SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K


[ X ]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                 EXCHANGE ACT OF 1934 [ NO FEE REQUIRED]

                     For the fiscal year ended June 30, 1999

                                       OR

[   ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

          For the transition period from __________ to _______________

                          Commission File No.: 0-25666

                         Bank West Financial Corporation
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


                  Michigan                              38-3203447
         ---------------------------                 ----------------
        (State or other jurisdiction                 (I.R.S. Employer
      of incorporation or organization)           Identification Number)

          2185 Three Mile Road N.W.
           Grand Rapids, Michigan                         49544
  ----------------------------------------              ---------
  (Address of principal executive offices)              (Zip code)


       Registrant's telephone number, including area code: (616) 785-3400

   Securities registered pursuant to Section 12(b) of the Act: Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:
                    Common Stock (par value $.01 per share)
                    ---------------------------------------
                                (Title of Class)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [ X ]   No  [   ]

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


<PAGE>
Based upon the $9.19 per share closing price of the Registrant's common stock as
of September 20, 1999, the aggregate market value of the 1,849,958 shares of the
Registrant's  common stock deemed to be held by non-affiliates of the Registrant
was $17.0 million.  Although  directors and executive officers of the Registrant
and certain of its employee benefit plans were assumed to be "affiliates" of the
Registrant for purposes of this  calculation,  the  classification  is not to be
interpreted as an admission of such status.

Number of shares of Common Stock outstanding as of September 20, 1999: 2,521,059

                       DOCUMENTS INCORPORATED BY REFERENCE

        Listed below are the documents incorporated by reference and the Part of
the Form 10-K into which the  document  is  incorporated:  (1)  portions  of the
Annual Report to Stockholders  for the year ended June 30, 1999 are incorporated
into  Part II,  Items 5 through 8 of this Form  10-K;  and (2)  portions  of the
definitive  proxy  statement  for the 1999 Annual  Meeting of  Stockholders  are
incorporated into Part III, Items 10 through 13 of this Form 10-K.



<PAGE>
PART I.

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

General

        Bank  West  Financial   Corporation   (the   "Company")  is  a  Michigan
corporation  organized in December 1994 by Bank West ("Bank West" or the "Bank")
for the  purpose of  becoming a unitary  holding  company of the Bank.  The only
significant  assets  of the  Company  are the  capital  stock of the  Bank,  the
Company's loan to the Company's Employee Stock Ownership Plan (the "ESOP"),  and
the portion of the net proceeds  retained by the Company in connection  with the
conversion  of the Bank from the mutual to stock form of  organization  in March
1995 (the "Conversion").  The business and management of the Company consists of
the business and management of the Bank.

        Bank West is a Michigan-chartered stock savings bank that was originally
formed in 1887 as a Michigan-chartered mutual savings and loan association known
as West Side Building and Loan. In 1938, the Bank converted to a federal savings
association  known as West Side Federal Savings and Loan  Association.  The Bank
changed its name and became a  federally-chartered  mutual savings bank in 1993.
In March 1995, the Bank converted from a federally-chartered mutual savings bank
to a  federally-chartered  stock  savings  bank,  and in December  1997 the Bank
converted to a Michigan-chartered savings bank.

        Bank West conducts  business from three offices located in Grand Rapids,
Michigan.  At June 30,  1999,  the Company had $206.7  million of total  assets,
$184.1 million of total liabilities,  including $132.4 million of deposits,  and
$22.6 million of total stockholders' equity.

        Bank West is primarily  engaged in attracting  deposits from the general
public through its offices and using those and other available  sources of funds
to originate loans secured primarily by one- to four-family  residences  located
in the  western  Michigan  area.  Bank  West is a  community-  oriented  savings
institution  which  emphasizes  customer  service.  It  generally  has sought to
enhance its net income by, among other things, maintaining strong asset quality.
In pursuit  of these  goals,  Bank West has  adopted a  business  strategy  that
emphasizes  lending and deposit products and services  traditionally  offered by
savings  institutions.  In addition,  since April 1993,  the Bank has engaged in
mortgage  banking  activities by originating  (and since fiscal 1994 purchasing)
one- to four-family  residential loans for sale into the secondary  market.  The
implementation  of such  strategy has enabled the Bank to be  profitable  and to
exceed regulatory  capital  requirements.  At June 30, 1999, the Bank's ratio of
Tier 1 capital to average total assets was 10.4%, its ratio of Tier 1 capital to
risk- weighted assets was 17.6% and its ratio of total capital to  risk-weighted
assets was 18.0%. See "Regulation - The Bank - Regulatory Capital Requirements."

         During  April  1999,  the Board of  Directors  appointed  Ronald A. Van
Houten as interim Chief Executive Officer,  replacing Paul W. Sydloski.  Mr. Van
Houten was named  President and Chief  Executive  Officer,  removing the interim
status in June 1999.

                                        2
<PAGE>
        During  May 1999,  the Bank  went  through a  strategic  realignment  by
appointing  Louis  D.  Knooihuizen  as  Vice  President  of  the  newly  created
Commercial  Lending  Division.  In addition,  James A. Koessel,  the former Vice
President and Chief Lending Officer, was named Senior Vice President of Mortgage
Lending.  This division  includes  commercial  mortgage  lending and residential
mortgage lending,  while the Commercial Lending Division concentrates  primarily
on commercial loans not collateralized by mortgages.  The strategic  realignment
reflects the change in the focus of the Bank's business model and strategic plan
to  concentrate   greater  efforts  on  commercial   lending   activities  while
consolidating mortgage lending activities.

        Beginning  in  fiscal  1995,  the Bank  expanded  its loan  products  by
offering commercial loans and various types of consumer loans. At June 30, 1999,
there were $42.5 million in loans receivable outstanding for these loan products
compared to $29.4 million and $16.5 million  outstanding  for such loan products
at June 30, 1998 and 1997, respectively.  Of the $42.5 million at June 30, 1999,
$21.3 million consisted of home equity lines of credit and second mortgages. The
Bank expects its  commercial  and consumer  loan  products  will improve its net
interest margin and make the Bank more competitive in the marketplace.

        The Company's total nonperforming  assets, which consist of $1.3 million
of non-accruing loans 90 days or more delinquent and $310,000 of net real estate
owned,  totalled  $1.6  million or 1.09% of the net loan  portfolio  at June 30,
1999.  At the end of each of the last five fiscal  years,  the  Company's  total
nonperforming  assets did not exceed fiscal 1999 levels.  At June 30, 1999,  the
Company's  allowance for loan losses amounted to $480,000,  representing .33% of
the total loan portfolio and 38% of total  nonperforming loans at such date. See
"Asset Quality."

        The Bank is subject to examination and  comprehensive  regulation by the
Commissioner  of the  Financial  Institutions  Bureau of the  State of  Michigan
("Commissioner"  or  "Financial  Institutions  Bureau"),  which  is  the  Bank's
chartering  authority and primary  regulator.  The Bank is also regulated by the
Federal Deposit Insurance Corporation ("FDIC"), the administrator of the Savings
Association Insurance Fund ("SAIF"). The Bank also is subject to certain reserve
requirements established by the Board of Governors of the Federal Reserve System
("Federal Reserve Board" or "FRB") and is a member of the Federal Home Loan Bank
("FHLB") of  Indianapolis,  which is one of the 12 regional banks comprising the
FHLB System.

        This Form 10-K includes  statements that may constitute  forward-looking
statements,  usually  containing  the words  "believe,"  "estimate,"  "project,"
"expect," "intend" or similar expressions. These statements are made pursuant to
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995. Forward-looking statements inherently involve risks and uncertainties that
could cause  actual  results to differ  materially  from those  reflected in the
forward-looking statements. Factors that could cause future results to vary from
current expectations include, but are not limited to, the following:  changes in
economic  conditions  (both  generally and more  specifically  in the markets in
which Bank West  operates);  changes in  interest  rates,  deposit  flows,  loan
demand,  real estate values and competition;  changes in accounting  principles,
government  legislation and  regulation;  and changes in other risks detailed in
this Form 10-K and in the Company's other Securities and Exchange

                                        3
<PAGE>
Commission  filings.  Readers are cautioned not to place undue reliance on these
forward-looking  statements,  which reflect management's analysis only as of the
date hereof.  The Company  undertakes  no  obligation  to publicly  revise these
forward-looking  statements to reflect events or circumstances  that arise after
the date hereof.

        The Company's  executive office is located at 2185 Three Mile Road N.W.,
Grand Rapids, Michigan 49544, and its telephone number is (616) 785-3400.

Market Area

        The Company's market area consists of western Michigan, with its primary
market  area   consisting  of  Grand  Rapids,   Michigan  and  the   surrounding
metropolitan  statistical area. Grand Rapids is located in west central Michigan
on the Grand River,  the state's longest river.  With a population of 189,000 as
of 1990,  the city is the 83rd  largest  in the  United  States  and the  second
largest in Michigan  after  Detroit.  Grand  Rapids is part of the Grand  Rapids
Metropolitan  Statistical Area with a population of 1,024,000 people as of 1997,
a 48.8%  increase from the 1990 census.  Per capita  income has increased  10.3%
from  $18,000 in 1990 to $19,851 in 1997.  Major  industries  include  furniture
manufacture, metal fabrication,  medical supplies, plastics, footwear, processed
foods, agricultural products,  appliance manufacture,  and health care services.
Major  employers in the area include  Meijer,  Inc.,  Steelcase,  General Motors
Corp., Amway Corporation and Spectrum Health.

Lending Activities

        Loan Portfolio  Composition.  At June 30, 1999, the Company's total loan
portfolio,  including  loans held for sale but before  net  items,  amounted  to
$156.7 million. The net loan portfolio,  excluding loans held for sale, amounted
to $145.2  million at June 30,  1999,  representing  approximately  70.2% of the
Company's  $206.7 million of total assets at that date.  The lending  activities
are conducted through Bank West, and the principal lending activity of Bank West
is the origination of one- to four-family  residential  loans. The Bank has also
purchased such loans to supplement its loan originations. At June 30, 1999, one-
to four-family residential loans amounted to $87.6 million or 55.9% of the total
loan  portfolio,  including  loans held for sale. To a lesser  extent,  the Bank
originates  residential  construction  and land development  loans,  home equity
lines of credit, second mortgages,  commercial and consumer loans.  Construction
and land  development  loans  amounted  to $26.6  million or 17.0% of the Bank's
total loan  portfolio,  home equity lines of credit amounted to $10.5 million or
6.7% of the total loan portfolio, and second mortgages amounted to $10.8 million
or 6.9%, of the total loan portfolio, including loans held for sale. At June 30,
1999,  commercial  mortgages  amounted  to $15.5  million  or  9.9%,  commercial
non-mortgages  amounted to $3.8 million or 2.4%,  and consumer loans amounted to
$1.8  million or 1.2%,  of the total loan  portfolio,  including  loans held for
sale.

                                        4
<PAGE>
               The  following  table sets forth the  composition  of Bank West's
loan portfolio by type of loan at the dates indicated.



<TABLE>
<CAPTION>
                                                                                   June 30,
                                          ------------------------------------------------------------------------------------------
                                                   1999                    1998                    1997                    1996
                                          -------------------     ------------------      ------------------       -----------------
                                           Amount        %         Amount         %       Amount         %         Amount        %
                                          -------       ----      -------       ----      -------       ----       -------     ----
                                                                             (Dollars In Thousands)
<S>                                      <C>            <C>       <C>           <C>       <C>           <C>        <C>         <C>
Real estate loans:(1)
  One- to four-family residential        $87,618        55.9%     $80,554       59.5%     $83,065       68.6%      $85,034     80.2%
  Construction and land development       26,585        17.0       25,407       18.8       21,560       17.8        14,074     13.3
  Commercial mortgages                    15,457         9.9        6,485        4.8        2,764        2.3         1,194      1.1
  Home equity lines of credit             10,513         6.7        9,877        7.3        6,371        5.2         2,214      2.1
  Second mortgages                        10,820         6.9        8,148        6.0        4,253        3.5         1,927      1.8
Consumer loans                             1,849         1.2        1,666        1.2        1,081         .9           622      0.6
Commercial non-mortgage                    3,824         2.4        3,253        2.4        2,032        1.7         1,010      0.9
                                         -------        ----      -------       ----      -------       ----       -------     ----
    Total loans                          156,666       100.0%     135,390      100.0%     121,126      100.0%      106,075    100.0%
                                                       =====                   =====                   =====                  =====
Less:
  Loans held for sale                      2,381                    8,157                   2,231                    4,297
  Loans in process                         9,001                    8,248                   7,169                    5,828
  Deferred fees and discounts              (402)                     (211)                    (30)                      47
  Allowance for loan losses                  480                      290                     226                      166
                                        --------                   -------               ---------                  -------
    Net loans                           $145,206                 $118,906                $111,530                  $95,737
                                        ========                  =======                 =======                   ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                         June 30,
                                                -----------------------
                                                           1995
                                                -----------------------
                                                 Amount              %
                                                -------            ----
<S>                                             <C>                <C>
Real estate loans:(1)
  One- to four-family residential               $92,673            91.7%
  Construction and land development               6,146             6.1
  Commercial mortgages                               90              .1
  Home equity lines of credit                     1,453             1.4
  Second mortgages                                  683             0.7
Consumer loans                                       30              --
Commercial non-mortgage                              --              --
                                                -------           -----
    Total loans                                 101,075           100.0%
                                                                  =====
Less:
  Loans held for sale                             2,746
  Loans in process                                2,290
  Deferred fees and discounts                        95
  Allowance for loan losses                         108
                                                -------
    Net loans                                   $95,836
                                                =======
</TABLE>
-------------------------

(1)  Includes loans held for sale.

