UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

         For the fiscal year ended December 31, 1999
                                                        OR
[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [No Fee Required]

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

                         Commission File Number 0-23182

                               AMB FINANCIAL CORP.
--------------------------------------------------------------------------------

      (Exact Name of Small Business Registrant as Specified in its Charter)

              Delaware                                  35-1905382
--------------------------------------------------------------------------------

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

8230 Hohman Avenue, Munster, Indiana                     46321-1578
--------------------------------------------------------------------------------

(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code:  (219) 836-5870
                                                     --------------

           Securities Registered Pursuant to Section 12(b) of the Act:
                                      None

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

                     Common Stock, par value $0.01 per share
                     ---------------------------------------
                                (Title of class)

         Check whether the Registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past twelve 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 [ ].

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         The  Registrant  had $8.9  million  in gross  income for the year ended
December 31, 1999.
<PAGE>
         The aggregate  market value of the voting stock held by  non-affiliates
of the  Registrant,  computed by  reference  to the average of the bid and asked
price of such stock as of December  31, 1999 was $5.8  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.)

                       DOCUMENTS INCORPORATED BY REFERENCE

                       Parts II and IV of Form  10-KSB - 1999  Annual  Report to
              Stockholders.  Part III of Form 10-KSB - Proxy  Statement  for the
              2000 Annual Meeting of Stockholders.
<PAGE>
FORWARD-LOOKING STATEMENTS

         AMB Financial Corp., and its wholly-owned subsidiary, American Savings,
FSB,  may from time to time make written or oral  "forward-looking  statements,"
including  statements  contained in its filings with the Securities and Exchange
Commission.  These  forward-looking  statements  may be  included in this Annual
Report on Form  10-KSB  and the  exhibits  attached  to it,  in AMB  Financial's
reports  to  shareholders  and in other  communications,  which are made in good
faith by us pursuant to the "safe harbor"  provisions of the Private  Securities
Litigation Reform Act of 1995.

         These forward-looking  statements include statements about our beliefs,
plans, objectives, goals, expectations, anticipations, estimates and intentions,
that are  subject to  significant  risks and  uncertainties,  and are subject to
change based on various factors, some of which are beyond our control. The words
"may",  "could",  "should",   "would",  "believe",   "anticipate",   "estimate",
"expect",  "intend",  "plan" and similar  expressions  are  intended to identify
forward-looking statements. The following factors, among others, could cause our
financial   performance  to  differ  materially  from  the  plans,   objectives,
expectations,   estimates  and  intentions   expressed  in  the  forward-looking
statements:

         o     the  strength  of the United  States  economy in general  and the
               strength of the local economies in which we conduct operations;
         o     the  effects  of, and  changes  in,  trade,  monetary  and fiscal
               policies  and  laws,  including  interest  rate  policies  of the
               Federal Reserve Board;
         o     inflation, interest rate, market and monetary fluctuations;
         o     the timely  development of and acceptance of our new products and
               services and the perceived  overall  value of these  products and
               services by users,  including the  features,  pricing and quality
               compared to competitors' products and services;
         o     the  willingness of users to substitute our products and services
               for products and services of our competitors;
         o     our success in gaining  regulatory  approval of our  products and
               services, when required;
         o     the impact of changes in financial services' laws and regulations
               (including  laws  concerning  taxes,   banking,   securities  and
               insurance);
         o     the impact of technological changes;
         o     acquisitions;
         o     changes in consumer spending and saving habits; and
         o     our success at managing the risks involved in the foregoing.

         The list of important factors stated above is not exclusive.  We do not
undertake to update any forward-looking statement, whether written or oral, that
may be made  from  time to time by or on behalf  of AMB  Financial  or  American
Savings.

                                        2
<PAGE>
                                     PART I

Item  1.          Description of Business
--------          -----------------------

         AMB Financial Corp., was formed in 1993 by American Savings,  FSB under
the laws of Delaware  for the  purpose of  becoming a savings  and loan  holding
company.  American Savings,  headquartered in Munster,  Indiana,  was founded in
1957 as a  federally  chartered  institution.  In March 1996,  American  Savings
converted  to the stock form of  organization  through the sale and  issuance of
1,124,125  shares of its common stock to AMB Financial.  The principal  asset of
AMB  Financial  is the  outstanding  stock of American  Savings.  AMB  Financial
presently  has no separate  operations  and its  business  consists  only of the
business of American Savings. All references to AMB Financial,  unless otherwise
indicated, at or before March 29, 1996 refer to American Savings.  References in
this Form 10- KSB to "we", "us" and "our" refer to AMB Financial and/or American
Savings as the context requires.

         We are a community-based financial institution that offers a variety of
selected  financial  services to meet the needs of the  community  we serve.  We
attract  deposits from the general public and use such deposits to originate and
purchase one- to four-family  residential mortgage and, to a lesser extent, non-
residential,  multi-family real estate,  commercial business,  consumer and land
loans.  We also  invest in  mortgage-backed  securities,  investment  securities
consisting  primarily  of U.S.  government  obligations  and  various  types  of
short-term   liquid  assets.   See  "--Lending   Activities"  and  "--Investment
Activities."

         We serve the  financial  needs of families and local  businesses in our
primary  market area,  northwest Lake County,  Indiana,  through our main office
located in Munster, Indiana and two branch offices located in the communities of
Dyer and Hammond,  Indiana.  Our deposits are insured up to applicable limits by
the FDIC. At December 31, 1999, we had total assets of $127.8 million,  deposits
of $88.9  million and  stockholders'  equity of $11.5  million or 9.03% of total
assets.

         Our executive office is located at 8230 Hohman Avenue, Munster, Indiana
46321-1578 and its telephone number at that address is (219) 836-5870.

Lending Activities

         Our principal  lending activity is originating and, to a lesser extent,
purchasing  first mortgage loans secured by  owner-occupied  one- to four-family
residential  properties  located in our primary market areas.  We also originate
and purchase  non-residential  real estate,  multi-family,  commercial business,
consumer and land loans. In addition to increasing the yield and/or the interest
rate sensitivity of our portfolio,  these non-one- to four family loans allow us
to provide  more  comprehensive  financial  services to families  and  community
businesses in our primary market area.

                                        3
<PAGE>
Loan Portfolio Composition

         The following table sets forth  information  concerning the composition
of our loan portfolio in dollar amounts and in  percentages  (before  deductions
for loans in process,  net deferred yield adjustments and allowances for losses)
as of the dates indicated.
<TABLE>
<CAPTION>
                                                                           December 31,
                                       -------------------------------------------------------------------------------------
                                               1999                  1998                  1997                       1996
                                       -------------------    -------------------   -------------------   ------------------
                                       Amount      Percent    Amount      Percent    Amount     Percent   Amount     Percent
                                       ------      -------    ------      -------    ------     -------   ------     -------
                                                                      (Dollars in Thousands)
<S>                                   <C>           <C>      <C>           <C>      <C>          <C>      <C>         <C>
Real Estate Loans:
-----------------
 One- to four-family..............    $82,210       76.11%   $63,369       69.69%   $51,567      64.71%   $43,669     63.41%
 Multi-family.....................      2,144        1.98      2,446        2.69      4,010       5.03      3,259      4.73
 Non-residential..................      8,775        8.12     10,370       11.40      8,376      10.51      8,806     12.79
 Construction.....................      4,279        3.96      2,522        2.77      4,450       5.59      4,406      6.40
 Land.............................        632        0.59      1,227        1.35      1,264       1.59        217      0.32
                                      -------      ------    -------      ------    -------     ------    -------    ------
     Total real estate loans......     98,040       90.76     79,934       87.90     69,667      87.43     60,357     87.65
                                      -------      ------    -------      ------    -------     ------    -------    ------

Other Loans:
-----------
 Consumer Loans:
  Deposit account.................        147        0.13        172        0.19        165       0.21        185      0.27
  Credit Card.....................        439        0.41        414        0.46        405       0.51        430      0.63
  Home improvement................        ---         ---         10        0.01         11       0.01         15      0.01
  Line of credit..................      3,336        3.09      3,552        3.91      3,259       4.09      2,968      4.31
  Other ..........................      1,059        0.98      1,244        1.37      1,264       1.58      1,391      2.02
                                      -------      ------    -------      ------    -------     ------    -------    ------
      Total consumer loans .......      4,981        4.61      5,392        5.93      5,104       6.40      4,989      7.24
                                      -------      ------    -------      ------    -------     ------    -------    ------

 Commercial business loans........      4,999        4.63      5,607        6.17      4,916       6.17      3,519      5.11
                                      -------      ------    -------      ------    -------     ------    -------    ------
     Total loans receivable.......    108,020      100.00%    90,933      100.00%    79,687     100.00%    68,865    100.00%
                                                   ======                 ======                ======              =======

Less:
----
 Loans in process.................      1,523                    569                  1,975                   910
 Net deferred yield adjustments...         (4)                    95                    209                   234
 Allowance for losses.............        591                    507                    410                   355
                                      -------                -------                -------               -------
 Total loans receivable, net......   $105,910                $89,762                $77,093               $67,366
                                     ========                =======                =======               =======

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                             1995
                                     ------------------

                                     Amount     Percent
                                     ------     -------

<S>                                  <C>           <C>
Real Estate Loans:
-----------------
 One- to four-family..............   $38,056       68.60%
 Multi-family.....................     3,419        6.16
 Non-residential..................     4,146        7.47
 Construction.....................     3,194        5.76
 Land.............................       223        0.40
                                     -------      ------
     Total real estate loans......    49,038       88.39
                                     -------      ------

Other Loans:
-----------
 Consumer Loans:
  Deposit account.................       223        0.40
  Credit Card.....................       368        0.67
  Home improvement................        12        0.01
  Line of credit..................     2,745        4.96
  Other ..........................       673        1.21
                                    --------     -------
     Total consumer loans.........     4,021        7.25
                                    --------     -------
 Commercial business loans........     2,420        4.36
                                    --------     -------
     Total loans receivable.......    55,479      100.00%
                                                  ======

Less:
----
 Loans in process.................       268
 Net deferred yield adjustments...       213
 Allowance for losses.............       359
                                    --------
 Total loans receivable, net......   $54,639
                                     =======
</TABLE>
                                       4

<PAGE>
         The following  table shows the  composition  of our loan  portfolios by
fixed- and adjustable-rate at the dates indicated.

<TABLE>
<CAPTION>
                                                                           December 31,
                                       -------------------------------------------------------------------------------------
                                               1999                  1998                  1997                       1996
                                       -------------------    -------------------   -------------------   ------------------
                                       Amount      Percent    Amount      Percent    Amount     Percent   Amount     Percent
                                       ------      -------    ------      -------    ------     -------   ------     -------
                                                                      (Dollars in Thousands)
<S>                                   <C>          <C>           <C>       <C>         <C>        <C>      <C>         <C>
Fixed-Rate Loans:
----------------
 Real estate:
  One- to four-family...............  $ 50,067     46.35%       $39,243    43.16%      $38,967     48.90%  $33,248      48.28%
  Multi-family......................       618      0.57            688     0.76         1,847      2.32     1,999       2.90
  Non-residential...................     5,160      4.78          2,685     2.95         3,364      4.22     2,917       4.24
  Construction......................     3,799      3.52          1,242     1.37         2,893      3.63       ---      ---
  Land..............................       286      0.27            338     0.37           211      0.27       ---      ---
                                      --------    ------        -------   ------       -------    ------   -------     ------
     Total real estate loans........    59,930     55.49         44,196    48.60        47,282     59.34    38,164      55.42
                                      --------    ------        -------   ------       -------    ------   -------     ------
 Consumer...........................     1,645      1.52          1,840     2.02         1,845      2.31     1,588       2.31
 Commercial business................     3,227      2.99          5,026     5.53         3,828      4.80     3,252       4.72
                                       --------    ------        -------   ------       -------    ------   -------     ------
     Total fixed-rate loans.........    64,802     60.00         51,062    56.15        52,955     66.45    43,004      62.45
                                      --------    ------        -------   ------       -------    ------   -------     ------

Adjustable-Rate Loans:
---------------------
 Real estate:
  One- to four-family...............    32,143     29.76         24,126    26.53        12,600     15.81    10,421      15.13
  Multi-family......................     1,526      1.41          1,758     1.93         2,163      2.71     1,260       1.83
  Non-residential...................     3,615      3.34          7,685     8.45         5,012      6.29     5,889       8.55
  Construction......................       480      0.44          1,280     1.41         1,557      1.96     4,406       6.40
  Land .............................       346      0.32            889     0.98         1,053      1.32       217       0.32
                                      --------    ------        -------   ------       -------    ------   -------     ------
     Total real estate loans........    38,110     35.27         35,738    39.30        22,385     28.09    22,193      32.23
                                      --------    ------        -------   ------       -------    ------   -------     ------
 Consumer...........................     3,336      3.09          3,552     3.91         3,259      4.09     3,401       4.93
 Commercial business................     1,772      1.64            581     0.64         1,088      1.37       267       0.39
                                       --------    ------        -------   ------       -------    ------   -------     ------
     Total adjustable-rate loans....    43,218     40.00         39,871    43.85        26,732     33.55    25,861      37.55
                                      --------    ------        -------   ------       -------    ------   -------     ------

     Total loans receivable.........   108,020    100.00%        90,933   100.00%       79,687    100.00%   68,865     100.00 %
                                                  ======                  ======                  ======               =======

