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                                Table of Contents

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President's Message ..............................................  2

Selected Consolidated Financial Information ......................  3

Management's Discussion and Analysis of Financial
   Condition and Results of Operations ...........................  5

Independent Auditors' Report ..................................... 16

Consolidated Financial Statements ................................ 17

Stockholder Information .......................................... 45

Corporate Information............................................. 46`

1

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President's Message
To Our Stockholders

On behalf of the Board of
Directors, Officers and Employees of AMB Financial Corp. (the Company), and its
wholly owned subsidiary, American Savings, FSB (the Bank), I am pleased to
present our 2000 Annual Report.

As we enter our 91st year
of servicing the financial needs of the people and businesses in Northwest
Indiana we are pleased with our progress in 2000. Our primary goals are to
remain an independent and viable community bank and to take the necessary steps
to increase the value of your investment in our company.

In the last year our total
assets grew 6.2% or $7.9 Million to $135.7 Million. Total loans increased 6.2%
or $6.6 Million and our liabilities increased 6.9% or $8.0 Million. The Company
had net income of $825,000, representing $.93 per diluted share. The 2000 return
on average assets was .63%, the return on average equity 7.47%.

During 2000 the Company
repurchased 115,000 shares. As of December 31, 2000 the number of outstanding
shares was 939,475, adjusted for the three for two stock split on June 14, 2000.
Book value per share, as of December 31, 2000 was $12.24.

During the year the Bank
purchased the Dyer office building. During the second half of 2001, the Bank
plans to expand its office space and consolidate the loan department in part of
the available space at this location. We hope to provide increased efficiency
with this move.

Our strategy for the year
2001 continues to emphasize strong growth and aggressive stock repurchases. I
believe that this strategy is in the best interest of both the Bank and the
stockholders.

Our financial performance
and our stock performance are available on our web site at
http://www.ambfinancial.com. I urge you to visit our site to view this
information and utilize its other services.

The entire staff of the
Bank and the Company appreciates your commitment and support, and we look
forward to a long and profitable relationship.

Sincerely,

|/s/  
Clement B. Knapp, Jr.
       Clement B. Knapp, Jr.
       President
|-------------------------------------------------------------------------

2

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`SELECTED CONSOLIDATED FINANCIAL INFORMATION
                  (Dollars in thousands except per share data)

                                                                          For the Year  Ended December 31
                                                        ---------------------------------------------------------------
                                                           2000         1999          1998          1997          1996
                                                        ---------------------------------------------------------------
SELECTED OPERATING DATA:

Total interest income                                    $ 9,209       $ 8,252       $ 7,969       $ 7,120      $ 5,957
Total interest expense                                     5,859         4,904         4,570         3,793        2,955
                                                         -------       -------       -------       -------      -------
     Net interest income                                   3,350         3,348         3,399         3,327        3,002
Provision for loan losses                                    124           119           102            74            0
                                                         -------       -------       -------       -------      -------
Net interest income after provision for loan losses        3,226         3,229         3,297         3,253        3,002
                                                         -------       -------       -------       -------      -------

Non-interest income:
Fees and service charges                                     468           450           450           349          263
Commission income                                             59            46            55            78           57
Gain (loss) on sale of securities                            (64)          116            68            58           53
Unrealized gain (loss) on trading securities                 122          (124)         (771)          561           46
Gain on sale of deposits                                      --            --            27            --           --
Gain (loss) on sale of real estate owned                      --            10            (2)            5           28
Loss from investment in joint venture                        (93)          (54)          (11)           --           --
Other                                                        227           168           123            81           64
                                                         -------       -------       -------       -------      -------
       Total non-interest income                             719           612           (61)        1,132          511
                                                         -------       -------       -------       -------      -------

Non-interest expense:
Compensation and benefits                                   1411          1345          1377         1,294        1,129
Office occupancy and equipment expenses                      366           311           309           353          334
Data processing                                              425           398           368           336          295
Federal deposit insurance premiums                            18            47            45            41          130
SAIF special assessment                                       --            --            --            --          389
Professional fees                                            173           135           167           131          138
Other                                                        565           580           613           531          442
                                                         -------       -------       -------       -------      -------
      Total non-interest expense                           2,958         2,816         2,879         2,686        2,857
                                                         -------       -------       -------       -------      -------

Income before income taxes                                   987         1,025           357         1,698          656
Income tax provision                                         162           328           152           675          214
                                                         -------       -------       -------       -------      -------
Net income                                                   825           697           205         1,023          442
                                                         -------       -------       -------       -------      -------

Basic earnings per share                                 $  0.93       $  0.64       $  0.16       $  0.75      $  0.29
Diluted earnings per share                               $  0.93       $  0.64       $  0.16       $  0.73      $  0.29`

*-All
earnings per share data has been adjusted to reflect the 3 for 2 stock split in
2000.

3

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`SELECTED CONSOLIDATED FINANCIAL INFORMATION
                             (Dollars in thousands)


                                                                        At December 31,
                                                      --------------------------------------------------------------
                                                           2000         1999          1998         1997        1996
                                                      --------------------------------------------------------------
SELECTED FINANCIAL DATA:

Total assets                                           $135,699     $127,786      $116,913      $99,796     $86,102
Loans receivable, net                                   112,482      105,910        89,762       77,093      67,366
Investment securities and interest bearing deposits       6,637        8,013        13,359       12,115      10,578
Mortgage-backed securities                                3,424        1,868         2,649        3,494       4,019
Trading securities                                          936        1,909         2,394        2,413         539
Deposits                                                 89,712       88,945        78,997       71,700      60,411
Borrowed funds                                           32,368       26,009        23,074       12,000       9,500
Stockholder's equity                                     11,499       11,539        13,413       14,770      15,170



                                                                         At or For the Year Ended December 31,
                                                     -----------------------------------------------------------------------------
                                                           2000           1999            1998            1997            1996
                                                     -----------------------------------------------------------------------------

SELECTED FINANCIAL RATIOS AND OTHER DATA:
-----------------------------------------

Return on average assets (1)                               0.63 %         0.58 %          0.18 %          1.07 %          0.84 %
Return on average stockholders' equity (1)                 7.47           5.68            1.46            7.06            5.02
Average stockholders' equity to
   average assets                                          8.44          10.14           12.61           15.10           16.78
Stockholders' equity to total assets                       8.47           9.03           11.47           14.80           17.62
Interest rate spread during period                         2.55           2.70            2.86            3.10            3.37
Net interest margin                                        2.75           2.98            3.29            3.67            3.97
Operating expenses to average assets (1)                   2.26           2.33            2.59            2.80            3.07
Efficiency ratio (2)                                      72.61          71.11           87.41           60.28           70.23
Non-performing assets to total assets                      0.69           0.73            0.43            0.34            0.35
Allowance for loan losses to non-
   performing loans                                       58.76          59.32          104.87          133.12          116.27
Allowance for loan losses to loans
   receivable, net                                         0.49           0.56            0.56            0.53            0.53
Ratio of  average interest-earning
assets to average interest-bearing liabilities            1.04x          1.06x           1.10x           1.14x           1.16x
Number of full-service offices                                3              3               3               4               4


(1)  Excludes the effect of the special SAIF charge in 1996.
(2)  Non-interest expense, excluding SAIF special assesment, divided by
     net-interest income plus other income except for gains and losses on
     investments available for sale.`

4

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



General
AMB Financial Corp. (the Company) is the thrift holding company for
American Savings FSB, (the Bank), a federally chartered savings
bank. Collectively, the Holding Company and the Bank are referred to herein as
the Company. On March 29, 1996, the Bank converted from a mutual
savings bank to a stock savings bank (the Conversion). Concurrent
with the Conversion, the Company sold 1,124,125 shares of its common stock in a
subscription and community offering at a price of $10.00 per share.

The
Companys primary market area consists of the northwest portion of Lake
County, Indiana. Business is conducted from its main office at 8230 Hohman
Avenue, Munster, Indiana, as well as two full-service banking offices located in
Dyer, and Hammond, Indiana. The Bank is a community-oriented savings institution
whose business primarily consists of accepting deposits from customers within
its market area and investing those funds in mortgage loans secured by
one-to-four-family residences. To a lesser extent, funds are invested in
commercial real estate, consumer, commercial business, construction,
multi-family and land loans. The Company also invests in mortgage-backed and
other investment securities.

The
Companys results of operations are primarily dependent on net interest
income, which is the difference between the interest income on its
interest-earning assets, such as loans and securities, and the interest expense
on its interest-bearing liabilities, such as deposits and borrowings and to a
lesser degree, non-interest income and non-interest expense. Net interest income
depends upon the volume of interest-earning assets and interest-bearing
liabilities and the interest rate earned or paid on them, respectively.
Non-interest income primarily consists of service charges, fees on deposit and
loan products and, on occasion, securities gains or losses. The Companys
non-interest expenses primarily consist of employee compensation and benefits,
occupancy and equipment expenses, data processing service fees, federal deposit
insurance premiums, and other operating expenses.

The
Companys results of operations are also affected by general economic
conditions, the monetary and fiscal policies of Federal agencies and the
policies of agencies that regulate financial institutions. Future changes in
applicable laws, regulations or government policies may have a material impact
on the Company. Lending activities are influenced by the demand for real estate
loans and other types of loans, competition among lenders, the level of interest
rates and the availability of funds. Deposit flows and costs of funds are
influenced by prevailing market interest rates (including rates on non-deposit
investment alternatives), account maturities, and the levels of personal income
and savings in the Companys market area.

Operating
Strategy. The Companys basic mission is to maintain its focus as
independent, community-oriented financial institution-serving customers in its
primary market area. The Board of Directors has sought to accomplish this
mission through an operating strategy designed to maintain capital in excess of
regulatory requirements and manage, to the extent practical, the Companys
loan delinquencies and vulnerability to changes in interest rates. The key
components of the Companys operating strategy are to: (i) focus its
lending operations on the origination of loans secured by one-to-four-family
residential real estate; (ii) supplement its one-to-four-family residential
lending activities with commercial real estate, consumer, commercial business,
construction, multi-family and land loans; (iii) augment its lending activities
with investments in purchased loans, mortgage-backed and other securities; (iv)
emphasize adjustable rate and/or short and medium duration assets when market
conditions permit (v) build and maintain its regular savings, transaction, money
market and club accounts; and (vi) increase, at a managed pace, to the extent
practicable, the volume of the Companys assets and liabilities.

5

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Management
and the Board of Directors of the Company have sought to enhance shareholder
value by using excess capital to repurchase outstanding shares when business and
market conditions warrant.

Forward-Looking
Statements. When used throughout this document, the words or phrases will
likely result, are expected to, will continue,
is anticipated, estimated, projected, or
similar expressions are intended to identify forward looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. Such statements are subject to certain risks and uncertainties
including changes in economic conditions in the Banks market area, changes
in policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Banks market area and competition, that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. Factors listed above could affect the Companys
financial performance and could cause actual results for future periods to
differ materially from any statements expressed with respect to future periods.

The
Company does not undertake, and specifically disclaims any obligation to
publicly revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.

Analysis
of Financial Condition. Total assets of the Company increased $7.9 million, or
6.2% to $135.7 millions at December 31, 2000, compared to $127.8 million at
December 31, 1999, due primarily to an increase in loans receivable funded with
borrowed money.

Cash
and short-term investments decreased by $843,000 to $4.6 million at December 31,
2000 from a combined $5.5 million at December 31, 1999. The Company utilized
$1.0 million to purchase 115,500 shares of common stock into treasury during the
year.

Investment
securities available for sale decreased by $1.5 million to $3.9 million at
December 31, 2000. The decrease is primarily due to the sale of $1.5 million of
short-term U.S. Treasury notes which were reinvested in mortgage-backed
securities. Gross unrealized gains in the available for sale portfolio were
$8,000 at December 31, 2000 compared to gross unrealized losses of $120,000 at
December 31, 1999.

Mortgage-backed
securities available for sale increased by $1.5 million to $3.4 million at
December 31, 2000. The increase is primarily due to purchases of $998,000 of
fixed rate GNMA securities and $1.2 million of fixed rate FHLMC Gold securities
offset by prepayments and amortization of $360,000 and sales of $362,000.

Trading
securities decreased by $973,000 to $936,000 at December 31, 2000, as a result
of the Company reducing its exposure to community bank and thrift stocks through
the sale of a thrift common stock mutual fund investment in the amount of
$885,000 and other smaller stock sales.

Loans
receivable increased to $112.5 million at December 31, 2000, a $6.6 million or
6.2% increase from December 31, 1999, as new originations of both residential
and non-residential loans of $22.7 million and loan purchases of $6.8 million
exceeded loan repayments of $22.8 million. The Company continues to remain
focused on an aggressive lending effort, as evidenced by the better than 15%
average annual increase over the last five years.

Liabilities
increased from $116.2 million at December 31, 1999, to $124.2 million at
December 31, 2000, an increase of $8.0 million, or 6.9%. The primary reason for
the increase in total liabilities was an increase in borrowed money. Borrowed
money, which consists of FHLB of Indianapolis advances, increased during 2000 by
$6.4 million to $31.1 million at December 31, 2000. Rates on advances drawn
during the year ranged from 4.98% to 7.23% and were utilized to fund loan
originations and loan purchases. The weighted average term to maturity of the
Companys FHLB advances was approximately 4.0 years at December 31, 2000.
Deposits increased modestly during the year by $767,000 to $89.7 million at
December 31, 2000. The increase is primarily due to interest credited to
deposits of $3.5 million offset by deposit outflows of $2.7 million.

6

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Total
stockholders equity decreased by $40,000 to $11.5 million at December 31,
2000 from the balance at December 31, 1999. This decrease was due to the
repurchase of common stock in the amount of $1.05 million and the payment of
dividends on common stock of $202,000, which was offset by net income of
$825,000, an increase of $148,000 in the net unrealized gain on securities
available for sale and normal amortization of RRP and ESOP benefits of $235,000.
The Company is no longer subject to regulatory limitations on stock repurchases
and intends to continue modest repurchases of stock depending on future market
conditions, investment opportunities and capital levels.

Analysis
of Net Interest Income. Net interest income represents the difference between
interest earned on interest-earning assets and interest paid on interest-bearing
liabilities. Net interest income is affected by the relative amounts of
interest-earning assets and interest-bearing liabilities, and the interest rates
earned or paid on them.

The
following table presents, for the periods indicated, the total dollar amounts of
interest income from average interest-earning assets and the resultant yields,
as well as the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates. No tax equivalent adjustments were made.
All average balances are monthly average balances and include non-accruing
loans. Management does not believe that the use of month-end balances instead of
daily average balances has caused any material differences in the information
presented.