                                        5
<PAGE>
        Contractual  Maturities.  The  following  table sets forth the scheduled
contractual  maturities  of Bank West's  loans at June 30, 1999.  Demand  loans,
loans  having no stated  schedule  of  repayments  and no stated  maturity,  and
overdraft  loans are reported as due in one year or less.  The amounts shown for
each period do not take into  account  loan  prepayments  but do reflect  normal
amortization.
<TABLE>
<CAPTION>
                                                   One- to        Construction
                                                 Four-Family        and Land        Commercial       Home        Second
                                                 Residential       Development       Mortgages       Equity      Mortgages
                                               -------------     ---------------   --------------   --------   ------------
                                                                                 (In Thousands)
<S>                                                <C>                <C>              <C>         <C>             <C>
Amounts due after June 30, 1999 in:
   One year or less                                 $   317           $11,999          $2,282      $     --        $    257
   After one year through two years                   9,170               625           5,254           257              29
   After two years through three years                2,267             1,260             340           208              49
   After three years through five years                 847                --           7,581         2,096           2,993
   After five years through ten years                42,073            11,410              --         7,952           2,137
   After ten years through fifteen years              8,970                --              --            --           4,414
   After fifteen years                               23,974             1,291              --            --             941
                                                    -------           -------         -------       -------         -------
    Total(1)                                        $87,618           $26,585         $15,457       $10,513         $10,820
                                                    =======           =======         =======       =======         =======
<CAPTION>
                                                                    Commercial
                                                    Consumer        Non-Mortgage           Total
                                                   ---------       -------------          ---------
<S>                                                 <C>                  <C>              <C>
Amounts due after June 30, 1999 in:
   One year or less                                 $    43              $1,970           $ 16,868
   After one year through two years                     245                 400             15,980
   After two years through three years                  421                  --              4,545
   After three years through five years               1,140                 370             15,027
   After five years through ten years                    --               1,022             64,594
   After ten years through fifteen years                 --                  62             13,446
   After fifteen years                                   --                  --             26,206
                                                    -------            --------           --------
    Total(1)                                        $ 1,849            $  3,824           $156,666
                                                    =======            ========           ========
</TABLE>
-----------------

(1)  Gross of loans in process,  deferred fees and discounts,  and allowance for
     loan losses.
<PAGE>
    The following  table sets forth the dollar  amount of all loans,  before net
items, due after one year from June 30, 1999, based on the scheduled contractual
maturities  shown in the preceding  table,  which have fixed  interest  rates or
which have floating or adjustable interest rates.
<TABLE>
<CAPTION>
                                                          Floating or
                                            Fixed-Rate  Adjustable-Rate    Total
                                            ----------  ---------------    -----
                                                        (In Thousands)
<S>                                          <C>           <C>          <C>
One- to four-family residential              $ 68,467      $18,834      $ 87,301
Construction and land development              14,370          216        14,586
Commercial mortgages                            7,135        6,040        13,175
Home equity                                      --         10,513        10,513
Second mortgages                               10,563         --          10,563
Consumer                                        1,764           42         1,806
Commercial non-mortgage                         1,120          734         1,854
                                             --------      -------      --------
  Total                                      $103,419      $36,379      $139,798
                                             ========      =======      ========
</TABLE>


                                        6

<PAGE>
    Scheduled  contractual  maturities of loans do not  necessarily  reflect the
actual term of Bank West's  portfolio.  The  average  life of mortgage  loans is
substantially   less  than  their  actual  contractual  terms  because  of  loan
prepayments  and  enforcement of due-on-sale  clauses,  which give Bank West the
right to declare a loan  immediately  due and payable in the event,  among other
things,  that the borrower  sells the real property  subject to the mortgage and
the loan is not repaid.  The average  life of mortgage  loans tends to increase,
however, when current mortgage loan rates substantially exceed rates on existing
mortgage loans and,  conversely,  decrease when rates on existing mortgage loans
substantially exceed current mortgage loan rates.

    Origination, Purchase and Sale of Loans. The lending activities of Bank West
are subject to the written,  non-discriminatory  underwriting standards and loan
origination  procedures  established  by Bank  West's  Board  of  Directors  and
management.  Loan  originations  are  obtained  through  a variety  of  sources,
including referrals from real estate brokers, developers,  builders and existing
customers.  Written loan  applications are taken by lending  personnel,  and the
loan department  supervises the  procurement of credit  reports,  appraisals and
other  documentation  involved with a loan. Property valuations are performed by
independent  outside  appraisers.  Except for second  mortgages  and home equity
lines of credit,  as to which  only  title  searches  are  performed,  Bank West
generally  requires title insurance with respect to residential and construction
loans.  Hazard insurance is also required on all secured  property,  as is flood
insurance if the property is located within a designated flood zone.

    Bank West's  loan  approval  process is  intended  to assess the  borrower's
ability to repay the loan,  the  viability  of the loan and the  adequacy of the
value of the  property  that will secure the loan.  If the loan is to be sold to
one of the investors with which the Bank has an agreement,  as discussed  below,
the Bank's loan  underwriter  may approve the loan if the investor has delegated
such  authority  to  the  Bank.  If the  investor  requires  that  the  loan  be
underwritten  by it, the loan is submitted to the investor for its approval.  If
the loan is to be held in the  Bank's  portfolio,  it must also be  approved  by
individuals  granted  loan  approval  authority  if the  loan  does  not  exceed
$500,000.  If the loan is to be held in the portfolio  and exceeds  $500,000 but
does not exceed  $750,000,  it must be approved by the Loan Committee.  Loans in
excess of $750,000 must be approved by the Board of Directors.

    The Bank has entered into  agreements  with Freddie Mac and several  private
investors.  The Bank sells  loans with  servicing  retained  to Freddie Mac on a
mandatory  commitment basis. Each private investor has agreed to purchase loans,
together with servicing  thereof,  from the Bank on a loan-by-loan  best efforts
basis, provided that the investor is satisfied after its review of the loan that
the loan  complies  with its  established  underwriting  guidelines  and lending
requirements.  The Bank does not approve a loan to be originated for sale unless
either the loan has been satisfactorily  reviewed by one of the investors or the
loan is to be sold to an investor that has  delegated the approval  authority to
the Bank. The Bank makes certain  representations  and warranties  regarding the
loans it sells pursuant to the above  agreements,  primarily with respect to the
origination  of the loans,  the loan  documents and the existence of valid liens
and insurance  policies.  Any violation of these  representations and warranties
or,  with  respect  to  certain  of the  agreements,  the  existence  of certain
deficiencies in the loans during a specified period may result in the Bank being
required to

                                        7

<PAGE>
repurchase  the affected loans that were sold. As of June 30, 1999, the Bank has
not been  required  to  repurchase  any of the  loans  it has  sold.  The  above
agreements  may be terminated by either party at any time with respect to future
loan commitments, with varying amounts of termination notice required.

    To supplement its loan  originations,  the Bank has entered into third-party
origination agreements with a number of mortgage banking companies and financial
institutions.  Pursuant to such  agreements,  the third-party  originators  sell
first and second mortgage  loans,  together with the servicing  thereof,  to the
Bank on a loan-by-loan basis. The Bank is under no obligation to purchase any of
such loans,  and the Bank agrees to  purchase  specific  loans only after it has
determined  that  such loan  meets its  underwriting  standards  and,  for first
mortgages,  the standards of the secondary  market.  The third-party  originator
makes certain representations and warranties regarding the loans it sells to the
Bank. If there is a violation of the  representations  and warranties,  then the
Bank may require the  third-party  originator to repurchase the affected  loans.
The above  agreements may be terminated by either party at any time with respect
to future loan commitments.  Pursuant to the third-party origination agreements,
the Bank  purchased  $35.2  million of loans in the year ended June 30, 1999. Of
the loans purchased in fiscal 1999, $6.6 million  consisted of fixed-rate,  one-
to four-family  residential  loans,  $350,000  consisted of mortgage loans which
provide for periodic interest rate adjustments ("ARMs"),  $7.3 million consisted
of balloon  mortgages,  $16.7 million  consisted of construction  loans, part of
which were included in loans in process at June 30, 1999, $3.9 million consisted
of fixed-rate  second  mortgages and $354,000  consisted of  variable-rate  home
equity loans.  Most of the one- to four-family  loans purchased by the Bank were
for resale, whereas the purchased construction,  home equity and second mortgage
loans were for portfolio.

    The Bank sold $41.6  million,  $45.0  million and $32.9  million of loans in
fiscal 1999, 1998 and 1997,  respectively,  representing 41.9%, 39.1% and 42.5%,
respectively, of total residential first mortgage loans originated and purchased
in such periods. Loan originations and purchases were at record levels in fiscal
1999,  as  greater  emphasis  was  placed  on  originating   ten-year   balloon,
residential  construction,  commercial  and various types of consumer  loans for
portfolio  instead of  concentrating  primarily on residential  mortgage banking
activities.  In addition,  lower prevailing  market interest rates during fiscal
1999  compared to the  previous  fiscal  years  increased  the dollar  amount of
refinances.  Total loan originations and purchases were $125.8 million in fiscal
1999  compared  to $115.0  million  and $77.4  million in fiscal  1998 and 1997,
respectively.



                                        8

<PAGE>
    The following table shows total loans originated, purchased, sold and repaid
during the periods indicated, including in each case loans held for sale.
<TABLE>
<CAPTION>
                                                       Year Ended June 30,
                                             -----------------------------------
                                               1999          1998         1997
                                             --------     ---------      -------
                                                        (In Thousands)
<S>                                          <C>          <C>            <C>
Loan originations:
  One- to four-family residential:
    Adjustable-rate                          $     91     $   1,054      $ 9,290
    Fixed-rate                                 29,648        32,669       13,036
    Balloon                                    18,950        11,986        1,854
  Construction and land development:
    Adjustable-rate                             9,029         9,565       14,758
    Fixed-rate                                    153           632          937
    Balloon                                    11,481         8,105          533
  Commercial mortgages                         11,053         5,433        2,002
  Consumer loans                                1,215         2,078        1,006
  Home equity loans                             2,644         3,383        5,565
  Second mortgages                              4,625         5,043        4,194
  Commercial non-mortgage                       1,711         1,919        2,315
                                             --------     ---------      -------
      Total loan originations                  90,600        81,867       55,490
Loans purchased:
   Second mortgages                             3,850         2,776         --
   Home equity loans                              354           617         --
   One- to four-family residential             30,963        29,717       21,892
                                             --------     ---------      -------
     Total loans originated
      and purchased                           125,767       114,977       77,382
                                             --------     ---------      -------

Sales and loan principal repayments:
  Carrying value of loans sold                 34,463        44,320       32,416
  Loan principal repayments                    70,028        56,393       29,915
                                             --------     ---------      -------
    Total loans sold and
      principal repayments                    104,491       100,713       62,331
                                             --------     ---------      -------
Increase (decrease) due to other
  items, net (1)                                5,024        (6,888)         742
                                             --------     ---------      -------
Net increase (decrease) in
  loan portfolio, net                        $ 26,300     $   7,376      $15,793
                                             ========     =========      =======
</TABLE>
----------------------

(1)  Other  items  consist of loans in  process,  deferred  fees and  discounts,
     allowance for loan losses and loans held for sale.

                                        9

<PAGE>
    Real Estate Lending Standards and Underwriting Policies. Effective March 19,
1993,   all  financial   institutions   were  required  to  adopt  and  maintain
comprehensive written real estate lending policies that are consistent with safe
and sound banking practices.  These lending policies must reflect  consideration
of the Interagency  Guidelines for Real Estate Lending  Policies  adopted by the
federal  banking  agencies in December 1992  ("Guidelines").  The Guidelines set
forth uniform regulations  prescribing  standards for real estate lending.  Real
estate  lending is defined as extensions of credit secured by liens on interests
in real  estate or made for the  purpose of  financing  the  constructions  of a
building or other improvements to real estate,  regardless of whether a lien has
been taken on the property.

    The policies must address  certain lending  considerations  set forth in the
Guidelines,   including   loan-to-value   ("LTV")  limits,  loan  administration
procedures,  underwriting  standards,  portfolio  diversification  standards and
requirements for documentation, approval and reporting. These policies must also
be  appropriate to the size of the  institution  and the nature and scope of its
operations,  and must be reviewed  and  approved by the  institution's  board of
directors at least annually.  The LTV ratio framework,  with the LTV ratio being
the total  amount of credit to be  extended  divided by the  appraised  value or
purchase  price of the  property at the time the credit is  originated,  must be
established  for each  category of real estate loans.  If not a first lien,  the
lender must combine all senior liens when calculating this ratio.

    Certain institutions can make real estate loans that do not conform with the
established  LTV ratio  limits up to 100% of the  institution's  total  capital.
Within  this  aggregate  limit,  total loans for all  commercial,  agricultural,
multi-family and other non-one-to-four  family residential properties should not
exceed  30%  of  total  capital.   An  institution  will  come  under  increased
supervisory scrutiny as the total of such loans approaches these levels. Certain
loans are exempt from the LTV ratios  (e.g.,  those  guaranteed  by a government
agency,  loans to  facilitate  the sale of real  estate  owned,  loans  renewed,
refinanced or  restructured  by the original  lender(s) to the same  borrower(s)
where there is no advancement of new funds, etc.).

    Bank West is in compliance with the above standards.

    Although  Michigan-chartered  savings  institutions,  such as Bank West, are
permitted  to  originate  and  purchase  loans  secured by real  estate  located
throughout  the United  States,  Bank West's  present  lending is primarily done
within western  Michigan.  At least 50% of Bank West's total assets are required
to consist of one or more of the  following:  loans that were made to  purchase,
refinance,  construct,  improve or repair  domestic  residential  housing;  home
equity  loans;  cash and other highly  liquid  assets;  securities  backed by or
representing an interest in mortgages on domestic residential housing, including
single or  multi-family  dwellings,  or  manufactured  housing;  shares of stock
issued by any federal home loan bank;  50% of the dollar  amount of the domestic
residential housing mortgage loans, including single or multi-family  dwellings,
originated  by Bank  West and sold  within 90 days of  origination;  200% of the
dollar amount of loans and investments to purchase, construct or develop one- to
four-family  residences  the purchase price of which is, or is guaranteed to be,
not greater than 60% of the median value of comparable newly constructed one- to
four-family  residences  within the savings bank's local community;  200% of the
dollar amount of loans for the

                                       10
<PAGE>
purchase,  construction,  development  or  improvement  of domestic  residential
housing,  or loans to small  businesses,  located within a geographic  region or
neighborhood in which the credit needs of low and moderate income  residents are
not being adequately met at the time the relevant loan is made;  shares of stock
issued by Freddie Mac and Fannie Mae; loans for personal,  family,  household or
educational purposes;  and certain other miscellaneous assets. At June 30, 1999,
Bank West significantly exceeded these asset requirements.

    Bank West  requires  title  insurance  insuring the priority of its lien, as
well as fire and extended coverage casualty  insurance,  in order to protect the
properties  securing  its real estate  loans.  Borrowers  must also obtain flood
insurance  policies when the property is in a flood hazard area as designated by
the Federal Emergency  Management  Agency.  Borrowers may be required to advance
funds on a monthly basis together with each payment of principal and interest to
a mortgage loan account from which Bank West makes  disbursements for items such
as real estate taxes,  hazard insurance  premiums and private mortgage insurance
premiums as they become due.

    Loans on Existing  Residential  Properties.  The primary real estate lending
activity  of Bank West is the  origination  of loans  secured by first  mortgage
liens on one- to  four-family  residences.  At June 30, 1999,  $87.6  million or
55.9% of Bank West's  total loan  portfolio,  including  loans held for sale but
before net items, consisted of one- to four-family residential loans.

    The LTV ratio,  maturity and other provisions of the loans made by Bank West
generally  have  reflected  the  policy of making  less  than the  maximum  loan
permissible  under  applicable  regulations,  in  accordance  with sound lending
practices,  market  conditions and  underwriting  standards  established by Bank
West. Bank West's lending policies on one- to four-family  residential  mortgage
loans  generally  limit  the  maximum  LTV  ratio  to 97% of the  lesser  of the
appraised  value  or  purchase  price of the  property,  and  generally  one- to
four-family  residential  loans in excess of an 80% LTV  ratio  require  private
mortgage insurance.  Prior to November 1992, the Bank had required a minimum 25%
down payment  with respect to such loans.  For 95% loans,  the  borrower's  down
payment must come from the  borrower's  own funds and cannot be in the form of a
gift. A borrower's total debt-to-income ratio generally may not exceed 41%.

