EXHIBIT 13

   Annual Report to Stockholders for the fiscal year ended September 30, 1996


<PAGE>


                     [MISSISSIPPI VIEW HOLDING COMPANY LOGO]


                                      1996

                                  ANNUAL REPORT

<PAGE>

                        MISSISSIPPI VIEW HOLDING COMPANY
                               1996 ANNUAL REPORT

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TABLE OF CONTENTS

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     Selected Financial and Other Data.............................   2


     Letter to Shareholders........................................   3


     Corporate Profile and Stock Market Information................   4


     Management's Discussion and Analysis of

        Financial Condition and Results of Operations..............   6

     Selected Quarterly Financial Data.............................  14

     Report of Independent Auditors................................  15

     Consolidated Financial Statements.............................  16

     Notes to Consolidated Financial Statements....................  21


     Office Locations..............................................  36

     Other Corporate Information...................................  36


                                        1
<PAGE>

<TABLE>
<CAPTION>


SELECTED FINANCIAL AND OTHER DATA
Financial Condition (Dollars in Thousands)

September 30,                                                         1996       1995       1994       1993       1992
---------------                                                       ----       ----       ----       ----       ----
<S>                                                                 <C>        <C>        <C>        <C>        <C>    
Total assets (1) ................................................   $70,011    $69,443    $62,865    $64,995    $65,857
Loans receivable, net ...........................................    43,070     42,989     44,226     44,712     45,065
Loans held for sale .............................................       179         58         93        241        354
Mortgage-backed securities ......................................     4,857      4,750      3,123      4,248      6,041
Investment securities (1) .......................................    17,323     16,745     11,549     10,383     11,888
Cash and cash equivalents (1) ...................................     2,584      2,837      1,732      3,950        772
Deposits ........................................................    56,531     54,920     56,402     58,873     60,680
Other borrowings ................................................        --         --         --         --         37
Net retained earnings (substantially restricted) (2) ............     7,320      6,832      5,869      5,495      4,690
Total stockholders equity (1) ...................................    12,440     13,783        n/a        n/a        n/a

Summary of Operations (Dollars in Thousands)

Year Ended September 30,                                              1996       1995       1994       1993       1992
------------------------                                              ----       ----       ----       ----       ----
Interest income .................................................   $ 5,173    $ 4,860    $ 4,233    $ 4,803    $ 5,530
Interest expense ................................................     2,531      2,234      2,065      2,577      3,456
Net interest income .............................................     2,642      2,626      2,168      2,226      2,074
Provision for credit losses .....................................         4         26        144         90         99
Non-interest income .............................................       351        215        155        303        164
Non-interest expense (3) ........................................     2,056      1,468      1,502      1,325      1,349
Income before income taxes and cumulative effect of change in
  accounting principle ..........................................       933      1,347        677      1,114        790
Income tax expense ..............................................       374        519        302        309        297
Income before cumulative effect of change in accounting principle       559        828        375        805        493
Cumulative effect of change in accounting principle .............        --         --         --         --         98
Net income ......................................................       559        828        375        805        591

Other Selected Data

Year Ended September 30,                                              1996       1995       1994       1993       1992
------------------------                                              ----       ----       ----       ----       ----
Return on average assets ........................................      0.80%      1.24%      0.59%      1.22%      0.88%
Return on average equity ........................................      4.18       7.94       6.47      15.81      13.45
Average interest earning assets to average interest bearing
  liabilities (1) ...............................................    124.74     119.33     109.87     108.23     106.46
Average equity to average assets (1) ............................     19.21      15.66       9.05       7.73       6.52
Net interest rate spread ........................................      2.95       3.35       3.10       3.09       2.78
Net interest income after provision for loan losses to total
  other expenses (1) ............................................    128.32     177.04     134.74     161.16     146.34
Earnings per share (4) ..........................................   $  0.66       0.89        n/a        n/a        n/a
Book value per share (4) ........................................   $ 14.17    $ 13.67        n/a        n/a        n/a
Stockholders equity to assets at period end (1) .................     17.77%     19.85%      9.34       8.45       7.11
Non-performing assets to total assets ...........................      0.07       0.11       0.18       0.35       1.15
Non-performing loans to total loans .............................      0.11       0.11       0.21       0.16       0.66
Allowance for loan losses to total loans ........................      2.03       2.23       2.27       1.88       1.78

</TABLE>

-------------------------------------
(1)  The  change is  primarily  due to the  conversion  from a mutual to a stock
     company in fiscal year 1995.
(2)  Composed of  appropriated  and  unappropriated  retained  earnings  and net
     unrealized gains/losses on marketable equity securities.
(3)  Includes a one time  assessment in fiscal year 1996 of $362 to recapitalize
     the SAIF.
(4)  There were no shares outstanding prior to the consummation of the Company's
     initial public offering on March 23, 1995.

                                        2
<PAGE>

                        Mississippi View Holding Company

To Our Shareholders:

I am pleased to present the annual report of  Mississippi  View Holding  Company
for the year ended  September  30, 1996,  our first full year of operations as a
stock company.

Fiscal  1996  earnings  were  significantly  impacted  by  a  one  time  Savings
Association  Insurance  Fund  (SAIF)  special  assessment  charged to  Community
Federal  Savings  and Loan  Association.  The purpose of the  assessment  was to
recapitalize SAIF and was charged to all SAIF insured  institutions  nationwide.
The Association's  1996 fiscal earnings were reduced by 27.3% as a result of the
assessment. The Company's year end return on assets was .80% compared to a 1.11%
return on assets that would have been achieved  without the special  assessment.
As a result of this  recapitalization  of the  insurance  fund,  future  deposit
premiums will decline significantly effective January 1, 1997.

As of September  30, 1996,  Mississippi  View  Holding  Company had  repurchased
approximately 13% of the stock it sold in the initial offering. This was done to
move  toward a  capital  level  which  provides  a more  adequate  return to our
shareholders.  In addition,  the Company has paid two  semi-annual  dividends of
$0.08 per share. Future dividends, if any, will be based on continued successful
operations of the company.  Community Federal continues to significantly  exceed
all minimum  federal  regulatory  capital  requirements.  The  attainment of the
Association's  financial  safety  and  soundness  is a result  of many  years of
conservative management.

Mississippi   View  Holding  Company  is  well  positioned  to  meet  tomorrow's
challenges and demands, and looks forward to the future with optimism. Its focus
will  continue  to be on meeting the  financial  needs of its  customers  and in
promoting  the  economic  growth of its  market  area.  The  Company's  board of
directors  and  staff  are  dedicated  to doing  what  they do  best,  providing
progressive, quality services to our customers.

Thank you for your continued support and for sharing in our future success.

Sincerely,

/s/ Thomas J. Leiferman
Thomas J. Leiferman
President and
   Chief Executive Officer

                                        3
<PAGE>

                 Business of the Corporation and the Association

Mississippi View Holding Company

Mississippi  View  Holding  Company  (the  "Company)  is the parent  company for
Community  Federal  Savings and Loan  Association  of Little  Falls  ("Community
Federal"  or  the  "Association").   The  Company  was  formed  as  a  Minnesota
corporation in November 1994 at the direction of the  Association to acquire all
of the capital stock that Community  Federal issued upon its conversion from the
mutual to stock form of ownership  (the  "Conversion").  On March 23, 1995,  the
Company became a unitary savings and loan holding company when it purchased 100%
of  the  Association's   newly-issued   common  stock  in  connection  with  the
"Conversion".

Under existing laws,  the Company  generally is not restricted  from engaging in
any type of business activity provided that the Association  retains a specified
amount  of its  assets in  housing-related  loans  and  investments.  Management
believes the holding company  structure will facilitate  expansion into existing
and new market areas, should it ever decide to do so, through the acquisition or
formation  of new  banking and  non-banking  operations.  However,  there are no
present plans,  arrangements,  agreements or  understandings  regarding any such
activities.

The Company's  business  activities to date have been limited to its investments
in and loans to the Association and a loan made to the Community Federal Savings
and Loan  Association  Employee Stock  Ownership Plan (the "ESOP") to enable the
ESOP to  purchase  shares  of the  Company's  common  stock.  The loan  bears an
interest rate and has a term and conditions  which  prevailed in the marketplace
at the time it was originated.

Community Federal Savings and Loan Association

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 have been 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's  primary market area consists of Morrison County,  Minnesota,
which  encounters  strong  competition  both in the  attraction  of deposits and
origination of real estate and other loans. Competition comes primarily from the
eight commercial 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 and holding  company or
branch network structure,  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.

                                        4
<PAGE>

The Association  competes for saving accounts by offering  competitive  interest
rates and a high level of personal  service.  The Association  attracts deposits
from the general public and uses such deposits 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, and unsecured loans. As of September 30,
1996, the Association's total net portfolio of loans was $43.2 million, of which
$33.7 million, or 78%, was secured by residential real estate.

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.

Stock Market Information

Since its issuance in March 1995, the Company's  common stock has been traded on
the Nasdaq  "Small Cap" Market  under the  trading  symbol of "MIVI".  The daily
stock  quotation for  Mississippi  View Holding Company is published in The Wall
Street  Journal under the trading  symbols of "MIVI" or "MissVw".  The following
table  reflects the stock price  trading range as published by the Nasdaq "Small
Cap" Market  statistical  report.  The stock price in the initial  offering  was
$8.00 per share.

                                             HIGH               LOW
                                             ----               ---

  Third Quarter - 6/30/95                   10 1/4             8 1/2
  Fourth Quarter - 9/30/95                  11 5/8             9 1/2
  First Quarter - 12/31/95                    12                11
  Second Quarter - 3/31/96                  12 1/4            11 1/4
  Third Quarter - 6/30/96                     12                11
  Fourth Quarter - 9/30/96                  12 3/4            10 3/4

The number of  shareholders  of record of common  stock as of the record date of
December 2, 1996,  was  approximately  208.  This does not reflect the number of
persons or entities who held stock in nominee or "street"  name through  various
brokerage firms. At September 30, 1996,  there were 877,714 shares  outstanding.
Semi-annual  cash dividends of  $0.08/share  were paid on February 15, 1996, and
August 15,  1996,  to the  shareholders  of common  stock on the record dates of
February 3, 1996, and August 1, 1996, respectively.

The  Company's  ability to pay  dividends  to  shareholders  is  dependent  upon
earnings from  investments and dividends it receives from the  Association.  The
Association  may not  declare or pay a cash  dividend on any of its stock if the
effect thereof would cause Community Federal's  regulatory capital to be reduced
below  (1) the  amount  required  for the  liquidation  account  established  in
connection with the  Association's  conversion from mutual to stock form, or (2)
the regulatory capital requirements imposed by the OTS.

                                        5
<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

General

The Company's  consolidated results of operations are primarily dependent on the
Association's net interest income, or the difference between the interest income
earned  on  its  loan,  mortgage-backed  securities  and  investment  securities
portfolios,  and the  interest  expense  paid on its savings  deposits and other
borrowings.  Net interest income is affected not only by the difference  between
the  yields  earned  on  interest-earning  assets  and  the  costs  incurred  on
interest-bearing   liabilities,  but  also  by  the  relative  amounts  of  such
interest-earning assets and interest-bearing liabilities.

Other components of net income include: provisions for losses on loans and other
assets;  noninterest income  (primarily,  miscellaneous loan fees; service fees;
gain on the sale of  loans;  and gain on sale of real  estate  owned  property);
noninterest  expense  (primarily,  compensation and employee  benefits;  federal
insurance premiums;  data processing costs; office occupancy expense; and gains,
losses and expenses associated with foreclosed real estate); and income taxes.

Earnings of the Company also are affected  significantly by general economic and
competitive   conditions,   particularly   changes  in  market  interest  rates,
government policies, and actions of regulatory authorities.

Management Strategy

Management's  strategy  has  been to  enhance  earnings  and  profitability  and
increase capital while  maintaining  asset quality.  The  Association's  current
lending  strategy  focuses on the  origination of traditional one to four-family
residential  mortgages with the primary emphasis on single family  residences in
the Association's  primary market area. Because deposits exceed loan demand, the
Association  also  invests a  significant  portion of its  assets in  investment
securities.  This  focus,  along  with  the  adherence  to  strict  underwriting
standards,  is  designed  to reduce the risk of loss on the  Association's  loan
portfolio.  However, the lack of diversification in its loan portfolio structure
does increase the Association's portfolio concentration risk by making the value
of the  portfolio  more  susceptible  to declines  in real estate  values in its
market  area.  This  risk  has  been  mitigated  in  recent  years  through  the
acquisition of investment  securities,  as well as the Association's  efforts to
maintain quality loans, consistent collection procedures,  and adequate reserves
for  loss on  loans.  The  Association's  policy  of  pricing  its  deposits  in
accordance with  management's  determination of its lending and investment needs
has caused assets to increase this past fiscal year. However,  disintermediation
has been a constant challenge  offsetting deposit growth.  Disintermediation  is
the flow of funds away from savings  institutions into direct investments,  such
as U.S. Government and corporate securities and other investment vehicles which,
because of the absence of federal insurance  premiums and reserve  requirements,
generally pay higher rates of return than savings institutions.  The Association
recognizes that it will take time to originate the necessary  amount of loans to
fully and prudently leverage its capital from conversion.  Therefore, management
continues  to invest in U.S.  Government  and federal  agency  securities.  When
needed,  proceeds from maturing  securities or sold  securities  will be used to
fund loan  originations.  

