[ L O G O ]




                           HIGH COUNTRY BANCORP, INC.


                                ANNUAL REPORT FOR

                                 THE YEAR ENDED

                                  JUNE 30, 2001


<PAGE>
                     [HIGH COUNTRY BANCORP, INC. LETTERHEAD]

TO OUR STOCKHOLDERS:

     Management  and the Board of Directors of High  Country  Bancorp,  Inc. are
pleased to present this Annual Report to the Stockholders. We thank you for your
support during the successful completion of another year.

     During fiscal 2001, assets increased from $137.7 million to $161.3 million.
This growth was a result of loan demand in the local economy, which continues to
be solid.  We  continued  to  diversify  our  operations  in order to expand our
customer  base. As a result,  net income  increased  21.6% from $1.05 million to
$1.27  million  or $1.30 per  share.  Stockholder's  equity  increased  to $16.6
million.

     In recent years, the Board of Directors has worked  diligently to establish
an  operations  infrastructure  to manage the diversity of our balance sheet and
meet the challenges of the economy.  We continue to attract and retain qualified
employees to maintain the current level of business and prepare for  anticipated
growth.  Overall,  asset  quality  remains  good  despite a  declining  national
economy.

     We continue to  repurchase  stock when  available.  The Board of  Directors
believes  our stock is  undervalued.  Our  Secondary  Mortgage  Loan  Department
processed  record  levels of loans  during the past year.  The  Commercial  Loan
Department and the Consumer Loan Department are successfully increasing volumes.
The  Operations   Department  has  succeeded  in  growing  core  deposits.   Our
subsidiary, High Country Title & Escrow Company, increased its business activity
and market share.  Additionally,  branch offices in Salida, Leadville, and Buena
Vista  have  shown  good  growth.  Final  preparations  are being made to open a
Mortgage Loan Production Office in Canon City, Colorado, this fall.

     Despite all of our  accomplishments,  we are saddened by the recent loss of
our Chairman of the Board.  Mr. Robert "Bert" Mitchell passed away  unexpectedly
on August 31,  2001.  Bert was a very  dedicated  and loyal member of the Bank's
Board of Directors since 1972. For 29 years, Bert provided  thoughtful  guidance
and  leadership.  His  professionalism  and  knowledge  about  the  Bank and the
community will be missed. We do not intend to replace his position on the Board.

     Our 115  years  of  service  and  sound  financial  condition  allow  us to
contribute to growth within our  communities.  We continue our commitment to our
local customers.

     We appreciate your support and invite you to review this Financial  Report.
We look forward to meeting the challenges of the financial services industry.

/s/ Larry D. Smith
-------------------------------
Larry D. Smith, President and
 Chief Executive Officer
<PAGE>


                                               FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
                                             AT JUNE 30,                    CHANGE
                                        ------------------------       ----------------------
                                           2001          2000         AMOUNT       PERCENT
                                           ----          ----         ------       -------
                                                        (DOLLARS IN THOUSANDS)
<S>                                      <C>             <C>           <C>         <C>
FINANCIAL POSITION:
Total assets .........................   $  161,331   $  137,735   $   23,596       17.13%
Loans receivable, net ................      136,834      119,898       16,936       14.13
Mortgage-backed and related securities        2,221        2,843         (622)     (21.88)
Investment securities ................        2,422        1,857          565       30.43
Deposits .............................       98,517       82,770       15,747       19.03
Stockholders' equity .................       16,559       16,108          451        2.80
Number of common shares outstanding ..    1,028,992    1,071,225      (42,233)      (3.94)
</TABLE>
<TABLE>
<CAPTION>
                                                             FOR THE YEAR ENDED
                                                                   JUNE 30,                      CHANGE
                                                          ------------------------       ------------------------
                                                             2001           2000         AMOUNT           PERCENT
                                                             ----           ----         ------           -------
                                                                                (DOLLARS IN THOUSANDS)
<S>                                                       <C>             <C>           <C>                <C>
RESULTS OF OPERATIONS:
  Interest income......................................   $    12,331     $   9,536     $  2,795           29.31%
  Interest expense.....................................         6,333         4,499        1,834           40.76
  Net interest income..................................         5,998         5,037          961           19.08
  Provision for loan losses............................           385           210          175           83.33
  Net interest income after provision
    for loan losses....................................         5,613         4,827          786           16.28
  Non-interest income..................................         1,225           590          635          107.63
  Non-interest expense.................................         4,756         3,752        1,004           26.76
  Net earnings.........................................         1,272         1,046          226           21.61

</TABLE>

                                       1
<PAGE>
                                  SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

<TABLE>
<CAPTION>
SELECTED FINANCIAL CONDITION DATA:

                                                                         AT JUNE 30,
                                                -----------------------------------------------------------
                                                   2001         2000        1999        1998        1997
                                                --------     --------    ---------    ---------    -------
                                                                    (DOLLARS IN THOUSANDS)
<S>                                             <C>          <C>          <C>          <C>         <C>
Total assets.................................   $161,331     $137,735     $114,014     $100,589    $ 76,324
Cash.........................................      2,760        4,393        2,249        2,999         895
Interest-earning deposits....................      9,176        1,321        4,410        6,963       2,381
Securities available for sale................         --           --           --           --          --
Securities  held to maturity.................      2,221        2,843        3,639        4,637       5,340
Loans receivable, net........................    136,834      119,898       98,433       81,359      63,127
Savings deposits.............................     98,517       82,770       72,604       63,425      56,152
Stockholders' equity.........................     16,559       16,108       18,028       18,279       5,958

Number of:
    Real estate loans outstanding............      1,285        1,282        1,231        1,185       1,137
    Savings accounts.........................     13,235       11,839       11,064       10,199       9,126
    Full-service offices.....................          4            4            3            3           3

</TABLE>
<TABLE>
<CAPTION>
SELECTED OPERATIONS DATA:

                                                                     YEAR ENDED JUNE  30,
                                                -------------------------------------------------------------
                                                   2001          2000         1999         1998         1997
                                                ----------    ----------   ----------   ----------   --------
                                                                           (IN THOUSANDS)
<S>                                             <C>           <C>           <C>          <C>         <C>
Interest income..............................   $12,331       $  9,536      $ 8,536      $  7,033    $  5,764
Interest expense.............................     6,333          4,499        3,920         3,266       2,813
                                                -------       --------      -------      --------    --------
    Net interest income......................     5,998          5,037        4,616         3,767       2,951
Provision for loan losses....................       385            210          230           219         282
                                                -------       --------      -------      --------    --------

    Net interest income after provision
      for loan losses........................     5,613          4,827        4,386         3,548       2,669
                                                -------       --------      -------      --------    --------
Noninterest income...........................     1,225            590          189           158         141
                                                -------       --------      -------      --------    --------
    Subtotal.................................     6,838          5,417        4,575         3,706       2,810
                                                -------       --------      -------      --------    --------

Noninterest expense:
  Compensation and benefits..................     2,742          2,216        1,866         1,506       1,345
  Other......................................     2,014          1,536        1,362         1,119       1,410
                                                -------       --------      -------      --------    --------
  Total noninterest expense..................     4,756          3,752        3,228         2,625       2,755
                                                -------       --------      -------      --------    --------
    Income before taxes......................     2,082          1,665        1,347         1,081          55
Income tax expense...........................       810            619          507           428          11
                                                -------       --------      -------      --------    --------
    Net income...............................   $ 1,272       $  1,046      $   840      $    653    $     44
                                                =======       ========      =======      ========    ========
</TABLE>

                                       2
<PAGE>
<TABLE>
<CAPTION>
OPERATING RATIOS
----------------
                                                                           AT OR FOR THE YEAR
                                                                              ENDED JUNE 30,
                                                                          --------------------
                                                                           2001          2000
                                                                          ------        ------
<S>                                                                       <C>           <C>
PERFORMANCE RATIOS:

Return on assets (ratio of net earnings
  to average total assets).............................................   0.84%          0.84%

Return on equity (ratio of net earnings to average equity).............   7.77           6.14

Ratio of average interest-earning assets to
  average interest-bearing liabilities................................. 112.09         110.07

Ratio of net interest income, after provision
  for loan losses, to noninterest expense.............................. 118.49         128.65

Net interest rate spread (difference between weighted average yield on
  interest-earning assets and weighted
  average cost of interest-bearing liabilities)........................   3.68           3.93

Net yield on average interest-earning assets...........................   4.23           4.32

QUALITY RATIOS:

Non-performing loans to total loans
  at end of period.....................................................   1.31           0.57

Non-performing loans to total assets...................................   1.11           0.50

Non-performing assets to total assets
  at end of period.....................................................   1.11           0.51

Allowance for loan losses to non-performing
  loans at end of period...............................................  75.64            147

Allowance for loan losses to total loans...............................   0.99           0.84

CAPITAL RATIOS:

Equity to total assets at end of period................................  10.26          11.69

Average equity to average assets.......................................  10.86          13.75
</TABLE>



                                       3
<PAGE>
                      BUSINESS OF THE COMPANY AND THE BANK

     HIGH COUNTRY BANCORP,  INC. High Country Bancorp,  Inc. (the "Company") was
incorporated  under the laws of the  State of  Colorado  in August  1997 for the
purpose of becoming a savings and loan holding  company for Salida  Building and
Loan  Association  which  changed its name to High  Country Bank (the "Bank") in
February 2000. On December 9, 1997,  the Bank  consummated  its conversion  from
mutual to stock form (the  "Conversion")  and the Company completed its offering
of Common  Stock  through the sale and  issuance of  1,322,500  shares of Common
Stock at a price of $10.00 per share,  realizing gross proceeds of $13.2 million
and net  proceeds of $12.7  million.  The Company  purchased  all of the capital
stock of the Bank with $5.8 million of the offering  proceeds.  On May 24, 1999,
the Company  announced  that it was  commencing  a stock  repurchase  program to
acquire up to 10% of the Company's  outstanding shares of Common Stock, or up to
132,250 shares,  over a 12-month  period.  These  repurchases  were completed in
December 1999. On March 20, 2000 the Company announced a second stock repurchase
program  to  acquire  up to 10% of the  Company's  outstanding  shares of Common
Stock, or up to 119,025 shares over a twelve month period.  The repurchases were
completed in May 2000. On November 8, 2000, the Company  announced a third stock
repurchase  program to acquire up to 10% of the Company's  outstanding shares of
Common  Stock or up to  107,123  shares  over a  twelve  month  period.  Through
September 15, 2001, 46,416 shares have been repurchased.

     The Company  engages in no  significant  activity  other than investing the
proceeds of the offering of Common Stock which it retained, holding the stock of
the Bank and  operating the business of a savings and loan  association  through
the Bank.  Accordingly,  the  information  set forth in this  report,  including
financial  statements  and related data,  relates  primarily to the Bank and its
subsidiaries.

     In April 2000 the Company  relocated its executive  offices to its new main
office  located at 7630 West US Highway  50,  Salida,  Colorado.  Its  telephone
number is (719) 539-2516.

     HIGH COUNTRY BANK. The Bank is a federal stock savings and loan association
operating through offices located in Salida (2), Colorado, Buena Vista, Colorado
and Leadville,  Colorado and serving Chaffee, Lake, Western Fremont and Saguache
Counties  in   Colorado.   The  Bank  was   chartered   in  1886  as  the  first
state-chartered  building and loan  association  in Colorado.  The Bank received
federal  insurance  of its deposit  accounts  and became a member of the FHLB in
1937. The Bank became a federally-chartered association on August 16, 1993 under
the name of Salida Building and Loan  Association.  Effective  December 9, 1997,
the Bank became a stock savings and loan association. At June 30, 2001, the Bank
had total assets of $161.3 million,  loans  receivable  (net) of $136.8 million,
total deposits of $98.5 million and equity of $16.6 million.

     Historically, the Bank has operated as a traditional savings institution by
emphasizing the origination of loans secured by one- to four-family  residences.
Since fiscal 1996,  the Bank has  significantly  increased  its  origination  of
consumer,  commercial business and commercial real estate loans, including loans
for the  purchase  and  development  of raw land,  all of which  loans have been
originated in its market area.

     In November 1999,  the Bank  incorporated  a new  subsidiary,  High Country
Title and Escrow Company ("High Country Title").  High Country Title is offering
title insurance and escrow closing services within the Bank's market area.