Less:
----
 Loans in process...................     1,523                      569                  1,975                 910
 Net deferred yield adjustment......        (4)                      95                    209                 234
 Allowance for loan losses..........       591                      507                    410                 355
                                      --------                  -------                -------             -------
    Total loans receivable, net.....  $105,910                  $89,762                $77,093             $67,366
                                      ========                  =======                =======             =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                     <C>          <C>
Fixed-Rate Loans:
----------------
 Real estate:
  One- to four-family...............    $30,512      55.00%
  Multi-family......................      2,102       3.79
  Non-residential...................      2,021       3.64
  Construction......................        ---        ---
  Land..............................        ---        ---
                                        -------     ------
     Total real estate loans........     34,635      62.43
                                        -------     ------
 Consumer...........................      1,272       2.29
 Commercial business................      2,089       3.76
                                        -------    -------
     Total fixed-rate loans.........     37,996      68.48
                                        -------     ------

Adjustable-Rate Loans:
---------------------
 Real estate:
  One- to four-family...............      7,544      13.60
  Multi-family......................      1,317       2.37
  Non-residential...................      2,125       3.83
  Construction......................      3,194       5.76
  Land .............................        223       0.40
                                        -------   --------
     Total real estate loans........     14,403      25.96
                                        -------    -------
 Consumer...........................      2,749       4.96
 Commercial business................        331       0.60
                                        -------   --------
     Total adjustable-rate loans....     17,483      31.52
                                        -------    -------

     Total loans receivable.........     55,479     100.00%
                                                    ======

Less:
----
 Loans in process...................        268
 Net deferred yield adjustment......        213
 Allowance for loan losses..........        359
                                        -------
    Total loans receivable, net.....    $54,639
                                        =======

</TABLE>

                                        5


<PAGE>
         The following table  illustrates  the interest rate  sensitivity of the
loan  portfolio  at  December  31,  1999.  Mortgages  which have  adjustable  or
renegotiable interest rates are shown as maturing in the period during which the
contract  requires the final payment to be made. This is shown without regard to
interest  rate  adjustments.  The table does not reflect the effects of possible
prepayments or enforcement of due-on-sale clauses.
<TABLE>
<CAPTION>
                                                      Real Estate
                           -------------------------------------------------------------------
                                                    Multi-family and
                            One- to Four-Family     Non-residential         Construction              Land
                           -----------------------------------------------------------------------------------------
                                          Weighted              Weighted              Weighted              Weighted
                                           Average               Average               Average               Average
                                 Amount      Rate      Amount      Rate      Amount      Rate      Amount      Rate
                           -----------------------------------------------------------------------------------------
                                                            (Dollars in Thousands)
<S>                            <C>            <C>     <C>           <C>      <C>          <C>       <C>       <C>
Due During the Period
Ending December 31,

2000.......................    $   997        8.38%   $   876       8.09%    $3,106       8.22%     $369      9.38%
2001 to 2002...............      6,076        7.00        112       9.55        ---        ---        92      7.67
2003 and 2004..............      4,829        7.74      2,960       8.27        948       9.00        59      8.00
2005 to 2009...............     13,333        7.35      1,737       8.18        200       7.00        78      8.54
2010 to 2019...............     21,861        7.40      2,631       8.95         25       9.00        34      9.00
2020 and following.........     35,114        7.33      2,603       8.00        ---        ---       ---       ---
                               -------        ----    -------       ----     ------       ----       ----     ----
   Total...................    $82,210        7.36%   $10,919       8.35%    $4,279       8.34%      $632     8.88%
                               =======                =======                ======                  ====

<CAPTION>
                                                       Commercial
                                  Consumer              Business               Total
                               ---------------------------------------------------------------------
                                          Weighted              Weighted                Weighted
                                           Average               Average                 Average
                                 Amount      Rate      Amount      Rate        Amount      Rate
                               ---------------------------------------------------------------------
<S>                             <C>         <C>        <C>          <C>        <C>          <C>
Due During the Period
Ending December 31,

2000.......................     $3,989      10.16%     $1,271       8.71%      $10,608      9.05%
2001 to 2002...............        428       7.68       1,571       9.56         8,279      7.56
2003 and 2004..............        472       8.05         823       9.24        10,091      8.15
2005 to 2009...............         16       8.00       1,334       6.72        16,698      7.38
2010 to 2019...............         76       8.32         ---        ---        24,627      7.57
2020 and following.........        ---        ---         ---        ---        37,717      7.38
                                 -----       ----      ------       ----      --------      ----
   Total...................     $4,981       9.71%     $4,999       8.53%     $ 108,020     7.63%
                                 ======                 ======                =========
</TABLE>
         The total  amount  of loans due after  December  31,  2000  which  have
predetermined  interest  rates is $70.1  million.  The total amount of loans due
after such dates  which have  floating  or  adjustable  interest  rates is $27.3
million.

                                        6


<PAGE>
         Under federal law, the aggregate  amount of loans that we are permitted
to make to any one borrower is generally  limited to 15% of  unimpaired  capital
and surplus  (25% if the  security  for such loan has a "readily  ascertainable"
value or 30% for certain  residential  development loans). At December 31, 1999,
our regulatory loan-to-one borrower limit was approximately $1.2 million. On the
same date,  we had no  borrowers  with  outstanding  balances  in excess of this
amount.  As of December 31, 1999, the largest dollar amount of  indebtedness  to
one borrower or group of related  borrowers was $1.1 million in loans secured by
non-residential  property.  Such loans are  performing in accordance  with their
terms.

         All of our lending is subject to its written underwriting standards and
to loan origination  procedures.  Decisions on loan applications are made on the
basis of detailed  applications and property valuations by qualified independent
appraisers.  Loans  greater  than  $500,000  must be  approved  by the  Board of
Directors after review and preliminary approval by the Loan Committee.  The loan
applications are designed primarily to determine the borrower's ability to repay
and the more  significant  items on the application are verified  through use of
credit reports, financial statements, tax returns and/or confirmations.

         Generally,  we require title insurance on our mortgage loans as well as
fire and extended coverage  casualty  insurance in amounts at least equal to the
principal  amount  of the loan or the  value of  improvements  on the  property,
depending on the type of loan.  We also require  flood  insurance to protect the
property  securing its interest when the property is located in a flood plain or
otherwise deemed prudent by management.

         One- to Four-Family Residential Real Estate Lending. The cornerstone of
our lending program is the  origination of long-term  permanent loans secured by
mortgages on  owner-occupied  one- to four- family  residences.  At December 31,
1999,  $82.2  million,  or 76.11% of our loan  portfolio  consisted of permanent
loans on one- to four-family  residences.  At that date, the average outstanding
residential  loan  balance was $79,100 and the largest  outstanding  residential
loan had a principal balance of $800,000. Virtually all of the residential loans
originated by us are secured by properties located in our market area.  However,
we have purchased a number of one-to-four  family  residential  loans secured by
properties  located elsewhere in the United States.  See "- Originations,  Sales
and Purchases of Loans."

         We originate  30-year fixed rate loans  secured by one- to  four-family
residential real estate as a result of continued  consumer demand.  We monitored
the fixed rate loans to ensure  compliance with our  asset/liability  management
policy.  At December 31, 1999, we had $21.5  million of  fixed-rate  residential
loans  with  less  than 10  years  to  maturity,  $15.7  million  of  fixed-rate
residential  loans with maturities  between 10 and 20 years and $12.9 million of
fixed-rate  residential  loans  with  maturities  in  excess  of 21 years in its
portfolio.  See "Management's Discussion and Analysis of Financial Condition and
Results of  Operations -  Asset/Liability  Management"  in the annual  report to
stockholders filed as Exhibit 13 hereto.

         In addition,  we originate  and acquire  adjustable  rate  mortgage and
balloon loans to reduce our exposure to changes in interest rates. We retain and
service all  adjustable  rate  mortgages and balloon loans  originated by us. We
make  adjustable  rate mortgage loans at rates,  terms and points  determined in
accordance with market and competitive  factors. Our current one- to four-family
residential   adjustable  rate  mortgages  are  fully   amortizing   loans  with

<PAGE>

contractual  maturities of up to 30 years.  The interest rates on the adjustable
rate  mortgages  originated  by  us  are  generally  subject  to  adjustment  at
three-year  intervals based on a margin over the Three Year Treasury  Securities
Constant  Maturity  Index.  Decreases or  increases in the interest  rate of our
adjustable rate mortgages are generally limited to 5% above or below the initial
interest rate over the life of the loan. We also originate balloon payment loans
normally due seven years from date of  origination  and amortized over 30 years.
Our adjustable rate mortgages are not convertible into fixed-rate  loans, do not
contain prepayment penalties and do not produce negative

                                        7


<PAGE>
amortization. Adjustable rate mortgage loans may be assumed provided home buyers
meet our  underwriting  standards and the applicable  fees are paid. At December
31, 1999, the total balance of one- to four-family adjustable rate mortgages was
$32.1 million.

         We evaluate both the borrower's ability to make principal, interest and
escrow  payments  and the value of the  property  that will secure the loan.  We
originate  residential  mortgage  loans with loan-to- value ratios up to 95%. On
mortgage loans exceeding an 80% loan-to-value  ratio at the time of origination,
we will generally  require private  mortgage  insurance in an amount intended to
reduce our  exposure  to 80% or less of the  appraised  value of the  underlying
property.

         As of December  31,  1999,  we had 25 one- to  four-family  residential
mortgage loans having an aggregate balance of $8.3 million with current balances
in excess of the 1999 Freddie Mac maximum,  $240,000. Our delinquency experience
on our loans in excess of this maximum has been similar to its experience on its
other residential loans.

         Our residential  mortgage loans customarily include due-on-sale clauses
giving us the right to declare the loan immediately due and payable in the event
that,  among other  things,  the  borrower  sells or  otherwise  disposes of the
property  subject to the  mortgage  and the loan is not repaid.  During 1999 and
1998, we purchased $11.8 million and $11.5 million  respectively,  of adjustable
rate one- to four-family first mortgage loans.

         Multi-Family and Non-Residential Real Estate Lending. We both originate
and, to a lesser extent purchase,  permanent  multi-family  and  non-residential
real estate loans in our primary market area. We have increased these portfolios
in recent years in accordance with our  asset/liability  management  policy. See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Asset/Liability  Management" in our 2000 annual report. At December
31, 1999, we had $10.9 million in multi-family and  non-residential  real estate
loans, representing 10.10% of the gross loan portfolio.

         The multi-family loan portfolio  includes loans secured by five or more
unit  residential  buildings  located  primarily in our primary market area. Our
non-residential  real  estate loan  portfolio  consists of loans on a variety of
non-residential  properties including retail facilities,  small office buildings
and motel/hotels.

         We originate and purchase both adjustable-and  fixed-rate  multi-family
and non-residential real estate loans. Rates on our adjustable-rate multi-family
and  non-residential  real estate loans generally adjust in a manner  consistent
with our one- to  four-family  residential  adjustable  rate  mortgages.  Multi-
family and  non-residential  real estate  loans are  generally  underwritten  in
amounts  of up to 80% of the  appraised  value of the  underlying  property  and
normally have terms up to 25 years.

         Appraisals on properties securing multi-family and non-residential real
estate loans originated by us are performed by a qualified independent appraiser
at the time the loan is made. In addition, our underwriting procedures generally
require  verification  of the borrower's  credit  history,  income and financial
statements,  banking  relationships,  references and income  projections for the
property.  Personal  guarantees  are  generally  obtained for  multi-family  and
non-residential real estate loans.
<PAGE>
         Substantially all of the multi-family  residential and  non-residential
real estate loans  originated by us are secured by properties  located within 50
miles of one or more of our offices.

         The table below sets forth by type of security  property the  estimated
number,   loan  amount  and  outstanding   balance  of  our   multi-family   and
non-residential real estate loans at December 31, 1999.

                                        8
<PAGE>
<TABLE>
<CAPTION>
                                                                                     Outstanding
                                         Number of              Original               Principal
                                           Loans               Loan Amount              Balance
                                         --------------------------------------------------------
                                                 (Dollars in Thousands)
<S>                                          <C>               <C>                     <C>
Multi-family................                  7                 $ 2,961                 $ 2,144
Office......................                  5                     830                     793
Retail......................                  4                     389                     345
Commercial building.........                  8                   2,422                   2,337
Auto service/repair.........                  1                     244                     228
Restaurants.................                  4                     828                     483
Hotel.......................                  5                   2,949                   2,770
Nursing home................                  1                     500                     473
Other.......................                 11                   1,459                   1,346
                                             --               ---------               ---------

   Total....................                 46                 $12,582                 $10,919
                                             ==                 =======                 =======
</TABLE>


         At  December   31,   1999,   the  largest   multi-family   and  largest
non-residential   real  estate  loans   totaled   $501,000  and  $1.1   million,
respectively.  As of December 31, 1999, none of these loans were 60 days or more
delinquent and were otherwise performing in accordance with their terms.

         Multi-family and non-residential  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  residential and non-  residential  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),  the  borrower's  ability to repay the loan may be
impaired.  At December 31, 1999, we had no multi-family loans which were 90 days
or more delinquent.

         Construction Lending. We make construction loans to individuals for the
construction  of their primary or secondary  residences and loans to builders or
developers for the construction of single-family and multi-family properties.