                                        6
<PAGE>

Management  has  increased the interest rate  sensitivity  of the  Association's
assets and decreased  the interest rate  sensitivity  of it  liabilities,  while
maintaining high asset quality.  This has been  accomplished by: (1) originating
mostly adjustable-rate  mortgage loans, 15 and 20 year fixed mortgage loans, and
shorter term consumer loans for its portfolio,  (2) emphasizing the solicitation
and retention of core deposits from within the primary market,  (3) investing in
short and intermediate term investments,  (4) adhering to sound underwriting and
investment  standards,  and (5) managing  interest  rates paid for deposits.  In
addition,  the  Association's  conventional  mortgage loans are  underwritten to
standards which would enable it to sell such loans in the secondary  market,  if
management decided to do so.

The Association  attempts to manage the interest rates it pays on deposits while
maintaining a stable deposit base and provide quality services to its customers.
The Association has limited its borrowings and relied primarily upon deposits as
its source of funds.  To the extent the  Association  is unable to invest  these
funds in loans originated in the Association's  market area, it will continue to
purchase shorter, high quality investment securities.

Changes in Financial Condition from September 30, 1995 to September 30, 1996

General. The Company increased total assets by $568,017 from September 30, 1995,
to  September  30,  1996.  The asset  increase  was the net result of  increased
investments  of $685,533 and increased  loans  receivable of $201,498  offset by
decrease in cash and cash equivalents of $253,416 and a decrease in other assets
of $65,598.

Cash  and  Cash  Equivalents.  Cash  and  cash  equivalents,  which  consist  of
interest-bearing and noninterest-bearing deposits, decreased $253,416, or 8.93%.
This  decrease was the result of  increased  deposits  offset by increased  loan
originations and the purchase of investments and common stock of the Company.

Securities   available  for  sale.   Securities  available  for  sale  increased
$7,740,122, or 172.19%, from $4,495,023 on September 30, 1995, to $12,235,145 on
September 30, 1996.  This increase was due to the purchase of $5.45 million debt
securities and a $2.5 million  transfer  between  categories as described below.
Furthermore,  mortgage-backed  securities  available for sale increased $752,713
due to the purchase of  mortgage-backed  securities less principal  amortization
during this period and reduced mark to market values. From September 30, 1995 to
September  30,  1996,  mark to  market  valuations  increased  the value of such
securities  by  $134,261.  Any  increase or decrease in the market value of such
securities   will  have  a   corresponding   positive  or  negative   effect  on
stockholders'  equity. These increases were offset by a $1.1 million maturity of
available for sale securities.

Securities  held  to  maturity.  Debt  and  mortgage-backed  securities  held to
maturity  decreased  $7,067,389,  or 43.20%,  from  $16,361,481 on September 30,
1995, to $9,294,092 on September 30, 1996.  The Financial  Accounting  Standards
Board issued a special  portfolio  classification  standard on investments dated
November 15,  1995,  creating a window from  November 15, 1995,  to December 31,
1995,  allowing  financial  institutions  to  reassess  their  existing  held to
maturity  securities  and  transfer  them to either  the  available  for sale or
trading category.  During this window, the Company transferred $2.5 million from
the held to maturity category to available for sale. 

                                        7

<PAGE>

Furthermore, maturities of $3.9 million of debt securities held to maturity were
reinvested   in   available   for  sale   securities   or  were  held  in  cash.
Mortgage-backed securities decreased $645,332 due to principal amortization.

FHLB Stock.  Federal Home Loan Bank Stock  increased  $12,800  from  $637,900 on
September 30, 1995, to $650,700 on September 30, 1996,  due to a stock  dividend
paid by the Federal Home Loan Bank of Des Moines at the end of December 1995.

Loans Held for Sale.  Loans held for sale  increased  $120,689  from  $57,974 at
September  30, 1995,  to $178,663 at September  30, 1996.  This  increase is the
result of management's  decision to sell in the secondary market  lower-yielding
fixed rate mortgage loans rather than maintaining  them for portfolio.  Held for
sale loans are presold in the secondary market prior to origination. The balance
is the amount sold, yet unfunded as of the period end.

Loans Receivable,  Net. Loans receivable increased $80,809,  from $42,989,472 on
September 30, 1995, to  $43,070,281  on September 30, 1996. The increase was due
from new originations  exceeding  principal  amortization and $2,135,339 held to
maturity loans  transferred  to loans  available for sale, the majority of which
were subsequently sold, during this period.

Accrued Interest Receivable.  Accrued interest receivable decreased $78,598 from
September 30, 1995,  to September  30, 1996,  as accrued  interest on Conversion
proceed investments were offset by reduced interest rates on adjustable rate and
new fixed rate mortgages.

Premises and Equipment.  Premises and equipment, net of depreciation,  decreased
$72,835 due to normal  depreciation  amortized  on fixed assets in excess of new
asset purchases.

Foreclosed Real Estate.  Foreclosed real estate decreased $29,711, or 100%, from
$29,711 at September 30, 1995 to $0.0 at September 30, 1996,  due to the sale of
REO during the period.

Deferred Tax Asset.  Deferred tax asset, net of valuation  allowance,  increased
$73,403  during this twelve month period.  The primary reason for the change was
the deferred tax effect of the one time SAIF assessment.

Other Assets.  Other assets including a tax refund receivable increased $42,143,
or 7.62%,  from  $553,065 as of September  30, 1995, to $595,208 as of September
30,  1996,  due to a $23,892 tax refund  receivable  and a $22,000  reduction in
various prepaid expenses.

Deposits.  Deposits, after interest credited,  increased by $1,610,863, or 2.93%
to  $56,531,194 at September 30, 1996,  from  $54,920,331 at September 30, 1995.
The increase was due to the marketing of a new deposit product and  management's
deposit pricing strategy.

Advances from  Borrowers for Taxes and  Insurance.  Advances from  borrowers for
taxes and insurance  decreased  $49,168 from $187,698 on September 30, 1995 , to
$138,530 on  September  30,  1996,  due to a change in  calculating  the maximum
allowed advances from borrowers for taxes and insurance. 

                                        8
<PAGE>

Accrued Income Tax. The income tax accrual  decreased  $115,222  between the two
periods  due to an  accrued  income tax  receivable  amount  calculated  through
September  30, 1996.  The September  30, 1996,  balance was  classified as a tax
refund  receivable  because the  estimated  tax  payments  exceeded  the accrued
expense.

Other Liabilities.  Other liabilities  increased by $464,298,  or 106.35%,  from
$436,552 on September 30, 1995,  to $900,850 on September 30, 1996.  The primary
reason for the increase was the SAIF deposit  insurance  assessment  of $362,557
along with increases in accounts payable of $34,928, accrued expenses of 65,900,
and deferred compensation of $17,625.

Shareholders'  Equity.  Shareholders' equity decreased by $1,342,754,  or 9.74%,
from  $13,782,999  on September 30, 1995, to  $12,440,245 on September 30, 1996.
This  decrease is the net effect of the following  changes in equity:  a paid in
capital  increase of $15,426  resulting from the fair market value adjustment to
earned and  committed to be released  Employee  Stock  Ownership  Plan  ("ESOP")
shares,  net of taxes;  an  increase  of $77,705 as a result of  accounting  for
earned  ESOP  shares;  an increase of $69,477  resulting  from market  valuation
adjustments on available for sale  securities;  an increase of $558,768 from net
operational  income  for the twelve  month  period  just  ended;  a decrease  of
$387,412 for unearned Management Stock Bonus Plan ("MSBP") shares resulting from
open market  purchase of MSBP shares;  a decrease of $1,536,689  resulting  from
open market  purchases of the  Company's  common  stock  pursuant to three stock
repurchase  programs,  and a decrease  to  retained  earnings  due to  dividends
declared and paid of $140,029.

Average Balance Sheet

The following table sets forth certain  information  relating to average balance
sheets and reflects the average yield on assets and average cost of  liabilities
for the periods  indicated and the average  yields  earned and rates paid.  Such
yields and costs are  derived  by  dividing  income or  expense  by the  average
balance  of assets or  liabilities,  respectively,  for the  periods  presented.
Average  balances  are derived  from  month-end  balances.  Management  does not
believe that the use of month-end  instead of daily average  balances has caused
any material difference in the information presented.

                                        9
<PAGE>

<TABLE>
<CAPTION>

Average Balance Sheet

                                                         For the Year Ended September 30,
                                        --------------------------------------------------------------------------
                                                     1996                                   1995
                                        ---------------------------------     ------------------------------------
                                        Average                 Average       Average                    Average
                                        Balance    Interest    Yield/Cost     Balance     Interest      Yield/Cost
                                        -------    --------    ----------     -------     --------     ------------
                                                                  (Dollars in Thousands)

Interest-earning assets:
<S>                                     <C>         <C>          <C>          <C>          <C>             <C>  
 Loans receivable (1) ...............   $43,435     $3,704         8.53%      $44,371      $3,610            8.14%
 Mortgage-backed securities .........     5,047        344         6.82%        3,502         280            8.00%
 Investment securities (2) ..........    16,286        964         5.92%       14,636         817            5.58%
 Other interest-earning assets ......     3,497        162         4.63%        2,887         153            5.30%
                                         ------      -----                     ------       -----
   Total interest-earning assets ....    68,265      5,174         7.58%       65,396       4,860            7.43%

Non interest-earning assets .........     1,315                                 1,177
                                         ------                                ------
   Total assets......................   $69,580                               $66,573
                                        =======                               =======
Interest-bearing liabilities:
 Passbook / Passcard savings.........   $11,105        268         2.41%      $10,621         232            2.18%
 NOW / MMDA .........................     6,068        100         1.65%        6,798         113            1.66%
 Certificates of Deposit ............    37,551      2,164         5.76%       37,385       1,889            5.05%
                                         ------      -----                     ------       -----
   Total interest-bearing liabilities    54,724      2,532         4.63%       54,804       2,234            4.08%
                                                     -----                                  -----

Non interest-bearing liabilities:
 Demand Deposits ....................       827                                   625
 Other non interest-bearing
  liabilities .......................       665                                   716
                                         ------                                ------
   Total liabilities ................    56,216                                56,145
Retained earnings ...................    13,364                                10,428
                                         ------                                ------
   Total liabilities and retained
   earnings .........................   $69,580                               $66,573
                                         ======                                ======
Net interest income .................               $2,642                                 $2,626                
                                                     =====                                  =====
Interest rate spread (3) ............                              2.95%                                     3.35%
Net yield on interest-earning assets
 (4).................................                              3.87%                                     4.02%
Ratio of average interest-earning
assets to average interest-bearing
liabilities .........................                            124.74%                                   119.33%
</TABLE>
---------------------------------
(1)  Average  balances  include  non-accrual  loans  and are net of  undisbursed
     commitments.
(2)  Includes interest-bearing deposits in other financial institutions.
(3)  Interest rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(4)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.

                                       10
<PAGE>


Comparison of Operating Results for the Years Ended September 30, 1995, and 1996

Net Income. Net Income decreased $268,786,  or 32.48% from $827,554 on September
30, 1995 to $558,768 on September 30, 1996.  The decrease was primarily due to a
$362,557 charge connected with a one time special assessment from the SAIF. This
one time  assessment was the result of  legislation  that was signed into law on
September 30, 1996, for the purpose of  recapitalizing  the SAIF.  Increased net
interest income of $16,279, increased noninterest income of $135,226, along with
decreased  provisions  for loan losses of $22,705 and  decreased  tax expense of
$144,809, were offset by increased noninterest expenses of $225,248.