     The Bank is subject to  examination  and  comprehensive  regulation  by the
Office of Thrift  Supervision  ("OTS"),  and the  Bank's  savings  deposits  are
insured  up to  applicable  limits by the  Savings  Association  Insurance  Fund
("SAIF"),  which is administered by the Federal  Deposit  Insurance  Corporation
("FDIC").  The Bank is a member of and owns  capital  stock in the Federal  Home
Loan Bank  ("FHLB")  of Topeka,  which is one of 12  regional  banks in the FHLB
System.  The Bank is further subject to regulations of the Federal Reserve Board
governing  reserves to be  maintained  and certain  other  matters.  Regulations
significantly affect the operations of the Bank.

     In April  2000 the Bank  relocated  its  executive  offices to its new main
office located at 7360 West US Highway 50, Salida, Colorado 81201-0309. Its main
telephone number is (719) 539-2516.

                                       4
<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

     Prior to the acquisition of all of the  outstanding  stock of the Bank, the
Company had no assets or  liabilities  and  engaged in no  business  activities.
Since its  acquisition  of the Bank,  the Company has engaged in no  significant
activity other than holding the stock of the Bank, investing the net proceeds of
the  offering  and  operating  the  business of a savings  and loan  association
through  the  Bank.  Accordingly,  the  information  set  forth in this  report,
including financial statements and related data, relates primarily to the Bank.

     The principal  business of the Bank consists of accepting deposits from the
general  public and investing  these funds  primarily in loans and in investment
securities and  mortgage-backed  securities.  The Bank's loan portfolio consists
primarily  of loans  secured by  residential  real estate  located in its market
area,  with  terms  of 15 to 30  years,  as  well  as  commercial  real  estate,
commercial business, land development and consumer loans.

     The Bank's net income is dependent  primarily  on its net interest  income,
which is the difference  between interest income earned on its loan,  investment
securities  and  mortgage-backed  securities  portfolio  and  interest  paid  on
interest-bearing  liabilities.  Net  interest  income is  determined  by (i) the
difference  between yields earned on  interest-earning  assets and rates paid on
interest-bearing  liabilities  ("interest  rate  spread")  and (ii) the relative
amounts of interest-earning assets and interest-bearing  liabilities. The Bank's
interest rate spread is affected by regulatory, economic and competitive factors
that  influence  interest  rates,  loan  demand and deposit  flows.  To a lesser
extent,  the Bank's  net income  also is  affected  by the level of  noninterest
expenses such as compensation and employee benefits and operating expenses.

     The  operations  of the  Bank  are  significantly  affected  by  prevailing
economic  conditions,  competition  and  the  monetary,  fiscal  and  regulatory
policies of  governmental  agencies.  Lending  activities  are influenced by the
demand  for and  supply of  housing,  competition  among  lenders,  the level of
interest rates and the  availability of funds.  Deposit flows and costs of funds
are  influenced by prevailing  market rates of interest,  primarily on competing
investments, account maturities and the levels of personal income and savings in
the Bank's market area.

ASSET/LIABILITY MANAGEMENT

     The  Bank's  asset/liability  management  strategy  has  been to  emphasize
shorter  term loans and develop a deposit  portfolio  of  transaction  accounts.
Beginning in late fiscal 1999 the Bank began selling  long-term fixed rate loans
in the secondary market.  The Bank's business plan calls for continued  emphasis
on shorter term, adjustable rate loans and sales of long-term fixed rate loans.

     As noted  above,  the Bank is seeking to reduce its  exposure to changes in
interest  rates by  originating  shorter term consumer and  commercial  business
loans with  maturities of no more than 10 years and by selling  long-term  fixed
rate loans. The matching of the Bank's assets and liabilities may be analyzed by
examining  the extent to which its  assets and  liabilities  are  interest  rate
sensitive and by monitoring the expected effects of interest rate changes on the
Bank's net interest income.

     An asset or liability is interest  rate  sensitive  within a specific  time
period if it will  mature or  reprice  within  that time  period.  If the Bank's
assets  mature  or  reprice  more  quickly  or  to a  greater  extent  than  its
liabilities,  the Bank's net portfolio  value and net interest income would tend
to increase  during periods of rising interest rates but decrease during periods
of falling interest rates. If the Bank's assets mature or reprice more slowly or
to a lesser extent than its liabilities,  the Bank's net portfolio value and net
interest  income would tend to decrease  during periods of rising interest rates
but  increase  during  periods of  falling  interest  rates.  As a result of the
interest rate risk inherent in the historical  savings  institution  business of
originating long-term loans funded by short-term deposits,  the Bank has pursued
certain  strategies  designed to decrease the  vulnerability  of its earnings to
material and prolonged changes in interest rates.

                                       5
<PAGE>
INTEREST RATE SENSITIVITY ANALYSIS

     The matching of assets and  liabilities  may be analyzed by  examining  the
extent to which such assets and liabilities are "interest rate sensitive" and by
monitoring  an  institution's  interest  rate  sensitivity  "gap."  An  asset or
liability is said to be interest rate sensitive  within a specific  period if it
will mature or reprice within that period.  The interest rate sensitivity gap is
defined as the difference between the amount of interest-earning assets maturing
or repricing  within a specific  time period and the amount of  interest-bearing
liabilities  maturing or repricing  within that time period. A gap is considered
positive when the amount of interest rate sensitive assets exceeds the amount of
interest rate sensitive liabilities,  and is considered negative when the amount
of interest  rate  sensitive  liabilities  exceeds  the amount of interest  rate
sensitive assets.

     Generally,  during a period of rising  interest rates, a negative gap would
be expected to adversely  affect net interest  income while a positive gap would
be expected to result in an increase in net interest  income,  while  conversely
during a period of declining interest rates, a negative gap would be expected to
result  in an  increase  in net  interest  income  and a  positive  gap would be
expected to adversely  affect net interest  income.  As noted above, the Bank is
attempting  to  improve  its   significant   negative  gap  by  emphasizing  the
origination of shorter-term consumer and commercial business loans.

     NET PORTFOLIO  VALUE.  In recent years,  the Bank has measured its interest
rate sensitivity by computing the "gap" between the assets and liabilities which
were expected to mature or reprice within certain periods,  based on assumptions
regarding loan prepayment and deposit decay rates formerly  provided by the OTS.
However,  the OTS now  requires  the  computation  of  amounts  by which the net
present value of an  institution's  cash flows from assets,  liabilities and off
balance  sheet items (the  institution's  net portfolio  value,  or "NPV") would
change in the event of a range of  assumed  changes  in market  interest  rates.
These   computations   estimate  the  effect  on  an   institution's   NPV  from
instantaneous  and permanent 1% to 3% increases and decreases in market interest
rates. In the Bank's interest rate sensitive policy,  the Board of Directors has
established a maximum  decrease in net interest income and maximum  decreases in
NPV given these instantaneous changes in interest rates.

         The following table sets forth the interest rate sensitivity of the
Bank's net portfolio value as of June 30, 2001 in the event of 1%, 2% and 3%
instantaneous and permanent increases and decreases in market interest rates,
respectively. These changes are set forth below as basis points, where 100 basis
points equals one percentage point.
<TABLE>
<CAPTION>
                                                                                           NPV AS % OF
                                NET PORTFOLIO VALUE                                 PORTFOLIO VALUE OF ASSETS
      CHANGE              ----------------------------------------             ----------------------------------
      IN RATES           $ AMOUNT        $ CHANGE       % CHANGE               NPV RATIO       BASIS POINT CHANGE
      --------           --------        --------       --------               ---------       ------------------
                                   (DOLLARS IN THOUSANDS)
      <S>                <C>           <C>                  <C>                   <C>                 <C>
      + 300 bp           $ 19,456         (3,606)           (16)%                 11.84%              (155) bp
      + 200 bp             20,742         (2,320)           (10)                  12.43                (96) bp
      + 100 bp             22,021         (1,041)            (5)                  12.98                (41) bp
          0 bp             23,062                                                 13.39
      - 100 bp             23,233            171              1                   13.34                 (5) bp
      - 200 bp             22,855           (207)            (1)                  13.01                (38) bp
      - 300 bp             22,313           (748)            (3)                  12.59                (79) bp

</TABLE>

                                       6
<PAGE>
     The following table sets forth the interest rate risk capital component for
the Bank at June 30,  2001 given a  hypothetical  200 basis point rate change in
market interest rates.

                                                                   June 30, 2001
                                                                   -------------
Pre-shock NPV Ratio: NPV as % of Portfolio Value of Assets..........  13.39%

Exposure Measure: Post-Shock NPV Ratio..............................  12.43%

Sensitivity Measure: Change in NPV Ratio............................  96 bp

     Computations of prospective  effects of hypothetical  interest rate changes
are based on numerous assumptions,  including relative levels of market interest
rates and loan  prepayments,  and should  not be relied  upon as  indicative  of
actual  results.  Further,  the  computations do not contemplate any actions the
Bank may undertake in response to changes in interest rates.

     Certain  shortcomings  are inherent in the method of analysis  presented in
both the  computation  of NPV and in the  analysis  presented  in  prior  tables
setting  forth  the  maturing  and  repricing  of  interest-earning  assets  and
interest-bearing   liabilities.   For  example,   although  certain  assets  and
liabilities may have similar maturities or periods to repricing,  they may react
in differing  degrees to changes in market interest rates. The interest rates on
certain of assets and  liabilities may fluctuate in advance of changes in market
interest  rates,  while interest rates on other assets and  liabilities  may lag
behind changes in market rates.  Based on the above,  net interest income should
decline with instantaneous increases in interest rates while net interest income
should increase with instantaneous  declines in interest rates.  Further, in the
event of a change in interest  rates,  prepayment  and early  withdrawal  levels
would likely deviate significantly from those assumed in the tables.

     The Bank originates  fixed-rate and variable-rate real estate loans and has
historically  held most loans in portfolio  until  maturity.  Because the Bank's
interest-bearing  liabilities  which  mature or  reprice  within  short  periods
substantially exceed its earning assets with similar  characteristics,  material
and prolonged  increases in interest rates generally would adversely  affect net
interest  income,  while  material and  prolonged  decreases  in interest  rates
generally,  but to a lesser  extent  because of their  historically  low levels,
would have the opposite effect.

AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES

     The following table sets forth certain  information  relating to the Bank's
average  interest-earning  assets and interest-bearing  liabilities and reflects
the average yield on assets and average cost of liabilities  for the periods and
at the date  indicated.  Such yields and costs are derived by dividing income or
expense by the average monthly  balance of assets or liabilities,  respectively,
for the periods presented. Management does not believe that the use of month-end
balances  instead of daily  balances has caused any material  difference  in the
information presented.

     The  table  also  presents  information  for the  periods  and at the  date
indicated  with respect to the  difference  between the average  yield earned on
interest-earning  assets and average rate paid on interest-bearing  liabilities,
or "interest rate spread," which savings institutions have traditionally used as
an  indicator  of  profitability.  Another  indicator  of an  institution's  net
interest income is its "net yield on interest-earning  assets," which is its net
interest income divided by the average balance of  interest-earning  assets. Net
interest  income is affected  by the  interest  rate spread and by the  relative
amounts  of  interest-earning  assets  and  interest-bearing  liabilities.  When
interest-earning assets approximate or exceed interest-bearing  liabilities, any
positive interest rate spread will generate net interest income.