    Bank West offers fixed-rate one- to four-family residential loans with terms
up to 30 years.  Such loans are amortized on a monthly basis with  principal and
interest due each month and customarily include "due-on-sale" clauses, which are
provisions  giving  Bank West the right to  declare a loan  immediately  due and
payable  in the event  the  borrower  sells or  otherwise  disposes  of the real
property  subject to the mortgage or the loan is not repaid.  Bank West enforces
due-on-sale clauses to the extent permitted under applicable laws.

    Various  legislative  and  regulatory  changes  have  given  Bank  West  the
authority to originate and purchase  ARMs,  subject to certain  limitations.  At
June 30, 1999, one- to four-family residential ARMs represented $18.8 million or
12.0% of the total loan portfolio, including loans held for sale.

    Bank West's one- to four-family  residential ARMs are fully amortizing loans
with contractual  maturities of up to 30 years.  These loans have interest rates
which are scheduled to adjust annually

                                       11
<PAGE>
in  accordance  with a  designated  index  (which,  at present,  is the one-year
Treasury security index, plus a range from 2.75% to 2.875%). Bank West currently
offers a one-year  adjustable-rate mortgage with a 2% cap on the rate adjustment
per  period  and a 6% cap  rate  adjustment  over  the  life  of the  loan.  The
adjustable-rate loans in Bank West's loan portfolio are not convertible by their
terms into  fixed-rate  loans,  may be  assumable  and do not  produce  negative
amortization.

    The demand for adjustable-rate  loans in Bank West's primary market area has
been a function of several  factors,  including the level of interest rates, and
the  difference  between the interest  rates  offered for  fixed-rate  loans and
adjustable-rate  loans.  Due to the generally lower interest rates prevailing in
recent  periods and a relatively  flat U.S.  Treasury  yield  curve,  the market
demand for  adjustable-rate  loans has  decreased  as  consumer  preference  for
fixed-rate  loans has  increased.  During  fiscal 1999,  the Bank  experienced a
higher dollar amount of ARM prepayments and refinances  than  anticipated.  As a
result,  ARMs  represented  only 21.5% of total one- to four-family  residential
loan  originations in fiscal 1999 as compared to 40.5% and 59.9% for fiscal 1998
and 1997,  respectively.  To offset ARM  prepayments  and  refinances,  the Bank
originated various types of balloon mortgages for portfolio,  primarily ten-year
balloons.  At June 30, 1999, one- to four-family  balloons  represented 59.2% of
total one- to four-family residential loan originations as compared to 30.3% and
15.0% for fiscal 1998 and 1997, respectively.

    Construction and Land  Development  Loans. The Bank originates and purchases
loans to finance the  construction  of one- to  four-family  dwellings.  It also
originates  loans for acquisition  and development of unimproved  property to be
used for residential purposes. Construction loans represent loans to individuals
who have a contract with a builder for the  construction  of their  residence as
well as loans to builders of  residential  real  estate  property.  This type of
lending has increased in recent years and represents the second most significant
type  of  loan  for  the  Bank.  At the  end of  fiscal  1999,  1998  and  1997,
construction and land development loans amounted to $26.6 million, $25.4 million
and $21.6  million,  respectively,  or 17.0%,  18.8% and 17.8% of the total loan
portfolio  (including  loans held for sale),  respectively.  The Bank  purchased
$16.7  million of  construction  loans in fiscal  1999,  a portion of which were
included  in loans in  process at June 30,  1999.  The Bank  expects  additional
growth in its construction loan portfolio in fiscal 2000.

    Construction  loans extended  pursuant to a builder's line of credit are for
up to the Bank's  regulatory  lending  limit at the prime rate plus a  specified
percentage.  A first  mortgage on each home  constructed is given as collateral.
Interest payments only are due for six months,  after which the balance extended
is due. The Board of Directors has adopted a policy limiting  builder's lines of
credit to four mortgages  outstanding at any one time, for an aggregate  balance
not to exceed the Bank's  regulatory  lending  limit.  Loans to builders under a
line of credit are limited to 75% of appraised  value.  The maximum term for any
loan pursuant to a builder's line of credit is one year. Pursuant to Bank West's
Construction Loan Policy,  construction  loans to individuals are limited to 95%
of the appraised  value, or purchase  price,  whichever is less, of the security
property. Construction loans are offered with both fixed and adjustable interest
rates.  Appropriate  documentation  related to the construction  process must be
submitted by applicants  for  construction  loans.  Bank West has also adopted a
policy for "spec  loans" to builders for  construction  of homes not under sales
contract. For these loans, the permissible LTV limit is 75%. A maximum of two

                                       12
<PAGE>
"spec  loans" is  permitted  to any one builder to be  outstanding  at one time,
unless an exception is made based upon the financial stability of the builder.

    Construction  lending is generally  considered to involve a higher degree of
risk  than one- to  four-family  residential  lending.  Such  lending  typically
involves  large loan  balances  concentrated  in a single  borrower or groups of
related  borrowers for properties that are dependent upon sale of the home being
constructed.  Construction  financing also is generally  considered to involve a
higher   degree  of  risk  of  loss  than   long-term   financing  on  improved,
owner-occupied  real  estate  because  of  the  uncertainties  of  construction,
including the possibility of costs exceeding the initial  estimates and the need
to obtain a tenant or purchaser if the property will not be owner-occupied. Bank
West  generally  attempts to mitigate  the risks  associated  with  construction
lending by, among other  things,  lending  primarily  in its market area,  using
conservative  underwriting  guidelines,  and closely monitoring the construction
process.

    Home Equity Lines of Credit. Bank West established a home equity credit line
program in November 1993 to further  develop its second  mortgage  lending.  The
lines of credit are secured by one- to four-family  residences and are available
for any purpose.  Loans are offered at the prime rate up to prime plus 1.0%. The
minimum  credit line is $1,000,  and the maximum  line of credit is equal to (a)
either  95%  of  the  property's  appraised  value  or two  times  its  assessed
valuation, minus (b) any existing indebtedness secured by the property. The term
of the line of credit is seven  years,  with a minimum  monthly  payment  of the
greater of 1% of the unpaid  balance,  $100 or the  interest  due on the line of
credit.  At June 30,  1999,  $10.5  million  or 6.7% of the  Bank's  total  loan
portfolio, including loans held for sale but before net items, consisted of home
equity loans.  During fiscal 1999,  the Bank  purchased  $354,000 of home equity
lines of credit from various correspondent financial institutions.  The Bank had
unused  commitments  of $8.9  million of home equity lines of credit at June 30,
1999. Management expects additional growth in its home equity lines of credit in
fiscal 2000.

    Second  Mortgages.  At June 30,  1999,  $10.8  million or 6.9% of the Bank's
total  loan  portfolio,  including  loans  held for sale but  before  net items,
consisted  of second  mortgages.  The second  mortgages  are  secured by one- to
four-family residences, are for a fixed amount and a fixed term, and are made to
individuals  for a variety of purposes.  During fiscal 1999,  the Bank purchased
$3.9  million  of  second   mortgages  from  various   correspondent   financial
institutions.  The majority of second mortgages purchased during the fiscal year
were required to have private mortgage  insurance in place.  Management  expects
additional growth in its second mortgage loan portfolio in fiscal 2000.

    Commercial   Lending.   Bank  West's  commercial   mortgage  and  commercial
non-mortgage  loans  amounted to $15.5 million and $3.8  million,  respectively,
representing 9.9% and 2.4% of the total loan portfolio, including loans held for
sale but  before  net items at June 30,  1999.  The  origination  of  commercial
mortgages  significantly  increased  to $11.1  million in fiscal  1999 from $5.4
million in fiscal 1998, as the Bank placed greater  emphasis on these loans. The
expected  result of the previously  mentioned  strategic  realignment  that took
place during fiscal 1999 is to significantly  increase both commercial  mortgage
and non-mortgage loan volume in fiscal 2000.


                                       13
<PAGE>
    Commercial  real estate  lending  and  commercial  non-mortgage  lending are
generally considered to involve a higher degree of risk than one- to four-family
residential  lending.  Such  lending  typically  involves  large  loan  balances
concentrated in a single  borrower or groups of related  borrowers for rental or
business properties or for the operation of businesses. In addition, the payment
experience  on  loans  secured  by  income-producing   properties  is  typically
dependent  on the success of the  operation  of the related  project and thus is
typically  affected by adverse  conditions  in the real estate market and in the
economy.  The Bank  generally  attempts to mitigate  the risks  associated  with
commercial lending by, among other things,  lending primarily in its market area
and using low LTV ratios in the underwriting process.

    Consumer  Lending.  At June 30, 1999,  Bank West's  consumer loan  portfolio
amounted to $1.8 million or 1.2% of the total loan  portfolio,  including  loans
held for sale but before net items.  The  consumer  loan  portfolio  consists of
automobile,  boat,  home  improvement  and unsecured  loans.  The origination of
consumer  loans  decreased  to $1.2  million in fiscal 1999 from $2.1 million in
fiscal 1998,  primarily as a result of  increased  competition  for these loans.
Management  expects  to  continue  to offer  these  loans  but  does not  expect
significant growth in this category during fiscal 2000.

    Consumer loans  generally have shorter terms and higher  interest rates than
mortgage  loans but  generally  involve  more  credit risk than  mortgage  loans
because of the type and nature of the  collateral  and,  in certain  cases,  the
absence of collateral.  In addition,  consumer lending collections are dependent
on the borrower's continuing financial stability, and thus are more likely to be
adversely affected by job loss,  divorce,  illness and personal  bankruptcy.  In
many cases,  any repossessed  collateral for a defaulted  consumer loan will not
provide an adequate source of repayment of the outstanding  loan balance because
of its  depreciated  value or improper  repair and maintenance of the underlying
collateral.  The remaining deficiency often does not warrant further substantial
collection  efforts  against the borrower.  The Bank believes that the generally
higher yields earned on consumer loans  compensate for the increased credit risk
associated  with such loans and that consumer loans are important to its efforts
to increase rate sensitivity, shorten the average maturity of its loan portfolio
and provide a full range of services to its customers.

    Loan Fees and  Servicing  Income.  In addition to interest  earned on loans,
Bank West  receives  income  through the  servicing  of loans sold and loan fees
charged in connection with loan originations and  modifications,  late payments,
prepayments,  changes  of  property  ownership  and for  miscellaneous  services
related to its loans. Income from these activities varies from  period-to-period
with the volume and type of loans made.

    Loan  origination  fees or "points" are a percentage of the principal amount
of the  mortgage  loan and are charged to the  borrower in  connection  with the
origination of the loan. Bank West's loan  origination  fees and certain related
direct  loan  origination  costs are  offset,  and the  resulting  net amount is
deferred and amortized  against interest income over the contractual life of the
related  loans as an  adjustment  to the yield of such loans.  At June 30, 1999,
Bank West had  approximately  $402,000 of net loan costs which had been deferred
and are being recognized as income over the lives of the related loans.


                                       14
<PAGE>
    At June 30, 1999,  Bank West was  servicing  $27.2  million of loans for the
Freddie Mac.  During fiscal 1999,  the Bank  experienced a high dollar amount of
prepayments  or refinances of loans  serviced for Freddie Mac due to the decline
in overall  market  interest  rates.  However,  the  increase in overall  market
interest rates since June 30, 1999 has significantly  reduced the prepayments of
loans serviced for Freddie Mac.

Asset Quality

    Delinquent  Loans.  The following  table sets forth  information  concerning
delinquent  loans at June 30, 1999, in dollar amounts and as a percentage of the
Company's  total loan  portfolio.  The  amounts  presented  represent  the total
outstanding  principal  balances  of the related  loans,  rather than the actual
payment amounts which are past due.
<TABLE>
<CAPTION>
                                                                          June 30, 1999
                                        -------------------------------------------------------------------------------------
                                                 30-59                          60-89                    90 or More Days
                                              Days Overdue                   Days Overdue                    Overdue
                                        --------------------------       -----------------------      -----------------------
                                                          Percent                       Percent                      Percent
                                                          of Total                      of Total                     of Total
                                         Amount             Loans          Amount         Loans        Amount         Loans
                                        --------         ---------       --------       --------      --------      ---------
                                                                    (Dollars in Thousands)
<S>                                     <C>                  <C>          <C>                            <C>           <C>
One- to four-family
  residential real estate loans          $   217              .14%         $    7           --%         $  207           .13%
Construction and land
  development                                 --               --              --           --             930           .59
Home equity and second
  mortgages                                  195              .12              51          .03             136           .09
Consumer loans                                34              .02              --           --               6            --
Commercial loans(1)                          323              .21               2           --              --            --
                                             ---              ---           -----          ---          ------          ----
Total                                    $   769              .49%          $  60          .03%         $1,279           .81%
                                         =======              ===           =====          ===          ======          ====
</TABLE>
------------------
(1) Includes commercial mortgage and commercial non-mortgage loans.

    Non-Performing  Assets.  When a  borrower  fails  to  make a  required  loan
payment,  Bank West attempts to cause the default to be cured by contacting  the
borrower.  In  general,  contacts  are made after a payment is more than 15 days
past due, at which time a late charge is  assessed.  In most cases  defaults are
cured promptly. If the delinquency on a mortgage loan exceeds 90 days and is not
cured  through  Bank  West's  normal  collection  procedures,  or an  acceptable
arrangement  is not  worked  out with the  borrower,  Bank West  will  institute
measures to remedy the default, including commencing a foreclosure action or, in
special  circumstances,  accepting  from the  borrower a  voluntary  deed of the
secured  property in lieu of foreclosure with respect to mortgage loans or title
and possession of collateral in the case of consumer loans.

    If  foreclosure  is effected,  the property is sold at a sheriff's  sale. If
Bank West is the successful  bidder,  the acquired real estate  property is then
included in Bank West's "real estate owned" account

                                       15
<PAGE>
until it is sold. Under Michigan law, there is generally a six-month  redemption
period with respect to one- to four- family residential  properties during which
the borrower has the right to repurchase  the  property.  Bank West is permitted
under  federal  regulations  to finance  sales of real estate owned by "loans to
facilitate"  which may  involve  more  favorable  interest  rates and terms than
generally would be granted under Bank West's  underwriting  guidelines.  At June
30, 1999 and at the end of each of the prior four fiscal years, Bank West had no
loans to facilitate real estate owned.

    All  loans  are  reviewed  on  a  regular   basis  under  the  Bank's  asset
classification  policy.  Loans are placed on a non-accrual  status when the loan
becomes  90  days  delinquent,   in  which  case  the  accrual  of  interest  is
discontinued.  At June 30, 1999, the Bank had $1,279,000 of loans on non-accrual
status.