Interest  Income.  Interest income increased  $313,562,  or 6.45%, in the twelve
month period  ended  September  30,  1996,  as compared to the same period ended
September 30, 1995. Interest income from loans receivable increased $93,447, the
result of decreased  mortgage loan interest of $40,742 due to a reduction in the
mortgage loan portfolio  average balance offset by increased  consumer and other
loan interest  income of $134,189 due to increased  loan  balances.  Income from
securities available for sale increased $326,005 and income from securities held
to maturity  decreased  $105,890.  The  decrease was a result of the transfer of
held to maturity  securities  to  available  for sale  securities  discussed  in
changes in  financial  condition.  The  remaining  available  for sale  security
investment  income of  $220,115  was due  primarily  to an  increase  in average
balance of investments as the Company  invested the proceeds from the Conversion
for only six months in fiscal 1995 compared to twelve months in fiscal 1996.

Interest  Expense:  Interest  expense,  which is comprised  of interest  paid on
deposits, increased $297,283, or 13.31%, for the twelve month comparative period
for  September  30, 1995 and 1996.  This increase was due to the increase in the
average balance of deposits,  particularly  certificates of deposit, with higher
rates paid on specific deposit products.

Net Interest  Income.  Net interest income  increased  $16,279,  or 0.62%,  from
$2,625,607  for the twelve month period ended  September 30, 1995, to $2,641,886
for the same period  ended  September  30, 1996.  This was due to the  increased
revenue from interest earned on the interest earning assets  ($313,562),  offset
by increased  deposit  interest  expense  ($297,283),  due to increased  average
balances.  The  Company's  spread  decreased  from 3.35% to 2.95% as the cost of
interest-bearing   deposits   increased   at  a  faster   rate  than  yields  on
interest-earning assets.

Provisions for Loan Losses. The Association currently maintains an allowance for
loan losses based upon  management's  periodic  evaluation of known and inherent
risks in the loan portfolio,  the  Association's  past loss experience,  adverse
situations  that may affect the  borrowers'  ability to repay  loans,  estimated
value of the underlying collateral,  and current and expected market conditions.
Provisions for loan losses decreased by $22,705, or 85.91%, from $26,430 for the
period ended  September 30, 1995,  to $3,725 for the period ended  September 30,
1996.  This decrease was due to an  assessment of the loan  portfolio and market
conditions. While management maintains its allowance for losses at a level which
it considers  to be adequate to provide for  potential  losses,  there can be no
assurances  that further  additions will not be made to the loss  allowances and
that such losses will not exceed the estimated amounts.

Noninterest  Income.  Noninterest  income increased  $135,226,  or 62.76%,  from
$215,452 at September 30, 1995, to $350,678 at September 30, 1996. This increase
was primarily the result of a $81,023 contingency  recovery in the first quarter
of fiscal  1996 and an  increase of $61,348 in gains on the sale of loans due to
the  Association's  sale of $2,135,339 of mortgage  loans in December  1995. The
contingency 

                                       11
<PAGE>

recovery  was due to a  $65,000  settlement  paid by the  Association  to settle
litigation  for  which it had  established  a  $146,023  loss  reserve.  In this
litigation the  bankruptcy  trustee was seeking the return of loan payments made
to the  Association  by the  servicer  on  account  of  mortgage  loans on which
payments had not been made from mortgagors, and on account of mortgage loans not
in the possession of the Association based on theories of fraudulent  conveyance
and  preference.  On October 30,  1995,  the Court  issued an order  approving a
settlement  in the amount of $65,000  between the  trustee and the  Association.
Furthermore,  other  noninterest  income increased  $24,950.  These  noninterest
income increases were offset by decreased fees and service charges of $5,529 and
a $24,730  decrease in gain on the sale of real estate  owned.  The reduction in
the gain on real estate owned was due to the  Association  recognizing a gain of
$32,878 on the sale of a property in December 1994.

Noninterest Expense.  Noninterest expense increased by $587,805, or 40.04%, from
$1,468,166  to $2,055,971  during the twelve month  periods ended  September 30,
1995 and  1996,  respectively.  Compensation  and  employee  benefits  increased
$155,669 due to director and employee  compensation  increases of $47,263,  ESOP
expense  increase of $42,058,  and MSBP expense  increase of $66,541.  In fiscal
1995 no MSBP expenses were incurred.

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  will pay a
special assessment of $362,557 to recapitalize the SAIF. The FDIC is expected to
lower the premium for deposit  insurance  to a level  necessary  to maintain the
SAIF at its required reserve level;  however, the range of premiums has not been
determined at this time.

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, 1996,  had the Act been in
effect,  the  Association's  Fico Bond  premium  would  have been  approximately
$36,000 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 the
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.

Other  increases  in  noninterest   expenses  were  occupancy  of  $4,227,  data
processing  of $4,673,  advertising  of $3,255,  real  estate  owned  expense of
$3,574,  offset by a decrease in provisions for losses on foreclosed real estate
of $7,295. "Other" noninterest expenses, including legal, consulting,  registrar
fees, filing fees, auditing, and shareholder meeting expenses, increased $62,027
due to the added costs of being a public company.

Income Tax  Expense.  Income tax expense  decreased  $144,809,  or 27.91%,  from
$518,909 for the twelve  months ended  September  30, 1995,  to $374,100 for the
twelve month period ended September 30, 1996, due to reduced earnings  primarily
from the SAIF assessment.

                                       12
<PAGE>

Liquidity and Capital Resources.

The  Association is required to maintain  minimum levels of "liquid  assets," as
defined by OTS regulations.  This requirement,  which may be varied from time to
time  depending  upon economic  conditions  and deposit  flows,  is based upon a
percentage of deposits and short-term borrowings. The required OTS minimum ratio
is currently 5%. The  Association's  average  liquidity  ratio was 26.65% during
September  1996.  The OTS required  short term liquidity is 1%; at September 30,
1996, the Association's short term liquidity was 16.42%. The Association manages
its liquidity  ratio to meet its funding  needs,  including:  deposit  outflows;
disbursements  of payments  collected  from  borrowers for taxes and  insurance;
repayment of borrowings,  when applicable and loan principal disbursements.  The
Association  also  monitors  its  liquidity  position  in  accordance  with  its
asset/liability objectives.

In addition to funds provided from operations, the Association's primary sources
of  funds   are:   savings   deposits;   principal   repayments   on  loans  and
mortgage-backed  securities;  and matured or called investment securities. As an
alternative to supplement  liquidity  needs,  the Association has the ability to
borrow from the FHLB of Des Moines.

Scheduled loan  repayments and maturing  investment  securities are a relatively
predictable source of funds.  However,  savings deposit flows and prepayments on
loans and mortgage-backed  securities are significantly influenced by changes in
market interest rates,  economic  conditions,  and competition.  The Association
strives to manage the pricing of its  deposits to maintain a balanced  stream of
cash flow commensurate  with its loan commitments and other predictable  funding
needs.

The  Association's  most  liquid  assets  are cash and cash  equivalents,  which
include  highly  liquid  short-term  investments.  The level of these  assets is
dependent on the Association's  operating,  financing,  and investing activities
during any given  period.  At  September  30,  1996,  cash and cash  equivalents
totaled $2.584 million.

The Association anticipates that it will have sufficient funds available to meet
its  current  commitments.  As  of  September  30,  1996,  the  Association  had
commitments to fund loans of $634,000,  unused lines of credit of $798,000,  and
loans in process of $227,762. Certificates of deposit scheduled to mature within
one year totaled  $27.0  million at  September  30,  1996.  Based on  historical
deposit  withdrawals  and  outflows,  and on internal  monthly  deposit  reports
monitored by  management,  management  believes that a majority of such deposits
will remain in the Association.  As a result,  no adverse  liquidity effects are
expected.

The  Association  is  required  by OTS to maintain  various  regulatory  capital
requirements.  At September 30, 1996, the Association  exceeded these regulatory
capital  requirements.  See  Note  14 to the  Notes  to  Consolidated  Financial
Statements included herein.

Impact of Inflation and Changing Prices

The Consolidated  Financial  Statements and Notes thereto  presented herein have
been prepared in accordance with generally accepted accounting  principles which
require the measurement of financial  position and operating results in terms of
historical dollars, without consideration for changes in the relative purchasing
power of money over time caused by inflation.

                                       13
<PAGE>

Unlike  industrial  companies,  nearly all of the assets  and  liabilities  of a
financial institution are monetary in nature. As a result, interest rates have a
more significant  impact on a financial  institution's  performance than general
levels  of  inflation.  Interest  rates  do not  necessarily  move  in the  same
direction  or in the same  magnitude as the price of goods and  services,  since
such goods and services are affected by inflation.  In the current interest rate
environment,  liquidity and the maturity  structure of the Association's  assets
and  liabilities  are  critical to the  maintenance  of  acceptable  performance
levels.

Impact of New Accounting Standards

The  Financial  Accounting  Standards  Board  ("FASB")  has issued  several  new
accounting  standards  which may affect the accounting for  transactions  of the
Association.  The new  standards are discussed in detail at Note 15 to the Notes
to Consolidated Financial Statements included herein.

Selected Quarterly Financial Data
(unaudited)
(Dollars in thousands except earnings
per share)

                              First    Second     Third     Fourth
                             Quarter   Quarter    Quarter   Quarter
                             -------   -------    -------   -------
    Fiscal 1996
-------------------------

Total interest income ...    $1,307    $1,300    $1,281     $1,286
Total interest expense ..       622       637       634        639
Net interest income .....       685       663       647        647
Provision for loan losses         2        --         2         --
Net Income ..............       258       174       196        (69)
Earnings per share ......    $ 0.29    $ 0.19    $ 0.24     $(0.09)

    Fiscal 1995
-------------------------

Total interest income ...    $1,120    $1,151    $1,276     $1,313
Total interest expense ..       518       535       575        606
Net interest income .....       602       616       701        707
Provision for loan losses        10        10         8         (2)
Net Income ..............    $  190    $  158    $  202     $  277
Earnings per share ......       N/A       N/A    $ 0.22     $ 0.30

                                       14
<PAGE>

                     [BERTRAM COOPER & CO., LLP LETTERHEAD]



                          INDEPENDENT AUDITORS' REPORT

     To the Board of Directors and Shareholders
     Mississippi View Holding Company and Subsidiary
     Little Falls, Minnesota 56345

     We have  audited the  accompanying  consolidated  statements  of  financial
     condition of Mississippi  View Holding Company and Subsidiary (the Company)
     as of September 30, 1996 and 1995, and the related consolidated  statements
     of income,  changes  in  shareholders'  equity,  and cash flows for the two
     years then ended.  These  financial  statements are the  responsibility  of
     management.  Our responsibility is to express an opinion on these financial
     statements based on our audits.

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

     In our opinion,  the financial statements referred to above present fairly,
     in  all  material   respects,   the  consolidated   financial  position  of
     Mississippi  View Holding  Company and  Subsidiary as of September 30, 1996
     and 1995, and the  consolidated  results of their operations and their cash
     flows for the two years then ended, in conformity  with generally  accepted
     accounting principles.

     As  discussed  in  Note 1 to the  consolidated  financial  statements,  the
     Company  changed its method of accounting  for certain  investments in debt
     and equity securities.