ANALYSIS OF NET INTEREST INCOME TABLE

`For the Year Ended December 31
                                                                               (Dollars in thousands)
                                          ------------------------------------------------------------------------------------------------------------
                                                            2000                           1999                            1998
                                          ------------------------------------------------------------------------------------------------------------
                                          Average     Interest                  Average      Interest                Average      Interest
                                        Outstanding    Earned/     Yield/     Outstanding     Earned/   Yield/     Outstanding     Earned/     Yield/
                                          Balance       Paid        Rate        Balance        Paid      Rate        Balance        Paid        Rate
Interest-Earning Assets

   Loans receivable (1)                    109,132       8,484     7.77%        96,000         7,420     7.73%        86,033         7,027      8.17%
   Mortgage-backed securities                2,932         209     7.13%         2,277           153     6.72%         3,033           204      6.73%
   Investment securities                     6,077         271     4.46%         8,335           371     4.45%         9,198           444      4.83%
   Interest-bearing deposits                 2,164         130     6.01%         4,226           200     4.73%         4,072           213      5.23%
   FHLB stock                                1,394         115     8.25%         1,347           108     8.02%         1,013            81      8.00%
                                         ------------------------------------------------------------------------------------------------------------
  Total interest-earning assets          $ 121,699   $   9,209     7.57%     $ 112,185     $   8,252     7.36%     $ 103,349     $   7,969      7.71%
                                         ------------------------------------------------------------------------------------------------------------
Interest-Bearing Liabilities
  Passbook accounts                         14,745         402     2.73%        15,361           420     2.73%        15,841           453      2.86%
  Demand and NOW accounts                   11,151         217     1.95%        10,853           226     2.08%        10,028           221      2.20%
  Certificate accounts                      66,504       3,757     5.65%        56,075         2,929     5.22%        49,707         2,800      5.63%
  Borrowings                                24,398       1,483     6.08%        23,051         1,329     5.77%        18,663         1,096      5.87%
                                         ------------------------------------------------------------------------------------------------------------
 Total interest-bearing liabilities      $ 116,798   $   5,859     5.02%     $ 105,340     $   4,904     4.66%     $  94,239     $   4,570      4.85%
                                         -------------------------------------------------------------------------------------------------------------
Net interest income                                     $3,350                                $3,348                                $3,399
                                                     =========                             =========                             =========
Net interest rate spread                                           2.55%                                 2.70%                                  2.86%
                                                                  ======                                 ====                                 ======
Net earning assets                          $4,901                              $6,845                                $9,110
                                         =========                           =========                             =========
Net yield on average
  interest-earning assets                                          2.75%                                 2.98%                                  3.29%
                                                                  =====                                  ====                                 ======
Average interest-earning assets to
  average interest-bearing liabilities                    1.04x                                 1.06x                                1.10x
                                                    ==========                             =========                             =========


(1)  Calculated net of deferred loan fees, loan premiums and discounts, loans in
     process and allowance for losses.`

7

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The table below presents
the extent to which changes in interest rates and changes in the volume of
interest-earning assets and interest bearing liabilities have affected the
Companys interest income and interest expense during the period indicated.
Information is provided in each category with respect to (i) changes
attributable to changes in rate (changes in rate multiplied by prior volume),
(ii) changes attributable to changes in volume (changes in volume multiplied by
prior rate), (iii) changes attributable to the combined impact of volume and
rate (changes in the rate multiplied by the changes in the volume), and (iv) the
net change. The changes attributable to the combined impact of volume and rate
have been allocated proportionately to the changes due to volume and the changes
due to rate.

`For the Year Ended December 31,
                                                           -------------------------------

                                         2000 Compared to 1999                      1999 Compared to 1998
                                        Increase (Decrease) Due to                  Increase (Decrease) Due to
                               -----------------------------------                  -----------------------------------
                                                            Rate/                                                           Rate/
                                   Rate       Volume        Volume       Net          Rate         Volume       Volume       Net
                               ------------------------------------------------     ----------------------------------------------
                                                                      (Dollars in thousands)
Interest-earning assets:
Loans receivable, net               43        1,015            6        1,064         (377)         814          (44)         393
Mortgage-backed
   securities                        9           44            3           56           --          (51)          --          (51)
Investment securities                1         (101)          --         (100)         (34)         (42)           3          (73)
Interest-bearing deposit            54          (98)         (26)         (70)         (20)           8           (1)         (13)
FHLB Stock                           3            4           --            7           --           27           --           27
                                ------       ------       ------       ------       ------       ------       ------       ------
      Totals                       110          864          (17)         957         (431)         756          (42)         283
                                ------       ------       ------       ------       ------       ------       ------       ------

Interest-bearing liabilities:
Passbook accounts                   (1)         (17)          --          (18)         (20)         (14)           1          (33)
Demand and Now
   accounts                        (15)           6           --           (9)         (12)          18           (1)           5
Certificate accounts               239          545           44          828         (204)         359          (26)         129
Borrowed funds                      72           78            4          154          (20)         258           (5)         233
                                ------       ------       ------       ------       ------       ------       ------       ------
     Totals                        295          612           48          955         (256)         621          (31)         334
                                ------       ------       ------       ------       ------       ------       ------       ------

Net change in net
   interest income                                                          2                                                 (51)
                                                                       ------                                              ------`

Comparison of Operating
Results for the Years Ended December 31, 2000 and 1999.

Net Income. The
Companys net income for the year ended December 31, 2000 was $825,000, an
increase of $128,000 compared to the year ended December 31, 1999. This increase
was primarily due to an increase in non-interest income of $107,000 and a
reduction in income tax expense of $166,000 offset by an increase in
non-interest expense of $142,000.

8

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Interest Income. Total
interest income increased $957,000 or 11.6% for the year ended December 31, 2000
compared to the prior year. This increase was due to a combination of higher
rates and higher average volume of interest earning assets. The higher volume is
primarily due to loans receivable as a result of the Companys continued
aggressive lending efforts. Interest income from loans increased $1.1 million
almost entirely as a result of the increased volume. The higher rates were
primarily due to higher short term interest rates throughout the year which
impacted to some degree all interest earning assets.

Interest Expense. Total
interest expense increased $955,000 or 19.5% for the year ended December 31,
2000 compared to the prior year. This increase was due to a combination of
higher rates and higher average volume of interest bearing liabilities. Interest
on deposits increased by $801,000, or 22.4% for the year ended December 31,
2000, due to a $10.1 million increase in the average balance of deposit
accounts, primarily certificates of deposits, as well as a 40 basis point
increase in the average cost of deposits. Interest on borrowings increased
$154,000, or 11.6% over the prior year period due to average higher volumes of
$1.3 million and a 35 basis point increase in the average cost of borrowings.

Provision for Loan Losses.
The determination of the allowance for loan losses involves material estimates
that are susceptible to significant change in the near term. The allowance for
loan losses is maintained at a level deemed adequate to provide for losses
through charges to operating expense. The allowance is based upon past loss
experience and other factors, which, in managements judgment, deserve
current recognition in estimating losses. Such other factors considered by
management include growth and composition of the loan portfolio, the
relationship of the allowance for losses to outstanding loans, and economic
conditions.

A provision for loan losses
of $124,000 was recorded during the year ended December 31, 2000 as compared to
$119,000 in the prior year. The increase in the provision for loan losses was
due primarily to the continuing growth in loans receivable. Management believes
that the total allowance of $701,000 on total loans of $113.8 million at
December 31, 2000, is adequate given the area economic conditions, the level of
impaired and non-performing loans, and the composition of the loan portfolio.
The allowance is maintained at a level which represents managements best
estimate of losses in the portfolio and such losses are both probable and
reasonably estimatable. At December 31, 2000, the Company was aware of no
regulatory directives or suggestions that the Company make additional provisions
for losses on loans.

Non-performing loans at
December 31, 2000 increased to $1.1 million, or .97% of net loans receivable,
compared to $929,000 of .88% of net loans receivable as of December 31, 1999.
The increase in non-performing loans from December 31, 1999 relates to
additional delinquent one-to-four family mortgage loans secured by real estate.
Included in non-performing loans at December 31, 2000, is a $556,000
non-residential participation construction loan that is currently in the
foreclosure process. At December 31, 2000, management had authorized the
establishment of a specific valuation reserve against this loan in the amount of
$150,000. On February 23, 2001, the Bank entered into an agreement where, for
consideration in the amount of $530,000, the Bank will assign, transfer and set
over to the lead lender all of its right title and interest in the loan
participation. The remaining loan balance at this date of approximately $28,000
has been charged off against the banks general allowance for loan losses.
Although the Bank maintains its allowance for loan losses at a level that it
considers to be adequate, there can be no assurance that future losses will not
exceed estimated amounts or that additional provisions for loan losses will not
be required in future periods.

Non-Interest Income. The
Companys non-interest income increased by $107,000 to $719,000 for the
year ended December 31, 2000 as compared to $612,000 recorded in 1999. The
increase in non-interest income is primarily attributable to income from
unrealized gains on trading securities. The Companys trading portfolio,
which is comprised of holdings in community bank and thrift stocks, performed
well during the year. For the year ended December 31, 2000, the Company recorded
unrealized gains in the trading portfolio of $122,000 as compared to recording a
net loss in the prior year of $124,000. In addition, the Company recorded higher
deposit related fee income of $69,000 due in part to increased volume of
transactions and increased ATM fee charges, increased commission income of

9

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$14,000 due to increased
sales of annuity products and $59,000 in other income, primarily from increased
cash surrender value on life insurance products. Non-interest income declined in
part by $51,000 from decreased loan fees and service charges, due to a decline
in the volume of mortgage loan originations, and an additional loss of $40,000
related to an investment in a low-income housing joint venture. As a result of
this investment, the Company recorded an additional offsetting $85,000 income
tax credit during the year which resulted in the reduction of the Companys
effective income tax rate.

Non-Interest Expense. The
Companys non-interest expense increased $142,000 to $3.0 million for the
year ended December 31, 2000 $2.8 million in the prior year. The increase was
primarily attributable to an increase in compensation and benefits of $66,000
due to new hirings and normal salary and benefit increases, an increase of
$55,000 in occupancy and equipment expenses related to increased depreciation
and maintenance charges, increased data processing costs of $27,000 due to an
increase in volume, fees and added services and an increase in professional fees
of $38,000. These increases were offset by a decline in advertising costs of
$45,000, due to fewer deposit promotions and in FDIC insurance premiums of
$29,000.

Income Taxes. Income tax
expense for the year ended December 31, 2000 decreased $166,000 to $162,000
compared to $328,000 for the 1999 year. This decrease was primarily attributable
to increased low-income housing tax credits of $85,000 discussed above as well
as current year tax benefit resulting from the Companys restructuring of
the ESOP program.

Comparison of Operating
Results for the Years Ended December 31, 1999 and 1998.

Net Income. The
Companys net income for the year ended December 31, 1999 was $697,000 as
compared to $205,000 for the same period in 1998, an increase of $492,000. The
Companys prior years period was affected by an unrealized loss on
trading securities of $771,000 as compared to the current years unrealized
loss on trading securities of $124,000.

Interest Income. Interest
income for the year ended December 31, 1999 increased $283,000 or 3.6%, as
compared to the prior year. The increase in interest income was the result of an
increase in average interest-earning assets of $8.8 million, partially offset by
a decrease in the average asset yield to 7.36% from 7.71%. Interest income on
loans increased $392,000 as a result of a $10.0 million increase in average
loans receivable, offset by a 44 basis point decrease in the average yield of
the loan portfolio. Interest income on both mortgage-backed and investment
securities declined as a result of decreases in the average balance of both
securities as well as declines in the average yield. The lack of additional
purchase activity in these types of investments is a result of the
Companys strategy and ability to originate and purchase loans for its own
investment portfolio.

Interest Expense. Interest
expense for the year ended December 31, 1999 increased $334,000, or 7.3% to $4.9
million as compared to $4.6 million in the prior year. Deposit interest
increased by $101,000, primarily as a result of the $6.7 million increase in the
average balance of deposit accounts offset by a 26 basis point decrease in the
average cost of deposits. The average certificate of deposit base increased by
$6.4 million in 1999 as the Bank offered special certificate promotions.
Interest expense on borrowed funds increased $233,000, to $1.3 million as the
average balance of borrowed funds increased $4.4 million to $23.1 million for
the year ended December 31, 1999. This increase was primarily due to funding
requirements for new mortgage loan originations and purchases.

Provision for Loan Losses.
The determination of the allowance for loan losses involves material estimates
that are susceptible to significant change in the near term. The allowance for
loan losses is maintained at a level deemed adequate to provide for losses
through charges to operating expense. The allowance is based upon past loss
experience and other factors, which, in managements judgment, deserve
current recognition in estimating losses. Such other factors considered by
management include growth and composition of the loan portfolio, the
relationship of the allowance for losses to outstanding loans, and economic
conditions.

10

---

A provision of $119,000 was
recorded during the year ended December 31, 1999 while a provision of $102,000
was recorded in the comparable 1998 period. The increase in the provision for
losses on loans was due to the continuing growth in the loan portfolio and is
based upon managements review of the loan portfolio by property type and
delinquency status. There were no significant individual loans, which
contributed to the increase in the allowance, and there were no regulatory
requests for additional provisions for loan losses during the years ended
December 31 1999 or 1998. Net charge offs for the year ended December 31, 1999
amounted to $35,000.

Non-performing assets
increased to $928,000 at December 31, 1999 from $506,000 at December 31, 1998.
The increase in non-performing loans from December 31, 1998 is attributable to a
$500,000 non-residential participation construction loan, which became
delinquent during the second quarter of 1999 and has since been foreclosed. The
Bank has established a $40,000 specific reserve against this loan and has
classified the balance as substandard. The Bank will continue to review its
allowance for loan losses and make future provisions as economic and regulatory
conditions dictate. Although the Bank maintains its allowance for loan losses at
a level that it considers to be adequate to provide for losses, there can be no
assurance that future losses will not exceed estimated amounts or that
additional provisions for loan losses will not be required in future periods.

Non-Interest Income. The
Companys non-interest income increased $672,000 for the year ended
December 31, 1999 compared with the previous year. The increase was directly
related to an increase in unrealized gains and losses on trading securities. For
the year ended December 31, 1999, the Company recorded an unrealized loss on
trading securities of $124,000 compared to an unrealized loss of $771,000
recorded in the prior year. The Companys trading portfolio, which consists
primarily of equity investments in community and regional financial
institutions, although at times appears to have stabilized, has yet to
experience any sustained turnaround from the devastating declines suffered
during the second half of 1998. Non-interest income, exclusive of unrealized
losses on trading securities, increased during the year 1999 by $25,000 to
$736,000 from $710,000 in the 1998 year. This increase resulted from an increase
of $48,000 in gains on the sale of trading securities and securities available
for sale, a $12,000 increase in gain on the sale of real estate owned, and
$36,000 in increased other operating income primarily from an increase in cash
surrender value from insurance policies. This increase was offset by an
additional $43,000 loss from investment in low-income housing joint venture, and
a $27,000 profit from the sale of the East Chicago deposit accounts in 1998,
which did not occur in 1999.