                                       7
<PAGE>
<TABLE>
<CAPTION>
                                                                   YEAR ENDED JUNE  30,
                                              -----------------------------------------------------------
                                                                 2001                    2000
                                              ------------------------------  ----------------------------
                                                                     AVERAGE                        AVERAGE
                                                                      YIELD/   AVERAGE               YIELD/
                                              BALANCE     INTEREST     COST    BALANCE    INTEREST   COST
                                              -------     --------    -------  -------    --------  -------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                          <C>           <C>         <C>     <C>          <C>        <C>
INTEREST-EARNING ASSETS:
Interest-bearing deposits..................  $   4,091     $     52    1.27%   $   3,511    $    80    2.28%
  Investments..............................      4,766          353    7.41        4,614        299    6.48
  Loans....................................    132,967       11,926    8.97      108,601      9,157    8.43
                                             ---------     --------            ---------    -------
Total interest-earning assets .............    141,824       12,331    8.69      116,726      9,536    8.17
                                                           --------                         -------
Non-interest-earning assets................      8,915                             7,181
                                             ---------                         ---------
Total assets...............................  $ 150,739                         $ 123,907
                                             =========                         =========

INTEREST-BEARING LIABILITIES:
  Savings deposits.........................  $  83,947     $  3,663    4.36    $  78,033    $ 2,864    3.67
  FHLB advances............................     42,581        2,670    6.27       28,012      1,635    5.84
                                             ---------     --------            ---------    -------
Total interest-bearing liabilities.........    126,528        6,333    5.01      106,045      4,499    4.24
                                                           --------                         -------
Non-interest bearing liabilities...........      7,848                               826
                                             ---------                         ---------
Total liabilities..........................    134,376                           106,871
Equity.....................................     16,363                            17,036
                                             ---------                         ---------
Total liabilities and equity...............  $ 150,739                         $ 123,907
                                             =========                         =========
Net interest income........................                $  5,998                         $ 5,037
                                                           ========                         =======

Net interest rate spread (1)...............                             3.68%                          3.93%
                                                                        ====                           =====
Net interest\dividend earning assets.......                $ 15,296                         $10,681
                                                           ========                         =======
Net interest margin (2)....................                             4.23%                          4.32%
                                                                        ====                           =====
Average interest-earning assets to
  average interest-bearing liabilities (3).                  112.09%                         110.07%
                                                           ========                         =======
<FN>
_________________
(1)  Net interest  rate spread  represents  the  difference  between the average
     yield on  interest-earning  assets and the average rate on interest-bearing
     liabilities.
(2)  Net  interest  margin  represents  net interest  income  divided by average
     interest-earning assets.
(3)  Due to the immaterial  amount of non-accruing  loans,  the balances of such
     loans have been included as interest-earning assets.
</FN>
</TABLE>

                                       8
<PAGE>

RATE/VOLUME ANALYSIS

     The following  table sets forth certain  information  regarding  changes in
interest income and interest expense of the Bank for the periods indicated.  For
each  category  of  interest-earning   asset  and  interest-bearing   liability,
information  is  provided  on changes  attributable  to:  (i)  changes in volume
(changes in volume  multiplied  by old rate);  (ii) changes in rate  (changes in
rate  multiplied by old volume);  and (iii) changes in  rate/volume  (changes in
rate multiplied by changes in volume).
<TABLE>
<CAPTION>
                                                      YEAR ENDED JUNE 30,
                                         ------------------------------------------------
                                                2000           VS.           1999
                                         ------------------------------------------------
                                                     INCREASE (DECREASE)
                                                              DUE TO
                                         ------------------------------------------------
                                                                   RATE/
                                         VOLUME       RATE         VOLUME      TOTAL
                                         ------       ----         -------     ------
                                                            (IN THOUSANDS)
<S>                                      <C>          <C>          <C>         <C>
INTEREST-EARNING ASSETS:
  Interest-bearing deposits............  $      13    $    (19)    $     (3)   $      (9)

  Investments..........................         10          43            1           54
  Loans................................      2,053         585          131        2,769
                                         ---------    --------     --------    ---------
    Total interest-earning assets......      2,076         609          129        2,814
                                         ---------    --------     --------    ---------
INTEREST-BEARING LIABILITIES:
  Deposits.............................        209         550           40          799

  FHLB advances........................        851         121           63        1,035
                                         ---------    --------     --------    ---------
     Total interest-bearing
       liabilities.....................      1,060        671         103          1,834
                                         ---------   --------     -------      ---------
  Increase (decrease) in net interest
    income.............................  $   1,016    $    (62)    $     26    $     980
                                         =========    ========     ========    =========
</TABLE>
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2001 AND JUNE 30, 2000

     The Company's total assets increased by $23.6 million or 17.13% from $137.7
million at June 30, 2000 to $161.3  million at June 30,  2001.  The  increase in
assets was due to loan growth of $16.9 million and increase in  interest-bearing
deposits of $7.9 million.

     Net loans  totaled  $136.8  million at June 30, 2001 and $119.9  million at
June 30, 2000.  The increase in loans  occurred in commercial  real estate loans
which increased  $10.9 million,  commercial  non-mortgage  loans which increased
$4.5  million,  land loans  which  increased  $4.1  million  and  single  family
construction loans which increased $2.1 million.  The bank benefited from strong
local demand for purchase  financing  and loan  refinancing.  The loan growth in
these areas offset a $4.1  million  decrease in single  family loans  associated
with the refinancing of portfolio loans into sold loans.

     During the year,  the Bank  continued  the program of ongoing loan sales of
fixed-rate  loans to the Federal Home Loan Mortgage  Corporation  (FHLMC).  Loan
sales for the year ended  June 30,  2001 were $28.0  million  compared  to $12.0
million  for the year ended June 30,  2000.  The loan sales  growth was due to a
large amount of  refinancing  associated  with lower interest  rates.  The sales
began in order to manage interest rate risk, compete with mortgage companies and
increase fee income.  At June 30, 2001,  loans held for sale were $917,500.  The
loans are valued at the lower of cost or market.

     The  allowance  for loan losses  totaled  $1.3 million at June 30, 2001 and
$1.0 million at June 30, 2000. At June 30, 2001 and June 30, 2000,  the ratio of
the allowance for loan losses to net loans was 0.99% and 0.84%,

                                       9
<PAGE>
respectively.  As of those dates the  non-performing  loans in the Association's
portfolio  were $1.8  million and  $533,000,  respectively.  The majority of the
increase  was due to the  addition of one  $660,000  loan  secured by  developed
residential  lots.  This  loan is also the  largest  non-performing  loan and is
currently in  foreclosure.  The Bank does not anticipate a loss on this loan due
to the property  value and the presence of a second lien holder.  Non-performing
loans also  increased due to the addition of two loans  totaling  $401,000 cross
collateralized with commercial real estate and residential  duplexes.  These two
loans have since been  brought  current and no loss is expected on these  loans.
The remaining  non-performing  loans include 28 loans secured by commercial real
estate,  single  family  residences,  business  equipment  and autos.  There was
$41,000 of loans  charged off and $1,000 in  recoveries  of previous loan losses
during the year ended June 30, 2001. The determination of the allowance for loan
losses is based on a review and  classification of the Bank's loan portfolio and
other factors,  including the market value of the underlying collateral,  growth
and  composition of the loan  portfolio,  the  relationship of the allowance for
loan losses to outstanding loans, historical loss experience, delinquency trends
and  prevailing  economic  conditions.  Particular  attention was focused on the
Bank's  commercial loan portfolio and any impaired loans.  The Bank believes the
current  level of allowance  for loan losses is adequate to provide for probable
future losses,  although there are no assurances that probable future losses, if
any, will not exceed estimated amounts.

     Interest bearing deposits  increased $7.9 million from $1.3 million at June
30,  2000 to $9.2  million  at June 30,  2001.  The  increase,  which  primarily
occurred  in the  last  quarter  of the  year,  was the  result  of  significant
refinancing of portfolio loans and the subsequent sale to FHLMC.  Deposit growth
also  contributed to the increase.  In the upcoming  months,  these funds may be
used for paying down FHLB advances,  seasonal deposit  withdrawals,  loan demand
and  investment  purchases.  The balance of the Company's  investment  portfolio
included mortgage-backed  securities classified as "held to maturity" carried at
amortized cost of $2.2 million and an estimated fair value of $2.3 million.

     At June 30, 2001 deposits  increased to $98.5 million from $82.8 million at
June 30, 2000 or a net increase of 19.03%.  The increase was  primarily  used to
fund  loan  growth.   Management  is   continually   evaluating  the  investment
alternatives  available to the Company's  customers,  and adjusts the pricing on
its savings products to maintain its existing deposits.

     Advances from the Federal Home Loan Bank increased to $44.1 million at June
30, 2001 from $36.2  million at June 30, 2000.  The  increase,  which  primarily
occurred in the first two quarters of the year was used to fund loan growth.

     On November 9, 2000,  the Company  announced a plan to repurchase up to 10%
or 107,122 shares of the outstanding  stock.  For the year ending June 30, 2001,
the Company  repurchased  42,233  shares at a cost of $607,000.  On November 15,
2000 and May 15,2001, the Company paid dividends of $0.25 per share.

COMPARISON OF OPERATING RESULTS FOR THE YEAR ENDED JUNE 30, 2001 AND 2000

     NET INCOME.  The  Company's net income for the year ended June 30, 2001 was
$1.3  million  compared to $1.0  million for the year ended June 30,  2000.  The
increase in net income  resulted  primarily from increased  interest  income and
non-interest income which offset increased interest, compensation, occupancy and
other expenses.

     NET INTEREST  INCOME.  Net interest income for the year ended June 30, 2001
was $6.0 million  compared to $5.0 million for the year ended June 30, 2000. The
increase is attributed to increased  interest earned on interest  earning assets
due to loan growth less the increase in interest  expense due to the increase in
interest  bearing  liabilities.  The average  yield on interest  earning  assets
increased  from  8.17% for the year  ended  June 30,  2000 to 8.69% for the year
ended June 30,  2001.  The  increase was due to  short-term  loans  repricing to
higher rates and growth in loans at higher average rates as compared to the loan
portfolio.  The average cost of interest bearing liabilities also increased from
4.24% for the year  ended  June 30,  2000 to 5.01% for the year  ended  June 30,
2001.  The  increase in costs was due to higher  deposit  rates  implemented  to
maintain  and attract  deposits and higher  Federal  Home Loan Advance  rates on
maturing and new advances. The interest rate spread decreased from 3.93% for the
year ended June 30, 2000 to 3.68% for the year ended June 30, 2001.

                                       10
<PAGE>

     PROVISION  FOR LOAN LOSSES.  The provision for loan losses was $385,000 for
the year ended June 30, 2001 as compared to $210,000 for the year ended June 30,
2000.  The  increase  reflects  a review of  impaired  loans  and the  growth in
commercial non-mortgage and real estate loans.

     NON-INTEREST  INCOME.  Non-interest  income was $1.2  million  for the year
ended June 30, 2001 as compared  to $590,000  for the year ended June 30,  2000.
Loan  origination  growth from favorable  mortgage loan interest rates increased
income from loan sales. Title and escrow fees from High Country Title and Escrow
Company  increased due to a full year of operation in comparison to the previous
period of only six  months  for year ended  June 30,  2000.  Other  non-interest
income  primarily  includes other loan fees and increased due to the higher loan
volume.

     NON-INTEREST  EXPENSES.  Non-interest expense was $4.8 million for the year
ended June 30,  2001 as  compared  to $3.8  million  for the year ended June 30,
2000. Increases occurred in compensation and benefit expense,  occupancy expense
and other expenses.  The increases are tied to additional employees, a full year
of  operation  in the new home  office  opened  in April  2000,  a full  year of
operation of High  Country  Title and Escrow  Company and other  expenses due to
growth.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's primary sources of funds consist of deposits,  FHLB advances,
repayment of loans and mortgage-backed securities, maturities of investments and
interest-bearing  deposits, and funds provided from operations.  While scheduled
repayments of loans and mortgage-backed  securities and maturities of investment
securities are predicable  sources of funds,  deposit flows and loan prepayments
are  greatly  influenced  by the  general  level  of  interest  rates,  economic
conditions and competition. The Company uses its liquidity resources principally
to fund existing and future loan commitments,  to fund maturing  certificates of
deposit and demand  deposit  withdrawals,  to fund  maturing FHLB  advances,  to
invest in other  interest-earning  assets,  to maintain  liquidity,  and to meet
operating  expenses.  Management believes that proceeds from loan repayments and
other  sources of funds will be adequate to meet the Company's  liquidity  needs
for the immediate future.

     The OTS repealed a statutory  liquidity  requirement in late 2000. The Bank
was  previously  required  to  maintain  a minimum  ratio of 4%.  Under  revised
regulations,  the Bank is required to maintain sufficient  liquidity to ensure a
safe and  sound  operation.  Management  believes  that the  Bank's  sources  of
liquidity for potential uses are adequate under the revised regulations.

IMPACT OF INFLATION AND CHANGING PRICES

     The  financial  statements  and  related  data  presented  herein have been
prepared in accordance  with generally  accepted  accounting  principles,  which
require the measurement of financial position and results of operations in terms
of historical  dollars without  considering  changes in the relative  purchasing
power of money over time because of inflation. Unlike most industrial companies,
virtually  all of the assets and  liabilities  of the  Company  are  monetary in
nature.  As a  result,  interest  rates  have a more  significant  impact on the
Company's performance than the effects of general levels of inflation.  Interest
rates do not necessarily  move in same direction or in the same magnitude as the
prices of goods and services.

IMPACT OF NEW ACCOUNTING STANDARDS

     ACCOUNTING  FOR  DERIVATIVES  AND  SIMILAR  FINANCIAL  INSTRUMENTS  AND FOR
HEDGING  ACTIVITIES.  In June 1998,  the Financial  Accounting  Standards  Board
issued Statement No. 133, which was  subsequently  amended by Statement No. 139.
The Statement  requires all  derivatives  to be measured at fair value and to be
recognized  as either  assets  or  liabilities  in the  statement  of  financial
condition,  and is  effective  for fiscal years  beginning  after June 15, 2000.
Management has determined the impact of adopting this statement on July 1, 2000,
will not have a material affect on the financial statements.

