<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the fiscal year ended December 31, 1997

                                       OR
[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from                 to
                                        ---------------    -------------

                  Commission file number 0-24118

                          OTTAWA FINANCIAL CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                           38-3172166
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


245 Central Avenue, Holland, Michigan                              49423
-------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code: (616) 393-7000
                                                    ---------------------------

           Securities Registered Pursuant to Section 12(b) of the Act:

                                      None

           Securities Registered Pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such requirements for
the past 90 days. YES X . NO  .
                      -      -
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the average of the closing bid and asked
price of such stock on the Nasdaq National Market as of March 25, 1998, was
$139.9 million. (The exclusion from such amount of the market value of the
shares owned by any person shall not be deemed an admission by the registrant
that such person is an affiliate of the registrant.)

As of March 25, 1998, there were issued and outstanding 5,311,911 shares of
the Registrant's Common Stock.


                       DOCUMENTS INCORPORATED BY REFERENCE

Parts II and IV of Form 10-K - Portions of the Annual Report to Stockholders for
the year ended December 31, 1997. Part III of Form 10-K - Portions of the Proxy
Statement for the Annual Meeting of Stockholders for the year ended December 31,
1997.



<PAGE>   2



                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

         Ottawa Financial Corporation ("Ottawa Financial" and, with its
subsidiary, the "Corporation") was formed at the direction of Ottawa Savings
Bank, FSB ("Ottawa Savings" or the "Bank") in March 1994 for the purpose of
owning all of the outstanding stock of Ottawa Savings issued upon the conversion
of the Bank from the mutual to the stock form (the "Conversion"). On August 19,
1994, Ottawa Financial acquired all of the shares of the Bank in connection with
the completion of the Conversion. The Corporation's Common Stock is traded on
the Nasdaq National Market under the symbol "OFCP."

         On February 13, 1996, the Company acquired AmeriBank Federal Savings
Bank ("AFSB"), a federally chartered savings bank headquartered in Muskegon,
Michigan, pursuant to which the Corporation acquired all of the outstanding
shares of common stock, including shares subject to options, of AFSB for
aggregate consideration of approximately $32.7 million in cash, converted
options and warrants. AFSB was thereupon merged into Ottawa Savings. The
acquisition was accounted for using the purchase method of accounting. During
the third quarter of 1996, Ottawa Savings changed its name to "AmeriBank."
Unless the context otherwise indicates, all references herein to the Corporation
include AmeriBank and its subsidiaries on a consolidated basis. See Notes 1 and
2 of the Notes to Consolidated Financial Statements in the Annual Report to
Shareholders attached hereto as Exhibit 13 (the "Annual Report").

         AmeriBank is the only operating subsidiary of Ottawa Financial.
AmeriBank is a Michigan-chartered savings bank headquartered in Holland,
Michigan. Originally organized in 1888, the Bank converted to a federal savings
bank in 1988, changed its name in 1996 from Ottawa Savings Bank, FSB to
AmeriBank, and converted to a state-chartered savings bank in July 1997. Its
deposits are insured up to the applicable limits by the Federal Deposit
Insurance Corporation ("FDIC"). AmeriBank currently serves Allegan, Kent,
Muskegon, Newaygo, Oceana and Ottawa Counties in Western Michigan through its 26
retail banking offices. At December 31, 1997, the Corporation had total assets
of $885.8 million, deposits of $654.6 million and shareholders' equity of $76.4
million.

         AmeriBank has been, and intends to continue to be, a community-oriented
financial institution offering a variety of financial services to meet the needs
of the communities it serves. The Bank attracts retail deposits from the general
public and invests those funds primarily in first mortgages on owner-occupied,
one- to four-family residences. The Bank also originates first mortgages on
nonowner-occupied one- to four-family residences, construction, commercial and
multi-family real estate, commercial business and consumer loans. See "Lending
Activities."

         The Bank's revenues are derived principally from interest on mortgage
and other loans and interest on investment securities.


                                        2

<PAGE>   3


         AmeriBank offers a variety of individual and commercial deposit
accounts having a wide range of interest rates and terms. The Bank's deposits
consist of passbook and statement savings accounts, interest and
non-interest-bearing checking accounts, and money market and certificate
accounts. The Bank also offers debit and credit cards as well as ATM services.
AmeriBank solicits deposits from its market area only, and has never used
brokers to obtain deposits.

         AmeriBank organized an insurance subsidiary in 1997 called AmeriPlan
Financial Services, Inc. It is expected that the subsidiary will offer financial
services that include fixed and variable annuities, mutual funds, discount
brokerage services, life insurance products and financial planning.

         The executive offices of the Corporation are located at 245 Central
Avenue, Holland, Michigan 49423. Its telephone number at that address is (616)
393-7000.

MARKET AREA

         AmeriBank's market area of Allegan, Kent, Muskegon, Newaygo, Oceana and
Ottawa Counties located in western Michigan is diverse, consisting of two
mid-sized cities, Grand Rapids and Muskegon, Holland, the headquarters for the
Corporation, and rural areas. Grand Rapids is the second largest city in
Michigan and has a solid and diverse economic base. Holland, the largest city in
Ottawa County also has a solid and diverse economic base, which includes
tourism, office furniture, automotive components and assemblies, pharmaceutical,
transportation, equipment, candy, food and construction supplies. Companies
operating in the market area include Steelcase, Herman Miller, Amway, Haworth,
Prince, General Motors, Gerber, SPX, Donnelly, Foremost Insurance and Meijers,
Inc. Holland, situated on Lake Macatawa and Lake Michigan and Muskegon, situated
on Muskegon Lake and Lake Michigan, benefit from tourism and recreational
activities, which peak in the summer months.

         Much of AmeriBank's success as a home lender has been due to its market
area's favorable population, housing and income demographics. While population
growth has generally been static in Michigan since 1980, as its manufacturing
base has declined, demographic trends in AmeriBank's market area reflect
above-average population growth, including population growth in AmeriBank's
market area of 6.7% since 1990. Income levels in the market area tend to
approximate state and national averages. Unemployment in the area at December
31, 1997 was approximately 2.7% versus 3.5% for the State of Michigan as a
whole.

LENDING ACTIVITIES

         General. The Bank has historically originated 30 year, fixed-rate
mortgage loans secured by one- to four-family residences. Since 1978, however,
the Bank has emphasized the origination of adjustable rate residential mortgage
("ARM") loans, call option and balloon payment loans, which has dramatically
reduced its portfolio of long term fixed rate loans. Today the Bank continues to
sell its 30 year fixed rate mortgage loans through its mortgage banking
activities. These mortgage banking activities have generated income from the
sale of mortgages in the secondary market and have increased income from loan
servicing operations. Since the acquisition of AFSB in February 1996, the Bank
has generated a larger percentage of consumer loans, commercial business loans
and


                                        3

<PAGE>   4



commercial real estate loans. The Bank continues to emphasize commercial and
multi-family real estate, and commercial business loans as well as consumer
loans which have higher yields than traditional one- to four-family loans. Most
of the current growth in the Bank's loan portfolio for 1997 was in commercial
business and consumer loans. Management's strategy has been to increase the
percentage of assets in its portfolio with shorter maturities or terms to
repricing, and in some cases higher yields, than traditional 30 years fixed rate
residential mortgage loans.

         Loan officers and certain executive officers of the Bank have approval
authority on loans depending on type and amount. Loans greater than $500,000 but
less than $1.0 million require the approval of the Bank's Loan Committee
comprised of certain loan officers and executive officers. Loans greater than
$1.0 million must be approved by the Board of Directors.

         At December 31, 1997, the maximum amount which the Bank could have
loaned to any one borrower and the borrower's related entities was approximately
$17.0 million. At such date, the Bank had no loans or groups of loans to related
borrowers with outstanding balances in excess of this amount.

         The Bank's largest lending relationship to a single borrower or a
single group of related borrowers was a $14.0 million line of credit with an
outstanding balance as of December 31, 1997 of $10.0 million. The line of credit
is secured by a combination of publicly traded marketable securities and first
lien mortgages on single family residential properties which have been assigned
to the Bank. At December 31, 1997, the line of credit was performing in
accordance with its repayment terms.

         The next largest relationship to a single borrower or a single group of
related borrowers totaled $8.4 million consisting of a number of loans, the
largest of which is a $3.0 million loan secured by two existing retail centers.
The relationship also includes a loan in the amount of $2.0 million secured by a
manufacturing building which the Bank is monitoring as a result of tenant
vacancy. At December 31, 1997, these loans were current and performing in
accordance with their terms. See "- Asset Quality--Other Loans of Concern."

         At December 31, 1997, the Bank had approximately 30 other loans or
lending relationships to a single borrower or group of related borrowers with a
balance in excess of $1.0 million, all of which were performing in accordance
with their repayment terms at such date.


                                        4

<PAGE>   5



         Loan Portfolio Composition. The following table sets forth information
concerning the composition of the Bank's loan portfolio in dollar amounts and in
percentages (before deductions for loans in process, deferred fees and discounts
and allowances for losses) as of the dates indicated.


<TABLE>
<CAPTION>


                                                                        December 31,
                                        --------------------------------------------------------------------------
                                               1997                       1996                       1995
                                        --------------------      --------------------       ---------------------
                                        Amount       Percent      Amount       Percent       Amount        Percent
                                        ------       -------      ------       -------       ------        -------
                                                                  (Dollars in Thousands)
<S>                                    <C>          <C>          <C>          <C>           <C>           <C>
Real Estate Loans:
 One- to four-family................    $483,502       62.20%     $516,935       69.59%      $209,159       71.24%
 Multi-family.......................      38,663        4.97        34,262        4.61         13,221        4.50
 Commercial.........................      35,147        4.52        42,745        5.75          4,106        1.40
 Construction or development........      71,145        9.15        33,823        4.55         42,659       14.53
                                        --------     -------      --------     -------       --------      ------
    Total real estate loans.........     628,457       80.84       627,765       84.50        269,145       91.67
                                        --------     -------      --------     -------       --------      ------

Other Loans:
 Consumer Loans:
  Automobile........................      49,264        6.34        46,247        6.23          9,530        3.25
  Home equity lines of credit.......      32,379        4.17        29,170        3.93         12,039        4.10
  Home equity installment...........      22,905        2.95        19,247        2.59            ---         ---
  Home improvement..................         676         .09         1,015         .14            373         .12
  Deposit account...................         756         .09           887         .12            263         .09
  Student...........................          21         ---           103         .01             85         .03
  Other.............................       5,577         .72         3,443         .46          2,168         .74
                                        --------     -------      --------     -------       --------      ------
    Total consumer loans............     111,578       14.36       100,112       13.48         24,458        8.33
  Commercial business loans.........      37,322        4.80        14,996        2.02            ---         ---
                                        --------     -------      --------      -------      --------      ------
    Total other loans...............     148,900       19.16       115,108       15.50         24,458        8.33
                                        --------     -------      --------      ------       --------      ------
       Total loans..................     777,357      100.00%      742,873      100.00%       293,603      100.00%
                                                      ======                    ======                     ======

Less:
 Loans in process...................      25,787                    22,956                     14,861
 Deferred fees and discounts........         854                     1,237                      1,034
 Allowance for losses...............       3,293                     3,129                      1,251
                                        --------                  --------                   --------
       Total loans receivable, net..    $747,423                  $715,551                   $276,457
                                        ========                  ========                   ========


<CAPTION>


                                                           December 31,
                                        ------------------------------------------------
                                               1994                       1993
                                        ---------------------      ---------------------
                                        Amount        Percent      Amount        Percent
                                        ------        -------      ------        -------
                                                    (Dollars in Thousands)
<S>                                    <C>           <C>          <C>           <C>
Real Estate Loans:
 One-to four-family.................     $184,237       76.10%      $170,678      78.30%
 Multi-family.......................        9,200        3.80         11,159       5.12
 Commercial.........................        4,903        2.02          7,169       3.29
 Construction or development........       20,420        8.44         12,534       5.75
                                         ---------    -------       --------     ------
    Total real estate loans.........      218,760       90.36        201,540      92.46
                                         ---------    -------       --------     ------


Other Loans:
 Consumer Loans:
  Automobile........................        4,515        1.86          1,757       0.81
  Home equity lines of credit.......       10,060        4.16          7,130       3.27
  Home equity installment...........          ---         ---            ---        ---
  Home improvement..................          294         .12            225       0.10
  Deposit account...................          213         .09            194       0.09
  Student...........................        7,067        2.92          6,705       3.08
  Other.............................        1,180         .49            419       0.19
                                         --------     -------       --------     ------
    Total consumer loans............       23,329        9.64         16,430       7.54
  Commercial business loans.........          ---         ---            ---        ---
                                         --------     -------       --------     ------
    Total other loans...............       23,329        9.64         16,430       7.54
                                         --------     -------       --------     ------
       Total loans..................      242,089      100.00%       217,970     100.00%
                                                       ======                    ======

Less:
 Loans in process...................        9,110                      5,109
 Deferred fees and discounts........        1,043                      1,132
 Allowance for losses...............        1,118                        950
                                         --------                   --------
       Total loans receivable, net..     $230,818                   $210,779
                                         ========                   ========

</TABLE>

                                      5
<PAGE>   6



         The following table shows the composition of the Bank's loan portfolio
by fixed and adjustable rate at the dates indicated. Call option loans are
presented as fixed rate loans.