         Loans to individuals for the construction of their residences typically
run for six months.  The borrower  pays  interest  only during the  construction
period.  Residential  construction loans are generally  underwritten pursuant to
the same  guidelines  used  for  originating  permanent  residential  loans.  At
December 31, 1999, we had three  construction  loans with outstanding  aggregate
balances of $1.2 million  (including an additional  $835,000 in undisbursed loan
proceeds)  secured by one- to four-  family  residential  property to  borrowers
intending to live on the properties upon completion of construction.  Subject to
future market conditions,  we intend to continue construction lending activities
to persons intending to be owner occupants.
<PAGE>
         We  also  make  loans  to  builders  and   developers  to  finance  the
construction  of residential  property.  Such loans  generally  have  adjustable
interest  rates  based upon  prime  with terms from six months to one year.  The
proceeds of the loan are advanced during  construction based upon the percentage
of  completion  as  determined  by an  independent  inspector.  The loan  amount
normally  does not exceed 80% of projected  completed  value for homes that have
been  pre-sold  to  the  ultimate  occupant.  For  loans  to  builders  for  the
construction of homes not pre-sold,  which may carry a higher risk, the loan- to
value  ratio is  generally  limited to 75%.  Whether  we are  willing to provide
permanent takeout

                                        9


<PAGE>
financing  to the  purchaser  of the  home is  determined  independently  of the
construction loan by a separate  underwriting  process. At December 31, 1999, we
had four  construction  loans with  outstanding  aggregate  balances of $519,000
(including an additional  $143,000 in undisbursed loan proceeds) secured by one-
to four-family residential property built on speculation.

         We  also  provide  construction   financing  on  multi-family  housing.
However,  there were no loans of this type were  outstanding  as of December 31,
1999.  Additionally,  we do occasionally participate with other lenders in loans
to developers and builders to finance  family  housing and  commercial  property
construction.  At December  31,  1999,  we were  involved in four  participation
construction  loans  with an  outstanding  aggregate  balance  of  $2.5  million
(including an additional $540,000 in undisbursed loan proceeds).

         Construction  lending  generally  affords us an  opportunity to receive
interest at rates higher than those obtainable from  residential  lending and to
receive  higher  origination  and other loan fees.  In addition,  such loans are
generally made for relatively short terms. Nevertheless, construction lending to
persons other than  owner-occupants is generally  considered to involve a higher
level of credit  risk than one- to  four-family  residential  lending due to the
concentration  of principal in a limited  number of loans and  borrowers and the
effects of general  economic  conditions on construction  projects,  real estate
developers  and  managers.  In addition,  the nature of these loans is such that
they  are  more  difficult  to  evaluate  and  monitor.  Our  risk  of loss on a
construction loan is dependent largely upon the accuracy of the initial estimate
of the  property's  value upon  completion of the project and the estimated cost
(including  interest)  of the  project.  If the  estimate of value  proves to be
inaccurate,  we may be confronted, at or prior to the maturity of the loan, with
a project with a value which is insufficient to assure full repayment and/or the
possibility of having to make  substantial  investments to complete and sell the
project.  Because  defaults in repayment  may not occur during the  construction
period,  it may be difficult to identify  problem loans at an early stage.  When
loan payments become due, the cash flow from the property may not be adequate to
service the debt.  In such cases,  we may be required to modify the terms of the
loan.

         We had one non-performing  construction loan outstanding as of December
31,  1999,   amounting  to  $519,000.   This  loan  was  originally  a  $500,000
non-residential  construction  loan  participation in a strip shopping center in
Goshen, Indiana. We have a 35% participation interest in the loan. The increased
balance at December  31, 1999 is primarily  attributable  to  capitalized  legal
fees.  The  construction  on the property is completed and tenants are currently
being sought.  The loan balance became  delinquent  during the second quarter of
1999 and is in  foreclosure  with a receiver  appointed.  We have  established a
$40,000 specific reserve against this loan as of December 31, 1999.

         Land Lending. Land loans, which include vacant land and developed lots,
are made to various builders and developers with whom we have had  long-standing
relationships.  All of such  loans are  secured  by land  zoned for  residential
developments  and  located  within our  market  area.  Disbursements  related to
acquisition and development  land loans are typically based on the  construction
cost estimate of an  independent  architect or engineer who inspects the project
in connection with significant  disbursement  requests. At December 31, 1999, we
had  $632,000  in loans  secured  by land,  or 0.59% of our  entire  gross  loan
portfolio.

                                       10
<PAGE>
         Land lending generally affords us an opportunity to receive interest at
rates higher than those obtainable from residential  lending. In addition,  land
loans are limited to a maximum 75%  loan-to-value  and are made with  adjustable
rates of interest and for relatively short terms. Nevertheless,  land lending is
generally  considered  to involve a higher  level of credit risk due to the fact
that funds are  advanced  upon the  security of the land,  which is of uncertain
value  prior  to its  development.  Because  of the  uncertainties  inherent  in
estimating land  development  costs as well as the market value on the completed
project and the  effects of  governmental  regulation  of real  property,  it is
relatively difficult to evaluate accurately the total funds required to complete
a development project and the related loan-to-value ratio.

         As of December 31, 1999, we have not experienced  significant losses in
connection with our land lending. See "Delinquencies and Non-Performing Assets."

         Consumer Lending. We believe that offering consumer loan products helps
to expand the customer base and to create stronger ties to the existing customer
base.  In addition,  because  consumer  loans  generally  have shorter  terms to
maturity and carry higher rates of interest than do residential  mortgage loans,
they can be valuable  asset/liability  management tools. We currently  originate
substantially  all of our  consumer  loans in our market  area.  At December 31,
1999,  the  consumer  loans  totaled  $5.0  million  or 4.61% of the gross  loan
portfolio.

         We offer a variety of secured  consumer  loans,  including  home equity
lines of credit,  home improvement  loans, loans secured by savings deposits and
automobile loans. Although we primarily originate consumer loans secured by real
estate,  deposits or other  collateral,  we also,  on occasion,  make  unsecured
personal loans.

         Our home equity loans are  generally  limited to  $100,000.  We use the
same  underwriting  standards for home equity lines of credit as we use for one-
to  four-family  residential  mortgage  loans.  Home equity  lines of credit are
originated in amounts  which,  together  with the amount of the first  mortgage,
generally do not exceed 80% of the appraised value of the property  securing the
loan. The interest rate for all home equity loans floats at a stated margin over
the prime rate.  At December 31, 1999,  we had $3.3 million of home equity lines
of credit and an additional  $2.7 million of  additional  funds  committed,  but
undrawn, under such lines.

         We also  offer a Visa  credit  card  program.  At  December  31,  1999,
approximately  417 credit cards had been issued,  with an aggregate  outstanding
loan balance of $439,000 and unused credit  available of $850,000.  We presently
charge no annual  membership  fee and a fixed  annual  rate of interest on these
credit cards.

         The terms of other types of consumer  loans vary  according to the type
of collateral,  length of contract,  and  creditworthiness of the borrower.  The
underwriting  standards  employed for consumer loans include a determination  of
the  applicant's  payment  history  on  other  debts  and an  assessment  of the
borrower's ability to meet payments on the proposed loan along with his existing
obligations.   In  addition  to  the  creditworthiness  of  the  applicant,  the
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount.  Unsecured personal loans are made
to borrowers for a variety of personal  needs and are usually  limited to 20% of
the  borrower's net worth not to exceed  $15,000,  with a minimum loan amount of
$2,500.
<PAGE>
         Consumer loans may entail greater risk than residential mortgage loans,
particularly  in the case of consumer  loans which are  unsecured  or secured by
rapidly  depreciable assets such as automobiles.  In such cases, any repossessed
collateral  for defaulted  consumer  loans may not provide  adequate  sources of
repayment  for  the  outstanding  loan  balances  as a  result  of  the  greater
likelihood of damage, loss or

                                       11


<PAGE>
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  federal  and state  bankruptcy  and
insolvency  laws, may limit the amount which can be recovered on such loans.  At
December  31,  1999,  $101,000,  or  approximately  2.03% of the  consumer  loan
portfolio,  was 60 days or  more  delinquent.  There  can be no  assurance  that
delinquencies will not increase in the future.

         Commercial  Business  Lending.  We maintain a portfolio  of  commercial
business  loans to increase the yield and interest rate  sensitivity of our loan
portfolio and to satisfy the demand for financial services in our primary market
area. Unlike  residential  mortgage loans, which generally are made on the basis
of the  borrower's  ability  to make  repayment,  and which are  secured by real
property whose value tends to be more easily ascertainable,  commercial business
loans are  generally 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 (which, in turn, may be dependent upon the general economic environment).
During the past five years, we have originated and purchased commercial business
loans  to  businesses  such as  small  retail  operations,  small  manufacturing
concerns and  professional  firms.  Our commercial  business loans almost always
include personal guarantees and are usually, but not always, secured by business
assets,  such as accounts  receivable,  equipment,  inventory  and real  estate.
However,  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.

         Most of our  commercial  business  loans  have terms  ranging  from six
months to five  years and carry  adjustable  interest  rates.  The  underwriting
process for commercial  business loans generally  includes  consideration of the
borrower's  financial  statements,  tax returns,  projections of future business
operations and inspection of the subject collateral, if any.

         Since 1995,  we have  purchased  seasoned  commercial  leases  covering
various types of office/commercial  equipment from another financial institution
with  expertise in  originating  and acquiring  such leases.  As of December 31,
1999,  the  outstanding  balance on these leases was $821,000.  In general,  the
leases are  full-payout  finance leases in which the lease payments  effectively
repay the lessor for the purchase  price of the  equipment,  plus an  acceptable
yield.  The  selling  institution  continues  to  service  the leases for us and
provides limited recourse in the event of a default by the lessor.  We purchased
these leases  because they were  available at  relatively  high yields at a time
when investment  alternatives were generating much lower yields and because they
had  relatively  short terms,  consistent  with our  asset/liability  management
strategy. Although, like other commercial business financings, commercial leases
involve higher risk than residential  mortgage loans,  management  believes that
these purchases are prudent in furtherance of our lending  strategy and in light
of the higher yields,  personal guarantees on most of the leases and the limited
additional credit recourse  provided by the seller.  These leases are classified
as loans for financial statement purposes.  As of December 31, 1999, all of such
leases were performing in accordance with their terms.

Originations, Purchases and Sales of Loans

         We originate real estate and other loans through marketing efforts, our
customer  base,  walk-in  customers and referrals  from real estate  brokers and
builders. In addition, we occasionally utilize the services of mortgage brokers.
<PAGE>
         We purchase loans from third parties to supplement loan production.  In
particular, we may purchase loans of a type which are not available or available
with favorable terms in our own market

                                       12
<PAGE>
area.  We  generally  use the same  underwriting  standards in  evaluating  loan
purchases  as we do in  originating  loans.  We will  continue to evaluate  loan
purchase  opportunities as they arise and make purchases in the future depending
on market conditions.

         We occasionally  sell long-term  fixed-rate loans. To date, most of our
loan sales have been made on a servicing  released  basis. At December 31, 1999,
approximately  $37.1 million of the loan portfolio was serviced by others and we
did not service any loans for others.

         Our ability to originate  large dollar volumes of real estate loans may
be substantially reduced or restricted in periods of rising interest rates, with
a resultant decrease in related fee income and operating earnings.  In addition,
our ability to sell loans may substantially  decrease if potential buyers reduce
their purchasing activities.

                                       13


<PAGE>
         The  following  table shows our loan  origination,  purchase,  sale and
repayment activities for the periods indicated.
<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                         -------------------------------------
                                                            1999         1998          1997
                                                         --------------------------------------
<S>                                                        <C>          <C>            <C>
Originations by type:
--------------------
 Adjustable rate:
  Real estate - one- to four-family..................      $  2,463     $  1,979       $ 3,444
                - multi-family.......................           ---          ---           ---
                - non-residential....................           410        1,884         1,014
                - construction.......................           ---          ---           772
                - land...............................           ---          370           ---
  Non-real estate - consumer.........................         4,013        4,261         3,565
                     - commercial business...........         2,814        1,608           677
                                                           --------     --------       -------
         Total adjustable-rate.......................         9,700       10,102         9,472
                                                           --------     --------       -------
 Fixed rate:
  Real estate - one- to four-family..................         9,866       10,243         7,096
                - multi-family.......................           344          ---            35
                - non-residential....................         2,748        1,050           160
                - construction.......................         1,110          664         2,707
                - land...............................           ---          176           192
  Non-real estate - consumer.........................         1,540        1,568         1,543
                     - commercial business...........           ---        2,118           531
                                                           --------     --------       -------
         Total fixed-rate............................        15,608       15,819        12,264
                                                            -------       ------       -------
         Total loans originated......................        25,308       25,921        21,736
                                                           --------     --------       -------

Purchases:
---------
  Real estate - one- to four-family..................       20,408(1)   11,539(1)        3,797
                - multi-family.......................           ---          459           491
                - non-residential....................           510          ---           500
                - construction.......................         2,910        1,306           272
  Non-real estate - consumer.........................           ---          483           ---
                     - commercial business...........           284          700         1,813
                                                            --------     --------       -------
         Total loans purchased.......................        24,112       14,487         6,873
                                                           --------     --------       -------
         Total additions.............................        49,420       40,408        28,609
                                                           --------     --------       -------

         Total loans sold............................           ---          ---           ---
  Principal repayments...............................        32,297       27,756        18,851
                                                           --------     --------       -------
         Net before other items......................        17,123       12,652         9,758
Increase (decrease) in other items, net..............          (975)          17           (31)
                                                           --------     --------       -------
         Net increase................................      $ 16,148     $ 12,669       $ 9,727
                                                           ========     ========       =======
</TABLE>
-----------
<PAGE>

(1)  Consisted  primarily of conforming  adjustable rate  mortgage's  secured by
     one-to-four family properties located out of our market area.