                                       11
<PAGE>

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting Bulletin ("SAB") No. 101. SAB No. 101 summarizes certain areas of the
Staff's views in applying  generally accepted  accounting  principles to revenue
recognition in financial  statements  and is effective for the Company's  fourth
quarter in fiscal 2001.

     In March  2000,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No. 44,  "Accounting  For Certain  Transactions  Involving Stock
Compensation"  - an  interpretation  of APB  Opinion  No. 25; the  criteria  for
determining  whether a plan qualifies as a noncompensatory  plan; the accounting
consequences  of various  modifications  to the terms of previously  fixed stock
options or awards;  and the  accounting  for an exchange  of stock  compensation
awards in a business combination.  FIN 44 is effective July 1, 2000, but certain
conclusions in FIN 44 cover specific  events that occurred after either December
15, 1998 or January 12, 2000.  Management  has not yet  determined the impact on
the consolidated financial statements or results of operations of the Company of
this new standard.


                                       12
<PAGE>

                        CONSOLIDATED FINANCIAL STATEMENTS
                   HIGH COUNTRY BANCORP, INC. AND SUBSIDIARIES


                                                                            Page

Independent Auditors' Report                                                 14

Consolidated Statements of Financial Condition as of June 30,
   2001 and 2000                                                             15

Consolidated Statements of Income for the Years Ended June 30,
   2001 and 2000                                                             16

Consolidated Statements of Equity for the Years Ended June 30,
   2001 and 2000                                                             17

Consolidated Statements of Cash Flows for the Years Ended June 30,
   2001 and 2000                                                             18

Notes to Consolidated Financial Statements                                   19


                                       13
<PAGE>

                  GRIMSLEY, WHITE & COMPANY              301 Raton Avenue
                  Certified Public Accountants    La Junta, Colorado 81050-1697
                  and Management Consultants                719-384-5489





                          INDEPENDENT AUDITORS' REPORT



Board of Directors
High Country Bancorp, Inc.
Salida, Colorado

We have audited the accompanying  consolidated statements of financial condition
of High  Country  Bancorp,  Inc. as of June 30,  2001 and 2000,  and the related
consolidated  statements  of income,  equity,  and cash flows for the years then
ended.  These  consolidated  financial  statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position  of High  Country
Bancorp, Inc. as of June 30, 2001 and 2000 and the results of its operations and
its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.


                                         /s/ Grimsley White & Company
                                         GRIMSLEY, WHITE & COMPANY



La Junta, Colorado
August 27, 2001

                                       14
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                             JUNE 30, 2001 AND 2000
<TABLE>
<CAPTION>

                            ASSETS                                                          2001              2000
                                                                                      ------------     -------------
<S>                                                                                    <C>               <C>
Cash and amounts due from banks                                                        $ 2,759,671       $ 4,392,623
Interest- bearing deposits at other institutions                                         9,175,856         1,320,918
Mortgage-backed securities, held to maturity                                             2,220,909         2,642,889
Securities held to maturity                                                                      -           200,000
Loans receivable - net                                                                 135,916,318       119,897,542
Loans held for sale                                                                        917,500                 -
Federal Home Loan Bank stock, at cost                                                    2,421,600         1,857,000
Accrued interest receivable                                                              1,121,412           825,109
Property and equipment, net                                                              6,111,907         6,071,939
Mortgage servicing rights                                                                   14,504            22,361
Prepaid expenses and other assets                                                          508,187           458,530
Deferred income taxes                                                                      162,800            46,300
                                                                                      ------------     -------------
            TOTAL ASSETS                                                              $161,330,664     $ 137,735,211
                                                                                      ============     =============

                    LIABILITIES AND EQUITY
LIABILITIES
Deposits                                                                              $ 98,517,228      $ 82,770,398
Advances by borrowers for taxes and insurance                                               29,724            11,316
Escrow accounts                                                                          1,070,624         1,833,388
Accounts payable and other liabilities                                                     988,588           762,553
Advances from Federal Home Loan Bank                                                    44,124,999        36,238,333
Accrued income taxes payable                                                                40,167            11,574
                                                                                      ------------     -------------
            TOTAL LIABILITIES                                                          144,771,330       121,627,562
                                                                                      ------------     -------------
Commitments and contingencies

EQUITY
Preferred stock- $.01 par value; authorized 1,000,000
   shares; no shares issued or outstanding                                                       -                 -
Common stock-$.01 par value; authorized 3,000,000 shares;
   issued and outstanding 1,028,992 (2001)and 1,071,225 shares (2000)                       10,290            10,712
Paid-in capital                                                                          9,151,686         9,720,159
Retained earnings - substantially restricted                                             8,215,667         7,433,495
Note receivable from ESOP Trust                                                           (626,865)         (732,665)
Deferred MRP stock awards                                                                 (191,444)         (324,052)
                                                                                      ------------     -------------
            TOTAL EQUITY                                                                16,559,334        16,107,649
                                                                                      ------------     -------------
            TOTAL LIABILITIES AND EQUITY                                              $161,330,664     $ 137,735,211
                                                                                      ============     =============
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       15
<PAGE>


                           HIGH COUNTRY BANCORP, INC.

                        CONSOLIDATED STATEMENTS OF INCOME

                       YEARS ENDED JUNE 30, 2001 AND 2000
<TABLE>
<CAPTION>
                                                                                          2001              2000
                                                                                      ------------       ----------
<S>                                                                                   <C>                <C>
Interest Income
      Interest on loans                                                               $ 11,926,363       $9,156,941
      Interest on securities held-to-maturity                                              178,492          193,795
      Interest on other interest-bearing assets                                            226,839          185,682
                                                                                      ------------       ----------
                  Total interest income                                                 12,331,694        9,536,418
                                                                                      ------------       ----------
Interest Expense
      Deposits                                                                           3,662,818        2,863,665
      Federal Home Loan Bank advances                                                    2,670,482        1,635,234
                                                                                      ------------       ----------
                  Total interest expense                                                 6,333,300        4,498,899
                                                                                      ------------       ----------
                  Net interest income                                                    5,998,394        5,037,519
Provision for losses on loans                                                              385,000          209,800
                                                                                      ------------       ----------
                  Net income after provision
                        for loan losses                                                  5,613,394        4,827,719
                                                                                      ------------       ----------
Noninterest Income
      Service charges on deposits                                                          209,496          155,355
      Loans sold                                                                           408,872          203,064
      Title and escrow fees                                                                305,278                -
      Other                                                                                301,065          231,478
                                                                                      ------------       ----------
                  Total noninterest income                                               1,224,711          589,897
                                                                                      ------------       ----------
Noninterest Expense
     Compensation and benefits                                                           2,742,264        2,216,093
     Occupancy and equipment                                                             1,115,756          754,025
     Insurance and professional fees                                                       249,549          236,221
     Other                                                                                 648,075          546,233
                                                                                      ------------       ----------
                  Total noninterest expense                                              4,755,644        3,752,572
                                                                                      ------------       ----------
                  Income before income taxes                                             2,082,461        1,665,044

                  Income tax expense                                                       810,082          618,600
                                                                                      ------------       ----------
                  Net income                                                          $  1,272,379       $1,046,444
                                                                                      ============       ==========
Basic Earnings Per Common Share                                                             $ 1.30           $ 0.96
                                                                                      ============       ==========
Diluted Earning Per Common Share                                                            $ 1.30           $ 0.96
                                                                                      ============       ==========
Weighted Average Common Shares Outstanding
     Basic                                                                                 975,855        1,090,233
     Diluted                                                                               979,255        1,090,233
Dividends Paid Per Share                                                                   $ 0.500          $ 0.450
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       16
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                        CONSOLIDATED STATEMENTS OF EQUITY

                       YEARS ENDED JUNE 30, 2001 AND 2000
<TABLE>
<CAPTION>
                                                                                           NOTE           DEFERRED
                                         COMMON         PAID-IN          RETAINED       RECEIVABLE          STOCK
                                          STOCK         CAPITAL          EARNINGS          ESOP             AWARDS
                                         --------      -----------      ----------       ----------       ----------
<S>                                      <C>          <C>               <C>              <C>              <C>
BALANCES JUNE 30, 1999                   $ 12,987     $ 12,426,953      $6,868,120       $ (838,465)      $ (441,363)

     Net income                                                          1,046,444


     MRP stock awards                                         (766)                                          117,311

     ESOP contribution                                      14,934

     ESOP note payment                                                                      105,800

     Stock purchased and
      retired                              (2,275)      (2,720,962)

     Dividends paid                                                       (481,069)
                                         --------      -----------      ----------       ----------       ----------

BALANCES JUNE 30, 2000                     10,712        9,720,159       7,433,495         (732,665)        (324,052)

     Net income                                                          1,272,379

     MRP stock awards                                          290                                           132,608

     ESOP contribution                                      37,977

     ESOP note payment                                                                      105,800

     Stock purchased and
     retired                                 (422)        (606,740)

     Dividends paid                                                       (490,207)

                                         --------      -----------      ----------       ----------       ----------
BALANCES JUNE 30, 2001                   $ 10,290      $ 9,151,686      $8,215,667       $ (626,865)      $ (191,444)
                                         ========      ===========      ==========       ==========       ==========
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       17
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                       YEARS ENDED JUNE 30, 2001 AND 2000
<TABLE>
<CAPTION>
                                                                     2001            2000
                                                                 ------------    ------------
<S>                                                              <C>             <C>
      Operating Activities
      Net income                                                 $  1,272,379    $  1,046,444
      Adjustments to reconcile net income to net cash provided
            by operating activities:
      Amortization of:
            Deferred loan origination fees                           (137,549)        (95,477)
            Premiums on investments                                     5,124           5,741
      Loss on disposition of equipment                                 12,598              --
      Compensation expense on ESOP shares                             105,800         105,800
      Compensation expense on Management Recognition Plan             132,897         117,311
      Stock dividend received from FHLB                                    --         (45,300)
      ESOP market value expense                                        37,977          14,168
      Provision for losses on loans                                   385,000         209,800
      Deferred income taxes                                          (116,500)        (38,900)
      Depreciation                                                    398,647         224,810
      Income taxes                                                     28,593         (10,440)
      Net change in miscellaneous assets                             (338,103)        (95,617)
      Net change in miscellaneous liabilities                         226,035         106,523
                                                                 ------------    ------------
            Net cash provided by operating activities               2,012,898       1,544,863
                                                                 ------------    ------------
Investing Activities
      Net change in interest bearing deposits                      (7,854,938)      3,089,031
      Net change in loans receivable                              (17,183,728)    (21,578,683)
      Principal repayments of securities-held-to-maturity             616,856         790,159
      Purchase of Federal Home Loan Bank stock                       (564,600)       (610,400)
      Purchases of property and equipment                            (451,211)     (3,433,024)
                                                                 ------------    ------------
            Net cash used by investing activities                 (25,437,621)    (21,742,917)
                                                                 ------------    ------------
Financing Activities
      Net change in deposits                                       15,746,830      10,165,990
      Net change in escrow funds                                     (744,356)      1,826,689
      Purchase of common stock                                       (607,162)     (2,723,237)
      Cash dividends paid                                            (490,207)       (481,069)
      Proceeds (payment) on FHLB advances                           7,886,666      13,553,333
                                                                 ------------    ------------
              Net cash provided by financing activities            21,791,771      22,341,706
                                                                 ------------    ------------
              Net change in cash and cash equivalents              (1,632,952)      2,143,652

Cash and cash equivalents, beginning                                4,392,623       2,248,971
                                                                 ------------    ------------
Cash and cash equivalents, ending                                $  2,759,671    $  4,392,623
                                                                 ============    ============

Supplemental disclosure of cash flow information
Cash paid for:
     Taxes                                                       $    664,989    $    667,940
     Interest                                                       6,328,232       4,503,612
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       18
<PAGE>


                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -1   OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          The  following is a  description  of the more  significant  accounting
          policies which High Country Bancorp,  Inc. (the Company and its wholly
          owned  subsidiary  High Country Bank formerly Salida Building and Loan
          Association  (the Bank) and its wholly owned  subsidiary  High Country
          Title and  Escrow  Company  follow in  preparing  and  presenting  the
          consolidated financial statements.

          Basis of Presentation
          The  consolidated  financial  statements  include the  accounts of the
          Company and its wholly  owned  subsidiary  High  Country  Bank and its
          wholly owned  subsidiary  High Country Title and Escrow  Company.  All
          significant   intercompany   accounts  and   transactions   have  been
          eliminated.