<TABLE>
<CAPTION>

                                                                                December 31,
                                                --------------------------------------------------------------------------
                                                        1997                       1996                       1995
                                                --------------------       --------------------       --------------------
                                                Amount       Percent       Amount       Percent       Amount       Percent
                                                ------       -------       ------       -------       ------       -------
                                                                          (Dollars in Thousands)
<S>                                            <C>          <C>           <C>          <C>           <C>          <C>
Fixed-Rate Loans:
 Real estate:
  One- to four-family.......................     $113,954      14.66%      $108,747      14.64%       $ 95,141      32.40%
  Multi-family..............................       27,187       3.50         15,937       2.14           3,163       1.08
  Commercial................................       25,558       3.29         27,108       3.65           1,347        .46
  Construction or development...............       59,300       7.62         12,552       1.69           9,442       3.21
                                                ---------    -------       --------     ------        --------     ------
     Total fixed-rate real estate loans.....      225,999      29.07        164,344      22.12         109,093      37.15
                                                ---------    -------       --------     ------        --------     ------
 Commercial.................................       14,004       1.80          6,007        .81             ---        ---
 Consumer...................................       79,199      10.19         65,241       8.78          12,294       4.19
                                                ---------    -------       --------     ------        --------     ------
     Total fixed-rate loans.................      319,202      41.06        235,592      31.71         121,387      41.34

Adjustable-Rate Loans
 Real estate:
  One- to four-family.......................      369,548      47.54        408,188      54.95         114,018      38.84
  Multi-family..............................       11,476       1.48         18,325       2.47          10,058       3.43
  Commercial................................        9,589       1.23         15,637       2.10           2,759        .94
  Construction or development...............       11,845       1.52         21,271       2.86          33,217      11.31
                                                ---------    -------       --------     ------        --------     ------
     Total adjustable-rate real estate loans      402,458      51.77        463,421      62.38         160,052      54.52
                                                ---------    -------       --------     ------        --------     ------
 Commercial.................................       23,318       3.00          8,989       1.21
 Consumer...................................       32,379       4.17         34,871       4.70          12,164       4.14
                                                ---------    -------       --------     ------        --------     ------
     Total adjustable rate loans............      458,155      58.94        507,281      68.29         172,216      58.66
                                                ---------    -------       --------     ------        --------     ------
         Total loans........................      777,357     100.00%       742,873     100.00%        293,603     100.00%
                                                              ======                    ======                     ======

Less:
 Loans in process...........................       25,787                    22,956                     14,861
 Deferred fees and discounts................          854                     1,237                      1,034
 Allowance for loan losses..................        3,293                     3,129                      1,251
                                                ---------                  --------                   --------
            Total loans receivable, net.....     $747,423                  $715,551                   $276,457
                                                 ========                  ========                   ========


<CAPTION>
                                                                     December 31,
                                                  ------------------------------------------------
                                                         1994                       1993
                                                  ---------------------      ---------------------
                                                  Amount        Percent      Amount        Percent
                                                  ------        -------      ------        -------
                                                            (Dollars in Thousands)

<S>                                              <C>           <C>          <C>           <C>
Fixed-Rate Loans:
 Real estate:
  One- to four-family.......................      $ 96,381        39.82%     $111,275       51.05%
  Multi-family..............................         3,080         1.27         5,289        2.43
  Commercial................................         2,692         1.11         5,389        2.47
  Construction or development...............         5,841         2.41         3,290        1.51
                                                 ---------      -------      --------      ------
     Total fixed-rate real estate loans.....       107,994        44.61       125,243       57.46
                                                  --------      -------      --------      ------
 Commercial.................................           ---          ---           ---         ---
 Consumer...................................         8,028         3.32         2,595        1.19
                                                 ---------      -------      --------      ------
     Total fixed-rate loans.................       116,022        47.93       127,838       58.65

Adjustable-Rate Loans
 Real estate:
  One- to four-family.......................        87,856        36.29        59,403       27.25
  Multi-family..............................         6,120         2.53         5,870        2.69
  Commercial................................         2,211          .91         1,780         .82
  Construction or development...............        14,579         6.02         9,244        4.24
                                                 ---------      -------      --------      ------
     Total adjustable-rate real estate loans       110,766        45.75        76,297       35.00
                                                 ---------      -------      --------      ------
 Commercial.................................
 Consumer...................................        15,301         6.32        13,835        6.35
                                                 ---------      -------      --------      ------
     Total adjustable rate loans............       126,067        52.07        90,132       41.35
                                                 ---------      --------     --------      ------
         Total loans........................       242,089       100.00%      217,970      100.00%
                                                                 ======                    ======

Less:
 Loans in process...........................         9,110                      5,109
 Deferred fees and discounts................         1,043                      1,132
 Allowance for loan losses..................         1,118                        950
                                                 ---------                   --------
            Total loans receivable, net.....      $230,818                   $210,779
                                                  ========                   ========

</TABLE>


                                        6

<PAGE>   7



         The following table illustrates the interest rate sensitivity of the
Bank's loan portfolio at December 31, 1997. Loans which have adjustable or
renegotiable interest rates and call option loans are shown as maturing in the
period during which the contract is due. The schedule does not reflect the
effects of possible prepayments, enforcement of due-on-sale, call option clauses
or the effect of the amortization of deferred loan fees.


<TABLE>
<CAPTION>

                                                    Real Estate
                                     -------------------------------------------
                                                                Construction
                                        Mortgage (1)           or Development            Commercial
                                     -------------------      ------------------     --------------------
                                                Weighted                Weighted                 Weighted
                                                 Average                 Average                 Average
                                     Amount       Rate        Amount      Rate       Amount        Rate
                                     ------     --------      ------    --------     ------      --------
                                                                 (Dollars in Thousands)

  Due During
Periods Ending
 December 31,
--------------
<S>                                 <C>         <C>          <C>        <C>         <C>          <C>
1998(2)..........................     $32,545     8.19%       $59,058      8.14%     $24,225      8.15%
1999 - 2002......................     109,690     8.07         12,087      8.63        9,428      8.96
2003 and following...............     415,077     7.83            ---       ---        3,669      8.08
                                     --------                 -------                -------
                                     $557,312     7.90        $71,145      8.22      $37,322      8.35
                                     ========                 =======                =======

<CAPTION>


                                           Consumer                   Total
                                     ---------------------     ---------------------
                                                  Weighted                  Weighted
                                                  Average                    Average
                                     Amount         Rate       Amount         Rate
                                     ------       --------     ------       --------
  Due During
Periods Ending
 December 31,
--------------
<S>                                 <C>          <C>         <C>          <C>
1998(2)..........................    $ 29,433     9.45%       $145,261     8.50%
1999 - 2002......................      66,075     9.56         197,280     8.62
2003 and following...............      16,070     9.36         434,816     7.84
                                     --------                 --------
                                     $111,578     9.50        $777,357     8.16
                                     ========                 ========
</TABLE>

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

(1) Includes one- to four-family, multi-family and commercial real estate loans.

(2) Includes demand loans, loans having no stated maturity and overdraft loans.


                                        7

<PAGE>   8



         The total amount of loans due after December 31, 1998 which have fixed
or predetermined interest rates is $224.9 million while the total amount of
loans due after such date which have floating or adjustable interest rates is
$407.2 million.

ONE- TO FOUR-FAMILY RESIDENTIAL REAL ESTATE LENDING

         The Bank focused its residential lending program during 1997 on the
origination of loans secured by mortgages on owner-occupied, one- to four-family
residences. The Bank also originated loans secured by nonowner-occupied, one- to
four-family residences. At December 31, 1997, $483.5 million or 62.2% of the
Bank's gross loan portfolio consisted of end loans secured by one- to
four-family residences. Residential mortgage loan originations derive from a
number of sources, including advertising, direct solicitation, real estate
broker referrals, existing borrowers and depositors, builders and walk-in
customers. Loan applications are accepted at most of the Bank's offices.

         The Bank emphasizes the origination of a variety of residential loans,
including conventional 15 and 30 year fixed-rate loans, call option loans and
ARM loans. While the substantial majority of these loans were secured by
properties in the Bank's market area, the Bank also purchased a number of loans
(approximately $6.0 million) secured by residential properties in southwest and
southeast Michigan and central Texas. Most of these loans were purchased from a
mortgage banking firm which has established a long term relationship with
AmeriBank. The historical loan losses incurred from these purchased loans have
been negligible.

         The Bank's one- to four-family residential ARM loans are fully
amortizing loans with contractual maturities of up to 30 years. The Bank's ARM
loans generally carry interest rates which are reset to a stated margin over an
independent index, generally the one-, three- or five-year constant maturity
treasury index. Increases or decreases in the interest rate of the Bank's ARM
loans are generally limited to 2% annually with lifetime interest rate caps of
6% over the initial interest rate. The Bank's ARM loans may be convertible into
fixed-rate loans upon payment of a fee, do not contain prepayment penalties and
do not produce negative amortization. Initial interest rates offered on the
Bank's ARM loans may be below the fully indexed rate, although borrowers are
generally qualified at the fully indexed rate. At December 31, 1997, the total
balance of one- to four-family ARM loans was $369.5 million, or 47.5% of the
Bank's gross loan portfolio.

         The Bank also offers fixed-rate mortgage loans to owner occupants with
maturities up to 30 years, which conform to secondary market standards. Interest
rates charged on these fixed-rate loans are priced on a daily basis according to
market conditions. These loans generally do not include prepayment penalties.
AmeriBank currently sells in the secondary market, long-term, conforming
fixed-rate loans with terms over 15 years it originates. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Asset/Liability Management" in the Annual Report.

         The Bank offers one- to four-family residential mortgage loans to
nonowner- occupants. These loans are underwritten considering cash flows from
the subject property in addition to using the same criteria as owner-occupied,
one- to four-family residential loans, but are generally priced


                                        8

<PAGE>   9



at higher rates than owner-occupied loans. Adjustable rates are offered on
nonowner-occupied one- to four-family residential loans, with terms of up to 30
years.

         The Bank originates residential mortgage loans with loan-to-value
ratios of up to 97% for owner-occupied residential loans and up to 80% for
nonowner-occupied residential loans. For loans with loan-to-value ratios in
excess of 80%, AmeriBank requires private mortgage insurance in an amount
sufficient to reduce the Bank's exposure to 80% or less of the lower of the
appraised value or purchase price of the underlying collateral.

         In underwriting one- to four-family residential real estate loans,
AmeriBank evaluates both the borrower's ability to make monthly payments and the
value of the property securing the loan. Properties securing one- to four-family
residential real estate loans made by AmeriBank are appraised by independent fee
appraisers. AmeriBank requires borrowers to obtain title insurance and fire,
property and, if necessary, flood insurance. Real estate loans originated by the
Bank contain a "due on sale" clause allowing the Bank to declare the unpaid
principal balance due and payable upon the sale of the security property. The
Bank generally enforces it's "due on sale" power to allow for faster repricing
and to reduce the duration of it's loan portfolio.