Non-Interest Expense. The
Companys non-interest expense decreased $63,000 to $2.8 million for the
year ended December 31, 1999 compared to $2.9 million for the previous year. The
decrease was primarily the result of decreased staffing costs of $32,000, due in
part to $44,000 of bonuses paid and expensed during the first quarter of 1998
that did not occur during 1999, a $29,000 loss on the disposition of the
Banks East Chicago facility in 1998, and a $51,000 decrease in other
non-interest expense, primarily in decreased professional service fees and
increased efficiencies in operations. This decrease was offset by an increase in
data processing costs of $29,000, due to increased transaction charges andY2K
expenditures, and increased advertising costs of $19,000 as a result of special
promotions of certificate and loan products, and PC banking services.

Provision for Income Taxes.
Income tax expense for the year ended December 31, 1999 increased $176,000 to
$328,000 compared to $152,000 for the 1998 year. Income taxes increased
primarily as a result of an increase in pre-tax income. The Companys
effective tax rate, however, did decline during the year ended December 31, 1999
to 32.0% from 42.6% in the prior year due to the recognition of $54,000 in low
income housing tax credits provided through an investment in a limited
partnership organized to build, own and operate a 56 unit low income apartment
complex.

11

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Qualitative and
Quantitative Disclosure of Market Risk

The principal objectives of
the Companys interest rate risk management activities are to: (i) define
an acceptable level of risk based on the Companys business focus,
operating environment, capital and liquidity requirements, and performance
objectives; (ii) quantify and monitor the amount of interest rate risk inherent
in the asset/liability structure; and (iii) modify the Companys
asset/liability structure, as necessary, to manage interest rate risk and net
interest margins in changing rate environments. Management seeks to manage the
ratio of interest rate sensitive assets to interest rate sensitive liabilities
within specified maturities or repricing periods. The Company does not currently
engage in the use of off-balance sheet derivative instruments to control
interest rate risk. Even though such activity may be permitted with the approval
of the Board of Directors, management does not intend to engage in such activity
in the immediate future.

Notwithstanding the
Companys interest rate risk management activities, the potential for
changing interest rates is an uncertainty that could have an adverse effect on
the earnings and net asset value of the Company. When interest-bearing
liabilities mature or reprice more quickly than interest-earning assets in a
given period, a significant increase in market interest rates could adversely
affect net interest income. Similarly, when interest-earning assets mature or
reprice more quickly than interest-bearing liabilities and net asset value,
falling interest rates could result in a decrease in net interest income and net
asset value. Finally, a flattening of the yield curve (i.e., a
narrowing of the spread between long- and short-term interest rates), could
adversely impact net interest income to the extent that the Companys
assets have a longer average term than its liabilities.

In managing the
Companys asset/liability position, the Board and management attempt to
manage the Companys interest rate risk while enhancing net interest
margins. However, the Board of Directors continues to believe that the increased
net interest income resulting from a mismatch in the maturity of the
Companys asset and liability portfolios can, during periods of declining
or stable interest rates and periods in which there is a substantial positive
difference between long- and short-term interest rates (i.e., a positively
sloped yield curve), can provide high enough returns to justify the
increased exposure to sudden and unexpected increases in interest rates. As a
result, the Companys results of operations and net portfolio values remain
significantly vulnerable to increases in interest rates and to fluctuations in
the difference between long- and short-term interest rates.

Consistent with its
asset/liability management philosophy, the Company has taken several steps to
manage its interest rate risk. First, the Company maintains a portfolio of
interest rate sensitive adjustable-rate loans. At December 31, 2000,
adjustable-rate loans represented $42.1 million, or 37.0% of the total loan
portfolio. Second, significant portions of the Companys other debt
securities (primarily U.S. Government and agency securities) are
intermediate-term instruments with $3.8 million of such securities contractually
maturing within five years of December 31, 2000. Third, the Company has a
substantial amount of regular savings, transaction, money market and club
accounts, which may be less sensitive to changes in interest rates than
certificate accounts. At December 31, 2000, the Company had $14.1 million of
regular savings accounts, $2.9 million of money market accounts and $8.0 million
of NOW, checking and club accounts. Overall, these accounts comprised 27.8% of
the Companys total deposit base. Fourth, most of the mortgage-backed
securities purchased by the Company in recent years had adjustable interest
rates and/or short or intermediate effective terms to maturity,

One approach used by
management to qualify interest rate risk is the net portfolio value
(NPV) analysis. NPV is generally considered to be the present value
of the difference between expected incoming cash flows on interest-earning and
other assets and expected outgoing cash flows on interest-bearing and other

12

---

liabilities. This approach
attempts to quantify interest rate risk as the change in the NPV, which would
result from a theoretical 200 basis point (1 basis point equals .01%) change in
market interest rates.

Presented below, as of
December 31, 2000, is an analysis of the Banks interest rate risk as
measured by changes in NPV for instantaneous and sustained parallel shifts of
100 basis points in market interest rates. As illustrated in the table, the
Companys NPV is more sensitive to rising rates than declining rates. From
an overall perspective, such difference in sensitivity occurs principally
because, as rates rise, borrowers do not prepay fixed rate loans as quickly as
they do when interest rates are declining. Also, the interest the Company would
pay on its deposits in the event of a rate increase would increase more rapidly
than the yield on its assets because the Companys deposits generally have
shorter periods to repricing.

`INTEREST RATE SENSITIVITY OF NET PORTFOLIO VALUE

         Assumed                                                      NPV as % of Present
Change in Interest Rates             Net Portfolio Value                Value of Assets
------------------------   --------------------------------------   -----------------------
     (Basis Points)        $ Amount       $ Change       % Change    % Ratio      Bp Change
     --------------        --------       --------       --------    -------      ---------


          +300                7,413         -2,530           -25       5.82           -159
          +200                8,395         -1,548           -16       6.47            -94
          +100                9,282           -661            -7       7.03            -38
                              9,943                                    7.41
          -100               10,013             70             1       7.37             -4
          -200                9,760           -183            -2       7.10            -31
          -300                9,649           -294            -3       6.92            -49`

Certain assumptions
utilized by the OTS in assessing the interest rate risk of thrift institutions
were employed in preparing the preceding table. These assumptions relate to
interest rates, loan prepayment rates, deposit decay rates, and the market
values of certain assets under the various interests rate scenarios. It
was also assumed that delinquency rates would not change as a result of changes
in interest rates although there can be no assurance that this will be the case.
Even if interest rates change in the designated amounts, there can be no
assurance that the Banks assets and liabilities would perform as set forth
above. In addition, a change in U.S. Treasury rates in the designated amounts
accompanied by a change in the shape of the Treasury yield curve would cause
significantly different changes to the NPV than indicated above.

Other types of market risk,
such as foreign currency exchange risk and commodity price risk, do not arise in
the normal course of the Companys business activities.

Liquidity and Capital
Resources.The Companys primary sources of funds are deposits, principal
and interest payments on loans and securities and, to a lesser extent,
borrowings and proceeds from the sale of loans and securities. While maturities
and scheduled amortization of loans and securities provide an indication of the
timing of the receipt of funds, other sources of funds such as loan prepayments
and deposit inflows are less predictable due to the effects of changes in
interest rates, economic conditions and competition.

The primary investing
activity of the Company is the origination and purchase of real estate and other
loans. During the years ended December 31, 2000, and 1999, the Companys
disbursements for loan originations totaled $22.7 million, and

13

---

$24.6 million respectively
and loan purchases totaled $6.8 million and $24.0 million respectively.

For the years ended
December 31, 2000, and 1999, the Company experienced net increases in deposits
(including the effect of interest credited) of $767,000 and $9.9 million
respectively. Proceeds from FHLB advances were $20.6 million in fiscal 2000, and
$9.0 million in fiscal 1999. FHLB advances of $14.2 million and $6.0 million
were repaid in fiscal 2000 and 1999 respectively.

The Company may borrow
funds from the FHLB of Indianapolis subject to certain limitations. Based on the
level of qualifying collateral available to secure advances at December 31,
2000, the Companys borrowing limit from the FHLB of Indianapolis was
approximately $55.9 million, with unused borrowing capacity of $24.8 million at
that date.

The Companys most
liquid assets are cash and cash equivalents, which include highly liquid
short-term investments (such as money market mutual funds) that are readily
convertible to known amounts of cash. The level of these assets is dependent on
the Companys operating, financing and investing activities during any
given period. At December 31, 2000 and 1999, cash and cash equivalents totaled
$4.6 million and $5.5 million, respectively.

At December 31, 2000, the
Company had outstanding loan origination commitments of $1.3 million,
undisbursed construction loans in process of $676,000 and approved but unused
lines of credit extended to customers of $4.9 million. The Company anticipates
that it will have sufficient funds available to meet its current loan
origination and other commitments. Certificates of deposit scheduled to mature
in one year or less from December 31, 2000 totaled $39.0 million. Based on the
Companys most recent experience and pricing strategy, management believes
that a significant portion of such deposits will remain with the Company.

The OTS capital regulations
require savings institutions to meet three minimum capital standards: a 1.5%
capital ratio, a 3% leverage (core capital) ratio and an 8% risk-based capital
ratio. The Bank satisfied these minimum capital standards at December 31, 2000
with tangible and leverage capital ratios of 6.66% and a total risk-based
capital ratio of 12.01%. In determining the amount of risk-weighted assets for
purposes of the risk-based capital requirement, a savings bank must compute its
risk-based assets by multiplying its assets and certain off-balance sheet items
by risk-weights, which range from 0% for cash and obligations issued by the
United States Government or its agencies to 100% for consumer and commercial
loans, as assigned by the OTS capital regulations. These capital requirements,
which are applicable to the Bank only, do not consider additional capital held
at the Company level, and require certain adjustments to stockholders
equity to arrive at the various regulatory capital amounts.

The Bank may not declare or
pay cash dividends on or repurchase any of its shares of common stock if the
effect thereof would cause equity to be reduced below applicable regulatory
capital requirements or the amount required to be maintained for the liquidation
account established in connection with the Conversion. The Bank paid a dividend
of $220,000 to the Company during the year ended December 31, 2000 compared to a
$1.3 million and $1.9 million dividend during the years ended December 31, 1999
and 1998. The dividends have been primarily used by the Company to repurchase
common stock for the treasury. Unlike the Bank, the Company is not subject to
OTS regulatory restrictions on the payment of dividends to its shareholders;
however, it is subject to the requirements of Delaware law. Delaware law
generally limits dividends to an amount equal to the excess of the net assets of
the Company (the amount by which total assets exceed total liabilities) over its
statutory capital, or if there is no such excess, to its profits for the current
and/or immediately preceding fiscal year.

14

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Impact of Inflation and
Changing Prices. The consolidated financial statements and related data
presented herein have been prepared in accordance with GAAP, which require the
measurement of financial position and operating results in terms of historical
dollars without considering the changes in the relative purchasing power of
money over time due to inflation. The impact of inflation is reflected in the
increased cost of the Companys operations. Unlike industrial companies,
nearly all of the assets and liabilities of the Company are monetary in nature.
As a result, interest rates have a greater impact on the Companys
performance than do the effects of general levels of inflation. Interest rates
do not necessarily move in the same direction or to the same extent as the price
of goods and services.

15

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INDEPENDENT AUDITORS' REPORT

The Board of Directors
AMB Financial Corp.

We  have  audited  the  consolidated   statements  of
financial  condition of AMB Financial Corp. and  subsidiaries as of December 31,
2000 and 1999,  and the related  consolidated  statements of income,  changes in
stockholders'  equity and cash  flows for each of the three  years in the period
ending  December 31,  2000.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion   on   these   consolidated    financial   statements   based   on   our
audits.

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

In  our opinion,  the consolidated  financial statements
referred to above  present  fairly,  in all  material  respects,  the  financial
position of AMB Financial Corp. and  subsidiaries at December 31, 2000 and 1999,
and the results of their  operations  and their cash flows for each of the three
years in the period  ending  December 31, 2000,  in  conformity  with  generally
accepted accounting principles.

|/s/  Cobitz, VandenBerg and Fenessy,
|------------------------------------

January 12, 2001
Palos Hills, Illinois

16

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AMB FINANCIAL CORP.AND SUBSIDIARIES

Consolidated Statements of Financial Condition

`December 31,
                                                                                   ----------------------------------
                                                                                         2000                1999
Assets
------
Cash and amounts due from depository institutions                                  $   3,529,829           4,180,088
Interest-bearing deposits                                                              1,084,703           1,277,650
                                                                                   -------------       -------------
   Total cash and cash equivalents                                                     4,614,532           5,457,738
Investment securities, available for sale, at fair value (note 2)                      3,928,311           5,352,142
Trading securities (note 3)                                                              936,159           1,909,333
Mortgage-backed securities, available for sale, at fair value (note 4)                 3,423,944           1,868,000
Loans receivable (net of allowance for loan losses:
  2000 - $701,173; 1999 - $590,701) (note 5)                                         112,482,467         105,909,909
Investment in limited partnership (note 6)                                             1,233,772           1,327,000
Stock in Federal Home Loan Bank of Indianapolis                                        1,624,400           1,383,500
Office properties and equipment - net (note 7)                                         2,251,267             399,867
Accrued interest receivable (note 8)                                                     720,970             642,111
Prepaid expenses and other assets (note 9)                                             4,483,022           3,536,270
                                                                                   -------------       -------------

   Total assets                                                                      135,698,844         127,785,870
                                                                                   =============       =============

Liabilities and Stockholders' Equity
------------------------------------

Liabilities:
------------
Deposits (note 10)                                                                    89,711,720          88,944,925
Borrowed money (note 11)                                                              31,108,134          24,675,589
Note payable                                                                           1,260,088           1,333,324
Advance payments by borrowers for taxes and insurance                                    468,264             431,676
Other liabilities (note 12)                                                            1,651,287             861,087
                                                                                   -------------       -------------
   Total liabilities                                                                 124,199,493         116,246,601
                                                                                   -------------       -------------

Stockholders' Equity:
---------------------

Preferred stock, $.01 par value: authorized
  100,000 shares; none outstanding                                                            --                  --
Common stock,  $.01 par value:  authorized 1,900,000  shares;
  1,686,169 shares issued and 939,475 shares outstanding at December 31, 2000
  and 1,054,975 shares outstanding at December 31, 1999                                   16,862              16,862
Additional paid-in capital                                                            10,822,244          10,793,053
Retained earnings, substantially restricted                                            8,404,133           7,780,655
Accumulated other comprehensive income, net of income taxes                               68,462             (79,763)
Treasury stock, at cost (746,694 and 631,194 shares at
  December 31, 2000 and 1999)                                                         (7,266,212)         (6,219,684)
Common stock acquired by Employee Stock Ownership Plan                                  (449,650)           (539,580)
Common stock awarded by Recognition and Retention Plan                                   (96,488)           (212,274)
                                                                                   -------------       -------------
   Total stockholders' equity (notes 16 and 17)                                       11,499,351          11,539,269
                                                                                   -------------       -------------

Commitments and contingencies (notes 18 and 19)

   Total liabilities and stockholders' equity                                      $ 135,698,844         127,785,870
                                                                                   =============       =============`

See accompanying notes to
consolidated financial statements.