    The following  table sets forth the amounts of the  Company's  nonperforming
assets at the dates indicated,  all of which consisted of non-accruing,  one- to
four-family  residential loans 90 days or more delinquent and real estate owned.
At such dates, there were no troubled debt restructurings.
<TABLE>
<CAPTION>
                                                         June 30,
                                   ----------------------------------------------------
                                   1999         1998       1997      1996         1995
                                   ------      ------      ----      -----      -------
                                                 (Dollars in Thousands)
<S>                                <C>         <C>         <C>       <C>        <C>
Total nonperforming assets:
  Non-accruing loans 90 days
   or more delinquent              $1,279      $  841      $417      $  43      $   145
  Real estate owned                   310         192        20         --           --
                                   ------      ------      ----      -----      -------
    Total                          $1,589      $1,033      $437      $  43      $   145
                                   ======      ======      ====      =====      =======
Total nonperforming loans as
  a percentage of loans, net         1.09%        .71%      .37%       .04%         .15%
                                   ======      ======      ====      =====      =======
Total nonperforming assets as
  a percentage of total assets        .77%        .57%      .28%       .03%         .10%
                                   ======      ======      ====      =====      =======
</TABLE>
    The  $1.6  million  of  nonperforming  assets  at June  30,  1999  consisted
primarily of one- to four-family  residential loans and construction spec loans.
The increase in  nonperforming  assets at June 30, 1999 was attributable to spec
construction  mortgage loans.  However, due to the Bank's low LTV ratio required
for each of these  loans,  no  portion  of the  allowance  for loan  losses  was
allocated to any specific loans at June 30, 1999.

    The  Bank's  total  classified  assets  at June 30,  1999  amounted  to $1.6
million, which was classified as substandard.

    At June 30,  1998,  management  was not aware of any  additional  loans with
possible credit problems which caused it to have doubts as to the ability of the
borrowers to comply with present loan repayment  terms and which in management's
view may result in the  future  inclusion  of such  items in the  non-performing
asset categories.

                                       16
<PAGE>
    Allowance for Loan Losses.  At June 30, 1999, Bank West's allowance for loan
losses amounted to $480,000 or .31% of the total loan portfolio, including loans
held  for  sale.  Bank  West's  loan  portfolio  consists  primarily  of one- to
four-family  residential  loans and, to a lesser extent,  construction  and land
development  loans,  home  equity  lines  of  credit,   second  mortgage  loans,
commercial mortgage and non-mortgage loans and consumer loans. The Bank believes
that there are no  material  elements of risk in its loan  portfolio,  and total
nonperforming  assets have remained at low levels.  The classification of assets
policy is reviewed quarterly by the Board of Directors.  The loan loss allowance
is maintained by management  at a level  considered  adequate to cover  possible
losses that are currently  anticipated  based on past loss  experience,  general
economic conditions,  information about specific borrower situations,  and other
factors and estimates which are subject to change over time. Although management
believes   that  it  uses  the  best   information   available   to  make   such
determinations,  future  adjustments  to allowances  may be  necessary,  and net
income could be significantly  affected,  if circumstances  differ substantially
from the assumptions used in making the initial determinations.

    The following table summarizes  changes in the allowance for loan losses and
other selected statistics for the periods presented.
<TABLE>
<CAPTION>
                                                                At or For the
                                                             Year Ended June 30,
                                      ----------------------------------------------------------------
                                        1999          1998          1997         1996          1995
                                      --------      --------      --------      --------      --------
                                                        (Dollars in Thousands)
<S>                                   <C>           <C>           <C>           <C>           <C>
Total loans outstanding(1)            $156,666      $135,390      $121,126      $106,075      $101,075
                                      ========      ========      ========      ========      ========

Allowance for loan losses,
  beginning of period                      290      $    226      $    166      $    108      $     88
Provision for loan losses                  220            81            60            60            20
Charge-offs, net of recoveries(2)           30            17            --             2            --
                                      --------      --------      --------      --------      --------
Allowance for loan losses, end of
  period                              $    480      $    290      $    226      $    166      $    108
                                      ========      ========      ========      ========      ========
Allowance for loan losses as a
  percent of total loans
 outstanding                               .31%          .21%          .19%          .16%          .11%
                                      ========      ========      ========      ========      ========
Allowance for loan losses as a
  percent of total nonperforming
  loans                                   37.5%         34.5%         54.2%        386.0%         74.5%
                                      ========      ========      ========      ========      ========

</TABLE>
                                                        (Footnotes on next page)


                                       17

<PAGE>
--------------------

(1)  Includes loans held for sale.

(2)  Of the $30,000 in charge-offs in fiscal 1999, $16,000 related to commercial
     loans,  $12,000 related to home equity loans and $2,000 related to consumer
     loans.  Of the $17,000 in  charge-offs in fiscal 1998,  $13,000  related to
     construction  loans and $4,000  related to  consumer  loans.  The $2,000 in
     charge-offs  in fiscal 1996  related to  residential  loans.  There were no
     recoveries in fiscal 1999, 1998 and 1997.


    The following table presents the allocation of the allowance for loan losses
by type of loan at each of the dates indicated.
<TABLE>
<CAPTION>
                                                           June 30,
                                          ----------------------------------------------
                                                 1999                     1998
                                          --------------------     --------------------
                                                        Loan                     Loan
                                                      Category                 Category
                                           Amount       as a %      Amount       as a %
                                             of       of Total        of        of Total
                                          Allowance     Loans      Allowance      Loans
                                          ---------     -----      ---------      -----
                                                      (Dollars in Thousands)
<S>                                          <C>         <C>          <C>         <C>
One- to four-family residential              $ 52        55.9%        $ 38        59.5%
Construction and land
   development                                 70        17.0           19        18.8
Commercial(1)                                 176        12.3          110         7.2
Consumer(2)                                    91        14.8           89        14.5
Unallocated                                    91          --           34          --
                                             ----       -----         ----       -----
Total                                        $480       100.0%        $290       100.0%
                                             ====       =====         ====       =====
</TABLE>
------------------------

(1)  Includes commercial mortgages and commercial non-mortgage loans.
(2)  Includes home equity lines of credit,  second  mortgages and other consumer
     loans.

Mortgage-Backed Securities

    The Company has invested in a portfolio of  mortgage-backed  securities  and
related securities. Mortgage-backed securities (which also are known as mortgage
participation   certificates   or   pass-through   certificates)   represent   a
participation  interest  in a  pool  of  one-  to  four-family  or  multi-family
residential  mortgages,  the principal and interest payments on which are passed
from the mortgage originators, through intermediaries (generally U.S. government
agencies and  government  sponsored  enterprises)  that pool and  repackage  the
participation  interests in the form of  securities,  to  investors  such as the
Company. The Company's  mortgage-backed  securities are insured or guaranteed by
the  Fannie  Mae or the  Freddie  Mac.  Fannie  Mae and  Freddie  Mac are public
corporations chartered by

                                       18
<PAGE>
the U.S. government. These institutions guarantee the timely payment of interest
and the ultimate return of principal. Fannie Mae and Freddie Mac mortgage-backed
securities are not backed by the full faith and credit of the United States, but
because  Fannie Mae and Freddie Mac are U.S.  government-sponsored  enterprises,
these  securities are considered  high quality  investments  with minimal credit
risks.

    During fiscal 1999,  1998 and 1997,  the Company  purchased  $19.2  million,
$28.3 million and $15.7 million, respectively, of adjustable-rate collateralized
mortgage  obligations  ("CMOs").  The  CMOs  are not  classified  as  "high-risk
mortgage  securities" under OTS Thrift Bulletin 52 ("TB 52"). CMOs are a special
type of pass-through debt in which the stream of principal and interest payments
on the  underlying  mortgages or  mortgage-backed  securities  is used to create
classes with different  maturities  and, in some cases,  amortization  schedules
with each such class possessing different risk characteristics. The CMOs reprice
monthly  based on either the prime rate  index or the London  Interbank  Offered
Rate ("LIBOR") index.

    At June 30, 1999,  the Company's  mortgage-backed  securities  classified as
available  for sale had a market  value of $3.4  million  (gross of  $94,000  in
unrealized  losses),  while CMOs  classified  as available for sale had a market
value of $21.1  million  (gross of $355,000 in net  unrealized  losses).  During
April of 1999, CMO's were transferred from the held to maturity portfolio to the
available  for sale  portfolio  and trading  portfolio  in  accordance  with the
provisions of Statement of Financial  Accounting  Standards No. 133,  Accounting
for Derivative  Instruments  and Hedging  Activities to provide the Company with
additional flexibility in the management of its security portfolio as more fully
discussed in the  "Management's  Discussion and Analysis of Financial  Condition
and Results of  Operations"  section of the 1999 Annual Report to  Stockholders,
filed  as  Exhibit  13.1  hereto  (the  "1999  Annual  Report").  At the date of
transfer,  these  securities  had  an  amortized  cost  of  $14.1  million.  For
additional information relating to the Company's mortgage-backed  securities and
CMO's and the transfer of securities noted above, see Note 2 to the Consolidated
Financial Statements in the Annual Report.

    Mortgage-backed securities and CMOs generally yield less than the loans that
underlie such  securities,  because of the cost of payment  guarantees or credit
enhancements  that result in nominal  credit risk. In addition,  mortgage-backed
securities  are more liquid than  individual  mortgage  loans and may be used to
collateralize   obligations   of  the  Company.   In  general,   mortgage-backed
pass-through  securities are weighted at no more than 20% for risk-based capital
purposes,  compared  to an  assigned  risk  weighting  of 50% to 100% for  whole
residential  mortgage  loans. As a result,  these types of securities  allow the
Company to optimize regulatory capital to a greater extent than  non-securitized
whole loans.

    While mortgage-backed  securities carry a reduced credit risk as compared to
whole  loans,  such  securities  remain  subject to the risk that a  fluctuating
interest  rate  environment,  along with other  factors  such as the  geographic
distribution of the underlying  mortgage loans, may alter the prepayment rate of
such mortgage loans and so affect both the prepayment  speed, and value, of such
securities.  In contrast  to  mortgage-backed  securities  in which cash flow is
received  (and,  hence,  prepayment  risk is shared) pro rata by all  securities
holders,  the  cash  flows  from the  mortgages  or  mortgage-backed  securities
underlying CMOs are segmented and paid in accordance with a

                                       19
<PAGE>
predetermined  priority to investors holding various tranches of such securities
or obligations. A particular tranche of CMOs may therefore carry prepayment risk
that differs from that of both the underlying collateral and other tranches.

     The  following   table  sets  forth  the   composition   of  the  Company's
mortgage-backed and CMO securities portfolio at each of the dates indicated.

<TABLE>
<CAPTION>
                                                             June 30,
                                                 -------------------------------
                                                   1999       1998         1997
                                                 -------      ------     -------
                                                        (In Thousands)
<S>                                              <C>         <C>         <C>
Mortgage-backed and related securities:
  Mortgage-backed securities                     $ 3,408     $   807     $ 1,583
  Collateralized mortgage obligations             21,131      35,700      23,995
                                                 -------     -------     -------
    Total mortgage-backed securities             $24,539     $36,507     $25,578
                                                 =======     =======     =======
</TABLE>

    During the fourth  quarter of fiscal 1999, the Bank sold  approximately  $15
million of its CMO's that were lower  yielding and had longer average lives than
the bonds that  replaced  them,  taking  advantage of the recent rise in overall
market interest rates.

    Information regarding the contractual  maturities and weighted average yield
of the  Company's  mortgage-backed  securities  portfolio  at June  30,  1999 is
presented  below.  Due  to  repayments  of  the  underlying  loans,  the  actual
maturities of mortgage-backed  securities  generally are substantially less than
the scheduled maturities.
<TABLE>
<CAPTION>
                                                               Amounts at June 30, 1999 Which Mature In
                                ----------------------------------------------------------------------------------------
                                                                           After Five
                                One Year             After One to             to              Over 10
                                 or Less             Five Years             10 Years            Years              Total
                                 -------             ----------             --------            -----              -----
                                                                        (Dollars in Thousands)
<S>                                <C>                 <C>                  <C>              <C>                 <C>
Mortgage-backed
 securities                        $   --              $    --              $   --           $  3,408            $  3,408
Collateralized mortgage
  obligations                          --                   --                 848             20,283              21,131
                                   ------              -------                 ---             ------            --------
     Total                         $   --              $    --              $  848           $ 23,691            $24,539
                                   ------              =======              ======           ========            ========
Weighted average yield                --%                   --%               6.55%             5.95%               5.97%
                                   =====               =======              ======           =======             ========
</TABLE>

                                       20
<PAGE>
    The following table sets forth the purchases, sales and principal repayments
of  the  Company's  mortgage-backed  securities  and  CMOs  during  the  periods
indicated.
<TABLE>
<CAPTION>
                                                     At or For the
                                                   Year Ended June 30,
                                         ---------------------------------------
                                           1999            1998           1997
                                         --------       --------       ---------
                                                  (Dollars In Thousands)
<S>                                      <C>            <C>            <C>
Mortgage-backed securities
 and CMOs at beginning of period         $ 36,507       $ 25,578       $ 17, 342
Purchases                                  21,180         28,348         15,729
Repayment                                  (7,450)          (787)          (545)
Sales and calls                           (24,813)       (16,576)        (7,247)
Gain (loss) on sales                         (184)            55             12
Amortization of premiums, net                (243)           (80)           (11)
Change in net unrealized gain (loss)
   on securities available for sale          (458)           (31)           298
                                         --------       --------       --------
Mortgage-backed securities
  and CMOs at end of period              $ 24,539       $ 36,507       $ 25,578
                                         ========       ========       ========
Weighted average yield at
  end of period                              5.97%          6.68%          7.09%
                                         ========       ========       ========
</TABLE>

Securities

    The investment policy of the Company, which is established by the Investment
Committee  and  approved by the Board of  Directors,  is designed  primarily  to
provide a portfolio of high quality,  diversified  instruments  while seeking to
optimize net interest  income  within  acceptable  limits of interest rate risk,
credit risk and liquidity.

    Securities  (excluding  FHLB stock,  mortgage-backed  securities  and CMO's)
totalled $17.7 million or 8.6% of total assets at June 30, 1999. Such securities
consist of U.S. government  agencies,  corporate bonds,  taxable municipal bonds
and equity securities. At June 30, 1999, all of the securities are classified as
available for sale.

    On May 31, 1998, the Company  reclassified equity securities with a carrying
and fair value of $1.2 million from the trading  classification to the available
for sale classification to reflect  management's intent to realize the long-term
potential  underlying  such  securities  rather than to benefit from  short-term
changes in market values. The downturn in the U.S. equity markets, especially in
small cap stocks, had a negative impact on the Company's equity investments.  As
a result,  the Company  liquidated the majority of its equity  securities during
the fiscal year. Remaining equity securities have a carrying value of $60,000 at
June 30, 1999.

                                       21
<PAGE>
    The following table sets forth certain information relating to the Company's
securities  portfolio  (excluding  mortgage-backed  securities  and CMOs) at the
dates indicated.
<TABLE>
<CAPTION>
                                                        June 30,
                            ----------------------------------------------------------------
                                    1999                  1998                    1997
                            -------------------     -----------------     ------------------

                             Book        Market     Book       Market      Book      Market
                             Value       Value      Value      Value       Value     Value
                            -------     -------     ------     ------     ------     ------
                                                   (In Thousands)
<S>                         <C>         <C>         <C>        <C>        <C>        <C>
U.S. Government agency
securities                  $10,899     $10,774     $3,995     $3,992     $3,999     $3,979
Corporate bonds               3,286       3,278         --         --         --         --
Taxable municipal bonds       3,659       3,622         --         --         --         --
Equity securities                62          60      3,011      3,011         --         --
FHLB stock                    2,700       2,700      2,100      2,100      1,550      1,550
                            -------     -------     ------     ------     ------     ------
  Total                     $20,606     $20,434     $9,106     $9,103     $5,549     $5,529
                            =======     =======     ======     ======     ======     ======
</TABLE>
    The following table sets forth the amount of securities  which mature during
each of the periods  indicated and the weighted average yields for each range of
maturities at June 30, 1999.