MULTI-FAMILY AND COMMERCIAL REAL ESTATE LENDING

         In order to enhance the yield on its assets AmeriBank originates
permanent loans secured by multi-family and commercial real estate. At December
31, 1997, the Bank's multi-family and commercial real estate loan portfolio
totaled $73.8 million or 9.5% of the Bank's gross loan portfolio, compared to
$77.0 million and $17.3 million, or 10.4% and 5.9% of gross loans outstanding at
December 31, 1996 and 1995, respectively.

         The Bank's permanent multi-family and commercial real estate loan
portfolio includes loans secured by apartment buildings, condominiums, small
office buildings, small business facilities, medical facilities and other
non-residential building properties, substantially all of which are located
within the Bank's primary market area.

         Permanent multi-family and commercial real estate loans have a maximum
term of 25 years, and typically have terms of 20 years or less, for ARM and call
option loans, with fixed-rate loans having terms of 10 years or less.
Multi-family loans and commercial real estate loans are written in amounts of up
to 80% of the lesser of the appraised value of the property or the purchase
price, and borrowers are generally personally liable for all or part of the
indebtedness.

         Appraisals on properties securing multi-family and commercial real
estate loans originated by the Bank are primarily performed by independent
appraisers designated by the Bank at the time the loan is made. All appraisals
on multi-family and commercial real estate loans are reviewed by the Bank's
management. In addition, the Bank's underwriting procedures generally require
verification of the borrower's credit history, income and financial statements,
banking relationships, references, and historical and projected cash flows for
the property that indicate minimum debt service coverage ratios of 1.15% or
more.


                                        9

<PAGE>   10



         Multi-family and commercial real estate loans generally present a
higher level of risk than loans secured by one- to four-family residences. This
greater risk is due to several factors, including the concentration of principal
in a limited number of loans and borrowers, the effects of general economic
conditions on income producing properties and the increased difficulty of
evaluating and monitoring these types of loans. Furthermore, the repayment of
loans secured by multi-family and commercial real estate is typically dependent
upon the successful operation of the related real estate project. If the cash
flow from the project is reduced (for example, if leases are not obtained or
renewed, or a bankruptcy court modifies a lease term, or a major tenant is
unable to fulfill its lease obligations), the borrower's ability to repay the
loan may be impaired. At December 31, 1997, $546,000 or .74% of the multi-family
and commercial real estate loan portfolio was non-performing. See "- Asset
Quality." There can be no assurance that delinquencies will not increase in the
future.

CONSTRUCTION AND DEVELOPMENT LENDING

         The Bank makes construction loans to individuals for the construction
of their residences, as well as to builders and developers for the construction
of one- to four-family residences and the development of one- to four-family
lots, residential subdivisions, condominium developments and other commercial
developments. At December 31, 1997, the Bank had $71.1 million in construction
and development loans outstanding, representing 9.15% of the Bank's gross loan
portfolio.

         Construction loans to individuals for their residences are structured
to be converted to permanent loans at the end of the construction phase, which
typically runs six months. These construction loans have rates and terms which
match any one- to four-family loans then offered by the Bank, except that during
the construction phase, the borrower pays interest only. Residential
construction loans are generally underwritten pursuant to the same guidelines
used for originating permanent residential loans. At December 31, 1997,
approximately 51.5% of the Bank's construction loans were to borrowers intending
to live in the properties upon completion of construction.

         Construction loans to builders of one- to four-family residences
generally require the payment of interest only for up to one year and either
have terms of up to 30 years with adjustable rates or with call options, or are
fixed rate loans of 15 years or less. These loans are structured to be assumed
by qualified borrowers as permanent loans. These loans may also provide for the
payment of loan fees from loan proceeds.

         The Bank also makes loans to builders for the purpose of developing
one- to four-family lots and residential condominium projects. These loans
typically have terms of 36 months or less with maximum loan to value ratios of
80%. These loans may provide for the payment of loan fees from loan proceeds.
Loan principal is typically paid down as lots or units are sold. At December 31,
1997, the Bank had $22.0 million of development loans outstanding.

         Construction and development loans are obtained principally through
continued business from developers and builders who have previously borrowed
from the Bank, as well as referrals from existing customers and walk-in
customers. The application process includes a submission to the Bank of accurate
plans, specifications and costs of the project to be constructed/developed.
These


                                       10

<PAGE>   11



items are used as a basis to determine the appraised value of the subject
property. Loans are based on the lesser of current appraised value and/or the
cost of construction (land plus building). At December 31, 1997, the Bank had 12
construction and development loans in excess of $500,000, each of which was
current at such date. The Bank's largest construction and development loan at
December 31, 1997, was a $2.5 million line of credit for the construction of an
office building, of which $806,000 was outstanding.

         Because of the uncertainties inherent in estimating development and
construction costs and the market for the project upon completion, it is
relatively difficult to evaluate accurately the total loan funds required to
complete a project, the related loan-to-value ratios and the likelihood of
ultimate success of the project. Construction and development loans to borrowers
other than owner-occupants also involve many of the same risks discussed above
regarding multi-family and commercial real estate loans and tend to be more
sensitive to general economic conditions than many other types of loans.

COMMERCIAL BUSINESS LENDING

         At December 31, 1997, the Bank had $37.3 million in commercial business
loans outstanding, representing 4.8% of the Bank's total loan portfolio compared
to $15.0 million, or 2.0% of gross loans outstanding at December 31, 1996. The
Bank's commercial business lending portfolio contains loans with a variety of
purposes and security, including loans to finance operations and equipment.
Generally, the Bank's commercial business lending has been limited to borrowers
headquartered, or doing business, in the Bank's primary market area. Management
intends to continue to increase the size of its commercial business portfolio
during 1998. At December 31, 1997, the average outstanding loan amount in the
Bank's commercial business loan portfolio was $139,000, with the largest
commercial business loan being a $14.0 million line of credit with an
outstanding balance at December 31, 1997 of $10.0 million.

         Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her employment and
other income, and which are secured by real property whose value tends to be
more easily ascertainable, commercial business loans are of higher risk and
typically are made on the basis of the borrower's ability to make repayment from
the cash flow of the borrower's business. As a result, the availability of funds
for the repayment of commercial business loans may be substantially dependent on
the success of the business itself. Further, the collateral securing the loans
may depreciate over time, may be difficult to appraise and may fluctuate in
value based on the success of the business.

CONSUMER LENDING

         The Bank originates a variety of different types of consumer loans,
including automobile loans, home equity lines of credit and installment loans,
home improvement loans, deposit account loans and other loans for household and
personal purposes. Recently, AmeriBank has placed increasing emphasis on
consumer loans, because of their attractive yields and shorter terms to
maturity. At December 31, 1997, consumer loans totaled $111.6 million, or 14.4%
of gross loans


                                       11

<PAGE>   12

outstanding, as compared to $100.1 million and $24.5 million, or 13.5% and 8.3%
of gross loans outstanding at December 31, 1996 and 1995, respectively.

         The Bank originates automobile loans, its largest segment of consumer
loans, on both a direct and an indirect basis. Direct loans are made when the
Bank extends credit directly to the borrower. Indirect loans are obtained when
the Bank purchases loan contracts from retailers of goods or services which have
extended credit to their customers.

         The Bank began its indirect lending program in 1995 with selected
automobile dealers located in the Bank's lending area. Moreover, the Bank
acquired a $25.0 million portfolio of mature, indirect automobile loans upon its
acquisition of AFSB. At December 31, 1997, the Bank's automobile loan portfolio
totaled $49.3 million (of which $38.5 million were originated on an indirect
basis), or 44.2% of the Bank's consumer loan portfolio and 6.3% of the Bank's
gross loan portfolio.

         The Bank's home equity installment loans are written so that the total
commitment amount, when combined with the balance of the first mortgage lien,
generally will not exceed the greater of 90% of the appraised value of the
property or 90% of two times the Michigan real estate assessment value. These
loans are written with fixed terms of up to five years, or up to 10 years with a
call option after five years, and carry fixed rates of interest. The Bank also
originates home equity lines of credit utilizing the same underwriting standards
as for home equity installment loans. Home equity lines of credit are revolving
line of credit loans. The majority of the Bank's existing home equity line of
credit portfolio has a 10 year term; however, the Bank currently offers these
loans with adjustable rates, interest only payments and a term of five years. At
December 31, 1997, the Bank had $22.9 million of home equity installment loans
and $32.4 million of home equity lines of credit outstanding, representing 3.0%
and 4.2%, respectively, of the Bank's gross loan portfolio. At that date, the
Bank had $33.1 million of unused credit available under its home equity line of
credit program.

         Prior to 1995, student loans represented a large component of the
consumer loan portfolio. During 1995, however, the Bank sold its entire student
loan portfolio and no longer originates such loans but participates in a
referral program with a third party lender.

         The underwriting standards employed by the Bank for consumer loans
include a determination of the applicant's payment history on other debts and
ability to meet existing obligations and payments on the proposed loan. Although
creditworthiness of the applicant is of primary consideration, the underwriting
process also includes a comparison of the value of the security, if any, in
relation to the proposed loan amount. Consumer loans may entail greater credit
risk than do residential mortgage loans, particularly in the case of consumer
loans which are unsecured or are secured by rapidly depreciable assets, such as
automobiles. In such cases, any repossessed collateral for a defaulted consumer
loan may not provide an adequate source of repayment of the outstanding loan
balance as a result of the greater likelihood of damage, loss or depreciation.
In addition, consumer loan collections are dependent on the borrower's
continuing financial stability, and thus are more likely to be affected by
adverse personal circumstances. Furthermore, the application of various federal
and state laws, including bankruptcy and insolvency


                                       12

<PAGE>   13



laws, may limit the amount which can be recovered on such loans. At December 31,
1997 $436,000 or .39% of the consumer loan portfolio was non-performing. There
can be no assurance that delinquencies will not increase in the future.

LOAN ORIGINATIONS, PURCHASES AND SALES

         Real estate loans are originated by AmeriBank's staff of loan officers.
Loan applications are taken in most branch offices and then submitted to the
Bank's designated loan underwriters for approval.

         The Bank originates both adjustable-rate and fixed-rate loans; however,
its ability to originate loans is dependent upon the relative customer demand
for loans in its market. Demand is affected by the interest rate environment.
Currently, almost all fixed-rate residential mortgage loans with maturities in
excess of 15 years are originated for sale to the Federal Home Loan Mortgage
Corporation (the "FHLMC") with servicing rights retained. These loans are
originated to satisfy customer demand, generate servicing fee income and are
sold to achieve the goals of the Bank's asset/liability management program.
Borrowers are allowed to lock in an interest rate at the date of application
without a fee. The Bank manages the volume of loans originated but not closed by
offsetting these loan commitments with forward commitments from the FHLMC when
the volume of applications exceeds $6.0 million.

         When loans are sold, the Bank typically retains the responsibility for
collecting and remitting loan payments, making certain that real estate tax
payments are made on behalf of borrowers, and otherwise servicing the loans. The
Bank receives a servicing fee for performing these functions. The amount of
servicing fees received by the Bank varies but is generally calculated at 3/8ths
of 1% per annum for ARM loans, and 1/4th of 1% per annum for fixed-rate mortgage
loans based on the outstanding principal amount of the loans serviced. The
servicing fee is recognized as income over the life of the loan. The Bank
serviced for others mortgage loans that it originated and sold amounting to
$130.4 million at December 31, 1997.

         The Bank purchases a limited amount of real estate loans from selected
sellers. The Bank carefully reviews and underwrites all loans to be purchased to
insure that they meet the Bank's underwriting standards. During 1997, the Bank
purchased a total of $6.0 million of one- to four-family mortgage loans secured
by residential properties in southwest and southeast Michigan and central Texas.

         In periods of economic uncertainty, the Bank's ability to originate
large dollar volumes of real estate loans may be substantially reduced or
restricted, with a resultant decrease in related fee income and operating
earnings. In addition, the Bank's ability to sell loans may substantially
decrease as potential buyers (principally government agencies) reduce their
purchasing activities.

         The following table shows the loan origination, purchase, sale and
repayment activities of the Bank for the periods indicated. Fixed-rate and call
option loans modified by the Bank are not reflected as new loan originations.
During 1997, the Bank modified a total of $15 million of loans as compared to
$13.9 million and $4.1 million during 1996 and 1995, respectively. See


                                       13

<PAGE>   14



"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operations" in the Annual Report.