     /s/ Bertram Cooper & Co., LLP
     Bertram Cooper & Co., LLP
     Waseca, Minnesota
     October 29, 1996

                                       15

<PAGE>

                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>


                                                                          September 30,
                                                                  ----------------------------
ASSETS                                                               1996              1995
                                                                  -----------      -----------

Cash and cash equivalents:
<S>                                                          <C>               <C>            
   Cash and due from banks                                   $       317,777   $       236,632
   Interest bearing deposits with banks                            2,265,877         2,600,438
Securities available for sale, at fair value                      12,235,145         4,495,023
Securities held to maturity, at amortized cost                     9,294,092        16,361,481
FHLB stock, at cost                                                  650,700           637,900
Loans held for sale                                                  178,663            57,974
Loans receivable, net of allowance for loan losses of
   $877,094 in 1996 and $962,086 in 1995                          43,070,281        42,989,472
Accrued interest receivable                                          450,327           528,925
Premises and equipment                                               788,846           861,681
Foreclosed real estate (net of allowance for losses
  of $15,700 for 1996 and $25,187 for 1995)                                -            29,711
Deferred tax asset (net of valuation allowance)                      163,903            90,500
Other assets                                                         595,208           553,065
                                                                  ----------        ----------
    Total Assets                                             $    70,010,819   $    69,442,802
                                                                  ==========        ==========
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Demand deposits                                           $     4,471,137   $     4,242,241
   Savings deposits                                               14,087,832        13,918,703
   Time deposits                                                  37,972,225        36,759,387
                                                                  ----------        ----------
    Total deposits                                                56,531,194        54,920,331
Advances from borrowers for taxes and insurance                      138,530           187,698
Income taxes payable                                                       -           115,222
Other liabilities                                                    900,850           436,552
                                                                  ----------        ----------
    Total Liabilities                                             57,570,574        55,659,803
                                                                  ==========        ==========

Shareholders' equity:
Serial preferred stock, no par value, 5,000,000 shares
  authorized, no shares issued                                             -                 -
Common stock, $.10 par value, 10,000,000 shares authorized;
  1,007,992 shares issued                                            100,799           100,799
Paid in capital                                                    7,510,397         7,494,971
Treasury stock (130,278 shares), at cost                          (1,536,689)            -
Retained earnings, substantially restricted                        7,116,646         6,697,907
Unearned ESOP shares (66,527 and 75,263 shares) at cost             (566,736)         (644,441)
Unearned MSBP shares (34,474 shares) at cost                        (387,412)            -
Net unrealized appreciation on available-for-sale securities,
  net of tax of $135,494 in 1996 and $89,175 in 1995                 203,240           133,763
                                                                  ----------        ----------
    Total shareholders' equity                                    12,440,245        13,782,999
                                                                  ----------        ----------
    Total liabilities and shareholders' equity               $    70,010,819   $    69,442,802
                                                                  ==========        ==========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                              financial statements

                                       16
<PAGE>


                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>


                                                                    For the Year ended
                                                                       September 30,
                                                                 -------------------------
                                                                   1996             1995
                                                                 ---------       ---------
   Interest income:
<S>                                                         <C>             <C>           
      Loans receivable                                      $    3,703,652  $    3,610,205
      Securities available for sale                                528,912         202,907             
      Securities held to maturity                                  940,865       1,046,755              
                                                                 ---------       ---------
         Total interest income                                   5,173,429       4,859,867            
                                                                                                        
   Interest expense:
      Demand deposits                                               37,345          39,941
      Savings deposits                                             330,357         304,947
      Time deposits                                              2,163,841       1,889,372
                                                                 ---------       ---------
         Total interest expense                                  2,531,543       2,234,260

      Net interest income                                        2,641,886       2,625,607
      Provision for loan losses                                      3,725          26,430
                                                                 ---------       ---------
         Net interest income after provision for loan losses     2,638,161       2,599,177
                                                                 ---------       ---------

   Noninterest income:

      Other fees and service charges                                70,603          76,132
      Gain on sale of loans                                         74,142          19,170
      Net gain on sale of real estate owned                         17,394          42,124
      Contingency recovery                                          81,023               -
      Other                                                        107,516          78,026
                                                                 ---------       ---------
         Total noninterest income                                  350,678         215,452
                                                                 ---------       ---------

   Noninterest expenses:
      Compensation and employee benefits                           919,565         763,896
      Occupancy                                                     87,856          83,629
      Deposit insurance assessment                                 362,557               -
      Deposit insurance premium                                    150,091         150,973
      Data processing                                               75,996          71,323
      Advertising                                                   30,787          27,532
      Real estate owned expense, net                                 5,053           5,204
      Provision for losses on foreclosed real estate                     -           3,570
      Other                                                        424,066         362,039
                                                                 ---------       ---------
         Total noninterest expense                               2,055,971       1,468,166
                                                                 ---------       ---------
   Income before income taxes                                      932,868       1,346,463
   Income tax expense                                              374,100         518,909
                                                                 ---------       ---------
   Net income                                               $      558,768  $      827,554
                                                                 =========       =========
   Earnings per share of common stock                       $         0.66  $         0.89
                                                                 =========       =========
</TABLE>


       The accompanying notes are an integral part of these consolidated
                              financial statements

                                       17
<PAGE>




                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>                                           
                                                                                                            Unrealized
                                                                      Retained   Unallocated  Unallocated   Gain (Loss)
                                            Additional                Earnings     Common       Common    on Securities
                                   Common    Paid-in      Treasury  Substantially Stock Held  Stock Held    Available
                                    Stock    Capital        Stock    Restricted    By ESOP     For MSBP      For Sale      Total
                                   ------   ----------    --------  ------------- ----------  ----------- ------------     -----

<S>                              <C>         <C>           <C>        <C>         <C>         <C>          <C>         <C>        
Balance, September 30, 1994      $      -    $     -       $     -    $5,870,353  $       -   $       -    $ (1,067)   $ 5,869,286

   Cumulative effect of 
     accounting change                  -           -            -             -          -           -      94,553         94,553

   Net earnings for the year
   ended September 30, 1995             -           -            -       827,554          -           -           -        827,554

   Issuance of common stock net
   of stock acquired by the ESOP  100,799    7,491,423           -             -   (690,472)          -           -      6,901,750

   Fair value adjustment of ESOP
   shares net of taxes of $2,365        -        3,548           -             -          -           -           -          3,548

   Allocated ESOP shares                -            -           -             -     46,031           -           -         46,031

   Net change in unrealized 
   appreciation on available-
   for-sale securities, net
   of taxes of $27,563                  -            -           -             -          -           -      40,277         40,277
                                  -------    ---------  ----------     ---------   --------     -------     -------     ----------
Balance, September 30, 1995       100,799    7,494,971           -     6,697,907   (644,441)          -     133,763     13,782,999

   Treasury Stock acquired              -            -  (1,536,689)            -          -           -           -     (1,536,689)

   Net earnings for the year
   ended September 30, 1995             -            -           -       558,768          -           -           -        558,768

   Dividend paid                        -            -           -      (140,029)         -           -           -       (140,029)

   Fair value adjustment of ESOP
   shares net of taxes of $10,284       -       15,426           -             -          -           -           -         15,426

   Allocated ESOP shares                -            -           -             -     77,705           -           -         77,705

   MSBP shares acquired, net of 
   earned shares in the amount 
   of $71,217                           -            -           -             -          -    (387,412)          -       (387,412)

   Net change in unrealized 
   appreciation on available-
   for-sale securities, net
   of taxes of $46,318                  -            -           -             -          -           -      69,477         69,477
                                 --------   ---------- -----------    ----------  ---------   ---------    --------    -----------

Balance, September 30, 1996      $100,799   $7,510,397 $(1,536,689)   $7,116,646  $(566,736)  $(387,412)   $203,240    $12,440,245
                                 ========   ========== ===========    ==========  =========   =========    ========    ===========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                              financial statements

                                       18

<PAGE>

                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                 For the Year Ended
                                                                    September 30,
                                                              --------------------------
                                                                 1996            1995
                                                              -----------    ------------
Cash flows from operating activities:
<S>                                                        <C>            <C>          
   Interest received on loans and investments              $   5,212,957  $   4,683,486
   Interest paid                                              (2,532,101)    (2,236,930)
   Other fees, commissions, and income received                  299,433        238,890
   Cash paid to suppliers, employees and others               (1,350,252)    (1,389,795)
   Contributions to charities                                     (7,869)        (2,304)
   Income taxes paid                                            (643,219)      (324,750)
   Loans originated for sale                                  (2,455,977)    (1,214,782)
   Proceeds from sale of loans                                 4,487,415      1,269,148
                                                              ----------     ----------
      Net cash provided by operating activities                3,010,387      1,022,963
                                                              ----------     ----------

Cash flows from investing activities:
   Purchases of available-for-sale securities                 (6,547,147)    (1,627,350)
   Proceeds from maturities of available-for-sale securities   1,356,285      1,000,000
   Purchases of held-to-maturity securities                   (4,694,532)   (13,570,461)
   Proceeds from maturities of held-to-maturity securities     9,295,315      7,555,005
   Loan originations and principal payments on loans, net     (2,123,430)     1,193,291
   Proceeds from sale of property and equipment                        -            464
   Purchases of property and equipment                           (10,936)       (47,620)
   Proceeds from sale of foreclosed real estate                   17,394         38,446
                                                              ----------     ----------
      Net cash provided by (used in) investing activities     (2,707,051)    (5,458,225)
                                                              ----------     ----------

Cash flows from financing activities:
   Net increase (decrease) in non-interest bearing demand
     and savings deposit accounts                                398,025       (791,572)
   Net increase (decrease) in time deposits                    1,213,396       (690,979)
   Net (decrease) increase in mortgage escrow funds              (49,168)       117,580
   Dividend on unallocated ESOP shares                            11,612              -
   Net proceeds from sale of  common stock                             -      7,595,770
   Acquisition of unearned ESOP shares                                 -       (690,472)
   Acquisition of treasury stock                              (1,536,689)             -
   Acquistion of unearned MSBP shares                           (453,899)             -
   Dividends paid                                               (140,029)             -
                                                              ----------     ----------
      Net cash used by financing activities                     (556,752)     5,540,327
                                                              ----------     ----------
Net (decrease) increase in cash and cash equivalents            (253,416)     1,105,065
Cash and cash equivalents at beginning of year                 2,837,070      1,732,005
                                                              ----------     ----------
Cash and cash equivalents at end of year                   $   2,583,654  $   2,837,070
                                                              ==========     ==========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                              financial statements

                                       19
<PAGE>

                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>


                                                                   For the Year Ended
                                                                       September 30,
                                                                   -------------------
                                                                   1996           1995
                                                                   ----           ----
RECONCILIATION OF NET INCOME TO NET CASH
   PROVIDED BY OPERATING ACTIVITIES

<S>                                                           <C>            <C>        
   Net income                                                 $   558,768    $   827,554
   Adjustments:                                            
      Provision for losses on loans and real estate                 3,725         30,000
      Depreciation                                                 83,771         79,882
      Federal Home Loan Bank stock dividends                      (12,800)             -
      Noncash dividends                                            (5,071)        (5,058)
      ESOP fair value adjustment                                   15,426          3,548
      Amortization of ESOP compensation                            66,092         46,031
      Amortization of MSBP compensation                            66,487              -
      Net amortization and accretion of premiums           
        and discounts on securities                                38,211         49,490
      Net loss on sale of fixed assets                                  -          4,540
      Net (gains) on sales of real estate owned                   (17,393)       (42,124)
      Net loan fees deferred and amortized                         14,291          5,579
      Net mortgage loan servicing fees deferred                   (11,611)             -
      Contingency recovery                                        (81,023)             -
      (Increase) decrease in:                              
         Loans held for sale                                    2,014,650         35,196
         Accrued interest receivable                               78,598       (166,962)
         Prepaid income tax                                       (23,892)        51,823
         Deferred tax asset                                      (119,721)        29,479
         Other assets                                              (6,639)        45,605
      Increase (decrease) in:                              
         Accrued interest payable                                    (558)        (2,670)
         Accrued income tax                                      (115,222)       115,222
         Other liabilities                                        464,298        (84,172)
                                                                ---------      ---------
         Net cash provided by operating activities            $ 3,010,387    $ 1,022,963
                                                                =========      =========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

   Federal Home Loan Bank stock dividends                     $    12,800    $         -
                                                           
   Refinancings of sales of real estate owned                      37,200          9,000
                                                           
   Transfers from loans to real estate acquired            
      through foreclosure                                           4,989         64,046
                                                           
   Noncash dividends                                                5,071          5,058
                                                           
   Transfer of debt securities to available for sale       
      from securities held to maturity                          2,449,446      3,568,247
                                                           
   Transfers of loans held for investment to loans         
      held for sale                                             2,135,339              -
</TABLE>
                                                       
       The accompanying notes are an integral part of these consolidated
                              financial statements

                                       20


<PAGE>
                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                          September 30, 1996 and 1995

Note 1. Summary of Significant Accounting Policies

        The following summarizes the significant accounting policies Mississippi
        View Holding  Company (the Company)  follows in presenting its financial
        statements.

        Principles of  Consolidation  - The  consolidated  financial  statements
        include the  accounts of the  Company  and its wholly  owned  subsidiary
        Community  Federal Savings and Loan Association (the  Association).  All
        significant  intercompany  transactions  and balances are  eliminated in
        consolidation. Certain amounts in the financial statements for the prior
        year have been  reclassified to conform to current  financial  statement
        presentation.

        Organization  - On March 23,  1995,  the  Association  converted  from a
        mutual  association  to  a  stock  association  pursuant  to a  Plan  of
        Conversion,  (the  Conversion)  via the  issuance  of common  stock.  In
        conjunction  with the Conversion,  the Company sold 1,007,992  shares of
        common  stock  which,  after  giving  effect  to  offering  expenses  of
        $471,714,  resulted in net  proceeds of $7.6 million  which  included an
        order for  20,159  shares of stock in the  amount of  $161,272  from the
        Employee Stock Ownership Plan (ESOP).  Pursuant to the  Conversion,  the
        Association  transferred  all of its  outstanding  shares  to its  newly
        organized  holding  company.  On March 24, 1995 the  Association's  ESOP
        purchased an additional  60,480 shares in the open market, in the amount
        of $529,200.  The ESOP's  purchases  were funded through a loan from the
        Company.