Delinquencies and Non-Performing Assets

         Delinquency  Procedures.  When a  borrower  fails  to  make a  required
payment on a loan, we attempt to cause the delinquency to be cured by contacting
the borrower.  In the case of loans,  a late notice is sent on all loans over 30
days  delinquent.  Another late notice along with any required demand letters as
set forth in the loan  contract are sent 60 days after the due date.  Additional
written and verbal  contacts are made with the  borrower  between 45 and 90 days
after the due date.

                                       14


<PAGE>
         If the  delinquency  is not  cured by the 90th  day,  the  customer  is
normally  provided 10 days  written  notice that the account will be referred to
counsel for collection and foreclosure,  if necessary.  A drive-by  appraisal is
normally  obtained  at this time and a title  search is  ordered.  A good  faith
effort by the  borrower  at this time will defer  foreclosure  for a  reasonable
length of time depending on individual  circumstances.  We may agree to accept a
deed in lieu of foreclosure.  If it becomes necessary to foreclose, the property
is sold at public sale and we may bid on the  property to protect its  interest.
The decision to foreclose  is made by the Senior Loan Officer  after  discussion
with the members of the Loan Committee.

         Consumer  loans are charged off if they remain  delinquent for 120 days
unless the borrower and lender agree on a payment plan. If terms of the plan are
not met, they are then subject to charge off. Our procedure for repossession and
sale of consumer  collateral are subject to various  requirements  under Indiana
consumer protection laws.

         When we acquire  real estate as a result of  foreclosure  or by deed in
lieu of  foreclosure  it is classified  real estate owned until it is sold.  The
real  estate is  recorded at the lower of cost or  estimated  fair  value,  less
estimated  selling  costs,  at the  date  of  acquisition,  and  any  write-down
resulting  therefrom is charged to the  allowance  for loan  losses.  Subsequent
decreases  in the value of the property  are charged to  operations  through the
creation of a valuation  allowance.  After  acquisition,  all costs  incurred in
maintaining  the property are expensed.  Costs relating to the  development  and
improvement of the property, however, are capitalized to the extent of estimated
fair value less estimated costs to sell.

         Loan  Delinquencies.  The following table sets forth loan delinquencies
by type, by amount and by percentage of type at December 31, 1999.

<TABLE>
<CAPTION>
                                                                     Loans Delinquent For:
                                 -----------------------------------------------------------------------------------------------
                                       60-89 Days                      90 Days and Over                  Total Delinquent 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>
Real Estate:
  One- to four-family......          6       $267        .32%        4       $282          .34%       10      $  549       .66%
  Multi-family.............        ---        ---        ---       ---        ---          ---       ---         ---       ---
  Non-residential..........        ---        ---        ---       ---        ---          ---       ---         ---       ---
  Construction.............        ---        ---        ---         1        519        12.13         1         519     12.13
  Land.....................        ---        ---        ---       ---        ---          ---       ---         ---       ---
Consumer...................          4         90       1.81         4         11          .22         8         101      2.03
Commercial business........          2        128       2.56         3        157         3.14         5         285      5.70
                                    --       ----       ----       ---        ---         ----       ---      ------      ----

     Total.................         12       $485        .45%       12       $969          .90%       24      $1,454      1.35%
                                    ==       ====        ===        ==       ====          ===       ==       ======      ====
</TABLE>
                                       15

<PAGE>
         Classified Assets.  Federal  regulations provide for the classification
of loans and other assets, such as debt and equity securities  considered by the
Office  of  Thrift  Supervision  to  be of  lesser  quality,  as  "substandard,"
"doubtful" or "loss." An asset is considered "substandard" if it is inadequately
protected by the current net worth and paying  capacity of the obligor or of the
collateral pledged, if any.  "Substandard" assets include those characterized by
the "distinct possibility" that the insured institution will sustain "some loss"
if the deficiencies are not corrected.  Assets classified as "doubtful" have all
of the weaknesses  inherent in those  classified  "substandard,"  with the added
characteristic  that the weaknesses  present make  "collection or liquidation in
full," on the basis of currently existing facts, conditions, and values, "highly
questionable and improbable."  Assets  classified as "loss" are those considered
"uncollectible"  and of such  little  value  that  their  continuance  as assets
without the  establishment  of a specific loss reserve is not warranted.  Assets
which do not currently  expose the insured  institution  to  sufficient  risk to
warrant  classification  in one of the  aforementioned  categories  but  possess
weaknesses are placed on a "watch list" by management.

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

         In connection  with the filing of our periodic  reports with the Office
of  Thrift  Supervision  and in  accordance  with our  classification  of assets
policy,  we  regularly  review the problem  loans in our  portfolio to determine
whether  any  loans  require   classification   in  accordance  with  applicable
regulations. On the basis of this review of our assets, at December 31, 1999, we
had classified a total of $969,000 of our loans and other assets of concern,  as
follows:
<TABLE>
<CAPTION>
                             One- to Four-                                        Commercial
                                Family         Construction       Consumer         Business        Total
                          ------------------------------------------------------------------------------
                                                               (In Thousands)
<S>                               <C>             <C>                <C>            <C>           <C>
Substandard...............        $282            $479               $11            $157          $929
Doubtful..................         ---             ---               ---             ---           ---
Loss......................         ---              40               ---             ---            40
                                  ----            ----               ---            ----          ----
                                  $282            $519               $11            $157          $969
                                  ====            ====               ===            ====          ====
</TABLE>
         Our classified assets consist of the (i) non-performing  loans and (ii)
loans and other assets of concern discussed herein. As of the date hereof, these
asset  classifications  are  consistent  with  those  of the  Office  of  Thrift
Supervision and FDIC.

                                       16
<PAGE>
         Non-Performing  Assets.  The following table sets forth the amounts and
categories of non- performing  assets in our loan portfolio.  Loans are reviewed
quarterly and any loan whose collectibility is doubtful is placed on non-accrual
status. Loans are placed on non-accrual status when either principal or interest
is 90 days or more past due, unless, in the judgment of management,  the loan is
well  collateralized  and in the  process of  collection.  Interest  accrued and
unpaid at the time a loan is placed on  non-accrual  status is  charged  against
interest  income.  Subsequent  payments  are either  applied to the  outstanding
principal balance or recorded as interest income, depending on the assessment of
the ultimate collectibility of the loan. For all years presented, we have had no
troubled debt restructurings  (which involved forgiving a portion of interest or
principal  on any loans or making loans at a rate  materially  less than that of
market rates). Foreclosed assets include assets acquired in settlement of loans.
Except as noted, the loans and foreclosed asset amounts shown are stated without
giving effect to the specific reserves which have been established  against such
assets. See "- Loan Loss Reserve Analysis."

<TABLE>
<CAPTION>
                                                                              December 31,
                                                         -------------------------------------------------------
                                                         1999         1998         1997        1996         1995
                                                         -------------------------------------------------------
                                                                          (Dollars in Thousands)
<S>                                                       <C>         <C>          <C>          <C>         <C>
Non-accruing loans:
  One- to four-family...........................          $282        $314         $263         $269        $318
  Multi-family..................................           ---         ---          ---          ---         ---
  Non-residential...............................           ---         ---          ---          ---         ---
  Construction..................................           479         ---          ---          ---         ---
  Consumer......................................            11         161           45           36          51
  Commercial business...........................           157         ---          ---          ---         ---
                                                        ------      ------      -------       ------      ------
     Total......................................           929         475          308          305         369
                                                           ---        ----        -----        -----       -----

Accruing loans delinquent more than 90 days:

  Consumer......................................           ---           8          ---          ---         ---
                                                        ------      ------      -------       ------      ------


Foreclosed assets:
  One- to four-family...........................           ---          23           27          ---         ---
  Multi-family..................................           ---         ---          ---          ---         ---
  Non-residential...............................           ---         ---          ---          ---         ---
  Construction..................................           ---         ---          ---          ---         ---
  Consumer......................................           ---         ---          ---          ---         ---
  Commercial business...........................           ---         ---          ---          ---         ---
                                                        ------      ------      -------       ------      ------
     Total......................................           ---          23           27           --         ---
                                                        ------       -----       ------       ------      ------

Total non-performing assets.....................          $929        $506         $335         $305        $369
                                                        ======       =====       ======       ======      ======
Total as a percentage of total assets...........          0.73%       0.43%        0.34%        0.35%       0.53%
                                                        ======       =====       ======       ======      ======
</TABLE>
<PAGE>
         Non-performing   assets   increased  in  1999  due   primarily  to  the
delinquency of the strip mall  construction  loans  discussed  under the caption
"Construction   Lending"  and  three   commercial   business  loans  secured  by
receivables and fixed assets totaling $157,000.

         For the year ended December 31, 1999, gross interest income which would
have been recorded had the  non-accruing  loans been current in accordance  with
their original terms amounted to $47,000.

         At December  31,  1999,  there were no other loans not  included on the
table or  discussed  above where known  information  about the  possible  credit
problems of borrowers caused us to have serious


                                      17

<PAGE>

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 allowance for loan losses is established
through a provision  for loan losses  based on our  evaluation  of the  probable
losses in our loan  portfolio  and  changes in the nature and volume of our loan
activity.  Such evaluation,  which includes a review of all loans for which full
collectibility may not be reasonably assured, considers among other matters, the
estimated  fair  value  of  the  underlying  collateral,   economic  conditions,
historical  loan loss  experience and other factors that warrant  recognition in
providing  for an adequate loan  allowance.  Although we believe we use the best
information  available to make such  determinations,  future  adjustments to the
allowance may be necessary,  and net income could be  significantly  affected if
circumstances  differ  substantially  from the  assumptions  used in making  the
initial  determinations.  At December  31, 1999,  we had an  allowance  for loan
losses of $591,000.

                                       18


<PAGE>
         The  following  table sets forth an analysis of the  allowance for loan
losses.

<TABLE>
<CAPTION>
                                                                   Year Ended December 31
                                                  1999       1998         1997         1996         1995
                                                  -------------------------------------------------------
                                                                   (Dollars in Thousands)
<S>                                               <C>         <C>          <C>          <C>          <C>
Balance at beginning of period...........         $507        $410         $355         $360         $331

Charge-offs:
  One- to four-family....................          ---         ---          ---          ---          ---
  Multi-family...........................          ---         ---          ---          ---          ---
  Non-residential........................          ---         ---          ---          ---          ---
  Construction...........................          ---         ---          ---          ---          ---
  Consumer...............................           40           5           33            5           10
  Commercial business....................          ---         ---          ---          ---          ---
                                                ------     -------      -------        -----        -----
         Total charge-offs...............           40           5           33            5           10
                                                 -----     -------       ------        -----         ----

Recoveries:
  One- to four-family....................          ---         ---          ---          ---          ---
  Multi-family...........................          ---         ---          ---          ---          ---
  Non-residential........................          ---         ---          ---          ---          ---
  Construction...........................          ---         ---          ---          ---          ---
  Consumer...............................            5         ---           14          ---          ---
  Commercial business....................          ---         ---          ---          ---          ---
                                                ------     -------       ------        -----        -----
        Total recoveries.................            5         ---           14          ---          ---
                                                ------     -------        -----        -----        -----

Net charge-offs..........................          (35)         (5)         (19)          (5)         (10)
Additions charged to operations..........          119         102           74          ---           39
                                                 -----      ------      -------     --------      -------
Balance at end of period.................         $591        $507         $410         $355         $360
                                                  ====        ====         ====         ====         ====

Ratio of net charge-offs during the
 period to average loans outstanding
during the period........................        0.04%         0.01%       0.03%         0.01%       0.02%
                                                 ====          ====        ====          ====        ====

Ratio of net charge-offs during the
period to average non-performing
assets...................................       4.62%        1.70%        4.15%         1.48%       2.30%
                                                ====         ====         ====          ====        ====
</TABLE>

                                                        19


<PAGE>
         The  distribution  of the  allowance  for  losses on loans at the dates
indicated is summarized as follows:
<TABLE>
<CAPTION>
                                                                    December 31,
                          -----------------------------------------------------------------------------------------------
                                     1999                             1998                             1997
                          ------------------------------   ------------------------------   -----------------------------
                                                Percent                           Percent                         Percent
                                               of Loans                         of Loans                        of Loans
                                        Loan    in Each                 Loan      in Each                 Loan    in Each
                           Amount of  Amounts   Category   Amount of   Amounts   Category   Amount of  Amounts  Category
                           Loan Loss     by     to Total   Loan Loss     by      to Total   Loan Loss     by    to Total
                           Allowance  Category   Loans     Allowance  Category     Loans    Allowance  Category   Loans
                           ---------  --------   -----     ---------  --------     -----    ---------  --------   -----
                                                                (Dollars In Thousands)

