the OTS and the  Federal
Deposit Insurance Corporation ("FDIC"). Lending activities and other investments
must comply with various  federal  statutory and  regulatory  requirements.  The
Association is also subject to certain reserve  requirements  promulgated by the
Federal Reserve Board.

                                       16

<PAGE>


        The  OTS,  in  conjunction  with  the  FDIC,   regularly   examines  the
Association  and prepares  reports for the  consideration  of the  Association's
Board of  Directors  on any  deficiencies  that are  found in the  Association's
operations.  The Association's relationship with its depositors and borrowers is
also  regulated to a great extent by federal and state law,  especially  in such
matters as the  ownership  of savings  accounts  and the form and content of the
Association's mortgage documents.

        The  Association  must file reports with the OTS and the FDIC concerning
its  activities  and financial  condition,  in addition to obtaining  regulatory
approvals  prior to entering into certain  transactions  such as mergers with or
acquisitions  of other savings  institutions.  This  regulation and  supervision
establishes a comprehensive  framework of activities in which an institution can
engage and is intended  primarily for the protection of the SAIF and depositors.
The  regulatory  structure  also  gives  the  regulatory  authorities  extensive
discretion in connection with their  supervisory and enforcement  activities and
examination  policies,  including policies with respect to the classification of
assets and the  establishment  of adequate  loan loss  reserves  for  regulatory
purposes.  Any change in such regulations,  whether by the OTS, the FDIC, or the
Congress could have a material  adverse impact on the Company,  the Association,
and their operations.

        Insurance of Deposit Accounts.  The  Association's  deposit accounts are
insured by the SAIF to the maximum of $100,000  permitted  by law.  Insurance of
deposits may be terminated by the FDIC upon a finding that the  institution  has
engaged in unsafe or unsound practices,  is in an unsafe or unsound condition to
continue operations or has violated any applicable law, regulation,  rule, order
or condition imposed by the FDIC or the institution's primary regulator.

        The FDIC  charges an annual  assessment  for the  insurance  of deposits
based on the risk a particular  institution poses to its deposit insurance fund.
Under this system as of September 30, 1997,  SAIF members paid within a range of
0  cents  to 27  cents  per  $100  of  domestic  deposits,  depending  upon  the
institution's  risk  classification.  This  risk  classification  is based on an
institution's capital group and supervisory subgroup assignment. Pursuant to the
Economic  Growth  and  Paperwork  Reduction  Act of 1996 (the  "Act"),  the FDIC
imposed a special  assessment  on SAIF  members  to  capitalize  the SAIF at the
designated  reserve  level  of  1.25%  as of  October  1,  1996.  Based  on  the
Association's  deposits as of March 31, 1995,  the date for measuring the amount
of the special  assessment  pursuant to the Act, the Association  paid a special
assessment  of $362,557 on November  27,  1996 to  recapitalize  the SAIF.  This
expense was  recognized  during the fourth  quarter of fiscal 1996. The FDIC has
reduced the premium for deposit  insurance to a level  necessary to maintain the
SAIF at its required reserve level.

        Pursuant to the Act, the Association will pay, in addition to its normal
deposit  insurance  premium  as a  member  of  the  SAIF,  an  amount  equal  to
approximately   6.4  basis  points  toward  the   retirement  of  the  Financing
Corporation  bonds ("Fico Bonds") issued in the 1980's to assist in the recovery
of the savings and loan industry. Members of the Bank Insurance Fund ("BIF"), by
contrast,  will pay, in  addition to their  normal  deposit  insurance  premium,
approximately  1.3 basis  points.  Based on total  deposits as of September  30,
1997,  the  Association's  Fico Bond  premium will be  approximately  $35,000 in
addition  to its  normal  deposit  insurance  premium.  Beginning  no later than
January  1,  2000,  the rate paid to  retire  the Fico  Bonds  will be equal for
members of the BIF and the SAIF.  The Act also  provides  for the merging of the
BIF  and  the  SAIF  by  January  1,  1999,  provided  there  are  no  financial
institutions  still  chartered  as savings  associations  at that  time.  Should
insurance  funds be merged before  January 1, 2000, the rate paid by all members
of this new fund to retire the Fico Bonds would be equal.