        Upon the Conversion,  the preexisting  liquidation  rights of the mutual
        stock association members were unchanged.  Such rights will be accounted
        for by the Company for the benefit of such  depositors  in proportion to
        their liquidation  interests as of either the Eligibility Record Date or
        the Supplemental Eligibility Record Date as defined.

        Subsequent to the  Conversion,  neither the Company nor the  Association
        may declare or pay cash dividends on any of their shares of common stock
        if the effect would be to reduce  shareholders'  equity below applicable
        regulatory capital  requirements or if such declaration of payment would
        otherwise violate regulatory requirements.

        Nature of  Business  -  Mississippi  View  Holding  Company is a unitary
        thrift holding company whose subsidiary provides financial services. The
        Association's  business is that of a financial intermediary and consists
        primarily of attracting  deposits from the general public and using such
        deposits,  together with  borrowings  and other funds,  to make mortgage
        loans secured by residential  real estate and other consumer  loans.  At
        September 30, 1996, the  Association  operated one retail banking office
        in Minnesota. The Association is subject to significant competition from
        other  financial  institutions,  and is also  subject to  regulation  by
        certain federal  agencies and undergoes  periodic  examinations by those
        regulatory authorities.

        Use of Estimates - In preparing the consolidated  financial statements,
        management is required to make estimates and assumptions that affect the
        reported amounts of assets and liabilities as of the date of the balance
        sheets,  and income and expenses for the period.  Actual  results  could
        differ from those  estimates.  Material  estimates that are particularly
        susceptible to  significant  change relate to the  determination  of the
        allowance for losses on loans and the valuation of real estate  acquired
        in  connection  with  foreclosures  or  in  satisfaction  of  loans.  In
        connection with the  determination  of the allowance for losses on loans
        and foreclosed real estate,  management obtains  independent  appraisals
        for significant properties.

        A substantial  portion of the Association's  loans are collateralized by
        real estate in local markets (see Note 13). In addition, foreclosed real
        estate is located in the same market  area.  Accordingly,  the  ultimate
        collectibility  of a  substantial  portion  of  the  Association's  loan
        portfolio  and the  recovery of a  substantial  portion of the  carrying
        amount of  foreclosed  real estate are  susceptible  to changes in local
        market conditions.

                                       21
<PAGE>

                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 1. Summary of Significant Accounting Policies - (continued)

        While management uses available information to recognize losses on loans
        and foreclosed  real estate,  future  additions to the allowances may be
        necessary  based on changes in local economic  conditions.  In addition,
        regulatory  agencies,  as an integral part of their examination process,
        periodically review the Association's  allowance for losses on loans and
        foreclosed  real estate.  Such agencies may require the  Association  to
        recognize  additions to the  allowance  based on their  judgments  about
        information available to them at the time of their examination.

        Cash  Equivalents - Cash  equivalents  of $1,000,000  and  $2,200,000 at
        September 30, 1996 and 1995,  respectively,  consist of  certificates of
        deposit,  and funds due from banks.  For purposes of the  statements  of
        cash flows, the Association considers all highly liquid debt instruments
        with original maturities of three months or less to be cash equivalents.

        Investment  Securities - The Company was required to adopt  Statement of
        Financial  Accounting  Standard (SFAS) No. 115,  "Accounting for Certain
        Investments  in  Debt  and  Equity  Securities,"  for  the  fiscal  year
        beginning October 1, 1994. SFAS No. 115 requires the Company to classify
        its   investments,   including  debt   securities,   marketable   equity
        securities,  mortgage-backed securities, and mortgage related securities
        in one of three categories:  held to maturity,  trading or available for
        sale.  Debt  securities  that the  Company has the  positive  intent and
        ability to hold to  maturity  are  classified  as held to  maturity  and
        reported at  amortized  cost.  The  Company  does not engage in security
        trading  and,  therefore,  the  balance of its debt  securities  and any
        equity  securities  are  classified as available  for sale.  The Company
        classifies debt securities as available for sale when it determines that
        such securities may be sold at a future date or if there are foreseeable
        circumstances under which the Company would sell such securities.

        Securities designated as available-for-sale  are recorded at fair value.
        Changes in the fair value of securities  available-for-sale are included
        in shareholders' equity as unrealized holding gains or losses net of the
        related tax effect.  Unrealized  losses on available for sale securities
        or held to maturity  securities  reflecting a decline in value judged to
        be other than temporary are charged to income.  Realized gains or losses
        on   available   for  sale   securities   are  computed  on  a  specific
        identification basis.

        In November 1995, the Financial Accounting Standards Board (FASB) issued
        "Special  Report  - A  Guide  to  Implementation  of  Statement  115  on
        Accounting for Certain Investments in Debt and Equity Securities," which
        provided  transition  guidance  permitting an enterprise to reassess the
        appropriateness  of the  classification  of all  its  securities  before
        December 31, 1995. The Company  reassessed its  classifications,  and on
        December  31,1995,   transferred  $2.5  million  in  amortized  cost  of
        investment  and  mortgage-backed  securities  from  held-to-maturity  to
        available-for-sale classification. The related unrealized gain after tax
        effect as of the date of transfer was $25,000.

        Premiums  and  discounts  on debt  and  mortgage-backed  securities  are
        amortized to expense and accreted to income over the  estimated  life of
        the respective security using a method that approximates the level yield
        method.

        Prior to adoption of SFAS No. 115,  marketable  equity  securities  were
        carried at lower of cost or  estimated  fair  value with net  unrealized
        losses  being  recognized  through  a  valuation  allowance  shown  as a
        reduction  in the  carrying  value of the  related  securities  and as a
        corresponding reduction in retained earnings.

        The  Association,  as a member of the Federal Home Loan Bank System,  is
        required to maintain an  investment in capital stock of the Federal Home
        Loan Bank of Des Moines.  Because no ready market exists for this stock,
        and it has no quoted market value, the Association's  investment in this
        stock is carried at cost.

                                       22
<PAGE>

                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 1. Summary of Significant Accounting Policies - (continued)

        Loans Held for Sale - Mortgage loans originated and intended for sale in
        the  secondary  market  are  carried  at the lower of cost or  estimated
        market value in the  aggregate.  Net  unrealized  losses are  recognized
        through a valuation allowance by charges to income.

        Loans  Receivable - Loans  receivable are  stated  at unpaid  principal
        balances,  less the  allowance  for  loan  losses,  net of deferred loan
        origination fees.

        The  allowance  for loan  losses is  increased  by charges to income and
        decreased by  charge-offs  (net of  recoveries).  Management's  periodic
        evaluation   of  the   adequacy  of  the   allowance  is  based  on  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.

        SFAS No. 114,  "Accounting  by Creditors for  Impairment of a Loan," and
        SFAS No. 118, "Accounting by Creditors for Impairment of a Loan - Income
        Recognition and Disclosures," were adopted  prospectively by the Company
        on October 1, 1995. These statements address the accounting for impaired
        loans and  specify  how  allowances  for loan  losses  related  to these
        impaired  loans should be determined.  The adoption of these  statements
        did not affect the level of the overall allowance or operating  results.
        Income recognition and charge-off  policies were not changed as a result
        of SFAS 114 and SFAS 118.  The  Association  defines the  population  of
        impaired   loans  to  be  all   non-accrual   commercial   real  estate,
        multi-family and land loans. Impaired loans are individually assessed to
        determine  that the loan's  carrying  value is not in excess of the fair
        value of the  collateral  or the  present  value of the loan's  expected
        future  cash  flows.   Smaller  balance   homogeneous   loans  that  are
        collectively  evaluated for  impairment,  such as  residential  mortgage
        loans and installment loans, are specifically excluded from the impaired
        loan  portfolio.  There were no impaired  loans at September 30, 1996 as
        defined by SFAS 114 and SFAS 118.

        Uncollectible  interest on loans contractually past due for three months
        is charged off or an  allowance  is  established  based on  management's
        periodic  evaluation.  The  allowance  is  established  by a  charge  to
        interest income equal to all interest  previously  accrued and income is
        subsequently  recognized  only to the extent cash  payments are received
        until, in management's judgment, the borrower's ability to make periodic
        interest and  principal  payments  returns to normal,  in which case the
        loan is returned to accrual status.

        Loan origination fees, net of certain  specifically  defined direct loan
        origination  costs, are deferred.  The net amount deferred is recognized
        as interest income using the interest  method over the contractual  term
        of each loan as an adjustment of yield. If the related loan is sold, the
        remaining net amount  deferred,  which is part of the basis of the loan,
        is used in determining gain or loss on sale.

        Mortgage   Servicing   Rights  -  The  Company  adopted  SFAS  No.  122
        "Accounting for Mortgage Servicing Rights-An Amendment of SFAS No. 65, "
        prospectively  as of  October  1,  1995.  SFAS No.  122  amends  certain
        provisions  of SFAS  No.  65 to  eliminate  the  accounting  distinction
        between  rights to service  mortgage  loans for others that are acquired
        through loan origination activities and rights acquired through purchase
        transactions.  The  statement  requires a mortgage  banking  enterprise,
        which sells or securitizes  loans and retains the servicing  rights,  to
        allocate the total cost of the mortgage loans to the mortgage  servicing
        rights  and the  loan  (without  the  servicing  rights)  based on their
        relative fair values.  Costs allocated to mortgage  servicing rights are
        recognized  as a separate  asset and amortized in proportion to and over
        the period of  estimated  net  servicing  income and are  evaluated  for
        impairment  based on their fair value.  The effect of adopting  SFAS No.
        122 did not have a material impact on the Company's  financial condition
        or the results of its operations.

                                       23
<PAGE>

                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 1. Summary of Significant Accounting Policies - (continued)

        Foreclosed Real Estate - Real estate properties  acquired through, or in
        lieu of, loan  foreclosure  are  initially  recorded at the lower of the
        related  unpaid  loan  balance  or  fair  value  of the  property,  less
        estimated  costs to sell at the date of  foreclosure.  Costs relating to
        development and improvement of property are  capitalized,  whereas costs
        relating  to the  holding  of  property  are  expensed.  Valuations  are
        periodically  performed by  management  and an  allowance  for losses is
        established  by a  charge  to  operations  if the  carrying  value  of a
        property exceeds its estimated fair value less estimated costs to sell.

        Premises and Equipment -  Land is carried at cost.  Building,  furniture
        and  equipment  are  carried  at  cost  less  accumulated  depreciation.
        Depreciation is computed by the straight-line  method over the estimated
        useful lives of the assets, which range from five to forty years.

        Long-Lived  Assets - The Company  adopted SFAS No. 121,  "Accounting for
        the  Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to be
        Disposed of," in fiscal year 1996.  This statement  requires  impairment
        losses to be  recorded on  long-lived  assets  used in  operations  when
        indicators of  impairment  are present.  Impairment  would be considered
        when the  undiscounted  cash flows  estimated  to be  generated by those
        assets are less than the assets' carrying amount. Implementation of this
        statement had no effect on the consolidated financial statements.

        Income  Taxes  -  Deferred  income  taxes  are  recognized  for  the tax
        consequences of temporary  differences by applying enacted statutory tax
        rates  applicable to future years to  differences  between the financial
        statement  carrying  amounts  and the tax bases of  existing  assets and
        liabilities.  The effect on  deferred  taxes of a change in tax rates is
        recognized in income in the period that includes the enactment date. The
        measurement  of deferred  tax assets is reduced,  if  necessary,  by the
        amount of any tax benefits that,  based on available  evidence,  are not
        expected   to  be   realized.   The   effect   of  a   change   in   the
        beginning-of-the-year balance of a valuation allowance that results from
        a change in judgment about the  realizability of deferred tax assets, is
        included in income.

        Earnings  Per Share -  Earnings  per share of common  stock for the year
        ended  September 30, 1996, has been determined by dividing net income by
        the weighted  average  number of shares of common stock and common stock
        equivalents  outstanding during the year of 852,612.  Earnings per share
        of common stock for the fiscal year ended  September 30, 1995,  has been
        computed by dividing  the net income for the twelve  month period by the
        calculated  weighted average number of shares of common stock and common
        stock  equivalents  which would have been  outstanding if the Conversion
        had  occurred  on the first day of the fiscal  year rather than on March
        23, 1996, which was 928,720 shares.

        Shares  acquired by the employee stock ownership plan are not considered
        in the weighted  average shares  outstanding  until shares are committed
        for allocation to an employees  individual  account or have been earned.
        Stock options are regarded as common stock  equivalents  computed  using
        the treasury stock method,  however, they did not have a material effect
        on primary and fully diluted earnings per share.