<S>                            <C>    <C>          <C>      <C>      <C>          <C>      <C>     <C>           <C>
One- to four-family.....       $125   $82,210      76.11%   $ 110    $63,369      69.69%   $  97   $51,567       64.71%
Multi-family............          7     2,144       1.98       12      2,446       2.69       12     4,010        5.03
Non-residential.........         26     8,775       8.12       26     10,370      11.40       25     8,376       10.51
Construction and land...        136     4,911       4.55       19      3,749       4.12       28     5,714        7.18
Consumer................         46     4,981       4.61       71      5,392       5.93       45     5,104        6.40
Commercial business.....         74     4,999       4.63       56      5,607       6.17       49     4,916        6.17
Unallocated.............        177       ---        ---      212        ---      ---        154       ---         ---
                               ----  --------     ------    -----    -------     ------     ----   -------      ------

     Total..............       $591  $108,020     100.00%   $ 506    $90,933     100.00%    $410   $79,687      100.00%
                               ====  ========     ======    =====    =======     ======     ====   =======      ======

<CAPTION>
                                                       December 31, 1999
                              ---------------------------------------------------------------
                                           1996                            1995
                              ---------------------------------------------------------------
                                                      Percent                         Percent
                                                     of Loans                        of Loans
                                              Loan    in Each                Loan     in Each
                               Amount of   Amounts   Category   Amount of  Amounts   Category
                               Loan Loss      by     to Total   Loan Loss    by      to Total
                               Allowance   Category   Loans     Allowance Category    Loans
                              ----------------------------------------------------------------
                               <C>      <C>         <C>         <C>         <C>       <C>
<S>
One- to four-family.....       $  89    $43,669      63.41%     $  93       $38,056    68.60%
Multi-family............          10      3,259       4.73         10         3,419     6.16
Non-residential.........          26      8,806      12.79         13         4,146     7.47
Construction and land...          23      4,623       6.72         17         3,417     6.16
Consumer................          45      4,989       7.24         23         4,021     7.25
Commercial business.....          35      3,519       5.11         24         2,420     4.36
Unallocated.............         127       ---         ---        180           ---      ---
                                ----    -------     ------       ----       -------   ------

     Total..............        $355    $68,865     100.00%      $360       $55,479   100.00%
                                ====    =======     ======       ====       =======   ======
</TABLE>

                                       20

<PAGE>
Investment Activities

         American  Savings must  maintain  minimum  levels of  investments  that
qualify  as  liquid  assets  under  Office of  Thrift  Supervision  regulations.
Liquidity may increase or decrease  depending upon the availability of funds and
comparative   yields  on  investments  in  relation  to  the  return  on  loans.
Historically,  we have  maintained  liquid  assets at levels  above the  minimum
requirements  imposed by the  Office of Thrift  Supervision  regulations  and at
levels  believed  adequate  to  meet  the  requirements  of  normal  operations,
including repayments of maturing debt and potential deposit outflows.  Cash flow
projections are regularly reviewed and updated to assure that adequate liquidity
is  maintained.  At December 31, 1999,  our liquidity  ratio (liquid assets as a
percentage of net  withdrawable  savings  deposits and current  borrowings)  was
10.88%.  See  "Management's  Discussion and Analysis of Financial  Condition and
Results of Operations - Liquidity and Capital Resources" in the Annual Report.

         Federally  chartered savings  institutions have the authority to invest
in various types of liquid assets, including United States Treasury obligations,
securities  of various  federal  agencies,  certain  certificates  of deposit of
insured banks and savings institutions, certain bankers' acceptances, repurchase
agreements  and  federal  funds.  Subject  to  various  restrictions,  federally
chartered savings institutions may also invest their assets in commercial paper,
investment grade corporate debt securities and mutual funds whose assets conform
to the investments that a federally  chartered savings  institution is otherwise
authorized to make directly.

         Our general  investment  policy  authorizes  us to purchase  investment
grade municipal securities and, depending on market conditions,  we may purchase
such  securities  from time to time.  We also invest,  to a limited  degree,  in
equity securities of other financial companies. At December 31, 1999, we did not
own any  securities  of a  single  issuer  which  exceeded  10% of our  retained
earnings,  other  than  U.S.  government  or  federal  agency  obligations.  See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations - Liquidity and Capital Resources" in the Annual Report.

         Investment  Securities.  At December  31, 1999,  investment  securities
totaled $8.6 million, or 6.76% of total assets.  Included in this amount is $1.4
million  investment  in  Federal  Home  Loan Bank  stock,  which  satisfies  our
requirement for membership in the Federal Home Loan Bank of Indianapolis.  It is
our general policy to purchase  investment  securities which are U.S. Government
securities  or  federal  agency  obligations  or other  issues  that  are  rated
investment grade or have credit enhancements.  At December 31, 1999, the average
term to maturity or repricing of the investment portfolio was 3.2 years.

                                       21

<PAGE>
         The  following  table  sets  forth the  composition  of our  investment
securities at the dates indicated.
<TABLE>
<CAPTION>
                                                                                December 31,
                                                         -------------------------------------------------------------------------
                                                                 1999                       1998                       1997
                                                         --------------------         ----------------        --------------------
                                                          Book          % of          Book        % of         Book          % of
                                                          Value         Total         Value       Total        Value         Total
                                                          -----         -----         -----       -----        -----         -----
                                                                                     (Dollars in Thousands)
<S>                                                       <C>            <C>          <C>          <C>         <C>            <C>
Investment securities held to maturity:
  Federal Home Loan Bank Stock.....................       $1,383         16.00%       $1,334       13.52%      $  725         6.39%
                                                          ------        ------        ------      ------       ------        ------

Investment securities available for sale:
  U.S. government securities........................       5,124         59.28         5,901       59.82        8,090        71.27
  Municipal obligations.............................          94          1.09           102        1.03          ---         ---
  Government securities mutual fund.................         134          1.55           134        1.36          124         1.09
                                                          ------        ------        ------      ------       ------       ------
                                                           5,352         61.92         6,137       62.21        8,214        72.36
                                                          ------        ------        ------      ------       ------       ------

Trading Securities:
  Thrift common stock mutual fund...................         965         11.16           964        9.77       1,325         11.67
  General equity mutual fund........................         ---           ---            57        0.58         ---           ---
  Common stock of other financial institutions......         857          9.91         1,277       12.94       1,088          9.58
  Corporate debt securities.........................          87          1.01            96        0.98         ---           ---
                                                          ------        ------        ------      ------      ------        ------
                                                           1,909         22.08         2,394       24.27       2,413         21.25
                                                          ------        ------        ------      ------      ------        ------
     Total investment securities....................      $8,644        100.00%       $9,865      100.00%    $11,352        100.00%
                                                          ======        ======        ======      ======     =======        ======

Average remaining life of debt investment
 securities.........................................                 3.2 years                 3.9 years                 1.8 years

Other interest-earning assets:
  Interest-bearing deposits with banks..............       1,278        100.00%       $5,887      100.00%    $ 3,119         98.21%
  Money market mutual fund..........................         ---           ---          ---          ---          57          1.79
                                                          ------        ------        ------      ------     -------        ------
     Total..........................................      $1,278        100.00%       $5,887      100.00%    $ 3,176        100.00%
                                                          ======        ======        ======      ======     =======        ======
</TABLE>
         The composition and maturities of the investment  securities portfolio,
excluding  Federal Home Loan Bank stock and equity securities as of December 31,
1999, are indicated in the following table.
<PAGE>
<TABLE>
<CAPTION>
                                                  Less Than     1 to 5        5 to 10       Over
                                                   1 Year        Years         Years      10 Years    Total Investment   Securities
                                                  ---------    ---------     ----------   ----------  ----------------   ----------
                                                  Book Value   Book Value    Book Value   Book Value    Book Value       Fair Value
                                                  ----------   ----------    ----------   ----------    ----------       -----------
                                                                               (Dollars in Thousands)
<S>                                                 <C>          <C>           <C>                        <C>              <C>
U.S. government securities..................        $1,152       $3,972        $  ---          ---        $5,124           $5,124
Municipal obligation........................           ---          ---           ---           94            94               94
Corporate debt securities...................           ---          ---           ---           87            87               87
                                                    ------       ------        ------         ----        ------           ------

Total investment securities (excluding Federal
Home Loan Bank stock and equity securities).        $1,152       $3,972           ---         $181        $5,305           $5,305
                                                    ======       ======        ======         ====        ======           ======

Weighted average yield......................          6.14%        6.07%          ---         6.85%         6.13%             ---

</TABLE>
                                       22
<PAGE>
         Mortgage-Backed Securities. We purchase mortgage-backed securities from
time to time to supplement  residential loan production.  The type of securities
purchased  is based upon our  asset/liability  management  strategy  and balance
sheet  objectives.  See  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations - Asset/Liability  Management" in the Annual
Report.  Our  mortgage-backed  securities  are  held in the  available  for sale
portfolio in order to retain investment flexibility and accordingly are included
in our financial statements at fair value.

         All of our mortgage-backed  securities at December 31, 1999, are backed
by federal agencies or government corporations. Accordingly, we believe that the
mortgage-backed securities are generally resistant to credit problems.

         The following table sets forth the  composition of our  mortgage-backed
securities at the dates indicated.

<TABLE>
<CAPTION>
                                                                            December 31,
                                                     1999                       1998                  1997
                                              -------------------------------------------------------------------
                                               Book          % of         Book        % of      Book         % of
                                              Value         Total         Value       Total     Value       Total
                                              -----         -----         -----       -----     -----       -----
                                                                        (Dollars in Thousands)
Mortgage-backed securities
available for sale:
<S>                                           <C>            <C>         <C>           <C>      <C>        <C>
  Ginnie Mae.............................     $  374         20.02       $   489       18.46%   $   639     18.29%
  Fannie Mae.............................         41          2.20            53        2.00         70      2.00
  Freddie Mac............................      1,453         77.78         2,107       79.54      2,785     79.71
                                               -----        ------       -------       -----     ------    ------

     Total mortgage-backed
       securities........................      $1,868       100.00%      $ 2,649      100.00%    $3,494    100.00%
                                               ======       ======       =======      ======     ======    ======
</TABLE>
         The following table shows mortgage-backed and related securities,  sale
and   repayment   activities   for  the   periods   indicated.   There  were  no
mortgage-backed securities purchases during such periods.
<PAGE>
<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                      -------------------------------------
                                                        1999          1998         1997
                                                      ------------------------------------
                                                              (In Thousands)
<S>                                                    <C>           <C>          <C>
Purchases:
---------
  Adjustable-rate................................      $   ---       $   ---      $   ---
  Fixed-rate.....................................          ---           ---          ---
                                                       -------       -------      -------
         Total purchases.........................          ---           ---          ---
                                                       -------       -------      -------

Sales and Repayments:
--------------------
         Total sales.............................          ---           ---          ---
                                                       -------       -------      -------
  Principal repayments...........................          720           847          570
                                                       -------       -------      -------
         Total reductions........................         (720)         (847)        (570)
  Increase (decrease) in other items, net........          (61)            2           45
                                                       -------       -------      -------
         Net increase (decrease).................        $(781)        $(845)       $(525)
                                                       =======       =======      =======
</TABLE>

                                       23


<PAGE>
         The  following  table  sets  forth the  contractual  maturities  of our
mortgage-backed   securities  at  December  31,  1999.   These   securities  are
anticipated  to be repaid well in advance of their  contractual  maturities as a
result  of  mortgage  loan  payments.  The  amounts  set forth  below  represent
principal  balances only and do not include  premiums,  discounts and fair value
adjustments.
<TABLE>
<CAPTION>

                                                                                   December 31, 1999
                                                                                  Balance Outstanding
                                                       Due in                     --------------------
                                         1 to         5 to 10     10 to 20
                                        5 Years        Years        Years         Fixed     Adjustable
                                        -------       -------     --------        -------   ----------
                                                            (In Thousands)
<S>                                        <C>            <C>       <C>           <C>         <C>
Freddie Mac.......................         $155           $96       $1,220        $1,471      $  ---
Fannie Mae........................          ---           ---           41           ---          41
Ginnie Mae........................          ---           ---          372           ---         372
                                         ------         -----     --------     ---------       -----

     Total........................         $155           $96       $1,633        $1,471        $413
                                           ====           ===       ======        ======        ====
</TABLE>

Sources of Funds

         Our primary sources of funds are deposits, borrowings, amortization and
prepayment of loan principal,  maturities of investment  securities,  short-term
investments and funds provided from operations.

         Deposits.  American Savings offers a variety of deposit accounts having
a wide range of  interest  rates and terms.  The  deposits  consist of  passbook
accounts, demand and NOW accounts, and money market and certificate accounts. We
rely primarily on advertising, competitive pricing policies and customer service
to attract and retain these 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  deposits  we  offer  by  have  allowed  us to be
competitive  in obtaining  funds and to respond with  flexibility  to changes in
consumer demand.  We have become more susceptible to short-term  fluctuations in
deposit flows, as customers have become more interest rate conscious.  We manage
the pricing of our  deposits  in keeping  with our  asset/liability  management,
profitability and growth  objectives.  Based on our experience,  we believe that
passbook,  demand and NOW accounts are relatively  stable sources of deposits as
compared to certificate  deposits.  However, our ability to attract and maintain
all deposits,  and the rates paid on these deposits,  has been and will continue
to be significantly affected by market conditions.