         Regulatory  Capital  Requirements.   OTS  capital  regulations  require
savings institutions to meet three capital standards: (1) tangible capital equal
to 1.5% of total adjusted  assets,  (2) a leverage ratio (core capital) equal to
at least 3% of total adjusted assets, and (3) a risk-based  capital  requirement
equal to 8.0% of total risk-weighted assets. Savings associations with a greater
than "normal" level of interest rate exposure will, in the future, be subject to
a  deduction  for an  interest  rate risk  ("IRR")  component  from  capital for
purposes of calculating their risk-based capital requirement.

                                       17
<PAGE>


        As shown  below,  the  Association's  regulatory  capital  exceeded  all
minimum  regulatory  capital  requirements  applicable to it as of September 30,
1997:

                                                 At September 30, 1997
                                            ----------------------------------
                                                                Percentage of
                                               Amount          Adjusted Assets
                                            -------------      ---------------

             GAAP Capital                   $11,998,136               17.50%  
                                            ===========               =====   

             Tangible Capital: (1)
                Regulatory requirement      $ 1,000,434               1.50%   
                Actual capital               10,886,680              16.32%
                                            -----------              -----    
                Excess                      $ 9,886,246              14.82%   
                                            ===========              =====    

             Core Capital: (1)
                 Regulatory requirement     $ 2,000,868               3.00%   
                 Actual capital              10,886,680              16.32%
                                            -----------              -----    
                 Excess                     $ 8,885,812              13.32%   
                                            ===========              =====    

             Risk-Based Capital: (2)
                 Regulatory requirement     $ 2,729,569               8.00%   
                 Actual capital              11,318,542              33.17%
                                            -----------              -----    
                 Excess                     $ 8,588,973              25.17%   
                                            ===========              =====    

(1) Regulatory capital reflects modifications from GAAP capital due to valuation
    adjustments  for  available for sale  securities  and  unallowable  mortgage
    servicing rights.

(2) Based on risk weighted assets of $34,119,617.


        Dividend and Other Capital  Distribution  Limitations.  OTS  regulations
require the  Association  to give the OTS 30 days advance notice of any proposed
declaration of dividends to the Company, and the OTS has the authority under its
supervisory  powers to prohibit  the payment of  dividends  to the  Company.  In
addition,  the Association may not declare or pay a cash dividend on its capital
stock if the effect  thereof  would be to reduce the  regulatory  capital of the
Association  below  the  amount  required  for  the  liquidation  account  to be
established pursuant to the Association's plan of conversion.

        OTS regulations  impose  limitations  upon all capital  distributions by
savings  institutions,  such  as  cash  dividends,  payments  to  repurchase  or
otherwise acquire its shares, payments to shareholders of another institution in
a cash-out  merger and other  distributions  charged against  capital.  The rule
establishes  three tiers of  institutions,  based primarily on an  institution's
capital  level.  An  institution  that  exceeds  all  fully  phased-in   capital
requirements  before  and  after  a  proposed  capital  distributions  ("Tier  1
institution")  and has not  been  advised  by the OTS that it is in need of more
than the normal  supervision can, after prior notice but without the approval of
the OTS, make capital  distributions during a calendar year equal to the greater
of (i) 100% of its net income to date during the  calendar  year plus the amount
that would reduce by one-half its "surplus  capital  ratio" (the excess  capital
over its fully phased-in capital  requirements) at the beginning of the calendar
year,  or (ii) 75% of its net income over the most recent four  quarter  period.
Any additional  capital  distributions  require prior  regulatory  approval.  At
September 30, 1997, the Association  was a Tier 1 institution.  In the event the

                                       18

<PAGE>


Association's  capital  fell below its fully  phased-in  requirement  or the OTS
notified  it  that  it  was  in  need  of  more  than  normal  supervision,  the
Association's  ability to make capital  distributions  could be  restricted.  In
addition,  the  OTS  could  prohibit  a  proposed  capital  distribution  by any
institution,  which would otherwise be permitted by the  regulation,  if the OTS
determines  that  such  distribution  would  constitute  an  unsafe  or  unsound
practice.