        Fiscal 1995 pro-forma  earnings per share of $1.01 is computed as if the
        net proceeds of the stock  conversion  were recorded on October 1, 1994,
        and was invested by the Company at 6.2%, which was equal to the one year
        U.S.  Treasury  bill rate as of October 31,  1994,  net of an  effective
        federal  and state  income tax rate of 40.5%  resulting  in an after tax
        yield  of  3.69%  on  $6,901,750.  The  stock  proceeds  were  generally
        available to the Company on March 1, 1995, resulting in a five month pro
        forma earning period.

        Treasury Stock - Treasury  stock  is recorded at cost. In the event of a
        subsequent  reissue,  the treasury  stock account will be reduced by the
        cost of such stock on the  average  cost basis with any excess  proceeds
        credited to addional  paid-in  capital.  Treasury stock is available for
        general corporate purposes.

                                       24
<PAGE>

                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 1. Summary of Significant Accounting Policies - (continued)

        Fair Values of Financial Instruments - SFAS  No. 107, "Disclosures about
        Fair Value of Financial  Instruments,"  initially  adopted during fiscal
        1996,  requires  disclosure of fair value  information  about  financial
        instruments,  whether or not  recognized  in the  statement of financial
        condition.  In cases where quoted market prices are not available,  fair
        values are based on estimates  using  present  value or other  valuation
        techniques.   Those  techniques  are   significantly   affected  by  the
        assumptions  used,  including  the discount rate and estimates of future
        cash flows. In that regard,  the derived fair value estimated  cannot be
        substantiated  by comparison to independent  markets and, in many cases,
        could not be realized in immediate  settlement of the instruments.  SFAS
        No. 107 excludes  certain  financial  instruments  and all  nonfinancial
        instruments from its disclosure requirements. Accordingly, the aggregate
        fair value amounts  presented do not represent the  underlying  value of
        the Company.

        The  following  methods  and  assumptions  were used by the  Company  in
        estimating  its fair value  disclosures,  as  presented  in Note 12, for
        financial instruments:

        Cash  and  cash  equivalents:  The  carrying  amounts  reported  in  the
        statements  of  financial   condition  for  cash  and  cash  equivalents
        approximate those assets' fair values.

        Debt and equity  securities:  Fair values for debt and equity securities
        are based on quoted market  prices,  where  available.  If quoted market
        prices are not available,  fair values are based on quoted market prices
        of comparable instruments.

        FHLB stock: The carrying amount of FHLB stock approximates fair value.

        Loans:  For  variable-rate   loans  that  reprice   frequently  with  no
        significant  change in credit  risk,  fair  values are based on carrying
        amounts.  The fair  values  for other  loans  (for  example,  fixed rate
        commercial real estate,  rental property  mortgage loans, and commercial
        and industrial loans) are estimated using discounted cash flow analysis,
        based on interest rates  currently  being offered for loans with similar
        terms to borrowers of similar  credit quality  giving  consideration  to
        estmated  perpayment and credit loss factors.  Loan fair value estimates
        include  judgments  regarding  future  expected loss experience and risk
        characteristics.  Fair values for  impaired  loans are  estimated  using
        discounted  cash flow analysis or underlying  collateral  values,  where
        applicable.

        Accrued  interest  receivable:  The carrying amount of accrued  interest
        receivable approximates fair value.

        Deposits:  The  fair  values  disclosed  for  demand  deposits  are,  by
        definition,  equal to the amount payable on demand at the reporting date
        (that is, their  carrying  amounts).  Fair values for time  deposits are
        estimated using a discounted cash flow calculation that applies interest
        rates  currently  offered on  certificates  to a schedule of  aggregated
        expected  monthly  maturities on time deposits.  The carrying  amount of
        accrued interest payable approximates fair value.

        Advance payments by borrowers for taxes and insurance (escrow accounts):
        The carrying amount of escrow accounts approximate fair value.

        Loan  commitments:  Commitments to extend credit were evaluated and fair
        value was  estimated  using the fees  currently  charged  to enter  into
        similar  agreements,  taking  into  account the  remaining  terms of the
        agreements and the present  creditworthiness of the counterparties.  For
        fixed-rate  loan  commitments,  fair value also considers the difference
        between  current levels of interest rates and the committed  rates.  The
        carrying  value and fair value of  commitments  to extend credit are not
        considered material for disclosure.

                                       25
<PAGE>

                 MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 2.   Debt and Equity Securities

       The amortized costs and approximate fair values of debt and equity
                      securities are summarized as follows:
<TABLE>
<CAPTION>
                                                                                     Gross         Gross   
                                                                   Amortized       Unrealized    Unrealized         Fair
                                                                     Cost            Gains        Losses           Value
                                                                   ---------       ----------    ----------       -------
         September 30, 1996:                      
         -------------------                      
      
         Debt and equity securities available for sale:

           Debt securities:
<S>                                                               <C>            <C>           <C>              <C>         
             U.S. Government and agency obligations               $ 10,361,165   $    21,133   $  (47,513)      $ 10,334,785
             Mortgage-backed Securities                              1,396,690            --      (19,107)         1,377,583
                                                                    ----------       -------      -------         ----------
                          Subtotal                                  11,757,855        21,133      (66,620)        11,712,368
                                                                    ----------       -------      -------         ----------
           Equity securities:
             Mutual fund                                                86,903            --          (33)            86,870
             Stock in FHLMC                                             51,653       384,254           --            435,907
                                                                    ----------       -------      -------         ----------

                          Subtotal                                     138,556       384,254          (33)           522,777
                                                                    ----------       -------      -------         ----------

           Total                                                  $ 11,896,411   $   405,387   $  (66,653)     $  12,235,145
                                                                    ==========       =======      =======         ==========

         Debt securities held to maturity:

           U.S. Government and agency obligations                 $  1,749,672   $       172   $   (2,031)     $   1,747,813
           Certificates of deposit                                   4,065,000            --           --          4,065,000
           Mortgage-backed securities                                3,479,420        75,648      (47,140)         3,507,928
                                                                    ----------       -------      -------         ----------

           Total                                                  $  9,294,092   $    75,820   $  (49,171)     $   9,320,741
                                                                    ==========       =======      =======         ==========

         September 30, 1995:
         ------------------

         Debt and equity securities available for sale:

           Debt securities:
             U.S. Government and agency obligations               $  3,513,087   $    13,081   $  (37,184)     $   3,488,984
             Mortgage-backed securities                                625,512            --         (642)           624,870
                                                                    ----------       -------      -------         ----------

                          Subtotal                                   4,138,599        13,081      (37,826)         4,113,854
                                                                    ----------       -------      -------         ----------
           Equity securities:
             Mutual fund                                                81,833            56           --             81,889
             Stock in FHLMC                                             51,653       247,627           --            299,280
                                                                    ----------       -------      -------         ----------

                          Subtotal                                     133,486       247,683           --            381,169
                                                                    ----------       -------      -------         ----------

         Total                                                     $ 4,272,085   $   260,764   $  (37,826)     $   4,495,023
                                                                    ==========       =======      =======         ==========

         Debt securities held to maturity:

           U.S. Government and agency obligations                  $ 6,172,729   $    38,094   $  (14,417)     $   6,196,406
           Certificates of deposit                                   6,064,000            --           --          6,064,000
           Mortgage-backed securities                                4,124,752        84,459      (81,760)         4,127,451
                                                                    ----------       -------      -------         ----------
           Total                                                   $16,361,481   $   122,553   $  (96,177)     $  16,387,857
                                                                    ==========       =======      =======         ==========
</TABLE>

          There were no sales of securities during the two years ended September
          30, 1996.

                                       26
<PAGE>
                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 2.   Debt and Equity Securities - (continued)

          The amortized  cost and estimated  market value of debt  securities at
          September  30,  1996,  by  contractual  maturity,   are  shown  below.
          Mortgage-backed   securities   have  been   aggregated  and  disclosed
          separately,  rather than  allocate  over several  maturity  groupings,
          since they lack a single  maturity date and because  borrowers  retain
          the right to prepay the obligation.
<TABLE>
<CAPTION>
                                                     Held to Maturity              Available for Sale
                                                 --------------------------      ----------------------
                                                                 Estimated                   Estimated
                                                 Amortized          Fair         Amortized     Fair
                                                    Cost            Value          Cost        Value
                                                 ----------      ----------      ---------   ----------
<S>                                          <C>             <C>             <C>            <C>        
         Due in one year or less             $    5,315,000  $    5,312,969  $   4,502,556  $ 4,495,130
         Due one year through five years            499,672         499,844      5,430,968    5,416,250
         Due after ten years                              -               -        427,641      423,405
                                                  ---------       ---------     ----------   ----------
           Subtotal                               5,814,672       5,812,813     10,361,165   10,334,785
         Mortgage-backed securities               3,479,420       3,507,928      1,396,690    1,377,583
                                                  ---------       ---------     ----------   ----------
           Total                             $    9,294,092  $    9,320,741  $  11,757,855  $11,712,368
                                                  =========       =========     ==========   ==========
</TABLE>                             
Note 3.   Loans Receivable                                       

          Loans  receivable  at  September  30,  1996  and 1995  consist  of the
          following:
<TABLE>
<CAPTION>
                                                                   1996            1995
                                                                 ----------     ----------
<S>                                                          <C>             <C>          
         Secured by 1-4 family residences                    $   37,623,209  $  37,514,624
         Secured by other real estate                             3,964,195      4,516,721
         Construction                                               626,900      1,136,300
         Consumer and other                                       1,916,165      1,551,198
         Loans secured by deposits                                  281,115        200,939
                                                                 ----------     ----------
           Total loans receivable                                44,411,584     44,919,782
                                                                 ----------     ----------
         Less:
           Undisbursed portion of mortgage loans                   (227,762)      (746,068)
           Allowance for loan losses                               (877,094)      (962,086)
           Deferred loan fees                                      (236,447)      (222,156)
                                                                 ----------     ----------
             Loans receivable,  net                          $   43,070,281  $  42,989,472
                                                                 ==========     ==========
</TABLE>
          A summary  of the  activity  in the  allowance  for loan  losses is as
          follows:
<TABLE>
<CAPTION>
                                                                  Years ended September 30,
                                                                  -------------------------
                                                                     1996           1995
                                                                   --------      ---------
<S>                                                          <C>             <C>          
         Balance, beginning of period                        $      962,086  $   1,006,252
         Provision for losses                                         3,725         26,430
         Charge offs                                                (92,213)       (75,333)
         Recoveries                                                   3,496          4,737
                                                                    -------      ---------
         Balance, end of period                              $      877,094  $     962,086
                                                                    =======      =========
</TABLE>
          In the ordinary course of business,  the Association has granted loans
          to certain executive officers,  directors and their related interests.
          Related party loans are made on substantially  the same terms as those
          prevailing  at the time for  comparable  transactions  with  unrelated
          persons   and  do  not   involve   more  than  the   normal   risk  of
          collectibility.  The  aggregate  dollar  amount  of  these  loans  was
          approximately  $140,000 and  $212,000 at September  30, 1996 and 1995,
          respectively.

                                       27
<PAGE>

                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 4.  Foreclosed Real Estate

         Foreclosed  real estate acquired in settlement of loans consists of the
following:

                                                              September 30,
                                                            -------------------
                                                             1996        1995
                                                            -------     -------
         Real estate acquired by foreclosure             $   15,700  $   54,898
         Less allowance for losses                           15,700      25,187
                                                             ------      ------
           Foreclosed real estate, net                   $        -  $   29,711
                                                             ======      ======

         Activity in the allowance  for losses on  foreclosed  real estate is as
follows:

                                               Years ended September 30,
                                               -------------------------
                                                    1996        1995
                                                   -------     -------
         Beginning balance                      $   25,187  $   78,461
         Provision charged to income                     -       3,570
         Charge-offs                                (9,487)    (56,844)
         Recoveries                                      -           -
                                                    ------     -------
         Ending balance                         $   15,700  $   25,187
                                                    ======     =======

Note 5. Loan Servicing

        Mortgage loans serviced for others are not included in the  accompanying
        consolidated  statements of financial  condition.  The unpaid  principal
        balances of loans  serviced for others was  $2,823,000 and $1,159,000 at
        September 30, 1996 and 1995, respectively.

        Custodial  escrow  balances  maintained in connection with the foregoing
        loan  servicing,  and included in demand  deposits,  were  approximately
        $13,300 and $13,500 at September 30, 1996 and 1995, respectively.

        Mortgage  servicing  rights of $12,700 were  capitalized  in fiscal 1996
        with a carrying  amount of $11,600 at September 30, 1996.  The valuation
        allowance on September 30, 1996 and changes in the  valuation  allowance
        during the period were not significant.