                                       24
<PAGE>
         The  following  table sets forth the savings  flows  during the periods
indicated.
<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                    -----------------------------------
                                                       1999          1998          1997
                                                    ---------     --------      --------
                                                            (Dollars in Thousands)
<S>                                                   <C>          <C>          <C>
Opening balance.............................          $78,997      $71,700      $ 60,411
Deposits....................................          171,722      151,006       142,882
Withdrawals.................................         (164,716)    (143,774)     (134,005)
Sale of deposit accounts                                  ---       (2,703)          ---
Interest credited...........................            2,942        2,768         2,412
                                                    ---------    ---------    ----------

Ending balance..............................          $88,945      $78,997      $ 71,700
                                                      =======      =======      ========

Net increase................................          $ 9,948      $ 7,297      $ 11,289
                                                      =======      =======      ========

Percent increase............................            12.59%       10.18%        18.69%
                                                        =====        =====         =====
</TABLE>

         The following table sets forth the dollar amount of savings deposits in
the various types of deposit programs we offer as of the dates indicated.
<TABLE>
<CAPTION>
                                                                               December 31,
                                                   ----------------------------------------------------------------------
                                                         1999                     1998                     1997
                                                   -------------------      -------------------     --------------------
                                                              Percent                  Percent                  Percent
                                                   Amount     of Total      Amount     of Total     Amount      of Total
                                                   ------     --------      ------     --------     ------      --------
                                                                           (Dollars in Thousands)
<S>                                               <C>          <C>       <C>            <C>         <C>           <C>
Transactions and Savings Deposits:
---------------------------------
Commercial Demand (0.00%(1))................       $1,229       1.38%     $   794        1.01%      $   698       0.97%
Passbook Accounts (2.75%(1))................       14,960      16.82       15,143       19.17        16,407      22.88
NOW Accounts (1.90%(1)).....................        7,375       8.29        6,610        8.37         6,560       9.15
Money Market Accounts (3.25%(1))............        3,372       3.79        3,773        4.78         2,878       4.01
                                                  -------     ------      -------     -------       -------     ------

Total Non-Certificates......................       26,936      30.28       26,320       33.32        26,543      37.02
                                                   ------     ------       ------      ------        ------      -----
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                               <C>          <C>       <C>            <C>         <C>           <C>
Certificates:
------------

 3.01 -  4.00%..............................          ---        ---         ---          ---           257       0.36
 4.01 - 5.00%...............................       17,354      19.51        9,036       11.44         1,158       1.62
 5.01 - 6.00%...............................       42,042      47.27       39,206       49.63        25,074      34.97
 6.01 - 7.00%...............................        2,507       2.82        3,822        4.84        18,005      25.11
 7.01 - 9.00%...............................          106       0.12          613        0.78           663       0.93
                                                ---------     ------     --------     -------      --------    -------

Total Certificates..........................       62,009      69.72       52,677       66.68        45,157      62.98
                                                  -------     ------     --------      ------       -------     ------
Total Deposits..............................      $88,945     100.00%     $78,997      100.00%      $71,700     100.00%
                                                  =======     ======      =======      ======       =======     ======
</TABLE>

-----------------------
(1)      Rates in effect at December 31, 1999.


                                       25


<PAGE>
         The  following  table  shows  rate  and  maturity  information  for our
certificates of deposit as of December 31, 1999.
<TABLE>
<CAPTION>

                                       4.01-           5.01-         6.01-                Percent
                                       5.00%           6.00%         9.00%      Total    of Total
                                       -----           -----         -----      -----    --------
                                                           (Dollars in Thousands)
<S>                                    <C>              <C>          <C>       <C>           <C>
Certificate account maturing
 in quarter ending:
 -----------------
March 31, 2000.................        $5,779           $1,778       $225      $7,782        12.55%
June 30, 2000..................         4,991            1,467        298       6,756        10.89
September 30, 2000.............         2,060           13,920        100      16,080        25.93
December 31, 2000..............         1,895           17,315        121      19,331        31.17
March 31, 2001.................           997              754        ---       1,751         2.82
June 30, 2001..................           661              388         60       1,109         1.79
September 30, 2001.............           265               86        ---         351         0.57
December 31, 2001..............           127              508      1,706       2,341         3.78
March 31, 2002.................           180            4,319         88       4,587         7.40
June 30, 2002..................            45              560        ---         605         0.98
September 30, 2002.............            50              159        ---         209         0.34
December 31, 2002..............           ---              257        ---         257         0.41
Thereafter.....................           304              531         15         850         1.37
                                      -------          -------     ------     -------      -------

   Total.......................       $17,354          $42,042     $2,613     $62,009       100.00%
                                      =======          =======     ======     =======       ======

   Percent of total............         27.99%           67.80%      4.21%     100.00%
                                        =====            =====       ====      ======
</TABLE>
         The following table indicates the amount of our certificates of deposit
and other deposits by time remaining until maturity as of December 31, 1999.
<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.......       $6,108        $5,600      $28,617       $11,386      $51,711

Certificates of deposit of $100,000 or more......        1,674         1,156        6,794           674       10,298
                                                        ------        ------     --------     ---------      -------

Total certificates of deposit....................       $7,782        $6,756      $35,411       $12,060      $62,009
                                                        ======        ======      =======       =======      =======
</TABLE>

                                       26
<PAGE>
         Borrowings.  We may obtain  advances from the Federal Home Loan Bank of
Indianapolis  upon the  security of our capital  stock in the Federal  Home Loan
Bank of  Indianapolis  and  certain of our  mortgage  loans and  mortgage-backed
securities.  Such  advances  may be made  pursuant to several  different  credit
programs,  each of which has its own interest rate and range of  maturities.  At
December  31,  1999,  we had $24.7  million in Federal  Home Loan Bank  advances
outstanding.  During recent years, we have utilized short-term borrowings,  most
of which have maturities of 12 to 36 months in order to fund loan demand. See --
"Management Discussion and Analysis - Asset/Liability Management."

         The  following  table  sets forth the  maximum  month-end  balance  and
average  balance  of  Federal  Home Loan Bank  advances,  securities  sold under
agreements to repurchase and other borrowings for the periods indicated.
<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                   ---------------------------------------
                                                                     1999            1998            1997
                                                                   -------         -------         -------
                                                                               (In Thousands)
<S>                                                                <C>             <C>             <C>
Maximum Balance:
---------------
  Federal Home Loan Bank advances.........................         $25,676         $25,683         $12,000
  Securities sold under agreements to repurchase..........             ---             ---             ---
  Other borrowings........................................             ---             ---             ---

Average Balance:
---------------
  Federal Home Loan Bank advances.........................         $23,262         $18,663         $11,629
  Securities sold under agreements to repurchase..........             ---             ---             ---
  Other borrowings........................................             ---             ---             ---
</TABLE>
         The following table sets forth certain information as to our borrowings
at the dates indicated.
<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                   ---------------------------------------
                                                                     1999            1998            1997
                                                                   -------         -------         -------
                                                                            (Dollars in Thousands)
<S>                                                                <C>             <C>             <C>
Federal Home Loan Bank advances...........................         $24,676         $21,683         $12,000
Securities sold under agreements to repurchase............             ---             ---             ---
Other borrowings..........................................             ---             ---             ---
                                                                   -------         -------         -------

     Total borrowings.....................................         $24,676         $21,683         $12,000
                                                                   =======         =======         =======

Weighted average interest rate of Federal Home
Loan Bank advances........................................           5.67%           5.65%            5.89%

Weighted average interest rate of securities sold
 under agreements to repurchase...........................            ---%            ---%             ---%

Weighted average interest rate of other borrowings........            ---%            ---%             ---%

</TABLE>
                                       27
<PAGE>
Service Corporations

         We have one wholly owned subsidiary service  corporation,  NIFCO, Inc.,
and one second tier subsidiary service corporation, Ridge Management, Inc. which
is owned by NIFCO.  NIFCO sells annuities and securities.  At December 31, 1999,
we had an equity investment in NIFCO of $30,000. For the year ended December 31,
1999, NIFCO recorded net income of $148. In the past,  Ridge Management  engaged
in  lending  and  investment  activity,  although  it is  currently  essentially
inactive.  For the  year  ended  December  31,  1999,  Ridge  Management  had no
activity.

Regulation

         American Savings is a federally chartered savings and loan association,
the  deposits  of which are  federally  insured and backed by the full faith and
credit of the United States Government. Accordingly, American Savings is subject
to broad federal  regulation and oversight  extending to all of our  operations.
American  Savings is a member of the Federal Home Loan Bank of Indianapolis  and
is  subject to  certain  limited  regulation  by the Board of  Governors  of the
Federal  Reserve  System.  As the savings and loan  holding  company of American
Savings,  AMB Financial  also is subject to federal  regulation  and  oversight.
However,  since AMB  Financial  existed as a unitary  savings  and loan  holding
company  prior  to May  4,  1999,  there  is  virtually  no  restriction  on its
activities.

         Federal  Regulation  of  Savings  Associations.  The  Office  of Thrift
Supervision has extensive authority over the operations of savings associations.
As part of this  authority,  we are required to file  periodic  reports with the
Office of Thrift  Supervision  and are subject to periodic  examinations  by the
Office of Thrift Supervision and the FDIC. When these examinations are conducted
by the Office of Thrift  Supervision  and the FDIC,  the  examiners  may require
American Savings to provide for higher general or specific loan loss reserves.

         The  Office  of  Thrift  Supervision  also  has  extensive  enforcement
authority over all savings  institutions  and their holding  companies,  such as
American Savings and AMB Financial.  This enforcement authority includes,  among
other  things,   the  ability  to  assess  civil  money   penalties,   to  issue
cease-and-desist or removal orders, and to initiate injunctive actions.

         Our general  permissible  lending  limit for  loans-to-one-borrower  is
equal to the  greater of  $500,000  or 15% of  unimpaired  capital  and  surplus
(except for loans fully secured by certain  readily  marketable  collateral,  in
which case this limit is increased to 25% of unimpaired capital and surplus). At
December 31, 1999, our lending limit under this  restriction  was  approximately
$1.2  million.  At  December  31,  1999,  we  had  no  loans  in  excess  of our
loans-to-one-borrower limit.

         Insurance of Accounts and Regulation by the FDIC. 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 Federal Home Loan Bank System
or the Savings  Association  Insurance  Fund. The FDIC also has the authority to
initiate  enforcement  actions  against savings  associations,  after giving the
Office  of Thrift  Supervision  an  opportunity  to take  such  action,  and may
terminate deposit insurance if it determines that the institution has engaged in
unsafe or unsound practices, or is in an unsafe or unsound condition.
<PAGE>
         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  insurance  premiums  based upon their  level of
capital and supervisory evaluation. Under the system, institutions classified as

                                       28


<PAGE>
well  capitalized  (i.e.,  a core capital  ratio of at least 5%, a ratio of core
capital to risk-weighted assets of at least 6% and a risk-based capital ratio of
at least 10%) and considered healthy,  pay the lowest premium while institutions
that are less than  adequately  capitalized  (i.e.,  core or risk-based  capital
ratios  of less  than 4% or a  risk-based  capital  ratio  of less  than 8%) and
considered of  substantial  supervisory  concern pay the highest  premium.  Risk
classification  of all insured  institutions is made by the FDIC semi- annually.
At December 31, 1999,  American  Savings was  classified  as a  well-capitalized
institution.

         The  current  premium  schedule  for Bank  Insurance  Fund and  Savings
Association  Insurance  Fund  insured  institutions  ranged  from 0 to 27  basis
points.  However,  Savings Association  Insurance Fund insured  institutions and
Bank  Insurance  Fund  insured  institutions  are  required  to pay a  Financing
Corporation  assessment in order to fund the interest on bonds issued to resolve
thrift  failures in the 1980s.  For the quarter  ended  December 31, 1999,  this
amount was equal to 5.920 basis  points for each $100 in domestic  deposits  for
Savings  Association  Insurance  Fund members while Bank  Insurance Fund insured
institutions  pay an assessment  equal to about 1.184 basis points for each $100
in domestic  deposits.  These  assessments,  which may be revised based upon the
level of Bank  Insurance Fund and Savings  Association  Insurance Fund deposits,
will continue until the bonds mature in 2017 through 2019.

         Regulatory    Capital    Requirements.    Federally   insured   savings
associations, such as American Savings, are required to maintain a minimum level
of regulatory capital.  The Office of Thrift Supervision has established capital
standards,  including a tangible capital requirement,  a leverage ratio (or core
capital)  requirement and a risk-based  capital  requirement  applicable to such
savings associations.

         The capital  regulations  require  tangible capital of at least 1.5% of
adjusted total assets (as defined by regulation). At December 31, 1999, American
Savings had tangible capital of $8.1 million, or 6.51% of adjusted total assets,
which is  approximately  $6.2 million above the minimum  requirement  of 1.5% of
adjusted  total assets in effect on that date.  At December  31, 1999,  American
Savings did not have any intangible assets.

         The capital standards also require core capital equal to at least 3% to
4% of adjusted total assets,  depending on an institution's  supervisory rating.
Core capital generally  consists of tangible  capital.  At December 31, 1999, we
had core capital equal to $8.1 million, or 6.51% of adjusted total assets, which
is $4.4 million above the minimum leverage ratio  requirement of 3% as in effect
on that date.