<TABLE>
<CAPTION>
                                                              Amounts at June 30, 1999 Which Mature In
                                   -----------------------------------------------------------------------------------------------
                                                                         Over One                        Over Five
                                                    Weighted                Year          Weighted         Years          Weighted
                                   One Year          Average              Through          Average        Through          Average
                                   or Less           Yield               Five Years         Yield        Ten Years          Yield
                                   -------           -----               ----------         -----        ---------          -----
<S>                                 <C>                                     <C>              <C>         <C>
 Bonds and other debt securities:
      U.S. Government agency
        securities                  $   --               --%                $10,774          6.12%       $      --               --%
     Corporate bonds                    --               --                   3,278           6.52              --               --
     Taxable municipal bonds            --               --                     995           6.33           2,627             6.79
 Equity securities(1)                   --               --                      --             --              --               --
 FHLB stock(1)                          --               --                      --             --              --               --
</TABLE>
----------

(1)      As a member of the FHLB of  Indianapolis,  the  Company is  required to
         maintain its investment in FHLB stock which has no stated maturity. The
         average  yield on the FHLB stock was 7.89% in fiscal  1999.  Also,  the
         Company's equity securities have no stated maturity.

         At June 30, 1999, the Company did not have securities in any one issuer
which exceeded 10% of the Company's stockholders' equity.

                                       22
<PAGE>
Interest-Bearing Deposits

         At  June  30,  1999,  the  Company  had  interest-bearing  deposits  in
financial  institutions  of $7.6  million,  as compared to $1.8 million and $2.0
million   at  June  30,   1998  and  1997,   respectively.   The   increase   in
interest-bearing  deposits  from June 30, 1998 to June 30, 1999 is primarily due
to excess liquidity generated from loan prepayments.

Sources of Funds

         General.  Deposits  are the  primary  source of Bank  West's  funds for
lending  and other  investment  purposes.  In addition  to  deposits,  Bank West
derives funds from principal repayments on loans and mortgage-backed  securities
and from FHLB advances. Loan repayments are a relatively stable source of funds,
while  deposit  inflows and outflows  are  significantly  influenced  by general
interest  rates  and  money  market  conditions.  FHLB  advances  may be used to
compensate for reductions in the availability of funds from other sources.  They
may also be used on a longer-term basis for general business purposes.

         Deposits.  Bank West's deposits are attracted  principally  from within
Bank West's  primary  market area through the  offering of a broad  selection of
deposit  instruments,  including NOW accounts,  money market  accounts,  regular
savings accounts,  and term certificate  accounts.  Included among these deposit
products are individual  retirement  account  certificates of approximately $9.4
million or 7.1% of total deposits at June 30, 1999.  Deposit account terms vary,
with the principal  differences  being the minimum  balance  required,  the time
periods the funds must remain on deposit and the interest rate.

         The  large  variety  of  deposit  accounts  offered  by Bank  West  has
increased Bank West's  ability to retain  deposits and has allowed it to be more
competitive  in  obtaining  new  funds,  but has not  eliminated  the  threat of
disintermediation  (the flow of funds away from savings institutions into direct
investment vehicles such as government and corporate securities). During periods
of high interest rates,  deposit  accounts that have  adjustable  interest rates
have been more costly than traditional passbook accounts. In addition, Bank West
has become  increasingly  subject to short-term  fluctuations  in deposit flows.
Bank  West's  ability to attract and  maintain  deposits is affected by the rate
consciousness  of its  customers  and  their  willingness  to  move  funds  into
higher-yielding  accounts. Bank West's cost of funds has been, and will continue
to be, affected by money market conditions.


                                       23
<PAGE>
         The  following  table  shows the  distribution  of, and  certain  other
information  relating  to,  Bank West's  deposits by type of deposit,  as of the
dates indicated.
<TABLE>
<CAPTION>
                                                                          June 30,
                                           ----------------------------------------------------------------------
                                                    1999                    1998                     1997
                                           ---------------------   ---------------------    ---------------------

                                            Amount          %        Amount         %         Amount         %
                                           --------       -----      --------     -----     --------       -----
                                                                    (Dollars in Thousands)
<S>                                        <C>           <C>       <C>            <C>       <C>            <C>
Certificate accounts:
  2.00% - 3.99%                            $    169          .1%    $    --          --%    $      --          --%
  4.00% - 5.99%                              84,699        64.0      61,575        51.3       45,409        44.2
  6.00% - 7.99%                              10,090         7.6      27,601        23.0       32,230        31.3
  8.00% - 9.99%                                  25          --          23          --           21          --
                                           --------       -----      --------     -----     --------       -----
    Total certificate accounts               94,983        71.7      89,199        74.3       77,660        75.5
                                           --------       -----      --------     -----     --------       -----
Transaction accounts:
  Passbook and statement savings             19,268        14.6      19,335        16.1       17,388        16.9
  Money market accounts                       5,313         4.0         572          .5          786          .8
  NOW and noninterest-bearing accounts       12,837         9.7      10,873         9.1        7,028         6.8
                                           --------       -----      --------     -----     --------       -----
    Total transaction accounts               37,418        28.3      30,780        25.7       25,202        24.5
                                           --------       -----      --------     -----     --------       -----
    Total deposits                         $132,401       100.0%   $119,979       100.0%    $102,862       100.0%
                                           ========       =====      ========     =====     ========       =====
</TABLE>
         The  following  table  presents  the  average  balance  of each type of
deposit  and the  average  rate paid on each  type of  deposit  for the  periods
indicated.
<TABLE>
<CAPTION>
                                                      Year Ended June 30,
                            ---------------------------------------------------------------------------
                                    1999                      1998                       1997
                            -----------------------    ----------------------     ---------------------


                            Average       Average      Average       Average      Average      Average
                            Balance      Rate Paid     Balance      Rate Paid     Balance     Rate Paid
                            -------      ---------     -------      ---------     ------      ----------
                                                       (Dollars in Thousands)
<S>                         <C>             <C>        <C>             <C>        <C>            <C>
Passbook and
statement                   $ 19,465        3.14%      $ 18,808        3.61%      $17,247        3.61%
  savings accounts
Money market
accounts                      12,418        1.97          7,013        1.65         6,260        1.69
  and NOW accounts
Certificates of deposit       91,307        5.52         83,032        5.79        73,465        5.71
                            --------        ----       --------        ----       -------        ----
           Total            $123,190        4.79%      $108,853        5.15%      $96,972        5.08%
                            ========        ====       ========        ====       =======         ====
</TABLE>
<PAGE>
         Bank West  attempts  to control  the flow of  deposits  by pricing  its
accounts to remain generally  competitive  with other financial  institutions in
its market area, but does not  necessarily  seek to match the highest rates paid
by competing institutions. Bank West has generally not taken a position of price
leadership  in its  markets  unless  there  has been an  opportunity  to  market
longer-term deposits.


                                       24

<PAGE>
         The principal methods used by Bank West to attract deposits include the
offering of a wide variety of services and accounts, competitive interest rates,
convenient  office locations and cards that access deposits at Bank West through
automatic teller machines ("ATMs")  established by other banking  organizations.
Bank West uses  traditional  marketing  methods to  attract  new  customers  and
deposits, including mass media advertising and direct mailings.

         The  following   table  sets  forth  the   maturities  of  Bank  West's
certificates of deposit having principal amounts of $100,000 or more at June 30,
1999.

<TABLE>
<CAPTION>
Quarter Ending:                                                   Amounts
---------------                                                   -------
                                                              (In Thousands)
<S>                                                               <C>
September 30, 1999                                                $ 6,636
December 31, 1999                                                   5,863
March 31, 2000                                                      3,006
June 30, 2000                                                         949
After June 30, 2000                                                 4,436
                                                                  -------
  Total certificates of deposit with
    balances of $100,000 or more                                  $20,890
                                                                  =======

</TABLE>

         Borrowings. Bank West may obtain advances from the FHLB of Indianapolis
based upon the  security of the common stock it owns in that bank and certain of
its  residential  mortgage  loans,  investment  securities  and  mortgage-backed
securities,  provided certain  standards  related to credit worthiness have been
met. See  "Regulation - The Bank - Federal Home Loan Bank System." Such advances
are made pursuant to several credit programs, each of which has its own interest
rate and range of  maturities.  Such  advances are  generally  available to meet
seasonal  and other  withdrawals  of deposit  accounts  and to permit  increased
lending.  At June 30, 1999,  Bank West had $50 million of advances from the FHLB
of Indianapolis, $30 million of which represent putable advances which gives the
FHLB the option to convert the advance to an adjustable-rate  beginning one, two
or five years after the purchase date,  depending on the advance,  and quarterly
thereafter.  In addition, $20 million of adjustable-rate  advances mature during
fiscal 2000.  See Note 7 to the  Consolidated  Financial  Statements in the 1999
Annual Report for additional information. During fiscal 1999, 1998 and 1997, the
Bank utilized  additional  FHLB advances to fund loans and securities  growth as
well as mortgage banking activities.


                                       25
<PAGE>
         The following table sets forth certain information regarding borrowings
at or for the dates indicated:
<TABLE>
<CAPTION>
                                                                     At or for the Year Ended June 30,
                                                           --------------------------------------------------
                                                            1999                 1998                 1997
                                                            ----                 ----                 ----
                                                                        (Dollars in Thousands)
<S>                                                        <C>                  <C>                  <C>
FHLB advances:
  Average balance outstanding                              $46,686              $35,803              $22,433
  Maximum amount outstanding
    at any month-end during
    the period                                             $51,925              $38,000              $29,000
  Balance outstanding at end
    of period                                              $50,000              $37,000              $29,000
  Average interest rate
    during the period                                        5.11%                5.61%                5.46%
  Weighted average interest rate
    at end of period                                         5.22%                5.48%                5.84%
</TABLE>

Subsidiaries

         At June 30, 1999,  the Bank had one  wholly-owned  subsidiary,  Sunrise
Mortgage Corporation ("Sunrise"), which was formed in December 1997. Sunrise was
established to originate and purchase  non-conforming  mortgage loans, including
sub-prime mortgage loans for resale. Recently, management decided to discontinue
non-conforming  lending  through  Sunrise  due to the lower than  expected  loan
volume originated and purchased during the most recent fiscal year.

Competition

         Bank West faces significant competition both in attracting deposits and
in making loans. Some of the Bank's major competitors include Bank One, Comerica
Bank, Michigan National Bank, Old Kent Bank, Huntington Bank, and National City.
Its most direct  competition for deposits  historically has come from commercial
banks,  credit  unions and other  savings  institutions  located in its  primary
market area,  including  many large  financial  institutions  which have greater
financial and  marketing  resources  available to them.  In addition,  Bank West
faces significant  competition for investors' funds from short-term money market
mutual  funds and issuers of  corporate  and  government  securities.  Bank West
competes for deposits  principally  by offering  depositors a variety of deposit
programs.  Bank  West does not rely upon any  individual  group or entity  for a
material  portion of its deposits.  The Bank  estimates that its market share of
total deposits in Kent County, Michigan is approximately 1%.

         Bank West's  competition for real estate loans comes  principally  from
mortgage banking  companies,  commercial  banks and other savings  institutions.
Bank West competes for loan  originations  primarily  through the interest rates
and loan fees it charges, and the efficiency and quality of services it provides
borrowers  and real estate  brokers.  Factors which affect  competition  include
general  and  local  economic  conditions,  current  interest  rate  levels  and
volatility in the mortgage markets. The Bank

                                       26
<PAGE>
estimates  that its market share of total  mortgage  loans secured by properties
located in Kent County, Michigan is approximately 3%.

Employees

         Bank  West  and its  subsidiaries  had 59  full-time  employees  and 12
part-time  employees at June 30, 1999. None of these employees is represented by
a  collective  bargaining  agent,  and Bank West  believes  that it enjoys  good
relations with its personnel.


                                   REGULATION

         The  following  is  a  summary  of  certain  statutes  and  regulations
affecting the Company and the Bank. This summary is qualified in its entirety by
such statutes and  regulations.  A change in applicable  laws or regulations may
have a material effect on the Company,  the Bank and the business of the Company
and the Bank.

General

         Financial  institutions  and their holding  companies  are  extensively
regulated  under  federal and state law.  Consequently,  the growth and earnings
performance  of the Company and the Bank can be affected not only by  management
decisions and general economic conditions, but also by the statutes administered
by,  and the  regulations  and  policies  of,  various  governmental  regulatory
authorities.  Those  authorities  include,  but are not  limited to, the Federal
Reserve Board, the FDIC, the  Commissioner,  the Internal  Revenue Service,  and
state taxing authorities. The effect of such statutes,  regulations and policies
can be significant, and cannot be predicted with a high degree of certainty.

         Federal  and  state  laws  and  regulations   generally  applicable  to
financial institutions and their holding companies regulate, among other things,
the scope of business,  investments,  reserves against deposits,  capital levels
relative to operations,  lending activities and practices, the nature and amount
of collateral for loans, the establishment of branches, mergers,  consolidations
and  dividends.  The system of  supervision  and  regulation  applicable  to the
Company and the Bank establishes a comprehensive  framework for their respective
operations  and is intended  primarily for the  protection of the FDIC's deposit
insurance  funds,  the  depositors  of the  Bank  and the  public,  rather  than
shareholders of the Bank or the Company.

         Federal law and regulations  establish supervisory standards applicable
to the lending  activities  of the Bank,  including  internal  controls,  credit
underwriting,  loan documentation and loan-to-value  ratios for loans secured by
real property.

The Company

         General.  The Company,  as a  registered  savings  institution  holding
company within the meaning of the Home Owners' Loan Act ("HOLA"),  is subject to
Office of Thrift Supervision ("OTS") regulations,  examinations, supervision and
reporting requirements. As a subsidiary of a savings

                                       27
<PAGE>
institution holding company, Bank West is subject to certain restrictions in its
dealings with the Company and affiliates thereof.

         Activities  Restrictions.  There are generally no  restrictions  on the
activities  of a  savings  institution  holding  company  which  holds  only one
subsidiary savings  institution.  However, if the Director of the OTS determines
that there is  reasonable  cause to believe that the  continuation  by a savings
institution  holding  company of an activity  constitutes  a serious risk to the
financial safety,  soundness or stability of its subsidiary savings institution,
the Director may impose such  restrictions  as deemed  necessary to address such
risk,  including  limiting (1) payment of dividends by the savings  institution;
(2) transactions between the savings institution and its affiliates; and (3) any
activities of the savings  institution that might create a serious risk that the
liabilities  of the  holding  company and its  affiliates  may be imposed on the
savings institution.  Notwithstanding the above rules as to permissible business
activities  of  unitary  savings  and loan  holding  companies,  if the  savings
institution  subsidiary  of such a holding  company  fails to meet the qualified
thrift lender ("QTL") test set forth in HOLA,  then such unitary holding company
also shall become subject to the activities  restrictions applicable to multiple
savings  institution  holding  companies  and,  unless the  savings  institution
requalifies as a QTL within one year  thereafter,  shall register as, and become
subject to the restrictions  applicable to, a bank holding company.  At June 30,
1999, the Bank satisfied the QTL test.