        Finally,  a savings  association  is  prohibited  from  making a capital
distribution if, after making the distribution, the savings association would be
undercapitalized   (not  meet  any  one  of  its  minimum   regulatory   capital
requirements).

        Qualified Thrift Lender Test. Savings  institutions must meet either the
QTL test pursuant to OTS  regulations or the  definition of a domestic  building
and loan  association  in section 7701 of the Internal  Revenue Code of 1986, as
amended (the  "Code").  If the  Association  maintains an  appropriate  level of
certain  specified  investments  (primarily  residential  mortgages  and related
investments,   including  certain  mortgage-related  securities)  and  otherwise
qualifies as a QTL or a domestic building and loan association, it will continue
to enjoy full  borrowing  privileges  from the FHLB of Des Moines.  The required
percentage  of  investments  under the QTL test is 65% of assets  while the Code
requires investments of 60% of assets. An association must be in compliance with
the QTL test or  definition  of  domestic  building  and loan  association  on a
monthly  basis in nine out of every 12 months.  As of September  30,  1997,  the
Association was in compliance with its QTL requirement and met the definition of
a domestic  building and loan  association.  There can be no assurance  that the
Association  will continue to meet the QTL  requirements  or the definition of a
domestic building and loan association in future periods.

        Loans-to-One Borrower. See "Business - Loans-to-One Borrower."

        Transactions  With Affiliates.  Generally,  restrictions on transactions
with affiliates require that transactions  between a savings  association or its
subsidiaries  and its affiliates be on terms as favorable to the  Association as
comparable  transactions  with  non-affiliates.  In  addition,  certain of these
transactions  are  restricted to an aggregate  percentage  of the  Association's
capital;  collateral in specified amounts must usually be provided by affiliates
to receive loans from the Association. Affiliates of the Association include the
Company  and  any  company  which  would  be  under  common   control  with  the
Association.  In addition,  a savings  association may not lend to any affiliate
engaged in activities not  permissible for a bank holding company or acquire the
securities of any affiliate that is not a subsidiary. The OTS has the discretion
to treat  subsidiaries  of savings  associations as affiliates on a case-by-case
basis.

        Liquidity  Requirements.   All  savings  associations  are  required  to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. The liquidity  requirement may vary from
time to time (between 4% and 10%) depending upon economic conditions and savings
flows of all savings  associations.  At September  30, 1997,  the  Association's
required  liquid  asset ratio was 5%.  Monetary  penalties  may be imposed  upon
associations for violations of liquidity requirements.

        Federal Home Loan Bank System.  The  Association is a member of the FHLB
of Des  Moines,  which is one of 12  regional  FHLBs that  administers  the home
financing credit function of savings associations. Each FHLB serves as a reserve
or  central  bank for its  members  within  its  assigned  region.  It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB  System.  It makes loans to members  (i.e.,  advances) in  accordance  with
policies and procedures established by the Board of Directors of the FHLB.

        As a member,  the Association is required to purchase and maintain stock
in the FHLB of Des  Moines  in an amount  equal to at least 1% of its  aggregate
unpaid   residential   mortgage  loans,  home  purchase   contracts  or  similar
obligations  at  the  beginning  of  each  year.  At  September  30,  1997,  the
Association  had  $650,700  in FHLB  stock,  which was in  compliance  with this
requirement.