<TABLE>
<CAPTION>

                                                                   Year Ended December 31,
                                                           -------------------------------------
                                                           1997             1996            1995
                                                           ----             ----            ----
                                                                    (In Thousands)
Originations by type:
 Adjustable rate:
<S>                                                      <C>              <C>             <C>
  Real estate:
     one- to four-family.............................     $  57,043        $ 111,313       $ 42,455
     multi-family....................................         1,710           37,261            144
     commercial......................................           ---            6,202            550
     construction or development.....................         4,507           37,137         38,918
  Commercial business................................        19,422              ---            ---
  Consumer...........................................        12,000           37,580         10,097
                                                          ---------        ---------       --------
         Total adjustable-rate.......................        94,682          229,493         92,164
                                                          ---------        ---------       --------
 Fixed-rate:
 ----------
  Real estate:
     one- to four-family.............................        58,086          19,644          11,381
     multi-family....................................         7,251           6,575           4,038
     commercial......................................         5,836           1,094             ---
     construction or development.....................        31,877           6,554          11,517
  Commercial business................................         8,798             ---             ---
  Consumer...........................................        38,775          35,320          11,683
                                                          ---------        --------        --------
         Total fixed-rate............................       150,623          69,187          38,619
                                                          ---------        --------        --------
         Total loans originated......................       245,305         298,680         130,783
                                                          ---------        --------        --------

Purchases:
  Real estate: one- to four-family...................         6,039          27,027             986
  Loans acquired in AFSB acquisition.................           ---         294,700             ---
                                                          ---------        --------        --------
         Total purchases.............................         6,039         321,727             986
                                                          ---------        --------        --------

Sales:
  Real estate: one- to four-family...................        43,161           9,833           4,707
  Consumer loans.....................................           ---             ---           6,794
                                                          ---------        --------        --------
         Total loan sales............................        43,161           9,833          11,501
                                                          ---------        --------        --------

Repayments:
  Principal repayments...............................       179,735         161,303          78,892
                                                          ---------        --------        --------
         Total reductions............................       222,896         171,136          90,393
                                                          ---------        --------        --------
  Increase (decrease) in other items, net............         5,379        ( 10,176)          4,263
                                                          ---------        --------        --------
         Net increase (decrease).....................     $  33,827        $439,095        $ 45,639
                                                          =========        ========        ========

</TABLE>


         Due to the historically low interest rate environment during 1997 the
Bank experienced a shift in customer demand from adjustable rate to fixed rate
products. The Bank consistent with its asset/liability management policy sold a
substantial portion of its fixed rate product in the secondary market. In
addition, consistent with the Bank's strategic plan of achieving a more balanced
loan portfolio between residential mortgage, consumer and commercial lending,
the Bank focused its loans origination efforts towards originating consumer and
commercial loans.


                                       14

<PAGE>   15



ASSET QUALITY

         When a borrower fails to make a required payment on a loan, the Bank
attempts to cause the delinquency to be cured by contacting the borrower. In the
case of residential loans, a late notice is sent for accounts 30 or more days
delinquent. If the delinquency is not cured by the 60th day, contact with the
borrower may be made by phone and by a second letter. Additional written and
oral contacts may be made with the borrower between 30 and 60 days after the due
date. If the delinquency continues for a period of 60 days, the Bank usually
sends a default letter to the borrower and after 90 days, if the loan is still
delinquent, institutes appropriate action to foreclose on the property. If
foreclosed, the property is sold at public auction and may be purchased by the
Bank. Delinquent consumer loans are handled in a generally similar manner,
except that initial contacts are made when the payment is 14 days past due and
appropriate action may be taken to collect any loan payment that is delinquent
for more than 30 days. The Bank's procedures for repossession and sale of
consumer collateral are subject to various requirements under Michigan consumer
protection laws. The Bank has not had significant experience with delinquent
loans.

         Delinquent Loans. The following table sets forth information concerning
delinquent loans at December 31, 1997, in dollar amounts and as a percentage of
each category of the Bank's loan portfolio. The amounts presented represent the
total remaining principal balances of the related loans, rather than the actual
payment amounts which are overdue.


<TABLE>
<CAPTION>

                                                        Loans Delinquent For:                             Total Delinquent
                                    -------------------------------------------------------------
                                             60-89 Days                   90 Days and Over                      Loans
                                    ----------------------------   -----------------------------     ---------------------------
                                                         Percent                         Percent                          Percent
                                                         of Loan                         of Loan                          of Loan
                                    Number    Amount    Category    Number     Amount    Category    Number    Amount    Category
                                    ------    ------    --------    ------     ------    --------    ------    ------    --------
                                                                        (Dollars in Thousands)
<S>                                <C>       <C>       <C>         <C>        <C>       <C>         <C>       <C>       <C>
  One- to four-family residential..   9       $  319       .07%         16     $  979      .20%       25       $1,298      .27%
  Multi-family and Commercial
    real estate.................... ---          ---       ---           1        548      .74         1          548      .74
  Construction or development......   3          326       .46           4        633      .89         7          959     1.35
  Commercial business..............   5          836      2.24           5        165      .44        10        1,001     2.68
  Consumer.........................   5           62       .06          33        434      .39        38          496      .44
                                    ---       ------                ------     ------                ---       ------
      Total........................  22       $1,543                    59     $2,759                 81       $4,302
                                    ===       ======                ======     ======                ===       ======
</TABLE>



         Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing assets in the Bank's loan portfolio. Interest
income on loans is accrued over the term of the loans based upon the principal
outstanding, except where serious doubt exists as to the collectibility of a
loan, in which case the accrual of interest is discontinued For all years
presented,


                                       15

<PAGE>   16



the Bank has had no troubled debt restructurings (which involve
forgiving a portion of interest or principal on any loans or making loans at a
rate or with a maturity less than that customary in the Bank's market).
Foreclosed assets include assets acquired in settlement of loans. The loan
amounts shown do not reflect reserves set up against such assets. See
"-Allowance for Loan Losses."

<TABLE>
<CAPTION>

                                                                           December 31,
                                                     --------------------------------------------------------
                                                       1997         1996         1995        1994        1993
                                                       ----         ----         ----        ----        ----
                                                                       (Dollars in Thousands)
<S>                                               <C>            <C>        <C>         <C>         <C>
Non-accruing loans:
  One- to four-family.........................       $  917       $1,792       $  ---      $  ---      $  ---
  Construction development....................          611          ---          ---         ---         ---
  Commercial business.........................          118          ---          ---         ---         ---
  Consumer....................................          434          331          ---         ---         ---
                                                     ------       ------       ------      ------      ------

     Total....................................        2,080        2,123          ---         ---         ---
                                                     ------       ------       ------      ------      ------

Accruing loans delinquent more than 90 days:
  One- to four-family.........................           98          132        1,317         922         505
  Multi-family and commercial real estate.....          546          426        1,110          96         ---
  Consumer....................................            2           55            7           1           5
                                                     ------       ------       ------      ------      ------
     Total....................................          646          613        2,434       1,019         510
                                                     ------       ------       ------      ------      ------

Foreclosed assets:
  One- to four-family.........................          276           39          296         164         274
  Consumer loans..............................          181          150
                                                    -------       ------       ------      ------      ------
     Total....................................          457          189          296         164         274
                                                    -------       ------       ------      ------      ------

Total non-performing assets...................       $3,183       $2,923       $2,730      $1,183      $  784
                                                     ======       ======       ======      ======      ======
Total non-performing assets as a percentage
of total assets...............................          .36%         .34%         .74%        .36%        .29%
                                                        ===          ===         ====         ===         ===
</TABLE>

         For the year ended December 31, 1997, gross interest income which would
have been recorded had the non-accruing loans been current in accordance with
their original terms amounted to $136,000, none of which was included in
interest income.

         Non-Performing Loans. At December 31, 1997, the Bank had $2.7 million
in non-performing loans, which constituted .35% of the Bank's gross loan
portfolio. Except as discussed immediately below, there were no non-accruing
loans or aggregate non-accruing loans-to-one-borrower in excess of $500,000.

         The largest non-performing loan at December 31, 1997, totaled $501,000
and was secured by property operated as a bed and breakfast. The loan
subsequently was paid off and the Bank received full repayment of principal and
a substantial portion of interest due.

         Other Loans of Concern. As of December 31, 1997, there were $3.0
million of other loans not included in the table or discussed above where known
information about the possible credit problems of borrowers caused management to
have doubts as to the ability of the borrower to comply with present loan
repayment terms. These loans consist of seven commercial and multi-family
loans, the largest of which was a $2.0 million loan secured by a manufacturing
plant. The


                                       16

<PAGE>   17



Bank is monitoring this loan as a result of a tenant vacancy. The loan was
current on payments as of December 31, 1997. See "Lending Activities - General."
These loans have been considered by management in conjunction with the analysis
of the adequacy of the allowance for loan losses.

         As of December 31, 1997, there were no other loans not included in the
table above or discussed under "Other Loans of Concern" where known information
about the possible credit problems of borrowers caused management to have doubts
as to the ability of the borrower to comply with present loan repayment terms
and which may result in disclosure of such loans in the future.

         Allowance for Loan Losses. The Bank establishes an allowance for loan
losses based on a systematic analysis of risk factors in the loan portfolio.
This analysis includes evaluation of concentrations of credit, past loss
experience, current economic conditions, amount and composition of the loan
portfolio, estimated fair value of the underlying collateral, loan commitments
outstanding, delinquencies, and other factors. Because the Bank has had limited
loan losses during its history, management also considers the loss experience of
similar portfolios in comparable lending markets. Management's analysis results
in establishment of allowance amounts by loan type, based on allocations by
quality classification. A portion of the allowance also consists of an
unallocated amount which increased substantially in 1996 due to the combination
of AFSB's unallocated portion of the allowance with the Bank's allowance. In
1997, the unallocated portion of the allowance decreased as management allocated
larger portions of the allowance to the higher risk consumer, construction and
other non-residential lending portfolios due to the increased emphasis on growth
in these portfolios. Although management believes it uses the best information
available to make such determinations, future adjustments to reserves may be
necessary and net income could be significantly affected if circumstances differ
substantially from the assumptions used in making the initial determinations.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operations - Provision for Loan Losses," in the Annual
Report.



                                       17

<PAGE>   18



         The following table sets forth an analysis of the Bank's allowance for
loan losses.

<TABLE>
<CAPTION>

                                                                         Year Ended December 31,
                                                      -------------------------------------------------------------
                                                         1997         1996          1995        1994        1993
                                                      ----------   ----------    ----------   ---------   ---------
                                                                        (Dollars in Thousands)
<S>                                                      <C>           <C>          <C>        <C>          <C>
Balance at beginning of period.....................       $3,129        $1,251       $1,118      $   950      $  500
Acquired from AFSB.................................          ---         1,358          ---          ---          --

Charge-offs:
  Consumer.........................................          615           134           28            2         ---
Recoveries.........................................          119            90            1          ---         ---
                                                          ------        ------       ------      -------      ------
Net charge-offs....................................         (496)          (44)         (27)          (2)        ---
Additions charged to operations....................          660           564          160          170         450
                                                          ------        ------       ------      -------      ------
Balance at end of period...........................       $3,293        $3,129       $1,251      $ 1,118      $  950
                                                          ======        ======       ======      =======      ======

Ratio of net charge-offs during the period to
 average loans outstanding during the period.......          ---%(1)       ---%(1)      ---%(1)      ---%(1)     ---%
                                                          ======         =====       ======      =======      ======

Ratio of net charge-offs during the period to
 average non-performing assets.....................        16.25%          ---%(1)      ---%(1)      ---%(1)     ---%
                                                          ======         =====       ======      =======      ======
</TABLE>
--------------

(1)  Less than 1.00%.