         If the Company were to acquire control of another savings  institution,
other than through  merger or other  business  combination  with Bank West,  the
Company would thereupon become a multiple savings  institution  holding company.
Except where such acquisition is pursuant to the authority to approve  emergency
thrift  acquisitions and where each subsidiary savings institution meets the QTL
test, the activities of the Company and any of its subsidiaries (other than Bank
West or other subsidiary  savings  institutions)  would thereafter be subject to
further  restrictions.  Among  other  things,  no multiple  savings  institution
holding company or subsidiary  thereof which is not a savings  institution shall
commence  or  continue  for a limited  period of time after  becoming a multiple
savings institution holding company or subsidiary thereof any business activity,
upon prior notice to, and no objection by the OTS, other than: (1) furnishing or
performing  management  services  for  a  subsidiary  savings  institution;  (2)
conducting  an insurance  agency or escrow  business;  (3) holding,  managing or
liquidating assets owned by or acquired from a subsidiary  savings  institution;
(4) holding or managing  properties  used or  occupied by a  subsidiary  savings
institution;  (5) acting as trustee under deeds of trust;  (6) those  activities
authorized  by  regulation  as of March 5,  1987 to be  engaged  in by  multiple
savings institution holding companies;  or (7) unless the Director of the OTS by
regulation  prohibits or limits such activities for savings  institution holding
companies,  those  activities  authorized  by the FRB as  permissible  for  bank
holding companies. Those activities described in (7) above also must be approved
by the  Director  of the OTS prior to being  engaged  in by a  multiple  savings
institution holding company.
<PAGE>
         Pending legislation in the U.S. Congress provides for the modernization
of the  banking  system  and  would  significantly  affect  the  operations  and
regulatory  structure of the financial  services  industry.  The  legislation is
intended to permit the banking,  securities and insurance  industries to compete
more efficiently and more effectively.  The legislation restricts the activities
of unitary holding  companies that were not in existence as of March 4, 1999 and
that had not filed an  application to become a unitary  holding  company by that
date. New unitary holding  companies would (1) have their activities  limited to
those that are financial in nature or incidental  thereto,  and (2) no longer be
able to be acquired by

                                       28

<PAGE>
commercial   companies.   The  Company  currently   believes  that  it  will  be
grandfathered  and that it will  not be  required  to  discontinue  any  current
activity.  No prediction can be made at this time as to whether such legislation
will be enacted or whether it will be enacted in its current form.

         Limitations  on  Transactions  with  Affiliates.  Transactions  between
savings  institutions  and any affiliate are governed by Sections 23A and 23B of
the  Federal  Reserve  Act  and  OTS  regulations.  An  affiliate  of a  savings
institution  is any company or entity which  controls,  is  controlled  by or is
under common control with the savings institution. In a holding company context,
the parent holding  company of a savings  institution  (such as the Company) and
any companies which are controlled by such parent holding company are affiliates
of the savings institution.  Generally,  such provisions (1) limit the extent to
which the  savings  institution  or its  subsidiaries  may  engage  in  "covered
transactions"  with  any  one  affiliate  to an  amount  equal  to 10%  of  such
institution's  capital stock and surplus,  and contain an aggregate limit on all
such  transactions with all affiliates to an amount equal to 20% of such capital
stock  and  surplus  and (2)  require  that  all such  transactions  be on terms
substantially  the  same,  or at  least  as  favorable,  to the  institution  or
subsidiary as those provided to a non-affiliate.  The term "covered transaction"
includes the making of loans,  purchase of assets,  issuance of a guarantee  and
other  similar  transactions.  In addition to the  restrictions  imposed by such
provisions, no savings institution may (a) loan or otherwise extend credit to an
affiliate,  except for any affiliate which engages only in activities  which are
permissible for bank holding companies, or (b) purchase or invest in any stocks,
bonds,  debentures,  notes or similar  obligations of any affiliate,  except for
affiliates which are subsidiaries of the savings institution.

         In addition,  Sections  22(h) and (g) of the Federal  Reserve Act place
restrictions   on  loans  to  executive   officers,   directors   and  principal
stockholders. Under Section 22(h), loans to a director, an executive officer and
to a  greater  than  10%  stockholder  of a  savings  institution,  and  certain
affiliated  interests  of  either,  may not  exceed,  together  with  all  other
outstanding  loans  to  such  person  and  affiliated  interests,   the  savings
institution's  loans  to  one  borrower  limit  (generally  equal  to 15% of the
institution's unimpaired capital and surplus).  Section 22(h) also requires that
loans to directors,  executive  officers and principal  stockholders  be made on
terms  substantially  the same as offered in  comparable  transactions  to other
persons and also requires prior board  approval for certain loans.  In addition,
the aggregate  amount of extensions  of credit by a savings  institution  to all
insiders  cannot  exceed  the  institution's  unimpaired  capital  and  surplus.
Furthermore,  Section 22(g) places additional restrictions on loans to executive
officers. Savings institutions also are subject to the restrictions of 12 U.S.C.
ss.1972,  which prohibits (1) a depository institution from extending credit, or
offering  any other  services  or fixing or varying the  consideration  for such
extension of credit or service,  on the condition that the customer  obtain some
additional  service from the  institution or certain of its affiliates or not to
obtain  services  of  a  competitor  of  the  institution,  subject  to  certain
exceptions,  and (2) extensions of credit to executive  officers,  directors and
greater  than  10%  stockholders  of  a  depository  institution  by  any  other
institution that has a correspondent  banking relationship with the institution,
unless  such  extension  of credit is on  substantially  the same terms as those
prevailing at the time for comparable  transactions  with other persons and does
not involve more than the normal risk of repayment or present other  unfavorable
features.  At June  30,  1999,  Bank  West  was in  compliance  with  the  above
restrictions.


                                       29
<PAGE>
         Restrictions  on  Acquisitions.  Except  under  limited  circumstances,
savings  institution  holding  companies are prohibited from acquiring,  without
prior  approval  of the  Director of the OTS,  (1) control of any other  savings
institution or savings  institution  holding  company or  substantially  all the
assets thereof or (2) more than 5% of the voting shares of a savings institution
or holding  company  thereof  which is not a  subsidiary.  Except with the prior
approval  of the  Director  of the OTS,  no  director  or  officer  of a savings
institution  holding  company  or  person  owning  or  controlling  by  proxy or
otherwise  more than 25% of such  company's  stock,  may acquire  control of any
savings  institution,  other than a subsidiary  savings  institution,  or of any
other savings institution holding company.

         The Director of the OTS may only approve acquisitions  resulting in the
formation of a multiple  savings  institution  holding  company  which  controls
savings  institutions  in  more  than  one  state  if (1) the  multiple  savings
institution  holding  company  involved  controls  a savings  institution  which
operated a home or branch office  located in the state of the  institution to be
acquired as of March 5, 1987; (2) the acquiror is authorized to acquire  control
of the savings institution pursuant to the emergency  acquisition  provisions of
the Federal Deposit Insurance Act ("FDIA");  or (3) the statutes of the state in
which the institution to be acquired is located specifically permit institutions
to be  acquired  by the  state-chartered  institutions  or  savings  institution
holding companies located in the state where the acquiring entity is located (or
by a holding company that controls such state-chartered savings institutions).

         Under the Bank Holding  Company Act of 1956,  the FRB is  authorized to
approve an application by a bank holding company to acquire control of a savings
institution.  In  addition,  a bank  holding  company  that  controls  a savings
institution  may merge or consolidate  the assets and liabilities of the savings
institution  with, or transfer  assets and  liabilities  to, any subsidiary bank
which is a member of the Bank  Insurance  Fund  ("BIF") with the approval of the
appropriate federal banking agency and the FRB. As a result of these provisions,
there have been a number of acquisitions of savings institutions by bank holding
companies in recent years.

The Bank

         General.  As a  Michigan-chartered  state  savings  bank with  deposits
insured  by the SAIF,  Bank  West is  subject  to  extensive  regulation  by the
Financial  Institutions  Bureau and the FDIC.  The lending  activities and other
investments  of the Bank must comply with various  federal and state  regulatory
requirements.  The Financial  Institutions Bureau periodically examines the Bank
for  compliance  with  various  regulatory  requirements.  The FDIC also has the
authority to conduct special  examinations  of SAIF members.  The Bank must file
reports  with the  Financial  Institutions  Bureau and the FDIC  describing  its
activities and financial condition. Bank West also is subject to certain reserve
requirements promulgated by the Board of Governors of the Federal Reserve System
(the "Federal  Reserve  Board").  This  supervision  and  regulation is intended
primarily for the protection of depositors.

         Regulatory Capital Requirements. The FDIC has established the following
minimum capital standards for  state-chartered,  FDIC-insured  non-member banks,
such as the Bank: a leverage requirement consisting of a minimum ratio of Tier 1
capital to total  assets of 3% for the most  highly-  rated  banks with  minimum
requirements of 4% to 5% for all others,  and a risk-based  capital  requirement
consisting of a minimum ratio of total capital to total risk-weighted  assets of
8%, at least one-half of which must be Tier 1 capital.  Tier 1 capital  consists
principally of shareholders' equity.

                                       30
<PAGE>
These capital requirements are minimum requirements.  Higher capital levels will
be required if warranted by the  particular  circumstances  or risk  profiles of
individual  institutions.  For  example,  FDIC  regulations  provide that higher
capital may be  required  to take  adequate  account  of,  among  other  things,
interest   rate  risk  and  the  risks  posed  by   concentrations   of  credit,
nontraditional activities or securities trading activities.

         Federal law provides the federal banking regulators with broad power to
take  prompt  corrective  action to resolve  the  problems  of  undercapitalized
institutions.  The extent of the  regulators'  powers  depends  on  whether  the
institution  in  question  is  "well  capitalized,"   "adequately  capitalized,"
"undercapitalized,"    "significantly    undercapitalized,"    or    "critically
undercapitalized."  Federal  regulations  define  these  capital  categories  as
follows:
<TABLE>
<CAPTION>
                                              Total              Tier 1
                                            Risk-Based        Risk-Based
                                           Capital Ratio     Capital Ratio          Leverage Ratio
                                           -------------     -------------          --------------
<S>                                       <C>                <C>                    <C>
Well capitalized                          10% or above       6% or above            5% or above
Adequately capitalized                     8% or above       4% or above            4% or above
Undercapitalized                          Less than 8%       Less than 4%           Less than 4%
Significantly undercapitalized            Less than 6%       Less than 3%           Less than 3%
Critically undercapitalized                         --                 --           A ratio of tangible
                                                                                    equity to total assets
                                                                                         of 2% or less
</TABLE>
         As of  June  30,  1999,  each of the  Bank's  ratios  exceeded  minimum
requirements for the well capitalized category.  See Note 13 to the Consolidated
Financial Statements in the 1999 Annual Report.

         Depending  upon  the  capital  category  to  which  an  institution  is
assigned,  the regulators' corrective powers include requiring the submission of
a capital  restoration plan;  placing limits on asset growth and restrictions on
activities;   requiring  the  institution  to  issue  additional  capital  stock
(including additional voting stock) or to be acquired;  restricting transactions
with  affiliates;  restricting  the  interest  rate the  institution  may pay on
deposits;  ordering a new election of directors  of the  institution;  requiring
that senior  executive  officers or  directors  be  dismissed;  prohibiting  the
institution  from accepting  deposits from  correspondent  banks;  requiring the
institution to divest certain subsidiaries; prohibiting the payment of principal
or interest on subordinated debt; and ultimately,  appointing a receiver for the
institution.

         In general,  a depository  institution  may be  reclassified to a lower
category  than is indicated  by its capital  levels if the  appropriate  federal
depository  institution  regulatory  agency  determines  the  institution  to be
otherwise  in an unsafe or  unsound  condition  or to be engaged in an unsafe or
unsound  practice.  This could include a failure by the  institution,  following
receipt  of a  less-than-satisfactory  rating  on its  most  recent  examination
report, to correct the deficiency.

         Dividends. Under Michigan law, the Bank is restricted as to the maximum
amount  of  dividends  it may pay on its  common  stock.  The  Bank  may not pay
dividends except out of net profits

                                       31

<PAGE>
after  deducting its losses and bad debts.  A  Michigan-chartered  state savings
bank may not  declare  or pay a  dividend  unless  the bank  will have a surplus
amounting to at least 20% of its capital after the payment of the  dividend.  If
the Bank has a surplus less than the amount of its  capital,  it may not declare
or pay any dividend until an amount equal to at least 10% of net profits for the
preceding  one-half year (in the case of quarterly or semi-annual  dividends) or
full-year (in the case of annual  dividends) has been transferred to surplus.  A
Michigan  state bank may,  with the  approval  of the  Commissioner,  by vote of
shareholders  owning  two-thirds  of the stock  eligible to vote,  increase  its
capital  stock by a  declaration  of a stock  dividend,  provided that after the
increase  the  bank's  surplus  equals at least  20% of its  capital  stock,  as
increased.  The Bank may not declare or pay any  dividend  until the  cumulative
dividends on preferred  stock (should any such stock be issued and  outstanding)
have been paid in full.

         Federal law generally  prohibits a depository  institution  from making
any  capital  distribution  (including  payment  of a  dividend)  or paying  any
management  fee to its  holding  company  if the  depository  institution  would
thereafter be undercapitalized. The FDIC may prevent an insured bank from paying
dividends  if the bank is in default of  payment  of any  assessment  due to the
FDIC.  In addition,  the FDIC may prohibit the payment of dividends by the Bank,
if such payment is determined, by reason of the financial condition of the Bank,
to be an unsafe and unsound banking practice.

         Safety and  Soundness  Standards.  The federal  banking  agencies  have
adopted  guidelines  to promote the safety and  soundness of  federally  insured
depository  institutions.  These  guidelines  establish  standards  for internal
controls,  information  systems,  internal  audit systems,  loan  documentation,
credit underwriting,  interest rate exposure, asset growth,  compensation,  fees
and benefits,  asset quality and earnings.  In general, the guidelines prescribe
the goals to be achieved in each area, and each  institution will be responsible
for  establishing  its own procedures to achieve those goals.  If an institution
fails to  comply  with any of the  standards  set forth in the  guidelines,  the
institution's  primary federal regulator may require the institution to submit a
plan for achieving and  maintaining  compliance.  The preamble to the guidelines
states that the agencies expect to require a compliance plan from an institution
whose  failure to meet one or more of the  standards is of such severity that it
could  threaten  the safe and sound  operation  of the  institution.  Failure to
submit an acceptable  compliance plan, or failure to adhere to a compliance plan
that has been accepted by the appropriate  regulator,  would constitute  grounds
for further enforcement action.