        Federal  Reserve   System.   The  Federal  Reserve  Board  requires  all
depository  institutions to maintain  non-interest bearing reserves at specified
levels against their transaction  accounts (primarily  checking,  NOW, and Super
NOW checking accounts) and non-personal time deposits.  The balances  maintained
to meet the reserve  requirements  imposed by the Federal  Reserve  Board may be
used to satisfy  the  liquidity  requirements  that are  imposed by the OTS.  At
September 30, 1997, the Association was in compliance with these requirements.

                                       19

<PAGE>


Item 2.  Description of Property
--------------------------------

(a) Properties.

        The Company  owns no real  property but utilizes the office owned by the
Association.  The  Association  owns and operates from its office  located at 35
East  Broadway,  Little Falls,  Minnesota  56345.  The  Association  has a total
investment  in office  property and  equipment of $1.44  million with a net book
value of $806,900 at September 30, 1997.

(b) Investment Policies.

        See  "Item  1.  Business"  above  for  a  general   description  of  the
Association's  investment  policies and any  regulatory  or Board of  Directors'
percentage  of  asset  limitations  regarding  certain  investments.  All of the
Association's  investment  policies  are  reviewed  and approved by the Board of
Directors  of  the  Association,   and  such  policies,  subject  to  regulatory
restrictions  (if  any),  can be  changed  without a vote of  stockholders.  The
Association's  investments are primarily  acquired to produce  income,  and to a
lesser extent, possible capital gain.

        (1) Investments in Real Estate or Interests in Real Estate. See "Item 1.
Business  -  Lending   Activities,"  "Item  1.  Business  -  Regulation  of  the
Association," and "Item 2. Description of Property. (a) Properties" above.

        (2)  Investments  in Real  Estate  Mortgages.  See "Item 1.  Business  -
Lending Activities" and "Item 1. Business - Regulations of the Association."

        (3)  Investments  in  Securities  of or Interests  in Persons  Primarily
Engaged in Real Estate Activities.  See "Item 1. Business - Lending Activities,"
"Item 1.  Business - Regulation  of the  Association,"  and "Item 1.  Business -
Subsidiary Activity."

(c)  Description of Real Estate and Operating Data.

        Not Applicable.

Item 3.  Legal Proceedings
--------------------------

        The  Company,  from  time  to  time,  is a  party  to  ordinary  routine
litigation,  which arises in the normal  course of  business,  such as claims to
enforce liens,  condemnation  proceedings on properties in which the Association
holds  security  interests,  claims  involving  the making and servicing of real
property loans, and other issues incident to the business of the Company. In the
opinion of  management,  no material  loss is expected  from any of such pending
claims or lawsuits.

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

        No matters were submitted to stockholders  for a vote during the quarter
ended September 30, 1997.

                                     PART II

Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
--------------------------------------------------------------------------------
Matters
-------

        The  information  contained  under the section  captioned  "Stock Market
Information" in the Company's  Annual Report to Stockholders for the fiscal year
ended  September  30, 1997 (the  "Annual  Report"),  is  incorporated  herein by
reference.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------

        The  required   information  is  contained  in  the  section   captioned
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" in the Annual Report and is incorporated herein by reference.


                                       20
<PAGE>



Item 7.  Financial Statements
-----------------------------

        The Company's  consolidated  financial  statements  required  herein are
contained in the Annual Report and are incorporated herein by reference.

        Quarter  results of  operations  on page 17 of the 1997 Annual Report is
hereby incorporated by reference.

Item  8.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
Financial Disclosure
--------------------

        Not Applicable.

                                    PART III

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

        The  information  contained  under the  sections  captioned  "Filing  of
Beneficial  Ownership Reports" and "I - Information with Respect to Nominees for
Director,  Directors  Continuing  in  Office,  and  Executive  Officers"  in the
Company's  definitive  proxy  statement  for the  Company's  Annual  Meeting  of
Stockholders (the "Proxy Statement") is incorporated herein by reference.