                                       18

<PAGE>   19



         The distribution of the Bank's allowance for losses on loans at the
dates indicated is summarized as follows:


<TABLE>
<CAPTION>

                                                                        December 31,
                                       ---------------------------------------------------------------------------
                                              1997                      1996                     1995
                                       -------------------       -------------------       -------------------
                                                   Percent                   Percent                  Percent
                                                   of Loans                  of Loans                 of Loans
                                                   in Each                   in Each                  in Each
                                                   Category                  Category                 Category
                                                   to Total                  to Total                 to Total
                                       Amount        Loans        Amount       Loans       Amount      Loans
                                       ------       ------        ------     --------      ------     --------
                                                                  (Dollars in Thousands)
<S>                                   <C>         <C>           <C>          <C>          <C>          <C>
One- to four-family.................   $   289        62.20%     $  331        69.59%      $  166        71.24%
Multi-family........................        14         4.97          18         4.61          413         4.50
Commercial real estate..............       593         4.52         606         5.75           21         1.40
Construction or development.........       461         9.15          54         4.55           53        14.53
Commercial business.................       289         4.80         150         2.02
Consumer............................     1,024        14.36         777        13.48          143         8.33
Unallocated.........................       623          ---       1,193          ---          455          ---
                                       -------       ------      -------      ------       ------       ------
     Total..........................   $ 3,293       100.00%     $3,129       100.00%      $1,251       100.00%
                                       =======       ======      ======       ======       ======       ======


<CAPTION>

                                                          December 31,
                                       --------------------------------------------------
                                              1994                     1993
                                       -------------------     -------------------
                                                   Percent                 Percent
                                                   of Loans                of Loans
                                                   in Each                 in Each
                                                   Category                Category
                                                   to Total                to Total
                                       Amount       Loans      Amount       Loans
                                       ------      --------    ------      --------
<S>                                   <C>          <C>        <C>          <C>
One- to four-family.................   $   148       76.10%    $  114        78.30%
Multi-family........................       287        3.80        257         5.12
Commercial real estate..............        25        2.02         79         3.29
Construction or development.........        28        8.44         18         5.75
Commercial business.................
Consumer............................        62        9.64         28         7.54
Unallocated.........................       568         ---        454          ---
                                       -------      ------     ------       ------
     Total..........................   $ 1,118      100.00%    $  950       100.00%
                                       =======      ======     ======       ======

</TABLE>


                                       19

<PAGE>   20



INVESTMENT ACTIVITIES

         Generally, the investment policy of the Bank is to invest funds among
various categories of investments and maturities based upon the Bank's
asset/liability management policies, concern for the highest investment quality,
liquidity needs and performance objectives. As market conditions change, the
Bank regularly re-evaluates the marketable securities in its portfolio. The
investment security portfolio currently is composed of federal agency
securities, collateralized mortgage obligations, mortgage-backed securities,
municipal bond, corporate debt securities and Federal Home Loan Bank ("FHLB")
stock.

         At December 31, 1997, the Bank's entire investment and mortgage-backed
securities portfolios were classified as available for sale. The amortized cost,
fair value and weighted average yield of securities at December 31, 1997, by
contractual maturity, are shown below. Expected maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties. Yields on tax exempt
obligations have been computed on a tax equivalent basis.

<TABLE>
<CAPTION>

                                                                      Securities
                                                           ------------------------------       Weighted
                                                           Amortized Cost      Fair Value     Average Yield
                                                           --------------      ----------     -------------
                                                                         (Dollars in Thousands)
<S>                                                       <C>               <C>               <C>
Due in one year or less..........................          $  6,190          $  6,164           5.34%
Due after one year through five years............            17,547            17,617           6.73
Due after five through 10 years..................             5,108             5,092           6.86
                                                           --------          --------          -----
                                                             28,845            28,873           6.45

Asset-backed debt securities(1)..................            28,369            28,435           7.58
                                                            -------           -------          -----
                                                            $57,214           $57,308           7.01
                                                            =======           =======
</TABLE>

------------------------
(1) Consists of asset-backed SBA loans and mortgage backed
    securities.

         Due to their variable payments, asset-backed securities are not
reported by a specific maturity grouping.


                                       20

<PAGE>   21



         The following table sets forth the composition of the Bank's securities
portfolio at the dates indicated. For additional information on the Bank's
investment and mortgage-backed securities, see Note 3 of the Notes to
Consolidated Financial Statements in the Annual Report.


<TABLE>
<CAPTION>


                                                             December 31,
                                          --------------------------------------------------
                                               1997              1996              1995
                                          --------------    --------------    --------------
                                          Carrying Value    Carrying Value    Carrying Value
                                          --------------    --------------    --------------
                                                        (Dollars in Thousands)
<S>                                           <C>                 <C>            <C>
Equity Securities:
   Money-market funds...................       $    ---         $     ---         $ 17,150
   Mortgage-backed funds................            ---               ---            2,574
   Other................................            ---               296              270
                                                -------         ---------         --------
     Total equity securities............            ---               296           19,994
                                                -------         ---------         --------

Debt Securities:
  Corporate.............................          2,010            11,353           21,292
  Asset-backed (SBA loans)..............         15,232            12,816            1,069
  Mortgage-backed.......................         13,203            17,773           10,379
  Government and Agency.................         25,007            15,960           12,030
  Municipal obligations.................          1,856             4,708              ---
                                                -------         ---------         --------
      Total debt securities.............         57,308            62,610           44,770
  FHLB Stock............................          7,308             6,958            2,162
                                                -------         ---------         --------

     Total securities...................        $64,616         $  69,864         $ 66,926
                                                =======         =========         ========
</TABLE>


SOURCES OF FUNDS

         General. The Bank's primary sources of funds are deposits, principal
and interest payments on loans, sales of loans, maturities of securities,
securities available for sale and borrowings, principally FHLB advances.

         Deposits. AmeriBank offers a variety of deposit accounts having a wide
range of interest rates and terms. The Bank's deposits consist of passbook and
statement savings accounts, interest and non-interest-bearing checking accounts,
money market checking and savings accounts, and certificates of deposit. The
Bank's High Performance Checking Account Program offers a variety of checking
accounts to customers. These checking accounts increase the Bank's core
deposits, provide the opportunity to cross sell other Bank products and generate
additional fee income; however, the cost of servicing these accounts has
increased the Bank's non-interest expense. The Bank relies primarily on
advertising, competitive pricing policies and customer service to attract and
retain these deposits. AmeriBank solicits deposits from its market area only,
and has never used brokers to obtain deposits.

         The flow of deposits is influenced significantly by general economic
conditions, changes in money market and prevailing interest rates and
competition. The variety of deposit accounts offered by the Bank has allowed it
to be competitive in obtaining funds and to respond with flexibility to changes
in consumer demand. The Bank has become more susceptible to short-term
fluctuations in deposit flows, as customers have become more interest rate
conscious. The Bank manages the


                                       21

<PAGE>   22



pricing of its deposits in keeping with its asset/liability management,
profitability and growth objectives. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Asset/Liability Management"
in the Annual Report. Based on its experience, the Bank believes that its
savings, interest and non-interest-bearing checking accounts are relatively
stable sources of deposits. However, the ability of the Bank to attract and
maintain certificates of deposit, and the rates paid on these deposits, has been
and will continue to be significantly affected by market conditions.

         The following table sets forth the savings flows at the Bank during the
periods indicated.

<TABLE>
<CAPTION>

                                                                     Year Ended December 31,
                                                           -------------------------------------------
                                                             1997            1996             1995
                                                             ----            ----             ----
                                                                     (Dollars in Thousands)
<S>                                                       <C>             <C>              <C>
Opening balance......................................         $622,492       $243,220         $231,321
Deposits acquired from AFSB..........................              ---        333,000              ---
Net Deposits (Withdrawals)...........................            6,373         23,462            5,061
Interest credited....................................           25,695         22,810            6,838
                                                             ---------      ---------        ---------
Ending balance.......................................         $654,560       $622,492         $243,220
                                                              ========       ========         ========

Net increase.........................................        $  32,068       $379,272        $  11,899
                                                             =========       ========        =========

Percent increase.....................................             5.15%        155.94%            5.14%
                                                                  ====         ======             ====
</TABLE>

         The following table sets forth the dollar amount of savings deposits in
the various types of deposit programs offered by the Bank at the dates
indicated.

<TABLE>
<CAPTION>

                                                                                     December 31,
                                                      ------------------------------------------------------------------------------
                                                              1997                     1996                          1995
                                                      ---------------  --------------------------------  ---------------------------
                                                                      Percent                   Percent                  Percent
                                                      Amount         of Total     Amount        of Total     Amount      of Total
                                                      ------         --------     ------        --------     ------      --------
                                                                                  (Dollars in Thousands)
<S>                                                   <C>           <C>          <C>           <C>       <C>            <C>
Transaction and Savings Deposits:
Noninterest-bearing...............................      $ 28,431        4.34%     $ 25,487        4.09%   $ 12,262         5.04%
Savings accounts (2.06%(1)).......................        60,143        9.19        64,987       10.44      46,470        19.12
NOW Accounts and money market deposit
 accounts (3.84%(1))..............................       160,296       24.49       154,711       24.85      46,986        19.31
                                                        --------     -------      --------      ------    --------       ------
Total Non-Certificates............................       248,870       38.02       245,185       39.38     105,718        43.47
                                                        --------     -------      --------      ------    --------       ------
Certificates:
   3.00 -  4.99%..................................         9,612        1.47        25,807        4.15      12,276         5.05
   5.00 -  6.99%..................................       359,494       54.92       301,184       48.38     111,298        45.76
   7.00 -  8.99%..................................        36,109        5.52        49,651        7.98      13,818         5.68
   9.00 -  10.99%.................................           475         .07           665         .11         110          .04
                                                        --------     -------      --------      ------    --------       ------
Total Certificates................................       405,690       61.98       377,307       60.62     137,502        56.53
                                                        --------     -------      --------      ------    --------       ------
Total Deposits....................................      $654,560      100.00%     $622,492      100.00%   $243,220       100.00%
                                                        ========     =======      ========      ======    ========       ======
</TABLE>

----------
(1)  At December 31, 1997.



                                       22

<PAGE>   23




         The following table shows rate and maturity information for the Bank's
certificates of deposit as of December 31, 1997.

<TABLE>
<CAPTION>

                                        3.00-        5.00-         7.00-       9.00% to                    Percent
                                        4.99%        6.99%         8.99%        10.99%        Total       of Total
                                       -------      -------       -------      --------      -------     ----------
                                                                 (Dollars in Thousands)
Certificate accounts maturing in quarter ending:
<S>                                       <C>         <C>          <C>           <C>         <C>             <C>
March 31, 1998......................       $7,098      $ 64,381      $ 1,015      $  11        $ 72,505        17.87%
June 30, 1998.......................          621        84,944        6,945        ---          92,510        22.80
September 30, 1998..................        1,254        46,890        9,170        ---          57,314        14.13
December 31, 1998...................          134        20,410        7,658         42          28,244         6.96
March 31, 1999......................          279        44,732          324        147          45,482        11.21
June 30, 1999.......................          151        47,336          351        275          48,113        11.86
September 30, 1999..................          ---         6,063          124        ---           6,187         1.53
December 31, 1999...................           75        13,755          412        ---          14,242         3.51
March 31, 2000......................          ---         5,846        7,683        ---          13,529         3.33
June 30, 2000.......................          ---         6,905        1,628        ---           8,533         2.10
September 30, 2000..................          ---         4,003           33        ---           4,036         1.00
December 31, 2000...................          ---         2,967          198        ---           3,165          .78
Thereafter..........................          ---        11,262          568        ---          11,830         2.92
                                           ------      --------      -------       ----        --------       ------
   Total............................       $9,612      $359,494      $36,109       $475        $405,690       100.00%
                                           ======      ========      =======       ====        ========       ======

   Percent of total.................        2.37%        88.61%        8.90%       .12%         100.00%
                                            ====         =====         ====        ===          ======
</TABLE>


         The following table indicates the amount of the Bank's certificates of
deposit and other deposits by time remaining until maturity as of December 31,
1997.