          Organization
          High  Country  Bank (the  Bank) is a federal  stock  savings  and loan
          association  with its main  office  in  Salida,  Colorado  and  branch
          offices in  Salida,  Leadville  and Buena  Vista,  Colorado.  The Bank
          provides a variety of  financial  services to the area it serves.  Its
          primary deposit products are  interest-bearing  checking  accounts and
          certificates  of deposit,  and its primary  lending  products are real
          estate mortgages, consumer and commercial loans.

          High Country Title & Escrow Company provides title, escrow and closing
          services primarily in Chaffee County.

          The Company's  purpose is to act as a holding company with the Bank as
          its sole subsidiary.  The Company's principal business is the business
          of the  Bank,  title  and  escrow  transactions  of the  wholly  owned
          subsidiary of the bank, and holding investments.

          Savings  deposits  of the  Bank are  insured  by the  Federal  Deposit
          Insurance  Corporation  ("FDIC") up to certain  limitations.  The Bank
          pays a premium to FDIC for the insurance of such savings.

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

          Investment  Securities and Mortgage-Backed  Securities Securities Held
          to Maturity.  Bonds and notes for which the entities have the positive
          intent and ability to hold to maturity are reported at cost,  adjusted
          for premiums and  discounts  that are  recognized  in interest  income
          using the interest method over the period to maturity.

          Securities Available for Sale.  Available-for-sale  securities consist
          of bonds  and  notes  not  classified  as  trading  securities  nor as
          held-to-maturity securities.

          Unrealized holding gains and losses, net of tax, on available-for-sale
          securities  are  reported as a net amount in a separate  component  of
          shareholders' equity until realized.

          Gains and  losses  on the sale of  available-for-sale  securities  are
          determined using the specific-identification method.

          Declines  in  the  fair  value  of  individual   held-to-maturity  and
          available-for-sale  securities  below  their  cost that are other than
          temporary would result in write-downs of the individual  securities to
          their fair value.  Should the entities incur  write-downs they will be
          included in earnings as realized losses.

                                       19
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -1   OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Premiums and  discounts are  recognized  in interest  income using the
          interest method over the period to maturity.

          Federal Home Loan Bank Stock
          The  stock is an  equity  interest  in the  Federal  Home Loan Bank of
          Topeka.  The Bank, as a member of the FHLB, is required to maintain an
          investment in capital stock of the FHLB. The stock is carried at cost,
          as its cost is assumed to equal its market value.  FHLB stock can only
          be sold at par value to the FHLB or to another member institution. The
          FHLB  declares  cash and  stock  dividends.  The stock  dividends  are
          recognized as income due to the fact they are  redeemable at par value
          ($100 per share) from the FHLB or another member institution.

          Loans
          Loans are stated at unpaid principal balances,  less the allowance for
          loan losses, net of deferred loan fees and loans in process.

          Loan  origination  and  commitment  fees,  as well as  certain  direct
          origination  costs,  are deferred and amortized as a yield  adjustment
          over  the  lives of the  related  loans  using  the  interest  method.
          Amortization  of  deferred  loan fees is  discontinued  when a loan is
          placed on nonaccrual status.

          Loans are placed on nonaccrual  status when  principal and interest is
          delinquent for 90 days or more.  Uncollectible interest on these loans
          is charged off, or an allowance is established,  based on management's
          periodic  evaluation,  by a charge  to  interest  income  equal to all
          interest previously accrued. Income is subsequently recognized only to
          the extent that cash payments are received.

          Management  has  determined  that first  mortgage loans on one-to-four
          family  properties,  home  equity,  second  mortgage  loans,  and  all
          consumer loans are large groups of  smaller-balance  homogenous  loans
          that are collectively evaluated.  Accordingly,  such loans are outside
          the scope of FASB Statement Nos. 114 and 118.

          Management considers an insignificant delay, which is determined as 90
          days by the  Association,  will not cause a loan to be  classified  as
          impaired.  A loan is not impaired  during a period of delay in payment
          if the bank  expects to collect  all amounts  due  including  interest
          accrued at the contractual  interest rate for the period of delay. All
          loans   identified   as  impaired  are  evaluated   independently   by
          management.

          Loans Held for Sale
          Loans originated and held for sale in the secondary market are carried
          at the lower or cost or  estimated  fair value in the  aggregate.  Net
          unrealized   losses,  if  any,  are  recognized  through  a  valuation
          allowance by charges to income.

          Allowance for Loan Losses
          The  allowance for loan losses is  maintained  at a level,  which,  in
          management's  judgment,  is adequate to absorb losses  inherent in the
          loan  portfolio.  The amount of the allowance is based on management's
          evaluation of the collectibility of the loan portfolio,  including the
          nature of the  portfolio,  credit  concentrations,  specific  impaired
          loans,  and  economic  conditions.  The  allowance  is  increased by a
          provision for loan losses, which is charged to expense, and reduced by
          charge-offs,   net  of  recoveries.   Such  provisions  are  based  on
          management's  estimate  of net  realizable  value or fair value of the
          collateral, as applicable. These estimates are susceptible to economic
          changes  that  could  result in a  material  adjustment  to results of
          operations  in the near term.  Recovery of the carrying  value of such
          loans is dependent to a great  extent on  economic,  operational,  and
          other conditions that may be beyond the Bank's control.

                                       20
<PAGE>
                          HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -1   OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued
          Loan Servicing
          The cost of mortgage  servicing  rights is amortized in proportion to,
          and over the period of, estimated net servicing  revenues.  Impairment
          of mortgage  servicing  rights is assessed  based on the fair value of
          those rights.  Fair values are estimated  using  discounted cash flows
          based on a current market interest rate.

          Property and Equipment
          Property   and   equipment   are  stated  at  cost  less   accumulated
          depreciation.   Depreciation   is  calculated   using   primarily  the
          straight-line  method over the  estimated  useful lives of the related
          assets.  Estimated useful lives of furniture,  fixtures, and equipment
          range from two to ten years;  buildings  and  improvements  range from
          five to forty years.

          Income Taxes
          Income taxes are provided in accordance with SFAS No. 109,  Accounting
          for Income Taxes.  Under the provisions of SFAS No. 109,  deferred tax
          assets and liabilities  are recorded based on the differences  between
          the financial  statement and tax bases of assets and  liabilities  and
          the tax rates  which  will be in effect  when  these  differences  are
          expected to reverse.  If appropriate,  deferred tax assets are reduced
          by a valuation allowance, which reflects expectations of the extent to
          which such assets will be realized.  The Company and its  subsidiaries
          file individual income tax returns.

          Financial Instruments
          Off-balance sheet instruments.  In the ordinary course of business the
          Bank  has  entered  into  off-balance   sheet  financial   instruments
          consisting of  commitments to extend  credit,  and standby  letters of
          credit.  Such  financial  instruments  are  recorded in the  financial
          statements when they are funded.

          Fair Values of Financial Instruments
          The  following  methods and  assumptions  were used by the entities in
          estimating fair values of financial instruments as disclosed herein:

          Cash and  short-term  instruments.  The  carrying  amounts of cash and
          short-term instruments approximate fair values.

          Available-for-sale  and held-to-maturity  securities.  Fair values for
          securities,  excluding  restricted  equity  securities,  are  based on
          quoted  market  prices.  The  carrying  values  of  restricted  equity
          securities approximate fair values.

          Loans receivable.  For variable-rate loans that reprice frequently and
          have no  significant  change in credit risk,  fair values are based on
          carrying-values.  Fair  values for  mortgage  loans,  consumer  loans,
          commercial  real  estate  and  commercial  loans are  estimated  using
          discounted  cash flow analysis,  using interest rates  currently being
          offered for loans with similar  terms to  borrowers of similar  credit
          quality. Fair values for impaired loans are estimated using discounted
          cash flow analysis or underlying collateral values, where applicable.

          Deposit  Liabilities.  The fair values  disclosed for demand  deposits
          are,  by  definition,  equal to the  amount  payable  on demand at the
          reporting  date.  The carrying  amounts of  variable-rate,  fixed-term
          money market accounts and  certificates  of deposit (CDs)  approximate
          their fair values at the reporting  date.  Fair values for  fixed-rate
          CDs are  estimated  using a  discounted  cash  flow  calculation  that
          applies  interest rates  currently  being offered on certificates to a
          schedule of aggregated expected monthly maturities on time deposits.

          Advances from Federal Home Loan Bank. The fair values are based on the
          borrowing rates and remaining maturities.

                                       21
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -1   OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Cash Equivalents
          For the purpose of  reporting  cash flows,  cash and cash  equivalents
          include  cash on hand,  amounts due from banks,  and  interest-bearing
          deposits  at other  institutions.  The  Company  considers  all highly
          liquid debt  instruments  with original  maturities of three months or
          less to be cash equivalents.

          Earnings Per Share
          The Company adopted Financial Accounting Standards Board Statement No.
          128  relating to  earnings  per share.  The  statement  requires  dual
          presentations  of basic and diluted  earnings per share on the face of
          the income  statement.  Basic EPS excludes dilution and is computed by
          dividing   income   available   to   common    stockholders   by   the
          weighted-average  number of common shares  outstanding for the period.
          Diluted  EPS  reflects  the  potential  dilution  that could  occur if
          securities or other  contracts to issue common stock were exercised or
          converted  into common  stock or  resulted  in the  issuance of common
          stock that then shares in the earnings of the entity.

          Stock Compensation Plan
          Statement of Financial  Accounting Standards (SFAS) No. 123 Accounting
          for Stock-Based Compensation,  encourages all entities to adopt a fair
          value based  method of  accounting  for  employee  stock  compensation
          plans,  whereby  compensation cost is measured at the grant date based
          on the value of the award and is recognized  over the service  period,
          which is usually the vesting period. However, it also allows an entity
          to  continue  to measure  compensation  cost for those plans using the
          intrinsic  value based method of  accounting  prescribed by Accounting
          Principles  Board  Opinion  No.  25,  Accounting  for Stock  Issued to
          Employees,  whereby  compensation  cost is the excess,  if any, of the
          quoted  market  price  of  the  stock  at the  grant  date  (or  other
          measurement  date) over the amount an employee must pay to acquire the
          stock.  Stock options issued under the plan have no intrinsic value at
          the grant  date,  and under  Opinion  No. 25 no  compensation  cost is
          recognized  for them.  The Company  has  elected to continue  with the
          accounting  methodology  in  Opinion  No.  25 and,  as a  result,  has
          provided  pro forma  disclosures  of net income and earnings per share
          and other disclosures, as if the fair value based method of accounting
          had been applied.

          Advertising Costs
          Advertising costs are charged to expense as incurred.

NOTE -2   SECURITIES
          Securities are classified in categories and accounted for as follows:

          Mortgage-Backed Securities Held-to-Maturity
          The  amortized  cost  and  estimated  fair  value  of  mortgage-backed
          held-to-maturity securities at June 30, 2001 and 2000 are as follows:
<TABLE>
<CAPTION>
                                                                     Gross            Gross
                                                 Amortized        Unrealized       Unrealized           Fair
                 2001                              Cost              Gains           Losses             Value
             ------------                      ------------     -------------     -------------    -------------
             <S>                               <C>              <C>               <C>              <C>
             Mortgage-backed securities
                GNMA certificates              $     627,745    $      12,387     $           0    $     640,132
                FHLMC certificates                   370,551            5,345            (5,696)         370,200
                FNMA certificates                  1,222,613           17,951                 0        1,240,564
                                               -------------    -------------     -------------    -------------
                                               $   2,220,909    $      35,683     $      (5,696)   $   2,250,896
                                               =============    =============     ==============   =============
</TABLE>

                                       22
<PAGE>
                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE -2      SECURITIES (Continued)
<TABLE>
<CAPTION>
                                                                     Gross            Gross
                                                 Amortized        Unrealized       Unrealized           Fair
                 2000                              Cost              Gains           Losses             Value
             ------------                      ------------     -------------     -------------    -------------
             <S>                               <C>              <C>               <C>              <C>
             Mortgage-backed securities
                GNMA certificates              $     791,340    $           0     $      (3,442)   $     787,898
                FHLMC certificates                   426,071            7,814            (6,582)         427,303
                FNMA certificates                  1,425,478           14,927           (17,244)       1,423,161
                                               -------------    -------------     --------------   -------------
                                               $   2,642,889    $      22,741     $     (27,268)   $   2,638,362
                                               =============    =============     ==============   =============
</TABLE>

          Expected  maturities will differ from contractual  maturities  because
          borrowers  may have the  right to call or prepay  obligations  with or
          without call or prepayment penalties.