Item 10.  Executive Compensation
--------------------------------

        The  information  contained  under the section  captioned  "Director and
Executive Officer Compensation" in the Proxy Statement is incorporated herein by
reference.

Item 11.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

        (a)  Security Ownership of Certain Beneficial Owners

             Information  required  by  this  item  is  incorporated  herein  by
             reference to the section captioned "Voting Securities and Principal
             Holders Thereof" in the Proxy Statement.

        (b)  Security Ownership of Management

             Information  required  by  this  item  is  incorporated  herein  by
             reference to the section captioned "I - Information with Respect to
             Nominees  for  Director,   Directors   Continuing  in  Office,  and
             Executive Officers" in the Proxy Statement.

        (c)  Management of the Company knows of no  arrangements,  including any
             pledge by any person of securities of the Company, the operation of
             which may at a subsequent date result in a change in control of the
             Registrant.

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

        The  information  required  by  this  item  is  incorporated  herein  by
reference  to  the  section   captioned   "Certain   Relationships  and  Related
Transactions" and "Voting Securities and Principal Holders Thereof" in the Proxy
Statement.

                                       21

<PAGE>


Item 13.  Exhibits, List and Reports on Form 8-K
------------------------------------------------

(a) Exhibits are either attached as part of this Report or  incorporated  herein
by reference.

            3.1  Articles of Incorporation of Mississippi View Holding Company*

            3.2  Amended Bylaws of Mississippi View Holding Company

           10.1  Employment  contract with Thomas J.  Leiferman* 

           10.2  Management Stock Bonus Plan** 

           10.3  1995 Stock Option Plan**

           10.4  1997 Stock Option Plan***

           11    Statement regarding computation of earnings per share

           13    Annual  Report  to  Stockholders  for  the  fiscal  year  ended
                 September  30, 1997. 

           21    Subsidiaries  of  the  Registrant  (see  information  contained
                 herein under "Business - Subsidiary Activity").

           23    Consent of Bertram Cooper & Co., LLP

           99    Financial Data Schedule****


(b) Reports on Form 8-K.

    None.

-------------------------------
*   Incorporated by reference to the Registrant's Registration Statement on Form
    S-1 (File No. 33-86820) declared effective by the SEC on February 9, 1995.

**  Incorporated  by  reference  to the  registrant's  proxy  statement  for the
    special  meeting of  stockholders  held on September 27, 1995 and filed with
    the SEC on August 17, 1995 (File No. 0-25546).

*** Incorporated by reference to the Registrant's proxy statement for the annual
    meeting of  stockholders  held  January  22,  1997 and filed with the SEC on
    December 16, 1997 (File No. 0-25546).

****Only in electronic filing.


<PAGE>


                                   SIGNATURES

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


                                         MISSISSIPPI VIEW HOLDING COMPANY

Dated:  December 10, 1997                By:  /s/ Thomas J. Leiferman
                                             -----------------------------------
                                             Thomas J. Leiferman
                                             President, Chief Executive Officer,
                                               and Director
                                             (Duly Authorized Representative)

        Pursuant to the requirement of the Securities Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


By:  /s/ Thomas J. Leiferman             By:  /s/ Wallace R. Mattock
     -----------------------------------      ----------------------------------
     Thomas J. Leiferman                      Wallace R. Mattock
     President, Chief Executive Officer,      Chairman of the Board
        and Director

Date:  December 10, 1997                      Date:  December 10, 1997


By:  /s/ Neil Adamek                     By:  /s/ Peter Vogel
     -----------------------------------      ----------------------------------
     Neil Adamek                              Peter Vogel
     Director                                 Director

Date:  December 10, 1997                      Date:  December 10, 1997


By:  /s/ Gerald Peterson
     -----------------------------------
     Gerald Peterson
     Director

Date:  December 10, 1997

By:  /s/ Larry D. Hartwig
     -----------------------------------
     Larry D. Hartwig
     Vice President (Principal Financial and
     Accounting Officer)

Date:  December 10, 1997