<TABLE>
<CAPTION>

                                                                    Maturity
                                                  ---------------------------------------------------
                                                                 Over          Over
                                                   3 Months      3 to 6       6 to 12         Over
                                                   or Less       Months        Months      12 months      Total
                                                   -------       ------        ------      ---------      -----
                                                                         (In Thousands)
<S>                                                <C>         <C>            <C>         <C>          <C>
Certificates of deposit less
 than $100,000..............................        $63,741     $79,011        $78,152     $140,448     $361,352

Certificates of deposit of
 $100,000 or more...........................          8,764      13,499          7,406       14,669       44,338
                                                    -------     -------        -------     --------     --------

Total certificates of deposit...............        $72,505     $92,510        $85,558     $155,117     $405,690 (1)
                                                    =======     =======        =======     ========     ========
</TABLE>

---------------
(1) Includes $5.12 million of deposits from governmental and other public
entities.


         BORROWINGS. AmeriBank's other available sources of funds include
advances from the FHLB of Indianapolis and other borrowings. As a member of the
FHLB of Indianapolis, the Bank is required to own capital stock in the FHLB and
is authorized to apply for advances from the FHLB. Each FHLB credit program has
its own interest rate, which may be fixed or variable, and range of


                                       23

<PAGE>   24



maturities. The FHLB of Indianapolis may prescribe the acceptable uses for these
advances, as well as limitations on the size of the advances and repayment
provisions.

         The Bank has borrowed funds from the FHLB of Indianapolis primarily
under its fixed-rate lending programs, with terms requiring monthly interest
payments and principal payments due upon maturity. To a lesser extent, the Bank
has obtained variable rate FHLB advances. The Bank utilizes FHLB advances as
part of its asset/liability management strategy in order to cost effectively
extend the maturity of its liabilities. The Bank is subject to a prepayment fee
if the advance is prepaid by the Bank.

         At December 31, 1997, the Corporation had $145.5 million of advances
from the FHLB of Indianapolis and the capacity to borrow up to $340.0 million;
however, the current Board policy limits the Bank's borrowing capacity to $175.0
million. For additional information on the Bank's borrowings and maturities
thereof, see Note 9 of the Notes to Consolidated Financial Statements contained
in the Annual Report.

         The following table sets forth the maximum month-end balance and
average balance of FHLB advances for the periods indicated.

<TABLE>
<CAPTION>

                                                   Year Ended December 31,
                                               -------------------------------
                                               1997          1996         1995
                                               ----          ----         ----
                                                        (In Thousands)
<S>                                            <C>           <C>           <C>
DURING THE PERIODS:
Maximum Balance:
  FHLB advances............................     $145,458      $139,170      $43,241

Average Balance:
  FHLB advances............................     $140,746      $ 94,269      $18,251

</TABLE>

         The following table sets forth the end of period interest rates and
balances at the dates indicated:

<TABLE>
<CAPTION>

                                                                         December 31,
                                                            --------------------------------------
                                                              1997           1996          1995
                                                              ----           ----          ----
                                                                     (Dollars in Thousands)
<S>                                                         <C>            <C>            <C>
FHLB advances.........................................       $145,458       $139,170       $43,241

Weighted average interest rate of FHLB advances.......           5.98%          5.87%         6.15%
</TABLE>


SUBSIDIARY AND OTHER ACTIVITIES

         Prior to December 1997, AmeriBank had two wholly-owned service
corporation subsidiaries: OS Services, Inc. ("OS Services") and Midwest
Investment Services, Inc. ("Midwest"). As of December 31, 1997, Midwest was
merged into OS Services due to the similar nature of their


                                       24

<PAGE>   25


operations. In addition, during December 1997, a new subsidiary,
AmeriPlan Financial Services, Inc. ("AmeriPlan") was established. At December
31, 1997, AmeriBank's investment in its service corporations totaled $1.4
million.

         OS Services invests in stock of MMLIC Life Insurance Company, a
subsidiary of the Minnesota Mutual Life Insurance Company, St. Paul, Minnesota.
In addition, OS Services invests in limited partnerships which are involved in
developing and providing affordable housing. The partnerships also provide
investors with low income housing tax credits available under Section 42 of the
Internal Revenue Code of 1986, as amended (the "Code"). The Bank, through OS
Services, has an equity investment in the partnerships totaling $969,000. In
addition, the Corporation received $250,000 in tax credits during 1997 as a
result of these activities. AmeriPlan's operations consist of offering
investment products, including mutual funds and annuities, as well as discount
brokerage services. The subsidiaries of the Bank generated net income of
$252,000 during 1997.

REGULATION

         General. AmeriBank is a state chartered savings bank, the deposits of
which are federally insured and backed by the full faith and credit of the
United States Government. Accordingly, AmeriBank is subject to broad regulation
and oversight by the Michigan Financial Institution Bureau and the FDIC
extending to all its operations. AmeriBank is a member of the FHLB of
Indianapolis and is subject to certain limited regulation by the Board of
Governors of the Federal Reserve System ("Federal Reserve Board"). As the
savings and loan holding company of AmeriBank, the Corporation also is subject
to federal regulation and oversight by the Office of Thrift Supervision ("OTS").
The purpose of the regulation of the Corporation and other holding companies is
to protect subsidiary savings associations. AmeriBank is a member of the Savings
Association Insurance Fund ("SAIF"), which together with the Bank Insurance Fund
(the "BIF") are the two deposit insurance funds administered by the FDIC, and
the deposits of AmeriBank are insured by the FDIC. As a result, the FDIC has
certain regulatory and examination authority over AmeriBank.

         Certain of these regulatory requirements and restrictions are discussed
below or elsewhere in this document.

         Insurance of Accounts and Regulation by the FDIC. AmeriBank is a member
of the SAIF, which is administered by the FDIC. Deposits are insured up to
applicable limits by the FDIC and such insurance is backed by the full faith and
credit of the United States Government. As insurer, the FDIC imposes deposit
insurance premiums and is authorized to conduct examinations of and to require
reporting by FDIC-insured institutions. It also may prohibit any FDIC-insured
institution from engaging in any activity the FDIC determines by regulation or
order to pose a serious risk to the SAIF or the BIF. The FDIC also has the
authority to initiate enforcement actions against savings associations, after
giving the OTS an opportunity to take such action, and may terminate the deposit
insurance if it determines that the institution has engaged in unsafe or unsound
practices or is in an unsafe or unsound condition.

         The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured depository institutions are placed into one of
nine categories and assessed


                                       25

<PAGE>   26


insurance premiums based upon their level of capital and supervisory evaluation.
The current assessment rates range from zero to .27% of deposits. Risk
classification of all insured institutions is made by the FDIC semi-annually.
Institutions that are well-capitalized and have a high supervisory rating are
subject to the lowest assessment rate. At December 31, 1997, the Bank met the
capital requirement of a "well capitalized" institution and was not subject to
any assessment. See Note 12 of Notes to Consolidated Financial Statements in the
Annual Report.

         The FDIC is authorized to increase assessment rates, on a semiannual
basis, if it determines that the reserve ratio of the SAIF will be less than the
designated reserve ratio of 1.25% of SAIF insured deposits. In setting these
increased assessments, the FDIC must seek to restore the reserve ratio to that
designated reserve level, or such higher reserve ratio as established by the
FDIC. These premiums are also subject to change in future periods.

         Prior to the enactment of the legislation recapitalizing the SAIF, a
portion of the SAIF assessment imposed on savings associations was used to repay
obligations issued by a federally chartered corporation to provide financing for
resolving the thrift crisis in the 1980s. Although the legislation also now
requires assessments to be made on BIF-assessable deposits for this purpose,
effective January 1, 1997, that assessment was limited to 20% of the rate
imposed on SAIF assessable deposits until the earlier of December 31, 1999 or
when no savings association continues to exist, thereby imposing a greater
burden on SAIF member institutions such as the Bank. Thereafter, however,
assessments on BIF-member institutions will be made on the same basis as
SAIF-member institutions. The rates established by the FDIC to implement this
requirement for all FDIC-insured institutions are a 6.7 basis points assessment
on SAIF deposits and 1.5 basis points assessment on BIF deposits until BIF
insured institutions participate fully in the assessment.

         Capital Requirements. Under FDIC regulations, state-charted banks that
are not members of the Federal Reserve System ("State nonmember banks") are
required to maintain a minimum leverage capital requirement consisting of a
ratio of Tier 1 capital to total assets of 3%, if the FDIC determines that the
institution is not anticipating or experiencing significant growth and has well-
diversified risk, including not undue interest rate risk exposure, excellent
asset quality, high liquidity, good earnings and in general is considered a
strong banking organization, rated composite 1 under the Uniform Financial
Institutions Rating System (the CAMEL rating system) established by the Federal
Financial Institutions Examination Council. For all but the most highly rated
institutions meeting the conditions set forth above, the minimum leverage
capital ratio is 3% plus an additional cushion amount of at least 100 to 200
basis points, consisting of a ratio of Tier 1 capital to total assets of not
less than 4%. Tier 1 capital is the sum of common stockholders' equity,
noncumulative perpetual preferred stock (including any related surplus) and
minority interests in consolidated subsidiaries, minus all intangible assets
(other than certain purchased mortgage servicing rights and purchased credit
card relationships), minus identified losses and minus investments in securities
subsidiaries.

         In addition to the leverage ratios, State nonmember banks must maintain
a minimum ratio of qualifying total capital to risk-weighted assets of at least
8.0%, of which at least four percentage points must be Tier 1 capital.
Qualifying total capital consists of Tier 1 capital plus Tier 2 or supplementary
capital items, which include allowances for loan losses in an amount of up to
1.25%


                                       26

<PAGE>   27



of risk-weighted assets, perpetual preferred stock that does not qualify as Tier
1 capital and long-term preferred stock with an original maturity of at least 20
years and certain other capital instruments. The includable amount of Tier 2
capital cannot exceed a bank's Tier 1 capital. Qualifying total capital is
further reduced by the amount of the bank's investments in banking and finance
subsidiaries that are not consolidated for regulatory capital purposes,
reciprocal cross-holdings of capital securities issued by other banks,
investments in securities subsidiaries and certain other deductions. Under the
FDIC risk-weighting systems, all of bank's balance sheet assets and the credit
equivalent amounts of certain off-balance sheet items are assigned to one of
four broad risk weight categories. The aggregate dollar amount of each category
is multiplied by the risk weight assigned to that category. The sum of these
weighted values equals the bank's risk-weighted assets.

         At December 31, 1997, the Bank's ratio of Tier 1 capital of total
assets was 6.8%, its ratio of Tier 1 capital to risk-weighted assets was 10.7%
and its ratio of total capital to risk-weighted assets was 11.3%.

         Prompt Corrective Regulatory Action. Federal banking regulators must
take prompt corrective action in the event an FDIC-insured institution fails to
meet certain minimum capital requirements. An institution is assigned to one of
the following five capital categories:

         *        Well Capitalized--Total risk-based capital ration of 10% or
                  greater, Tier 1 risk based capital ratio of 6% or greater,
                  leverage ratio of 5% or greater, and no written FDIC directive
                  or order requiring the maintenance of specific levels of
                  capital;

         *        Adequately Capitalized--Total risk-based capital ratio of 8%
                  or greater, Tier 1 risk- based capital ratio of 4% or greater,
                  and leverage ratio of 4% or greater (or 3% or greater if the
                  institution's composite rating under the FDIC's supervisory
                  rating system is 1);

         *        Undercapitalized--Total risk-based capital ratio of less than
                  8%, or Tier 1 risk-based capital ratio of less than 4%, or
                  leverage ratio of less than 4% (or less than 3% if the
                  institution's composite rating under the FDIC's supervisory
                  rating system is 1);

         *        Significantly Undercapitalized--Total risk-based capital ratio
                  of less than 6%, or Tier 1 risk-based capital ratio of less
                  than 3% or leverage ratio of less than 3%; and

         *        Critically Undercapitalized--Ratio of tangible equity to total
                  assets of 2% or less.