17

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AMB FINANCIAL CORP.AND SUBSIDIARIES

Consolidated
Statements of Income

`Years Ended December 31,
                                                                -----------------------------------------------
                                                                     2000             1999              1998
                                                                     ----             ----              ----
Interest income:
  Interest on loans                                             $ 8,484,266         7,419,764         7,027,445
  Interest on mortgage-backed securities                            209,354           153,111           204,014
  Interest on investment securities                                 270,995           371,083           443,942
  Interest on interest-bearing deposits                             130,199           200,325           212,488
  Dividends on Federal Home Loan Bank stock                         115,020           107,719            81,208
                                                                -----------       -----------       -----------
     Total interest income                                        9,209,834         8,252,002         7,969,097
                                                                -----------       -----------       -----------

Interest expense:
  Interest on deposits                                            4,376,137         3,574,843         3,474,206
  Interest on borrowings                                          1,483,301         1,329,235         1,096,056
                                                                -----------       -----------       -----------
     Total interest expense                                       5,859,438         4,904,078         4,570,262
                                                                -----------       -----------       -----------

     Net interest income before provision  for loan losses        3,350,396         3,347,924         3,398,835
Provision for loan losses (note 5)                                  124,180           119,024           102,047
                                                                -----------       -----------       -----------
     Net interest income after provision for loan losses          3,226,216         3,228,900         3,296,788
                                                                -----------       -----------       -----------


Non-interest income:
  Loan fees and service charges                                     105,646           156,833           143,640
  Commission income                                                  59,308            45,781            55,416
  Unrealized gain (loss) on trading securities - net                121,818          (123,773)         (771,172)
  Gain (loss)on sale of trading securities                          (59,404)           99,627            24,086
  Gain (loss)on sale of investment securities                        (4,676)           15,981            44,204
  Gain (loss) on sale of real estate owned                               --             9,904            (1,696)
  Gain on sale of deposit accounts                                       --                --            27,033
  Loss from limited partnership (note 6)                            (93,228)          (53,925)          (10,529)
  Deposit related fees                                              362,708           293,548           305,896
  Other income                                                      226,516           167,657           122,530
                                                                -----------       -----------       -----------
     Total non-interest income                                      718,688           611,633           (60,592)
                                                                -----------       -----------       -----------

Non-interest expense:
  Staffing costs (notes 13 and 14)                                1,410,794         1,345,027         1,376,916
  Advertising                                                        72,458           117,011            98,036
  Occupancy and equipment expenses (note 7)                         365,742           311,297           309,385
  Data processing                                                   424,570           397,545           368,335
  Professional fees                                                 172,538           134,640           167,386
  Federal deposit insurance premiums                                 18,389            47,150            45,112
  Loss on disposition of fixed assets                                 7,823                --            28,798
  Other                                                             485,629           463,128           485,415
                                                                -----------       -----------       -----------
     Total non-interest expense                                   2,957,943         2,815,798         2,879,383
                                                                -----------       -----------       -----------

Income before income taxes                                          986,961         1,024,735           356,813
  Income taxes (note 15)                                            161,577           327,894           152,171
                                                                -----------       -----------       -----------

     Net income                                                 $   825,384           696,841           204,642
                                                                ===========       ===========       ===========

Earnings per share -
     Basic                                                      $       .93               .64               .16
     Diluted                                                    $       .93               .64               .16`

See accompanying notes to consolidated
financial statements.

18

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AMB FINANCIAL CORP.AND SUBSIDIARIES

Consolidated Statements of Changes in
Stockholders' EquityThree Years Ended December 31, 2000

`Accumulated                 Common     Common
                                                         Additional                  Other                     Stock      Stock
                                                Common    Paid-in       Retained Comprehensive   Treasury     Acquired   Awarded
                                                Stock     Capital       Earnings     Income        Stock      by ESOP     by RRP
                                               --------  ----------    ---------  ------------  -----------  ---------  ---------

Balance at December 31, 1997                   $ 11,241  10,717,068    7,357,250     71,061     (2,223,051)   (719,440)  (443,846)

3 for 2 stock split on June 30, 2000              5,621      (5,621)
                                               --------  ----------    ---------  ---------     ----------    --------   --------

Restated balance at December 31, 1997            16,862  10,711,447    7,357,250     71,061     (2,223,051)   (719,440)  (443,846)
                                               --------  ----------    ---------  ---------      ---------    --------    -------
Comprehensive income:
Net income                                                               204,642
  Other comprehensive income, net of tax:
    Unrealized holding gain during the year                                          49,076
    Less: reclassification adjustment of gains
      included in net income                                                         (6,281)
                                                                       ---------  ---------
Total comprehensive income                                               204,642     42,795


Purchase of treasury stock
  (140,953 shares)                                                                              (1,620,964)
Amortization of award of RRP
stock                                                                                                                     115,786
Contribution to fund ESOP loan                               54,731                                             89,930
Dividends declared on common stock
  ($.1933 per share)                                                    (244,373)
                                               --------  ----------    ---------  ---------      ---------    --------    -------

Balance at December 31, 1998                     16,862  10,766,178    7,317,519    113,856     (3,844,015)   (629,510)  (328,060)
                                               --------  ----------    ---------  ---------      ---------    --------    -------
Comprehensive income:
Net income                                                                          696,841
  Other comprehensive income, net of tax:
    Unrealized holding loss during the year                                                       (193,619)
                                                                                  ---------        -------
Total comprehensive income                                                          696,841       (193,619)

Purchase of treasury stock
  (249,750 shares)                                                                                          (2,375,669)

Amortization of award of RRP stock                                                                                        115,786
Contribution to fund ESOP loan                               26,875                                             89,930
Dividends declared on
  common stock ($.2133 per share)                                                  (233,705)
                                               --------  ----------    ---------  ---------      ---------    --------    -------
Balance at December 31, 1999                     16,862  10,793,053    7,780,655    (79,763)    (6,219,684)   (539,580)  (212,274)
                                               --------  ----------    ---------  ---------      ---------    --------    -------

Comprehensive income:
 Net income                                                              825,384
  Other comprehensive income, net of tax:
    Unrealized holding gain during the period                                       148,179
    Less: Reclassification adjustment of losses
      included in net income                                                             46
                                                                       ---------  ---------
Total comprehensive income                                               825,384    148,225

Purchase of treasury stock
  (115,500 shares)                                                                                          (1,046,528)
Amortization of award of RRP
stock                                                                                                                     115,786
Contribution to fund ESOP loan                               29,191                                             89,930
Dividends declared on
  common stock ($.2267 per share)                                       (201,740)
3 for 2 stock split related
  to fractional shares                                                      (166)
                                               --------  ----------    ---------  ---------      ---------    --------    -------
Balance at December 31, 2000                   $ 16,862  10,822,244    8,404,133     68,462     (7,266,212)   (449,650)   (96,488)
                                               ========  ==========    =========     ======     ==========    ========    =======






                                                  Total
                                               -----------

Balance at December 31, 1997                    14,770,283

3 for 2 stock split on June 30, 2000                    --
                                                ----------

Restated balance at December 31, 1997           14,770,283
                                                ----------
Comprehensive income:
Net income                                         204,642
  Other comprehensive income, net of tax:
    Unrealized holding gain during the year         49,076
    Less: reclassification adjustment of gains
      included in net income                        (6,281)
                                                ----------
Total comprehensive income                         247,437


Purchase of treasury stock
  (140,953 shares)                              (1,620,964)
Amortization of award of RRP
stock                                              115,786
Contribution to fund ESOP loan                     144,661
Dividends declared on common stock
  ($.1933 per share)                              (244,373)
                                                ----------

Balance at December 31, 1998                    13,412,830
                                                ----------
Comprehensive income:
Net income                                         696,841
  Other comprehensive income, net of tax:
    Unrealized holding loss during the year       (193,619)
                                                ----------
Total comprehensive income                         503,222

Purchase of treasury stock
  (249,750 shares)                              (2,375,669)

Amortization of award of RRP stock                 115,786
Contribution to fund ESOP loan                     116,805
Dividends declared on
  common stock ($.2133 per share)                 (233,705)
                                                ----------
Balance at December 31, 1999                    11,539,269
                                                ----------

Comprehensive income:
 Net income                                        825,384
  Other comprehensive income, net of tax:
    Unrealized holding gain during the period      148,179
    Less: Reclassification adjustment of losses
      included in net income                            46
                                                ----------
Total comprehensive income                         973,609

Purchase of treasury stock
  (115,500 shares)                              (1,046,528)
Amortization of award of RRP
stock                                              115,786
Contribution to fund ESOP loan                     119,121
Dividends declared on
  common stock ($.2267 per share)                 (201,740)
3 for 2 stock split related
  to fractional shares                                (166)
                                                ----------
Balance at December 31, 2000                    11,499,351
                                                ==========`

See accompanying notes to
consolidated financial statements.

19

---

AMB FINANCIAL CORP.AND SUBSIDIARIES

Consolidated
Statements of Cash Flows

`Years Ended December 31,
                                                                        -------------------------------------------------------

                                                                             2000                   1999                 1998
                                                                             ----                   ----                 ----
 Cash flows from operating activities:
  Net income                                                            $     825,384              696,841              204,642
  Items not requiring (providing) cash:
         Depreciation                                                         161,687              122,984              136,566
         Amortization of cost of stock benefit plans                          205,176              205,716              205,716
         Amortization of premiums and accretion of discounts                   28,628               30,117               13,773
         Net (gain) loss on sale of securities                                 64,080             (115,608)             (68,290)
         Net (gain) loss on sale of real estate owned                              --               (9,904)               1,696
         Provision for loan losses                                            124,180              119,024              102,047
         Loss on disposition of fixed assets                                    7,823                   --               28,798
         Loss from limited partnership                                         93,228               53,925               10,529
         Gain on sale of deposits                                                  --                   --              (27,033)
         Unrealized (gain) loss on trading securities                        (121,818)             123,773              771,172
         Purchase of trading securities                                            --              (93,750)            (852,648)
         Proceeds from sale of trading securities                           1,035,588              554,401              124,399
         Increase (decrease) in deferred income on loans                       29,786               (2,110)             (76,687)
         Decrease in accrued and deferred income taxes                       (221,423)            (204,645)            (591,282)
         Increase in accrued interest receivable                              (78,859)             (47,169)             (61,433)
         Increase (decrease) in accrued interest payable                       28,025               (5,350)              24,206
         Increase in deferred compensation                                     84,123               76,974               61,581
         Other, net                                                          (116,363)            (136,430)              (8,354)
                                                                        -------------        -------------        -------------

Net cash provided by operating activities                                   2,149,245            1,368,789                 (602)
                                                                        -------------        -------------        -------------

Cash flows from investing activities:

         Proceeds from sales of investment securities                       1,530,205               15,981            2,793,760
         Proceeds from maturities of investment securities                         --              500,000            2,875,000
         Purchase of investment securities                                     (7,925)              (6,329)          (3,492,968)
         Proceeds from sales of mortgage-backed securities                    361,625                   --                   --
         Proceeds from repayments of mortgage-backed securities               360,007              719,969              847,014
         Purchase of mortgage-backed securities                            (2,162,287)                  --                   --
         Purchase of Federal Home Loan Bank stock                            (240,900)             (49,300)            (608,800)
         Purchase of life insurance policies                                       --                   --           (1,515,000)
         Purchase of loans                                                 (6,807,417)         (23,991,209)         (14,487,063)
         Loan disbursements                                               (22,749,891)         (24,570,680)         (25,987,142)
         Loan repayments                                                   22,830,784           32,297,483           27,756,288
         Proceeds from sale of real estate owned                                   --               33,273               25,785
         Property and equipment expenditures, net                          (2,020,910)             (95,028)            (121,457)
                                                                        -------------        -------------        -------------

Net cash provided for investing activities                                 (8,906,709)         (15,145,840)         (11,914,583)
                                                                        -------------        -------------        -------------

Cash flows from financing activities:

         Deposit receipts                                                 190,652,344          171,721,626          151,006,489
         Deposit withdrawals                                             (193,386,117)        (164,715,766)        (143,773,817)
         Sale of deposit accounts                                                  --                   --           (2,676,263)
         Interest credited to deposits                                      3,500,568            2,941,850            2,767,713
         Proceeds from borrowed money                                      20,575,000            9,000,000           15,683,000
         Repayment of borrowed money                                      (14,142,455)          (6,007,411)          (6,000,000)
         Proceeds from notes payable                                           48,607                   --                   --
         Repayment of notes payable                                          (121,843)             (58,130)                  --
         Increase (decrease) in advance payments by borrowers for
         taxes and insurance                                                   36,588             (135,422)             183,861
         Purchase of treasury stock                                        (1,046,528)          (2,375,669)          (1,620,964)
         Dividends paid on common stock                                      (201,906)            (233,705)            (244,373)
                                                                        -------------        -------------        -------------

Net cash provided by financing activities                                   5,914,258           10,137,373           15,325,646
                                                                        -------------        -------------        -------------

Net change in cash and cash equivalents                                      (843,206)          (3,639,678)           3,410,461
Cash and cash equivalents at beginning of year                              5,457,738            9,097,416            5,686,955
                                                                        -------------        -------------        -------------

Cash and cash equivalents at end of year                                $   4,614,532            5,457,738            9,097,416
                                                                        =============        =============        =============

Supplemental disclosure of cash flow information:
Cash paid during the year for:

       Interest                                                         $   5,831,413            4,909,428            4,546,056
       Income taxes                                                           383,000              532,539              739,521
  Non-cash investing activities:
       Transfer of loans to real estate owned                           $          --                   --               23,369`

See accompanying notes to consolidated
financial statements.