          Securities Held-to-Maturity
          The  amortized  cost and  estimated  fair  value  of  held-to-maturity
          securities are as follows:
<TABLE>
<CAPTION>
                                                                     Gross            Gross
                                                 Amortized        Unrealized       Unrealized           Fair
                 2000                              Cost              Gains           Losses             Value
             ------------                      ------------     -------------     -------------    -------------
             <S>                               <C>              <C>               <C>              <C>
             Chaffee County School
                District Bonds                 $     200,000    $           0     $         (53)   $     199,947
                                               =============    =============     ==============   =============
</TABLE>

          At June 30, investments with a carrying value of $1,808,760 (2001) and
          $2,156,158  (2000) were pledged as  collateral  for deposits of public
          funds.

NOTE -3   LOANS RECEIVABLE

          Loans receivable at June 30, are summarized as follows:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             Loans secured by real estate:
                One-to-four family residences                                $     62,163,878    $    67,150,191
                Commercial real estate                                             29,562,996         18,694,660
                Construction                                                        9,059,977          7,522,069
                Land                                                                8,677,500          4,601,407
                                                                             ----------------    ---------------

                Total Loans Secured by Real Estate                                109,464,351         97,968,327

             Consumer loans, net of discounts                                      14,597,005         14,386,438
             Loans collateralized by savings accounts                                 740,310            587,521
             Commercial loans                                                      16,064,527         11,601,910
             Other loans                                                               50,317             21,115
                                                                             ----------------    ---------------
                Total Loans                                                       140,916,510        124,565,311

             Less:
                Undisbursed portion of loans in process                             3,026,054          3,069,165
                Deferred loan origination fees                                        626,181            595,844
                Allowance for loan losses                                           1,347,957          1,002,760
                                                                             ----------------    ---------------
                Loans Receivable, Net                                        $    135,916,318    $   119,897,542
                                                                             ================    ===============
</TABLE>
             The changes in the allowance for loan losses were as follows:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             Balance, beginning of year                                      $      1,002,760    $       909,471
             Provision for losses                                                     385,000            210,000
             Recoveries                                                                 1,027              4,493
             Losses incurred                                                          (40,830)          (121,204)
                                                                             -----------------   ----------------
             Balance, end of year                                            $      1,347,957    $     1,002,760
                                                                             ================    ===============
</TABLE>
          At  June  30,  the  Bank  had   adjustable   interest  rate  loans  of
          approximately  $6,878,000 (2001) and $5,933,000 (2000). The adjustable
          rate loans have interest rate adjustment limitations and are generally
          indexed to the 1-year U.S.  Treasury  Note rate or prime rate.  Future
          market  factors  may  affect  the  correlation  of the  interest  rate
          adjustment with the rate the Bank pays on the short-term deposits that
          have been primarily utilized to fund these loans.

                                       23
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -3   LOANS RECEIVABLE (Continued)
          As of  June  30,  2001,  $5,514,214  of  loans  had  been  pledged  as
          collateral for deposits of public funds.

          Loans receivable at June 30 include loans to officers and directors of
          approximately  $1,338,000 (2001) and $1,510,000  (2000).  For the year
          ended June 30,  2001,  $414,000 of new loans were made and payments of
          $461,000 were received and one loan of $125,000 was sold.

NOTE -4   LOAN SERVICING

          Mortgage   loans   serviced   for  others  are  not  included  in  the
          accompanying  statements of financial condition.  The unpaid principal
          balances of these loans at June 30 are summarized as follows:
<TABLE>
<CAPTION>
                                                                    2001            2000
                                                               -----------      ------------
             <S>                                               <C>              <C>
             Mortgage loan portfolios serviced for:
                FHLMC                                          $ 3,635,591      $ 4,679,663
                                                               ===========      ===========
</TABLE>

          In  connection  with these loans  serviced  for others at June 30, the
          Bank held borrowers' escrow balances of $456 (2001) and $394 (2000).

NOTE -5   ACCRUED INTEREST RECEIVABLE
          Interest receivable at June 30, relates to the following:
<TABLE>
<CAPTION>
                                                                    2001                2000
                                                               ----------------    ---------------
             <S>                                               <C>                 <C>
             Loans                                             $      1,105,226    $       806,778
             Mortgage-backed securities                                  16,186             17,648
             Other investments                                                0                683
                                                               ----------------    ---------------

                                                               $      1,121,412    $       825,109
                                                               ================    ===============
</TABLE>

NOTE -6   PROPERTY AND EQUIPMENT
          Property and equipment  and the related  accumulated  depreciation  at
          June 30, are summarized as follows:
<TABLE>
<CAPTION>
                                                                     2001                2000
                                                               ----------------    ---------------
             <S>                                               <C>                 <C>
             Land and improvements                             $        584,132    $       572,269
             Buildings and improvements                               5,009,917          4,920,245
             Furniture, fixtures and equipment                        2,085,341          1,759,481
             Construction in progress                                    12,000             28,821
                                                               ----------------    ---------------
                                                                      7,691,390          7,280,816
             Less accumulated depreciation                           (1,579,483)        (1,208,877)
                                                               -----------------   ----------------

                                                               $      6,111,907    $     6,071,939
                                                               ================    ===============
</TABLE>

          Depreciation  expense  for the years ended June 30,  totaled  $398,647
          (2001) and $224,810 (2000).

NOTE -7   DEPOSIT ACCOUNTS
          Deposit accounts at June 30 are summarized as follows:
<TABLE>
<CAPTION>
                                                                      2001                        2000
                                                            ------------------------    ------------------------
                                                                    Weighted                    Weighted
                                                                     Average                     Average
                                                                Amount         Rate          Amount       Rate
                                                            ---------------    ----     ----------------  ----
             <S>                                            <C>                <C>      <C>                <C>
             NOW accounts, including
                non-interest bearing
                deposits of $6,738,274 (2001)
                and $8,899,702 (2000)                       $    25,874,424    1.13%    $     22,151,987   1.27%
             Money market and
                savings accounts                                 23,065,825    2.95%          19,007,212   3.10%
             Certificate accounts                                49,576,979    5.83%          41,611,199   5.67%
                                                            ---------------             ----------------
                                                           $     98,517,228             $     82,770,398
                                                            ===============             ================
</TABLE>

                                       24
<PAGE>


                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -7   DEPOSIT ACCOUNTS (Continued)

          At June  30,  2001,  scheduled  maturities  of the  above  certificate
          accounts are summarized as follows:
<TABLE>
<CAPTION>
                                                            Year ending June 30,
                           -------------------------------------------------------------------------------------
                                                                                                      2006 and
                                 2002              2003              2004             2005           thereafter
                           ---------------     -------------    -------------     -------------    -------------
             <S>           <C>                <C>              <C>                <C>              <C>
             3.01-4.00     $       516,851
             4.01-5.00           8,131,343     $   1,269,679    $      75,923
             5.01-6.00          13,717,297         5,582,208        1,056,612     $     601,863    $     347,455
             6.01-7.00           9,625,561         4,620,306          471,481           238,369          622,261
             7.01-8.00             911,865           684,006          254,719           346,414          502,766
                           ---------------     -------------    -------------     -------------    -------------

                           $    32,902,917     $  12,156,199    $   1,858,735     $   1,186,646    $   1,472,482
                           ===============     =============    =============     =============    =============
</TABLE>

          The  aggregate  amount  of  certificates  of  deposits  with a minimum
          denomination  of  $100,000  at  June  30 was  $13,899,773  (2001)  and
          $11,105,764 (2000).

          Deposits  in  excess  of  $100,000  are  not  insured  by the  Savings
          Association Insurance Fund (SAIF).

          Interest expense on deposits for the years ended June 30 is summarized
          as follows:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             NOW accounts                                                    $        253,240    $       204,255
             Money market and savings accounts                                        689,816            561,101
             Certificate accounts                                                   2,719,762          2,098,309
                                                                             ----------------    ---------------
                                                                             $      3,662,818    $     2,863,665
                                                                             ================    ===============
</TABLE>

NOTE -8   ADVANCES FROM FEDERAL HOME LOAN BANK
          Advances  from  the  Federal  Home  Loan  Bank  (FHLB)  at June 30 are
          summarized as follows:
<TABLE>
<CAPTION>
                                                            Interest
                                                               Rate                2001                2000
                                                            ----------       ----------------    ---------------
             <S>                                             <C>             <C>                 <C>
             Maturing within one year                        5.42-6.96%      $      4,500,000    $    12,630,000
             Maturing in 2003                                5.49-7.05%             9,999,999          3,000,000
             Maturing in 2004                                5.14-6.91%             7,500,000          6,833,333
             Maturing in 2005                                5.62-7.34%             5,500,000                  0
             Maturing in 2006                                5.54-6.98%             3,500,000          3,000,000
             Maturing after 2006                             5.37-6.10%            13,125,000          6,775,000
                                                                             ----------------    ---------------
                                                                                   44,124,999         32,238,333
             Line of credit                                       7.28%                     0          4,000,000
                                                                             ----------------    ---------------
                                                                             $     44,124,999    $    36,238,333
                                                                             ================    ===============
</TABLE>
          Pursuant to collateral  agreements with the FHLB, advances are secured
          by a blanket  pledge  agreement with the FHLB,  which includes  single
          family and commercial real estate loans.

          At June 30, 2001,  the Bank has an approved line of credit  subject to
          the maximum  amount of credit  available  to the Bank under the FHLB's
          credit  policies,  which expires April 26, 2002. At June 30, 2000, the
          bank has drawn  $4,000,000 on the line of credit.  No amount was drawn
          on the line of credit at June 30, 2001.

          Interest  was  capitalized  in  the  amount  of  $55,994,  during  the
          construction of the new building, for the year ended June 30, 2000.

                                       25
<PAGE>
                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -9   INCOME TAXES
          The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             Current                                                         $        926,582    $       657,500
             Deferred                                                                (116,500)           (38,900)
                                                                             -----------------   ----------------
                                                                             $        810,082    $       618,600
                                                                             ================    ===============
</TABLE>

          The  effective  tax rate on income  before the  provisions  for income
          taxes  differs from the federal  statutory  income tax rate of 34% for
          the following reasons:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             Provision for income taxes at statutory rate                    $        708,000    $       566,100
             Nondeductible expenses for tax purposes                                   32,000             28,300
             State income taxes, net of federal income
               tax benefit                                                             68,300             39,500
             Other, net                                                                 1,782            (15,300)
                                                                             ----------------    ----------------

                                                                             $        810,082    $       618,600
                                                                             ================    ===============

             Effective tax rates                                                           39%                37%
</TABLE>

          Deferred  income  taxes  reflect  the net  tax  effects  of  temporary
          differences between the carrying amounts of assets and liabilities for
          financial  reporting  purposes  and the  amounts  used for  income tax
          purposes.  The net deferred tax assets (liabilities) as of June 30 are
          as follows:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             Difference between tax basis and
               carrying basis of FHLB stock                                  $       (196,600)   $      (202,000)
             Tax depreciation in excess of
               financial statement amounts                                           (101,100)           (84,000)
             Difference between tax basis and carrying
               basis of long term incentive plan                                      134,000            125,400
             Other                                                                     (2,400)             5,100
             Loan loss allowance                                                      328,900            201,800
                                                                             ----------------    ---------------

                      Net deferred tax asset                                 $        162,800    $        46,300
                                                                             ================    ===============
</TABLE>

          Management has determined that a valuation allowance is not required.

          The deferred tax expense (benefit) results from timing  differences in
          the recognition of income and expense for tax and financial  purposes.
          The sources and tax effects of these temporary timing  differences are
          as follows:
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             FHLB stock dividends                                            $              0    $        16,700
             Accumulated depreciation                                                  17,100                100
             Allowance for loan losses - net                                         (127,100)           (42,700)
             Other                                                                      2,100             (5,100)
             Long-term incentive plan                                                  (8,600)            (7,900)
                                                                             -----------------   ----------------
                                                                             $       (116,500)   $       (38,900)
                                                                             =================   ================
</TABLE>
                                       26
<PAGE>
                          HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -9   INCOME TAXES (Continued)

          The Bank was in prior years permitted under the Internal  Revenue Code
          to deduct an annual  addition to reserve for bad debts in  determining
          taxable  income,  subject  to  certain  limitations.   This  deduction
          differed from the bad debt  provision  used for  financial  accounting
          purposes.  Bad debt deductions for income tax purposes are included in
          taxable  income of later  years  only if the bad debt  reserve is used
          subsequently  for  purposes  other  than to  absorb  bad debt  losses.
          Because the Bank does not intend to use the reserve for purposes other
          than to absorb  losses,  no deferred  income taxes have been provided.
          Retained earnings at June 30, 2001, include approximately  $1,169,000,
          representing  such bad debt  deductions for which no income taxes have
          been provided.