         An "undercapitalized institution" generally is (i) subject to increased
monitoring by the appropriate federal banking regulator; (ii) required to submit
an acceptable capital restoration plan within 45 days; (iii) subject to asset
growth limits; and (iv) required to obtain prior regulatory approval for
acquisitions, branching and new lines of businesses. A significantly
undercapitalized institution, as well as any undercapitalized institution that
does not submit an acceptable capital restoration plan, may be subject to
regulatory demands for recapitalization, broader application of restrictions on
transactions with affiliates, limitations on interest rates paid on deposits,
restrictions on asset growth and other activities, possible replacement of
directors and officers, and restrictions


                                       27

<PAGE>   28



on capital distributions by any bank holding company controlling the
institution. Any company controlling the institution may also be required to
divest the institution. The senior executive officers of such an institution may
not receive bonuses or increases in compensation without prior approval and the
institution is prohibited from making payments of principal or interest on its
subordinated debt, with certain exceptions. If an institution's ratio of
tangible capital to total assets falls below a level established by the
appropriate federal banking regulator, which may not be less than 2% of total
assets nor more than 65% of the minimum tangible capital level otherwise
required (the "critical capital level"), the institution is subject to
conservatorship or receivership within 90 days unless periodic determinations
are made that forbearance from such action would better protect the deposit
insurance fund. At December 31, 1997, the Bank was classified as "well
capitalized" under the FDIC's regulations.

         Dividend Limitations. The Bank may not pay dividends on its capital
stock if its regulatory capital would thereby be reduced below the amount then
required for the liquidation account established for the benefit of certain
depositors of the Bank at the time of its conversion to stock form.

         Earnings of the Bank appropriated to bad debt reserves and deducted for
Federal income tax purposes are not available for payment of cash dividends or
other distributions to stockholders without payment of taxes at the then current
tax rate by the Bank on the amount of earnings removed from the reserves for
such distributions. The Bank intends to make full use of this favorable tax
treatment and does not contemplate use of any earnings in a manner which would
create federal tax liabilities.

         Under FDIC regulation, the Bank is prohibited from making any capital
distributions if after making the distribution, the Bank would have: (i) a total
risk-based capital ratio of less than 8.0%; (ii) a Tier 1 risk-based capital
ratio of less than 4.0%; or (iii) a leverage ratio of less than 4.0%.

         Community Reinvestment Act. Under the Community Reinvestment Act
("CRA"), every FDIC insured institution has a continuing and affirmative
obligation consistent with safe and sound banking practices to help meet the
credit needs of its entire community, including low and moderate income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community, consistent with the CRA. The CRA
requires the FDIC, in connection with the examination of AmeriBank's, to assess
the institution's record of meeting the credit needs of its community and to
take such record into account in its evaluation of certain applications, such as
a merger or the establishment of a branch, by the Bank. An unsatisfactory rating
may be used as the basis for the denial of an application by the OTS.

         The federal banking agencies, including the FDIC, have recently revised
the CRA regulations and the methodology for determining an institution's
compliance with the CRA. Due to the heightened attention being given to the CRA
in the past few years, the Bank may be required to devote additional funds for
investment and lending in its local community. The Bank was examined for CRA
compliance in November 1996 and received a rating of "satisfactory."


                                       28

<PAGE>   29



         Holding Company Regulation. The Corporation is a unitary savings and
loan holding company subject to regulatory oversight by the OTS. As such, the
Corporation is required to register and file reports with the OTS and is subject
to regulation and examination by the OTS. In addition, the OTS has enforcement
authority over the Corporation and its non-savings association subsidiaries
which also permits the OTS to restrict or prohibit activities that are
determined to be a serious risk to the subsidiary savings association.

         As a unitary savings and loan holding company, the Corporation
generally is not subject to activity restrictions. If the Corporation acquires
control of another savings association as a separate subsidiary, it would become
a multiple savings and loan holding company, and the activities of the
Corporation and any of its subsidiaries (other than AmeriBank or any other
SAIF-insured savings association) would become subject to such restrictions
unless such other associations each qualify as a QTL and were acquired in a
supervisory acquisition.

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

         Federal Securities Law. The stock of the Corporation is registered with
the SEC under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Corporation is subject to the information, proxy solicitation,
insider trading restrictions and other requirements of the SEC under the
Exchange Act.

         Corporation stock held by persons who are affiliates (generally
officers, directors and principal stockholders) of the Corporation may not be
resold without registration or unless sold in accordance with certain resale
restrictions. If the Corporation meets specified current public information
requirements, each affiliate of the Corporation is able to sell in the public
market, without registration, a limited number of shares in any three-month
period.

         Federal Reserve System. The Federal Reserve Board requires all
depository institutions to maintain non-interest bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW and Super NOW
checking accounts). At December 31, 1997, AmeriBank was in compliance with these
reserve requirements.

         Savings associations are authorized to borrow from the Federal Reserve
Bank "discount window," but Federal Reserve Board regulations require
associations to exhaust other reasonable alternative sources of funds, including
FHLB borrowings, before borrowing from the Federal Reserve Bank.

         Federal Home Loan Bank System. AmeriBank is a member of the FHLB of
Indianapolis, which is one of 12 regional FHLBs, that administers the home
financing credit function of savings associations. Each FHLB serves as a reserve
or central bank for its members within its assigned region. It is funded
primarily from proceeds derived from the sale of consolidated obligations of the


                                       29

<PAGE>   30



FHLB System. It makes loans to members (i.e., advances) in accordance with
policies and procedures, established by the board of directors of the FHLB,
which are subject to the oversight of the Federal Housing Finance Board. All
advances from the FHLB are required to be fully secured by sufficient collateral
as determined by the FHLB. In addition, all long-term advances are required to
provide funds for residential home financing.

         As a member, AmeriBank is required to purchase and maintain stock in
the FHLB of Indianapolis. At December 31, 1997, AmeriBank had $1.3 million in
FHLB stock, which was in compliance with this requirement. AmeriBank receives
dividends on its FHLB stock. Over the past five calendar years such dividends
have averaged 8.7% and were 8.0% for the calendar year 1997. For the year ended
December 31, 1997, dividends paid by the FHLB of Indianapolis to AmeriBank
totaled $577,000.

         Under federal law the FHLBs are required to provide funds for the
resolution of troubled savings associations and to contribute to low- and
moderately priced housing programs through direct loans or interest subsidies on
advances targeted for community investment and low- and moderate-income housing
projects. These contributions have affected adversely the level of FHLB
dividends paid and could continue to do so in the future. These contributions
could also have an adverse effect on the value of FHLB stock in the future. A
reduction in value of AmeriBank's FHLB stock may result in a corresponding
reduction in AmeriBank's capital.

         Michigan Banking Law. Effective July 1, 1996, the Michigan Legislature
enacted the Michigan Savings Bank Act (the "MSBA"). In several respects, the
MSBA contains provisions similar to the Michigan Banking Code of 1969. Pursuant
to the MSBA, the Bank has converted its charter from that of a federal savings
bank to that of a Michigan savings bank.

         As a state-chartered savings bank, the Bank is subject to the MSBA and
the regulations of the Michigan Financial Institutions Bureau adopted
thereunder, as well as other applicable provisions of Michigan law. The Bank
derives its lending and investment powers from the MSBA, and is subject to
periodic examination and reporting requirements by the Financial Institutions
Bureau. The MSBA further regulates many of the internal operating affairs of the
Bank, including the activities of the board of directors and the noticing and
conduct of the annual shareholder meetings.

         In order to maintain its qualification as a savings bank under the
MSBA, the Bank must maintain at least 50% of its total assets, as measured by
monthly averages calculated at the close of each calendar month, in at least 9
months of the immediately preceding 12 months, in certain consumer related
assets, including residential single and multi-family loans, home equity loans,
stock issued by a federal home loan bank, loans to small businesses and loans
for personal, family, household or education purposes.

         Federal Taxation. Savings associations such as the Bank that meet
certain definitional tests relating to the composition of assets and other
conditions prescribed by the Internal Revenue Code of 1986, as amended (the
"Code"), had been permitted to establish reserves for bad debts and to make
annual additions thereto which may, within specified formula limits, be taken as
a deduction


                                       30

<PAGE>   31



in computing taxable income for federal income tax purposes. The amount of the
bad debt reserve deduction for "non-qualifying loans" was computed under the
experience method. The amount of the bad debt reserve deduction for "qualifying
real property loans" (generally loans secured by improved real estate) was
computed under either the experience method or the percentage of taxable income
method (based on an annual election). Under the experience method, the bad debt
reserve deduction was an amount determined under a formula based generally upon
the bad debts actually sustained by the savings association over a period of six
years.

         The percentage of specially computed taxable income that was used to
compute a savings association's bad debt reserve deduction under the percentage
of taxable income method (the "percentage bad debt deduction") was 8%. The
percentage bad debt deduction thus computed was reduced by the amount permitted
as a deduction for non-qualifying loans under the experience method. The
availability of the percentage of taxable income method permitted qualifying
savings associations to be taxed at a lower effective federal income tax rate
than that applicable to corporations generally (approximately 31.3% assuming the
maximum percentage bad debt deduction).

         In August 1996, legislation was enacted that repeals the reserve method
of accounting (including the percentage of taxable income method) used by many
thrifts, including the Bank, to calculate their bad debt reserve for federal
income tax purposes. As a result, large thrifts such as the Bank must recapture
that portion of the reserve that exceeds the amount that could have been taken
under the specific charge-off method for post-1987 tax years. The legislation
also requires thrifts to account for bad debts for federal income tax purposes
on the same basis as commercial banks for tax years beginning after December 31,
1995. The recapture will occur over a six-year period, the commencement of which
will be delayed until the first taxable year beginning after December 31, 1997,
provided the institution meets certain residential lending requirements. The
management of the Company does not believe that the legislation will have a
material impact on the Company or the Bank.

         In addition to the regular income tax, corporations, including savings
associations such as the Bank, generally are subject to a minimum tax. An
alternative minimum tax is imposed at a minimum tax rate of 20% on alternative
minimum taxable income, which is the sum of a corporation's regular taxable
income (with certain adjustments) and tax preference items, less any available
exemption. The alternative minimum tax is imposed to the extent it exceeds the
corporation's regular income tax and net operating losses can offset no more
than 90% of alternative minimum taxable income. For taxable years beginning
after 1986 and before 1996, corporations, including savings associations such as
the Bank, were also subject to an environmental tax equal to .12% of the excess
of alternative minimum taxable income for the taxable year (determined without
regard to net operating losses and the deduction for the environmental tax) over
$2.0 million.

         To the extent earnings appropriated to a savings association's bad debt
reserves for "qualifying real property loans" and deducted for federal income
tax purposes exceed the allowable amount of such reserves computed under the
experience method and to the extent of the association's supplemental reserves
for losses on loans ("Excess"), such Excess may not, without adverse tax
consequences, be utilized for the payment of cash dividends or other
distributions to a shareholder


                                       31

<PAGE>   32



(including distributions on redemption, dissolution or liquidation) or for any
other purpose (except to absorb bad debt losses). As of December 31, 1997, the
Bank's Excess for tax purposes totaled approximately $12.3 million.

         The Corporation and its subsidiaries file consolidated federal income
tax returns on a calendar year basis using the accrual method of accounting.
Savings associations, such as AmeriBank, that file federal income tax returns as
part of a consolidated group are required by applicable Treasury regulations to
reduce their taxable income for purposes of computing the percentage bad debt
deduction for losses attributable to activities of the non-savings association
members of the consolidated group that are functionally related to the
activities of the savings association member.

         The Corporation and its consolidated subsidiaries have been audited by
the IRS with respect to consolidated federal income tax returns for 1990 through
1993. With respect to years examined by the IRS, either all deficiencies have
been satisfied or sufficient reserves have been established to satisfy asserted
deficiencies. In the opinion of management, any examination of still open
returns (including returns of subsidiaries and predecessors of, or entities
merged into, the Corporation or the Bank) would not result in a deficiency which
could have a material adverse effect on the financial condition of the
Corporation and its consolidated subsidiaries.

         Michigan Taxation. The State of Michigan imposes a tax on intangible
personal property in the amount of $.20 per $1,000 of deposits of a savings bank
or a savings and loan institution less deposits owed to the federal or Michigan
state governments, their agencies or certain other financial institutions. This
tax has been repealed effective January 1, 1998. The State of Michigan also
imposes a "Single Business Tax." The Single Business Tax is a value-added type
of tax and is for the privilege of doing business in the State of Michigan. The
major components of the Single Business Tax base are compensation, depreciation
and federal taxable income, as increased by net operating loss carry forwards,
if any, utilized in arriving at federal taxable income, and decreased by the
cost of acquisition of tangible assets during the year. The tax rate is 2.30% of
the Michigan adjusted tax base.