         Federal  Home  Loan Bank  System.  Bank West is a member of the FHLB of
Indianapolis,  which  is one of 12  regional  FHLBs  that  administers  the home
financing credit function of savings institutions. Each FHLB serves as a reserve
or  central  bank for its  members  within  its  assigned  region.  It is funded
primarily from proceeds derived from the sale of consolidated obligations of the
FHLB  System.  It makes loans to members  (i.e.,  advances) in  accordance  with
policies and  procedures  established by the Board of Directors of the FHLB. The
FHLB borrowings are  collateralized by a blanket collateral loan agreement under
which  the  Bank  must  maintain  minimum  eligible  collateral  of  160% of the
outstanding  advances.  Under  this  agreement,  the  limit on the  Bank's  FHLB
borrowings  was $75.6 million at June 30, 1999.  At June 30, 1999,  the Bank had
$50 million of FHLB advances  outstanding,  and  available  credit of $2 million
under a line of credit with the FHLB, of which no balance was  outstanding.  See
Note 7 to the Consolidated Financial Statements in the 1999 Annual Report.


                                       32
<PAGE>
         As a member,  Bank West is required to purchase and  maintain  stock in
the FHLB of  Indianapolis  in an  amount  equal to at least 1% of its  aggregate
unpaid   residential   mortgage  loans,  home  purchase   contracts  or  similar
obligations at the beginning of each year. At June 30, 1999, Bank West had $ 2.7
million in FHLB stock, which was in compliance with this requirement.

         The FHLBs are required to provide funds for the  resolution of troubled
savings  institutions  and to contribute to affordable  housing programs through
direct loans or interest subsidies on advances targeted for community investment
and  low-  and  moderate-income  housing  projects.   These  contributions  have
adversely  affected the level of FHLB dividends paid and could continue to do so
in the  future.  These  contributions  also could have an adverse  effect on the
value of FHLB stock in the future.

         Deposit Insurance. The deposits of Bank West are insured to the maximum
extent  permitted by the SAIF, which is administered by the FDIC, and are backed
by the full faith and credit of the U.S.  Government.  As  insurer,  the FDIC is
authorized to conduct examinations of, and to require reporting by, FDIC-insured
institutions. It also may prohibit any FDIC-insured institution from engaging in
any activity the FDIC determines by regulation or order to pose a serious threat
to the FDIC.  The FDIC also has the  authority to initiate  enforcement  actions
against savings  institutions,  after giving the  Commissioner an opportunity to
take such action.

         Under current FDIC regulations,  SAIF-insured institutions are assigned
to one of three  capital  groups  which  are  based  solely  on the  level of an
institution's   capital--"well   capitalized,"   "adequately  capitalized,"  and
"undercapitalized"--which  are defined as  discussed  above under "-  Regulatory
Capital  Requirements." These three groups are then divided into three subgroups
which  reflect  varying  levels of  supervisory  concern,  from those  which are
considered  to be healthy to those  which are  considered  to be of  substantial
supervisory  concern.  The matrix so created  results  in nine  assessment  risk
classifications,  with rates  ranging  prior to September 30, 1996 from .23% for
well capitalized, healthy institutions to .31% for undercapitalized institutions
with substantial supervisory concerns.

         The deposits of the Bank are  currently  insured by the SAIF.  Both the
SAIF and the BIF are required by law to attain and thereafter maintain a reserve
ratio of 1.25% of  insured  deposits.  The BIF  achieved a fully  funded  status
first, and effective January 1, 1996 the FDIC substantially  reduced the average
deposit  insurance  premium paid by  BIF-insured  banks.  The deposit  insurance
premiums for BIF member  institutions were reduced to zero basis points (subject
to a $2,000 minimum) for  institutions in the lowest risk category,  as compared
to 23 basis points for SAIF members in the lowest risk category.

         On  September  30,  1996,  new  legislation  required  all SAIF  member
institutions to pay a one-time special assessment to recapitalize the SAIF, with
the  aggregate  amount to be  sufficient  to bring the reserve ratio to 1.25% of
insured  deposits.  The legislation also provided for elimination of the premium
differential  between  SAIF-insured  and  BIF-insured  institutions  and for the
merger of the BIF and the SAIF,  with such  merger  being  conditioned  upon the
prior elimination of the thrift charter.

         Implementing  FDIC regulations  imposed a one-time  special  assessment
equal to 65.7 basis  points  for all  SAIF-assessable  deposits  as of March 31,
1995, which was accrued as an expense on

                                       33
<PAGE>
September 30, 1996. The Bank's one-time special assessment amounted to $551,000.
Net of related  tax  benefits,  the  one-time  special  assessment  amounted  to
$364,000  or $0.14 per share.  The  payment of the  special  assessment  had the
effect of  immediately  reducing  the Bank's  capital by such  amount.  However,
management does not believe that this one-time special assessment had a material
adverse effect on the Company's consolidated financial condition.

         Beginning  January 1, 1997,  effective SAIF rates  generally range from
zero basis points to 27 basis points.  From 1997 through 1999, SAIF members will
pay 6.4  basis  points  to fund the  Financing  Corporation,  while  BIF  member
institutions  will pay  approximately  1.3 basis  points.  The Bank's  insurance
premiums,  which had amounted to 23 basis points, were thus reduced to 6.4 basis
points effective January 1, 1997.

         The FDIC may terminate the deposit insurance of any insured  depository
institution,  including  Bank West,  if it  determines  after a hearing that the
institution has engaged or is engaging in unsafe or unsound practices,  is in an
unsafe  or  unsound  condition  to  continue  operations,  or has  violated  any
applicable law, regulation,  order or any condition imposed by an agreement with
the FDIC. It also may suspend deposit insurance  temporarily  during the hearing
process for the permanent  termination of insurance,  if the  institution has no
tangible  capital.  If insurance of accounts is terminated,  the accounts at the
institution at the time of the termination,  less subsequent withdrawals,  shall
continue to be insured for a period of six months to two years, as determined by
the FDIC. Management is aware of no existing circumstances which would result in
termination of the Bank's deposit insurance.

         Restrictions on Certain Activities. Under FDICIA, state-chartered banks
with deposits  insured by the FDIC are generally  prohibited  from  acquiring or
retaining  any  equity  investment  of a  type  or  in an  amount  that  is  not
permissible  for a national bank. The foregoing  limitation,  however,  does not
prohibit  FDIC-insured  state  banks  from  acquiring  or  retaining  an  equity
investment   in  a   subsidiary   in  which  the  bank  is  a  majority   owner.
State-chartered banks are also prohibited from engaging as principal in any type
of activity  that is not  permissible  for a national bank and  subsidiaries  of
state-chartered,  FDIC-insured  state banks may not engage as  principal  in any
type of activity  that is not  permissible  for a subsidiary  of a national bank
unless  in either  case the FDIC  determines  that the  activity  would  pose no
significant risk to the appropriate  deposit insurance fund and the bank is, and
continues to be, in compliance with applicable capital standard.

         The FDIC has adopted regulations to clarify the foregoing  restrictions
on activities of FDIC- insured,  state-chartered  banks and their  subsidiaries.
Under the  regulations,  the term activity  refers to the authorized  conduct of
business  by an insured  state bank and  includes  acquiring  or  retaining  any
investment other than an equity  investment.  A bank or subsidiary is considered
acting as principal  when  conducted  other than as an agent for a customer,  as
trustee, or in a brokerage,  custodial,  advisory or administrative capacity. An
activity  permissible  for  a  national  bank  includes  an  activity  expressly
authorized  for  national  banks by  statute or  recognized  as  permissible  in
regulations,  official  circulars  or  bulletins  or in  any  order  or  written
interpretation  issued by the Office of the Comptroller of the Currency ("OCC").
In its  regulations,  the FDIC  indicated that it will not permit state banks to
directly engage in commercial  ventures or directly or indirectly  engage in any
insurance  underwriting  activity  other than to the extent such  activities are
permissible  for a national  bank or a national  bank  subsidiary  or except for
certain  other  limited  forms of  insurance  underwriting  permitted  under the
regulations.

                                       34
<PAGE>
Under the regulations, the FDIC permits state banks that meet applicable minimum
capital  requirements to engage as principal in certain  activities that are not
permissible  to national  banks  including  guaranteeing  obligations of others,
activities  which the Federal  Reserve Board has found by regulation or order to
be closely  related to  banking  and  certain  securities  activities  conducted
through subsidiaries.

         Uniform Lending Standards.  Federal  regulations require banks to adopt
and maintain written policies establishing  appropriate limits and standards for
extensions  of credit that are secured by liens or  interests  in real estate or
are made for the purpose of  financing  permanent  improvements  to real estate.
These policies must establish loan portfolio diversification standards,  prudent
underwriting  standards,  including  loan-to-value  limits,  that are  clear and
measurable,  loan  administration  procedures  and  documentation,  approval and
reporting  requirements.  A bank's  real  estate  lending  policy  must  reflect
consideration of the guidelines that have been adopted by the banking  agencies.
The Bank does not believe  that such  guidelines  materially  affect its lending
activities.

         Limits on Loans to One Borrower. The permissible amount of loans-to-one
borrower now generally  follows the national bank standard for all loans made by
savings  institutions.  The  standard  generally  does not  permit  loans-to-one
borrower  to exceed the  greater of  $500,000  or 15% of  capital  and  surplus.
However,  upon approval by two-thirds vote of the Board of Directors,  the limit
may be  increased  not to exceed 25% of the capital and surplus.  During  fiscal
1998, the Board of Directors  approved the 25% limit.  At June 30, 1999, the 25%
limit for the Bank was $2.6 million,  and the Bank did not have any loans to one
borrower in excess of such amount.

         Consumer Protection Laws. The Bank's business includes making a variety
of types of loans to individuals.  In making these loans, the Bank is subject to
state usury and regulatory  laws and to various  federal  statutes,  such as the
Equal  Credit  Opportunity  Act,  the Fair Credit  Reporting  Act,  the Truth in
Lending Act, the Real Estate  Settlement  Procedures  Act, and the Home Mortgage
Disclosure  Act, and the  regulations  promulgated  thereunder,  which  prohibit
discrimination, specify disclosures to be made to borrowers regarding credit and
settlement  costs,  and regulate the mortgage loan  servicing  activities of the
Bank,  including  the  maintenance  and  operation  of escrow  accounts  and the
transfer of mortgage loan servicing.  In receiving deposits, the Bank is subject
to extensive  regulation under state and federal law and regulations,  including
the Truth in Savings Act, the Expedited Funds Availability Act, the Bank Secrecy
Act, the Electronic  Funds Transfer Act, and the Federal Deposit  Insurance Act.
Violation of these laws could result in the  imposition of  significant  damages
and fines upon the Bank and its directors and officers.

         Commissioner   Assessments.   Michigan   banks  are   required  to  pay
supervisory fees to the Commissioner to fund the operations of the Commissioner.
The amount of  supervisory  fees paid by a bank is based  upon the bank's  total
assets, as reported to the Commissioner.

         Branching  Authority.  Michigan  banks,  such  as the  Bank,  have  the
authority  under  Michigan  law to establish  branches  anywhere in the State of
Michigan, subject to receipt of all required regulatory approvals (including the
approval of the Commissioner and the FDIC).


                                       35
<PAGE>
         Effective  June  1,  1997,  the  Riegle-Neal   Interstate  Banking  and
Branching  Efficiency  Act of 1994  (the  "IBBEA")  allows  banks  to  establish
interstate  branch  networks  through  acquisitions  of other banks,  subject to
certain  conditions,  including  certain  limitations on the aggregate amount of
deposits  that  may be  held  by  the  surviving  bank  and  all of its  insured
depository  institution  affiliates.  The  establishment  of de novo  interstate
branches or the  acquisition  of individual  branches of a bank in another state
(rather than the acquisition of an out-of-state bank in its entirety) is allowed
by IBBEA only if specifically  authorized by state law. The legislation  allowed
individual  states to "opt-out" of  interstate  branching  authority by enacting
appropriate legislation prior to June 1, 1997.

         Michigan  did not opt out of  IBBEA,  and now  permits  both  U.S.  and
non-U.S.  banks to establish  branch offices in Michigan.  The Michigan  Banking
Code  permits,  in  appropriate  circumstances  and  with  the  approval  of the
Commissioner, (1) the acquisition of all or substantially all of the assets of a
Michigan-chartered  bank by an FDIC-insured  bank,  savings bank, or savings and
loan   association   located  in  another  state,   (2)  the  acquisition  by  a
Michigan-chartered  bank  of  all or  substantially  all  of  the  assets  of an
FDIC-insured  bank,  savings  bank or savings  and loan  association  located in
another state, (3) the consolidation of one or more Michigan-chartered banks and
FDIC- insured banks,  savings banks or savings and loan associations  located in
other states  having laws  permitting  such  consolidation,  with the  resulting
organization  chartered by Michigan,  (4) the  establishment  by a foreign bank,
which has not previously  designated any other state as its home state under the
International Banking Act of 1978, of branches located in Michigan,  and (5) the
establishment  or  acquisition  of branches in  Michigan by  FDIC-insured  banks
located in other  states,  the  District  of  Columbia  or U.S.  territories  or
protectorates  having  laws  permitting  Michigan-chartered  banks to  establish
branches in such jurisdiction.  Further, the Michigan Banking Code permits, upon
written notice to the Commissioner,  (a) the acquisition by a Michigan-chartered
bank of one or more branches (not  comprising  all or  substantially  all of the
assets) of an FDIC-insured  bank,  savings bank or savings and loan  association
located in another  state,  the  District of  Columbia,  or a U.S.  territory or
protectorate,  (b) the  establishment  by  Michigan-chartered  banks of branches
located in other  states,  the  District of  Columbia,  or U.S.  territories  or
protectorates, and (c) the consolidation of one or more Michigan-chartered banks
and FDIC-insured banks,  savings banks or savings and loan associations  located
in other states, with the resulting  organization chartered by one of such other
states.


                                    TAXATION

Federal Taxation

         General.  The  Company  and Bank  West  are  subject  to the  generally
applicable  corporate tax  provisions  of the Code,  and Bank West is subject to
certain additional  provisions of the Code which apply to thrift and other types
of financial  institutions.  The  following  discussion  of federal  taxation is
intended only to summarize  certain  pertinent federal income tax matters and is
not a  comprehensive  discussion of the tax rules  applicable to the Company and
Bank West.

         Fiscal  Year.  The  Company and Bank West file a  consolidated  federal
income tax return on the basis of a fiscal year ending June 30.


                                       36
<PAGE>
         Bad Debt Reserves. Savings institutions,  such as Bank West, which meet
certain  definitional tests primarily relating to their assets and the nature of
their businesses, are permitted to establish a reserve for bad debts and to make
annual additions to the reserve.  These additions may, within specified  formula
limits, be deducted in arriving at the institution's taxable income.

         In August 1996, legislation was enacted that repeals the reserve method
of accounting  (including the  percentage of taxable  income method)  previously
used by many  savings  institutions  to  calculate  their bad debt  reserve  for
federal income tax purposes.  Savings  institutions with $500 million or less in
assets may, however,  continue to use the experience  method.  As a result,  the
Bank must  recapture  that portion of its reserve  which exceeds the amount that
could have been taken under the  experience  method for post-1987 tax years.  At
June 30, 1996, the Bank's  post-1987  excess reserves  amounted to approximately
$781,000.  The recapture will occur over a six-year  period  beginning in fiscal
1999. The  legislation  also requires  savings  institutions  to account for bad
debts for federal income tax purposes on the same basis as commercial  banks for
tax years beginning after December 31, 1995.