         The  Office  of  Thrift  Supervision  risk-based  requirement  requires
savings  associations  to have  total  capital  of at least 8% of  risk-weighted
assets.   Total  capital  consists  of  core  capital,  as  defined  above,  and
supplementary  capital.  Supplementary capital consists of certain permanent and
maturing  capital  instruments  that do not qualify as core  capital and general
valuation  loan  and  lease  loss  allowances  up  to  a  maximum  of  1.25%  of
risk-weighted  assets.   Supplementary  capital  may  be  used  to  satisfy  the
risk-based requirement only to the extent of core capital.

         In  determining  the  amount  of  risk-weighted   assets,  all  assets,
including certain  off-balance sheet items, will be multiplied by a risk weight,
ranging from 0% to 100%,  based on the risk  inherent in the type of asset.  For

<PAGE>

example,  the Office of Thrift Supervision has assigned a risk weight of 50% for
prudently  underwritten  permanent one- to four-family first lien mortgage loans
not more than 90 days  delinquent and having a  loan-to-value  ratio of not more
than 80% at origination,  unless insured to such ratio by an insurer approved by
Fannie Mae or Freddie Mac.

         On December 31, 1999, we had total risk-based  capital of approximately
$8.6 million,  including $8.1 million in core capital and $551,000 in qualifying
supplementary capital, and risk-weighted assets of

                                       29

<PAGE>
$69.3 million,  or total capital of 12.44% of risk-weighted  assets. This amount
was $3.1 million above the 8% requirement in effect on that date.

         The  Office of  Thrift  Supervision  is  authorized  to impose  capital
requirements  in excess  of these  standards  on  individual  associations  on a
case-by-case basis. The Office of Thrift Supervision and the FDIC are authorized
and,  under certain  circumstances  required,  to take certain  actions  against
savings associations that fail to meet their capital requirements. The Office of
Thrift  Supervision  is  generally  required  to take  action  to  restrict  the
activities of an  "undercapitalized  association"  (generally  defined to be one
with less than either a 4% core capital  ratio, a 4% core  risked-based  capital
ratio or an 8% risk- based capital ratio).  Any such  association  must submit a
capital restoration plan and until such plan is approved by the Office of Thrift
Supervision may not increase its assets, acquire another institution,  establish
a branch or engage in any new  activities,  and  generally  may not make capital
distributions.  The Office of Thrift  Supervision  is  authorized  to impose the
additional  restrictions  that are applicable to significantly  undercapitalized
associations.

         The  Office of  Thrift  Supervision  is also  generally  authorized  to
reclassify  an  association  into  a  lower  capital  category  and  impose  the
restrictions applicable to such category if the institution is engaged in unsafe
or unsound practices or is in an unsafe or unsound condition.

         The  imposition by the Office of Thrift  Supervision or the FDIC of any
of these  measures on AMB  Financial or American  Savings may have a substantial
adverse effect on our operations and profitability.

         Limitations on Dividends and Other Capital Distributions. The Office of
Thrift  Supervision  imposes various  restrictions on savings  associations with
respect  to their  ability  to make  distributions  of  capital,  which  include
dividends,  stock  redemptions  or  repurchases,   cash-out  mergers  and  other
transactions  charged to the capital account.  The Office of Thrift  Supervision
also prohibits a savings  association  from declaring or paying any dividends or
from  repurchasing  any of its  stock  if,  as a  result  of  such  action,  the
regulatory  capital  of  American  Savings  would be  reduced  below the  amount
required to be maintained for the liquidation  account established in connection
with American Savings mutual to stock conversion.

         American Savings may make a capital  distribution  without the approval
of the  Office of Thrift  Supervision  provided  we notify  the Office of Thrift
Supervision,  30 days before we declare the capital distribution and we meet the
following  requirements:  (i) we have a regulatory  rating in one of the two top
examination categories,  (ii) we are not of supervisory concern, and will remain
adequately- or well- capitalized, as defined in the Office of Thrift Supervision
prompt corrective action regulations,  following the proposed distribution,  and
(iii) the  distribution  does not exceed our net income for the  calendar  year-
to-date plus  retained net income for the previous two calendar  years (less any
dividends previously paid). If we do not meet the above stated requirements,  we
must  obtain  the prior  approval  of the  Office of Thrift  Supervision  before
declaring any proposed distributions.

         Qualified Thrift Lender Test. All savings  institutions are required to
meet a qualified  thrift  lender  test to avoid  certain  restrictions  on their
operations. This test requires a savings institution to have at least 65% of its
portfolio assets (as defined by regulation) in qualified thrift investments on a
monthly  average  for nine out of every 12  months  on a  rolling  basis.  As an

<PAGE>

alternative,  the savings  institutions  may maintain 60% of its assets in those
assets  specified in Section  7701(a)(19)  of the Internal  Revenue Code.  Under
either test, these assets primarily consist of residential housing related loans
and  investments.  At December 31, 1999,  American  Savings met the test and has
always met the test since its effectiveness.  American Savings' qualified thrift
lender percentage was 91.3% at December 31, 1999.

                                       30


<PAGE>
         Any savings  institution that fails to meet the qualified thrift lender
test must  convert  to a  national  bank  charter,  unless it  requalifies  as a
qualified thrift lender and remains a qualified thrift lender. If an institution
does not  requalify  and  converts to a national  bank  charter,  it must remain
Savings Association Insurance Fund-insured until the FDIC permits it to transfer
to the Banking  Insurance  Fund. If an  institution  has not yet  requalified or
converted to a national bank, its new  investments and activities are limited to
those permissible for both a savings  association and a national bank, and it is
limited to national bank branching  rights in its home state.  In addition,  the
institution is immediately  ineligible to receive any new Federal Home Loan Bank
borrowings  and is subject to national bank limits for payment of dividends.  If
the institution has not requalified or converted to a national bank within three
years after the failure,  it must sell all  investments  and stop all activities
not  permissible  for a national  bank. In addition,  it must repay promptly any
outstanding  Federal Home Loan Bank  borrowings,  which may result in prepayment
penalties.  If any  institution  that fails the qualified  thrift lender test is
controlled  by a holding  company,  then within one year after the failure,  the
holding  company must register as a bank holding  company and become  subject to
all restrictions on bank holding companies. See "- Holding Company Regulation."

         Community Reinvestment Act. Under the Community Reinvestment Act, 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
Community  Reinvestment  Act  requires  the  Office  of Thrift  Supervision,  in
connection with its examination of American Savings, to assess the institution's
record of meeting the credit needs of our community and to take this record into
account  in our  evaluation  of  certain  applications,  such as a merger or the
establishment of a branch, by American Savings. An unsatisfactory  rating may be
used as the  basis  for the  denial of an  application  by the  Office of Thrift
Supervision.  American  Savings was  examined  for  Community  Reinvestment  Act
compliance in July 1999 and received a rating of "satisfactory".

         Transactions with Affiliates. Generally, transactions between a savings
association or its  subsidiaries  and its affiliates are required to be on terms
as  favorable  to  American   Savings  or   subsidiary  as   transactions   with
non-affiliates.  In addition, certain of these transactions, such as loans to an
affiliate,  are  restricted  to  a  percentage  of  American  Savings'  capital.
Affiliates  of American  Savings  include AMB Financial and any company which is
under common control with American Savings.  In addition,  a savings association
may not lend to any affiliate  engaged in activities not  permissible for a bank
holding  company or acquire the  securities  of most  affiliates.  The Office of
Thrift   Supervision  has  the  discretion  to  treat  subsidiaries  of  savings
associations as affiliates on a case by case basis.

         Certain  transactions with directors,  officers or controlling  persons
are also subject to conflict of interest  regulations  enforced by the Office of
Thrift  Supervision.  These conflict of interest  regulations and other statutes
also impose  restrictions on loans to such persons and their related  interests.
Among other things,  such loans must be made on terms  substantially the same as
for loans to unaffiliated individuals.

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

                                       31
<PAGE>
         As a  unitary  savings  and  loan  holding  company,  that  has been in
existence  since before May 4, 1999,  AMB Financial  generally is not subject to
activity  restrictions.  If AMB Financial  acquires  control of another  savings
association  as a separate  subsidiary,  it would become a multiple  savings and
loan  holding  company  and  the  activities  of AMB  Financial  and  any of our
subsidiaries  (other  than  American  Savings or any other  Savings  Association
Insurance Fund insured savings  association)  would generally  become subject to
certain restrictions. Additionally, if we fail the qualified thrift lender test,
within one year AMB Financial  must register as, and will become subject to, the
significant activity restrictions applicable to bank holding companies.

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

         AMB  Financial  stock held by  persons  who are  affiliates  (generally
executive officers,  directors and 10% shareholders) of AMB Financial may not be
resold  without  registration  or unless sold in accordance  with certain resale
restrictions.  If AMB  Financial  meets  specified  current  public  information
requirements,  each  affiliate  of AMB  Financial  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  noninterest  bearing reserves at specified
levels against their transaction accounts (primarily checking, NOW and Super NOW
checking  accounts).  At December 31, 1999,  American  Savings was in compliance
with these  reserve  requirements.  The balances  maintained to meet the reserve
requirements  imposed by the Federal  Reserve  Board may also be used to satisfy
liquidity  requirements that may be imposed by the Office of Thrift Supervision.
See "--Liquidity" in the annual report.

         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
Federal Home Loan Bank  borrowings,  before  borrowing from the Federal  Reserve
Bank.

         Federal  Home Loan Bank  System.  American  Savings  is a member of the
Federal Home Loan Bank of Indianapolis, which is one of 12 regional Federal Home
Loan  Banks  that  administer  the home  financing  credit  function  of savings
associations.  Each  Federal  Home Loan Bank serves as a reserve or central bank
for its members  within its assigned  region.  It makes loans to members  (i.e.,
advances) in accordance with policies and  procedures,  established by the board
of directors of the Federal Home Loan Bank,  which are subject to the  oversight
of the Federal  Housing  Finance Board.  All advances from the Federal Home Loan
Bank are required to be fully secured by sufficient  collateral as determined by
the Federal Home Loan Bank. In addition, all long-term advances must be used for
residential home financing.

         As a member,  American  Savings is required to purchase  and maintain a
minimum  amount  of stock in the  Federal  Home Loan  Bank of  Indianapolis.  At
December 31, 1999,  American  Savings had $1.4 million in Federal Home Loan Bank
stock,  which was in compliance with this requirement.  In past years,  American
Savings has received substantial  dividends on our Federal Home Loan Bank stock.

<PAGE>

For the fiscal year ended December 31, 1999,  dividends paid by the Federal Home
Loan  Bank  of  Indianapolis  to  American  Savings  totaled   $107,700,   which
constitutes a $26,500  increase from the amount of dividends  received in fiscal
1998.  Over the past five fiscal years these  dividends  have averaged 7.94% and
were 8.00% for fiscal 1999.

                                       32
<PAGE>
Federal and State Taxation

         Federal Taxation.  Savings  institutions that met certain  definitional
tests relating to the composition of assets and other  conditions  prescribed by
the Internal  Revenue Code of 1986, as amended,  had been permitted to establish
reserves  for bad  debts  and to  make  annual  additions  which  could,  within
specified  formula limits,  be taken as a deduction in computing  taxable income
for federal income tax purposes. The amount of the bad debt reserve deduction is
now computed under the experience method.

         In addition to the regular income tax, corporations,  including savings
institutions, 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.

         To the extent earnings appropriated to a savings institution'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 institution's  supplemental  reserves
for losses on loans, such excess may not, without adverse tax  consequences,  be
utilized  for  the  payment  of  cash  dividends  or  other  distributions  to a
shareholder (including distributions on redemption,  dissolution or liquidation)
or for any other purpose (except to absorb bad debt losses).  As of December 31,
1999,  American  Savings'  excess for tax purposes  totaled  approximately  $1.9
million.

         We file consolidated  federal income tax returns on a fiscal year basis
using the accrual method of accounting.  Savings  institutions 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.

         Our  federal  income tax  returns  for the last three years are open to
possible  audit by the IRS.  No  returns  are  being  audited  by the IRS at the
current time. In our opinion,  any  examination  of still open returns would not
result  in a  deficiency  which  could  have a  material  adverse  effect on our
financial condition.

         Indiana Taxation. The State of Indiana imposes an 8.5% franchise tax on
the net income of financial (including thrift) institutions.  Taxable income for
franchise  tax  purposes  will  constitute  federal  taxable  income  before net
operating loss  deductions and special  deductions,  adjusted for certain items,
including  the addition of Indiana  income  taxes,  property  taxes,  tax exempt
interest and bad debts.  Other  applicable  Indiana taxes include sales, use and
property taxes.
<PAGE>
         Delaware Taxation.  As a company incorporated under Delaware state law,
AMB  Financial is exempt 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
Holding Company is also subject to an annual  franchise tax imposed by the State
of Delaware.

                                       33


<PAGE>
Competition

         We face strong competition both in originating real estate loans and in
attracting deposits. Competition in originating loans comes primarily from other
savings institutions,  credit unions,  commercial banks and mortgage bankers who
also make loans  secured by real estate  located in our primary  market area. We
compete for loans  principally  on the basis of the interest rates and loan fees
we  charge,  the types of loans we  originate  and the  quality of  services  we
provide to borrowers.