20

---

AMB FINANCIAL CORP.AND SUBSIDIARIES

Notes to Consolidated
Financial Statements

1)   
   Summary of Significant Accounting Policies

| | AMB
Financial Corp. (the Company) is a Delaware corporation incorporated
on November 23, 1993 for the purpose of becoming the savings and loan holding
company for American Savings, FSB (the Bank). On March 29, 1996, the
Bank converted from a mutual to a stock form of ownership, and the Company
completed its initial public offering, and, with a portion of the net proceeds
acquired all of the issued and outstanding capital stock of the Bank (the
Conversion).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
accounting and reporting policies of the Company and its subsidiaries conform to
generally accepted accounting principles and to general practice within the
thrift industry. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
description of the more significant policies which the Bank follows in preparing
and presenting its consolidated financial statements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Principles of
Consolidation
| | ---------------------------

| | The
accompanying consolidated financial statements consist of the accounts of the
Company, and its wholly owned subsidiary, American Savings FSB, the Banks
wholly owned subsidiary, NIFCO, Inc. and the wholly owned subsidiary of NIFCO,
Inc., Ridge Management, Inc. Significant intercompany balances and transactions
have been eliminated in consolidation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Industry
Segments
| | -----------------

| | The Company operates  principally in the banking industry through its subsidiary
bank. As such,  substantially all of the  Companys  revenues,  net income,
identifiable   assets  and   capital   expenditures   are   related  to  banking
operations.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21

---

1)   
   Summary of Significant Accounting Policies (continued)

| | Investment
Securities and Mortgage-Backed Securities, Available for Sale
| | ------------------------------------------------------------------------

| | Investment
securities and mortgage-backed securities available for sale are recorded in
accordance with Statement of Financial Accounting Standards (SFAS)
No. 115 Accounting for Certain Investments in Debt and Equity
Securities. SFAS No. 115 requires the use of fair value accounting for
securities available for sale or trading and retains the use of the amortized
cost method for investments the Company has the positive intent and ability to
hold to maturity.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | SFAS
No. 115 requires the classification of debt and equity securities into one of
three categories: held to maturity, available for sale, or trading. Held to
maturity securities are measured at amortized cost. Unrealized gains and losses
on trading securities are included in income. Unrealized gains and losses on
available for sale securities are excluded from income and reported net of taxes
as a separate component of stockholders equity.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has currently designated all of its investment securities and
mortgage-backed securities as available for sale, and has recorded these
investments at their current fair values. Unrealized gains and losses are
recorded in a valuation account which is included, net of income taxes, as a
separate component of stockholders equity. Gains and losses on the sale of
securities are determined using the specific identification method and are
reflected in earnings when realized.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Trading
Securities
| | ------------------

| | Trading
account securities are carried at fair value, and net unrealized gains and
losses are reflected in the consolidated statements of income.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | Loans
Receivable and Related Fees
| | ---------------------------------

| | Loans
are stated at the principal amount outstanding, net of loans in process,
deferred yield adjustment and the allowance for losses. Interest on loans is
credited to income as earned and accrued only if deemed collectible. Loans are
placed on nonaccrual status when, in the opinion of management, the full timely
collection of principal or interest is in doubt. As a general rule, the accrual
of interest is discontinued when principal or interest payments become 90 days
past due or earlier if conditions warrant. When a loan is placed on nonaccrual
status, previously accrued but unpaid interest is charged against current
income.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Loan
origination fees and certain direct loan origination costs are being deferred in
accordance with SFAS No. 91 Accounting for Nonrefundable Fees and Costs
Associated with Originating or Acquiring Loans and Initial Direct Costs of
Leases. This statement requires that loan origination fees and direct loan
origination costs for a completed loan be netted and then deferred and amortized
into interest income as an adjustment of yield over the contractual life of the
loan.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has adopted the provisions of SFAS No. 114 Accounting by Creditors
for Impairment of a Loan and SFAS No. 118 Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures. These
statements apply to all loans that are identified for evaluation except for
large groups of smaller-balance homogeneous loans that are collectively
evaluated for impairment. These loans include, but are not limited to, credit
card, residential mortgage and consumer installment loans. Of the remaining
loans which are evaluated for impairment, management has determined that there
were no material amounts of loans which met the definition of an impaired loan
during the years ended December 31, 2000 and 1999 and one loan to be evaluated
for impairment at December 31, 2000.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

22

---

1)   
   Summary of Significant Accounting Policies (continued)

| | Allowance
for Loan Losses
| | -------------------------

| | The
determination of the allowance for loan losses involves material estimates that
are susceptible to significant change in the near term. The allowance for loan
losses is maintained at a level adequate to provide for losses through charges
to operating expense. The allowance is based upon past loss experience and other
factors which, in managements judgement, deserve current recognition in
estimating losses. Such other factors considered by management include growth
and composition of the loan portfolio, the relationship of the allowance for
losses to outstanding loans and economic conditions.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Management
believes that the allowance is adequate. While management uses available
information to recognize losses on loans, future additions to the allowance may
be necessary based on changes in economic conditions. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Banks allowance for losses. Such agencies may
require the Bank to recognize additions to the allowance based on their
judgements about information available to them at the time of their examination.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Real
Estate Owned
| | -----------------

| | Real
estate acquired through foreclosure or deed in lieu of foreclosure is carried at
the lower of fair value minus estimated costs to sell or the related loan
balance at the date of foreclosure. Valuations are periodically performed by
management and an allowance for loss is established by a charge to operations if
the carrying value of a property exceeds its fair value minus estimated costs to
sell.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Depreciation
and Amortization
| | -----------------------------

| | Depreciation
of office properties and equipment is accumulated on the straight line basis
over estimated lives of the various assets. The cost of leasehold improvements
is amortized using the straight line method over the term of the lease.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Investment
in Limited Partnership
| | ---------------------------------

| | The
investment in limited partnership is recorded using the equity method of
accounting. Losses due to impairment are recorded when it is determined that the
investment no longer has the ability to recover its carrying amount. The
benefits of low income housing tax credits associated with the investment are
accrued when earned.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Income Taxes
| | ------------

| | The
Company files a consolidated federal income tax return with the Bank. The
provision for federal and state taxes on income is based on earnings reported in
the financial statements. Deferred income taxes arise from the recognition of
certain items of income and expense for tax purposes in years different from
those in which they are recognized in the consolidated financial statements.
Deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amount of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using tax rates in
effect for the year in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income for the period that includes the
enactment date.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

1)   
   Summary of Significant Accounting Policies (continued)

| | Consolidated
Statements of Cash Flows
| | -------------------------------------

| | For
the purposes of reporting cash flows, the Company has defined cash and cash
equivalents to include cash on hand, amounts due from depository institutions,
interest-bearing deposits in other financial institutions and federal funds
sold.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Stockholders'
Equity
| | --------------------

| | On
May 31, 2000, the Board of Directors of AMB Financial Corp. approved a 3 for 2
stock split, effected in the form of a stock dividend which was payable on June
30, 2000 to stockholders of record on June 14, 2000. Accordingly, stockholders
of record received one additional share for each two shares owned as of June 14,
2000. All prior share related information has been restated to reflect the stock
split effect, including earnings per share data.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Earnings Per
Share
| | ------------------

| | Basic
earnings per share is computed by dividing net income by the weighted average
number of shares outstanding for the period. ESOP shares not committed to be
released are not considered to be outstanding. Stock options are regarded as
future common stock and are considered in the earnings per share calculations,
and are the only other adjustments made in computing diluted earnings per share.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Weighted average used in calculating earnings per share are summarized
     below.
| | ----------------------------------------------------------------------------------

`Years Ended December 31,
                                                             ------------------------
                                                         2000          1999          1998
                                                         ----          ----          ----
     Weighted average number of common shares
       outstanding used in basic EPS calculation        966,528      1,177,233     1,375,860
     Reduction for common shares not yet
       released by Employee Stock Ownership Plan        (80,937)       (94,426)     (107,916)
                                                        -------      ---------     ---------
     Total weighted average common shares
       outstanding for basic computation                885,591      1,082,807     1,267,944
     Add common stock equivalents for shares
       issuable under Stock Option Plans                  5,603          2,784        31,039
                                                        -------      ---------     ---------
     Weighted average number of shares outstanding
       adjusted for common stock equivalents            891,194      1,085,591     1,298,983
                                                        =======      =========     =========

     Net income                                       $ 825,384        696,841       204,642
     Basic earnings per share                         $     .93            .64           .16
     Diluted earnings per share                       $     .93            .64           .16`

24

---

2)   
   Investment Securities, Available for Sale

| | Investment securities available for sale are recorded at fair value in
accordance with SFAS No. 115. This portfolio is summarized as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------

`Gross            Gross
                                           Amortized       Unrealized        Unrealized         Fair
                                             Cost             Gains            Losses           Value
                                             ----             -----            ------           -----
     December 31, 2000
     -----------------
        United States Government
            securities                     $3,677,056           22,606           20,021        3,679,641
        Municipal securities                   99,638            1,752               --          101,390
        Marketable equity securities          143,341            3,939               --          147,280
                                           ----------       ----------       ----------       ----------

                                           $3,920,035           28,297           20,021        3,928,311
                                           ==========       ==========       ==========       ==========

     December 31, 1999
     -----------------
        United States Government
            securities                     $5,236,797            4,656          117,441        5,124,012
        Municipal securities                   99,600               --            5,144           94,456
        Marketable equity securities          135,416               --            1,742          133,674
                                           ----------       ----------       ----------       ----------

                                           $5,471,813            4,656          124,327        5,352,142
                                           ==========       ==========       ==========       ==========


     The contractual maturity of the above investments is summarized as follows:


                                                      December 31, 1999                  December 31, 2000
                                                   ------------------------         --------------------------
                                                   Amortized          Fair           Amortized          Fair
        Term to Maturity                             Cost             Value             Cost            Value
        ----------------                             ----             -----             ----            -----

     Due in one year or less                      $  501,522          501,406        1,150,531        1,151,578
     Due after one year through five years         3,175,534        3,178,235        4,086,266        3,972,434
     Due after five years through ten years           99,638          101,390               --
     Due after ten years                                  --               --           99,600           94,456
     Marketable equity securities                    143,341          147,280          135,416          133,674
                                                  ----------       ----------       ----------       ----------

                                                  $3,920,035        3,928,311        5,471,813        5,352,142
                                                   ==========       ==========       ==========       ==========`

| | During
the current year, the Company sold securities realizing gross proceeds of
$1,530,205, with gross gains of $5,752 and gross losses of $3,536 realized on
those sales. Proceeds from sales of investment securities available for sale
during the years ended December 31, 1999 and 1998 were $15,981 and $2,793,760
with gross gains of $15,981 and $44,493 and gross losses of $-0- and $289
realized on those sales. The change in net unrealized gains and losses during
the current year of $127,947, net of the tax effect of $51,179, resulted in a
$76,768 credit to stockholders equity.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25

---

3)   
   Trading Securities

| | Trading
securities are accounted for at their current fair values. Trading securities at
December 31, 2000 consists of equity securities (common stock with a carrying
value of $854,909) and debt securities with a carrying value of $81,250. The
common stock investment at December 31, 2000 is pledged as collateral for a
revolving line of credit as discussed in Note 11. Trading securities at December
31, 1999 also consists of equity securities (thrift common stock mutual fund
investment with a carrying value of $964,614 and common stock with a carrying
value of $857,219) and debt securities with a carrying value of $87,500. The
adjustment of these securities to their current fair values has resulted in a
net unrealized gain of $121,818 for the year ended December 31, 2000 and a net
unrealized loss of $123,773 and $771,172 for the years ended December 31, 1999
and 1998. Proceeds from sales of trading securities during the years ended
December 31, 2000, 1999 and 1998 were $1,035,588, $554,401 and $124,399 with
gross gains of $15,610, $99,627 and $24,086 and gross losses of $75,014, $-0-
and $-0- realized on those sales.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4)   
   Mortgage-Backed Securities, Available for Sale

| | Mortgage-backed securities available for sale are recorded at fair value in
     accordance with SFAS No. 115. This portfolio is summarized as follows:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

`Gross            Gross
                                        Amortized        Unrealized       Unrealized         Fair
                                           Cost            Gains            Losses           Value
                                       -------------------------------------------------------------
     December 31, 2000
     -----------------
     Participation Certificates:
       FHLMC - Fixed rate              $2,340,778           66,439            2,488        2,404,729
       FNMA -  Adjustable rate             35,209               --              449           34,760
       GNMA -  Fixed rate                 942,130           42,325               --          984,455
                                       ----------       ----------       ----------       ----------
                                       $3,318,117          108,764            2,937        3,423,944
                                       ==========       ==========       ==========       ==========


     Weighted average interest rate         7.14%
                                            ====


     December 31, 1999
     -----------------
     Participation Certificates:
       FHLMC - Fixed rate              $1,463,776               33           10,989        1,452,820
       FNMA -  Adjustable rate             40,785               --              109           40,676
       GNMA -  Adjustable rate            376,707              816            3,019          374,504
                                       ----------       ----------       ----------       ----------
                                       $1,881,268              849           14,117        1,868,000
                                       ==========       ==========       ==========       ==========


     Weighted average interest rate          6.73%
                                             ====`

| | Proceeds
from sales of mortgage-backed securities available for sale during the year
ended December 31, 2000 were $361,625 with gross losses of $6,892 realized on
those sales. There were no sales of mortgage-backed securities available for
sale during the years ended December 31, 1999 and 1998. The change in net
unrealized gains and losses during the current year of $119,095, net of the tax
effect of $47,638, resulted in a $71,457 credit to stockholders equity.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26

---

5)   
   Loans Receivable

| | Loans receivable are summarized as follows:
| | -------------------------------------------

`December 31,
                                                 ------------------------------------
                                                       2000                   1999
       Mortgage loans:
            One-to-four family                   $  84,349,122            82,210,196
            Multi-family                             2,188,938             2,144,343
            Nonresidential                          10,155,517             8,774,978
            Construction                             4,853,958             4,278,942
            Land                                     1,041,058               631,704
                                                 -------------         -------------

         Total mortgage loans                      102,588,593            98,040,163
                                                 -------------         -------------


       Other loans:
            Loans on deposit accounts                  213,121               146,963
            Equity lines of credit                   4,129,997             3,336,406
            Other consumer                           1,538,059             1,497,930
                                                 -------------         -------------

         Total other loans                           5,881,177             4,981,299
                                                 -------------         -------------


       Commercial business loans                     5,377,322             4,998,619
                                                 -------------         -------------


         Total loans receivable                    113,847,092           108,020,081
                                                 -------------         -------------


       Less:
            Loans in process                           676,461             1,522,746
            Net deferred yield adjustments             (13,009)               (3,275)
            Allowance for loan losses                  701,173               590,701
                                                 -------------         -------------

       Loans receivable, net                     $ 112,482,467           105,909,909
                                                 =============         =============


       Weighted average interest rate                     7.82%                 7.63%
                                                          ====                  ====


     Activity in the allowance for loan losses is summarized as follows:


                                                 Years Ended December 31,
                                       -----------------------------------------
                                         2000              1999             1998
                                         ----              ----             ----
     Balance, beginning of year       $ 590,701          506,534          410,383
     Provision for loan losses          124,180          119,024          102,047
     Charge-offs                        (17,422)         (39,845)          (5,896)
     Recoveries                           3,714            4,988               --
                                      ---------        ---------        ---------