NOTE -10  REGULATORY CAPITAL REQUIREMENTS
          The  Bank  is  subject  to  various  regulatory  capital  requirements
          administered by the federal banking agencies.  Failure to meet minimum
          capital  requirements can initiate certain actions by regulators that,
          if  undertaken,  could  have a direct  material  effect on the  Bank's
          financial  statements.  Under  capital  adequacy  guidelines  and  the
          regulatory  framework for prompt corrective action, the Bank must meet
          specific guidelines that involve  quantitative  measures of the Bank's
          assets, liabilities, and certain off-balance sheet items as calculated
          under regulatory accounting practices.  The Bank's capital amounts and
          classification  are  also  subject  to  qualitative  judgments  by the
          regulators about components, risk weightings, and other factors.

          Quantitative  measures  established  by regulation  to ensure  capital
          adequacy  require  the  Association  to maintain  minimum  amounts and
          ratios as outlined below.  Management  believes,  as of June 30, 2001.
          The  Bank  meets  all  capital  adequacy  requirements  to which it is
          subject.

          As of September 7, 1999, the most recent  notification  from Office of
          Thrift Supervision  categorized the Bank as well capitalized under the
          regulatory   framework  for  prompt  corrective  action.  To  be  well
          capitalized the Bank must maintain  minimum total  risk-based,  Tier I
          risk-based,  and Tier I leverage  ratios.  There are no  conditions or
          events since that notification  that management  believes have changed
          the institution's category.

          The following is a reconciliation  of capital computed under generally
          accepted  accounting  principles  (GAAP) to  regulatory  capital.  OTS
          regulations  specify  minimum capital  requirements  for the Bank. The
          following  reconciliation  also compares the capital  requirements  as
          computed to the minimum capital  requirements for the Bank, as of June
          30.
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             Equity Per GAAP                                                 $     14,196,000    $    13,120,703
             Less Servicing Rights Plus Valuations                                     (1,000)            (2,236)
                                                                             -----------------   ----------------

             Equity Per GAAP- Tier I Capital                                       14,195,000         13,118,467
             Valuation Allowance                                                    1,348,000          1,002,760
                                                                             ----------------    ---------------

             Regulatory Capital                                              $     15,543,000    $    14,121,227
                                                                             ================    ===============
</TABLE>

                                       27
<PAGE>
                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -10     REGULATORY CAPITAL REQUIREMENTS (Continued)
<TABLE>
<CAPTION>
                                                                 Minimum Required       To Be Well Capitalized
                                                                    For Capital        Under Prompt Corrective
                                           Actual                Adequacy Purposes        Action Regulations
                                   Amount       Ratio            Amount      Ratio        Amount       Ratio
                                 -----------   -------          ---------   -------     ----------    -------
              <S>                <C>            <C>             <C>          <C>        <C>            <C>
              2001
              ----
              Total Capital
                 (to Risk
                 Weighted
                 Assets)         $15,543,000    13.05%          $9,531,000   8.00%      $11,914,000    10.00%

              Tier I Capital
                 (to Risk
                 Weighted
                 Assets)          14,195,000    11.91            3,574,000   3.00         7,148,000     6.00

              Tier I Capital
                 (to Average
                 Assets)          14,195,000     9.42            2,261,000   1.50         7,537,000     5.00

              Tangible Capital
                 (to Tangible
                 Assets)          14,195,000     8.78            2,426,000   1.50           N/A

             2000
             ----
              Total Capital
                 (to Risk
                 Weighted
                 Assets)         $14,121,227    14.37%          $7,864,160   8.00%       $9,830,200    10.00%

              Tier I Capital
                 (to Risk
                 Weighted
                 Assets)          13,118,467    13.35            2,949,060   3.00         5,898,120     6.00

              Tier I Capital
                 (to Average
                 Assets)          13,118,467    10.65            1,846,911   1.50         6,156,370     5.00

              Tangible Capital
                 (to Tangible
                 Assets)          13,118,487     9.49            2,073,705   1.50           N/A
</TABLE>

          The Bank's  management  believes that, under the current  regulations,
          the Bank will continue to meet its minimum capital requirements in the
          coming year.  However,  events beyond the control of the Bank, such as
          increased  interest  rates or a downturn  in the economy in the Bank's
          operating   area,   could   adversely   affect  future  earnings  and,
          consequently,  the  ability  of the  Bank to meet its  future  minimum
          capital requirements.

                                       28
<PAGE>
                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -11  BENEFIT PLANS

          The Bank adopted a Long-Term  Incentive Plan in June 1997 covering the
          directors  and key  employees  of the  Bank.  On June 30 of each  year
          following 1997 the participants will have a contribution made to their
          account  providing  the  participant  continues  to be an  employee or
          director  of the Bank.  Prior to  distribution  under the terms of the
          Plan,  each  participant's  account  shall be credited  with a rate of
          return, on any amounts previously credited,  equal to the highest rate
          of interest paid by the Bank on one-year  certificates of deposit,  or
          after  conversion the rate of return will equal the  dividend-adjusted
          rate of return on the common stock.

          Amounts credited to  Participant's  Accounts on the effective date and
          thereafter  shall be fully vested.  Account balances shall be paid, in
          cash,  in ten equal  annual  installments  beginning  during the first
          quarter of the calendar  year which next follows the calendar  year in
          which the  participant  ceases to be a director  or  employee  for any
          reason,  with  subsequent  payments  being made by the last day of the
          first quarter of each  subsequent  calendar year until the participant
          has received the entire  amount of his  account.  Notwithstanding  the
          foregoing a participant may elect to have his account paid in lump sum
          distribution  or in annual payments over a period less than ten years.
          Any  benefits  accrued  under the plan  will be paid  from the  Bank's
          general  assets.  The  Bank has  established  a trust in order to hold
          assets with which to pay benefits. Trust assets, which are included in
          the consolidated statement of financial condition,  will be subject to
          the claims of the Bank's general  creditors.  The expense for the plan
          recognized  for the years ended June 30, 2001 and 2000 was $32,987 and
          $32,821.

          As part of the  conversion to stock,  the Bank  established an ESOP to
          benefit substantially all employees. The ESOP purchased 105,800 shares
          of common stock in the conversion  with proceeds  received from a loan
          from the  Company.  The note is to be repaid in ten  annual  principal
          installments of $105,800, starting June 30, 1998. Interest is based on
          the Wall  Street  Journal  Prime  plus one  percent,  and is  adjusted
          annually on July 1. The  unallocated  shares of stock held by the ESOP
          are  pledged  as  collateral  on the  debt.  The  ESOP  is  funded  by
          contributions  made by the Bank in  amounts  sufficient  to retire the
          debt. At June 30, 2001 and June 30, 2000, the  outstanding  balance of
          the note  receivable  was  $626,865 and $732,665 and is presented as a
          reduction of stockholders'  equity. ESOP compensation  expense for the
          years ended June 30, 2001 and 2000 was $146,768 and $144,432.

          In  November  1993,  the  AICPA  issued  Statement  of  Position  93-6
          "Employers'  Accounting  for  Employee  Stock  Ownership  Plans."  The
          statement  was adopted  December 9, 1997,  the  effective  date of the
          Association's  conversion to a stock company.  The Statement requires,
          among other things, that: (1) for ESOP shares committed to be released
          in  a  period  to  compensate  employees  directly,  employers  should
          recognize  compensation  cost  equal to the  average  fair  value  (as
          determined on a monthly basis) of the shares committed to be released,
          (2) dividends on  unallocated  shares used to repay ESOP loans are not
          considered  dividends for financial reporting  purposes,  dividends on
          allocated  or  committed  shares are  credited to the  accounts of the
          participants  and reported as dividends in the  financial  statements,
          (3) for an internally  leveraged  ESOP, the Company's loan  receivable
          and the ESOP note  payable as well as the interest  income/expense  is
          not reflected in the  consolidated  financial  statements  and (4) for
          earnings per share computations,  ESOP shares that have been committed
          to be released should be considered outstanding. ESOP shares that have
          not  been   committed  to  be  released   should  not  be   considered
          outstanding.

          The ESOP shares as of June 30, 2001 are as follows:
              Shares released                                            31,740
              Shares committed to be released for allocation             10,580
              Unreleased shares                                          63,480
                                                                  -------------
              Total ESOP shares                                         105,800
                                                                  =============

              Fair value of unreleased shares                     $     983,940
                                                                  =============

                                       29
<PAGE>
                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -11  BENEFIT PLANS (Continued)

          The  board  of  directors   of  the  Company   approved  a  Management
          Recognition  Plan ("MRP") for  directors  and  employees.  The MRP was
          approved by the  stockholders  at the annual meeting in December 1998.
          The Company  purchased in the open market  39,675 shares of its common
          stock, at a cost of $551,721,  to fund the MRP. Under the terms of the
          plan  33,836  shares of common  stock were  awarded to  directors  and
          employees.  The  shares  awarded  pursuant  to the MRP have a  vesting
          schedule,   which  provides  that  25%  of  the  shares  awarded  will
          automatically  vest on the  effective  date of the  award and 25% will
          vest on each subsequent anniversary date. Compensation expense related
          to the MRP was $132,897 and $117,311 for the years ended June 30, 2001
          and 2000.

          The bank also has a  noncontributory  401(K) plan which  employees may
          elect to join after 90 days of employment.

NOTE -12  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS
          OF CREDIT RISK
          The Bank is a party to financial  instruments with  off-balance  sheet
          risk in the normal course of business to meet the  financing  needs of
          its  customers.  At June 30, 2001,  the Bank has  commitments  to fund
          fixed rate mortgage  loans of  $2,641,000,  with  interest  rates from
          6.00% to 9.25%,  unfunded lines of credit of $11,376,000,  and letters
          of credit of $84,000. The Bank makes contractual commitments to extend
          credit,  which  are  legally  binding  agreements  to  lend  money  to
          customers at prevailing  interest rates for specified periods of time.
          The credit risk involved in issuing these  commitments  is essentially
          the same as that involved in extending loan facilities to customers.

          As  such,  the  Bank's  exposure  to  credit  loss,  in the  event  of
          non-performance  by the counterparty to the financial  instrument,  is
          represented by the contractual amount of those  instruments.  However,
          the Bank applies the same credit standards used in the lending process
          when extending  these  commitments,  and  periodically  reassesses the
          customers' credit  worthiness.  Additional risks associated with these
          commitments  arise when they are drawn  upon,  such as the  demands on
          liquidity that the Bank could experience if a significant portion were
          drawn  down  at  once.  This  is  considered  unlikely,   however,  as
          commitments may expire without having been drawn upon.

          The Bank  originates  loans  primarily  in Chaffee and Lake  Counties,
          Colorado.  Although  the  Bank has a  diversified  loan  portfolio,  a
          substantial  portion of its borrower's ability to repay their loans is
          dependent upon economic conditions in the market area.

NOTE -13  FAIR VALUES OF FINANCIAL INSTRUMENTS
          The estimated fair values of the financial instruments are as follows:
<TABLE>
<CAPTION>
                                                          2001                                  2000
                                               Carrying              Fair             Carrying          Fair
                                                Amount               Value           Amount             Value
                                            --------------    -------------     ---------------     ------------
             <S>                            <C>               <C>                  <C>               <C>
             Financial Assets:
             Cash                           $    2,759,671    $   2,759,671        $  4,392,623     $  4,392,623
             Interest-bearing deposits           9,175,856        9,175,856           1,320,918        1,320,918
             Mortgage backed securities          2,220,909        2,250,896           2,642,889        2,638,362
             Securities held to maturity                 0                0             200,000          199,947
             FHLB stock                          2,421,600        2,421,600           1,857,000        1,857,000
             Loans receivable - net            136,833,818      143,175,000         119,897,542      120,116,000

             Financial liabilities
             Deposits                           98,517,228       99,311,000          82,770,398       82,430,000
             Advances from FHLB                 44,124,999       44,989,000          36,238,333       35,431,000
</TABLE>

                                       30
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -14     OTHER NON-INTEREST EXPENSE
<TABLE>
<CAPTION>
                                                                                     2001                2000
                                                                                  -----------         ----------
             <S>                                                                  <C>                 <C>
             Advertising                                                          $    78,798         $   89,198
             Stationery Supplies                                                      150,612            140,250
             Postage                                                                  102,142             92,066
             Telephone                                                                 59,692             40,945
             Dues and Subscriptions                                                    43,867             37,365
             Community Support                                                         48,416             30,878
             Bank Charges                                                              42,857             36,733
             Other                                                                    121,691             78,798
                                                                                  -----------         ----------

                                                                                  $   648,075         $  546,233
                                                                                  ===========         ==========
</TABLE>

NOTE - 15 STOCKHOLDERS' EQUITY
          In the years  ended  June 30,  2001 and 2000,  the  Company  purchased
          42,233 and 227,494  shares of its common stock,  at a cost of $607,162
          and  $2,723,237,  and retired the stock in  accordance  with  Colorado
          Revised Statutes.