         At June 30,1999 the federal  income tax reserves of Bank West  included
$3.4 million for which no federal income tax has been provided. Because of these
federal  income tax reserves and the  liquidation  account  established  for the
benefit of certain  depositors of Bank West in connection with the conversion of
the Bank to stock form,  the  retained  earnings of Bank West are  substantially
restricted.

         Distributions.  If Bank West were to distribute cash or property to its
sole stockholder, and the distribution was treated as being from its accumulated
bad debt  reserves,  the  distribution  will cause Bank West to have  additional
taxable income.  A distribution is deemed to have been made from accumulated bad
debt  reserves to the extent that (a) the reserves  exceed the amount that would
have  been  accumulated  on the  basis of actual  loss  experience,  and (b) the
distribution is a "non-qualified  distribution." A distribution  with respect to
stock is a non-qualified distribution to the extent that, for federal income tax
purposes, (1) it is in redemption of shares, (2) it is pursuant to a liquidation
of the institution, or (3) in the case of a current distribution,  together with
all  other  such   distributions   during  the  taxable  year,  it  exceeds  the
institution's current and post-1951 accumulated earnings and profits. The amount
of additional  taxable  income  created by a  non-qualified  distribution  is an
amount that when reduced by the tax attributable to it is equal to the amount of
the distribution.

         Minimum Tax. The Code imposes an  alternative  minimum tax at a rate of
20%. The alternative  minimum tax generally applies to a base of regular taxable
income plus certain tax  preferences  ("alternative  minimum  taxable income" or
"AMTI")  and is  payable to the  extent  such AMTI is in excess of an  exemption
amount.  The Code provides  that an item of tax  preference is the excess of the
bad debt  deduction  allowable for a taxable year pursuant to the  percentage of
taxable income method over the amount  allowable  under the  experience  method.
Other items of tax preference that constitute AMTI include (a)  depreciation and
(b) 75% of the excess (if any) of (1)  adjusted  current  earnings as defined in
the Code, over (2) AMTI (determined  without regard to this preference and prior
to reduction by net operating losses).


                                       37
<PAGE>
         Net Operating Loss Carryovers.  A financial  institution may carry back
net operating  losses  ("NOLs") to the preceding three taxable years and forward
to the succeeding 15 taxable years. This provision applies to losses incurred in
taxable  years  beginning  after 1986.  At June 30,  1999,  Bank West had no NOL
carryforwards for federal income tax purposes.

         Capital Gains and Corporate Dividends-Received Deduction. Corporate net
capital gains are currently taxed at a maximum rate of 35%.  Corporations  which
own 20% or more of the stock of a corporation distributing a dividend may deduct
80% of the dividends received. Corporations which own less than 20% of the stock
of a  corporation  distributing  a  dividend  may  deduct  70% of the  dividends
received.  However,  a corporation that receives  dividends from a member of the
same affiliated group of corporations may deduct 100% of the dividends received.

         Other Matters. Federal legislation is introduced from time to time that
would  limit the  ability of  individuals  to deduct  interest  paid on mortgage
loans.  Individuals  are currently not permitted to deduct  interest on consumer
loans.  Significant  increases  in tax  rates  or  further  restrictions  on the
deductibility of mortgage interest could adversely affect Bank West.

         Bank West's federal income tax returns for the tax years ended June 30,
1996 forward are open under the statute of limitations and are subject to review
by the IRS.

State Taxation

         The State of Michigan imposes a tax on intangible  personal property in
the amount of $0.20 per $1,000 of  deposits  of a savings  bank or a savings and
loan  institution,   less  deposits  owed  to  the  federal  or  Michigan  state
governments,  their agencies or certain other financial  institutions.  In 1996,
the State of Michigan  repealed  this tax over a phase-out  period  beginning in
calendar 1995 and ending in calendar  1998.  For calendar  years 1997,  1996 and
1995, the amount of the tax calculated pursuant to the above formula was reduced
by 75%, 50% and 25%, respectively.  The State of Michigan also imposes a "Single
Business  Tax," which is a  value-added  type of tax and is for the privilege of
doing  business in the State of  Michigan.  The major  components  of the Single
Business Tax base are  compensation,  depreciation  and federal  taxable income,
increased by NOLs, if any,  utilized in arriving at federal taxable income,  and
decreased by the cost of acquisition of depreciable  tangible  assets during the
year. The tax rate through September 30, 1994 was 2.35% of the Michigan adjusted
tax base. Beginning October 1, 1994, the rate decreased to 2.30% of the Michigan
adjusted tax base.  In 1999,  the State of Michigan  repealed this tax over a 23
year phase-out period beginning in calendar year 2000.

Item 2.  Properties.

         At June 30, 1999, Bank West conducted its business from its main office
in Walker,  Michigan  and two  branch  offices in Grand  Rapids,  Michigan.  The
following table sets forth the net book value (including leasehold  improvement,
furnishings  and  equipment) and certain other  information  with respect to the
offices and other properties of Bank West at June 30, 1999.


                                       38
<PAGE>
<TABLE>
<CAPTION>
                                                         Net Book
                                                         Value of                 Amount of
Description/Address              Leased/Owned            Property                  Deposits
-------------------              ------------            --------                  --------
                                                                    (In Thousands)
<S>                                  <C>                    <C>                     <C>
2185 Three Mile Road N.W.
Grand Rapids, MI  49544               Owned                 $2,269                  $ 53,474

910 Bridge Street
Grand Rapids, MI  49504               Owned                    608                    71,771

6740 Cascade Road S.E.
Grand Rapids, MI  49546              Leased                    124                     7,156
                                                            ------                 ---------

  Total                                                     $3,001                  $132,401
                                                            ======                  ========
</TABLE>
Item 3.  Legal Proceedings.
---------------------------

         Bank West is a defendant  under two legal  proceedings  pending in Kent
County  Circuit  Court:  Cowles v. Bank West and  Newton v. Bank  West.  Cowles'
original complaint was filed on July 17, 1998 and was premised upon a claim that
the Bank was  engaged in the  unauthorized  practice  of law  because it charged
residential  mortgagors a $250 document  preparation  fee and that the Bank also
violated  the  Michigan  Consumer   Protection  Act.  The  complaint   contained
additional claims, largely dependent upon the foregoing  allegations.  Plaintiff
later filed amendments,  alleging claims under the Federal Truth in Lending Act.
Judge Johnston dismissed on August 30, 1999 the claim for unauthorized  practice
of law and the claim under the Michigan Consumer  Protection Act. He earlier had
dismissed one of the Truth in Lending Act claims.  There currently remain in the
case a claim for  violation  of the Truth in Lending  Act, and claims for unjust
enrichment and innocent and negligent  misrepresentation.  On September 9, 1999,
plaintiff  filed a  motion  to file yet a third  amended  complaint,  trying  to
conform the  allegations  concerning  the remaining  claims to Judge  Johnston's
August 30, 1999 opinion.

         The case of Newton  v. Bank  West,  filed on  August  12,  1999 in Kent
County  Circuit  Court by the same  attorneys  who  represent  the  plaintiff in
Cowles,  also is based upon Bank West's  charging of a document  preparation fee
and contains  claim for the  unauthorized  practice of law and  violation of the
Michigan  Consumer  Protection Act. Newton also is pending before Judge Johnston
and if the judge  follows  his  reasoning  in  Cowles,  those  claims  should be
dismissed.  Newton also contains claims for unjust  enrichment and negligent and
innocent  misrepresentation and replevin.  These latter claims have not yet been
sought to be amended to conform to Judge  Johnston's  August 30, 1999 rulings in
Cowles.

         Management intends to continue to contest these cases vigorously. Based
on a review  of  current  facts  and  circumstances,  management  is  unable  to
determine the amount of loss, if any, that is possible.


                                       39
<PAGE>
         The  Company  and the Bank are also  subject  to  certain  other  legal
actions  arising  in  the  ordinary  course  of  business.  In  the  opinion  of
management,  after consultation with legal counsel,  the ultimate disposition of
these other  matters is not  expected to have a material  adverse  effect on the
consolidated financial position of the Company.

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

         Not applicable.

PART II.

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

         The  information   required  herein,  to  the  extent  applicable,   is
incorporated  by reference from the inside back cover page of the Company's 1999
Annual Report.

Item 6.  Selected Financial Data.
---------------------------------

         The information  required herein is incorporated by reference from page
2 of the 1999 Annual Report.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
           of Operations.
           --------------

         The information required herein is incorporated by reference from pages
3 to 16 of the 1999 Annual Report.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.
---------------------------------------------------------------------

         Not applicable since the Company  qualifies as a small business issuer.
See Item 305(e) of Regulation S-K.

Item 8.  Financial Statements and Supplementary Data.
-----------------------------------------------------

         The information required herein is incorporated by reference from pages
17 to 44 of the 1999 Annual Report.

Item 9.  Changes in and Disagreements With Accountants on Accounting and
------------------------------------------------------------------------
            Financial Disclosure.
            ---------------------

         Not applicable.


                                       40

<PAGE>
PART III.

Item 10.  Directors and Executive Officers of the Registrant.
-------------------------------------------------------------

         The information required herein is incorporated by reference from pages
3 to 5 and 11 of the  definitive  proxy  statement of the Company for the Annual
Meeting of  Stockholders  to be held on October  27,  1999,  which will be filed
within 120 days of June 30, 1999 ("Definitive Proxy Statement").

Item 11.  Executive Compensation.
---------------------------------

         The information required herein is incorporated by reference from pages
11 to 17 of the Definitive Proxy Statement.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.
-------------------------------------------------------------------------

         The information required herein is incorporated by reference from pages
8 to 11 of the Definitive Proxy Statement.

Item 13.  Certain Relationships and Related Transactions.
---------------------------------------------------------

         The information  required herein is incorporated by reference from page
17 of the Definitive Proxy Statement.

PART IV.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
--------------------------------------------------------------------------

         (a)  Documents Filed as Part of this Report

         (1) The following  financial  statements are  incorporated by reference
from Item 8 hereof (see Exhibit 13):

                  Report of Independent Auditors
                  Consolidated  Balance  Sheets  as of June  30,  1999  and 1998
                  Consolidated Statements of Income for the Years Ended
                     June 30, 1999, 1998 and 1997
                  Consolidated Statements of Changes in Shareholders' Equity for
                     the Years Ended June 30, 1999, 1998 and 1997
                  Consolidated Statements of Cash Flows for the Years
                     ended June 30, 1999, 1998 and 1997
                  Notes to Consolidated Financial Statements


                                       41
<PAGE>
         (2) All  schedules  for  which  provision  is  made  in the  applicable
accounting  regulation  of  the  SEC  are  omitted  because  of the  absence  of
conditions under which they are required or because the required  information is
included in the consolidated financial statements and related notes thereto.

         (3) The  following  exhibits  are filed as part of this Form 10-K,  and
this list includes the Exhibit Index.

                                  Exhibit Index
                                  -------------


 2.1*             Plan of Conversion
 3.1*             Articles of Incorporation of Bank West Financial Corporation
 3.2**            Bylaws of Bank West Financial Corporation
 4.1***           Stock Certificate of Bank West Financial Corporation
10.1*             Employee Stock Ownership Plan
10.2***           Employment  Agreement  among Bank West Financial  Corporation,
                  Bank West, F.S.B. and Paul W. Sydloski dated March 30, 1995
10.3*             Form  of  Employment   Security   Agreement  among  Bank  West
                  Financial   Corporation,   Bank  West  and  certain  executive
                  officers
10.4****          1995 Key Employee Stock Compensation Program
10.5****          1995 Directors' Stock Option Plan
10.6****          1995 Management Recognition Plan for Officers
10.7****          1995 Management Recognition Plan for Directors
10.8              Form of Amendment to Employment  Security Agreement among Bank
                  West Financial  Corporation,  Bank West and certain  executive
                  officers
10.9              Amended and Restated  Agreement and General Release among Bank
                  West  Financial  Corporation,  Bank West and Paul W. Sydloski,
                  dated February 24, 1999
10.10             Employment  Agreement  with Bank West  Financial  Corporation,
                  Bank West and Ronald A. Van Houten, effective April 13, 1999
10.11             Employment   Security  Agreement  among  Bank  West  Financial
                  Corporation, Bank West and Louis D. Knooihuizen,  dated May 6,
                  1999
13.1              1999 Annual Report to Stockholders
21.1              Subsidiaries of the Registrant - Reference is made to "Item 2.
                  Business" for the required information
23.1              Consent of Crowe, Chizek and Company LLP
27.1              Financial Data Schedule

------------------
(*)  Incorporated herein by reference from the Company's  Registration Statement
     on Form S-1  (Registration No. 33-87620) filed with the SEC on December 21,
     1994, as subsequently amended.


                                       42
<PAGE>
(**)     Incorporated  herein by reference  from the  Company's  Form 10-Q filed
         with the SEC on November 14, 1997.

(***)    Incorporated  herein by reference  from the Company's  Annual Report on
         Form 10-K filed with the SEC on September 28, 1995.

(****)   Incorporated  herein by reference  from the Company's  Annual Report on
         Form 10-K filed with the SEC on September 26, 1996.

         (b) The Company did not file any reports on Form 8-K during the quarter
ended June 30, 1999.

         (c) See (a)(3)  above for all exhibits  filed  herewith and the Exhibit
Index.

         (d) There are no financial  statements or schedules which were excluded
from Item 8 which are required to be reported herein.

                                       43

<PAGE>



                                   SIGNATURES


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



                                                 BANK WEST FINANCIAL CORPORATION



Date:  September 23, 1999                        By:    /s/ Ronald A. Van Houten
                                                        ------------------------
                                                        Ronald A. Van Houten
                                                        President and
                                                        Chief Executive Officer


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



/s/ Ronald A. Van Houten                                     September 23, 1999
------------------------
Ronald A. Van Houten
President and Chief Executive Officer


/s/ George A. Jackoboice                                     September 23, 1999
------------------------
George A. Jackoboice
Chairman of the Board and
 Director


/s/ Richard L. Bishop                                        September 23, 1999
---------------------
Richard L. Bishop
Director


/s/ Thomas D. DeYoung                                        September 23, 1999
---------------------
Thomas D. DeYoung
Director



<PAGE>




/s/ Jacob Haisma                                             September 23, 1999
----------------
Jacob Haisma
Director


/s/ Harry E. Mika                                            September 23, 1999
-----------------
Harry E. Mika
Director


/s/ Wallace D. Riley                                         September 23, 1999
--------------------
Wallace D. Riley
Director


/s/ Carl A. Rossi                                            September 23, 1999
-----------------
Carl A. Rossi
Director


/s/ Robert J. Stephan                                        September 23, 1999
---------------------
Robert J. Stephan
Director


/s/ John H. Zwarensteyn                                      September 23, 1999
-----------------------
John H. Zwarensteyn
Director


/s/ Kevin A. Twardy                                          September 23, 1999
-------------------
Kevin A. Twardy
Chief Financial Officer
 (also principal accounting
 officer)