     Balance, end of year             $ 701,173          590,701          506,534
                                      =========        =========        =========`

| | Delinquent
loans (loans having monthly payments past due ninety days or more and
non-accruing) at December 31, 2000 and 1999 amounted to approximately $1,088,000
and $969,000 respectively. As of December 31, 2000, the total investment in
impaired loans was $556,000. The impaired loan at this date was subject to an
allowance for credit losses of $150,000, which is included in the above loan
loss allowance.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For
the years ended December 31, 2000 and 1999, gross interest income which would
have been recorded had the non-accruing loans been current in accordance with
their original terms amounted to approximately $68,000 and $47,000 respectively.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Loans
to directors and executive officers aggregated approximately $463,000 and
$323,000 at December 31, 2000 and 1999 respectively. Such loans are made on
substantially the same terms as those for other loan customers.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

---

6)   
   Investment in Limited Partnership

| | The
investment in limited partnership of $1,233,772 and $1,327,000 at December 31,
2000 and 1999 represents a 39.60% equity in Pedcor Investments 1997 - XXXI
(Pedcor), a limited partnership organized to build, own and operate
a 56 unit apartment complex. The Bank has recorded its equity in the losses of
Pedcor in the amount of $93,228, $53,925 and $10,529 for the years ended
December 31, 2000 and 1999 and the nine months ended December 31, 1998.
Condensed financial statements for Pedcor are as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Condensed Statements of Financial Condition

                                                              December 31,
                                                        ------------------------
                                                        2000                1999
                                                        ----                ----
     Assets
     ------
     Cash                                            $    9,468          181,985
     Property and equipment                           3,933,525        4,028,104
     Land                                               112,000          112,000
     Other                                               15,812           19,177
                                                     ----------       ----------

       Total assets                                   4,070,805        4,341,266
                                                     ==========       ==========

     Liabilities
     -----------
     Notes payable - Bank                               923,475          983,000
     Notes payable - Other                            2,791,368        2,855,115
     Other liabilities                                  132,721          312,242
                                                     ----------       ----------
       Total liabilities                              3,847,564        4,150,357
                                                     ----------       ----------

     Partners' capital                                  223,241          190,909
                                                     ----------       ----------

       Total liabilities and partners' capital       $4,070,805        4,341,266
                                                     ==========       ==========



                                                                   Nine Months
                                    Years Ended December  31,         Ended
                                    -------------------------      December 31,
                                       2000            1999            1998
                                    ---------       ---------       ---------
Condensed statement of operations

Total revenues                      $ 269,721         104,027           8,278
Total expenses                        504,301         240,200          34,867
                                    ---------       ---------       ---------

  Net loss                          $(234,580)       (136,173)        (26,589)
                                    =========       =========       =========`

28

---

7)   
   Office Properties and Equipment

| | Office
properties and equipment are summarized as follows:
| | ----------------------------------------------------------

`December 31,
                                        --------------------------------
                                              2000              1999
                                              ----              ----
     Cost:

         Land -        Munster            $    40,669          40,669
                       Hammond                 33,300          33,300
                       Dyer                   300,000              --

         Building   -  Munster                420,271         417,151
                       Hammond                245,372         243,030
                       Dyer                 1,435,275              --
         Leasehold improvements               149,744         144,932
         Furniture and equipment            1,238,033       1,000,179
                                            ---------       ---------
                                            3,862,664       1,879,261
                                            ---------       ---------

     Less accumulated depreciation:
         Building   -  Munster                402,453         394,190
                       Hammond                236,354         233,308
                       Dyer                     6,112              --
         Leasehold improvements                75,374          65,942
         Furniture and equipment              891,104         785,954
                                           ----------       ----------
                                            1,611,397       1,479,394
                                            ---------       ---------

     Net book value                        $2,251,267         399,867
                                            =========      ==========`

| | Depreciation
of office properties and equipment for the years ended December 31, 2000, 1999
and 1998 amounted to $161,687, $122,984 and $136,566 respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Bank had entered into a lease agreement for its office location in Dyer,
Indiana. Rent was payable monthly and adjusted annually based on the consumer
price index. Monthly rent during 2000 amounted to $3,236 including utilities.
The Bank is responsible for its proportionate share of real estate taxes and
assessments and for maintaining public liability insurance covering the
premises. Rent expense for the years ended December 31, 2000, 1999 and 1998
amounted to $32,361, $38,320 and $37,372 respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the current year, the Bank purchased the Dyer office location at a cost of
$1,730,000. The additional space that the Bank does not currently occupy will be
remodeled and utilized in part by the Bank to house recently expanded
operations, with the unused portion of the building to be leased to third-party
tenants.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8)
      Accrued Interest Receivable

| | Accrued interest receivable is summarized as follows:
| | -----------------------------------------------------

`December 31,
                                                 --------------------------
                                                   2000              1999
                                                   ----              ----

         Investment securities                   $  48,165         71,284
         Mortgage-backed securities                 19,787         10,619
         Loans receivable                          774,795        621,172

         Allowance for uncollected interest       (121,777)        (60,964)
                                                   -------         -------

                                                 $ 720,970         642,111
                                                   =======         =======`

29

---

9)
      Prepaid Expenses and Other Assets

| | Prepaid expenses and other assets consist of the following:
| | -----------------------------------------------------------

`December 31,
                                                                  ---------------------------
                                                                       2000             1999
                                                                       ----             ----

     Prepaid insurance premiums                                   $    60,168         40,686
     Prepaid pension cost                                             105,653         91,776
     Prepaid federal and state income taxes                           167,427         72,579
     Other prepaid expenses                                            67,316         56,173
     Cash surrender value of life insurance policies (a)            2,849,287      2,710,899
     Deferred federal and state income tax benefit - net (b)          569,866        542,108
     Purchased accounts receivable (c)                                565,673             --
     Miscellaneous                                                     97,632         22,049
                                                                  -----------     ----------
                                                                  $ 4,483,022      3,536,270
                                                                  ===========     ==========`

|(a) | The Board of Directors has approved two non-qualified retirement income plans
which will provide pre-retirement death benefits, post-retirement death
benefits, and retirement benefits to senior management and the Board of
Directors. The Bank has purchased life insurance policies on all individuals
covered under the plans. The Bank is the owner and beneficiary of each policy.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Significant  components of the deferred tax assets and  liabilities  are as
 follows:
|--- | -------------------------------------------------------------------------------------

`December 31,
                                                                 -----------------------
                                                                    2000          1999
                                                                    ----          ----
     Deferred tax assets:
        Loan fees deferred for financial reporting purposes      $ 13,595        16,832
        Accelerated book depreciation                              51,024        36,492
        Deferred compensation                                     217,007       183,358
        Nondeductible incentive plan expense                       13,251        11,934
        Book allowance for loan losses                            280,469       236,280
        Unrealized loss on securities available for sale               --        53,176
        Unrealized loss on trading account securities              48,694        55,976
        Allowance for uncollected interest                         48,711        24,385
                                                                 --------      --------

             Total deferred tax assets                            672,751       618,433
                                                                 --------      --------


     Deferred tax liabilities:
        Tax allowance for loan losses                              57,244        76,325
        Unrealized gain on securities available for sale           45,641            --
                                                                 --------      --------

             Total deferred tax liabilities                       102,885        76,325
                                                                 --------      --------

             Net deferred tax benefit                            $569,866       542,108
                                                                 ========      ========`

|(c) | During the current year, the Bank entered into a program to purchase and manage
the accounts receivable of credit-worthy merchants with required repurchase of
delinquent accounts and with the merchants repurchase obligation supported
by a cash collateral reserve account. For each merchant, the Bank establishes a
maximum amount of purchased receivables allowed to be outstanding at any one
time. At December 31, 2000, this amount was $825,000.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

30

---

10)
      Deposits

| | Deposit accounts are summarized as follows:
| | -------------------------------------------

`December 31,
                                               ----------------------------
                                                  2000             1999
                                               -----------      -----------

         Passbook accounts                     $14,096,470       14,959,746
         Demand deposits and NOW accounts        8,017,741        8,604,446
         Money market accounts                   2,852,181        3,371,829
                                               -----------      -----------

                                                24,966,392       26,936,021
                                               -----------      -----------
         Certificates of deposit by interest rate:

                4.01 - 5.00                      3,916,893       17,353,680
                5.01 - 6.00                     20,819,384       42,041,941
                6.01 - 7.00                     38,783,478        2,507,128
                7.01 - 8.00                      1,218,877          100,000
                8.01 - 9.00                          6,696            6,155
                                               -----------      -----------

                                                64,745,328       62,008,904
                                               -----------      -----------
                                               $89,711,720       88,944,925
                                               ===========      ===========


     The weighted  average rate on deposit accounts at December 31, 2000 and
     1999 was 5.19% and 4.43% respectively.

     A summary of certificates of deposit by maturity is as follows:


                                               December 31,
                                     ------------------------------
                                          2000               1999
                                          ----               ----

         Within 12 months            $ 38,995,751        49,948,679
         12 months to 24 months        23,804,732         5,552,405
         24 months to 36 months         1,248,293         5,658,055
         36 months to 48 months           636,862           638,417
         Over 48 months                    59,690           211,348
                                     ------------       -----------

             Total                   $ 64,745,328        62,008,904
                                     ============       ===========


     Interest expense on deposits consists of the following:


                                              Years Ended December 31,
                                  ------------------------------------------

                                      2000             1999           1998
                                      ----             ----           ----
     Passbook accounts            $  402,066         419,474         453,324
     NOW accounts                    127,445         128,313         127,794
     Money market accounts            89,305          98,030          93,611
     Certificates of deposit       3,757,321       2,929,026       2,799,477
                                  ----------      ----------      ----------

         Total                    $4,376,137       3,574,843       3,474,206
                                  ==========      ==========      ==========`

| | The
aggregate amount of deposit accounts with a balance of $100,000 or greater was
approximately $14,000,000 and $14,600,000, or approximately 15.6% and 16.4% of
total deposit balances at December 31, 2000 and 1999, respectively. Deposits in
excess of $100,000 are not insured by the Federal Deposit Insurance Corporation.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

31

---

11)
      Borrowed Money

| | Borrowed
money consists of advances from the Federal Home Loan Bank of Indianapolis and
is summarized as follows:
| | -----------------------------------------------------------------------------------------------------------------

`December 31,
                                                                                  -----------------------------
                                                         Interest
         Maturity Date                                     Rate                       2000               1999
         -------------                                   ---------                    ----               ----

         January 18, 2000                                 5.53%                   $        --         1,000,000
         May 17, 2000                                     6.07*                            --         3,000,000
         June 21, 2000                                    4.26*                            --         2,000,000
         July 25, 2000                                    6.11                             --         2,000,000
         August 16, 2000                                  6.09                             --         3,000,000
         August 24, 2000                                  6.03                             --         1,000,000
         January 19, 2001                                 6.74*                     1,000,000                --
         January 22, 2001                                 5.56                      1,000,000         1,000,000
         February 12, 2001                                7.17                      1,000,000                --
         February 20, 2001                                7.23                      1,000,000                --
         April 20, 2001                                   6.83                      1,000,000                --
         April 23, 2001                                   6.67*                     1,000,000                --
         May 21, 2001                                     5.90                      2,000,000         2,000,000
         July 26, 2001                                    6.78*                     1,500,000                --
         August 24, 2001                                  5.71                      3,000,000         3,000,000
         September 4, 2001                                6.40                      1,000,000                --
         September 17, 2001                               6.18                      2,500,000                --
         November 21, 2001                                6.63                      1,000,000                --
         November 23, 2001                                6.63                      1,000,000                --
         January 21, 2003                                 5.68                      1,000,000         1,000,000
         September 15, 2003                               5.26                      4,000,000         4,000,000
         May 15, 2009                                     5.93                        923,475           983,000
         August 16, 2010                                  5.99                      1,500,000                --
         September 20, 2010                               5.95                      1,000,000                --
         December 20, 2010                                4.98                      2,000,000                --
         July 15, 2015                                    5.91                        684,659           692,589
         November 16, 2020                                6.71                      2,000,000                --
                                                                                  -----------       -----------
                                                                                  $31,108,134        24,675,589
                                                                                  ===========       ===========
         Weighted average interest rate                                                  6.08%             5.67%
                                                                                  ===========       ===========

     * Variable interest rate`

| | The
Bank is required to maintain qualifying collateral for the Federal Home Loan
Bank of Indianapolis representing approximately 170 percent of current Bank
credit. At December 31, 2000, the Bank met this requirement. Assets which are
eligible collateral for meeting the 170% coverage requirement include
one-to-four family whole mortgage loans, government and agency securities
including mortgage-backed securities insured or guaranteed by FHLMC, FNMA and
GNMA, and high rated private mortgage-backed securities. The mortgage loans must
not include participations, construction loans, loans which are not in the clear
title of the institution, conventional mortgages with more than 30 years
remaining to maturity, loans for more than 90% of the appraised value unless
there is private or federal insurance, mortgages which are more than 60 days
delinquent, or loans upon which any employee of the institution or the FHLB is
personally liable.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

32

---

11)
      Borrowed Money (continued)

| | During
the prior year, the Company entered into a revolving line of credit in the
maximum amount of $650,000 with Peoples Bank SB. The loan will bear interest at
one half percent under the Wall Street Journal prime rate of interest. The
Company may borrow up to 75% of the market value of the collateral security. At
December 31, 2000, the Company pledged common stock with a market value of
approximately $855,000 as collateral securing this line of credit. The Company
incurred minimal borrowing activity against this line of credit during the year
ended December 31, 2000.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
connection with the Companys initial public offering, the Bank established
an Employee Stock Ownership Plan (ESOP). The ESOP was funded by the proceeds
from a loan from the Company. The loan carries an interest rate of 6.07% and
matures in the year 2006. The loan is secured by the shares of the Company
purchased with the loan proceeds. The Bank has committed to make contributions
to the ESOP sufficient to allow the ESOP to fund the debt service requirements
of the loan. At December 31, 2000, the balance of this loan amounted to
$449,650.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12)
      Other Liabilities

| | Other liabilities include the following:
| | ----------------------------------------

`December 31,
                                                          ---------------------------
                                                              2000             1999
                                                              ----             ----

     Accrued interest on deposits                         $   58,599          49,679
     Accrued interest on borrowings                           81,087          61,982
     Accrued bonus                                            50,800          48,015
     Accrued audit and accounting fees                        17,563          18,500
     Accrued real estate and personal property taxes          73,700          55,500
     Deferred compensation (see note 13)                     542,517         458,394
     Outstanding bank drafts                                 705,557          88,009
     Miscellaneous accounts payable                          121,464          81,008
                                                          ----------      ----------

                                                          $1,651,287         861,087
                                                          ==========      ==========`

33

---

13)
      Benefit Plans

| | The
Bank has a qualified noncontributory, defined benefit pension plan which covers
all full-time employees having a minimum of twelve months of service, and who
are at least twenty-one years of age. The benefits are primarily based on years
of service and earnings.