          For the years  ended June 30, 2001 and 2000,  the Company  paid a cash
          dividend of $.50 and $.45 per share respectively.

NOTE - 16 STOCK OPTION PLAN
          The  stockholders  approved the adoption of the 1998  incentive  stock
          option plan, providing for the award of incentive stock options to key
          employees  and  directors of the Company,  and its  affiliates  at the
          discretion  of the  Board of  Directors.  Under  the terms of the plan
          116,376 shares of the Company's common stock were granted to employees
          and  directors  on December  17,  1998.  Such  options  have an option
          exercise  price of  $13.125,  which was the fair value of the stock at
          December 17, 1998. The aggregate number of shares deliverable pursuant
          to awards shall not exceed  145,475  shares.  Such stock  options will
          have a term of ten years and a vesting schedule, for employees,  which
          provides that one third of the options vested at the date of the grant
          and one third will vest January 1, 1999 and one-third January 1, 2000.
          The directors' options vested at the date of the grant.

          The Company applies APB Opinion No. 25 and related  interpretations in
          accounting  for the stock option plan.  Accordingly,  no  compensation
          cost has been  recognized.  If the Company  had  elected to  recognize
          compensation  cost based on the fair value of the  options  granted at
          the grant date (1998) as  prescribed by SFAS 123, the effect would not
          have been material to net income or earnings per share.

          A  summary  of the  status  of the  Company's  stock  option  plan  is
          presented below:
<TABLE>
<CAPTION>
                                                                                      2001                2000
                                                                                    ---------           --------
             <S>                                                                     <C>                <C>
             Outstanding at the beginning of year                                     116,376            116,376
             Granted                                                                        0                  0
             Exercised                                                                      0                  0
             Forfeited                                                                      0                  0
             Outstanding at year end                                                  116,376            116,376

             Options exercisable at year end                                          116,376            116,376
</TABLE>

          The  exercise  price for the  outstanding  options is $13.125  and the
          remaining contractual life is 7.6 years.

                                       31
<PAGE>
                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -16  IMPACT OF NEW ACCOUNTING STANDARDS
          Accounting For Derivatives and Similar  Financial  Instruments and For
          Hedging Activities.  In June 1998, the Financial  Accounting Standards
          Board issued  Statement  No. 133,  which was  subsequently  amended by
          Statement  No. 139.  The  Statement  requires  all  derivatives  to be
          measured  at fair  value  and to be  recognized  as  either  assets or
          liabilities in the statement of financial condition,  and is effective
          for fiscal years beginning after June 15, 2000. The impact of adopting
          this statement on July 1, 2000, did not have a material  affect on the
          financial statements.

          In December 1999, the Securities and Exchange  Commission issued Staff
          Accounting  Bulletin  ("SAB") No. 101. SAB No. 101 summarizes  certain
          areas of the Staff's views in applying generally  accepted  accounting
          principles  to revenue  recognition  in financial  statements  and was
          effective for the Company's fourth quarter in fiscal 2001.

          In March 2000, The Financial  Accounting  Standards  Board issued FASB
          Interpretation No. 44, "Accounting for Certain Transactions  Involving
          Stock  Compensation"  - an  interpretation  of APB Opinion No. 25; the
          criteria   for   determining   whether   a   plan   qualifies   as   a
          non-compensatory   plan;  the  accounting   consequences   of  various
          modifications  to the  terms of  previously  fixed  stock  options  or
          awards;  and the  accounting  for an  exchange  of stock  compensation
          awards in a business  combination.  FIN 44 was effective July 1, 2000,
          but certain  conclusions in FIN 44 cover specific events that occurred
          after either December 15, 1998 or January 12, 2000. The impact was not
          material  on the  consolidated  financial  statements  or  results  of
          operations of the Company of this new standard.

NOTE -17  CONTINGENCIES AND COMMITMENTS
          In the normal  course of  business,  the Bank is  involved  in various
          legal  actions  arising in the  ordinary  course of  business.  In the
          opinion of management,  after  consultation  with legal  counsel,  the
          ultimate  disposition  of  these  matters  is not  expected  to have a
          material adverse effect on the financial position of the Bank.

NOTE -18  CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)
          The following condensed  statements  summarize the financial position,
          operating results and cash flows of High Country Bancorp, Inc.,
<TABLE>
<CAPTION>
                                                                                   2001                2000
                                                                             ----------------    ---------------
             <S>                                                             <C>                 <C>
             CONDENSED BALANCE SHEET
             ASSETS
                 Cash and equivalents                                        $      2,550,640    $       291,757
                 Investment in subsidiary                                           8,237,730          7,189,424
                 Note due from subsidiary                                                   0          3,000,000
                 ESOP note receivable                                                 626,865            732,665
                 Other                                                                  2,307                  0
                                                                             ----------------    ---------------

                                                                             $     11,417,542    $    11,213,846
                                                                             ================    ===============
             LIABILITIES AND STOCKHOLDERS' EQUITY
                 Accruals                                                    $              0    $         7,700
                 Stockholders' equity                                              11,417,542         11,206,146
                                                                             ----------------    ---------------

                                                                             $     11,417,542    $    11,213,846
                                                                             ================    ===============
</TABLE>

                                       32
<PAGE>

                           HIGH COUNTRY BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE -16     CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

<TABLE>
<CAPTION>
             CONDENSED STATEMENT OF INCOME

             For the years ended June 30, 2001 and
             June 30, 2000
             <S>                                                             <C>                 <C>
             Equity in undistributed net income of subsidiary                $      1,248,017    $       960,396
             Other net                                                                 22,482             86,048
                                                                             ----------------    ---------------

                                                                             $      1,270,499    $     1,046,444
                                                                             ================    ===============
</TABLE>
<TABLE>
<CAPTION>
             CONDENSED STATEMENT OF CASH FLOWS

             For the years ended June 30, 2001 and June 30, 2000
             Operating Activities:
             <S>                                                             <C>                 <C>
             Net income                                                      $      1,270,499    $     1,046,444
             Adjustments to reconcile net income to cash
             provided by operating activities:
             Equity in undistributed net income of
             subsidiary                                                            (1,248,017)          (960,396)
             Other                                                                     27,970             12,490
                                                                             ----------------    ---------------

             Net cash provided by operations                                           50,452             98,538
                                                                             ----------------    ---------------

             Investing Activities:
             ESOP note payment                                                        105,800            105,800

             Loan (to) payment from subsidiary                                      3,000,000           (500,000)
             Dividends received                                                       200,000            400,000
                                                                             ----------------    ---------------

             Net cash used in investing activities                                  3,305,800              5,800
                                                                             ----------------    ---------------
             Financing Activities:
             Purchase of common stock                                                (607,162)        (2,723,237)
             Dividends paid                                                          (490,207)          (481,069)
                                                                             ----------------    ----------------

             Net cash provided (used) by financing activities                      (1,097,369)        (3,204,306)
                                                                             -----------------   ----------------

             Net increase (decrease) in cash                                        2,258,883         (3,099,968)

             Cash beginning                                                           291,757          3,391,725
                                                                             ----------------    ---------------

             Cash ending                                                     $      2,550,640    $       291,757
                                                                             ================    ===============
</TABLE>

                                       33
<PAGE>

                         MARKET AND DIVIDEND INFORMATION

TRADING IN THE COMMON STOCK AND DIVIDENDS PAID

     The Company's  Common Stock is traded on the Nasdaq  SmallCap  Market under
the symbol "HCBC." As of September 15, 2001,  there were 1,024,809 shares of the
Common Stock issued and outstanding and  approximately  331 holders of record of
the Common Stock (not including shares held in "street name").

     The following  table sets forth certain  information as to the range of the
high and low bid prices for the Company's common stock for the calendar quarters
since the first quarter of fiscal 2000.
<TABLE>
<CAPTION>
                                            HIGH BID (1)      LOW BID (1)           DIVIDENDS PAID
                                            ------------      -----------           --------------
<S>                                            <C>               <C>                      <C>
     Fiscal 2000:
         First Quarter                         13.00             12.13                     --
         Second Quarter                        13.50             11.50                    0.20
         Third Quarter                         12.25              9.75                     --
         Fourth Quarter                        12.13              9.69                    0.25

     Fiscal 2001:
         First Quarter                         11.75             11.00                     --
         Second Quarter                        14.00             11.31                    0.25
         Third Quarter                         15.50             13.25                     --
         Fourth Quarter                        15.53             15.00                    0.25
<FN>
     ______________
     (1) Quotations reflect inter-dealer price, without retail mark-up,
         mark-down or commissions, and may not represent actual transactions.
</FN>
</TABLE>

DIVIDEND RESTRICTIONS

     The payment of dividends will be subject to the  requirements of applicable
law and the  determination by the Board of Directors of the Company that the net
income,  capital and  financial  condition  of the Company and the Bank,  thrift
industry  trends  and  general  economic   conditions  justify  the  payment  of
dividends,  and there can be no  assurance  that  dividends  will be paid or, if
paid, will continue to be paid in the future.

     Since the Company initially has no significant  source of income other than
dividends  from the Bank,  principal  and interest  payments on the note payable
from  the  ESOP  and  earnings  from  investment  of the  cash  proceeds  of the
Conversion retained by the Company, the payment of dividends by the Company will
depend in large  part upon the  proceeds  from the  Conversion  retained  by the
Company and the Company's earnings thereon and the receipt of dividends from the
Bank, which is subject to various tax and regulatory restrictions on the payment
of dividends.  Unlike the Converted  Association,  the Company is not subject to
regulatory  restrictions on the payment of dividends to stockholders.  Under the
Colorado General  Corporation  Law,  dividends may be paid either out of surplus
or, if there is no surplus,  out of net profits for the fiscal year in which the
dividend is declared and/or the preceding fiscal year.

                                       34
<PAGE>
<TABLE>
<CAPTION>
                                                    BOARD OF DIRECTORS

<S>                                         <C>                                         <C>
LARRY D. SMITH                              PHILIP W. HARSH                             TIMOTHY R. GLENN
President and Chief Executive               Owner and Agent of Fredrickson Brown        Owner and Funeral Director of
Officer of the Company and                  Insurance Agency                            Lewis & Glenn Funeral Home
the Bank

SCOTT G. ERCHUL                             RICHARD A. YOUNG
Vice President of the Company               Partner of Swartz & Young, P.C.
and the Bank


                                                    EXECUTIVE OFFICERS

LARRY D. SMITH                              SCOTT G. ERCHUL                             FRANK L. DELAY
President and Chief Executive Officer of    Vice President of the Company               Chief Financial Officer of the
the Company and the Bank                    and the Bank                                Company and the Bank


                                                     OFFICE LOCATIONS

MAIN OFFICE:                                BRANCH OFFICE:          BRANCH OFFICE:      BRANCH OFFICE:
7360 West US Highway 50                     130 West 2nd            600 Harrison        713 East Main
Salida, Colorado                            Salida, Colorado        Leadville,          Buena Vista, Colorado
                                            Colorado


                                                    GENERAL INFORMATION

INDEPENDENT PUBLIC ACCOUNTANTS                ANNUAL MEETING ANNUAL                      REPORT ON FORM 10-KSB
Grimsley, White & Company,               The 2001 Annual Meeting of Stockholders      A copy of the Company's Annual Report
Certified Public Accountants             will be held on October 30, 2001 at 5:00     on Form 10-KSB for the fiscal year
La Junta, Colorado                       p.m. at High Country Bank, 7360 West US      ended June 30, 2001 as filed with the
                                         Highway 50, Salida, Colorado  81210          Securities and Exchange Commission
GENERAL COUNSEL                                                                       will be furnished without charge to
Rush and Rush, P.C.                      TRANSFER AGENT AND REGISTRAR                 stockholders as of the record date
Salida, Colorado                         Illinois Stock Transfer                      for the 2001 Annual Meeting upon
                                         209 West Jackson Boulevard                   written request to Richard A. Young,
SPECIAL COUNSEL                          Suite 903                                    Secretary, High Country Bancorp,
Stradley Ronon Housley Kantarian &       Chicago, Illinois  60606                     Inc., 7360 West US Highway 50,
Bronstein, LLP                           Phone 1-800-757-5755                         Salida, Colorado  81201.
1220 19th Street, N.W., Suite 700        Fax 1-312-427-2879
Washington, D.C.  20036

</TABLE>