         We attract all of its deposits  through our branch  offices,  primarily
from the  communities  in which those  branch  offices are  located;  therefore,
competition for those deposits is principally  from other savings  institutions,
commercial  banks,  securities  firms,  money market and mutual funds and credit
unions  located in the same  communities.  Our  ability  to  attract  and retain
deposits  depends  on our  ability to provide  an  investment  opportunity  that
satisfies  the  requirements  of  investors.  We compete  for these  deposits by
offering a variety of deposit accounts at competitive rates, convenient business
hours and a customer  oriented  staff.  As of December 31, 1999,  our  estimated
market share of savings deposits in the Gary-Hammond, Indiana MSA market area to
be approximately 1.4%.

Employees

         At December 31, 1999,  we had a total of 29  employees,  including  two
part-time  employees.  Our  employees  are  not  represented  by any  collective
bargaining group. We consider employee relations to be good.

                                       34


<PAGE>
Item 2.           Description of Property
-------           -----------------------

         We conduct business at its main office located in Munster, Indiana. The
following table sets forth information  relating to each of our properties as of
December 31, 1999.

                                                   Total
                                    Owned       Approximate
                         Year        or           Square      December 31, 1999
Location               Acquired    Leased         Footage        Book Value
--------               --------    ------         -------        ----------
                                                              (In Thousands)
Main Office:

8230 Hohman Avenue       1963       Owned          8,400         $64,000
Munster, Indiana

Branch Offices:

1001 Main Street         1990      Leased          2,800          79,000
Dyer, Indiana

4521 Hohman Avenue       1983       Owned          1,600          43,000
Hammond, Indiana



         We believe that current facilities are adequate to meet our present and
foreseeable needs, subject to possible future expansion.

         We  maintain  an  on-line  data base with a  service  bureau  servicing
financial  institutions.  The net book value of the data processing and computer
equipment utilized at December 31, 1999 was $105,000.

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

         We are involved  from time to time 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 our
opinion,  after  consultation  with counsel  representing us in the proceedings,
that the resolution of these  proceedings  should not have a material  effect on
the results of operations.

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

         No matters to a vote of security  holders,  through the solicitation of
proxies, during the quarter ended December 31, 1999.

                                       35

<PAGE>
                                     PART II

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

         Page  45  of  our  1999  annual  report  to   stockholders   is  herein
incorporated by reference.

Item 6.           Management's Discussion and Analysis or Plan of Operation
-------           ---------------------------------------------------------

         Pages 5 through 15 of our 1999 annual report to  stockholders is herein
incorporated by reference.

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

         The   following   information   appearing  in  our  annual   report  to
stockholders  for the year ended December 31, 1999, is incorporated by reference
in this annual report on Form 10-KSB as Exhibit 13.

<TABLE>
<CAPTION>
                                                                                           Pages in
                                                                                            Annual
                                       Annual Report Section                                Report
-----------------------------------------------------------------------------------------   ------


<S>                                                                                           <C>
Report of Independent Certified Public Accountants........................................    16

Consolidated Balance Sheets (December 31, 1999 and 1998)..................................    17

Consolidated Statements of Earnings (For the Years Ended December 31, 1999
  and 1998)...............................................................................    18

Consolidated Statements of Stockholders' Equity (For the Years Ended December 31,
1999 and 1998)............................................................................    19

Consolidated Statements of Cash Flows (For the Years Ended December 31, 1999
  and 1998)...............................................................................    20

Notes to Consolidated Financial Statements................................................    21
</TABLE>

         With the exception of the aforementioned  information in Part II of the
Form 10-KSB,  our annual report to stockholders  for the year ended December 31,
1999 is not deemed filed as part of this annual report on Form 10-KSB.

Item 8.           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 in
accountants and/or reporting disagreements on any matter of accounting principle
or financial statement disclosure.
<PAGE>
                                    PART III

Item 9.           Directors and Executive Officers, Promoters and Control

                                       36

<PAGE>
                  Persons; Compliance with Section 16(a) of the Exchange Act
                  ----------------------------------------------------------

Directors
---------

         Information  concerning the directors of AMB Financial is  incorporated
herein by reference from the definitive  proxy  statement for the annual meeting
of  stockholders to be held on April 26, 2000, a copy of which will be filed not
later than 120 days after the close of fiscal year.

Executive Officers
------------------

         Information  concerning  the  executive  officers of AMB  Financial  is
incorporated  herein by reference  from the definitive  proxy  statement for the
annual  meeting of  stockholders  to be held on April 26,  2000, a copy of which
will be filed not later than 120 days after the close of fiscal year.

Compliance with Section 16(a)
-----------------------------

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  our
directors  and  executive  officers,  and  persons  who own  more  than 10% of a
registered  class  of AMB  Financial  equity  securities,  to file  with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity  securities of AMB Financial.  Officers,  directors and greater
than 10%  stockholders  are required by SEC regulation to furnish us with copies
of all Section 16(a) forms they file.

         To our  knowledge,  based  solely  on a review  of the  copies  of such
reports  furnished to the us and written  representations  that no other reports
were required, all Section 16(a) filing requirements applicable to its officers,
directors  and greater  than 10 percent  beneficial  owners were  complied  with
during the fiscal year ended December 31, 1999.

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

         Information concerning executive compensation is incorporated herein by
reference  from our  definitive  proxy  statement for the 2000 annual meeting of
stockholders,  a copy of which  will be filed not later  than 120 days after the
close of the fiscal year.


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

<TABLE>
<CAPTION>

                                                                        Shares
                                                                    Beneficially
                                                                       Owned at               Percent
           Beneficial Owner                                         March 15, 2000            of Class
           ----------------                                         --------------            --------
<S>                                                                    <C>                     <C>
AMB Financial Corp. Employee Stock Ownership Plan                      91,013(1)               14.01%
8230 Hohman Avenue
Munster, Indiana
Clement B. Knapp, Jr.                                                  61,060(2)                 9.09
Ronald W. Borto                                                        26,705(3)                 4.07
Donald L. Harle                                                        15,120(3)                 2.30
John C. McLaughlin                                                      5,620(3)                 0.86
John G. Pastrick                                                        7,820(3)                 1.19
Robert E. Tolley                                                       11,020(3)                 1.68
Directors, director emeritus and executive officers,                  196,753(4)                27.72
  as a group (12 persons)


</TABLE>
-------------
(1)            The amount reported  represents  shares held by the ESOP,  32,956
               shares of which have been allocated to accounts of  participants.
               First Bankers  Trust,  the trustee of the ESOP,  may be deemed to
               beneficially  own the shares held by the ESOP which have not been
               allocated to accounts of  participants.  Participants in the ESOP
               are  entitled to instruct  the trustee as to the voting of shares
               allocated to their  accounts under the ESOP.  Unallocated  shares
               held in the ESOP's suspense account or allocated shares for which
               no voting  instructions  are received are voted by the trustee in
               the same proportion as allocated shares voted by participants.
(2)            Includes 6,921 shares allocated under the ESOP, vested options to
               purchase  16,862  shares  pursuant to a stock option plan,  4,496
               unvested shares under a recognition and retention plan and 14,536
               beneficially  owned by Mrs. Knapp.  Excludes  unvested options to
               purchase 11,241 shares pursuant to a stock option plan.
(3)            Includes  vested  options to  purchase  3,372  shares  which each
               director  has the right to acquire  pursuant to the stock  option
               plan and 900 unvested shares which each director has the right to
               acquire pursuant to the recognition and retention plan.  Excludes
               unvested options to purchase 2,248 shares.
(4)            Includes  shares  held  directly,  as  well  as  shares  held  in
               retirement  accounts,  shares  allocated to the ESOP  accounts of
               certain  of the named  persons,  vested  stock  options,  held by
               certain members of the named  individuals'  families,  or held by
               trusts of which the named  individual is a trustee or substantial
               beneficiary,  with respect to which the named  individuals may be
               deemed  to  have  sole  voting  and  investment  power.  Excludes
               unvested options under the stock option plan.

<PAGE>

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

         Information   concerning  certain  relationships  and  transactions  is
incorporated  herein by reference  from our definitive  proxy  statement for the
2000  annual  meeting of  stockholders,  a copy of which will be filed not later
than 120 days after the close of the fiscal year.

                                       37
<PAGE>
                                     PART IV

Item 13.          Exhibits and Reports on 8-K
--------          ---------------------------

         (a)      Exhibits:

<TABLE>
<CAPTION>
                                                                                              Reference to
                                                                                              Prior Filing
      Regulation                                                                               or Exhibit
     S-K Exhibit                                                                             Number Attached
        Number                                     Document                                      Hereto
------------------------------------------------------------------------------------------------------------
<S>       <C>         <C>                                                                       <C>
          2           Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation            None
                      or Succession.....................................................
          3           Articles of Incorporation and Bylaws..............................            *
          4           Instruments defining the rights of security holders,
                      including indentures:
                       Common Stock Certificate.........................................            *
          9           Voting Trust Agreement............................................          None
          10          Material contracts:
                      1996 Stock Option and Incentive Plan..............................           ***
                      Recognition and Retention Plan....................................           ***
                      Employee Stock Ownership Plan.....................................            *
                      Employee Severance Compensation Plan..............................            *
                      Employment Agreements.............................................           **
                      Second Executive Deferred Compensation Plan.......................          ****
                      Trust Agreement for the Compensation Agreement....................          ****
          11          Statement re computation of per share earnings....................          *****
          13          Annual Report to Security Holders for the last fiscal year, Form
                      10-Q or 10QSB or quarterly report to security holders.............           13
          16          Letter on change in certifying accountant.........................            *
          18          Letter on Change in Accounting Principles.........................          None
          21          Subsidiaries of Registrant........................................           21
          22          Published Report Regarding Matters Submitted to Vote..............          None
          23          Consent of Experts and Counsel....................................           23
          24          Power of Attorney.................................................      Not required
          27          Financial Data Schedule...........................................           27
          99          Additional Exhibits...............................................          None
</TABLE>
--------------------

*        Filed on December 29, 1995 as exhibits to the Registrant's Registration
         Statement  No.  33-80991  on Form  S-1.  All of such  previously  filed
         documents  are hereby  incorporated  herein by reference in  accordance
         with Item 601 of Regulation S-B.
**       Filed  on  December  29,  1995  as  Exhibits   10.2  and  10.3  to  the
         Registrant's  Registration  Statement No.  33-80991 on Form S-1. All of
         such previously filed documents are hereby incorporated by reference in
         accordance with Item 601 of Regulation S-B.
***      Filed on September  12, 1996,  under  Schedule  14A, as  appendices  to
         definitive proxy materials.  All of such previously filed documents are
         hereby  incorporated herein by reference in accordance with Item 601 of
         Regulation S-B.
<PAGE>

****     Filed on March 31, 1999, as exhibits to the Registrant's  annual report
         on Form  10-KSB.  All of such  previously  filed  documents  are hereby
         incorporated  herein  by  reference  in  accordance  with  Item  601 of
         Regulation S-B.
*****    See Note A of the Notes to the Consolidated  Financial Statement in the
         annual report to the Stockholder's attached hereto as Exhibit 13.

         (b)      Reports on Form 8-K:

         No reports on Form 8-K have been filed  during the  three-month  period
ended December 31, 1999.

                                       38


<PAGE>

                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
Registrant  caused  this  Report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                          AMB FINANCIAL CORPORATION

Date:  March 30, 2000     By:  /s/ Clement B. Knapp, Jr.
                               -------------------------
                               Clement B. Knapp, Jr., Chairman of the Board
                               President 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.
<TABLE>
<CAPTION>
<S>     <C>                                                <C>     <C>

By:      /s/ CLEMENT B. KNAPP, JR.                         By:      /s/ DANIEL T. POLUDNIAK
         ------------------------                                   -----------------------
         Clement B. Knapp, Jr., Chairman of the                     Daniel T. Poludniak, Vice President,
         Board, President and Chief Executive Officer                 Treasurer and Chief Financial Officer
           (Principal Executive and Operating                         (Principal Financial and Accounting
           Officer)                                                   Officer)

Date:    March 30, 2000                                    Date:    March 30, 2000
         --------------                                             --------------


By:      /s/ DONALD L. HARLE                               By:      /s/ RONALD W. BORTO
         -------------------                                        -------------------
         Donald L. Harle, Director                                  Ronald W. Borto, Director

Date:    March 30, 2000                                    Date:    March 30, 2000
         --------------                                             --------------


By:      /s/ JOHN G. PASTRICK                              By:      /s/ JOHN C. McLAUGHLIN
         --------------------                                       ----------------------
         John G. Pastrick, Director                                 John C. McLaughlin, Director

Date:    March 30, 2000                                    Date:    March 30, 2000
         --------------                                             --------------


                                                           By:      /s/ ROBERT E. TOLLEY
                                                                    --------------------
                                                                    Robert E. Tolley, Director

                                                           Date:    March 30, 2000
                                                                    --------------
</TABLE>
<PAGE>

                                  Exhibit Index




     Exhibit No.                        Document
     -----------         -------------------------------------------------------

         11              Statement  Regarding  Computation of Per Share Earnings
                         (included   under  Note  A  of  Notes  to  Consolidated
                         Financial   Statements   in  the   Annual   Report   to
                         Stockholders' attached hereto as Exhibit 13.

         13              Annual Report

         21              Subsidiaries of the Registrant

         23              Consent of Cobitz, VandenBerg & Fennessy

         27              Financial Data Schedule