Note 6.  Accrued Interest Receivable

         Accrued  interest   receivable  at  September  30,  1996  and  1995  is
summarized as follows:

                                                             1996        1995
                                                            -------     -------
         Investment securities                           $  164,382  $  246,865
         Mortgage-backed securities                          41,500      48,562
         Loans receivable                                   244,445     233,498
                                                            -------     -------
           Total                                         $  450,327  $  528,925
                                                            =======     =======

Note 7.  Premises and Equipment

         Premises and  equipment at September  30, 1996 and 1995 consists of the
following:

                                                             1996        1995
                                                            -------    --------
         Land                                            $   98,840  $   98,840
         Office building                                    790,702     786,739
         Furniture and equipment                            463,914     456,943
                                                          ---------   ---------
            Total                                         1,353,456   1,342,522
         Less accumulated depreciation                     (564,610)   (480,841)
                                                          ---------   ---------
            Premises and equipment, net                  $  788,846  $  861,681
                                                          =========   =========



                                       28

<PAGE>
                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 8. Deposits

        The  aggregate   amount  of  certificates  of  deposit  with  a  minimum
        denomination of $100,000 was approximately  $2,434,000 and $2,109,000 at
        September 30, 1996 and 1995,  respectively.  Deposited amounts in excess
        of $100,000  per  account  are not  insured by the  Savings  Association
        Insurance Fund.

         At September 30, 1996, the scheduled maturities of time deposits are as
follows:

                                     1997                $26,959,056
                                     1998                 10,495,000
                                     1999                    487,908
                                     2000                     30,261
                                                          ----------
                                    Total                $37,972,225
                                                          ==========

        Deposits by related parties were approximately  $803,000 and $623,000 at
        September 30, 1996 and 1995, respectively.

        The Association  provides collateral to various local governmental units
        as required by state statute on savings and certificate account balances
        greater than  $100,000.  The  collateral  pledged  against such deposits
        consisted  of  mortgage-backed   securities   totaling   $1,101,623  and
        $2,188,784 as of September 30, 1996 and 1995, respectively.

Note 9.  Income Taxes

         Income tax expense (benefit)  applicable to operations  include current
and deferred taxes as follows:

                                                Years ended September 30,
                                                -------------------------
                                                    1996        1995
                                                  -------      -------
           CURRENT
              Federal                           $  367,539  $  369,700
              State                                126,283     119,730
                                                  --------     -------
                 Subtotal                          493,822     489,430
                                                  --------     -------
           DEFERRED
              Federal                              (89,790)     22,109
              State                                (29,932)      7,370
                                                  --------     -------
                 Subtotal                         (119,722)     29,479
                                                  --------     -------
           Total income tax provision           $  374,100  $  518,909
                                                  ========     =======

        The  State  of  Minnesota  follows  the  Internal  Revenue  Code for the
        determination   of  taxable   income  in   connection   with   temporary
        differences. The State portion of deferred tax assets and liabilities is
        approximately 25 percent.

        Temporary  differences  between financial statement carrying amounts and
        the tax basis of assets and liabilities  that create deferred tax assets
        and liabilities are as follows:

                                                               September 30,
                                                            -------------------
                                                             1996        1995
                                                            -------     -------
         Deferred tax assets:
           General loan loss allowance                   $  350,838  $  272,699
           Deferred loan fees                                94,579      88,864
           Deferred compensation                            129,278     100,304
           SAIF assessment                                  145,023           -
                                                           --------    --------
                                                            719,718     461,867
           Less valuation allowance                        (162,000)   (159,037)
                                                           --------    --------
           Subtotal                                         557,718     302,830
                                                           --------    --------




                                       29
<PAGE>
                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 9.  Income Taxes - (continued)

                                                              September 30,
                                                         ----------------------
                                                             1996        1995
                                                         ----------  ----------
         Deferred tax liabilities:
           Excess tax reserves                              115,768           -
           Securities unrealized gains                      135,494      89,175
           FHLB stock dividend                               99,680      88,198
           Mortgage servicing rights                          4,644           -
           Depreciation and basis adjustment                 38,229      34,957
                                                            -------     -------
           Subtotal                                         393,815     212,330
                                                            -------     -------
         Net deferred tax assets                         $  163,903  $   90,500
                                                            =======     =======

        The  Association  has paid  sufficient  income taxes in prior  carryback
        years which would  enable it to recover the balance of the net  deferred
        tax  assets,  and  therefore,  no  additional  valuation  allowance  was
        required at September 30, 1996 and 1995.

        Actual income tax expense varied from  "expected" tax expense  (computed
        by applying the United States  federal  corporate  income tax rate of 34
        percent to earnings before taxes) as follows:

<TABLE>
<CAPTION>
                                                           Years ended September 30,
                                                           -------------------------
                                                                 1996        1995
                                                             ----------  ----------
<S>                                                          <C>         <C>       
       Computed "expected" tax expense:                      $  317,200  $  457,760
       Increase (reduction) in income tax resulting from:

          State income taxes, net of federal tax benefit         63,600      82,600
          Other (net)                                            (6,700)    (21,451)
                                                                -------     -------
       Total income tax expense                              $  374,100  $  518,909
                                                                =======     =======
</TABLE>
        If certain conditions are met, savings and loan associations are allowed
        a bad debt  deduction in determining  income for tax purposes,  based on
        specified  experience  formulas or a percentage of taxable income before
        such deduction. On August 21, 1996 legislation was signed into law which
        repealed the  percentage  of taxable  income method for the tax bad debt
        deduction.  The repeal is effective for the  Association's  taxable year
        beginning  October 1, 1996. In addition,  the  legislation  requires the
        Company to include in taxable income its tax bad debt reserves in excess
        of its base year reserves  (pre-1988  reserves)  over a six,  seven,  or
        eight  year  period  depending  upon  the  attainment  of  certain  loan
        origination  levels.  Since the  percentage of taxable income method for
        the tax bad debt deduction and the corresponding increase in the tax bad
        debt  reserve  in excess of base year have been  recorded  as  temporary
        differences,  this  change  in the  tax  law is not  expected  to have a
        material effect on the Company's statement of operations.

        Retained  earnings  at  September  30,  1996,   includes   approximately
        $1,459,000  of  pre-1988  reserves,  for which no  deferred  income  tax
        liability,  approximately  $584,000,  has been  recognized.  This amount
        represents  an  allocation  of  income  to bad debt  deductions  for tax
        purposes only. Reduction of amounts so allocated for purposes other than
        tax bad debt  losses or  adjustments  from  carryback  of net  operating
        losses would create income for tax purposes only, which would be subject
        to the then current corporate income tax rate.

Note 10. Employee Benefit Plans

        Salary Continuation Plan

        The  Association is obligated to its former  executive  officers under a
        deferred compensation plan. The unpaid liability of $101,768 is recorded
        in the accompanying financial statements.  The plan is fully funded with
        annuity  contracts  recorded  as  assets in the  accompanying  financial
        statements.  The Association has also adopted a directors' consultations
        and retirement plan. Benefits related to services are expensed under the
        plan vesting  schedule.  The  Association  adopted an insured  executive
        supplemental  retirement plan and the estimated benefits will be accrued
        over the  expected  remaining  years  of  employment.  The  compensation
        expense  related to these plans  amounted to $29,892 and $27,182 for the
        years ended September 30, 1996 and 1995, respectively.

                                       30
<PAGE>
                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 10. Employee Benefit Plans - (continued)

        Salary Reduction Plan

        The Association has adopted a salary  reduction plan (401(k) Plan) which
        covers substantially all full time employees.  Company contributions are
        determined anually by the Board of Directors.  The Company's expense was
        $1,042 and  $14,516  for the years  ended  September  30, 1996 and 1995,
        respectively.

        Employee Stock Ownership Plan

        At the time of the stock  conversion,  the  Association  established  an
        Employee Stock Ownership Plan (ESOP) covering all employees over the age
        of 21,  with at least one year of service  who work at least 1,000 hours
        during  the plan  year.  The ESOP  borrowed  funds  from the  Company to
        purchase a total of 80,639  shares of the Company's  Common  Stock.  The
        loan  is  collateralized  by  the  Common  Stock.  Contributions  by the
        Association  are used to repay the loan with shares being  released from
        the Company's lien  proportional  to the loan  repayment.  Annually,  on
        December 31, the released  shares are allocated to the  participants  in
        the same proportion as their wages bear to the total compensation of all
        of the participants.

        The Company  presents these financial  statements in accordance with the
        AICPA Statement of Position (SOP) No. 93-6,  "Employers'  Accounting for
        Employee  Stock  Ownership  Plans."  The price of the shares  issued and
        unreleased  are  charged  to  unearned  compensation,   a  contra-equity
        account,  and shares released are reported as compensation expense equal
        to the current market value price of the released shares. Dividends paid
        on  allocated  shares are  charged  to  retained  earnings  and those on
        unallocated shares are charged to expense.

        The following table presents the components of the ESOP shares:

                                                              September 30,
                                                         -----------------------
                                                            1996        1995
                                                         ----------  -----------
           Allocated shares                                   8,064           -
           Commited to be released shares                     6,048       5,376
           Unreleased shares                                 66,527      75,263
                                                            -------     -------
           Total ESOP shares                                 80,639      80,639
                                                            =======     =======
           Fair value of unreleased shares               $  756,745  $  865,525
                                                            =======     =======
           Compensation expense recorded                 $   94,003  $   51,945
                                                            =======     =======

    
        Management  Stock Bonus Plan (MSBP)

        The Company has adopted a MSBP for  directors  and  Management to enable
        the Association to attract and retain  experienced and capable personnel
        in key  positions  of  responsibility.  A total of  29,224  shares  were
        awarded in the form of restricted stock payable over a five year vesting
        period and 11,095  shares were reserved for future  awards.  The Company
        acquired the MSBP shares in fiscal 1996 in an open market  purchase at a
        cost of $458,629,  which was initially recorded as unearned compensation
        in  a  contra  shareholders'  equity  account.  The  Company  recognizes
        compensation  expense pro rata over the vesting period which amounted to
        $66,487 for fiscal 1996.

        Stock Option Plan

        The Company established two stock option plans for directors,  officers,
        and employees. One is a non-qualified plan and the other is an incentive
        stock  option  plan.  The option  plans were  approved by the  Company's
        shareholders  on September 27, 1995,  and 100,799  shares were available
        for grant. Awarded were 73,072 shares exercisable at the market price of
        $11.38 per share. All options were outstanding at September 30, 1996 and
        expire ten years from date of grant.

Note 11. Commitments and Contingencies

        Loans  serviced  for FNMA,  in the amount of $740,000 at  September  30,
        1996,  were sold  subject  to  recourse  provisions  which  require  the
        Association  to buy back any loan which is  delinquent  more than ninety
        days. The Association also sold loans and related  servicing  subject to
        recourse  provisions  which  expire  in  March  1997  in the  amount  of
        $1,082,400 at September 30, 1996..  The Association has not incurred any
        losses on loans sold with recourse provisions.

                                       31
<PAGE>
                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 12. Financial Instruments

        The  Association is a party to financial  instruments  with  off-balance
        sheet risk in the normal course of business to meet the financing  needs
        of its customers.  These financial instruments are commitments to extend
        credit and  involve,  to varying  degrees,  elements  of credit  risk in
        excess of the amount recognized in the balance sheet.

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

        Commitments  to extend  credit are  agreements  to lend to a customer as
        long as  there  is no  violation  of any  condition  established  in the
        contract.  Commitments  generally have fixed  expiration  dates or other
        termination  clauses and may require  payment of a fee.  Commitments  to
        extend  credit which  represent  credit risk totaled  $634,000 for loans
        ($296,000 at fixed rates and $338,000 at adjustable  rates) and $798,000
        unused lines of credit at September 30, 1996.

        Commitments to sell loans amounted to $179,000 at September 30, 1996.

        The estimated fair values of the Company's financial  instruments are as
        follows:
<TABLE>
<CAPTION>
                                                             September 30, 1996
                                                         ---------------------------
                                                           Carrying          Fair
         Financial assets:                                  Amount           Value
                                                         -----------     -----------
<S>                                                      <C>             <C>        
           Cash and cash equivalents                     $ 2,583,654     $ 2,583,654
           Investment securities                          21,529,237      21,555,886
           FHLB Stock                                        650,700         650,700
           Loans Receivable                               44,590,248      45,544,520
           Accrued interest receivable                       450,327         450,327
                                                                        
         Financial liabilities:                                         
           Deposits                                       56,531,194      56,538,374
           Advance payments by borrowers (escrows)           138,530         138,530
</TABLE>
                                                                    
Note 13. Significant Geographic Concentration of Credit Risk

        A  significant  portion of the  Association's  loans  receivable  are to
        borrowers  located  in  Little  Falls,  Minnesota,  and the  surrounding
        counties. This geographic concentration amounted to approximately 95% of
        the total loans  receivable  balance for the years ended  September  30,
        1996 and 1995.