The  following  is a summary of the plan as of  December  31,  2000 and 1999:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`2000              1999
                                                                                ----              ----
     Change in Benefit Obligation:
          Benefit obligation at beginning of year                           $ 1,273,364         1,141,297
          Service cost                                                           48,479            46,150
          Interest cost                                                         101,096            82,956
          Benefits paid                                                         (14,537)          (70,433)
          Other - net                                                            50,533            73,394
                                                                            -----------       -----------
          Benefit obligation at end of year                                   1,458,935         1,273,364
                                                                            -----------       -----------
     Change in Plan Assets:
          Plan assets at fair value at beginning of year                      1,267,440         1,156,980
          Actual return on plan assets                                            9,769           112,630
          Benefits paid                                                         (14,537)          (70,433)
          Employer contribution                                                  67,772            68,263
                                                                            -----------       -----------
          Fair value of plan assets at end of year                            1,330,444         1,267,440
                                                                            -----------       -----------

     Plan assets in excess of (less than) projected benefit obligation         (128,491)           (5,924)
     Unrecognized net (gain) loss from actuarial experience                      89,863           (56,961)
     Unrecognized prior service cost                                             70,279            74,965
     Unrecognized net transition obligation                                      74,002            79,696
                                                                            -----------       -----------

     Pension asset included in other assets                                 $   105,653            91,776
                                                                            ===========       ===========`

| | The weighted average discount rate and rate of increase in future compensation
levels used in determining the actuarial present value of the projected benefit
obligation were 8.00% and 3.50%, respectively, for the year ended December 31,
2000 and 7.50% and 3.50%, respectively, for the years ended December 31, 1999
and 1998. The weighted average expected long-term rate return on assets was
8.00% for the year ended December 31, 2000, and 9.00% for the years ended
December 31, 1999 and 1998.

Net pension cost includes the following components:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Years Ended December 31,
                                              -------------------------------------------
                                                 2000             1999            1998
                                                 ----             ----            ----

     Service cost                             $  48,479          46,150          40,233
     Interest cost on benefit obligation        101,096          82,956          67,636
     Expected return on assets                 (106,067)       (104,031)        (92,666)
     Net amortization and deferral               10,380           9,875          (2,945)
                                              ---------       ---------       ---------

     Net periodic pension cost                $  53,888          34,950          12,258
                                              =========       =========       =========`

| | The Bank has established two non-qualified 401(k) Plan for officers of the Bank.
Both Plans provide participating officers the opportunity to defer up to 6% of
their salary into a tax deferred accumulation for future retirement. In
addition, the Bank has also established a Director Deferral Plan which provides
participating directors with the opportunity to defer all or a portion of their
fees over a predetermined period. All deferred non-qualified 401(k) Plan
contributions and deferred director fees are credited with interest from the
Bank at the rate of 10% per year.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Interest
credited by the Bank to the 401(k) Plan on accumulated funds was $49,932,
$41,933 and $34,798 for the years ended December 31, 2000, 1999 and 1998
respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

34

---

14)
      Director, Officer and Employee Plans

| | Stock
Option Plan. In conjunction with the Conversion, the stockholders of the Company
approved the AMB Financial Corp. 1996 Stock Option and Incentive Plan. This is
an incentive stock option plan for the benefit of the directors, officers and
employees of the Company and its affiliates. The number of options on shares of
common stock authorized under the Plan is 168,618, equal to 10.0% of the total
number of shares issued in the Conversion. As of October 23, 1996, 150,063
options were granted at $8.50 per share, exercisable at a rate of 20% per year
commencing October 23, 1997, and expiring ten years from the date of grant. The
following is an analysis of the stock option activity for each of the years in
the three year period ended December 31, 2000 and the stock options outstanding
at the end of the respective periods.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Exercise Price
                                       ----------------------------------------------
          Options                      Number of Options    Per Share        Total
       ------------                    -----------------    ---------     -----------

Outstanding at December 31, 1997            150,063         $   8.50       $1,275,535
Granted                                           0
Exercised                                         0
Forfeited                                         0
                                           --------         --------       ----------

Outstanding at December 31, 1998            150,063             8.50        1,275,535
Granted                                           0
Exercised                                         0
Forfeited                                         0
                                           --------         --------       ----------

Outstanding at December 31, 1999            150,063             8.50        1,275,535
Granted                                           0
Exercised                                         0
Forfeited                                         0
                                           --------         --------       ----------

Outstanding at December 31, 2000            150,063         $   8.50       $1,275,535
                                         ==========         ========       ==========

Exercisable at December 31, 2000            120,048         $   8.50       $1,020,408
                                         ==========         ========       ===========
Options available for future grants
    at December 2000                         18,555
                                         ==========`

| | The
Company accounts for its stock options in accordance with Accounting Principles
Board (APB) Opinion No. 25 Accounting for Stock Issued to Employees.
Under APB 25, as the exercise price of the Companys employees stock
options equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company has implemented SFAS No. 123 Accounting for Stock-Based
Compensation. The Company has retained its accounting method for its
stock-based compensation plans. This statement has only resulted in additional
disclosures for the Company, and as such, its adoption did not, nor is it
expected to have, a material impact on the Companys financial condition or
its results of operations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following summarizes the pro forma net income as if the fair value method of
accounting for stock-based compensation plans had been utilized:
| | -------------------------------------------------------------------------------------------------------------------------------------------------

`Years Ended December 31,
                                                      -------------------------------------
                                                        2000           1999           1998
                                                        ----           ----           ----

     Net income (as reported)                         $825,384        696,841       204,642
     Pro forma net income                              759,170        630,627       138,428
     Diluted earnings per share (as reported)              .93            .64           .16
     Pro forma diluted earnings per share                  .85            .58           .11`

| | The
pro forma results presented above may not be representative of the effects
reported in pro forma net income for future years.
| | ---------------------------------------------------------------------------------------------------------------------------------

35

---

14)
      Director, Officer and Employee Plans
(continued)

| | Employee
Stock Ownership Plan. In conjunction with the Conversion, the Bank formed an
Employee Stock Ownership Plan (ESOP). The ESOP covers substantially
all employees with more than one year of employment and who have attained the
age of 18. The ESOP borrowed $899,300 from the Company and purchased 134,895
common shares issued in the Conversion. The Bank will make scheduled
discretionary cash contributions to the ESOP sufficient to service the amount
borrowed. In accordance with generally accepted accounting principles, the
unpaid balance of the ESOP loan, which is comparable to unearned compensation,
is reported as a reduction of stockholders equity. Total contributions by
the Bank to the ESOP which were used to fund principal and interest payments on
the ESOP debt totaled $26,992, $128,672 and $134,207 for the years ended
December 31, 2000, 1999 and 1998 respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Statement
of Position No. 93-6, Employers Accounting for Employee Stock
Ownership Plans (SOP 93-6) provides guidance for accounting
for all ESOPs. SOP 93-6 requires that the issuance or sale of treasury shares to
the ESOP be reported when the issuance or sale occurs and that compensation
expense be recognized for shares committed to be released to directly compensate
employees equal to the fair value of the shares committed. In addition, SOP 93-6
requires that leveraged ESOP debt and related interest expense be reflected in
the employers financial statements. Prior practice was to recognize
compensation expense based on the amount of the employers contributions to
the ESOP. The application of SOP 93-6 results in fluctuations in compensation
expense as a result of changes in the fair value of the Companys common
stock; however, any such compensation expense fluctuations will result in an
offsetting adjustment to additional paid-in capital. For the years ended
December 31, 2000, 1999 and 1998, additional compensation expense of $29,191,
$26,875 and $54,731 was recognized as a result of implementation of this
accounting principle.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Recognition
and Retention Plan. In conjunction with the Conversion, the stockholders of the
Company approved the AMB Financial Corp. 1996 Recognition and Retention Plan
(RRP). This plan was established to award shares to directors and to
employees in key management positions in order to provide them with a
proprietary interest in the Company in a manner designed to encourage such
employees to remain with the Company. The number of shares authorized under the
Plan is 67,447, equal to 4.0% of the total number of shares issued in the
Conversion. These shares were purchased in the open market at a total cost of
$578,929. As of October 23, 1996, 65,424 shares were awarded and will vest at a
rate of 20% per year commencing October 23, 1997, while 2,023 shares were
reserved for future awards.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
$578,929 contributed to the RRP is being amortized to compensation expense as
the plan participants become vested in those shares. For the years ended
December 31, 2000, 1999 and 1998, $115,786, $115,786 and $115,786 have been
amortized to expense. The unamortized cost, which is comparable to deferred
compensation, is reflected as a reduction of stockholders equity.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

36

---

15)
      Income Taxes

| | As a result of legislation that changed the method used by many thrifts to
calculate their bad debt reserve for federal income tax purposes, the Bank must
recapture that portion of the reserve that exceeds the amount that could have
been taken under the experience method for tax years beginning after December
31, 1987. The legislation also requires thrifts to account for bad debts for
federal income tax purposes on the same basis as commercial banks for tax years
beginning after December 31, 1995. The recapture is occurring over a six year
period. The commencement of the recapture by the Bank was delayed two years as
the Bank met certain residential lending requirements. For the three years ended
December 31, 2000, the Bank recaptured approximately $143,000 in excess bad debt
reserves resulting in tax payments of approximately $57,000 which were
previously accrued. The pre-1988 reserve provisions are subject only to
recapture requirements if the Bank no longer qualifies as a thrift. Tax bad debt
deductions accumulated prior to 1988 by the Bank and included in retained
earnings total approximately $1,950,000. No deferred income taxes have been
provided for these bad debt deductions and no recapture of these amounts is
anticipated.

The provision for income taxes consists of the following:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Years Ended December 31,
                              ---------------------------------------------
                                 2000               1999             1998
                                 ----               ----             ----

     Current                  $ 288,152           418,434          529,126
     Deferred (benefit)        (126,575)          (90,540)        (376,955)
                               --------           -------          -------

                               $ 161,577          327,894           152,171
                               =========          =======           =======


     A reconciliation  of the statutory federal income tax rate to effective
     income tax rate is as follows:


                                               Years Ended December 31,
                                         -----------------------------------
                                           2000         1999          1998
                                           ----         ----          ----

     Statutory federal income tax rate     34.0%        34.0%         34.0%
     State income taxes                     4.0          4.9           6.0
     Low income housing credit            (14.1)        (5.3)           --
     Other                                 (7.5)         (1.6)         2.6
                                          -----         -----        -----

     Effective income tax rate             16.4%        32.0%         42.6%
                                           ====         ====          ====


     Deferred income tax expense (benefit) consists of the following tax effects
     of timing differences:


                                                                        Years Ended December 31,
                                                              -----------------------------------------
                                                                  2000            1999           1998
                                                                  ----            ----           ----

     Loan fees                                                $    3,237          7,440         21,203
     Depreciation                                                (14,532)        (5,674)       (13,918)
     Deferred compensation                                       (33,649)       (34,548)       (25,089)
     Book loan loss provision in excess of tax deduction         (44,189)       (33,666)       (38,459)
     Recapture of bad debt reserve                               (19,081)       (19,081)       (19,084)
     Unrealized gain (loss) on trading account securities          7,282          9,622       (296,671)
     Other, net                                                  (25,643)       (14,633)        (4,937)
                                                                --------        -------      ---------

                                                              $ (126,575)       (90,540)      (376,955)
                                                              ==========        =======       =========`

37

---

16)
      Regulatory Capital Requirements

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

| | Quantitative
measures established by regulation to ensure capital adequacy require the Bank
to maintain minimum amounts and ratios, set forth in the table below of the
total risk-based, tangible and core capital, as defined in the regulations.
Management believes, as of December 31, 2000, that the Bank meets all capital
adequacy requirements to which it is subject.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Bank, according to federal regulatory standards, is well-capitalized under
the regulatory framework for prompt corrective action. To be categorized as
adequately capitalized, the Bank must maintain minimum total risk-based,
tangible, and core ratios as set forth in the table. There are no conditions or
events since that notification that management believes have changed the
institutions category.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
December 31, 2000 and 1999, the Banks actual capital amounts and ratios,
minimum amounts and ratios required for capital adequacy purposes and minimum
amounts and ratios to meet the well-capitalized criteria under prompt corrective
action provision, are as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`To Be Well-
                                                            For                  Capitalized Under
                                                          Capital                Prompt Corrective
                                Actual               Adequacy Purposes           Action Provisions
                      -------------------------   ----------------------        ------------------
                         Amount      Ratio          Amount         Ratio        Amount       Ratio
                      ------------  -------       ----------       -----        ------       -----

December 31, 2000

Tangible               $8,861,114     6.66%      $1,997,000        1.50%     $      N/A      N/A %
Core                    8,861,114     6.66        3,994,000        3.00       6,656,000      5.00
Risk-based              9,397,287    12.01        6,261,000        8.00       7,827,000     10.00


December 31, 1999
-----------------
Tangible               $8,090,945     6.51%      $1,865,000        1.50%     $      N/A       N/A %
Core                    8,090,945     6.51        3,730,000        3.00       6,217,000      5.00
Risk-based              8,626,646    12.44        5,547,000        8.00       6,934,000     10.00`

38

---

16)
      Regulatory Capital Requirements (continued)

`Tangible              Core           Risk-based
                                                                     Capital              Capital           Capital
                                                                     -------              -------           -------
     December 31, 2000
     -----------------

     Stockholders' equity                                         $  8,929,576          8,929,576          8,929,576
     Unrealized gain on securities
        available for sale, net of taxes                               (68,462)           (68,462)           (68,462)
     General loss allowances                                                --                 --            551,173
     Direct equity investments                                              --                 --            (15,000)
                                                                  ------------       ------------       ------------
     Regulatory capital computed                                  $  8,861,114          8,861,114          9,397,287
                                                                  ============       ============       ============

  A  reconciliation  of the Bank's equity  capital at December 31, 2000 is as
  follows:

      Stockholders' equity                                                           $ 11,499,351
      Less Company stockholders' equity not available for regulatory capital           (2,569,775)
                                                                                     ------------
      Stockholders' equity of the Bank                                               $  8,929,576
                                                                                     ============



                                                                      Tangible           Core          Risk-based
                                                                      Capital           Capital          Capital
                                                                      -------           -------          -------
     December 31, 1999
     -----------------

     Stockholders' equity                                         $  8,012,227         8,012,227        8,012,227
     Unrealized loss on securities
        available for sale, net of taxes                                78,718            78,718           78,718
     General loss allowances                                                --                --          550,701
     Direct equity investments                                              --                --          (15,000)
                                                                  ------------      ------------      -----------

     Regulatory capital computed                                  $  8,090,945         8,090,945        8,626,646
                                                                  ============      ============      ===========


     A  reconciliation  of the Bank's equity  capital at December 31, 1999 is as
     follows:

     Stockholders' equity                                                                           $  11,539,269
     Less Company stockholders' equity not available for regulatory capital                            (3,527,042)
                                                                                                    -------------
         Stockholders' equity of the Bank                                                           $   8,012,227
                                                                                                    =============`