         Delaware Taxation. As a Delaware holding company, the Corporation is
exempted from Delaware corporate income tax but is required to file an annual
report with and pay an annual fee to the State of Delaware. The Corporation is
also subject to an annual franchise tax imposed by the State of Delaware.

COMPETITION

         The Bank faces strong competition in originating loans and attracting
deposits. That competition comes from other commercial banks, other savings
institutions, credit unions, mortgage banking companies and other non-bank
financial services companies including insurance companies and investment firms.
Finance companies compete with the Bank for consumer loan business.

         The Bank attracts all of its deposits through its branch offices,
primarily from the communities in which those branch offices are located;
therefore, competition for those deposits is


                                       32

<PAGE>   33



principally from other savings institutions, commercial banks, credit unions,
mutual funds and insurance companies. The Bank competes for these deposits by
offering a variety of deposit accounts at competitive rates, convenient business
hours, and convenient branch locations with interbranch deposit and withdrawal
privileges. Automated teller machine facilities are also available at most of
the Bank's 26 locations.

         The Bank's six county market area has a strong base of financial
institutions and several of those competitors are much larger than AmeriBank in
terms of total deposits and number of branches. The largest commercial banks
operating in the market area are First of America, Old Kent Bank, Huntington
Bank, NBD and Michigan National Bank. Despite the presence of significant
competition, AmeriBank has demonstrated the ability to sustain positive deposit
growth rates during the past year. Growth of deposits can be attributed to a
strong local economy, customer loyalty and the local orientation of the Bank.

EMPLOYEES

         At December 31, 1997, the Bank had a total of 316 employees, including
95 part-time employees. The Bank's employees are not represented by any
collective bargaining group. Management considers its employee relations to be
good.

EXECUTIVE OFFICERS OF THE CORPORATION AND THE BANK WHO ARE NOT DIRECTORS

         JON W. SWETS. Mr. Swets, age 32, is Vice President and Treasurer of the
Corporation and Senior Vice President-Chief Financial Officer of the Bank. He
joined the Corporation and the Bank in these capacities in November 1996. Prior
to joining the Company and the Bank, Mr. Swets was a Senior Manager with Crowe,
Chizek and Company LLP, a large public accounting firm. Mr. Swets joined Crowe,
Chizek and Company LLP as a staff accountant in June 1987.

ITEM 2.           PROPERTIES

         The Corporation's operations are conducted through its main office and
25 branches (including a "drive-up" facility). At December 31, 1997, the
Corporation owned its main office and 24 of its branch offices; the remaining
branch office and the land on which it is situated were leased. As of December
31, 1997, the net book value of the Corporation's investment in premises,
equipment and leaseholds, excluding computer equipment, was approximately $13.3
million.

         The Corporation maintains an on-line data base of depositor and
borrower customer information. The net book value of the data processing and
computer equipment and software utilized by the Corporation at December 31, 1997
was $1.7 million.

ITEM 3.           LEGAL PROCEEDINGS

         The Corporation is involved as plaintiff or defendant in various legal
actions arising in the normal course of business. While the ultimate outcome of
these proceedings cannot be predicted with certainty, it is the opinion of
management, after consultation with counsel representing the


                                       33

<PAGE>   34



Corporation in the proceedings, that the resolution of these proceedings should
not have a material effect on the Corporation's results of operations.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the quarter ended December 31,
1997.

                                     PART II

ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
                  HOLDER MATTERS

         The section entitled "Shareholder Information - Market" of the
attached Annual Report to Stockholders for year ended December 31, 1997 is
incorporated herein by reference.

ITEM 6.           SELECTED FINANCIAL DATA

         The section entitled "Selected Consolidated Financial Information"
of the attached Annual Report to Stockholders for year ended December 31, 1997
is incorporated herein by reference.

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

         The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the attached Annual Report to
Stockholders for year ended December 31, 1997 is incorporated herein by
reference.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Asset/Liability Management" of the
attached Annual Report to Stockholders for year ended December 31, 1997 is
incorporated herein by reference.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The section entitled "Consolidated Financial Statements" of the
attached Annual Report to Stockholders for year ended December 31, 1997 is
incorporated herein by reference.


ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

         There has been no Current Report on Form 8-K filed within 24 months
prior to the date of the most recent financial statements reporting a change of
accountants and/or reporting disagreements on any matter of accounting principle
or financial statement disclosure.


                                       34

<PAGE>   35



                                    PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

         Information concerning Directors of the Registrant is incorporated
herein by reference from the Corporation's definitive Proxy Statement for the
Annual Meeting of Shareholders scheduled to be held in April 1998, except for
information contained under the heading "Compensation Committee Report on
Executive Compensation" and "Shareholder Return Performance Presentation", a
copy of which will be filed not later than 120 days after the close of the
fiscal year.

Executive Officers

         Information concerning executive officers of the Corporation is set
forth under the caption "Executive Officers" contained in Part I of this Form
10-K.

Compliance with Section 16(a)

         Section 16(a) of the Exchange Act requires the Corporation's directors
and executive officers, and persons who own more than 10% of a registered class
of the Corporation's equity securities, to file with the SEC reports of
ownership and reports of changes in ownership of common stock and other equity
securities of the Corporation. Officers, directors and greater than 10%
stockholders are required by SEC regulation to furnish the Corporation with
copies of all Section 16(a) forms they file.

         To the Corporation's knowledge, based solely on a review of the copies
of such reports furnished to the Corporation and written representations that no
other reports were required during the fiscal year ended December 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with.

ITEM 11.          EXECUTIVE COMPENSATION

         Information concerning executive compensation is incorporated herein by
reference from the Corporation's definitive Proxy Statement for the Annual
Meeting of Shareholders scheduled to be held in April 1998, except for
information contained under the heading "Compensation Committee Report on
Executive Compensation" and "Shareholder Return Performance Presentation", a
copy of which will be filed not later than 120 days after the close of the
fiscal year.

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information concerning security ownership of certain beneficial owners
and management is incorporated herein by reference from the Corporation's
definitive Proxy Statement for the Annual Meeting of Shareholders scheduled to
be held in April 1998, except for information contained under the heading
"Compensation Committee Report on Executive Compensation" and "Shareholder


                                       35

<PAGE>   36



Return Performance Presentation", a copy of which will be filed not later than
120 days after the close of the fiscal year.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Not applicable.

                                     PART IV


ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
                  FORM 8-K

(a)      The following is a list of documents filed as part of this report:

         (1)  Financial Statements:

         The following financial statements are included under Part II, Item 8
of this Form 10-K:


     1.   Report of Independent Auditors.
     2.   Consolidated Statements of Balance Sheet at December 31, 1997 and
          1996.
     3.   Consolidated Statements of Income for the Years ended December 31,
          1997, 1996 and 1995.
     4.   Consolidated Statements of Changes in Shareholders' Equity for the
          Years ended December 31, 1997, 1996 and 1995.
     5.   Consolidated Statements of Cash Flows for the Years ended December 31,
          1997, 1996 and 1995.
     6.   Notes to Consolidated Financial Statements
     7.   Ottawa Financial Corporation Quarterly Financial Data

         (2)  Financial Statement Schedules:

         All financial statement schedules have been omitted as the information
is not required under the related instructions or is inapplicable.

         (3) Exhibits:

         See Index to Exhibits

(b) Reports on Form 8-K:

         1.       The Corporation filed a Current Report on Form 8-K dated
                  October 2, 1997, containing a press release announcing the
                  adjustments to its outstanding warrants as a result of the
                  Corporation's recently declared 10% stock dividend.



                                       36

<PAGE>   37



                                   SIGNATURES


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

                                            OTTAWA FINANCIAL CORPORATION


Date: March 27, 1998                        By:  /s/ Gordon L. Grevengoed
      -----------------------------              -------------------------------
                                            Gordon L. Grevengoed, President and
                                            and Chief Executive Officer (Duly
                                            Authorized Representative)

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



By:  /s/ Gordon H. Cunningham                             Date: March 30, 1998
    --------------------------------------                      --------------
      Gordon H. Cunningham,
       Chairman of the Board


By:  /s/ Gordon L. Grevengoed                             Date: March 30, 1998
    ---------------------------------------                     --------------
      Gordon L. Grevengoed, President
       Chief Executive Officer and Director


By:  /s/ Douglas J. Iverson                               Date: March 30, 1998
    ------------------------------------------                  --------------
      Douglas J. Iverson, Executive Vice
       President, Chief Operating Officer,
       Secretary and Director


By: /s/ Ronald L. Haan                                    Date: March 30, 1998
    ------------------------------------------                  --------------
      Ronald L. Haan, Senior Vice
       President, Assistant Secretary and
       Director


By:  /s/ Brian W. Koop                                    Date: March 30, 1998
    ------------------------------------------                  --------------
      Brian W. Koop, Director




<PAGE>   38



By:  /s/ Leon E. Koop                                     Date: March 30, 1998
    -----------------------------------------                   --------------
      Leon E. Koop, Director


By:  /s/ Ronald J. Bieke                                  Date: March 30, 1998
    -----------------------------------------                   --------------
       Ronald J. Bieke, Director


By:  /s/ B. Patrick Donnelly, III                         Date: March 30, 1998
    ------------------------------------------                  --------------
      B. Patrick Donnelly, III, Director


By:  /s/ Robert D. Kolk                                   Date: March 30, 1998
    ------------------------------------------                  --------------
      Robert D. Kolk, Director


By:  /s/ G.W. Haworth                                     Date: March 30, 1998
    -----------------------------------------                   --------------
      G.W. Haworth, Director


By:  /s/ Jon Swets                                        Date: March 30, 1998
    --------------------------------------------                --------------
      Jon Swets, Vice President -
      Finance and Treasurer (Principal
      Financial and Accounting Officer)





<PAGE>   39



                                INDEX TO EXHIBITS


 Exhibit
 Number                                      Document

   2              Plan of acquisition, reorganization, arrangement, liquidation
                  or succession, filed on August 11, 1995 as an exhibit to the
                  Registrant's Report on Form 8-K (File No. 0-24118), is
                  incorporated herein by reference.

   3(i)           Registrant's Certificate of Incorporation as currently in
                  effect, filed on March 18, 1994 as an exhibit to Registrant's
                  Registration Statement on Form S-1 (File No. 33-76600), is
                  incorporated herein by reference.

   3(ii)          Registrant's Bylaws, as amended and as currently in effect,
                  filed as an exhibit to the Registrant's Report on Form 10-Q
                  for the quarterly period ended March 31, 1997 (File No.
                  0-24118), is incorporated herein by reference.

    4             Registrant's Specimen Stock Certificate, filed on March 18,
                  1994 as an exhibit to Registrant's Registration Statement on
                  Form S-1 (File No. 33-76600), is incorporated herein by
                  reference.

 10.1             Employment Agreements between the Registrant's operating
                  subsidiary and Gordon L. Grevengoed and Douglas J. Iverson,
                  filed on March 18, 1994 as an exhibit to Registrant's
                  Registration Statement on Form S-1 (File No. 33-76600), are
                  incorporated herein by reference.

 10.2             Employment Agreement between the Registrant's operating
                  subsidiary and Ronald L. Haan, filed as an exhibit to the
                  Registrant's Report on Form 10-K for the year ended December
                  31, 1995 (File No. 0-24118), is incorporated herein by
                  reference.

 10.3             Registrant's Employee Stock Ownership Plan, filed on March 18,
                  1994 as an exhibit to Registrant's Registration Statement on
                  Form S-1 (File No. 33-76600), is incorporated herein by
                  reference.

 10.4             Registrant's 1995 Stock Option and Incentive Plan, filed as an
                  exhibit to the Registrant's Report on Form 10-K for the year
                  ended December 31, 1994 (File No. 0-24118), is incorporated
                  herein by reference.

 10.5             Registrant's Recognition and Retention Plan, filed as an
                  exhibit to the Registrant's Report on Form 10-K for the year
                  ended December 31, 1994 (File No. 0-24118), is incorporated
                  herein by reference.

 11               Statement re: computation of per share earnings

 13               Annual Report to Stockholders

 21               Subsidiaries of the Registrant

 23               Consent of Accountants

 27               Financial Data Schedule (electronic filing only)