Note 14. Regulatory Matters

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

        The OTS  includes an  interest-rate  risk  component  in its  risk-based
        capital   requirements.   Institutions   with  a  greater   than  normal
        interest-rate  risk exposure (as defined) must take a deduction from the
        total capital  available to meet their  risk-based  capital  requirement
        equal to half the difference  between the institution's  actual measured
        exposure and a defined normal level of exposure.

        Quantitative  measures  established  by  regulation  to  ensure  capital
        adequacy  require the Association to maintain minimum amounts and ratios
        (set forth in the following table below) of total and Tier 1 capital (as
        defined in the regulation),  to risk-weighted assests (as defined),  and
        of tangible and Tier 1 capital (as defined) to adjusted total assets (as
        defined).  Management  believes,  as of  September  30,  1996,  that the
        Association  meets all of capital  adequacy  requirements to which it is
        subject.
                                       32
<PAGE>
                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 14.Regulatory Matters - (continued)

        As of September 30, 1996 and 1995, the most recent notification from the
        OTS categorized the Association as well capitalized under the regulatory
        framework  for  prompt  corrective  action.  To be  categorized  as well
        capitalized the Association must maintain minimum total risk-based, Tier
        1 risk-based,  Tier 1 leverage  ratios as set forth in the table.  There
        are no  conditions  or events since that  notification  that  management
        believes have changed the Association's category.

        The Association's actual regulatory capital amounts,  with reconcilation
        to the Company's  capital  investment in the  Association  determined in
        accordance with generally  accepted  accounting  principles  (GAAP), and
        ratios as of  September  30, 1996,  are also  presented in the table (in
        thousands).
<TABLE>
<CAPTION>
                                                                    For Capital       Prompt Corrective
                                                  Actual           Adequacy Purposes  Action Provision
                                          ----------------------  ------------------  ----------------
                                            Amount      Percent    Amount   Percent   Amount    Percent        
                                            ------      -------    ------   -------   ------    -------        
<S>                                       <C>             <C>    <C>          <C>   <C>         <C>  
        GAAP capital                      $  10,643      
        Less: Unrealized gains on debt                   
           securities held for sale            (238)     
                                                         
        Excess mortgage servicing rights         (1)    
                                            -------
        Tangible capital and ratio                                                                              
           to adjusted total assest       $  10,404       14.9%  $    1,046   1.50%
                                            -------       ----       ------   ----
        Tier 1 (Core) capital and ratio                  
          to adjust total assets          $  10,404       14.9%  $    2,092   3.0%  $    3,487   5.0%
                                            -------       ----       ------  ----        -----   ---
        Tier 1 capital and ratio                         
          to risk-weighted assets         $  10,404       30.5%  $    1,366   4.0%  $    2,049   6.0%
                                            -------       ----       ------  ----        -----   ---
        Tier 2 capital, allowance                        
          for loan losses                       430      
                                            -------
       Total risk-based capital and                     
          ratio to risk-weighted assets   $  10,834       31.7%  $    2,733   8.0%  $    3,416  10.0%
                                            =======       ====       ======   ===        =====  ====
</TABLE>                                                           
        The Association may not declare or pay cash dividends to the Company if
        the effect would be to reduce GAAP capital below applicable  regulatory
        capital  requirements or if such declaration and payment would otherwise
        violate regulatory requirements.

Note 15.Effects of New Financial Accounting Standards

        In October 1995, the Financial  Accounting  Standards  Board issued SFAS
        No. 123,  "Accounting  for  Stock-Based  Compensation".  This  statement
        establishes financial accounting and reporting standards for stock-based
        employees  compensation plans. SFAS 123 encourages all entities to adopt
        the  "fair  value  based  method"  of  accounting   for  employee  stock
        compensation plans.  However, SFAS 123 also allows an entity to continue
        to measure compensation cost under such plans using the "intrinsic value
        based method." Under the fair value based method,  compensation  cost is
        measured  at the  grant  date  based on the  value of the  award  and is
        recognized  over the service period,  usually the vesting  period.  Fair
        value is  determined  using an option  pricing  model  that  takes  into
        account the stock  price at the grant  date,  the  exercise  price,  the
        expected life of the option,  the volatility of the underlying stock and
        the expected  dividends on it, and the risk-free  interest rate over the
        expected  life of the option.  Under the  intrinsic  value based method,
        compensation  cost is the excess,  if any, of the quoted market price of
        the stock at the grant date or other measurement date over the amount an
        employee  must pay to  acquire  the  stock.  Most  stock  plans  have no
        intrinsic  value  at  date  of  grant,  and  under  previous  accounting
        guidance, no compensation cost was to be recognized.

        The  accounting   requirements  of  this  statement  are  effective  for
        transactions  entered into in fiscal years that begin after December 15,
        1995. The Company intends to continue  accounting for compensation  cost
        under the  intrinsic  value  based  method  and will  provide  pro forma
        disclosures  for all awards  granted  after  September  30,  1996.  Such
        disclosures  include  net income and  earnings  per share as if the fair
        value based method of accounting has been applied.

                                       33
<PAGE>
                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 15.Effects of New Financial Accounting Standards - (continued)

        In June 1996, the Financial  Accounting  Standards Board issued SFAS No.
        125,  "Accounting  for Transfers  and Servicing of Financial  Assets and
        Extinguishments  of Liabilities."  SFAS 125 amends portions of SFAS 115,
        amends  and  extends  to  all  servicing   assets  and  liabilities  the
        accounting  standards for mortgage  servicing rights now in SFAS 65, and
        supercedes  SFAS 122. The statement  provides  consistent  standards for
        distinguishing  transfers  of  financial  assets  that  are  sales  from
        transfers that are secured  borrowings.  Those  standards are based upon
        consistent  application of a financial  components approach that focuses
        on  control.   The  statement  also  defines  accounting  treatment  for
        servicing  assets and other  retained  interest  in the assets  that are
        transferred.  SFAS 125 is  effective  for  transfers  and  servicing  of
        financial  assets and  extinguishments  of liabilities  occurring  after
        December 31, 1996, and is to be applied  prospectively.  The adoption of
        the statement is not expected to have a material effect on the Company's
        financial condition or results of operations.

Note 16.Parent Only Condensed Financial Information

        This  information  should be read in conjunction with the other Notes to
        Consolidated Financial Statements.  On March 23, 1996 the Company issued
        $7.6  million  of  common  stock  and  contributed  one-half  of the net
        proceeds to the  Association  as equity  capital.  Shareholders'  equity
        differs from the consolidated statements by the amount of consolidating
        ESOP adjustments.

                        STATEMENT OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
                                                   September 30,      September 30,
       ASSETS                                          1996               1995
                                                   -----------        -----------
<S>                                                <C>                <C>         
        Cash and cash equivalents                  $    61,525        $     48,790
        Investment in Association subsidiary        10,642,889          10,588,338
        Loan to Association subsidiary               1,725,000           3,100,000
        Loan to Association ESOP                       609,813             690,472
        Tax refund receivable                           33,235                   -
                                                    ----------          ----------
                        Total                      $13,072,462        $ 14,427,600
                                                    ==========          ==========
       LIABILITIES AND SHAREHOLDERS EQUITY
        Other liabilities                          $    70,210        $       160
        Shareholders' equity                        13,002,252         14,427,440
                                                    ----------          ----------
                        Total                      $13,072,462        $14,427,600
                                                    ==========          ==========
</TABLE>
                              STATEMENT OF INCOME
<TABLE>
<CAPTION>
                                                     For the
                                                    Year Ended     From inception to
                                                   September 30,      September 30,
       Interest from:                                  1996               1995
                                                   -----------        -----------
<S>                                                 <C>                <C>       
        Association's subsidiary loan               $  151,949         $  103,063
        Association's ESOP loan                         54,101             32,008
        Dividends from Association subsidiary          200,000                  -
                                                       -------            ------- 
                        Total income                   406,050            135,071
       Expenses:
        Non-interest expenses                          234,402             68,732
        Income tax (refund) expense                    (11,679)            26,895
                                                       -------            ------- 
                        Total expenses                 222,723             95,627
                                                       -------            ------- 

       Income before equity in undistributed 
        net income of
        Association subsidiary                         183,327             39,444
       Equity in undistributed net income of
        Association subsidiary                         577,217            788,110
                                                       -------            ------- 
       Net income                                   $  760,544         $  827,554
                                                       =======            =======
</TABLE>
                                       34
<PAGE>

                MISSISSIPPI VIEW HOLDING COMPANY AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)

Note 16.Parent Only Condensed Financial Information - (continued)

STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                 For the       
                                                                Year Ended      From inception to
                                                               September 30,      September 30,
                                                                    1996               1995
                                                                ----------         ----------
<S>                                                             <C>                <C>       
        Net income                                              $  760,544         $  827,554
        Adjustments:                                            
            Equity distribution net of Association subsidiary     (577,217)          (788,110)
            ESOP fair value adjustment, net of taxes                15,426                  -
            Dividend from Association subsidiary                  (200,000)                 -
            Increase in income tax refund receivable               (33,235)                 -
            (Decrease) increase in accrued income taxes               (160)               160
            Increase in other liabilities                           70,210                  -
                                                                  --------           --------
        Net cash provided by operations                             35,568             39,604
                                                                  --------           --------

                                                                
        Cash flows from investing activities:                                                                                  
            Loan to subsidiary                                   1,375,000         (3,100,000)
            Dividend from Association subsidiary                   200,000                  -
            Purchase of treasury stock                          (1,536,689)                 -
            Purchase of subsidiary stock                                 -         (3,796,112)
                                                                  --------           --------
        Net cash used in investing activities                       38,311         (6,896,112)
                                                                  --------           --------
                                                                
        Cash flows from financing activities:                                                                                   
            Proceeds from sale of stock                                  -          7,595,770
            Payment of cash dividend                              (141,804)                 -
            Purchase of ESOP shares                                 80,660           (690,472)
                                                                  --------           --------
        Net cash (used in) provided by financing activities        (61,144)         6,905,298
                                                                  --------           --------
        Increase in cash and cash equivalents                       12,735             48,790
                                                                
        Cash and cash equivalents                               
                                                                
            Beginning of year                                       48,790                  -
                                                                  --------           --------
            End of year                                         $   61,525         $   48,790
                                                                  ========           ========  
</TABLE>
                                                                
                                                                
                                       35                       
<PAGE>

                                OFFICE LOCATIONS

                        MISSISSIPPI VIEW HOLDING COMPANY
                                35 East Broadway
                          Little Falls, Minnesota 56345
                                 (320) 632-5461

                 COMMUNITY FEDERAL SAVINGS AND LOAN ASSOCIATION
                                 OF LITTLE FALLS
                                35 East Broadway
                          Little Falls, Minnesota 56345
                                 (320) 632-5461

             Board of Directors of Mississippi View Holding Company
                                       and
         Community Federal Savings and Loan Association of Little Falls

                               Andrew P. Revering
                              Chairman of the Board
                               (rotated annually)

          Neil Adamek                           Thomas J. Leiferman

       Wallace R. Mattock                       Gerald Peterson

                                   Peter Vogel

             Executive Officers of Mississippi View Holding Company
                                       and
          Community Federal Savings & Loan Association of Little Falls

                               Thomas J. Leiferman
                      President and Chief Executive Officer

        Larry D. Hartwig                        Mary Ann Karnowski
        Treasurer/Controller                    Secretary

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

    Corporate Counsel                           Independent Auditors
    Rosenmeier Anderson & Vogel                 Bertram Cooper & Co., LLP
    210 Second Street, N.E.                     110 Second Avenue, S.E.
    Little Falls, Minnesota   56345             Waseca, Minnesota  56093

    Special Counsel                             Transfer Agent and Registrar
    Malizia, Spidi, Sloane & Fisch, P.C.        Registrar and Transfer Company
    One Franklin Square                         10 Commerce Drive
    1301 K Street, N.W., Suite 700 East         Cranford, New Jersey  07016
    Washington D.C.  20005                      (908) 272-8511

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

The Company's  Annual Report for the year ended  September 30, 1996,  filed with
the  Securities  and Exchange  Commission  on Form 10-KSB is  available  without
charge upon written request. For a copy of the Form 10-KSB or any other investor
information, please write or call Larry D. Hartwig,  Treasurer/Controller at the
Company's Office in Little Falls, Minnesota.  The Annual Meeting of Shareholders
will be held on January 22, 1997, at 10:00 a.m. at the office of the Company.

                                       36