39

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17)
      Stockholders' Equity

| | As
part of the Conversion, the Bank established a liquidation account for the
benefit of all eligible depositors who continue to maintain their deposit
accounts in the Bank after conversion. In the unlikely event of a complete
liquidation of the Bank, each eligible depositor will be entitled to receive a
liquidation distribution from the liquidation account, in the proportionate
amount of the then current adjusted balance for deposit accounts held, before
distribution may be made with respect to the Banks capital stock. The Bank
may not declare or pay a cash dividend to the Company on, or repurchase any of,
its capital stock if the effect thereof would cause the retained earnings of the
Bank to be reduced below the amount required for the liquidation account. Except
for such restrictions, the existence of the liquidation account does not
restrict the use or application of retained earnings.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
addition, the Bank may not declare or pay cash dividends on or repurchase any of
its shares of common stock if the effect thereof would cause stockholders
equity to be reduced below applicable regulatory capital maintenance
requirements or if such declaration and payment would otherwise violate
regulatory requirements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Unlike
the Bank, the Company is not subject to these regulatory restrictions on the
payment of dividends to its stockholders. However, the Companys source of
funds for future dividends may depend upon dividends received by the Company
from the Bank.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18)
      Financial Instruments with Off-Balance
Sheet Risk

| | The
Bank is a party to various transactions with off-balance sheet risk in the
normal course of business. These transactions are primarily commitments to
originate loans and to extend credit on previously approved unused lines of
credit. These financial instruments carry varying degrees of credit and
interest-rate risk in excess of amounts recorded in the consolidated financial
statements.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Commitments
to originate mortgage loans of $1,343,000 at December 31, 2000 represent amounts
which the Bank plans to fund within the normal commitment period of 60 to 90
days. Of this amount, $713,000 are in fixed rate commitments with rates ranging
from 7.875% to 9.00% and $630,000 are in adjustable rate commitments. Because
the credit worthiness of each customer is reviewed prior to extension of the
commitment, the Bank adequately controls its credit risk on these commitments,
as it does for loans recorded on the balance sheet. The Bank conducts all of its
lending activities in the Northwest Indiana area. Management believes the Bank
has a diversified loan portfolio and the concentration of lending activities in
these local communities does not result in an acute dependency upon economic
conditions of the lending region.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Bank has approved, but unused, home equity lines of credit of approximately
$2,430,000 at December 31, 2000. Approval of lines of credit is based upon
underwriting standards that generally do not allow total borrowings, including
the line of credit, to exceed 75% of the estimated fair value of the
customers home. In addition, the Bank has approved but unused equity lines
of credit on various construction and commercial projects of approximately
$1,530,000 at December 31, 2000. The Bank also has approved but unused credit
card lines of credit of approximately $920,000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Bank is currently participating with several local financial institutions in
credit enhancement agreements with in-state municipalities to guarantee the
repayment on municipal revenue bonds. The Bank has accepted credit risk on these
various municipal projects in the amount of approximately $1,400,000. These
credit enhancements are in cooperation with the Federal Home Loan Bank of
Indianapolis (FHLB) and have pledging requirements as part of the
qualifying collateral agreement with FHLB. Additionally, at December 31, 2000,
the Bank had issued standby letters of credit totaling approximately $800,000 to
guarantee the performance of a customer to a third party.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

40

---

19)
      Contingencies

| | The
Bank is, from time to time, a party to certain lawsuits in the ordinary course
of its business, wherein it enforces its security interest. Management, based
upon discussions with legal counsel, believes that the Company and the Bank are
not engaged in any legal proceedings of a material nature at the present time.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20)
      Subsequent Event

| | On
January 31, 2001, the Company declared a quarterly cash dividend of $.06 per
share, totaling $56,368, payable February 23, 2001 to shareholders of record as
of February 9, 2001.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21)
      Disclosures About the Fair Value of
Financial Instruments

| | The
following methods and assumptions were used to estimate the fair value of each
class of financial instruments for which it is practicable to estimate that
value:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cash
and cash equivalents: For cash and interest-bearing deposits, the carrying
amount is a reasonable estimate of fair value.
| | ------------------------------------------------------------------------------------------------------------------------------

| | Investment
securities: Fair values for securities held to maturity, available for sale or
held for trade are based on quoted market prices as published in financial
publications or on quotes from third-party brokers.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Mortgage-backed
securities: Fair values for mortgage-backed securities are based on the lower of
quotes received from various third-party brokers.
| | --------------------------------------------------------------------------------------------------------------------------------------------------

| | Loans
receivable: The fair values of fixed-rate one-to-four family residential
mortgage loans are based on quoted market prices of similar loans sold in
conjunction with securitization transactions. The fair values for other fixed
and adjustable rate mortgage loans are estimated using discounted cash flow
analyses, using interest rates currently being offered for loans with similar
terms and collateral to borrowers of similar credit quality.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deposit
liabilities: The fair value of demand deposits, savings accounts and money
market deposits is the amount payable on demand at the reporting date. The fair
value of fixed maturity certificates of deposit is estimated by discounting the
future cash flows using the rates currently offered for deposits of similar
original maturities.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Borrowed
money: Rates currently available to the Company for debt with similar terms and
remaining maturities are used to estimate fair value of existing debt.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

41

---

21)
      Disclosures About the Fair Value of
Financial Instruments (continued)

| | The estimated fair value of the Companys financial instruments as of
December 31, 2000 and 1999 are as follows:
| | ----------------------------------------------------------------------------------------------------------------

`December 31, 2000
                                                                  --------------------------------
                                                                     Carrying           Fair
                                                                      Amount            Value
                                                                  -------------   ----------------
     Financial assets:
        Cash and cash equivalents                                $   4,614,532         4,614,532
        Investment securities, available for sale                    3,928,311         3,928,311
        Trading securities                                             936,159           936,159
        Mortgage-backed securities, available for sale               3,423,944         3,423,944
        Loans receivable                                           112,482,467       111,597,000

     Financial liabilities:
        Deposits                                                 $  89,711,720        90,044,000
        Borrowed money                                              31,108,134        30,728,000




                                                                         December 31, 1999
                                                                  --------------------------------
                                                                     Carrying           Fair
                                                                      Amount            Value
                                                                  -------------   ----------------
     Financial assets:
        Cash and cash equivalents                                $   5,457,738         5,457,738
        Investment securities, available for sale                    5,352,142         5,352,142
        Trading securities                                           1,909,333         1,909,333
        Mortgage-backed securities, available for sale               1,868,000         1,868,000
        Loans receivable                                           105,909,909       104,015,000

     Financial liabilities:
        Deposits                                                 $  88,944,925        88,551,000
        Borrowed money                                              24,675,589        23,259,000`

42

---

22)
      Condensed Parent Company Only Financial
Statements

| | The following  condensed statement of financial  condition,  as of December
     31, 2000 and 1999 and condensed statements of income and cash flows for the
     years ended December 31, 2000, 1999 and 1998 for AMB Financial Corp. should
     be read in conjunction with the consolidated  financial  statements and the
     notes thereto.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

`Condensed Statements of Financial Condition
                   -------------------------------------------

                                                               December 31,
                                                    -------------------------------
                                                          2000               1999
                                                          ----               ----
     Assets
     ------
     Cash and cash equivalents                      $     909,595           574,929
     Trading securities                                   936,159         1,909,333
     Loans receivable                                     449,650           620,118
     Equity investment in the Bank                      9,132,505         8,482,502
     Prepaid expenses and other assets                    316,305           469,600
                                                     ------------      ------------

                                                       11,744,214        12,056,482

     Liabilities and Stockholders' Equity
     ------------------------------------

     Liabilities:
     -----------
     Accrued taxes and other liabilities                   41,934            46,938
                                                     ------------     -------------

     Stockholders' Equity:
     --------------------
     Common stock                                          16,862            11,241
     Additional paid-in capital                        10,643,985        10,649,606
     Retained earnings                                  8,404,133         7,780,655
     Treasury stock                                    (7,266,212)       (6,219,684)
     Common stock awarded by RRP                          (96,488)         (212,274)
                                                     ------------      ------------

       Total stockholders' equity                      11,702,280        12,009,544
                                                       ----------        ----------

                                                    $  11,744,214        12,056,482
                                                       ==========        ==========


                     Condensed Statements of Income
                     ------------------------------


                                                                      Years Ended December 31,
                                                            -------------------------------------------
                                                                2000            1999            1998
                                                                ----            ----            ----

     Net interest income                                     $  85,994         114,740         152,693
     Gain (loss) on sale of trading securities                 (59,404)         99,627          24,086

     Unrealized gain (loss) on trading securities              121,818        (123,773)       (771,172)
     Non-interest expense                                     (251,264)       (242,094)       (270,859)
                                                             ---------       ---------       ---------
     Net loss before income taxes and
        equity in earnings of subsidiaries                    (102,856)       (151,500)       (865,252)
     Benefit from income taxes                                  58,237          54,764         325,292
                                                             ---------       ---------       ---------
     Net loss before equity in earnings of subsidiaries        (44,619)        (96,736)       (539,960)
     Equity in earnings of subsidiaries                        870,003         793,577         744,602
                                                             ---------       ---------       ---------

       Net income                                            $ 825,384         696,841         204,642
                                                             =========       =========       =========`

43

---

22)
      Condensed Parent Company Only Financial
Statements (continued)

`Condensed Statements of Cash Flows
                       ----------------------------------

                                                                      Years Ended December 31,
                                                         ------------------------------------------------
                                                              2000              1999               1998
                                                              ----              ----               ----
    Operating activities:
        Net income                                       $   825,384           696,841           204,642
        Equity in earnings of the Bank                      (870,003)         (793,577)         (744,602)
        Amortization of cost of stock benefit plan           115,786           115,786           115,786
        (Gain) loss on sale of trading securities             59,404           (99,627)          (24,086)
        Unrealized (gain) loss on trading
           securities held for trade                        (121,818)          123,773           771,172
        Purchase of trading securities                            --           (93,750)         (852,648)
        Proceeds from sale of trading securities           1,035,588           554,401           124,399
        (Increase) decrease in other assets                  153,295          (134,355)         (333,787)
        Increase (decrease) in accrued
           taxes and other liabilities                        (5,004)            4,655          (179,467)
                                                         -----------       -----------       -----------

    Net cash provided by (for) operating activities        1,192,632           374,147          (918,591)
                                                         -----------       -----------       -----------

    Investing activities:
        Loan disbursements                                        --        (4,000,000)       (4,000,000)
        Loan repayments                                      170,468         5,103,353         5,003,353
                                                         -----------       -----------       -----------

    Net cash provided by investing activities                170,468         1,103,353         1,003,353
                                                         -----------       -----------       -----------

    Financing activities:
        Proceeds from borrowed money                          75,000                --                --
        Repayment of borrowed money                          (75,000)               --                --
        Purchase of treasury stock                        (1,046,528)       (2,375,669)       (1,620,964)
        Dividends received from Bank                         220,000         1,300,000         1,900,000
        Dividends paid on common stock
           and payment of fractional shares                 (201,906)         (233,705)         (244,373)
                                                         -----------       -----------       -----------

    Net cash provided by (for) investing activities       (1,028,434)       (1,309,374)           34,663
                                                         -----------       -----------       -----------

    Net increase in cash and cash equivalents                334,666           168,126           119,425
    Cash and cash equivalents at beginning of year           574,929           406,803           287,378
                                                         -----------       -----------       -----------

    Cash and cash equivalents at end of year             $   909,595           574,929           406,803
                                                         ===========       ===========       ===========`

44

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AMB Financial Corp.Stockholder Information

Annual Meeting

The annual meeting of stockholders will be held at 10:30 a.m., on April 25,
2001, at the Companys corporate office, located at 8230 Hohman Avenue,
Munster, Indiana.

Stock Listing

The  Company's  stock is traded over the  counter,  on the NASDAQ Small Cap
Market under the symbol "AMFC".

Price Range of Common
Stock and Dividends

The table below shows the range of high and low bid prices and dividends paid
in fiscal 2000. These prices do not represent actual transactions and do not
include retail markups, markdowns or commissions.

`Quarter Ended                High         Low        Dividends
          -------------               ------       -----      -----------
          March 31, 2000               9.583       8.750       $0.053
          June 30, 2000                9.583       8.667       $0.053
          September 30, 2000          10.000       7.750       $0.060
          December 31, 2000            9.500       7.875       $0.060`

The
Board of Directors will consider the payment of future cash dividends based on
the results of operations and financial condition of the Company, tax
considerations, industry standards, economic conditions, regulatory
restrictions, general business practices and other factors. See Note 17 of the
Notes to the Consolidated Financial Statements for information regarding
limitations of the Banks ability to pay dividends to the Company.

As of December 31, 2000, the Company had 360 stockholders of record and 939,475
outstanding shares of common stock.

|Shareholder General Inquiries                                                                                                                   | Transfer Agent                                                                                                
|----------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------
|Clement B. Knapp, Jr., President
AMB Financial Corp.            
8230 Hohman Ave.               
Munster, Indiana  46321        
(219) 836-5870 | Registrar & Transfer Co.
    10 Commerce Drive           
    Cranford, New Jersey 07016  
     (800) 456-0596

45

---

AMB Financial Corp.Corporate Information

`Corporate Office

     AMB Financial Corp.                 Telephone   (219) 836-5870
     8230 Hohman Avenue                  Fax         (219) 836-5883
     Munster, IN  46321                  Web site  ambfinancial.com


     Directors of the Board             AMB Financial Corp. Officers


     Clement B. Knapp, Jr.               Clement B. Knapp, Jr.
     President since 1977.               Chairman of the Board, President
     and Chief Executive Officer


     Ronald W. Borto                     Louis A. Green
     Director since 1986.                Senior Vice-President

     Donald L. Harle                     Daniel T. Poludniak
     Director since 1995.                Vice-President, Treasurer and
                                         Chief Financial Officer

     John C. McLaughlin                  Denise L. Knapp
     Director since 1979.                Corporate Secretary


     John G. Pastrick                    Michael Mellon
     Director since 1979.                Vice President

     Robert E. Tolley                    Todd Williams
     Director since 1987.                Asst-Vice President



     Independent Auditors                Corporate Counsel / Local
     Cobitz, VandenBerg & Fennessy       Abrahamson & Reed
     9944 S. Roberts Road Suite 202      Attorneys at Law
     Palos Hills, IL  60465              200 Russell Street
                                         Hammond, IN 46320


                                         Corporate Counsel / Washington DC
                                         Jenkens & Gilchrist
                                         1919 Pennsylvania Avenue, NW, Suite 600
                                         Washington, D.C. 20006`

46

---

Annual and Other Report

The  Company  is  required  to file an  annual  report on Form  10-KSB  with the
Securities and Exchange Commission. Copies of the Form 10-KSB, annual report and
the Company's quarterly reports may be obtained without charge by contacting:

| | Sara E. Meeks
     AMB Financial Corp.
     8230 Hohman Avenue
     Munster, Indiana 46321 
     (219) 836-5870
| | ---------------------------------------------------------------------------------------------------------------

47

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